VALLEY COTTAGE, New York, August 15 /PRNewswire-FirstCall/ -- XTL
Biopharmaceuticals Ltd. (NASDAQ:XTLB)(LSE:XTL)(TASE:XTL), a
biopharmaceutical company engaged in the acquisition, development
and commercialization of therapeutics for the treatment of unmet
medical needs, particularly neuropathic pain and hepatitis C, today
announced its financial results for the six months ended June 30,
2007. At June 30, 2007, the Company had cash, cash equivalents and
short-term bank deposits of $12.6 million, compared to $25.2
million at December 31, 2006. The decrease of $12.6 million during
the first six months of 2007 was attributable primarily to the
Company's $7.5 million upfront payment made in connection with the
in-licensing of Bicifadine in January 2007, operating expenditures
associated with the planned Phase IIb clinical trial of Bicifadine,
the development of the DOS hepatitis C pre-clinical program, and
operating expenditures associated with the Company's legacy
hepatitis C clinical programs that were terminated this year. The
loss for the six months ended June 30, 2007 was $14.6 million, or
$0.07 per ordinary share, compared to a loss of $7.3 million, or
$0.04 per ordinary share, for the six months ended June 30, 2006,
representing an increase in net loss of $7.3 million. The increased
loss was primarily attributable to the $7.5 million upfront payment
in connection with the in-licensing of Bicifadine and additional
costs associated with the Bicifadine program, offset by lower costs
associated with the Company's legacy hepatitis C clinical programs.
The increase in loss was also due to a $0.6 million charge that was
recorded relating to stock appreciation rights granted as part of
the Bicifadine transaction. For the six months ended June 30, 2007
and 2006, the Company's loss of $14.6 million and $7.3 million,
respectively, included $1.0 million and $1.2 million, respectively,
of non-cash stock option compensation expense. Ron Bentsur, Chief
Executive Officer of XTL, commented, "From a financial standpoint
our spend over the first 6 months, excluding the extraordinary
payment associated with the in-licensing of Bicifadine, was
slightly below plan. We have been planning our Phase IIb study for
Bicifadine in diabetic neuropathic pain and are looking forward to
starting that study shortly. As a member of the SNRI class, a
proven class in neuropathic pain, and as a drug candidate that has
demonstrated anti-pain activity in multiple clinical trials, we
believe that Bicifadine represents a very compelling later-stage
opportunity." Mr. Bentsur added, "We are very excited about the
pending commencement of the Phase IIb clinical study for Bicifadine
as we strive to increase investor awareness to this undervalued
opportunity." About XTL Biopharmaceuticals Ltd. XTL
Biopharmaceuticals Ltd. ("XTL") is engaged in the acquisition,
development and commercialization of therapeutics for the treatment
of neuropathic pain and hepatitis C. XTL is developing Bicifadine,
a serotonin and norepinephrine reuptake inhibitor, for the
treatment of neuropathic pain. XTL is also developing several novel
pre-clinical hepatitis C small molecule inhibitors. XTL also has an
active in-licensing and acquisition program designed to identify
and acquire additional drug candidates. XTL is publicly traded on
the NASDAQ, London, and Tel-Aviv Stock Exchanges (NASDAQ:XTLB) (
LSE: XTL) (TASE:XTL). Cautionary Statement Some of the statements
included in this press release, particularly those anticipating
future financial performance, clinical and business prospects for
our clinical compound for neuropathic pain, Bicifadine, and for our
pre-clinical compounds for hepatitis C from our XTL-DOS program,
growth and operating strategies and similar matters, may be
forward-looking statements that involve a number of risks and
uncertainties. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Among the factors that
could cause our actual results to differ materially are the
following: our ability to start a clinical trial with Bicifadine in
2007 and our ability to successfully complete cost-effective
pre-clinical trials for our DOS program, both of which will
directly impact our ability to continue to fund our operations; our
ability to meet anticipated development timelines for all of our
drug candidates due to recruitment, clinical trial results,
manufacturing capabilities or other factors; and other risk factors
identified from time to time in our reports filed with the
Securities and Exchange Commission and the London Stock Exchange,
including our annual report on Form 20-F filed with the Securities
