Medwell Capital Reports 2010 Year-End Results
Edmonton, Alberta, February 11, 2011 – Medwell Capital Corp. (TSX-V: MWC) today announced financial and operational results for the year ended December 31, 2010.
“In June 2010, we reorganized our Company to reflect a new business model as an investment, financial, advisory and merchant banking firm focused on the middle market healthcare sector.” said Mr. Kevin Giese, President and CEO of Medwell Capital. “Our lead investment in Spectral Diagnostics continues to make progress in its Phase III clinical trial program, and we are actively reviewing and engaging in a number of additional investment and advisory transactions that are expected to improve our potential for profitability.”
Reorganization into Medwell Capital. The Company has been reorganized into three separate business units:
Manages the $40 million assets under management.
Performs internal pharma-level diligence analysis in support of investments, and provides clinical, advisory, regulatory and consulting services to companies.
Acquired a licensed Exempt Market Dealer and award winning healthcare investment banking team to provide strategic advisory, financing and M&A services; and,
Supports Medwell’s investment model by identifying investment opportunities and advises companies in their financing, licensing and M&A strategies.
“As we advance, our focus will be to generate revenues from these business units as well as through potential gains in Medwell Investments,” said Mr. Giese. “We will utilize our team to help us make specialized healthcare investments, and to provide clinical and “exit” advisory services to client companies.”
Medwell Investments has invested $12.8 million in a total of four healthcare companies to date. Medwell Investments has also invested approximately $0.5 million in two non-healthcare companies. Investments in healthcare have followed the merchant bank “investment with influence” model. As such, Medwell has invested:
o $12 million in Spectral Diagnostics, a company undertaking a Phase III sepsis trial in the U.S. with a therapeutic device licensed from Toray Industries, Inc. of Japan. Medwell owns approximately 37% of Spectral, has the right to nominate two board seats, and has a $3 million contract to provide clinical and corporate advisory services. To learn more please visit: http://www.spectraldx.com/
o $250k in the form of a convertible debenture in Novation, with which Medwell has the right to nominate a board seat. Novation, a private company, focuses on discovering and developing small-molecule therapeutics that modulate messenger RNA (“mRNA”) to treat a broad range of diseases. For further information please visit http://www.novation-pharma.com/
o $250k in Bioniche Life Sciences Inc. (TSX: BNC), a public company developing proprietary cancer therapies with revenues from marketed products in human and animal health. Medwell Securities also provided advisory services to Bioniche as part of its recent $20 million financing. To learn more please visit: http://www.bioniche.com/
Medwell Securities has been engaged by several biotechnology, service and pharmaceutical companies to provide advisory services involving strategic, M&A and financing transactions. Recent engagements include:
o $90k advisory contract with Plantform Corporation, a private company with a novel, plant-based monoclonal antibody production technology that is expected to enable low-cost production of therapeutic antibodies. Medwell has the opportunity to provide future investment in, and clinical, strategic and financial advisory services to the company. To learn more about Plantform please visit: http://www.plantformcorp.com/
Medwell Capital is reporting results from both continuing and discontinued operations. Continuing operations consist of activities related to Medwell Capital as an investment and advisory service provider. Medwell Capital’s discontinued operations relate to the late-stage clinical development program for dirucotide, a drug for the treatment of multiple sclerosis.
The consolidated net loss from continuing operations for the year ended December 31, 2010 was $8.6 million or $(0.09) per share compared with a consolidated net loss from continuing operations of $8.8 million or $(0.09) per share for the same period in the previous year. These results include the recognition of an unrealized loss of $0.3 million on Medwell’s investments for the year, due to changes in the fair value of the Company’s investments. Medwell Capital’s lead investment in Spectral Diagnostics represents approximately 40% of Spectral’s issued and outstanding common shares. The closing market price Spectral as at December 31, 2010 was $0.35 per common share compared to $0.40 as at December 17, 2009 when the investment was made.
Revenue earned from the services agreement initiated with Spectral amounted to $1.0 million for the year ended December 31, 2010. Interest income earned on funds invested was $0.2 million for the year ended December 31, 2010, compared to $0.3 million in the previous year.
Total consolidated expenses from continuing operations for the year ended December 31, 2010 were $9.8 million compared with $9.2 million in the year ended December 31, 2009.
The consolidated net loss from discontinued operations for the year ended December 31, 2010 was $1.3 million or $(0.01) per share compared with a consolidated net income from discontinued operations of $11.7 million or $0.12 per share in the previous year. Upon the conclusion of the MAESTRO-01 clinical trial the Company discontinued the other dirucotide clinical trials, MAESTRO-02 and MAESTRO-03, and completed final collection of data and records.
At December 31, 2010, cash and cash equivalents and short-term investments totaled $27.5 million as compared to $51.4 million at December 31, 2009. At December 31, 2010, the Company had working capital of $26.1 million as compared to $47.5 million at December 31, 2009. Management estimates that the current working capital is sufficient for the Company to meet its obligations.
As at December 31, 2010 there were 91,008,923 Class “A” common shares of the Company issued and outstanding.
To download the press release with complete financials please click here.
About Medwell Capital Corp.
Medwell Capital Corp. is a Canadian-based service provider of capital and advisory services. For further information please visit www.medwellcapital.com.
This press release may contain forward-looking statements, which reflect the Corporation’s current expectation regarding future events. These forward-looking statements involve risks and uncertainties that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Corporation’s ongoing quarterly and annual reporting. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.