RedHill Biopharma Reports 2012 Fourth Quarter and Year-End Results

RedHill Biopharma Reports 2012 Fourth Quarter and Year-End Results

 Key Planned Milestones for 2013 Include Commencement of Phase III and Phase
    II/III Studies With RHB-104 (Crohn's Disease) and RHB-105 (H. pylori),
 Respectively, and New Drug Application (NDA) Filings With RHB-102 (Oncology
               Support Antiemetic) and RHB-103 (Acute Migraine)

TEL-AVIV, Israel, Feb. 19, 2013 (GLOBE NEWSWIRE) -- RedHill Biopharma Ltd.
(Nasdaq:RDHL) (TASE:RDHL), an Israeli biopharmaceutical company focused
primarily on the acquisition and development of late clinical-stage,
patent-protected, new formulations and combinations of existing drugs,
released its financial results for the fourth quarter and year ended December
31, 2012.

2012 was characterized by significant milestones for the Company, including:

  (i)Positive results in a pivotal comparative bioequivalence clinical
  trial with RHB-102,a proprietary once-daily formulation of a leading
  oncology support drug for the prevention of nausea and vomiting,

  (ii)Positive results in a pivotal bioequivalence clinical trial and a
  successful pre-NDA meetingwith the FDA with RHB-103, a proprietary oral
  thin film formulation of a leading drug for the treatment of acute migraine,

  (iii) Filing of a new U.S. composition patent covering RHB-104 (Crohn's
  disease) through 2029, and

  (iv) NASDAQ (ADR) listing in December 2012.

Financial highlights for the year ended December 31, 2012:

Research and Development Expenses for the year ended December 31, 2012 were
approximately $6.5 million, an increase of $1.1 million (approximately 20%),
compared to $5.4 million in the previous year. This increase was mainly
attributed to the clinical trials conducted with RHB-102 and RHB-103 and
advanced clinical trial preparations with RHB-104 and RHB-105.

General and Administrative Expenses for the year ended December 31, 2012 were
approximately $2.6 million, an increase of $0.1 million (approximately 4%)
compared to $2.5 million in the previous year. This increase was due in part
to an increase in professional service fees in connection with the NASDAQ
listing, partly offset by a decrease in share based payments.

Operating Loss for the year ended December 31, 2012 was approximately $9.0
million, an increase of $1.1 million (approximately 14%) compared to $7.9
million in the previous year. This increase was due in part to an increase in
research and development expenses.

Financing Expenses (net) for the year ended December 31, 2012 were
approximately $1.3 million, a decrease of $6.3 million (approximately 83%),
compared to $7.6 million in the previous year. This decrease was mainly due to
a non-cash financing expense of $7.9 million resulting from the conversion of
mandatory convertible loans into equity prior to the 2011 IPO in Tel-Aviv,
compared to non-cash expenses of $1.5 million resulting from the acquisition
of royalty obligations from investors in 2012.

Net Cash Used in Operating Activities was $6.8 million for the year ended
December 31, 2012, an increase of $2.1 million (approximately 47%), compared
to $4.7 million in the previous year. This increase was mainly due to the
clinical trials and clinical trial preparations referred to above and
increased professional services expenses.

Net Cash Resulting from Investment Activities was $3.0 million for the year
ended December 31, 2012, compared to cash used for investment activities of
$4.8 million in the previous year. The change was mainly due to long term
investments during 2011 which became short term investments (with a term of
less than three months) during 2012.

Cash Balance^1 on December 31, 2012 was approximately $16.8 million, an
increase of $2.7 million (or 19%), compared to a cash balance of $14.1 million
in the previous year. This increase was mainly due to a November 2012 private
placement of approximately $6.5 million, offset largely by the cash used in
operating activities.

^1 Including cash, bank deposits and short term investments.

Key operational highlights for the year ended December 31, 2012:

1.In April 2012, the Company reported positive results in a pivotal
    comparative bioequivalence trial with RHB-102, a once-daily oral
    formulation of ondansetron for the prevention of nausea and vomiting in
    cancer patients.
    
