ConjuChem Announces Fiscal 2009 Second Quarter Financial Results



    MONTREAL, June 11 /CNW/ - ConjuChem Biotechnologies (TSX:CJB) today
announced financial results for the second quarter of fiscal 2009, ended April
30, 2009.
    "We recently presented results at American Diabetes Association's 69th
Annual Scientific Sessions from two randomized Phase II trials of
PC-DAC(TM):Exendin-4 as well as preclinical data for PC-Insulin, generating
significant scientific interest in our two diabetes drugs and our proprietary
approach to overcoming the limitations of short-lived therapeutic peptides,"
said Mark Perrin, President and CEO of ConjuChem. "This conference was also an
important venue for advancing licensing discussions for our products. Our
current highest priority is to secure a partner who will support our efforts
to bring PC-DAC(TM):Exendin-4 to market."

    Financial Results

    Net loss for the quarter ended April 30, 2009 amounted to $6.1 million
compared to $7.9 million for the quarter ended April 30, 2008. Net loss for
the six-month period ended April 30, 2009 amounted to $11.9 million compared
to $19.8 million for the six-month period ended April 30, 2008. The decrease
in the net loss is mainly attributable to a decrease in the accretion in the
carrying value of the convertible senior unsecured notes and interest due to
the early redemption of the convertible senior unsecured notes during the
first six-month period of the 2008 fiscal year, a decrease in R&D expenses and
by the reversal of tax-related reserves following the results of tax audits in
the first six-month period of the 2009 fiscal year.
    The Company recorded interest income on cash and investments that
amounted to $32,276 for the quarter ended April 30, 2009, compared to $375,926
for the quarter ended April 30, 2008. The Company recorded interest income on
cash and investments that amounted to $138,517 for the six-month period ended
April 30, 2009, compared to $948,581 for the six-month period ended April 30,
2008. The decreases in interest income were a result of a reduced investment
portfolio base combined with a general decrease in market rates.
    Gross research and development expenses amounted to $2.9 million for the
quarter ended April 30, 2009, compared to $5.4 million for the quarter ended
April 30, 2008. Gross research and development expenses amounted to $7.1
million for the six-month period ended April 30, 2009, compared to $9.1
million for the six-month period ended April 30, 2008. The decreases are due
to the completion of phase II clinical trials in November 2008 for
PC-DAC(TM):Exendin-4.
    General and administrative costs amounted to $1.5 million for the quarter
ended April 30, 2009, compared with $1.2 million for the quarter ended April
30, 2008. General and administrative costs amounted to $2.5 million for the
six-month period ended April 30, 2009, compared with $2.8 million for the
six-month period ended April 30, 2008. The decrease in general and
administrative expenses is largely attributable to fees related to the early
redemption of the convertible senior unsecured notes in the six-month period
ended April 30, 2008. The increase in general and administrative expenses in
the quarter ended April 30, 2009 is largely attributable to professional fees
and to severance costs related to a reduction in headcount. During the quarter
ended April 30, 2009, the Company completed a consolidation of its operations,
focusing its resources on securing a partner for PC-DAC(TM):Exendin-4 and the
rapid development of PC-Insulin, a long-acting basal insulin in preclinical
testing. The restructuring included a workforce reduction of approximately 50%
of the Company's personnel.
    As at April 30, 2009, the Company had cash and cash equivalents and
investments totaling $8.7 million compared to $21.1 million as at October 31,
2008. As at April 30, 2009, working capital amounted to $3.1 million, compared
to $12.0 million as at October 31, 2008. ConjuChem believes that its current
cash and cash equivalents, marketable securities and interest income will be
sufficient to carry out current research and development plans and operations
into the fourth quarter of 2009.

    About ConjuChem

    ConjuChem, a developer of next generation medicines from therapeutic
peptides, creates long-acting compounds based on its proprietary
bioconjugation platform technology. The Company has two major development
programs: PC-DAC(TM):Exendin-4, a GLP-1 receptor agonist in Phase II clinical
development and PC-Insulin, a long-acting basal insulin in preclinical
development.
    Detailed descriptions of the Company and its technologies 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's 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.

    
    ConjuChem Biotechnologies Inc.

