Critical Outcome Technologies Inc.
TSX VENTURE : COT
OTCQB : COTQF

Critical Outcome Technologies Inc.

September 29, 2017 17:57 ET

Critical Outcome Technologies Reports Fiscal 2018 First Quarter Financial and Operating Results

LONDON, ONTARIO and BOSTON, MASSACHUSETTS--(Marketwired - Sept. 29, 2017) - Critical Outcome Technologies Inc. (TSX VENTURE:COT)(OTCQB:COTQF) ("COTI" or the "Company") reported its financial and operating results today for the three-month period ended July 31, 2017. Recent highlights include:

Progressed the Phase 1 clinical trial of COTI-2:

  • In August 2017, COTI announced the completion of the in-patient dose escalation portion of its study in patients with gynecological malignancies, which showed that COTI-2 is generally safe and well-tolerated at doses up to 1.7 mg/kg;
  • Continued the analysis of the secondary and exploratory endpoints in the gynecological malignancies portion of the trial, with data expected to read-out by the end of 2017;
  • In August 2017, initiated Part B of its Phase 1 trial in patients with head and neck squamous cell carcinoma (HNSCC).

Secured additional funding:

  • In September 2017, COTI announced the close of the first tranche of a non-brokered private placement with accredited investors, for a raise of approximately $1.5 million CAD.

Broadened the leadership team:

  • In May 2017, COTI welcomed Dr. Richard Ho, M.D., Ph.D., as Chief Scientific Officer.

"We made considerable progress in our Phase 1 trial of COTI-2 this quarter, and were pleased to report preliminary clinical data, suggesting the drug is generally safe and well-tolerated at doses up to 1.7 mg/kg in women with advanced stage gynecological malignancies," said Alison Silva, President & CEO. "We are excited to expand the study to include patients with HNSCC at an initial dosing level of 1.0 mg/kg, and to report additional secondary and exploratory endpoint data in women with gynecological malignancies before year-end. Our current financing efforts are expected to support continued progression of the trial through the balance of the fiscal year."

Upcoming Milestones

COTI-2:

  • Additional secondary and exploratory endpoint data from the gynecological malignancies arm of the Phase 1 trial expected by year-end;
  • Top-line data from HNSCC expansion arm of the Phase 1 trial expected in 2018;
  • Initiation of additional trial arms evaluating COTI-2 as combination treatment in gynecological malignancies and HNSCC expected in 2018.

COTI-219:

  • Advancement of IND-enabling studies towards a planned IND filing with the FDA for Phase 1 study evaluating COTI-219 in multiple oncology indications in 2018.

Financial Results

The Company's operational activities during the quarter were primarily focused on advancing the Phase 1 clinical trial of COTI-2 for the treatment of gynecologic malignancies.

The Company incurred a net loss of $0.242 million, or $0.02 per share, for the three-months ended July 31, 2017, compared to a net loss of $2.315 million, or $0.16 per share, for the three-months ended July 31, 2016. The decrease in the net loss of approximately $2.073 million is primarily due to a non-cash gain on the fair value measurement of the warrant liability required at each reporting date. Operational expenses increased $0.185 million over the comparable quarter last year related to increases in Research and Development ("R&D") expense and General and Administration ("G&A") expense and a decrease in investment tax credit income earned.

R&D expense in the three-months ended July 31, 2017 increased by $0.052 million over the same period in 2016, primarily due to costs for salaries and benefits, and preclinical testing of the COTI-219 and other compounds. G&A expense in the three-months ended July 31, 2017 increased $0.127 million over the same period in 2016, primarily due to staffing increases and associated share-based compensation programs. ITC income decreased nominally by $0.022 million for the quarter due to a decrease in eligible R&D expenditures. S&M expense in the three-months ended July 31, 2017 decreased nominally by $0.018 compared to the same period in 2016 due to lower marketing and travel costs following the shift of business development responsibilities from external consultants to internal personnel.

Financing

The Company successfully executed its financing efforts during the quarter and subsequently closed the first tranche of a non-brokered private placement with accredited investors for approximately $1.5 million in gross proceeds on September 19, 2017. The final tranche is expected to close in early October. Also during the quarter, the Company completed a 10:1 consolidation of its issued and outstanding common shares in June 2017 to revise its capital structure in order to facilitate future financings.

Detailed operating and financial results can be found in the Company's Unaudited Condensed Interim Financial Statements and Management Discussion and Analysis for the three-month period ended July 31, 2017, 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 is a clinical stage biotech company that uses proprietary artificial intelligence technologies to pursue a targeted and transformational approach to treating cancer and other unmet medical needs. COTI's CHEMSAS® technology accelerates the discovery and development of novel drug therapies, allowing the Company to build a pipeline of potential drug candidates faster and with a higher probability of success than traditional methods.

The Company's lead compound, COTI‐2, has a novel p53‐dependent mechanism of action with selective and potent anti‐cancer activity. P53 mutations occur in over 50% of all cancers. COTI‐2 is initially being evaluated for the treatment of gynecologic cancers and head and neck squamous cell carcinoma in a Phase 1 clinical trial at the MD Anderson Cancer Center at the University of Texas and the Lurie Cancer Center at Northwestern University. The Company has secured orphan drug status in the United States for COTI‐2 for the treatment of ovarian cancer. Preclinical data suggests that COTI-2 could dramatically improve the treatment of cancers with mutations in the p53 gene.

The Company's second lead compound, COTI-219, is a novel oral small molecule compound targeting the mutant forms of KRAS without inhibiting normal KRAS function. KRAS mutations occur in up to 30% of all cancers and represent a tremendous unmet clinical need and a desirable drug target. COTI-219 is undergoing IND-enabling studies to support a regulatory submission in early 2018.

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

Neither the 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.

For more information, visit www.criticaloutcome.com.

Notice to Readers:

Information contained in this press release may contain certain statements which constitute "forward- looking statements" as such term is defined under applicable securities laws. For example, the statements, "…with data expected to read-out by the calendar year end of 2017" and "The final tranche is expected to close in early October" 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.

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