LONDON, ON and BOSTON, MA--(Marketwired - March 16, 2017) - Critical Outcome Technologies Inc. (TSX VENTURE: COT) (OTCQB: COTQF) ("COTI" or the "Company") reported its financial and operating results today for the three- and nine-month periods ended January 31, 2017. Major highlights for the quarter included:
- Commencing dosing of cohort 4 patients in the Phase 1 clinical trial of the Company's lead drug candidate, COTI-2. The trial is evaluating the safety and tolerability of COTI-2 in women with advanced gynecologic cancers who have failed conventional therapy;
- Completing regulatory requirements to initiate the two expansion cohorts in the ongoing COTI-2 trial. The expansion cohorts will include patients with recurrent ovarian cancer, and recurrent squamous cell head and neck cancer; dosing of patients is expected to begin in 2H 2017;
- Broadening the COTI-2 indication landscape with the initiation of activities for a p53 basket trial to include other cancers, potentially colorectal cancer, lung cancer, and pancreatic cancer; dosing of patients is expected to begin in 2H 2017;
- Executing COTI's succession plan with the appointment of Alison Silva as Chief Executive Officer and strengthening the Company's management team with internal hires.
"During the quarter, we continued to make excellent progress towards advancing our pipeline. We were pleased to begin dosing of the fourth cohort in the Phase 1 trial of our lead asset, COTI-2, intended for the treatment of gynecological cancer. We expect to begin dosing the fifth, sixth, and expansion cohorts later this year," said Alison Silva, President & CEO. "In 2017, we also expect to initiate new trials with COTI-2, and to file an investigational new drug ("IND") application for our second clinical candidate, COTI-219. We are excited for the catalyst-rich year ahead, and look forward to sharing the news in the coming months, as we continue to leverage our proprietary CHEMSAS® platform to drive our pipeline of innovative internally developed novel compounds into development for the treatment of serious diseases.
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 cancers.
The Company incurred a net loss of $1.2 million, or $0.01 per share, for the three months ended January 31, 2017 compared to a net loss of $0.6 million, or $0.01 per share, for the three months ended January 31, 2016. The increase in net loss is primarily due to an increase in Research and Development ("R&D") expense, and General and Administration ("G&A") expense, partially offset by an expense recovery related to the quarter-end revaluation of the Company's USD denominated warrant liability.
For the nine months ended January 31, 2017, the Company reported a net loss of $4.3 million or $0.03 per share, compared to a loss of $2.6 million or $0.02 per share for the same period in 2016. Increases in R&D expense and G&A expense for the nine months ended January 31, 2017 were responsible for the increase in net loss compared to the same periods in 2016. These increases were partially offset by a decrease in Sales and Marketing expense ("S&M") and an increase in Investment Tax Credit income ("ITC").
R&D expense in the three- and nine-month periods ended January 31, 2017 increased by $0.3 million and $1.0 million respectively over the same periods in 2016, primarily due to COTI-2 clinical trial costs. G&A expense in the three- and nine-month periods ended January 31, 2017 increased $0.8 million and $1.4 million respectively over the same periods in 2016, primarily due to compensation expenses related to changes in the senior management team. These expenses included transitional payments in respect of the leadership succession and reflect added managerial capacity.
S&M expense in the three- and nine-month periods ended January 31, 2017 decreased nominally compared to the same periods in 2016 due to the shift of business development and investor relations responsibilities from external consultants to internal personnel. ITC income in the three- and nine-month periods ended January 31, 2017 increased nominally and by $0.1 million respectively compared to the same periods in 2016 due to an increase in eligible R&D expenditures.
During the quarter, the Company realized approximately $0.1 million in net funding from the exercise of share options.
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- and nine-month periods ended January 31, 2017, which can be found on SEDAR at www.sedar.com or on the Company's website at www.criticaloutcome.com.
The Company announced today that it has strengthened its investor relations expertise with the engagement of two seasoned cross-border firms. Hybrid Financial Ltd. ("Hybrid"), based in Toronto, has been contracted to assist with retail investor relations support and outreach activities in Canada. Stern Investor Relations, Inc. ("Stern IR"), based in New York, will provide strategic advisory services, and support ongoing efforts to expand visibility within the North American investment community.
"We are pleased to be working with an exceptional team of investor relations professionals who have considerable expertise in the biotech industry," said Alison Silva. "We look forward to sharing the COTI story with a broader investment community as we approach significant value inflection points in the months ahead."
About Hybrid Financial Ltd. and Stern Investor Relations, Inc.
Hybrid was founded in 2011 by Steve Marshall and Alexandre Cote to provide retail-focused origination and distribution services to the investment management industry throughout North America. COTI engaged Hybrid for a three-month period to deepen the awareness of the Company among Canadian investment advisors and develop a broader following of interested parties.
Founded in 1998 by Lilian Stern, Stern IR is a premier investor relations firm that provides consulting services to entrepreneurial healthcare and biotech companies. Under the terms of the agreement, Stern IR will provide comprehensive investor relations services for an initial six-month term.
Neither Stern IR or Hybrid, or any of their directors and officers own any securities of COTI. These engagements are subject to final acceptance by the TSX Venture Exchange.
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, including ovarian, cervical, and endometrial cancers 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. The Company also plans to evaluate COTI-2 in additional oncology indications, including head and neck cancer, Li-Fraumeni Syndrome, and acute myelogenous leukemia. 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 by the end of calendar 2017.
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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 "We expect to begin dosing the fifth, sixth, and expansion cohorts later this year" and "… we also expect to initiate new trials with COTI-2, and to file an investigational new drug application ("IND") for our second clinical candidate, COTI-219" and "… as we approach significant value inflection points in the months ahead" 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.