Transition Therapeutics Announces Second Quarter Fiscal 2013 Financial Results

Thu Feb 7, 2013 4:01pm EST

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TORONTO,  Feb. 7, 2013  /PRNewswire/ -  Transition Therapeutics Inc. 
("Transition" or the "Company") (TSX: TTH; NASDAQ: TTHI), a
 product-focused biopharmaceutical company developing therapeutics for
 disease indications with large markets, today announced its financial
 results for the three and six month periods ended  December 31, 2012.


Selected Highlights


During fiscal 2013 and up to the date of this press release, the Company
 announced the following:

* On  November 28, 2012, Transition announced that their licensing partner
 Elan had enrolled the first patient in a Phase II study of ELND005 for
 the treatment of agitation/aggression in patients with moderate to
 severe Alzheimer's disease;


* On  August 30, 2012, Transition announced that their licensing partner
 Elan had dosed the first patient in a Phase II clinical study of
 ELND005 in Bipolar Disorder.  The study is a placebo-controlled, safety and
efficacy study of oral
 ELND005 as an adjunctive maintenance treatment in patients with Bipolar
 1 Disorder to delay the time to occurrence of mood episodes. As the
 first patient has been dosed in the study, Transition received a
 milestone payment of  US$11 million  from Elan.

Financial Liquidity


The Company's cash and cash equivalents and short term investments were
  $24,958,522  at  December 31, 2012.



The Company's current cash projection indicates that the current cash
 resources should enable the Company to execute its core business plan
 and meet its projected cash requirements well beyond the next 12
 months.


Financial Review


For the three month period ended  December 31, 2012, the Company recorded
 a net loss of  $2,754,534  ($0.10  loss per common share) compared to net
 loss of  $3,790,421  ($0.15  loss per common share) for the three month
 period ended  December 31, 2011.



For the six month period ended  December 31, 2012, the Company recorded a
 net income of  $4,981,512  ($0.19  income per common share) compared to a
 net loss of  $6,661,178  ($0.28  loss per common share) for the six-month
 period ended  December 31, 2011.



Revenue is nil and  $10,815,200  in the three and six month periods ended
  December 31, 2012  respectively, compared to nil in both three and six
 month period ended  December 31, 2011.



In  August 2012, Elan dosed the first patient in a Phase 2 clinical study
 of ELND005 in Bipolar Disorder.  In light of the amendments to the Elan
 agreement, the Company has recognized  $10,815,200(US$11,000,000)  as
 revenue during the first quarter of fiscal 2013 which represents the
 milestone payment received from Elan upon their commencement of the
 next ELND005 clinical trial. The payment from Elan was received on
  October 1, 2012.



Research and development expenses increased  $80,635  or 4% from
  $2,060,622  for the three month period ended  December 31, 2011  to
  $2,141,257  for the three month period ended  December 31, 2012. The
 increase is largely due to an increase in clinical development costs
 related to TT-401/402, which has been offset by decreases in clinical
 development costs related to TT-301/302 and salaries and related costs
 associated with headcount reductions.



For the six month period ended  December 31, 2012, research and
 development expenses decreased  $118,543  or 3% to  $4,195,803  from
  $4,314,346  for the same period in fiscal 2012. The decrease is
 primarily due to decreases in clinical development costs related to
 TT-301/302 and salaries and related costs associated with headcount
 reductions. The decrease is largely offset by increased clinical
 development costs related to TT-401/402.



General and administrative expenses decreased by  $683,472  or 45% from
  $1,532,912  for the three month period ended  December 31, 2011  to
  $849,440  for the three month period ended  December 31, 2012.  For the
 six month period ended  December 31, 2012, general and administrative
 expenses decreased  $956,616  or 36% to  $1,666,342  from  $2,622,958  for
 the same period in fiscal 2012.



The decreases in general and administrative expenses for both the three
 and six month periods ended  December 31, 2012  are due to decreases in
 legal consulting fees, facility lease costs, and investor relation and
 business development expenses, as well as decreased salaries and
 related costs resulting from headcount reductions as the comparative
 periods included severances relating to terminations.


About Transition  


Transition is a biopharmaceutical company, developing novel therapeutics
 for disease indications with large markets. Transition's lead product
 is ELND005 for the treatment of Alzheimer's disease and bipolar
 disorder.  Transition also has an emerging pipeline of innovative
 preclinical and clinical drug candidates. The other drugs in the
 pipeline that the Company is developing are for anti-inflammatory and
 metabolic indications. Transition's shares are listed on the NASDAQ
 under the symbol "TTHI" and the Toronto Stock Exchange under the symbol
 "TTH". For additional information about the Company, please visit 
www.transitiontherapeutics.com.



