Afexa Life Sciences Inc.

Afexa Life Sciences Inc.

February 11, 2010 18:47 ET

Afexa Announces Record Quarterly Results

- Fiscal 2010 Q1 revenue of $29.5 million; net earnings $6.8 million - Olympics launch COLD-FX® and IMMUNITY-FX™ on world stage

EDMONTON, ALBERTA--(Marketwire - Feb. 11, 2010) - Afexa Life Sciences Inc. (TSX:FXA) today announced record quarterly revenue of $29.5 million in the fiscal 2010 first quarter, an increase of approximately 50% from revenue of $19.7 million in the three months ended December 31, 2008. Net earnings rose 141% to $6.8 million ($0.06 per share) in the first three months of fiscal 2010 from $2.8 million ($0.03 per share) in the same quarter last year.

"Our quarterly revenue results reflect robust increases in demand for our core products, accelerated by public concern about flu. Our previous best quarter - the first three months of fiscal 2007 - generated revenue of $22.6 million," said Chairman and Chief Executive Officer Jack Moffatt. "We expect demand to moderate in the second quarter of fiscal 2010 as retail customers become well supplied with cold and flu products. Additionally, consumer incidences of colds and flu are currently below the three-year average. However, given the very robust numbers announced today, we are optimistic that Afexa's year-over-year results in fiscal 2010 will compare favorably to those for fiscal 2009."

The Company's cash position at December 31, 2009 was up sharply at $16.2 million from $3.5 million at September 30, 2009, while working capital rose to $21.8 million from $15.1 million. These increases were mainly attributable to greater cash flow provided by operating activities due to high fiscal first quarter revenue. Cash flow prior to working capital changes was $6.9 million in the fiscal 2010 first quarter compared to $2.9 million in the three months ended December 31, 2008.

"Over the past two years we completed a major restructuring, assembled an outstanding team, established an ambitious but achievable strategic plan, and recommitted our Company to an ethic of strong financial discipline, including prudent cost management. As a result, we are confident that we will succeed in maximizing Afexa's potential as we move forward," Mr. Moffatt said.

Afexa's lead product, COLD-FX®, is the official cold and flu remedy of the 2010 Olympic and Paralympic Winter Games - global events already highlighting the success of our products to athletes and the international community. The Winter Games are the major focus of near-term marketing efforts and many special events are planned. Afexa is an Official Supplier to the Canadian teams and COLD-FX and IMMUNITY-FX™ will be sold at general stores in the Olympic and Paralympic Villages. Product destined for all Olympic and Paralympic volunteers has been shipped to Vancouver and, during the Games, COLD-FX and IMMUNITY-FX will be distributed to nearly 250,000 spectators in venues around Vancouver and across Canada. As well, Afexa sponsors a number of elite athletes, including a longstanding relationship with Clara Hughes, who will be Canada's Olympic flag-bearer for the Opening Ceremonies.

COLD-FX aids in the prevention and relief of colds and flu by strengthening the immune system. It remains Canada's best selling cold and flu remedy, according to The Nielsen Company MarketTrack National all channel dollar sales for the categories of Cold Remedies and Supplements and Products for the 52 weeks ended December 19, 2009. Total dollar sales to consumers of COLD-FX and COLD-FX Extra Strength climbed 25% for the 12 weeks ended December 19, 2009 from the same period in the prior year. As well, COLD-FX continues to be the number one pharmacist and doctor recommended natural cold remedy, as reported by industry publications Drug Store Canada and The Medical Post.

Afexa's daily immune booster, IMMUNITY-FX, was launched in the fourth quarter of fiscal 2009 and is now on the shelves of leading pharmacies, retailers and natural health products stores across Canada. Consistent with the Company's revenue recognition policy, IMMUNITY-FX revenue is only recorded when consumers make purchases from retailers. This approach will be maintained until the brand is firmly established. In the coming months Afexa anticipates receiving a Natural Product Number (NPN) for IMMUNITY-FX from Health Canada but the Department has a large backlog of applications. Any holdup in receiving an NPN could delay the timing of Afexa's plans for market penetration of the IMMUNITY-FX brand. Afexa has NPN certification for COLD-FX.

