On December 13, 2018 ESSA Pharma Inc. ("ESSA" or the "Company") (TSX-V: EPI,NASDAQ: EPIX), a pharmaceutical company focused on developing novel therapies for the treatment of prostate cancer, reported financial results for the fiscal fourth quarter and year ended September 30, 2018 (Press release, ESSA, DEC 13, 2018, View Source [SID1234532082]). All references to "$" in this release refer to United States dollars, unless otherwise indicated.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We have narrowed our selection of an IND candidate to a small number of compounds with high potency, metabolic stability and, therefore, predicted long half-lives, as well as superior pharmaceutical properties," stated David Parkinson, MD, President and CEO of ESSA. "We will make a final IND candidate selection following full compound selectivity characterization and in vivo animal model results, which are expected in the first calendar quarter of 2019. We look forward to preparing our lead candidate efficiently in order to enter the clinic as expeditiously as possible after our IND submission."

2018 Year Highlights

Achieved significant progress in advancing the Company’s next-generation aniten program toward identifying a lead clinical product candidate and submitting an Investigational New Drug Application to the U.S. Food and Drug Administration
Lead compounds are at least fifteen times more potent and five times more stable in vitro compared to the first-generation aniten N-terminal domain inhibitor compound, EPI-506.
Two poster abstracts accepted for presentation at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Symposium (ASCO-GU) in February 2019, which will be the first public presentation of preclinical data from ESSA’s new aniten compounds.
Closed equity financings totaling $26 million in January 2018, issuing a total of 4,321,000 common shares and 2,189,000 prepaid warrants exercisable at a nominal price of $0.002.
Strengthened the Company’s preclinical development capabilities.
Summary Financial Results
Effective April 25, 2018, the Company consolidated its issued and outstanding common shares on the basis of one post-consolidation share for every 20 pre-consolidation shares. The consolidation applied uniformly to all ESSA common shares, incentive stock options, prepaid warrants, and other securities convertible into or exercisable for common shares. Unless otherwise stated, all ESSA common share and per share amounts have been restated retrospectively to reflect this share consolidation.

Net Income (Loss). ESSA recorded a net loss of $11.6 million ($2.55 loss per common share based on 4,566,519 weighted average common shares outstanding) for the year ended September 30, 2018, compared to a net loss of $4.5 million ($3.09 loss per common share based on 1,454,936 weighted average common shares outstanding) for the year ended September 30, 2017, which included a gain on derivative liability of $7.3 million. The net loss for the fourth quarter ended September 30, 2018 was $2.3 million compared to a net loss of $1.9 million for the fourth quarter ended September 30, 2017.
Research and Development ("R&D") expenditures. R&D expenditures for the year ended September 30, 2018 were $4.9 million net of grants ($5.1 million gross) compared to $5.7 million net of grants ($10.9 million gross) for the year ended September 30, 2017. For the fourth quarter ended September 30, 2018, R&D expenditures were $0.9 million net of grants ($1.2 million gross), as compared to $1.2 million (net and gross) for the fourth quarter ended September 30, 2017. The decreases in R&D expenditures for the full year and fourth quarter were primarily related to decreases in manufacturing and clinical trial costs as ESSA focused its R&D resources on preclinical research related to the Company’s next-generation aniten compounds in the current year. ESSA concluded its Phase I clinical study of EPI-506 in September 2017.
General and administration ("G&A") expenditures. G&A expenditures for the year ended September 30, 2018 were $5.9 million compared to $5.1 million for the year ended September 30, 2017. For the fourth quarter ended September 30, 2018, G&A expenditures were $1.2 million, compared to $1.1 million for the fourth quarter ended September 30, 2017. The increases in the full year and fourth quarter primarily reflected increased corporate activity, such as the 1:20 share consolidation, filing of the base shelf prospectus, as well as compensation expenses and increased share-based payments reflecting the vesting of stock options.
Liquidity and Outstanding Share Capital
Cash on hand at September 30, 2018, was $14.8 million, with working capital of $12.3 million, reflecting the aggregate gross proceeds of the completed January 2018 financing, which totaled $26 million.

As of September 30, 2018, the Company had 5,776,098 common shares issued and outstanding, and 2,189,000 common shares issuable on the exercise of prepaid warrants at a nominal exercise price of $0.002 per common share. If all prepaid warrants are exercised, there would be approximately 7,965,098 ESSA common shares outstanding.

In addition, there were 474,937 common shares issuable upon the exercise of warrants and broker warrants at a weighted-average exercise price of $34.35 per ESSA common share and 888,709 ESSA common shares issuable upon the exercise of outstanding stock options at a weighted-average exercise price of $4.81 per common share.