                       UNAUDITED INTERIM BALANCE SHEETS


    As at

                                                      April 30,   October 31,
                                                          2009          2008
                                                             $             $
                                                 ----------------------------
    ASSETS
    Current
    Cash and cash equivalents                        2,689,621     2,187,423
    Investments                                      5,972,581    18,934,737
    Accounts receivable                                 80,104       160,644
    Investment tax credits receivable                1,022,000       542,000
    Prepaid expenses                                   146,236       229,006
                                                 ----------------------------
    Total current assets                             9,910,542    22,053,810
    Property, plant and equipment                      732,514       841,685
    Intangible assets                                    8,331        11,108
                                                 ----------------------------
                                                    10,651,387    22,906,603
                                                 ----------------------------
                                                 ----------------------------

    LIABILITIES AND SHAREHOLDERS' DEFICIENCY
    Current liabilities
    Accounts payable and accrued
     liabilities                                     6,858,482    10,080,463
                                                 ----------------------------
    Total current liabilities                        6,858,482    10,080,463
    Convertible unsecured subordinated
     debentures                                     15,018,184    13,634,906
                                                 ----------------------------
                                                    21,876,666    23,715,369
                                                 ----------------------------

    Shareholders' deficiency
    Capital stock                                  266,858,635   266,823,735
    Warrants                                        10,817,394    10,817,394
    Equity portion of convertible
     unsecured subordinated debentures               5,184,867     5,193,793
    Contributed surplus                             50,211,587    48,818,826
    Deficit                                       (344,298,290) (332,390,857)
    Accumulated other comprehensive
     income (loss)                                         528       (71,657)
                                                 ----------------------------
    Total shareholders' deficiency                 (11,225,279)     (808,766)
                                                 ----------------------------
                                                    10,651,387    22,906,603
                                                 ----------------------------
                                                 ----------------------------


    ConjuChem Biotechnologies Inc.

                   UNAUDITED INTERIM STATEMENTS OF DEFICIT

                            Three-months ended           Six-months ended
                          April 30,     April 30,     April 30,     April 30,
                              2009          2008          2009          2008
                                 $             $             $             $
                      -------------------------------------------------------
    Deficit,
     beginning of
     period           (338,219,066) (304,814,216) (332,390,857) (292,973,699)
    Net loss for
     the period         (6,079,224)   (7,925,350)  (11,907,433)  (19,765,867)
                      -------------------------------------------------------
    Deficit, end
     of period        (344,298,290) (312,739,566) (344,298,290) (312,739,566)
                      -------------------------------------------------------
                      -------------------------------------------------------


    ConjuChem Biotechnologies Inc.

                       UNAUDITED INTERIM STATEMENTS OF
                      OPERATIONS AND COMPREHENSIVE LOSS



                            Three-months ended           Six-months ended
                         April 30,      April 30,    April 30,      April 30,
                             2009           2008         2009           2008
                                $              $            $              $
                      -------------------------------------------------------
    REVENUES
    Contract revenues       15,443        24,557        15,443        51,904
    Interest income         32,276       375,926       138,517       948,581
                      -------------------------------------------------------
                            47,719       400,483       153,960     1,000,485
                      -------------------------------------------------------

    EXPENSES
    Research and
     development         2,937,049     5,422,425     7,064,280     9,080,282
    Investment tax
     credits              (250,000)     (100,000)   (1,330,000)     (200,000)
                      -------------------------------------------------------
    Net research and
     development
     expenses            2,687,049     5,322,425     5,734,280     8,880,282
    General and
     administrative
     expenses            1,458,416     1,211,310     2,511,160     2,797,951
    Amortization of
     property, plant
     and equipment          40,572        54,979        84,686       110,100
    Amortization of
     intangible assets       1,388         2,443         2,777         4,924
    Stock-based
     compensation          791,056       657,959     1,392,761     1,372,838
    Financial charges        5,545         6,101         8,897        10,307
    Foreign exchange
     loss                   26,829        12,324       117,292       191,275
    Accretion in
     carrying value of
     convertible senior
     unsecured notes
     and interest                -             -             -     5,504,427
    Accretion in
     carrying value of
     convertible unsecured
     subordinated
     debentures and
     interest            1,116,088     1,058,292     2,209,540     1,626,809
    Loss on redemption
     of long-term
     investments                 -             -             -       267,439
                      -------------------------------------------------------
                         6,126,943     8,325,833    12,061,393    20,766,352
                      -------------------------------------------------------
    Net loss            (6,079,224)   (7,925,350)  (11,907,433)  (19,765,867)


