Mistral Pharma Inc.
TSX VENTURE : MIP

Mistral Pharma Inc.

June 14, 2007 14:24 ET

Mistral Pharma Announces its Financial Results for the Year Ended March 31, 2007

MONTREAL, QUEBEC--(Marketwire - June 14, 2007) - Mistral Pharma Inc. (TSX VENTURE:MIP) (the "Corporation", "Mistral") announces today its financial results and review of operating highlights for the year ended March 31, 2007. "The highlights of Mistral's second year as a publicly traded company were the successful pilot clinical trial of its MIST-B02 product, the realization of the successful private placement of $5 million that closed in May 2006 and the closing of a working capital loan of US $ 1.5 million with MMV Financial Inc. in the fall of 2006," said Mr. Bertrand Bolduc, the Corporation's President & CEO. "These achievements, combined with the recent acquisition of CuraMedica (Canada) Inc., the approval of Instillagel® by Health Canada and the announcement that we have entered into exclusive discussions with a strategic partner for the co-development and commercialization of MIST-B01 for the US market, demonstrate our commitment to becoming an important development and marketing partner for pharmaceutical companies," he added.

Highlights of the fourth quarter

During the fourth quarter, Mistral moved its operations to its new facilities, continued development work on its branded products MIST-B02 and MIST-B03, initiated development work on new branded products and completed its due diligence work for the acquisition of CuraMedica. In addition, Mistral entered into exclusive discussions with a strategic partner for the co-development and commercialization of MIST-B01 for the US market.

Results for the year ended March 31, 2007

The loss for the year was $2,562,739 ($0.02 per share) compared to $1,926,188 for the same period in the previous year ($0.03 per share). There were no revenues in the fiscal year ended March 31, 2007 while revenues of $378,249 were recognized during the previous year following the termination of the contract with ratiopharm Inc. Stock-based compensation expense was $584,903 for the year compared to $332,550 for the same period a year earlier, an increase of $252,353. This increase relates to the expense portion of the value of the 8,825,000 options granted to employees and Board members during the year ended March 31, 2007. Research and development costs, net of tax credits, were $687,377 for the year compared to $870,197 for the year ended March 31, 2006. Despite increases in staffing and wages during the year, the decrease for the year ended March 31, 2007 is a result of the reduction in fees paid to subcontractors following the termination of the development agreement with GlaxoSmithKline ("GSK") in the fall of 2005.

For the year ended March 31, 2007, Administration and Business Development expenses totaled $1,018,380 compared to $864,342 in 2006. The increase is the result of higher expenses for consultants, marketing and promotional material as well as for professional and legal fees relating to Mistral's regulatory obligations. Net financial expenses totaled $66,987 for the year ended March 31, 2007 compared to $132,311 for the previous year. Despite a higher level of long term debt, higher interest revenues were generated during the year from the outstanding cash balance. The gain on exchange was only $9,748 for the year ended March 31, 2007 compared to $63,393 a year earlier because the appreciation of the Canadian dollar compared to the US dollar on the US denominated long term debt was only marginal for the year ended March 31, 2007.

As at March 31, 2007, the Corporation had cash and cash equivalents of $ 3,731,911 compared to $966,552 as at March 31, 2006. This increase in liquidity is a result of the completion of the $5 million Private Placement realized in May 2006 and the addition of a working venture loan of US $1.5 million (Can $ 1,729,350) in the fall of 2006. During the year ended March 31, 2007, the funds were used for operating activities, for the purchase of R&D equipment and for leasehold improvements to the new facilities.

Results for the three-month period ended March 31, 2007

The loss for the quarter was $624,026 ($0.00 per share) compared to $393,802, for the same period in 2006 ($0.01 per share). The higher loss for the quarter compared to the previous year can be explained as follows: Research & Development expenses were higher because of increased staffing and higher wages, as well as increased spending for subcontractors. Administrative and Business Development expenses were higher because of increased wages and professional and legal fees relating to Mistral's regulatory obligations. The reasons for higher stock-based compensation are the same as the reasons given for the annual increase. The increase in interest and financial expenses reflects the higher amount of long term debt following the addition of the working capital loan from MMV in the amount of US $1,500,000 (Can $ 1,729,350) in October 2006.



Selected Financial Information
Three months ended Year ended
March 31th March 31th
2007 2006 2007 2006
(Unaudited) (Unaudited) (Audited) (Audited)
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$ $ $ $
Revenues - - - 378,249
Expenses
Research and development
costs 84,891 32,349 687,377 870,197
Administration 234,834 186,341 883,158 782,555
Business development 42,378 22,172 135,222 81,787
Stock-based compensation 150,101 90,078 584,903 332,550
Interest & others 54,171 15,025 66,987 132,311
Exchange loss (gain) (8,153) 1,057 (9,748) (63,393)
Amortization 65,804 46,780 214,840 168,430
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624,026 393,802 2,562,739 2,304,437
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Net loss 624,026 393,802 2,562,739 1,926,188
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Deficit, beginning 12,561,513 8,952,123 9,459,019 6,642,193
Share issue costs - 113,094 1,163,781 890,638
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Deficit, end 13,185,539 9,459,019 13,185,539 9,459,019
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Net loss per share basic
and diluted 0.00 0.01 0.02 0.03
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Weigthed average number
of common
shares outstanding 166,095,155 56,633,514 156,342,373 55,144,860


2007-03-31 2006-03-31
(Audited) (Audited)
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$ $
Assets
Cash and Cash equivalent 3,731,911 966,552
Receivable and other current assets 341,205 162,451
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4,073,116 1,129,003
Equipment 1,949,000 1,383,307
Deposit 230,580 233,420
Intangible and other assets 889,112 850,397
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7,141,808 3,596,127
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Liabilites
Bank financing 128,680 -
Accounts payable and accrued liabilities 320,920 291,115
Other current liabilities - 135,000
Current portion of long term debt 899,808 434,783
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1,349,408 860,898
Long term debt 1,841,951 813,101
Shareholders' Equity
Share capital 14,449,863 9,949,863
Contributed surplus 2,686,125 1,431,284
Deficit (13,185,539) (9,459,019)
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3,950,449 1,922,128
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7,141,808 3,596,127
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About Mistral Pharma Inc.

Mistral Pharma is an innovative pharmaceutical product development and drug delivery company. Its first two branded drug delivery products, MIST-B01 & MIST-B02, showed positive results at their respective first pilot clinical trials. Mistral also has the Canadian rights to Instillagel®, a local anesthetic and antiseptic combination product used for urology procedures which is expected to be launched in Canada during Q4 2007. Mistral positions itself as a development and marketing partner in Canada for pharmaceutical companies.

Forward-looking Statements

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Mistral Pharma. These statements are based on assumptions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for Mistral Pharma's products, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

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