CALGARY, May 3 /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 three-month period which ended on March 31, 2006.
First Quarter Highlights - Published positive preclinical results of plant-produced insulin in Arabidopsis in January 2006 Plant Biotechnology Journal. - New data on the utility of DermaSphere(R) Oleosome Technology as a controlled-release carrier for active ingredients in personal care formulations was published by the Company's licensee Lonza Inc. in Cosmetics & Toiletries, a personal care industry journal. - Successfully harvested safflower in Chile as part of the commercial scale-up of ImmunoSphere(TM) Feed Additive.
"We expect to receive results on the level of insulin expression in safflower during the second quarter. The outcome from these studies will go a long way in determining the economic and scientific potential of plant- produced insulin as a viable source of insulin to serve the expanding insulin market," said Andrew Baum, President and CEO of SemBioSys Genetics Inc. "Developments during the first quarter in the broader insulin market continued to unfold favourably as Pfizer received FDA and European approval for Exubera(R) Inhalation Powder, an inhaled formulation of insulin to treat diabetes. Inhaled insulin delivery technologies will significantly increase the demand for a cost-effective supply of insulin as inhaled insulin requires up to 10 times the amount of product as injected insulin. We believe the economics of plant-produced insulin provide a cost-effective method to meet this increased demand."
Financials
Total revenues for the three-month period ended March 31, 2006 were $100,086 compared with $486,717 for the corresponding period in 2005.
The $100,086 in revenue for the three-month period ended March 31, 2006 was generated entirely from contract research. Contract research and licensing fees of $359,539 and $127,178 respectively were generated during the same three-month period ended March 31, 2005. The difference in contract research relates to the collaboration agreements in the first quarter of 2005 with Martek Biosciences Corporation, Dow AgroSciences LLC and Arcadia Biosciences, Inc. With the subsequent completion of the funded work plans of two of these collaborations, the revenue from the first quarter of 2006 relates primarily to the ongoing Martek collaboration agreement. Licensing fees from the first quarter of 2005 related to agreements with Lonza Inc. and Arcadia which have subsequently moved from a research and development stage to a commercialization stage, therefore, no fees were collected in the first quarter of 2006.
Total expenditures for the three-month period ended March 31, 2006, were $2,748,954, compared with $1,992,406 for the corresponding period last year.
Research and development expenses for the three-month period ended March 31, 2006 were $1,107,526, compared with $877,326 for the three-month period ended March 31, 2005. The difference is primarily related to increased salary expenses for new staff and the related support costs.
General and administrative expenses for the three-month period ended March 31, 2006 were $972,260 compared with $840,415 for the corresponding period last year. The difference is due mainly to operating costs associated with the expanded indoor safflower growth facilities, including utilities.
Intellectual property costs for the three-month period ended March 31, 2006 were $263,037 compared with $208,600 for the three-month period ended March 31, 2005. The change is mainly attributable to a one-time technology license fee.
Business development costs for the three-month period ended March 31, 2006 were $184,805 compared with $57,299 for the corresponding period last year. The difference is primarily related to accelerated activities related to the commercialization of the Company's products and an emphasis on new product candidates.
Net loss for the three-month period ended March 31, 2006 was $2,504,339 or ($0.15) per share, compared to a net loss of $1,395,858 or ($0.11) per share for the three-month period ended March 31, 2005.
As at March 31, 2006 the Company had cash and cash equivalents totaling $25,897,261 compared to $28,513,095 at December 31, 2005.
As at March 31, 2006 the Company had 16,567,194 common shares outstanding, 4,565,296 warrants, and 916,915 options.
