Stellar Pharmaceuticals Inc. Announces Record Second Quarter Revenues and Profitability for the First Half

05 Aug 2009
www.biospace.com
LONDON, ONTARIO--(Marketwire - August 05, 2009) - Stellar Pharmaceuticals Inc. ("Stellar" or the "Company")(OTCBB: SLXCF) a Canadian pharmaceutical developer and marketer of high quality, cost effective products for select health care markets, today announced that its second quarter revenues increased by 65.8% to $1,074,300 compared to $647,900 for the same period last year and that the Company had a profit of $164,700 for the quarter compared to a loss of $68,000 in the second quarter of 2008. This is the third consecutive quarter that the Company has shown a profit. For the six month period ended June 30, 2009 Stellar's total revenues increased by 57.1% to $1,846,800 compared to $1,175,300 for the same period in 2008. Canadian sales for NeoVisc and Uracyst were up by 22.2% and 21.9% respectively for the period. International sales increased by 121.4% for this period as the Company's European partners continue to gain traction with both NeoVisc and Uracyst sales. The Company showed a profit of $189,900 for the first half of 2009 compared to a loss of $166,800 over the same period in 2008. Peter Riehl, Stellar's President and CEO, stated, "This is the strongest second quarter in the Company's history, with revenues up in all markets. We are very pleased to show profitability for the quarter and on a year-to-date basis, this currently puts the Company in a good position for strong operating results for the end of 2009. Besides these encouraging results, it has also been a very active quarter in other areas; Watson Pharmaceuticals received an IDE from the FDA and has now started a pilot clinical trial at a number of centers in the USA, the Company also launched its NeoVisc Single Dose (one injection) in mid June and we are very pleased with initial sales generated. In addition, the Company continues to actively search for new partners to out-license its products to around the world. It is very rewarding to see this growth and escalating business development activities, given the challenging economic times." 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®, its patented technology for treatment of interstitial cystitis/painful bladder syndrome an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreement for the distribution and sale of 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 (Expressed in Canadian Dollars) As at As at June 30, 2009 December 31, 2008 --------------- ----------------- (Unaudited) (Audited) ASSETS CURRENT Cash and cash equivalents $ 1,882,040 $ 2,105,966 Accounts receivable, net of allowance $nil (2008 - $nil) 676,827 549,055 Inventories 651,296 364,551 Taxes recoverable 205,885 212,445 Loan receivable 18,369 18,369 Prepaids, deposits and sundry receivables 276,634 130,515 --------------- ----------------- 3,711,051 3,380,901 PROPERTY, PLANT AND EQUIPMENT 1,248,699 1,270,257 OTHER ASSETS 91,048 65,495 --------------- ----------------- $ 5,050,798 $ 4,716,653 --------------- ----------------- --------------- ----------------- LIABILITIES CURRENT Accounts payable $ 183,684 $ 173,812 Accrued liabilities 339,794 186,201 Deferred revenues 3,850 1,749 --------------- ----------------- 527,328 361,762 --------------- ----------------- 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 23,495,040 Common shares (2008 - 23,702,540) 8,188,486 8,261,403 Nil - Treasury shares (2008 - (147,500)) - (51,625) Additional paid-in capital for cancelled common shares 2,329 2,329 Additional paid-in capital options - outstanding 35,965 35,965 - expired 722,372 722,372 --------------- ----------------- 8,949,152 8,970,444 DEFICIT (4,425,682) (4,615,553) --------------- ----------------- 4,523,470 4,354,891 --------------- ----------------- $ 5,050,798 $ 4,716,653 --------------- ----------------- --------------- ----------------- STELLAR PHARMACEUTICALS INC. CONDENSED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS