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2023 marked by Ceapro's achievement of key milestones and progress toward its next phase of growth
– R&D activities focused on advancement of avenanthramide Phase 1-2a clinical study and the processing of yeast beta glucan along with the building of pilot scale units for PGX Technology
– Sales impacted (decreased by 49% from $18.8M in 2022 to $9.6M in 2023) due to re-organization associated with the spin-off of the consumer division of one major customer
– Announced merger of equals with Aeterna Zentaris to create a diversified biopharmaceutical company; expected to close in the second quarter of 2024, subject to the closing conditions
EDMONTON, Alberta, April 29, 2024 (GLOBE NEWSWIRE) -- Ceapro Inc. (TSX-V: CZO, OTCQX: CRPOF) ("Ceapro" or the "Company") , a growth-stage biotechnology company focused on the development and commercialization of active ingredients for healthcare and cosmetic industries, today announced operational highlights and financial results for the fourth quarter and full year ended December 31, 2023.
"While the base business was significantly impacted during 2023 due to various economic factors and organizational changes within one major customer, we expect renewed growth with our active ingredients base business and will continue to focus our efforts in expanding our business model towards nutraceutical and pharmaceutical sectors. We are very pleased with progress made in the development of new products and technologies such as the ongoing Phase 1-2a clinical trial with avenanthramides and the very well-advanced 50L scale-up of the PGX Technology which will enable the development and production of yeast beta glucan as an immune modulator. Lastly, with our recent announcement of the merger of equals with Aeterna Zentaris, we believe we are, more than ever, positioned to significantly propel Ceapro into its next phase of growth and unlock value as a biopharmaceutical company," stated Gilles Gagnon, M.Sc., MBA, President and CEO of Ceapro.
2023 Corporate and Operational Highlights
Focus has been on development of Avenanthramides, scale-up of the PGX Technology and development of PGX-processed products.
Avenanthramides:
Clinical
- Significantly advanced Phase 1 safety and tolerability study with healthy volunteers at Montreal Heart Institute (MHI). Since commencing the dosing of first patients in December 2023, five groups of 8 subjects per group have completed the first arm of the Phase 1 with single ascending doses (SAD) ranging from 30mg to 480mg per day. A Data Safety Monitoring Board is to decide shortly regarding the administration of the highest dose (960mg) as per approved protocol by Health Canada. As no significant adverse reactions have been observed so far, the Company expects to initiate the multiple ascending dose (MAD) arm during the summer 2024 with three additional groups of 8 subjects per group. This is the first-in-human clinical study to assess safety, tolerability, and pharmacokinetics of single and multiple ascending oral doses of avenanthramides.
Formulation & Analytics
- In planning for the extension into a Phase 2a clinical study, a second GMP clinical batch of the selected 30mg and 240mg pill formulation of the drug product was manufactured by Corealis Inc. GMP Manufacturing Services ("Corealis"). Stability studies are ongoing.
- Bioassays for the detection of avenanthramides in the blood and urine were successfully developed with Altasciences Inc. Ceapro is the owner of these bioassays currently used for the pharmacokinetics profile of avenanthramides.
Pre-Clinical
- Announced positive findings demonstrating oat derived beta glucan and avenanthramides promote wound healing and tissue regeneration. These data were presented at the 2023 Annual Meeting of the Wound Healing Society and were published in the scientific journals "Current Developments in Nutrition" in July 2023 and "Advances in Wound Care" in March 2024 .
Avenanthramides Malted Technology
- Successfully scaled up the Malting Technology at commercial-scale level. This will enable the production of large quantities of avenanthramides powder for solid formulations.
Technology:
PGX
- Decision made to use a stepwise approach to ensure standardization of product specifications at each scale level from 10 Liters to 50-100 Liters vessels. Scale-up being done at the following locations:
- Edmonton Main Facility - PGX Scale-Up 50 Liters Vessel: This project is almost completed. Three trial runs of yeast beta glucan have been performed as part of the last commissioning phase. Given that the Edmonton site license is for natural products, yeast beta glucan produced from this facility will be offered as a nutraceutical. Subject to approval by Health Canada, this product could be launched by end of 2024.
- Natex Facility, Austria - PGX Scale-Up 100 Liters Vessel: The project is on schedule. PGX pressure vessel design is 100% completed. Initial safety and regulatory risk assessment has also been completed. Commissioning is expected to be completed by end of Q3 2024
- Edmonton Main Facility - PGX Scale-Up 50 Liters Vessel: This project is almost completed. Three trial runs of yeast beta glucan have been performed as part of the last commissioning phase. Given that the Edmonton site license is for natural products, yeast beta glucan produced from this facility will be offered as a nutraceutical. Subject to approval by Health Canada, this product could be launched by end of 2024.
