CALGARY, Aug. 2 /PRNewswire-FirstCall/ - SemBioSys Genetics Inc. , a biotechnology company developing a portfolio of therapeutic proteins for metabolic and cardiovascular diseases, today announced its 2007 second quarter operational and financial results.
Highlights - Successfully developed commercially viable levels of apolipoprotein AI and its variant apolipoprotein AIMilano (collectively referred to as Apo AI) in safflower seed lines, subsequent to quarter end. - Presented positive preclinical data supporting the development of recombinant human insulin produced in safflower at the 67th Scientific Sessions of the American Diabetes Association in Chicago. - Construction of the full-scale commercial manufacturing facility for the Company's topical oilbody business is on schedule and on budget and commercial scale production will begin in the third quarter.
"With the recent announcement from our Apo AI program, we are now actively scaling-up production and conducting the necessary preclinical work to start clinical trials for two large-market protein products, insulin and Apo AI," said Andrew Baum, President and CEO of SemBioSys Genetics Inc. "We expect to receive data on the functional equivalence of Arabidopsis-produced Apo AI to serum-derived Apo AI from animal trials later this year. We also intend to scale-up production and initiate functional equivalence studies in animals of safflower-produced Apo AI immediately. With respect to the insulin program, we expect to initiate a Phase II clinical trial in early 2008 and anticipate data from that trial toward the middle of 2008. In addition to our progress on our pharmaceutical programs, we have also increased our production capacity for our topical oilbody product, DermaSphere(R), and are scaling-up production of our shrimp feed additive, ImmunoSphere(TM), in preparation for its commercial launch in early 2008."
Outlook
The Company has completed the major scientific milestones necessary to proceed into human clinical trials of safflower-produced insulin in early 2008. Additional insulin milestone events expected in 2007 include:
- Complete the preclinical testing of safflower-produced insulin - Complete the technology transfer and scale-up of insulin processing and formulation to the Company's contract manufacturer for Phase II clinical material and production of clinical grade material for early stage human trials - Continue business development activities toward an insulin partnership - Submit an IND to the FDA and prepare for Phase II clinical trial
With the Company's recent achievement of successfully developing commercial levels of Apo AI, the 2007 milestone events that the Company expects from this program include:
- Functional equivalence results comparing Arabidopsis-produced Apo AI to serum-derived Apo AI from animal trials - Functional equivalence results comparing safflower-produced Apo AI to serum-derived Apo AI from animal trials
In addition to the above pharmaceutical milestones, the Company is also advancing the development of its non-pharmaceutical products. The 2007 milestone events expected from these programs include:
- Increase production capacity of personal care topical oilbody products and establish distribution channels for commercialization - Initiate and complete pond trials for the Company's shrimp feed additive, ImmunoSphere(TM) - Complete development feed of formulation process using harvested ImmunoSphere(TM) product Financials
Total revenue for the three and six-month periods ended June 30, 2007 were $459,407 and $1,002,195 respectively, compared with $167,445 and $267,531 for the corresponding periods in 2006. The increase in revenue relates primarily to the recognition of an upfront license fee payment received from Martek and is offset by the reduced level of research activity with respect to the collaboration agreement with Martek.
Total expenditures for the three and six-month periods ended June 30, 2007 were $4,046,723 and $7,990,131 respectively, compared with $5,007,483 and $7,756,437 for the corresponding periods last year.
Research and development expenses for the three and six-month periods ended June 30, 2007 were $1,924,745 and $3,668,717, compared with $1,375,635 and $2,483,161 for the corresponding periods last year. 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 preclinical work for insulin and Apo AI, and increased field planting costs incurred for process development of the ImmunoSphere(TM) product. The increased personnel costs are primarily attributable to an enhanced quality control and assurance program and further development of a stronger preclinical and clinical team.
General and administrative expenses for the three and six-month periods ended June 30, 2007 were $1,086,766 and $2,110,477 respectively, compared with $819,659 and $1,791,919 for the corresponding periods last year. The difference is mainly due to newly added staff and increased investor relations activities as the Company broadens its exposure to U.S. and European markets.
