Bioniche Secures Final Financing to Scale-up E. coli O157:H7 Vaccine Production



    - full $25 million of required financing now in place -

    BELLEVILLE, ON, June 25 /CNW/ - Bioniche Life Sciences Inc. (TSX: BNC), a
research-based, technology-driven Canadian biopharmaceutical company, today
announced that it has secured an amendment to a pre-existing $7.6 million
contribution agreement with the Industrial Technologies Office of Industry
Canada that will support the scale-up of its vaccine production facility in
Belleville, Ontario. The amended agreement extends the timeline for completion
of work on the production scale-up to March 31, 2013.
    This funding will be combined with the $10 million in Ontario government
financing through the Ministry of Economic Development and Trade (MEDT)'s
Advanced Manufacturing Investment Strategy (AMIS), $5 million in federal
government financing through the Agri-Opportunities Program of the Department
of Agriculture and Agri-Food (Canada) (AAFC), both announced in December,
2007, and a loan of $5 million from the Business Development Bank of Canada
(BDC) announced in February, 2008. With $25 million in funding now in place,
the Company has the required financing to complete the scale-up of vaccine
production at its Belleville facility over the next two years. This will
provide capacity of a minimum of 40 million doses of the E. coli O157:H7
vaccine. It is part of a long-term, $107 million project to create a
state-of-the-art Animal Health and Food Safety Vaccine Manufacturing Centre in
Belleville.
    "We are pleased to have all of the necessary financing now in place to
complete the first phase of production scale-up in Belleville," said Graeme
McRae, President & CEO of Bioniche Life Sciences Inc. "The assistance of these
programs has provided a favourable weighted average cost of capital and the
terms of the funding will permit repayment from vaccine revenues. The fact
that the majority of this financing is coming from various levels of
government demonstrates recognition of the public health importance of the
E. coli O157:H7 vaccine and future food safety vaccines that will be produced
in our Belleville facility."
    This first phase of the project will take place within the Company's
current 137,000 square foot manufacturing and head office complex in
Belleville. The planning and engineering of this project has been ongoing.
With the full funding now in place, Bioniche expects to recover its prior
outlays, complete detailed engineering drawings, begin physical construction,
and complete and validate this scale-up in the second half of 2010.
    Bioniche has developed the world's first cattle vaccine that may be used
as an on-farm intervention to reduce the amount of E. coli O157:H7 shed by
cattle. This will be the first product manufactured in the scaled-up
production facility in Belleville. The vaccine is unique in that it helps to
reduce shedding of an organism that, while potentially lethal to humans,
causes no disease in cattle. The Company obtained approval to distribute its
vaccine under the Permit to Release Veterinary Biologics regulations by the
Canadian Food Inspection Agency (CFIA) in December, 2006. In February of this
year, the United States Department of Agriculture (USDA) granted eligibility
for conditional licensing of the vaccine.
    It remains very clear that there is a pressing need to reduce the amount
of E. coli O157:H7 shed into the environment by cattle. Food recalls continue
to occur on a regular basis in beef, produce and prepared food. On-farm
interventions to reduce the shedding of E. coli O157:H7 by cattle, such as
vaccination, may assist in reducing the potential for food and water
contamination and the resulting human illnesses and deaths.
    Approximately 100,000 cases of human infection with the E. coli O157:H7
organism are reported each year in North America. 2% to 7% of those people
develop hemolytic uremic syndrome (HUS), a disease characterized by kidney
failure (in recent outbreaks, this percentage has risen to as high as 16%).
Five percent of HUS patients die, many of them children and senior citizens,
whose kidneys are more sensitive to damage.
    Beyond consumption of contaminated food or water, individuals can become
infected from E. coli O157:H7 by visiting animal exhibits. Petting zoos,
fairs, and agricultural exhibits provide many possible routes of transmission
for E. coli. Direct animal contact is the obvious route, but contact with
contaminated products (e.g., sawdust, shavings, soiled clothing or shoes) can
also lead to human infection.

    About the E. coli O157:H7 Cattle Vaccine

    This vaccine received international recognition in September, 2007 by the
Animal Pharm Industry Excellence Awards as the best new veterinary product for
livestock globally. The vaccine has been developed by a strategic alliance
formed in 2000 between the University of British Columbia (UBC), the Alberta
Research Council (ARC), the University of Saskatchewan's Vaccine & Infectious
Disease Organization (VIDO), and Bioniche, which holds the rights for
worldwide commercialization of the vaccine. The vaccine prevents the
E. coli O157:H7 bacteria from attaching to the intestines of vaccinated
cattle, thereby reducing their reproduction within the animal, and reducing
the amount of bacteria that can be released through cattle manure in the
environment. More than 30,000 cattle have been involved in clinical testing of
the vaccine over the past five years.

    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.

    %SEDAR: 00013159EF




For further information:

For further information: 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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