Canadian Biotechnology Company hits key insulin and Apo AI(Milano)
milestones
TSX symbol: SBS
CALGARY, Aug. 5 /PRNewswire-FirstCall/ - SemBioSys Genetics Inc. , a biotechnology company developing a portfolio of therapeutic proteins for metabolic and cardiovascular diseases, today announced its 2008 second quarter financial and operational results.
Outlook
SemBioSys intends to follow its recent IND application with the submission of a Clinical Trial Application (CTA) to the appropriate European authorities later in the third quarter of this year. In order to meet both FDA and EMEA requirements, the Company plans to conduct a Phase I/II clinical trial wherein safflower-produced insulin is compared to both U.S. and European-sourced reference insulin. The upcoming insulin milestone events include:
In 2007, SemBioSys successfully achieved commercial levels of both Apo AI and Apo AI(Milano) accumulation in safflower. With positive results demonstrating safflower-produced Apo AI(Milano) increased cholesterol mobilization in animals earlier this year, SemBioSys is continuing testing in animals to establish that safflower-produced Apo AI(Milano) is equivalent to microbial-produced Apo AI(Milano) with respect to plaque-remodeling and plaque regression. The upcoming milestone events include:
In addition to its pharmaceutical milestones, SemBioSys also expects to collect milestone payments from Arcadia Biosciences, Inc., upon their successful commercial scale-up and market launch of High GLA Safflower Oil in late 2008 or early 2009.
Meanwhile, Botaneco is also advancing the development of its personal care ingredient products with the expansion of the commercial distribution of Hydresia(TM) and Hydresia(TM) G2. With the completion of the recent funding transaction with Avrio, along with the previously committed $2.4 million from AVAC Ltd., SemBioSys expects Botaneco to be self-financing moving forward.
"The progress we have made with our two lead pharmaceutical programs, insulin and Apo AI(Milano), over the past few months has transformed SemBioSys. We are now poised to have insulin enter the clinic later this year as the first recombinant human protein produced from safflower to advance into human trials, which addresses a component of the largest volume drug protein market in the world. The animal results we received demonstrating safflower-produced Apo AI(Milano) successfully increased cholesterol mobilization were a critical milestone for the Company. With these data in hand, we are now able to intensify our formal partnering process for Apo AI(Milano) in parallel to the execution of additional animal studies designed to show plaque remodeling and plaque regression. We are already engaged in discussions with several major pharmaceutical companies concerning this program," said Andrew Baum, president and chief executive officer of SemBioSys. "As we advanced each of our pharmaceutical programs we also made important operational progress with our subsidiary, Botaneco. The funding from AVAC and Avrio provides Botaneco with the financial independence to pursue commercial opportunities on its own, while SemBioSys focuses its resources on advancing the insulin and Apo AI(Milano) programs."
Financials
Prior to the third quarter of 2007, SemBioSys operated under one segment. During the third quarter of 2007, Botaneco completed construction of its manufacturing facility and SemBioSys began to operate 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(Milano) and (ii) the Specialty Ingredients segment. As of October 1, 2007, Botaneco Specialty Ingredients Inc. was established as a separate legal entity, and SemBioSys' previously dormant U.S. subsidiary, SemBioSys Inc., was renamed as Botaneco Inc.
Total revenue for the three and six-month periods ended June 30, 2008 was $62,207 and $272,234 respectively, compared with $459,407 and $1,002,195 for the corresponding periods in 2007. The difference is due mainly to a license fee payment earned from the Company's collaboration agreement with Martek BioSciences Corporation in the first half of 2007 which is partially offset by 2008 product sales revenue from Hydresia(TM) and the option payment received from INDEAR S.A.
Total expenditures for the three and six-month periods ended June 30, 2008 were $6,542,258 and $11,799,869 respectively, compared with $4,046,723 and $7,990,131 for the corresponding periods last year.
Research and development expenses for the three and six-month periods ended June 30, 2008 were $3,357,683 and $6,151,786, compared with $1,924,745 and $3,668,717 for the corresponding periods last year. The difference is primarily related to the shift in the stage of development of the Company from research to preclinical development of two major drug candidates, which requires significant external resources to advance and prepare for the upcoming clinical trials. These include increased contract research organization (CRO) costs, independent third party animal studies, preparation of GMP and cGMP material and other outsourcing costs, as well as increased personnel and the associated support costs and laboratory supplies related to preclinical activity.
General and administrative expenses for the three and six-month periods ended June 30, 2008 were $1,666,323 and $3,061,598 respectively, compared with $1,086,766 and $2,110,477 for the corresponding periods last year. The difference is mainly due to the commercial operations of Botaneco being fully established during 2008 resulting in additional increases in general and administrative costs and legal fees incurred for the Botaneco debenture financing.
Intellectual property costs for the three and six-month periods ended June 30, 2008 were $504,690 and $847,020 respectively, compared with $307,414 and $835,663 for the corresponding periods last year. The difference in costs for the three-month periods is due mainly to an increase in legal costs for patent applications for the Company's insulin program during 2008, which were partially offset by a decrease in royalty payments.
Business development costs for the three and six-month periods ended June 30, 2008 were $155,522 and $315,152 respectively, compared with $404,434 and $713,909 for the corresponding periods last year. The difference is primarily due to the shift in Botaneco's activities from essentially entirely business development related prior to the commissioning of its commercial manufacturing operations which occurred in September 2007, to now being fully operational.
Net loss for the 2008 second quarter was $6,414,856 or ($0.25) per share, compared to a net loss of $3,225,371 or ($0.15) per share for the same period last year. Net loss for the six-month period ended June 30, 2008 was $11,431,911 or ($0.44) per share compared with $6,453,782 or ($0.31) per share for the same six-month period last year. The change in net loss is primarily due to the increased commercial activities of Botaneco and the increased preclinical activities related to insulin and Apo AI.
As at June 30, 2008 the Company had cash and cash equivalents totaling $14,101,923 and a net positive working capital balance of $13,154,749 compared to $20,444,013 and $19,518,408 respectively, at December 31, 2007. Total long-term debt and convertible debentures at June 30, 2008 was $4,352,904 compared with $1,389,047 at December 31, 2007.
As at July 31, 2008 the Company had 25,938,294 common shares outstanding, 2,390,000 warrants and 2,387,269 options.
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(Milano), a next generation cardiovascular drug. In addition to its pharmaceutical products, SemBioSys and its subsidiary, Botaneco Specialty Ingredients Inc., are developing a series of non-pharmaceutical products addressing human topical, nutritional oils and agricultural biotechnology markets. More information is available and can be accessed at www.sembiosys.com.
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:
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; The Trout Group, Ian
Clements, Senior Vice President, Phone: (415) 392-3385, E-mail:
iclements@troutgroup.com
