Bioniche Reports Fiscal 2011 Year-End Results

    <<
               - Animal Health product sales revenues stable -
    - overall revenues decrease due to fewer Human Health milestone revenues
                          compared to Fiscal 2010 -
    >>

(all figures are in Canadian dollars unless otherwise noted)

BELLEVILLE, ON, Sept. 14 /CNW/ - Bioniche Life Sciences Inc. (TSX: BNC) (ASX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for its fiscal year ended June 30, 2011.

"The Company has worked diligently over the past few years to de-risk its business and, thus, create a more attractive investment opportunity," said Graeme McRae, Chairman, President & CEO. "This has been achieved through the signing of partnership deals, the presence of a solid base business generating revenue and positive earnings before research and development, the investment in intellectual property protection of core technologies, and the successful raising of capital resources."

The Company expects to be launching a series of new research and technology-driven products from its pipeline over the next 18 months. Announcements will be made as these products are launched in various global jurisdictions.

Fiscal 2011 Financial Results Highlights

Consolidated revenues related to Bioniche Animal Health product sales for the fiscal year were $27.4 million, as compared to $27 million in Fiscal 2010. This represents a stabilization of product revenues which had previously been reduced with the economic recession in some markets.

In addition to revenues from animal health product sales, the Company recorded licensing revenue of $5.5 million in Fiscal 2011, as compared to $16.2 million in Fiscal 2010, reflecting non-recurring milestone revenue earned under the Urocidin(TM) license, development and supply agreement with Endo Pharmaceuticals Inc. (Endo) and the amortization of the up-front payment by Endo upon the signing of this agreement. The total up-front payment received, C$22.3 million, will be recognized over 15 years, which is the term over which the Company maintains substantive contractual obligations (per Canadian Generally Accepted Accounting Principles - GAAP).

The Company generated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) - before research and development expenses - of $6.0 million, as compared to $20.5 million in Fiscal 2010. The decrease can be attributed primarily to the lower milestone revenues in Fiscal 2011.

Fiscal year-end cash, cash equivalents and short-term investments amounted to $16.8 million, as compared to $11.1 million at June 30, 2010. At June 30, 2011, the Company's net working capital totaled $23.0 million, excluding the current portion of non-refundable deferred licensing revenue, as compared to net working capital of $16.5 million at June 30, 2010.

The value of the Company's Property, Plant and Equipment has increased to $27.8 million at June 30, 2011, compared to $16.6 million at June 30, 2010. This reflects the significant investment in the Animal Health and Food Safety Vaccine Manufacturing Centre at the Company's corporate headquarters in Belleville, Ontario. This facility was officially opened in April, 2011 and is undergoing commissioning and validation, a process which is expected to be completed in early calendar 2012, to be followed by production scale-up.

Administrative expenses grew in Fiscal 2011 to $10.5 million from $6.8 million at June 30, 2010. Administrative expenses reflect the accrual of approximately $2.0 million for a pension plan for the Company's President & CEO in recognition of his many years of service and longstanding leadership in the Company. The plan provides two months of salary continuance for every year of service, but has not required any cash outlay as the obligation is unfunded. Administrative expenses also include an increase in salaries and related benefits of $0.9 million, comprised of average salary increases of 3% and the creation of four new positions.

Research and development expenditures increased by $1.5 million in Fiscal 2011 to $19.8 million, as compared to $18.3 million in Fiscal 2010. R&D resources are focused on the advancement of certain development programs in Animal Health and Food Safety. There is continued investment in the staffing and infrastructure associated with the GMP production of the Company's Urocidin(TM) bladder cancer treatment that is in Phase III clinical testing. Endo has assumed financial responsibility for the external costs of clinical activities as they relate to Urocidin(TM), and the Company is refocusing its human clinical development activities for the underlying technology - Mycobacterial Cell Wall-DNA Complex (MCC) - on other indications.

