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Trimel Provides Corporate Update and Second Quarter 2014 Financial Results

- Natesto(TM) Receives FDA Approval

TORONTO, ONTARIO -- (Marketwired) -- 07/30/14 -- Trimel Pharmaceuticals Corporation (TSX:TRL) today provided an overview of its corporate accomplishments and reported financial results for the three month period ended June 30, 2014.

Corporate Highlights

Natesto(TM) Approval

On May 28, 2014, the United States Food and Drug Administration approved Natesto(TM) (testosterone nasal gel), for replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone (male hypogonadism).

Tefina(TM) Phase II Results

Also on May 28, 2014, Trimel announced positive top-line results of its Phase II clinical trial evaluating the efficacy and safety of Tefina(TM), a "use-as-required" testosterone nasal gel for the treatment of Female Orgasmic Disorder ("FOD"). Women treated with Tefina(TM) 0.6 mg reported a 35% increase in the average number of orgasms versus placebo (p=0.0013) and 58% of women had at least one orgasm, compared to 43% of women in the placebo group. Tefina(TM) 0.6 mg also showed a statistically significant (p=0.017) improvement in distress over placebo.

Estrace® Acquisition

On July 16, 2014, the Company announced that it has acquired from Shire plc the Canadian rights for Estrace® (17-beta estradiol), a product indicated for the treatment of symptomatic relief of menopausal symptoms. Estrace® has been available on the Canadian market for 39 years and generated revenues of USD$9.9 million in 2013 within a hormone replacement therapy ("HRT") market valued at USD$100 million and grew by 6% in 2013. It is anticipated that Estrace® will contribute significantly to the Company's earnings before interest, tax, depreciation, and amortization ("EBITDA") and future cash flows.

Private Placement

On July 30, 2014 the Company completed a private placement of 28,801,000 common shares of the Company at a price of CDN$0.62 per share for gross proceeds of CDN$17,856,620.

The Company has used the full net proceeds from the private placement to repay a significant portion of a convertible promissory note previously issued to First Generation Capital Inc. ("First Generation"), a company affiliated with Mr. Ian Ihnatowycz, the Chairman of the Board of Directors of the Company. Following this repayment, First Generation has advised that it intends to convert a portion of the note into a total of 8,945,796 common shares after August 21, 2014. Following such conversion, First Generation would hold approximately 23.7% of the company's common shares, thereby maintaining its current securityholding percentage. The indebtedness remaining under the note (expected to equal approximately US$4.1 million) following such conversion and repayment would remain outstanding in accordance with the terms of the note and no longer be convertible into common shares after such time.

As a result of the transactions noted above, the Company has received an additional USD$5.0 million from its senior secured lender pursuant to the terms and conditions of its applicable senior credit facility.

Financial Results for the Three Months Ended June 30, 2014 (All values in U.S. dollars)

Research and Development ("R&D") expenses were $4.1 million and $6.9 million respectively for the three months ended June 30, 2014 and 2013. The variance is primarily due to costs related to the filing of the Natesto(TM) new drug application ("NDA") that were incurred during the 2013 period. The decrease in Natesto(TM) related expenses is offset by higher Tefina(TM) clinical trial costs in 2014 as this study progressed to its completion during the quarter.

Trimel incurred General and Administrative ("G&A") expenses of $1.5 million and $2.4 million respectively for the three months ended June 30, 2014 and 2013. The decrease in spending was primarily attributable to lower salaries, benefits and share-based compensation, and lower legal fees related to arbitration, corporate and intellectual property matters. The arbitration matters were settled pursuant to a December 21, 2013 agreement.

For the three months ended June 30, 2014, the Company incurred a net loss of $0.05 per share as compared to a net loss of $0.07 per share for the same 2013 period.

At June 30, 2014, the Company had total assets of $22.4 million, as compared to $28.1 million at December 31, 2013 and total liabilities of $9.0 million at June 30, 2014, as compared to $14.5 million at December 31, 2013. The $5.8 million decrease in assets is primarily due to the $5.8 million decrease in cash during the period as it was used to fund current activities. The $5.6 million decrease in total liabilities was primarily impacted by $4.25 million milestone obligation paid to M&P Patent AG and payments related to the Company's debt facility, offset by a $2.5 million Natesto(TM) milestone accrual that was made in the second quarter of 2014.

