Thallion Pharmaceutiques Inc.
TSX : TLN

Thallion Pharmaceutiques Inc.

April 24, 2012 17:00 ET

Thallion Announces 2012 First Quarter Results and Provides Shigamabs Update

MONTRÉAL, QUÉBEC--(Marketwire - April 24, 2012) - Thallion Pharmaceuticals Inc. (TSX:TLN) today announced its financial results for the 2012 first quarter ended February 29, 2012 and updates progress made in its Shigamabs development program. As previously announced in January, the Company completed patient enrollment for the high dose cohort of the Phase II SHIGATEC trial.

"We are preparing to report preliminary study results at the upcoming 8th International Symposium on Shiga Toxin (Verocytotoxin)-Producing Escherichia coli Infections (VTEC 2012), which takes place in Amsterdam, the Netherlands, May 6-9th," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals Inc. "The VTEC conference is the leading international forum on Shiga toxin-producing bacterial infections and provides an excellent platform for the first dissemination of the un-blinded data."

The oral presentation, entitled "SHIGATEC: A phase II study evaluating Shigamabs in STEC-infected children", is expected to be given during the morning session on May 9th, 2012.

Financial Highlights

Collaboration and licensing revenues for the three-month period ended February 29, 2012, were $616,557 compared to $833,882 for the three-month period ended February 28, 2011. The decrease in revenues is primarily due to a decline in research and development expenses in the first quarter of 2012 compared to the same period in 2011, resulting in an approximate $150,000 reduction in revenues. Additionally, in the fourth quarter of 2011, the Company revised its estimate for clinical and manufacturing costs for both Phase II and Phase III SHIGATEC studies which directly impacted the percentage of completion calculation used to recognize revenues and consequently, resulted in lower revenue recognition in the first quarter of 2012 compared to the first quarter of 2011.

Research and development (R&D) expenses amounted to $1,028,563 in the first quarter of 2012, compared with $1,162,176 in the first quarter of 2011. This decrease is the result of approximately $240,000 in reduced clinical trial expenditures as patients screened/recruited during the first quarter of 2012 were fewer than during the first quarter of 2011. This was partially offset by $60,000 in increased costs related to manufacturing activities and $45,000 in increased costs associated with completion of enrollment of the high dose cohort of the SHIGATEC study.

General and administrative expenses amounted to $613,128 in the first quarter of 2012 and were stable when compared with $607,274 in the first quarter of 2011.

The Company recorded a net loss of $835,254 or $0.03 per share in the first quarter of 2012, compared with $1,009,810 or $0.03 per share in the first quarter of 2011. This decrease in net loss is mainly attributable to a decrease in R&D expenditures and higher foreign exchange gains recognized in the first quarter of 2012 as a result of changes in the fair value of forward exchange contracts, partially offset by lower collaboration and licensing revenues.

As at February 29, 2012, the Company's unrestricted cash position amounted to $7,165,474, which consists of cash and short-term investments. The Company's liquidity availability amounted to $7,504,044 compared with $8,533,803 on November 30, 2011. The decrease in liquidity is primarily due to the reduction of trade and other payables in addition to cash expenses relating to operations for the first three months of 2012, offset by Shigamabs® development funding received from LFB. Furthermore, the Company's working capital amounted to $5,929,635 as at February 29, 2012, compared to $6,337,692 as at November 30, 2011, a decrease of $408,057 due primarily to activities related to the Company's first quarter of operations.

As of April 24, 2012, the Company had 32,194,566 common shares outstanding and a total of 3,676,450 stock options outstanding.

About Thallion Pharmaceuticals Inc.

