Mistral Pharma Inc.
TSX VENTURE : MIP

Mistral Pharma Inc.

November 23, 2007 10:43 ET

Mistral Pharma Announces its Financial Results for the Second Quarter Ended September 30, 2007

MONTREAL, QUEBEC--(Marketwire - Nov. 23, 2007) - Mistral Pharma Inc. (TSX VENTURE:MIP) (the "Corporation", "Mistral") announces today its financial results and review of operating highlights for the second quarter and for the six-month period ended September 30, 2007. "The highlights of Mistral's second quarter were the successful pilot clinical trial of our MIST-B03 product, the signing of a method use license for our MIST-B02 product and of course, the preparation for the launch of the recently approved Instillagel® by Health Canada ", said Bertrand Bolduc, the Corporation's President & CEO. "As planned, we had a successful product launch at the beginning of November 2007 "he added.

Highlights of the second quarter

During the second quarter, Mistral continued development work on its branded products MIST-B02 and MIST-B03, pursued formulation work on new branded products and prepared the launch of the Corporation's first commercial product Instillagel®. Mistral also announced the results of a pilot study showing that MIST-B03, which is designed using the CHRONOP™ technology, presents the expected pulse release profile for both active ingredients included in the formulation. Finally, Mistral licensed a method of use patent application from La Societe Theraprouve Inc., in relation to a new gastroenterology therapeutic indication for the drug included in Mistral's MIST-B02.

Results for the quarter ended September 30, 2007

The loss for the quarter was $ 788,392 ($0.00 per share) compared to $ 552,657 for the same period in the previous year ($0.00 per share). Research and development costs, net of tax credits, were $ 242,782 for the quarter compared to $ 122,686 for the quarter ended September 30, 2006. The increase is the result of an increase in wages and staffing as well as higher spending for subcontractors, material and rent.

For the quarter ended September 30, 2007, Administration expenses totaled $ 217,211 compared to $ 222,136 in 2006. The timing of certain legal, audit and consulting expenses explain the decrease for the quarter despite higher wages and higher rental and office expenses resulting from the move to the new location. Sales and business development expenses were $ 104,470 compared to $ 22,058 a year earlier. The acquisition of CuraMedica and higher expenses incurred to bring the product Instillagel® to market explain the increase. Stock based compensation was $ 70,382 for the quarter ended September 30, 2007 compared to $ 151,205 for the same period in the previous year. These amounts represent the expense portion of the grant of options made in the previous periods over the award's vesting period. Interest expense totaled $ 65,462 for the quarter ended September 30, 2007 compared to net interest revenue of $ (16,740) for the same quarter a year earlier. The higher amount of long term debt explains this increase. Also, Mistral generated higher interest revenues during the same quarter in the previous year because of higher liquidities. The gain on exchange was $ 50,489 for the quarter ended September 30, 2007 compared to a loss of $ 1,553 a year earlier because Mistral had more US denominated long term debt and because of the important appreciation of the Canadian dollar compared to the US dollar during the quarter ended September 30, 2007.

As at September 30, 2007, the Corporation had cash and cash equivalents of $ 1,679,341 compared to $ 3,400,576 as at September 30, 2006. The cash balance was higher last year because Mistral had just completed the last tranche of its $ 5 million Private Placement realized in May 2006. During the quarter ended September 30, 2007, the funds were used for operating activities including the preparation for the launch of Instillagel®, for the purchase of R&D equipment and for the normal repayment of long-term debt.

Results for the six-month period ended September 30, 2007

The loss for the six-month period ended September 30, 2007 was $ 1,584,493 ($0.01 per share) compared to $ 1,157,369 for the same period in the previous year ($0.01 per share). Research and development costs, net of tax credits, were $ 502,615 for the six-month period compared to $ 297,936 for the six-month period ended September 30, 2006. The increase is the result of an increase in wages and staffing as well as higher spending for subcontractors, material and rent.

For the six-month period ended September 30, 2007, administration expenses totaled $ 472,822 compared to $ 455,929 in 2006. The increase is the result of higher wages and higher rental and office expenses resulting from the move to the new location. Sales and business development expenses were $ 167,042 compared to $ 62,946 a year earlier. The acquisition of CuraMedica and higher expenses incurred to bring the product Instillagel® to market explain the increase. Stock based compensation was $ 159,767 for the six-month period ended September 30, 2007 compared to $ 291,265 for the same period in the previous year. These amounts represent the expense portion of the grant of options made in the previous periods over the award's vesting period. Stock-Based Compensation was higher in the previous year because new options had been granted in the period. Interest expense totaled $ 129,551 for the six-month period ended September 30, 2007 compared to net interest revenue of $ (22,869) for the same period a year earlier. As explained previously, the higher amount of long term debt explains this increase. Also, Mistral generated higher interest revenues in the previous year because of higher liquidities. The gain on exchange was $ 109,700 for the six-month period ended September 30, 2007 compared to a gain of $ 25,517 a year earlier because Mistral had more US denominated long term debt and because of the important appreciation of the Canadian dollar compared to the US dollar during the six-month period ended September 30, 2007.




Selected Financial Three months ended Six months ended
Information September 30th September 30th
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
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Expenses
Research and
development
costs 242,782 122,686 502,615 297,936
Administration 217,211 222,136 472,822 455,929
Sales & Business
development 104,470 22,058 167,042 62,946
Stock-based
compensation 70,382 151,205 159,767 291,265
Interest 65,462 (16,740) 129,551 (22,869)
Exchange loss (gain) (50,489) 1,553 (109,700) (25,517)
Amortization & other 138,574 49,759 262,396 97,679
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Net loss 788,392 552,657 1,584,493 1,157,369
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Deficit, beginning 13,998,175 11,252,468 13,185,539 9,459,019
Accounting change - - 12,800 -
Share issue costs - (24,956) 3,735 1,163,781
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Deficit, end 14,786,567 11,780,169 14,786,567 11,780,169
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Net loss per share
basic and diluted 0.00 0.00 0.01 0.01
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Weigthed average
number of common
shares outstanding 176,045,905 166,095,155 174,251,507 146,642,883



2007-09-30 2007-03-31
(Unaudited) (Audited)
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$ $
Assets
Cash and Cash equivalent 1,679,341 3,731,911
Receivable and other current assets 450,634 341,205
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2,129,975 4,073,116
Equipment 1,862,552 1,949,000
Deposit 199,260 230,580
Intangible and other assets 1,385,466 889,112
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5,577,253 7,141,808
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Liabilities
Accounts payable and accrued liabilities 159,665 128,680
Other current liabilities 338,664 320,920
Current portion of long term debt 754,245 899,808
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1,252,574 1,349,408
Long term debt 1,226,612 1,841,951
Shareholders' Equity
Share capital 14,507,981 13,910,936
Contributed surplus 3,376,653 3,225,052
Deficit (14,786,567) (13,185,539)
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3,098,067 3,950,449
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5,577,253 7,141,808
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About Mistral Pharma Inc.

Mistral Pharma Inc. is an innovative pharmaceutical company that is active in the reformulation and the commercialization of already-marketed drugs. Its branded drug delivery products, MIST-B01, MIST-B02 & MIST-B03, showed positive results at their respective first pilot clinical trials. Mistral also markets INSTILLAGEL® in Canada, a local anesthetic and antiseptic combination product used for urology procedures. Mistral has also in-licensed TAMALIS™ (Rupatadine) a new antihistamine and INSTILLAQUILL®, a single use extension tube used in gynecology which should be filed with Health Canada in 2008. Mistral positions itself as a development and marketing partner 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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