MISSISSAUGA, ON, May 15, 2017 /CNW/ - Crescita Therapeutics Inc. (TSX:CTX) (Crescita or the Company), a commercial dermatology company with a portfolio of non-prescription skincare products and prescription drug products for the treatment and care of skin conditions and diseases and their symptoms, today announced its financial and operational results for the first quarter ended March 31, 2017.
Product and Technology Updates
In April, the Company entered into a development and commercialization license agreement (the Agreement) with Taro Pharmaceuticals Inc. (Taro), the Canadian subsidiary of Taro Pharmaceutical Industries Ltd. Under the terms of the Agreement, Crescita has granted Taro an exclusive license to the rights to sell and distribute Pliaglis in the U.S. market and for the Enhanced Formulation. In consideration of the rights granted under the Agreement, Taro will make the following payments to Crescita: an upfront payment of US$2.0 million, up to US$5.75 million in non-dilutive development and sales milestone payments and tiered royalties on net sales of products licensed under the Agreement. The Company is evaluating strategies to optimize product sales in Canada and Mexico.
In March, the Company signed an exclusive license agreement with a U.S.-based, major dermatological contract research company (the Licensee) to develop prescription treatments of skin diseases utilizing Crescita's patented multiplexed molecular penetration enhancer (MMPE) technology. The Licensee will oversee and fund the cost of all development activities until commercialization partner(s) for the products are secured. Crescita is entitled to a share of royalties and other consideration received by the Licensee from such partners based on a formula that includes compensation to Crescita for granting the Licensee the exclusive license to the MMPE technology.
In January, INTEGA Skin Sciences (INTEGA) launched the ISDIN Acnisdin and Nutratopic product lines at Brunet pharmacy chains throughout Québec. The trademark is owned by ISDIN S.A. and is being used under license by INTEGA.
In April, the board of directors of the Company appointed Serge Verreault to the position of President. Mr. Verreault had previously held the position of Executive Director of Business Development at Valeant Canada and was a member of the Operating Committee.
The Company is continually assessing in-licensing, merger and acquisition activities, or some combination thereof, related to new product opportunities. The Company's goal is to leverage its current sales and manufacturing infrastructure to facilitate growth.
"Although the first quarter of 2017 was a difficult one for Crescita, it was not unexpected, as sales are typically the lowest in this quarter," said Dan Chicoine, Crescita's Executive Chairman and Interim CEO. In addition, Crescita continued to incur restructuring and integration costs which should decline during the course of the year. The anticipated higher sales going forward, additional revenue from the Taro Agreement, as well as reducing costs, should provide improvements in our financial results."
For further details on the results, please refer to the Management, Discussion and Analysis (MD&A) and Condensed Consolidated Interim Financial Statements which are available on the Company's website (www.crescitatherapeutics.com).
At March 31, 2017, cash and short-term investments were $13.8 million compared to $18.4 million at December 31, 2016 of which $8.6 million is restricted cash.
Total revenue, consisting of product sales, royalties and services revenue, for the three months ended March 31, 2017 was $2.1 million compared to $95,000 for the three months ended March 31, 2016. The increase in revenue related to product sales of non-prescription skincare products resulting from the INTEGA acquisition.
Total operating expenses for the three months ended March 31, 2017 were $5.2 million compared to $4.7 million for the three months ended March 31, 2016. The increase in operating expenses relates primarily to the inclusion of INTEGA's operations including product costs, as well as costs related to the restructuring of the business, offset by synergies from integration.
Net loss for the three months ended March 31, 2017 was $3.2 million compared to $6.1 million for the three months ended March 31, 2016. The improvement in net loss for the current quarter was a result of the increased revenues from INTEGA product sales netted against the corresponding costs to realize those sales and were offset by the additional one-time non-recurring costs incurred to integrate and restructure the operations. In the comparative quarter, net loss included a net loss from discontinued operations of $1.1 million which includes costs related to the 2015 WF10 Trial, as well as costs of maintaining the European operations. Net loss for the current quarter includes loss from discontinued operations of $63,000 attributable to legal and professional fees incurred to facilitate the wind-down.
The number of common shares outstanding as at March 31, 2017 was 13,935,638.
Restated Annual Financial Statements and MD&A
The Company has also filed restated annual Consolidated Financial Statements and MD&A for the year ended December 31, 2016 related to a non-cash adjustment to deferred income taxes in the amount of $1.8 million. The documents can be found on SEDAR at www.sedar.com.
About Crescita Therapeutics Inc.
Crescita (TSX:CTX) is a publicly traded, Canadian commercial dermatology company with a portfolio of non-prescription skincare products and prescription drug products for the treatment and care of skin conditions and diseases and their symptoms. Crescita owns multiple proprietary drug delivery platforms that support the development of patented formulations that can facilitate the delivery of active drugs into or through the skin. Crescita's board of directors and management team have demonstrated success in building Crescita's predecessor company, Nuvo Research Inc., including developing multiple drugs that are now approved and commercialized and negotiating multiple licensing transactions. For additional information, please visit www.crescitatherapeutics.com.
This Press Release contains "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company's current beliefs, expectations and assumptions regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. Crescita's actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, readers should not rely on any of these forward-looking statements. Important factors that could cause Crescita's actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the risk factors included in Crescita's most recent Annual Information Form dated March 29, 2017 under the heading "Risks Factors", and as described from time to time in the reports and disclosure documents filed by Crescita with Canadian securities regulatory agencies and commissions. These and other factors should be considered carefully and readers should not place undue reliance on Crescita's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and none of Crescita or any other person assumes responsibility for the accuracy and completeness of these forward-looking statements.
Any forward-looking statement made by the Company in this Press Release is based only on information currently available to it and speaks only as of the date on which it is made. Except as required by applicable securities laws, Crescita undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
SOURCE Crescita Therapeutics Inc.