CARDIOME PHARMA CORP.
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Date: November 13, 2012
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/s/ JENNIFER ARCHIBALD
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Jennifer Archibald
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Chief Financial Officer
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EXHIBIT
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DESCRIPTION OF EXHIBIT
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99.1 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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99.2 |
Consolidated Financial Statements
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99.3
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Material Change Report dated November 13, 2012
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99.4 |
Certificate of Filing - CEO
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99.5 |
Certificate of Filing - CFO
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Project
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Stage of Development
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Current Status
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Cost to
Date (in
millions
of
dollars)
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|||
Vernakalant (iv)
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FDA New Drug Application (NDA)
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Approvable letter received in 2008
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$ 102.4
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European Marketing Authorisation Application (MAA)
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Marketing approval received in September 2010 under trade name BRINAVESS™
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|||||
European Comparator (AVRO) Study
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Final results released in Q2-2010
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|||||
Phase 3 Asia Pacific study
Phase 3 ACT 5 study
Post approval study
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Patient enrollment initiated in Q3-2010 Suspended pending transition
Study terminated
Spectrum (post approval safety study) initiated in 2011
Study continuing
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Vernakalant (oral)
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Phase 2b Clinical Trial
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Final results released in Q3-2008
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109.4
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Pharmacokinetic/ pharmacodynamics studies
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Phase 1 PK/PD study completed
28-day Phase 1 trial completed
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Pre-clinical Projects
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Pre-Clinical Stage
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Pre-clinical studies
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17.8
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(in thousands of U.S. dollars)
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For the Three Months
Ended September 30
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For the Nine Months
Ended September 30
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||||||||||||||
2012
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2011
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2012
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2011
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|||||||||||||
Clinical Development Programs
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||||||||||||||||
Vernakalant (iv)
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$ | 66 | $ | 974 | $ | 622 | $ | 4,217 | ||||||||
Vernakalant (oral)
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9 | 198 | 66 | 925 | ||||||||||||
$ | 75 | $ | 1,172 | $ | 688 | $ | 5,142 | |||||||||
Research Projects
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||||||||||||||||
Other projects (including pre-clinical studies)
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374 | 2,731 | 4,944 | 6,640 | ||||||||||||
Total research and development expenditures
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$ | 449 | $ | 3,903 | $ | 5,632 | $ | 11,782 |
(In thousands of U.S. dollars
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Quarter ended
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|||||||||||||||
except per share amounts) |
September 30,
2012
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June 30,
2012
(Restated)(1)
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March 31,
2012
(Restated)(1
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December 31,
2011
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||||||||||||
Total revenue
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$ | 63 | $ | 209 | $ | 433 | $ | 401 | ||||||||
Research and development
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449 | 2,255 | 2,928 | 3,442 | ||||||||||||
General and administration
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2,496 | 2,207 | 2,552 | 2,095 | ||||||||||||
Restructuring
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9,036 | 165 | 804 | - | ||||||||||||
Net loss
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$ | (13,412 | ) | $ | (5,677 | ) | $ | (6,970 | ) | $ | (5,898 | ) | ||||
Loss per share
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||||||||||||||||
Basic and diluted
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$ | (0.22 | ) | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.10 | ) |
(In thousands of U.S. dollars
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Quarter ended
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|||||||||||||||
except per share amounts) |
September 30,
2011
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June 30,
2011
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March 31,
2011
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December 31,
2010
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||||||||||||
Total revenue
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$ | 274 | $ | 443 | $ | 387 | $ | 374 | ||||||||
Research and development
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3,903 | 4,073 | 3,806 | 4,417 | ||||||||||||
General and administration
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2,764 | 3,466 | 3,224 | 2,740 | ||||||||||||
Net loss
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$ | (7,153 | ) | $ | (7,723 | ) | $ | (7,146 | ) | $ | (7,302 | ) | ||||
Loss per share
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||||||||||||||||
Basic and diluted
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$ | (0.12 | ) | (0.13 | ) | (0.12 | ) | (0.12 | ) |
(1)
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Restatement relates to the reclassification to restructuring of employee termination benefits related to the Q1-2012 workforce reduction.
