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Lorus Therapeutics Reports Fourth Quarter Results for Fiscal Year 2008

TORONTO, July 21 /PRNewswire-FirstCall/ - Lorus Therapeutics Inc. (Lorus), a biopharmaceutical company specializing in the research and development of pharmaceutical products and technologies for the management of cancer, today reported financial results for the three and twelve months ended May 31, 2008. Unless specified otherwise, all amounts are in Canadian dollars.


- Initiation of GLP toxicology studies for Lorus' lead anticancer small

molecule drug LOR-253. The toxicology studies, currently underway,

are designed to support the filing of an Investigational New Drug

(IND) application with the U.S. FDA for LOR-253 to initiate a Phase I

clinical study in cancer indications. Lorus intends to submit an IND

for LOR-253 by the Q4/2008 or 1Q/2009, following successful

completion of the toxicology program in the third quarter of 2008

calendar year.

- Announced completion of a proof-of-concept clinical trial in Acute

Myeloid Leukemia (AML), and expansion of its LOR-2040 development

program in this indication, with initiation of a more advanced

Phase II clinical trial. The proof-of-concept study generated

encouraging results demonstrating safety and appropriate dosing of

the combination regimen. Notably, promising clinical responses in

patients under 60 years of age were obtained which included complete

responses in 35% of the 23 patients and significant cytoreduction of

leukemic blasts in two others. Moreover, the clinical responses

correlated with downregulation of R2, the cellular target of LOR-

2040, and were further supported by demonstration of intracellular

LOR-2040 in circulating and bone marrow leukemic cells.

- Signed an exclusive multinational license agreement with Zor

Pharmaceuticals LLC ("ZOR") formed as a subsidiary of Zoticon

Bioventures Inc. ("Zoticon"), to further develop and commercialize

Virulizin(R) for human therapeutic applications. ZOR is responsible

for the cost of all clinical development, regulatory submissions and

commercialization of Virulizin(R) in North and South America, Europe

and Israel. Under the terms of the licensing agreement, Lorus is

entitled to receive payments in excess of US$10 million in upfront

and various clinical and regulatory milestones payments as well as

royalties that vary from 10-20% depending on sales of Virulizin(R).

Lorus also received 25% of the initial equity in ZOR. In addition,

Lorus has entered into a Service Agreement with ZOR to assist in the

transfer of knowledge for moving forward with the clinical

development program for Virulizin(R).

- Commenced a development program aimed at expanding the therapeutic

application of its clinical-stage drug LOR-2040 for the treatment of

superficial bladder cancer.

- Completed a corporate reorganization resulting in approximately

$6.9 million in additional cash for Lorus without diluting the equity

interests of existing securityholders

- Announced a rights offering to Lorus shareholders to raise, if fully

subscribed, gross proceeds of $7.1 million. Each shareholder will

receive one right and 4 rights will entitle the holder to purchase

one unit consisting of one common share and 1/2 common share purchase


"We are pleased with the important milestones achieved during fiscal 2008 including the initiation of GLP-toxicology studies for LOR-253; the commencement of a Phase II clinical trial for LOR-2040 in AML; and a key licensing transaction for Virulizin(R)", stated Dr. Aiping Young, President and CEO of Lorus. "In addition to the key scientific milestones achieved during fiscal 2008, we have strengthened our financial position through a $6.9 million non-dilutive financing by means of corporate reorganization and initiation of a rights offering. The achievements realized this year have resulted in a necessary increase in research and development expenditures, although we expect our overall expenditures to decrease significantly in fiscal 2009".


Due to an increase in research and development activities as described below, loss from operations excluding the gain on sale relating to the arrangement (as discussed below) for the year ended May 31, 2008, increased to $12.6 million from $9.6 million in the same period last year. On the close of the arrangement, in July 2007, the Company realized a gain on the sale of the shares of Old Lorus in the amount of $6.3 million resulting in a net loss for the year ended May 31, 2008 of $6.3 million ($0.03 per share).

Research and development expenses increased to $6.1 million for the year ended May 31, 2008 as compared $3.4 million in the prior year.

The increase in research and development expenditures in the year ended May 31, 2008 is due to a significant increase in activity within our LOR-2040 and Small Molecule development programs, in particular, due to the manufacturing cost of LOR-2040 needed to complete the ongoing Phase I and Phase II clinical studies as well as future potential development initiatives. Other contributing factors include the initiation of an advanced Phase II clinical trial with LOR-2040 in AML, GLP-toxicology studies with LOR-2040 for the treatment of bladder cancer, and the advancement of our small molecule program into GLP-toxicology studies.

