WEX Pharmaceuticals Inc.
TSX : WXI

WEX Pharmaceuticals Inc.

June 29, 2005 08:30 ET

WEX Reports Year End Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 29, 2005) - WEX Pharmaceuticals Inc. ("WEX" or the "Company") (TSX:WXI) reported today highlights and financial results for the fiscal year ended March 31, 2005. All amounts, unless specified otherwise, are in Canadian dollars.

For the year ended March 31, 2005, the Company recorded a loss of $11.7 million ($0.35 per common share) compared to a loss of $8.0 million ($0.31 per common share) for the year ended March 31, 2004. The increase in loss for the year ended March 31, 2005, when compared to the preceding year, is attributable to substantial increases in research and development costs as they relate to the clinical trials of Tectin™ and Tetrodin™. The Company expects losses to continue during the next few years as it continues to focus resources on clinical trials in an effort to further the commercialization of Tectin™.

The Company raised a net $6.8 million (US$5.1million) in proceeds from debentures issued in the year ended March 31, 2005 and had cash, cash equivalents and short term investments of $20.8 million at the end of the year as compared to $18.3 million as at March 31, 2004. Not included in the $20.8 million was a payment from Laboratories del Dr. Esteve, S.A.("Esteve") of approximately $3.1 million (EUR 2 million), which was included in accounts receivable as at March 31, 2005, but subsequently received.

The Company's subsidiary in China, Nanning Maple Leaf Pharmaceuticals Co. Ltd. ("NMLP") and Wex Medical Limited in Hong Kong recorded product revenues of $569,739 for the year ended March 31, 2005, which included generic revenues of $517,997, as compared to $363,764 in the same period in the previous year or an increase of $154,233. This increase is a result of an expanded generic product line. The remaining portion of revenue includes the amortization of deferred licensing fees of $284,349 and the $3.1 million (EUR 2 million) relating to the research and collaboration fees from Esteve.

All results of operations were in line with management expectations.

There have been no material changes during the twelve months ended March 31, 2005 to the forward-looking information provided in the "Management's Discussion and Analysis of Financial Condition and Operations" for the prior fiscal year.

Corporate Developments

- The Company advanced its lead drug candidate Tectin™ into a Phase IIb/III trial in Canada for patients suffering from moderate to severe inadequately controlled cancer-related pain. This trial is ongoing and recruitment and dosing is expected to be completed by the end of June 2006.

- The Company's wholly owned subsidiary in Hong Kong, Wex Medical Limited, issued unsecured convertible debentures in the aggregate principal amount of US $5.1 million to three investment funds managed by a major Asian financial institution and its affiliates.

- The Company began a Tectin™ Phase II trial in China for patients suffering from moderate to severe inadequately controlled cancer-related pain. The first part of the study is now completed and the results are expected in the summer of 2005.

- The Company along with its European partner held a positive end of Phase IIa meeting with the U.S. Food and Drug Administration ("FDA"). The Company received confirmation that the FDA will accept foreign studies, conducted to International Conference of Harmonization ("ICH") standards, as part of an New Drug Application ("NDA") filing, and is encouraged that its current efforts in Canada and Europe will be an important part of the U.S. commercialization strategy.

- The Company's research facilities in China were expanded by 1000 m2 and equipped with state of the art technology to support its many ongoing research projects. While the primary focus at WEX is on the development of products derived from Tetrodotoxin ("TTX") this year the Company has been evaluating many new compounds derived from natural toxins and has added several early stage products to its pipeline.

- The Company changed its name from International Wex Technologies Inc. to WEX Pharmaceuticals Inc. which the Company believes better describes its business operations. The trading symbol on the TSX remains as WXI.

- The Company initiated a Canadian Phase IIa study on the efficacy and safety of Tetrodin™ alleviating Naloxone-precipitated withdrawal in Methadone maintained subjects. Results are expected during the summer of 2005.

- The Company signed an agreement with Esteve to make certain amendments to the previously executed License and Collaboration Agreement relating to the Company's products Tectin™, Tetrodin™ and Tocudin™. The amendments expand the existing collaboration to include additional co-development work. WEX believes that commercialization of Tectin™ in the most expeditious manner will be achieved by effectively utilizing combined resources.

- WEX invoiced Esteve in the amount of EUR 2,000,000 (approximately Cdn $3,136,200) for Research and Development work done for the recently completed Tectin™ Phase IIa trial in Canada. Subsequently, the funds were received in April 2005.

- During this fiscal year, management further strengthened the Company by hiring 25 new employees, the majority in clinical and scientific research. Michael Perri joined the Company as Chief Financial Officer and Dr. Jean Bourgouin joined the Company as Chief Medical Officer in charge of all clinical, non-clinical and discovery programs.

