Liquidity and Capital Resources for Pharmaxis (PXSL)

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Pharmaxis (PXSL)

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PXSL » Topics » Liquidity and Capital Resources

This excerpt taken from the PXSL 20-F filed Nov 27, 2007.

Liquidity and Capital Resources

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Since our inception, our operations have mainly been financed through the issuance of equity securities and convertible redeemable preference shares. Additional funding has come through research grants, interest on investments, the exercise of options and rent received from a former subtenant. Through June 30, 2007, we had received net cash proceeds from the following: (a) A$122.3 million from the issuance of ordinary shares; (b) A$11.4 million from the issuance of convertible redeemable preference shares; and (c) approximately A$8.0 million in research grants. We have incurred significant losses since our inception. We incurred losses of A$10.4 million, A$17.7 million and A$24.2 million and A$62.8 million in fiscal 2005, 2006, 2007 and since inception to June 30, 2007, respectively. As of June 30, 2007 we had cash and cash equivalents of A$76.2 million and additionally have ongoing research grants with a total of A$0.9 million of funding potentially available.

For fiscal 2007, we used net cash of A$20.7 million for operating activities. This consisted of a net loss for the period of A$24.2 million, which included A$0.9 million of non-cash depreciation and amortization, and non-cash stock option expense of A$1.5 million, and other working capital movements of A$1.0 million. Net cash used in investing activities during fiscal 2007 was A$1.3 million, which included purchase of plant and equipment for quality control laboratory facilities and equipment. Net cash provided by financing activities during fiscal 2007 was A$0.3 million resulting from the issue of shares upon the exercise of options granted under the Pharmaxis Employee Option Plan.

For fiscal 2006, we used net cash of A$13.7 million for operating activities. This consisted of a net loss for the period of A$17.7 million, which included A$0.9 million of non-cash depreciation and amortization, and non-cash stock option expense of A$1.1 million, and other working capital movements of A$2.0 million. Net cash used in investing activities during fiscal 2006 was A$1.8 million, which included purchase of plant and equipment for manufacturing expansion. Net cash provided by financing activities during fiscal 2006 was A$80.0 million resulting from the issue and sale of our ordinary shares in a U.S. public offering and a concurrent Australian share placement.

For fiscal 2005, we used net cash of A$9.3 million for operating activities. This consisted of a net loss for the period of A$10.4 million, which included A$0.6 million of non-cash depreciation and amortization, and non-cash stock option expense of A$0.3 million, and other working capital movements of A$0.3 million. Net cash used in investing activities during fiscal 2005 was A$1.6 million, which included purchase of plant and equipment of A$1.3 million reflecting the manufacturing expansion. Net cash provided by financing activities during fiscal 2005 was A$19.0 million resulting from the issue and sale of our ordinary shares in a share placement to Australian qualified institutional and sophisticated investors, and a share purchase plan available to existing shareholders.

At June 30, 2007, we had cash and cash equivalents of A$76.2 million as compared to A$97.8 million as of June 30, 2006. This overall decrease was primarily due to our research and development program.

On October 11, 2007 the Company announced a A$50 million placement to institutions and sophisticated investors at A$3.90 per share. At the same time the Company announced a share purchase plan whereby each shareholder could subscribe for up to A$5,000 worth of Pharmaxis Ltd shares at an issue price of A$3.90. The share purchase plan closed on November 9, 2007 and raised A$11.7 million.

We believe that our cash and cash equivalents will be sufficient to meet our capital requirements for at least the next 12 months. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue one or more of our clinical trials or our operations.

We expect to continue to incur substantial losses. Our future capital requirements are difficult to forecast and will depend on many factors, including:

•

the costs of expanding sales, marketing and distribution capabilities;

•

the scope, results and timing of preclinical studies and clinical trials;

•

the costs and timing of regulatory approvals; and

•

the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on finding:

•

the clinical development for Bronchitol in patients with cystic fibrosis;

—54—

•

the commercial launch of Aridol for the management of asthma in the E.U. and the U.S.;

•

the clinical development of Aridol for management of asthma and COPD;

•

the clinical development for Bronchitol in patients with bronchiectasis and chronic bronchitis;

•

the pre-clinical development of our product pipeline; and

•

further expansion of our manufacturing capablities.

