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Investors | Therapix Biosciences Therapix Biosciences Reports Third Quarter 2018 Financial Results and Provides Business Update

Key Takeaway: | Therapix Biosciences Biosciences Reports Third 2018 Financial Results and AVIV, Israel, Dec. 3, 2018 /PRNewswire/ -- Therapix Biosciences Ltd. (Nasdaq: TRPX) (the "Company" or "Therapix"), a specialty, clinical-stage pharmaceutical company focusing on the development of can

Full Press Release Details

| Therapix Biosciences
Biosciences Reports Third
2018 Financial Results and
AVIV, Israel, Dec. 3, 2018 /PRNewswire/ -- Therapix Biosciences Ltd. (Nasdaq: TRPX) (the "Company" or "Therapix"),
a specialty, clinical-stage pharmaceutical company focusing on the development of cannabinoid-based treatments, issued today its
financial results for the three and nine months ended September 30, 2018. The functional currency of the Company is New Israeli
Shekel; for presentation purposes, the financial data herein is presented in USD).
Update and Developments in the Company's Clinical R&D Programs:
Cognitive Impairment (MCI).
previously described, THX-150 is a pharmaceutical composition of dronabinol (synthetic 9-tetrahydracannabinol) with or
without palmitoylethanolamide (PEA) along with a selected antibacterial agent that may possess synergy potential. Our objective
is to use our entourage technology in association with THC to potentially increase the efficacy of existing antibiotic drugs especially
in antibiotic-resistant bacterial strains. Moreover, we began an additional set of in vitro studies intended to evaluate the mechanism
of action attributed to THX-150 antibacterial effect. In addition, the Company continues its animal study of a microbial infection
to test the potential efficacy and safety of THX-150.
STATEMENTS OF FINANCIAL POSITION
on an effective exchange rate of 3.627 NIS/USD as of September 30, 2018)
September 30, December 31,
2018 2017 2017
Unaudited Audited
USD in thousands
ASSETS
CURRENT ASSETS:
Cash 2,027 10,735 9,195
Restricted cash 10 35 24
Accounts receivable 542 188 278
Convertible loans 2,353 - -
4,932 10,958 9,497
NON-CURRENT ASSETS:
Long-term restricted deposit 23 - -
Prepaid public offering costs 53 - 19
Property and equipment 50 31 50
126 31 69
5,058 10,989 9,566
LIABILITIES AND EQUITY (DEFICIT)
CURRENT LIABILITIES:
Trade payables 1,294 565 1,017
Other accounts payable 153 151 160
1,447 716 1,177
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
Share capital 3,812 3,812 3,812
Share premium 37,041 36,612 36,612
Reserve from share-based payment transactions 5,390 4,616 5,311
Foreign currency translation reserve 497 649 782
Transactions with non-controlling interests 261 261 261
Accumulated deficit (43,390 ) (35,677 ) (38,389 )
Total equity 3,611 10,273 8,389
5,058 10,989 9,566
STATEMENTS OF PROFIT OR LOSS
on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Nine months ended September 30, Three months ended September 30, Year ended December 31,
2018 2017 2018 2017 2017
Unaudited Audited
USD in thousands
Research and development expenses 2,344 1,033 699 338 1,943
General and administrative expenses 3,168 2,150 1,029 775 3,810
5,512 3,183 1,728 1,113 5,753
Other expenses - - - - 1
Operating loss 5,512 3,183 1,728 1,113 5,754
Finance income (516 ) - - (80 ) (1 )
Finance expenses 5 349 11 - 491
Loss 5,001 3,532 1,739 1,033 6,244
Basic and diluted loss per share attributable to equity holders of the Company 0.04 0.03 0.01 0.01 0.05
Basic and diluted loss per ADS attributable to equity holders of the Company 1.43 1.31 0.5 0.3 2.14
STATEMENTS OF COMPREHENSIVE INCOME
on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Nine months ended September 30, Three months ended September 30, Year ended December 31,
2018 2017 2018 2017 2017
Unaudited Audited
USD in thousands
Net loss 5,001 3,532 1,739 1,033 6,244
Amounts that will not be reclassified subsequently to profit or loss:
Adjustments arising from translation financial statements from functional currency to presentation currency 285 (328 ) (65 ) 111 (461 )
Total other comprehensive (income) loss 285 (328 ) (65 ) 111 (461 )
Total comprehensive loss 5,286 3,204 1,674 1,144 5,783
