Today Advitech inc. (TSX VENTURE: AVI) presents an update, its first quarter 2007 results and the appointment of Dr Colin Bier and Mr Pierre Labbe to its Board of Directors.
UPDATE ON RECENT DEVELOPMENTS AND OUTLOOK
For the first quarter of fiscal 2007, revenue amounted to $ 53,315 and net loss was $ 397,925. Now that we have actual market numbers, distribution agreements signed in 2006 for Canada and Taiwan, new letters of intention for distribution agreements signed in 2007 for markets such as France, Belgium, Indonesia, Hong Kong and Macau and other agreements under discussion for territories such as the United States of America and Germany, we are confident to increase revenues in 2007 compared to 2006. According to the purchase order forecasts made by our marketing partners, 2007 sales will begin to materialize in the second quarter with a foreseeable growth in the last two quarters. The Company's operations are subject to the cyclical or seasonal nature of psoriasis effects on the patients. As a result, revenue will fluctuate from quarter to quarter. Since October is the month for psoriasis on a worldwide basis, our distributors will start to concentrate on their promotion program in September.
We began the commercialization of Dermylex(TM) in July 2006 and since then sales have been mainly in Canada and Taiwan and handled through our marketing partners. This operation has generated revenues of $ 540,000 in the last two quarters of 2006. The units sold (more than 25,000 bottles sold in Canada alone) have been used primarily to supply different distribution networks and this since November 2006.
"We now have a six-month background history with sales of Dermylex(TM) in Canada and we have been able to note that a demand does exist for Dermylex(TM). Also, the reordering process, a critical factor to evaluate the success of a commercial product is now quantifiable although the data is still preliminary " has indicated Mr. Renaud Beauchesne, President and Chief Executive Officer of the Corporation.
Other applications issued from Advitech's technological platform
Our R&D team is presently working on three other applications: ulcerative colitis, eczema and wound healing. The management has already made the strategic decision to focus on dermatological applications so as to optimize the commercial networking development we have been setting up. We are therefore concentrating our efforts on eczema and wound healing. In fact, a clinical study, in its planning stages, is scheduled to begin in the third quarter of 2007. We have initiated pre-clinical work on wound healing that is derived from a new technological platform we are now evaluating. The results of these scientific studies will be announced in the fourth quarter of 2007. If positive results are obtained, we should be in a position to initiate the commercialization of a new product for eczema during 2008 and at the same time continuing to pursue the development of a product for wound healing.
Concerning the ulcerative colitis application, we have made a strategic decision to out-licence the development and commercialization rights to one or several interested partners. We are presently having discussions with potential partners in order to reach such an agreement by the end of 2007. Our intellectual property is strong and protects manufacturing aspects as well as the compositions and applications (psoriasis and inflammation related to Th1) of our products. New patents are presently in preparation so as to protect eczema and wound healing applications.
On a financial standpoint, we had a 2006-2007 financing plan with a minimal objective of $ 2,300,000. "Considering the $ 970,000 investment announced on May 2nd, 2007 we exceeded this objective and have the required funding to reach our 2007 plan. We don't have any current financing projects in the works but we are staying watchful to all opportunities that may be proposed to the society" has indicated Mr. Beauchesne, president and Chief Executive Officer.
APPOINTMENT TO THE BOARD OF DIRECTORS
Mr. Claude R. Livernoche, Chairman of the Board, announced today the appointment of Dr. Colin Bier and Mr. Pierre Labbe to its Board of Directors.
"I wish to welcome Colin as a director at Advitech. He brings with him an outstanding record as a board member and consultant to several successful companies in the biotechnology sector," stated Claude R. Livernoche, Chairman of the Board of Advitech. Dr. Bier holds an M.Sc and a Ph.D. specialized in physiology, immunology and pathology. The appointment of Dr. Bier follows a 970,000$ investment by AgeChem Venture Fund L.P in Advitech announced earlier.
Dr. Bier is currently Chairman of the board of two private companies while also serving as director on the boards of one public (Neurochem, NRM.TO and Nasdaq; NRMX) and two private companies. Dr. Bier travels extensively in North America and Europe and has a special interest and knowledge in immune mediated and inflammatory disorders such as psoriasis. He will bring to Advitech a solid networking capacity and expertise in technical, regulatory and marketing issues. Dr. Bier is a member of the Investment Committee of AgeChem Venture Fund L.P.
"I would like also to welcome Pierre Labbe on our board. He has a strong financial experience along with a special interest in the biotechnology sector," added Claude R. Livernoche. "I would also like to take this opportunity to thank Andre Lamothe for his contribution to the board over the past three years. Mr Lamothe has served on the Audit Committee and his expertise has been very helpful".
