Advitech Inc. ("Advitech" or the "Corporation") (TSX Venture Exchange: AVI)announces today its financial results for the fourth quarter of 2008 and for the year ended on December 31, 2008.
FOURTH QUARTER OF 2008 FINANCIAL RESULTS
Increased revenues by 65% to $671,103 for the fourth quarter of 2008, compared to $405,576 for the corresponding period in 2007.
The revenues growth of $265,527 was generated by Dermylex® sales.
Reduced net loss by 2% to $137,344 for the fourth quarter of 2008, compared to $140,381 for the same period in 2007. The increase in allowance for doubtful accounts during the fourth quarter of 2008 affected the Corporation's net loss.
YEAR-END 2008 FINANCIAL RESULTS
Revenues amounted to $1,063,322 for the year ended December 31, 2008 compared to $1,110,157 for the year ended December 31, 2007. This $46,835 or 4% decreaseis mainly due by the delay in U.S. sales, which saw a decrease of 77% in 2008 compared to 2007.
The net loss amounted to $1,539,417 for the year ended December 31, 2008 compared to $1,349,753 for the year ended December 31, 2007, an increase of $189,664 or 14% resulting from the staff increase during 2008 in selling and marketing department, and from a higher allowance for doubtful accounts.
Canadian sales for the year 2008 totalized $32,004 compared to $157,069 for the year 2007, a decrease of $125,065 or 80% due to delays surrounding the change of the Canadian distributor. The Corporation's new distributor for Canada should begin the distribution of Dermylex® starting April 1st, 2009. The 2008 sales in the United States generated $95,445 compared to $419,659 during the year 2007, a decrease of $324,214 or 77% mainly due to the delay of the U.S. launch orchestrated by the Advitech's American partner. This launch, initially scheduled for 2008, has been delayed to a later date and is now planned for the middle of May 2009. These sales drops in Canada and the United States have been compensated in 2008 by sales made with new partners, in particular in Mexico, Indonesia and Hong Kong.
As of December 31, 2008, the Corporation had a cash position of $278,224. On March 12, 2009, the Corporation completed a $1,000,000 equity private placement of 50,000,000 units at a price of $0.02 per unit. Each unit issued as part of the private placement consists of one common share in the share capital of Advitech and of one common share purchase warrant. Each warrant will entitle its holder to purchase one common share at a price of $0.05 per share for a period of one year following the date of issuance of the warrants, and, thereafter, at a price of $0.10 per share until the fifth anniversary of the date of issuance of the warrants. The proceeds of this placement, along with the share and the warrant certificates, are presently held under escrow until the realization of the three following conditions: (i) the conversion in common shares of at least 80% of the principal amount of the Corporation' outstanding debentureswith accrued interests thereon, (ii) the confirmation of TSX Venture Exchange's approval, and (iii) the confirmation of Advitech shareholders' approval at the meeting scheduled for April 16th, 2009. As at March 12, 2009, the Corporation had in hand written undertakings from debenture holders, representing more than 80% of the outstanding debentures, for the conversion of their debentures upon release of the escrow.
"The main objective for Advitech in 2008 was to build a sales momentum using the 2007 results as the cornerstone of an overall strategy based on three main initiatives: the growth of Dermylex® sales, the on-going development of our two technological platforms with a stronger focus on the wound healing application, and the financing of the Corporation's operations" commented Mr. Renaud Beauchesne, President and Chief Executive Officer at Advitech.
"For the Dermylex® sales, we have experienced mitigated results for 2008, having only reached the level of revenues that was reached in 2007. This level of performance, lower than our expectations, is the direct result of the delay in the U.S. sales, and the end of the year economical slow down which has had a significant impact on our discussion agenda with new marketing and distribution partners" added Mr. Beauchesne.
For the wound healing application, the Corporation has concluded in 2008 a collaboration agreement with Urgo Laboratories, a leading French company in the wound healing market. This agreement, which relates to both IM and XP-828L platforms, will upgrade the Corporation's current R&D program on wound healing, and should end in 2009 with a development or a co-development agreement. The management expects that the milestones schedule should permit the Corporation to generate value as soon as the second part of 2009. Wound healing does represent a significant opportunity for Advitech, and it should help the Corporation to rapidly diversify its products portfolio and this, ideally, in both pharmaceutical and cosmaceutical sectors.
CHANGES IN MANAGEMENT AND BOARD OF DIRECTORS
Along with the private placement with AgeChem Venture Fund L.P. ("AgeChem") announced on March 12, 2009, the following changes will be brought to the management and to the composition of the Board of directors of the Corporation.
On March 31, 2009, Mr. Renaud Beauchesne, the Corporation's President and Chief Executive Officer, will forsake the operations of the Corporation to devote himself entirely to the strategic plan.
For a minimal interim period of three months, he will be assisted by Mr. Jocelyn R. Pelchat for the supervision and coordination of the Corporation's operations. Mr. Pelchat was the President of the international division at Axcan Pharma up to 2007, and since then he's President of Acteo, a company specialized in strategic corporate consultation. In addition to the supervision of the current operations and of the commercial activities, Mr. Pelchat will be mandated to develop a strategic plan of mergers and acquisitions which should permit Advitech to extend its portfolio while developing a solid team to assure the conclusion of important synergies and the organic growth.
Mr. Stephane Gagné will also join the Corporation for its business development. Mr. Gagné was responsible for the sales development in companies similar to Advitech, and his expertise will mainly be used to develop the American market.
Composition of the Board of directors
The Corporation intends to propose the following candidates during the annual general and special meeting of shareholders, being held on April 16, 2009: Renaud Beauchesne, MBA; Richard Bordeleau, consultant; Louis Lacasse, President of GeneChem Management inc.; Pierre Labbé, CA, Vice-President and Chief Financial Officer of Medicago inc.; and Claude Livernoche, corporate director. A sixth director, which would be designated by AgeChem, might eventually join the Board of directors during 2009. In respect to this, the Corporation also intends to ask its shareholders to approve a modification to its articles to allow its directors to increase, in accordance with its constitutive law, the number of directors during the year.
Mr. Germain Carrière and Mr. Colin Bier have chosen not to solicit a new mandate in order to be on the Board of directors for the upcoming year. Their contribution to the development of the Corporation has been greatly appreciated.
ABOUT ADVITECH INC. www.advitech.com:
Advitech is a health sciences and technology company with a mission to discover and commercialize proprietary and evidence-based natural health products. Effective and safe, these products play a role in the prevention of immune-mediated inflammatory disorders, such as psoriasis and inflammatory bowel disease. Advitech produces Dermylex® for the treatment of mild-to-moderate psoriasis.