Intellipharmaceutics International Inc.
(NASDAQ:IPCI) (TSX:I) (“Intellipharmaceutics” or the “Company”), a
pharmaceutical company specializing in the research, development
and manufacture of novel and generic controlled-release and
targeted-release oral solid dosage drugs, today reported the
results of operations for the year ended November 30, 2016.
All dollar amounts referenced herein are in United States dollars
unless otherwise noted.
Fiscal 2016 Key Strategic
Highlights
For the fiscal year-ended November 30, 2016 the
Company:
- Announced that RexistaTM is bioequivalent to Oxycontin®, and
has no food effect
- Secured tentative approval for generic Seroquel XR®. Launch
planned for first half of 2017
- Announced partnership agreement with Mallinckrodt with respect
to:
- generic Seroquel XR®
- generic Pristiq®
- generic Lamictal® XRTM
- Filed NDA for RexistaTM
- Strengthened its cash position and overall financial
viability
Dr. Isa Odidi, Chairman and CEO, stated, “In 2016
we laid some critical groundwork for the Company, which culminated
in a major partnership announcement with Mallinckrodt and the
filing of an NDA for Rexista™. This momentum continues into
our first quarter of 2017 with the reporting of three key
developments: the issuance of patents for our PODRAS™ overdose
prevention technology by the U.S. and Canadian patent offices, the
launch of two additional generic Focalin XR® strengths with first
filer rights by our partner Par, and the FDA acceptance of our
Rexista™ NDA application granting us a PDUFA date of September 25,
2017. I am confident that 2017 will be a transformative year
for Intellipharmaceutics as we expect a significant increase in
revenues due to the additional generic Focalin XR® strengths, the
anticipated revenues from the launch of generic Seroquel XR® on
expiry of the first filers’ exclusivity period and continued
progress in our RexistaTM NDA candidate.”
Corporate Developments
- In February 2017, the U.S. Food and Drug Administration (“FDA”)
accepted for filing the Company’s previously-announced 505(b)(2)
New Drug Application (“NDA”) seeking authorization to market its
RexistaTM (abuse-deterrent oxycodone hydrochloride extended
release tablets) in the 10 mg, 15 mg, 20 mg, 30 mg, 40 mg, 60 mg
and 80 mg strengths. The FDA has determined that the
Company’s application is sufficiently complete to permit a
substantive review, and has set a target action date under the
Prescription Drug User Fee Act (“PDUFA”) of September 25, 2017. The
submission is supported by pivotal pharmacokinetic studies that
demonstrated that RexistaTM is bioequivalent to
OxyContin® (oxycodone hydrochloride extended
release). The submission also includes abuse-deterrent studies
conducted to support abuse-deterrent label claims related to abuse
of the drug by various pathways, including oral, intra-nasal and
intravenous, having reference to the FDA's "Abuse-Deterrent Opioids
— Evaluation and Labelling" guidance published in April 2015.
- In January 2017, the Company’s U.S. marketing partner, Par
Pharmaceutical Inc. (“Par”), launched the 25 and 35 mg
strengths of its generic Focalin XR® (dexmethylphenidate
hydrochloride extended-release) capsules in the U.S., complementing
the 15 and 30 mg strengths of the Company’s generic Focalin XR®
currently marketed by Par. The FDA recently granted final
approval to Par’s Abbreviated New Drug Application (“ANDA”) for
its generic Focalin XR® capsules in the 5, 10, 15, 20, 25, 30,
35 and 40 mg strengths. We expect sales of the 25 and 35 mg
strengths to significantly improve our revenues in 2017. As the
first filer of an ANDA for generic Focalin XR® in the 25 and 35 mg
strengths, Par has 180 days of U.S. generic marketing exclusivity
for these strengths. We believe Par is preparing to launch all the
remaining strengths in the first half of 2017.