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

As at March 31 (expressed in Canadian dollars)
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2005 2004
(Restated(1))
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ASSETS

Current
Cash and cash equivalents $ 10,233,288 $ 8,301,863
Restricted cash 23,000 232,336
Short-term investments 10,581,176 10,000,000
Accounts and other receivables 3,716,189 199,083
Investment tax credit receivable 293,000 100,000
Inventories 81,080 38,748
Prepaid expenses, deposits and others 447,193 884,906
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Total current assets 25,374,926 19,756,936

Deposits 125,000 -
Property and equipment 2,802,823 1,556,493
Intangible assets 4,079,145 4,545,332

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TOTAL ASSETS $ 32,381,894 $ 25,858,761
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LIABILITIES AND SHAREHOLDERS' EQUITY

Current
Accounts payable and accrued
liabilities $ 3,146,016 $ 818,396
Due to directors - 99,831
Deferred revenue 187,778 316,540
Capital lease obligations 27,036 25,629
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Total current liabilities 3,360,830 1,260,396

Deferred tenant inducements 214,610 -
Deferred revenue 688,520 844,106
Capital lease obligations 19,386 50,270
Convertible debentures 4,295,419 -

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Total liabilities 8,578,765 2,154,772

Commitments and contingencies

Shareholders' equity
Share capital 62,583,019 55,161,562
Equity component of convertible
debentures 2,332,443 -
Contributed surplus 4,533,117 2,523,216
Deficit (45,645,450) (33,980,789)
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Total shareholders' equity 23,803,129 23,703,989

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TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 32,381,894 $ 25,858,761

(1) Restated to reflect the change in accounting policy on patents



WEX PHARMACEUTICALS INC.
(formerly International Wex Technologies Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

Years ended March 31 (expressed in Canadian dollars)
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2005 2004
(Restated (1))
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Revenue

Product sales $ 569,739 $ 414,764
License fees 284,349 316,540
Research and collaboration fees 3,136,200 -
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3,990,288 731,304

Cost of goods sold - product sales 375,350 249,542

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3,614,938 481,762

Expenses
Research and development 8,635,609 4,259,386
General and administrative 5,217,778 3,748,717
Amortization 796,068 471,647
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Total operating expenses 14,649,455 8,479,750

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Operating loss (11,034,517) (7,997,988)
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Other
Convertible debentures - interest
expense (559,700) -
Interest and sundry income 447,403 149,004
Foreign exchange loss (517,847) (170,468)
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Total other (630,144) (21,464)

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Loss for the year (11,664,661) (8,019,452)

Deficit, beginning of year (33,980,789) (25,961,337)

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Deficit, end of year $ (45,645,450) $ (33,980,789)
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Basic and diluted loss per share (0.35) (0.31)

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Weighted average number of common
shares outstanding 33,591,889 25,697,183
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(1) Restated to reflect the change in accounting policy on patents



WEX PHARMACEUTICALS INC.
(formerly International Wex Technologies Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended March 31 (expressed in Canadian dollars)
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2005 2004
(Restated (1))
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OPERATING ACTIVITIES
Loss for the year $ (11,664,661) $ (8,019,452)
Adjustment for items not involving
cash:
Amortization of capital assets and
intangibles 796,068 471,647
Amortization of deferred tenant
inducement allowance (25,337) -
Loss on disposal of property
and equipment 14,894 2,086
Stock-based compensation 2,152,721 2,138,063
Accretion of liability component on
convertible debentures 527,438 -
Foreign exchange expense on
convertible debentures (429,299) -
Amortization of deferred financing
costs 3,844 -
Amortization of deferred revenue (284,349) (316,540)
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(8,908,681) (5,724,196)

Changes in non-cash working capital
items:
Accounts and other receivables (3,517,106) (144,740)
Investment tax credit receivable (193,000) 26,849
Inventories (42,332) 10,504
Prepaid expenses, deposits and
other 583,149 (55,260)
Accounts payable and accrued
liabilities 2,327,621 316,534

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Cash used in operating activities (9,750,349) (5,570,309)
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INVESTING ACTIVITIES
Purchase of short-term investments (10,581,176) (10,023,000)
Proceeds from short-term investments 10,000,000 1,023,000
Rental deposit (250,000) -
Tenant inducement allowance received 239,947 -
Restricted cash 209,336 (209,336)
Purchase of property and equipment (1,591,104) (999,544)
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Cash used in investing activities (1,972,997) (10,208,880)
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FINANCING ACTIVITIES
Debentures issued, net of issuance costs 6,781,736 -
Proceeds from issuance of share capital,
net of issuance costs 7,278,637 23,474,814
Repayment of amounts due to directors (99,831) (215,135)
Repayment of capital lease obligations (29,477) (22,002)
Convertible debentures - interest
repayments (276,294) -
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Cash provided by financing activities 13,654,771 23,237,677
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Increase in cash and cash equivalents 1,931,425 7,458,488

Cash and cash equivalents, beginning
of year 8,301,863 843,375

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Cash and cash equivalents, end of year $ 10,233,288 $ 8,301,863

(1) Restated to reflect the change in accounting policy on patents


Contact Information

  • WEX Pharmaceuticals Inc.
    Don Evans
    604-683-8880 or 1-800-722-7549
    604-683-8868 (FAX)
    or
    WEX Pharmaceuticals Inc.
    Gordon Stanley
    Corporate Communications
    604-683-8880 or 1-800-722-7549
    604-683-8868 (FAX)
    wex@wexpharma.com
    www.wexpharma.com