Bioniche Reports Fiscal 2008 Second Quarter



    - year over year sales decrease; gross profit margin increases; net loss
    remains stable -

    (all figures are in Canadian dollars unless otherwise noted)

    BELLEVILLE, ON, Feb. 8 /CNW/ - Bioniche Life Sciences Inc. (TSX: BNC), a
research-based, technology-driven Canadian biopharmaceutical company, today
announced financial results for the second quarter of its 2008 fiscal year,
ending December 31, 2007.
    "The second quarter of Fiscal 2008 and subsequent weeks have been very
positive for us with three announcements related to financing in support of
the scale-up of vaccine manufacturing at our Belleville, Ontario facility,"
said Graeme McRae, President & CEO of Bioniche Life Sciences Inc. "The $20
million that was announced goes a long way toward covering the costs of $25
million first phase of scale-up, which is critical to prepare for market
demand for our E. coli O157:H7 cattle vaccine as regulatory approvals are
received." The vaccine is available to Canadian veterinarians under the Permit
to Release Veterinary Biologics regulations of the Canadian Food Inspection
Agency (CFIA). Earlier this week, the United States Department of Agriculture
(USDA) gave notice that the E. coli O157:H7 vaccine is eligible for a
conditional license, providing access to the U.S. market.

    Fiscal 2008 Second Quarter Financial Results Highlights

    Consolidated revenues for the six-month period ending December 31, 2007
totalled $12.4 million, a decrease of $1.2 million, or 9% from the $13.6
million recorded in the same period in Fiscal 2007.
    The overall gross profit margin was 58% for the six-month period ending
December 31, 2007 as compared to 57% for the same period last year.
    Expenses before research and development totalled $8.8 million for the
six months ending December 31, 2007, the same amount recorded in the same
period in Fiscal 2007. Expenses include increased costs related to the
Company's education and awareness program focused on the dangers of E. coli
O157:H7 and the importance of food and environmental safety.
    Gross research and development expenses were $7.2 million for the
six-month period ending December 31, 2007. This is unchanged from the same
period in Fiscal 2007. The majority of these costs can be attributed to the
ongoing Phase III clinical program with Urocidin(TM) in bladder cancer.
    The basic net loss per share for the six-month period ending December 31,
2007 was ($0.13), compared to a net loss per share of ($0.14) recorded in the
same period last year.

    The balance sheet at December 31, 2007 shows:

    
    -   Total assets of $36.8 million, as compared to $41.5 million at
        June 30, 2007.
    -   Working capital of $7.1 million, as compared to $14.4 million at
        June 30, 2007.
    -   Shareholders' equity of $21.7 million, as compared to $29.1 million
        at June 30, 2007.
    -   Cash and cash equivalents of $6.6 million, as compared to cash, cash
        equivalents and short-term investments of $11.0 million at June 30,
        2007.
    -   Unused revolving credit facilities of $1.6 million, as compared to
        $1.8 million at the end of June 30, 2007.
    

    "It is important to note that despite some going concern with our cash
position, our commercial operations continue to perform nicely," said Patrick
Montpetit, Chief Financial Officer of Bioniche Life Sciences Inc. "We are well
positioned and committed to execute a strategic partnership transaction
related to the financing of our bladder cancer therapy, Urocidin(TM), at the
earliest opportunity."

    The Company will discuss its second quarter results and other recent news
during a:

    
                       Conference Call & Audio Web Cast
                         Tuesday, February 12, 2008
                             9:00 a.m. (Eastern)
    

    To participate in the teleconference, call 416-644-3418/toll-free
1-800-731-6941.

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

    www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2167660
    (English)

    www.cnw.ca/fr/webcast/viewEvent.cgi?eventID=2167660 (French)

    A replay of the conference call will be available until February 19, 2008
by calling (416) 640-1917 or toll-free 1-877-289-8525 (passcode: 21262743
followed by the number sign).
    The web cast will be available for replay using the above links until May
12, 2008.

    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
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. Bioniche has been named one of Canada's Top Ten Life Sciences
Companies for 2008. 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

                     INTERIM CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)

                                                         As at         As at
                                                   December 31,      June 30,
                                                          2007          2007
                                                             $             $
    -------------------------------------------------------------------------

