Trimel Pharmaceuticals Corporation
TSX : TRL

Trimel Pharmaceuticals Corporation

November 03, 2011 07:00 ET

Trimel Pharmaceuticals Corporation Provides Quarterly Update and Announces Third Quarter 2011 Financial Results

- During the quarter, raised US$30.4 million of gross proceeds and completed going-public transaction

- CompleoTRT entered Phase III for testing in males suffering from low testosterone

- Female Sexual Dysfunction Phase II trial completed early with an interim positive analysis

- Tom Rossi hired as President and John Friedrichsen joined the Board of Directors

TORONTO, ONTARIO--(Marketwire - Nov. 3, 2011) - Trimel Pharmaceuticals Corporation (TSX:TRL) today provided investors with an overview of its quarterly achievements, the status of its product development programs, and business and financial results for the three and nine month periods ended September 30, 2011.

Significant Corporate Event

Financing and Going-Public Transaction

During the quarter ended September 30, 2011, Trimel Pharmaceuticals Corporation and / or its wholly-owned subsidiaries (the "Company" or "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 issued by Trimel totalling US$26,945,822 of principle and US$1,893,970 of accrued interest were converted into common equity during the quarter ended September 30, 2011. Subsequently, the Toronto Stock Exchange ("TSX") approved the listing of the Company's common shares and warrants and trading commenced under the tickers TRL and TRL-WT respectively. Following the conversion of debt described above, Trimel has no remaining convertible or other debt obligations.

Business Update

CompleoTRT

CompleoTRT, Trimel's most advanced product development program, entered Phase III clinical trials at the end of the Company's third quarter. CompleoTRT utilizes the Company's licensed bio-adhesive intranasal gel technology and is being developed to provide males with clinically low levels of testosterone (medically referred to as hypogonadism) with superior safety and enhanced patient convenience over currently available treatment options. This Phase III trial is expected to take approximately one year to conduct. The required end points for FDA approval are blood level studies which demonstrate the product's ability to restore testosterone levels to be within a defined normal range. These same end points were successfully achieved in the Company's Phase II clinical program.

TBS-2 – Treatment for Female Sexual Dysfunction

Trimel's second bio-adhesive intranasal gel product development program, TBS-2, is being developed for the treatment of anorgasmia, a female sexual dysfunction condition. Anorgasmia is defined as a women's inability to achieve or persistent difficulty in achieving orgasm even in conjunction with adequate sexual stimulation. TBS-2 is being developed to offer women suffering from anorgasmia an on-demand treatment option to improve their quality of life and reduce the distress they suffer associated with this condition.

During the quarter ended September 30, 2011, based on positive preliminary data obtained, the Company completed its Vibro-Tactile Stimulation (VTS) Phase II clinical study early. The VTS clinical study was designed to measure the effect of TBS-2 on the occurrence of orgasm, time to orgasm, the quality of orgasm, and placebo response rates for the anorgasmic patient population in order to assist in determining statistical power required in a planned Phase II Ambulatory (AMB) clinical study in the United States. The VTS study was also designed to identify appropriate patient inclusion and exclusion criteria and the biochemical markers and measureable patient physiological and emotional response rates to be studied in the upcoming AMB clinical study.

Since commencing the development of TBS-2 in 2010, in addition to the VTS study, the Company has successfully completed a Phase I/II clinical program in which it dosed TBS-2 for the first time in patients, at a therapeutic level, while demonstrating that within the anticipated dosing period, the dose is cleared and blood levels return to normal. This study further demonstrated positive downstream physical effects related to achieving orgasm. Further, Trimel's results signaled a clinical scientific breakthrough as TBS-2 demonstrated genital responsiveness 30 minutes post dosing.

Strengthening of Senior Management and Board of Directors

Trimel strengthened its senior management team with the addition of Mr. Tom Rossi as President and its Board of Directors with the appointment of Mr. John Friedrichsen. Mr. Rossi, who most recently was President and CEO of Novartis Pharmaceuticals Canada, brings significant industry knowledge, skills and contacts to the Company. Mr. Friedrichsen is a chartered accountant and the Senior Vice President and Chief Financial Officer of a TSX listed company and brings further independence and substantive public company experience to the Trimel Board of Directors.

Chairman of the Board and Chief Executive Officer Bruce Brydon commented, "Trimel's 2011 third quarter has been the most productive 90 day period in the Company's short three year history. During the quarter, Trimel raised over $30 million dollars in gross proceeds and completed a going-public transaction, strengthened its senior management team with the appointment of Tom Rossi as President, strengthened the depth and independence of its Board through the appointment of John Friedrichsen, completed a Phase II trial of the Company's product under development for the treatment of a female sexual dysfunction condition known as anorgasmia, and initiated a Phase III clinical trial for CompleoTRT, the Company's product under development for the treatment of male hypogonadism, also known as Low T. These accomplishments should help the Company in the future as it works toward entering into commercial transactions to license the rights to a number of its developmental programs, strengthening its balance sheet, and continuing to advance its clinical program and product development activities".

