WEX Pharmaceuticals Inc.
TSX : WXI

WEX Pharmaceuticals Inc.

November 15, 2005 19:14 ET

WEX Reports Second Quarter Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 15, 2005) - WEX Pharmaceuticals Inc. ("WEX" or the "Company") (TSX:WXI) reported today events and financial results for the three and six month periods ended September 30, 2005. All amounts, unless specified otherwise, are in Canadian dollars.

Financial Results - Unaudited

For the three months ended September 30, 2005, the Company recorded a loss of $4.1 million ($0.12 per common share) compared to a loss of $2.4 million ($0.07 per common share) in the three months ended September 30, 2004. The increase in loss for the three months ended September 30, 2005, when compared to the preceding year, is mainly attributable to increased clinical trial costs and employee severance and audit fee expenses recorded in the period.

The Company recorded a loss for the six months ended September 30, 2005 of $7.6 million ($0.22 per common share) compared to a loss of $5.7 million ($0.18 per common share) in the six months ended September 30, 2004. The increase in loss for the six months ended September 30, 2005, when compared to the preceding period, is attributable to the large increase in clinical trial costs, employee severance costs and professional fees offset by a significant reduction in stock-based compensation recorded in the current period as compared to the prior 2004 period.

Management expects losses to continue during the coming quarters as it continues to focus resources on clinical trials in an effort to further the commercialization of Tectin™.

The Company had cash, cash equivalents and short term investments of $17.2 million as at September 30, 2005 as compared to $20.7 million as at June 30, 2005 and $20.8 million as at March 31, 2005.

The Company's subsidiaries in China, Nanning Maple Leaf Pharmaceuticals Co. Ltd. ("NMLP"), and Wex Medical Limited in Hong Kong, recorded product revenues of $122,321 for the three months ended September 30, 2005, as compared to $164,014 in the same period in the previous year, or a decrease of $41,693.

Product revenues were $253,307 for the six months ended September 30, 2005, as compared to $300,213 for the same period in the previous year, or a decrease of $46,906.

Second Quarter Events

- The Company re-launched its Canadian Phase IIb/III clinical trial protocol for Tectin™ in moderate to severe inadequately controlled cancer-related pain. With the amendments to the protocol, the enrollment and dosing of patients in this study are projected to be completed by the end of June 2006.

- The Company received a request for early redemption of its unsecured convertible debentures in the aggregate principal amount of US$5.1 million that were issued in June 2004 by the Company's wholly owned subsidiary, Wex Medical Ltd., to 3 investment funds managed by a major Asian financial institution. The Company is in discussions regarding this matter and is now finalizing with the Institution the amendments required to the repayment terms to satisfy its request.

- The Company announced that it was seeking a new Chief Executive Officer to take the company to the next level. Dr. Edge Wang will serve as the Chief Executive Officer on an interim basis while the search for a replacement is conducted. Mr. Frank Shum resigned as Chief Executive Officer and will concentrate on operations in Asia.

- The Company undertook a restructuring to reduce its costs. In connection with the restructuring the headcount has been reduced by about 35% in both its headquarters in Vancouver and its Hong Kong Office. After giving effect to restructuring costs, the headcount reduction is expected to reduce employment and related expenses by approximately 30%. The restructuring allows the Company to focus more of its resources on clinical development to help achieve commercialization of the lead product Tectin™ in the most expeditious manner.

- The shareholders of the Company approved a Shareholder Rights Plan. The Rights Plan was designed to encourage the fair treatment of its shareholders in the event of an unsolicited take-over bid for shares of the Company.

About WEX Pharmaceuticals Inc.

WEX Pharmaceuticals Inc. is dedicated to the discovery, development, manufacture and commercialization of innovative drug products to treat moderate to severe acute and chronic pain, symptom pain relief associated with addiction withdrawal from opioid abuse and medicines designed for local anaesthesia. The Company's principal business strategy is to derive drugs from naturally occurring toxins and develop proprietary products for the Global market. The Company's Chinese subsidiary sells generic products manufactured at its facility in China.

Forward-Looking Statements

This News Release contains forward-looking statements which may not be based on historical fact, including without limitation statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.



