ConjuChem Biotechnologies Announces Fiscal 2008 Year-End Financial Results



    MONTREAL, Jan. 29 /CNW/ - ConjuChem Biotechnologies Inc. (TSX: CJB) today
announced financial results for its fiscal year, ended October 31, 2008.
    "ConjuChem achieved a major clinical milestone during 2008, delivering
data from our two randomized, double-blind, placebo controlled Phase II trials
for our lead product, PC-DAC(TM):Exendin-4 for the treatment of Type 2
diabetes. Data from the two studies confirmed that our drug can achieve
statistically significant reductions in HbA1c and weight loss while
demonstrating an excellent tolerability profile," said Mark Perrin, President
and CEO of ConjuChem. "These data not only met our efficacy and safety
objectives, they also provided a new level of validation for our platform
technology, which greatly extends the half-life of therapeutic peptides. As
such, we remain more convinced than ever that both our PC-DAC(TM):Exendin-4
and PC-Insulin products have the potential to become leading compounds within
the enormous market for drugs that help manage diabetes."
    The Company's net loss for the quarter ended October 31, 2008 amounted to
$10.9 million, or ($0.04) per share, compared to $6.5 million, or ($0.03) per
share, for the quarter ended October 31, 2007. The net loss for the year ended
October 31, 2008 amounted to $39.4 million or ($0.16) per share, compared to
$45.9 million or ($0.20) per share, for the year ended October 31, 2007. The
increase in the net loss over the three-month period is attributable to the
recently completed Phase II clinical trials for PC-DAC(TM):Exendin-4. The
decrease over the twelve-month period is mainly attributable to a decrease in
net research and development expenses of $12.2 million which is largely
related to the purchase, in the fiscal year ended October 31, 2007, of drug
substance and drug product for the ongoing development of
PC-DAC(TM):Exendin-4.
    The Company recorded interest income on cash, short and long-term
investments that amounted to $194,703 for the quarter ended October 31, 2008
compared to $876,394 for the same period last year. Interest income for the
year ended October 31, 2008 was $1.4 million versus $3.7 million for fiscal
2007. The decrease in interest income was a result of a reduced investment
portfolio base combined with a general decrease in market rates.
    Net research and development expenses amounted to $6.6 million for the
quarter ended October 31, 2008 compared to $3.4 million for the quarter ended
October 31, 2007. Net research and development expenses amounted to $21.5
million for the year ended October 31, 2008 compared to $33.7 million for
fiscal 2007. The increase over the three-month period is largely attributable
to the ongoing Phase II clinical trials for PC-DAC(TM):Exendin-4. The decrease
over the twelve-month period is largely attributable to the purchase, in 2007,
of drug substance and drug product for the ongoing development of
PC-DAC(TM):Exendin-4.
    General and administrative costs amounted to $2.0 million for the quarter
ended October 31, 2008 compared to $1.1 million for the quarter ended October
31, 2007. For the year ended October 31, 2008 general and administrative costs
amounted to $6.0 million, compared to the $4.8 million incurred for the same
period the previous year. The increase in general and administrative expenses
is largely attributable to fees related to the early redemption of the
convertible senior unsecured notes and to a provision for income tax matters.
    At October 31, 2008, the Company had cash and cash equivalents and
available-for-sale short-term investments totalling $21.1 million compared to
$26.0 million as at October 31, 2007. As at October 31, 2008, working capital
amounted to $12.0 million. The Company believes that its current cash and cash
equivalents, investments and interest income will be sufficient to carry out
their current research and development plans and operations into the second
quarter of 2009.

    Notice of AGM

    ConjuChem will hold its Annual General Meeting of Shareholders at 4:15pm
on Tuesday, April 28, 2009 at 1000 de La Gauchetière Street West, Suite 2500,
Montreal, Quebec, H3B 0A2.

    About ConjuChem

    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 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 that has successfully completed Phase II trials 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.


    
                               BALANCE SHEETS

    As at October 31
                                                          2008          2007
                                                             $             $
                                                  ---------------------------
    ASSETS
    Current
    Cash and cash equivalents                        2,187,423     1,235,704
    Investments                                     18,934,737    24,797,545
    Accounts receivable                                160,644       103,277
    Investment tax credits receivable                  542,000     1,169,000
    Prepaid expenses                                   229,006       208,945
                                                  ---------------------------
    Total current assets                            22,053,810    27,514,471
    Long-term investments                                    -    59,736,098
    Property, plant and equipment                      841,685     1,049,147
    Intangible assets                                   11,108        19,257
                                                  ---------------------------
                                                  ---------------------------
                                                    22,906,603    88,318,973
                                                  ---------------------------
                                                  ---------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
    Current liabilities
    Accounts payable and accrued liabilities        10,080,463     8,576,258
    Unearned revenue                                         -        35,314
                                                  ---------------------------
    Total current liabilities                       10,080,463     8,611,572
    Convertible senior unsecured notes                       -    52,502,487
    Convertible unsecured subordinated debentures   13,634,906             -
                                                  ---------------------------
                                                    23,715,369    61,114,059
                                                  ---------------------------