STATEMENTS OF CHANGES IN EQUITY
on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Attributable to equity holders of the Company
Reserve
from share- Foreign Transactions
based currency with non-
Share Share payment translation controlling Accumulated
capital premium transactions reserve interests deficit Total
Unaudited
USD in thousands
Balance at January 1, 2018 3,812 36,612 5,311 782 261 (38,389 ) 8,389
Loss - - - - - (5,001 ) (5,001 )
Other comprehensive loss - - - (285 ) - - (285 )
Total comprehensive loss - - - (285 ) - (5,001 ) (5,286 )
Share-Based payment - - 508 - - - 508
Expiration of share options - 429 (429 ) - - - -
Balance at September 30, 2018 3,812 37,041 5,390 497 261 (43,390 ) 3,611
STATEMENTS OF CHANGES IN EQUITY
on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Attributable to equity holders of the Company
Reserve
from share- Foreign Transactions
based currency with non-
Share Share payment translation controlling Accumulated
capital premium transactions reserve interests deficit Total
Unaudited
USD in thousands
Balance at January 1, 2017 1,087 26,600 4,449 321 261 (32,145 ) 573
Loss - - - - - (3,532 ) (3,532 )
Other comprehensive income - - - 328 - - 328
Total comprehensive income (loss) - - - 328 - (3,532 ) (3,204 )
Share-Based payment - - 167 - - - 167
Issuance of shares (1) 189 769 - - - - 958
Issuance of shares (2) 2,207 7,928 - - - - 10,135
Issuance of shares (3) 329 1,315 - - - - 1,644
Balance at September 30, 2017 3,812 36,612 4,616 649 261 (35,677 ) 10,273
STATEMENTS OF CHANGES IN EQUITY
on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Attributable to equity holders of the Company
Reserve
from share- Foreign Transactions
based currency with non-
Share Share payment translation controlling Accumulated
capital premium transactions reserve interests deficit Total
Unaudited
USD in thousands
Balance at June 30, 2018 3,812 36,989 5,310 432 261 (41,651 ) 5,153
Loss - - - - - (1,739 ) (1,739 )
Other comprehensive income - - - 65 - - 65
Total comprehensive income (loss) - - - 65 - (1,739 ) (1,674 )
Share-based payment - - 132 - - - 132
Expiration of share options - 52 (52 ) - - - -
Balance at September 30, 2018 3,812 37,041 5,390 497 261 (43,390 ) 3,611
STATEMENTS OF CHANGES IN EQUITY
on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Attributable to equity holders of the Company
Reserve
from share- Foreign Transactions
based currency with non-
Share Share payment translation controlling Accumulated
capital premium transactions reserve interests deficit Total
Unaudited
USD in thousands
Balance at June 30, 2017 3,812 36,612 4,584 760 261 (34,644 ) 11,385
Loss - - - - - (1,033 ) (1,033 )
Other comprehensive loss - - - (111 ) - - (111 )
Total comprehensive loss - - - (111 ) - (1,033 ) (1,144 )
Share-based payment - - 32 - - - 32
Balance at September 30, 2017 3,812 36,612 4,616 649 261 (35,677 ) 10,273
STATEMENTS OF CHANGES IN EQUITY
on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Attributable to equity holders of the Company
Reserve
from share- Foreign Transactions
based currency with non-
Share Share payment translation controlling Accumulated
capital premium transactions reserve interests deficit Total
Unaudited
USD in thousands
Balance at January 1, 2017 1,087 26,600 4,449 321 261 (32,145 ) 573
Loss - - - - - (6,244 ) (6,244 )
Other comprehensive income - - - 461 - - 461
Total comprehensive income (loss) - - - 461 - (6,244 ) (5,783 )
Share-Based payment - - 862 - - - 862
Issuance of shares (1) 189 769 - - - - 958
Issuance of shares (2) 2,207 7,928 - - - - 10,135
Issuance of shares (3) 329 1,315 - - - - 1,644
Balance at December 31, 2017 3,812 36,612 5,311 782 261 (38,389 ) 8,389
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Based on the average exchange rate of 3.56 NIS/USD for the nine-month period ended September 30, 2018)
Nine months ended Three months ended Year ended
September 30, September 30, December 31,
2018 2017 2018 2017 2017
Unaudited Audited
USD in thousands
Cash flows from operating activities:
Net loss (5,001 ) (3,532 ) (1,739 ) (1,033 ) (6,244 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 10 4 4 2 5
Gain from sale of equipment - - - - 1
