Dr. Peter Pang, CEO & Chief Scientific Officer, reports that the year 2001 has been a year of positive developments and significant changes for CV Technologies. We have continued our focus on the development of CVT-E002 for the prevention of viral infections. In November 2001, we presented our exciting CVT-E002 Phase II clinical results at the IV International Symposium on Respiratory Viral Infections. This provided a notable introduction for CV Technologies to the established scientific, medical and pharmaceutical communities. The Company's expertise in natural medicine as well as pharmaceutical product development is now receiving global attention from those investigators and companies researching the development of natural medicines - an achievement that we are particularly proud of and one that should serve all shareholders well.
During the second quarter CV Technologies ended its administrative presence in the United States. With this CVT regrettably bid farewell to all its US based administrative staff, and welcomed the addition of some new team members to our Edmonton office. During the fourth quarter of the 2001 fiscal year, CVT considerably reduced its staffing levels and expenditures, in order to concentrate efforts and resources on the development and commercialization of proprietary pharmaceuticals and nutraceuticals from natural sources. In the fourth quarter we initiated a marketing plan for our HerbTechr line of products to improve the cash flows from these operations. Initial success was visible during the first quarter of the 2002 fiscal year. We expect that with the initiation of this two-prong approach, cost reductions and increasing revenues, CV Technologies will offer increased value for the shareholders.
The consolidated losses from continuing operations for the years 2001, and 2000 were $3.9 million and $3.1 million, respectively. The two largest contributors to the increased loss were the decrease of contract research revenue and the planned increase in cost associated with the pharmaceutical development program, in particular the cost associated with the completion of the Phase II clinical trial for CVT-E002.
Revenues from natural health product sales for the years 2001, and 2000 were $856,022 and $730,540, respectively, an increase of 17%. Other revenues generated from contract research, interest income on the Company's cash balances, licenses and royalties, and research and development assistance for the years 2001, and 2000 were $412,501 and $1,248,203, respectively. In 2000 a significant portion of the Company's revenues were derived from a one-time contract research with Dupont.
Total consolidated expenses for the period ending September 30, 2001 were $4,829,170 as compared to $4,619,659 for the year ended September 30, 2000. CV Technologies' General & Administrative expenses in 2001 were $1,575,342, representing 33% of the Company's total expenses, decreased significantly compared to the previous year's expenses ($2,203,471 or 48% of total expenses). This decrease is mainly due to the end of CV Technologies' administrative presence in the United States. The cost associated with professional fees, business development, insurance, investor relations, administration and corporate salaries and benefits and various other expenses relating to the operation and growth of the Company are included in this category. Research & Development expenses, $2,948,570, representing 61% of the Company's total expenses, saw a significant increase, from $2,101,092 or 45% of total expenses, when compared to the previous fiscal year. This increase is mainly due to the a mplified clinical program conducted by CVT during this fiscal year. In particular, the cost associated with the completion of the Phase II trial for CVT-E002 contributed to the increased cost in this category. This clinical trial program increase was partially covered by the 79% increase in monies received from the Industrial Research Assistance Program and AVAC Ltd. to offset the cost of research and development.
Our efforts during the year have created a new very advantageous position,
- · Completion of a positive Phase II clinical trial for CVT-E002,
- · Renewed marketing campaign, and
- · Financial stability,
for the company and our shareholders. Although we are currently not in position to make a major breakthrough announcement for the company, either a strategic partnership for the natural health and/or pharmaceutical market, our efforts are focused to secure such a partnership during 2002.
The complete Annual Report and Financial Statements and more information about CV technologies, Inc. can be found at www.cvtechnologies.com
This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. For this purpose, any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "intends", "expects" and similar expressions are intended to identify forward-looking statements. Such risks and uncertainties include, but are not limited to, the need for capital, changing market conditions, completion of clinical trials, patient enrollment rates, uncertainty of pre-clinical, retrospective and early clinical trial results, the establishment of manufacturing processes and new corporate alliances, the timely development, regulatory approval and market acceptance of the Company's products, and other risks detailed from time to time in the Company's filings with Canadia n securities authorities.