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RedHill Biopharma Reports Results For The Third Quarter Of 2013

Key highlights include:
  • Commencement of the MAP US study – a Phase III clinical study in North America and Israel with RHB-104 for the treatment of Crohn's disease
  • Commencement of the ERADICATE Hp study – a Phase III clinical study in the U.S. with RHB-105 for the treatment of H. pylori bacterial infection
  • Positive results in two supplementary studies conducted with RHB-102, once daily oncology support anti-emetic, with NDA submission planned for the first quarter of 2014
  • Company shareholders, board members and officers exercised warrants and options for a total amount of approximately $2.2 million since the beginning of the year

TEL-AVIV, Israel, Nov. 12, 2013 (GLOBE NEWSWIRE) -- RedHill Biopharma Ltd. (Nasdaq:RDHL) (TASE:RDHL) (the "Company" or "RedHill"), an emerging Israeli biopharmaceutical company focused primarily on the development and acquisition of late clinical-stage, proprietary formulations and combinations of existing drugs, today reported financial results for the third quarter ended September 30, 2013.

The Company achieved significant milestones in the third quarter of 2013, including:

(i) Commencement of the MAP US study – a Phase III clinical study in North America and Israel, designed to evaluate the safety and efficacy of fixed-dose RHB-104 in patients with moderately to severely active Crohn's disease.

(ii) Commencement of the ERADICATE Hp study – a Phase III clinical study in the U.S. designed to evaluate the safety and efficacy of RHB-105, proprietary fixed-dose combination therapy as a first-line treatment for confirmed Helicobacter pylori ( H. pylori) bacterial infection.

(iii) Positive results in two supplementary pharmacokinetic (PK) studies conducted with RHB-102, once daily oncology support anti-emetic, with NDA submission planned for the first quarter of 2014.

(iv) Positive results in a pre-clinical study with RHB-104 for the treatment of rheumatoid arthritis (RA) and plans to conduct a Phase IIa proof of concept clinical trial to assess the efficacy and safety of RHB-104 in patients suffering from RA.

Financial highlights for the third quarter of 2013:

Research and Development Expenses , net for the quarter ended September 30, 2013 were approximately $2.2 million, an increase of $0.2 million (approximately 10%) compared to $2.0 million for the quarter ended June 30, 2013. Research and Development Expenses, net for the nine months ended September 30, 2013 were approximately $5.5 million, an increase of $0.3 million (approximately 6%) compared to $5.2 million in the nine months ended September 30, 2012. The increase in both periods was mainly due to expenses related to preparations for the Phase III clinical trials with RHB-104 (Crohn's) and RHB-105 ( H. pylori).

General and Administrative Expenses for each of the quarters ended September 30, 2013 and June 30, 2013 were approximately $0.5 million. General and Administrative Expenses for the nine months ended September 30, 2013 were approximately $1.8 million, an increase of $0.1 million (approximately 6%) compared to $1.7 million for the nine months ended September 30, 2012. The increase was mainly attributed to expenses associated with the requirements of being a dual-listed company on both TASE and NASDAQ.

Operating Loss for the quarter ended September 30, 2013 was approximately $2.7 million, an increase of $0.2 million (approximately 8%) compared to $2.5 million for the quarter ended June 30, 2013. Operating loss for the nine months ended September 30, 2013 was approximately $7.3 million, an increase of $0.4 million (approximately 6%) compared to $6.9 million in the nine months ended September 30, 2012. The increase in both periods was mainly due to an increase in Research and Development Expenses, net.

Net Cash Used in Operating Activities for each of the quarters ended September 30, 2013 and June 30, 2013 was approximately $2.1 million. Net cash used in operating activities for the nine months ended September 30, 2013 was $6.0 million, an increase of $0.8 million (approximately 15%) compared to $5.2 million in the nine months ended September 30, 2012. The increase was mainly due to an increase in Research and Development Expenses, net.

Net Cash Used from Investment Activities for the quarter ended September 30, 2013 was approximately $0.2 million, compared to net cash resulting from investment activities of $0.5 million for the quarter ended June 30, 2013, a decrease of $0.7 million (approximately 140%). The decrease was mainly due to a $0.2 million development milestone payment for RHB-103 in the quarter ended September 30, 2013 and due to proceeds from the sale of tradable securities in the quarter ended June 30, 2013. Net cash resulting from investment activities in the nine months ended September 30, 2013 was $0.9 million, an increase of $0.5 million (approximately 125%) compared to net cash of $0.4 million resulting from investment activities in the nine months ended September 30, 2012. The increase was mainly due to the conversion of short-term deposits into cash and cash equivalents.

