Transition Therapeutics Announces Second Quarter Fiscal 2013 Financial Results

Transition Therapeutics Announces Second Quarter Fiscal 2013 Financial Results

PR Newswire

TORONTO, Feb. 7, 2013

TORONTO,  Feb.   7,  2013   /PRNewswire/   -  Transition   Therapeutics   Inc. 
("Transition" or the  "Company") (TSX: TTH;  NASDAQ: TTHI), a  product-focused 
biopharmaceutical company developing therapeutics for disease indications with
large markets, today  announced its financial  results for the  three and  six 
month periods ended December 31, 2012.

Selected Highlights

During fiscal 2013  and up  to the  date of  this press  release, the  Company 
announced the following:

  * On November 28, 2012, Transition announced that their licensing partner
    Elan had enrolled the first patient in a Phase II study of ELND005 for the
    treatment of agitation/aggression in patients with moderate to severe
    Alzheimer's disease;

  * On August 30, 2012, Transition announced that their licensing partner Elan
    had dosed the first patient in a Phase II clinical study of ELND005 in
    Bipolar Disorder. The study is a placebo-controlled, safety and efficacy
    study of oral ELND005 as an adjunctive maintenance treatment in patients
    with Bipolar 1 Disorder to delay the time to occurrence of mood episodes.
    As the first patient has been dosed in the study, Transition received a
    milestone payment of US$11 million from Elan.

Financial Liquidity

The Company's  cash  and cash  equivalents  and short  term  investments  were 
$24,958,522 at December 31, 2012.

The  Company's  current  cash  projection  indicates  that  the  current  cash 
resources should enable the Company to execute its core business plan and meet
its projected cash requirements well beyond the next 12 months.

Financial Review

For the three month period ended December 31, 2012, the Company recorded a net
loss of  $2,754,534 ($0.10  loss per  common share)  compared to  net loss  of 
$3,790,421 ($0.15 loss  per common  share) for  the three  month period  ended 
December 31, 2011.

For the six month period ended December  31, 2012, the Company recorded a  net 
income of $4,981,512 ($0.19 income per common share) compared to a net loss of
$6,661,178 ($0.28  loss  per common  share)  for the  six-month  period  ended 
December 31, 2011.

Revenue is  nil and  $10,815,200 in  the  three and  six month  periods  ended 
December 31, 2012 respectively,  compared to nil in  both three and six  month 
period ended December 31, 2011.

In August 2012, Elan dosed  the first patient in a  Phase 2 clinical study  of 
ELND005 in  Bipolar  Disorder.   In  light  of  the  amendments  to  the  Elan 
agreement, the Company has  recognized $10,815,200 (US$11,000,000) as  revenue 
during the first quarter of fiscal 2013 which represents the milestone payment
received from Elan upon their commencement of the next ELND005 clinical trial.
The payment from Elan was received on October 1, 2012.

Research and development expenses increased $80,635 or 4% from $2,060,622  for 
the three month  period ended December  31, 2011 to  $2,141,257 for the  three 
month period  ended December  31, 2012.  The  increase is  largely due  to  an 
increase in clinical development costs  related to TT-401/402, which has  been 
offset by decreases in  clinical development costs  related to TT-301/302  and 
salaries and related costs associated with headcount reductions.

For the six  month period ended  December 31, 2012,  research and  development 
expenses decreased $118,543 or 3% to  $4,195,803 from $4,314,346 for the  same 
period in fiscal 2012. The decrease is primarily due to decreases in  clinical 
development costs  related  to  TT-301/302  and  salaries  and  related  costs 
associated with  headcount  reductions.  The decrease  is  largely  offset  by 
increased clinical development costs related to TT-401/402.

General  and  administrative  expenses  decreased  by  $683,472  or  45%  from 
$1,532,912 for the three month period ended December 31, 2011 to $849,440  for 
the three month  period ended  December 31, 2012.   For the  six month  period 
ended  December  31,  2012,  general  and  administrative  expenses  decreased 
$956,616 or 36% to  $1,666,342 from $2,622,958 for  the same period in  fiscal 
2012.

The decreases in general  and administrative expenses for  both the three  and 
six month  periods ended  December 31,  2012  are due  to decreases  in  legal 
consulting fees,  facility lease  costs, and  investor relation  and  business 
development  expenses,  as  well  as  decreased  salaries  and  related  costs 
resulting from  headcount  reductions  as  the  comparative  periods  included 
severances relating to terminations.