    Shareholders' equity (deficiency)
    Capital stock                                  266,823,735   265,332,302
    Warrants                                        10,817,394    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                             48,818,826    28,008,989
    Deficit                                       (332,390,857) (292,973,699)
    Accumulated other comprehensive loss               (71,657)      (15,333)
                                                  ---------------------------
    Total shareholders' equity (deficiency)           (808,766)   27,204,914
                                                  ---------------------------
                                                    22,906,603    88,318,973
                                                  ---------------------------
                                                  ---------------------------



                            STATEMENTS OF DEFICIT

    Years ended October 31
                                                          2008          2007
                                                             $             $
                                                  ---------------------------

    Deficit, beginning of year                    (292,973,699) (247,082,959)
    Net loss for the year                          (39,417,158)  (45,890,740)
                                                  ---------------------------
    Deficit, end of year                          (332,390,857) (292,973,699)
                                                  ---------------------------
                                                  ---------------------------



                        STATEMENTS OF OPERATIONS AND
                             COMPREHENSIVE LOSS

    Years ended October 31
                                                          2008          2007
                                                             $             $
                                                  ---------------------------
    REVENUES
    Contract revenues                                   60,731        69,430
    Interest income                                  1,449,360     3,693,388
                                                  ---------------------------
                                                     1,510,091     3,762,818
                                                  ---------------------------

    EXPENSES
    Research and development                        22,212,279    35,034,021
    Investment tax credits                            (701,306)   (1,352,940)
                                                  ---------------------------
    Net research and development expenses           21,510,973    33,681,081
    General and administrative expenses              5,965,092     4,754,366
    Amortization of property, plant and equipment      220,918       255,128
    Amortization of intangible assets                   10,122        17,442
    Stock-based compensation                         2,567,057     3,872,365
    Financial charges                                  209,500        15,976
    Foreign exchange loss (gain)                       937,925      (243,562)
    Accretion in carrying value of
     convertible senior
     unsecured notes and interest                    5,504,427     7,300,762
    Accretion in carrying value of
     convertible unsecured
     subordinated debentures and interest            3,733,796             -
    Loss on redemption of long-term investments        267,439             -
                                                  ---------------------------
                                                    40,927,249    49,653,558
                                                  ---------------------------
    Net loss for the year                          (39,417,158)  (45,890,740)

    Other comprehensive loss
    Unrealized loss on investments                     (56,324)      (15,333)
                                                  ---------------------------
    Comprehensive loss                             (39,473,482)  (45,906,073)
                                                  ---------------------------
                                                  ---------------------------

    Basic and diluted loss per share                     (0.16)        (0.20)
                                                  ---------------------------
                                                  ---------------------------

    Weighted average number of common shares
     outstanding during the year                   244,260,543   226,019,318
                                                  ---------------------------
                                                  ---------------------------



                          STATEMENTS OF CASH FLOWS

    Years ended October 31
                                                          2008          2007
                                                             $             $

                                                  ---------------------------

    OPERATING ACTIVITIES
    Net loss for the year                          (39,417,158)  (45,890,740)
    Items not affecting cash:
      Amortization of property, plant and equipment    220,918       255,128
      Amortization of intangible assets                 10,122        17,442
      Amortization of premium on long-term
       investments                                      (8,436)      (91,965)
      Stock-based compensation                       2,567,057     3,872,365
      Accretion in carrying value of
       convertible senior
       unsecured notes and interest                  5,504,427     7,300,762
      Accretion in carrying value of convertible
       unsecured subordinated debentures             2,292,066             -
      Loss on redemption of long-term investments      267,439             -
                                                  ---------------------------
                                                   (28,563,565)  (34,537,008)
    Net changes in non-cash working
     capital balances relating to operations         2,018,463    (4,498,728)
                                                  ---------------------------
    Cash flows relating to operating activities    (26,545,102)  (39,035,736)
                                                  ---------------------------

    INVESTING ACTIVITIES
    Acquisition of  investments                    (46,878,259)  (76,839,026)
    Proceeds on maturities of investments           52,684,741    59,270,549
    Acquisition of long-term investments              (167,037)  (59,644,133)
    Proceeds on redemption of long-term
     investments                                    59,644,133
    Acquisition of property, plant and equipment       (13,456)     (142,389)
    Acquisition of intangible assets                    (1,973)       (3,631)
                                                  ---------------------------
    Cash flows relating to investing activities     65,268,149   (77,358,630)
                                                  ---------------------------

    FINANCING ACTIVITIES
    Repayment of convertible senior unsecured
     notes                                         (58,006,914)            -
    Issuance of convertible unsecured
     subordinated debenture units                   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 year                  951,719    (2,799,233)
    Cash and cash equivalents, beginning of year     1,235,704     4,034,937
                                                  ---------------------------
    Cash and cash equivalents, end of year           2,187,423     1,235,704
                                                  ---------------------------
                                                  ---------------------------

    Supplemental cash flow information:
    Interest paid                                   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, (416) 815-0080,
jsmith@equicomgroup.com

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