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(in thousands of U.S. dollars)
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For the Three Months
Ended September 30,
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For the Nine Months
Ended September 30,
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||||||||||||||
2012
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2011
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2012
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2011
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|||||||||||||
Cash used in operating activities
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$ | (7,006 | ) | $ | (6,402 | ) | $ | (19,796 | ) | $ | (21,702 | ) | ||||
Cash used in investing activities
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(89 | ) | (158 | ) | (314 | ) | (943 | ) | ||||||||
Cash provided by financing activities
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- | - | 25,000 | 358 | ||||||||||||
Effect of foreign exchange rate on cash and cash equivalents
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40 | (209 | ) | 87 | (54 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents
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$ | (7,055 | ) | $ | (6,769 | ) | $ | 4,977 | $ | (22,341 | ) |
Contractual Obligations
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Payment due by period
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|||||||||||||||||||||||||||
(In thousands of U.S. dollars)
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2012
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2013
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2014
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2015
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2016
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There-
after
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Total
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|||||||||||||||||||||
Long-term debt
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Nil
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Nil
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Nil
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Nil
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25,000 | (1) | 25,000 | (1) | 50,000 | |||||||||||||||||||
Interest expense on long-term debt(2)
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1,158 | 4,596 | 4,596 | 4,596 | 4,609 | 2,298 | 21,853 | |||||||||||||||||||||
Operating lease obligations
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26 | 102 | 102 | 79 | 309 | |||||||||||||||||||||||
Other commitments
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13 | 4 | 2 |
Nil
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Nil
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Nil
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19 | |||||||||||||||||||||
Total
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$ | 1,197 | $ | 4,702 | $ | 4,700 | $ | 4,675 | $ | 29,609 | $ | 27,298 | $ | 72,181 |
(1)
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These include two $25.0 million advances, which must be repaid in full by December 31, 2016 and December 31, 2017, respectively. We may, at our option, repay all or a portion of these advances prior to December 31, 2016 and December 31, 2017, respectively, without premium or penalty.
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(2)
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Interest expense obligations have been calculated based on the interest rate in effect at September 30, 2012.
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CARDIOME PHARMA CORP.
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Consolidated Balance Sheets
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(Unaudited)
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(Expressed in thousands of U.S. dollars, except share amounts)
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(Prepared in accordance with U.S. GAAP)
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September 30,
2012
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December 31,
2011
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|||||||
Assets
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | 53,621 | $ | 48,644 | ||||
Accounts receivable
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700 | 1,248 | ||||||
Prepaid expenses and other assets
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675 | 628 | ||||||
54,996 | 50,520 | |||||||
Property and equipment
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430 | 1,967 | ||||||
Intangible assets
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1,501 | 1,548 | ||||||
$ | 56,927 | $ | 54,035 | |||||
Liabilities and Stockholders’ Equity
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||||||||
Current liabilities:
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||||||||
Accounts payable and accrued liabilities (note 5)
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$ | 7,235 | $ | 3,188 | ||||
Current portion of deferred leasehold inducement
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- | 116 | ||||||
7,235 | 3,304 | |||||||
Deferred leasehold inducement
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- | 445 | ||||||
Long-term debt (note 6)
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50,000 | 25,000 | ||||||
57,235 | 28,749 | |||||||
Stockholders’ equity:
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Common stock
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262,097 | 262,097 | ||||||
Authorized - unlimited number with no par value
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||||||||
Issued and outstanding – 61,129,091 (2011 – 61,129,091)
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Additional paid-in capital
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32,673 | 32,208 | ||||||
Deficit
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(313,263 | ) | (287,204 | ) | ||||
Accumulated other comprehensive income
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18,185 | 18,185 | ||||||
(308 | ) | 25,286 | ||||||
$ | 56,927 | $ | 54,035 |
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Related party transactions (note 9)
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Contingencies (note 10)
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See accompanying notes to the consolidated financial statements.