    ASSETS
    Current
    Cash and cash equivalents                        6,639,947     1,523,597
    Short-term investments                                   -     9,500,000
    Accounts receivable                              5,125,946     5,495,836
    Inventories                                      5,313,158     5,480,167
    Prepaid expenses and deposits                      711,359       658,867
    Foreign currency embedded derivatives              242,969             -
    -------------------------------------------------------------------------
                                                    18,033,379    22,658,467
    -------------------------------------------------------------------------
    Long-term
    Property, plant and equipment                    9,302,202     9,557,359
    Intangible assets                                8,116,957     8,545,215
    Goodwill                                           456,155       456,155
    Deferred financing fees                                  -       209,578
    Foreign currency embedded derivatives               81,915             -
    Other assets                                       803,621       100,000
    -------------------------------------------------------------------------
                                                    36,794,229    41,526,774
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Revolving credit facility                        2,872,562       895,619
    Accounts payable and accrued liabilities         6,912,470     6,399,382
    Income and other taxes payable                     418,964       283,845
    Deferred government incentives                     597,848       541,282
    Current portion of long-term debt and
     obligations under capital leases                  127,445       123,769
    -------------------------------------------------------------------------
                                                    10,929,289     8,243,897
    -------------------------------------------------------------------------
    Long-term
    Long-term debt                                     399,497       421,396
    Obligations under capital leases                   737,362       764,933
    Deferred government incentives                   2,986,572     2,986,572
    -------------------------------------------------------------------------
                                                    15,052,720    12,416,798
    -------------------------------------------------------------------------
    Shareholders' equity
    Share capital                                   90,386,332    90,038,524
    Special warrants                                 2,174,008     2,174,008
    Other paid-in capital                            5,707,033     5,528,059
    Deficit                                        (76,525,864)  (68,630,615)
    -------------------------------------------------------------------------
                                                    21,741,509    29,109,976
    -------------------------------------------------------------------------
                                                    36,794,229    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            307,385       209,791      -          -
    Stock-based compensation               -             -      -          -
    Shares issued to directors       109,998        76,999      -          -
    Share bonus                        5,264         4,001      -          -
    Term debt repayment
     made in shares                1,234,358       804,352      -          -
    Warrants issued in
     connection with the
     convertible term note                 -             -      -          -
    Revolving debt principal
     payments made in shares       1,595,712     1,014,413      -          -
    -------------------------------------------------------------------------
    Balance, December 31, 2006    42,450,857    62,903,741    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                  386,113       271,306      -          -
    Stock-based compensation               -             -      -          -
    Shares issued to directors        73,560        76,502      -          -
    -------------------------------------------------------------------------
    Balance, December 31, 2007    62,171,540    81,426,545    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                -           -          -      2,871
    Stock-based compensation             -           -          -    111,022
    Shares issued to directors           -           -          -          -
    Share bonus                          -           -          -          -
    Term debt repayment
     made in shares                      -           -          -          -
    Warrants issued in
     connection with the
     convertible term note               -           -          -     93,023
    Revolving debt principal
     payments made in shares             -           -          -          -
    -------------------------------------------------------------------------
    Balance,
     December 31, 2006          12,000,000  11,731,716          -  4,763,206
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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             -           -          -    178,974
    Shares issued to directors           -           -          -          -
    -------------------------------------------------------------------------
    Balance, December 31, 2007   9,000,000   8,798,787  2,174,008  5,707,033
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                     Cumulative
                                                    translation
                                            Deficit  adjustment        Total
                                                  $           $            $
    -------------------------------------------------------------------------

    Balance, June 30, 2006              (53,869,621)    (23,379)  23,350,191
    Net loss for the period              (5,653,935)     23,379   (5,630,556)
    Issued under employee
     share ownership plan                         -           -      212,662
    Stock-based compensation                      -           -      111,022
    Shares issued to directors                    -           -       76,999
    Share bonus                                   -           -        4,001
    Term debt repayment
     made in shares                               -           -      804,352
    Warrants issued in
     connection with the
     convertible term note                        -           -       93,023
    Revolving debt principal
     payments made in shares                      -           -    1,014,413
    -------------------------------------------------------------------------
    Balance,
     December 31, 2006                  (59,523,556)          -   20,036,107
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance, June 30, 2007              (68,630,615)          -   29,109,976
    Transition adjustment                   134,674           -      134,674
    Net loss for the period              (8,029,923)          -   (8,029,923)
    Issued under employee share
     ownership plan                               -           -      271,306
    Stock-based compensation                      -           -      178,974
    Shares issued to directors                    -           -       76,502
    -------------------------------------------------------------------------
    Balance, December 31, 2007          (76,525,864)          -   21,741,509
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Bioniche Life Sciences Inc.

                   INTERIM CONSOLIDATED STATEMENTS OF LOSS
                                 (Unaudited)

    For the three and six months ended December 31

                           Current     Last Year       Current          Last
                           Quarter       Quarter  Year to Date  Year to Date
                              2007          2006          2007          2006
                                 $             $             $             $
    -------------------------------------------------------------------------

    REVENUE
    Sales                6,514,261     5,912,276    12,419,045    13,656,902
    Cost of sales        2,687,177     2,745,283     5,166,481     5,936,128
    -------------------------------------------------------------------------
    Gross profit         3,827,084     3,166,993     7,252,564     7,720,774
    -------------------------------------------------------------------------

    EXPENSES
    Administration       1,973,720     1,601,948     3,603,134     2,732,239
    Marketing
     and selling         1,729,968     1,484,573     3,370,091     2,906,037
    Quality assurance      200,354       169,539       370,784       338,046
    Interest on
     long-term debt         35,980       299,924        73,930       494,745
    Other
     interest (income)     (21,526)       71,527       (84,346)      144,731
    Accreted interest
     on convertible
     term note                   -       510,587             -       619,413
    Amortization of
     property, plant
     and equipment         282,375       295,562       564,162       590,846
    Amortization of
     intangible assets     214,130       214,130       428,259       428,259
    Amortization of
     deferred financing
     fees                  117,641       634,930       152,807       809,258
    Foreign exchange
     loss (gain)           118,541      (271,665)      316,514      (283,851)
    -------------------------------------------------------------------------
                         4,651,183     5,011,055     8,795,335     8,779,723
    -------------------------------------------------------------------------
    Loss before
     research and
     development
     expenses and
     other items          (824,099)   (1,844,062)   (1,542,771)   (1,058,949)

