Hemosol (NASDAQ:HMSL)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Hemosol Charts. Click Here for more Hemosol Charts.](/p.php?pid=staticchart&s=N%5EHMSL&p=8&t=15)
Hemosol Corp. Announces Second Quarter 2004 Financial Results
TORONTO, Aug. 9 /PRNewswire-FirstCall/ -- Hemosol Corp. (NASDAQ:HMSLNASDAQ:
TSX:NASDAQ:HML) today announced financial results and reviewed operational
highlights for the second quarter and six-month period ended June 30, 2004. The
quarterly and year-to-date financial results of Hemosol Corp. are compared with
those of its predecessor, Hemosol Inc., which was subsequently renamed LPBP
Inc. after the completion of a Plan of Arrangement involving Hemosol Inc., its
shareholders and MDS Inc. ("MDS"). All amounts are expressed in Canadian
currency unless otherwise stated.
For the second quarter ended June 30, 2004 the company had net income of $2.9
million, or $0.05 per share, compared with a net loss for the quarter ended
June 30, 2003 of $9.6 million, or ($0.21) per share. The net income resulted
from the Company concluding an agreement with MDS, involving a reorganization
of its business, which generated gross proceeds of $16 million, and from a cost
savings plan implemented in April 2003. Net loss for the first six months of
2004 was $2.1 million, or ($0.04) per share, compared with $20.0 million, or
($0.43) per share, for the same period in the prior year.
"During the quarter, Hemosol focused on negotiating and completing agreements
to formalize key relationships that will drive the Company's growth strategy in
the near future," said Lee Hartwell, President and Chief Executive Officer of
Hemosol. "Completion of the reorganization has provided us with the financial
flexibility to proceed with a series of value-creation initiatives that we
believe will allow us to leverage the Meadowpine manufacturing facility and
further develop our pipeline of oxygen therapeutics and drug delivery
technologies."
On April 30, 2004, subsequent to court and shareholder approval, the Company
concluded an agreement (the "Arrangement") with MDS, a related party, under
which the Company, through a reorganization of the Company's business and
certain MDS diagnostic assets, exchanged a significant portion of its existing
accumulated future tax assets in exchange for a $16 million ($13.9 million
after transaction expenses) cash infusion. This cash infusion allows the
Company to pursue multiple strategic opportunities, including the further
development of HEMOLINK(TM) (hemoglobin raffimer) and other blood product
candidates, as well as advance the implementation of the strategic alliance
with ProMetic and the American National Red Cross ("American Red Cross"). After
completion of the Plan of Arrangement, Hemosol Corp. became the successor to
Hemosol Inc. (which was subsequently renamed LPBP Inc.)
In early June, Hemosol announced that it had entered into definitive license
and strategic alliance agreements with ProMetic Biosciences Inc. a subsidiary
of ProMetic Life Sciences Inc. (TSX: PLI) ("ProMetic"), to license the Cascade
technology developed by ProMetic and its strategic partner, the American Red
Cross, for the separation of valuable therapeutic proteins from human plasma.
Hemosol is currently integrating the Cascade technology into its
state-of-the-art Meadowpine facility and intends, upon completion, to sell the
resulting products to customers, including the American Red Cross.
The American Red Cross has committed in principle to supply plasma to Hemosol
and subsequently purchase therapeutic products isolated using the Cascade
technology. Under the license Hemosol will have the right to the Cascade
technology to manufacture therapeutic products from plasma on an exclusive
basis in North America. The Company is currently negotiating a supply and
purchase agreement with the American Red Cross. As a result of the strategic
alliance agreement, ProMetic and Hemosol have also agreed to work together to
generate revenues in the short term through technology transfer support and the
supply of clinical trial material to other forthcoming licensees of ProMetic
outside of North America.
More Financial Results
The Company's operating expenses consist of research and development expenses,
marketing and business development, administration and support services
expenses.
Total operating expenses for the quarter ended June 30, 2004 decreased to $4.5
million from $8.1 million for the quarter ended June 30, 2003 (a decrease of
44%), bringing operating expenses for the six months ended June 30, 2004 to
$8.0 million compared with $17.3 million for the same period in the prior year.
The decrease in operating expenses, offset by stock based compensation expenses
of $1.1 million, resulted primarily from a cost savings plan implemented in
April 2003, which reduced the monthly burn-rate by approximately $2.0 million
to the current average monthly burn-rate of approximately $1.2 million.
Specifically, costs associated with science and process development, market and
business development, support services and administration were significantly
reduced during the period. The Company's burn rate is expected to fluctuate
with milestone payments to ProMetic, under the terms of the definitive license
and strategic alliance agreement, and the delivery and timing of potential
biomanufacturing services.
The cash used in operating activities for the three month period ended June 30,
2004 decreased from $9.4 million for the quarter ended June 30, 2003 to $3.3
million for the quarter ended June 30, 2004, a decrease of 65%. Cash used in
operating activities for the six months ended June 30, 2004 decreased to $8.2
million compared with $21.1 million for the same period in the prior year. The
significant decrease was also a result of restructuring measures implemented in
April 2003. Specifically, a reduction in costs associated with the development
of HEMOLINK.
