Intellipharmaceutics International (NASDAQ: IPCI; TSX: I; $IPCI) is engaged in the research, development, and commercialization of controlled-release and targeted pharmaceutical products. Controlled-release means releasing a drug into the bloodstream or at a target site in the body, over an extended period of time or at predetermined times. In some circumstances, controlled-release drug delivery can enhance efficacy and patient compliance as compared to immediate release formats for the same drug.
The company's proprietary Hypermatrix™ technology is at the core of their controlled-release drug delivery approach. The flexibility of the Hypermatrix™ technology allows for the intelligent and efficient design of drugs through the precise control of a number of key variables. This allows the company to respond to varying drug attributes and patient requirements, producing a desired controlled-release effect in a time and cost-effective manner.
The company has reported the results of operations for the year ended November 30, 2011. All dollar amounts referenced in this article are in United States dollars unless otherwise noted.
The loss for the year ended November 30, 2011 was $4.9 million, or $0.33 per common share. By contrast, the loss for the year ended November 30, 2010 was $5.8 million, or $0.53 per common share. The reduced loss "can be attributed to the fair value adjustment of the derivative liability associated with the issuance of warrants in Intellipharmaceutics' February 2011 private placement financing, and revenue from the amendment of the existing development and commercialization agreement between the Company and Par Pharmaceutical, Inc. to include additional strengths of Focalin XR(R) generic products." Under the terms of the expanded agreement, Intellipharmaceutics received a cash payment from Par and will continue to receive a share of profits from any future sales of our generic versions of Focalin XR(R). Revenue of $0.5 million was recognized from the $0.6 million cash payment received principally related to a developed generic product. The fair value adjustment of the derivative liability for the year ended November 30, 2011 was $5.3 million versus $0.2 million in the prior year.
Loss from operations for the year ended November 30, 2011 was $7.8 million compared with loss from operations of $6.1 million for the year ended November 30, 2010. Research and development expenditures increased to $5.1 million, compared to $4.5 million for the prior year, primarily due to the advanced development of several generic product candidates including two multi-strength products that were filed as abbreviated new drug applications ("ANDA") during the year, and the development of a number of other pipeline product candidates. Selling, general and administrative expenses for the year ended November 30, 2011 increased to $2.9 million versus $2.7 million in the prior year.
At November 30, 2011, Intellipharmaceutics' cash and cash equivalents totaled $4.8 million, compared with $0.8 million at November 30, 2010. The increase in cash and cash equivalents during the year ended November 30, 2011 is mainly a result of net proceeds of $10.5 million in cash provided from the private placement financing, reduced by cash used in research and development activities, and the repayment of C$817,822 owed to a related party.