The basic and fully-diluted net loss per share for Fiscal 2011 is ($0.17), as compared to a net loss per share of ($0.02) in Fiscal 2010. The decrease in revenues associated with reduced milestone payments from Endo contributed to the greater loss in Fiscal 2011. Total common shares outstanding at June 30, 2011 were 102,108,692, as compared to 72,890,247 at June 30, 2010.

More information on the Company's year-end financial results is provided in the Company's Fiscal 2011 Management's Discussion and Analysis dated September 14, 2011.

Fiscal 2011 Year-End Results Conference Call

The Company will discuss its year-end results during a:

    <<
                       Conference Call & Audio Web Cast
                        Wednesday, September 21, 2011
                             6:00 p.m. (Eastern)
    >>

To participate in the conference call from North America, call (888) 231-8191.

To participate in the conference call from Australia, call 1-800-287-011.

A listen-only audio web cast will be available at:

http://event.on24.com/r.htm?e=357400&s=1&k=196F8E1949C7EF06BF11AE4846538BA0

A replay of the conference call will be available until September 28, 2011 at midnight by calling 1-855-859-2056 (passcode: 10564534 followed by the number sign).

The web cast will be available for replay using the above link until September 20, 2012.

Timing of Q1, Fiscal 2012 Financial Reporting

Beginning in Q1, Fiscal 2012, the Company will be reporting its financial results according to International Financial Reporting Standards (IFRS). The conversion to IFRS accounting is a major project and the financial report will occur on or about December 8, 2011 as per Ontario Securities Commission regulations.

About Bioniche Life Sciences Inc.

Bioniche Life Sciences Inc. is a research-based, technology-driven Canadian biopharmaceutical company focused on the discovery, development, manufacturing, and marketing of proprietary products for human and animal health markets worldwide. The fully-integrated company employs more than 200 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company's primary goal is to develop proprietary cancer therapies supported by revenues from marketed products in human and animal health. The Company was named one of the Top 50 Small and Medium-Sized Employers in Canada for 2010, based on employee opinion. For more information, please visit www.Bioniche.com.

Except for historical information, this news release may contain forward-looking statements that reflect the Company's current expectation regarding future events. 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.

    <<
    Bioniche Life Sciences Inc.
    Amalgamated under the laws of Ontario

                         CONSOLIDATED BALANCE SHEETS

    As at June 30
    (thousands of Canadian dollars)                        2011         2010
                                                             $            $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                            15,353       11,070
    Short-term investment                                 1,493            -
    Accounts receivable                                   6,460        8,601
    Income taxes receivable                                 254           63
    Future income tax assets                                 85          197
    Inventories                                           8,604        6,668
    Prepaid expenses and deposits                         1,068          793
    -------------------------------------------------------------------------
                                                         33,317       27,392
    -------------------------------------------------------------------------
    Long-term
    Property, plant and equipment                        27,759       16,584
    Intangible assets                                     6,306        6,500
    Goodwill                                                456          456
    Long-term accounts receivable                         1,756        1,156
    Future income tax assets                                 43           51
    -------------------------------------------------------------------------
                                                         69,637       52,139
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities              8,520        9,716
    Current portion of long-term debt and
     obligations under capital leases                       700          256
    Current portion of repayable government assistance    1,049          960
    Current portion of non-refundable deferred
     licensing revenue                                    1,486        1,486
    -------------------------------------------------------------------------
                                                         11,755       12,418
    -------------------------------------------------------------------------
    Long-term
    Long-term debt                                        2,171        1,341
    Obligations under capital leases                        546        1,184
    Repayable government assistance                      13,395        6,965
    Employee future benefit                               2,012            -
    Deferred government incentives                            -        2,382
    Non-refundable deferred licensing revenue            17,867       19,353
    -------------------------------------------------------------------------
                                                         47,746       43,643
    -------------------------------------------------------------------------
    Shareholders' equity
    Share capital                                       125,630       96,677
    Other paid-in capital                                 8,515        8,700
    Deficit                                            (112,254)     (96,881)
    -------------------------------------------------------------------------
                                                         21,891        8,496
    -------------------------------------------------------------------------
                                                         69,637       52,139
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Commitments and contingencies


    Bioniche Life Sciences Inc.