The Company had a net cash outflow of $5.2 million for the three months ended June 30, 2014 and had $12.3 million of cash at June 30, 2014. The Company's average monthly burn rate during the three months ended June 30, 2014 was approximately US$1.7 million as compared to approximately $3.1 million for the three months ended June 30, 2013 after excluding certain payments made during the second quarter of 2013 (NDA filing fee for Natesto(TM), a milestone payment made to a technology partner and an inventory prepayment). The Company believes it has sufficient resources to fund its ongoing activities into 2015, depending on the timing of further clinical activities and barring unforeseen events. The Company's average monthly burn rate is a non-GAAP financial measure with no standard meaning under IFRS, which management uses to further evaluate the Company's results of operations in each reporting period.

The information set out above is in summary form. Readers are encouraged to review the Company's annual information form, financial statements (and accompanying notes), together with management's discussion and analysis available on SEDAR at www.sedar.com and on the Company's website at www.trimelpharmaceuticals.com.

Conference Call Details

Shareholders are reminded of the conference call to discuss the Company's second quarter results to be held on July 31, 2014 at 8:30 a.m. (Toronto time). To access the call live, please dial 416-340-2216 or 1-866-223-7781. Listeners are encouraged to dial in 10 minutes before the call begins to avoid delays. A replay of the conference call will be available until 7:00 p.m. (Toronto time) on Wednesday, August 6, 2014 by dialling 905-694-9451 or 1-800-408-3053, using access code: 8161397#.

About Trimel

Trimel is a specialty pharmaceutical company involved in the sale, distribution, and development of products with a focus in men's health, women's health, and respiratory medicine. Natesto(TM), a product utilizing Trimel's licensed nasal gel technology, has been approved for sale in the United States by the FDA. For more information, please visit www.trimelpharmaceuticals.com.

Notice regarding forward-looking statements:

Information in this press release that is not current or historical factual information may constitute forward looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties, including with respect to the performance of Estrace®, and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 5, 2014 which is available at www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities law.

                     TRIMEL PHARMACEUTICALS CORPORATION                     
       CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION       
                            AS AT JUNE 30, 2014                             
                                 UNAUDITED                                  
                        (expressed in U.S. Dollars)                         
                                                                            
                                   ASSETS                                   
                                                    June 30,   December 31, 
                                                        2014           2013 
                                              ------------------------------
                                                                            
CURRENT                                                                     
  Cash                                          $ 12,289,692   $ 18,111,145 
  Restricted cash                                     23,417         23,505 
  Inventory                                        3,758,254      1,913,772 
  Prepaids and other assets                          700,779      1,582,924 
  Assets classified as held for sale                 107,135              - 
                                              ------------------------------
                                                  16,879,277     21,631,346 
                                                                            
NON-CURRENT ASSETS                                                          
  Property and equipment, net                      2,407,046      3,273,196 
  Intangible assets                                3,068,900      3,216,800 
                                              ------------------------------
TOTAL ASSETS                                    $ 22,355,223   $ 28,121,342 
                                              ------------------------------
                                                                            
                                                                            
                                LIABILITIES                                 
                                                                            
CURRENT                                                                     
  Accounts payable and accrued liabilities       $ 5,678,088    $ 9,864,079 
  Current portion of long-term debt, net of                                 
   issuance costs                                  2,874,046      2,834,639 
                                              ------------------------------
                                                   8,552,134     12,698,718 
                                                                            
LONG-TERM                                                                   
  Long-term debt, net of issuance costs              349,999      1,827,082 
  Derivative financial instrument                     49,008         20,977 
                                              ------------------------------
TOTAL LIABILITIES                                $ 8,951,141   $ 14,546,777 
                                              ------------------------------
                                                                            
                                                                            
                            SHAREHOLDERS' EQUITY                            
                                                                            
Share capital                                    129,211,443    119,741,040 
Warrants                                           1,039,705      1,039,705 
Contributed surplus                                8,284,868      7,987,237 
Accumulated other comprehensive (loss)            (1,539,663)    (1,639,862)
Deficit                                         (123,592,271)  (113,553,555)
                                              ------------------------------
TOTAL SHAREHOLDERS' EQUITY                        13,404,082     13,574,565 
                                              ------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY      $ 22,355,223   $ 28,121,342 
                                              ------------------------------
                                                                            
