Protox Therapeutics Inc.
TSX VENTURE : PRX

Protox Therapeutics Inc.

May 29, 2006 09:15 ET

Protox Releases Q1, 2006 Financial Statements; Prostate Cancer Trial on Track

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 29, 2006) - Protox Therapeutics Inc. (TSX VENTURE:PRX) announced today the release of its financial statements for the three months ending March 31, 2006 and provided an update on company progress.

Operational Highlights

- Following approval by the United States Food and Drug Administration (FDA) in the first quarter to begin clinical trials using PRX302 for the treatment of localized recurrent prostate cancer, the first patient was treated on May 2, 2006.

- Preclinical data was presented at the American Association of Cancer Research (AACR) meeting in April which demonstrated the validity of PRX302 as a treatment for prostate cancer and benign prostatic hyperplasia (BPH).

"We are pleased with the progress of the prostate cancer trial and are on track to complete patient recruitment by year end," stated Dr. Fahar Merchant, President and CEO. "Simultaneously, we are adding considerable value to PRX302 by pursuing the BPH indication, which represents another significant market opportunity."

Financial Statements

Results of operations for the three months ended March 31, 2006.

For the three months ending March 31, 2006 the Company reported a net loss of $854,824 ($0.02 per share) compared to a net loss of $982,913 ($0.04 per share) for the same period last year. The Company earned $33,783 in interest income for the three months ending March 31, 2006 compared with $22,178 in the first quarter of 2005.

For the quarter ended March 31, 2006, the Company incurred expenses related to research and development of $421,977, compared to $687,347 for the quarter ending March 31, 2005. The majority of the research and development expenditures in the first quarter of 2006 were related to the preparation for the Phase I clinical trials to treat localized, recurrent prostate cancer with PRX302. The research and development expenditures incurred during the same period last year were primarily related to the preclinical animal studies and GMP manufacturing of PRX302. The research expenditures for the three months ended March 31, 2006 were also offset by $113,335 of IRAP funding claimed during the quarter.

The Company incurred general and administrative expenses of $420,019 for the quarter ending March 31, 2006 compared to $235,979 for the same period last year. The increase in general and administrative expenses is primarily due to the change in management in 2005 and additional employees hired to support the Company's programs and business development activities.

The Company does not anticipate earning any revenue in the foreseeable future, other than interest revenue earned on invested funds. In addition, research expenses are expected to increase over the coming quarters as the Company proceeds with the clinical trials for prostate cancer, preparation of the BPH program for clinical trials and key activities associated with the Company's research programs.

Summary of Quarterly Results



Three months Three months Three months Three months
ended ended ended ended
March 31, December 31, September 30, June 30,
2006 2005 2005 2005
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Interest
income $ 33,783 $ 15,079 $ 8,895 $ 16,182
Total
expenses $ 887,020 $ 1,582,563 $ 1,455,246 $ 1,562,306
Net loss $ (854,824) $ (1,570,622) $ (1,447,035) $ (1,548,762)
Net loss
per share $ (0.02) $ (0.05) $ (0.06) $ (0.07)

Three months Three months Three months Three months
ended ended ended ended
March 31, December 31, September 30, June 30,
2005 2004 2004 2004
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Interest
income $ 22,178 $ 14,150 $ 9,757 $ 6,427
Total
expenses $ 1,003,506 $ 1,485,918 $ 748,719 $ 435,351
Net loss $ (982,913) $ (1,471,768) $ (738,962) $ (428,924)
Net loss
per share $ (0.04) $ (0.06) $ (0.03) $ (0.03)


Liquidity and capital resources

As at March 31, 2006, the Company had cash and cash equivalents of $4,793,964 as compared with $5,471,804 as at December 31, 2005. As at March 31, 2006, the Company had working capital of $4,615,094 compared with $5,166,583 as at December 31, 2005 and $3,455,528 as at March 31, 2005. The increase in current assets compared with March 31, 2005 can predominantly be attributed to the non-brokered private placement of $5,619,915, net of cash costs of $251,885, completed in November 2005.

Based on its working capital position as at March 31, 2006, the proceeds received from the private placement financing in November, 2005, and its current business plan, the Company anticipates that it will have sufficient funds to operate its business into Q2, 2007. However, the Company's working capital may not be sufficient to meet its stated business objectives in the event of unforeseen circumstances or a change in the strategic direction of the Company. The Company will need to raise further capital in order to advance its research & development programs to commercialization. There can be no assurance that the Company will be able to obtain further financing on terms that are acceptable, if at all.

About Protox Therapeutics

Protox Therapeutics is a product-focused development-stage company and a leader in advancing novel, targeted protein toxin therapeutics for treatment of cancer and other diseases. Through the company's PORxin™ technology platform, therapeutic candidates are generated by engineering the naturally occurring protein, proaerolysin. These proteins become potent anti-cancer agents when activated at a tumor site by specific proteases produced by cancer cells. Once activated, the drug punches holes in the cancer cells causing the contents to leak out and ultimately, cell death. Protox is in Phase I clinical trial with the lead compound, PRX302, for the treatment of localized prostate cancer. PRX302 is also being developed for treatment of benign prostatic hyperplasia.

This press release contains certain forward-looking statements respecting the Company's business, capital, research and development, and potential future products, which statements can be identified by the use of forward-looking terminology, such as "expect", "to generate", "moving forward", "intends", "committed to", "moving", "developing", "believe" or the negative thereof or any other variations thereon or, or that events or conditions "will", "can", "to", "may", "could" or "should" occur, or comparable terminology referring to future events or results. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including, without limitation, the need for extensive additional research and development, which is costly and time-consuming and may not produce anticipated or useful results; scientific research and development risks; the risk of technical obsolescence; intellectual property risks; manufacturing and marketing risks; partnership/strategic alliance risks; the effect of competition; the need for regulatory approvals, including without limitation, FDA approvals, which is not assured; product liability and insurance risks; the need for future human clinical trials, the occurrence and success of which is not assured; changes in business strategy or development plans; and the need for additional capital, which may not be obtained; and the fact that the Company may not produce any products or if it does, that such products may not be commercially successful; any of which could cause actual results to vary materially from current results or the Company's anticipated future results. See the Company's prospectus and other documents filed with the TSX Venture Exchange and the Canadian Securities Administrators at www.sedar.com from time to time for a further discussion of these and other important risks and uncertainties that could cause actual results to differ materially from results referred to in forward-looking statements. The Company assumes no obligation to update the information contained in this press release.

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

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