TORONTO, May 31 /PRNewswire-FirstCall/ - ChondroGene Limited today announced its financial results for the first quarter ended March 31, 2006. The Company reported revenues of $868,222 for the period compared to $878,251 for the three months ended March 31, 2005. Revenues were attributable to fees for service and amortization of the one time payment under the research collaboration with Pfizer that was announced in December 2004. The net loss for the quarter was $2,204,103 or $0.06 per share, compared to a net loss of $1,126,595 or $0.03 per share for the three-month period ended March 31, 2005.
“Since the beginning of the year, we have made significant progress in the development of our blood-based colon cancer test, ColonSentry(TM). We announced preliminary performance results of our test, had an abstract accepted at the Association of Clinical Oncology (ASCO) meeting to be held in early June, and entered into a clinical collaboration with Kaiser Permanente to further refine and evaluate the test,” stated K. Wayne Marshall, President and CEO of ChondroGene. “We had a significant paper published during the quarter in the Journal of Laboratory and Clinical Medicine that, for the first time in a peer reviewed publication, described the application of the Sentinel Principle(TM) in a wide variety of tissues associate with various diseases - brain, colon, heart, kidney, liver, lung, prostate, spleen, and stomach. The lead author of this paper was Dr. C.C. Liew, ChondroGene’s Chief Scientist and the discoverer of the Sentinel Principle. In the latter part of quarter, we sponsored and organized a conference in Malaysia - the 2006 Biotechnology Symposium: Developing Medical Biotechnology in Malaysia, from Start-up to IPO. This conference not only allowed us to promote our company and technology in Malaysia but also to solidify our relationships there and attract new investors.”
Subsequent to the quarter end, the Company closed a $25 million private placement financing with a syndicate, led by Westwind Partners Inc., which included PowerOne Capital Markets Limited, Canaccord Capital Corporation, Loewen, Ondaatje, McCutcheon Limited and Paradigm Capital Inc., by issuing 15,625,000 common shares at a price of $1.60 per share. The financing was placed with institutional and accredited Canadian, US, Asian and other offshore investors.
Dr. Marshall added that “completion of the offering provides sufficient capital to drive commercialization of our lead product, ColonSentry. It also enables us to leverage our platform technology for biomarker discovery and validation, the Sentinel Principle, in order to provide content for our Sentry line of diagnostic products and to provide biomarker content for strategic partners in the diagnostic and pharmaceutical industries”
Annual General Meeting
ChondroGene’s Annual General Meeting will be held at 4:30 PM on June 12, 2006 at the Toronto Board of Trade, 1 First Canadian Place.
About ChondroGene
ChondroGene is focussed on the application of functional genomics to enable early diagnosis and personalized therapeutic intervention based on disease-specific biomarkers. The Company has developed a novel approach, the Sentinel Principle(TM), to detect and stage virtually any disease or medical condition from a simple blood sample. ChondroGene is currently applying the Sentinel Principle in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. For more information on ChondroGene, visit www.chondrogene.com.
This press release contains forward-looking statements, which reflect the Company’s current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein. Investors should consult the Company’s ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
(Financial statements to follow.) ChondroGene Limited Consolidated Balance Sheets Amounts in Canadian dollars ------------------------------------------------------------------------- March 31 December 31 2006 2005 ------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 4,441,264 $ 4,680,882 Accounts receivable 178,966 1,356,392 Investment tax credits recoverable 596,900 1,254,922 Prepaid expenses and deposits 343,557 365,715 ----------------------------------------------------------------------- 5,560,687 7,657,911 Capital assets 1,294,284 1,251,014 Intellectual property 1,174,138 1,284,675 ------------------------------------------------------------------------- $ 8,029,109 $ 10,193,600 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES and SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 1,476,323 $ 929,837 Deferred revenue 1,462,362 2,134,361 Current portion of long term debt 143,612 139,427 ----------------------------------------------------------------------- 3,082,297 3,203,625 Long term debt 65,038 102,549 Shareholders’ equity: Capital stock 20,242,231 20,138,831 Contributed surplus 1,622,058 1,527,007 Deficit (16,982,515) (14,778,412) ----------------------------------------------------------------------- 4,881,774 6,887,426 ------------------------------------------------------------------------- $ 8,029,109 $ 10,193,600 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ChondroGene Limited Consolidated Statements of Operations and Deficit Amounts in Canadian dollars “Unaudited” ------------------------------------------------------------------------- Three months Three months ended ended March 31 March 31 2006 2005 ------------------------------------------------------------------------- Revenue Milestones $ - $ - Fees for service 196,459 206,488 One-time payment 671,763 671,763 ----------------------------------------------------------------------- 868,222 878,251 Expenses Research and development 2,366,201 1,335,094 General and administrative 512,682 421,703 Stock compensation 113,432 173,885 Amortization of intellectual property 110,537 110,535 Interest on long term debt 6,470 10,189 ----------------------------------------------------------------------- 3,109,322 2,051,406 Interest income 36,997 46,560 ------------------------------------------------------------------------- Net loss for the period (2,204,103) (1,126,595) Deficit, beginning of period (14,778,412) (11,703,305) ------------------------------------------------------------------------- Deficit, end of period $(16,982,515) $(12,829,900) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net loss per common share Basic and fully diluted $ (0.06) $ (0.03) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding Basic and fully diluted 39,545,221 39,270,470 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ChondroGene Limited Consolidated Statements of Cash Flows Amounts in Canadian dollars “Unaudited” ------------------------------------------------------------------------- Three months Three months ended ended March 31 March 31 2006 2005 ------------------------------------------------------------------------- Cash flows provided by (used in): Operations: Net loss for the period $ (2,204,103) $ (1,126,595) Items therein not requiring cash Stock based compensation 113,432 173,885 Amortization of capital assets 92,474 76,322 Amortization of intellectual property 110,537 110,535 --------------------------------------------------------------------- (1,887,660) (765,853) Changes in non-cash working capital: Accounts receivable 1,177,426 5,490,306 Investment tax credit recoverable 658,022 - Prepaid expenses and deposits 22,158 121,038 Accounts payable and accrued liabilities 546,486 (806,896) Deferred revenue (671,999) (672,478) --------------------------------------------------------------------- (155,567) 3,366,117 Financing: Net proceeds from issue of capital stock 85,019 4,500 Payments on long term debt (33,326) (29,607) ----------------------------------------------------------------------- 51,693 (25,107) Investments: Additions to capital assets (135,744) (93,316) ----------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents (239,618) 3,247,694 Cash and cash equivalents, beginning of period 4,680,882 6,381,870 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 4,441,264 $ 9,629,564 ------------------------------------------------------------------------- -------------------------------------------------------------------------
ChondroGene Limited
CONTACT: Dr. K. Wayne Marshall, President & CEO, (416) 650-0060 x234,wmarshall@chondrogene.com; Bruno Maruzzo, Corporate Development, (416)650-0060 x237, bmaruzzo@chondrogene.com