Bioniche Reports Fiscal 2007 Year-End Results



    - consolidated revenues rise 3% over Fiscal 2006 to $27.5 million -

    (all figures are in Canadian dollars unless otherwise noted)

    BELLEVILLE, ON, Sept. 26 /CNW/ - Bioniche Life Sciences Inc. (TSX: BNC),
a research-based, technology-driven Canadian biopharmaceutical company, today
announced financial results for its 2007 fiscal year ended June 30, 2007.
    "The recent announcements of the first shipment and commercial usage of
our E. coli O157:H7 cattle vaccine and the Special Protocol Assessment (SPA)
agreement with the U.S. Food and Drug Administration for our second Phase III
pivotal trial in bladder cancer occurred after the end of Fiscal 2007, but are
the result of significant internal efforts during the fiscal year," noted
Patrick Montpetit, Chief Financial Officer of Bioniche Life Sciences Inc.
"During Fiscal 2007, we started our first Phase III clinical trial using our
proprietary Mycobacterial Cell Wall-DNA Complex (MCC) in the treatment of
bladder cancer patients whose condition is refractory (unresponsive) to the
current standard therapy. We also closed a $17.5 million equity financing,
with strong support from both institutional and individual investors."

    Fiscal 2007 Financial Results Highlights

    Consolidated revenues for the fiscal year increased by 3% to
$27.5 million, as compared to $26.7 million in Fiscal 2006. The overall gross
profit margin was 56% this fiscal year as compared to 57% in Fiscal 2006.
    Expenses totalled $18.5 million for the 12 months ending June 30, 2007,
which compares to $19.6 million recorded in the same period last year. This
decrease of $1.1 million, or 6%, includes a decrease in interest on long-term
debt and other interest associated with the refinancing and repayment of the
Company's debt.
    Gross research and development (R&D) expenses increased $2 million, or
16%, in Fiscal 2007, reaching $14.9 million compared to $12.9 million in
Fiscal 2006. This is largely attributable to the start of the Phase III
pivotal trial with Urocidin in bladder cancer patients whose condition is
refractory (unresponsive) to the current standard therapy.
    The Company repaid its long-term convertible debt with Laurus Master
Funds during Fiscal 2007. US$1,723,307 was repaid on the secured convertible
term note through conversion into shares and US$2,845,178 was repaid in cash.
A secured revolving line of credit with Laurus Master Funds remains in place,
allowing a maximum borrowing limit of US$4.0 million.
    The basic net loss per share for Fiscal 2007 was ($0.32) compared to a
net loss per share of ($0.03) in Fiscal 2006, which was bolstered by a gain of
$0.47 per share from discontinued operations.
    "We continue to pursue our strategic objectives with a view to creating
shareholder value," added Graeme McRae, President & CEO of Bioniche Life
Sciences Inc. "We are focused on obtaining a full Canadian license for our E.
coli O157:H7 cattle vaccine, while beginning to sell vaccine to Canadian
veterinarians under the Permit to Release Veterinary Biologics. At the same
time, we continue to pursue a registration in the U.S. We are also focused on
the successful completion of a marketing partnership deal for our bladder
cancer technology, while executing our Phase III clinical program with
Urocidin and planning for early stage studies to support the use of our MCC
technology in the treatment of other human cancers. Meeting these key
milestones will, we believe, greatly enhance shareholder value in Bioniche."

    Conference Call/Audio Web Cast

    Bioniche will host a conference call to discuss Fiscal 2007 results on
Friday, September 28, 2007 at 10:00 a.m. Eastern. To participate in the
teleconference, call 416-644-3414/toll-free 1-800-733-7571. A listen-only
audio web cast will be available at
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2012120 (English) or
www.cnw.ca/fr/webcast/viewEvent.cgi?eventID=2012120 (French).
    A replay of the conference call will be available until October 5, 2007
by calling (416) 640-1917 or toll-free 1-877-289-8525 (passcode: 21247148
followed by the number sign). The web cast will be available for replay using
the above links until December 28, 2007.

