![[exhibit991002.gif]](https://capedge.com/proxy/8-K/0001116502-08-001868/exhibit991002.gif)
Exhbit 99.1
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| Press Release Source: Stellar Pharmaceuticals Inc. |
STELLAR PHARMACEUTICALS INC. ANNOUNCES PRODUCT REVENUE INCREASES FOR BOTH DOMESTIC AND INTERNATIONAL MARKETS
London, Ontario, November 13, 2008 –Stellar Pharmaceuticals Inc. ("Stellar" or the “Company”)(OTCBB:SLXCF.OB) today announced that for the three month period ended September 30, 2008, total product revenues increased by 19.6% compared to the same period in 2007. Product sales in Canada grew by 8.3% and international product sales were up 96.6% due to increased sales of NeoViscÒ in Europe. For the nine month period ended September 30, 2008, product revenues increased by 21.6% over the same period in 2007, with Canadian product sales up 3.7% while international sales grew by 139.8% again due to solid growth of NeoVisc in Europe.
Total income from operations for the nine month period ended September 30, 2008, was up 4.2%, while income from operations for the three month period ended September 30, 2008 decreased 21.8% compared to the same periods in 2007. The decrease for the three month period ended September 30, 2008, was due to the termination as of March 31, 2008, of Stellar’s European licence agreement for Uracyst, which resulted in significant reduction of royalty income for the past two quarters in 2008. Although it can not be certain, Stellar expects to have new licensed partners in place in the last quarter of 2008, which will greatly help to improve UracystÒ royalty income in 2009 and onward.
The Company’s loss from operations for the nine month period ended September 30, 2008 was reduced by 20.9% to $303,800 compared to a loss of $384,200 for the same period in 2007. The loss from operations for the three month period ended September 30, 2008 was $88,600 or a decrease of 380.8%, compared to income from operations of $31,500 for the same period in 2007. The main decrease differential of income for the quarter and year-to-date over the prior year is due to the decrease in royalty payments recorded in 2008 compared to 2007 and the receipt in 2007, of $216, 200 from the mediated European agreement settlement for Uracyst.
In order to accommodate the future increased manufacturing demand for our products, Stellar has currently invested $354,000 in capital expenses in order to accommodate the expansion of its manufacturing to two separate sites. This will help reduce risks associated with one supplier and greatly improve the Company’s efficiencies, as well as its ability to supply the increased demand for its products. The Company’s product NeoVisc® will now be manufactured at Hyaluron Inc., located in Burlington, MA. Hyaluron has a proven track record in working with highly viscous products such as NeoVisc® and therefore felt to be a good fit for this manufacturing process. DRAXIS Pharma, a division of DRAXIS Specialty Pharmaceuticals located in Kirkland Quebec, will now be manufacturing Uracyst®. DRAXIS also has a proven track record in producing sterile products and is believed to be capable of meeting Stellar’s Uracyst® manufacturing requirements. Both these facilities started to manufacture Stellar’s products during this quarter. With these two facilities now in place, Stellar will no longer manufacture its products at Dalton Pharma Services.
As at September 30, 2008, the Company was debt free and had working capital of $2,981,200 of which $2,594,800 was in cash or cash equivalents.
Purchasing of Equity Securities
Pursuant to the terms of the Company's normal course issuer bid, the Company, as of the date of this release, has purchased 222,500 of its common shares at an average purchase price of $0.38.
ABOUT STELLAR PHARMACEUTICALS INC.
Stellar has developed and is marketing direct in Canada and in countries around the world through out-license agreements two products based on its core polysaccharide technology: NeoVisc®, for the treatment of osteoarthritis; and Uracyst® and the Uracyst® Test Kit, its patented technology for the diagnosis and treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreements for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.
STELLAR PHARMACEUTICALS INC.