Intellectual property costs for the three and six-month periods ended June 30, 2007 were $307,414 and $835,663 respectively, compared with $2,081,258 and $2,344,295 for the corresponding periods last year. This difference is primarily attributable to a $1,516,906 non-cash license fee incurred in the second quarter of 2006 for the acquisition of technology from Syngenta Crop Protection AG in exchange for warrants and a decrease in patent activity in the second quarter offset by an increase in royalty payments that became due in the same period.
Business development costs for the three and six-month periods ended June 30, 2007 were $404,434 and $713,909 respectively, compared with $267,292 and $452,097 for the corresponding periods last year. The difference is primarily related to the further commercialization of the oilbody business, increased staffing levels and increased contractor and consulting time as the Company's products progress further along in their commercialization.
Net loss for the 2007 second quarter was $3,225,371 or ($0.15) per share, compared to a net loss of $4,608,182 or ($0.28) per share for the same period last year. Net loss for the six-month period ended June 30, 2007 was $6,453,782 or ($0.31) per share compared with $7,112,521 or ($0.43) for the same six-month period last year.
As at June 30, 2007 the Company had cash and cash equivalents totaling $22,877,784 compared to $28,805,937 at March 31, 2007. Approximately $2,112,436 has been spent to date on the construction of the topical oilbody manufacturing facility.
About SemBioSys Genetics Inc. (www.sembiosys.com)
Calgary, Alberta-based SemBioSys Genetics Inc. is a biotechnology company developing protein-based pharmaceuticals for metabolic and cardiovascular diseases. The Company's lead pharmaceutical candidates, produced in the plant host safflower, are recombinant human insulin to serve the rapidly expanding global diabetes market and Apo AI, a next generation cardiovascular drug. In addition to its pharmaceutical products, SemBioSys is developing a series of non-pharmaceutical products addressing human topical, nutritional oils and animal health 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.
Financials results included below: SemBioSys Genetics Inc. Consolidated Balance Sheets (Unaudited) As at June 30, 2007 and December 31, 2006 ------------------------------------------------------------------------- (expressed in Canadian dollars) June 30, December 31, 2007 2006 ------------- ------------- $ $ Assets Current assets Cash and cash equivalents 22,877,784 16,328,459 Accounts receivable 228,403 526,002 Interest receivable 67,352 504,551 Prepaid expenses, deposits and other 444,728 405,459 ------------- ------------- 23,618,267 17,764,471 Property and equipment 7,559,026 5,157,163 ------------- ------------- 31,177,293 22,921,634 ------------- ------------- ------------- ------------- Liabilities Current liabilities Accounts payable and accrued liabilities 1,719,307 1,356,018 Repayable advances - 85,640 Short-term portion of long-term debt 667,985 746,658 ------------- ------------- 2,387,292 2,188,316 Deferred cost recoveries 286,551 84,203 Long-term debt 890,534 1,337,445 ------------- ------------- 3,564,377 3,609,964 ------------- ------------- Shareholders' Equity Capital stock 62,691,360 48,302,036 Warrants 6,274,716 6,274,716 Contributed surplus 5,841,108 5,475,404 Deficit (47,194,268) (40,740,486) ------------- ------------- 27,612,916 19,311,670 ------------- ------------- 31,177,293 22,921,634 ------------- ------------- ------------- ------------- SemBioSys Genetics Inc. Consolidated Statements of Loss, Comprehensive Loss and Deficit (Unaudited) ----------------------------------------------- ------------------------- (expressed in Canadian dollars) Three month period Six month period ended June 30 ended June 30 ------------------------- ------------------------- 2007 2006 2007 2006 ------------ ------------ ------------ ------------ $ $ $ $ Revenue Licensing fees 437,012 - 874,024 - Contract research 22,395 167,445 128,171 267,531 ------------ ------------ ------------ ------------ 459,407 167,445 1,002,195 267,531 ------------ ------------ ------------ ------------ Expenses Research