Stellar Pharmaceuticals Inc.
TSX VENTURE : SLX
OTC Bulletin Board : SLXCF

Stellar Pharmaceuticals Inc.

November 08, 2007 07:30 ET

Stellar Pharmaceuticals Announces Profitability for 2007 Third Quarter Financial Results

LONDON, ONTARIO--(Marketwire - Nov. 8, 2007) - Stellar Pharmaceuticals Inc. (TSX VENTURE:SLX)(OTCBB:SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the third quarter ended September 30, 2007. All amounts in this press release are in Canadian dollars, rounded to the nearest one hundred dollars and are the result of the use of U.S. generally accepted accounting principles.

Third Quarter 2007 Financial Results and Review

For the three month period ended September 30, 2007 total operating revenues from all sources increased by 43.2% to $615,400 compared to $429,900 in the same period in 2006. Gross profit for the quarter increased 79.1% to $535,000 compared to $298,800 for the same period in 2006. The Company showed a profit for the quarter of $137,500 compared to a loss of $278,800 in the same quarter of 2006.

For the nine month period ended September 30, 2007 total operating revenues from all sources increased 20.8% to $1,589,600 compared to $1,316,100 in the same period of 2006. Gross profit for this nine month period grew by 30.6% to $1,267,500 from $970,500 for the same period in 2006. Stellar's net loss for the nine month period was reduced by 75.4% to $212,500 compared to a loss of $865,100 in 2006.

NeoVisc sales in Canada grew by 19.9% for the quarter and 10.0% for the nine month period ending September 30, 2007 over the comparable periods for 2006. While international sales for NeoVisc were up 23.9% for the quarter and 90.8% for the nine month period compared to the same periods in 2006. Uracyst sales in Canada grew by 26.8% for the quarter and 19.9% for the nine month period compared to the same periods in 2006.

As previously announced, Stellar's United States Licensee, Watson Pharmaceuticals is in the process of conducting a Canadian-based, placebo controlled, pilot clinical study in interstitial cystitis patients, which is expected to end in early 2008. The results of this study will be utilized in designing the pivotal Phase III safety and efficacy trial, slated to commence in 2008, the data from which will be submitted to the FDA in support of marketing approval.

Peter Riehl, Stellar's President & CEO commented, "We are extremely pleased to see the Company profitable for the quarter and moving towards positive cash flow. Stellar has no debt on its balance sheet and over $3 million in cash and cash equivalents, which puts the Company in an excellent position to accelerate future market growth domestically and internationally. Both NeoVisc and Uracyst continue to gain traction in all markets which is exciting given the number of new markets they will be introduced to in the next nine months." Mr. Riehl added, "Stellar's global licensing strategy is now starting to show returns and the Company expects future royalty and licensing revenue to become a growing percentage of total revenues."

About Stellar Pharmaceuticals Inc.

Stellar has developed and is marketing direct in Canada, and in countries around the world through out-license agreements, three products based on its core polysaccharide technology: NeoVisc®, for the treatment of osteoarthritis; and Uracyst® and the Uracyst® Test Kit, its patented technology for the diagnosis and treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Stellar also has an in-licensing agreement for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.



STELLAR PHARMACEUTICALS INC.

CONDENSED BALANCE SHEETS
(Canadian Funds)

ASSETS

As at As at
September 30, 2007 December 31 , 2006
--------------------------------------
CURRENT (Unaudited) (Audited)

Cash and cash equivalents $ 3,145,355 $ 3,515,193
Accounts receivable, net of
allowance $0 (2005 - $0) 299,434 199,704
Inventories 219,156 274,597
Prepaid, deposits, and sundry
receivables 191,902 55,407
--------------------------------------
3,855,847 4,044,901

PROPERTY, PLANT, AND EQUIPMENT 827,042 853,818

OTHER ASSETS 55,893 49,691
PROMISSORY NOTE 14,945 -
--------------------------------------
$ 4,753,727 $ 4,948,410
--------------------------------------
--------------------------------------

LIABILITIES

CURRENT
Accounts payable $ 257,348 $ 226,026
Accrued liabilities 89,825 135,198
Deferred revenues 11,627 1,500
--------------------------------------
358,800 362,724
--------------------------------------

SHAREHOLDERS' EQUITY

CAPITAL STOCK
AUTHORIZED
Unlimited Non-voting, convertible,
redeemable, and retractable
preferred shares with
no par value

Unlimited Common shares with no
par value

ISSUED
23,822,540 Common shares
(2006 - 23,819,040) 8,303,054 8,299,554
Paid-in capital
options -
outstanding 130,316 513,990
- expired 605,360 201,322
Accumulated other comprehensive
income (loss) (2,100) -
DEFICIT (4,641,703) (4,429,180)
--------------------------------------
4,394,927 4,585,686
--------------------------------------
$ 4,753,727 $ 4,948,410
--------------------------------------
--------------------------------------



STELLAR PHARMACEUTICALS INC.