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CARDIOME PHARMA CORP.
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Consolidated Statements of Operations and Comprehensive Loss
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(Unaudited)
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(Expressed in thousands of U.S. dollars, except share and per share amounts)
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(Prepared in accordance with U.S. GAAP)
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Three months ended
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Nine months ended
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September 30,
2012
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September 30,
2011
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September 30,
2012
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September 30,
2011
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Revenue:
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||||||||||||||||
Licensing and other fees
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$ | 60 | $ | 91 | $ | 379 | $ | 372 | ||||||||
Research collaborative fees
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3 | 183 | 326 | 732 | ||||||||||||
63 | 274 | 705 | 1,104 | |||||||||||||
Expenses:
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||||||||||||||||
Research and development
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449 | 3,903 | 5,632 | 11,782 | ||||||||||||
General and administration
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2,496 | 2,764 | 7,255 | 9,454 | ||||||||||||
Restructuring (note 8)
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9,036 | - | 10,005 | - | ||||||||||||
Amortization
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507 | 271 | 980 | 825 | ||||||||||||
12,488 | 6,938 | 23,872 | 22,061 | |||||||||||||
Operating loss
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(12,425 | ) | (6,664 | ) | (23,167 | ) | (20,957 | ) | ||||||||
Other expenses (income):
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||||||||||||||||
Interest expense
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1,154 | 560 | 3,383 | 1,659 | ||||||||||||
Other income
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(181 | ) | (234 | ) | (489 | ) | (626 | ) | ||||||||
Foreign exchange loss (gain)
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14 | 163 | (2 | ) | 32 | |||||||||||
987 | 489 | 2,892 | 1,065 | |||||||||||||
Net loss and comprehensive loss for the period
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$ | (13,412 | ) | $ | (7,153 | ) | $ | (26,059 | ) | $ | (22,022 | ) | ||||
Basic and diluted loss per common share(1)
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$ | (0.22 | ) | $ | (0.12 | ) | $ | (0.43 | ) | $ | (0.36 | ) | ||||
Weighted average common shares outstanding
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61,129,091 | 61,129,091 | 61,129,091 | 61,124,696 |
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(1) Basic and diluted loss per common share based on the weighted average number of common shares outstanding during the period.
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See accompanying notes to the consolidated financial statements.
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CARDIOME PHARMA CORP.
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Consolidated Statements of Stockholders’ Equity
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For the nine months ended September 30, 2012 and 2011
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(Unaudited)
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(Expressed in thousands of U.S. dollars)
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(Prepared in accordance with U.S. GAAP)
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For the nine months ended September 30, 2012
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Common
stock
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Additional
paid-in capital
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Deficit
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Accumulated
other
comprehensive
income
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Total
stockholders’
equity
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|||||||||||||||
Balance at December 31, 2011
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$ | 262,097 | $ | 32,208 | $ | (287,204 | ) | $ | 18,185 | $ | 25,286 | |||||||||
Net loss
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- | - | (26,059 | ) | - | (26,059 | ) | |||||||||||||
Stock-based compensation expense recognized
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- | 465 | - | - | 465 | |||||||||||||||
Balance at September 30, 2012
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$ | 262,097 | $ | 32,673 | $ | (313,263 | ) | $ | 18,185 | $ | (308 | ) |
For the nine months ended September 30, 2011
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Common stock
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Additional
paid-in capital
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Deficit
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Accumulated
other
comprehensive
income
|
Total
stockholders’
equity
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|||||||||||||||
Balance at December 31, 2010
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$ | 261,554 | $ | 30,462 | $ | (259,284 | ) | $ | 18,185 | $ | 50,917 | |||||||||
Net loss
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- | - | (22,022 | ) | - | (22,022 | ) | |||||||||||||
Common stock issued upon exercise of options
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358 | - | - | - | 358 | |||||||||||||||
Reallocation of additional paid-in capital arising from stock-based compensation related to exercise of options
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185 | (185 | ) | - | - | - | ||||||||||||||
Stock-based compensation expense recognized
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- | 1,657 | - | - | 1,657 | |||||||||||||||
Balance at September 30, 2011
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$ | 262,097 | $ | 31,934 | $ | (281,306 | ) | $ | 18,185 | $ | 30,910 |
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CARDIOME PHARMA CORP.