    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 approximately
195 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. 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                                          2007         2006
                                                             $            $
    -------------------------------------------------------------------------

    ASSETS
    Current
    Cash and cash equivalents                         1,523,597    4,093,293
    Short-term investments                            9,500,000            -
    Accounts receivable                               5,495,836    5,644,956
    Inventories                                       5,480,167    6,171,453
    Prepaid expenses and deposits                       658,867      804,470
    -------------------------------------------------------------------------
                                                     22,658,467   16,714,172
    -------------------------------------------------------------------------
    Long-term
    Property, plant and equipment                     9,557,359   10,138,797
    Intangible assets                                 8,545,215    9,401,733
    Goodwill                                            456,155      456,155
    Deferred financing fees                             209,578    1,258,236
    Investment                                                -    3,298,279
    Other assets                                        100,000      100,000
    -------------------------------------------------------------------------
                                                     41,526,774   41,367,372
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Revolving credit facility                           895,619    3,162,097
    Accounts payable and accrued liabilities          6,399,382    5,054,593
    Income and other taxes payable                      283,845      494,881
    Deferred government incentives                      541,282    3,433,007
    Current portion of long-term debt and capital
     leases                                             123,769    1,220,840
    -------------------------------------------------------------------------
                                                      8,243,897   13,365,418
    -------------------------------------------------------------------------
    Long-term
    Long-term debt                                      421,396    3,697,806
    Obligations under capital leases                    764,933      953,957
    Deferred government incentives                    2,986,572            -
    -------------------------------------------------------------------------
                                                     12,416,798   18,017,181
    -------------------------------------------------------------------------
    Shareholders' equity
    Share capital                                    90,038,524   72,686,901
    Special warrants                                  2,174,008            -
    Other paid-in capital                             5,528,059    4,556,290
    Deficit                                         (68,630,615) (53,869,621)
    Cumulative translation adjustment                         -      (23,379)
    -------------------------------------------------------------------------
                                                     29,109,976   23,350,191
    -------------------------------------------------------------------------
                                                     41,526,774   41,367,372
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Bioniche Life Sciences Inc.

                     CONSOLIDATED STATEMENTS OF DEFICIT

    Years ended June 30
                                                           2007         2006
                                                             $            $
    -------------------------------------------------------------------------

    Deficit, beginning of year                      (53,869,621) (52,726,240)
    Net loss                                        (14,760,994)  (1,143,381)
    -------------------------------------------------------------------------
    Deficit, end of year                            (68,630,615) (53,869,621)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Bioniche Life Sciences Inc.

                       CONSOLIDATED STATEMENTS OF LOSS

    Years ended June 30
                                                           2007         2006
                                                             $            $
    -------------------------------------------------------------------------

    REVENUE
    Sales                                            27,479,727   26,655,647
    Cost of sales                                    12,179,266   11,331,332
    -------------------------------------------------------------------------
    Gross profit                                     15,300,461   15,324,315
    -------------------------------------------------------------------------

    EXPENSES
    Administration                                    7,239,106    5,856,666
    Marketing and selling                             6,106,225    6,341,082
    Quality assurance                                   690,291    1,208,459
    Interest on long-term debt                          637,510    1,538,130
    Other interest                                       75,049      287,729
    Accreted interest on convertible term note          722,867      379,554
    Amortization of property, plant and equipment     1,169,948    1,217,731
    Amortization of intangible assets                   856,518    1,245,451
    Amortization of deferred financing fees           1,048,658    1,357,835
    Foreign exchange loss (gain)                        (55,375)     192,841
    -------------------------------------------------------------------------
                                                     18,490,797   19,625,478
    -------------------------------------------------------------------------
    Loss before research and development expenses
     and other items                                 (3,190,336)  (4,301,163)

    Research and development expenses, gross         14,935,158   12,915,955
    Less: government incentives, net                 (1,727,403)    (833,148)
    Loss on sale of investment                          192,157            -
    Gain on sale of rights to future royalty stream  (2,127,587)           -
    Debt refinancing                                          -    2,493,920
    -------------------------------------------------------------------------
    Loss from continuing operations before income
     taxes                                          (14,462,661) (18,877,890)
    Provision for income taxes                          298,333      112,094
    -------------------------------------------------------------------------
    Loss from continuing operations                 (14,760,994) (18,989,984)
    Income from discontinued operations                       -   17,846,603
    -------------------------------------------------------------------------
    Net loss                                        (14,760,994)  (1,143,381)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and fully diluted net income (loss) per share
      Continuing operations                               (0.32)       (0.50)
      Discontinued operations                                 -         0.47
    -------------------------------------------------------------------------
    Basic and fully diluted net loss per share            (0.32)       (0.03)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of common shares
     outstanding                                     45,827,257   37,936,361