                                                                            
                     TRIMEL PHARMACEUTICALS CORPORATION                     
  CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS  
         FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013          
                                 UNAUDITED                                  
                        (expressed in U.S. Dollars)                         
                                                                            
                     For the three months ended   For the six months ended  
                              June 30,                    June 30,          
                             2014          2013          2014          2013 
                    --------------------------------------------------------
EXPENSES                                                                    
  Research and                                                              
   development        $ 4,139,357   $ 6,917,920   $ 6,849,318  $ 11,792,337 
  General and                                                               
   administrative       1,531,071     2,361,902     2,806,136     5,764,213 
                    --------------------------------------------------------
  Total operating                                                           
   expenses             5,670,428     9,279,822     9,655,454    17,556,550 
                    --------------------------------------------------------
                                                                            
FINANCE COSTS, NET                                                          
  Interest on long-                                                         
   term debt and                                                            
   other financing                                                          
   costs                  179,786       369,723       356,498       658,378 
  Interest income         (29,514)      (36,940)      (49,157)      (41,083)
  Foreign exchange                                                          
   (gain)/ loss         1,632,069      (471,406)       48,002      (468,036)
  Change in fair                                                            
   value of                                                                 
   derivative                                                               
   financial                                                                
   instrument               7,220       (10,947)       27,919      (146,914)
                    --------------------------------------------------------
                        1,789,561      (149,570)      383,262         2,345 
                    --------------------------------------------------------
TOTAL EXPENSES          7,459,989     9,130,252    10,038,716    17,558,895 
                    --------------------------------------------------------
NET LOSS             $ (7,459,989) $ (9,130,252) $(10,038,716) $(17,558,895)
                    --------------------------------------------------------
                    --------------------------------------------------------
                                                                            
OTHER COMPREHENSIVE INCOME                                                  
(LOSS), NET OF INCOME TAX                                                   
Items that may be                                                           
 reclassified                                                               
 subsequently to                                                            
 profit or loss:                                                            
  Foreign currency                                                          
   translation                                                              
   adjustment           1,906,275    (1,403,787)      100,199    (1,530,274)
                    --------------------------------------------------------
TOTAL COMPREHENSIVE                                                         
 LOSS FOR THE PERIOD $ (5,553,714) $(10,534,039) $ (9,938,517) $(19,089,169)
                    --------------------------------------------------------
                    --------------------------------------------------------
Basic and diluted                                                           
 weighted average                                                           
 shares outstanding   163,126,438   132,555,004   158,947,911   112,108,917 
                                                                            
Basic and diluted                                                           
 net loss per common                                                        
 share                    $ (0.05)      $ (0.07)      $ (0.06)      $ (0.16)
                                                                            
                                                                            
                     TRIMEL PHARMACEUTICALS CORPORATION                     
 CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
               FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013              
                                  UNAUDITED                                 
                         (expressed in U.S. Dollars)                        
                                                                            
                                                                Contributed 
                          Notes Share capital       Warrants        surplus 
                               ---------------------------------------------
                                                                            
Balance, January 1, 2013         $ 78,214,661    $ 3,452,607    $ 4,318,927 
                                                                            
Net loss for the period                     -              -              - 
                                                                            
Cumulative translation                                                      
 adjustment                                 -              -              - 
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive loss                                                    
 for the period                             -              -              - 
                                                                            
Common shares, net of                                                       
 share issuance costs              41,526,379              -              - 
                                                                            
Share based compensation                    -              -      1,000,556 
----------------------------------------------------------------------------
Balance as at June 30,                                                      
 2013                           $ 119,741,040    $ 3,452,607    $ 5,319,483 
----------------------------------------------------------------------------
                                                                            
Balance, January 1, 2014        $ 119,741,040    $ 1,039,705    $ 7,987,237 
                                                                            
Net loss for the period                     -              -              - 
                                                                            
Cumulative translation                                                      
 adjustment                                 -              -              - 
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive loss                                                    
 for the period                             -              -              - 
                                                                            
Common shares, net of     8                                                 
 share issuance costs               9,470,403              -              - 
                                                                            
Share based compensation  11                -              -        297,631 
----------------------------------------------------------------------------
Balance as at June 30,                                                      
 2014                           $ 129,211,443    $ 1,039,705    $ 8,284,868 
----------------------------------------------------------------------------