and Exchange Commission on March 23, 2007. Any forward-looking
statements set forth in this press release speak only as of the
date of this press release. We do not intend to update any of these
forward-looking statements to reflect events or circumstances that
occur after the date hereof. This press release and prior releases
are available at http://www.xtlbio.com/. The information in our
website is not incorporated by reference into this press release
and is included as an inactive textual reference only. XTL
BIOPHARMACEUTICALS LTD. (A Development Stage Company) Consolidated
Balance Sheets as of June 30, 2007 and 2006 (unaudited), and
December 31, 2006 (audited) (in thousands of US dollars, except
share amounts) June 30, December 31, 2007 2006 2006 ----------
---------- ---------- A s s e t s CURRENT ASSETS: Cash and cash
equivalents 2,451 32,172 4,400 Short-term bank deposits 10,185 --
20,845 Trading securities -- -- 102 Property and equipment (held
for sale) -- net 35 43 18 Deferred tax asset -- -- 29 Other
receivables and prepaid expenses 651 644 702 --------- ---------
--------- Total current assets 13,322 32,859 26,096 ---------
--------- --------- EMPLOYEE SEVERANCE PAY FUNDS 42 173 98
RESTRICTED LONG-TERM DEPOSITS 53 119 172 PROPERTY AND EQUIPMENT --
net 128 620 490 INTANGIBLE ASSETS -- net 18 32 25 DEFERRED TAX
ASSET -- -- 19 --------- --------- --------- T o t a l assets
13,563 33,803 26,900 ========= ========= ========= Liabilities and
shareholders' equity CURRENT LIABILITIES: Accounts payable and
accrued expenses 3,130 2,705 3,003 Deferred gain 399 399 399 Other
current liabilities 565 -- -- --------- --------- --------- Total
current liabilities 4,094 3,104 3,402 --------- --------- ---------
LIABILITY IN RESPECT OF EMPLOYEE SEVERANCE OBLIGATIONS 188 444 340
DEFERRED GAIN 198 598 398 COMMITMENTS AND CONTINGENCIES ---------
--------- --------- Total liabilities 4,480 4,146 4,140 ---------
--------- --------- SHAREHOLDERS' EQUITY: Ordinary shares of NIS
0.02 par value (authorized 300,000,000 as of June 30, 2007, June
30, 2006 and December 31, 2006, issued and Outstanding 220,154,349,
220,069,801 and 220,124,349 as of June 30, 2007, June 30, 2006 and
December 31, 2006, respectively) 1,072 1,072 1,072 Additional paid
in capital 137,583 135,667 136,611 Deficit accumulated during the
development stage (129,572) (107,082) (114,923) --------- ---------
--------- Total shareholders' equity 9,083 29,657 22,760 ---------
--------- --------- Total liabilities and shareholders' equity
13,563 33,803 26,900 ========= ========= ========= Interim
Consolidated Statements of Operations for the Six Months Ended June
30, 2007 and 2006 (unaudited) (in thousands of US dollars, except
share and per share amounts) Period from Six months ended March 9,
1993(*) June 30, to June 30, 2007 2006 2007 ----------- -----------
----------- REVENUES: Reimbursed out-of-pocket expenses -- -- 6,012
License 227 227 1,320 ---------- ---------- --------- 227 227 7,332
COST OF REVENUES: Reimbursed out-of-pocket expenses -- -- 6,012
License (with respect to royalties) 27 27 167 -----------
----------- --------- 27 27 6,179 GROSS MARGIN 200 200 1,153
----------- ----------- --------- RESEARCH AND DEVELOPMENT COSTS
(includes non-cash stock option compensation of $66 and $107, for
the six months ended June 30, 2007 and 2006, respectively) 12,118
5,008 105,237 L E S S - PARTICIPATIONS 56 -- 11,006 -----------
----------- --------- 12,062 5,008 94,231 IN-PROCESS RESEARCH AND
DEVELOPMENT COSTS -- -- 1,783 GENERAL AND ADMINISTRATIVE EXPENSES
(includes non-cash stock option compensation of $892 and $1,105,
for the six months ended June 30, 2007 and 2006, respectively)
2,523 2,532 37,111 BUSINESS DEVELOPMENT COSTS (includes non-cash
stock option compensation of $11 and $1, for the six months ended
June 30, 2007 and 2006, respectively, and also includes stock
appreciation rights compensation of $565 for the six months ended
June 30, 2007) 828 168 5,982 ----------- ----------- ---------
OPERATING LOSS 15,213 7,508 137,954 FINANCIAL AND OTHER INCOME, net
351 323 8,635 ----------- ----------- --------- LOSS BEFORE INCOME
TAXES 14,862 7,185 129,319 INCOME TAXES (213) 106 253 -----------
----------- --------- LOSS FOR THE PERIOD 14,649 7,291 129,572
----------- ----------- --------- BASIC AND DILUTED LOSS PER $ 0.07
$ 0.04 ORDINARY SHARE WEIGHTED AVERAGE NUMBER OF SHARES USED IN
COMPUTING BASIC AND DILUTED LOSS PER ORDINARY SHARE 220,145,233
183,085,938 ----------- ----------- (*) Incorporation date see note
1. Interim Consolidated Statements of Changes in Shareholders'
Equity for the Six Months Ended June 30, 2007 (unaudited) (in
