Cynapsus Therapeutics Inc.
TSX VENTURE : CTH

Cynapsus Therapeutics Inc.

June 17, 2011 16:00 ET

Cynapsus Therapeutics Announces First Quarter 2011 Financial Results and Recent Developments

TORONTO, ONTARIO--(Marketwire - June 17, 2011) - Cynapsus Therapeutics Inc. (TSX VENTURE:CTH), a specialty pharmaceutical company developing an improved dosing formulation of an approved drug used to treat the symptoms of Parkinson's disease, today announced its results for the three months ended March 31, 2011. The first quarter of 2011 represents the Company's first reporting period under International Financial Reporting Standards (IFRS). Unless specified otherwise, all amounts are in Canadian dollars.

"In the first quarter our team continued to make significant progress on our lead drug candidate, APL 130277," said Anthony Giovinazzo, President and Chief Executive Officer of Cynapsus. "During the quarter we initiated additional formulation development work, prepared for our Pre-IND meeting with the US FDA, and continued to refine our plans for human clinical studies that are scheduled to begin later in the year. Finally, we made significant strides regarding a proposed acquisition of Adagio Pharmaceuticals, as well as a $10 million private placement financing, both of which were announced subsequent to quarter end, and are critical pieces of the ongoing development of the business."

Financial Highlights

  • Cash and cash equivalents at March 31, 2011 of $364,537 (December 31, 2010: $193,484).
  • Subsequent to quarter end, on May 26, 2011, the Company announced the completion of a debenture financing for net proceeds of $460,000.
  • Net loss of $603,701 for the three months ended March 31, 2011 (March 31, 2010: Net loss of $435,907).
  • Report 100,263,219 common shares outstanding at March 31, 2010 (December 31, 2010: 93,359,219).

Recent Developments

New Chairman of the Board:

On March 22, 2011, Cynapsus announced that Rochelle Stenzler was elected to the position of Chairperson. Ms. Stenzler replaced Mr. David Pattenden, who resigned as a director and Chairman for personal reasons. Ms. Stenzler has 25 years experience in the pharmaceutical/healthcare industry and has served on Cynapsus' Board since its formation on March 15, 2006. She has served as the President and/or Chief Executive Officer of Pharma Plus Drugmarts, Revlon Canada, TLC Laser Eye Centers and TouchLogic Corporation. Ms. Stenzler currently serves as a Director on the Humber River Regional Hospital Board and is a Board advisor to Patient Case Automation Services Inc. Ms. Stenzler is a graduate of the University of Toronto with a BSc.Phm and the Rotman School of Management, Institute of Corporate Directors, with an ICD.D.

Meeting with US Food and Drug Administration (FDA):

On April 20, 2011, subsequent to the quarter end, Cynapsus held a successful Pre-IND Meeting with the US FDA in Washington, D.C., to discuss preliminary clinical plans for APL 130277, an apomorphine thin film strip formulation for the rescue of patients experiencing "OFF" periods in Parkinson's disease. The outcome of the meeting was positive, and the Company expects to enter its first human clinical trials of APL 130277 in H2 2011.

Proposed Acquisition of Adagio Pharmaceuticals:

On April 26, 2011, subsequent to the quarter end, Cynapsus announced that it has entered into a preliminary agreement dated April 26, 2011 with Adagio Pharmaceuticals Ltd. providing for the acquisition by Cynapsus of all of the issued and outstanding shares of Adagio in a share exchange. The acquisition would supersede and replace the License Option Agreement dated July 22, 2010 entered into by Cynapsus and Adagio with respect to the intellectual property owned by Adagio concerning the world-wide APL-130277 patent rights and know-how.

Proposed $10 Million Private Placement Offering:

On May 25, 2011, subsequent to the quarter end, Cynapsus announced that it had signed a term sheet with a Health Care / Life Sciences focused Institutional Investment Group (the "Lead Investor") to be the lead investor in a private placement offering of $10 million of its common shares and warrants (the "Offering"). The Lead Investor and certain of the Lead Investor's limited partners will purchase $3.5 million of the Offering. Upon successful completion of a Phase 1 Milestone by March 31, 2012, an additional maximum $9.375 million may be received through the exercise of warrants, making the total potential gross proceeds of the Offering at $19.375 million. Under the term sheet, immediately prior to the closing, the Company will complete a 20:1 share consolidation, subject to TSX Venture Exchange and minority shareholder approval. The closing is scheduled to be completed on or around June 30, 2011. Summer Street Research Partners will act as the sole placement agent.

Results of Annual and Special Meeting of Shareholders:

On May 31, 2011, subsequent to the quarter end, Cynapsus announced the results of its Annual and Special Meeting of Shareholders held earlier in the day, on May 31, 2011. Of importance, and further to the press release of April 26, 2011, shareholders have approved the proposed acquisition of Adagio Pharmaceuticals Ltd. and the proposed share consolidation. These approvals are integral to the completion of the $10 million Private Placement described in the press release of May 25, 2011.

About Cynapsus Therapeutics

Cynapsus is a specialty pharmaceutical company developing an improved dosing formulation of an approved drug used to treat the symptoms of Parkinson's disease. Parkinson's disease is a chronic and progressive neurodegenerative disease that impacts motor activity, and its prevalence is increasing with the aging of the population. It is estimated that between 25 percent and 50 percent of patients experience "off episodes" in which they have impaired movement or speaking capabilities. Current medications only control the disease's symptoms, and most drugs become less effective over time as the disease progresses.

Cynapsus' lead drug candidate, APL-130277, is an easy-to-administer, fast-acting and oral reformulation of an approved drug, apomorphine, used to rescue patients from off episodes. Cynapsus is focused on rapidly maximizing the value of APL-130277 by completing pivotal studies in advance of a New Drug Application expected to be submitted in 2013 or 2014. The Company anticipates out-licensing to an appropriate pharmaceutical partner before such an application is submitted.

More information about Cynapsus (TSX VENTURE:CTH) is available at www.cynapsus.ca and at the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cynapsus to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks and uncertainties relating to Cynapsus' business disclosed under the heading "Risk Factors" in Cynapsus' current Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Although Cynapsus has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cynapsus does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

THE TSX VENTURE EXCHANGE INC. HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.

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