On August 9, 2016 Moleculin Biotech, Inc., (NASDAQ: MBRX) ("Moleculin" or the "Company"), a preclinical and clinical-stage pharmaceutical company focused on the development of anti-cancer drug candidates, some of which are based on license agreements with The University of Texas System on behalf of the M.D. Anderson Cancer Center, reported it has agreed to extend through August of 2017 and expand its sponsored research agreement with MD Anderson Cancer Center (MD Anderson), the world’s largest cancer research facility (Press release, Moleculin, AUG 9, 2016, View Source [SID1234519562]).

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Moleculin’s Chairman and CEO, Walter Klemp, commented, "The research we have sponsored to date at MD Anderson has generated some very promising new technologies, including WP1066, a novel small molecule that is an effective stimulator of patients’ natural immune response and inducer of tumor cell death in the in vivo models of even the most difficult to treat cancers." He added, "We are now extending and expanding this agreement in light of new indications that we may be able to improve upon the WP1066 technology significantly."

Dr. Waldemar Priebe, Professor of Medicinal Chemistry at MD Anderson and Scientific Advisor to Moleculin, a shareholder and inventor of licensed technology, explained, "We are very excited about the potential for orally administered WP1066 in clinic, and we are now actively investigating expansion of clinical uses of Moleculin’s licensed therapeutics and researching their methods of administration while preserving drugability of this and similar compounds. For example, the injectable/iv administered versions of WP1066 would greatly expand its clinical applications and commercial potential. The continued research sponsored by Moleculin could make this possible."

Mr. Klemp concluded, "Moleculin’s continuing research sponsorship also facilitates access to grant funding from both public and private sources, and we are pleased that the expansion of this critical research collaboration will provide access to cutting edge research capability and potentially create more patentable discoveries."

On August 9, 2016 Sophiris Bio Inc. (NASDAQ: SPHS) (the "Company" or "Sophiris"), a biopharmaceutical company developing topsalysin (PRX302) for the treatment of urological diseases, reported financial results for the three and six months ended June 30, 2016 (Press release, Sophiris Bio, AUG 9, 2016, View Source [SID:1234514574]).

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Business Highlights:

On June 9, 2016, the Company announced successful results from its completed Phase 2a study of topsalysin in localized prostate cancer.
On May 12, 2016, the Company announced the engagement Oppenheimer & Co. Inc. as its financial advisor to assist with the evaluation of various strategic options for advancing topsalysin development programs.
On May 11, 2016, the Company announced the closing of a registered offering in which the Company raised net proceeds of $4.6 million. During June and July, the Company received proceeds of $2.4 million from the exercise of warrants included in this transaction bringing the total proceeds from this offering to $7.0 million.
On May 7, 2016, the Company presented positive data from its successful Phase 3 clinical trial of topsalysin as a treatment for the symptoms of benign prostatic hyperplasia ("BPH") as a late breaking poster at the 111th American Urological Association Annual Meeting. A copy of the poster is available on the Company’s website at www.sophirisbio.com.
"2016 is proving to be a transformational year for Sophiris," stated Randall Woods, president and CEO of Sophiris Bio. "In the past quarter, we completed a Phase 2a proof of concept trial of topsalysin in localized prostate cancer in which topsalysin demonstrated the ability to ablate tumor cells in 50 percent of patients, including two men who experienced complete ablation of their targeted tumor with no evidence of any tumor remaining at 6 months post treatment. We also presented complete results from the Phase 3 BPH study in a late breaking presentation at the AUA 2016 Annual Meeting, demonstrating that topsalysin met the primary endpoint of a reduction in symptom score compared to the vehicle control arm. These two indications represent very large patient populations with very few adequate treatment options, and these clinical results are generating interest from investigators and the medical community. We are currently evaluating our options for moving these programs forward into additional clinical trials."

Financial Results:

At June 30, 2016, we had cash and cash equivalents of $8.3 million and net working capital of $5.7 million. We expect that our cash and cash equivalents will be sufficient to fund our operations for at least the next twelve months assuming that we do not initiate any new development activities for topsalysin. We do not plan to initiate any new clinical trials, including a second Phase 3 trial in BPH or a second Phase 2 trial in localized prostate cancer unless we obtain additional financing. We are actively evaluating strategic alternatives, including potential partnering arrangements, financings or a strategic transaction. As of June 30, 2016, the outstanding principal balance of our term loan was $4.3 million on which we make principal and interest payments monthly.