thousands of US dollars, except share amounts) Ordinary shares
-------------------- Additional Number of paid in shares Amount
capital ----------- ------- ------- BALANCE AT DECEMBER 31, 2006
220,124,349 1,072 136,611 CHANGES DURING THE SIX MONTHS ENDED JUNE
30, 2007: Comprehensive loss - loss for the period -- -- --
Non-employee stock option compensation expenses -- -- 5 Employee
stock option compensation expenses -- -- 964 Exercise of stock
options 30,000 (**) 3 ----------- ------- -------- BALANCE AT JUNE
30, 2007 220,154,349 1,072 137,583 =========== ======= ========
Deficit accumulated during the development stage Total ---------
--------- BALANCE AT DECEMBER 31, 2006 (114,923) 22,760 CHANGES
DURING THE SIX MONTHS ENDED JUNE 30, 2007: Comprehensive loss -
loss for the period (14,649) (14,649) Non-employee stock option
compensation expenses -- 5 Employee stock option compensation
expenses -- 964 Exercise of stock options -- 3 --------- ---------
BALANCE AT JUNE 30, 2007 (129,572) 9,083 ========= ========= (**)
Represents an amount less than $1,000. Interim Consolidated
Statements of Cash Flows for the Six Months Ended June 30, 2007 and
2006 (unaudited) (in thousands of US dollars) Period from Six
months March 9, 1993(*) ended June 30, to June 30, 2007 2006 2007
---------- ---------- ---------- CASH FLOWS FROM OPERATING
ACTIVITIES: Loss for the period (14,649) (7,291) (129,572)
Adjustments to reconcile loss to net cash used in operating
activities: Depreciation and amortization 69 114 3,141 Linkage
difference on restricted long-term (2) (4) (9) deposits Acquisition
of in process research and development -- -- 1,783 Gain on disposal
of property and equipment (53) (25) (92) Increase (decrease) in
liability in respect of employee severance obligations (49) 35
1,187 Impairment charges 95 -- 475 Gain from sales of investment
securities -- -- (410) Other income related to exchange of shares
-- -- (100) Loss from trading securities 48 -- 46 Stock option
based compensation expenses 969 1,213 6,427 Stock appreciation
rights compensation expenses 565 -- 565 Gain on amounts funded in
respect of employee severance pay funds -- -- (92) Deferred tax
asset 48 -- -- Changes in operating assets and liabilities:
Decrease (increase) in other receivables and prepaid expenses 5 38
(604) Increase in accounts payable and accrued expenses 132 449
3,049 Increase (decrease) in deferred gain (200) (200) 597
--------- --------- -------- Net cash used in operating activities
(13,022) (5,671) (113,609) --------- --------- -------- CASH FLOWS
FROM INVESTING ACTIVITIES: Decrease (increase) in short-term
deposits 10,660 -- (10,185) Decrease (increase) in restricted
deposits 121 (5) (44) Investment in investment securities -- --
(3,363) Proceeds from sales of investment securities -- -- 3,773
Proceeds from sales of trading securities 54 -- 54 Employee
severance pay funds (6) (12) (915) Purchase of property and
equipment (47) (16) (4,089) Proceeds from disposals of property and
equipment 288 33 540 Acquisition in respect of license and purchase
of assets -- -- (548) --------- --------- -------- Net cash
provided by (used in) investing activities 11,070 -- (14,777)
--------- --------- -------- Interim Consolidated Statements of
Cash Flows for the Six Months Ended June 30, 2007 and 2006
(unaudited)(continued) (in thousands of US dollars) Period from Six
months March 9, 1993(*) ended June 30, to June 30, 2007 2006 2007
---------- ---------- ---------- CASH FLOWS FROM FINANCING
ACTIVITIES: Issuance of share capital - net of share issuance
expenses -- 24,391 128,734 Exercise of share warrants and stock
options 3 92 2,103 Proceeds from long-term debt -- -- 399 Proceeds
from short-term debt -- -- 50 Repayment of long-term debt -- --
(399) Repayment of short-term debt -- -- (50) --------- ---------
--------- Net cash provided by financing activities 3 24,483
130,837 --------- --------- --------- NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (1,949) 18,812 2,451 BALANCE OF CASH AND
CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,400 13,360 -- ---------
--------- --------- BALANCE OF CASH AND CASH EQUIVALENTS AT END OF
PERIOD 2,451 32,172 2,451 ======== ========= =========
Supplementary information on investing and financing activities not
involving cash flows - Issuance of ordinary shares in respect of
license, and purchase of assets -- -- 1,391 Conversion of
convertible subordinated Debenture into shares -- -- 1,700
Supplemental disclosures of cash flow information: Income taxes
paid 166 63 623 ======== ========= ========= Interest paid -- --
350 ======== ========= ========= (*) Incorporation date see note 1.
