Amorfix announces third quarter fiscal 2008 results



    - For the three and nine months ended December 31, 2007 -

    TSX: AMF

    TORONTO, Feb. 8 /CNW/ - Amorfix Life Sciences (TSX: AMF), a company
focused on treatments and diagnostics for brain-wasting diseases, today
reported its third quarter operating results and provided an update on the
Company's diagnostic and therapeutic programs.
    "Our progress during the third quarter demonstrates that our platform
continues to generate an expanding range of therapeutic and diagnostic
products for brain-wasting diseases. In particular, based on new work by our
scientific team led by Dr. Neil Cashman, we have discovered that the misfolded
SOD1 protein that is found in ALS patients is also found in the brain of
Alzheimer's patients," said Dr. George Adams, President & Chief Executive
Officer of Amorfix Life Sciences. "This new work, together with our ongoing
vCJD and ALS programs, provides multiple potential products for Amorfix from
both a therapeutic and diagnostic perspective."

    
    Therapeutic Development Highlights

    -   Amorfix announced the discovery of misfolded superoxide dismutase-1
        (SOD1) protein in the brain of Alzheimer's Disease patients which
        suggests that SOD1 is a common link between Alzheimer's and
        Amyotrophic Lateral Sclerosis (ALS). This breakthrough represents a
        new approach and a novel target in the search for an effective
        therapeutic for Alzheimer's through specifically recognizing
        misfolded SOD1 proteins and neutralizing their toxic activity.

    -   Amorfix continued to advance its research targeting misfolded SOD1
        proteins in ALS patients through the development of its vaccine
        program and antibody program. The Company is on schedule to meet the
        second of three development milestones in accordance with its
        agreement with Biogen Idec. Amorfix has initiated a preclinical
        program and expects to select a lead agent from multiple candidates
        in the second half of 2008.

    Diagnostic Development Highlights

    -   Subsequent to quarter-end, the UK National Institute for Biological
        Standards and Control (NIBSC) established the process to verify the
        performance of an acceptable blood test for vCJD. Based on the
        performance of its EP-vCJD(TM) assay, Amorfix received and accepted
        an invitation from the British government to further qualify the
        assay using British blood samples. The NIBSC will provide blood
        samples from scrapie-infected sheep, normal human controls and
        patients with vCJD. Until this announcement, it was not clear whether
        human vCJD blood samples would be available for use in validating a
        blood test for vCJD. As a result of this opportunity to access human
        vCJD samples, the Company plans to concentrate its efforts on this
        clinical validation process prior to completing the final steps of
        the self-declared CE Mark process.

    -   Amorfix recently completed testing for scrapie prions in a blinded
        panel of sheep blood samples and is currently developing a diagnostic
        test for scrapie in sheep to support the vCJD diagnostic assay
        commercialization while evaluating the commercial potential for a
        veterinary diagnostic test.
    

