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SemBioSys, Genetics Inc

SemBioSys Announces First Quarter Results

Calgary , Canada (ots/PRNewswire)

- Canadian Biotechnology Company Achieves Insulin Milestones and
Strengthens Balance Sheet
SemBioSys Genetics Inc. (TSX:SBS), a biotechnology company
developing  insulin and other metabolic and cardiovascular
protein-based  pharmaceuticals and a series of non-pharmaceutical
products, today  announced its operational and financial results for
the 2007 first quarter  which ended on March 31, 2007.
     First Quarter Highlights
     -   Demonstrated the functional equivalence of the Company's proprietary
         safflower-produced insulin to U.S. pharma grade human insulin in
         animal models. The Company also announced in vitro and in vivo assay
         results that demonstrate the Company's safflower-produced insulin is
         chemically, structurally and physiologically indistinguishable from
         U.S. pharma grade human insulin.
     -   Confirmed that the Company is eligible to pursue a Section 505(b)(2)
         regulatory path for safflower-produced insulin after meeting with
         the U.S. Food and Drug Administration (FDA).
     -   Harvested over 300 acres of the Company's proprietary transgenic
         safflower-produced ImmunoSphere(TM) Feed Additive in Chile as part
         of its counter seasonal commercial scale-up in preparation for
         product launch later this year or early in 2008.
     -   Renegotiated the Company's docosahexaenoic acid (DHA) collaboration
         agreement with Martek Biosciences Corporation (Martek). Under the
         terms of the amended agreement, SemBioSys received a license fee of
         US$750,000 in January 2007 and was entitled to receive an additional
         license fee of up to US$250,000 upon delivery of seed and the
         achievement of expression of at least five percent of DHA in
         Arabidopsis prior to April 19th, 2007. Subsequent to the end of the
         quarter, the Company reported to Martek the existing
         proof-of-concept results from its DHA-rich safflower oil program. To
         date, SemBioSys has not achieved the five percent DHA accumulation
         threshold in Arabidopsis, although progress in this direction has
         been achieved.
         SemBioSys is, therefore, no longer eligible for the additional
         (US$250,000) license fee. However, SemBioSys is continuing to
         analyze the remaining DHA Arabidopsis lines from the development
         program to determine its ability to establish proof-of-concept.
         These results will be reported to Martek shortly.
     -   Completed an underwritten public offering, concurrent with a
         secondary offering, for aggregate gross proceeds of CDN$24,150,000.
         The total gross proceeds to the Company from the treasury offering,
         including the over-allotment option, were CDN$15,904,488. The
         secondary offering involved certain shareholders of the Company that
         sold 2,748,504 previously issued common shares of the Company
         representing CDN$8,245,512.
"With our two critical insulin announcements in the first quarter,
we  continue to advance the development of our safflower-produced
insulin  program toward the initiation of a Phase II clinical trial
which we expect  to commence in early 2008 with pharmacokinetics and
pharmacodynamics as the  primary endpoints," said Andrew Baum,
President and CEO of SemBioSys  Genetics Inc. "In parallel to our
insulin development, we are also  advancing our Apo AI program and
our non-pharmaceutical pipeline.  Specifically, during the next few
months we intend to actively pursue  business development
alternatives to maximize the value of the DermaSphere (R) Oleosome
Technology to the Company and execute pond trials with our
ImmunoSphere(TM) Shrimp Feed Additive product."
Financials
Total revenues for the three-month period ended March 31, 2007
were  CDN$542,788 compared with $100,086 for the corresponding period
in 2006.  Total revenues for the three-month period ended March 31,
2007 consisted of  CDN$437,012 in license fees, compared with $nil
during the same period last  year and CDN$105,776 in contract
research compared with CDN$100,086 for the  corresponding period last
year. The change in license fee revenue relates  entirely to the
partial recognition of the upfront license fee payment  received from
Martek as part of the amended collaboration agreement which  included
a US$750,000 license fee payment that was received upon signing of
the contract in January 2007.
Total expenditures for the three-month period ended March 31, 2007
were CDN$3,943,408, compared with CDN$2,748,954 for the corresponding
period  last year.
Research and development expenses for the three-month period ended
March 31, 2007 were CDN$1,905,422, compared with CDN$1,107,526 for
the three- month period ended March 31, 2006. The difference is
primarily due to  increased personnel and the related support costs
in all areas of research  and development with an expanded focus on
insulin. This included an  enhanced quality control and assurance
program and further development of a  stronger preclinical and
clinical team.
General and administrative expenses for the three-month period
ended  March 31, 2007 were CDN$1,023,711, compared with CDN$972,260
for the  corresponding period last year.
Intellectual property costs for the three-month period ended March
31,  2007 were CDN$528,249 compared with CDN$263,037 for the
three-month period  ended March 31, 2006. The difference is mainly
attributable to the timing of,  and an increase in, patent costs and
as a result of the final remaining  US$100,000 payment to re-acquire
rights to the DermaSphere(R) Oleosome  Technology from Lonza Inc.,
which became due during the first quarter of  2007.
Business development costs for the three-month period ended March
31,  2007 were CDN$148,005 compared with CDN$184,805 for the
corresponding period  last year.
Net loss for the three-month period ended March 31, 2007 was
CDN$3,228, 411 or (CDN$0.17) per share, compared to a net loss of
CDN$2,504,339 or  (CDN$0.15) per share for the three-month period
ended March 31, 2006.
As at March 31, 2007 the Company had cash and cash equivalents
totaling CDN$28,805,937 compared to CDN$16,328,459 at December 31,
2006.  Management believes the existing capital resources are
adequate to fund its  current plans for research and development
activities into early 2009.  Total long-term debt at March 31, 2007
was CDN$1,877,377 compared to  CDN$2,084,103 at December 31, 2006.
The increase in cash resulted from an  underwritten public offering,
