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Trimel Announces Third Quarter 2012 Financial Results and Provides Product Development Update

Date : 11/08/2012 @ 3:30AM
Source : Marketwired
Stock : Trimel Pharmaceuticals Corp (TRL)
Quote : 0.47  -0.01 (-2.08%) @ 1:06AM
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Trimel Announces Third Quarter 2012 Financial Results and Provides Product Development Update

Trimel Pharmaceuticals Corp (TSX:TRL)
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Trimel Pharmaceuticals Corporation (TSX:TRL) ("Trimel or "the Company") today reported its financial results for the three and nine month periods ended September 30, 2012. The Company today is also providing investors with an update on the status of its product development programs, the market conditions for its key products as well as a discussion of the results of a physician research study on the potential use of CompleoTRT(TM) in clinical practice.

Management of the Company will host a conference call to discuss these results and the status of its business on Thursday, November 8, 2012, at 8:30 a.m. Eastern Standard Time. Presenting from Trimel will be Bruce Brydon, Chairman of the Board and Chief Executive Officer, Tom Rossi, President and Chief Operating Officer and Kenneth Howling, Chief Financial Officer. The conference call details can be found at the end of the press release.

Financial Results for the Three and Nine Months Ended September 30, 2012

For the three and nine month periods ended September 30, 2012, Trimel incurred Research and Development expenses ("R&D") of US$3.5 million and US$12.6 million respectively as compared to US$6.3 million and US$11.0 million for the comparable 2011 periods. The increase in R&D spending for the 2012 period relates primarily to the costs associated with the advancement of the CompleoTRT(TM) Phase III and Tefina(TM) Phase II clinical trials.

Trimel incurred General and Administrative expenses of US$2.8 million and US$7.6 million for the three and nine month periods ended September 30, 2012 respectively as compared to US$2.6 million and US$5.8 million for the comparable 2011 periods. The increase in spending for the 2012 period as compared to spending levels for the same 2011 period was primarily attributable to employment related expenses, professional fees and public company costs following the Company's successful qualifying transaction in July 2011.

For the three and nine month periods ended September 30, 2012, the Company incurred a net loss of US$0.07 and US$0.24 per share respectively, as compared to US$0.14 and US$0.34 per share for the comparable 2011 periods.

As at September 30, 2012, the Company had total assets of US$25.3 million as compared to US$12.1 million at June 30, 2012 and total liabilities of US$13.7 million at September 30, 2012 as compared to US$6.7 million at June 30, 2012.

During the third quarter of 2012 the Company completed two financing transactions raising total gross proceeds of US$20.6 million. On July 17, 2012 the Company announced that it had closed a public offering for aggregate gross proceeds of C$13.2 million (the "Offering"). In connection with the Offering, the Company issued 7,569,000 units ("Units") at a price of C$1.75 per Unit. Each Unit consists of one common share of the Company ("Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each whole Warrant entitles the holder to purchase one Common Share at an exercise price of C$2.50 until January 17, 2015.

The offering was completed by a syndicate of underwriters led by RBC Dominion Securities Inc. and including GMP Securities L.P. On August 3, 2012, RBC Dominion Securities Inc. and GMP Securities L.P. exercised in part their over-allotment option to purchase an additional 60,400 Trimel Common Shares and 74,700 Trimel Warrants for aggregate gross proceeds of C$111,040. The closing of the over-allotment took place on August 3, 2012.

On July 18, 2012, the Company entered into a loan and security agreement with GE Capital, Healthcare Financial Services ("GE Capital"), as agent for the lenders party thereto, pursuant to which GE Capital advanced US$7,500,000 (the "Loan") to the Company. According to the Loan Agreement, the Loan accrues interest at 10.75% per year and is repayable in scheduled instalments through to July 1, 2015 (subject to repayment on demand at any time should certain customary events of default occur). As is customary, the Company has granted security over the assets of the Company and its subsidiaries. In connection with the Loan transaction, the lenders under the Loan Agreement (or certain of their affiliates) have been issued Warrants exercisable for an aggregate of 154,916 Common Shares of the Company and certain brokers have been issued Warrants exercisable for an aggregate of 51,639 common shares of the Company. The Warrants are exercisable for five years at an exercise price calculated using the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange for the period of five days ending immediately prior to the completion of the Loan.

