CALGARY, March 15 /PRNewswire-FirstCall/ - SemBioSys Genetics Inc. , a biotechnology company developing a broad pipeline of protein-based pharmaceuticals and non-pharmaceutical products, today announced its operational and financial results for the fiscal year which ended on December 31, 2005.
2005 Highlights Pharmaceutical Products - Reported preclinical results of plant-produced insulin in Arabidopsis in January 2006 Plant Biotechnology Journal, subsequent to year end. - Increased levels of insulin and Apo AI expression in Arabidopsis, the Company’s model plant system and continued development progress in safflower, the commercial plant system. Non-Pharmaceutical Products - Initiated scale-up of proprietary transgenic safflower-produced ImmunoSphere(TM) Feed Additive in Chile. - Announced receipt of the second and final scheduled license payment from the royalty-bearing license and sales agreement with Lonza Inc. for the DermaSphere(R) Oleosome Technology. In mid 2005, Lonza launched DermaSphere(R) under the Natrulon(R) OSF brand into the personal care market. - Continued work on the DHA rich safflower oil program resulting in ongoing research payments from its partner Martek Biosciences Corporation. - Received milestone payments from Arcadia Biosciences, Inc. for progress in the Company’s GLA rich safflower oil program. - Announced successful completion of an animal vaccine feasibility program with Dow AgroSciences LLC. Corporate - Completed a $15.5 million private placement through the issuance of 3.86 million units, each unit consisted of one common share and one-half of one common share purchase warrant. - Completed a $2,500,000 long-term debt financing agreement. - Receipt of $2.6 million related to the exercise of the over-allotment option of the Company’s Initial Public Offering. - Expanded the in-house plant growth facility to provide additional capacity for plant research and development operations.
“SemBioSys is carrying significant momentum into 2006 due to our product development and corporate progress in 2005. This success is highlighted by the launch of our first commercial product DermaSphere(R) by our partner Lonza Inc., our progress toward commercialization in other non-pharmaceutical programs, and our progress to increase expression levels of insulin in safflower. These results demonstrate the ability of our team to achieve development milestones and as a result, build value and attract the interest of potential new partners,” said Andrew Baum, President and CEO of SemBioSys Genetics Inc. “A number of critical milestones are upcoming in 2006 that will further demonstrate the viability of our platform to produce high value proteins and products, in particular, results of the commercial level of expression of insulin in safflower, our commercial plant system, and targeted expression levels of DHA in Arabidopsis, our model plant.”
Financials
Total revenues for the fiscal year ended December 31, 2005 were $2,459,202 compared to $1,467,868 for the corresponding period in 2004.
Revenues were generated from licensing fees, which were $763,031 for the fiscal year ended December 31, 2005, compared with $343,099 for the same period in 2004, and contract research, which was $1,696,171 for the 2005 fiscal year compared with $1,124,769 for the fiscal year ended December 31, 2004. These increases are from the Company’s continued progress in its existing collaborative arrangement with its partners.
Total expenditures for the year ended December 31, 2005 were $9,734,220 compared to $7,185,581 for the year ended December 31, 2004.
Research and development expenses for the fiscal year ended December 31, 2005 were $4,420,886, an increase of $0.6 million from $3,849,292 for the 2004 fiscal year, this difference is primarily from increased salary expenses, an enhanced quality control and assurance program and additional field studies related to product development programs. The Company increased its research and development staff to begin preparation for preclinical and clinical trials related to insulin and Apo AI and future pipeline candidates.
General and administrative expenses for the year ended December 31, 2005 were $3,516,871 compared with $2,901,161 for the 2004 fiscal year, the difference is due mainly to additional costs associated with being a publicly listed company including listing fees, investor relations, and corporate governance.
Intellectual property costs for the year ended December 31, 2005 were $1,586,788 compared with $1,151,444 for the year ended December 31, 2004. The difference is primarily due to the payment of additional license fees in 2005, several new patents that were filed in late 2005 and for further maintenance of existing patents.
It should also be noted that the Company is no longer eligible to have its investment tax credits refunded as a result of being a publicly traded company. This has resulted in a $0.8 million adverse effect in comparison to the prior year.
Net loss for the year ended December 31, 2005 was $6,824,545 or ($0.54) per share, compared to a net loss of $5,692,493 or ($0.95) per share for 2004.
As at December 31, 2005 the Company had cash and cash equivalents totaling $28,513,095 compared to $18,836,396 at December 31, 2004. Total long-term debt at December 31, 2005 was $1,877,330. Cash provided by financing activities of $18,435,626 was a result of the three financing activities in 2005; the over-allotment related to the Initial Public Offering of $2,429,387, debt financing of $1,658,122 and $14,458,582 from completion of the private placement offering, all net of issue costs.
As at December 31, 2005 the Company had 16,559,030 common shares outstanding, 4,565,296 warrants, and 926,639 options.
Outlook
The Company’s priorities for 2006 are to achieve commercial levels of expression in safflower of its pharmaceutical products, insulin and Apo AI, and to advance the development of its non-pharmaceutical ImmunoSphere(TM) and DHA rich safflower oil programs. The upcoming milestone events expected in 2006 include:
- First royalties from sales of the DermaSphere(R) product - Achievement of commercial levels of insulin expression in safflower - Achievement of commercial levels of Apo AI expression in safflower - Initiation of a new pharmaceutical product development program - Scale-up of ImmunoSphere(TM) product in Chile for commercial launch in 2007 - Achievement of key DHA proof-of-concept milestone
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 focused on the development, commercialization and production of protein-based pharmaceuticals and non-pharmaceutical products based on its plant genetic engineering skills and proprietary oilbody-oleosin technology platform - the Stratosome(TM) Biologics System. Its two lead pharmaceutical product candidates are insulin and a developmental cardiovascular drug called Apo AI. It also has a series of non-pharmaceutical products addressing animal and aquaculture health, nutritional oils and human topical markets. SemBioSys currently has five major funded partnership agreements, including agreements with Martek Biosciences Corporation, Lonza Inc. and Arcadia Biosciences, Inc.
