SemBioSys announces second quarter 2009 financial and operational results
CALGARY, Aug. 13 /CNW/ - SemBioSys Genetics Inc. (TSX:SBS), specializing
in the manufacture of high-value proteins and oils in plant seeds, today
announced its second quarter 2009 financial and operational results.
"Successfully completing the $4.15 million public offering in difficult
capital markets, together with securing additional AVAC funding were
fundamental to strengthening our balance sheet and extending our development
runway into 2010," said James Szarko, Chief Executive Officer of SemBioSys.
"In addition, we are encouraged by the positive preclinical data that have
been obtained for Apo AI(Milano) in collaboration with Dr. Prediman K. Shah at
Cedars-Sinai Heart Institute and other leading experts in cardiovascular
research. Our top priorities are now advancing partnership discussions for our
Apo AI(Milano) and Biosimilar Insulin programs and executing on other
non-dilutive funding opportunities."
Highlights
Corporate
- Completed a public offering of 11,865,341 units at a price of $0.35
per unit for total gross proceeds to SemBioSys of $4,152,869
subsequent to the end of the quarter
- Completed a transaction with Botaneco and Avrio Ventures Limited
Partnership where SemBioSys secured a 20% equity interest (on a fully
converted basis) in Botaneco subsequent to the end of the quarter.
The purpose of the transaction was to amend the capital structure of
Botaneco to facilitate discussions that are underway related to a
potential transaction between Botaneco and an independent third
party.
Apo AI(Milano)
- Received positive results from in vivo plaque remodelling and
regression studies confirming the anti-atherosclerotic effects of
plant-derived Apo AI(Milano). The results demonstrated the regulation
of cholesterol mobilization from the arterial wall, decreasing lipid
content of atherosclerotic plaques, and reduction of overall volume
of atherosclerotic plaque after multiple injections. In all, seven
different types of studies have been performed at four outside
laboratories with each demonstrating the molecule to be biologically
active.
- Completed a pre-IND (Investigational New Drug) meeting during which
the U.S. Food and Drug Administration (FDA) confirmed SemBioSys'
development plan necessary to file an IND application and addressed
the proposed design of clinical trials for Apo AI(Milano)
Insulin Program
- Presented the results of the Phase I/II study with its Biosimilar
Human Insulin, demonstrating that SBS-1000 was bioequivalent to Eli
Lilly's Humulin(R) R in a late-breaking scientific poster at the
American Diabetes Association's (ADA) 69th Scientific Sessions
- Granted U.S. patent US 7,547,821 entitled "Methods for the Production
of Insulin in Plants"
Outlook
The Company anticipates a number of milestone events in the coming months
including:
- Insulin: post-phase II meeting with the U.S. FDA regarding further
development of SBS-1000;
- Apo AI(Milano): development of a pilot scale manufacturing process;
- Apo AI(Milano): completion of additional in vivo studies; and
- Further progress with the partnering of both insulin and Apo
AI(Milano).
Financials
The second quarter financials compare SemBioSys and Botaneco's financial
and operating results for the three-month and six-month periods ended June 30,
2009 to SemBioSys and Botaneco's financial and operating results for the
three-month and six-month periods ended June 30, 2008. Due to the completion
of the divestiture of Botaneco on July 31, 2009, third quarter 2009 financials
will be presented such that Botaneco's financial results will be segregated
from SemBioSys' financial results.
Net loss for the second quarter of 2009 was $3,886,112 or $0.13 per
share, compared to a net loss of $6,414,856 or $0.25 per share for the same
period last year. Net loss for the six-month period ended June 30, 2009 was
$7,714,565 or $0.27 per share, compared to a net loss of $11,431,911 or $0.44
per share for the same six-month period last year.
Total revenue for the three-month and six-month periods ended June 30,
2009 was $489,530 and $1,788,994 respectively, compared with $62,207 and
$272,234 for the corresponding periods in 2008. The difference is due mainly
to the recognition of licensing option fees in the first half of 2009 from the
option agreement entered into with MannKind Corporation in the fourth quarter
of 2008. In addition, $252,048 of licensing fees were recognized in the second
quarter of 2009 related to the Company's GLA program.
Total expenditures (net of cost recoveries) for the three-month and
six-month periods ended June 30, 2009 were $4,173,518 and $9,105,465
respectively, compared with $6,542,258 and $11,799,869 for the corresponding
periods in 2008. However, total expenditures excluding non-cash items
(stock-based compensation and amortization) and cost recoveries for the
three-month and six-month periods ended June 30, 2009 were $3,502,553 and
$7,618,814 respectively, compared with $5,826,373 and $10,942,616 for the
corresponding periods ended June 30, 2008. The decrease is primarily due to
the cost reductions implemented in the Biopharmaceuticals and Bioproducts
segment in the fourth quarter of 2008 and in 2009, and decreased preclinical
costs as the majority of the preclinical work for the insulin clinical trial
was completed in 2008. This decrease was offset by a modest increase in costs
of the Specialty Ingredients segment. The reduction in cost recoveries for the
three-month and six-month periods ended June 30, 2009 as compared to the
corresponding periods ended June 30, 2008 resulted from the achievement of all
outstanding milestones related to the agreement with AVAC Ltd. for the insulin
program in 2008.