               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

    (thousands of Canadian dollars, except share amounts)

                                          Preferred shares -
                   Common shares                Series 1
                  No.           $           No.           $
    ------------------------------------------------------------
    Balance,
     June 30,
     2009     71,681,147       86,895          167          161
    Net loss
     for the
     year              -            -            -            -
    Issued under
     employee
     share
     ownership
     plan        639,176          464            -            -
    Fair value
     of stock
     options
     vested            -            -            -            -
    Directors'
     remun-
     eration     278,495          103            -            -
    Warrants
     exercised   211,429          165            -            -
    Options
     exercised    80,000           90            -            -
    ------------------------------------------------------------
    Balance,
     June 30,
     2010     72,890,247       87,717          167          161
    ------------------------------------------------------------

    Net loss
     for the
     year              -            -            -            -
    Issued under
     employee
     share
     ownership
     plan        663,021          829            -            -
    Fair value
     of stock
     options
     vested            -            -            -            -
    Shares
     issued   20,121,380       28,928            -            -
    Share
     issuance
     costs             -       (2,969)           -            -
    Share
     redemption (130,000)        (156)           -            -
    Conversion
     of
     Series II
     preferred
     shares    6,521,677        8,799            -            -
    Warrants
     exercised   710,992          836            -            -
    Options
     exercised 1,331,375        1,485            -            -
    Related
     party
     transaction       -            -            -            -
    ------------------------------------------------------------
    Balance,
     June 30,
     2011    102,108,692      125,469          167          161
    ------------------------------------------------------------
    ------------------------------------------------------------


                                           Other
                 Preferred shares -       paid-in
                      Series ll           capital      Deficit       Total
                  No.           $            $            $            $
    -------------------------------------------------------------------------
    Balance,
     June 30,
     2009      9,000,000        8,799        8,539      (95,291)       9,103
    Net loss
     for the
     year              -            -            -       (1,590)      (1,590)
    Issued under
     employee
     share
     ownership
     plan              -            -            -            -          464
    Fair value
     of stock
     options
     vested            -            -          240            -          240
    Directors'
     remun-
     eration           -            -            -            -          103
    Warrants
     exercised         -            -          (61)           -          104
    Options
     exercised         -            -          (18)           -           72
    -------------------------------------------------------------------------
    Balance,
     June 30,
     2010      9,000,000        8,799        8,700      (96,881)       8,496
    -------------------------------------------------------------------------

    Net loss
     for the
     year              -            -            -      (15,336)     (15,336)
    Issued under
     employee
     share
     ownership
     plan              -            -            -            -          829
    Fair value
     of stock
     options
     vested            -            -          477            -          477
    Shares
     issued            -            -            -            -       28,928
    Share
     issuance
     costs             -            -            -            -       (2,969)
    Share
     redemption        -            -            -          (17)        (173)
    Conversion
     of
     Series II
     preferred
     shares   (9,000,000)      (8,799)           -            -            -
    Warrants
     exercised         -            -         (313)           -          523
    Options
     exercised         -            -         (349)           -        1,136
    Related
     party
     transaction       -            -            -          (20)         (20)
    -------------------------------------------------------------------------
    Balance,
     June 30,
     2011              -            -        8,515     (112,254)      21,891
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Bioniche Life Sciences Inc.

           CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

    Years ended June 30
    (thousands of Canadian dollars, except share and per share amounts)

