Bioniche Reports Fiscal 2008 First Quarter



    revenues down due to non-recurring event in 2007, net loss stable

    (all figures are in Canadian dollars unless otherwise noted)

    BELLEVILLE, ON, Nov. 9 /CNW/ - Bioniche Life Sciences Inc. (TSX: BNC), a
research-based, technology-driven Canadian biopharmaceutical company, today
announced financial results for the first quarter of its 2008 fiscal year,
ending September 30, 2007.
    "We are also focused on the successful completion of a marketing
partnership deal for Urocidin - our bladder cancer therapy, while executing
our Phase III clinical program, the first trial of which continues to recruit
patients at 25 centres in the U.S. and Canada," said Graeme McRae, President &
CEO of Bioniche Life Sciences Inc. "We also continue to be focused on
obtaining a full Canadian license for our E. coli O157:H7 cattle vaccine,
while seeking an opportunity to clarify statistical analysis methodology with
our U.S. regulator."

    Fiscal 2008 First Quarter Financial Results Highlights

    Consolidated revenues for the first quarter totaled $5.9 million, a
decrease of 23% from the $7.7 million recorded in the same period in Fiscal
2007. A one-time promotion of a leading animal health product contributed to
higher revenues for the first quarter last year, an event that was not
repeated this year.
    The overall gross profit margin was 58% for the first quarter of
Fiscal 2008, as compared to 59% for the same period in Fiscal 2007.
    Expenses totaled $4.1 million for the three months ending September 30,
2007, which compares to $3.8 million recorded in the same period last year.
This increase of $0.3 million, or 8%, primarily reflects additional staff,
increased expenditures on E. coli O157:H7 development and awareness program
and some necessary salary increases.
    Gross research and development expenses remained stable at $3.6 million
for the 3-month periods ending September 30, 2007 and September 30, 2006
respectively. The majority of these costs can be attributed to the ongoing
Phase III clinical program in bladder cancer and expenditures on the E. coli
O157:H7 development program.
    The basic net loss per share for the first quarter of Fiscal 2008 was
($0.06), compared to a net loss per share of ($0.07) recorded in the same
period last year.

    Annual Meeting Highlights

    At the Company's Annual and Special Meeting of Shareholders yesterday
afternoon in Toronto, Ontario, the Company provided an update on its Phase III
clinical program with Urocidin in bladder cancer and its E. coli O157:H7
vaccine program. In the first Phase III trial involving refractory bladder
cancer patients treated with Urocidin, it was reported that the Data Safety
Monitoring Committee is satisfied with the progress of the trial and that
recruitment of the 105 patients should be completed by mid-2008. With its
E. coli O157:H7 vaccine, Bioniche is in the process of building industry
awareness about this bacterium and in support of sales to high profile early
adopters.

    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
                                 (Unaudited)

                                                          As at        As at
                                                   September 30,     June 30,
                                                           2007         2007
                                                              $            $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                         8,004,353    1,523,597
    Short-term investments                                    -    9,500,000
    Accounts receivable                               5,137,800    5,495,836
    Inventories                                       5,486,543    5,480,167
    Prepaid expenses and deposits                       554,160      658,867
    Foreign currency embedded derivatives               231,579            -
    -------------------------------------------------------------------------
                                                     19,414,435   22,658,467
    -------------------------------------------------------------------------
    Long-term
    Property, plant and equipment                     9,513,696    9,557,359
    Intangible assets                                 8,331,086    8,545,215
    Goodwill                                            456,155      456,155
    Deferred financing fees                                   -      209,578
    Foreign currency embedded derivatives               137,758            -
    Other assets                                         80,613      100,000
    -------------------------------------------------------------------------
                                                     37,933,743   41,526,774
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Revolving credit facility                           503,443      895,619
    Accounts payable and accrued liabilities          6,537,404    6,399,382
    Income and other taxes payable                      323,827      283,845
    Deferred government incentives                      573,116      541,282
    Current portion of long-term debt and
     obligations under capital leases                   129,014      123,769
    -------------------------------------------------------------------------
                                                      8,066,804    8,243,897
    -------------------------------------------------------------------------
    Long-term
    Long-term debt                                      408,158      421,396
    Obligations under capital leases                    765,187      764,933
    Deferred government incentives                    2,986,572    2,986,572
    -------------------------------------------------------------------------
                                                     12,226,721   12,416,798
    -------------------------------------------------------------------------
    Shareholders' equity
    Share capital                                    90,228,909   90,038,524
    Special warrants                                  2,174,008    2,174,008
    Other paid-in capital                             5,612,805    5,528,059
    Deficit                                         (72,308,700) (68,630,615)
    -------------------------------------------------------------------------
                                                     25,707,022   29,109,976
    -------------------------------------------------------------------------
                                                     37,933,743   41,526,774
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Bioniche Life Sciences Inc.

           INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (Unaudited)

                                                        Preferred shares -
                                Common shares               Series 1
                               No.           $           No.           $
    -------------------------------------------------------------------------
    Balance, June 30,
     2006                  39,198,140   60,794,185          167      161,000
    Net loss for the
     period                                                   -            -
    Issued under employee
     share ownership plan      54,332       41,291            -            -
    Stock-based
     compensation                   -            -            -            -
    Revolving debt
     principal payments
     made in shares           266,712      155,434            -            -
    -------------------------------------------------------------------------
    Balance, Sept. 30,
     2006                  39,519,184   60,990,910          167      161,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance, June 30,
     2007                  61,711,867   81,078,737          167      161,000
    Transition adjustment           -            -            -            -
    Net loss for the
     period                         -            -            -            -
    Issued under employee
     share ownership plan     171,920      113,883            -            -
    Stock-based
     compensation                   -            -            -            -
    Shares issued to
     directors                 73,560       76,502            -            -
    -------------------------------------------------------------------------
    Balance, Sept. 30,
     2007                  61,957,347   81,269,122          167      161,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                                    Other
                              Preferred shares -       Special     paid-in
                                  Series ll           Warrants     capital
                               No.           $            $            $
    -------------------------------------------------------------------------
    Balance, June 30,
     2006                  12,000,000   11,731,716            -    4,556,290
    Net loss for the
     period                         -            -            -            -
    Issued under employee
     share ownership plan           -            -            -      (41,291)
    Stock-based
     compensation                   -            -            -       55,780
    Revolving debt
     principal payments
     made in shares                 -            -            -            -
    -------------------------------------------------------------------------
    Balance, Sept. 30,
     2006                  12,000,000   11,731,716            -    4,570,779
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance, June 30,
     2007                   9,000,000    8,798,787    2,174,008    5,528,059
    Transition adjustment           -            -            -            -
    Net loss for the
     period                         -            -            -            -
    Issued under employee
     share ownership plan           -            -            -            -
    Stock-based
     compensation                   -            -            -       84,746
    Shares issued to
     directors                      -            -            -            -
    -------------------------------------------------------------------------
    Balance, Sept. 30,
     2007                   9,000,000    8,798,787    2,174,008    5,612,805
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                        Cumulative
                                       translation
                            Deficit     adjustment      Total
                                 $           $            $
    ------------------------------------------------------------
    Balance, June 30,
     2006                 (53,869,621)     (23,379)  23,350,191
    Net loss for the
     period                (2,740,864)           -   (2,740,864)
    Issued under employee
     share ownership plan           -            -            -
    Stock-based
     compensation                   -            -       55,780
    Revolving debt
     principal payments
     made in shares                 -            -      155,434
    ------------------------------------------------------------
    Balance, Sept. 30,
     2006                 (56,610,485)     (23,379)  20,820,541
    ------------------------------------------------------------
    ------------------------------------------------------------

    Balance, June 30,
     2007                 (68,630,615)           -   29,109,976
    Transition adjustment     134,674            -      134,674
    Net loss for the
     period                (3,812,759)           -   (3,812,759)
    Issued under employee
     share ownership plan           -            -      113,883
    Stock-based
     compensation                   -            -       84,746
    Shares issued to
     directors                      -            -       76,502
    ------------------------------------------------------------
    Balance, Sept. 30,
     2007                 (72,308,700)           -   25,707,022
    ------------------------------------------------------------
    ------------------------------------------------------------


    Bioniche Life Sciences Inc.

