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November 18, 2002
Neurochem Announces First Quarter Results for Fiscal 2003.
The Company realizes pivotal corporate and clinical milestones.
Neurochem Inc. (TSX : NRM) today announced its results for the first quarter of fiscal
2003, ended September 30, 2002. The Company reported revenues of $253,000 and a net loss
of $3,962,000 or ($0.20) per share for the quarter, compared to revenues of $1,506,000 and
a net loss of $1,660,000 or ($0.09) per share for the same quarter last year. The increase
in the net loss over last year was largely due to higher net research and development
expenses as a result of the Company having three programs in clinical trials, and to lower
revenues due to the discontinuance of a collaborative research agreement. The Company further
reported that it achieved significant clinical milestones with the clearance of two
Investigational New Drug (IND) applications for its lead drug candidate Alzhemed™ and
Cerebril™. Additionally, the Company realized a multi-million dollar strategic investment
by Picchio Pharma Inc., and announced important appointments to its senior management team
and to the Board of Directors.
"We have made significant progress in our clinical program with Alzhemed™ and
Cerebril™ now in Phase II clinical trials following the clearance of the IND
applications," said Dr. Louis R. Lamontagne, President and CEO of Neurochem.
"With Dr. Bellini as Neurochem's Chairman, Mr. Claude Michaud as Senior Vice-President
Finance and Chief Financial Officer, and the key appointments of Mr. Kruyt and Mr. Nordmann
to our Board of Directors, we have broadened our financial and management expertise and are
now outlining a commercialization strategy for Fibrillex™, which is in the pivotal
and final Phase II/III clinical trial."
Highlights:
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Phase II clinical trials were initiated following the IND clearance by the Food and
Drug Administration in the U.S. for Alzhemed™, the Company's disease-modifying
drug candidate for the treatment of Alzheimer's Disease (AD) and Cerebril™, for
the treatment of Hemorrhagic Stroke due to Cerebral Amyloid Angiopathy (CAA). The three
month studies in the United States are multicenter, randomized, double-blind,
placebo-controlled and parallel design studies and will determine the optimal dosing
regimens for subsequent pivotal efficacy trials.
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During the quarter, the Company closed an important $7 million dollar transaction
by Picchio Pharma Inc., which could reach $15.75 million upon the total exercise of
warrants over the next three years. In July, Dr. Francesco Bellini, Chairman of
Picchio, joined Neurochem's Board as Chairman.
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Following the close of the quarter, Mr. Claude Michaud joined Neurochem's management
team as Senior Vice-President Finance and Chief Financial Officer. With his extensive
North American capital market and corporate finance expertise, Mr. Michaud adds
significant strategic value to the Company.
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The Company also made two important additions to its Board of Directors, following
the close of the quarter with the appointment of Mr. Peter Kruyt, Vice-President
of Power Corporation of Canada and Mr. Ronald M. Nordmann, Co-President of Global
Health Associates, LLC. Their financial and industry sector expertise will bring
added value to Neurochem's Board.
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The pivotal Phase II/III clinical study for Fibrillex™ is on schedule following
the recent review by Neurochem's independent Data Safety Monitoring Board. This is
an important first step in the drug's ongoing data safety monitoring process and was
based on the good safety profile of the patients having completed at least four
months of the study. Patient recruitment for this international Fibrillex™ trial
should be completed in the coming weeks.
Financial Highlights:
Revenues for the first quarter ended September 30, 2002, amounted to $253,000 as compared
to $1,506,000 for the same period the previous year. The $1,253,000 decrease in revenues
quarter-to-quarter was primarily due to the discontinuance of a research contract with H.
Lundbeck A/S ("Lundbeck") ($1,116,000). The Company did not perform any research
contract work in the quarter ended September 30, 2002. In addition, the Company earned
$137,000 less in interest income as a result of lower average cash balances in the current
period.
Research and development expenses, before the application of research tax credits and
grants, increased to $3,963,000 for the quarter ended September 30, 2002, compared to
$2,762,000 for the same quarter last year. The $1.2 million increase reflects the
additional external costs associated with the Company having three of its programs in
clinical trials versus two for the same period in 2001.
Research tax credits amounted to $213,000 in the quarter ended September 30, 2002, compared
to $143,000 for the same quarter last year. The increase is in line with the quarter-to-quarter
increase in research and development expenses. Research grants for this quarter are up to
$573,000 from $342,000 for the comparable quarter last year. The increase is attributable
to higher payments under the Technology Partnerships Canada Program received for
Alzhemed™ this quarter compared to last year's first quarter, as well as the payment by
the Food and Drug Administration, relating to the grant for Fibrillex™.
General and other corporate expenses for the quarter were slightly down to $759,000, compared
to $788,000 for the quarter ending September 30, 2001. The decrease is primarily due to lower
professional fees this quarter as compared to the same quarter last year.
Depreciation and amortization for the current quarter increased to $250,000 from $212,000 for
the comparable quarter in 2001. The increase reflects the acquisition of additional
property and equipment over the last twelve months, as well as additional patent costs.
As at September 30, 2002, the Company had cash, cash equivalents and marketable securities
of $27.2 million compared to $24.2 million as at June 30, 2002. The $3.0 million net increase
is the result of funds used in operations ($3.8 million), investing activities and repayment
of leasing obligations ($0.8 million) and funds raised from financing activities of
approximately $7.6 million, including the $7 million equity investment by Picchio Pharma
Inc. in July 2002.
Neurochem is an industry leader in the development of a novel, proprietary series of
compounds that inhibit the formation, deposit and toxic effects of amyloid fibrils on
cells within the body. Neurochem's research team has been working with international
amyloid experts on the development of therapeutic cures to amyloid-related diseases,
including Alzheimer's disease, Secondary Amyloidosis , Diabetes Type II and Hemorrhagic
Stroke (due to Cerebral Amyloid Angiopathy). Neurochem has advanced three drug candidates to
clinical trials: Alzhemed™, for the treatment of Alzheimer's disease,
Fibrillex™, for Secondary Amyloidosis, and Cerebril™, for
Hemorrhagic Stroke. At present, the Company employs over 50 people and is located in
Saint-Laurent, Canada (www.neurochem.com).
All of the statements contained in this news release, other than statements of fact which
are independently verifiable at the date hereof, are forward-looking statements. Such
statements, based as they are on the current expectations of management, inherently involve
numerous risks and uncertainties, known and unknown. Some examples of known risks are: the
impact of general economic conditions, general conditions in the pharmaceutical industry, changes
in the regulatory environment in the jurisdictions in which Neurochem does business, stock
market volatility, fluctuations in costs, and changes to the competitive environment due to
consolidation or otherwise. Consequently, actual future results may differ materially from
the anticipated results expressed in the forward-looking statements.
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