SemBioSys announces first quarter 2010 financial and operational results
CALGARY, May 13 /CNW/ - SemBioSys Genetics Inc. (TSX:SBS), a leader in the development of Biosimilars, proprietary pharmaceuticals and high value proteins utilizing plants for their production, today reported its operational and unaudited financial results for the first quarter ended March 31, 2010.
"We have experienced significant new interest in our drug development programs and platform technologies during the quarter. Additional strategic discussions for our Biosimilar insulin program were spurred on by a rapidly growing need for affordable sources of insulin in developing pharmaceutical markets, most notably China and India." stated James Szarko, Chief Executive Officer of SemBioSys. He continued, "The acquisition of Pfizer's Apo program by the Medicines Company earlier in the year, has served as a catalyst in furthering our Apo AI(Milano) program discussions with several candidate partner organizations. I remain very confident in the progress we are making on a number of fronts."
Highlights
Corporate
- SemBioSys' GLA Program licensing partner, Arcadia Biosciences Inc.,
completed U.S. Food and Drug Administration (FDA) registration for a
GLA-rich safflower oil and successfully completed the manufacturing
of its first commercial batch. Pursuant to our partnership agreement
with Arcadia, SemBioSys is due to receive royalty payments on future
GLA product sales.
- Completed a non-brokered private placement for gross proceeds to the
Company of $1,778,595
Apo AI(Milano)
- SemBioSys/Cedars-Sinai Heart Institute Research collaboration: Dr.
Prediman K. Shah, presented a poster illustrating the results of a
highly successful preclinical study involving SemBioSys' Apo
AI(Milano). (being developed for acute treatment of arterial plaque
build up) at the American College of Cardiology's (ACC) 59th
Scientific Sessions in Atlanta.
Biosimilar Insulin
- CTV National News and Canada AM ran a "prime time" story on
SemBioSys' game changing plant-based Biosimilars production platform.
Story documented SemBioSys' Biosimilar Insulin (SBS-1000), which can
be made in plants, in high volumes at potentially lower cost than
current production methods.
Financials
SemBioSys has historically operated in two reportable segments: (i) Biopharmaceuticals and Bioproducts and (ii) Specialty Ingredients. Effective July 29, 2009, the Company divested its majority interest in Botaneco Specialty Ingredients Inc. and Botaneco Inc. (collectively referred to as "Botaneco"), and, therefore, it no longer has control nor significant influence over these entities. As a result, the Specialty Ingredients segment is no longer being consolidated and its operating results are included in discontinued operations.
Net loss for the three months ended March 31, 2010 compared to the same period last year:
- $2,063,751 or $0.05 per share from continuing operations compared to
$2,457,677 or $0.09 per share;
- $nil from discontinued operations compared to $1,370,776 or $0.05 per
share; and
- $2,063,751 or $0.05 per share in total net loss compared to
$3,828,453 or $0.14 per share.
Net loss decreased in 2010 as a result of completing the insulin clinical trials in the first quarter of 2009, combined with the savings realized from the cost reduction programs implemented in the third quarter of 2009.
Revenue for the three months ended March 31, 2010 compared to the same period last year:
- $356,465 in revenue from continuing operations compared to
$1,161,495;
- $nil in revenue from discontinued operations compared to $137,969;
and
- $356,465 in total revenue compared to $1,299,464.
The decrease in revenue in 2010 for continuing operations is due mainly to the recognition of licensing option fees in 2009 from an option agreement entered into with MannKind in the fourth quarter of 2008, offset by licensing fees in 2010 related to the Company's GLA program.
Expenditures (net of cost recoveries in each case) for the three months ended March 31, 2010 compared to the same period last year:
- $2,315,892 in expenditures from continuing operations compared to
$3,589,252;
- $nil in expenditures from discontinued operations compared to
$1,342,694; and
- $2,315,892 in total expenses net of cost recoveries compared to
$4,931,946.