CONDENSED INTERIM STATEMENTS OF OPERATIONS, DEFICITS
AND COMPREHENSIVE INCOME (LOSS)
(Canadian Funds)

(Unaudited)

For the Three Month Period For the Nine Month Period
Ended September 30 Ended September 30
2007 2006 2007 2006
-----------------------------------------------

PRODUCT SALES $ 399,178 $ 332,423 $ 1,194,733 $ 1,025,903

COST OF GOODS SOLD 80,474 89,175 301,941 303,652
-----------------------------------------------------
MARGIN ON PRODUCT SOLD 318,704 243,248 892,792 722,251

ROYALTY AND LICENSING
REVENUES 216,218 97,445 394,834 290,164

WRITE-DOWN OF
OBSOLETE INVENTORY - (41,949) (20,145) (41,949)
-----------------------------------------------------
GROSS PROFIT 534,922 298,744 1,267,481 970,466
-----------------------------------------------------

EXPENSES
Selling, general,
and administrative 441,486 491,784 1,451,254 1,571,380
Research and
development 25,662 50,817 83,150 174,310
Amortization 36,226 38,973 117,285 117,324
-----------------------------------------------------
503,374 581,574 1,651,689 1,863,014
-----------------------------------------------------

INCOME (LOSS) FROM
OPERATIONS 31,548 (282,830) (384,208) (892,548)
INTEREST AND OTHER
INCOME 32,229 4,063 97,985 27,410
EXTRAORDINARY INCOME 73,700 - 73,700 -
-----------------------------------------------------
NET INCOME (LOSS)
FOR THE PERIOD 137,477 (278,767) (212,523) (865,138)
DEFICIT, beginning
of period (4,779,180) (6,270,776) (4,429,180) (5,684,405)
-----------------------------------------------------

DEFICIT, end of
period $(4,641,703) $(6,549,543) $(4,641,703) $(6,549,543)
-----------------------------------------------------
-----------------------------------------------------

OTHER COMPREHENSIVE
INCOME (LOSS)
Foreign currency
translation
adjustment (2,100) - (2,100) -
COMPREHENSIVE INCOME
(LOSS) FOR THE PERIOD 135,377 (278,767) (214,623) (865,138)

EARNINGS (LOSS) PER
SHARE
Net earnings (loss) $ 0.01 $ (0.01) $ (0.01) $ (0.04)

WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 23,822,540 23,472,690 23,821,232 23,530,318
-----------------------------------------------------
-----------------------------------------------------



STELLAR PHARMACEUTICALS INC.

CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Canadian Funds)

(Unaudited)

For the Three Month Period For the Nine Month Period
Ended September 30 Ended September 30
2007 2006 2007 2006
----------------------------------------------
CASH FLOWS USED IN
OPERATING ACTIVITIES
Net income (loss)
for the period $ 137,477 $ (278,767) $ (212,523) $ (865,138)
Amortization 36,226 38,973 117,287 117,324
Issuance of shares
and options for
services rendered 12,916 22,909 23,865 106,380
----------------------------------------------------
186,619 (216,885) (71,371) (641,434)

Change in non-cash
operating assets and
liabilities
Accounts receivable (86,762) 2,438 (99,730) (67,198)
Inventories 2,924 70,733 55,441 77,339
Prepaid, deposits,
and sundry
receivables (128,444) 17,972 (136,495) 67,966
Promissory note 2,100 - (14,945) -
Accounts payable and
accrued liabilities 164,537 (66,745) (14,051) (416,272)
Deferred revenues 11,627 2,400 10,127 (40,997)
----------------------------------------------------
152,601 (190,087) (271,024) (1,020,596)
----------------------------------------------------

CASH FLOWS USED IN
INVESTING ACTIVITIES
Additions to
property, plant
and equipment (80,115) (32,981) (89,495) (59,882)
Additions to other
assets (5,695) - (7,219) -
----------------------------------------------------
(85,810) (32,981) (96,714) (59,882)
----------------------------------------------------
CASH FLOWS PROVIDED
BY FINANCING
ACTIVITIES
Issuance of common
stock - - - 48,900
----------------------------------------------------

EFFECT OF FORIEGN
EXCHANGE ON CASH (2,100) - (2,100) -
CHANGE IN CASH AND
CASH EQUIVALENTS 64,691 (223,068) (369,838) (1,031,578)
CASH AND CASH
EQUIVALENTS,
beginning of period 3,080,672 1,300,245 3,515,193 2,108,755
----------------------------------------------------
CASH AND CASH
EQUIVALENTS,
end of period $ 3,145,355 $ 1,077,177 $ 3,145,355 $ 1,077,177
----------------------------------------------------
----------------------------------------------------


Contact Information

  • Stellar Pharmaceuticals Inc.
    Peter Riehl
    President & CEO
    1-800-639-0643 or (519) 434-1540
    or
    Stellar Pharmaceuticals Inc.
    Arnold Tenney
    Chairman
    (416) 587-3200
    or
    Seventh Circle Consulting, LLC
    Christine Petraglia
    (646) 354-8886