ConjuChem Biotechnologies Announces Fiscal 2007 Second Quarter Financial Results



    MONTREAL, June 11 /CNW/ - ConjuChem Biotechnologies (TSX:CJB) today
announced financial results for the second quarter of fiscal 2007, ended
April 30, 2007.
    "The second quarter of fiscal 2007 was highlighted by the positive
clinical data we reported from the Phase I/II multiple-dose clinical study of
our PC-DAC(TM): Exendin-4 Albumin Conjugate. The data was further evidence of
our drug's potential to become a safe and effective once-weekly treatment for
Type 2 diabetes," said Lennie Ryer, Vice-President and CFO.
    The Company's net loss for the quarter ended April 30, 2007 amounted to
$12.2 million, or ($0.05) per share, compared to $10.0 million, or ($0.21) per
share, for the quarter ended April 30, 2006. The Company's net loss for the
six-month period ending April 30, 2007 amounted to $30.8 million, or ($0.15)
per share, compared to $19.9 million, or ($0.42) per share, for the same
period a year ago. The increase in the net loss is mainly attributable to an
increase in net research and development expenses of $12.6 million largely
related to the purchase of drug substance for the upcoming clinical trials for
PC-DAC(TM):Exendin-4 and related toxicity and carcinogenicity studies.
    The Company recorded interest income on cash, short and long-term
investments that amounted to $1.0 million for the quarter ending April 30,
2007 compared to $55,751 for the same period last year. Interest income for
the six-month period ending April 30, 2007 was $1.9 million versus $136,638
for the same period last year. The increase in interest revenue was a result
of the investment portfolio available subsequent to the November 2006
financing initiative.
    Net research and development expenses amounted to $9.1 million for the
quarter ending April 30, 2007 compared to $6.0 million for the quarter ending
April 30, 2006. Net research and development expenses amounted to
$24.8 million for the six-month period ending April 30, 2007 compared to
$12.2 million for the six-month period ending April 30, 2006. This increase is
explained above and relates to the purchase of raw materials to manufacture
PC-DAC(TM):Exendin-4.
    General and administrative costs remained level at $1.1 million for the
periods ending April 30, 2007 and 2006. For the six-month period ending
April 30, 2007 general and administrative costs amounted to $1.9 million
compared to $2.3 million for the same period the previous year. The decrease
in these expenses is attributable to decreased costs of insurance as well as a
reduction in costs related to salaries and recruiting.
    As of April 30, 2007, the Company had cash and cash equivalents of
$40.6 million and a working capital position of $30.6 million. The Company
significantly improved its liquidity on November 28, 2006 when it closed a
public offering of units resulting in net proceeds of approximately
$114.0 million.

    About ConjuChem Biotechnologies

    ConjuChem, 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 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.


    
                               BALANCE SHEETS

    As at
                                                      April 30    October 31
                                                          2007          2006

                                                             $             $
    ASSETS
    Current
    Cash and cash equivalents                       10,904,758     4,034,937
    Available-for-sale short-term investments       29,717,125     7,244,401
    Accounts receivable and other assets               621,666       394,758
    Investment tax credits receivable                  850,000       550,000
    Prepaid expenses                                   139,649       288,746
    -------------------------------------------------------------------------
    Total current assets                            42,233,198    12,512,842
    Deferred financing fees                                  -        74,675
    Property, plant and equipment                    1,171,046     1,161,886
    Intangible assets                                   27,208        33,068
    Held-to-maturity long-term investments          57,526,918             -
    -------------------------------------------------------------------------
                                                   100,958,370    13,782,471
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
    Current liabilities
    Accounts payable and accrued liabilities        11,595,892    12,862,582
    -------------------------------------------------------------------------
    Total current liabilities                       11,595,892    12,862,582
    Convertible senior unsecured notes              48,689,747    45,276,400
    -------------------------------------------------------------------------
                                                    60,285,639    58,138,982
    -------------------------------------------------------------------------

    Shareholders' equity (deficiency)
    Capital stock                                  265,332,302   162,017,141
    Warrants                                        11,885,875     3,276,000
    Equity portion of convertible senior
     unsecured notes                                14,966,780    14,966,780
    Contributed surplus                             26,412,843    22,466,527
    Deficit                                       (277,921,960) (247,082,959)
    Accumulated other comprehensive loss                (3,109)            -
    -------------------------------------------------------------------------
    Total shareholders' equity (deficiency)         40,672,731   (44,356,511)
    -------------------------------------------------------------------------
                                                   100,958,370    13,782,471
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                            STATEMENTS OF DEFICIT

                             Three-month periods           Six-month periods
                                  ended April 30              ended April 30

                              2007          2006          2007          2006
                                 $             $             $             $
    -------------------------------------------------------------------------

    Deficit, beginning
     of period        (265,712,922) (210,869,185) (247,082,959) (200,918,066)
    Net loss for the
     period            (12,209,038)   (9,963,807)  (30,839,001)  (19,914,926)
    -------------------------------------------------------------------------
    Deficit, end of
     period           (277,921,960) (220,832,992) (277,921,960) (220,832,992)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



               STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                             Three-month periods           Six-month periods
                                  ended April 30              ended April 30

