Trimel Pharmaceuticals Corporation
TSX : TRL

Trimel Pharmaceuticals Corporation

August 07, 2012 17:00 ET

Trimel Announces Second Quarter 2012 Financial Results and Provides Product Development Update

TORONTO, ONTARIO--(Marketwire - Aug. 7, 2012) - Trimel Pharmaceuticals Corporation (TSX:TRL) ("Trimel or "the Company") today reported its financial results for the three and six month periods ended June 30, 2012. The Company also provided investors today with an update on the status of its product development programs.

Management of the Company will host a conference call to discuss these results and update investors on the status of its business on Wednesday, August 8, 2012, at 8:30 a.m. Eastern Daylight Time. Presenting from Trimel will be Bruce Brydon, Chairman of the Board and Chief Executive Officer, Tom Rossi, President and Chief Operating Officer and Kenneth Howling, Chief Financial Officer. The conference call details can be found at the end of the press release.

Financial Results for the Three and Six Months Ended June 30, 2012

For the three and six month periods ended June 30, 2012, Trimel incurred Research and Development expenses ("R&D") of US$4.8 million and US$9.1 million respectively as compared to US$2.9 million and US$4.7 million for the comparable 2011 periods. The increase in R&D spending for the 2012 period relates primarily to the costs associated with the advancement of the CompleoTRT™ Phase III clinical trial.

Trimel incurred General and Administrative expenses of US$2.6 million and US$4.8 million for the three and six month periods ended June 30, 2012 respectively as compared to US$1.3 million and US$3.2 million for the comparable 2011 periods. The increase in spending for the 2012 period as compared to spending levels for the same 2011 period was primarily attributable to employment related expenses, professional fees and public company costs following the Company's successful 'go public' transaction in July 2011.

For the three and six month periods ended June 30, 2012, the Company incurred a net loss of US$0.09 and US$0.17 per share respectively, as compared to US$0.10 and US$0.19 per share for the comparable 2011 periods.

As at June 30, 2012, the Company had total assets of US$12.1 million as compared to US$17.6 million at March 31, 2012 and total liabilities of US$6.7 million at June 30, 2012 as compared to US$5.6 million at March 31, 2012. Subsequent to June 30, 2012the Company completed two financing transactions raising total gross proceeds of US$20.6 Million (see "Corporate Update" section below).

The information set out above is in summary form. Readers are encouraged to review the Company's annual information form, financial statements (and accompanying notes), together with management's discussion and analysis available on SEDAR at www.sedar.com.

Product Development Update

CompleoTRT (Testosterone - Hypogonadism ("Low T"))

Phase III Enrolment Completed

On July 23, 2012, the Company announced the completion of enrolment and randomization of 304 patients in the Phase III clinical trial evaluating CompleoTRT™. The pivotal Phase III clinical trial, which was initiated in October 2011, is a randomized study in which patients are administered CompleoTRT™ and evaluated for efficacy after 90 days of treatment using the pharmacokinetic endpoint established for Low T therapies. The Phase III study in its entirety represents the final stage of product development prior to the submission of a New Drug Application (NDA) to the Food and Drug Administration (FDA) for marketing approval in the United States.

Efficacy results from the Phase III clinical trial are expected to be available in the fourth quarter of 2012. As previously announced on May 29, 2012, the preliminary review of early data from the Phase III trial demonstrated that patients treated with CompleoTRT™ achieved an average serum testosterone level that exceeds the threshold required by the FDA to confirm the efficacy of a testosterone replacement product.

Testosterone Market Dynamics - Second Quarter 2012

According to IMS Health, nearly 1.7 million testosterone prescriptions were written in the second quarter of 2012, reflecting growth of 37% versus the same period in 2011. This represents an acceleration of prescription growth rates as physicians and patient awareness of this medical condition increases.

