Thallion Pharmaceuticals Inc.
TSX : TLN

Thallion Pharmaceuticals Inc.

April 08, 2009 16:00 ET

Thallion Announces 2009 First Quarter Results

MONTREAL, QUEBEC--(Marketwire - April 8, 2009) - Thallion Pharmaceuticals Inc. (TSX:TLN) today announced its operational and financial results for the 2009 first quarter which ended on February 28, 2009.

"We continue to enroll patients in our two Phase II oncology trials for TLN-4601 and TLN-232. The data from these trials will allow us to make informed decisions on the appropriate next steps from a development and partnering perspective for both product candidates," said Lloyd M. Segal, Chief Executive Officer of Thallion Pharmaceuticals Inc. "The ongoing strategic review the Board is conducting is proving to be productive. The Special Committee continues to identify and evaluate potential strategic alternatives through this process, which it expects to conclude and report on during the second quarter of calendar 2009."

Outlook

Thallion is focused on advancing the development of its clinical assets to the next significant milestone events, specifically as it relates to its oncology candidates. The upcoming events include:

- Continuing enrollment at multiple centers in Canada and the U.S. in the Phase II clinical trials for TLN-4601, a monotherapy for glioblastoma multiforme, and TLN-232, a monotherapy for metastatic melanoma patients.

- Presenting non-clinical data on TLN-4601 and TLN-232 at the American Association for Cancer Research (AACR) conference on April 21, 2009. The data support and advance the understanding of the mechanisms of action of Thallion's two oncology products. The data demonstrate TLN-4601 clearly inhibits Ras-MAPK pathway signaling, including signaling inhibition of mutated K-Ras expressing cancer cells. New data opens the potential for combinatory opportunities for TLN-4601 based on increased cytotoxicity when it is used in combination with several marketed oncology drugs.

- Reporting tumor imaging data and interim analyses from the Phase II TLN-4601 trial in the third quarter of calendar 2009 once an initial cohort of patients have been assessed.

- Reporting dose escalation data from the Phase II TLN-232 trial in the fourth quarter of calendar 2009.

- Continuing its licensing discussions for Shigamabs® with potential partners, with the intent of completing a strategic transaction prior to initiating the next stage of clinical development.

- Reporting the recommendations of the strategic review from the Special Committee of independent directors of the Board in the second quarter of calendar 2009.

Financial Highlights

Interest revenues amounted to $37,047 in the first quarter of 2009, compared with $259,434 in the first quarter of 2008. The change in interest revenue resulted from the maturity of cash equivalents and short-term investments used to fund the Company's operations throughout the period.

Research and development expenses before tax credits amounted to $2,111,941 in the first quarter of 2009, compared with $2,969,879 in the first quarter of 2008, reflecting a decrease in costs of $857,938 or 29%. Research and development expenses in the first quarter of 2009 included development activities focused on the two oncology clinical programs compared with development related activities pertaining to the Company's three clinical programs during the first quarter of 2008.

General and administrative expenses amounted to $1,337,424 in the first quarter of 2009, compared with $1,350,467 in the first quarter of 2008. The change in 2009 is primarily the result of reduced operating costs now that final integration of the Company's two operating facilities has been completed in addition to management's continued efforts to reduce general and administrative expenses which were partially offset by an increase of approximately $150,000 in costs pertaining to the Special Committee's ongoing review of the Company's strategic alternatives.

The Company recorded a net loss of $3,238,671 or $0.10 per share in the first quarter of 2009, compared with $3,969,087 or $0.12 per share in the first quarter of 2008. The decrease in net loss is primarily attributable to a reduction in research and development expenses as described above.

As at February 28, 2009 the Company's cash position amounted to $9,848,470 which consists of cash and cash equivalents and short-term investments. Tax credits receivable amounted to $1,105,595. Consequently, the Company's liquidity availability amounted to $10,954,065 compared with $13,849,800 on November 30, 2008. The decrease in liquidity is primarily due to cash expenses relating to operations for the first three months of 2009.

As of April 8, 2009, the Company had 32,144,316 common shares outstanding. The number of options and warrants outstanding were 2,527,118 and 9,530,000 respectively.

Notice of Conference Call

Thallion will hold a conference call today, April 8, 2009, at 4:30 p.m. (ET) hosted by Mr. Lloyd M. Segal, Chief Executive Officer and Mr. Michael Singer, Chief Financial Officer to discuss the Company's financial results and corporate developments. To access the conference call by telephone, dial 416-644-3418 or 1-800-731-5319. A live audio webcast of the call will be available at www.thallion.com. The webcast will be archived for 90 days.

Notice of Annual General Meeting of Shareholders

Thallion will hold its Annual General Meeting of Shareholders tomorrow, April 9, 2009, at 10:00 a.m. (ET) at the offices of McCarthy Tetrault LLP, Suite 2500, 1000, De La Gauchetiere Street West, Montreal, Quebec. Following the formal proceedings of the meeting, Lloyd M. Segal, Chief Executive Officer will present a corporate update on the Company.