As of June 30, 2009 the Company had cash and cash equivalents of $850,780
and a net positive working capital balance of $807,933, compared to $3,819,796
and $3,730,413 respectively at December 31, 2008. Subsequent to the end of the
quarter, the Company completed a public offering which resulted in total gross
proceeds to SemBioSys of $4,152,869. Total long-term debt and convertible
debentures was $6,672,098 at June 30, 2009 compared to $5,127,829 at December
31, 2008.
The decrease in cash and working capital during the period resulted
primarily from net cash burn, which includes significant costs for the insulin
clinical trial that was completed in the first quarter of 2009. The increase
in long-term debt and convertible debentures is a result of the $500,000 of
funding received from AVAC in the first quarter of 2009 that is secured by
certain Botaneco assets, as well as the $950,000 of funding SemBioSys received
from AVAC in the second quarter of 2009 that is secured by certain SemBioSys
assets.
As at August 13, 2009 the Company had 40,653,592 common shares
outstanding, 14,495,341 warrants and 2,900,691 options.
About SemBioSys
Calgary, Alberta-based SemBioSys is a world leader in manufacturing
high-value proteins and oils in plant seeds. With its unique, proprietary
platform, SemBioSys provides partners with product enablement, exceptionally
low cost and unprecedented scalability. The Company applies this platform with
high selectivity to opportunities where it has a unique competitive advantage.
Since its inception, SemBioSys has produced more than 50 non-native proteins
and oils using its patented seed technology, demonstrating applicability
across a broad range of industries such as pharmaceuticals, personal care and
industrial products. 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.
Financial results included below:
SemBioSys Genetics Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
June 30, December 31,
2009 2008
$ $
------------ ------------
ASSETS
Current assets
Cash and cash equivalents 850,780 3,819,796
Accounts receivable 415,522 912,702
Prepaid expenses, deposits and other 437,789 457,693
Inventory 1,661,970 1,929,289
------------ ------------
3,366,061 7,119,480
Property and equipment 6,999,702 8,009,624
------------ ------------
10,365,763 15,129,104
------------ ------------
------------ ------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 1,947,226 2,237,225
Deferred revenue - 612,295
Short-term portion of long-term debt 378,520 539,547
Short-term portion of convertible
debenture interest 232,381 -
------------ ------------
2,558,127 3,389,067
Deferred cost recoveries 2,505 39,557
Long-term debt 3,226,434 1,773,776
Convertible debenture 2,834,763 2,814,506
------------ ------------
8,621,829 8,016,906
------------ ------------
------------ ------------
SHAREHOLDERS' EQUITY
Capital stock 72,278,212 70,428,431
Warrants 2,630,463 2,550,880
Contributed surplus 12,205,444 11,802,064
Equity component of convertible debenture 1,427,127 1,427,127
Accumulated other comprehensive loss 13,557 -
Deficit (86,810,869) (79,096,304)
------------ ------------
1,743,934 7,112,198
------------ ------------
10,365,763 15,129,104
------------ ------------
------------ ------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(Unaudited)
(expressed in Canadian
dollars, except shares)
-------------------------------------------------------------------------
Three month period ended Six month period ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
$ $ $ $
REVENUE
Licensing option fees - - 1,161,495 50,110
Licensing fees 252,048 - 252,048 -
Contract research 38,151 - 38,151 -
Product sales 199,331 62,207 337,300 222,124
------------ ------------ ------------ ------------
489,530 62,207 1,788,994 272,234
EXPENSES
Research and
development 1,592,033 3,357,683 3,506,889 6,151,786
General and
administration 1,014,723 1,666,323 2,320,180 3,061,598
Intellectual
property costs 333,270 504,690 632,277 847,020
Cost of products
sold 252,366 45,534 502,100 317,279
Sales and marketing 185,421 96,621 376,854 249,781
Business development 124,740 155,522 280,514 315,152
Stock-based
compensation 126,907 175,947 403,381 355,850
Amortization 567,808 580,733 1,138,575 1,074,567
Cost recoveries (23,750) (40,795) (55,305) (573,164)
------------ ------------ ------------ ------------
4,173,518 6,542,258 9,105,465 11,799,869
------------ ------------ ------------ ------------
Loss before
the undernoted (3,683,988) (6,480,051) (7,316,471) (11,527,635)
------------ ------------ ------------ ------------
Interest income 3,617 96,649 12,230 267,507
Interest expense (241,590) (43,412) (408,493) (105,076)
Foreign exchange
gain (loss) 35,849 11,958 (1,831) (66,707)