Tefina™ (Testosterone - Female Orgasmic Disorder)

Enrolment initiated for 240 Patient Ambulatory Study

On May 17th, 2012, the Company announced the initiation of patient enrolment into one of the largest clinical studies to ever explore a "use-as-required" treatment for women experiencing Female Orgasmic Disorder ("FOD"), or more commonly referred to as Anorgasmia. FOD is defined as the persistent or recurrent delay in, or absence of, orgasm following a normal sexual excitement phase which can result in marked personal distress or interpersonal difficulties. FOD affects 1 in 5 women worldwide. Currently there are no approved treatments for FOD and therefore this condition represents a significant unmet need for women suffering distress from this condition.

The Company intends to enrol 240 patients in this Phase II study being initiated in the United States, with additional sites in Canada and Australia expected to join the study in the second half of 2012. The Tefina™ Phase II study design will involve pre-menopausal women experiencing FOD and will be conducted as an ambulatory trial. As part of this double-blinded placebo-controlled study, patients will receive Tefina™ or placebo at home instead of in a hospital setting. The primary efficacy endpoint of the ambulatory trial will be the increase in the occurrence of orgasm over the treatment period compared against baseline levels.

Corporate Update

Equity Financing

On July 17th, 2012 the Company announced that it had closed a public offering for aggregate gross proceeds of C$13.2 Million. In connection with the offering the Company issued 7,569,000 units ("Units") at a price of C$1.75 per Unit. Each Unit consists of one common share of the Company ("Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each whole Warrant entitles the holder to purchase one Common Share at an exercise price of C$2.50 until January 17, 2015.

The Offering was completed by a syndicate of underwriters led by RBC Dominion Securities Inc. and including GMP Securities L.P. On July 31, 2012, RBC Dominion Securities Inc. and GMP Securities L.P. exercised in part their over-allotment option to purchase an additional 60,400 Trimel Common Shares and 74,700 Trimel Warrants for aggregate gross proceeds of C$111,040. The closing of the over-allotment took place on August 3, 2012.

Debt Financing

On July 18, 2012, the Company had entered into a loan and security agreement with GE Capital, Healthcare Financial Services ("GE Capital"), as agent for the lenders party thereto, pursuant to which GE Capital advanced U.S. $7,500,000 (the "Loan") to the Company. According to the Loan Agreement, the Loan accrues interest at 10.75% per year and is repayable in scheduled instalments through to July 1, 2015 (subject to repayment on demand at any time should certain customary events of default occur). As is customary, the Company has granted security over the assets of the Company and its subsidiaries. In connection with the transaction, the lenders under the Loan Agreement (or certain of their affiliates) have been issued warrants exercisable for an aggregate of 154,916 Common Shares of the Company and certain brokers have been issued warrants exercisable for an aggregate of 51,639 common shares of the Company. The warrants are exercisable for five years at an exercise price calculated using the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange for the period of five days ending immediately prior to the completion of the Loan.

Conference Call Details

To access the call live, please dial 416-340-2216 (Toronto), 1-866-226-1792 (Canada and U.S.), and 00-800-9559-6849 (International). Listeners are encouraged to dial in 10 minutes before the call begins to avoid delays.

A replay of the conference call will be available until 7:00 p.m. Eastern Daylight Time on Tuesday, August 14, 2012 by dialing 905-694-9451 (Toronto), 1-800-408-3053 (Canada and U.S.) or 00-800-3366-3052 (International), using access code: 2484026#.

About CompleoTRT

CompleoTRT™ is designed to represent a significant advancement in the treatment of male hypogonadism, or low testosterone - commonly known as "Low T". CompleoTRT™'s unique delivery technology is designed to provide patients with the therapeutic effect of supplementing testosterone levels while doing so with a small amount of drug in the form of a bio-adhesive intranasal gel.

CompleoTRT™'s intranasal no-touch delivery system is designed to avoid the risk of accidental transfer (primary or secondary transference) of testosterone to spouses or other family members, thus offering unique patient benefits and improved safety as compared to other currently marketed products indicated to treat "Low T".