                                                                            
                                  Accumulated                               
                                        other                               
                                comprehensive                               
                          Notes  income (loss)       Deficit          Total 
                               ---------------------------------------------
                                                                            
Balance, January 1, 2013            $ 362,920  $ (81,598,627)   $ 4,750,488 
                                                                            
Net loss for the period                     -    (17,558,895)   (17,558,895)
                                                                            
Cumulative translation                                                      
 adjustment                        (1,530,274)             -     (1,530,274)
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive loss                                                    
 for the period                    (1,530,274)   (17,558,895)   (19,089,169)
                                                                            
Common shares, net of                                                       
 share issuance costs                       -              -     41,526,379 
                                                                            
Share based compensation                    -              -      1,000,556 
----------------------------------------------------------------------------
Balance as at June 30,                                                      
 2013                            $ (1,167,354) $ (99,157,522)  $ 28,188,254 
----------------------------------------------------------------------------
                                                                            
Balance, January 1, 2014         $ (1,639,862) $(113,553,555)  $ 13,574,565 
                                                                            
Net loss for the period                     -    (10,038,716)   (10,038,716)
                                                                            
Cumulative translation                                                      
 adjustment                           100,199              -        100,199 
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive loss                                                    
 for the period                       100,199    (10,038,716)    (9,938,517)
                                                                            
Common shares, net of     8                                                 
 share issuance costs                       -              -      9,470,403 
                                                                            
Share based compensation  11                -              -        297,631 
----------------------------------------------------------------------------
Balance as at June 30,                                                      
 2014                            $ (1,539,663) $(123,592,271)  $ 13,404,082 
----------------------------------------------------------------------------
                                                                            
                                                                            
                     TRIMEL PHARMACEUTICALS CORPORATION                     
           CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS           
              FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013               
                                 UNAUDITED                                  
                        (expressed in U.S. Dollars)                         
                                                                            
                                                        2014           2013 
                                              ------------------------------
                                                                            
CASH FLOWS FROM OPERATING ACTIVITIES                                        
----------------------------------------------                              
Net loss for the period                        $ (10,038,716) $ (17,558,895)
Items not requiring an outlay of cash:                                      
  Adjustment for foreign exchange (gain)/loss        220,411       (175,959)
  Amortization of intangible assets                  147,900        147,900 
  Depreciation of property and equipment           1,078,511        412,561 
  Interest on long-term debt and other                                      
   financing costs                                   356,498        658,378 
  Change in fair value of derivative financial                              
   instrument                                         27,919       (146,914)
  Share based compensation                           297,631      1,000,556 
  Impairment of property and equipment                45,138          9,338 
Net changes in non-cash working capital items                               
 related to operating activities:                                           
  Inventory                                         (813,763)             - 
  Prepaids and other assets                         (116,582)    (1,926,000)
  Accounts payable and accrued liabilities        (4,579,699)       383,458 
Provisions                                                 -        (41,620)
                                              ------------------------------
                                                 (13,374,752)   (17,237,197)
                                              ------------------------------
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES                                        
----------------------------------------------                              
Proceeds from issuance of common shares, net                                
 of financing costs                                9,470,403     41,526,379 
Financing costs, long-term debt                      (70,907)             - 
Payment of long-term debt obligations             (1,500,000)    (1,250,000)
Payment of capital lease obligations                       -       (140,551)
Interest paid                                       (180,274)      (319,602)
                                              ------------------------------
                                                   7,719,222     39,816,226 
                                              ------------------------------
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES                                        
----------------------------------------------                              
Acquisition of property and equipment, net of                               
 deposits                                            (58,838)      (245,611)
Proceeds from sale of property and equipment               -          2,812 
                                              ------------------------------
                                                     (58,838)      (242,799)
                                              ------------------------------
                                                                            
                                                                            
NET (DECREASE)/INCREASE IN CASH FOR THE PERIOD    (5,714,368)    22,336,230 
                                                                            
Exchange (loss) on cash                             (107,085)    (1,238,830)
                                                                            
CASH BEGINNING OF PERIOD                          18,111,145      9,216,999 
                                              ------------------------------
                                                                            
CASH END OF PERIOD                              $ 12,289,692   $ 30,314,399 
                                              ------------------------------

Contacts:
Kenneth G. Howling
Chief Financial Officer
416 679 0536
[email protected]

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