                                                        2011         2010
                                                          $            $
    -------------------------------------------------------------------------
    REVENUES
    Sales                                                27,366       26,993
    Licensing                                             5,532       16,203
    Research collaborations                               3,146        1,820
    Gain on disposal of intangible assets                     -          883
    -------------------------------------------------------------------------
                                                         36,044       45,899
    -------------------------------------------------------------------------
    EXPENSES
    Cost of sales (excluding amortization)               13,029       12,387
    Administration                                       10,525        6,841
    Marketing and selling                                 6,643        6,264
    Financial expenses                                    1,015          726
    Amortization of property, plant and equipment         1,058        1,080
    Amortization and write-down of intangible assets        881          813
    Foreign exchange loss                                   516          505
    -------------------------------------------------------------------------
                                                         33,667       28,616
    -------------------------------------------------------------------------
    Income before research and development expenses
     and other items                                      2,377       17,283
    Research and development expenses, gross             19,782       18,264
    Repayable government assistance                           -        3,884
    Less: government assistance, net                     (1,954)      (3,181)
    -------------------------------------------------------------------------
    Loss before income taxes                            (15,451)      (1,684)
    Provision for income tax recovery                      (115)         (94)
    -------------------------------------------------------------------------
    Net loss and comprehensive loss for the year        (15,336)      (1,590)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and fully diluted net loss per share            (0.17)       (0.02)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted-average number of common shares
     outstanding                                     88,896,923   72,239,959
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Bioniche Life Sciences Inc.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

    Years ended June 30
    (thousands of Canadian dollars)                        2011         2010
                                                             $            $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net loss for the year                               (15,336)      (1,590)
    Add (deduct) non cash items:
      Amortization                                        1,939        1,841
      Accreted interest on discounted receivables and
       interest-free loans and amortization of
       financial expenses                                   775          471
      Write-down of intangible assets                         -           52
      Unrealized foreign exchange loss (gain)                65          (47)
      Deemed government assistance                          (61)         (81)
      Stock-based compensation expense                      477          240
      Accrued pension expense                             2,012            -
      Repayable government assistance                         -        3,884
      Licensing revenue                                  (1,486)      (1,447)
      Amortization of deferred government incentives     (1,005)      (1,689)
      Future income taxes                                    97         (248)
      Employee share ownership plan                         836          528
      Gain on sale of intangible assets                       -         (883)
    -------------------------------------------------------------------------
                                                        (11,687)       1,031
    Decrease in restricted cash                               -        1,227
    Net change in non-cash working capital balances      (1,361)      (7,960)
    Net change in non-refundable deferred licensing
     revenue                                                  -       22,286
    -------------------------------------------------------------------------
    Cash (used in) provided by operating activities     (13,048)      16,584
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Government incentives received on account of
     property, plant and equipment                        1,496        1,098
    Proceeds on settlement of long-term accounts
     receivable                                             100            -
    Proceeds on sale of intangible assets                     -          606
    Purchase of short-term investments                   (1,493)           -
    Proceeds on disposal of property, plant and
     equipment                                               70           21
    Purchases of intangible assets                         (687)        (521)
    Purchases of property, plant and equipment          (18,718)      (7,789)
    -------------------------------------------------------------------------
    Cash used in investing activities                   (19,232)      (6,585)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Proceeds from government assistance                   9,342        1,706
    Proceeds from long-term debt                            500            -
    Payment of financing fees - debt                          -       (2,117)
    Proceeds from shares issued                          30,587          176
    Payment of share issuance costs                      (2,969)           -
    Redemption of common shares                            (173)           -
    Proceeds from deferred government incentives            691          407
    Repayment of government assistance                     (960)           -
    Repayment of revolving credit facility                    -       (4,416)
    Repayment of capital lease obligations                 (431)        (292)
    Repayment of long-term debt                             (24)        (343)
    -------------------------------------------------------------------------
    Cash provided by (used in) financing activities      36,563       (4,879)
    -------------------------------------------------------------------------
    Net increase in cash and cash equivalents during
     the year                                             4,283        5,120
    Cash and cash equivalents, beginning of year         11,070        5,950
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year               15,353       11,070
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>

SOURCE Bioniche Life Sciences Inc.

For further information: Jennifer Shea, Vice-President, Communications, Investor & Government Relations, Bioniche Life Sciences Inc., Telephone: (613) 966-8058; from Australia: 0011 1 613-966-8058, Cell: (613) 391-2097; from Australia: 0011 1 613-391-2097, Jennifer.Shea@Bioniche.com

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Bioniche Life Sciences Inc.

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