    Research and
     development
     expenses, gross     3,663,747     3,561,692     7,230,414     7,151,440
    Less: government
     incentives, net      (374,735)     (413,907)     (718,583)     (836,534)
    Change in
     unrealized loss
     (gain) on foreign
     currency embedded
     derivatives            44,453             -      (138,203)            -
    Impairment
     of investment               -             -             -       175,000
    Loss on sale
     of investment               -        17,157             -        17,157
    Gain on sale of
     right to future
     royalty stream              -    (2,127,587)            -    (2,127,587)
    -------------------------------------------------------------------------
    Loss before
     income taxes       (4,157,564)   (2,881,417)   (7,916,399)   (5,438,425)
    Provision for
     income taxes           59,601        31,654       113,524       215,510
    -------------------------------------------------------------------------
    Net loss for
     the period         (4,217,165)   (2,913,071)   (8,029,923)   (5,653,935)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and diluted
     net loss per share      (0.07)        (0.07)        (0.13)        (0.14)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted-average
     number of
     common shares
     outstanding        62,073,503    40,225,172    61,977,023    39,759,475



    Bioniche Life Sciences Inc.

                INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)

    For the three and six months ended December 31

                           Current     Last Year       Current          Last
                           Quarter       Quarter  Year to Date  Year to Date
                              2007          2006          2007          2006
                                 $             $             $             $
    -------------------------------------------------------------------------

    OPERATING
     ACTIVITIES
    Net loss for the
     period             (4,217,165)   (2,913,071)   (8,029,923)   (5,653,935)
    Add (deduct)
     non-cash items:
      Amortization         614,146     1,144,622     1,145,228     1,828,363
      Accreted interest
       on convertible
       term note                 -       510,587             -       619,413
      Change in unrealized
       loss (gain) on
       foreign currency
       embedded
       derivatives          44,453             -      (138,203)            -
      Foreign exchange
       loss (gain)          21,667       351,777       (53,451)      345,644
      Stock-based
       compensation         94,228        55,242       178,974       111,022
      Share compensation   253,437        81,000       253,437        81,000
      Employee share
       ownership plan      163,553       212,662       311,322       212,662
      Impairment of
       investment                -             -             -       175,000
      Loss on sale of
       investment                -        17,157             -        17,157
      Gain on sale of
       right to future
       royalty stream            -    (2,127,587)            -    (2,127,587)
    -------------------------------------------------------------------------
                        (3,025,681)   (2,667,611)   (6,332,616)   (4,391,261)
    Net change in
     non-cash working
     capital balances   (1,475,702)      792,819      (830,764)    1,097,708
    -------------------------------------------------------------------------
    Cash used in
     operating
     activities         (4,501,383)   (1,874,792)   (7,163,380)   (3,293,553)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Proceeds from
     maturity of
     short-term
     investments                 -             -     9,500,000             -
    Proceeds from
     sale of investment          -     3,196,200             -     3,196,200
    Proceeds from sale
     of right to future
     royalty stream              -     3,652,800             -     3,652,800
    Government incentives
     received on account
     of property, plant
     and equipment           2,807        30,224         4,641        30,224
    Purchase of property,
     plant and equipment   (73,688)      (74,671)     (272,397)     (182,076)
    -------------------------------------------------------------------------
    Cash provided by
     (used in) investing
     activities            (70,881)    6,804,553     9,232,244     6,697,148
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Proceeds from
     deferred government
     incentives             18,701        74,282        49,965        74,282
    Proceeds from
     revolving credit
     facility            8,505,017     5,560,270    13,451,976    10,052,318
    Repayment of
     revolving credit
     facility           (5,281,835)   (5,548,157)  (10,380,520)  (10,705,685)
    Repayment of
     obligations under
     capital lease         (29,164)      (25,584)      (64,323)      (58,259)
    Repayment of senior
     and other long-term
     debt                   (4,861)   (2,956,883)       (9,612)   (3,234,149)
    -------------------------------------------------------------------------
    Cash provided by
     (used in) financing
     activities           3,207,858   (2,896,072)    3,047,486    (3,871,493)
    -------------------------------------------------------------------------

    Net increase
     (decrease) in cash
     and cash equivalents
     during the period   (1,364,406)   2,033,689     5,116,350      (467,898)
    Cash and cash
     equivalents,
     beginning of period  8,004,353    1,591,706     1,523,597     4,093,293
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end
     of period            6,639,947    3,625,395     6,639,947     3,625,395
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





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 & Government Relations Director, Bioniche Life Sciences Inc.,
Telephone: (613) 966-8058, Cell: (613) 391-2097, Jennifer.Shea@Bioniche.com

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