2.In August 2012, the Company and its Canadian co-development partner
    IntelGenx Corp. announced positive results in a pivotal bioequivalence
    clinical trial with RHB-103, an oral thin-film rizatriptan for the
    treatment of migraine. On November 7, 2012, the Company and IntelGenx
    concluded a pre-New Drug Application (pre-NDA) meeting with the FDA
    related to RHB-103 and, given the positive outcome of the pre-NDA meeting,
    the Company estimates that an NDA will be filed during the first quarter
    of 2013.
    
3.In October 2012, the Company reported that as a result of discussions held
    with the FDA regarding the Company's IND (Investigational New Drug)
    amendment with RHB-104, for the treatment of Crohn's disease, there were
    no regulatory restrictions to commence a clinical trial. As of January
    2013, a multi-site initiation process is underway in the U.S., Canada and
    Israel for a first multi-center, randomized, double-blind,
    placebo-controlled, parallel group initial Phase III study (the MAP US
    Study) to assess the efficacy and safety of fixed-dose combination RHB-104
    in subjects with moderately to severely active Crohn's disease. The MAP US
    Study patient recruitment is planned to commence in the second quarter of
    2013.
    
4.In October 2012, the Company reported advanced preparations for a Phase
    II/III clinical trial in the U.S. and Canada with RHB-105 for the
    treatment of H. pylori bacterial infection. The clinical trial is designed
    to test the safety and efficacy of RHB-105 in eradication of H. pylori
    bacteria which have been implicated in causing ulcers and are associated
    with gastric cancer. Subject to regulatory discussions and other
    preparations, the trial is expected to commence in the second quarter of
    2013.
    
5.In October 2012, the Company entered into a term sheet with SCOLR Pharma,
    Inc. (OTCBB:SCLR) under which, subject to a definitive agreement,
    necessary corporate approvals and successful completion of due diligence,
    the Company will acquire exclusive, world-wide rights to two
    patent-protected 12 hour extended release drugs (based on SCOLR's
    patent-protected CDT® controlled release technology) in advanced stages of
    clinical development. The first drug is ibuprofen, an analgesic for the
    treatment of pain and inflammation. The second drug is pseudoephedrine, a
    decongestant for the treatment of cough and cold.
    
6.In October 2012, the Company reported positive results in three Multiple
    Sclerosis (MS) pre-clinical studies using the experimental autoimmune
    encephalomyelitis (EAE) model and is in advanced preparations for a Phase
    IIa proof of concept clinical trial in Israel to assess the efficacy and
    safety of its fixed dose oral drug combination, RHB-104, as an add-on
    therapy in patients treated for Relapsing Remitting MS. The Phase IIa
    clinical trial is expected to commence in the first quarter of 2013.
    
7.In January 2013, the United States Patent and Trademark Office (USPTO)
    issued a new patent for "Methods and Compositions for Treating
    Inflammatory Bowel Disease" expiring no earlier than in 2029, for RHB-104,
    intended primarily for the treatment of Crohn's disease.
    
8.As of December, 2012, the Company had received a total of approximately
    $6.5 million in connection with a private placement of shares and
    warrants, increasing its cash balance to approximately $18.5 million.
    
9.On December 27, 2012, the Company listed its ADS for trading on NASDAQ.
    Following the NASDAQ listing, the Company's securities are traded both on
    NASDAQ and on the Tel-Aviv Stock Exchange (TASE). The Bank of New York
    Mellon was appointed as the Company's depository bank. Each ADS represents
    10 ordinary shares of the Company.

Ori Shilo, Deputy CEO Finance and Operations said: "As a result of the
significant progress made by the Company in 2012, we are preparing marketing
approval applications (NDA) for RHB-102 for the prevention of nausea and
vomiting in cancer patients and for RHB-103 for the treatment of migraine, in
parallel with commercialization efforts with potential partners. We completed
our NASDAQ listing which provides us exposure to the U.S. financial markets
and successfully completed a pre-listing private financing of approximately
$6.5 million. Our cash position remains strong with $18.5 million at the end
of the year and no debt. The strong balance sheet is expected to allow us to
execute our plans in 2013, including the commencement of the Phase III MAP US
Study with RHB-104 for Crohn's disease and a Phase II/III trial with RHB-105
for H. pylori bacteria causing ulcers."

Conference Call and Webcast Information:

The Company will host a conference call and an audio webcast at 09:00am EST on
Wednesday, February 20, 2013.