- In December 2016, U.S. Patent No. 9,522,119 and Canadian Patent
No. 2,910,865 were issued by the U.S. Patent and Trademark Office
and the Canadian Intellectual Property Office in respect of
“Compositions and Methods for Reducing Overdose”. The issued
patents cover aspects of the Company’s Paradoxical OverDose
Resistance Activating System ("PODRAS™") delivery technology, which
is designed to prevent overdose when more pills than prescribed are
swallowed intact. Preclinical studies of prototypes of oxycodone
with PODRASTM technology suggest that, unlike other third-party
abuse-deterrent oxycodone products in the marketplace, if more
tablets than prescribed are deliberately or inadvertently
swallowed, the amount of drug active released over 24 hours may be
substantially less than expected. However, if the prescribed number
of pills is swallowed, the drug release should be as expected. The
issuance of these patents provides the Company the opportunity to
accelerate its PODRAS™ development plan by pursuing proof of
concept studies in humans. The Company intends to incorporate this
technology in an alternate RexistaTM product candidate.
- In October 2016, the Company entered into a license and
commercial supply agreement with Mallinckrodt LLC ("Mallinckrodt"),
granting Mallinckrodt an exclusive license to market, sell and
distribute in the U.S. the following extended release drug product
candidates (the "licensed products") for which the Company has
ANDAs filed with the FDA (the “Mallinckrodt agreement”): -
Quetiapine fumarate extended-release tablets (generic Seroquel XR®)
– ANDA Tentatively Approved by FDA - Desvenlafaxine
extended-release tablets (generic Pristiq®) – ANDA Under FDA Review
- Lamotrigine extended-release tablets (generic Lamictal®
XR™) – ANDA Under FDA Review
Under the terms of this 10-year agreement, the
Company received a non-refundable upfront payment of $3 million.
The agreement also provides for a long-term profit sharing
arrangement (which includes up to $11 million in cost recovery
payments to the Company). The Company has agreed to manufacture and
supply the licensed products exclusively for Mallinckrodt on a cost
plus basis.
- In October 2016, the Company received tentative approval from
the FDA for its ANDA for quetiapine fumarate extended-release
tablets (“generic Seroquel XR®”) in the 50, 150, 200, 300 and 400
mg strengths. The Company was permitted to launch its generic
versions of the 50, 150, 200, 300 and 400 mg strengths of generic
Seroquel XR®, on November 1, 2016, subject to FDA final approval of
the Company's ANDA for those strengths. Such FDA final approval is
subject to a 180 day exclusivity period relating to a prior filer
or filers of a generic equivalent of the branded product. The
first filer rights are shared by Par and Accord Healthcare
(“Accord”). The Company believes that in early November 2016,
Par launched the 50, 100, 200, and 300 mg strengths, and Accord
launched the 400 mg strength. The Company and its marketing
and distribution partner for generic Seroquel XR® in the U.S.,
Mallinckrodt, are working diligently towards a launch of all such
strengths upon final FDA approval.
- In July 2016, the FDA completed its review of our previously
requested waiver of the NDA user fee related to our RexistaTM NDA
product candidate. The FDA, under the small business waiver
provision section 736(d)(1)(D) of the Federal Food, Drug, and
Cosmetics Act, granted the Company a waiver of the $1,187,100
application fee for RexistaTM.
- In July 2016, the Company announced the results of a food
effect study conducted on its behalf for RexistaTM. The study
showed that RexistaTM can be administered with or without a
meal (i.e., no food effect). RexistaTM met the
bioequivalence criteria (90% confidence interval of 80% to
125%) for all matrices, involving maximum plasma concentration and
area under the curve (i.e., Cmax ratio of RexistaTM taken under
fasted conditions to fed conditions, and AUC metrics taken under
fasted conditions to fed conditions). The Company believes
that RexistaTM is well differentiated from currently marketed oral
oxycodone extended release products.