For the year ended May 31, 2008, general and administrative expense was $3.9 million compared with $3.8 million in the same period last year. General and administrative expenditures have remained consistent with the prior year.

The Company utilized cash of $10.2 million in operating activities in the year ended May 31, 2008 compared with $6.3 million during the year ended May 31, 2007 reflecting the increase in research and development activities during the year. At May 31, 2008, Lorus had cash and cash equivalents, short-term investments and marketable securities of $9.4 million compared to $12.2 million at May 31, 2007. Lorus believes that its current cash and cash equivalents, short-term investments and marketable securities and interest income will be sufficient to carry out the current research and development plans and operations through to the first quarter of fiscal 2010.

Lorus Therapeutics Inc.

Consolidated Statements of Loss

Years Ended May 31


(Canadian dollars) 2008 2007 2006


REVENUE $ 133 $ 107 $ 26



Cost of sales 2 16 3

Research and development 6,087 3,384 10,237

General and administrative 3,888 3,848 4,334

Stock-based compensation 719 503 1,205

Depreciation and amortization of

fixed assets 317 402 771


Operating expenses 11,013 8,153 16,550

Interest expense on convertible

debentures 1,029 1,050 882

Accretion in carrying value of

convertible debentures 1,045 935 790

Amortization of deferred financing

charges 131 110 87

Interest income (542) (503) (374)


Loss from operation for the period 12,543 9,638 17,909


(Gain) on sale of shares (6,299)


Net (earnings)/loss and other

comprehensive income for the

period 6,244 9,638 17,909


Basic and diluted loss per common

share $ 0.03 $ 0.05 $ 0.10



Weighted average number of common

shares outstanding used in the

calculation of basic and diluted

loss per share 215,084 204,860 173,523



Note re the financial statement information above:

On July 10, 2007 (the "Arrangement Date"), the Company completed a plan of arrangement and corporate reorganization with 4325231 Canada Inc., formerly Lorus Therapeutics Inc., ("Old Lorus"), 6707157 Canada Inc. and Pinnacle International Lands Inc (the "Arrangement"). As a result of the plan of arrangement and reorganization, among other things, each common share of Old Lorus was exchanged for one common share of the Company and the assets (excluding certain future tax assets and related valuation allowance) and liabilities of Old Lorus were transferred to the Company and/or its subsidiaries. The Company continued the business of Old Lorus after the Arrangement Date with the same officers and employees and continued to be governed by the same Board of Directors as Old Lorus prior to the Arrangement Date. Therefore, the Company's operations have been accounted for on a continuity of interest basis and accordingly, the consolidated financial statement information above reflect that of the Company as if it had always carried on the business formerly carried on by Old Lorus.

About Lorus

Lorus is a biopharmaceutical company focused on the research and development of novel therapeutics in cancer. Lorus' goal is to capitalize on its research, preclinical, clinical and regulatory expertise by developing new drug candidates that can be used, either alone, or in combination with other drugs, to successfully manage cancer. Through its own discovery efforts and an acquisition and in-licensing program, Lorus is building a portfolio of promising anticancer drugs. Lorus Therapeutics Inc. is listed on the Toronto Stock Exchange under the symbol LOR, and on the American Stock Exchange under the symbol LRP.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Canadian and U.S. securities laws. Such statements include, but are not limited to, statements relating to: financings and corporate reorganizations, the establishment of corporate alliances, the Company's plans, objectives, expectations and intentions and other statements including words such as "continue", "expect", "intend", "will", "should", "would", "may", and other similar expressions. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements described in this press release. Such expressed or implied forward looking statements could include, among others: our ability to obtain the capital required for research and operations; the inherent risks in early stage drug development including demonstrating efficacy; development time/cost and the regulatory approval process; the progress of our clinical trials; our ability to find and enter into agreements with potential partners; our ability to attract and retain key personnel; changing market conditions; and other risks detailed from time-to-time in our ongoing quarterly filings, annual information forms, annual reports and annual filings with Canadian securities regulators and the United States Securities and Exchange Commission.

Should one or more of these risks or uncertainties materialize, or should the assumptions set out in the section entitled "Risk Factors" in our filings with Canadian securities regulators and the United States Securities and Exchange Commission underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this press release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. We cannot assure you that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

Lorus Therapeutics Inc.'s recent press releases are available through its website at For Lorus' regulatory filings on SEDAR, please go to For SEDAR filings prior to July 10, 2007 you will find these under the company profile for Global Summit Real Estate Inc. (Old Lorus).

SOURCE Lorus Therapeutics Inc.
Copyright©2008 PR Newswire.
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