ConjuChem Announces Fiscal 2008 Third Quarter Financial Results



    MONTREAL, Sept. 9 /CNW/ - ConjuChem Biotechnologies Inc (TSX:CJB) today
announced financial results for the third quarter of fiscal 2008, ended
July 31, 2008.
    "During the third quarter, we completed recruitment for both of our
Phase II clinical trials of our lead product, PC-DAC(TM):Exendin-4. A combined
total of more than 200 patients are enrolled in the two randomized,
double-blind placebo controlled clinical studies and we anticipate preliminary
results from these trials will be available by the end of calendar 2008," said
Mark Perrin, President and CEO of ConjuChem. "We are also preparing to have an
IND filed with the FDA for our PC-DAC(TM):Insulin program in the first half of
2009. The primary objective of this program is to leverage our platform
technology to advance development of a long-lasting insulin therapy with a
truly peakless pharmacodynamic profile."
    Net loss for the three-month period ended July 31, 2008 amounted to
$8.7 million compared to $8.6 million for the three-month period ended
July 31, 2007. Net loss for the nine-month period ended July 31, 2008 amounted
to $28.5 million compared to $39.4 million for the nine-month period ended
July 31, 2007. The decrease in the net loss is attributable to a decrease in
net research and development expenses of $15.4 million which was largely
related to the purchase, in the nine-month period ended July 31, 2007, of drug
product for the ongoing development of PC-DAC(TM):Exendin-4.
    The Company recorded interest income on cash, short-term investments that
amounted to $306,076 for the quarter ended July 31, 2008, compared to $949,773
for the quarter ended July 31, 2007. The Company recorded interest income on
cash, short and long-term investments amounting to $1.3 million for the
nine-month period ended July 31, 2008, compared to $2.8 million for the
nine-month period ended July 31, 2007. The decrease in interest income was a
result of a reduced investment portfolio base combined with a general decrease
in market rates.
    Gross research and development expenses amounted to $6.2 million for the
quarter ended July 31, 2008, compared to $5.7 million for the quarter ended
July 31, 2007. Gross research and development expenses amounted to
$15.2 million for the nine-month period ended July 31, 2008, compared to
$30.9 million for the nine-month period ended July 31, 2007. The decrease is
largely attributable to the purchase, in 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 July 31, 2008 compared to $1.3 million for the quarter ended July 31,
2007. General and administrative costs amounted to $4.0 million for the
nine-month period ended July 31, 2008 compared to $3.3 million for the
nine-month period ended July 31, 2007. The increase in general and
administrative expenses is attributable to financial charges and fees related
to the early redemption of the convertible senior unsecured notes and to an
increase in additional headcount compensation and benefits.
    As at July 31, 2008, the Company had cash, cash equivalents and
short-term investments totalling $29.2 million compared to $26.0 million as at
October 31, 2007. As at July 31, 2008, working capital amounted to
$21.7 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 its
current research and development plans and operations into 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 DAC(TM) 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.

    Forward-Looking Statements

    Some of the statements made herein may constitute forward-looking
statements. These statements relate to future events or our future financial
performance and involve known and unknown risks, uncertainties and other
factors that may cause ConjuChem Biotechnologies' actual results, performance
or achievements to be materially different from those expressed or implied by
any of the Company's statements. Actual events or results may differ
materially. We disclaim any intention, and assume no obligation, to update
these forward-looking statements unless requested to do so by securities
regulators.


    
    ConjuChem Biotechnologies Inc.

