Trimel Pharmaceuticals Corporation

Trimel Pharmaceuticals Corporation

August 03, 2011 17:00 ET

Trimel Pharmaceuticals Corporation Updates Investors and Announces Second Quarter 2011 Financial Results

- Private Placement Raises Approximately US$30 Million of Gross Proceeds, Going Public Transaction Completed

- Lead Program to Treat Males Suffering from Low Testosterone Levels Ready to Enter Phase III Trials

- Investigational New Drug Application for Female Sexual Dysfunction Program Accepted by Food and Drug Administration

- PricewaterhouseCoopers LLP Engaged as Auditors

TORONTO, ONTARIO--(Marketwire - Aug. 3, 2011) - Trimel Pharmaceuticals Corporation (TSX:TRL) today provided investors with an update on the completion of its financing / go public transaction and the status of its product development programs and business. Trimel Pharmaceuticals Corporation also announced the second quarter and six month period ended June 30, 2011 financial results for Trimel BioPharma Holdings Inc. ("Trimel Holdings"), a wholly owned subsidiary following the July 14, 2011 completion of a "Qualifying Transaction" and the amalgamation of a subsidiary of Trimel Pharmaceuticals Corporation with Trimel Holdings.

Significant Corporate Events


On July 14, 2011, concurrent with its going public transaction, Trimel Holdings completed a private placement of its securities to accredited investors and other exempt purchasers. Trimel Holdings sold US$30,356,939 of units (at US$1.10 per unit) which resulted in the issuance of 27,597,217 Class A shares of Trimel Holdings and 13,798,609 warrants to acquire a common share for two years at an exercise price of US$1.75 per share. Net proceeds from the transaction after deducting underwriters' fees and expenses were US$28,461,903.

As the final subscription price per unit (US$1.10 per unit) for the financing was less than the US$2.00 per unit price paid in March 2011 by other private placement investors, Trimel Holdings issued an additional 1,501,773 Class A shares to those investors representing the difference between the shares that would have been issued at the final subscription price and the number of shares already issued to the investors. As well, Trimel Holdings exchanged the 917,750 warrants previously issued to the March 2011 private placement investors for 1,668,636 new warrants (with an exercise price of US$1.75 per share).

Conversion of the Convertible Debt

On July 14, 2011, the holders of two series of convertible debt issued by Trimel Holdings totaling US$26,945,822 of debt and US$1,893,970 of accrued interest was converted for common equity prior to the amalgamation on July 14, 2011. The 2008-1 series note face value and accrued interest converted into 2,881,707 common shares and the 2009-1 series note face value and accrued interest converted into 26,517,930 common shares. Following the conversion of debt described above, Trimel Pharmaceuticals Corporation has no remaining convertible or other debt obligations.

Going Public Transaction and Share Exchange

On July 14, 2011, after the completion of the financing and debt conversion described above, Trimel Holdings amalgamated with J5 (Barbados), Inc. and became the surviving company (the "Surviving Company"). Each of the common shares owned by investors of the Surviving Company were transferred to Trimel Pharmaceuticals Corporation in exchange for common shares in the capital of Trimel Pharmaceuticals Corporation on a 2:1 basis. Warrants and stock options of the Surviving Company were similarly transferred to Trimel Pharmaceuticals Corporation in exchange for warrants (with an exercise price post the exchange of US$3.50) and stock options on such basis. Following completion of such amalgamation and share exchange, the Surviving Company became a wholly-owned subsidiary of Trimel Pharmaceuticals Corporation.

Listing on the Toronto Stock Exchange

Trimel Pharmaceuticals Corporation completed the application process with the Toronto Stock Exchange to have its shares listed for trading following the amalgamation. The listing was approved and the common shares began trading on July 19, 2011. At this time, the common shares of Trimel Pharmaceuticals Corporation were concurrently delisted from the TSX Venture Exchange. Trimel Pharmaceuticals Corporation is in the process of submitting an application to the Toronto Stock Exchange for the listing and trading of all issued and outstanding warrants.

PricewaterhouseCoopers LLP Engaged as Auditors

Trimel Pharmaceuticals Corporation's Audit Committee has recommended and the Board has approved the engagement of PricewaterhouseCoopers LLP as external auditors.

Business Update

Trimel Pharmaceuticals Corporation and its subsidiaries ("Trimel" or "the Company") have made significant progress advancing a number of its development programs and business. As announced separately, Trimel Pharmaceuticals Corporation has strengthened its management team with the addition of Mr. Tom Rossi as President. Mr. Rossi, who most recently was Country President and CEO of Novartis Pharmaceuticals Canada, brings significant industry knowledge, skills and contacts to Trimel Pharmaceuticals Corporation.