- In June 2016, the Company completed an underwritten public
offering of 3,229,814 units of common shares and warrants, at a
price of $1.61 per unit. The warrants are currently exercisable,
have a term of five years and an exercise price of $1.93 per common
share. The Company issued at the initial closing of the offering an
aggregate of 3,229,814 common shares and warrants to purchase an
additional 1,614,907 common shares. The underwriter also purchased
at such closing additional warrants to acquire 242,236 common
shares pursuant to the over-allotment option exercised in part by
the underwriter. The Company subsequently sold an aggregate of
459,456 additional common shares at the public offering price of
$1.61 per share in connection with subsequent partial exercises of
the underwriter’s over-allotment option. The closings of these
partial exercises brought the total net proceeds from the offering
to approximately $5.1 million, after deducting the underwriter’s
discount and offering expenses.
- In February 2016, the Company announced that the FDA granted
final approval of its ANDA for levetiracetam extended release
tablets for the 500 and 750 mg strengths. The Company’s approved
product is the generic equivalent of the branded product Keppra
XR®. Keppra XR®, and the drug active levetiracetam, are
indicated for use in the treatment of partial onset seizures
associated with epilepsy. The Company is actively exploring the
best approach to commercialize the product.
- In January 2016, the Company announced that pivotal
bioequivalence trials of the Company’s RexistaTM, dosed under
fasted and fed conditions, had demonstrated bioequivalence to
Oxycontin® (oxycodone hydrochloride) extended release tablets. The
study design was based on FDA recommendations and compared the
lowest and highest strengths of exhibit batches of the Company’s
RexistaTM to the same strengths of Oxycontin®. The results show
that the ratios of the pharmacokinetic metrics, Cmax, AUC0-t and
AUC0-f for RexistaTM vs. Oxycontin®, are within the interval of 80%
- 125% required by the FDA with a confidence level exceeding
90%.
The Company is unable to state or estimate an
actual launch date of any or all remaining strengths of Par’s
generic Focalin XR®. In addition, there can be no assurance as to
when or if any of the above-mentioned licensed products will
receive final FDA approval or that, if so approved, the licensed
products will be successfully commercialized and produce
significant revenues for us. Also, there can be no assurance that
we will not be required to conduct further studies for RexistaTM,
that the FDA will ultimately approve the NDA for the sale of
RexistaTM in the U.S. market, or that it will ever be successfully
commercialized, that our approved generic of Keppra XR® will be
successfully commercialized, that we will be successful in
submitting any additional ANDAs, Abbreviated New Drug Submissions
(“ANDSs”) or NDAs with the FDA or similar applications with Health
Canada, that the FDA or Health Canada will approve any of our
current or future product candidates for sale in the U.S. market
and Canadian market, or that they will ever be successfully
commercialized and produce significant revenue for us.
Full Year Financial Results
The Company recorded revenues of $2.2 million for
the year ended November 30, 2016 versus $4.1 million for the year
ended November 30, 2015. For the year ended November 30, 2016, we
recognized licensing revenue of $2.2 million from commercial sales
of 15 and 30 mg strengths of generic Focalin XR® capsules under the
Par agreement. The decrease in revenues is primarily due to
increased competition and a softening of pricing conditions for our
generic Focalin XR® capsules. A fifth generic competitor
entered the market in the second half of 2015, resulting in
increased price competition and lower market share. Based on the
most recent two month trend, our market share for the 15 and 30 mg
strengths is approximately 30% for the combined strengths. In
addition, during the year ended November 30, 2016, the Company
received a non-refundable up-front payment of $3.0 million from
Mallinckrodt pursuant to the Mallinckrodt agreement, of which
$37,500 was recognized as revenue, with the balance to be deferred
and recognized as revenue over the expected 10 year term of the
contract.