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.

Product Development Update

CompleoTRT(TM) (Testosterone - Hypogonadism ("Low T"))

Phase III Efficacy Dosing Completed

On October 15, 2012 the Company announced that all patients have completed dosing for the efficacy portion of the CompleoTRT(TM) Phase III clinical trial. The Company continues to gather the Phase III efficacy results for all patients since achieving the "data lock" on November 6, 2012. Once the final results have been tabulated and reviewed, they will be included in the New Drug Application ("NDA") for CompleoTRT(TM).

A specific filing timeline has yet to be determined for the NDA, as it is directly impacted by the outcome of a pre-NDA meeting requested with the Food and Drug Administration ("FDA").

CompleoTRT(TM) Physician Market Research

On October 22, 2012, the Company announced positive results from an independent market research study on the reception by physicians of CompleoTRT(TM). The quantitative study conducted in the United States surveyed 113 physicians covering urologists, endocrinologists and primary care physicians that are well versed in treating Low T with currently marketed testosterone replacement therapies.

After reviewing a profile of CompleoTRT(TM), all physicians surveyed who had prior experience with CompleoTRT(TM) as part of the recently completed clinical development program indicated that they would likely prescribe CompleoTRT(TM) to their Low T patients. These physicians anticipated that they would use CompleoTRT(TM) to treat 36% of their Low T patients and 45% of all of their newly diagnosed Low T patients. Looking at the 113 respondents as a whole, 87% of the physicians surveyed indicated that they would initiate CompleoTRT(TM) therapy. Overall, the 113 physicians surveyed anticipated that CompleoTRT(TM) would be used in 18% of their Low T patients and 23% of their newly diagnosed Low T patients.

When asked for their opinion on the acceptability of an intranasal treatment, 77% of the physicians responded that patients would not have an issue with using an intranasal product. The CompleoTRT(TM) benefits most mentioned by the respondents related to safety and the reduced risk of secondary transference of testosterone to women and young children, as well the ease of use and convenience of CompleoTRT(TM) administration.

Testosterone Market Dynamics

According to IMS Health, nearly 4.6 million testosterone prescriptions were written in the first eight months of 2012, reflecting growth of 35% versus the same period in 2011. This represents an acceleration of prescription growth rates as physicians and patient awareness of this medical condition increases.

Tefina(TM) (Testosterone - Female Orgasmic Disorder)

Enrolment Initiated for Patient Ambulatory Study in Australia

On October 15, 2012, the Company announced that it had received clearance from the Therapeutic Goods Administration ("TGA"), Australia's regulatory body, to initiate patient enrolment in Australia for the Tefina(TM) Phase II Ambulatory study. Approval for the Australian sites brings the number of countries recruiting to three, including the United States and Canada where patient recruitment was initiated in May and June of 2012 respectively.

This study is exploring a "use-as-required" treatment for women experiencing Female Orgasmic Disorder ("FOD"), more commonly referred to as anorgasmia. FOD is defined as the persistent or recurrent delay in, or absence of, orgasm following a normal sexual excitement phase which can result in marked personal distress or interpersonal difficulties. FOD affects 1 in 5 women worldwide. Currently there are no approved treatments for FOD; therefore, this condition represents a significant unmet need for women suffering distress from this condition.

The Tefina(TM) Phase II study design will involve women experiencing FOD and will be conducted as an ambulatory trial. As part of this double-blinded placebo-controlled study, patients will receive Tefina(TM) or placebo at home instead of in a hospital setting. The primary efficacy endpoint of the ambulatory trial will be the increase in the occurrence of orgasm over the treatment period compared against baseline levels.

The Company intends to enroll 240 patients in this Phase II study, with estimated completion in the latter part of Q3 2013.

Conference Call Details

To access the call live, please dial 416-340-2216 (Toronto), 1-866-226-1792 (Canada and U.S.), and 00-800-9559-6849 (International). 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. Eastern Standard Time on Wednesday November 14, 2012 by dialing 905-694-9451 (Toronto), 1-800-408-3053 (Canada and U.S.) or 00-800-3366-3052 (International), using access code: 6252312#.