Financial Results for the Three and Nine Months Ended September 30, 2011

For the three and nine month periods ended September 30, 2011, Trimel incurred Research and Development expenses ("R&D") of US$6.0 million and US$10.4 million respectively as compared to US$2.2 million and US$5.6 million for the comparable 2010 periods. The increase in 2011 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 completed VTS clinical study for TBS-2 and milestone fee payments of approximately US$2.8 million and US$3.4 million associated with the Company's male testosterone product development program for the three and nine month periods respectively.

Trimel incurred General and Administrative expenses ("G&A") of US$2.8 million and US$6.4 million for the three and nine month periods ended September 30, 2011 as compared to US$1.5 million and US$3.9 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 its going-public transaction, increased audit related activities, 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 nine month periods ended September 30, 2011 finance expenses were US$2.2 million and US$3.9 million respectively as compared to US$0.6 million and US$1.7 million for the comparable 2010 periods. During the three months ended September 30, 2011, and as a result of the Company's going-public transaction, the excess of the fair market value assigned to the common shares retained by the former shareholders of J5 Acquisition Corporation was expensed as Capital Reorganization Costs in the amount of $1.3 million. The financial expenses (which are non-cash expenses) are attributable to two series of convertible debt obligations that were converted in July 2011 as described above.

The Company had total net losses of US$11.2 million and US$21.0 million for the three and nine month periods ended September 30, 2011 as compared to US$4.3 million and US$11.3 million respectively for the comparable 2010 periods. The increase in period over period net losses is primarily due to spending R&D and G&A spending increases as described above.

As at September 30, 2011, the Company had total assets of US$26.8 million as compared to US$8.2 million at December 31, 2010 and total liabilities of US$4.1 million at September 30, 2011 as compared to US$26.6 million at December 31, 2010.

During the nine months ended September 30, 2011, the Company received net proceeds of US$31.2 million related to private placement subscriptions from the sale of units comprising one Class A share and half a warrant (redeemable for one-half of one common share) and $2.4 million from the issuance of convertible debt as compared to $5.9 million from the issuance of convertible debt and the receipt of US$0.7 net proceeds from a family and friends private placement during the first nine months of 2010.

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

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". Moreover, CompleoTRT is designed to avoid the negative impact of first-pass metabolism on the product, liver, or both.

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 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 North America exceeded $1 billion annually in 2010.

About TBS-2

Trimel's product candidate TBS-2 is a bio-adhesive intranasal low-dose gel formulation of testosterone. TBS-2 is being developed to offer women with anorgasmia, an on-demand treatment option improving their quality of life. TBS-2 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 a woman's inability to achieve or persistent difficulty in achieving orgasm. 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): Developing quality of life pharmaceuticals, targeting conditions related to Aging, Well Being and Female Sexual Health. Trimel is developing multiple product opportunities, including CompleoTRT, a bio-adhesive intranasal testosterone gel for the treatment of male hypogonadism, a condition commonly referred to as "Low T". For more information, please visit www.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 Trimel Pharmaceuticals Corporation's ("TPC") management regarding the future growth of TPC 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 TPC'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: TPC 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; TPC will be able to attract and retain key personnel; TPC will be able to acquire any necessary technology or businesses and effectively integrate such acquisitions; TPC will be successful in developing and clinically testing products under development; TPC 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 TPC's products will be favourable; TPC's products will not be adversely impacted by competitive products and pricing; raw materials and finished products necessary for TPC's products will continue to be available; TPC will be able to maintain and enforce the protection afforded by any patents or other intellectual property rights; TPC's products will be successfully licensed to third parties to market and distribute such products on favourable terms; TPC'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 TPC; the tax treatment of TPC and its subsidiaries will remain constant and TPC will not become subject to any material legal proceedings. TPC 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 TPC 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 TPC 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 TPC 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 TPC 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 STATEMENT OF FINANCIAL POSITION
AS AT SEPTEMBER 30, 2011
(with comparative figures for December 31, 2010)
(expressed in U.S. Dollars)
(UNAUDITED)
ASSETS
September 30, December 31,
2011 2010
CURRENT
Cash$18,945,461 $786,834
Other receivables 241,271 249,396
Prepaids and deposits 186,757 1,667,710
19,373,489 2,703,940
NON-CURRENT ASSETS
Property, plant and equipment, net 3,511,136 1,311,832
Intangible assets 3,932,350 4,154,200
7,443,486 5,466,032
TOTAL ASSETS$26,816,975 $8,169,972
LIABILITIES
CURRENT
Trade and other payables$3,435,019 $2,412,081
Income taxes payable 53,219 95,630
Current portion of capital lease obligation 375,476 -
Convertible debt - 22,871,634
Accrued interest on convertible debt - 1,173,019
3,863,714 26,552,364
LONG-TERM
Capital lease obligation 231,440 -
Deferred tax liability 68,107 34,551
299,547 34,551
TOTAL LIABILITIES 4,163,261 26,586,915
SHAREHOLDERS' EQUITY (DEFICIENCY)
Share capital 66,907,543 4,252,937
Warrants 2,413,368 -
Debt conversion option - 3,609,798
Contributed surplus 1,485,417 916,912
Accumulated other comprehensive loss (54,786) -
Deficit (48,097,828) (27,196,590)
TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY) 22,653,714 (18,416,943)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)$26,816,975 $8,169,972
TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011
(with comparative figures for the three and nine months ended September 30, 2010)
(expressed in U.S. Dollars)
(UNAUDITED)
For the three months ended For the nine months ended
September 30, September 30,
2011 2010 2011 2010
REVENUE$- $- $- $-
EXPENSES
Research and development 6,026,154 2,154,089 10,359,749 5,596,896
General and administrat
-ive
2,801,932 1,458,678 6,408,155 3,852,813
8,828,086 3,612,767 16,767,904 9,449,709
FINANCE COSTS
Accretion of convertible debt 853,391 391,334 1,815,859 1,100,375
Interest on convertible debt and other interest 56,180 234,555 726,125 589,649
Capital reorganizat
-ion costs
1,311,751 - 1,311,751 -
2,221,322 625,889 3,853,735 1,690,024
TOTAL EXPENSES 11,049,408 4,238,656 20,621,639 11,139,733
LOSS BEFORE INCOME TAXES (11,049,408) (4,238,656) (20,621,639) (11,139,733)
PROVISION FOR INCOME TAXES
Current 61,569 59,920 241,743 117,936
Deferred 21,380 - 37,856 -
82,949 59,920 279,599 117,936
NET LOSS$(11,132,357) $(4,298,576) $(20,901,238) $ (11,257,669)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment (54,786) - (54,786) -
NET LOSS AND COMPREHENSIVE LOSS$(11,187,143) $(4,298,576) $(20,956,024) $(11,257,669)
Basic and diluted weighted average shares outstanding78,861,289 52,283,000 61,589,825 52,264,795
Basic and diluted net loss per share$(0.14) $(0.08) $(0.34) $(0.22)
TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(with comparative figures for the nine months ended September 30, 2010)
(expressed in U.S. Dollars)
(UNAUDITED)
Share Capital Warrants
Debt
Conversion
Option
Contributed
Surplus