For the three months ended June 30, 2016

The Company reported a net loss of $4.1 million ($0.21 per share) for the three months ended June 30, 2016 compared to a net loss of $3.7 million ($0.22 per share) for the three months ended June 30, 2015.

Research and development expenses

Research and development expenses were $1.0 million for the three months, ended June 30, 2016, compared to $2.6 million for the three months ended June 30, 2015. The decrease in research and development costs are primarily attributable to a decrease in the costs associated with the Company’s Phase 3 PLUS-1 clinical trial and our Phase 2a proof of concept clinical trial for the low to intermediate risk prostate cancer. These decreases are partially offset by an increase in personnel related costs and a $0.1 million milestone payment payable as the result of the completion of Phase 1 clinical activities of topsalysin for the treatment of prostate cancer.

General and administrative expenses

General and administrative expenses were $1.4 million for the three months ended June 30, 2016 compared to $1.0 million for the three months ended June 30, 2015. The increase is primarily due to increases in personnel related costs, legal costs and closing costs which were allocated to the warrants issued in our financing completed in May 2016. These increases were partially offset by a decrease in non-cash stock-based compensation expense.

For the six months ended June 30, 2016

The Company reported a net loss of $6.3 million ($0.35 per share) for the six months ended June 30, 2016 compared to a net loss of $8.0 million ($0.48 per share) for the six months ended June 30, 2015.

Research and development expenses

Research and development expenses were $1.9 million for the six months ended June 30, 2016 compared to $5.6 million for the six months ended June 30, 2015. The decrease in research and development costs are primarily attributable to a decrease in the costs associated with the Company’s completed Phase 3 PLUS-1 clinical trial of topsalysin and costs associated with the manufacturing activities for topsalysin. These decreases are partially offset by increases in personnel related costs and a $0.1 million milestone payment payable as the result of the completion of Phase 1 clinical activities of topsalysin for the treatment of prostate cancer.

General and administrative expenses

General and administrative expenses were $2.5 million for the six months ended June 30, 2016 compared to $2.0 million for the six months ended June 30, 2015. The increase is primarily due to an increase in legal, accounting, professional services, personnel related costs and closing costs which were allocated to the warrants issued in our financing completed in May 2016. These increases were partially offset by a decrease in non-cash stock-based compensation expense.

On August 9, 2016 QLT Inc. (NASDAQ:QLTI) (TSX:QLT) ("QLT" or the "Company") reported financial results today for the second quarter ended June 30, 2016 (Press release, QLT, AUG 9, 2016, View Source;p=RssLanding&cat=news&id=2194329 [SID:1234514572]). Unless otherwise specified, all amounts are reported in U.S. dollars and in accordance with U.S. GAAP.

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2016 SECOND QUARTER FINANCIAL RESULTS

Operating Expenses/Income

During the second quarter of 2016, research and development ("R&D") expenditures were $2.9 million compared to $3.4 million for the same period in 2015. The $0.5 million (15%) decrease was primarily due to lower stock based compensation, lower salary and overhead costs related to R&D headcount attrition, the foreign exchange impact of the weak Canadian dollar and downsizing of our lease space. Stock-based compensation expense was significantly lower in the current period relative to the prior period due to the impact of the June 2015 accelerated vesting of all outstanding stock options in connection with the investment in and subsequent distribution of the Aralez Shares (defined below) and execution of the InSite Merger Agreement (defined below). The cost decreases described above were partially offset by an increase in costs related to preparatory activities for our planned Phase III pivotal trial for QLT091001.

During the second quarter of 2016, we incurred $3.2 million of consulting and advisory fees related to our exploration of strategic alternatives and pursuit of the merger transaction with Aegerion Pharmaceuticals, Inc. ("Aegerion") described below. In comparison, we incurred $4.7 million of similar costs in 2015 related to our pursuit of a merger transaction with InSite Vision Incorporated ("InSite") and the Aralez Distribution (defined below). The agreement and plan of merger with InSite (the "InSite Merger Agreement") was terminated by InSite on September 15, 2015.

