ConjuChem Announces Fiscal 2008 Second Quarter Financial Results



    MONTREAL, June 11 /CNW/ - ConjuChem Biotechnologies Inc (TSX:CJB) today
announced financial results for the second quarter of fiscal 2008, ended
April 30, 2008.
    "During the second quarter, we continued to advance our two Phase II
clinical trials for PC-DAC(TM):Exendin-4, our lead drug designed to be a
best-in-class treatment for Type 2 diabetes. These randomized, double-blind
clinical studies were initiated earlier in 2008 and collectively will enroll
approximately 210 patients," said Mark Perrin, President and CEO of ConjuChem.
"We are on track to produce results from at least one of our two trials by the
end of 2008."
    Net loss for the three-month period ended April 30, 2008 amounted to $7.9
million compared to $12.2 million for the three-month period ended April 30,
2007. Net loss for the six-month period ended April 30, 2008 amounted to $19.8
million compared to $30.8 million for the six-month period ended April 30,
2007. The decrease in the net loss is attributable to a decrease in net
research and development expenses of $16.0 million which was largely related
to the purchase, in the six-month period ended April 30, 2007, of drug product
for the ongoing development PC-DAC(TM):Exendin-4.
    The Company recorded interest income on cash, short and long-term
investments that amounted to $0.4 million for the second quarter ended April
30, 2008, compared to $1.0 million for the second quarter ended April 30,
2007. The Company recorded interest income on cash, short and long-term
investments amounting to $0.9 million for the six-month period ended April 30,
2008, compared to $1.9 million for the six-month period ended April 30, 2007.
The decrease in interest income was a result of the reduction of the Company's
investment portfolio base.
    Gross research and development expenses amounted to $5.4 million for the
quarter ended April 30, 2008, compared to $9.2 million for the quarter ended
April 30, 2007. Gross research and development expenses amounted to $9.1
million for the six-month period ended April 30, 2008, compared to $25.1
million for the six-month period ended April 30, 2007. The decrease is largely
attributable to the purchase, in the six-month period ended April 30, 2007, of
drug product for the ongoing development of PC-DAC(TM):Exendin-4.
    General and administrative costs amounted to $1.2 million for the quarter
ended April 30, 2008 compared to $1.1 million for the quarter ended April 30,
2007. General and administrative costs amounted to $2.8 million for the
six-month period ended April 30, 2008 compared to $1.9 million for the
six-month period ended April 30, 2007. The increase in general and
administrative expenses is partially attributable to an increase in additional
headcount compensation and benefits.
    As at April 30, 2008, the Company had cash, cash equivalents and
short-term investments totalling $36.9 million compared to $26.0 million at
October 31, 2007. As at April 30, 2008, working capital amounted to $29.1
million compared to $18.9 million as at October 31, 2007. ConjuChem believes
that its current cash and cash equivalents, available-for-sale marketable
securities and interest income will be sufficient to carry out our current
research and development plans and operations through the second quarter of
2009.

    About ConjuChem Biotechnologies

    ConjuChem Biotechnologies, developer of next generation medicines from
therapeutic peptides, is creating long-acting compounds based on its
bioconjugation platform technologies. When applied to peptides, the Company's
systemic DACTM and PC-DAC(TM) technologies enable the creation of new drugs
with significantly enhanced therapeutic properties as compared to the original
peptide. Detailed descriptions of the Company can be viewed on the Company's
website www.conjuchem.com.

    
                      UNAUDITED INTERIM BALANCE SHEETS


    As at
                                                      April 30,   October 31,
                                                          2008          2007
                                                             $             $
                                                   --------------------------

    ASSETS
    Current
    Cash and cash equivalents                       11,720,885     1,235,704
    Available-for-sale short-term investments       25,209,116    24,797,545
    Accounts receivable and other assets               595,284       103,277
    Investment tax credits receivable                1,045,000     1,169,000
    Prepaid expenses                                   114,359       208,945
                                                   --------------------------
    Total current assets                            38,684,644    27,514,471
    Held-to-maturity long-term investments                   -    59,736,098
    Property, plant and equipment                      946,933     1,049,147
    Intangible assets                                   15,211        19,257
                                                   --------------------------
                                                    39,646,788    88,318,973
                                                   --------------------------
                                                   --------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable and accrued liabilities         9,614,266     8,576,258
    Unearned revenues                                    8,828        35,314
                                                   --------------------------
    Total current liabilities                        9,623,094     8,611,572
    Convertible senior unsecured notes                       -    52,502,487
    Convertible unsecured subordinated debentures   13,375,448             -
                                                   --------------------------
                                                    22,998,542    61,114,059
                                                   --------------------------