The overall decrease in expenditures is primarily due to the cost reductions implemented in the third quarter of 2009, in addition to decreased post-clinical costs as the majority of the post-clinical work for the insulin clinical trial was completed in the first quarter of 2009.
As of March 31, 2010 the Company had cash and cash equivalents from continuing operations of $3,011,583 and a net positive working capital balance of $1,672,624, compared to $3,687,548 and $1,595,217 respectively at December 31, 2009 The short-term portion of long-term debt was $1,605,409 at March 31, 2010 compared to $1,534,535 at December 31, 2009.
As at May 12, 2010 the Company had 51,259,536 common shares outstanding, 12,655,341 warrants, 2,088,198 options, 1,423,840 broker warrants and 519,857 deferred stock units.
About SemBioSys
Calgary, Alberta-based SemBioSys is focused on leveraging its unique proprietary platform to manufacture high-value proteins and oils. SemBioSys' seed-based protein production system can provide for its partners product enablement, exceptionally low cost and unprecedented scalability. SemBioSys is applying the platform with high selectivity to products with tremendous clinical promise and value potential. The Company's current pharmaceutical development programs include insulin (SBS-1000, regulated as a biosimilar in Europe) and Apo AI(Milano), a next-generation cardiovascular therapy. SemBioSys' proprietary safflower-derived Apo AI(Milano) is a des-1,2- variant of Apo AI(Milano) as previously described in the literature. SemBioSys is listed on the Toronto Stock Exchange under the ticker SBS. More information is available 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 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, the submission of a CTA to the appropriate European authorities, the successful initiation and timely and successful completion of clinical studies, the fact that Apo AI(Milano) 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.
SemBioSys Genetics Inc.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
$ $
------------- -------------
ASSETS
Current assets
Cash and cash equivalents 3,011,583 3,687,548
Investment 326,229 380,601
Accounts receivable 458,979 124,083
GST receivable 82,380 52,649
Prepaid expenses, deposits and other 292,125 175,894
------------- -------------
4,171,296 4,420,775
Property and equipment 3,329,424 3,683,462
------------- -------------
7,500,720 8,104,237
------------- -------------
------------- -------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 893,263 1,291,023
Short-term portion of long-term debt 1,605,409 1,534,535
------------- -------------
2,498,672 2,825,558
------------- -------------
------------- -------------
SHAREHOLDERS' EQUITY
Capital stock 75,444,408 73,726,414
Warrants 3,527,425 3,527,425
Contributed surplus 13,887,896 13,764,398
Accumulated other comprehensive loss (108,744) (54,372)
Deficit (87,748,937) (85,685,186)
------------- -------------
5,002,048 5,278,679
------------- -------------
7,500,720 8,104,237
------------- -------------
------------- -------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(unaudited)
(expressed in Canadian dollars, except shares)
-------------------------------------------------------------------------
Three month period ended
March 31, March 31,
2010 2009
$ $
------------- -------------
REVENUE
Licensing option fees - 1,161,495
Licensing fees 315,789 -
Contract research 40,676 -
------------- -------------
356,465 1,161,495
EXPENSES
Research and development 1,098,065 2,022,908
General and administration 373,323 561,399
Intellectual property costs 231,673 265,231
Business development 139,462 155,774
Stock-based compensation 123,498 230,646
Amortization 354,038 373,599
Cost recoveries (4,167) (20,305)
------------- -------------
2,315,892 3,589,252
------------- -------------
Loss before the undernoted (1,959,427) (2,427,757)
------------- -------------
------------- -------------
Interest income 22 5,416
Interest expense (97,406) (20,128)
Foreign exchange loss (6,940) (15,208)
------------- -------------
------------- -------------
(104,324) (29,920)
------------- -------------
Net loss from continuing operations (2,063,751) (2,457,677)
Discontinued operations - (1,370,776)
------------- -------------
Net loss (2,063,751) (3,828,453)
Deficit - Beginning of the period (85,685,186) (79,096,304)
------------- -------------
Deficit - End of the period (87,748,937) (82,924,757)
------------- -------------
------------- -------------