WEX PHARMACEUTICALS INC.
(formerly International Wex Technologies Inc.)
Incorporated under the laws of Canada

CONSOLIDATED BALANCE SHEETS
(Unaudited)

--------------------------------------------------------------------
(expressed in Canadian Dollars)
--------------------------------------------------------------------
As at September 30, March 31,
2005 2005
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ASSETS
--------------------------------------------------------------------
Current
--------------------------------------------------------------------
Cash and cash equivalents
(notes 4 (a) and (c)) $ 9,657,137 $ 10,233,288
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Restricted cash 11,500 23,000
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Short-term investments
(notes 4 (b) and (c)) 7,531,280 10,581,176
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Accounts and other receivables 519,612 3,716,189
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Investment tax credit receivable 556,604 293,000
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Inventories 107,892 81,080
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Prepaid expenses, deposits and other 380,242 447,193
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Total current assets 18,764,267 25,374,926
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Deposits 125,000 125,000
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Property and equipment (note 5) 2,376,405 2,802,823
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Intangible assets (note 6) 3,846,051 4,079,145
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TOTAL ASSETS $ 25,111,723 $ 32,381,894
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LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------------------------------------
Current
--------------------------------------------------------------------
Accounts payable and
accrued liabilities $ 3,287,675 $ 3,146,016
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Deferred revenue 187,778 187,778
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Capital lease obligations (note 7) 6,669 27,036
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Total current liabilities 3,482,122 3,360,830
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Deferred tenant inducements 263,502 214,610
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Deferred revenue 594,631 688,520
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Capital lease obligations (note 7) - 19,386
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Convertible debentures (notes 8) 4,283,738 4,295,419
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Total liabilities 8,623,993 8,578,765
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Commitments and contingencies
(notes 1 and 11)
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Shareholders' equity
--------------------------------------------------------------------
Share capital (note 9) 62,766,019 62,583,019
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Equity component of convertible
debentures (notes 8 and 11 (vi)) 2,332,443 2,332,443
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Contributed surplus (note 9 (e)) 4,667,188 4,533,117
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Deficit (53,277,920) (45,645,450)
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Total shareholders' equity 16,487,730 23,803,129
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 25,111,723 $ 32,381,894
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On behalf of the Board:

Pierre Lapalme, Director Peter Stafford, Director

See Sedar for accompanying notes


WEX PHARMACEUTICALS INC.
(formerly International Wex Technologies Inc.)
Incorporated under the laws of Canada

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited)

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(Expressed in Three Months Ended Six Months Ended
Canadian Dollars) September 30 September 30
--------------------------------------------------------------------
2005 2004 2005 2004
(Restated (Restated
see note 3) see note 3)
--------------------------------------------------------------------
$ $ $ $
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Revenue
--------------------------------------------------------------------
Product sales
(note 12 (b)) 122,321 164,014 253,307 300,213
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License fees
(note 12 (b)) 46,943 79,135 93,888 158,270
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169,264 243,149 347,195 458,483
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Cost of
goods sold -
product sales 102,221 105,194 197,821 189,922
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67,043 137,955 149,374 268,561
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Expenses
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Research and
development
(notes 9(e)
and 10 (a)) 2,069,766 1,123,193 4,302,345 2,688,986
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General and
administrative
(notes 9(e)
and 10 (b)) 1,544,173 1,222,528 2,644,628 2,612,715
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Amortization 204,843 174,438 438,179 357,618
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3,818,782 2,520,159 7,385,152 5,659,319
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Operating Loss (3,751,739) (2,382,204) (7,235,778) (5,390,758)
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Other
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Interest and
sundry income 78,696 116,246 194,343 179,531
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Debenture
interest expense (161,051) (173,187) (328,888) (204,563)
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Foreign exchange
gain or (loss) (227,953) 8,964 (262,147) (313,524)
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(310,308) (47,977) (396,692) (338,556)
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Loss for
the period (4,062,047) (2,430,181) (7,632,470) (5,729,314)
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Deficit,
beginning
of period (49,215,873) (37,279,922) (45,645,450) (33,980,789)
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Deficit,
end of period (53,277,920) (39,710,103) (53,277,920) (39,710,103)
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Basic and diluted
loss per share $ (0.12) $ (0.07) $ (0.22) $ (0.18)
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Weighted average
number of
common shares
outstanding 35,059,451 32,690,320 35,054,675 32,562,774
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See Sedar for accompanying notes