About CompleoTRT(TM)

CompleoTRT(TM) is designed to represent a significant advancement in the treatment of male hypogonadism, or low testosterone - commonly known as "Low T". CompleoTRT(TM)'s unique delivery technology is designed to provide patients with the therapeutic effect of supplementing testosterone levels while doing so with a small amount of drug in the form of a bio-adhesive intranasal gel.

CompleoTRT(TM)'s intranasal no-touch delivery system is designed to avoid the risk of accidental transfer (secondary transference) of testosterone to spouses or other family members, thus offering unique patient benefits and improved safety as compared to other currently marketed products indicated to treat "Low T".

Since Trimel took over development of the product in the second half of 2009, CompleoTRT(TM) has been optimized to meet FDA regulatory requirements, including the development of a no-touch applicator device that is designed to ensure that CompleoTRT(TM) is dosed accurately and discretely. Trimel's research program to date has demonstrated that CompleoTRT(TM) is safe and effective, having recorded over 10,000 drug exposures in the studies conducted thus far in the United States.

About Hypogonadism ("Low T")

Subject to FDA approval, Trimel's lead product candidate, CompleoTRT(TM) would be indicated for the treatment of male hypogonadism or low testosterone - commonly known as "Low T". Hypogonadism is a biochemical syndrome characterized by a deficiency in serum testosterone levels that can be either acquired or inherited, and seriously affects the quality of life for those affected with the syndrome. Low testosterone is estimated to affect 13 million men in the United States, of which an estimated 90% go untreated. According to IMS Health, sales of marketed treatments for low testosterone in the United States grew 24% in 2011 versus 2010 to now exceed $1.6 billion in annual sales volume.

About Tefina(TM)

Trimel's product candidate Tefina(TM) is a bioadhesive 'no touch' intranasal low-dose gel formulation of testosterone. Tefina(TM) is being developed to offer women with female orgasmic disorder, a "use as required" treatment option. Tefina(TM) is expected to present an attractive safety profile, with virtually no androgen-related side effects such as acne, facial and body hair growth or deepening of the voice. Moreover, there is no expected risk of skin-to-skin transfer of testosterone to third parties with the multi-dose dispenser.

About Female Orgasmic Disorder ("Anorgasmia")

Female Orgasmic Disorder ("FOD") is defined as the persistent or recurrent delay in, or absence of, orgasm following normal sexual excitement phase that causes marked personal distress or interpersonal difficulties. The etiology of FOD is often characterized by whether the dysfunction has been lifelong (primary) or acquired (secondary). This condition is estimated to affect one in five pre and post menopausal women worldwide. Currently there are no approved treatments for FOD and therefore represents an unmet need for women suffering distress from this condition.

About Trimel

Trimel Pharmaceuticals Corporation (TSX:TRL) - Developing medications for Female Sexual Health and conditions related to Aging, and Well Being. Trimel is developing multiple product opportunities, including CompleoTRT(TM), a bioadhesive intranasal Testosterone gel currently in Phase III clinical testing in the United States. CompleoTRT(TM) is under investigation for the treatment of male hypogonadism, a condition commonly referred to as "Low T". For more information, please visit www.trimelpharmaceuticals.com.

For further information regarding Trimel Pharmaceuticals Corporation, please contact either Bruce Brydon, Chairman of the Board and Chief Executive Officer at (416) 679-0711 or Kenneth Howling, Chief Financial Officer at (416) 679-0536 or via email at ir@trimelpharmaceuticals.com.

Notice regarding forward-looking statements:

This press release contains forward looking information. This forward-looking information is not based on historical facts but rather on the expectations of the Company's management regarding the future growth of the Company and its respective results of operations, performance and business prospects and opportunities. Forward-looking information may include financial and other projections, as well as statements regarding future plans, objectives or economic performance, or the assumptions underlying any of the foregoing. This press release uses words such as "believe", "expect", "would", "will", "expects", "anticipates", "intends", "estimates", or similar expressions to identify forward-looking information. Such forward-looking information reflects the current beliefs of the Company's management based on information currently available to them.