Share-based payment expense 508 167 132 32 862
Finance expenses (incomes), net 72 363 584 (83 ) 525
590 534 720 (49 ) 1,393
Working capital adjustments:
Increase (decrease) in accounts receivable (282 ) (58 ) (93 ) 52 (143 )
Decrease (increase) in trade payables 328 (106 ) 215 (5 ) 349
Increase (decrease) in other accounts payable - 58 (3 ) 25 66
46 (106 ) 119 72 272
Net cash used in operating activities (4,365 ) (3,104 ) (900 ) (1,010 ) (4,579 )
Cash flows from investing activities:
Increase in restricted cash (10 ) (22 ) (10 ) (20 ) (11 )
Proceed from sale of equipment - - - - 2
Purchase of equipment (12 ) (22 ) - (15 ) (44 )
Grant of convertible loan (2,125 ) - (1,625 ) - -
Net cash used in investing activities (2,147 ) (44 ) (1,635 ) (35 ) (53 )
Cash flows from financing activities:
Prepaid public offering costs (36 ) - - - (18 )
Proceeds from issuance of share capital (net of issuance expenses) - 13,287 - 120 13,193
Net cash provided by (used in) financing activities (36 ) 13,287 - 120 13,175
Exchange rate differences on cash and cash equivalents in foreign currency (299 ) (365 ) (607 ) 81 (527 )
Translation differences on cash and cash equivalents (321 ) 285 66 (205 ) 503
Increase (decrease) in cash (7,168 ) 10,059 (3,076 ) (1,049 ) 8,519
Cash at the beginning of the period 9,195 676 5,103 11,784 676
Cash at the end of the period 2,027 10,735 2,027 10,735 9,195
(Based on the average exchange rate of 3.56 NIS/USD for the
nine-month period ended September 30, 2018)
Nine months ended Three months ended Year ended
September 30, September 30, December 31,
2018 2017 2018 2017 2017
Unaudited Audited
USD in thousands
Research and Development Expenses:
Clinical studies 633 367 261 111 551
R&D and preclinical studies 452 234 29 76 362
Wages and related expenses 490 200 155 60 321
Share-based payment 107 32 27 8 103
Regulatory and other expenses 601 163 217 46 276
Chemistry and formulation studies 61 37 10 37 330
2,344 1,033 699 338 1,943
General and Administrative Expenses:
Investor relations and business expenses 246 601 82 213 871
Professional and director fees 902 655 189 261 1,007
Regulatory expenses 55 31 20 - 80
Business development 910 - 426 - 74
Wages and related expenses 496 568 149 225 808
Office, maintenance, rent and other expenses 158 160 58 52 211
Share-based payment 401 135 105 24 759
3,168 2,150 1,029 775 3,810
On October 22, 2018 (the "Effective Date"), the Company signed a binding letter of intent (the "LOI") to be acquired (the "Proposed Transaction") by FSD Pharma Inc. ("FSD"), a publicly-traded company on the Canadian Securities Exchange. As of the Effective Date, the all stock Proposed Transaction values the Company at approximately $48 million, pursuant to which the Company's shareholders would receive FSD stock in exchange for their shares of the Company's ADSs. The LOI by its terms lasted until November 19, 2018, but is automatically extended for additional one-week terms unless either party delivers a written notice of termination three (3) days prior to the expiration of the applicable term.
On November 23, 2018, the Company entered into a securities purchase agreement and a registration rights agreement with YA II PN Ltd. (the "Investor"), a fund managed by Yorkville Advisors Global L.P., for the sale in a private placement of up to $2.5 million in principal amount of unsecured convertible debentures (the "Debentures"). Interest on the Debentures will accrue at a rate of 5% per annum and is payable upon the maturity date of the Debentures, being 12 months from the issuance of each Debenture. The first tranche of $1.5 million of the Debentures was issued on November 23, 2018, and the Investor will receive 9,171 ADSs of the Company as a commitment fee. Two other tranches of $500,000 each of the Debentures shall be purchased by the Investor conditional on the passage of time and/or certain triggering events, including, among others, the earlier of the termination of the previously announced acquisition of the Company by FSD or March 1, 2019. The Company shall pay the Investor additional commitment fees upon issuance of each such tranche, to be paid at the Company's option in cash or ADSs of the Company.
