GlobeNewswire Inc | Nov 23, 2021 08:00AM EST

November 23, 2021

-- Initiated PORT-2 Phase 1/2 IMP-MEL trial in patients with Melanoma & NSCLC -- Enrollment ongoing in Phase 1 PRECIOUS-01 study of PORT-3 for the treatment of NY-ESO-1 positive solid tumors

WESTPORT, Conn., Nov. 23, 2021 (GLOBE NEWSWIRE) -- Portage Biotech Inc. (NASDAQ: PRTG) (Portage or the Company), a clinical-stage immuno-oncology company developing therapies to improve patient lives and increase survival by avoiding and overcoming cancer treatment resistance, today announced financial results for the quarter ended September 30, 2021 (the second quarter of Fiscal 2022).

During our second quarter we continued to advance our pipeline of novel immuno-oncology therapeutics designed to avoid and overcome cancer treatment resistance, said Dr. Ian Walters, chief executive officer of Portage Biotech. Our lead invariant natural killer T cell (iNKT) agonists, PORT-2 and PORT-3, are now in the clinic, with both the PRECIOUS Phase 1 study of PORT-3 and IMP-MEL randomized Phase 1/2 study of PORT-2 having treated initial patients. We believe our iNKTs have the potential to re-sensitize PD-1 tumors and significantly expand the opportunity available within the PD-1 cancer treatment market. We were pleased to see this opportunity highlighted by key opinion leaders in the webinar we hosted earlier this month. With the support of a broad retail and institutional investor base and significant financial resources secured this year, we are well prepared to leverage our unique drug development strategy and product engine to deliver on important clinical milestones over the next 18 months.

Highlights For the Second Quarter and Recent Weeks

-- Hosted Key Opinion Leader Webinar How iNKT Agonists Could Improve Immuno-Oncology Treatment with leading researchers from La Jolla Institute of Immunology and Imperial College London. The replay can be accessed on Portages investor website under News & Events. -- First patient was dosed in the IMP-MEL randomized Phase 1/2 study of PORT-2, a liposomal formulation of Portages IMM60 iNKT agonist. In the trial, PORT-2 will be tested both as a monotherapy and in combination with standard of care (Keytruda) in melanoma and NSCLC.The PORT-2 study has 6 arms and is expected to enroll up to 100 patients. Preclinical data for PORT-2 demonstrated good tolerability and a strong cancer-specific B- and T-cell response.The IMP-MEL study is part of a comprehensive clinical development plan to evaluate Portages iNKT agonist therapies, PORT-2 and PORT-3. PORT-3 is currently being evaluated in a Phase 1 clinical trial initiated in April 2021.The trials are being conducted in Europe and the UK with delays in enrollment due to the ongoing COVID-19 pandemic. Initial safety results are expected in January 2022. -- Presented at high-profile Fall investor and scientific conferences: Promising efficacy and survival data on Intensity Therapeutics INT230-6 (PORT-1) was presented at Society for Immunotherapy of Cancer (SITC) and Connective Tissue Oncology Society (CTOS) 2021 conferences. Phase 2 IT-01 trial data shows INT230-6 (PORT-1) to be well tolerated with direct tumor-killing effects as a monotherapy and in combination with approved checkpoint inhibitors.Management participated in September 2021 investor conferences including H.C. Wainwright 23rd Annual Global Investor Conference, Oppenheimer Fall Healthcare Life Sciences & MedTech Summit and Cantor Virtual Global Healthcare Conference. Archived replays of the Oppenheimer and Cantor webcasts are available on Portages investor website under News & Events.

Second Quarter FY 2022 Financial Results

The Company generated a net loss and comprehensive loss of approximately $2.9 million in the second quarter of Fiscal 2022, compared to a net loss of approximately $2.7 million and comprehensive loss of approximately $2.8 million in the three months ended September 30, 2020 (the second quarter of Fiscal 2021), an increase in loss of $0.2 million and $0.1 million, respectively, year over year. Operating expenses, which include research and development and general and administrative expenses, were $3.4 million in the second quarter of Fiscal 2022, compared to $1.2 million in the second quarter of Fiscal 2021, an increase of $2.2 million. Operating expenses included $2.1 million of non-cash share-based compensation expense in the second quarter of Fiscal 2022, compared to $0.2 million in the second quarter of Fiscal 2021.

The Companys other items of income and expense were substantially non-cash in nature and increased net loss before provision for income taxes by approximately $0.1 million in the second quarter of Fiscal 2022, compared to approximately $1.5 million in the second quarter of Fiscal 2021. The primary reasons for the year over year difference in other items of income and expense was the loss on equity issued at a discount with respect to the settlement of the SalvaRx notes of $1.3 million and a $0.2 million loss on the extinguishment of the SalvaRx notes in the second quarter of Fiscal 2021, net of $0.1 million of other year over year changes.

Additionally, the Company reflected a net income tax benefit of approximately $0.5 million in the second quarter of Fiscal 2022, attributable to recoverable research and development tax credits generated in the U.K. and offset by the change in the foreign currency exchange rate on deferred tax liability settleable in British pounds sterling.

Research & development ("R&D") costs were approximately $1.4 million during the second quarter of Fiscal 2022, compared to approximately $0.8 million during the second quarter of Fiscal 2021. The increase of approximately $0.6 million was primarily attributable to non-cash share-based compensation expense associated with grants made under the 2021 Equity Incentive Plan of $1.0 million, partially offset by a decrease of $0.3 million in other R&D costs relating to services and storage. Additionally, the second quarter of Fiscal 2021 was impacted by a general slow down in expenditures resulting from the pandemic.