Extracts of the Financial Statements to Follow:


CONSOLIDATED BALANCE SHEETS
(Unaudited)
As at

 In Canadian Dollars                                   December 31, 2012    June 30, 2012   
                                                                                            
 Assets                                                                                     
 Current assets                                                                             
 Cash and cash equivalents                                    18,955,854       12,955,081   
 Short term investments                                        6,002,668        6,057,264   
 Trade and other receivables                                      48,408           43,658   
 Investment tax credits receivable                               370,289          241,951   
 Prepaid expenses and deposits                                   458,037          316,286   
                                                                                            
                                                              25,835,256       19,614,240   
 Non-current assets                                                                         
 Property and equipment                                          194,181          215,000   
 Intangible assets                                            16,374,143       17,263,790   
 Total assets                                                 42,403,580       37,093,030   
                                                                                            
 Liabilities                                                                                
 Current liabilities                                                                        
 Trade and other payables                                        896,145        1,178,915   
 Current portion of contingent consideration payable           2,321,373        2,321,373   
                                                               3,217,518        3,500,288   
                                                                                            
 Non-current liabilities                                                                    
 Contingent consideration payable                              1,434,958        1,434,958   
 Leasehold inducement                                             28,579           34,295   
                                                               4,681,055        4,969,541   
                                                                                            
 Equity attributable to owners of the Company                                               
 Share capital                                               165,334,259      165,334,259   
 Contributed surplus                                          13,431,445       13,168,411   
 Share-based payment reserve                                   3,331,522        2,977,032   
 Deficit                                                   (144,374,701)    (149,356,213)   
                                                              37,722,525       32,123,489   
                                                                                            
 Total liabilities and equity                                 42,403,580       37,093,030   


CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
For the six and three month periods ended  December 31, 2012  and 2011
(Unaudited)

 In Canadian Dollars                             Six month          Six month        Three month        Three month    
                                                 period ended       
period ended    period ended       
period ended  
                                                 December 31,       
December 31,    December 31,       
December 31,  
                                                 2012               
2011            2012               
2011          
                                                                                                                       
 Revenues                                                                                                              
 Licensing fees                                        10,815,200                -                  -                - 
 Expenses                                                                                                              
 Research and development                               4,195,803        4,314,346          2,141,257        2,060,622 
 Selling, general and administrative expenses           1,666,342        2,622,958            849,440        1,532,912 
 Loss on disposal of property and equipment                     -          118,623                  -           38,709 
                                                                                                                       
 Operating income (loss)                                4,953,055      (7,055,927)        (2,990,697)      (3,632,243) 
                                                                                                                       
 Interest income                                           68,489           80,339             34,872           40,412 
 Interest expense                                               -            (851)                  -            (241) 
 Foreign exchange gain (loss)                            (40,032)          315,261            201,291        (198,349) 
 Net income (loss) and                                  4,981,512      (6,661,178)        (2,754,534)      (3,790,421) 
 comprehensive income (loss) for the                                                                                   
 period                                                                                                                
 Basic and diluted net income (loss)                         0.19           (0.28)             (0.10)           (0.15) 
 per common share                                                                                                      


Notice to Readers: Information contained in our press releases should be
 considered accurate only as of the date of the release and may be
 superseded by more recent information we have disclosed in later press
 releases, filings with the OSC, SEC or otherwise. Except for historical
 information, this press release may contain forward-looking statements,
 relating to expectations, plans or prospects for Transition, including
 conducting clinical trials. These statements are based upon the current
 expectations and beliefs of Transition's management and are subject to
 certain risks and uncertainties that could cause actual results to
 differ materially from those described in the forward-looking
 statements. These risks and uncertainties include factors beyond
 Transition's control and the risk factors and other cautionary
 statements discussed in Transition's quarterly and annual filings with
 the Canadian commissions. 


SOURCE  Transition Therapeutics Inc.

For further information on Transition, visit

www.transitiontherapeutics.com

, or contact:

Dr. Tony Cruz

Chairman & Chief Executive Officer

Transition Therapeutics Inc.

Phone: (416) 260-7770, x.223

tcruz@transitiontherapeutics.com

Nicole Rusaw-George

Chief Financial Officer

Transition Therapeutics Inc.

Phone: (416) 260-7770, x.202

nrusaw@transitiontherapeutics.com

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