Contact:
Stellar Pharmaceuticals Inc. -OR-
Seventh Circle Consulting, LLC
Peter Riehl, President & CEO
Christine Petraglia
(800) 639-0643
(646)354-8886
(519) 434-1540
Arnold Tenney, Chairman
(416) 587-3200
Stellar Pharmaceuticals Announces Profitability for 2007 Third Quarter Financial Results
LONDON, ONTARIO--(MARKET WIRE)—November 8, 2007 -- Stellar Pharmaceuticals Inc. (TSX VENTURE:SLX.V -News) (OTCBB:SLXCF.OB -News) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the third quarter ended September 30, 2007. All amounts in this press release are in Canadian dollars, rounded to the nearest one hundred dollars and are the result of the use of U.S. generally accepted accounting principles.
Third Quarter 2007 Financial Results and Review
For the three month period ended September 30, 2007 total operating revenues from all sources increased by 43.2% to $615,400 compared to $429,900 in the same period in 2006. Gross profit for the quarter increased 79.1% to $535,000 compared to $298,800 for the same period in 2006. The Company showed a profit for the quarter of $137,500 compared to a loss of $278,800 in the same quarter of 2006.
For the nine month period ended September 30, 2007 total operating revenues from all sources increased 20.8% to $1,589,600 compared to $1,316,100 in the same period of 2006. Gross profit for this nine month period grew by 30.6% to $1,267,500 from $970,500 for the same period in 2006. Stellar’s net loss for the nine month period was reduced by 75.4% to $212,500 compared to a loss of $865,100 in 2006.
NeoVisc sales in Canada grew by 19.9% for the quarter and 10.0% for the nine month period ending September 30, 2007 over the comparable periods for 2006. While international sales for NeoVisc were up 23.9% for the quarter and 90.8% for the nine month period compared to the same periods in 2006. Uracyst sales in Canada grew by 26.8% for the quarter and 19.9% for the nine month period compared to the same periods in 2006.
As previously announced, Stellar’s United States Licensee, Watson Pharmaceuticals is in the process of conducting a Canadian-based, placebo controlled, pilot clinical study in interstitial cystitis patients, which is expected to end in early 2008. The results of this study will be utilized in designing the pivotal Phase III safety and efficacy trial, slated to commence in 2008, the data from which will be submitted to the FDA in support of marketing approval.
Peter Riehl, Stellar’s President & CEO commented, “We are extremely pleased to see the Company profitable for the quarter and moving towards positive cash flow. Stellar has no debt on its balance sheet and over $3 million in cash and cash equivalents, which puts the Company in an excellent position to accelerate future market growth domestically and internationally. Both NeoVisc and Uracyst continue to gain traction in all markets which is exciting given the number of new markets they will be introduced to in the next nine months.” Mr. Riehl added, “Stellar’s global licensing strategy is now starting to show returns and the Company expects future royalty and licensing revenue to become a growing percentage of total revenues.”
About Stellar Pharmaceuticals Inc.
Stellar has developed and is marketing direct in Canada, and in countries around the world through out-license agreements, three 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 an in-licensing agreement for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.
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.
STELLAR PHARMACEUTICALS INC.
