SYDNEY -- (BUSINESS WIRE) --
This Preliminary final report should be read in conjunction with the 30
June 2014 Annual Report signed on 27 August 2014 together with ASX
announcements issued after this date.
Additional Appendix 4E disclosure requirements can be found in the directors’ report and the 30 June 2014 financial statements and accompanying notes.
Appendix 4E Preliminary Final Report
ABN 16 102 254 151
1. Reporting Period
Report for the financial year ended 30 June 2014.
Previous corresponding period is the financial year ended 30 June 2013.
2. Results for announcement to the market
|Revenue from ordinary activities (item 2.1)||Down||84%||To||670|
|Net loss from ordinary activities after tax attributable to members (item 2.2)||Up||32%||To||(13,335)|
|Net loss for the period attributable to members (item 2.3)||Up||32%||To||(13,335)|
Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6)
On 20 December 2011, the Company signed a binding Letter of Intent (LOI) with Actavis Inc. (Actavis) to commercialise immediate release Moxduo in the US. The LOI was secured by a non-refundable, non-creditable up front signing fee of $5.9 million (US$6 million). The fee revenue was recognised from the date of the signing of the LOI to the anticipated FDA approval date representing an approximation of the time relating to the submission of the filing with the FDA and associated processes. The Group had recognised $5.3 million as revenue up to 30 June 2013 and the remaining $0.6 million (2013: $3.5 million) during this financial year.
On 9 October 2012, the Company signed a license agreement with Paladin Labs Inc. (Paladin) to commercialise immediate release Moxduo in Canada. The license agreement was secured by a one-time, non-refundable, non-creditable upfront fee in the amount of $485,000 (US$500,000). No fee revenue was recognised (2013: $0.5 million) during this financial year.
Net loss from ordinary activities
The net loss of $13.3 million (2013: net loss $10.1 million) from ordinary activities resulted from the Group’s continuing efforts to secure approval for immediate release Moxduo®, a Dual Opioid®, for the treatment of moderate to severe acute pain. This included efforts to obtain approval from the United States Food and Drug Administration (FDA) of a New Drug Application (NDA) in the United States (US), and activities associated with the preparation of the regulatory filings in Europe, Australia and Canada.
The net loss includes the following key items:
As at 30 June 2014, the Group holds cash and cash equivalents of $10.5 million (2013: $12 million). On 4 July 2014 an amount of $3.62 million covering potential employee liabilities was set aside in an escrow account. In addition, the Company had been carrying as a liability excess annual leave entitlements and in early July 2014 the Company paid down $0.43 million of this liability.
The Group announced on 14 August 2014 that it is halting all further development work on the Moxduo portfolio of products, its prime product pipeline. The Group has commenced implementing a reduction in its overhead structure, minimising non-essential expenditure and retaining only a small core team tasked with exploring all strategic alternatives for the Group and its assets, with a clear view to maximising residual value for its shareholders.
|Dividends (items 2.4 – 2.5)|
|It is not proposed to a pay a dividend.|
3. Statement of comprehensive income - Refer to the attached Annual financial report
4. Balance sheet - Refer to the attached Annual financial report
5. Statement of cash flows - Refer to the attached Annual financial report
6. Statement of changes in equity - Refer to the attached Annual financial report
7. Dividends – It is not proposed to pay a dividend (item 7 ).
8. Net Tangible Assets per Security (item 9)
|Net tangible assets per ordinary share||$0.055||$0.068|
9. The Group did not acquire or lose control over any entities during the period. (2013: none)
10. The Group had no associates or joint venture entities.
11. Commentary on the results (item 12 & 14)
QRxPharma has been developing proprietary Dual Opioid formulations for treating patients with moderate to severe acute or chronic pain.
This patented Dual Opioid product combines morphine and oxycodone to potentially offer physicians broader treatment options than traditional opioids, a large and growing market hindered by older therapies with debilitating side effects. Worldwide sales for all opioids are US$14 billion and growing at 6%. The Company’s Dual Opioids are first in class and at present there are no combination opioid - opioid products available commercially anywhere in the world.
The Company’s proprietary Dual Opioid portfolio includes three complementary products to address various pain management needs:
As detailed in the Regulatory section below the Company announced on 14 August 2014 that it is halting all further development work on the Moxduo portfolio of products.
QRxPharma has also developed a proprietary abuse deterrence technology, referred to as Stealth BeadletsTM, which was developed for the controlled release Moxduo formulation for the treatment of chronic pain. Stealth Beadlets may be incorporated into almost any potentially abused drug (e.g. opioids, amphetamines, sedatives, etc.) that are sold in solid dosage forms (e.g. tablet, capsule, sachet); they provide significant resistance against the extraction of active ingredients if crushed, solubilized or heated. The Company has a non-exclusive Collaboration Agreement with Aesica Formulation Development Limited (Aesica) to promote QRxPharma’s Stealth Beadlets technology for inclusion in their clients; existing formulations of controlled drugs.
The near term commercial opportunity for the Group rested with the regulatory approval of immediate release Moxduo in the US. Having been denied in June 2012 a first cycle approval by the FDA of its NDA, the Company continued to progress towards an approval during the financial year culminating in the following key regulatory events:
The Company believes that the Moxduo program will require a repeat Phase 2 clinical study, followed by one or more pivotal Phase 3 clinical studies. The FDA has advised that agreement on a Special Protocol Assessment (SPA) would be unlikely for these studies and given specific issues related to the design of these clinical studies, such as a primary endpoint of 90% SpO2 and flexible dosing, both which have been strongly encouraged by FDA, the likelihood of success is now in considerable doubt. The Company estimates the time and cost for such a development program to be significant and is not commercially justified given the limited residual patent life.
QRxPharma has entered into strategic agreements with Actavis Inc., Paladin Labs Inc., Aspen Group and Teva Pharmaceuticals for the commercialisation of immediate release Moxduo in the US, Canada, Australia (including New Zealand and Oceania), South Africa and Israel. With the decision to halt all further development work on the Moxduo portfolio of products, the Company is in discussion with these parties with respect to these licenses.
The Company has continued to strengthen its intellectual property portfolio during the financial year. Whilst no new patents have been issued during the current financial year the Company continued to progress a number of provisional filings that form part of a portfolio of Company patents that if issued will extend the duration of protection for Moxduo in various formulations up until 2029.
12. Status of audit (items 15 to 17)
This report has been prepared in accordance with Australian Accounting Standards, Interpretations and other authoritative pronouncements issued by the Australian Accounting Standards Board and the Corporations Act 2001. QRxPharma Limited is a for-profit entity for the purpose of preparing the financial statements.
This preliminary financial report is based on financial statements and notes which have been audited and are not subject to any qualifications or disputes. The attached financial statements have been prepared on a going concern basis. This matter has been considered by the Group’s auditors Deloitte Touche Tohmatsu and the financial statements are subject to an Emphasis of Matter as noted in the Independent auditors’ report to the members of QRxPharma Limited on pages 64 to 65 of the 2014 Annual Report.
The Board currently constitutes the audit committee.
Chris J Campbell
27 August 2014