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Consolidated Statements of Cash Flows
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(Unaudited)
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(Expressed in thousands of U.S. dollars)
|
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(Prepared in accordance with U.S. GAAP)
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Three months ended
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Nine months ended
|
|||||||||||||||
September 30,
2012
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September 30,
2011
|
September 30,
2012
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September 30,
2011
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Cash flows from operating activities:
|
||||||||||||||||
Net loss for the period
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$ | (13,412 | ) | $ | (7,153 | ) | $ | (26,059 | ) | $ | (22,022 | ) | ||||
Items not affecting cash:
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||||||||||||||||
Amortization
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507 | 271 | 980 | 825 | ||||||||||||
Stock-based compensation
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160 | 636 | 465 | 1,657 | ||||||||||||
Deferred leasehold inducement
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(504 | ) | (44 | ) | (561 | ) | (115 | ) | ||||||||
Unrealized foreign exchange loss (gain)
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(38 | ) | 80 | (77 | ) | (21 | ) | |||||||||
Impairment of property and equipment
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711 | - | 716 | - | ||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Accounts receivable
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809 | 642 | 551 | 128 | ||||||||||||
Prepaid expenses and other assets
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(84 | ) | (150 | ) | 153 | 319 | ||||||||||
Accounts payable and accrued liabilities
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4,845 | (684 | ) | 4,036 | (2,473 | ) | ||||||||||
Net cash used in operating activities
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(7,006 | ) | (6,402 | ) | (19,796 | ) | (21,702 | ) | ||||||||
Cash flows from investing activities:
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||||||||||||||||
Purchase of property and equipment
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(21 | ) | (101 | ) | (111 | ) | (634 | ) | ||||||||
Purchase of intangible assets
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(68 | ) | (57 | ) | (203 | ) | (309 | ) | ||||||||
Net cash used in investing activities
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(89 | ) | (158 | ) | (314 | ) | (943 | ) | ||||||||
Cash flows from financing activities:
|
||||||||||||||||
Issuance of common stock upon exercise of stock options
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- | - | - | 358 | ||||||||||||
Proceeds from draws of long-term debt
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- | - | 25,000 | - | ||||||||||||
Net cash provided by financing activities
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- | - | 25,000 | 358 | ||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
40 | (209 | ) | 87 | (54 | ) | ||||||||||
Increase (decrease) in cash and cash equivalents during the period
|
(7,055 | ) | (6,769 | ) | 4,977 | (22,341 | ) | |||||||||
Cash and cash equivalents, beginning of period
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60,676 | 61,316 | 48,644 | 76,888 | ||||||||||||
Cash and cash equivalents, end of period
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$ | 53,621 | $ | 54,547 | $ | 53,621 | $ | 54,547 | ||||||||
Supplemental cash flow information:
|
||||||||||||||||
Interest paid
|
$ | 1 | $ | 567 | $ | 2,238 | $ | 1,677 | ||||||||
Interest received
|
6 | 7 | 13 | 18 |
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See accompanying notes to the consolidated financial statements.