and development 1,924,745 1,375,635 3,668,717 2,483,161 General and administration 1,086,766 819,659 2,110,477 1,791,919 Intellectual property costs 307,414 2,081,258 835,663 2,344,295 Business development 404,434 267,292 713,909 452,097 Stock-based compensation 186,654 294,731 365,704 346,443 Amortization 241,887 201,908 469,945 400,522 Cost recoveries (105,177) (33,000) (174,284) (62,000) ------------ ------------ ------------ ------------ 4,046,723 5,007,483 7,990,131 7,756,437 ------------ ------------ ------------ ------------ Loss before the undernoted (3,587,316) (4,840,038) (6,987,936) (7,488,906) ------------ ------------ ------------ ------------ Interest income 262,962 230,525 475,195 450,605 Interest expense (52,570) (45,505) (110,543) (94,353) Loss on sale of property and equipment (1,483) (16,802) (1,483) (16,802) Foreign exchange gain 153,036 63,638 170,985 36,935 ------------ ------------ ------------ ------------ 361,945 231,856 534,154 376,385 ------------ ------------ ------------ ------------ Net loss and comprehensive loss for the period (3,225,371) (4,608,182) (6,453,782) (7,112,521) Deficit - Beginning of period (43,968,897) (29,117,739) (40,740,486) (26,613,400) ------------ ------------ ------------ ------------ Deficit - End of period (47,194,268) (33,725,921) (47,194,268) (33,725,921) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Loss per share - basic and diluted (0.15) (0.28) (0.31) (0.43) ------------ ------------ ------------ ------------ Weighted average shares outstanding 22,089,356 16,680,603 20,511,557 16,622,790 ------------ ------------ ------------ ------------ SemBioSys Genetics Inc. Consolidated Statements of Cash Flows (Unaudited) ------------------------------------------------------------------------- (expressed in Canadian dollars) Three month period Six month period ended June 30 ended June 30 ------------------------- ------------------------- 2007 2006 2007 2006 ------------ ------------ ------------ ------------ $ $ $ $ Cash provided by (used in) Operating activities Net and comprehensive loss for the period (3,225,371) (4,608,182) (6,453,782) (7,112,521) Add items not affecting cash: Amortization 241,887 201,908 469,945 400,522 Acquisition of intellectual property for warrants - 1,516,906 - 1,516,906 Loss on sale of property and equipment 1,483 16,802 1,483 16,802 Stock-based compensation 186,654 294,731 365,704 346,443 Unrealized foreign exchange gain (128,534) (65,819) (149,544) (50,830) ------------ ------------ ------------ ------------ (2,923,881) (2,643,654) (5,766,194) (4,882,678) Change in non-cash working capital and other balances related to operations (686,470) (145,061) 795,297 (242,028) ------------ ------------ ------------ ------------ (3,610,351) (2,788,715) (4,970,897) (5,124,706) Financing activities Issuance of capital stock - - 15,904,488 - Share issue costs (168,939) - (1,525,478) - Exercise of stock options 10,000 162,813 14,500 167,915 Repayment of long-term debt (191,843) (146,964) (375,812) (290,808) Repayment of repayable advances - - (85,640) - ------------ ------------ ------------ ------------ (350,782) 15,849 13,932,058 (122,893) ------------ ------------ ------------ ------------ Investing activities Proceeds on sale of property and equipment 6,000 - 6,000 - Acquisition of property and equipment (1,973,020) (249,861) (2,417,836) (390,962) ------------ ------------ ------------ ------------ (1,967,020) (249,861) (2,411,836) (390,962) ------------ ------------ ------------ ------------ Increase (decrease) in cash and cash equivalents (5,928,153) (3,022,727) 6,549,325 (5,638,561) Cash and cash equivalents - Beginning of period 28,805,937 25,897,261 16,328,459 28,513,095 ------------ ------------ ------------ ------------ Cash and cash equivalents - End of period 22,877,784 22,874,534 22,877,784 22,874,534 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Supplemental Information Cash interest received 308,755 45,600 912,394 247,383 Cash interest paid 47,864 41,651 99,206 86,646 Non-cash transactions Capital items included in accounts payable 824,063 117,017 824,063 117,017 Capital items included in accounts receivable - 7,000 - 7,000
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