PGX-Processed Products
Yeast Beta Glucan (YBG):
- Fully defined specifications for the product to be further assessed and produced for immune modulation properties as well as for potential inhalable therapeutic for lung fibrotic diseases. Identified process conditions for YBG improving morphology of YBG-processed using PGX Technology (PGX-YBG) to boost immunomodulating activity. Progress achieved for the pre-processing of YBG to ensure homogeneous dispersion and deagglomeration of polymers and batch-to-batch consistency. YBG is the product being used for the scale-up of the PGX Technology.
- Announced on May 23, 2023 the completion of CHRP collaboration with McMaster University with encouraging results evaluating PGX-processed YBG for interstitial lung diseases. These results triggered presentations at International scientific conferences confirming that PGX-YBG is suitable for inhalation and can act through a newly discovered mechanism of action through specific binding on white blood cells (macrophages) involved in the inflammation and fibrotic process. A comprehensive scientific article was recently submitted to the Biomaterials scientific journal.
- Ongoing assessment as a potential drug candidate for a Phase 1 clinical trial.
Whey Proteins:
- Using its PGX Technology, Ceapro and University of Alberta researchers successfully processed in one economical step a very complex mixture containing animal-based proteins, and in particular whey proteins that are typically found in liquid that remains after cheese production. While these proteins are widely used in sport drinks, baked goods, meal replacements, protein supplements and infant formulas due to their recognized nutritional and functional properties, current commercial purification processes require many steps and considerable amounts of water. PGX Technology can be a very efficient and economical alternative for this product offering.
- Results from this ground-breaking study were published in the Journal of Food Engineering in an article titled " Single-step concentration of whey proteins using the pressurized gas eXpanded (PGX) liquid technology: Effect on physicochemical properties and scale-up ,". They will be presented at the 20 th European meeting on supercritical fluids being held May 26-29, 2024 in Maribor, Slovenia.
New Product - Chewable Oat Beta Glucan (OBG):
- Ceapro's team has successfully developed a unique, standardized formulation for a healthy confection which includes a high concentration of OBG with daily dosage according to approved claims in 10 developed countries.
- Health Canada has approved Ceapro's Novel Nutraceutical Product (NPN 80127493). The substantive claims derived from this approval include reduction of LDL cholesterol, supporting cardiovascular health reduction of Type 2 diabetes risks, source of fiber for the maintenance of general good health and support of a healthy digestive system.
- Ceapro's team anticipates the official commercial launch of its approved natural health product in H2 2024, marking an important chapter in the Company's journey toward promoting wellness while expanding its business model.
Corporate
- Re-affirmed our partnership with Symrise by extending a supply and distribution agreement until December 31, 2026, and therefore securing the long-term sustainability of Ceapro's base business which should regrow.
- Appointed Mr. Michel Regnier as Senior Vice-President, Technical Operations. Mr. Regnier is an experienced and respected Operations Executive and Professional Engineer with 20+ years of progressive technical and leadership experience in the medical device, pharmaceutical and aerospace materials manufacturing industries.
- Announced technical collaboration with Austrian based NATEX Prozesstechnologie GmbH for the larger scale-up of PGX Technology using yeast beta glucan.
- Announced merger of equals with Aeterna Zentaris to create a diversified biopharmaceutical company.
Subsequent to Year End
- Announced on March 12, 2024 approval of merger with Aeterna Zentaris by Securityholders at special meeting.
- Received on March 28, 2024 the final court approval for merger with Aeterna Zentaris.
Financial Highlights for the Fourth Quarter and Full Year 2023 Ended December 31, 2023
- Total sales of $1,650,000 for the fourth quarter of 2023 and $9,633,000 for the full year of 2023 compared to $3,322,000 and $18,840,000 for the comparative periods in 2022. The Company revenues have been significantly impacted by the re-organization associated with the spinoff of the consumer division of one major customer, which resulted in lag of new ordering. In the first quarter of 2024, the customer has resumed ordering from Ceapro.
- Net loss of $2,131,000 for the fourth quarter of 2023 and a net loss of $4,710,000 for the full year of 2023 compared to a net loss of $231,000 for the fourth quarter 2022 and a net profit of 4,398,000 for the full year 2022.
