Stellar Pharmaceuticals Inc.
OTC Bulletin Board : SLXCF

Stellar Pharmaceuticals Inc.

November 09, 2010 11:12 ET

Stellar Pharmaceuticals Reports Third Quarter 2010 Financial Results

LONDON, ONTARIO--(Marketwire - Nov. 9, 2010) - Stellar Pharmaceuticals Inc. (OTCBB:SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the quarter ended September 30, 2010. In this press release, all dollar amounts are expressed in Canadian currency rounded to the nearest hundredth. These results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).

For the three-month period ended September 30, 2010, Stellar's total revenues from all sources were $2,236,900 as compared to $826,900 in the same period in 2009. The Company noted that total revenues in for the third quarter of 2010, were positively impacted by a milestone payment from Watson Pharma, Inc. of $1,345,200 related to the issuance of the Company's Uracyst® high-dose patent in the United States. With respect to product sales, the Company experienced solid growth for all products in the Canadian market as well as strong growth for Uracyst® in international markets. International NeoVisc® sales, however, declined primarily as a result of a negative economic situation in Eastern Europe. Stellar's net profit for the three-month period ended September 30, 2010 was $1,380,800. This result compares to a profit of $25,900 that was generated in the same period in 2009.

Stellar ended the quarter in a strong financial position, with no debt and working capital of $4,599,100. This amount does not include the gross proceeds of US$1,000,000 from a non-brokered private placement of 1,000,000 Units of the Company that was completed in October 2010. Each unit consists of one Common Share and warrants to purchase up to 1,500,000 additional Common Shares.

Peter Riehl, Stellar's President and Chief Executive Officer, commented, "We entered 2010 with a strong focus on building Canadian sales and expanding global partnerships for our two lead products, Uracyst® and NeoVisc®. By virtually any measure that focus has delivered improved operating performance over the previous year. Now, as we move through the fourth quarter, we will continue to execute our growth strategy while carefully managing our expenses."

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®, its patented technology for treatment of interstitial cystitis/painful bladder syndrome, an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreement for the distribution and sale of NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer. For more information, please visit the company's website at www.stellarpharma.com.

Forward-Looking Statements

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.

STELLAR PHARMACEUTICALS INC.

BALANCE SHEETS

(Expressed in Canadian dollars)

      As at September 30, 2010   As at December 31, 2009
      (Unaudited)    
  ASSETS        
CURRENT          
Cash and cash equivalents $ 3,274,412 $ 2,325,212
Accounts receivable, net of allowance of $nil (2009 - $nil)   608,513   293,565
Inventories   799,825   721,061
Taxes recoverable   5,998   1,501
Loan receivable   15,814   15,818
Prepaids, deposits and sundry receivables   125,000   163,698
  Total current assets   4,829,562   3,520,855
PROPERTY, PLANT AND EQUIPMENT, net   1,574,899   1,390,296
OTHER ASSETS   129,999   114,553
  Total assets $ 6,534,460 $ 5,025,704
LIABILITIES        
CURRENT          
Accounts payable $ 134,847 $ 228,367
Accrued liabilities   91,173   175,637
Deferred revenues   4,473   2,890
         
  Total current liabilities   230,493   406,894
         
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          
23,585,040   Common shares (December 31, 2009 – 23,480,040)    8,291,429    8,183,638
  Additional Paid-in capital options - outstanding   172,849   89,562
  Additional Paid-in capital options - expired   724,127   724,127
      9,188,405   8,997,327
DEFICIT     (2,884,438)   (4,378,517)
  Total shareholders' equity   6,303,967   4,618,810
  Total liabilities and shareholders' equity $ 6,534,460 $ 5,025,704
           

STELLAR PHARMACEUTICALS INC.