To participate in the conference call please dial 1-866-966-9439 (domestic
U.S., toll free) or +1-631-510-7498 (International) and use access code:
11015754 #.

The conference call will be broadcasted simultaneously and archived on the
Company's website, http://ir.redhillbio.com/. To participate, please access
the Company's website at least 15 minutes ahead of the conference to register,
download, and install any necessary audio software. The webcast replay will be
available on RedHill's website for 30 days.

About RedHill Biopharma Ltd.:

RedHill Biopharma is an emerging Israeli biopharmaceutical company focused
primarily on the acquisition and development of late clinical-stage, patent
protected, new formulations and combinations of existing drugs. The Company's
current product pipeline includes a once-daily formulation of a leading
congestive heart failure and high blood pressure drug, a once-daily
formulation of a leading chemotherapy and radiotherapy-induced nausea and
vomiting prevention drug, an oral thin film formulation drug for the treatment
of acute migraine, a combination therapy for the treatment of Crohn's disease
as well as Multiple Sclerosis (MS) disease, a combination therapy for the
treatment of Helicobacter pylori bacteria causing ulcers, and an encapsulated
formulation for bowel preparation ahead of certain gastro procedures. For more
information please visit: www.redhillbio.com.

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements may be
preceded by the words "intends," "may," "will," "plans," "expects,"
"anticipates," "projects," "predicts," "estimates," "aims," "believes,"
"hopes," "potential" or similar words. Forward-looking statements are not
guarantees of future performance, are based on certain assumptions and the
Company's current and best understanding of the regulatory status and are
subject to various known and unknown risks and uncertainties, many of which
are beyond the Company's control, and cannot be predicted or quantified and
consequently, actual results may differ materially from those expressed or
implied by such forward-looking statements. Such risks and uncertainties
include, without limitation, risks and uncertainties associated with (i) the
initiation, timing, progress and results of the Company's preclinical studies,
clinical trials, and other therapeutic candidate development efforts; (ii) the
Company's ability to advance its therapeutic candidates into clinical trials
or to successfully complete its preclinical studies or clinical trials; (iii)
the extent and number of additional studies that the Company may be required
to conduct and the Company's receipt of regulatory approvals for its
therapeutic candidates, and the timing of other regulatory filings and
approvals; (iv) the clinical development, commercialization, and market
acceptance of the Company's therapeutic candidates; (v) the Company's ability
to establish and maintain corporate collaborations; (vi) the interpretation of
the properties and characteristics of the Company's therapeutic candidates and
of the results obtained with its therapeutic candidates in preclinical studies
or clinical trials; (vii) the implementation of the Company's business model,
strategic plans for its business and therapeutic candidates; (viii) the scope
of protection the Company is able to establish and maintain for intellectual
property rights covering its therapeutic candidates and its ability to operate
its business without infringing the intellectual property rights of others;
(ix) estimates of the Company's expenses, future revenues capital requirements
and the Company's needs for additional financing; (x) competitive companies,
technologies and the Company's industry; and (xi) statements as to the impact
of the political and security situation in Israel on the Company's business.
More detailed information about the Company and the risk factors that may
affect the realization of forward-looking statements is set forth in the
Company's filings with the Securities and Exchange Commission (SEC), including
the Company's Registration Statement on From 20-F filed with the SEC on
December 26, 2012, and its Reports on Form 6-K. Investors and security holders
are urged to read these documents free of charge on the SEC's web site at
http://www.sec.gov. All forward-looking statements included in this Press
Release are made only as of the date of this Press Release. We assume no
obligation to update any written or oral forward-looking statement made by us
or on our behalf as a result of new information, future events or other
factors.


REDHILL BIOPHARMA LTD.
STATEMENTS OF COMPREHENSIVE LOSS
                                                    
                                           Year ended
                                            December 31
                                           2012      2011
                                           U.S. dollars in
                                            thousands
                                                    
REVENUE                                     16     23
RESEARCH AND DEVELOPMENT EXPENSES           (6,455)  (5,414)
GENERAL AND ADMINISTRATIVE EXPENSES         (2,601)  (2,482)
OTHER EXPENSES                              --      --
OPERATING LOSS                              (9,040)  (7,873)
FINANCIAL INCOME                            197      570
FINANCIAL EXPENSES                          (1,483)  (8,200)
FINANCIAL EXPENSES NET                      (1,286)  (7,630)
                                                    