                       UNAUDITED INTERIM BALANCE SHEETS

    As at
                                                       July 31,   October 31,
                                                          2008          2007
                                                             $             $
                                                  ---------------------------
    ASSETS
    Current
    Cash and cash equivalents                       13,978,639     1,235,704
    Available-for-sale short-term investments       15,231,753    24,797,545
    Accounts receivable and other assets               247,763       103,277
    Investment tax credits receivable                1,145,000     1,169,000
    Prepaid expenses                                   293,392       208,945
                                                  ---------------------------
    Total current assets                            30,896,547    27,514,471
    Held-to-maturity long-term investments                   -    59,736,098
    Property, plant and equipment                      894,726     1,049,147
    Intangible assets                                   12,749        19,257
                                                  ---------------------------
                                                    31,804,022    88,318,973
                                                  ---------------------------
                                                  ---------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable and accrued liabilities         9,218,974     8,576,258
    Unearned revenues                                        -        35,314
                                                  ---------------------------
    Total current liabilities                        9,218,974     8,611,572
    Convertible senior unsecured notes                       -    52,502,487
    Convertible unsecured subordinated debentures   12,973,611             -
                                                  ---------------------------
                                                    22,192,585    61,114,059
                                                  ---------------------------

    Shareholders' equity
    Capital stock                                  266,823,735   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                         5,193,793             -
    Contributed surplus                             44,991,706    28,008,989
    Deficit                                       (321,476,292) (292,973,699)
    Accumulated other comprehensive loss               (14,899)      (15,333)
                                                  ---------------------------
    Total shareholders' equity                       9,611,437    27,204,914
                                                  ---------------------------
                                                    31,804,022    88,318,973
                                                  ---------------------------
                                                  ---------------------------



    ConjuChem Biotechnologies Inc.

                   UNAUDITED INTERIM STATEMENTS OF DEFICIT

                             Three-month periods          Nine-month periods
                                   ended July 31               ended July 31
                              2008          2007          2008          2007
                                 $             $             $             $
                      --------------------------- ---------------------------

    Deficit, beginning
     of period        (312,739,566) (277,921,960) (292,973,699) (247,082,959)
    Net loss for the
     period             (8,736,726)   (8,562,113)  (28,502,593)  (39,401,114)
                      --------------------------- ---------------------------
    Deficit, end of
     period           (321,476,292) (286,484,073) (321,476,292) (286,484,073)
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------



    ConjuChem Biotechnologies Inc.

               UNAUDITED INTERIM STATEMENTS OF OPERATIONS AND
                             COMPREHENSIVE LOSS

                             Three-month periods          Nine-month periods
                                   ended July 31               ended July 31
                              2008          2007          2008          2007
                                 $             $             $             $
                      --------------------------- ---------------------------

    REVENUES
    Contract revenues        8,827        24,366        60,731        24,366
    Interest income        306,076       949,773     1,254,657     2,816,994
                      --------------------------- ---------------------------
                           314,903       974,139     1,315,388     2,841,360
                      --------------------------- ---------------------------

    EXPENSES
    Research and
     development         6,153,681     5,721,984    15,233,963    30,855,519
    Investment tax
     credits              (100,000)     (233,940)     (300,000)     (533,940)
                      --------------------------- ---------------------------
    Net research and
     development
     expenses            6,053,681     5,488,044    14,933,963    30,321,579
    General and
     administrative
     expenses            1,198,403     1,346,308     3,996,354     3,253,409
    Amortization of
     property, plant
     and equipment          55,411        65,052       165,511       194,198
    Amortization of
     intangible assets       2,462         4,470         7,386        13,081
    Non-cash
     stock-based
     compensation          643,099       875,620     2,015,937     3,151,839
    Financial charges        2,987         2,948        13,294        13,138
    Foreign exchange
     loss (gain)            60,543      (109,808)      251,818       (56,410)
    Accretion in
     carrying value
     of convertible
     senior unsecured
     notes and interest          -     1,863,618     5,504,427     5,351,640
    Accretion in
     carrying value of
     convertible
     unsecured
     subordinated
     debentures and
     interest            1,035,043             -     2,661,852             -
    Loss on redemption
     of held-to-
     maturity long-term
     investments                 -             -       267,439             -
                      --------------------------- ---------------------------
                         9,051,629     9,536,252    29,817,981    42,242,474
                      --------------------------- ---------------------------
    Net loss            (8,736,726)   (8,562,113)  (28,502,593)  (39,401,114)

    OTHER COMPREHENSIVE
     LOSS
    Unrealized loss on
     available-for-sale
     short-term
     investments           (17,631)      (15,133)      (14,899)      (18,242)
                      --------------------------- ---------------------------
    Comprehensive loss  (8,754,357)   (8,577,246)  (28,517,492)  (39,419,356)
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------

    Basic and diluted
     loss per share          (0.04)        (0.04)        (0.12)        (0.18)
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------

    Weighted average
     number of common
     shares
     outstanding
     during the period 246,094,442   240,213,668   242,188,235   221,235,875
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------



    ConjuChem Biotechnologies Inc.

