Dr. Robert Gundel reports

AMORFIX ANNOUNCES FINANCIAL RESULTS FOR NINE-MONTH PERIOD ENDED DECEMBER 31, 2014

Amorfix Life Sciences Ltd. has released its operational and financial results for the three- and nine-month period ended Dec. 31, 2014.

"Recently the company made the decision to close its research facility in Mississauga, Ont., and initiate a review of strategic alternatives to further develop its neurobiological assets and other research and development programs," said Amorfix chief executive officer Dr. Robert Gundel. "The management team and the board of directors are fully engaged in this effort to identify the best path forward for the company to maximize long-term shareholder value."

Annual highlights and recent developments:

• On Jan. 12, 2015, the company announced that it is closing its operations in Mississauga, Ont., during the first quarter of fiscal 2015 and that it planned to relocate operations to South San Francisco, Calif., once new investment funds are received.
• On March 16, 2015, the company announced that its board of directors has formally authorized the company to review all strategic alternatives available to it. The company's management has been charged, among other things, with the responsibility for exploring alternative ways to maximize shareholder value, including transactions involving the sale of all or part of the assets of the company. The company had numerous discussions with potential investors in recent months, many of whom ultimately declined to invest based on a variety of factors, citing a reluctance to invest in a public biotechnology company at an early stage of the company's progress toward clinical trials, among other reasons. The board of directors will consider any and all strategic proposals, including proposals that would transfer the company's assets into a privately held entity in such a manner that would provide the company and its shareholders with a continuing equity stake in the private entity's business, although the board of directors has not ruled out any strategic alternatives at this stage.
• In April, 2014, the company completed a non-brokered private placement through the issuance of 3,320,333 common shares of Amorfix and 3,320,333 warrants for gross proceeds of $996,100. In conjunction with the offering, the company paid $40,016 in finder fees and issued 133,385 finder warrants which have the same terms as the warrants.
• On July 16, 2014, the company announced that it has been issued a broad patent covering antibodies that target misfolded SOD1 (mSOD1) for the treatment of ALS by the U.S. Patent and Trademark Office. This patent provides very broad patent protection for the company's ALS therapeutic antibody product portfolio and puts Amorfix in a controlling position for commercialization of antibodies that target misfolded SOD1.
• On July 17, 2014, the company announced that its EP-AD diagnostic assay for the early detection of Alzheimer's disease can now measure aggregated As42 separately from aggregated As40 in patient cerebrospinal fluid, greatly expanding the utility of the diagnostic assay. The ability to distinguish one form of the aggregated protein from another will help advance the scientific understanding of the role of aggregates in Alzheimer's disease progression and improve the targeting of new therapies to patients who are more likely to show therapeutic benefit.
• On Oct. 21, 2014, the company announced that it would get the rights back for development and commercialization of the ALS antibody therapeutics originally licensed to Biogen-Idec effective Jan. 14, 2015.

Annual results of operations

Effective Oct. 3, 2014, the company changed its fiscal year-end from March 31 to Dec. 31. As a result of that change the current period is for the nine-month period ended Dec. 31, 2014, while the prior-year comparative period is for the 12 months ended March 31, 2014, and therefore is not directly comparable to the current nine-month period.

Since inception, the company has incurred losses while advancing the research and development of its diagnostic and therapeutic technologies. The net loss for the nine-month period ended Dec. 31, 2014, was $2,141,439 versus the net loss of $2,253,341 for the year ended March 31, 2014.

For the nine-month period ended Dec. 31, 2014, revenue from services and sales was $48,205 versus $139,968 in the comparative period. Revenue for both periods related mostly to the company's EP-AD diagnostic test. In addition, through a research collaboration, the company recognized $209,578 in contract research revenue for the nine-month period ended Dec. 31, 2014, versus $8,354 for the year ended March 31, 2014. This research project is now completed and no further revenue will be recognized related to this collaboration.

Research and development expenses for the nine-month period ended Dec. 31, 2014, were $1,318,294 versus $1,408,961 in the year ended March 31, 2014. The decrease results from comparing a nine-month period versus a 12-month period. Annualizing the expenses for the nine-month period ended Dec. 31, 2014, to make it comparable to the year ended March 31, 2014, results in an increase in expenditures related mostly to higher expenses on its cancer therapeutics and AD diagnostic research programs.

General and administrative expenses for the nine-month period ended Dec. 31, 2014, were $1,080,928 versus $992,702 in the year ended March 31, 2014. The increase in annualized expenditures for the nine-month period ended Dec. 31, 2014, versus the year ended March 31, 2014, related mostly to higher consulting fees and higher stock-based compensation.

Results of operations -- three months ended Dec. 31, 2014, and 2013

The net loss for the three months ended Dec. 31, 2014, was $521,617 versus a net loss of $435,713 for the three months ended Dec. 31, 2013. The increased net loss in the current period results mainly from higher professional fees and higher program fees for its Alzheimer's disease diagnostic program.

For the three months ended Dec. 31, 2014, contract research revenue was $63,092. There was no research revenue in the comparable period. Sales and service revenue were $646 in the current period as compared with $35,590 in the comparable period.

Research and development expenses for the three months ended Dec. 31, 2014, were $355,916 versus $295,832 in the three months ended Dec. 31, 2013. The increase in expenditures in the current period related mostly to higher expenditures on its Alzheimer's disease diagnostic program, higher salaries and travel expenses, offset by lower stock option compensation.

General and administrative expenses for the three months ended Dec. 31, 2014, were $229,439 versus $175,471 in the three months ended Dec. 31, 2013. The increase in expenditures in the current period resulted mainly from higher professional fees expense offset by lower stock option compensation.

The company incurred a loss of $2,141,439 for the nine-month period ended Dec. 31, 2014, and has a deficit of $36,426,344 as at Dec. 31, 2014, and as at Dec. 31, 2014, had working capital deficiency of $286,786. At present, the company's cash resources are expected to be fully depleted imminently. These circumstances may cast significant doubt as to the ability of the company to continue as a going concern. The company is actively pursuing financing and strategic alternatives to further develop certain of the company's scientific initiatives, but there is no assurance that these initiatives will be successful, timely or sufficient.

Outlook

The company intends to continue to maintain its core neurodegenerative disease assets for ALS and Alzheimer's disease until one or more strategic transactions are consummated. For ALS, these assets include therapeutic antibodies that block misfolded SOD1 and a simple blood test diagnostic for early detection of the disease. For Alzheimer's disease, the company has developed a best-in-class diagnostic that can accurately identify patients with early stage disease.

No timetable has been set for the company's process for reviewing strategic alternatives. No decision has been made to enter into any transaction at this time, and there can be no assurance that the company will enter into such a transaction in the future. Such a transaction, if one were to occur, could require formal shareholder approval, in which case detailed proxy or other solicitation material would be made available to shareholders. There is no assurance that this strategic alternatives review will result in Amorfix changing its current business plan, pursuing a particular transaction, or completing any such transaction.

The company currently intends to retain its listing as a public company on the Toronto Stock Exchange unless a so-called going-private transaction or any other strategic alternative is consummated. There can be no assurance that any such transaction will be consummated.

We seek Safe Harbor.