Adherex Technologies Inc.
TSX : AHX
AMEX : ADH

Adherex Technologies Inc.

March 30, 2009 07:51 ET

Adherex Reports 2008 Fiscal Results

Announces Corporate Restructuring

RESEARCH TRIANGLE PARK, NORTH CAROLINA--(Marketwire - March 30, 2009) - Adherex Technologies Inc. (TSX:AHX), a biopharmaceutical company dedicated to solving problems for patients with cancer, today reported its financial results for the fiscal year ended December 31, 2008. All amounts are in U.S. dollars.

Financial Update

The net loss for the fiscal year ended December 31, 2008 was $13.6 million, or $0.11 loss per share, compared to a net loss of $13.4 million, or $0.11 loss per share, for the fiscal year ended December 31, 2007. Operating expenses totaled $13.9 million for the fiscal year ended December 31, 2008 as compared to $14.2 million for the fiscal year ended December 31, 2007.

Cash and cash equivalents totaled $5.3 million as of December 31, 2008 compared to $16.2 million as of December 31, 2007, with a corresponding decrease in working capital of approximately $10.9 million. The decreased cash balance reflects expenditures used to fund operations. With the implementation of the restructuring described below, the Company believes that it has sufficient capital resources to carry out currently planned development and operational activities into September 2009. However, if a strategic transaction or other source of further financial resources cannot be secured in the very near term, the Company might cease operations sooner than September 2009.

The selected consolidated financial data presented below are derived from our consolidated financial statements, which were prepared in accordance with U.S. generally accepted accounting principles. The complete audited consolidated financial statements for the year ended December 31, 2008 and management's discussion and analysis of financial condition and results of operations are included in our Annual Report filed on Form 10-K, which is available via our website at www.adherex.com and also at www.sec.gov.

Corporate Update

In addition to the measures implemented as part of our prioritization initiative announced on November 12, 2008, the Company today announced a restructuring to further conserve its remaining limited financial resources. Given the difficult market conditions, the Company does not believe that it will be able to access additional equity capital in the near term on reasonable terms or at all. This restructuring is intended to further reduce ongoing expenditures while the Board of Directors reviews its strategic alternatives, including potential partnership transactions, mergers, acquisitions and/or the monetizing of certain assets. At this time, discussions with various companies interested in potential strategic transactions are ongoing but because the timeline and likelihood for completion of any potential strategic alternative is unknown, the Board of Directors believed it was both prudent and necessary to take these additional measures. There can be no assurances that any strategic or financial transaction will be secured, on reasonable terms or at all. The Company does not plan to make future announcements regarding the status of the strategic alternatives review unless there are material developments to report.

The restructuring plan calls for a 75% reduction in headcount effective April 30, 2009, representing all 13 of the current non-executive positions at the Company. The four executives of the Company, namely Dr. William Peters, Chairman & CEO, Mr. James Klein, Jr., CFO, Dr. Robin Norris, President & COO, and Mr. Scott Murray, SVP, General Counsel & Secretary, will remain to assist the Board as necessary in their ongoing search, assessment, negotiation and implementation of any potential strategic alternatives. Effective immediately, in addition to the several other cost containment measures that have been or will be implemented company-wide, the Company's Board of Directors has agreed to continue their work for the benefit of shareholders without further compensation.

"While we have focused the large majority of our recent efforts on collecting and analyzing recently completed clinical trial data, reducing costs and attaining additional financial resources, we have also been able to identify creative, non-dilutive ways to fund parts of our drug development during these very challenging times," said Dr. Peters. "We believe the scientific community is increasingly appreciating the potential therapeutic impact of our product candidates. STS is in Phase III trials. ADH-1 was recently the subject of a plenary session presentation at the Society of Surgical Oncology meeting in Phoenix, AZ and new data will be presented at ASCO. The National Cancer Institute, or NCI, has recently confirmed their intention to support further clinical trials with ADH-1 in multiple cancer indications and we are working with the NCI to launch the first of these trials as quickly as possible. Finally, we continue to explore a number of investigator-initiated approaches for the continued scientific and clinical advancement of our products."