Outlook
The Company's priorities for 2006 are to achieve commercial levels of expression in safflower of its pharmaceutical products, insulin and apolipoprotein AI (Apo AI), and to advance the development of its non- pharmaceutical products, including ImmunoSphere(TM) and docosahexaenoic acid (DHA) rich safflower oil. 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 North America and Chile for commercial launch in late 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 biopharmaceuticals 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 funded partnership 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 (Unaudited) As at March 31, 2006 and December 31, 2005 ------------------------------------------------------------------------- (expressed in Canadian dollars) March 31, December 31, 2006 2006 ------------ ------------ $ $ Assets Current assets Cash and cash equivalents 25,897,261 28,513,095 Accounts receivable 622,805 1,363,541 Prepaid expenses, deposits and other 287,040 265,062 ------------ ------------ 26,807,106 30,141,698 Property and equipment 4,457,920 4,497,190 ------------ ------------ 31,265,026 34,638,888 ------------ ------------ ------------ ------------ Liabilities Current liabilities Accounts payable and accrued liabilities 639,253 1,368,276 Repayable advances 85,640 85,640 Short-term portion of long-term debt 586,286 590,243 ------------ ------------ 1,311,179 2,044,159 Deferred cost recoveries 73,165 76,535 Deferred revenue 130,171 195,259 Long-term debt 1,162,188 1,287,087 ------------ ------------ 2,676,703 3,603,040 ------------ ------------ Shareholders' Equity Capital stock 48,108,811 48,103,709 Contributed surplus 183,096 131,384 Warrants 9,414,155 9,414,155 Deficit (29,117,739) (26,613,400) ------------ ------------ 28,588,323 31,035,848 ------------ ------------ 31,265,026 34,638,888 ------------ ------------ ------------ ------------ SemBioSys Genetics Inc. Consolidated Statements of Operations and Deficit (Unaudited) ------------------------------------------------------------------------- (expressed in Canadian dollars) Three month period ended March 31 ------------------------- 2006 2005 ------------ ------------ $ $ Revenue Licensing fees - 127,178 Contract research 100,086 359,539 ------------ ------------ 100,086 486,717 ------------ ------------ Expenses Research and development 1,107,526 877,326 General and administration 972,260 840,415 Intellectual property costs 263,037 208,600 Business development 184,805 57,299 Stock-based compensation 51,712 5,621 Amortization 198,614 118,218 Cost recoveries (29,000) (115,073) ------------ ------------ 2,748,954 1,992,406 ------------ ------------ Loss before the undernoted (2,648,868) (1,505,689) ------------ ------------ Interest income 220,080 112,646 Interest expense (48,848) (6,744) Foreign exchange loss (26,703) (4,535) Gain on sale of property and equipment - 8,464 ------------ ------------ 144,529 109,831 ------------ ------------ Net loss for the period (2,504,339) (1,395,858) Deficit - Beginning of period (26,613,400) (19,788,855) ------------ ------------ Deficit - End of period (29,117,739) (21,184,713) ------------ ------------ ------------ ------------ Loss per share - basic and diluted (0.15) (0.11) ------------ ------------ ------------ ------------ SemBioSys Genetics Inc. Consolidated Statements of Cash Flows (Unaudited) ------------------------------------------------------------------------- (expressed in Canadian dollars) Three month period ended March 31 ------------------------- 2006 2005 ------------ ------------ Cash provided by (used in) $ $ Operating activities Net loss for the period (2,504,339) (1,395,858) Add: Amortization 198,614 118,218 Gain on sale of property and equipment - (8,464) Stock-based compensation 51,712 5,621 Unrealized foreign exchange loss 14,989 - ------------ ------------ (2,239,024) (1,280,483) Change in non-cash working capital and other balances related to operations (96,966) (808,458) ------------ ------------ Cash used in operating activities (2,335,990) (2,088,941) ------------ ------------ Financing activities Issuance of capital stock - 2,640,049 Share issue costs - (186,997) Exercise of stock options 5,102 - Repayment of long-term debt (143,845) (42,435) ------------ ------------ Cash provided by (used in) financing activities (138,743) 2,410,617 ------------ ------------ Investing activities Proceeds on sale of property and equipment - 12,000 Acquisition of property and equipment (141,101) (135,502) ------------ ------------ Cash used in investing activities (141,101) (123,502) ------------ ------------ Increase (decrease) in cash and cash equivalents (2,615,834) 198,174 Cash and cash equivalents - Beginning of period 28,513,095 18,836,396 ------------ ------------ Cash and cash equivalents - End of period 25,897,261 19,034,570 ------------ ------------ ------------ ------------ Supplemental Information Cash interest received 201,784 112,646 Cash interest paid 44,995 6,744 Non-cash transactions Capital items included in accounts payable 18,243 30,960
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