AND DEFICIT (Expressed in Canadian Dollars) (Unaudited) For the Three Month Period For the Six Month Period Ended June 30 Ended June 30 2009 2008 2009 2008 ------------ ------------ ------------ ------------- PRODUCT SALES $ 914,126 $ 645,535 $ 1,458,545 $ 974,991 COST OF PRODUCTS SOLD 333,082 148,937 488,034 260,332 ------------ ------------ ------------ ------------ MARGIN ON PRODUCTS SOLD 581,044 496,598 970,511 714,659 ROYALTY AND LICENSING REVENUES 160,168 2,400 388,265 200,356 ------------ ------------ ------------ ------------ GROSS PROFIT 741,212 498,998 1,358,776 915,015 ------------ ------------ ------------ ------------ EXPENSES Selling, general and administrative 562,941 551,893 1,140,996 1,042,885 Research and development 1,803 4,424 7,411 58,242 Amortization (non-manufacturing property, plant and equipment) 13,703 30,044 27,401 60,426 ------------ ------------ ------------ ------------ 578,447 586,361 1,175,808 1,130,269 ------------ ------------ ------------ ------------ INCOME (LOSS) FROM OPERATIONS 162,765 (87,363) 182,968 (215,254) INTEREST AND OTHER INCOME 1,929 19,349 6,903 48,423 ------------ ------------ ------------ ------------ NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD 164,694 (68,014) 189,871 (166,831) DEFICIT, beginning of period (4,590,376) (4,675,438) (4,615,553) (4,576,621) Effect of repurchase and cancellation of Common Shares - (2,933) - (2,933) DEFICIT, end of period $(4,425,682) $ (4,746,385) $ (4,425,682) $ (4,746,385) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ EARNINGS (LOSS) PER SHARE $ 0.01 $ (0.00) $ 0.01 $ (0.01) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 23,495,040 23,755,759 23,816,387 23,788,919 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ STELLAR PHARMACEUTICALS INC. CONDENSED INTERIM STATEMENTS OF CASH FLOWS (Expressed in Canadian Dollars) (Unaudited) For the Three Month Period For the Six Month Period Ended June 30 Ended June 30 2009 2008 2009 2008 ------------ ------------ ------------- ------------ CASH FLOWS USED IN OPERATING ACTIVITIES - Net income (loss) for the period $ 164,694 $ (68,014) $ 189,871 $ (166,831) Items not affecting cash Amortization 33,117 30,044 68,112 60,426 Unrealized foreign exchange (gain) loss 19,128 (7,912) 20,523 2,317 Issuance of equity instruments for services rendered - 7,538 - 13,125 Change in non-cash operating asset and liabilities (593,295) 2,788 (390,251) (109,397) ------------ ------------ ------------- ------------ CASH FLOWS USED IN OPERATING ACTIVITIES (376,356) (35,556) (111,745) (200,360) ------------ ------------ ------------- ------------ CASH FLOWS USED IN INVESTING ACTIVITIES - Additions to property, plant and equipment (43,938) (177,971) (44,135) (193,877) Increase to other assets (19,274) - (26,231) (6,063) ------------ ------------ ------------- ------------ CASH FLOWS USED IN INVESTING ACTIVITIES (63,212) (177,971) (70,366) (199,940) ------------ ------------ ------------- ------------ CASH FLOWS USED IN FINANCING ACTIVITIES - Repurchase of common shares for cash - (43,655) (21,292) (43,655) ------------ ------------ ------------- ------------ CASH FLOWS USED IN FINANCING ACTIVITIES - (43,655) (21,292) (43,655) ------------ ------------ ------------- ------------ EFFECT OF EXCHANGE RATES ON CASH HELD IN FOREIGN CURRENCY (19,127) 7,910 (20,523) (2,315) ------------ ------------ ------------- ------------ CHANGE IN CASH AND CASH EQUIVALENTS (458,695) (249,272) (223,926) (446,270) CASH AND CASH EQUIVALENTS, Beginning of period 2,340,735 3,014,128 2,105,966 3,211,126 ------------ ------------ ------------- ------------ CASH AND CASH EQUIVALENTS, End of period $ 1,882,040 $ 2,764,856 $ 1,882,040 $ 2,764,856 ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------ Contacts: Stellar Pharmaceuticals Inc. Peter Riehl President & CEO (800) 639-0643 or (519) 434-1540 Corpinfo@StellarPharma.com Stellar Pharmaceuticals Inc. Arnold Tenney (416) 587-3200
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