CALGARY, Nov. 1 /PRNewswire-FirstCall/ - SemBioSys Genetics Inc. , a biotechnology company developing a portfolio of therapeutic proteins for metabolic and cardiovascular diseases, today announced its 2007 third quarter operational and financial results.
“We continue to demonstrate momentum across both our pharmaceutical and non-pharmaceutical pipeline products, highlighted by our two successful announcements on the commercial levels of native Apo AI and Apo AIMilano accumulation in safflower. Additionally, we continue to work on the preclinical development of safflower-produced insulin in preparation for our IND submission and our planned Phase II trial which we expect to initiate in 2008,” said Andrew Baum, President and CEO of SemBioSys Genetics Inc. “We have now clearly established the technical viability of our oilbody-oleosin technology to produce commercial biopharmaceuticals that target large markets in diabetes and cardiovascular disease management. On the non-pharmaceutical side, we have commissioned the commercial manufacturing for our oilbody product and expect to generate modest revenue in the fourth quarter of 2007.”
Financials
Please note that prior to the third quarter of 2007, SemBioSys operated under one segment. During the quarter, Botaneco completed the construction of its manufacturing facility and SemBioSys began operating in two reportable segments: (i) the Biopharmaceutical, Animal Health, and Nutritional Oils segment focused on the Company’s lead pharmaceutical candidates, recombinant human insulin and Apo AI, in addition to its animal health product, ImmunoSphere(TM) and nutritional oils, DHA and GLA and (ii) the Specialty Ingredients segment which will manufacture and market branded lines of naturally derived base emulsions and delivery systems used in the development of cosmetics, personal care, prescription topical/dermatology, and food products through the Botaneco business unit.
Total revenue for the three-month and nine-month periods ended September 30, 2007 were $38,629 and $1,045,467 respectively, compared with $123,039 and $390,570 for the corresponding periods in 2006. The difference in revenue relates primarily to the recognition of an upfront license fee payment received from Martek in the first quarter of 2007 as well as contract research revenue recognized in the first half of 2007 and three-month and nine-month periods ended September 30, 2006.
Total expenditures for the three-month and nine-month periods ended September 30, 2007 were $4,022,642 and $12,017,416 respectively, compared with $2,949,791 and $10,706,226 for the corresponding periods last year.
Research and development expenses for the three-month and nine-month periods ended September 30, 2007 were $1,892,224 and $5,560,941 respectively, compared with $1,360,045 and $3,843,207 for the corresponding periods last year. The difference is primarily from increased personnel and outsourcing related to preclinical costs and the related support costs in all areas of research and development with an expanded focus on insulin and Apo AI. As SemBioSys prepares to enter clinical trials, all lab related activities continue to substantially increase resulting in a higher overall cost. The Company has also expanded the plant growth team and infrastructure both indoors and in the field as its programs further progress.
General and administrative expenses for the three-month and nine-month periods ended September 30, 2007 were $1,041,949 and $3,152,426 respectively, compared with $903,753 and $2,695,669 for the corresponding periods last year. The difference is mainly due to newly added staff to support expanded operations and increased investor relations activities as the Company broadens its exposure to U.S. and European markets.
Intellectual property costs for the three-month and nine-month periods ended September 30, 2007 were $237,430 and $1,073,093 respectively, compared with $217,269 and $2,561,564 for the corresponding periods last year. This difference in the nine-month period 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.
Business development costs for the three-month and nine-month periods ended September 30, 2007 were $396,481 and $1,115,033 respectively, compared with $134,182 and $586,279 for the corresponding periods last year. The difference is primarily related to the commercialization activities of Botaneco.
Net loss for the three-month period ended September 30, 2007 was $3,680,950 or ($0.17) per share, compared to a net loss of $2,659,025 or ($0.16) per share for the same period last year. Net loss for the nine-month period ended September 30, 2007 was $10,134,732 or ($0.48) per share compared with $9,771,546 or ($0.59) for the same nine-month period last year.
As at September 30, 2007 the Company had cash and cash equivalents totaling $17,329,814 compared to $22,877,784 at June 30, 2007.
Subsequent to the end of the quarter the Company entered into an agreement to issue 2,500,000 units of the Company at a price of $2.60 per unit, on a bought deal private placement basis to a syndicate of underwriters. The Company also granted the underwriters an over-allotment option to purchase up to an additional 1,180,000 units on the same terms as the initial amount which, if exercised in full, would raise the total gross proceeds to the Company to $9,658,000. The offering is expected to close on or about November 14, 2007 and is subject to the receipt of all necessary regulatory and stock exchange approvals, as well as completion of standard documentation and other customary terms and conditions. Each unit will consist of one common share of the Company and one-half of one common share purchase warrant.
Outlook
The Company has completed a number of the major scientific milestones necessary to proceed into human clinical trials of safflower-produced insulin in the first half of 2008. Additional upcoming insulin milestone events include:
With the Company’s recent achievement of successfully developing commercial levels of Apo AI, the upcoming Apo AI milestone events include:
In addition to its pharmaceutical milestones, the Company is also advancing the development of its non-pharmaceutical products. The upcoming milestone events expected from these programs include:
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 and market size, the acceptance of an IND by the FDA in respect of clinical studies and the successful and timely completion of clinical studies, the fact that Apo AI is currently a development stage drug, 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.
CONTACT: SemBioSys Genetics Inc., Mr. Andrew Baum, President and Chief
Executive Officer, Phone: (403) 717-8767, Fax: (403) 250-3886, E-mail:
bauma@sembiosys.com, Internet: www.sembiosys.com; Investor Relations, Ross
Marshall, The Equicom Group Inc., Phone: (416) 815-0700 (Ext. 238), Fax:
(416) 815-0080, E-mail: rmarshall@equicomgroup.com
