Critical Outcome Technologies Inc. (COTI)
TSX VENTURE : COT
OTCQB : COTQF

Critical Outcome Technologies Inc. (COTI)

December 17, 2014 18:05 ET

Critical Outcome Technologies Reports Fiscal 2015 Second Quarter Results

Highlighted by Development Milestones for COTI-2 as IND Filing Nears Completion

LONDON, ONTARIO--(Marketwired - Dec. 17, 2014) - Critical Outcome Technologies Inc. (TSX VENTURE:COT)(OTCQB:COTQF) ("COTI" or the "Company") the biopharmaceutical company that uses machine learning to rapidly develop targeted therapies, reported its financial and operating results today for the three and six month periods ended October 31, 2014.

Highlights for the quarter included:

  • signing a letter of intent with MD Anderson Cancer Center, one of the world's most respected cancer centers, for the Phase 1 clinical development of COTI-2 in gynecological cancers;
  • receiving the final report for the two-species toxicity studies of COTI-2 that confirmed the low toxicity profile of the compound and provided important considerations for the Phase 1 clinical trial protocol design;
  • completing additional and definitive testing confirming COTI-2's p53-dependent mechanism of action at dosages 60% lower than previously used in similar experiments that potentially translate into better efficacy and even better safety for the upcoming Phase 1 study;
  • expanding the potential indications for COTI-2 beyond gynecological cancers with the signing of two material transfer agreements, one with MD Anderson, and another with the London Health Science Centre, to continue the evaluation of COTI-2 in the treatment of patients with head and neck squamous cell cancer;
  • receiving the sixth U.S., first Japanese, and first Canadian patents for COTI-2, strengthening the potential to maximize future commercial licensing opportunities; and,
  • completing a private placement providing additional funding for operations.

"We met several key milestones for our lead compound, COTI-2, during the second quarter," said Dr. Wayne Danter, Chief Executive Officer. "Positive results from critical pre-clinical experiments, along with additional funding from our recent financing, better position COTI-2 for the upcoming Phase 1 clinical trial. We continue to strengthen our relationship with MD Anderson and are pursuing opportunities for COTI-2 to make a difference in the treatment of other cancer indications beyond gynecological cancers. As we continue to prepare our IND submission, we also look forward to what should be a very exciting year for our Company and its investors in 2015."

Financial Results

The Company's operational activities during the quarter were focused in three main areas; first, the completion of testing and preparation of the IND submission for COTI-2; second, financing efforts to fund the Phase 1 human trial of COTI-2 and the Company's operations for the next year; and, third, business development initiatives. These activities resulted in the Company incurring a net loss of $946,204, or $0.01 per share, for the quarter compared to a net loss of $598,220, or $0.01 per share, for the second quarter a year earlier. For the six months ended October 31, 2014, the Company reported a loss of $1,917,000 or $0.02 per common share, compared to a loss of $1,098,273, or $0.01 per common share, for the same period last year. The increased loss for the quarter and year-to-date were attributable to increased expenses of $325,507 and $776,726 respectively in all functional expense areas but primarily research and development and general and administration.

Research and development expenditures increased $231,052 for the quarter and $332,749 year-to-date primarily reflecting the completion of the two-species toxicity studies, chemistry and manufacturing testing and analysis in support of the COTI-2 IND filing, and third party assistance in the preparation of the investigational new drug submission to the FDA.

General and administration ("G&A") expenditures increased $95,869 in the quarter and $443,326 year-to-date primarily related to professional fees and corporate governance costs supporting strategic advice and pursuit of financing in the U.S. Other activities that increased G&A expenditures included; investor relations activities in the U.S., support costs in obtaining the U.S. listing on the OTC trading platform, assistance with successfully obtaining the Orphan Drug Designation for COTI-2, information technology upgrades and strategic planning sessions.

Financing

During the quarter, the Company generated approximately $723,000 in gross proceeds to fund operations with approximately $522,000 from the first tranche of a non-brokered private placement with accredited investors and a further $201,000 from the exercise of warrants. Subsequent to the quarter end, the Company closed the second and third tranches of the private placement for aggregate gross proceeds from the total financing of approximately $2.628 million.

More detailed operating and financial results can be found in the Company's Unaudited Condensed Interim Financial Statements and the Management Discussion and Analysis for the three and six month periods ended October 31, 2014, which can be found on SEDAR at www.sedar.com or on the Company's website at www.criticaloutcome.com.

About Critical Outcome Technologies Inc. (COTI)

COTI is a biopharmaceutical company using machine learning to rapidly develop targeted therapies. COTI's proprietary artificial intelligence platform, CHEMSAS®, utilizes a series of predictive computer models to identify compounds with a high probability of being successfully developed from disease specific drug discovery through chemical optimization and preclinical testing. These compounds are targeted for a variety of diseases, particularly those for which current treatments are either lacking or ineffective.

Follow @CriticalOutcome on Twitter at http://twitter.com/CriticalOutcome.

Notice to Readers

Information contained in this press release may contain certain statements, which constitute "forward-looking statements" within the meaning of the Securities Act (Ontario) and applicable securities laws. For example, the statements "… continue to strengthen our relationship with MD Anderson and are pursuing opportunities for COTI-2 to make a difference in the treatment of other cancer indications beyond gynecological cancers" and "… continue to prepare our IND submission …" are forward-looking statements. Forward‐looking statements, by their nature, are not guarantees of future performance and are based upon management's current expectations, estimates, projections and assumptions. COTI operates in a highly competitive environment that involves significant risks and uncertainties, which could cause actual results to differ materially from those anticipated in these forward‐looking statements. Management of COTI considers the assumptions on which these forward‐looking statements are based to be reasonable, but as a result of the many risk factors, cautions the reader that actual results could differ materially from those expressed or implied in these forward-looking statements. Information in this press release should be considered accurate only as of the date of the release and may be superseded by more recent information disclosed in later press releases, filings with the securities regulatory authorities or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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