LOSS AND COMPREHENSIVE LOSS                 (10,326) (15,503)
                                                    
LOSS PER ORDINARY SHARE – basic and diluted (0.20)   (0.32)



REDHILL BIOPHARMA LTD.
STATEMENTS OF FINANCIAL POSITION
                                                              
                                                     December 31
                                                     2012      2011
                                                     U.S. dollars in
                                                      thousands
CURRENT ASSETS:                                       
Cash and cash equivalents                             16,814   14,070
Bank deposits                                         486      3,013
Financial assets at fair value through profit or loss 1,065    1,564
Prepaid expenses and receivables                      198      89
                                                     18,563   18,736
NON-CURRENT ASSETS:                                            
Restricted bank deposit                               75       73
Fixed assets                                          113      132
Intangible assets                                     1,345    1,245
                                                     1,533    1,450
Totalassets                                          20,096   20,186
                                                              
CURRENT LIABILITIES --                                         
Accounts payable and accrued expenses                 1,078    513
                                                              
NON-CURRENT LIABILITIES:                                       
Royalty obligations to investors                      --       886
Totalliabilities                                     1,078    1,399
                                                              
COMMITMENTS                                                   
                                                              
EQUITY:                                                        
Ordinary shares                                       143      142
Ordinary shares to be issued                          8,020    --
Additional paid-in capital                            31,469   31,168
Warrants                                              3,273    2,686
Accumulated deficit                                   (23,887) (15,209)
Total equity                                          19,018   18,787
                                                              
Total liabilities and equity                          20,096   20,186



REDHILL BIOPHARMA LTD.
STATEMENTS OF CASH FLOWS
                                                          
                                                          Year ended
                                                           December 31
                                                          2012      2011
                                                          U.S. dollars in
                                                           thousands
                                                                   
CASH FLOWS FROM OPERATING ACTIVITIES:                               
Loss                                                      (10,326) (15,503)
Adjustments in respect of income and expenses not                   
involving cash flows:
Share-based compensation to employees and service          1,648    2,863
providers
Fair value losses on mandatory convertible loans           --      7,938
Depreciation                                               24       15
Fair value losses (gains) on financial assets at fair      (57)     29
value through profit or loss
Revaluation of bank deposits                              (4)      9
Accretion and settlement of royalty obligations to         1,473    168
investors
Exchange differences in respect of cash and cash           (12)     (640)
equivalents
Changes in asset and liability items:                               
Decrease (increase) in prepaid expenses andreceivables    (109)    61
Increase in accounts payable and accrued expenses          568      369
Net cash used in operating activities                      (6,795)  (4,691)
CASH FLOWS FROM INVESTING ACTIVITIES:                               
Purchase of fixed assets                                  (8)      (136)
Purchase of intangible assets                              (100)    (45)
Changes in investment in bank deposits                     2,529    (3,080)
Acquisition of financial assets at fair value through      (1,032)  (1,506)
profit or loss
Proceeds from sale of financial assets at fair value       1,588    --
through profit or loss
Net cash used in investing activities                      2,977    (4,767)
CASH FLOWS FROM FINANCING ACTIVITIES:                               
Proceeds on account of shares and warrants, net            6,248    --
Proceeds from issuance of shares and warrants under        --      12,662
February 2, 2011 prospectus, net of issuance expenses
Exercise of warrants and options into shares, net of       302      1,176
expenses
Proceeds from mandatory convertible loans and royalty      --      --
obligations to investors
Net cash provided by financing activities                  6,550    13,838
INCREASE IN CASH AND CASH EQUIVALENTS                      2,732    4,380
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS          12       640
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR  14,070   9,050
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR        16,814   14,070
                                                                   
Supplementary information on interest received in cash     126      14
Supplementary Information on financing activities not               
involving cash flows :
Settlement of the royalty obligations                     2,359    --
Conversion ofmandatory convertible loans                  --      19,183

CONTACT: IR contact (US):
         Lauren Glaser
         Vice President
         The Trout Group
         +1-646-378-2972
         lglaser@troutgroup.com
        
         Company contact:
         Adi Frish
         Senior VP Business Development & Licensing
         RedHill Biopharma
         +972-54-6543-112
         adi@redhillbio.com
 
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