BioSyntech announces second quarter fiscal 2010 financial results

LAVAL, QC, Nov. 13 /CNW/ - BioSyntech, Inc. (TSX: BSY), a biotechnology company developing biotherapeutic thermogels for regenerative medicine, today announced its financial and operational results for the second quarter of fiscal 2010, ended September 30, 2009 .

"We recently closed the second portion of our financing, raising $4.5 million in gross proceeds for the Company. This funding will allow us to continue our Canadian/European pivotal trial for BST-CarGel(R), our lead product for cartilage repair, and advance the strategic review processes that we are undertaking with our advisors, PricewaterhouseCoopers," said Ms. Jeanne M. Bertonis , Chief Executive Officer for BioSyntech. "In addition, we are completing our interim analysis from our ongoing pivotal study; I am pleased to report that our MRI data is positive and supports the previously reported positive biopsy findings. We look forward to obtaining the final results from the pivotal trial for this product in the summer of calendar year 2010."

Recent Highlights

    
    -   Appointed Ms. Jeanne M. Bertonis to the position of Chief Executive
        Officer and Ms. Antoinette Lizzi to the position of Chief Financial
        Officer.
    -   Raised $1.4 million in a non-brokered private placement consisting of
        140,000 units of BioSyntech, each comprised of $10 principal amount
        of subordinated secured convertible debentures and 91 common share
        purchase warrants at a price of $10 per Unit.
    -   Subsequent to quarter-end, closed rights offering for gross aggregate
        proceeds of $3.1 million.
    -   Interim analysis of clinical data from 41 patients in the ongoing
        Canadian/European clinical trial is being finalized, including MRI
        data.
    

Financial Review

During the three-month period ended September 30, 2009 , the Company had revenues of $120,512 compared to revenues of nil for the three-month period ended September 30, 2008 . During the six-month period ended September 30, 2009 , BioSyntech had revenues of $175,492 compared to revenues of $12,368 for the six-month period ended September 30, 2008 . The increases in revenues were mainly due to the sale of instrumentation product (Mach-1), a non-core product for BioSyntech, during the quarter ended September 30, 2009 .

Research and development ("R&D") expenses were $958,363 for the three-month period ended September 30, 2009 compared to $1,437,748 for the three-month period ended September 30, 2008 . Research and development expenses were $1,720,927 for the six-month period ended September 30, 2009 compared to $2,944,504 for the six-month period ended September 30, 2008 . The decrease was mainly due to a reduction in spending for research contracts and lower expenses mostly in remuneration and consumables, following a restructuring of BioSyntech's activities in the fiscal year ended March 31, 2009 .

General and administrative expenses were $1,319,959 for the three-month period ended September 30, 2009 compared to $815,859 for the three-month period ended September 30, 2008 . General and administrative expenses were $1,943,196 for the six-month period ended September 30, 2009 compared to $1,665,233 for the six-month period ended September 30, 2008 . The increases were mainly due to lower remuneration as a result of the previously announced restructuring and lower marketing and investor relations expenses, partly offset by higher professional fees.

Accretion in the carrying value of the subordinated secured convertible debentures and interest amounted to $1,298,713 for the three-month period ended September 30, 2009 compared to an accretion expense of $789,819 for the three-month period ended September 30, 2008 . Accretion expense was $2,450,465 for the six-month period ended September 30, 2009 compared to an accretion expense of $789,819 for the six-month period ended September 30, 2008 . The increase in accretion expense is due primarily to the issuance of new debentures in August 2009 .

The net loss for the three-month period ended September 30, 2009 amounted to $3,624,041 ( $0.03 per share), compared to $3,015,372 ( $0.03 per share) for the three-month period ended September 30, 2008 . The loss for the six-month period ended September 30, 2009 amounted to $6,283,785 ( $0.06 per share), compared $5,351,616 ( $0.06 per share) for the six-month period ended September 30, 2008 .

As of September 30, 2009 , the Company had cash and cash equivalents in the amount of $696,318 compared to $3,803,036 at March 31, 2009 . This decrease reflects mainly the funds used for operating and investing activities during the first quarter of 2009.

Subsequent to the quarter end on October 16, 2009 , the Company announced the closing of its offering of rights to purchase 310,000 units, each comprised of $10 principal amount of subordinated secured convertible debentures and 91 common share purchase warrants, at a price of $10 per unit, for gross aggregate proceeds of $3,100,000 to BioSyntech.

Clinical Update

The Company is finalizing the interim analysis of the clinical data from 41 subjects who completed their 12 month follow-up in the ongoing Canadian/European clinical trial assessing the efficacy and safety BST-CarGel(R). Biopsy is the gold standard assessment for quality and quantity of cartilage repair; in June 2009 the Company announced biopsy results showing statistically significant improvement of BST CarGel(R) for tissue repair versus microfracture, the current standard of care. Recent interim analysis of MRI data shows improvement of the primary structural parameters including the amount of tissue fill in cartilage lesion and the quality of repair tissue in the BST CarGel(R) group versus microfracture, supporting the positive biopsy findings. Final clinical results of this pivotal study are anticipated in the summer of 2010.

The Company's Management's Discussion and Analysis is available on the BioSyntech website at www.biosyntech.com and in the Company's regulatory filings at www.sedar.com.

About BioSyntech

BioSyntech is a medical device company specialized in the development, manufacturing and commercialization of advanced biotherapeutic thermogels for regenerative medicine (tissue repair) and therapeutic delivery. BioSyntech's platform technology is a family of hydrogels called BST-Gel(R), some of which are liquid at low temperature and solid at human body temperature. These gels can be injected or applied to a specific local site and offer beneficial properties for the local repair of damaged tissue such as cartilage, bone and chronic wounds and provide the benefit of avoiding invasive surgery. The Company's lead, late-stage product, BST-CarGel(R) is currently undergoing an international pivotal trial. For additional information, visit www.biosyntech.com.

Forward-Looking Statements

This press release contains forward-looking statements and information which are subject to material risks and uncertainties. Such statements are not historical facts and are based on the current expectations of management. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances, or events to differ materially from those projected in the forward-looking information. These risks include, but are not limited to, those associated with our capacity to finance our activities, the adequacy, timing, and results of our clinical trials, the regulatory approval process, competition, securing and maintaining corporate alliances, market acceptance of BioSyntech's products, the availability of government and insurance reimbursements for BioSyntech's products, the strength of our intellectual property, the success of our research and development programs, reliance on subcontractors and key personnel, and other risks and uncertainties detailed from time-to time in our filings with the Canadian securities commissions.

Readers should not place undue reliance on the forward-looking information, given that (i) our actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and (ii) certain material factors or assumptions which were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, could prove to be inaccurate. Additional information about (i) the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and (ii) the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, is contained in BioSyntech's annual report and other documents filed from time to time with the Canadian securities commissions which are available at www.sedar.com. These statements speak only as of the date they are made, and we assume no obligation to revise such statements as a result of any event, circumstance or otherwise, except in accordance with law.

%SEDAR: 00020217E

For further information: Casey Gurfinkel, The Equicom Group, [phone] x283, [email protected]