Loss per share
Basic and diluted from continuing operations (0.05) (0.09)
Basic and diluted from discontinued operations - (0.05)
Basic and diluted (0.05) (0.14)
------------- -------------
------------- -------------
Weighted average shares outstanding 43,913,882 28,299,952
------------- -------------
------------- -------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
Three month period ended
March 31, March 31,
2010 2009
$ $
------------- -------------
Net loss for the period (2,063,751) (3,828,453)
Other comprehensive loss
Foreign currency translation adjustment - 32,620
Foreign currency translation adjustment
transferred to net income from discontinued
operations during the year - (32,620)
Unrealized loss on investment (54,372) -
------------- -------------
Comprehensive loss (2,118,123) (3,828,453)
------------- -------------
------------- -------------
CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE LOSS
(Unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
Three month period ended
March 31, March 31,
2010 2009
$ $
------------- -------------
Accumulated other comprehensive loss
- beginning of the period (54,372) -
Foreign currency translation adjustments
Change in accounting policy - 26,534
Adjustments during the year - 6,086
Transferred to net income from discontinued
operations during the year - (32,620)
------------- -------------
(54,372) -
Unrealized loss on Investment (54,372) -
------------- -------------
Accumulated other comprehensive loss
- end of the period (108,744) -
------------- -------------
------------- -------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three month period ended
March 31, March 31,
(unaudited) 2010 2009
(expressed in Canadian dollars) $ $
-------------------------------------------------------------------------
Cash provided by (used in)
Operating activities
Net loss for the year from continuing
operations (2,063,751) (2,457,677)
Add items not affecting cash:
Amortization 354,038 373,599
Stock-based compensation 123,498 230,646
Shares issued for services 92,935 152,985
Unrealized foreign exchange loss 21,500 3,379
Non-cash interest expense 97,172 -
------------- -------------
(1,374,608) (1,697,068)
------------- -------------
------------- -------------
Change in non-cash working capital and other
balances related to operations (717,477) (269,415)
------------- -------------
Cash used in operating activities (2,092,085) (1,966,483)
------------- -------------
------------- -------------
Financing activities
Issuance of capital stock 1,778,595 1,752,000
Share issue costs (147,043) (43,312)
Issuance of warrants - 81,600
Warrant issue costs (6,340) (2,017)
Costs related to the corporate reorganization (182,794) -
Repayment of long-term debt (26,298) (135,463)
------------- -------------
Cash provided by financing activities 1,416,120 1,652,808
------------- -------------
------------- -------------
Investing activities
Acquisition of property and equipment - (17,311)
------------- -------------
Cash used in investing activities - (17,311)
------------- -------------
------------- -------------
Net change in cash from continuing operations (675,965) (330,986)
Cash flow from discontinued operations
Operating activities - (920,520)
Financing activities - 495,788
Investing activities - (61,957)
------------- -------------
Net change in cash from discontinued
operations - (486,689)
------------- -------------
Decrease in cash and cash equivalents (675,965) (817,675)
Cash and cash equivalents
- Beginning of period 3,687,548 3,819,796
------------- -------------
------------- -------------
Cash and cash equivalents - End of period 3,011,583 3,002,121
------------- -------------
------------- -------------
Cash and cash equivalents - discontinued
operations - 1,406,139
Cash and cash equivalents
- from continuing operations 3,011,583 1,595,982
------------- -------------
------------- -------------
Supplemental Information
(continuing operations)
Cash interest received 133 6,979
Cash interest paid 234 20,033
Non-cash transactions
Capital items included in accounts payable - -
Share issue costs included in accounts
payable 11,247 11,892
------------- -------------
------------- -------------
For further information: SemBioSys Genetics Inc., Abby Garfunkel, Investor Relations, Phone: (403) 717-4185, E-mail: [email protected]; The Equicom Group Inc., Ross Marshall, Vice President, Phone: (416) 815-0700 ext. 238, E-mail: [email protected]
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