Since Trimel took over development of the product in the second half of 2009, CompleoTRT™ has been optimized to meet FDA regulatory requirements, including the development of a product dispenser that is designed to ensure that CompleoTRT™ is dosed accurately and discretely. Trimel has now successfully manufactured over 60,000 multi-dose dispensers. Trimel's CompleoTRT™ clinical program, having previously demonstrated that CompleoTRT™ is safe and effective in a Phase II trial, has recorded over 10,000 drug exposures in the studies conducted thus far in the United States.

About Hypogonadism ("Low T")

Subject to FDA approval, Trimel's lead product candidate, CompleoTRT™ would be indicated for the treatment of male hypogonadism or low testosterone - commonly known as "Low T". Hypogonadism is a biochemical syndrome characterized by a deficiency in serum testosterone levels that can be either acquired or inherited, and seriously affects the quality of life for those affected with the syndrome. Low testosterone is estimated to affect 13 million men in the United States, of which an estimated 90% go untreated. According to IMS Health, sales of marketed treatments for low testosterone in the United States grew 24% in 2011 versus 2010 to now exceed $1.6 billion in annual sales volume.

About Tefina™

Trimel's product candidate Tefina™ is a bioadhesive 'no touch' intranasal low-dose gel formulation of testosterone. Tefina™ is being developed to offer women with anorgasmia, a "use as required" treatment option. Tefina™ is expected to present an attractive safety profile, with virtually no androgen-related side effects such as acne, facial and body hair growth or deepening of the voice. Moreover, there is no expected risk of skin-to-skin transfer of testosterone to third parties with the multi-dose dispenser.

About Female Orgasmic Disorder

Female Orgasmic Disorder ("FOD") is defined as the persistent or recurrent delay in, or absence of, orgasm following normal sexual excitement phase that causes marked personal distress or interpersonal difficulties. The etiology of FOD is often characterized by whether the dysfunction has been lifelong (primary) or acquired (secondary). This condition affects 1 in 5 pre and post menopausal women worldwide. Currently there are no approved treatments for FOD and therefore represents an unmet need for women suffering distress from this condition.

About Trimel

Trimel Pharmaceuticals Corporation (TSX:TRL) - Developing medications for Female Sexual Health and conditions related to Aging, and Well Being. Trimel is developing multiple product opportunities, including CompleoTRT™, a bio-adhesive intranasal Testosterone gel currently in Phase III clinical testing in the United States. CompleoTRT™ is under investigation for the treatment of male hypogonadism, a condition commonly referred to as "Low T". For more information, please visit www.trimelpharmaceuticals.com.

For further information regarding Trimel Pharmaceuticals Corporation, please contact either Bruce Brydon, Chairman of the Board and Chief Executive Officer at (416) 679-0711 or Kenneth Howling, Chief Financial Officer at (416) 679-0536 or via email at ir@trimelpharmaceuticals.com.

Notice regarding forward-looking statements:

This release contains forward looking information. This forward-looking information is not based on historical facts but rather on the expectations of the Company's management regarding the future growth of the Company and its respective results of operations, performance and business prospects and opportunities. Forward-looking information may include financial and other projections, as well as statements regarding future plans, objectives or economic performance, or the assumptions underlying any of the foregoing. This release uses words such as "will", "expects", "anticipates", "intends", "estimates", or similar expressions to identify forward-looking information. Such forward-looking information reflects the current beliefs of the Company's management based on information currently available to them.