    Financial Results

    For the three months ended December 31, 2007 the Company reported a net
loss of $1,477,264 ($0.04 per share) compared to a net loss of $863,378
($0.03 per share) for the comparable period. For the nine months ended
December 31, 2007 the Company reported a net loss of $5,269,542 ($0.13 per
share) compared to a net loss of $2,404,221 ($0.08 per share) for the nine
months ended December 31, 2006.
    Research and development expenses for the three and nine months ended
December 31, 2007 were $659,421 and $2,581,678 higher, respectively, than the
comparable prior year periods. The increase in research and development costs
related to: higher vCJD program expenses associated with scale up and
commercialization, and development of the sheep scrapie diagnostic assay;
costs of the ALS therapeutic program where the Company demonstrated a
therapeutic effect with both passive and active immunotherapy in pilot studies
using an ALS mouse model and has now initiated larger preclinical mouse
studies; costs of an expanded AD diagnostic program in the current fiscal
periods; and the initiation of the AD therapeutic program.
    General and administration costs for the three months ended December 31,
2007 were $190,064, a decrease of $28,788 over the comparable period and for
the nine months ended December 31, 2007 were $975,762 an increase of $411,479
over the comparable period. Higher expenses for the nine months ended
December 31, 2007 resulted mainly from increased legal and exchange filing
fees associated with graduating to the TSX exchange, and higher stock-based
compensation and investor relations expenses.
    Cash burn (cash used in operating activities) was $1,258,030 for the
three months ended December 31, 2007 compared to $715,438 for the
corresponding period in 2006. Cash burn was $4,234,811 for the nine months
ended December 31, 2007 compared to $2,133,368 for the corresponding period in
2006. The increase in cash burn was as planned reflecting the
commercialization costs of the vCJD blood screening assay, the advancement of
the Alzheimer's blood test, the completion of pilot ALS animal studies and the
costs of larger preclinical ALS animal studies now initiated using multiple
treatments, and the initiation of therapeutic research on Alzheimer's disease
by targeting the SOD1 misfolded protein.
    For the nine months ended December 31, 2007, Amorfix received gross
proceeds of $638,908 through the issuance of common shares on the exercise of
warrants and options. During the second quarter, the Company completed the
first research milestone under its agreement with Biogen Idec. On achievement
of this milestone, Biogen Idec subscribed for 91,445 common shares of Amorfix
for gross proceeds of Cdn. $160,944 (US$150,000).
    As at December 31, 2007 Amorfix had working capital of $9,995,463
compared to $13,835,243 as at March 31, 2007.
    As at December 31, 2007 the Company had 41,628,380 common shares
outstanding.
    Subsequent to quarter end, Amorfix granted 1,020,125 stock options to
management, directors, employees and consultants at an exercise price of
$0.93.
    Additional information about the Company, including the MD&A and
financial results may be found on SEDAR at www.sedar.com.

    About Amorfix

    Amorfix Life Sciences Ltd. (TSX:AMF) is a theranostics company developing
therapeutic products and diagnostic devices targeting brain-wasting diseases
including ALS, Alzheimer's Disease, Parkinson's Disease and variant
Creutzfeldt-Jakob Disease (vCJD). Amorfix's proprietary Epitope Protection(TM)
(EP) technology enables it to specifically identify very low levels of
aggregated misfolded proteins (AMP) in a sample of normal protein. Aggregated
misfolded proteins are a common element of many brain wasting diseases and the
ability to identify AMPs and understand their structure and mechanism of
folding are the first steps to developing new treatments for these devastating
diseases. Amorfix's lead programs are a diagnostic blood screening test for
vCJD and a therapy for ALS.

    This information release may contain certain forward-looking information.
Such information involves known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements to be
materially different from those implied by statements herein, and therefore
these statements should not be read as guarantees of future performance or
results. All forward-looking statements are based on the Company's current
beliefs as well as assumptions made by and information currently available to
it as well as other factors. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of this
press release. Due to risks and uncertainties, including the risks and
uncertainties identified by the Company in its public securities filings,
actual events may differ materially from current expectations. The Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

    Financial results included below:

    
    Amorfix Life Sciences Ltd.
    (a development stage company)
    Balance Sheets
    -------------------------------------------------------------------------

                                                    December 31,    March 31,
                                                           2007         2007
                                                              $            $
                                                     (unaudited)

    Assets

    Current assets
    Cash and cash equivalents                         2,323,282    1,660,594
    Marketable securities                             7,886,711   12,192,600
    Amounts receivable                                  111,711      229,692
    Tax credits receivable                              350,082      283,527
    Prepaid expenses and deposits                       201,773      132,312
                                                    -------------------------

    Total current assets                             10,873,559   14,498,725

    Property and equipment, net                         341,656      204,732
    Technology rights, net                               12,714       30,873
                                                    -------------------------

                                                     11,227,929   14,734,330
                                                    -------------------------
                                                    -------------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities            878,096      663,482
                                                    -------------------------