Forward-looking information included in this press release is based in part, on factors and assumptions that may change, thus causing actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking information. Such factors and assumptions include that: the Company will achieve, sustain or increase profitability, and will be able to fund its operations with existing capital, and/or it will be able to raise additional capital to fund operations; the Company will be able to attract and retain key personnel; the Company will be able to acquire any necessary technology or businesses and effectively integrate such acquisitions; the Company will be successful in developing and clinically testing products under development; the Company will be successful in obtaining all necessary approvals for commercialization of its products from the U.S. Food and Drug Administration, the Canadian Therapeutic Products Directorate or other regulatory authorities; the results of continuing and future safety and efficacy studies by industry and government agencies relating to the Company's products will be favourable; the Company's products will not be adversely impacted by competitive products and pricing; raw materials and finished products necessary for the Company's products will continue to be available; the Company will be able to maintain and enforce the protection afforded by any patents or other intellectual property rights; the Company's products will be successfully licensed to third parties to market and distribute such products on favourable terms; the Company's key strategic alliances, out licensing and partnering arrangements, now and in the future, will remain in place and in force; the general regulatory environment will not change in a manner adverse to the business of the Company; the tax treatment of the Company and its subsidiaries will remain constant and the Company will not become subject to any material legal proceedings. The Company cautions that the foregoing list of factors and assumptions is not exhaustive.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. Risks related to forward-looking statements include those risks referred to in the Company's filings with the Canadian Securities regulators, including risks described in the Company's Annual Information Form dated March 9, 2012 under the heading "Risk Factors" and updated by the Company's short form prospectus dated July 11, 2012 under the headings "Forward-Looking Statements" and "Risk Factors". Actual results, performance or achievement could differ materially from that expressed in, or implied by; any forward-looking information in this press release, and, accordingly, investors should not place undue reliance on any such forward-looking information. Further, any forward-looking information speaks only as of the date on which such statement is made and the Company undertakes no obligation to update any forward-looking information to reflect the occurrence of unanticipated events, except as required by law. New factors emerge from time to time and the importance of current factors may change from time to time and it is not possible for management of the Company to predict all of such factors, changes in such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information contained in this press release.


                     TRIMEL PHARMACEUTICALS CORPORATION                     
      INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION       
                          AS AT SEPTEMBER 30, 2012                          
                                 UNAUDITED                                  
                        (expressed in U.S. Dollars)                         
                                                                            
                                                                            
                                                                            
                                        ASSETS                              
                                               September 30,   December 31, 
                                                        2012           2011 
                                              --------------- --------------
                                                                            
CURRENT                                                                     
 Cash                                         $   17,778,637  $  14,528,625 
 Other receivables                                    78,171         74,304 
 Prepaids and other assets                           514,801        276,578 
                                              --------------- --------------
                                                  18,371,609     14,879,507 
                                              --------------- --------------
                                                                            
NON-CURRENT ASSETS                                                          
 Restricted cash                                      25,427              - 
 Property and equipment,                                                    
  net                                              3,221,895      3,508,194 
 Intangible assets                                 3,636,550      3,858,400 
                                              --------------- --------------
                                                   6,883,872      7,366,594 
                                              --------------- --------------
TOTAL ASSETS                                  $   25,255,481  $  22,246,101 
                                              --------------- --------------
                                                                            
                                                                            
                                   LIABILITIES                              
CURRENT                                                                     
 Accounts payable and                                                       
  accrued liabilities                         $    6,405,714  $   3,207,507 
 Provisions                                           58,336        417,378 
 Income taxes payable                                      -         74,611 
 Current portion of                                                         
  capital lease obligation                           246,740        393,807 
 Current portion of long-term debt, net of                                  
  issuance costs                                   1,642,148              - 
                                              --------------- --------------
                                                   8,352,938      4,093,303 
                                              --------------- --------------
                                                                            
LONG-TERM                                                                   
 Capital lease obligation                                  -        137,497 
 Deferred tax liability                                    -         56,953 
 Long-term debt, net of                                                     
  issuance costs                                   5,244,859              - 
 Derivative financial                                                       
  instrument                                         102,990              - 
                                              --------------- --------------
                                                   5,347,849        194,450 
                                              --------------- --------------
                                              --------------- --------------
TOTAL LIABILITIES                                 13,700,787      4,287,753 
                                              --------------- --------------
                                                                            
