Mistral Pharma Inc.
TSX VENTURE : MIP

Mistral Pharma Inc.

November 24, 2006 11:23 ET

Mistral Pharma Announces its Financial Results for the Second Quarter Ended September 30, 2006

MONTREAL, QUEBEC--(CCNMatthews - Nov. 24, 2006) - Mistral Pharma Inc. (TSX VENTURE:MIP)(the "Corporation", "Mistral") announces today its financial results and review of operating highlights for the quarter ended September 30, 2006. "We are pursuing the development of our products and our good financial position allows us to envision new projects" said Mr. Bertrand Bolduc, the Corporation's President & CEO.

Results for the quarter ended September 30, 2006

The loss for the quarter was $552,657 ($0.00 per share) compared to $467,250 for the same period in 2005 ($0.01 per share). While total expenses for the second quarter of 2006 were lower than those of the corresponding quarter, Mistral had recognized milestone revenues in the same quarter in 2005 which explains the higher loss for the second quarter of 2006. The positive impact of the GSK contract termination realized in the fall of 2005 continues to help the Corporation's performance as R&D expenses, net of tax credits, were $122,686 compared to $384,832 for 2005, a decrease of 68%. The stock-based compensation expense of $151,205 for the quarter compared to $101,199 for the same period a year earlier reflects the grant of options to employees in May 2006.

Administration and business development expenses totaled $244,194 for the second quarter of 2006 compared to $192,271 for the same quarter in 2005. The higher expenses in the current quarter reflect the higher expenses incurred for consultants as well as for professional and legal fees relating to Mistral's regulatory obligations as a publicly traded company. Mistral earned net interest revenues again this quarter totaling $16,740 compared to a net interest expense of $35,320 for the same quarter of 2005, reflecting the higher interest revenues generated from the funds raised at the beginning of the current fiscal year, as well as the lower level of indebtedness.

As at September 30, 2006, the Corporation had cash and cash equivalents of $3,400,576 compared to $910,783 as at September 30, 2005. Mistral completed the last tranche of its $5,000,000 private financing in May 2006; issuing 90,000,000 shares at $0.05 per share for a total consideration of $4,500,000. This financing brought in a net proceed of $3,939,017 after deducting the share issuance expenses of $560,983. During the three-month period ending September 30, 2006, Mistral continued the development of its branded products, and purchased certain R&D equipment.

Results for the six-month period ended September 30, 2006

The loss for the six-month period ended September 30, 2006 was $1,157,419 ($0.01 per share) compared to $1,172,973 for the same period in 2005 ($0.02 per share). R&D expenses, net of tax credits, were $297,936 compared to $722,389 for the same period in 2005. As mentioned above, the GSK contract termination in the fall of 2005 was the main reason for this cost reduction. As was the case for the quarter, total expenses for the six-month period ended September 30, 2006 were lower than those of the corresponding period in 2005. However, the reduction in the net loss for the current period is smaller than the decrease in expenses mentioned above because Mistral had recognized milestone revenues in the same period in 2005. The stock-based compensation expense of $291,265 for the six-month period ending September 30th 2006 compared to $152,394 for the same period a year earlier reflects the grant of options to employees in May 2006.

Administration and business development expenses for the six-month period ended September 30, 2006 totaled $518,875 compared to $475,306 for the same period in 2005. The higher expenses in the current period reflect the higher expenses incurred for consultants as well as for professional and legal fees relating to Mistral's regulatory obligations as a publicly traded company. Financial revenues, net of financial expenses, were $22,819 for the 6-month period ending on September 30th, 2006 compared to expenses of $63,351 for the same period in 2005, reflecting the higher interest revenues generated from the funds raised at the beginning of the current fiscal year as well as the lower level of indebtedness compared to the same period in the previous year.



Selected Financial Three months ended Six months ended
Information Sept 30th Sept 30th
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
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$ $ $ $
Revenues - 250,000 - 250,000
Expenses
Research and
development costs 122,686 384,832 297,936 722,389
Administration 222,136 173,980 455,929 434,803
Business development 22,058 18,291 62,946 40,503
Stock-based
compensation 151,205 101,199 291,265 152,394
Interest (16,740) 35,323 (22,869) 63,351
Exchange loss (gain) 1,553 (36,560) (25,517) (65,517)
Amortization & other 49,759 40,185 97,679 75,050
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Net loss 552,657 467,250 1,157,369 1,172,973
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Deficit, beginning 11,252,468 8,125,460 9,459,019 6,642,193
Share issue costs (24,956) - 1,163,781 777,544
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Deficit, end 11,780,169 8,592,710 11,780,169 8,592,710
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Net loss per share
basic and diluted 0.00 0.01 0.01 0.02
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Weigthed average
number of common
shares outstanding 166,095,155 54,595,155 146,642,883 51,609,670

Sept. 30, March 30,
2006 2006
(Unaudited) (Audited)
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$ $

Assets
Cash and Cash equivalent 3,400,576 966,552
Receivable and other current assets 349,110 162,451
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3,749,686 1,129,003
Equipment 1,492,558 1,383,307
Deposit 223,060 233,420
Intangible and other assets 850,192 850,397
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6,315,496 3,596,127
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Liabilites
Accounts payable and accrued liabilities 299,813 291,115
Other current liabilities - 135,000
Current portion of long term debt 434,050 434,783
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733,863 860,898
Long term debt 586,591 813,101
Shareholders' Equity
Share capital 14,449,863 9,949,863
Contributed surplus 2,325,348 1,431,284
Deficit (11,780,169) (9,459,019)
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4,995,042 1,922,128
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6,315,496 3,596,127
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About Mistral Pharma Inc.

Mistral Pharma is a pharmaceutical product development and drug delivery company and its first branded product, MIST-B01, showed positive results at its first pilot clinical trial. Mistral is also working on two other control-delivery branded products. Mistral positions itself as a development partner for specialty pharmaceutical companies. Additional information about Mistral Pharma can be obtained on Mistral Pharma's website at www.mistralpharma.com

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, results from clinical studies and regulatory approval process as well as 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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