Akela reports $0.1M net income for second-quarter 2010 vs. $1.1M net loss for same period in 2009

Akela Pharma, Inc. ("Akela"), (TSX: AKL), a leader in the development of therapeutics for the treatment of pain, and the company's wholly owned subsidiary, PharmaForm, today announced its financial results for the three and six months ended June 30, 2010.

Akela's net income for the three months ending June 30, 2010 was $0.1 million, $0.00 per share, as compared to a net loss of $1.1 million, or ($0.04) per share, for the same period in 2009.

"Our cost reduction efforts and realignment of business objectives over the past year have been realized in our recent financial performance. Our quarterly results, in part, reflect the success of our 2009 restructuring. We look forward to further growth in our PharmaForm subsidiary as well as continued development of Akela's lead compound Fentanyl Taifun(R) during the remainder of the year," said Greg McKee, President and Chief Executive Officer.

2010 Second Quarter Financial Highlights

Consolidated net income for the second quarter of 2010 was $0.1 million, or $0.00 per share, versus a consolidated net loss of $1.1 million, or ($0.04) per share, for the second quarter of 2009.

Total consolidated revenues for the second quarter of 2010 were $3.1 million, including $2.4 million of contract services, as compared to $4.0 million, including $3.1 million of contract services, for the same period during the previous year.

Operating results for the three months ended June 30, 2010 benefited from the strengthening of the US dollar and its impact on the balance of Euro denominated debt and trade payables which resulted in $0.7 million in non-cash foreign exchange gains during the second quarter. Excluding onetime gains and losses, Akela's consolidated net loss for the second quarter of 2010 was $0.4 million or ($0.01) per share as compared to $1.8 million or ($0.07) per share for the second quarter of 2009.

The Company had a cash balance of $0.3 million as of June 30, 2010 compared with $0.1 million as of December 31, 2009.

2010 Second Quarter Operational Highlights

- During the second quarter of 2010 our PharmaForm subsidiary benefited from the cost reductions initiated during 2009 and continued through 2010. PharmaForm's streamlined operations and effective project management initiatives have resulted in increased operating margins and efficiencies during the first and second quarters of 2010. In the second quarter of 2010 direct costs were reduced by 30% with SG&A costs seeing a reduction of 14% over the same period in 2009. PharmaForm ended the quarter with positive EBITDA. - On June 30, 2010 Akela held its Annual General Meeting ("AGM") in Vancouver, British Columbia. At the AGM shareholders ratified in person and by proxy all amendments brought before the Board as contemplated on the Form of Proxy including the election of Robert W. Rieder, Gordon Busenbark and Gregory McKee to continue as directors of the Company. Further, amendments to the Company's 2007 Stock Incentive Plan, the changing of the registered office of the Company from the Province of Quebec to the Province of British Columbia were also approved. All amendments, including those referenced above, may be viewed in the Information Circular and Form of Proxy of the Company available on SEDAR at www.sedar.com. - On June 30, 2010 Akela announced that the Company had obtained from the securities regulatory authorities of Québec, Ontario, British Columbia, Saskatchewan, Manitoba Nova Scotia and Alberta full revocation of the management cease trade order that was prohibiting certain directors, officers and insiders of Akela Pharma from trading in securities of Akela Pharma for as long as the annual financial statements, CEO and CFO certifications and related management discussion and analysis ("MD&A") and annual information form ("AIF") were not filed. On May 31, 2010, Akela Pharma filed its audited annual financial statements, CEO and CFO certifications, MD&A and AIF for the year ended December 31, 2009, and on June 18, 2010, Akela Pharma filed its interim financial statements for the quarter ended March 31, 2010, which documents are available on SEDAR at www.sedar.com.