Isotechnika reports consolidated net loss of $2.9 million for first quarter 2011

Isotechnika Pharma Inc. (TSX: ISA) today announced financial and operating results for the three months ended March 31, 2011.

First Quarter 2011 Highlights

On January 28, 2011, the Company finalized a Development, Distribution and License Agreement ("DDL") with ILJIN Life Science Co., Ltd. ("ILJIN"). Under the DDL, the Company granted to ILJIN an exclusive license to voclosporin for transplant and autoimmune indications for the US and other regions outside of Canada, Israel, South Africa, Europe, China, Taiwan and Hong Kong.  Under this license, the Company will conduct a single Phase 3 clinical trial in kidney transplantation.  Pursuant to this DDL, the Company has already received US$6.9 million with a further US$18 million to be provided by ILJIN over the next 2 years.

"We are excited that this agreement with ILJIN provides us with funding to commence the Phase 3 clinical trial program for the Company's lead drug voclosporin in its key indication, the prevention of organ rejection in kidney transplant", said Dr. Robert Foster, President and Chief Executive Officer.

On February 28, 2011 Dr. Peter Wijngaard, Vice President, Innovation Leader, Research & Development at The Medicines Company, and Dr. Heung-Joon Yang, President, Global Network Services, Inc. joined the Board of Directors. Isotechnika's President & CEO, Dr. Robert Foster commented, "We are excited to welcome these two highly qualified individuals to our Board.  They both have a strong depth of relevant experience that can help Isotechnika as we move into Phase 3 for the prevention of kidney transplant rejection and progress our corporate development activities."

Dr. Wijngaard holds a Ph.D. in Immunology from Utrecht University, The Netherlands.  Dr. Wijngaard formerly worked for F. Hoffmann-La Roche Ltd. (Basel, Switzerland.) as the Life Cycle Leader Transplantation for voclosporin, Cellcept, Zenapax, and DAC HYP.  Dr. Wijngaard's past experience with the development of voclosporin in conjunction with his pharmaceutical industry background will be very beneficial to the Company. Dr. Yang holds a Ph.D. in Bioengineering from University of Washington (Seattle, Washington, USA) and was the former President and CEO of LG Life Sciences, Ltd.  Dr. Yang has a great deal of experience with cyclosporine analogues and has an in depth understanding of the Company's lead compound, voclosporin.

Financial Results

The Company's unaudited interim consolidated financial statements as at and for the three months ended March 31, 2011 represent the Company's first filing in accordance with international financial reporting standards (IFRS).

For the first quarter ended March 31, 2011, the Company reported a consolidated net loss of $2.9 million or $0.018 per common share, as compared to consolidated net income of $956,000 or $0.007 per common share for the same period in 2010.

The Company reported income from discontinued operations of $nil for the first quarter of 2011 compared to $1.90 million for the first quarter of 2010. In the first quarter of 2010 the Company sold its 88% share of the Helikit diagnostic revenue stream to Paladin and under IFRS recorded a net gain on sale of $1.90 million which it reported as a discontinued operation.

Revenue from continuing operations decreased to $134,000 for the three months ended March 31, 2011, compared to $1.46 million for the three months ended March 31, 2010. The decrease was primarily the result of recording significantly lower amortization of deferred licensing and research and development revenue earned in the 2011 period compared to the same period in 2010.

Net research and development expenditures decreased to $781,000 in the first quarter of 2011, compared to $1.41 million in the first quarter of 2010 as the Company had fewer clinical trial activities under way in 2011 compared to 2010. Corporate and administration expenses were relatively consistent at $709,000 for the first quarter of 2011, compared to $730,000 for the first quarter of 2010.

Cash and cash equivalents totalled $9.9 million as at March 31, 2011 compared to $6.3 million as at December 31, 2010.