About Transition

Transition is a biopharmaceutical  company, developing novel therapeutics  for 
disease indications with large markets.  Transition's lead product is  ELND005 
for the treatment  of Alzheimer's  disease and  bipolar disorder.   Transition 
also has  an emerging  pipeline of  innovative preclinical  and clinical  drug 
candidates. The other drugs in the pipeline that the Company is developing are
for anti-inflammatory  and  metabolic  indications.  Transition's  shares  are 
listed on the NASDAQ  under the symbol "TTHI"  and the Toronto Stock  Exchange 
under the symbol "TTH". For  additional information about the Company,  please 
visit www.transitiontherapeutics.com.

Extracts of the Financial Statements to Follow:

CONSOLIDATED BALANCE SHEETS
(Unaudited)
As at

In Canadian Dollars                        December 31, 2012   June 30, 2012  
                                                                              
Assets                                                                        
Current assets                                                                
Cash and cash equivalents                         18,955,854      12,955,081  
Short term investments                             6,002,668       6,057,264  
Trade and other receivables                           48,408          43,658  
Investment tax credits receivable                    370,289         241,951  
Prepaid expenses and deposits                        458,037         316,286  
                                                                              
                                                  25,835,256      19,614,240  
Non-current assets                                                            
Property and equipment                               194,181         215,000  
Intangible assets                                 16,374,143      17,263,790  
Total assets                                      42,403,580      37,093,030  
                                                                              
Liabilities                                                                   
Current liabilities                                                           
Trade and other payables                             896,145       1,178,915  
Current portion of contingent                      2,321,373       2,321,373  
consideration payable
                                                   3,217,518       3,500,288  
                                                                              
Non-current liabilities                                                       
Contingent consideration payable                   1,434,958       1,434,958  
Leasehold inducement                                  28,579          34,295  
                                                   4,681,055       4,969,541  
                                                                              
Equity attributable to owners of the                                          
Company
Share capital                                    165,334,259     165,334,259  
Contributed surplus                               13,431,445      13,168,411  
Share-based payment reserve                        3,331,522       2,977,032  
Deficit                                        (144,374,701)   (149,356,213)  
                                                  37,722,525      32,123,489  
                                                                              
Total liabilities and equity                      42,403,580      37,093,030  

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
For the six and three month periods ended December 31, 2012 and 2011
(Unaudited)

                      Six month      Six month     Three month    Three month
                     period ended   period ended   period ended   period ended
In Canadian          December 31,   December 31,   December 31,   December 31,
Dollars                  2012           2011           2012           2011
                                                                              
Revenues                                                                      
Licensing fees         10,815,200              -              -              -
Expenses                                                                      
Research and            4,195,803      4,314,346      2,141,257      2,060,622
development
Selling, general        1,666,342      2,622,958        849,440      1,532,912
and administrative
expenses
Loss on disposal                -        118,623              -         38,709
of property and
equipment
                                                                              
Operating income        4,953,055    (7,055,927)    (2,990,697)    (3,632,243)
(loss)
                                                                              
Interest income            68,489         80,339         34,872         40,412
Interest expense                -          (851)              -          (241)
Foreign exchange         (40,032)        315,261        201,291      (198,349)
gain (loss)
Net income (loss)
and
comprehensive
income (loss) for
the
period                  4,981,512    (6,661,178)    (2,754,534)    (3,790,421)
Basic and diluted
net income (loss)
per common share             0.19         (0.28)         (0.10)         (0.15)

Notice to  Readers: Information  contained  in our  press releases  should  be 
considered accurate only as of the date  of the release and may be  superseded 
by more recent information we have disclosed in later press releases,  filings 
with the OSC, SEC or otherwise. Except for historical information, this  press 
release may  contain  forward-looking statements,  relating  to  expectations, 
plans or prospects for Transition, including conducting clinical trials. These
statements are based upon the current expectations and beliefs of Transition's
management and are subject to certain risks and uncertainties that could cause
actual  results   to   differ  materially   from   those  described   in   the 
forward-looking statements.  These  risks and  uncertainties  include  factors 
beyond  Transition's  control  and  the  risk  factors  and  other  cautionary 
statements discussed in  Transition's quarterly  and annual  filings with  the 
Canadian commissions. 

SOURCE Transition Therapeutics Inc.

Contact:

For further information on Transition, visit www.transitiontherapeutics.com,
or contact:

Dr. Tony Cruz
Chairman & Chief Executive Officer
Transition Therapeutics Inc.
Phone: (416) 260-7770, x.223
tcruz@transitiontherapeutics.com 

Nicole Rusaw-George
Chief Financial Officer
Transition Therapeutics Inc.
Phone: (416) 260-7770, x.202
nrusaw@transitiontherapeutics.com