Compleo TRT, Trimel's most advanced product development program, is expected to enter Phase III clinical trials in the near term. Compleo TRT, which utilizes the Company's licensed bio-adhesive intranasal gel technology, 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. Product for use in the final clinical trial has been manufactured, placed on stability and warehoused pending commencement of the trial. A leading endocrinology Contract Research Organization ("CRO") that will be managing the trial has been contracted and many of the CRO's sites have been audited by Trimel. Further commentary, if any, regarding the clinical trial protocols for this study is expected from the Food and Drug Administration ("FDA") soon. Once initiated, this trial is expected to take approximately one year to conduct. The primary end-point for this study is based on achieving certain testosterone blood level parameters. Trimel's recently completed Phase II study program for Compleo TRT achieved results that met the FDA's guidelines for product approval.

Trimel's second bio-adhesive intranasal gel product development program, TBS-2, is for the treatment of the female sexual dysfunction condition anorgasmia ("Anorgasmia") which is the inability to achieve orgasm or an increased level of difficulty in achieving orgasm. The Company's Investigational New Drug application ("IND") for TBS-2 has been accepted by the FDA. Our ongoing Phase II Vibrotactile Stimulation Study ("VTS") has achieved positive preliminary results. This study was designed to examine the ability of TBS-2 to induce orgasm in women who are diagnosed with primary or secondary Anorgasmia. Preliminary review of VTS study data shows positive results have been achieved to date. The previous Phase I / Phase II clinical study related to this product development program demonstrated an ability to deliver the medication (testosterone) without any negative side effects and the ability for the medication to clear the dose within the anticipated dosing range while demonstrating statistically significant downstream physiological effect.

In relation to an approved IND, Trimel has successfully developed and manufactured formulation batches for TBS-7, the Company's product development program intended to treat patients with acute asthma. This material has been packaged in the TriVair deposition system.

Trimel's manufacturing facility is now capable of manufacturing bulk intranasal gel (for both the male and female products described above) and capable of filling the applicable product dispensers, all under Good Manufacturing Practices.

Second Quarter and Six Months Ended June 30, 2011 Financial Results

For the three month and six month periods ended June 30, 2011, Trimel incurred Research and Development expenses ("R&D") of US$2.7 million and US$4.3 million respectively versus US$1.7 million and US$3.4 million for the comparable 2010 periods. The increase in 2011 R&D spending for both periods relates primarily to a second quarter 2011 milestone fee payment of US$0.5 million associated with the Company's male testosterone product development program and 2011 spending associated with advancing the Company's female sexual dysfunction product development program.

Trimel incurred General and Administrative expenses ("G&A") of US$1.5 million and US$3.6 million for the three month and six month periods ended June 30, 2011 versus US$1.2 million and US$2.4 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 is primarily attributable to increased audit related activities, the impact of headcount additions, and incremental office costs related to headcount additions and higher costs associated with a move in July 2010 to a facility that provides the Company with office, lab, manufacturing and warehousing capabilities.

For the three month and six month periods ended June 30, 2011, financial expenses were US$0.9 million and US$1.6 million respectively versus US$0.6 million and US$1.1 million for the comparable 2010 periods. Financial expenses (which are non-cash expenses) are attributable to two series of convertible debt obligations. As described above, these debt obligations were converted on July 14, 2011 and no longer exist.

The Company had total net losses of US$5.1 million and US$9.8 million for the three month and six month periods ended June 30, 2011 versus US$3.6 million and US$7.0 million respectively for the comparable 2010 periods.

As at June 30, 2011, the Company had total assets of US$8.5 million versus US$8.2 million at December 31, 2010. At June 30, 2011, the Company had total liabilities of US$32.5 million including US$26.1 million of convertible debt (which was converted and eliminated on July 14, 2011 as described above) and US$26.6 million including US$22.9 million of convertible debt at December 31, 2010.

During the six months ended June 30, 2011, the Company received gross proceeds of US$3.7 million related to private placement subscriptions from the sale of units (comprising one Class A share and half a warrant) versus the receipt of US$0.7 gross proceeds from a family and friends private placement completed in January 2010.

During the six months ended June 30, 2011, the Company received advances under the 2009-1 series note totaling US$2.4 million versus advances of US$3.1 million under the note for the comparable 2010 period.

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

For further information regarding Trimel Pharmaceuticals Corporation, please contact either Bruce Brydon, Chief Executive Officer at 416 679-0711 or Kenneth Howling, Chief Financial Officer at 416 679-0536 or via email at

About Trimel

Trimel Pharmaceuticals Corporation (TSX:TRL) is a leader in developing quality of life pharmaceuticals, targeting conditions related to Aging, Well Being and Female Sexual Health. Trimel is developing multiple product opportunities, including Compleo TRT, 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

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 Trimel Holdings, their 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 reflect 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 Trimel 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 or Trimel Holdings 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 each of TPC and Trimel Holdings undertake 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 or Trimel Holdings 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 and Trimel Holdings 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.