This excerpt taken from the PXSL 6-K filed Feb 20, 2007.

Liquidity and Capital Resources

Since our inception, our operations have mainly been financed through the issuance of equity securities and convertible redeemable preference shares. Additional funding has come through research grants, interest on investments, the exercise of options and rent received from a former subtenant. Through December 31, 2006, we had received net cash proceeds from the following: (a) A$122.1 million from the issuance of ordinary shares; (b) A$11.4 million from the issuance of convertible redeemable preference shares; and (c) approximately A$7.0 million in research grants. We have incurred significant losses since our inception. We incurred losses of A$6.6 million, A$10.4 million and A$17.7 million and A$13.3 million and A$51.9 million in fiscal 2004, 2005, 2006, and the six months ended December 31, 2006 and since inception to December 31, 2006, respectively. As of December 31, 2006, we had cash and cash equivalents of A$86.1 million and additionally have ongoing research grants with a total of A$3.7 million of funding potentially available.

For the six months ended December 31, 2006, we used net cash of A$11.1 million for operating activities. This consisted of a net loss for the period of A$13.3 million, which included A$0.4 million of non-cash depreciation and amortization, and non-cash stock option expense of A$0.6 million, and other working capital movements of A$1.1 million. Net cash used in investing activities during the six months ended December 31, 2006 was A$0.9 million, which included purchase of plant and equipment for quality control expansion. Net cash provided by financing activities during the six months ended December 31, 2006 was A$0.2 million resulting from the issue of shares upon the exercise of options granted under the employee option plan.

At December 31, 2006, we had cash and cash equivalents of A$86.1 million as compared to A$97.8 million as of June 30, 2006. This overall decrease was primarily due to the Company’s research program.

We expect to continue to incur substantial losses. Our future capital requirements are difficult to forecast and will depend on many factors, including:

•

the costs of expanding sales, marketing and distribution capabilities;

•

the scope, results and timing of preclinical studies and clinical trials;

•

the costs and timing of regulatory approvals; and

•

the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on:

•

to fund clinical development for Bronchitol in patients with cystic fibrosis;

•

to fund the commercial launch of Aridol for the management of asthma in the E.U. and the U.S.;

•

to fund clinical development of Aridol for management of asthma and COPD;

•

to fund clinical development for Bronchitol in patients with bronchiectasis and chronic bronchitis;

•

to fund pre-clinical development of our product pipeline; and

•

to fund further expansion of our manufacturing facility.

F-17

This excerpt taken from the PXSL 20-F filed Dec 6, 2006.

Liquidity and Capital Resources

Since our inception, our operations have mainly been financed through the issuance of equity securities and convertible redeemable preference shares. Additional funding has come through research grants, interest on investments, the exercise of options and rent received from a former subtenant. Through June 30, 2006, we had received net cash proceeds from the following: (a) A$121.9 million from the issuance of ordinary shares; (b) A$11.4 million from the issuance of convertible redeemable preference shares; and (c) approximately A$5.8 million in research grants. We have incurred significant losses since our inception. We incurred losses of A$6.6 million, A$10.4 million and A$17.7 million and A$38.6 million in fiscal 2004, 2005, 2006, and since inception to June 30, 2006, respectively. As of June 30, 2006, we had cash and cash equivalents of A$97.8 million and additionally have ongoing research grants with a total of A$3.6 million of funding potentially available.

-53-

For fiscal 2004, we used net cash of A$4.8 million for operating activities. This consisted of a net loss for the period of A$6.6 million, which included A$0.6 million of non-cash depreciation and amortization, non-cash stock option expense of A$0.5 million, and significant accrued clinical development liabilities at June 30, 2004 of A$0.8 million. Net cash used in investing activities during fiscal 2004 was A$0.4 million, which included purchases of plant and equipment of A$0.4 million. Net cash provided by financing activities during fiscal 2004 was A$22.9 million resulting from the issue and sale of our ordinary shares at the time of our initial public offering and listing in Australia.