XTL Biopharmaceuticals Ltd. (A Development Stage Company) Notes to
Interim Consolidated Financial Statements as of June 30, 2007
unaudited) 1. GENERAL XTL Biopharmaceuticals Ltd. (the "Company")
was incorporated under the Israel Companies Ordinance on March 9,
1993. The Company is a development stage company in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 7
"Accounting and Reporting by Development Stage Enterprises."
Through June 30, 2007, the Company has incurred losses in an
aggregate amount of US $129.6 million. Such losses have resulted
from the Company's activities as a development stage company. It is
expected that the Company will be able to finance its operations
from its current reserves through 2007. Continuation of the
Company's current operations after utilizing its current cash
reserves is dependent upon the generation of additional financial
resources either through agreements for the commercialization of
its product portfolio or through external financing. These matters
raise substantial doubt about the Company's ability to continue as
a going concern. The Company has not generated any revenues from
its planned principal operations and is dependent upon significant
financing to provide the working capital necessary to execute its
business plan. If the Company determines that it is necessary to
seek additional funding, there can be no assurance that the Company
will be able to obtain any such funding on terms that are
acceptable to it, if at all. 2. STOCK-BASED COMPENSATION The
Company accounts for equity instruments issued to employees and
directors in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 123R "Share - Based Payment" ("SFAS 123R").
SFAS 123R addresses the accounting for share-based payment
transactions in which a company obtains employee services in
exchange for (a) equity instruments of a company or (b) liabilities
that are based on the fair value of a company's equity instruments
or that may be settled by the issuance of such equity instruments.
SFAS 123R requires instead that such transactions be accounted for
using the grant-date fair value based method. The Company accounts
for equity instruments issued to third party service providers
(non-employees) in accordance with the fair value method prescribed
by SFAS 123R, and the provisions of Emerging Issues Task Force
Issue ("EITF") No. 96-18, "Accounting for Equity Instruments That
Are Issued to Other Than Employees for Acquiring, or in Conjunction
with Selling Goods or Services" ("EITF 96-18"). The Company
accounts for the transaction advisory fee in the form of stock
appreciation rights in accordance with the provisions of EITF 96-18
and by the provisions of EITF No. 00-19, "Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock" ("EITF 00-19"). 3. RESEARCH AND DEVELOPMENT
COSTS Research and development costs are expensed as they are
incurred and consist primarily of salaries and related personnel
costs, fees paid to consultants and other third-parties for
clinical and laboratory development, license and milestone fees,
and facilities-related and other expenses relating to the design,
development, testing, and enhancement of product candidates. In
connection with the purchase of assets, amounts assigned to
intangible assets to be used in a particular research and
development project that have not reached technological feasibility
and have no alternative future use are charged to in-process
research and development costs at the purchase date. Contact: Ron
Bentsur, Chief Executive Officer Tel: +1-845-267-0707 ext. 225
+972-8-930-4444 DATASOURCE: XTL Biopharmaceuticals Ltd CONTACT:
Contact: Ron Bentsur, Chief Executive Officer, Tel: +1-845-267-0707
ext. 225, +972-8-930-4444
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