- Cash used in operations of $3,623,000 for the full year 2023 compared to Cash generated from operations of $6,637,000 in 2022.
- Positive working capital balance of $13,108,600 as of December 31, 2023.
"We expect to continue leveraging our base business for the development of new products and technologies and subject to the closing and successful integration with Aeterna Zentaris, we expect to benefit from complementary competencies, additional financial resources and expanded portfolio with revenue generation product to accelerate the completion of our prioritized projects while continuing to assess different market initiatives to bring new business and unlock value in the near and long term," concluded Mr. Gagnon.
| Ceapro Inc. | |||
| Consolidated Balance Sheets | |||
| December 31, | December 31, | ||
| 2023 | 2022 | ||
| $ | $ | ||
| ASSETS | |||
| Current Assets | |||
| Cash | 8,843,742 | 13,810,998 | |
| Trade receivables | 167,295 | 2,820,300 | |
| Other receivables | 216,763 | 64,808 | |
| Inventories (note 3) | 5,308,987 | 3,757,040 | |
| Prepaid expenses and deposits | 310,191 | 135,133 | |
| Total Current Assets | 14,846,978 | 20,588,279 | |
| Non-Current Assets | |||
| Restricted cash | 10,000 | - | |
| Investment tax credits receivable | 984,200 | 854,895 | |
| Deposits | 74,369 | 76,954 | |
| Licences (note 4) | 9,625 | 12,588 | |
| Property and equipment (note 5) | 15,421,884 | 16,201,755 | |
| Deferred tax assets (note 12 (b)) | 98,778 | - | |
| Total Non-Current Assets | 16,598,856 | 17,146,192 | |
| TOTAL ASSETS | 31,445,834 | 37,734,471 | |
| LIABILITIES AND EQUITY | |||
| Current Liabilities | |||
| Accounts payable and accrued liabilities | 1,342,156 | 1,730,377 | |
| Current portion of lease liabilities (note 6) | 396,232 | 370,460 | |
| Total Current Liabilities | 1,738,388 | 2,100,837 | |
| Non-Current Liabilities | |||
| Long-term lease liabilities (note 6) | 1,852,345 | 2,248,577 | |
| Deferred tax liabilities (note 12 (b)) | - | 1,095,968 | |
| Total Non-Current Liabilities | 1,852,345 | 3,344,545 | |
| TOTAL LIABILITIES | 3,590,733 | 5,445,382 | |
| Equity | |||
| Share capital (note 7 (b)) | 16,721,867 | 16,694,625 | |
| Contributed surplus | 4,963,067 | 4,714,404 | |
| Retained earnings | 6,170,167 | 10,880,060 | |
| Total Equity | 27,855,101 | 32,289,089 | |
| TOTAL LIABILITIES AND EQUITY | 31,445,834 | 37,734,471 | |
| Ceapro Inc. | |||||
| Consolidated Statements of Net (Loss) Income and Comprehensive (Loss) Income | |||||
| 2023 | 2022 | ||||
| Years Ended December 31, | $ | $ | |||
| Revenue (note 14) | 9,633,400 | 18,839,607 | |||
| Cost of goods sold | 5,677,211 | 7,821,908 | |||
| Gross margin | 3,956,189 | 11,017,699 | |||
| Research and product development | 2,751,473 | 1,788,666 | |||
| General and administration | 7,419,593 | 3,700,498 | |||
| Sales and marketing | 40,484 | 29,558 | |||
| Finance costs (note 9) | 183,130 | 184,967 | |||
| (Loss) income from operations | (6,438,491 | ) | 5,314,010 | ||
| Other income (note 10) | (533,852 | ) | (462,905 | ) | |
| (Loss) income before income taxes | (5,904,639 | ) | 5,776,915 | ||
| Deferred tax (benefit) expense (note 12 (a)) | (1,194,746 | ) | 1,378,817 | ||
| Net (loss) income and comprehensive (loss) income for the year | (4,709,893 | ) | 4,398,098 | ||
| Net (loss) income per common share (note 19): | |||||
| Basic | (0.06 | ) | 0.06 | ||
| Diluted | (0.06 | ) | 0.06 | ||
| Weighted average number of common shares outstanding (note 19): | |||||
| Basic | 78,272,574 | 77,961,714 | |||
| Diluted | 78,272,574 | 78,582,083 | |||
| Ceapro Inc. | ||||
| Consolidated Statements of Cash Flows | ||||
| 2023 | 2022 | |||
| Year Ended December 31, | $ | $ | ||
| OPERATING ACTIVITIES | ||||
| Net (loss) income for the year | (4,709,893 | ) | 4,398,098 | |
| Adjustments for items not involving cash | ||||
| Finance costs | 128,130 | 129,967 | ||
| Depreciation and amortization | 1,946,776 | 1,911,278 | ||
| Deferred income tax (benefit) expense | (1,194,746 | ) | 1,378,817 | |
| Share-based payments | 259,005 | 89,648 | ||
| (3,570,728 | ) | 7,907,808 | ||
| CHANGES IN NON-CASH WORKING CAPITAL ITEMS | ||||
| Trade receivables | 2,653,005 | (727,458 | ) | |
| Other receivables | (151,955 | ) | (18,958 | ) |