About Therapix Biosciences Ltd.:
Therapix Biosciences Ltd. is a specialty clinical-stage pharmaceutical
company led by an experienced team of senior executives and scientists. The Company's focus is creating and enhancing a portfolio
of technologies and assets based on cannabinoid pharmaceuticals. With this focus, the Company is currently engaged in the following
drug development programs based on repurposing an FDA-approved cannabinoid (Dronabinol): THX-110 for the treatment of Tourette
syndrome (TS), for the treatment of Obstructive Sleep Apnea (OSA), and the treatment of pain; THX-130 for the treatment of Mild
Cognitive Impairment (MCI) and Traumatic Brain Injury (TBI); THX-150 for the treatment of infectious diseases; and THX-160 for
the treatment of pain. Please visit our website for more information at www.therapixbio.com.
About TXH-110 (Previously referred to as THX-TS01 and THX-OSA01):
THX-110 is a combination drug candidate for the treatment of
Tourette syndrome, Obstructive Sleep Apnea and pain. It is composed of two components: (1) dronabinol (an FDA approved analog of
9-tetrahydracannabinol, or "THC"), and (2) palmitoylethanolamide ("PEA"), which is an endogenous fatty
acid amide that belongs to the class of nuclear factor agonists, which are molecules that regulate the expression of genes. The
combination of THC and PEA may induce a reaction known as the "Entourage Effect." The basic tenet of the entourage effect
is that cannabinoids work together, or possess synergy, and affect the body in a mechanism similar to the body's own endocannabinoid
system, which is a group of molecules and receptors that are expressed throughout the mammalian central nervous system (including
the brain) and peripheral nervous system and regulate a variety of physiological and cognitive processes. This entourage effect
may account for the pharmacological actions of PEA. Based on an activity enhancement of other physiological compounds, PEA may
indirectly stimulate the cannabinoid receptors by potentiating their affinity for a receptor or by inhibiting their metabolic degradation,
and by doing so, may increase the uptake of cannabinoid compounds, such as THC. Thus, it is speculated that the presence of the
PEA molecule could increase the efficacy of THC, while reducing the required dosage and decreasing associated deleterious adverse
THX-130 is a proprietary, innovative, formulation of ultra-low
dose dronabinol, which is intended to provide a treatment for Mild Cognitive Impairment (MCI). Recent pre-clinical animal studies
have found that an ultralow dose of THC could potentially protect the brain from long-term cognitive impairment, which may be caused
by aging, lack of oxygen supply, seizures or use of drugs. Certain pre-clinical studies also suggest that ultra-low doses of THC
cause animals to improve performance in behavioral tests that measure learning and memory.
THX-150 is a drug candidate intended for the treatment of infectious
diseases. It consists of dronabinol or dronabinol with PEA and a selected antibacterial agent, which possesses antimicrobial synergy
THX-160 is a drug candidate intended for the treatment of pain.
It consists of a CB2 receptor agonist with or without the opioid.
Forward-Looking Statements:
This press release contains forward-looking statements within
the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other federal
securities laws. The words "believe," "anticipate," "intends," "estimate," "forecast,"
"project," "plan," "potential," "may," "should," "expect," "expected,"
"pending," and similar expressions identify forward-looking statements. Because such statements deal with future events
and are based on Therapix's current expectations, they are subject to various risks and uncertainties and actual results, performance
or achievements of Therapix could differ materially from those described in or implied by the statements in this press release.
For example, forward-looking statements include statements regarding the Company's plans with respect to its clinical trials and
its intent to report material developments and information regarding such trials. In addition, historic results of scientific research
and clinical and preclinical trials do not guarantee that the conclusions of future research or trials will suggest identical or
even similar conclusions. The forward-looking statements contained or implied in this press release are subject to other risks
and uncertainties, including those discussed under the heading "Risk Factors" in Therapix's Annual Report on Form 20-F
filed with the U.S. Securities and Exchange Commission ("SEC") on April 30, 2018 and in subsequent filings with the SEC.
Except as otherwise required by law, Therapix disclaims any intention or obligation to update or revise any forward-looking statements,
which speak only as of the date they were made, whether as a result of new information, future events or circumstances or otherwise.
For further information:
SOURCE Therapix Biosciences Ltd.
Additional assets available online:
Last updated: Dec 3, 2018