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CARDIOME PHARMA CORP.
|
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Notes to Consolidated Financial Statements
|
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(Unaudited)
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CARDIOME PHARMA CORP.
|
|
Notes to Consolidated Financial Statements
|
|
(Unaudited)
|
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CARDIOME PHARMA CORP.
|
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Notes to Consolidated Financial Statements
|
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(Unaudited)
|
September 30,
|
December,31
|
|||||||
2012
|
2011
|
|||||||
Trade accounts payable
|
$ | 1,605 | $ | 743 | ||||
Accrued contract research
|
353 | 1,066 | ||||||
Employee-related accruals
|
59 | 746 | ||||||
Restructuring (note 8)
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4,607 | - | ||||||
Other accrued liabilities (1)
|
611 | 633 | ||||||
$ | 7,235 | $ | 3,188 |
(1)
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Included in other accrued liabilities at September 30, 2012 is an amount of $218 (December 31, 2011 - $59) owing to a related party (note 9).
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CARDIOME PHARMA CORP.
|
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Notes to Consolidated Financial Statements
|
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(Unaudited)
|
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CARDIOME PHARMA CORP.
|
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Notes to Consolidated Financial Statements
|
|
(Unaudited)
|
Employee
termination
benefits
|
Idle-use
expense
and other
charges
|
Asset
impairments
|
Total
|
|||||||||||||
Restructuring expense recognized
|
5,530 | 3,764 | 711 | 10,005 | ||||||||||||
Payments made
|
(5,158 | ) | (201 | ) | - | (5,359 | ) | |||||||||
Non-cash items
|
273 | 393 | (711 | ) | (45 | ) | ||||||||||
Foreign exchange adjustment
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9 | (3 | ) | - | 6 | |||||||||||
Total restructuring accrual as of September 30, 2012
|
654 | 3,953 | - | 4,607 |
(a)
|
The Company may, from time to time, be subject to claims and legal proceedings brought against it in the normal course of business. Such matters are subject to many uncertainties. Management believes that adequate provisions have been made in the accounts where required and the ultimate resolution of such contingencies will not have a material adverse effect on the consolidated financial position of the Company.
|
(b)
|
The Company entered into indemnification agreements with all officers and directors. The maximum potential amount of future payments required under these indemnification agreements is unlimited. However, the Company maintains appropriate liability insurance that limits the exposure and enables the Company to recover any future amounts paid, less any deductible amounts pursuant to the terms of the respective policies, the amounts of which are not considered material.
|
(c)
|
The Company has entered into license and research agreements with third parties that include indemnification provisions that are customary in the industry. These indemnification
|
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CARDIOME PHARMA CORP.
|
|
Notes to Consolidated Financial Statements
|
|
(Unaudited)
|
|
provisions generally require the Company to compensate the other party for certain damages and costs incurred as a result of third party claims or damages arising from these transactions. In some cases, the maximum potential amount of future payments that could be required under these indemnification provisions is unlimited. These indemnification provisions may survive termination of the underlying agreement. The nature of the indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any indemnification payments under such agreements and no amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations.
|
(d)
|
The Company is party to a proceeding related to its use of certain intellectual property and is currently in discussions to resolve this proceeding.
|
1.
|
Name and Address of Company
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2.
|
Date of Material Change
|
3.
|
News Release
|
4.
|
Summary of Material Change
|
5.
|
Full Description of Material Change
|
6.
|
Reliance on Subsection 7.1(2) or (3) of National Instrument 51-102
|
7.
|
Omitted Information
|
8.
|
Executive Officer
|
9.
|
Date of Report
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Cardiome Pharma Corp. (the “issuer”) for the interim period ended September 30, 2012.
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework.
|
5.2
|
ICFR – material weakness relating to design: N/A
|
5.3
|
Limitation on scope of design: N/A
|
6.
|
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2012 and ended on September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Cardiome Pharma Corp. (the “issuer”) for the interim period ended September 30, 2012.
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
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Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework.
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5.2
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ICFR – material weakness relating to design: N/A
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5.3
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Limitation on scope of design: N/A
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6.
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Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2012 and ended on September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
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