CONDENSED BALANCE SHEETS
(Expressed in Canadian Dollars)
| | | | | | | | | | | | | |
ASSETS | |
| | As at | | | As at | |
| | September 30, 2008 | | | December 31, 2007 | |
CURRENT | | (Unaudited) | | | (Audited) | |
Cash and cash equivalents | | $ | 2,594,811 | | | $ | 3,211,126 | |
Accounts receivable, net of allowance | | | 176,384 | | | | 272,341 | |
Inventories | | | 447,276 | | | | 305,040 | |
Taxes recoverable | | | 200,070 | | | | 164,714 | |
Prepaid, deposits and sundry receivables | | | 49,285 | | | | 44,066 | |
| | | 3,467,826 | | | | 3,997,287 | |
| | | | | | | | |
PROPERTY, PLANT AND EQUIPMENT | | | 1,135,179 | | | | 822,692 | |
OTHER ASSETS | | | 65,834 | | | | 55,430 | |
LOAN RECEIVABLE | | | 15,899 | | | | 14,822 | |
| | $ | 4,684,738 | | | $ | 4,890,231 | |
| | | | | | | | |
LIABILITIES | |
| | | | | | |
CURRENT | | | | | | |
Accounts payable | | $ | 235,328 | | | $ | 214,442 | |
Accrued liabilities | | | 248,527 | | | | 192,364 | |
Deferred revenues | | | 2,799 | | | | 10,573 | |
| | | 486,654 | | | | 417,379 | |
| | | | | | | | |
CONTINGENCIES AND COMMITMENTS | | | | | | | | |
| | | | | | | | |
SHAREHOLDERS' EQUITY | |
CAPITAL STOCK | | | | | | |
| AUTHORIZED | | | | | | |
| Unlimited | | Non-voting, convertible, redeemable and retractable | | | | | | |
| | | preferred shares with no par value | | | | | | |
| Unlimited | | Common shares with no par value | | | | | | |
| | | | | | | | | |
| ISSUED | | | | | | | | |
| | 23,655,040 | | Common shares (2007 - 23,822,540) | | | 8,245,179 | | | | 8,303,054 | |
| | | | Additional paid-in capital - options - outstanding | | | 69,633 | | | | 123,002 | |
| | | | - expired | | | 691,816 | | | | 623,417 | |
| | | | | | | 9,006,628 | | | | 9,049,473 | |
DEFICIT | | | | | (4,808,544 | ) | | | (4,576,621 | ) |
| | | | | | | 4,198,084 | | | | 4,472,852 | |
| | | | | | $ | 4,684,738 | | | $ | 4,890,231 | |
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS AND DEFICIT
(Expressed in Canadian Dollars)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | For the Three Month
Period Ended September 30 | | | For the Nine Month
Period Ended September 30 | |
| | 2008 | | | 2007 | | | 2008 | | | 2007 | |
PRODUCT SALES(Note 8) | | $ | 477,289 | | | $ | 399,178 | | | $ | 1,452,280 | | | $ | 1,194,733 | |
COST OF PRODUCTS SOLD (excluding amortization of $14,314 for the three month period ended September 30, 2008 (2007 - $22,803); and amortization of $45,598 for the nine month period ended September 30, 2008 (2007 - $78,002) and other items shown below for the three month period ended September 30, 2008 $nil (2007 - $nil) and for the nine month period ended September 30, 2008 $nil (2007 – $20,145) | | | 92,159 | | | | 80,474 | | | | 321,206 | | | | 301,941 | |
MARGIN ON PRODUCTS SOLD | | | 385,130 | | | | 318,704 | | | | 1,131,074 | | | | 892,792 | |
ROYALTY & LICENSING REVENUES | | | 3,780 | | | | 216,218 | | | | 204,136 | | | | 394,834 | |
WRITE-DOWN OF OBSOLETE INVENTORY | | | –– | | | | –– | | | | –– | | | | (20,145 | ) |
GROSS PROFIT | | | 388,910 | | | | 534,922 | | | | 1,335,210 | | | | 1,267,481 | |
EXPENSES | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | 453,362 | | | | 441,486 | | | | 1,496,246 | | | | 1,451,254 | |
Research and development | | | (4,805 | ) | | | 25,662 | | | | 53,437 | | | | 83,150 | |
Amortization | | | 28,939 | | | | 36,226 | | | | 89,367 | | | | 117,285 | |
| | | 477,496 | | | | 503,374 | | | | 1,639,050 | | | | 1,651,689 | |
INCOME (LOSS) FROM OPERATIONS | | | (88,586 | ) | | | 31,548 | | | | (303,840 | ) | | | (384,208 | ) |
