Stellar Pharmaceuticals Inc.
TSX VENTURE : SLX
OTC Bulletin Board : SLXCF

Stellar Pharmaceuticals Inc.

May 15, 2008 07:30 ET

Stellar Pharmaceuticals Inc. Announces Revenue Increased by 25.7% Gross Profits up by 50.9%

LONDON, ONTARIO--(Marketwire - May 15, 2008) - Stellar Pharmaceuticals Inc. ("Stellar" or the "Company") (TSX VENTURE:SLX)(OTCBB:SLXCF) announced that for the three month period ended March 31, 2008, total operating revenues improved by 25.7%. This improvement was driven by increased international sales for NeoVisc, while cost of products sold for the period improved to 24.3% of product sales compared to 31.4% of product sales in the same period in 2007. The reduction in cost of products sold was a result of a decrease in the cost of materials used in the manufacturing process, as well as healthier production yields. These positive operating changes resulted in a gross profit increase of 50.9% over the same period in 2007.

Increased sales revenue was mainly a result of the growth in international sales of NeoVisc, which grew by 103.3%, as Stellar's new European partners increased their market penetration. While Canadian sales for the quarter decreased 9.5% compared to the same period in 2007 (due to price increases, which generated a buy-in of NeoVisc and Uracyst, in February 2007), BladderChek sales were up over 604% compared to the first quarter of 2007.

During the quarter the Company also received interim results of a 50 patient Canadian, community based, clinical trial with Uracyst, which showed positive results. The Company anticipates these results to be formally published or presented by the fourth quarter of this year and although there can be no assurance, the Company believes this will have a positive impact on Uracyst sales in all sectors.

Peter Riehl, Stellar's President and CEO stated, "We are very pleased with our progress in this quarter and believe these improvements should continue to occur for the balance of the year. The Company is moving forward to execute on its strategy to improve the top line and believes it is in a more positive position in its move to a profitable status for 2008."

As at March 31, 2008, the Company was debt free and had working capital of $3,852,700 of which $3,014,100 was in cash.

ABOUT STELLAR PHARMACEUTICALS INC.

Stellar has developed and is marketing direct in Canada and in countries around the world through out-license agreements two products based on its core polysaccharide technology: NeoVisc®, for the treatment of osteoarthritis; and Uracyst® and the Uracyst® Test Kit, its patented technology for the diagnosis and treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreements for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.



STELLAR PHARMACEUTICALS INC.

CONDENSED BALANCE SHEETS
(Expressed in Canadian Dollars)

ASSETS

As at As at
March 31, 2008 December 31, 2007
-----------------------------------
CURRENT (Unaudited) (Audited)

Cash and cash equivalents $ 3,014,128 $ 3,211,126
Accounts receivable, net of allowance
$nil (2007 - $nil) 298,455 272,341
Inventories 328,280 305,040
Taxes recoverable 164,714 164,714
Prepaid, deposits and sundry
receivables 50,743 44,066
-----------------------------------
3,856,320 3,997,287
PROPERTY, PLANT AND EQUIPMENT 808,554 822,692
OTHER ASSETS 61,154 55,430
LOAN RECEIVABLE 14,822 14,822
-----------------------------------
$ 4,740,850 $ 4,890,231
-----------------------------------
-----------------------------------

LIABILITIES

CURRENT
Accounts payable $ 230,649 $ 214,442
Accrued liabilities 122,102 192,364
Deferred revenues 8,475 10,573
-----------------------------------
361,226 417,379
-----------------------------------

CONTINGENCIES AND COMMITMENTS

SHAREHOLDERS' EQUITY

CAPITAL STOCK
AUTHORIZED

Unlimited Non-voting, convertible,
redeemable, and retractable
preferred shares with no par
value
Unlimited Common shares with no par value

ISSUED
23,822,540 Common shares
(2007 - 23,822,540) 8,303,054 8,303,054
Additional paid-in capital-
options - outstanding 128,591 123,002
- expired 623,417 623,417
-----------------------------------
9,055,062 9,049,473
DEFICIT (4,675,438) (4,576,621)
-----------------------------------
4,379,624 4,472,852
-----------------------------------
$ 4,740,850 $ 4,890,231
-----------------------------------
-----------------------------------


STELLAR PHARMACEUTICALS INC.

CONDENSED INTERIM STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS AND DEFICIT
(Expressed in Canadian Dollars)

(Unaudited)

For the Three Month Period
Ended March 31
2008 2007
-----------------------------------

PRODUCT SALES $ 329,456 $ 328,931
COST OF PRODUCTS SOLD (excluding
amortization of $17,216
(2007- $27,586)) 80,111 103,132
-----------------------------------
MARGIN ON PRODUCTS SOLD 249,345 225,799
ROYALTY AND LICENSING REVENUES 197,956 90,765
WRITE-DOWN OF OBSOLETE INVENTORY - (20,145)
-----------------------------------
GROSS PROFIT 447,301 296,419
-----------------------------------

EXPENSES
Selling, general and administrative 490,991 512,784
Research and development 53,818 38,612
Amortization 30,383 40,442
-----------------------------------
575,192 591,838
-----------------------------------
LOSS FROM OPERATIONS (127,891) (295,419)
INTEREST AND OTHER INCOME 29,074 34,029
-----------------------------------
NET LOSS AND COMPREHENSIVE LOSS FOR
THE PERIOD (98,817) (261,390)
DEFICIT, beginning of period (4,576,621) (4,429,180)
-----------------------------------
DEFICIT, end of period $ (4,675,438) $ (4,690,570)
-----------------------------------
-----------------------------------

LOSS PER SHARE $ 0.00 $ (0.01)

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 23,822,540 23,819,040
-----------------------------------
-----------------------------------


STELLAR PHARMACEUTICALS INC.

STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)

(Unaudited)

For the Three Month Period
Ended March 31
2008 2007
-----------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (98,817) $ (261,390)
Items not affecting cash
Amortization 30,383 40,442
Unrealized foreign exchange (gain) loss (13,150) 1,082
Issuance of equity instruments for
services rendered 5,589 2,749
Change in non-cash operating assets and
liabilities (112,184) (128,326)
-----------------------------------

CASH FLOWS USED IN OPERATING ACTIVITIES (188,179) (345,443)

CASH FLOWS INVESTING ACTIVITIES
Additions to property, plant and equipment (15,906) (1,087)
Increase in other assets (6,063) -
-----------------------------------

CASH FLOWS USED IN INVESTING ACTIVITIES (21,969) (1,087)

EFFECT OF EXCHANGE RATES ON CASH HELD IN
FOREIGN CURRENCY 13,150 (1,082)
CHANGE IN CASH AND CASH EQUIVALENTS (196,998) (347,612)
CASH AND CASH EQUIVALENTS, beginning of
period 3,211,126 3,515,193
-----------------------------------
CASH AND CASH EQUIVALENTS, end of period $ 3,014,128 $ 3,167,581
-----------------------------------
-----------------------------------


This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.

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

Contact Information

  • Stellar Pharmaceuticals Inc.
    Peter Riehl
    1-800-639-0643 or (519) 434-1540
    or
    Stellar Pharmaceuticals Inc.
    Arnold Tenney
    (416) 587-3200