WEX PHARMACEUTICALS INC.
(formerly International Wex Technologies Inc.)
Incorporated under the laws of Canada

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

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(Expressed in Three Months Ended Six Months Ended
Canadian Dollars) September 30 September 30
--------------------------------------------------------------------
2005 2004 2005 2004
(Restated (Restated
see note 3) see note 3)
--------------------------------------------------------------------
$ $ $ $
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OPERATING ACTIVITIES
--------------------------------------------------------------------
Loss for
the period (4,062,047) (2,430,181) (7,632,470) (5,729,314)
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Adjustment for
items not
involving cash
--------------------------------------------------------------------
Amortization 204,843 174,438 438,179 357,618
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Amortization of
deferred tenant
inducement
allowance (7,601) - (15,202) -
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Loss on disposal
of vehicles 97,244 150 97,244 150
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Stock-based
compensation 108,507 477,812 134,070 1,830,229
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Amortization of
deferred revenue (46,944) (79,135) (93,889) (158,270)
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Implied interest
expense on
convertible
debenture 158,623 61,289 326,460 92,665
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Unrealized
foreign
exchange loss (231,181) (252,314) (175,073) (252,314)
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(3,778,556) (2,047,941) (6,920,681) (3,859,236)
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Changes in
non-cash
working
capital items:
--------------------------------------------------------------------
Accounts and
other receivables (25,637) (145,840) 3,196,577 (207,743)
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Inventories (33,937) (51,896) (26,812) (63,785)
--------------------------------------------------------------------
Investment tax
credit receivable (163,604) - (263,604) -
--------------------------------------------------------------------
Prepaid expenses
and deposits (29,218) 153,768 (58,049) (16,299)
--------------------------------------------------------------------
Accounts payable
and accrued
liabilities 542,192 (683) 141,659 (213,283)
--------------------------------------------------------------------
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Cash used in
operating
activities (3,488,760) (2,092,592) (3,930,910) (4,360,346)
--------------------------------------------------------------------
--------------------------------------------------------------------

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INVESTING ACTIVITIES
--------------------------------------------------------------------
(Purchase) of
short term
investments - (7,193,841) (5,193,681) (7,193,841)
--------------------------------------------------------------------
Proceeds from
short term
investments 3,410,144 - 8,243,576 -
--------------------------------------------------------------------
Deposit - (586,518) 125,000 (711,518)
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Tenant
inducement
allowance 9,483 - 64,094 -
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Restricted cash 11,500 - 11,500 209,336
--------------------------------------------------------------------
(Purchase) of
property and
equipment (24,125) (175,228) (40,477) (566,140)
--------------------------------------------------------------------
Proceeds from
disposal of
vehicles 164,569 - 164,569 -
--------------------------------------------------------------------
--------------------------------------------------------------------
Cash provided
by (used in)
investing
activities 3,571,571 (7,955,587) 3,374,581 (8,262,163)
--------------------------------------------------------------------
--------------------------------------------------------------------

--------------------------------------------------------------------
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FINANCING ACTIVITIES
--------------------------------------------------------------------
Proceeds from
issuance of share
capital, net of
issuance costs - 1,819,790 183,000 3,494,914
--------------------------------------------------------------------
Advance or (repay)
amounts due to
directors &
demand loan - 2,564 - (92,507)
--------------------------------------------------------------------
Debenture issued - - - 6,818,744
--------------------------------------------------------------------
Repayment of
capital lease
obligations (34,009) (10,082) (39,753) (15,272)
--------------------------------------------------------------------
Repayment of
convertible
debenture (163,069) - (163,069) -
--------------------------------------------------------------------
--------------------------------------------------------------------
Cash (used in)
provided by
financing
activities (197,078) 1,812,272 (19,822) 10,205,879
--------------------------------------------------------------------
--------------------------------------------------------------------
(Decrease)
increase in
cash and cash
equivalents (114,267) (8,235,90) (576,151) (2,416,630)
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Cash and cash
equivalents,
beginning
of period 9,771,404 14,121,140 10,233,288 8,301,863
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--------------------------------------------------------------------
Cash and cash
equivalents,
end of period 9,657,137 5,885,233 9,657,137 5,885,233
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See Sedar for accompanying notes


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