INTEREST AND OTHER INCOME | | | 18,627 | | | | 105,929 | | | | 67,050 | | | | 171,685 | |
GAIN ON DISPOSAL OF EQUIPMENT | | | 9,676 | | | | –– | | | | 9,676 | | | | –– | |
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD | | $ | (60,283 | ) | | $ | 137,477 | | | $ | (227,114 | ) | | $ | (212,523 | ) |
DEFICIT,beginning of period | | | (4,746,385 | ) | | | (4,779,180 | ) | | | (4,576,621 | ) | | | (4,429,180 | ) |
Effect of repurchase and cancellation of Common Shares | | | (1,876 | ) | | | –– | | | | (4,809 | ) | | | –– | |
DEFICIT,end of period | | $ | (4,808,544 | ) | | $ | (4,641,703 | ) | | $ | (4,808,544 | ) | | $ | (4,641,703 | ) |
EARNINGS (LOSS) PER SHARE – Basic and Diluted | | $ | 0.00 | | | $ | 0.01 | | | $ | (0.01 | ) | | $ | (0.01 | ) |
WEIGHTED AVERAGE NUMBER OF COMMON | | | | | | | | | | | | | | | | |
SHARES OUTSTANDING | | | 23,681,779 | | | | 23,822,540 | | | | 23,752,790 | | | | 23,821 232 | |
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | For the Three Month Period Ended September 30 | | | For the Nine Month Period Ended September 30 | |
| | 2008 | | | 2007 | | | 2008 | | | 2007 | |
CASH FLOWS USED IN OPERATING ACTIVITIES | | | | | | | | | | | | |
Net income (loss) for the period | | $ | (60,283 | ) | | $ | 137,477 | | | $ | (227,114 | ) | | $ | (212,523 | ) |
| | | | | | | | | | | | | | | | |
Items not affecting cash | | | | | | | | | | | | | | | | |
Amortization | | | 28,939 | | | | 36,226 | | | | 89,367 | | | | 117,285 | |
Gain on sale of asset | | | (9,676 | ) | | | –– | | | | (9,676 | ) | | | –– | |
Unrealized foreign exchange (gain) loss | | | (8,042 | ) | | | 712 | | | | (14,399 | ) | | | 15,906 | |
Issuance of equity instruments for services rendered | | | 3,603 | | | | 12,916 | | | | 16,730 | | | | 23,865 | |
Change in non-cash operating assets and liabilities | | | 35,832 | | | | (34,018 | ) | | | (65,808 | ) | | | (199,653 | ) |
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES | | | (9,627) | | | | 153,313 | | | | (210,900 | ) | | | (255,118 | ) |
| | | | | | | | | | | | | | | | |
CASH FLOWS USED IN INVESTING ACTIVITIES | | | | | | | | | | | | | | | | |
Sale of equipment assets | | | 10,000 | | | | –– | | | | 10,000 | | | | –– | |
Additions to property, plant and equipment | | | (152,373 | ) | | | (80,115 | ) | | | (354,008 | ) | | | (89,495 | ) |
Additions in other assets | | | (5,357 | ) | | | (5,695 | ) | | | (11,420 | ) | | | (7,219 | ) |
CASH FLOWS USED IN INVESTING ACTIVITIES | | | (147,730 | ) | | | (85,810 | ) | | | (355,428 | ) | | | (96,714 | ) |
| | | | | | | | | | | | | | | | |
CASH FLOWS USED IN FINANCING ACTIVITIES | | | | | | | | | | | | | | | | |
Purchase of shares under normal course issuer bid | | | (20,729 | ) | | | –– | | | | (64,384 | ) | | | –– | |
CASH FLOWS USED IN FINANCING ACTIVITIES | | | (20,729 | ) | | | –– | | | | (64,384 | ) | | | –– | |
| | | | | | | | | | | | | | | | |
EFFECT OF EXCHANGE RATES ON CASH HELD | | | | | | | | | | | | | | | | |
IN FOREIGN CURRENCY | | | 8,041 | | | | (2,820 | ) | | | 14,397 | | | | (18,006 | ) |
CHANGE IN CASH AND CASH EQUIVALENTS | | | (170,045 | ) | | | 64,683 | | | | (616,315 | ) | | | (369,838 | ) |
CASH AND CASH EQUIVALENTS, beginning of period | | | 2,764,856 | | | | 3,080,672 | | | | 3,211,126 | | | | 3,515,193 | |
CASH AND CASH EQUIVALENTS,end of period | | $ | 2,594,811 | | | $ | 3,145,355 | | | $ | 2,594,811 | | | $ | 3,145,355 | |
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.
Contact:
Stellar Pharmaceuticals Inc.
544 Egerton St.
London, ON N5W 3Z8
Peter Riehl
(800) 639-0643 or (519) 434-1540
or
Arnold Tenney
(416) 587-3200