    Total current liabilities                           878,096      663,482
                                                    -------------------------

    Shareholders' Equity

    Common shares                                    19,142,728   18,028,305
    Warrants and options                              2,663,101    2,404,259
    Contributed surplus                                 162,927        4,056
    Accumulated other comprehensive loss                (33,609)           -
    Deficit                                         (11,585,314)  (6,365,772)
                                                    -------------------------

                                                     10,349,833   14,070,848
                                                    -------------------------

                                                     11,227,929   14,734,330
                                                    -------------------------
                                                    -------------------------



    Amorfix Life Sciences Ltd.
    (a development stage company)
    Statements of Operations and Comprehensive Loss
    (Unaudited)
    -------------------------------------------------------------------------

                                Three Months Ended         Nine Months Ended
                                    December 31               December 31
                                 2007         2006         2007         2006
                                    $            $            $            $
    Revenues
    Interest earned           111,820       66,140      371,742      170,999
                          ---------------------------------------------------
    Expenses
    Research and
     development            1,358,132      698,711    4,559,654    1,977,976
    General and
     administrative           190,064      218,852      975,762      564,283
    Amortization of
     property and
     equipment                 28,168       11,604       72,709       31,908
    Amortization of
     technology rights         12,720          351       33,159        1,053
                          ---------------------------------------------------
                            1,589,084      929,518    5,641,284    2,575,220
                          ---------------------------------------------------
    Loss before the
     undernoted            (1,477,264)    (863,378)  (5,269,542)  (2,404,221)
    Costs related to
     reverse takeover               -            -            -            -
                          ---------------------------------------------------
    Loss for the period    (1,477,264)    (863,378)  (5,269,542)  (2,404,221)

    Other Comprehensive
     Income
    Unrealized gain on
     available-for-sale
     marketable securities     26,470            -       16,391            -
                          ---------------------------------------------------
    Comprehensive loss
     for the period        (1,450,794)    (863,378)  (5,253,151)  (2,404,221)
                          ---------------------------------------------------
                          ---------------------------------------------------

    Basic and diluted loss
     per common share           (0.04)       (0.03)       (0.13)       (0.08)
                          ---------------------------------------------------
                          ---------------------------------------------------

    Weighted average
     number of common
     shares outstanding    41,508,217   32,381,509   41,183,744   30,822,956
                          ---------------------------------------------------
                          ---------------------------------------------------


                          Period from
                           January 23,
                                 2004
                       (inception) to
                          December 31
                                 2007
                                    $
    Revenues
    Interest earned           661,950
                          ------------
    Expenses
    Research and
     development            9,134,522
    General and
     administrative         2,457,059
    Amortization of
     property and
     equipment                132,391
    Amortization of
     technology rights         43,599
                          ------------
                           11,767,571
                          ------------
    Loss before the
     undernoted           (11,105,621)
    Costs related to
     reverse takeover         479,693
                          ------------
    Loss for the period   (11,585,314)

    Other Comprehensive
     Income
    Unrealized gain on
     available-for-sale
     marketable securities     16,391
                          ------------
    Comprehensive loss
     for the period       (11,568,923)
                          ------------
                          ------------

    Basic and diluted loss
     per common share
                          ------------
                          ------------

    Weighted average
     number of common
     shares outstanding
                          ------------
                          ------------



    Amorfix Life Sciences Ltd.
    (a development stage company)
    Statements of Cash Flows
    (Unaudited)
    -------------------------------------------------------------------------

                                Three Months Ended         Nine Months Ended
                                    December 31               December 31
                                 2007         2006         2007         2006
                                    $            $            $            $