| Investment tax credits receivable | (129,305 | ) | (88,266 | ) |
| Inventories | (1,551,947 | ) | (1,432,955 | ) |
| Prepaid expenses and deposits | (172,473 | ) | 30,371 | |
| Accounts payable and accrued liabilities relating to operating activities | (571,430 | ) | 1,096,074 | |
| 75,895 | (1,141,192 | ) | ||
| Net (loss) income for the year adjusted for non-cash and working capital items | (3,494,833 | ) | 6,766,616 | |
| Interest paid | (128,130 | ) | (129,967 | ) |
| CASH (USED IN) GENERATED FROM OPERATIONS | (3,622,963 | ) | 6,636,649 | |
| INVESTING ACTIVITIES | ||||
| Purchase of property and equipment | (980,733 | ) | (388,821 | ) |
| CASH USED IN INVESTING ACTIVITIES | (980,733 | ) | (388,821 | ) |
| FINANCING ACTIVITIES | ||||
| Stock options exercised | 16,900 | 81,290 | ||
| Increase in restricted cash | (10,000 | ) | - | |
| Repayment of lease liabilities | (370,460 | ) | (299,109 | ) |
| CASH USED IN FINANCING ACTIVITIES | (363,560 | ) | (217,819 | ) |
| (Decrease) increase in cash | (4,967,256 | ) | 6,030,009 | |
| Cash at beginning of the year | 13,810,998 | 7,780,989 | ||
| Cash at end of the year | 8,843,742 | 13,810,998 | ||
The complete financial statements are available for review on SEDAR at https://sedar.com/Ceapro and on the Company's website at www.ceapro.com .
About Ceapro Inc.
Ceapro Inc. is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and "active ingredients" from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical, and therapeutics products for humans and animals. The Company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions. For more information on Ceapro, please visit the Company's website at www.ceapro.com .
Forward-looking information
The information in this news release has been prepared as at April 24, 2024. Certain statements made herein, including statements relating to matters that are not historical facts and statements of the Company's beliefs, intentions and expectations about developments, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information relates to future events or future performance, reflect current expectations or beliefs regarding future events and is typically identified by words such as "aim", "anticipate", "assume", "believe", "continue", "could", "expect", "forecast", "future", "intend", "maintain", "may", "outlook", "plan", "potential", "project", "synergies", "will", and similar expressions suggesting future outcomes or statements regarding an outlook. Forward-looking information includes, but is not limited to, statements with respect to the Arrangement, including the expected timing and outcome of the Meeting, closing and various other steps to be completed in connection with the Arrangement, and other statements that are not historical facts, including the Company's ability to obtain regulatory approvals, including those from health authorities, and to develop, introduce, and implement new products as well as enhancements for existing products that meet customer needs and product requirements in a timely manner.
Forward-looking information is based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performance or achievements of the Company or the combined company to be materially different from future results, performance or achievements expressed or implied by such information. There can be no assurance that such information will prove to be accurate. Such information being based on numerous assumptions.
Readers are cautioned not to place undue reliance on forward-looking information, which speak only as of the date made. For a more detailed discussion of such risks and other factors that may affect Ceapro's ability to achieve the expectations set forth in the forward-looking information contained in this news release, see Ceapro's management information circular dated February 9, 2024, MD&A filed under Ceapro's profile on SEDAR+ at www.sedarplus.ca , as well as Ceapro's other filings with the Canadian securities regulators. Other than as required by law, the Company does not intend, and does not assume any obligation to, update the forward-looking information in this news release.
For more information contact:
Issuer:
Gilles R. Gagnon, M.Sc., MBA
President & CEO
T: 780-421-4555
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