As of June 30, 2004 the Company had $11.7 million of cash and cash-equivalents
and short-term investments and a further $1 million held in escrow related to
the reorganization.
Outlook
Hemosol expects to finish integrating the Cascade technology at its Meadowpine
facility over the coming months and be in a position to manufacture and sell
clinical material by the end of 2005. Commercial scale implementation would
follow, subject to advance approval of the applicable regulatory agency in each
jurisdiction where sales are completed, with full-scale commercial revenue
anticipated to begin in late 2007 or early 2008.
In addition to meeting its obligations under the aforementioned agreements,
Hemosol will continue its work on other key corporate initiatives for the
balance of 2004. One of the most important is to determine the clinical path
forward for HEMOLINK, the company's core oxygen therapeutic product. Hemosol
has worked diligently to address the issues that led to the suspension of
clinical trials with the objective of establishing the clinical path forward
for HEMOLINK by the end of this year.
Hemosol's R&D team will continue its work in the bio-conjugation and cell
expansion areas to develop both a hemoglobin-based drug delivery platform and a
portfolio of novel therapeutics to stimulate the growth of blood cells. An
active program is underway to pursue partnering and licensing opportunities to
continue to advance the development of these products.
About Hemosol
Hemosol is a biopharmaceutical company focused on the development and
manufacturing of biologics, particularly blood-related proteins. Hemosol is
leveraging its expertise in manufacturing blood proteins and its
state-of-the-art Meadowpine manufacturing facility to seek additional strategic
growth opportunities. Hemosol has a broad range of novel therapeutic products
in development, including HEMOLINK(TM) (hemoglobin raffimer), an oxygen
therapeutic designed to rapidly and safely improve oxygen delivery via the
circulatory system. Hemosol is also developing next generation oxygen
therapeutics, a hemoglobin-based drug delivery platform to treat diseases such
as hepatitis C and liver cancers, and a cell therapy program initially directed
to the treatment of cancer.
For more information visit Hemosol's website at http://www.hemosol.com/.
Hemosol's common shares are listed on the NASDAQ Stock Market under the trading
symbol "HMSL" and on the Toronto Stock Exchange under the trading symbol "HML".
Certain statements concerning Hemosol's future prospects are "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and other applicable securities legislation.
There can be no assurances that future results will be achieved, and actual
results could differ materially from forecasts and estimates. Important factors
that could cause actual results to differ materially from forecasts and
estimates include, but are not limited to: Hemosol's ability to obtain
regulatory approvals for its products; Hemosol's ability to successfully
complete clinical trials for its products and enter into satisfactory
arrangements for the supply of materials used in its manufacturing operations
and the sale of resulting products to customers; technical, manufacturing or
distribution issues; the competitive environment for Hemosol's products; the
degree of market penetration of Hemosol's products; Hemosol's ability to obtain
sufficient financing to complete clinical development of its products; and
other factors set forth in filings with Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission. These risks and
uncertainties, as well as others, are discussed in greater detail in the
filings of Hemosol with Canadian securities regulatory authorities and the U.S.
Securities and Exchange Commission. Hemosol makes no commitment to revise or
update any forward-looking statements in order to reflect events or
circumstances after the date any such statement is made.
Financial Statements to follow.
HEMOSOL CORP (A DEVELOPMENT STAGE COMPANY) -
INCORPORATED UNDER THE LAW OF ONTARIO
CONSOLIDATED BALANCE SHEETS
(unaudited)
See Note 1b- Basis of Presentation
June, 30 December, 31
2004 2003
(THOUSANDS OF CANADIAN DOLLARS)
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 4,765 8,125
Cash held in escrow (notes 4d and 5) 1,000 448
Short-term investments (note 2) 6,965 -
Prepaids and other assets 1,004 735
Inventory 1,257 1,274
-------------------------------------------------------------------------
Total current assets 14,991 10,582
-------------------------------------------------------------------------
Property, plant and equipment, net 83,026 83,881
Patents and trademarks, net 1,304 1,368
License technology, net (note 6) 5,195 2,520
Deferred charges, net - 2,026
-------------------------------------------------------------------------
Total other assets 89,525 89,795
-------------------------------------------------------------------------
104,516 100,377
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities 1,670 3,394
Short-term debt 20,000 20,000
-------------------------------------------------------------------------
Total current liabilities 21,670 23,394
-------------------------------------------------------------------------
Long term liabilities
Minority interest (note 4a) 5,981 -
Future tax liability (note 4b) 2,694 -
Total long term liabilities 8,675 -
-------------------------------------------------------------------------
30,345 23,394
-------------------------------------------------------------------------
Shareholders' equity
Common shares (note 6) 311,668 305,983