Thallion Pharmaceuticals Inc. (TSX:TLN) is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. The Company's clinical programs include Shigamabs®, a dual antibody product being evaluated in a Phase II clinical trial for the treatment of Shiga toxin-producing E. coli bacterial infections, and TLN-4601, a novel anti-cancer therapy. 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 Thallion'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, the satisfaction of conditions provided in the development and commercialization agreement with LFB, 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 Thallion'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. Thallion 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.
Condensed Consolidated Statements of Financial Position
(unaudited)
February 29, 2012 November 30, 2011 December 1, 2010
Assets
Current assets:
Cash $ 3,870,860 $ 5,005,687 $ 6,228,340
Short-term investments 3,294,614 3,284,428 4,026,441
Foreign exchange forward contracts 187,820 103,445 175,082
Sales tax receivable and other assets 19,968 10,270 120,801
Tax credits receivable 338,570 243,688 434,066
Receivable from Premium Brands Holdings Corporation - - 292,249
Deposits and prepaid expenses 214,655 233,774 436,043
7,926,487 8,881,292 11,713,022
Restricted cash 1,000,000 1,000,000 1,000,000
Property and equipment 39,014 42,269 55,204
1,039,014 1,042,269 1,055,204
$ 8,965,501 $ 9,923,561 $ 12,768,226
Liabilities and Equity (Deficiency)
Current liabilities:
Trade and other payables $ 1,719,090 $ 2,210,613 $ 3,037,971
Provisions 277,762 332,986 789,132
1,996,852 2,543,599 3,827,103
Deferred revenues 7,415,853 7,001,794 4,610,503
Equity (Deficiency):
Share capital 115,512,823 115,512,823 115,512,823
Warrants 1,375,000 1,375,000 1,375,000
Contributed surplus 20,320,343 20,310,461 20,230,421
Deficit (137,655,370 ) (136,820,116 ) (132,787,624 )
Equity (deficiency) attributable to equity holders of the Company
(447,204

)

378,168

4,330,620
$ 8,965,501 $ 9,923,561 $ 12,768,226
THALLION PHARMACEUTICALS INC.
Condensed Consolidated Statements of Loss and Comprehensive Loss
(unaudited)
Three-month periods ending
February 29,
2012
February 28,
2011
Revenues
Collaboration and licensing revenues $ 616,557 $ 833,882
Expenses (income)
Research and development 1,028,563 1,162,176
Tax credits (94,882 ) (91,595 )
933,681 1,070,581
General and administrative 613,128 607,274
Finance income - interest income (16,142 ) (15,221 )
Finance costs
Foreign exchange loss 49,110 49,401
Changes in fair value of foreign exchange forward contracts (127,966 ) 131,657
(78,856 ) 181,058
Net finance (income) costs (94,998 ) 165,837
1,451,811 1,843,692
Net loss and comprehensive loss attributable to equity holders of the Company $ (835,254 ) $ (1,009,810 )
Net basic and diluted loss per share $ (0.03 ) $ (0.03 )
Weighted average numberof outstanding shares 32,194,566 32,194,566
THALLION PHARMACEUTICALS INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
Three-month periods ended
February 29,
2012
February 28,
2011
Cash flows used in operating activities:
Net loss $ (835,254 ) $ (1,009,810 )
Adjustments for:
Depreciation 3,255 4,969
Finance income - interest income (16,142 ) (15,221 )
Interest received 19,780 14,864
Gain on disposal of property and equipment (25,331 ) (22,706 )
Unrealized foreign exchange loss 95,433 127,630
Decrease (increase) in fair value of open
foreign exchange forward contracts (84,375 ) 153,657
Stock-based compensation 9,882 23,189
(832,752 ) (723,428 )
Changes in operating assets and liabilities:
Sales tax receivable and other assets (13,336 ) 14,501
Tax credits receivable (94,882 ) (91,595 )
Receivable from Premium Brands
Holdings Corporation - 292,249
Deposits and prepaid expenses 19,119 103,858
Trade and other payables (491,523 ) (1,701,883 )
Provisions (55,224 ) (80,344 )
Deferred revenues 414,059 632,128
(221,787 ) (831,086 )
(1,054,539 ) (1,554,514 )
Cash flows from investing activities:
Acquisition of short-term investments (1,010,186 ) (4,579 )
Proceeds from disposal/maturity of short-term investments 1,000,000 791,962
Additions to property and equipment - (6,555 )
Proceeds from disposal of property and equipment 25,331 22,706
15,145 803,534
Net decrease in cash (1,039,394 ) (750,980 )
Cash, beginning of period 5,005,687 6,228,340
Effect of exchange rate fluctuations on cash held (95,433 ) (127,630 )
Cash, end of period $ 3,870,860 $ 5,349,730

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