The Company recorded net loss for the year ended
November 30, 2016 of $10.1 million or $0.38 per common share,
compared with a net loss of $7.4 million or $0.31 per common share
for the year ended November 30, 2015. In the year ended November
30, 2016, the higher net loss is primarily attributed to lower
licensing revenues from commercial sales of generic Focalin XR® for
2016. To a lesser extent, the higher loss for the 2016 period
was due to the accrual of management bonuses and additional
compensation costs related to vested performance options as a
result of the FDA approval of generic Keppra XR® and the Company’s
shareholders approving an extension of the expiry date of the
performance based stock options. In the year ended November
30, 2015, the net loss is attributed to the ongoing R&D and
selling, general and administrative expense, partially offset by
licensing revenue.
Research and development (“R&D”) expenditures
in the year ended November 30, 2016 were $8.2 million compared to
$7.3 million in the year ended November 30, 2015. The increase is
primarily due to higher stock option compensation expense as a
result of certain performance based stock options vesting upon FDA
approval of generic Keppra XR®, and additional compensation costs
related to vested performance options as a result of the Company’s
shareholders approving a two year extension of the expiry date of
the performance-based options from September 2016 to September
2018, partially offset by lower spending for ongoing R&D
work.
Selling, general and administrative expenses were
$3.5 million for the year ended November 30, 2016 in comparison to
$3.6 million for the year ended November 30, 2015. The decrease is
due to a decrease in administrative costs and marketing costs,
offset by an expense for management bonuses. There were no
management bonuses paid in the prior year.
The Company had cash of $4.1 million as at November
30, 2016 compared to $1.8 million as at November 30, 2015 and
compared to $4.2 million as at November 30, 2014. The increase in
cash during the year ended November 30, 2016 was mainly a result of
an increase in cash flows provided from financing activities which
were mainly from the Company’s underwritten public offering and
common share sales under the Company’s at-the-market offering
program, and the receipt of a non-refundable upfront payment of
$3.0 million under the Mallinckrodt agreement, partially offset by
lower cash receipts relating to commercialized sales of our generic
Focalin XR® and a reduction in accounts payable and accrued
liabilities.
As of February 9, 2017, our cash balance was $2.9
million. We currently expect to satisfy our operating cash
requirements until June 2017 from cash on hand. The Company
may need to obtain additional funding prior to that time as we
pursue the development of our product candidates and if we
accelerate our product commercialization activities. If
necessary, we expect to utilize our at-the-market offering program
to bridge any funding shortfall in the first and second quarters of
2017. In the second half of fiscal 2017, the Company expects
revenues to improve as it prepares for the launch of its
tentatively approved generic Seroquel XR® (quetiapine fumarate
extended release tablet) on the expiry of Par’s and Accord’s first
filer exclusivity periods in May 2017, although there can be no
assurance as to when or if any launch will occur, or if generic
Seroquel XR® will be successfully commercialized.
About Intellipharmaceutics
Intellipharmaceutics International Inc. is a
pharmaceutical company specializing in the research, development
and manufacture of novel and generic controlled-release and
targeted-release oral solid dosage drugs. The Company’s patented
Hypermatrix™ technology is a multidimensional controlled-release
drug delivery platform that can be applied to the efficient
development of a wide range of existing and new pharmaceuticals.
Based on this technology platform, Intellipharmaceutics has
developed several drug delivery systems and a pipeline of products
(some of which have received FDA approval) and product candidates
in various stages of development, including ANDAs filed with the
FDA (and one Abbreviated New Drug Submission filed with Health
Canada) in therapeutic areas that include neurology,
cardiovascular, gastrointestinal tract, diabetes and pain.
Intellipharmaceutics also has NDA 505(b)(2)
specialty drug product candidates in its development pipeline.