General and administrative ("G&A") expenses were approximately $2.0 million during the second quarter of Fiscal 2022, an increase of approximately $1.6 million from the second quarter of Fiscal 2021. The increase was due primarily to $1.0 million of non-cash share-based compensation expense associated with the Companys 2021 Equity Incentive Plan. No share-based compensation expense under the 2021 Equity Incentive Plan was incurred during the second quarter of Fiscal 2021. Additionally, the Company incurred an increase of $0.1 million in professional fees relating to initiatives associated with a corporate restructuring and public relations / business development. Finally, D&O insurance premiums increased $0.4 million in the second quarter of Fiscal 2022 from the second quarter of Fiscal 2021, due to market rate increases in the cost of coverage.

As of September 30, 2021, the Company had cash and cash equivalents of approximately $27.3 million and total current liabilities of approximately $1.3 million. For the six months ended September 30, 2021, the Company is reporting a net loss of approximately $6.1 million and cash used in operating activities of approximately $2.9 million.

About Portage Biotech Inc.Portage is a clinical-stage immuno-oncology company advancing first-in-class therapies that target known checkpoint resistance pathways to improve long-term treatment response and quality of life in patients with evasive cancers. The Companys access to next-generation technologies coupled with a deep understanding of biological mechanisms enables the identification of the most promising clinical therapies and product development strategies that accelerate these medicines through the translational pipeline. Portages portfolio consists of five diverse platforms, leveraging delivery by intratumorals, nanoparticles, liposomes, aptamers, and virus-like particles. Within these five platforms, Portage has 10 products currently in development with multiple clinical readouts expected over the next 12-24 months. For more information, please visit www.portagebiotech.com, follow us on Twitter at @PortageBiotech or find us on LinkedIn at Portage Biotech Inc.

Forward-Looking Statements

This news release contains statements about the Companys information that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them as actual results may differ materially from the forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof, and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, except as required by law.

FOR MORE INFORMATION, PLEASE CONTACT:

Investor RelationsChuck Padalachuck@lifesciadvisors.com

Media RelationsGwen Schankergschanker@lifescicomms.com

-tables to follow-

PORTAGE BIOTECH INC.Consolidated Statements of Operations and Comprehensive Income (Loss)(U.S. Dollars in thousands, except per share amounts)

Note Three months ended Six months ended September 30, September 30, 2021 2020 2021 2020 In 000?$ In 000?$ In 000?$ In 000?$ Expenses Research and $ 1,330 $ 792 $ 2,876 $ 1,244 developmentGeneral andadministrative 2,000 376 4,047 897 expensesLoss from operations (3,330 ) (1,168 ) (6,923 ) (2,141 )Change in fair value 13 15 59 384 59 of warrant liabilityShare of (loss)income in associate 7 (58 ) (49 ) (102 ) 391 accounted for usingequity method(Loss) on equity 14 ? (1,333 ) ? (1,333 )issued at a discountGain on sale ofmarketable equity 6 ? 72 ? 72 securities(Loss) onextinguishment of 12 ? (223 ) ? (223 )notes payableInterest (expense) (7 ) (47 ) (41 ) (169 )Loss beforeprovision for income (3,380 ) (2,689 ) (6,682 ) (3,344 )taxesIncome tax benefit 503 ? 582 ? Net (loss) (2,877 ) (2,689 ) (6,100 ) (3,344 )Other comprehensive income (loss)Unrealized (loss) on 6, 9 ? (78 ) ? ? investmentTotal comprehensive $ (2,877 ) $ (2,767 ) $ (6,100 ) $ (3,344 )(loss) for periodNet (loss) income attributable to:Owners of the $ (2,975 ) $ (2,455 ) $ (6,041 ) $ (3,151 )CompanyNon-controlling 21 98 (234 ) (59 ) (193 )interest $ (2,877 ) $ (2,689 ) $ (6,100 ) $ (3,344 )Comprehensive (loss)income attributable to:Owners of the 21 $ (2,975 ) $ (2,533 ) $ (6,041 ) $ (3,151 )CompanyNon-controlling 98 (234 ) (59 ) (193 )interest $ (2,877 ) $ (2,767 ) $ (6,100 ) $ (3,344 )(Loss) per share 16 (Actual)Basic and diluted $ (0.22 ) $ (0.21 ) $ (0.47 ) $ (0.28 )Weighted average 16 shares outstandingBasic and diluted 13,332 11,686 12,776 11,411

PORTAGE BIOTECH INC.Consolidated Statements of Financial Position(U.S. Dollars in thousands)

September March 31,As of, Notes 30, 2021 2021 (Audited) Assets Current assets Cash and cash equivalents $ 27,261 $ 2,770 Prepaid expenses and other receivables 5 1,384 2,176 28,645 4,946 Long-term assets Long-term portion of other receivables 5 ? 22 Investment in associate 7 1,633 1,735 Investments in private companies 9 7,409 7,409 Goodwill 10 43,324 43,324 In-process research and development 11 117,388 117,388 Other assets 38 36 Total assets $ 198,437 $ 174,860 Liabilities and Equity Current liabilities Accounts payable and accrued liabilities $ 809 $ 1,938 Warrant liability 13 535 1,120 Unsecured notes payable 12 ? 150 1,344 3,208 Non-current liabilities Deferred tax liability 11 23,514 24,050 23,514 24,050 Total liabilities 24,858 27,258 Shareholders? Equity Capital stock 14 158,216 130,649 Stock option reserve 15 12,142 7,977 Accumulated other comprehensive income 958 958 Accumulated deficit (44,176 ) (38,135 )Total equity attributable to owners of the 127,140 101,449 CompanyNon-controlling interest 21 46,439 46,153 Total equity $ 173,579 $ 147,602 Total liabilities and equity $ 198,437 $ 174,860 Commitments and Contingent Liabilities (Note 17)