    Cash provided by
     (used in)
    Operating activities
    Loss for the period    (1,477,264)    (863,378)  (5,269,542)  (2,404,221)
      Amortization of
       property and
       equipment               28,168       11,604       72,709       31,908
      Amortization of
       technology rights       12,720          351       33,159        1,053
      Stock-based
       compensation           126,706       93,023      732,284      345,895
      Non-cash interest
       expense                      -            -            -            -
      Non-cash costs
       related to reverse
       takeover                     -            -            -            -
    Changes in non-cash
     working capital           51,640       42,962      196,579     (108,003)
                          ---------------------------------------------------
                           (1,258,030)    (715,438)  (4,234,811)  (2,133,368)
                          ---------------------------------------------------

    Investing activities
    Purchase of marketable
     securities              (247,638)     (25,243)    (247,638)  (4,463,711)
    Maturity or sale of
     marketable securities    498,509      992,103    4,569,918    6,130,311
    Purchase of property
     and equipment            (64,478)     (24,643)    (209,633)    (130,604)
    Purchase of technology
     rights                         -            -      (15,000)      (7,000)
                          ---------------------------------------------------
                              186,392      942,217    4,097,647    1,528,996
                          ---------------------------------------------------

    Financing activities
    Issuance of common
     shares, net of cash
     issue costs                    -            -      160,944      422,213
    Issuance of common
     share units, net of
     cash issue costs               -            -            -       50,000
    Issuance of common
     shares on exercise
     of warrants                    -      955,224      523,408    2,081,524
    Issuance of common
     shares on exercise
     of options                97,500        7,560      115,500      253,448
    Cash acquired on
     reverse takeover               -            -            -            -
    Issuance of
     promissory note                -            -            -            -
                          ---------------------------------------------------
                               97,500      962,784      799,852    2,807,185
                          ---------------------------------------------------
    Net increase
     (decrease) in cash      (974,138)   1,189,563      662,688    2,202,813
    Cash - Beginning of
     period                 3,297,420    1,127,044    1,660,594      113,794
                          ---------------------------------------------------
    Cash - End of period    2,323,282    2,316,607    2,323,282    2,316,607
                          ---------------------------------------------------
                          ---------------------------------------------------


                          Period from
                           January 23,
                                 2004
                       (inception) to
                          December 31
                                 2007
                                    $

    Cash provided by
     (used in)
    Operating activities
    Loss for the period   (11,585,314)
      Amortization of
       property and
       equipment              132,391
      Amortization of
       technology rights       43,599
      Stock-based
       compensation         1,743,839
      Non-cash interest
       expense                  2,673
      Non-cash costs
       related to reverse
       takeover               232,442
    Changes in non-cash
     working capital          124,068
                          ------------
                           (9,306,302)
                          ------------

    Investing activities
    Purchase of marketable
     securities           (20,312,708)
    Maturity or sale
     of marketable
     securities            12,392,388
    Purchase of property
     and equipment           (474,047)
    Purchase of technology
     rights                   (56,313)
                          ------------
                           (8,450,680)
                          ------------

    Financing activities
    Issuance of common
     shares, net of cash
     issue costs            4,383,129
    Issuance of common
     share units, net of
     cash issue costs      11,973,069
    Issuance of common
     shares on exercise
     of warrants            2,935,920
    Issuance of common
     shares on exercise
     of options               521,368
    Cash acquired on
     reverse takeover         141,778
    Issuance of
     promissory note          125,000
                          ------------
                           20,080,264
                          ------------
    Net increase
     (decrease) in cash     2,323,282
    Cash - Beginning of
     period                         -
                          ------------
    Cash - End of period    2,323,282
                          ------------
                          ------------
    

    %SEDAR: 00022789E




For further information:

For further information: Dr. George Adams, President & Chief Executive
Officer, Amorfix Life Sciences Ltd., Tel: (416) 847-6959, Fax: (416) 847-6899,
george.adams@amorfix.com; James Parsons, Chief Financial Officer, Amorfix Life
Sciences Ltd., Tel: (416) 847-6929, Fax: (416) 847-6899,
james.parsons@amorfix.com

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Amorfix Life Sciences Ltd.

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