                        NOTES TO INTERIM CONSOLIDATED
                             FINANCIAL STATEMENTS

    September 30, 2007 and 2006                                    Unaudited

    Bioniche Life Sciences Inc.

                   INTERIM CONSOLIDATED STATEMENTS OF LOSS
                                 (Unaudited)

    For the three months ended September 30

                                                           2007         2006
                                                              $            $
    -------------------------------------------------------------------------
    REVENUE
    Sales                                             5,904,784    7,744,626
    Cost of sales                                     2,479,305    3,190,845
    -------------------------------------------------------------------------
    Gross profit                                      3,425,479    4,553,781
    -------------------------------------------------------------------------

    EXPENSES
    Administration                                    1,629,414    1,130,291
    Marketing and selling                             1,640,123    1,421,464
    Quality assurance                                   170,430      168,507
    Interest on long-term debt                           37,950      160,509
    Other interest (income)                             (62,820)      73,204
    Accreted interest on convertible term note                -      143,138
    Amortization of property, plant and equipment       281,787      295,284
    Amortization of intangible assets                   214,129      214,129
    Amortization of deferred financing fees              35,166      174,328
    Foreign exchange loss (gain)                        197,973      (12,186)
    -------------------------------------------------------------------------
                                                      4,144,152    3,768,668
    -------------------------------------------------------------------------
    Income (loss) before research and
     development expenses and other items              (718,673)     785,113
    Research and development expenses, gross          3,566,667    3,589,748
    Less: government incentives, net                   (343,848)    (422,627)
    Unrealized gain on foreign currency
     embedded derivatives                              (182,656)           -
    Impairment of investment                                  -      175,000
    -------------------------------------------------------------------------
    Loss before income taxes                         (3,758,836)  (2,557,008)
    Provision for income taxes                           53,923      183,856
    -------------------------------------------------------------------------
    Net loss for the period                          (3,812,759)  (2,740,864)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and diluted net loss per share                  (0.06)       (0.07)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted-average number of common shares
     outstanding                                     61,880,544   39,293,778


    Bioniche Life Sciences Inc.

                       INTERIM CONSOLIDATED STATEMENTS
                                OF CASH FLOWS
                                 (Unaudited)

    For the three months ended September 30

                                                           2007         2006
                                                              $            $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net loss for the period                          (3,812,759)  (2,740,864)
    Add (deduct) non cash items:
      Amortization                                      531,082      683,741
      Accreted interest on convertible debt                 531      143,138
      Foreign exchange gain                             (75,117)      (6,133)
      Change in fair value of foreign currency
       embedded derivatives                            (182,656)           -
      Stock-based compensation                           84,746       55,780
      Employee share ownership plan                     147,769            -
      Impairment of investment                                -      175,000
    -------------------------------------------------------------------------
                                                     (3,306,935)  (1,689,338)
    Net change in non-cash working capital balances     644,938      270,577
    -------------------------------------------------------------------------
    Cash used in operating activities                (2,661,997)  (1,418,761)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Proceeds from maturity of short-term investments  9,500,000            -
    Government incentives received on account
     of property, plant and equipment                     1,834            -
    Purchase of property, plant and equipment          (198,709)    (107,405)
    -------------------------------------------------------------------------
    Cash used in investing activities                 9,303,125     (107,405)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Proceeds from deferred government incentives         31,264            -
    Proceeds from revolving credit facility           4,946,959    4,492,048
    Repayment of revolving credit facility           (5,098,685)  (5,157,528)
    Repayment of capital lease obligations              (35,159)     (32,675)
    Repayment of senior and other long-term debt         (4,751)    (277,266)
    -------------------------------------------------------------------------
    Cash used in financing activities                  (160,372)    (975,422)
    -------------------------------------------------------------------------

    Net increase (decrease) in cash and
     cash equivalents during the period               6,480,756   (2,501,588)
    Cash and cash equivalents,
     beginning of period                              1,523,597    4,093,293
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period          8,004,353    1,591,705
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





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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