Forward-looking information included in this release is based in part, on assumptions that may change, thus causing actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking information. Such assumptions include that: the Company will achieve, sustain or increase profitability, and will be able to fund its operations with existing capital, and/or it will be able to raise additional capital to fund operations; the Company will be able to attract and retain key personnel; the Company will be able to acquire any necessary technology or businesses and effectively integrate such acquisitions; the Company will be successful in developing and clinically testing products under development; the Company will be successful in obtaining all necessary approvals for commercialization of its products from the U.S. Food and Drug Administration, the Canadian Therapeutic Products Directorate or other regulatory authorities; the results of continuing and future safety and efficacy studies by industry and government agencies relating to the Company's products will be favourable; the Company's products will not be adversely impacted by competitive products and pricing; raw materials and finished products necessary for the Company's products will continue to be available; the Company will be able to maintain and enforce the protection afforded by any patents or other intellectual property rights; the Company's products will be successfully licensed to third parties to market and distribute such products on favourable terms; the Company's key strategic alliances, out licensing and partnering arrangements, now and in the future, will remain in place and in force; the general regulatory environment will not change in a manner adverse to the business of the Company; the tax treatment of the Company and its subsidiaries will remain constant and the Company will not become subject to any material legal proceedings. The Company cautions that the foregoing list of assumptions is not exhaustive.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. Risks related to forward-looking statements include those risk factors referred to in the Company's filings with the Canadian Securities regulators. Actual results, performance or achievement could differ materially from that expressed in, or implied by; any forward-looking information in this release, and, accordingly, investors should not place undue reliance on any such forward-looking information. Further, any forward-looking information speaks only as of the date on which such statement is made and the Company undertakes no obligation to update any forward-looking information to reflect the occurrence of unanticipated events, except as required by law including applicable securities laws. New factors emerge from time to time and the importance of current factors may change from time to time and it is not possible for management of the Company to predict all of such factors, changes in such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information contained in this release.

