Adherex Technologies Inc.
TSX : AHX
AMEX : ADH

Adherex Technologies Inc.

May 15, 2006 08:47 ET

Adherex Reports First Quarter 2006 Financial Results

RESEARCH TRIANGLE PARK, NORTH CAROLINA--(CCNMatthews - May 15, 2006) - Adherex Technologies Inc. (TSX:AHX)(AMEX:ADH) a biopharmaceutical company with a broad portfolio of oncology products under development, today reported its financial results for the first quarter ended March 31, 2006. Unless otherwise indicated, the amounts included in this press release are in U.S. dollars.

Financial Update

The net loss for the three-month period ended March 31, 2006 was $3.5 million, or $0.08 loss per share, compared to a net loss of $3.1 million, or $0.09 loss per share, for the three-month period ended March 31, 2005. Operating expenses totaled $3.9 million, an increase of 13% over the same period last year. These operating expenses primarily reflect increased research and development expenditures related to our expanding clinical trial program for ADH-1 and the initiation of two clinical studies for eniluracil.

Cash, cash equivalents and short-term investments totaled $10.0 million as of March 31, 2006, compared to $13.1 million as of December 31, 2005, with a corresponding decrease in working capital of $3.0 million. The decreased cash balance reflects spending during the quarter to fund operations. Subsequent to the quarter end, the Company received approximately $6.5 million in gross proceeds from a private placement offering of securities.

Corporate Update

During and subsequent to the quarter ended March 31, 2006, Adherex's accomplishments of note included:



- Initiation of the eniluracil clinical program, including: 1) a
Phase I eniluracil + 5-FU study in solid tumors in Nashville,
Tennessee to define the maximum tolerated dose of our proprietary
combination of these drugs, and 2) a clinical proof-of-mechanism
study at the University of Alabama at Birmingham to confirm the
Adherex dosing schedule of eniluracil. Adherex plans to initiate
a third Phase I study in hepatocellular (liver) cancer in Asia in
the second quarter of 2006. In addition, Adherex has been working
with investigators at the University of Alabama at Birmingham who
have demonstrated in human cells that eniluracil can be a
reversible, competitive inhibitor of enzymes involved in the
activation of 5-FU into an anti-cancer agent. This finding is
consistent with Adherex's explanation of the GSK trial results
and the Company's new clinical development strategy.

- Completion of the Phase Ib component of the single agent Phase
Ib/II ADH-1 trial in Europe. The Company is now expanding
enrollment in this trial at a dose of 2400 mg/m(2) in patients
with N-cadherin positive non-squamous cell lung cancer and
ovarian cancer.

- Expansion of the single agent Phase II ADH-1 study to six centers
in Canada, with plans for additional U.S. sites, and conversion
of the dosing schedule to once every week from once every three
weeks. The Company continues to expect this trial to complete in
the second half of 2006.

- Execution of a Clinical Trial Agreement with the U.S. National
Cancer Institute's Division of Cancer Treatment and Diagnosis,
for non-clinical studies and clinical trials of ADH-1 in a
variety of administration schedules and tumor types. The Company
expects these NCI studies will complement its own single-agent
and combination studies of ADH-1 and further its understanding of
how best to use this drug.

- Receipt of orphan drug designation from the U.S. Food and Drug
Administration for the use of eniluracil in combination with
fluoropyrimidines, such as 5-FU, for the treatment of liver
cancer.

- Presentation of three sets of data at the Annual Meeting of the
American Association of Cancer Research (AACR) - two on its lead
biotechnology compound, ADH-1, and one on its oral
dihydropyrimidine dehydrogenase ("DPD") inhibitor, eniluracil. Of
particular note, the eniluracil data presented demonstrated that
in preclinical studies, Adherex's proprietary dose and schedule
for the combination of eniluracil and 5-FU increased the potency,
efficacy and therapeutic index of 5-FU.