Afexa has renewed its normal course issuer bid ("NCIB") with the Toronto Stock Exchange, permitting the Company to purchase, over a one-year period, up to 5% (5,245,645) of the common shares issued and outstanding when the NCIB came into effect on October 16, 2009. Afexa has so far repurchased 40,906 common shares at a weighted average trading price of $0.73 per share and these shares were cancelled prior to December 31, 2009. Opportunities to repurchase shares have been limited due to prohibitions on trading when material news announcements are pending. Afexa's management continues to believe the current market price of the Company's shares does not reflect their underlying value.

A complete set of Company's first quarter Financial Statements and Management's Discussion and Analysis will be filed on SEDAR ( and posted on the Company's web site.


Afexa Life Sciences Inc., founded in 1992, strives to deliver the most trusted health brand on the planet through pioneering evidence-based natural medicines that empower people to achieve their health potential. The Company's patented ChemBioPrint® discovery and standardization technology enables the development of effective and safe medicines from complex natural sources, while ensuring reliable health benefits and batch-to-batch consistency. COLD-FX®, a ChemBioPrint product, is the Company's flagship product and Canada's leading over-the-counter (OTC) cold and flu remedy. It is officially indicated in Canada to help reduce the frequency, severity and duration of cold and flu symptoms by boosting the immune system. COLD-FX products have product licenses (NPN) and are supported by scientific evidence, including randomized, double-blind, placebo-controlled clinical trials.

Advisory regarding forward-looking information:

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: those comments predicting the timing and/or initiation of clinical trials, clinical trial results, and associated regulatory clearances; initiatives to reduce time required to complete or start research projects and whether or not those projects will lead to commercialized products; whether LlP-01 will show efficacy leading to a commercialized product for cholesterol management; whether or not the Company decides to seek U.S. botanical drug registration and whether such application would lead to registration and if successful; whether such registration would lead to other market registrations; financing and acceptance of COLD-FX® and other of the Company's products in the marketplace; U.S. revenue generation through internet channels; control initiatives to enhance management's ability to estimate revenue; Olympic sponsorship activities and whether or not these will lead to increased brand awareness and increased sales of COLD-FX and IMMUNITY-FX; consumer buying patterns and whether the product demand seen in the first quarter 2010 will continue; and comments related to potential growth through acquisitions, strategic partnerships and/or licensing activities.
The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "would", "project", "could", "should", "contemplate", "potential", "depend", "forecast", "believe", "plans", "targets", "intends" and similar expressions are intended to identify forward-looking statements. In addition to the risks outlined in the Risks and Uncertainties section of the associated MD&A which will be filed on SEDAR today, further forward-looking information and statements may pertain to the following: the impact of competition; consumer confidence and spending levels; general economic conditions; interest and currency exchange rates; unseasonable weather patterns; the incidence of illnesses in the general population; the cost and availability of capital; the cost and availability of grants/funding; and product development; lawsuit final settlement expectations; reliance on third parties; dependence on a small number of major customers; hiring expectations and related anticipated capital expenditures; adequate cash position to mitigate potential tightening of credit terms; success and adequacy of the IFRS conversion plan and the impact of the implementation on future financial statements; the risk that actual results may differ from management's assumptions, estimates and interpretation of policies; marketing efforts anticipated to parallel increases in cold and flu activity may not necessarily be accounted for in the quarters for which revenue is derived; and delays in receipt of an NPN for IMMUNITY-FX may potentially have a negative impact on the business and future development plans. The Company believes that the expectations and assumptions reflected in the forward-looking information and statements contained herein are reasonable but no assurance can be given that these expectations and assumptions are correct and that the results, performance or achievements expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. The Company claims exemption under U.S. SEC Rule 12g3-2(b).

Contact Information

  • Afexa Life Sciences Inc. - Financial Contact
    Allan Cleiren
    Chief Financial Officer and Senior VP Operations
    (780) 432-0022
    Afexa Life Sciences Inc. - Investor Contact
    Jane Tulloch
    Senior Director, Investor Relations
    (780) 577-3724