TRIMEL PHARMACEUTICALS CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT JUNE 30, 2012
UNAUDITED
(expressed in U.S. Dollars)
ASSETS
June 30, December 31,
2012 2011
CURRENT
Cash $ 4,199,137 $ 14,528,625
Other receivables 193,697 74,304
Prepaids and other assets 674,268 245,126
5,067,102 14,848,055
NON-CURRENT ASSETS
Property and equipment, net 3,277,759 3,508,194
Intangible assets 3,710,500 3,858,400
6,988,259 7,366,594
TOTAL ASSETS $ 12,055,361 $ 22,214,649
LIABILITIES
CURRENT
Trade and other payables $ 6,217,121 $ 3,207,507
Provisions 25,630 385,926
Income taxes payable 76,758 74,611
Current portion of capital lease obligation 337,470 393,807
6,656,979 4,061,851
LONG-TERM
Capital lease obligation - 137,497
Deferred tax liability - 56,953
- 194,450
TOTAL LIABILITIES 6,656,979 4,256,301
SHAREHOLDERS' EQUITY
Share capital 67,485,939 67,430,241
Warrants 2,412,902 2,413,367
Contributed surplus 2,797,846 1,610,972
Accumulated other comprehensive income 39,221 78,682
Deficit (67,337,526 ) (53,574,914 )
TOTAL SHAREHOLDERS' EQUITY 5,398,382 17,958,348
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,055,361 $ 22,214,649
TRIMEL PHARMACEUTICALS CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012
UNAUDITED
(expressed in U.S. Dollars)
For the three months ended For the six months ended
June 30, June 30,
2012 2011 2012 2011
EXPENSES
Research and development, net of refundable tax credits $ 4,836,040 $ 2,869,702 $ 9,054,428 $ 4,736,273
General and administrative 2,607,260 1,274,171 4,806,040 3,203,697
Total operating expenses 7,443,300 4,143,873 13,860,468 7,939,970
FINANCE COSTS
Accretion of convertible debt - 510,039 - 962,468
Interest on convertible debt - 342,687 - 669,945
Other interest expense 8,510 - 18,194 -
Interest income (3,352 ) (152 ) (5,743 ) (152 )
5,158 852,574 12,451 1,632,261
TOTAL EXPENSES 7,448,458 4,996,447 13,872,919 9,572,231
LOSS BEFORE INCOME TAXES (7,448,458 ) (4,996,447 ) (13,872,919 ) (9,572,231 )
PROVISION FOR (RECOVERY OF) INCOME TAXES
Current (52,714 ) 116,621 (52,714 ) 180,174
Deferred 258 8,529 (57,593 ) 16,476
(52,456 ) 125,150 (110,307 ) 196,650
NET LOSS $ (7,396,002 ) $ (5,121,597 ) $ (13,762,612 ) $ (9,768,881 )
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment (70,352 ) - (39,461 ) -
NET LOSS AND COMPREHENSIVE LOSS $ (7,466,354 ) $ (5,121,597 ) $ (13,802,073 ) $ (9,768,881 )
Basic and diluted weighted average shares outstanding 83,151,680 53,200,750 83,141,926 52,790,044
Basic and diluted net loss per share $ (0.09 ) $ (0.10 ) $ (0.17 ) $ (0.19 )
TRIMEL PHARMACEUTICALS CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011
UNAUDITED
(expressed in U.S. Dollars)
Share capital Warrants Debt conversion option Contributed surplus Accumulated other comprehensive income Deficit Total
Balance, January 1, 2011 $ 4,252,937 $ - $ 3,609,798 $ 916,912 $ - $ (27,196,590 ) $ (18,416,943 )
Net loss for the period - - - - - (9,768,881 ) (9,768,881 )
Cumulative translation adjustment - - - - - - -
Total comprehensive loss for the period - - - - - (9,768,881 ) (9,768,881 )
Issuance of shares 3,671,000 - - - - - 3,671,000
Share issuance costs (50,000 ) - - - - - (50,000 )
Equity portion of convertible debt issued - 141,571 - - - 141,571
Share based compensation - - - 373,500 - - 373,500
Balance as at June 30, 2011 $ 7,873,937 $ - $ 3,751,369 $ 1,290,412 $ - $ (36,965,471 ) $ (24,049,753 )
Balance, January 1, 2012 $ 67,430,241 $ 2,413,367 $ - $ 1,610,972 $ 78,682 $ (53,574,914 ) $ 17,958,348
Net loss for the period - - - - - (13,762,612 ) (13,762,612 )
Cumulative translation adjustment - - - - (39,461 ) - (39,461 )
Total comprehensive loss for the period - - - - (39,461 ) (13,762,612 ) (13,802,073 )
Conversion of warrants 5,698 (465 ) - - - - 5,233
Conversion of options 50,000 - - - - - 50,000
Share based compensation - - - 1,186,874 - - 1,186,874
Balance as at June 30, 2012 $ 67,485,939 $ 2,412,902 $ - $ 2,797,846 $ 39,221 $ (67,337,526 ) $ 5,398,382
TRIMEL PHARMACEUTICALS CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011
UNAUDITED
(expressed in U.S. Dollars)
For the six months ended June 30
2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (13,762,612 ) $ (9,768,881 )
Items not requiring an outlay of cash:
Amortization of intangible assets 147,900 147,900
Depreciation of property and equipment 351,262 221,598
Accretion of convertible debt - 962,468
Share based compensation 1,186,874 373,500
Accrued interest on convertible debt - 669,945
Impairment loss on equipment - 43,333
Deferred income tax liability (56,301 ) 16,476
Income tax provision (52,851 ) 180,174
Other 29,917 (48,586 )
Net changes in non-cash working capital items related to operating activities:
Other receivables (122,312 ) 202,761
Trade and other payables 2,997,465 1,848,405
Provisions (352,149 ) -
Prepaids and other assets (439,650 ) (969,394 )
(10,072,455 ) (6,120,301 )
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Class A shares and warrants - 3,621,000
Issuance of convertible debt - 2,399,900
Issuance of common shares 55,233 -
Payment of capital lease obligations (189,821 ) -
(134,588 ) 6,020,900
CASH FLOWS FROM INVESTING ACTIVITY
Acquisition of property and equipment (119,497 ) (400,178 )
(119,497 ) (400,178 )
NET INCREASE (DECREASE) IN CASH FOR THE PERIOD (10,326,540 ) (499,579 )
Exchange loss on cash (2,947 ) -
CASH, BEGINNING OF THE PERIOD 14,528,625 786,834
CASH, END OF THE PERIOD $ 4,199,137 $ 287,255

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