ConjuChem Biotechnologies Announces Fiscal 2007 Third Quarter Financial Results



    MONTREAL, Sept. 6 /CNW/ - ConjuChem Biotechnologies (TSX:CJB) today
announced financial results for the third quarter of fiscal 2007, ended
July 31, 2007.
    The Company's net loss for the quarter ended July 31, 2007 amounted to
$8.6 million, or ($0.04) per share, compared to $10.3 million, or ($0.19) per
share, for the quarter ended July 31, 2006. The Company's net loss for the
nine-month period ending July 31, 2007 amounted to $39.4 million, or ($0.18)
per share, compared to $30.2 million, or ($0.61) per share, for the same
period a year ago. The decrease in the net loss for the three-month period is
mainly attributable to a decrease in net research and development expenses of
$1.6 million, largely related to completion of the Phase I/II clinical trials
for PC-DAC(TM):Exendin-4, in March 2007. The increase in the net loss for the
nine-month period is mainly attributable to an increase in net research and
development expenses of $11.0 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 $944,698 for the quarter ending July 31, 2007
compared to $203,187 for the same period last year. Interest income for the
nine-month period ending July 31, 2007 was $2.8 million versus $339,825 for
the same period last year. The increase in interest revenue was a result of
the magnitude of the investment portfolio available resulting from the closing
of the November 28, 2006 financing initiative.
    Net research and development expenses amounted to $5.5 million for the
quarter ending July 31, 2007 compared to $7.1 million for the quarter ending
July 31, 2006. Net research and development expenses amounted to $30.3 million
for the nine-month period ending July 31, 2007 compared to $19.3 million for
the nine-month period ending July 31, 2006. The decrease over the three-month
period is largely attributable to the completion of the Phase I/II clinical
trials for PC-DAC(TM):Exendin-4, in March 2007. The increase over the
nine-month period is largely attributable to the purchase of drug substance
for the upcoming clinical trials for PC-DAC(TM):Exendin-4 and related toxicity
and carcinogenicity studies.
    General and administrative costs amounted to $1.3 million for the quarter
ending July 31, 2007 compared to $908,535 for the quarter ending July 31,
2006. For the nine-month period ending July 31, 2007 general and
administrative costs amounted to $3.3 million compared with $3.2 million for
the same period the previous year. The increase in general and administrative
expenses is attributable to an increase in costs related to consultants,
salaries and recruiting.
    As at July 31, 2007, the Company had cash and cash equivalents of $30.2
million and a working capital position of $23.2 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 Biotechnologies, 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.

    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.

    
                               BALANCE SHEETS

    As at                                              July 31,   October 31,
                                                          2007          2006
    -------------------------------------------------------------------------
                                                             $             $
    -------------------------------------------------------------------------

    ASSETS
    Current
    Cash and cash equivalents                        3,896,969     4,034,937
    Available-for-sale short-term investments       26,293,060     7,244,401
    Accounts receivable and other assets               296,671       394,758
    Investment tax credits receivable                  450,000       550,000
    Prepaid expenses                                   299,904       288,746
    -------------------------------------------------------------------------
    Total current assets                            31,236,604    12,512,842
    Deferred financing fees                                  -        74,675
    Property, plant and equipment                    1,111,531     1,161,886
    Intangible assets                                   23,618        33,068
    Held-to-maturity long-term investments          59,166,308             -
    -------------------------------------------------------------------------
                                                    91,538,061    13,782,471
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
     (DEFICIENCY)
    Current liabilities
    Accounts payable and accrued liabilities         7,981,809    12,862,582
    Unearned revenue                                    31,782             -
    -------------------------------------------------------------------------
    Total current liabilities                        8,013,591    12,862,582
    Convertible senior unsecured notes              50,553,365    45,276,400
    -------------------------------------------------------------------------
                                                    58,566,956    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                             27,288,463    22,466,527
    Deficit                                       (286,484,073) (247,082,959)
    Accumulated other comprehensive loss               (18,242)            -
    -------------------------------------------------------------------------
    Total shareholders' equity (deficiency)         32,971,105   (44,356,511)
    -------------------------------------------------------------------------
                                                    91,538,061    13,782,471
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                            STATEMENTS OF DEFICIT

                           Three-month periods            Nine-month periods
                                 ended July 31                 ended July 31
                           2007           2006           2007           2006
                              $              $              $              $
    -------------------------------------------------------------------------

    Deficit,
     beginning of
     period        (277,921,960)  (220,832,992)  (247,082,959)  (200,918,066)
    Net loss for
     the period      (8,562,113)   (10,321,041)   (39,401,114)   (30,235,967)
    -------------------------------------------------------------------------
    Deficit, end
     of period     (286,484,073)  (231,154,033)  (286,484,073)  (231,154,033)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



               STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                           Three-month periods            Nine-month periods
                                 ended July 31                 ended July 31
                           2007           2006           2007           2006
                              $              $              $              $
    REVENUES
    Contract
     revenues            24,366              -         24,366        239,123
    Interest
     income             949,773        203,187      2,816,994        339,825
    -------------------------------------------------------------------------
                        974,139        203,187      2,841,360        578,948
    -------------------------------------------------------------------------
    EXPENSES
    Research and
     development      5,721,984      7,509,867     30,855,519     18,735,329
    Investment
     tax credits       (233,940)      (399,248)      (533,940)       582,752
    -------------------------------------------------------------------------
    Net research
     and
     development
     expenses         5,488,044      7,110,619     30,321,579     19,318,081
    General and
     administrative
     expenses         1,346,308        908,535      3,253,409      3,244,991
    Amortization of
     property, plant
     and equipment       65,052         73,546        194,198        219,304
    Amortization of
     intangible
     assets               4,470          8,267         13,081         24,801
    Amortization of
     deferred
     financing fees       8,722          8,722         26,166         26,166
    Non-cash stock-
     based
     compensation       875,620        814,843      3,151,839      3,540,347
    Financial
     charges              2,948         34,544         13,138         43,134
    Foreign exchange
     (gain) loss       (109,808)        10,818        (56,410)       (70,467)
    Accretion in
     carrying value
     of convertible
     senior
     unsecured notes  1,854,896      1,554,334      5,325,474      4,468,558
    -------------------------------------------------------------------------
                      9,536,252     10,524,228     42,242,474     30,814,915
    -------------------------------------------------------------------------
    Net loss for
     the period      (8,562,113)   (10,321,041)   (39,401,114)   (30,235,967)

    Other
     comprehensive
     income
    -------------------------------------------------------------------------
    Unrealized
     (loss) gain
     on available-
     for-sale
     short-term
     investments        (15,133)             -        (18,242)             -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Comprehensive
     loss for
     the period      (8,577,246)   (10,321,041)   (39,419,356)   (30,235,967)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and
     diluted loss
     per share            (0.04)         (0.19)         (0.18)         (0.61)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted
     average number
     of common
     shares         240,213,668     53,705,574    221,235,875     49,631,801
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                           STATEMENTS OF CASH FLOWS

                           Three-month periods            Nine-month periods
                                 ended July 31                 ended July 31
                           2007           2006           2007           2006
                              $              $              $              $
    OPERATING
     ACTIVITIES
    Net loss         (8,562,113)   (10,321,041)   (39,401,114)   (30,235,967)
    Items not
     affecting cash:
    Amortization
     of property,
     plant and
     equipment           65,052         73,546        194,198        219,304
    Amortization of
     intangible
     assets               4,470          8,267         13,081         24,801
    Amortization of
     deferred
     financing fees       8,722          8,722         26,166         26,166
    Amortization of
     discount on
     long-term
     investments        (25,874)             -        (66,091)         2,658
    Non-cash stock
     based
     compensation       875,620        814,843      3,151,839      3,540,347
    Accretion in
     value of
     convertible
     senior
     unsecured
     notes            1,854,896      1,554,334      5,325,474      4,468,558
    -------------------------------------------------------------------------
                     (5,779,227)    (7,861,329)   (30,756,447)   (21,954,133)
    Net changes
     in non cash
     working
     capital
     balances
     relating to
     operations      (3,017,561)     1,934,984     (4,662,062)     3,237,557
    -------------------------------------------------------------------------
    Cash flows
     relating to
     operating
     activities      (8,796,788)    (5,926,345)   (35,418,509)   (18,716,576)
    -------------------------------------------------------------------------

    INVESTING
     ACTIVITIES
    Acquisition
     of short-term
     investments    (26,211,300)    (4,403,711)   (68,258,235)    (8,992,905)
    Proceeds on
     maturities of
     short-term
     investments     29,620,234              -     49,191,336     22,195,268
    Acquisition of
     property,
     plant and
     equipment           (5,537)        (6,465)      (143,843)      (121,071)
    Acquisition of
     intangible
     assets                (880)             -         (3,631)             -
    Acquisition of
     long-term
     investments     (1,613,518)             -    (59,100,219)             -
    -------------------------------------------------------------------------
    Cash flows
     relating to
     investing
     activities       1,789,999     (4,410,176)   (78,314,592)    13,081,292
    -------------------------------------------------------------------------

    FINANCING
     ACTIVITIES
    Proceeds from
     reorganization           -      6,400,000              -      6,400,000
    Costs of
     reorganization           -     (1,083,809)             -     (1,083,809)
    Draw down
     from bridge
     loan                     -              -              -      2,000,000
    Repayment of
     bridge loan              -     (2,000,000)             -     (2,000,000)
    Issuance of
     units for cash           -     15,793,178    120,253,483     15,806,376
    Issuance costs
     paid in cash             -       (958,145)    (6,658,350)      (958,145)
    -------------------------------------------------------------------------
    Cash flows
     relating to
     financing
     activities               -     18,151,224    113,595,133     20,164,422
    -------------------------------------------------------------------------

    Net increase
     (decrease) in
     cash and cash
     equivalents
     during the
     period          (7,007,789)     7,814,703       (137,968)    14,529,138
    Cash and cash
     equivalents,
     beginning of
     period          10,904,758      6,851,653      4,034,937        137,218
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period    3,896,969     14,666,356      3,896,969     14,666,356
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental
     cash flow
     information:
    Cash paid
     during the
     period for
     interest:              331         29,365          1,604         29,625
    -------------------------------------------------------------------------
    





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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