These include RexistaTM (abuse deterrent oxycodone hydrochloride
extended release tablets), based on its proprietary nPODDDS™ novel
Point Of Divergence Drug Delivery System (for which an NDA has been
filed with the FDA), and Regabatin™ XR (pregabalin extended-release
capsules). Our current development effort is increasingly directed
towards improved difficult-to-develop controlled-release drugs
which follow an NDA 505(b)(2) regulatory pathway. The Company has
increased its research and development emphasis towards new product
development, facilitated by the 505(b)(2) regulatory pathway, by
advancing the product development program for both RexistaTM and
Regabatin™. The 505(b)(2) pathway (which relies in part upon
the approving agency’s findings for a previously approved drug)
both accelerates development timelines and reduces costs in
comparison to NDAs for new chemical entities. An advantage of our
strategy for development of NDA 505(b)(2) drugs is that our product
candidates can, if approved for sale by the FDA, potentially enjoy
an exclusivity period which may provide for greater commercial
opportunity relative to the generic ANDA route.
Cautionary Statement Regarding
Forward-Looking Information
Certain statements in this document constitute
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and/or
"forward-looking information" under the Securities Act (Ontario).
These statements include, without limitation, statements expressed
or implied regarding our plans, goals and milestones, status of
developments or expenditures relating to our business, plans to
fund our current activities, statements concerning our partnering
activities, health regulatory submissions, strategy, future
operations, future financial position, future sales, revenues and
profitability, projected costs, and market penetration. In some
cases, you can identify forward-looking statements by terminology
such as “may,” “will,” “should,” “expects,” “plans,” “plans to,”
“anticipates,” “believes,” “estimates,” “predicts,” “confident”,
“potential,” “continue,” “intends,” “could,” or the negative of
such terms or other comparable terminology. We made a number of
assumptions in the preparation of our forward-looking statements.
You should not place undue reliance on our forward-looking
statements, which are subject to a multitude of known and unknown
risks and uncertainties that could cause actual results, future
circumstances or events to differ materially from those stated in
or implied by the forward-looking statements. Risks, uncertainties
and other factors that could affect our actual results include, but
are not limited to, the effects of general economic conditions,
securing and maintaining corporate alliances, our estimates
regarding our capital requirements, and the effect of capital
market conditions and other factors, including the current status
of our product development programs, on capital availability, the
potential dilutive effects of any future financing and the expected
use of any proceeds from any offering of our securities, our
ability to maintain compliance with the continued listing
requirements of the principal markets on which our securities are
traded, our programs regarding research, development and
commercialization of our product candidates, the timing of such
programs, the timing, costs and uncertainties regarding obtaining
regulatory approvals to market our product candidates and the
difficulty in predicting the timing and results of any product
launches, and the timing and amount of any available investment tax
credits, the actual or perceived benefits to users of our drug
delivery technologies, products and product candidates as compared
to others, our ability to establish and maintain valid and
enforceable intellectual property rights in our drug delivery
technologies, products and product candidates, the scope of