Cash Resulting from Financing Activities for the quarter ended September 30, 2013 was approximately $1.3 million, an increase of $1.2 million (approximately 1,200%) compared to $0.1 million for the quarter ended June 30, 2013. The increase was mainly due to the exercise of warrants by investors from the 2010 financing. Cash resulting from financing activities for the nine months ended September 30, 2013 was $1.4 million, an increase of $1.1 million (approximately 370%) compared to net cash of $0.3 million in the nine months ended September 30, 2012. The increase was mainly due to exercise of warrants by investors from the 2010 financing.

Cash Balance 1 as of September 30, 2013 was approximately $13.7 million, a decrease of $1.0 million (approximately 7%) compared to $14.7 million at the end of the previous quarter ended June 30, 2013 and a decrease of $4.7 million (approximately 25%) compared to $18.5 million as of December 31, 2012.

Ori Shilo, Deputy CEO Finance and Operations said: "Activities in the third quarter of 2013 were mainly focused on preparations for the Phase III clinical trials with RHB-104 for Crohn's and RHB-105 for H. pylori infection which commenced in September and October 2013 respectively. Our cash position remains strong with approximately $14 million in cash at the end of the quarter and no financial debt. We are very pleased with the vote of confidence by our shareholders, including board members and officers, who elected to exercise warrants and options since the beginning of the year for a total amount of approximately $2.2 million." Mr. Shilo added: "Looking ahead, we are excited by the prospective milestones for 2014, including the PDUFA date for our migraine drug RHB-103, expected in February 3, 2013, results from the Phase III study with RHB-105 for H. pylori bacterial infection, the planned NDA submission with RHB-102 for prevention of nausea and vomiting in cancer patients and results from the Phase IIa study with RHB-104 for multiple sclerosis."

Key operational highlights for the third quarter ended September 30, 2013:

1. On October 30, 2013, the Company announced that it had commenced the patient screening process for the ERADICATE Hp study – a Phase III clinical study in the U.S. designed to evaluate the safety and efficacy of RHB-105, a proprietary fixed-dose combination therapy of two antibiotics and a proton pump inhibitor (PPI), as a first-line treatment for confirmed H. pylori bacterial infection. The randomized, double-blind, placebo-controlled Phase III study is expected to enroll 90 subjects in up to ten clinical sites in the U.S. The primary endpoint of the study will be eradication of H. pylori infection 28 to 56 days after completion of treatment and data is expected by the second half of 2014.

2. On October 15, 2013, the Company announced the presentation of a poster at the ACG (American College of Gastroenterology) 2013 Annual Scientific Meeting and the pending publication in the American Journal of Gastroenterology on positive results from an independent, single-center, retrospective study with pediatric patients suffering from Crohn's disease. The study was conducted by Professor Thomas Borody, a member of RedHill's advisory board, with an earlier formulation of RedHill's RHB-104 anti-MAP ( Mycobacterium avium subspecies paratuberculosis) combination therapy, using the same active ingredients in doses adjusted for pediatric usage. The results of the study demonstrated a clinical remission rate of 80% in 10 pediatric Crohn's disease patients, with a median duration of remission of 16 months.

3. On October 8, 2013, the Company announced positive results in two supplementary pharmacokinetic (PK) studies conducted with RHB-102, a patent-protected, extended-release (24 hours) oral formulation of ondansetron, the active ingredient in GlaxoSmithKline's Zofran® immediate release tablets for the prevention of radiotherapy-induced nausea and vomiting (RINV) and chemotherapy-induced nausea and vomiting (CINV). The supplementary PK program was initiated by the Company in July 2013 to support the planned submission of a New Drug Application (NDA). Following the successful PK program, the Company is seeking a pre-NDA meeting with the U.S. Food and Drug Administration (FDA) to discuss the clinical aspects of the planned NDA. Subject to the results of the pre-NDA meeting, completion of CMC (Chemistry, Manufacturing and Control) modules and the required regulatory process, the Company plans to submit an NDA for RHB-102 in the first quarter of 2014, seeking U.S. marketing approval.

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