Kalytera Therapeutics, Inc. (TSX VENTURE: KLY and OTCQB: KALTF) (the “Company” or “Kalytera”) today reported financial results for the first quarter of 2019. (All dollars U.S. unless otherwise noted.)
“Since the beginning of the year, we have made important progress in our lead product development program,” stated Robert Farrell, Kalytera’s President and CEO. “In that program, we are evaluating cannabidiol (“CBD”) for the prevention of acute graft versus host disease (“GVHD”). The first, “low dose”, cohort of patients has completed our ongoing Phase 2 clinical study with excellent results, and we are now enrolling the second, “medium dose”, cohort. We have also made good progress in our program to develop the first cannabinoid-derived pain treatment targeting activation of alpha3 glycine pain receptors, and we will provide additional updates on both of these programs shortly.”
First Quarter 2019 Financial Results
In the first quarter (“Q1”) of 2019, the Company recorded a net loss of approximately $6.4 million ($0.021 per Common Share), compared with a net loss of approximately $1.9 million ($0.01 per Common Share) in Q1 2018.
Research and development expenses increased to approximately $2.8 million in Q1 2019 from approximately $1.3 million in Q1 2018, due primarily to an increase in costs relating to the Company’s ongoing Phase 2 clinical trial in the prevention of acute GVHD.
General and administrative expenses remained consistent between Q1 2019 and Q1 2018, with a slight decrease from $798,000 in Q1 2018, to $768,000 in Q1 2019.
Changes in Fair-Value
In addition to the increase in R&D expenses from Q1 2018 to Q1 2019, there were changes in the fair-value of certain assets and liabilities of the Company that were charged to income, contributing to the increase in net loss from Q1 2018 to Q1 2019. These changes in fair-value included: (1) an increase in the fair-value of the Company’s intellectual property; (2) an increase in the fair-value of certain convertible debt and equity instruments; and (3) an increase in the fair value of the contingent consideration that the Company is obligated to pay to the former shareholders of Talent Biotechs, Ltd. in connection with the acquisition of that company by Kalytera in February 2017.
Liquidity and Capital Resources
At March 31, 2019, the Company’s cash and cash equivalents decreased to $142,000 from $227,000 at December 31, 2018. However, the Company completed a public offering subsequent to March 31. On April 26, the Company announced the first closing of the public offering for aggregate gross proceeds of CDN $6,758,300, and on May 14, the Company announced the second closing of the public offering for aggregate gross proceeds of CDN $1,617,500.
The Company believes that it has sufficient cash to fund its operating costs through completion, later this year, of its ongoing Phase 2 clinical trial evaluating CBD in the prevention of acute GVHD.
Kalytera Therapeutics, Inc. is pioneering the development of CBD therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of CBD medicines for a range of important unmet medical needs, with an initial focus on GVHD and treatment of acute and chronic pain.
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This press release may contain certain forward-looking information and statements (“forward-looking information”) within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives and other statements containing the words “believes”, “anticipates”, “plans”, “intends”, “will”, “should”, “expects”, “continue”, “estimate”, “forecasts” and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that future clinical studies may not proceed as expected or may produce unfavourable results. Kalytera undertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Kalytera believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond Kalytera’s control. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Kalytera disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.