News ReleasesPROTOX RELEASES Q3 FINANCIAL RESULTS AND COMPANY HIGHLIGHTS Vancouver, British Columbia, November 29, 2006 – ProtoxTM Therapeutics Inc. (TSX-V:PRX) today reported financial results and operating highlights for the third quarter ended September 30, 2006. “Protox made substantial progress during the third quarter with the acquisition of PRX321 from Neurocrine Biosciences and the US Public Health Service,” said Dr. Fahar Merchant, President and CEO of Protox. “PRX321 significantly expands our pipeline with a Phase II clinical program that utilizes our core expertise in toxin-based targeted therapies.” Dr. Merchant added: “Approval from Health Canada for our Clinical Trial Application, received subsequent to quarter’s end, allows us to initiate a Phase I human clinical trial for PRX302 to treat adult men with benign prostatic hyperplasia. Furthermore, the successful closing of our private placement this month allows us to advance clinical programs for both PRX321 and PRX302.” Q3 Operating Highlights
Subsequent events
Financial Results The loss for the three months ended September 30, 2006 of $1,351,490 ($0.04 per share) was 7% lower compared with the loss of $1,447,035 ($0.06 per share) for the comparable period last year and 9% lower compared with the loss of $1,478,373 ($0.04 per share) for the three months ended June 30, 2006. The decrease in the loss for the third quarter of 2006 compared with the second quarter of 2006 is attributable to the lower general and administration costs whereas the decrease in loss compared with the comparable period last year is primarily attributable to the lower research and development costs. Research and Development Research and development expenses of $851,924 for the three months ended September 30, 2006 increased by 10% compared with $774,625 for the second quarter of 2006. The increase in research and development expenditures for the third quarter of 2006 is primarily due to the Phase I clinical trial costs for PRX302 for the treatment of localized prostate cancer, which commenced in Q2, 2006, and the costs associated with the acquisition of the INxinTM program. Research and development expenses of $2,048,526 for the nine months ended September 30, 2006 were 22% lower compared with $2,633,752 for the same period last year. The majority of the research and development expenditures for the first nine months of 2006 were related to the Phase I clinical trial for PRX302 for the treatment of localized prostate cancer. Patient enrolment commenced in Q2, 2006 and is expected to be completed in Q1, 2007. In contrast, the majority of the expenditures in 2005 were related to the preclinical animal studies and GMP manufacturing of PRX302. The research and development expenditures for the nine months ended September 30, 2006 also included $41,883 associated with the amortization of the intangible assets acquired from Neurocrine and PHS on July 20, 2006. Research expenditures for the three and nine months ended September 30, 2006 were offset by government funding of $12,820 and $147,185 respectively. General and Administrative General and administrative expenditures of $409,656 for the three months ended September 30, 2006 are 10% higher compared with the same period last year and 23% lower compared to $530,061 for the second quarter of 2006. The increase compared with the three months ended September 30, 2005 is due to higher travel and due diligence costs associated with the INxin acquisition. The decrease compared with the second quarter of 2006 is due to lower legal expenses and costs associated with the AGM and annual report, which were completed in the second quarter of 2006. General and administrative expenditures of $1,386,559 for the nine months ended September 30, 2006 were 43% higher compared with $971,556 for the same period last year. The increase in general and administrative expenses is primarily due to additional business development expenses, travel and due diligence costs associated with the INxin acquisition and additional employees hired to support the Company’s programs. Stock-based Compensation Stock-based compensation for the three months ended September 30, 2006 amounted to $103,069, compared with $149,575 for the same period last year, and $388,673 for the nine months ended September 30, 2006 compared with $350,257 for the same period last year. The increase in stock-based compensation for the nine months ended September 30, 2006 compared with the same period last year relates to stock options granted to new employees as well as additional stock options granted to existing employees and directors. Other Income and Expenses The Company earned $32,991 in interest for the three months ended September 30, 2006, compared with $8,895 for the third quarter of 2005, and $102,525 for the nine months ended September 30, 2006 compared with $47,256 for the same period last year. The increase in interest income is a result of higher interest rates and higher average amounts held in interest bearing accounts. The Company incurred a foreign exchange loss of $8,363 on the US dollar denominated cash and cash equivalents and accounts payable balances for the three months ended September 30, 2006, compared with a gain of $983 for the same period last year, and a loss of $41,921 for the nine months ended September 30, 2006 compared with a loss of $17,674 for the same period last year. Summary of Quarterly Results
Liquidity As at September 30, 2006, the Company had cash and cash equivalents of $2,283,353 compared with $5,471,804 as at December 31, 2005. As at September 30, 2006, the Company had working capital of $886,564 compared with $5,166,583 as at December 31, 2005 and $776,864 as at September 30, 2005. The decrease in working capital compared with December 31, 2005 is primarily attributable to the $2,105,860 cash utilized in operations for the nine months ended September 30, 2006 and the increase in accounts payable as a result of the acquisition of the intangible INxin assets from Neurocrine and PHS. On November 29, 2006, the Company completed a private placement of 18,349,500 Units at $0.50 per Unit for gross proceeds of $9,174,750. Each Unit comprised one common share of Protox and one-half of one share purchase warrant. Each whole warrant entitles the holder to purchase one common share of Protox within 24 months of the date of closing at a price of $0.65 per share. Based on the current business plan and the closing of the $9,174,750 private placement financing on November 29, 2006, the Company anticipates that it will have sufficient funds to operate its business into Q1, 2008. However, the Company’s working capital may not be sufficient to meet its stated business objectives in the event of unforeseen circumstances or a change in the strategic direction of the Company. The Company will need to raise further capital in order to extend its research and development programs beyond Q1, 2008. There can be no assurance that the Company will be able to obtain further financing on terms that are acceptable, if at all. About Protox NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Protox’ current beliefs as well as assumptions made by and information currently available to Protox and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Protox in its public securities filings; actual events may differ materially from current expectations. Protox disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information visit our website at www.protoxtherapeutics.com, or contact: Anthony Boone Michael Moore | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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