About Thallion Pharmaceuticals Inc.

Thallion Pharmaceuticals Inc. (TSX:TLN) is a biotechnology company developing pharmaceutical products in the areas of oncology and infectious disease. Thallion has three clinical programs at the Phase II stage of development. The two oncology product candidates include TLN-4601, a novel anti-cancer therapy targeting the RAS-MAPK pathway, and TLN-232, a peptide therapy targeting the M2 isoform of the metabolic enzyme pyruvate kinase (M2PK), with potential efficacy in multiple oncology indications. TLN-4601 and TLN-232 are currently recruiting patients in their respective multi-centre, Phase II, North American clinical trials. The Company's third product candidate, Shigamabs®, is a dual antibody product for the treatment of Shigatoxin producing E. coli bacterial infections. Additional information about the Company can be obtained at www.thallion.com.

Forward-Looking Statements

This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time-to-time in the Company's ongoing filings with the Canadian securities regulatory authorities which filings can be found at www.sedar.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.



THALLION PHARMACEUTICALS INC.
Consolidated Balance Sheets
February 28, 2009 and November 30, 2008
(Unaudited)

CONSOLIDATED BALANCE SHEETS

2009 2008
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Assets (audited)
Current assets:
Cash and cash equivalents $6,656,449 $8,863,383
Short-term investments 3,192,021 4,168,541
Sales tax receivable and other 333,854 253,923
Accounts receivable 21,666 88,369
Tax credits receivable 1,105,595 817,876
Deposits and prepaid expenses 527,832 468,011
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11,837,417 14,660,103


Long-term deposit 200,000 200,000
Capital assets 3,151,021 3,258,947
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$15,188,438 $18,119,050
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $2,214,705 $1,935,668
Current portion of lease exit obligations 657,841 608,505
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2,872,546 2,544,173

Long-term portion of lease exit obligations 910,460 1,042,769


Shareholders' Equity:
Capital stock 115,502,723 115,502,723
Warrants 9,986,860 9,986,860
Contributed surplus 2,460,322 2,348,592

Deficit (116,544,473)(113,305,802)
Accumulated other comprehensive loss - (265)
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(116,544,473)(113,306,067)
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Total shareholders' equity 11,405,432 14,532,108
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$15,188,438 $18,119,050
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Operations
Three-month periods ended February 28, 2009 and February 29, 2008
(Unaudited)

2009 2008
--------------------------------------------------------------------
Revenues
Interest revenues $37,047 $259,434

Costs and expenses
Research and development 2,111,941 2,969,879
Tax credits (287,719) (285,000)
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1,824,222 2,684,879

General and administrative 1,337,424 1,350,467
Amortization of capital assets 124,235 166,224
Foreign exchange (gain) loss (10,163) 26,951
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3,275,718 4,228,521
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Net loss $(3,238,671) $(3,969,087)
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Net basic and diluted loss per share $(0.10) $(0.12)
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Weighted average number of
outstanding shares 32,144,316 32,065,195
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Consolidated Statements of Comprehensive Loss
Three-month periods ended February 28, 2009 and February 29, 2008
(Unaudited)

2009 2008
--------------------------------------------------------------------
Net loss for the period $(3,238,671) $(3,969,087)
Other comprehensive income
Unrealized gain on available for
sale investments arising during
the period 265 51,861
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Comprehensive loss $(3,238,406) $(3,917,226)
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Cash Flows
Three-month periods ended February 28, 2009 and February 29, 2008
(Unaudited)


2009 2008
--------------------------------------------------------------------
Cash flows from operating activities:
Net loss $(3,238,671) $(3,969,087)
Adjustments for:
Accretion in carrying value of
lease liability 77,294 -
Amortization of capital assets 124,235 166,224
Gain on disposal of short-term investments (14,013) -
Stock-based compensation 111,730 191,225
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(2,939,425) (3,611,638)
Changes in operating assets and liabilities:
Interest receivable 1,470 100,147
Accounts receivable 66,703 (4,658)
Sales tax receivable and other (81,401) 13,095
Tax credits receivable (287,719) 1,430,503
Deposits and prepaid expenses (59,821) (119,954)
Accounts payable and accrued liabilities 279,037 (220,349)
Payment of lease exit obligations (160,267) -
Deferred revenues - 82,033
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(241,998) 1,280,817
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(3,181,423) (2,330,821)
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Cash flows from investing activities:
Acquisition of short-term investments (23,498) (992,522)
Proceeds from disposal of short-term
investments 1,014,296 35,692
Additions to capital assets (16,309) (8,711)
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974,489 (965,541)
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Net decrease in cash and cash equivalents (2,206,934) (3,296,362)
Cash and cash equivalents, beginning
of period 8,863,383 10,606,914
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Cash and cash equivalents, end of period $6,656,449 $7,310,552
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