including the exercise of the over-allotment  option, of 5,301,496
common shares at a price of CDN$3.00 per share, for  total gross
proceeds to SemBioSys of CDN$15,904,488.
As at March 31, 2007 the Company had 22,083,886 common shares
outstanding, 3,102,796 warrants, and 1,436,494 options.
Outlook
The Company has completed the major scientific milestones
necessary to  proceed into first-in-man clinical trials of
safflower-produced insulin in  early 2008. Additional insulin
milestone events expected in 2007 include:
-   Complete the scale-up and preclinical development of
safflower-produced insulin
-   Complete the technology transfer and production of clinical
grade
material for early stage human trials
-   Initiate business development activities toward an insulin
partnership
-   Submit insulin IND to the FDA and prepare for Phase II trial
The Company is also advancing the development of its other
pharmaceutical and non-pharmaceutical products. The 2007 milestone
events  expected from these programs include:
  • Announce results of animal trials from Arabidopsis-produced Apo AI
  • Achieve commercial levels of Apo AI expression in safflower
  • Increase production capacity of personal care topical oilbody
products and establish distribution channels for commercialization
  • Initiate and complete pond trials for ImmunoSphere(TM)
  • Complete processing of harvested ImmunoSphere(TM) product
  • Initiate a new pharmaceutical product development program
Additional information about the Company, including the MD&A and
financial results may be found on SEDAR at www.sedar.com.
About SemBioSys Genetics Inc. (www.sembiosys.com)
Calgary, Alberta-based SemBioSys Genetics Inc. is a biotechnology
company developing insulin and other protein-based pharmaceuticals
for  metabolic and cardiovascular diseases. The Company's lead
candidate is  recombinant human insulin produced in the plant host
safflower, to serve  the rapidly expanding global diabetes market and
to supply insulin for  inhalation and other alternative insulin
delivery technologies. The  Company's other protein-based
pharmaceutical candidate is a cardiovascular  drug called Apo AI.
SemBioSys is also developing a series of non- pharmaceutical products
addressing animal and aquaculture health,  nutritional oils and human
topical markets.
This press release contains certain forward-looking statements,
including, without limitation, statements containing the words
"believe",  "may", "plan", "will", "estimate", "continue",
"anticipate", "intend", " expect" and other similar expressions which
constitute "forward-looking  information" within the meaning of
applicable Canadian securities laws.  Forward-looking statements
reflect the Company's current expectation and  assumptions, and are
subject to a number of risks and uncertainties that  could cause
actual results to differ materially from those anticipated.  These
forward-looking statements involve risks and uncertainties including,
but not limited to, changing market conditions, the successful and
timely  completion of clinical studies, the establishment of
corporate alliances,  the impact of competitive products and pricing,
new product development,  uncertainties related to the regulatory
approval process and other risks  detailed from time-to-time in the
Company's ongoing filings with the  Canadian securities regulatory
authorities which filings can be found at  www.sedar.com. Given these
risks and uncertainties, readers are cautioned  not to place undue
reliance on such forward-looking statements. The Company  undertakes
no obligation to publicly update or revise any forward-looking
statements either as a result of new information, future events or
otherwise, except as required by applicable Canadian securities laws.
     Financial results included below:
     SemBioSys Genetics Inc.
     Consolidated Balance Sheets
     (Unaudited)
     As at March 31, 2007 and December 31, 2006
     (expressed in Canadian dollars)
                                                    March 31,    December 31,
                                                       2006           2007
                                                  -------------  ------------
                                                        $              $
     Assets
     Current assets
     Cash and cash equivalents                      28,805,937     16,328,459
     Accounts receivable                               192,842        526,002
     Interest receivable                               113,145        504,551
     Prepaid expenses, deposits and other              394,271        405,459
                                                  -------------  ------------
                                                    29,506,195     17,764,471
     Property and equipment                          5,480,474      5,157,163
                                                  -------------  ------------
                                                    34,986,669     22,921,634
                                                  -------------  ------------
                                                  -------------  ------------
     Liabilities
     Current liabilities
     Accounts payable and accrued liabilities        1,700,006      1,356,018
     Repayable advances                                      -         85,640
     Short-term portion of long-term debt              730,750        746,658
                                                  -------------  ------------
                                                     2,430,756      2,188,316
     Deferred cost recoveries                          330,641         84,203
     Deferred revenue                                  437,012              -
     Long-term debt                                  1,146,627      1,337,445
                                                  -------------  -------------
                                                     4,345,036      3,609,964
                                                  -------------  ------------
     Shareholders' Equity
     Capital stock                                  62,681,360     48,302,036
     Warrants                                        6,274,716      6,274,716
     Contributed surplus                             5,654,454      5,475,404
     Deficit                                       (43,968,897)  (40,740,486)
                                                  -------------  ------------
                                                    30,641,633     19,311,670
                                                  -------------  ------------
                                                    34,986,669     22,921,634
                                                  -------------  ------------