CONDENSED BALANCE SHEETS
(Canadian Funds)
|
|
|
| As at |
|
| As at |
|
| ASSETS |
| Sep/30/07 |
|
| Dec/31/06 |
CURRENT |
|
|
|
|
|
| |
| Cash and cash equivalents | $ | 3,145,355 |
| $ | 3,515,193 | |
| Accounts receivable, net of allowance $0 (2005 - $0) |
| 299,434 |
|
| 199,704 | |
| Inventories |
| 219,156 |
|
| 274,597 | |
| Prepaid, deposits and sundry receivables |
| 191,902 |
|
| 55,407 | |
|
|
|
| 3,855,847 |
|
| 4,044,901 |
PROPERTY, PLANT AND EQUIPMENT |
| 827,042 |
|
| 853,818 | ||
|
|
|
|
|
|
|
|
OTHER ASSETS |
| 55,893 |
|
| 49,691 | ||
PROMISSORY NOTE |
| 14,945 |
|
| - | ||
|
|
| $ | 4,753,727 |
| $ | 4,948,410 |
|
| LIABILITIES |
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|
|
CURRENT |
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|
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|
|
| |
| Accounts payable | $ | 257,348 |
| $ | 226,026 | |
| Accrued liabilities |
| 89,825 |
|
| 135,198 | |
| Deferred revenues |
| 11,627 |
|
| 1,500 | |
|
|
|
| 358,800 |
|
| 362,724 |
|
| SHAREHOLDERS' EQUITY |
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CAPITAL STOCK |
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AUTHORIZED |
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Unlimited Non-voting, convertible, redeemable, and retractable preferred |
|
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| ||
| shares with no par value |
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| |
Unlimited Common shares with no par value |
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| ||
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ISSUED |
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| |
23,822,540 | Common Shares (2006- 23,819,040) |
| 8,303,054 |
|
| 8,299,554 | |
|
| Paid-in capital options - outstanding |
| 130,316 |
|
| 513,990 |
|
| - expired |
| 605,360 |
|
| 201,322 |
Accumulated other comprehensive income (loss) |
| (2,100) |
|
| - | ||
DEFICIT |
|
| (4,641,703) |
|
| (4,429,180) | |
|
|
|
| 4,394,927 |
|
| 4,585,686 |
|
|
| $ | 4,753,727 |
| $ | 4,948,410 |
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF OPERATIONS, DEFICITS
AND COMPREHENSIVE INCOME (LOSS)
(Canadian Funds)
(Unaudited)
|
| For the Three Month |
|
| For the Nine Month | ||||||
|
| Period Ended September 30 |
|
| Period Ended September 30 | ||||||
|
| 2007 |
|
| 2006 |
|
| 2007 |
|
| 2006 |
|
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|
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|
|
|
|
|
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|
PRODUCT SALES | 399,178 |
| $ | 332,423 |
| $ | 1,194,733 |
| $ | 1,025,903 | |
COST OF GOODS SOLD | 80,474 |
|
| 89,175 |
|
| 301,941 |
|
| 303,652 | |
MARGIN ON PRODUCT SOLD | 318,704 |
|
| 243,248 |
|
| 892,792 |
|
| 722,251 | |
ROYALTY AND LICENSING REVENUES | 216,218 |
|
| 97,445 |
|
| 394,834 |
|
| 290,164 | |
WRITE-DOWN OF OBSOLETE INVENTORY | - |
|
| (41,949) |
|
| (20,145) |
|
| (41,949) | |
GROSS PROFIT | 534,922 |
|
| 298,744 |
|
| 1,267,481 |
|
| 970,466 | |
EXPENSES |
|
|
|
|
|
|
|
|
|
| |
| Selling, general and administrative | 441,486 |
|
| 491,784 |
|
| 1,451,254 |
|
| 1,571,380 |
| Research and development | 25,662 |
|
| 50,817 |
|
| 83,150 |
|
| 174,310 |
| Amortization | 36,226 |
|
| 38,973 |
|
| 117,285 |
|
| 117,324 |
|
| 503,374 |
| $ | 581,574 |
|
| 1,651,689 |
|
| 1,863,014 |
INCOME (LOSS) FROM OPERATIONS | 31,548 |
|
| (282,830) |
|
| (384,208) |
|
| (892,548) | |
INTEREST AND OTHER INCOME | 105,929 |
|
| 4,063 |
|
| 172,685 |
|
| 27,410 | |
NET INCOME (LOSS) FOR THE PERIOD | 137,477 |