    Bioniche Life Sciences Inc.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

    Years ended June 30
                                                           2007         2006
                                                             $            $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net loss from continuing operations             (14,760,994) (18,989,984)
    Add (deduct) non cash items:
      Amortization                                    3,075,124    3,821,017
      Accreted interest on convertible term note        722,867      498,881
      Foreign exchange (gain) loss                       38,208     (543,011)
      Stock-based compensation                          221,712      241,484
      Warrants issued to consultants                     39,300            -
      Share bonus and shares issued to directors        962,759       90,002
      Employee share ownership plan                     523,559      544,872
      Loss on sale of investment                        192,157            -
      Gain on sale of right to future royalty stream
       and royalties recognized                      (2,618,306)           -
      Write-down of deferred costs - government
       incentives                                             -      576,000
      Debt refinancing                                        -    1,271,454
      -----------------------------------------------------------------------
                                                    (11,603,614) (12,489,285)
    Net change in non-cash working capital balances     615,806   (1,552,485)
    -------------------------------------------------------------------------
    Cash used in operating activities               (10,987,808) (14,041,770)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Payment relating to acquisition of net assets             -     (123,120)
    Acquisition of short-term investments           (11,000,548)           -
    Proceeds from maturity of short-term investments  1,500,548            -
    Government incentives received on account of
     property, plant and equipment                       30,224       54,422
    Proceeds on disposal of property, plant and
     equipment                                            4,786       11,888
    Proceeds from sale (purchase) of investment       3,196,200   (1,740,146)
    Selling costs incurred for sale of investment
     and future royalty stream                         (100,000)           -
    Proceeds from sale of right to future royalty
     stream                                           3,652,800            -
    Purchase of property, plant and equipment          (623,520)  (1,000,017)
    -------------------------------------------------------------------------
    Cash used in investing activities                (3,339,510)  (2,796,973)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Proceeds from bridge loan                                 -    8,681,250
    Proceeds from units issued                       17,500,000    1,102,993
    Proceeds from over-allotment warrants issued         22,500            -
    Proceeds from exercise of compensation warrants      23,730            -
    Proceeds from exercise of stock options               1,800            -
    Unit issue costs incurred                        (1,906,316)     (49,300)
    Proceeds from convertible term note                       -    7,048,807
    Payment of financing fees - debt                          -   (1,333,986)
    Proceeds from deferred government incentives         74,282      727,721
    Proceeds from revolving credit facility          21,019,297    4,051,250
    Repayment of revolving credit facility          (21,677,375)    (741,285)
    Repayment of bridge loan                                  -   (8,605,500)
    Repayment of senior and other long-term debt     (3,300,296) (18,989,521)
    -------------------------------------------------------------------------
    Cash provided by (used in) financing activities  11,757,622   (8,107,571)
    -------------------------------------------------------------------------

    Net decrease in cash from continuing operations  (2,569,696) (24,946,314)
    Net increase in cash from discontinued operations         -   25,512,199
    -------------------------------------------------------------------------
    Net increase (decrease) in cash for the year     (2,569,696)     565,885
    Cash and cash equivalents, beginning of year      4,093,293    3,527,408
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year            1,523,597    4,093,293
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00013159EF




For further information:

For further information: Patrick Montpetit, CA, Vice-President and Chief
Financial Officer, Bioniche Life Sciences Inc., Telephone: (514) 697-6636,
Patrick.Montpetit@Bioniche.com; Jennifer Shea, Corporate Communications &
Investor Relations Manager, Bioniche Life Sciences Inc., Telephone: (613)
966-8058, Cell: (613) 391-2097, Jennifer.Shea@Bioniche.com

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