Warrants and options (notes 3 and 6) 11,521 15,642
Contributed surplus (note 4c) 9,125 8,535
Deficit (258,143) (253,177)
-------------------------------------------------------------------------
Total shareholders' equity 74,171 76,983
-------------------------------------------------------------------------
104,516 100,377
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes
HEMOSOL CORP (A DEVELOPMENT STAGE COMPANY) -
INCORPORATED UNDER THE LAW OF ONTARIO
CONSOLIDATED STATEMENTS OF LOSS (INCOME)
(unaudited)
3 MONTHS 6 MONTHS
PERIOD ENDED PERIOD ENDED
(THOUSANDS OF CANADIAN DOLLARS June 30 June 30 June 30 June 30
EXCEPT FOR SHARE DATA) 2004 2003 2004 2003
-------------------------------------------------------------------------
EXPENSES
Research and development (note 3)
Scientific and process 2,657 2,225 4,761 5,713
Regulatory and clinical 364 1,854 663 4,760
Administration (note 3) 1,340 2,566 2,169 3,687
Marketing and business development 43 542 150 1,422
Support services 77 843 261 1,427
Foreign currency translation loss 18 69 9 285
-------------------------------------------------------------------------
Loss from operations before
the following 4,499 8,099 8,013 17,294
Amortization of deferred charges 434 1,271 1,687 2,495
Interest income (51) - (87) -
Interest expense 243 254 506 222
Net gain on Arrangement (note 4d) (6,838) - (6,838) -
Miscellaneous expense (income) 19 - (30) -
-------------------------------------------------------------------------
Loss (income) before income taxes (1,694) 9,624 3,251 20,011
Minority interest (256) - (256) -
Provision for income taxes
Current 50 - 100 -
Future (1,029) - (1,029) -
-------------------------------------------------------------------------
Net loss (income) for the period (2,929) 9,624 2,066 20,011
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted loss (income)
per share (0.05) 0.21 0.04 0.43
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of common
shares outstanding (000's) 56,453 46,103 56,163 46,103
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes
HEMOSOL CORP (A DEVELOPMENT STAGE COMPANY) -
INCORPORATED UNDER THE LAW OF ONTARIO
CONSOLIDATED STATEMENTS OF DEFICIT
(unaudited)
3 MONTHS 6 MONTHS
PERIOD ENDED PERIOD ENDED
(THOUSANDS OF CANADIAN DOLLARS June 30 June 30 June 30 June 30
EXCEPT FOR SHARE DATA) 2004 2003 2004 2003
-------------------------------------------------------------------------
Deficit, beginning of period 258,172 251,148 253,177 240,761
Net loss (income) for the period (2,929) 9,624 2,066 20,011
Distribution (note 4c) 2,900 - 2,900 -
-------------------------------------------------------------------------
Deficit, end of period 258,143 260,772 258,143 260,772
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes
HEMOSOL CORP (A DEVELOPMENT STAGE COMPANY) -
INCORPORATED UNDER THE LAW OF ONTARIO
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
3 MONTHS 6 MONTHS
PERIOD ENDED PERIOD ENDED
(THOUSANDS OF CANADIAN DOLLARS June 30 June 30 June 30 June 30
EXCEPT FOR SHARE DATA) 2004 2003 2004 2003
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) for the period 2,929 (9,624) (2,066) (20,011)
Add (deduct) items not involving cash
Amortization of property plant
and equipment 567 604 1,110 1,207
Amortization of license technology 42 - 84 -
Amortization of patents and trademarks 41 24 70 49
Amortization of deferred charges 434 1,271 1,687 2,495
Stock based compensation (note 3) 1,053 - 1,053 -
Future tax liability (1,029) - (1,029) -
Minority interest (256) - (256) -
Net gain on Arrangement (note 4d) (6,838) - (6,838) -
Foreign currency translation
(gain) loss (8) 69 - 285
-------------------------------------------------------------------------
(3,065) (7,656) (6,185) (15,975)
Net changes in non-cash working
capital balances related to operations (282) (1,710) (1,975) (5,126)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash used in operating activities (3,347) (9,366) (8,160) (21,101)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Patent and trademark costs (4) (52) (6) (95)
Purchase of capital assets (125) (6,327) (255) (8,160)
Purchase of license technology
(note 6) (1,500) - (1,500) -
Proceeds from Arrangement, net of
transaction costs (note 4d) 12,898 - 12,898 -
Purchase of short term investments
(note 2) (6,965) - (6,965) -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash provided by (used in) investing
activities 4,304 (6,379) 4,172 (8,255)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds on issuance of common shares
(note 6) - - 180 -
Proceeds from loan (note 5) - 3,000 - 13,000
Cash released from escrow - - 448 -
Deferred charges - - - (29)
-------------------------------------------------------------------------
Cash provided by financing activities - 3,000 628 12,971
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Effect of exchange rates on cash 8 (69) - (285)
-------------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents during the period 965 (12,814) (3,360) (16,670)
Cash and cash equivalents, beginning
of period 3,800 13,723 8,125 17,579
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash and cash equivalents, end
of period 4,765 909 4,765 909
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes
DATASOURCE: Hemosol Corp.
CONTACT: Jason Hogan, Investor & Media Relations, (416) 361-1331,
(800) 789-3419, (416) 815-0080 fax, , http://www.hemosol.com/;
Archived images on this organization are available through CNW E-Pix at
http://www.newswire.ca/. Images are free to members of The Canadian Press.
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca/ and click on reports@cnw.