AS AT JUNE 30, 2011
(with comparative figures for December 31, 2010)
(expressed in U.S. Dollars)
June 30, December 31,
2011 2010
Cash $ 287,255 $ 786,834
Accounts receivable 46,635 249,396
333,890 1,036,230
Deferred charges 1,086,523 1,667,710
Property, plant and equipment, net 3,049,589 1,311,832
Intangible assets 4,006,300 4,154,200
8,142,412 7,133,742
TOTAL ASSETS $ 8,476,302 $ 8,169,972
Trade and other payables $ 4,539,275 $ 2,507,711
Convertible debt 26,092,431 22,871,634
Accrued interest on convertible debt 1,842,244 1,173,019
32,473,950 26,552,364
Deferred tax liability 52,105 34,551
TOTAL LIABILITIES 32,526,055 26,586,915
SHARE CAPITAL 7,873,937 4,252,937
DEBT CONVERSION OPTION 3,751,369 3,609,798
DEFICIT (36,965,471 ) (27,196,590 )
TOTAL SHAREHOLDERS' DEFICIENCY (24,049,753 ) (18,416,943 )
(with comparative figures for the three and six months ended June 30, 2010)
(expressed in U.S. Dollars)
For the three months ended June 30, For the six months ended June 30,
2011 2010 2011 2010
REVENUE $ - $ - $ - $ -
Research and development 2,671,650 1,769,337 4,333,595 3,442,807
General and administrative 1,267,952 1,145,772 3,193,392 2,217,931
Depreciation of property, plant and equipment 130,169 18,812 221,598 28,265
Amortization of intangible assets 73,950 73,969 147,900 147,939
Impairment loss on equipment - - 43,333 -
4,143,721 3,007,890 7,939,818 5,836,942
Accretion of convertible debt 510,039 365,408 962,468 709,041
Interest on convertible debt 342,687 192,019 669,945 355,094
852,726 557,427 1,632,413 1,064,135
TOTAL EXPENSES 4,996,447 3,565,317 9,572,231 6,901,077
LOSS BEFORE INCOME TAXES (4,996,447) (3,565,317) (9,572,231) (6,901,077)
Current 116,621 29,420 180,174 58,016
Deferred 8,529 - 16,476 -
125,150 29,420 196,650 58,016
NET LOSS $ (5,121,597) $ (3,594,737) $ (9,768,881) $ (6,959,093)
Basic Weighted Average Shares Outstanding 106,401,500 104,566,000 105,580,088 104,507,436
Basic Net Loss per Share $ (0.05) $ (0.03) $ (0.09) $ (0.07)
(with comparative figures for the six months ended June 30, 2010)
(expressed in U.S. Dollars)
Share Capital Debt Conversion Option Share-based Payment Reserve 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 - 397,763 - - 397,763
Issuance of stock options - - 369,162 - 369,162
Net loss for the period - - - (6,959,093 ) (6,959,093 )
Balance as at June 30, 2010 $ 4,252,937 $ 2,861,193 $ 397,009 $ (15,646,630 ) $ (8,135,491 )
Balance, January 1, 2011 $ 4,252,937 $ 3,609,798 $ 916,912 $ (27,196,590 ) $ (18,416,943 )
Issuance of Class A shares 3,671,000 - - - 3,671,000
Share issuance costs (50,000 ) - - - (50,000 )
Equity portion of convertible debt issued - 141,571 - - 141,571
Issuance of stock options - - 373,500 - 373,500
Net loss for the period - - - (9,768,881 ) (9,768,881 )
Balance as at June 30, 2011 $ 7,873,937 $ 3,751,369 $ 1,290,412 $ (36,965,471 ) $ (24,049,753 )
(with comparative figures for the six months ended June 30, 2010)
(expressed in U.S. Dollars)
For the six months ended June 30
2011 2010
Net loss for the period before taxes $ (9,572,231 ) $ (6,901,077 )
Items not requiring an outlay of cash:
Amortization of intangible assets 147,900 147,939
Depreciation of property, plant and equipment 221,598 28,265
Accretion of convertible debt 962,468 709,041
Share based compensation 373,500 369,162
Accrued interest on convertible debt 669,945 355,094
Impairment loss on equipment 43,333 -
Net changes in non-cash working capital items related to operating activities:
Accounts receivable 202,761 (23,418 )
Other (48,586 ) (3,646 )
Trade and other payables, excluding income taxes 1,848,405 (656,588 )
Income taxes paid - (70,586 )
(5,150,907 ) (6,045,814 )
Issuance of Class A shares and warrants, net of issuance costs 3,621,000 -
Issuance of convertible debt 2,399,900 3,100,000
Issuance of common shares, net of issuance costs - 710,000
6,020,900 3,810,000
Acquisition of property, plant and equipment, net of transfers from deposits (400,178 ) (241,870 )
Increase in deferred charges, net of transfers to property, plant and equipment (969,394 ) (195,477 )
(1,369,572 ) (437,347 )
CASH, END OF THE PERIOD $ 287,255 $ 1,926,615

Contact Information

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