The Company's development programs currently consist of:

- The ongoing investigator-initiated Phase I randomized trial of topical eniluracil intended to prevent hand-foot syndrome in patients taking Xeloda®, and

- The ongoing Phase III trials of sodium thiosulfate (STS) with the International Childhood Liver Tumour Strategy Group, also known as SIOPEL, and the Children's Oncology Group, or COG. Both the SIOPEL and COG studies are exploring the safety and efficacy of STS as a hearing protectant in children during platinum-based chemotherapy.

We expect to have early proof-of-concept data from the topical eniluracil program by approximately mid-2009. The Company has also completed the initial 3-month follow-up on all 51 patients enrolled in the Phase I/IIB ADH-1 trial in combination with regional melphalan for the treatment of in-transit melanoma. Analysis of the data is ongoing and complete results are expected to be presented at the ASCO annual meeting in June 2009.

Annual General Meeting of Shareholders

Adherex also announced that it will hold its Annual General Meeting of Shareholders on Tuesday, May 19, 2009 at 3 p.m. ET at the Toronto Board of Trade, Ketchum Osgoode Room, 3rd Floor, 1 First Canadian Place, Toronto, Ontario.

About Adherex Technologies

Adherex Technologies Inc. is a biopharmaceutical company dedicated to the discovery and development of novel cancer therapeutics. We are in the business of solving problems for patients with cancer. We have multiple products in the clinical stage of development, including eniluracil, ADH-1 and sodium thiosulfate (STS). Eniluracil, an oral dihydropyrimidine dehydrogenase (DPD) inhibitor, is being developed to improve the tolerability and effectiveness of 5-fluorouracil (5-FU), one of the most widely used oncology drugs in the world. ADH-1 is a biotechnology compound which selectively targets N-cadherin, a protein present on certain tumor cells and the blood vessels of solid tumors. STS is a chemoprotectant being developed to reduce or prevent hearing loss that may result from treatment with platinum-based chemotherapy drugs. For more information, please visit our website at www.adherex.com.



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

December 31, December 31,
2008 2007
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Condensed Consolidated Balance Sheets:
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Assets:
Cash and cash equivalents $5,349 $16,162
Other current and long-term assets 711 1,047
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Total Assets $6,060 $17,209
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Liabilities and stockholders' equity:
Accounts payable and accrued liabilities $2,430 $2,362
Other current and long-term liabilities 577 699
Total stockholders' equity 3,053 14,148
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Total liabilities and stockholders' equity $6,060 $17,209
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Condensed Consolidated Statements Year Ended Year Ended Year Ended
of Operations: December December December
31, 31, 31,
2008 2007 2006
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Revenue $- $- $-

Operating expenses:
Research and development 10,366 10,912 14,003
General and administration 3,520 3,278 2,883
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(Loss from operations) (13,886) (14,190) (16,886)

Other income (expense):
Interest expense - - (3)
Interest income 286 833 449
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Total other income 286 833 446

Loss before income taxes (13,600) (13,357) (16,440)
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Net loss and total comprehensive
income $(13,600) $(13,357) $(16,440)
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Net loss per share of common stock,
basic and diluted $(0.11) $(0.11) $(0.34)
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Weighted-average number of shares of
common stock outstanding, basic
and diluted 128,227 116,571 47,663
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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 our development plans and the expected funding, timing and results of our development as well as our efforts to pursue strategic alternatives. We can provide no assurance that development will proceed as currently anticipated, that previous results will be predictive of future outcomes, that the expected funding, timing or results of our development will be realized, or that we will be able to form strategic collaborations or partnerships with other companies. We are subject to various risks, including our near term need for additional capital to fund our operations, current and anticipated conditions in the economy and financial markets, our history of losses, our ability to continue to meet the listing requirements of the TSX, the uncertainties of clinical trials, drug development and regulatory review, the early stage of our product candidates, our reliance on collaborative partners, and other risks inherent to the biopharmaceutical industry. 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.
    D. Scott Murray
    Senior Vice President, Corporate Development
    919-484-8484
    info@adherex.com