Except for historical information, this press release may contain forward-looking statements, which are based on the Company’s beliefs and assumptions based on information available at the time the assumption was made. These forward-looking statements involve risk and uncertainties, which may cause but are 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 quarterly and annual reporting.
Financials results included below: SemBioSys Genetics Inc. Consolidated Balance Sheets As at December 31, 2005 and 2004 ------------------------------------------------------------------------- (expressed in Canadian dollars) 2005 2004 $ $ Assets Current assets Cash and cash equivalents 28,513,095 18,836,396 Accounts receivable 1,363,541 458,995 Investment tax credits receivable - 750,000 Prepaid expenses, deposits and other 265,062 99,739 ------------------------------ 30,141,698 20,145,130 Property and equipment 4,497,190 3,522,102 ------------------------------ 34,638,888 23,667,232 ------------------------------ ------------------------------ Liabilities Current liabilities Accounts payable and accrued liabilities 1,368,276 902,617 Repayable advances 85,640 275,822 Current portion of long-term debt 590,243 173,683 ------------------------------ 2,044,159 1,352,122 Deferred cost recoveries 76,535 354,062 Deferred revenue 195,259 906,759 Long-term debt 1,287,087 256,326 ------------------------------ 3,603,040 2,869,269 ------------------------------ Shareholders’ Equity Capital stock 48,103,709 35,619,699 Contributed surplus 131,384 - Warrants 9,414,155 4,967,119 Deficit (26,613,400) (19,788,855) ------------------------------ 31,035,848 20,797,963 ------------------------------ 34,638,888 23,667,232 ------------------------------ ------------------------------ SemBioSys Genetics Inc. Consolidated Statements of Operations and Deficit As at December 31, 2005 and 2004 ------------------------------------------------------------------------- (expressed in Canadian dollars) 2005 2004 $ $ Revenue Licensing fees 763,031 343,099 Contract research 1,696,171 1,124,769 ------------------------------ 2,459,202 1,467,868 ------------------------------ Expenses Research and development 4,420,886 3,849,292 General and administration 3,516,871 2,901,161 Intellectual property costs 1,586,788 1,151,444 Business development 480,022 464,522 Stock-based compensation 131,384 - Amortization 568,595 586,767 Cost recoveries (899,018) (921,149) Investment tax credits (71,308) (846,456) ------------------------------ 9,734,220 7,185,581 ------------------------------ Loss before the undernoted (7,275,018) (5,717,713) ------------------------------ Interest income 421,091 149,740 Interest expense (31,410) (166,757) Foreign exchange gain 52,028 42,237 Gain on sale of property and equipment 8,764 - ------------------------------ 450,473 25,220 ------------------------------ Net loss for the year (6,824,545) (5,692,493) Deficit - Beginning of year (19,788,855) (14,096,362) ------------------------------ Deficit - End of year (26,613,400) (19,788,855) ------------------------------ ------------------------------ Loss per share - basic and diluted (0.54) (0.95) ------------------------------ ------------------------------ SemBioSys Genetics Inc. Consolidated Statements of Cash Flows As at December 31, 2005 and 2004 ------------------------------------------------------------------------- (expressed in Canadian dollars) 2005 2004 $ $ Cash provided by (used in) Operating activities Net loss for the year (6,824,545) (5,692,493) Add items not affecting cash Amortization 568,595 586,766 Accretion of convertible promissory note - 124,117 Gain on sale of property and equipment (8,764) - Stock-based compensation 131,384 - Unrealized foreign exchange gain (36,975) (133,279) ------------------------------ (6,170,305) (5,114,889) Change in non-cash working capital and other balances related to operations (1,147,959) (154,272) ------------------------------ (7,318,264) (5,269,161) ------------------------------ Financing activities Issuance of units 18,081,000 17,500,000 Share issue costs (1,193,031) (2,294,022) Exercise of stock options 63,361 42,228 Proceeds from long-term debt 1,658,122 - Repayment of long-term debt (173,826) (114,886) ------------------------------ 18,435,626 15,133,320 ------------------------------ Investing activities Proceeds on sale of property and equipment 12,300 - Acquisition of property and equipment (1,452,963) (470,803) ------------------------------ (1,440,663) (470,803) ------------------------------ Increase in cash and cash equivalents 9,676,699 9,393,356 Cash and cash equivalents - Beginning of year 18,836,396 9,443,040 ------------------------------ Cash and cash equivalents - End of year 28,513,095 18,836,396 ------------------------------ ------------------------------ Supplemental information Cash interest received 341,510 149,740 Cash interest paid 16,802 34,341 Non-cash transactions Settlement of convertible note payable for common shares - 2,918,208 Share issue costs included in accounts payable 20,284 165,665 Capital items included in accounts payable 94,256 10,180
SemBioSys Genetics Inc.
CONTACT: SemBioSys Genetics Inc.: Mr. Andrew Baum, President and ChiefExecutive Officer, Phone: (403) 717-8767, Fax: (403) 250-3886, E-mail:bauma@sembiosys.com, Internet: www.sembiosys.com; Investor Relations: RossMarshall, The Equicom Group Inc., Phone: (416) 815-0700 (Ext. 238), Fax:(416) 815-0080, E-mail: rmarshall@equicomgroup.com