                                                                            
                          SHAREHOLDERS' EQUITY                              
                                                                            
Share capital                                     78,214,661     67,430,241 
Warrants                                           3,452,607      2,413,367 
Contributed surplus                                3,386,097      1,610,972 
Accumulated other                                                           
 comprehensive income                                418,810         78,682 
Deficit                                          (73,917,481)   (53,574,914)
                                              --------------- --------------
TOTAL SHAREHOLDERS' EQUITY                        11,554,694     17,958,348 
                                              --------------- --------------
TOTAL LIABILITIES AND                                                       
 SHAREHOLDERS' EQUITY                         $   25,255,481  $  22,246,101 
                                              --------------- --------------
                                                                            
                                                                            
                   TRIMEL PHARMACEUTICALS CORPORATION                       
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS    
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012             
                               UNAUDITED                                    
                      (expressed in U.S. Dollars)                           
                                                                            
                                                                            
                                                                            
                                                                            
                     For the three months ended   For the nine months ended 
                            September 30,               September 30,       
                             2012          2011          2012          2011 
                    -------------- ------------- ------------- -------------
                                                                            
EXPENSES                                                                    
 Research and                                                               
  development, net                                                          
  of refundable tax                                                         
  credits           $   3,524,371  $  6,273,761  $ 12,578,799  $ 11,010,034 
 General and                                                                
  administrative        2,766,439     2,555,434     7,572,479     5,759,131 
                    -------------- ------------- ------------- -------------
 Total operating                                                            
  expenses              6,290,810     8,829,195    20,151,278    16,769,165 
                    -------------- ------------- ------------- -------------
                                                                            
FINANCE COSTS, NET                                                          
 Accretion of long-                                                         
  term debt                12,946       853,391        12,946     1,815,859 
 Interest on long-                                                          
  term debt and                                                             
  other financing                                                           
  costs                   287,164        56,180       305,358       726,125 
 Interest income           (4,978)       (1,109)      (10,721)       (1,261)
 Change in fair                                                             
  value of                                                                  
  derivative                                                                
  financial                                                                 
  instrument               (5,987)            -        (5,987)            - 
 Capital                                                                    
  reorganization                                                            
  costs                         -     1,311,751             -     1,311,751 
                    -------------- ------------- ------------- -------------
                          289,145     2,220,213       301,596     3,852,474 
                    -------------- ------------- ------------- -------------
                                                                            
TOTAL EXPENSES          6,579,955    11,049,408    20,452,874    20,621,639 
                    -------------- ------------- ------------- -------------
                                                                            
LOSS BEFORE INCOME                                                          
 TAXES                 (6,579,955)  (11,049,408)  (20,452,874)  (20,621,639)
PROVISION FOR                                                               
 (RECOVERY OF)                                                              
 INCOME TAXES                                                               
 Current                        -        61,569       (52,519)      241,743 
 Deferred                       -        21,380       (57,788)       37,856 
                    -------------- ------------- ------------- -------------
                                -        82,949      (110,307)      279,599 
                    -------------- ------------- ------------- -------------
                                                                            
NET LOSS            $  (6,579,955) $(11,132,357) $(20,342,567) $(20,901,238)
                    -------------- ------------- ------------- -------------
                    -------------- ------------- ------------- -------------
                                                                            
OTHER COMPREHENSIVE                                                         
 INCOME                                                                     
 Foreign currency                                                           
  translation                                                               
  adjustment              379,589       (54,786)      340,128       (54,786)
                    -------------- ------------- ------------- -------------
                                                                            
NET LOSS AND                                                                
 COMPREHENSIVE LOSS $  (6,200,366) $(11,187,143) $(20,002,439) $(20,956,024)
                    -------------- ------------- ------------- -------------
                    -------------- ------------- ------------- -------------
                                                                            
Basic and Diluted                                                           
 Weighted Average                                                           
 Shares Outstanding    89,375,821    78,861,289    85,235,059    61,589,825 
                                                                            
Basic and Diluted                                                           
 Net Loss per                                                               
 Common Share       $       (0.07) $      (0.14) $      (0.24) $      (0.34)
                                                                            
                                                                            
                                                                            
                     TRIMEL PHARMACEUTICALS CORPORATION                     
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012                
                                  UNAUDITED                                 
                         (expressed in U.S. Dollars)                        
                                                                            
