Transition Therapeutics Announces Third Quarter Fiscal 2013 Financial Results

Transition Therapeutics Announces Third Quarter Fiscal 2013 Financial Results

PR Newswire

TORONTO, May 7, 2013

TORONTO, May 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  nine 
month periods ended March 31, 2013.

Selected Highlights

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

  *On April 30, 2013, Transition announced the results of a five-week proof
    of concept clinical study of TT-401 in type 2 diabetic and obese
    non-diabetic subjects. In the study, TT-401, a once-weekly administered
    peptide, demonstrated significant improvements in glycemic control and
    reductions in body weight;

  *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 
$22,942,039 at March 31, 2013.

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 March 31, 2013,  the Company recorded a  net 
loss of  $2,903,331 ($0.11  loss per  common share)  compared to  net loss  of 
$3,072,112 ($0.11 loss  per common  share) for  the three  month period  ended 
March 31, 2012.

For the  nine month  period ended  March 31,  2013, the  Company recorded  net 
income of $2,078,181 ($0.08 income per common share) compared to a net loss of
$9,733,290 ($0.39 loss per common share) for the nine month period ended March
31, 2012.

Revenue is nil and $10,815,200 in the three and nine month periods ended March
31, 2013 respectively, compared  to nil in both  three and nine month  periods 
ended March 31, 2012.

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 $483,948  or 26% from  $1,896,585 
for the three month period  ended March 31, 2012  to $2,380,533 for the  three 
month period ended March 31, 2013. For  the nine month period ended March  31, 
2013, research and development expenses increased $365,405 or 6% to $6,576,336
from $6,210,931 for the same period in fiscal 2012.

The increases in  research and development  expenses are primarily  due to  an 
increase in clinical development costs  related to TT-401/402, which has  been 
partially offset  by  a decrease  in  clinical development  costs  related  to 
TT-301/302 as  well  as reduced  salaries  and related  costs  resulting  from 
headcount reductions which occurred during  the nine month period ended  March 
31, 2012.

General  and  administrative  expenses  decreased  by  $151,183  or  15%  from 
$1,022,040 for the three month period ended March 31, 2012 to $870,857 for the
same period in fiscal 2013.  For the nine month  period ended March 31,  2013, 
general and administrative expenses decreased $1,107,798 or 30% to  $2,537,199 
from $3,644,997 for the same period in fiscal 2012.

The decreases in general  and administrative expenses for  both the three  and 
nine month  periods  ended  March 31,  2013  are  due to  decreases  in  legal 
consulting fees and business development expenses. The decrease in general and
administrative expenses for the nine month period ended March 31, 2013 is also
attributed to decreased facility lease costs as well as decreased salaries and
related costs resulting from headcount  reductions as the comparative  periods 
included severances relating to terminations. In both the three and nine month
periods ended  March 31,  2013,  the decrease  in general  and  administrative 
expenses have been partially offset by increased investor relation expenses.

About Transition

Transition is a biopharmaceutical  company, developing novel therapeutics  for 
disease indications with large markets. The Company's lead CNS drug  candidate 
is ELND005 for  the treatment  of Alzheimer's disease  and bipolar  disorder. 
Transition lead metabolic drug candidate is TT-401 for the treatment of type 2
diabetes and  accompanying obesity.  The Company'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                  March 31, 2013  June 30, 2012
                                                                          
Assets                                                                     
Current assets                                                             
Cash and cash equivalents                           17,913,332     12,955,081
Short term investments                               5,028,707      6,057,264
Trade and other receivables                             53,875         43,658
Investment tax credits receivable                      165,065        241,951
Prepaid expenses and deposits                          472,338        316,286
                                                                          
                                                   23,633,317     19,614,240
Non-current assets                                                         
Property and equipment                                 184,396        215,000
Intangible assets                                   15,929,319     17,263,790
Total assets                                        39,747,032     37,093,030
                                                                          
Liabilities                                                                
Current liabilities                                                        
Trade and other payables                              942,192      1,178,915
Current portion of contingent                        2,321,373      2,321,373
consideration payable
                                                    3,263,565      3,500,288
                                                                          
Non-current liabilities                                                    
Contingent consideration payable                     1,434,958      1,434,958
Leasehold inducement                                    25,721         34,295
                                                    4,724,244      4,969,541
                                                                          
Equity attributable to owners of                                           
the Company
Share capital                                      165,334,259    165,334,259
Contributed surplus                                 14,245,402     13,168,411
Share-based payment reserve                          2,721,159      2,977,032
Deficit                                          (147,278,032)  (149,356,213)
                                                   35,022,788     32,123,489
                                                                          
Total liabilities and equity                        39,747,032     37,093,030
                                                                          

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
For the nine and three month periods ended March 31, 2013 and 2012
(Unaudited)

                     Nine month     Nine month    Three month    Three month
                    period ended   period ended   period ended   period ended
                      March 31,   March 31, 2012 March 31, 2013 March 31, 2012
In Canadian Dollars     2013
                                                                         
Revenues                                                                  
Licensing fees         10,815,200              -              -              -
Expenses                                                                  
Research and            6,576,336      6,210,931      2,380,533      1,896,584
development
Selling, general
and
administrative
expenses                2,537,199      3,644,997        870,857      1,022,040
Loss on disposal of
property and
equipment                       -        125,748              -          7,125
                                                                         
Operating income        1,701,665    (9,981,676)    (3,251,390)    (2,925,749)
(loss)
                                                                         
Interest income           107,448        124,352         38,959         44,013
Interest expense                -          (851)              -              -
Foreign exchange          269,068        124,885        309,100      (190,376)
gain (loss)
Net income (loss)
and
comprehensive
income (loss)
for the period          2,078,181    (9,733,290)    (2,903,331)    (3,072,112)
Basic and diluted
net income
(loss) per common
share                        0.08         (0.39)         (0.11)         (0.11)

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:

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
 
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