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Intellipharmaceutics Announces 2012 Year End Results

Stocks in this article: IPCI

At November 30, 2012, Intellipharmaceutics' cash and cash equivalents totaled $0.5 million, compared with $4.8 million at November 30, 2011. The decrease in cash and cash equivalents during the year ended November 30, 2012 is mainly a result of cash used in operating activities related to R&D activities and the purchase of production, laboratory and computer equipment due to the acceleration of product development activities.

For the year ended November 30, 2012 net cash flows used in operating activities increased to $7.6 million compared to $7.0 million for the year ended November 30, 2011. The increase was due to the prior year cash payment from Par related to the amendment of the development and commercialization agreement. During these years the Company incurred similar cash expenditures in R&D activities and for selling, general and administrative expenses. For the year ended November 30, 2012 net cash flows from financing activities of $4.4 million compared to $11.3 million in the year ended November 30, 2011. In the year ended November 30, 2012 the Company completed a registered direct common share offering for gross proceeds of $5 million as compared to its prior year's completion of a private placement financing of common stock and warrants for gross proceeds of $12.0 million. For the year ended November 30, 2012 net cash flows used in investing activities of $1.0 million compared to $0.3 million in the year ended November 30, 2011. This increase related mainly to the purchase of production, laboratory and computer equipment due to the acceleration of product development activities.

Corporate Update

  • In November 2012, the Company announced the successful completion of a Phase I clinical trial on our non-generic controlled-release formulation of pregabalin. This was the first bioavailability study of our controlled-release pregabalin versus Lyrica® (immediate release pregabalin). The study was carried out in 14 subjects. The results showed that our 150 mg pregabalin once-a-day dosage was comparable in bioavailability to Lyrica® 50 mg three-times-a-day dosage. Pregabalin is indicated for the management of neuropathic pain associated with diabetic peripheral neuropathy, postherpetic neuralgia, spinal cord injury and fibromyalgia. According to Source Healthcare Analytics, U.S. sales for the 12 months ended December 2012 for Lyrica® (pregabalin capsules) were approximately $2.0 billion. There is no controlled-release formulation on the market at this time. There can be no assurance that additional clinical trials will meet our expectations, that we will be successful in submitting a new drug application 505(b)(2) filing with the United States Food and Drug Administration ("FDA"), that the FDA will approve this product candidate for sale in the U.S. market, or that it will ever be successfully commercialized.
  • In November 2012, the Company announced the achievement of another of its previously announced development goals for 2012 with the completion of clinical batch manufacturing of Rexista™ oxycodone, and the initiation of Phase I studies of Rexista™ oxycodone. Preliminary Phase I data from this trial is expected in early 2013. According to Source Healthcare Analytics, U.S. sales for the 12 months ended December 2012 for OxyContin® were approximately $2.4 billion.
  • In January 2013, the Company completed a private placement financing (the "Financing") of an unsecured convertible debenture (the "Debenture") in the principal amount of $1.5 million, which will mature January 1, 2015. The Debenture bears interest at a rate of 12% per annum, payable monthly, is pre-payable at any time at the option of the Company, and is convertible at any time into 500,000 common shares at a conversion price of $3.00 per common share at the option of the holder. Dr. Isa Odidi, CEO and Co-Founder, and Dr. Amina Odidi, COO and Co-Founder, of the Company provided the Company with the $1.5 million of the proceeds for the Debenture. The Financing was non-brokered and the net proceeds are to be used for working capital and general corporate purposes.

Intellipharmaceutics' goals for 2013 include the following:

  • Obtain FDA approval of our generic version of Focalin XR®
  • Obtain FDA approval of one or more additional ANDAs
  • File up to two additional ANDAs with the FDA
  • Establish one or more additional development/marketing alliances
  • Complete Phase I studies of Rexista™oxycodone
  • Complete additional Phase I studies of controlled-release pregabalin

About Intellipharmaceutics

Intellipharmaceutics International Inc. is a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs. The Company's patented Hypermatrix™ technology is a multidimensional controlled-release drug delivery platform that can be applied to the efficient development of a wide range of existing and new pharmaceuticals. Based on this technology, Intellipharmaceutics has a pipeline of product candidates in various stages of development, including eight ANDAs filed with the FDA, in therapeutic areas that include neurology, cardiovascular, gastrointestinal tract, diabetes and pain.

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