                              2007          2006          2007          2006
                                 $             $             $             $
    REVENUES
    Contract revenue             -             -             -       239,123
    Interest income      1,004,891        55,751     1,867,221       136,638
    -------------------------------------------------------------------------
                         1,004,891        55,751     1,867,221       375,761
    -------------------------------------------------------------------------

    EXPENSES
    Research and
     development         9,231,762     4,948,463    25,133,535    11,225,462
    Investment tax
     credits              (150,000)    1,057,000      (300,000)      982,000
    -------------------------------------------------------------------------
    Net research and
     development
     expenses            9,081,762     6,005,463    24,833,535    12,207,462
    General and
     administrative
     expenses            1,081,653     1,132,496     1,907,101     2,336,456
    Amortization of
     property, plant and
     equipment              66,480        72,944       129,146       145,758
    Amortization of
     intangible assets       4,306         2,048         8,611        16,534
    Amortization of
     deferred financing
     fees                    8,722         8,722        17,444        17,444
    Non-cash stock-based
     compensation        1,445,652     1,386,012     2,276,219     2,725,504
    Financial charges        5,513         4,917        10,190         8,590
    Foreign exchange
     (gain) loss          (253,937)      (81,469)       53,398       (81,285)
    Accretion in carrying
     value of convertible
     senior unsecured
     notes               1,773,778     1,488,425     3,470,578     2,914,224
    -------------------------------------------------------------------------
                        13,213,929    10,019,558    32,706,222    20,290,687
    -------------------------------------------------------------------------
    Net loss for the
     period            (12,209,038)   (9,963,807)  (30,839,001)  (19,914,926)

    Other comprehensive
     income
    Unrealized (gain)
     loss on available-
     for-sale short-term
     investments            (7,685)            -         3,109             -
    -------------------------------------------------------------------------
    Comprehensive loss
     for the period    (12,201,353)   (9,963,807)  (30,842,110)  (19,914,926)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     loss per share         ($0.05)       ($0.21)       ($0.15)      ($0.42)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     number of common
     shares            240,209,679    47,566,927   211,589,703   47,561,154
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                           STATEMENTS OF CASH FLOWS

                             Three-month periods           Six-month periods
                                  ended April 30              ended April 30

                              2007          2006          2007          2006
                                 $             $             $             $
    OPERATING ACTIVITIES
    Net loss           (12,209,038)   (9,963,807)  (30,839,001)  (19,914,926)
    Items not affecting
     cash:
    Amortization of
     property, plant and
     equipment              66,480        72,944       129,146       145,758
    Amortization of
     intangible assets       4,306         2,048         8,611        16,534
    Amortization of
     deferred financing
     fees                    8,722         8,722        17,444        17,444
    Amortization of
     discount on
     long-term investments (25,030)          330       (40,217)        2,658
    Non-cash stock-based
     compensation        1,445,652     1,386,012     2,276,219     2,725,504
    Accretion in value of
     convertible senior
     unsecured notes     1,773,778     1,488,425     3,470,578     2,914,224
    -------------------------------------------------------------------------
                        (8,935,130)   (7,005,326)  (24,977,220)  (14,092,804)
    Net changes in non-
     cash working capital
     balances relating to
     operations         (5,236,536)    2,057,413    (1,912,163)    1,302,573
    -------------------------------------------------------------------------
    Cash flows relating
     to operating
     activities        (14,171,666)   (4,947,913)  (26,889,383)  (12,790,231)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Acquisition of short-
     term investments   (5,056,000)            -   (42,046,935)   (4,589,194)
    Proceeds on
     maturities of short-
     term investments    7,906,801     5,565,830    19,571,102    22,195,268
    Acquisition of
     property, plant and
     equipment             (73,047)       (2,553)     (138,306)     (114,606)
    Acquisition of
     intangible assets           -             -        (2,751)            -
    Acquisition of long-
     term investments            -             -   (57,219,039)            -
    -------------------------------------------------------------------------
    Cash flows relating
     to investing
     activities          2,777,754     5,563,277   (79,835,929)   17,491,468
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Draw down from bridge
     loan                        -     2,000,000             -     2,000,000
    Issuance of units for
     cash                    3,483         9,351   120,253,483        13,198
    Issuance costs paid
     in cash                (9,734)            -    (6,658,350)            -
    -------------------------------------------------------------------------
    Cash flows relating to
     financing activities   (6,251)    2,009,351   113,595,133     2,013,198
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash and cash
     equivalents during
     the period        (11,400,163)    2,624,715     6,869,821     6,714,435
    Cash and cash
     equivalents,
     beginning of
     period             22,304,921     4,226,938     4,034,937       137,218
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end
     of period          10,904,758     6,851,653    10,904,758     6,851,653
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash
     flow information:
    Cash paid during the
     period for interest:        -           154         1,273           260
    -------------------------------------------------------------------------
    





For further information:

For further information: Lennie Ryer, CA, Vice President Finance, CFO,
ConjuChem Biotechnologies Inc., (514) 844-5558 ext 224, ryer@conjuchem.com;
Michael Polonsky, Investor Relations, (416) 815-0700 ext. 231, (416) 815-0080,
mpolonsky@equicomgroup.com

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CONJUCHEM BIOTECHNOLOGIES INC.

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