Trimel Pharmaceuticals Corporation
TSX : TRL

Trimel Pharmaceuticals Corporation

March 08, 2012 23:15 ET

Trimel Pharmaceuticals Corporation Announces 2011 Financial Results And Provides Corporate Update

TORONTO, ONTARIO--(Marketwire - March 8, 2012) - Trimel Pharmaceuticals Corporation (TSX:TRL) ("Trimel or "the Company") today reported its financial results for the three and twelve month periods ended December 31, 2011. The Company also provided investors today with a review of the Company's 2011 achievements as well as an update on the status of its product development programs.

Financial Results for the Three and Twelve Months Ended December 31, 2011

For the three and twelve month periods ended December 31, 2011, Trimel incurred Research and Development expenses ("R&D") of US$2.0 million and US$13.2 million respectively as compared to US$4.1 million and US$10.0 million for the comparable 2010 periods. The increase in R&D spending for both periods relates primarily to increased clinical trial activities in the 2011 periods associated with the initiation of the CompleoTRT™ Phase III study, the Company's Vibrotactile Stimulation ("VTS") study for Tefina™ and milestone fee payments to a technology partner of approximately US$0.1 million and US$3.4 million for the three and twelve month periods respectively.

Trimel incurred General and Administrative expenses of US$2.8 million and US$8.5 million for the three and twelve month periods ended December 31, 2011 as compared to US$2.1 million and US$5.8 million respectively for the comparable 2010 periods. The increase in spending for both 2011 periods as compared to spending levels for the same 2010 periods was primarily attributable to public company costs as a result of completing the Company's going-public transaction, increased professional fees, the impact of employee headcount additions and incremental office costs, and a full year of costs related to the move in July 2010 to a new Canadian facility that provides the Company with office, lab, manufacturing and warehousing capabilities.

For the three and twelve month periods ended December 31, 2011, the Company incurred a net loss of US$0.06 and US$0.39 per share respectively, as compared to US$0.14 and US$0.35 per share respectively for the comparable 2010 periods.

As at December 31, 2011, the Company had total assets of US$22.2 million as compared to US$8.2 million at December 31, 2010 and total liabilities of US$4.3 million at December 31, 2011 as compared to US$26.6 million at December 31, 2010.

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.

Chairman of the Board and Chief Executive Officer Bruce Brydon commented: "Trimel's progress in 2011, whereby the Company advanced two products into late stage development, is likely unparalleled in the context of the Canadian pharmaceutical industry. Trimel's rapid ascent is testament to the dedication of Trimel's employees as well as the confidence of our investors and other stakeholders."

2011 Corporate Achievements

Financing and Going-Public Transaction

During the quarter ended September 30, 2011, Trimel raised US$30,356,939 in completing a private placement of its securities and became a publicly listed company pursuant to a concurrent transaction. Net proceeds from the private placement transaction after deducting underwriters' fees and expenses were US$27,567,281. As well, two series of convertible debt with a carrying value of $29,613,792 issued by Trimel were converted into common shares. On July 14, 2011, the Company's common shares and warrants began trading on the Toronto Stock Exchange ("TSX") under the tickers TRL and TRL-WT, respectively. Following the conversion of debt described above, Trimel had no remaining convertible or other debt obligations.

Appointment of Tom Rossi

The Company announced August 8, 2011, that Mr. Tom Rossi joined the Company in the newly created position of President. Mr. Rossi has over 24 years experience in the pharmaceutical industry in Canada and abroad. Since joining Trimel Mr. Rossi has led the ongoing business and corporate development efforts.

Receipt of GMP Compliance Designation

The Company announced December 2, 2011, that Health Canada issued a final inspection report from its audit of Trimel's Dunwin R&D/manufacturing facility, confirming that Trimel was fully compliant with Good Manufacturing Practices ("GMP") for the manufacture of clinical supplies. Trimel intends to use the Dunwin facility to manufacture clinical supplies for both of its CompleoTRT™ and Tefina™ products as well as the balance of its pipeline including those compounds under development with the TriVair™ respiratory delivery system. Trimel has demonstrated to Health Canada that the activities it conducts at its Dunwin facility conform to the Food and Drugs Act and its associated regulations.

Clinical / Regulatory Achievements

During 2011, the Company completed or initiated five clinical trials and met with the Food and Drug Administration ("FDA") on separate occasions to seek regulatory guidance for both CompleoTRT™ and Tefina™, as well as engaged health authorities in a number of key European territories. The Company's Dunwin facility was found to be compliant in three separate audits by Health Canada as well as those conducted by the Company's supply chain partners.

Product Development Update

Tefina™ – Phase II Vibrotactile Stimulation (VTS) Study results

On February 14th, 2012, the Company released results from its recently reported Phase II study of Tefina™ with women experiencing anorgasmia. Anorgasmia 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. Tefina™ was studied in a hospital setting by employing the established VTS anorgasmia research model. Women experiencing primary or secondary anorgasmia were treated with a single dose of Tefina™ or a placebo, and then challenged with a VTS device designed to induce orgasm at different time points post dose. Patient reports, Vaginal Pulse Amplitude ("VPA") - a physiological measurement of blood flow in the vagina corresponding with engorgement of female genitalia, as well as clinically accepted patient questionnaires were used to measure the response.