CONDENSED STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME AND DEFICIT

(Expressed in Canadian Dollars)

(Unaudited)

  For the Three Month Period
   Ended September 30
For the Nine Month Period
Ended September
30
  2010 2009 2010 2009
         
PRODUCT SALES $ 690,881 $ 811,684 $ 2,052,144 $ 2,270,229
ROYALTY AND LICENSING REVENUES   1,546,044   15,233   2,018,472   403,498
  TOTAL REVENUES FROM ALL SOURCES   2,236,925   826,917   4,070,616   2,673,727
COST OF PRODUCTS SOLD   235,334   275,710   719,809   763,744
GROSS PROFIT   2,001,591   551,207   3,350,807   1,909,983
                 
EXPENSES                
  Selling, general and administrative   566,371   505,391   1,726,890   1,646,388
  Research and development   45,606   9,009   81,560   16,420
  Amortization (non-manufacturing property, plant and equipment)   11,600   14,488   38,919   41,888
    623,577   528,888   1,847,369   1,704,696
INCOME FROM OPERATIONS   1,378,014   22,319   1,503,438   205,287
INTEREST AND OTHER INCOME   2,827   3,559   5,949   10,462
LOSS ON DISPOSAL OF EQUIPMENT   -   -   (15,308)   -
                 
INCOME AND COMPREHENSIVE INCOME FOR THE PERIOD BEFORE INCOME TAXES   1,380,841   25,878   1,494,079   215,749
                 
NET INCOME AND COMPREHENSIVE INCOME FOR THE PERIOD   1,380,841   25,878   1,494,079   215,749
                 
DEFICIT, beginning of period   (4,265,279)   (4,425,682)   (4,378,517)   (4,615,553)
DEFICIT, end of period $ (2,884,438) $ (4,399,804) $ (2,884,438) $ (4,399,804)
                 
EARNINGS PER SHARE - basic $ 0.06 $ 0.00 $ 0.06 $ 0.01
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC   23,585,040   23,493,736   23,517,256   23,505,241
                 
EARNINGS PER SHARE - diluted $ 0.06 $ 0.00 $ 0.06 $ 0.01
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED   23,594,579   23,493,736   23,518,390   23,505,241

STELLAR PHARMACEUTICALS INC.

STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

(Unaudited)

  For the Three Month Period
Ended September 30
For the Nine Month Period
Ended September 30
   2010  2009  2010  2009
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES -         
Net income for the period $ 1,380,841 $ 25,878 $ 1,494,079 $ 215,749
Items not affecting cash                
  Amortization   21,474   15,770   79,053   83,885
  Loss on disposal of equipment   -   -   15,308   -
  Issuance of equity instruments for services rendered   -   -   4,000   -
  Stock-based compensation   66,689   -   118,079   -
  Change in non-cash operating asset and liabilities   39,974   65,698   (535,908)   (322,815)
CASH FLOWS (USED IN) OPERATING ACTIVITIES   1,508,978   107,346   1,174,611   (23,181)
                 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES -                
                 
  Additions to property, plant and equipment   (28,052)   (66,899)   (290,194)   (112,776)
  Increase to other assets   (6,000)   -   (16,847)   (26,231)
  Proceeds from sale of equipment   -   -   12,630   -
CASH FLOWS USED IN INVESTING ACTIVITIES   (34,052)   (66,899)   (294,411)   (139,007)
                 
CASH FLOWS USED IN FINANCING ACTIVITIES -                
  Stock options exercised   -   -   69,000   -
  Re-purchase of Common shares for cash   -   (9,293)   -   (30,584)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES   -   (9,293)   69,000   (30,584)
                 
CHANGE IN CASH AND CASH EQUIVALENTS   1,474,926   31,154   949,200   (192,772)
                 
CASH AND CASH EQUIVALENTS,                
  Beginning of period   1,799,486   1,882,040   2,325,212   2,105,966
                 
CASH AND CASH EQUIVALENTS,                
  End of period $ 3,274,412 $ 1,913,194 $ 3,274,412 $ 1,913,194

Contact Information

  • Company Contact
    Stellar Pharmaceuticals Inc.
    Peter Riehl
    President & CEO
    (519) 434-1540
    corpinfo@stellarpharma.com
    or
    Stellar Pharmaceuticals Inc.
    Arnold Tenney
    Chairman
    (705) 445-9505
    or
    Investor Contact
    Kilmer Lucas Inc.
    Stephen Kilmer
    President
    (905) 690-2400 ext. 21
    stephen@kilmerlucas.com
    or
    Media Contact
    Kilmer Lucas Inc.
    Leonard Zehr
    Managing Director
    (905) 690-2400 ext. 41
    len@kilmerlucas.com