|
| (278,767) |
|
| (212,523) |
|
| (865,138) | |
DEFICIT, beginning of period | (4,779,180) |
|
| (6,270,776) |
|
| (4,429,180) |
|
| (5,684,405) | |
DEFICIT, end of period | (4,641,703) |
| $ | (6,549,543) |
| $ | (4,641,703) |
| $ | (6,549,543) | |
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
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|
|
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|
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| |
| Foreign currency translation adjustment | (2,100) |
|
| - |
|
| (2,100) |
|
| - |
COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD | 135,377 |
|
| (278,767) |
|
| (214,623) |
|
| (865,138) | |
EARNINGS (LOSS) PER SHARE | 0.01 |
|
| (0.01) |
|
| (0.01) |
|
| (0.04) | |
WEIGHTED AVERAGE NUMBER OF COMMON |
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| |
| SHARES OUTSTANDING | 23,822,540 |
|
| 23,472,690 |
|
| 23,821,232 |
|
| 23,530,318 |
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Canadian Funds)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| For the Three Month Period |
|
| For the Nine Month Period | ||||||
|
|
|
| Ended September 30 |
|
| Ended September 30 | ||||||
|
|
|
| 2007 |
|
| 2006 |
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| 2007 |
|
| 2006 |
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CASH FLOWS USED IN OPERATING ACTIVITIES |
|
|
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|
| ||
| Net income (loss) for the period |
| 137,477 |
|
| (278,767) |
|
| (212,523) |
|
| (865,138) | |
| Amortization |
| 36,226 |
|
| 38,973 |
|
| 117,287 |
|
| 117,324 | |
| Issuance of shares and options for services rendered |
| 12,916 |
|
| 22,909 |
|
| 23,865 |
|
| 106,380 | |
|
|
|
| 186,619 |
|
| (216,885) |
|
| (71,371) |
|
| (641,434) |
| Change in non-cash operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
| |
|
| Accounts receivable |
| (86,762) |
|
| 2,438 |
|
| (99,730) |
|
| (67,198) |
|
| Inventories |
| 2,924 |
|
| 70,733 |
|
| 55,441 |
|
| 77,339 |
|
| Prepaid, deposits, and sundry receivables |
| (128,444) |
|
| 17,972 |
|
| (136,495) |
|
| 67,966 |
|
| Promissory note |
| 2,100 |
|
| - |
|
| (14,945) |
|
| - |
|
| Accounts payable and accrued liabilities |
| 164,537 |
|
| (66,745) |
|
| (14,051) |
|
| (416,272) |
|
| Deferred revenues |
| 11,627 |
|
| 2,400 |
|
| 10,127 |
|
| (40,997) |
|
|
|
| 152,601 |
|
| (190,087) |
|
| (271,024) |
|
| (1,020,596) |
CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
|
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|
|
|
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|
|
| ||
|
| Additions to property, plant and equipment |
| (80,115) |
|
| (32,981) |
|
| (89,495) |
|
| (59,882) |
|
| Additions to other assets |
| (5,695) |
|
| - |
|
| (7,219) |
|
| - |
|
|
|
| (85,810) |
|
| (32,981) |
|
| (96,714) |
|
| (59,882) |
CASH FLOWS USED IN FINANCING ACTIVITIES |
|
|
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|
|
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|
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|
| ||
|
| Issuance of common stock |
| - |
|
| - |
|
| - |
|
| 48,900 |
EFFECT OF FOREIGN EXCHANGE ON CASH |
| (2,100) |
|
|
|
|
| (2,100) |
|
|
| ||
CHANGE IN CASH AND CASH EQUIVALENTS |
| 64,691 |
|
| (223,068) |
|
| (369,838) |
|
| (1,080,478) | ||
CASH AND CASH EQUIVALENTS, beginning of period |
| 3,080,672 |
|
| 1,300,245 |
|
| 3,515,193 |
|
| 2,108,755 | ||
CASH AND CASH EQUIVALENTS, end of period | $ | 3,145,355 |
| $ | 1,077,177 |
| $ | 3,145,355 |
| $ | 1,077,177 |