------------ ------------ ------------ ------------
(202,124) 65,195 (398,094) 95,724
------------ ------------ ------------ ------------
Net loss for
the period (3,886,112) (6,414,856) (7,714,565) (11,431,911)
Deficit - Beginning
of period (82,924,757) (61,176,218) (79,096,304) (56,159,163)
------------ ------------ ------------ ------------
Deficit - End
of period (86,810,869) (67,591,074) (86,810,869) (67,591,074)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Loss per share -
basic and diluted (0.13) (0.25) (0.27) (0.44)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average
shares
outstanding 28,788,251 25,937,476 28,545,450 25,936,634
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
Three month period ended Six month period ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
$ $ $ $
------------ ------------ ------------ ------------
Net loss for the
period (3,886,112) (6,414,856) (7,714,565) (11,431,911)
Other comprehensive
loss
Foreign currency
translation
adjustment (19,063) - 13,557 -
------------ ------------ ------------ ------------
Comprehensive
loss (3,905,175) (6,414,856) (7,701,008) (11,431,911)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
ACCUMULATED OTHER COMPREHENSIVE LOSS
(Unaudited)
(expressed in Canadian dollars)
Six month
period ended
June 30,
2009
$
-----------
Accumulated other comprehensive income - beginning of period -
Change in accounting policy - foreign currency translation
adjustment 26,534
Foreign currency translation adjustment (12,977)
Accumulated other comprehensive income - end of period 13,557
-----------
-----------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(expressed in
Canadian dollars)
-------------------------------------------------------------------------
Three month period ended Six month period ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
$ $ $ $
------------ ------------ ------------ ------------
Cash provided by (used in)
Operating activities
Net loss for
the period (3,886,112) (6,414,856) (7,714,565) (11,431,911)
Add items not
affecting cash:
Amortization 567,808 580,733 1,138,575 1,074,567
Stock-based
compensation 126,907 175,947 403,381 355,850
Stock-based payments - - 152,985 -
Unrealized foreign
exchange
(gain) loss (40,800) 4,991 (12,730) 49,002
Non-cash
interest
expense 210,244 18,288 356,035 37,068
------------ ------------ ------------ ------------
(3,021,953) (5,634,897) (5,676,319) (9,915,424)
------------ ------------ ------------ ------------
Change in non-cash
working capital
and other
balances related
to operations 122,776 88,886 (109,859) 298,802
------------ ------------ ------------ ------------
Cash used in
operating
activities (2,899,177) (5,546,011) (5,786,178) (9,616,622)
------------ ------------ ------------ ------------
Financing
activities
Issuance of
capital stock - - 1,752,000 -
Share issue costs (26,411) - (69,724) (57,884)
Issuance of
warrants - - 81,600 -
Warrant issue costs - - (2,017) -
Exercise of stock
options - - - 31,750
Issuance of
convertible
debenture - 4,000,000 - 4,000,000
Proceeds from
long-term debt 970,000 - 1,470,000 634,900
Repayment of
long-term debt (142,144) (158,038) (281,820) (310,584)
------------ ------------ ------------ ------------
Cash provided by
financing
activities 801,445 3,841,962 2,950,039 4,298,182
------------ ------------ ------------ ------------
Investing
activities
Acquisition of
property and
equipment (53,609) (478,806) (132,877) (1,023,650)
------------ ------------ ------------ ------------
Cash used in
investing
activities (53,609) (478,806) (132,877) (1,023,650)
------------ ------------ ------------ ------------
Decrease in cash
and cash
equivalents (2,151,341) (2,182,855) (2,969,016) (6,342,090)
Cash and cash
equivalents -
Beginning of
period 3,002,121 16,284,778 3,819,796 20,444,013
------------ ------------ ------------ ------------
Cash and cash
equivalents -
End of period 850,780 14,101,923 850,780 14,101,923
------------ ------------ ------------ ------------
Supplemental
Information
Cash interest
received 6,410 224,636 18,765 325,244
Cash interest paid 46,588 25,123 67,795 53,878
Non-cash
transactions
Capital items
included in
accounts
payable - 24,831 - 24,831
Share issue
costs included
in accounts
payable 102,766 - 102,766 -
------------ ------------ ------------ ------------
For further information: SemBioSys Genetics Inc., Abby Garfunkel,
Investor Relations, Phone: (403) 717-4185, E-mail: garfunkela@sembiosys.com;
The Trout Group, Christine Labaree, Managing Director, Phone: (617) 583-1307,
E-mail: clabaree@troutgroup.com; The Equicom Group Inc., Ross Marshall, Vice
President, Phone: (416) 815-0700 ext. 238, E-mail: rmarshall@equicomgroup.com
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