    Shareholders' equity
    Capital stock                                  265,332,302   265,332,302
    Warrants                                        14,093,394    11,885,875
    Equity portion of convertible senior
     unsecured notes                                         -    14,966,780
    Equity portion of convertible unsecured
     subordinated debentures                         5,610,777             -
    Contributed surplus                             44,348,607    28,008,989
    Deficit                                       (312,739,566) (292,973,699)
    Accumulated other comprehensive income (loss)        2,732       (15,333)
                                                   --------------------------
    Total shareholders' equity                      16,648,246    27,204,914
                                                   --------------------------
                                                    39,646,788    88,318,973
                                                   --------------------------
                                                   --------------------------




                   UNAUDITED INTERIM STATEMENTS OF DEFICIT


                             Three-month periods           Six-month periods
                                  ended April 30              ended April 30
                              2008          2007          2008          2007
                                 $             $             $             $
                       --------------------------  --------------------------
    Deficit, beginning
     of period        (304,814,216) (265,712,922) (292,973,699) (247,082,959)
    Net loss for
     the period         (7,925,350)  (12,209,038)  (19,765,867)  (30,839,001)
                       --------------------------  --------------------------
    Deficit, end
     of period        (312,739,566) (277,921,960) (312,739,566) (277,921,960)
                       --------------------------  --------------------------
                       --------------------------  --------------------------




               UNAUDITED INTERIM STATEMENTS OF OPERATIONS AND
                             COMPREHENSIVE LOSS


                             Three-month periods           Six-month periods
                                  ended April 30              ended April 30
                              2008          2007          2008          2007
                                 $             $             $             $
                       --------------------------  --------------------------
    REVENUES
    Contract revenues       24,557             -        51,904             -
    Interest income        375,926     1,004,891       948,581     1,867,221
                       --------------------------  --------------------------
                           400,483     1,004,891     1,000,485     1,867,221
                       --------------------------  --------------------------

    EXPENSES
    Research and
     development         5,422,425     9,231,762     9,080,282    25,133,535
    Investment tax
     credits              (100,000)     (150,000)     (200,000)     (300,000)
                       --------------------------  --------------------------
    Net research and
     development
     expenses            5,322,425     9,081,762     8,880,282    24,833,535
    General and
     administrative
     expenses            1,211,310     1,081,653     2,797,951     1,907,101
    Amortization of
     property, plant
     and equipment          54,979        66,480       110,100       129,146
    Amortization of
     intangible assets       2,443         4,306         4,924         8,611
    Non-cash stock-
     based compensation    657,959     1,445,652     1,372,838     2,276,219
    Financial charges        6,101         5,513        10,307        10,190
    Foreign exchange
     loss (gain)            12,324      (253,937)      191,275        53,398
    Accretion in
     carrying value of
     convertible senior
     unsecured
     notes and interest          -     1,782,500     5,504,427     3,488,022
    Accretion in
     carrying value of
     convertible
     unsecured
     subordinated
     debentures and
     interest            1,058,292             -     1,626,809             -
    Loss on redemption
     of held-to-
     maturity long-term
     investments                 -             -       267,439             -
                       --------------------------  --------------------------
                         8,325,833    13,213,929    20,766,352    32,706,222
                       --------------------------  --------------------------
    Net loss            (7,925,350)  (12,209,038)  (19,765,867)  (30,839,001)

    OTHER COMPREHENSIVE
     INCOME
    Unrealized gain
     (loss) on
     available-for-sale
     short-term
     investments               405         7,685         2,732        (3,109)
                       --------------------------  --------------------------
    Comprehensive
     loss               (7,924,945)  (12,201,353)  (19,763,135)  (30,842,110)
                       --------------------------  --------------------------
                       --------------------------  --------------------------
    Basic and diluted
     loss per share          (0.03)        (0.05)        (0.08)        (0.15)
                       --------------------------  --------------------------
                       --------------------------  --------------------------
    Weighted average
     number of
     common shares
     outstanding
     during the
     period            240,213,668   240,209,679   240,213,668   211,589,703
                       --------------------------  --------------------------
                       --------------------------  --------------------------