protection provided by intellectual property for our drug delivery
technologies, products and product candidates, the actual size of
the potential markets for any of our products and product
candidates compared to our market estimates, our selection and
licensing of products and product candidates, our ability to
attract distributors and collaborators with the ability to fund
patent litigation and with acceptable development, regulatory and
commercialization expertise and the benefits to be derived from
such collaborative efforts, sources of revenues and anticipated
revenues, including contributions from distributors and
collaborators, product sales, license agreements and other
collaborative efforts for the development and commercialization of
product candidates, our ability to create an effective direct sales
and marketing infrastructure for products we elect to market and
sell directly, the rate and degree of market acceptance of our
products, delays that may be caused by changing regulatory
requirements, the difficulty in predicting the timing of regulatory
approval and launch of competitive products, the difficulty in
predicting the impact of competitive products on volume, pricing,
rebates and other allowances, the inability to forecast wholesaler
demand and/or wholesaler buying patterns, the seasonal fluctuation
in the numbers of prescriptions written for our Focalin XR®
(dexmethylphenidate hydrochloride extended-release) capsules which
may produce substantial fluctuations in revenues, the timing and
amount of insurance reimbursement for our products, changes in laws
and regulations affecting the conditions required by the FDA for
approval and labelling of drugs including abuse or overdose
deterrent properties, and changes affecting how opioids are
regulated and prescribed by physicians, changes in the laws and
regulations, including Medicare and Medicaid, affecting among other
things, pricing and reimbursement of pharmaceutical products, the
success and pricing of other competing therapies that may become
available, our ability to retain and hire qualified employees, the
availability and pricing of third party sourced products and
materials, challenges related to the development,
commercialization, technology transfer, scale-up, and/or process
validation of manufacturing processes for our product candidates,
the manufacturing capacity of third-party manufacturers that we may
use for our products, the successful compliance with FDA, Health
Canada and other governmental regulations applicable to the Company
and its third party manufacturers' facilities, products and/or
businesses, difficulties, delays or changes in the FDA approval
process or test criteria for ANDAs and NDAs, challenges in securing
final FDA approval for our product candidates including, RexistaTM
in particular, if a patent infringement suit is filed against us,
which could delay the FDA’s final approval of such product
candidates, the FDA may not approve product labelling for our
product candidate(s) having abuse-deterrent properties, risks
associated with cyber-security and the potential for vulnerability
of the digital information of the Company or a current and/or
future drug development or commercialization partner of the Company
and risks arising from the ability and willingness of our
third-party commercialization partners to provide documentation
that may be required to support information on revenues earned by
us from those commercialization partners. Additional risks and
uncertainties relating to the Company and our business can be found
in the “Risk Factors” section of our latest annual information
form, our latest Form 20-F, and our latest Form F-3 (including any
documents forming a part thereof or incorporated by reference
therein), as well as in our reports, public disclosure documents
