Mistral Pharma Inc.
TSX VENTURE : MIP

Mistral Pharma Inc.

February 23, 2007 11:50 ET

Mistral Pharma Announces its Financial Results for the Third Quarter Ended December 31, 2006

MONTREAL, QUEBEC--(CCNMatthews - Feb. 23, 2007) - Mistral Pharma Inc. (TSX VENTURE:MIP) (the "Corporation", "Mistral") announces today its financial results and review of operating highlights for the quarter ended December 31, 2006. "During the quarter, we closed a working capital loan of US $ 1.5 M from MMV Financing and actively pursued our product development activities as well as our discussions with strategic partners" said Mr. Bertrand Bolduc, the Corporation's President & CEO.

Results for the quarter ended December 31, 2006

The loss for the quarter was $781,344 ($0.00 per share) compared to $359,413 for the same period in 2005 ($0.01 per share). The higher loss for the third quarter of 2006 when compared to the loss of the corresponding quarter in 2005 is a result of higher R&D expenses and higher Stock-based compensation expenses. Also, Mistral had recognized milestone revenues in the amount of $128,249 in the same quarter in 2005 while none were recorded in the quarter ending December 31, 2006.

R&D expenses, net of tax credits were $ 304,550 for the quarter ending December 31, 2006 compared to $115,459 for the quarter ending December 31, 2005. Higher spending for subcontractors and consultants as well as higher material spending explain this increase. The stock-based compensation expense of $143,537 for the quarter compared to $90,078 for the same period a year earlier reflects the grant of options to employees in May 2006.

Administration and business development expenses totaled $222,293 for the third quarter of 2006 compared to $180,523 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. Net interest expenses were $35,685 for the quarter ending December 31, 2006 compared to $53,936 for the quarter ending December 31, 2005. Mistral generated higher interest revenues in the quarter from the funds raised at the beginning of the current fiscal year and from the working capital loan received in the quarter from MMV Financing Inc. ("MMV").

As at December 31, 2006, the Corporation had cash and cash equivalents of $4,253,128 compared to $523,848 as at December 31, 2005. This increase in cash and cash equivalents can be explained as follows: During the quarter ending December 31, 2006, Mistral entered into a working capital loan agreement in the amount of US $ 1,500,000 (Can $ 1,747,950) with MMV. In May 2006, Mistral completed the last tranche of its $5,000,000 private financing; 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 December 31, 2006, Mistral continued the development of its branded products, and purchased certain R&D equipment and leasehold improvements for its new facilities.

Results for the nine-month period ended December 31, 2006

The loss for the nine-month period ended December 31, 2006 was $1,938,713 ($0.01 per share) compared to $1,532,475 for the same period in 2005 ($0.03 per share). Mistral recorded a higher net loss during the nine-month period ending December 31, 2006 when compared to the same period in 2005 because Mistral had recognized milestone revenues of $378,249 in the nine-month period in 2005 while none were recorded in the nine-month period ending December 31, 2006. Total expenses for the nine-month period ended December 31, 2006 were $1,938,713 compared to $1,910,635 for the corresponding period in 2005 or an increase of 1%. R&D expenses, net of tax credits, were $602,486 compared to $837,848 for the same period in 2005. The GSK contract termination in the fall of 2005 was the main reason for this cost reduction. The stock-based compensation expense of $434,802 for the nine-month period ending December 31, 2006 compared to $242,472 for the same period a year earlier reflects the grant of options to employees and Directors during the nine-month period in 2006.

Administration and business development expenses for the nine-month period ended December 31, 2006 totaled $741,168 compared to $655,829 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. Net financial expenses were $12,816 for the nine-month period ending on December 31, 2006 compared to expenses of $117,286 for the same period in 2005, reflecting the higher interest revenues generated from the funds raised at the beginning of the current fiscal year and through the addition of a working capital loan of US $ 1,500,000 (Can $ 1,747,950) with MMV in October 2006.



Selected Financial Information

Three months ended Nine months ended
December 31th December 31th
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------------------------------------------------------------------
$ $ $ $
Revenues - 128,249 - 378,249
Expenses
Research and
development costs 304,550 115,459 602,486 837,848
Administration 192,395 161,411 648,324 596,214
Business development 29,898 19,112 92,844 59,615
Stock-based compensation 143,537 90,078 434,802 242,472
Interest 35,685 53,936 12,816 117,286
Exchange loss (gain) 23,922 1,067 (1,595) (64,450)
Amortization & other 51,357 46,599 149,036 121,650
----------------------------------------------------------------------
781,344 487,662 1,938,713 1,910,635
----------------------------------------------------------------------
Net loss 781,344 359,413 1,938,713 1,532,386
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----------------------------------------------------------------------
Deficit, beginning 11,780,169 8,592,710 9,459,019 6,642,193
Share issue costs - - 1,163,781 777,544
----------------------------------------------------------------------
Deficit, end 12,561,513 8,952,123 12,561,513 8,952,123
----------------------------------------------------------------------
----------------------------------------------------------------------
Net loss per share
basic and diluted 0.00 0.01 0.01 0.03
----------------------------------------------------------------------
----------------------------------------------------------------------
Weigthed average
number of common
shares outstanding 166,095,155 54,595,155 153,150,553 52,619,307



2006-12-31 2006-03-31
(Unaudited) (Audited)
----------------------------------------------------------------------
$ $
Assets
Cash and Cash equivalent 4,253,128 966,552
Receivable and other current assets 393,940 162,451
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4,647,068 1,129,003
Equipment 1,626,854 1,383,307
Deposit 233,060 233,420
Intangible and other assets 902,763 850,397
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7,409,745 3,596,127
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----------------------------------------------------------------------
Liabilities
Accounts payable and accrued liabilities 342,706 291,115
Other current liabilities - 135,000
Current portion of long term debt 810,094 434,783
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1,152,800 860,898
Long term debt 1,833,671 813,101
Shareholders' Equity
Equity component of long-term debt 59,012 -
Share capital 14,449,863 9,949,863
Contributed surplus 2,475,912 1,431,284
Deficit (12,561,513) (9,459,019)
----------------------------------------------------------------------
4,423,274 1,922,128
----------------------------------------------------------------------
7,409,745 3,596,127
----------------------------------------------------------------------
----------------------------------------------------------------------


About Mistral Pharma Inc.

Mistral Pharma is an innovative pharmaceutical product development and drug delivery company and its first two branded products, MIST-B01 & B02, showed positive results at their respective first pilot clinical trials. Mistral is also working on other control-delivery branded products. Mistral positions itself as a development partner for 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.

Contact Information

  • Mistral Pharma Inc.
    Bertrand F. Bolduc, B.Pharm., MBA
    President and Chief Executive Officer
    514-421-1717 Ext. 2224
    bbolduc@mistralpharma.com
    or
    Mistral Pharma Inc.
    Alain Provencher, CA, CF
    Vice-President and Chief Financial Officer
    514-421-1717 Ext. 2222
    aprovencher@mistralpharma.com