ConjuChem Announces Fiscal 2010 Second Quarter Financial Results

MONTREAL, June 14 /CNW/ - ConjuChem Biotechnologies today announced financial results for the second quarter of fiscal 2010, ended April 30, 2010.

On June 11, 2010, ConjuChem's creditors approved the Company's plan of reorganization and compromise under the CCAA and the Canada Business Corporations Act. Pursuant to the terms of the Plan, new investors will recapitalize ConjuChem by subscribing for new common shares which will represent the only issued and outstanding shares of the Company. ConjuChem's motion to obtain the sanction of the Plan by the Superior Court of Québec is presentable on June 15, 2010. Once the Sanction Order is obtained, the Plan will be implemented and distributions will be made to the creditors in accordance with the terms of the Plan. Pursuant to the terms of the Plan, existing common shares of ConjuChem will be effectively cancelled for no consideration.

Financial Results

Net loss for the quarter ended April 30, 2010 amounted to $3.6 million compared to $6.1 million for the quarter ended April 30, 2009. Net loss for the six-month period ended April 30, 2010 amounted to $7.3 million compared to $11.9 million for the six-month period ended April 30, 2009. The decrease in the net loss is mainly attributable to a decrease in net R&D expenses of $3.6 million resulting from a decline of development activities due to the completion of the Phase IIa clinical trials for PC-DAC(TM):Exendin-4 in November 2008 and a general reduction in research activities. There was also a reduction in headcount resulting in a decrease in compensation and benefits.

Gross research and development expenses amounted to $871,872 for the quarter ended April 30, 2010, compared to $2.9 million for the quarter ended April 30, 2009. Gross research and development expenses amounted to $2.2 million for the six-month period ended April 30, 2010, compared to $7.1 million for the six-month period ended April 30, 2009. The decrease is due to an important decline of development activities due to the completion of the Phase IIa clinical trials for PC-DAC(TM):Exendin-4 in November 2008 and to a reduction in research activities as explained above.

General and administrative costs amounted to $1.2 million for the quarter ended April 30, 2010, compared to $1.5 million for the quarter ended April 30, 2009. General and administrative costs amounted to $1.9 million for the six-month period ended April 30, 2010, compared to $2.5 million for the six-month period ended April 30, 2009. The decrease in general and administrative expenses is largely attributable to a decrease in headcount which reduced employee compensation and benefits expenses in the six-month period ended April 30, 2010.

As at April 30, 2010, the Company had cash and cash equivalents and investments totaling $2.6 million compared to $7.5 million as at October 31, 2009. As at April 30, 2010, working capital is negative and amounts to $16.7 million given the December 2010 maturity of the 20.3 million convertible unsecured subordinated debentures.

About ConjuChem

ConjuChem, a developer of next generation medicines from therapeutic peptides, is creating long-acting compounds based on bioconjugation platform technologies. When applied to peptides, the Company's systemic PC-DAC(TM) technologies enable the creation of new drugs with significantly enhanced therapeutic properties as compared to the original peptide.

The Company has two major development programs: PC-DAC(TM):Exendin-4, a GLP-1 agonist in Phase II for the treatment of Type II diabetes and PC-Insulin, a long-acting basal insulin in preclinical testing.

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,
                                                          2010          2009
                                                             $             $
                                                -----------------------------
    ASSETS
    Current
    Cash and cash equivalents                        1,470,988     1,743,327
    Investments                                      1,104,502     5,717,766
    Accounts receivable                              1,113,154     1,087,670
    Investment tax credits receivable                  584,000       524,000
    Prepaid expenses                                    56,365       181,799
                                                -----------------------------
    Total current assets                             4,329,009     9,254,562
    Property, plant and equipment                      569,464       635,550
    Intangible assets                                    4,165         5,554
                                                -----------------------------
                                                     4,902,638     9,895,666
                                                -----------------------------
                                                -----------------------------

    LIABILITIES AND SHAREHOLDERS' DEFICIENCY
    Current liabilities
    Accounts payable and accrued liabilities         2,909,373     3,135,216
    Convertible unsecured subordinated
     debentures                                     18,079,553             -
                                                -----------------------------
    Total current liabilities                       20,988,926     3,135,216
    Convertible unsecured subordinated
     debentures                                              -    16,548,369
                                                -----------------------------
                                                    20,988,926    19,683,585
                                                -----------------------------

    Shareholders' deficiency
    Capital stock                                  267,190,642   266,858,635
    Warrants                                         2,207,519    10,817,394
    Equity portion of convertible unsecured
     subordinated debentures                         5,169,565     5,184,867
    Contributed surplus                             64,843,549    55,533,174
    Deficit                                       (355,501,594) (348,182,669)
    Accumulated other comprehensive income               4,031           680
                                                -----------------------------
    Total shareholders' deficiency                 (16,086,288)   (9,787,919)
                                                -----------------------------
                                                     4,902,638     9,895,666
                                                -----------------------------
                                                -----------------------------



    ConjuChem Biotechnologies Inc.