                                                                            
                                                         Debt               
                               Share               conversion   Contributed 
                             capital    Warrants       option       surplus 
                        ------------- ----------- ------------ ------------ 
                                                                            
Balance, January 1,                                                         
 2011                   $  4,252,937  $        -  $ 3,609,798  $    916,912 
                                                                            
Net loss for the period            -           -            -             - 
                                                                            
Cumulative translation                                                      
 adjustment                        -           -            -             - 
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive                                                         
 loss for the period               -           -            -             - 
                                                                            
Issuance of Class A                                                         
 shares and warrants      31,710,141   2,317,798            -             - 
                                                                            
Share issuance costs      (2,935,228)     95,570            -             - 
                                                                            
Equity portion of                                                           
 convertible debt                                                           
 issued                            -           -      141,571             - 
                                                                            
Conversion of                                                               
 convertible debt         32,591,161           -   (3,751,369)            - 
                                                                            
Share issuance in                                                           
 amalgamation                                                               
 transaction               1,288,532           -            -             - 
                                                                            
Share based                                                                 
 compensation                      -           -            -       568,505 
                                                                            
----------------------------------------------------------------------------
                                                                            
Balance as at September                                                     
 30, 2011               $ 66,907,543  $2,413,368  $         -  $  1,485,417 
----------------------------------------------------------------------------
                                                                            
Balance, January 1,                                                         
 2012                   $ 67,430,241  $2,413,367  $         -  $  1,610,972 
                                                                            
Net loss for the period            -           -            -             - 
                                                                            
Cumulative translation                                                      
 adjustment                        -           -            -             - 
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive                                                         
 loss for the period               -           -            -             - 
                                                                            
Unit issuance in public                                                     
 offering, net of                                                           
 issuance costs           10,728,722   1,002,882            -             - 
                                                                            
Broker warrants issued                                                      
 as part of long-term                                                       
 debt                              -      36,823            -             - 
                                                                            
Conversion of warrants         5,698        (465)           -             - 
                                                                            
Conversion of options         50,000           -            -             - 
                                                                            
Share based                                                                 
 compensation                      -           -            -     1,775,125 
                                                                            
----------------------------------------------------------------------------
                                                                            
Balance as at September                                                     
 30, 2012               $ 78,214,661  $3,452,607  $         -  $  3,386,097 
----------------------------------------------------------------------------
                                                                            
                                                                            

                     TRIMEL PHARMACEUTICALS CORPORATION                     
   INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'    
                                   EQUITY                                   
                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012                
                                 UNAUDITED                                  
                        (expressed in U.S. Dollars)                         
                                                                            
                                                                            
                             Accumulated                                    
                                   other                                    
                           comprehensive                                    
                                  income           Deficit            Total 
                       ------------------ ----------------- ----------------
                                                                            
Balance, January 1,                                                         
 2011                  $               -  $    (27,196,590) $   (18,416,943)
                                                                            
Net loss for the period                -       (20,901,238)     (20,901,238)
                                                                            
Cumulative translation                                                      
 adjustment                      (54,786)                -          (54,786)
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive                                                         
 loss for the period             (54,786)      (20,901,238)     (20,956,024)
                                                                            
Issuance of Class A                                                         
 shares and warrants                   -                 -       34,027,939 
                                                                            
Share issuance costs                   -                 -       (2,839,658)
                                                                            
Equity portion of                                                           
 convertible debt                                                           
 issued                                -                 -          141,571 
                                                                            
Conversion of                                                               
 convertible debt                      -                 -       28,839,792 
                                                                            
Share issuance in                                                           
 amalgamation                                                               
 transaction                           -                 -        1,288,532 
                                                                            
Share based                                                                 
 compensation                          -                 -          568,505 
                                                                            
----------------------------------------------------------------------------
                                                                            
Balance as at September                                                     
 30, 2011              $         (54,786) $    (48,097,828) $    22,653,714 
----------------------------------------------------------------------------
                                                                            
Balance, January 1,                                                         
 2012                  $          78,682  $    (53,574,914) $    17,958,348 
                                                                            
Net loss for the period                -       (20,342,567)     (20,342,567)
                                                                            