Excluding the strategic consulting and advisory fees discussed above, during the second quarter of 2016, selling, general and administrative ("SG&A") expenditures were $1.3 million compared to $2.4 million for the same period in 2015. The $1.1 million (46%) decrease was primarily related to lower stock-based compensation expense during the period due to the accelerated vesting described above, lower fees paid for director compensation and lower general operating costs related to the downsizing of our lease space. These costs savings were partially offset by a lower amount of overhead being allocated to R&D expense due to R&D headcount attrition.

Other Expenses/Income

On April 5, 2016, QLT effected a distribution of 4,799,619 common shares (the "Aralez Shares") of Aralez Pharmaceuticals Inc. ("Aralez"), which had a fair value of $19.3 million, and $15.0 million of cash to its shareholders of record as of February 16, 2016 (the "Aralez Distribution").

During the three and six months ended June 30, 2016, QLT recognized a $2.3 million fair value gain and $10.7 million fair value loss, respectively, related to the change in the value of the Aralez Shares held by QLT from the February 5, 2016 acquisition date to the April 5, 2016 distribution date.

Operating Loss and Net Loss per Share

The operating loss for the second quarter of 2016 was $7.4 million, compared to $10.7 million for the same period in 2015. As described above under "Operating Expenses/Income", the net $3.3 million change in our operating loss was primarily due to lower strategic consulting and advisory fees, significantly lower stock-based compensation expense and lower overhead costs.

Net loss per common share was $0.10 in the second quarter of 2016, compared to a net loss per common share of $0.21 for the same quarter in 2015. The change in our loss per common share was primarily due to the same factors described above.

Cash and Cash Equivalents

As at June 30, 2016, the Company’s consolidated cash and cash equivalents were $79.9 million compared to $141.8 million at December 31, 2015. The $61.9 million decrease was primarily due to: (i) the $45.0 million investment in Aralez, which was subsequently distributed to QLT’s shareholders via the Aralez Distribution described above, (ii) $5.4 million of strategic consulting and advisory fees related to the Aralez Distribution, the proposed Merger (as defined below) with Aegerion, and exploration of other strategic alternatives, (iii) $3.0 million advanced to Aegerion pursuant to the terms of the Loan Agreement (defined below) with Aegerion, and (iv) cash used in operating activities during the period.

Passive Foreign Investment Company

The Company believes that it was classified as a Passive Foreign Investment Company ("PFIC") for 2008 through 2015, and that it may be classified as a PFIC in 2016, which could have adverse tax consequences for U.S. shareholders. Please refer to our 2015 Annual Report on Form 10-K (as amended by the Form 10-K/A filed on April 29, 2016) for additional information.

Strategic Transactions

On June 14, 2016, QLT and Aegerion entered into an agreement and plan of merger (the "Merger Agreement") pursuant to which a wholly owned indirect subsidiary of QLT will be merged with and into Aegerion, with Aegerion surviving as a wholly owned indirect subsidiary of QLT (the "Merger"). On the closing of the Merger, each outstanding share of Aegerion common stock will be exchanged for 1.0256 (the "Exchange Ratio") QLT common shares, subject to potential downward adjustment in the event either the DOJ/SEC Investigations (as defined below) or the Class Action Lawsuit (as defined below) are settled for amounts in excess of the Negotiated Thresholds (as defined below) prior to the closing of the Merger. The Merger is currently expected to close before the end of 2016 and is subject to various closing conditions, including receipt of the approvals of the QLT and Aegerion shareholders.

If Aegerion does not settle either its Department of Justice or Securities and Exchange Commission investigations (the "DOJ/SEC Investigations") or its pending shareholder class action lawsuit (the "Class Action Lawsuit") prior to the closing of the Merger, QLT shareholders will receive warrants (the "Warrants"), which will become exercisable to purchase a certain number of QLT common shares for a purchase price of $0.01 in the event that (i) the DOJ/SEC Investigations are resolved for amounts in excess of $40 million, or (ii) the Class Action Lawsuit is settled for an amount that exceeds the amount, if any, available under Aegerion’s insurance coverage (the $40 million in respect of the DOJ/SEC Investigations and the available insurance coverage in respect of the Class Action Lawsuit being the "Negotiated Thresholds").

