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