                   UNAUDITED INTERIM STATEMENTS OF DEFICIT


                            Three-months ended           Six-months ended
                          April 30,     April 30,     April 30,     April 30,
                              2010          2009          2010          2009
                                 $             $             $             $
                     --------------------------------------------------------
    Deficit,
     beginning
     of period        (351,868,681) (338,219,066) (348,182,669) (332,390,857)
    Net loss for the
     period             (3,632,913)   (6,079,224)   (7,318,925)  (11,907,433)
                     --------------------------------------------------------
    Deficit, end of
     period           (355,501,594) (344,298,290) (355,501,594) (344,298,290)
                     --------------------------------------------------------
                     --------------------------------------------------------



    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,
                              2010          2009          2010          2009
                                 $             $             $             $
                       ------------------------------------------------------
    REVENUES
    Contract revenues            -        15,443             -        15,443
    Interest income          2,207        32,276        16,381       138,517
                       ------------------------------------------------------
                             2,207        47,719        16,381       153,960
                       ------------------------------------------------------

    EXPENSES
    Research and
     development           871,872     2,937,049     2,215,003     7,064,280
    Investment tax
     credits               (10,000)     (250,000)      (60,000)   (1,330,000)
                       ------------------------------------------------------
    Net research and
     development
     expenses              861,872     2,687,049     2,155,003     5,734,280
    General and
     administrative
     expenses            1,206,002     1,458,416     1,929,860     2,511,160
    Amortization of
     property, plant
     and equipment          33,043        40,572        66,086        84,686
    Amortization of
     intangible assets         695         1,388         1,389         2,777
    Stock-based
     compensation          407,227       791,056       824,500     1,392,761
    Financial charges        2,365         5,545         4,726         8,897
    Foreign exchange loss  (37,371)       26,829       (25,151)      117,292
    Accretion in carrying
     value of convertible
     unsecured
     subordinated
     debentures and
     interest            1,161,287     1,116,088     2,378,893     2,209,540
                       ------------------------------------------------------
                         3,635,120     6,126,943     7,335,306    12,061,393
                       ------------------------------------------------------
    Net loss            (3,632,913)   (6,079,224)   (7,318,925)  (11,907,433)

    Other comprehensive
     loss
    Unrealized gain
     (loss) on
     investments             2,260           (63)        3,351        72,185
                       ------------------------------------------------------
    Comprehensive loss  (3,630,653)   (6,079,287)   (7,315,574)  (11,835,248)
                       ------------------------------------------------------
                       ------------------------------------------------------

    Basic and diluted
     loss per share          (0.01)        (0.02)        (0.03)        (0.05)
                       ------------------------------------------------------
                       ------------------------------------------------------

    Weighted average
     number of common
     shares
     outstanding during
     the period        252,576,168   250,456,997   251,803,867   250,444,504
                       ------------------------------------------------------
                       ------------------------------------------------------



    ConjuChem Biotechnologies Inc.


                 UNAUDITED INTERIM STATEMENTS OF CASH FLOWS


                            Three-months ended           Six-months ended
                          April 30,     April 30,     April 30,     April 30,
                              2010          2009          2010          2009
                                 $             $             $             $
                       ------------------------------------------------------
    OPERATING
    ACTIVITIES
    Net loss            (3,632,913)   (6,079,224)   (7,318,925)  (11,907,433)
    Items not
     affecting cash:
      Amortization of
       property, plant
       and equipment        33,043        40,572        66,086        84,686
      Amortization of
       intangible
       assets                  695         1,388         1,389         2,777
      Stock-based
       compensation        407,227       791,056       824,500     1,392,761
      Accretion in
       carrying value
       of convertible
       unsecured
       subordinated
       debentures          765,881       719,752     1,580,637     1,409,252
      Gain on proceeds
       for sales of
       property, plant
       and equipment             -        (5,253)            -        (5,253)
                       ------------------------------------------------------
                        (2,426,067)   (4,531,709)   (4,846,313)   (9,023,210)
      Net changes in
       non-cash working
       capital balances
       relating to
       operations          511,936      (390,402)     (185,893)   (3,538,671)
                       ------------------------------------------------------
    Cash flows relating
     to operating
     activities         (1,914,131)   (4,922,111)   (5,032,206)  (12,561,881)
                       ------------------------------------------------------

    INVESTING
    ACTIVITIES
    Acquisition of
     investments          (978,501)   (4,236,904)      (978,501)  (9,043,104)
    Proceeds on
     maturities of
     investments         2,000,000     7,331,130      5,595,118   22,077,445
    Acquisition of
     property, plant
     and equipment               -          (958)             -      (11,652)
    Proceeds for sales
     of property,
     plant and equipment         -        41,390              -       41,390
                       ------------------------------------------------------
    Cash flows relating
     to investing
     activities          1,021,499     3,134,658      4,616,617   13,064,079
                       ------------------------------------------------------

    FINANCING ACTIVITIES
    Issuance of common
     shares for cash             -              -       143,250            -
                       ------------------------------------------------------
    Cash flows relating
     to financing
     activities                  -              -       143,250            -
                       ------------------------------------------------------

    Net change in cash
     and cash equivalents
     during the period     (892,632)    (1,787,453)    (272,339)     502,198
    Cash and cash
     equivalents,
     beginning of period  2,363,620      4,477,074    1,743,327    2,187,423
                       ------------------------------------------------------
    Cash and cash
     equivalents, end of
     period               1,470,988      2,689,621    1,470,988    2,689,621
                       ------------------------------------------------------
                       ------------------------------------------------------

    Supplemental cash
     flow information:
    Interest paid                 -             52      813,200      814,661
                       ------------------------------------------------------
    

SOURCE CONJUCHEM BIOTECHNOLOGIES INC.

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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