Mr. Labbe is a chartered accountant and is currently the Chief Financial Officer of Medicago inc., a public traded company (MDG-TSX-V).
For the first quarter ended March 31, 2007, the net loss stood at $ 397,925, or $ 0.01 per share, compared to a net loss of $ 361,872, or $ 0.01 per share, for the same period in 2006, an increase of $ 36,053. The increased loss is explained by higher research and development expenses for the XP-828L development program, higher financial expenses and by a reduction in the contribution of commercial activities.
Revenues for the first quarter of 2007 were $ 53,315, compared to $ 158,122 for the corresponding quarter in 2006. Revenues for the first quarter of 2007 are mostly derived from licensing royalties.
Before the tax credits, the research and development expenses reached $ 149,777 for the first quarter ending March 31, 2007 in comparison to $ 133,212 for the first quarter ending March 31, 2006. This increase is mostly due to the higher costs incurred by the clinical and preclinical development program of XP-828L.
As at March 31, 2007, the Company had $ 1,585,120 in cash and cash equivalents, compared to $ 601,375 as at December 31, 2006. The increase in liquidities is the result of the financing activities that took place in the first quarter of 2007.
Lastly, concerning financing activities, the Company obtained a total financing of $ 1,476,049 in the first quarter. Of this amount $ 77,490$ is a bank loan secured by research and development tax credits, $ 948,000 come from convertible debentures issued in February and March 2007, $ 14,431 from a commercialization loan by Economic Development Canada and finally, $ 436,128 is from an issue of share capital. An amount of $ 88,297 was used for share and convertible debenture issues. Globally, in the first quarter of 2007 the Company has generated liquid assets from financing amounting to a total of $ 1,387,752 compared to the first quarter in 2006 when the Company used a total of $ 18,270 in liquid assets to reimburse existing loans.
Selected financial information Years ended March 31, (In thousands of dollars, except per share amounts) 2007 2006 Financial Results Total Revenues $53.3 $158.1 Operating Expenses $451.2 $520.0 Research and Development Costs, Net of Tax Credits $149.8 $107.9 Net Loss $(397.9) $(361.9) Loss per Share, Basic and Diluted $(0.01) $(0.01) Balance Sheet Cash and Cash Equivalents $1,585.1 $730.2 Other Current Assets $498.2 $416.3 Long-term Assets $169.4 $242.4 Current Liabilities $617.5 $574.4 Long-term Liabilities $1,689.2 $685.8 Shareholders' Equity $(54.0) $128.7
The first quarter financial statements and the fiscal year financial statements, as well as the management's discussion and analysis of results of operations and financial condition, are available on the Company's website at the following address:
About Advitech Inc.
Advitech is a health sciences and technology company with a mission to discover and commercialize proprietary and evidence-based natural health products. Effective and safe, these products play a role in the prevention of Immune-Mediated Inflammatory Disorders (IMID), such as psoriasis and inflammatory bowel disease. Advitech's common shares are listed on the TSX Venture Exchange under the symbol AVI. The number of common shares outstanding is 72 965 051.
Dermylex(TM), developed by Advitech, is an oral natural health product relieving mild-to-moderate psoriasis symptoms. Its efficacy has been clinically proven by two clinical trials, one of them multi-center, double-blind and placebo-controlled, for 112 days and on 84 patients, confirming Dermylex(TM)'s efficacy and safety for that type of psoriasis. Dermylex(TM) is currently available in Canada. For more information, please visit the www.dermylex.ca website.
The AgeChem Venture Fund L.P. currently is seeking to invest in companies developing therapeutics targeting age-related diseases. The range of diseases and chronic conditions associated with aging provides a breadth of attractive investment opportunities The world's population aged 65 and older is growing by an unprecedented 800,000 people a month and the global aging trend is expected to continue well into the 21st century. Principally, AgeChem wants to build a portfolio of Companies developing novel therapeutics to treat age-related disorders such as metabolic disorders (e.g. diabetes, obesity), cardiovascular diseases, cancers, diseases of the central nervous system (e.g. Alzheimer, Parkinson and Insomnia), inflammatory diseases (e.g. rheumatoid arthritis, psoriasis), ophthalmic and auditory diseases and others. AgeChem's principals have a wide breadth of experience having invested in several private and public entities. In addition to AgeChem, some of the principals are also managing the GeneChem Technologies Venture Fund L.P. and the GeneChem Therapeutics Venture Fund L.P. (www.genechem.com).
This press release contains forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.