     SemBioSys Genetics Inc.
     Consolidated Statements of Loss, Comprehensive Loss and Deficit
     (Unaudited)
     (expressed in Canadian dollars)                   Three month period
                                                         ended March 31,
                                                       2006           2007
                                                  -------------  ------------
                                                        $              $
     Revenue
     Licensing fees                                    437,012              -
     Contract research                                 105,776        100,086
                                                  -------------  ------------
                                                       542,788        100,086
                                                  -------------  ------------
     Expenses
     Research and development                        1,905,442      1,107,526
     General and administration                      1,023,711        972,260
     Intellectual property costs                       528,249        263,037
     Business development                              148,005        184,805
     Stock-based compensation                          179,050         51,712
     Amortization                                      228,058        198,614
     Cost recoveries                                   (69,107)      (29,000)
                                                  -------------  ------------
                                                     3,943,408      2,748,954
                                                  -------------  ------------
     Loss before the undernoted                     (3,400,620)   (2,648,868)
                                                  -------------  ------------
     Interest income                                   212,233        220,080
     Interest expense                                  (57,973)      (48,848)
     Foreign exchange gain (loss)                       17,949       (26,703)
                                                  -------------  ------------
                                                       172,209        144,529
                                                  -------------  ------------
     Net loss and comprehensive loss for
      the period                                    (3,228,411)   (2,504,339)
     Deficit - Beginning of period                 (40,740,486)  (26,613,400)
                                                  -------------  ------------
     Deficit - End of period                       (43,968,897)  (29,117,739)
                                                  -------------  ------------
                                                  -------------  ------------
     Loss per share - basic and diluted                  (0.17)        (0.15)
                                                  -------------  ------------
     SemBioSys Genetics Inc.
     Consolidated Statements of Cash Flows
     (Unaudited)
     (expressed in Canadian dollars)                   Three month period
                                                         ended March 31,
                                                       2006           2007
                                                  -------------  ------------
                                                        $              $
     Cash provided by (used in)
     Operating activities
     Net and comprehensive loss for the period      (3,228,411)   (2,504,339)
     Add items not affecting cash:
       Amortization                                    228,058        198,614
       Stock-based compensation                        179,050         51,712
       Unrealized foreign exchange (gain) loss         (21,010)        14,989
                                                  -------------  ------------
                                                    (2,842,313)   (2,239,024)
     Change in non-cash working capital and
      other balances related to operations           1,481,767       (96,966)
                                                  -------------  ------------
                                                    (1,360,546)   (2,335,990)
                                                  -------------  ------------
     Financing activities
     Issuance of capital stock                      15,904,488              -
     Share issue costs                              (1,356,539)             -
     Exercise of stock options                           4,500          5,102
     Repayment of long-term debt                      (183,969)     (143,845)
     Repayment of repayable advances                   (85,640)             -
                                                  -------------  ------------
                                                    14,282,840      (138,743)
                                                  -------------  ------------
     Investing activities
     Acquisition of property and equipment            (444,816)     (141,101)
                                                  -------------  ------------
                                                      (444,816)     (141,101)
                                                  -------------  ------------
     Increase (decrease) in cash and
      cash equivalents                              12,477,478    (2,615,834)
     Cash and cash equivalents - Beginning
      of period                                     16,328,459    28,513,095
                                                  -------------  ------------
     Cash and cash equivalents - End of period      28,805,937    25,897,261
                                                  -------------  ------------
                                                  -------------  ------------
     Supplemental Information
     Cash interest received                            603,639        201,784
     Cash interest paid                                 51,422         44,995
     Non-cash transactions
       Capital items included in accounts payable      469,161         18,243
       Share issue costs included in accounts
       payable                                        168,939              -

Contact:

For further information: SemBioSys Genetics Inc., Mr. Andrew Baum,
President and Chief Executive Officer, Phone: +1-403-717-8767, Fax:
+1-403-250-3886, E-mail: bauma@sembiosys.com, Internet:
www.sembiosys.com; Investor Relations, Ross Marshall, The Equicom
Group Inc., Phone: +1-416-815-0700 (Ext.238), Fax: +1-416-815-0080,
E-mail: rmarshall@equicomgroup.com

Plus de actualités: SemBioSys, Genetics Inc
Plus de actualités: SemBioSys, Genetics Inc