                 UNAUDITED INTERIM STATEMENTS OF CASH FLOWS


                             Three-month periods          Six-month periods
                                  ended April 30             ended April 30
                              2008          2007          2008         2007
                                 $             $             $            $
                       --------------------------  --------------------------
    OPERATING
     ACTIVITIES
    Net loss            (7,925,350)  (12,209,038)  (19,765,867)  (30,839,001)
    Items not
     affecting cash:
      Amortization of
       property, plant
       and equipment        54,979        66,480       110,100       129,146
      Amortization of
       intangible assets     2,443         4,306         4,924         8,611
      Amortization of
       premium on held-
       to-maturity
       long-term
       investments               -       (25,030)       (8,436)      (40,217)
      Non-cash stock-
       based
       compensation        657,959     1,445,652     1,372,838     2,276,219
      Accretion in
       carrying value
       of convertible
       senior unsecured
       notes and interest        -     1,782,500     5,504,427     3,488,022
      Accretion in
       carrying value of
       convertible
       unsecured
       subordinated
       debentures          389,639             -       958,156             -
      Loss on redemption
       of held-to-
       maturity long-term
       investments               -             -       267,439             -
                       --------------------------  --------------------------
                        (6,820,330)   (8,935,130)  (11,556,419)  (24,977,220)
      Net changes in
       non-cash working
       capital balances
       relating to
       operations        2,102,413    (5,236,536)      526,257    (1,912,163)
                       --------------------------  --------------------------
    Cash flows
     relating to
     operating
     activities         (4,717,917)  (14,171,666)  (11,030,162)  (26,889,383)
                       --------------------------  --------------------------

    INVESTING
     ACTIVITIES
    Acquisition of
     available-for-
     sale short-term
     investments        (8,784,180)   (5,056,000)  (21,694,881)  (42,046,935)
    Proceeds from
     sale of available-
     for-sale short-
     term investments   11,115,581     7,906,801    21,515,408    19,571,102
    Acquisition of
     held-to-maturity
     long-term
     investments                 -             -      (167,037)  (57,219,039)
    Proceeds on
     redemption of
     held-to-maturity
     long-term
     investments                 -             -    59,644,132             -
    Acquisition of
     property, plant
     and equipment               -       (73,047)       (9,772)     (138,306)
    Acquisition of
     intangible assets           -             -        (1,179)       (2,751)
                       --------------------------  --------------------------
    Cash flows
     relating to
     investing
     activities          2,331,401     2,777,754    59,286,671   (79,835,929)
                       --------------------------  --------------------------

    FINANCING
     ACTIVITIES
    Repayment of
     convertible senior
     unsecured notes             -             -   (58,006,914)            -
    Issuance of
     convertible
     unsecured
     subordinated
     debentures                  -             -    22,000,000             -
    Issuance costs
     paid in cash                -             -    (1,764,414)            -
    Issuance of
     common shares
     for cash                    -         3,483             -   120,253,483
    Share issue
     costs paid
     in cash                     -        (9,734)            -    (6,658,350)
                       --------------------------  --------------------------
    Cash flows
     relating to
     financing activities        -        (6,251)  (37,771,328)  113,595,133
                       --------------------------  --------------------------
    Net increase
     in cash and cash
     equivalents
     during the period  (2,386,516)  (11,400,163)   10,485,181     6,869,821
    Cash and cash
     equivalents,
     beginning of
     period             14,107,401    22,304,921     1,235,704     4,034,937
                       --------------------------  --------------------------
    Cash and cash
     equivalents,
     end of period      11,720,885    10,904,758    11,720,885    10,904,758
                       --------------------------  --------------------------
                       --------------------------  --------------------------
    Supplemental
     cash flow
     information:
    Interest paid                -             -    13,006,914         1,273
                       --------------------------  --------------------------

    




For further information:

For further information: Lennie Ryer, CA, Vice President, Finance & CFO,
ConjuChem Biotechnologies Inc., (514) 844-5558, ext. 224, ryer@conjuchem.com;
James Smith, Investor Relations, (416) 815-0700, ext. 229,
jsmith@equicomgroup.com

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CONJUCHEM BIOTECHNOLOGIES INC.

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