- Receipt of acceptance for two presentations of data on ADH-1 at
the 2006 American Society of Clinical Oncology Annual Meeting:
1)an oral presentation on the Phase I North American trial
results, and 2) a poster discussion on data from the Phase Ib
portion of the European Phase Ib/II trial.


Conference Call

Adherex will host a conference call at 10:00 a.m. ET on Wednesday, May 17, 2006 to review the financial results for the three-month period ended March 31, 2006 and provide a corporate update. This call will be webcast live via the Internet at www.adherex.com. The event will also be archived and available for telephone replay until midnight on Friday, May 19, 2006 and webcast replay through May 17, 2007.



Live Participant Dial In (Toll Free, Canadian and US callers):
888-695-0609
Live Participant Dial In (International): (719) 457-2660
Conference Passcode: 4653841
Replay Number (Toll Free): 888-203-1112
Replay Number (International): 719-457-0820
Replay Passcode: 4653841


About Adherex Technologies

Adherex Technologies Inc. is a biopharmaceutical company dedicated to the discovery and development of novel cancer therapeutics. We aim to be a leader in developing innovative treatments that address important unmet medical needs in cancer. We currently have multiple products in the clinical stage of development, including ADH-1 (Exherin™), eniluracil and sodium thiosulfate (STS). ADH-1, our lead biotechnology compound, selectively targets N-cadherin, a protein present on certain tumor cells and established blood vessels that feed solid tumors. Eniluracil, an oral dihydropyrimidine dehydrogenase (DPD) inhibitor, was previously under development by GlaxoSmithKline for oncology indications. STS, a drug from our specialty pharmaceuticals pipeline, protects against the disabling hearing loss that can often result from treatment with platinum-based chemotherapy drugs. With a diversified portfolio of unique preclinical and clinical-stage cancer compounds and a management team with expertise in identifying, developing and commercializing novel cancer therapeutics, Adherex is emerging as a pioneering oncology company. For more information, please visit our website at www.adherex.com.



Adherex Technologies Inc.
Selected Financial Data
(U.S. dollars in thousands except per share amounts)

March 31, December 31,
2006 2005
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(unaudited)

Condensed Consolidated Balance Sheets:
Assets:
Cash and cash equivalents $9,953 $13,144
Other current and long-term assets 1,105 1,147
Acquired intellectual property rights 13,610 14,154
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Total assets $24,668 $28,445
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Liabilities and shareholders'equity:
Accounts payable and accrued liabilities $2,416 $2,664
Future income taxes 4,975 5,174
Other long-term liabilities 599 550
Total shareholders'equity 16,678 20,057
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Total liabilities and shareholders'equity $24,668 $28,445
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Three Months Ended March 31,
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2006 2005
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(unaudited) (unaudited)
Condensed Consolidated Statements
of Operations:
Operating expenses:
Research and development $2,560 $2,018
General and administration 747 718
Amortization of acquired
intellectual property rights 544 681
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Loss from operations (3,851) (3,417)

Net interest income 130 49
Recovery of future income taxes 199 249
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Net loss $(3,522) $(3,119)
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Net loss per share of common stock,
basic and diluted $(0.08) $(0.09)
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This press release contains forward-looking statements that involve significant risks and uncertainties. The actual results, performance or achievements of the Company might differ materially from the results, performance or achievements of the Company expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation, those regarding the development plans of the Company and the expected timing and results of such development. We can provide no assurance that such development will proceed as currently anticipated or that the expected timing or results of such development will be realized. We are subject to various risks, including the uncertainties of clinical trials, drug development and regulatory review, other risks inherent in the biopharmaceutical industry, the early stage of our product candidates, our reliance on collaborative partners, our need for additional capital to fund our operations, and our history of losses. For a more detailed discussion of related risk factors, please refer to our public filings available at www.sedar.com and www.sec.gov.

Contact Information

  • Adherex Technologies Inc.
    Melissa Matson
    Director, Corporate Communications
    (919) 484-8484
    matsonm@adherex.com