Intellipharmaceutics International Inc. (Nasdaq:IPCI) (TSX:I), a pharmaceutical company 
specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs, today reported the results of operations for the three and six months ended May 31, 2012. All dollar amounts referenced herein are in United States dollars unless otherwise noted.
The Company recorded a net loss for the three months ended May 31, 2012 of $1.4 million, or $0.08 per common share, compared with a net loss of $2.0 million, or $0.12 per common share for the three months ended May 31, 2011. The net loss for the six months ended May 31, 2012 was $3.3 million, or $0.20 per common share, compared with a net loss of $4.7 million, or $0.33 per common share for the six months ended May 31, 2011. The Company's reduced net loss in the three months ended May 31, 2012, can be attributed to a reduction in the fair value adjustment of derivative liability of $0.8 million and the timing of certain research and development activities. After adjusting for the fair value adjustment of derivative liability, the loss for the three months ended May 31, 2012 was lower by $0.3 million and is discussed below.
Loss from operations for the three months ended May 31, 2012 was $2.0 million compared with $2.4 million for the three months ended May 31, 2011. Research and development expense for the three months ended May 31, 2012 decreased to $1.1 million compared to $1.4 million in the three months ended May 31, 2011. After adjusting for stock-based compensation expense, expenditures for research and development for the three months ended May 31, 2012 were lower by $0.4 million. Selling, general and administrative expenses for the three months ended May 31, 2012 decreased to $0.8 million versus $0.9 million in the prior period. After adjusting for stock-based compensation expense, expenditures for selling, general and administrative expenses for the three months ended May 31, 2012 were lower by $0.2 million.
At May 31, 2012, Intellipharmaceutics' (IPCI) cash and cash equivalents totaled $4.9 million, compared with $2.6 million at February 29, 2012. The increase in cash during the three months ended May 31, 2012 is mainly due to the Company's registered direct common share offering for gross proceeds of $5 million completed on March 14, 2012.
For the three months ended May 31, 2012 net cash flows used in operating activities was effectively unchanged at $1.8 million, as compared to net cash flows used in operating activities for the three months ended May 31, 2011 of $1.9 million. For the three months ended May 31, 2012 net cash flows from financing activities of $4.5 million related mainly to the Company's registered direct common share offering for gross proceeds of $5 million.
Corporate Update
- On March 15, 2012, we closed a registered direct common share offering for gross proceeds of $5 million. The Company sold an aggregate of 1,818,182 shares to U.S. institutional investors at a price of $2.75 per share. After placement agent fees and estimated offering expenses, the Company received net proceeds from the offering of approximately $4.2 million. Intellipharmaceutics is using the net proceeds to file additional abbreviated new drug applications ("ANDAs") with the Food and Drug Administration ("FDA"), to advance clinical trials for its abuse resistant Rexista" technology and/or other New Drug Application ("NDA") 505(b)(2) opportunities, to establish additional partnerships, and for working capital, research, product development and general corporate purposes.
- On May 1, 2012, the Company held a pre-Investigational New Drug ("pre-IND") meeting with the FDA to discuss our Rexista" oxycodone development plan. A panel of the FDA's Center for Drug Evaluation and Research clarified the Company's path going forward for its Rexista" abuse-deterrent oxycodone development plan. Intellipharmaceutics will now advance toward the next goals of its Rexista" program, namely the manufacture of clinical batches of Rexista" abuse-deterrent oxycodone product candidate under current good manufacturing practice ("cGMP") conditions and the commencement of definitive Phase I clinical studies. This follows from the previous proof-of-concept Phase I clinical study completed on a pilot laboratory batch, which yielded positive results. There can be no assurances as to whether or when the FDA will approve any Intellipharmaceutics' application.
About Intellipharmaceutics
Intellipharmaceutics International Inc. is a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs. The Company's patented Hypermatrix" technology is a multidimensional controlled-release drug delivery platform that can be applied to the efficient development of a wide range of existing and new pharmaceuticals. Based on this technology, Intellipharmaceutics has a pipeline of product candidates in various stages of development, including six ANDAs under review by the FDA, in therapeutic areas that include neurology, cardiovascular, gastrointestinal tract, diabetes, pain and infection.