Study analysis concluded that during the VTS treatment phase four women who were administered Tefina™ experienced orgasms, while an additional eight patients treated with Tefina™ were also determined to have experienced orgasms based on a post treatment assessment. Of the patients in the placebo arm, two patients reported experiencing orgasms during the VTS treatment however one patient seemed to have experienced an orgasm during the screening portion of the study and should have been excluded from proceeding into the treatment phase. Patients treated with Tefina™ also showed a statistically significant improvement in VPA versus placebo, and elevation of sexual arousal, as well as positive trends in terms of elevating sensuality and pleasurable genital sensation.

Tefina™ is expected to enter a multi-national Phase II trial in the second quarter of 2012. The current study design has an expected enrolment of between 240 to 275 pre-menopausal women experiencing secondary anorgasmia and will be conducted as an ambulatory trial. As part of this double-blind placebo-controlled trial, patients will receive Tefina™ or a placebo at home instead of in a hospital setting. The primary efficacy end point of the ambulatory trial will be the increase in occurrence of orgasm over a four-week period compared against baseline levels. This upcoming clinical study will be one of the largest to ever explore a "use as required" treatment for women experiencing any form of anorgasmia.

CompleoTRT™ Recruitment Update

CompleoTRT™, Trimel's most advanced product development program, entered Phase III clinical trials in September 2011. As of March 2012 recruitment had passed the halfway point, continuing to proceed on schedule as the Company moves toward completing the study and filing a new drug application with the FDA at the end of 2012 or early 2013.

The Company is actively involved in discussions with multiple pharmaceutical companies and looks to conclude a commercial or strategic transaction for CompleoTRT™, Tefina™ and/or its other products in the coming months.

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's research program to date has demonstrated that CompleoTRT™ is safe and effective, with over 3,500 drug exposures studied 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 defined as a biochemical syndrome characterized by a deficiency in serum testosterone levels that can be either acquired or inherited, and can seriously affect 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 exceeded $1.6 billion in 2011.

About Tefina™

Trimel's product candidate Tefina™ is a bio-adhesive 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 nasal applicator currently under development.

About Female Anorgasmia

Female anorgasmia is an indication recognized by the Food and Drug Administration, or FDA, as a form of Female Sexual Dysfunction characterised by 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 anorgasmia 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 anorgasmia and therefore there exists an unmet need for women suffering distress from this condition.

About Trimel

Trimel Pharmaceuticals Corporation (TSX:TRL) is a unique specialty pharmaceutical company actively developing medications for female sexual health and conditions related to aging and well being in several disease states. Trimel is developing multiple product opportunities, including CompleoTRT™, a 'no touch' bio-adhesive intranasal testosterone gel currently in a Phase III clinical study 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. 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
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(expressed in U.S. Dollars)
ASSETS
December 31, 2011 December 31, 2010
CURRENT
Cash $ 14,528,625 $ 786,834
Other receivables 74,304 249,396
Prepaids and deposits 245,126 1,667,710
14,848,055 2,703,940
NON-CURRENT ASSETS
Property and equipment, net 3,508,194 1,311,832
Intangible assets 3,858,400 4,154,200
7,366,594 5,466,032
TOTAL ASSETS $ 22,214,649 $ 8,169,972
LIABILITIES
CURRENT
Trade and other payables $ 3,207,507 $ 2,336,055
Provisions 385,926 76,026
Income taxes payable 74,611 95,630
Current portion of capital lease obligation 393,807 -
Convertible debt - 24,044,653
4,061,851 26,552,364
LONG-TERM
Capital lease obligation 137,497 -
Deferred tax liability 56,953 34,551
194,450 34,551
TOTAL LIABILITIES 4,256,301 26,586,915
SHAREHOLDERS' EQUITY (DEFICIENCY)
Share capital 67,430,241 4,252,937
Warrants 2,413,367 -
Debt conversion option - 3,609,798
Contributed surplus 1,610,972 916,912
Accumulated other comprehensive loss 78,682 -
Deficit (53,574,914 ) (27,196,590 )
TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY) 17,958,348 (18,416,943 )
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) $ 22,214,649 $ 8,169,972

TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
(expressed in U.S. Dollars)
For the three months ended
December 31,
For the twelve months ended
December 31,
2011 2010 2011 2010
(Unaudited) (Audited)
EXPENSES
Research and development 2,020,804 4,137,161 $ 13,163,594 $ 10,024,610
General and administrative 2,755,963 2,149,884 8,507,133 5,780,847
Total operating expenses 4,776,767 6,287,045 21,670,727 15,805,457
FINANCE COSTS
Accretion of convertible debt (143,000 ) 448,176 1,672,859 1,548,551
Interest on convertible debt - 288,475 720,951 878,124
Other interest expense 11,282 - 16,456 8
Interest income (160,327 ) - (160,327 ) -
(292,045 ) 736,651 2,249,939 2,426,683
REORGANIZATION AND OTHER COSTS 774,000 - 2,085,751 -
TOTAL EXPENSES 5,258,722 7,023,696 26,006,417 18,232,140
LOSS BEFORE INCOME TAXES (5,258,722 ) (7,023,696 ) (26,006,417 ) (18,232,140 )
PROVISION FOR INCOME TAXES
Current 106,347 125,617 348,090 243,553
Deferred (14,039 ) 33,360 23,817 33,360
92,308 158,977 371,907 276,913
NET LOSS $ (5,351,030 ) $ (7,182,673 ) $ (26,378,324 ) $ (18,509,053 )
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment 133,469 - 78,682 -
NET LOSS AND COMPREHENSIVE LOSS $ (5,217,561 ) $ (7,182,673 ) $ (26,299,642 ) $ (18,509,053 )
Basic and diluted weighted average shares outstanding 83,131,781 52,283,000 67,019,568 52,268,479
Basic and diluted net loss per share $ (0.06 ) $ (0.14 ) $ (0.39 ) $ (0.35 )


TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
(expressed in U.S. Dollars)
Share
capital
Warrants Debt
conversion
option
Contributed
surplus
Accumulated
other
comprehensive
income
Deficit Total
Balance, January 1, 2010 $ 3,575,627 $ - $ 2,463,430 $ 27,847 $ - $ (8,687,537 ) $ (2,620,633 )
Net loss for the year - - - - - (18,509,053 ) (18,509,053 )
Issuance of shares 710,000 - - - - - 710,000
Share issuance costs (32,690 ) - - - - - (32,690 )
Equity portion of convertible debt issued - 1,146,368 - - - 1,146,368
Share based compensation - - - 889,065 - - 889,065
Balance as at December 31, 2010 $ 4,252,937 $ - $ 3,609,798 $ 916,912 $ - $ (27,196,590 ) $ (18,416,943 )
Balance, January 1, 2011 $ 4,252,937 $ - $ 3,609,798 $ 916,912 $ - $ (27,196,590 ) $ (18,416,943 )
Net loss for the year - - - - - (26,378,324 ) (26,378,324 )
Cumulative translation adjustment - - - - 78,682 - 78,682
Total comprehensive loss for the year - - - - 78,682 (26,378,324 ) (26,299,642 )
Issuance of Class A shares and warrants 31,703,951 2,317,797 - - - - 34,021,748
Share issuance costs (3,037,339 ) 95,570 - - - - (2,941,769 )
Equity portion of convertible debt issued - - 141,571 - - - 141,571
Conversion of convertible debt 33,222,160 - (3,751,369 ) - - - 29,470,791
Share issuance in amalgamation transaction 1,288,532 - - - - - 1,288,532
Share based compensation - - - 694,060 - - 694,060
Balance as at December 31, 2011 $ 67,430,241 $ 2,413,367 $ - $ 1,610,972 $ 78,682 $ (53,574,914 ) $ 17,958,348


TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
(expressed in U.S. Dollars)
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the year $ (26,378,324 ) $ (18,509,053 )
Items not requiring an outlay of cash:
Amortization of intangible assets 295,800 295,800
Depreciation of property and equipment 555,220 85,837
Accretion of convertible debt 1,672,859 1,548,551
Share based compensation 694,060 889,065
Accrued interest on convertible debt 720,951 878,124
Reorganization and other costs 2,085,751 -
Impairment loss on equipment 43,333 -
Non cash milestone expense - 1,250,000
Income tax provision 371,907 276,912
Other (11,748 ) 2,104
Net changes in non-cash working capital items related to operating activities:
Other receivables 175,092 (223,677 )
Trade and other payables 871,452 654,548
Provision for onerous contracts 309,900 76,026
Prepaids and deposits (77,784 ) (82,133 )
Income taxes paid (357,475 ) (353,432 )
(19,029,006 ) (13,211,328 )
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Class A shares and warrants, net of issuance costs 31,079,979 -
Issuance of convertible debt 2,399,900 11,499,950
Issuance of common shares, net of issuance costs - 677,310
Payment of capital lease obligations (175,957 ) -
33,303,922 12,177,260
CASH FLOWS FROM INVESTING ACTIVITY
Acquisition of property and equipment, net of transfers from deposits (527,699 ) (2,778,874 )
(527,699 ) (2,778,874 )
NET INCREASE (DECREASE) IN CASH FOR THE YEAR 13,747,217 (3,812,942 )
Exchange gains (loss) on cash (5,426 ) -
CASH, BEGINNING OF THE YEAR 786,834 4,599,776
CASH, END OF THE YEAR $ 14,528,625 $ 786,834

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