EDMONTON, ALBERTA--(Marketwire - Nov. 11, 2011) - Afexa Life Sciences Inc. ("Afexa" or the "Company") (TSX:FXA) today announced that during the quarter ended September 30, 2011 revenue of $15.0 million was achieved, reflecting a 21.9% decrease over the same three-month period in 2010. For the six-month period ended September 30, 2011 revenue of $19.6 million was achieved which is $1.4 million or 6.6% lower than the $21.0 million achieved in the same period ending September 30, 2010. The reduced revenue is primarily due to a reduction of orders from one significant customer and the prevalence of relatively low incidences of flu at the beginning of this year's cold and flu season.
Margins for the quarter ended September 30, 2011 improved to 74.3% from 73.5% achieved in the same quarter of the previous year due to improved inventory management and logistics. Operating expenses increased to $10.9 million in the quarter compared to $7.4 million in the same quarter last year, primarily due to the incurrence of legal, advisory, employee retention, and acceleration and revaluation of share-based payments related to takeover bids that the Company received during this period. A net loss of $0.2 million was incurred in the quarter ended September 30, 2011 as compared to a $4.8 million net income in the prior year's corresponding quarter. The lower net income is due to the lower sales and higher expenses.
On October 18, 2011, Valeant Pharmaceutical International, Inc. ("Valeant") announced that it had acquired approximately 73.8% of Afexa's common shares and was extending its offer to purchase the remaining outstanding common shares of Afexa. Pursuant to a support agreement between Afexa and Valeant, the majority of the directors of Afexa as well as the interim CEO were replaced with Valeant appointees. On October 27, 2011, Valeant announced that it had acquired additional shares for a total share ownership of approximately 81.6% of Afexa's common shares. Afexa is now preparing for a special meeting of its shareholders to be held on December 12, 2011 that will propose an acquisition transaction be accepted. This will result in the privatization of Afexa effective in December 2011 and the remaining shareholders of Afexa being paid for their Afexa shares in December 2011.
ABOUT AFEXA LIFE SCIENCES INC
Afexa Life Sciences Inc. is a life sciences and technology company founded in 1992 and headquartered in Edmonton, Alberta, Canada. The Company have developed, commercialized and patented a proprietary technology, known as ChemBioPrint, which is used in the discovery and biological standardization of natural products that deliver consistent, verifiable and provable health benefits. Using the ChemBioPrint(R) product discovery and standardization platform, Afexa's scientists are able to precisely identify the chemical profile and biological activity of natural products. The process involves a combination of chemical and biological fingerprinting to ensure that the creation and scientific substantiation of its natural health products are safe, effective and consistent. Afexa is committed to using a pharmaceutical model (involving rigorous drug discovery and clinical development methods) to develop natural medicines for health maintenance and disease prevention. The Company's efforts in scientific research and product innovation are key factors in enabling Afexa to secure the trust of consumers, trade professionals, healthcare practitioners and government. Afexa's lead commercial product, COLD-FX(R), is approved to help reduce the frequency, duration, and severity of cold and flu symptoms by strengthening the immune system. COLD-FX continues to be the number one selling cold and flu remedy in Canada (source: The Nielsen Company MarketTrack National all channel dollar sales for the categories of Cold Remedies and Supplements and Products ("Point of Sale Data"), 52 weeks ended September 24, 2011).
Advisory Regarding Forward-looking Statements
This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "would", "project", "could", "should", "contemplate", "potential", "depend", "forecast", "believe", "plans", "targets", "intends" and similar expressions are intended to identify such forward-looking statements. These forward-looking statements reflect our beliefs and are based on information currently available to us. These statements require the Company to make assumptions which it believes are reasonable, and which are subject to inherent risks and uncertainties. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements, as certain of these risks and uncertainties are beyond Afexa's control. The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. An examples of such forward-looking statements include, but is not limited to plans that the Company will be privatized in December 2011 and the remaining shareholders of Afexa being paid for their Afexa shares in December 2011.
In addition, forward-looking statements are subject to the following risks and uncertainties which include, among other matters, the impact of competition; consumer confidence and spending levels; general economic conditions; interest rates; unseasonable weather patterns; the incidence of illnesses in the general population; the cost and availability of capital; the cost and availability of grants/funding; product development; reliance on third parties; dependence on a small number of major customers; adequacy of the Company's cash position to mitigate potential tightening of credit terms; success and adequacy of the Company's long-term strategic objectives; and the risk that actual results may differ from management's assumptions and estimates.
The Company believes that the expectations and assumptions reflected in the forward-looking information and statements contained herein are reasonable, but no assurance can be given that these expectations and assumptions are correct and that the results, performance or achievements expressed in, or implied by, forward-looking statements within this disclosure will occur, or, if they do, that any benefits may be derived from them. Afexa assumes no duty to update or revise forward-looking information, except as may be required pursuant to applicable laws. All forward-looking information is expressly qualified in its entirety by this cautionary statement. Further information regarding risks and uncertainties relating to Afexa and its securities can be found in the disclosure documents filed with the securities regulatory authorities, available at www.sedar.com.