QLT plans to change its name upon closing of the Merger to Novelion Therapeutics Inc. ("Novelion") and its common shares will continue to trade on the NASDAQ Global Select Market and the Toronto Stock Exchange. Assuming no adjustment to the Exchange Ratio, QLT shareholders, including the Investors in the Private Placement (as defined and described below), are expected to own approximately 67% of the outstanding Novelion common shares following the Merger.

Concurrent with signing the Merger Agreement, QLT and Aegerion entered into a loan and security agreement (the "Loan Agreement") under which QLT has agreed to provide Aegerion with a term loan facility to support working capital needs for an aggregate principal amount not to exceed $15 million, subject to various terms and conditions. As at August 8, 2016, $3.0 million is outstanding under the Loan Agreement.

On June 14, 2016, QLT entered into a unit subscription agreement (the "Unit Subscription Agreement’) with certain investors party thereto (the "Investors") pursuant to which QLT will issue units to such investors for an aggregate subscription price of $21.8 million (the "Private Placement"). Each unit consists of one QLT common share and one Warrant, as described above. The Private Placement, which is contemplated to occur immediately prior to, and is conditional on the closing of, the Merger, is intended to provide QLT with additional capital to support future operations and business development initiatives. The completion of at least $17.5 million of the Private Placement is a condition to the closing of the Merger.

QLT Inc. – Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands of U.S. dollars except share and per share information)
Three months ended Six months ended
June 30, June 30,
2016 2015 2016 2015

Expenses
Research and development $ 2,929 $ 3,404 $ 5,919 $ 5,612
Selling, general and administrative 4,451 7,154 10,349 10,773
Depreciation 23 179 61 367
7,403 10,737 16,329 16,752
Operating loss (7,403 ) (10,737 ) (16,329 ) (16,752 )
Other (expense) income
Net foreign exchange (losses) gains (31 ) (60 ) (108 ) 38
Interest income 54 51 129 83
Fair value gain (loss) on investment 2,256 – (10,704 ) –
Other 9 – 9 (2 )
2,288 (9 ) (10,674 ) 119
Loss before income taxes (5,115 ) (10,746 ) (27,003 ) (16,633 )
Provision for income taxes (5 ) (5 ) (11 ) (14 )
Net loss and comprehensive loss $ (5,120 ) $ (10,751 ) $ (27,014 ) $ (16,647 )

Basic and diluted net loss per common share
Net loss per common share $ (0.10 ) $ (0.21 ) $ (0.51 ) $ (0.32 )

Weighted average number of common shares outstanding (thousands)
Basic and diluted 52,829 51,779 52,829 51,508

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands of U.S. dollars) June 30, 2016 December 31, 2015
ASSETS
Current assets
Cash and cash equivalents $ 79,943 $ 141,824
Accounts receivable, net of allowances for doubtful accounts 359 287
Loan receivable 3,011 -
Income taxes receivable 14 14
Prepaid and other assets 668 611
Total current assets 83,995 142,736
Accounts receivable 2,000 2,000
Property, plant and equipment 467 430
Total assets $ 86,462 $ 145,166
LIABILITIES
Current liabilities
Accounts payable $ 5,219 $ 1,656
Accrued liabilities 800 1,827
Total current liabilities 6,019 3,483
Uncertain tax position liabilities 376 342
Total liabilities 6,395 3,825
SHAREHOLDERS’ EQUITY
Share capital
Authorized
500,000,000 common shares without par value
5,000,000 first preference shares without par value, issuable in series
Issued and outstanding common shares $ 475,333 $ 475,333
June 30, 2016 – 52,829,398 shares
December 31, 2015 – 52,829,398 shares
Additional paid-in capital 63,117 97,377
Accumulated deficit (561,352 ) (534,338 )
Accumulated other comprehensive income 102,969 102,969
Total shareholders’ equity 80,067 141,341
Total shareholders’ equity and liabilities $ 86,462 $ 145,166