and other filings with the securities commissions and other
regulatory bodies in Canada and the U.S., which are available on
www.sedar.com and www.sec.gov. The forward-looking statements
reflect our current views with respect to future events and are
based on what we believe are reasonable assumptions as of the date
of this document, and we disclaim any intention and have no
obligation or responsibility, except as required by law, to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Trademarks used herein are the property of their
respective holders.
Nothing contained in this document should be
construed to imply that the results discussed herein will
necessarily continue or that any conclusion reached herein will
necessarily be indicative of actual operating results of the
Company.
The audited consolidated financial statements,
accompanying notes to the audited consolidated financial
statements, and Management Discussion and Analysis for the year
ended November 30, 2016 will be accessible on Intellipharmaceutics’
website at www.intellipharmaceutics.com and will be available
on SEDAR and EDGAR.
Summary financial tables are provided
below.
Intellipharmaceutics International Inc. |
Consolidated balance sheets |
As at
November 30, 2016 and 2015 |
(Stated in
U.S. dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash |
|
|
4,144,424 |
|
|
1,755,196 |
|
|
Accounts
receivable, net |
|
472,474 |
|
|
478,674 |
|
|
Investment
tax credits |
|
681,136 |
|
|
458,021 |
|
|
Prepaid expenses, sundry and other assets |
|
400,642 |
|
|
229,225 |
|
|
|
|
|
|
5,698,676 |
|
|
2,921,116 |
|
|
|
|
|
|
|
|
|
Deferred
offering costs |
|
386,375 |
|
|
543,745 |
|
Property and equipment, net |
|
1,889,638 |
|
|
1,759,438 |
|
|
|
|
|
|
7,974,689 |
|
|
5,224,299 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current |
|
|
|
|
|
|
Accounts
payable |
|
807,295 |
|
|
3,027,974 |
|
|
Accrued
liabilities |
|
384,886 |
|
|
454,290 |
|
|
Employee
costs payable |
|
1,044,151 |
|
|
175,172 |
|
|
Current
portion of capital lease obligations |
|
14,829 |
|
|
20,460 |
|
|
Convertible
debenture |
|
1,494,764 |
|
|
1,518,429 |
|
|
Deferred revenue |
|
450,000 |
|
|
- |
|
|
|
|
|
|
4,195,925 |
|
|
5,196,325 |
|
|
|
|
|
|
|
|
|
Capital
lease obligations |
|
- |
|
|
15,660 |
|
Deferred
revenue |
|
2,662,500 |
|
|
150,000 |
|
|
|
|
|
|
6,858,425 |
|
|
5,361,985 |
|
|
|
|
|
|
|
|
|
Shareholders' equity (deficiency) |
|
|
|
|
Capital
stock |
|
|
|
|
|
Authorized |
|
|
|
|
|
|
Unlimited
common shares without par value |
|
|
|
|
|
|
Unlimited
preference shares |
|
|
|
|
|
Issued and
outstanding |
|
|
|
|
|
|
29,789,992
common shares |
|
29,830,791 |
|
|
21,481,242 |
|
|
|
|
(2015 -
24,244,050) |
|
|
|
|
Additional
paid-in capital |
|
34,017,071 |
|
|
30,969,093 |
|
Accumulated
other comprehensive income |
|
284,421 |
|
|
284,421 |
|
Accumulated deficit |
|
(63,016,019 |
) |
|
(52,872,442 |
) |
|
|
|
|
|
1,116,264 |
|
|
(137,686 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
7,974,689 |
|
|
5,224,299 |
|
|
|
|
|
|
|
|
|
Intellipharmaceutics International Inc. |
Consolidated statements of operations and comprehensive loss |
for the
years ended November 30, 2016, 2015 and 2014 |
|
|
|
|
|
|
|
|
|
|
(Stated in
U.S. dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Licensing |
|
|
|
2,209,502 |
|
|
4,093,781 |
|
|
8,415,540 |
|
|
Milestone |
|
|
|
- |
|
|
- |
|
|
354,153 |
|
|
Up-front fees |
|
|
|
37,500 |
|
|
- |
|
|
- |
|
|
|
|
|
|
2,247,002 |
|
|
4,093,781 |
|
|
8,769,693 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
8,166,736 |
|
|
7,247,473 |
|
|
8,020,201 |
|
|
Selling,
general and administrative |
|
3,546,132 |
|
|
3,581,913 |
|
|
3,900,803 |
|
|
Depreciation |
|
|
|
385,210 |
|
|
377,849 |
|
|
381,385 |
|
|
|
|
|
|
12,098,078 |
|
|
11,207,235 |
|
|
12,302,389 |
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(9,851,076 |
) |
|