                 UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

                             Three-month periods          Nine-month periods
                                   ended July 31               ended July 31
                              2008          2007          2008          2007
                                 $             $             $             $
                      --------------------------- ---------------------------
    OPERATING
     ACTIVITIES
    Net loss            (8,736,726)   (8,562,113)  (28,502,593)  (39,401,114)
    Items not affecting
     cash:
      Amortization of
       property, plant
       and equipment        55,411        65,052       165,511       194,198
      Amortization of
       intangible
       assets                2,462         4,470         7,386        13,081
      Amortization of
       premium on held-
       to-maturity
       long-term
       investments               -       (25,874)       (8,436)      (66,091)
      Non-cash
       stock-based
       compensation        643,099       875,620     2,015,937     3,151,839
      Accretion in
       carrying value
       of convertible
       senior unsecured
       notes and
       interest                  -     1,863,618     5,504,427     5,351,640
      Accretion in
       carrying value
       of convertible
       unsecured
       subordinated
       debentures          672,613             -     1,630,769             -
      Loss on
       redemption of
       held-to-maturity
       long-term
       investments               -             -       267,439             -
                      --------------------------- ---------------------------
                        (7,363,141)   (5,779,227)  (18,919,560)  (30,756,447)
      Net changes in
       non-cash
       working capital
       balances
       relating to
       operations          (63,878)   (3,017,561)      462,379    (4,662,062)
                      --------------------------- ---------------------------
    Cash flows
     relating to
     operating
     activities         (7,427,019)   (8,796,788)  (18,457,181)  (35,418,509)
                      --------------------------- ---------------------------

    INVESTING
     ACTIVITIES
    Acquisition of
     available-for-
     sale short-term
     investments        (6,137,130)  (26,211,300)  (27,832,011)  (68,258,235)
    Proceeds from sale
     of available-for-
     sale short-term
     investments        15,823,221    29,620,234    37,338,629    49,191,336
    Acquisition of
     held-to-maturity
     long-term
     investments                 -    (1,613,518)     (167,037)  (59,100,219)
    Proceeds on
     redemption of
     held-to-maturity
     long-term
     investments                 -             -    59,644,132             -
    Acquisition of
     property, plant
     and equipment          (1,318)       (5,537)      (11,090)     (143,843)
    Acquisition of
     intangible assets           -          (880)       (1,179)       (3,631)
                      --------------------------- ---------------------------
    Cash flows
     relating to
     investing
     activities          9,684,773     1,788,999    68,971,444   (78,314,592)
                      --------------------------- ---------------------------

    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                    -             -             -   120,253,483
    Share issue costs
     paid in cash                -             -             -    (6,658,350)
                      --------------------------- ---------------------------
    Cash flows
     relating to
     financing
     activities                  -             -   (37,771,328)  113,595,133
                      --------------------------- ---------------------------

    Net increase
     (decrease) in
     cash and cash
     equivalents
     during the period   2,257,754    (7,007,789)   12,742,935      (137,968)
    Cash and cash
     equivalents,
     beginning of
     period             11,720,885    10,904,758     1,235,704     4,034,937
                      --------------------------- ---------------------------
    Cash and cash
     equivalents, end
     of period          13,978,639     3,896,969    13,978,639     3,896,969
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------

    Supplemental cash
     flow information:
    Interest paid          892,926           331    13,899,840         1,604
                      --------------------------- ---------------------------
    





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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