Cumulative translation                                                      
 adjustment                      340,128                 -          340,128 
                                                                            
----------------------------------------------------------------------------
                                                                            
Total comprehensive                                                         
 loss for the period             340,128       (20,342,567)     (20,002,439)
                                                                            
Unit issuance in public                                                     
 offering, net of                                                           
 issuance costs                        -                 -       11,731,604 
                                                                            
Broker warrants issued                                                      
 as part of long-term                                                       
 debt                                  -                 -           36,823 
                                                                            
Conversion of warrants                 -                 -            5,233 
                                                                            
Conversion of options                  -                 -           50,000 
                                                                            
Share based                                                                 
 compensation                          -                 -        1,775,125 
                                                                            
----------------------------------------------------------------------------
                                                                            
Balance as at September                                                     
 30, 2012              $         418,810  $    (73,917,481) $    11,554,694 
----------------------------------------------------------------------------
                                                                            
                                                                            
                     TRIMEL PHARMACEUTICALS CORPORATION                     
          INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS           
                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012                
                                 UNAUDITED                                  
                        (expressed in U.S. Dollars)                         
                                                                            
                                                                            
                                                 For the nine months ended  
                                                       September 30,        
                                               -----------------------------
                                                                            
                                                        2012           2011 
                                               -------------- --------------
                                                                            
                                                                            
CASH FLOWS FROM OPERATING ACTIVITIES                                        
----------------------------------------------                              
Net loss for the period                        $ (20,342,567) $ (20,901,238)
Items not requiring an outlay of cash:                                      
  Amortization of intangible assets                  221,850        221,850 
  Depreciation of property and equipment             515,092        385,875 
  Accretion of long-term debt                         12,946      1,815,859 
  Amortization of deferred financing costs            68,886              - 
  Share based compensation                         1,775,125        568,505 
  Change in fair value of derivative financial                              
   instrument                                         (5,987)             - 
  Interest expense                                   236,472        726,125 
  Capital reorganization expense                           -      1,311,751 
  Impairment loss on equipment                             -         43,333 
  Deferred income tax liability                      (56,954)        37,856 
  Income tax provision                               (73,519)       241,743 
  Other                                                5,418       (158,351)
Net changes in non-cash working capital items                               
 related to operating activities:                                           
  Other receivables                                   (1,722)         8,125 
  Accounts payable and accrued liabilities         3,183,991      1,022,938 
  Prepaids and other assets                         (225,986)       (53,205)
  Income taxes payable                                     -       (282,021)
Provisions                                          (356,858)             - 
                                                                            
                                               -------------- --------------
                                                 (15,043,812)   (15,010,855)
                                               -------------- --------------
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES                                        
----------------------------------------------                              
Proceeds from issuance of Class A shares and                                
 warrants, net of issuance costs                           -     31,188,281 
Proceeds from issuance of common shares and                                 
 warrants, net of financing costs                 11,731,604              - 
Proceeds from issuance of convertible debt                 -      2,399,900 
Proceeds from long-term debt financing, net of                              
 financing costs                                   6,914,265              - 
Proceeds from exercise of warrants                     5,233              - 
Proceeds from exercise of options                     50,000              - 
Payment of capital lease obligations                (272,080)       (63,960)
Interest paid                                       (169,284)        (5,174)
                                               -------------- --------------
                                                  18,259,737     33,519,047 
                                               -------------- --------------
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES                                        
----------------------------------------------                              
Acquisition of property and equipment               (147,797)      (349,565)
Restricted cash                                      (24,942)             - 
                                               -------------- --------------
                                                    (172,739)      (349,565)
                                               -------------- --------------
                                                                            
                                                                            
NET INCREASE IN CASH FOR THE PERIOD                3,043,186     18,158,627 
                                                                            
Exchange gain on cash                                206,826              - 
                                                                            
CASH, BEGINNING OF THE PERIOD                     14,528,625        786,834 
                                               -------------- --------------
                                                                            
CASH, END OF THE PERIOD                        $  17,778,637  $  18,945,461 
                                               -------------- --------------

Contacts: Trimel Pharmaceuticals Corporation Kenneth G. Howling Chief Financial Officer 416 679 0536ir@trimelpharmaceuticals.com www.trimelpharmaceuticals.com



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