At June 30, 2006, we had cash and cash equivalents of A$97.8 million as compared to A$33.3 million as of June 30, 2005. This overall increase was primarily due to the receipt of net proceeds of A$80.0 million related to the issue and sale of our ordinary shares in a U.S. public offering and a concurrent Australian share placement.

We expect to continue to incur substantial losses. Our future capital requirements are difficult to forecast and will depend on many factors, including:

•

the costs of expanding sales, marketing and distribution capabilities;

•

the scope, results and timing of preclinical studies and clinical trials;

•

the costs and timing of regulatory approvals; and

•

the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on:

•

to fund clinical development for Bronchitol in patients with cystic fibrosis;

•

to fund the commercial launch of Aridol for the management of asthma in the E.U. and the U.S.;

•

to fund clinical development of Aridol for management of asthma and COPD;

•

to fund clinical development for Bronchitol in patients with bronchiectasis and chronic bronchitis;

•

to fund pre-clinical development of our product pipeline; and

•

to fund further expansion of our manufacturing facility.

-54-

This excerpt taken from the PXSL 20-F filed Dec 20, 2005.

Liquidity and Capital Resources

Since our inception, our operations have mainly been financed through the issuance of equity securities and convertible redeemable preference shares. Additional funding has come through research grants, interest on investments, and rent received from a former subtenant. Through June 30, 2005, we had received net cash proceeds from the following: (a) A$41.9 million from the issuance of ordinary shares; (b) A$11.4 million from the issuance of convertible redeemable preference shares; and (c) approximately A$4.7 million in research grants. We have incurred significant losses since our inception. We incurred losses of A$2.1 million, A$6.6 million and A$10.4 million and A$20.9 million in fiscal 2003, 2004 and 2005, and since inception to June 30, 2005, respectively. As of June 30, 2005, we had cash and cash equivalents of A$33.3 million and additionally have ongoing research grants with a total of A$5.0 million of funding potentially available.

For fiscal 2003, we used net cash of A$1.3 million for operating activities. This consisted of a net loss for the period of A$2.1 million, which included A$0.3 million of non-cash depreciation and amortization and non-cash stock option expense of A$0.4 million. Net cash used in investing activities during fiscal 2003 was A$1.4 million, which included purchases of plant and equipment for A$1.3 million primarily related to the establishment of the manufacturing facility and headquarters at Frenchs Forest. Net cash provided by financing activities during fiscal 2003 was A$9.4 million resulting from the issue and sale of our “B” class convertible redeemable preference shares.

At June 30, 2005, we had cash and cash equivalents of A$33.3 million as compared to A$25.1 million as of June 30, 2004. This overall increase was primarily due to the receipt of net proceeds of A$19.0 million related to the issue and sale of our ordinary shares in a share placement to Australian qualified institutional buyers and sophisticated investors, and a share purchase plan available to existing shareholders.

At September 30, 2005, we had cash and cash equivalents on an unaudited basis equal to A$30.0 million.

We expect to continue to incur substantial losses. Our future capital requirements are difficult to forecast and will depend on many factors, including:

•

the costs of establishing sales, marketing and distribution capabilities;

-51-

•

the scope, results and timing of preclinical studies and clinical trials;

•

the costs and timing of regulatory approvals; and

•

the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on:

•

to fund clinical development for Bronchitol in patients with cystic fibrosis;

•

to fund clinical development of Aridol for management of asthma and COPD;

•

prepare for the commercial launch of Aridol for the management of asthma;

•

to fund clinical development for Bronchitol in patients with bronchiectasis and chronic bronchitis;

•

to fund pre-clinical development of our product pipeline; and

•

to fund further expansion of our manufacturing facility.

EXCERPTS ON THIS PAGE:

20-F	Nov 27, 2007

6-K	Feb 20, 2007

20-F	Dec 6, 2006

20-F	Dec 20, 2005

Pharmaxis (PXSL)

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