Accumulated
other
comprehensive
loss
Deficit Total
Balance, January 1, 2010$3,575,627 $- $2,463,430 $27,847 $- $(8,687,537)$(2,620,633)
Issuance of shares 710,000 - - - - 710,000
Share issuance costs (32,690) - - - - (32,690)
Equity portion of convertible debt issued - 694,245 - - - 694,245
Issuance of stock options - - 631,819 - - 631,819
Net loss for the period - - - - (11,257,669) (11,257,669)
Balance as at September 30, 2010$4,252,937 $- $3,157,675 $659,666 $- $(19,945,206)$(11,874,928)
Balance, January 1, 2011$4,252,937 $- $3,609,798 $916,912 $- $(27,196,590)$(18,416,943)
Issuance of Class A shares and warrants 31,710,141 2,317,798 - - - $34,027,939
Share issuance costs (2,935,228) 95,570 - - - $(2,839,658)
Equity portion of convertible debt issued 141,571 $141,571
Conversion of convertible debt 32,591,161 (3,751,369) $28,839,792
Share issuance in amalgamation transaction 1,288,532 $1,288,532
Cumulative translation adjustment (54,786) $(54,786)
Issuance of stock options - - 568,505 - $568,505
Net loss for the period - - - (20,901,238)$(20,901,238)
Balance as at September 30, 2011$66,907,543 $2,413,368 $- $1,485,417 $(54,786)$(48,097,828)$22,653,714
TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(with comparative figures for the nine months ended September 30, 2010)
(expressed in U.S. Dollars)
(UNAUDITED)
For the nine months ended
September 30
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period$(20,901,238) $(11,257,669)
Items not requiring an outlay of cash:
Amortization of intangible assets 221,850 221,850
Depreciation of property, plant and equipment 385,875 45,387
Accretion of convertible debt 1,815,859 1,100,375
Share based compensation 568,505 631,819
Accrued interest on convertible debt 720,951 589,649
Impairment loss on equipment 43,333 -
Capital reorganization expense 1,311,751 -
Income tax provision 279,599 117,936
Other (158,350) 199,888
Net changes in non-cash working capital items related to operating activities:
Other receivables 8,125 (235,043)
Trade and other liabilities, excluding income taxes 1,022,938 15,716
Prepaids and deposits (53,205) (1,160,313)
Income taxes paid (282,021) (317,824)
(15,016,028) (10,048,229)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Class A shares and warrants, net of issuance costs 31,188,281 -
Issuance of convertible debt 2,399,900 5,850,000
Issuance of common shares, net of issuance costs - 677,310
Payment of capital lease obligations (63,960) -
33,524,221 6,527,310
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment, net of transfers from deposits (349,565) (717,232)
(349,565) (717,232)
NET INCREASE (DECREASE) IN CASH FOR THE PERIOD 18,158,628 (4,238,151)
CASH, BEGINNING OF THE PERIOD 786,834 4,599,776
CASH, END OF THE PERIOD$18,945,461 $361,625

Contact Information

  • Trimel Pharmaceuticals Corporation
    Kenneth Howling
    Chief Financial Officer
    416 679-0536