    OTHER COMPREHENSIVE INCOME
    Unrealized gain/
     (loss) on
     investments               (63)          405        72,185         2,732
                      -------------------------------------------------------
    Comprehensive loss  (6,079,287)   (7,924,945)  (11,835,248)  (19,763,135)
                      -------------------------------------------------------
                      -------------------------------------------------------
    Basic and diluted
     loss per share          (0.02)        (0.03)        (0.05)        (0.08)
                      -------------------------------------------------------
                      -------------------------------------------------------
    Weighted average
     number of common
     shares outstanding
     during the
     period            250,456,997   240,213,668   250,444,504   240,213,668
                      -------------------------------------------------------
                      -------------------------------------------------------


    ConjuChem Biotechnologies Inc.

                 UNAUDITED INTERIM STATEMENTS OF CASH FLOWS


                            Three-months ended           Six-months ended
                          April 30,     April 30,     April 30,     April 30,
                              2009          2008          2009          2008
                                 $             $             $             $
                      -------------------------------------------------------

    OPERATING ACTIVITIES
    Net loss            (6,079,224)   (7,925,350)  (11,907,433)  (19,765,867)
    Items not
     affecting cash:
      Amortization of
       property, plant
       and equipment        40,572        54,979        84,686       110,100
      Amortization of
       intangible
       assets                1,388         2,443         2,777         4,924
      Amortization of
       premium on
       long-term
       investments               -             -             -        (8,436)
      Stock-based
       compensation        791,056       657,959     1,392,761     1,372,838
      Accretion in
       carrying value
       of convertible
       senior unsecured
       notes and
       interest                  -             -             -     5,504,427
      Accretion in
       carrying value
       of convertible
       unsecured
       subordinated
       debentures          719,752       389,639     1,409,252       958,156
      Gain on proceeds
       for sales of
       property, plant
       and equipment        (5,253)            -        (5,253)            -
      Loss on
       redemption
       of long-term
       investments               -             -             -       267,439
                      -------------------------------------------------------
                        (4,531,709)   (6,820,330)   (9,023,210)  (11,556,419)
      Net changes in
       non-cash
       working
       capital
       balances
       relating to
       operations         (390,402)    2,102,413    (3,538,671)      526,257
                      -------------------------------------------------------
    Cash flows
     relating
     to operating
     activities         (4,922,111)   (4,717,917)  (12,561,881)  (11,030,162)
                      -------------------------------------------------------

    INVESTING ACTIVITIES
    Acquisition of
     investments        (4,236,904)   (8,784,180)   (9,043,104)  (21,694,881)
    Proceeds on
     maturities of
     investments         7,331,130    11,115,581    22,077,445    21,515,408
    Acquisition
     long-term
     investments                 -             -             -      (167,037)
    Proceeds on
     redemption of
     long-term
     investments                 -             -             -    59,644,132
    Acquisition of
     property, plant
     and equipment            (958)            -       (11,652)       (9,772)
    Proceeds for sales
     of property,
     plant and
     equipment              41,390             -        41,390             -
    Acquisition of
     intangible assets           -             -             -        (1,179)
                      -------------------------------------------------------
    Cash flows
     relating
     to investing
     activities          3,134,658     2,331,401    13,064,079    59,286,671
                      -------------------------------------------------------

    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)
                      -------------------------------------------------------
    Cash flows
     relating to
     financing
     activities                  -             -             -   (37,771,328)
                      -------------------------------------------------------

    Net change in
     cash and cash
     equivalents
     during the period  (1,787,453)   (2,386,516)      502,198    10,485,181
    Cash and cash
     equivalents,
     beginning of
     period              4,477,074    14,107,401     2,187,423     1,235,704
                      -------------------------------------------------------
    Cash and cash
     equivalents,
     end of period       2,689,621    11,720,885     2,689,621    11,720,885
                      -------------------------------------------------------
                      -------------------------------------------------------
    Supplemental
     cash flow
     information:
    Interest paid               52             -       814,661    13,006,914
                      -------------------------------------------------------
    





For further information:

For further information: Mark Perrin, President and CEO, ConjuChem
Biotechnologies Inc., (514) 844-5558 ext 311, perrin@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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