TORONTO, March 31 /CNW/ - Fralex Therapeutics Inc. (TSX: FXI) ("Fralex"
or the "Company"), a medical technology company, announced today its financial
results for the fourth quarter and year ended December 31, 2008.
Operating Highlights for 2008
- As at December 31, 2008, Fralex had $3,750,344 in cash and short-term
investments, and working capital of $2,750,900.
- In order to conserve its cash resources, the Company has restructured
its operations through a reduction of headcount and programs
primarily related to quality and engineering functions.
- In the first three quarters of 2008, the Company primarily focused on
continuing measures to sustain enrolment and on meeting the Company's
interim analysis ("IA") timeline for the RELIEF trial.
- On October 2, 2008, based on the data received on 100 patients
completing treatment, the Company announced results from its IA
whereby the RELIEF trial was declared futile. During the fourth
quarter of 2008, the Company halted the RELIEF trial, discontinued
further patient enrolment and focused on closing its clinical sites.
Events Subsequent to Year End
- On March 30, 2009, the Company announced a reorganization and an
arrangement to sell the shares of the Company to Baylis Medical
Company Inc. for approximately $900,000 cash subject to shareholder,
regulatory and judicial approval, as previously announced.
- The Company's warrants expired unexercised on February 13, 2009.
- The Company closed all clinical sites by March 2009 and submitted its
final report to the Food and Drug Administration ("FDA") and the
Therapeutics Products Directorate, Health Canada ("TPD") on
March 26, 2009.
- Dr. Thomas resigned as Vice President, Research on March 19, 2009.
- The TSX has granted the Company's request to extend its review
process until April 5, 2009. The Company has submitted its
application to NEX, a separate board of the TSX Venture Exchange.
"Management has been actively evaluating investment opportunities", said
Avi Grewal, President and CEO of Fralex, "and, to date, numerous business or
technology platforms have been reviewed. Comprehensive due diligence has been
performed on a select number of options, however, we remain open to reviewing
additional opportunities. If a suitable investment opportunity cannot be
identified, the Company will return residual capital to shareholders."
Financial Review
For the three months ended December 31, 2008, the Company reported a
decrease in loss of $323,422 to $489,458 in 2008 (or $0.02 loss per share) as
compared with the same period in 2007 of $812,880 (or $0.02 loss per share).
This was primarily due to a decline in research and development costs of
$171,318 and to the gain on sales of USD securities of $145,574. For the
year-ended December 31, 2008, the Company reported an increase in loss of
$297,327 to $5,291,100 (or $0.24 loss per share), compared with a loss of
$4,993,773 (or $0.25 loss per share) for the same period in 2007, primarily
due to the operations of the RELIEF trial.
Taking into consideration the cash and short-term investments of
$3,750,344 and working capital of $2,750,900 as at December 31, 2008,
management believes that the Company has sufficient cash resources to fund its
current obligations and business exploratory activities beyond December 31,
2009.
Detailed financial statements and the MD&A are available at
www.fralex.com or www.sedar.com.
About FRALEX:
For more information on FRALEX, please visit www.fralex.com.
Certain statements contained in this release containing words like
"believe", "intend", "may", "expect", and other similar expressions, are
forward-looking statements that involve a number of risks and uncertainties.
Factors that could cause actual results to differ materially from those
projected in the Company's forward-looking statements include the following:
dependence on key personnel; business projections; additional financing
requirements and access to capital; legal product liability and availability
of insurance; risks related to the proposed arrangement including but not
limited to its completion being subject to a number of conditions precedent
and possible failure to complete the arrangement; risk relating to
post-arrangement tax indemnification of the Company and Baylis and other risk
factors identified from time to time in the Company's filings.
Fralex Therapeutics Inc.
(A development stage company)
Balance Sheets
-------------------------------------------------------------------------
December 31, December 31,
2008 2007
$ $
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Assets
Current assets
Cash 184,064 92,485
Short-term investments 3,566,280 7,681,861
Investment tax credits receivable 290,000 727,077
Receivables - other 35,089 21,492
Prepaid expenses and deposits 31,563 142,499
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4,106,996 8,665,414
Property and equipment 35,579 76,991
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4,142,575 8,742,405
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,356,096 1,047,991
-----------------------------
Shareholders' equity
Share capital 18,030,787 18,027,262
Warrants 1,064,777 1,064,777
Other equity 584,068 392,330
Deficit (17,078,991) (11,787,891)
Accumulated other comprehensive income
(loss) 185,838 (2,064)
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2,786,479 7,694,414
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4,142,575 8,742,405
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Fralex Therapeutics Inc.
(A development stage company)
Statements of Operations and Comprehensive Loss
-------------------------------------------------------------------------
Year ended December 31,
2008 2007
$ $
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Expenses
Research and development 4,136,742 3,173,730
General and administrative 1,336,838 1,349,021
Stock-based compensation 192,888 446,329
Amortization 48,243 73,793
Foreign exchange (gain) loss (228,647) 333,576
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Loss before the undernoted (5,486,064) (5,376,449)
Interest income - net 194,964 382,676
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Net loss for the year (5,291,100) (4,993,773)
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-----------------------------
Other comprehensive income (loss)
Unrealized income (loss) on
available-for-sale short-term investments 187,902 (2,064)
-----------------------------
Comprehensive loss for the year (5,103,198) (4,995,837)
-----------------------------
-----------------------------
Basic and diluted loss per common share (0.24) (0.25)
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