(7,113,454 |
) |
|
(3,532,696 |
) |
|
|
|
|
|
|
|
|
|
|
Net foreign
exchange gain (loss) |
|
|
(22,470 |
) |
|
46,211 |
|
|
10,896 |
|
Interest
income |
|
|
|
207 |
|
|
1,507 |
|
|
4,898 |
|
Interest
expense |
|
|
|
(270,238 |
) |
|
(256,629 |
) |
|
(339,451 |
) |
Extinguishment loss |
|
|
- |
|
|
(114,023 |
) |
|
- |
|
Net loss and comprehensive loss |
|
|
(10,143,577 |
) |
|
(7,436,388 |
) |
|
(3,856,353 |
) |
|
|
|
|
|
|
|
|
|
|
Loss per
common share, basic and diluted |
|
(0.38 |
) |
|
(0.31 |
) |
|
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common |
|
|
|
|
|
|
|
shares outstanding, basic and diluted |
|
26,699,579 |
|
|
23,767,677 |
|
|
23,050,618 |
|
|
|
|
|
|
|
|
|
|
|
Intellipharmaceutics International Inc. |
Consolidated statements of cash flows |
for the
years ended November 30, 2016, 2015 and 2014 |
(Stated in
U.S. dollars) |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
|
(10,143,577 |
) |
|
(7,436,388 |
) |
|
(3,856,353 |
) |
Items not
affecting cash |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
385,210 |
|
|
377,849 |
|
|
381,385 |
|
|
Stock-based
compensation |
|
|
|
2,261,444 |
|
|
417,818 |
|
|
1,748,607 |
|
|
Deferred share
units |
|
|
|
31,628 |
|
|
29,056 |
|
|
20,807 |
|
|
Accreted
interest |
|
|
|
79,245 |
|
|
27,103 |
|
|
127,261 |
|
|
Loss on
extinguishment |
|
|
|
- |
|
|
114,023 |
|
|
- |
|
|
Unrealized
foreign exchange loss (gain) |
|
|
22,916 |
|
|
(81,063 |
) |
|
3,057 |
|
|
|
|
|
|
|
|
|
|
|
Change in
non-cash operating assets & liabilities |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
|
6,200 |
|
|
532,459 |
|
|
464,611 |
|
|
Investment tax
credits |
|
|
|
(223,115 |
) |
|
(133,035 |
) |
|
(145,436 |
) |
|
Prepaid
expenses, sundry and other assets |
|
|
(171,417 |
) |
|
185,438 |
|
|
(102,130 |
) |
|
Accounts
payable and accrued liabilities |
|
|
(1,466,019 |
) |
|
2,034,576 |
|
|
(356,722 |
) |
|
Deferred revenue |
|
|
|
2,962,500 |
|
|
150,000 |
|
|
- |
|
Cash flows used in operating activities |
|
|
|
(6,254,985 |
) |
|
(3,782,164 |
) |
|
(1,714,913 |
) |
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
Repayment of related
party loans |
|
|
|
- |
|
|
- |
|
|
(739,208 |
) |
|
Repayment
of capital lease obligations |
|
|
(21,291 |
) |
|
(27,489 |
) |
|
(53,557 |
) |
|
Issuance of
shares on exercise of stock options |
|
|
52,868 |
|
|
167,962 |
|
|
116,984 |
|
|
Issuance of
common shares on at-the-market financing, gross |
|
|
3,469,449 |
|
|
1,290,168 |
|
|
6,571,673 |
|
|
Proceeds
from issuance of shares and warrants (Note 10) |
|
|
5,939,967 |
|
|
- |
|
|
- |
|
|
Proceeds
from issuance of shares on exercise of warrants (Note 14) |
|
|
700,653 |
|
|
562,500 |
|
|
781,220 |
|
|
Offering costs (Note
10) |
|
|
|
(982,023 |
) |
|
(259,276 |
) |
|
(719,837 |
) |
Cash flows provided from financing activities |
|
|
9,159,623 |
|
|
1,733,865 |
|
|
5,957,275 |
|
|
|
|
|
|
|
|
|
|
|
Investing activity |
|
|
|
|
|
|
|
|
|
Purchase of
property and equipment |
|
|
(515,410 |
) |
|
(430,480 |
) |
|
(768,973 |
) |
Cash flows used in investing activities |
|
|
|
(515,410 |
) |
|
(430,480 |
) |
|
(768,973 |
) |
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in cash |
|
|
|
2,389,228 |
|
|
(2,478,779 |
) |
|
3,473,389 |
|
Cash,
beginning of year |
|
|
|
1,755,196 |
|
|
4,233,975 |
|
|
760,586 |
|
Cash, end of year |
|
|
|
4,144,424 |
|
|
1,755,196 |
|
|
4,233,975 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
|
Interest paid |
|
|
|
165,585 |
|
|
179,878 |
|
|
213,637 |
|
|
Taxes paid |
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Company Contact:
Intellipharmaceutics International Inc.
Domenic Della Penna
Chief Financial Officer
416-798-3001 ext. 106
investors@intellipharmaceutics.com
Investor Contact:
ProActive Capital
Kirin Smith
646-863-6519
ksmith@proactivecapital.com
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