MEDWELL CAPITAL REPORTS 2010 YEAR-END RESULTS

EDMONTON, Feb. 11 /CNW/ - Medwell Capital Corp. (TSX-V: MWC) today announced financial and operational results for the year ended December 31, 2010.

"In June 2010, we reorganized our Company to reflect a new business model as an investment, financial, advisory and merchant banking firm focused on the middle market healthcare sector," said Mr. Kevin Giese, President and CEO of Medwell Capital. "Our lead investment in Spectral Diagnostics continues to make progress in its Phase III clinical trial program, and we are actively reviewing and engaging in a number of additional investment and advisory transactions that are expected to improve our potential for profitability." 

Highlights:

Reorganization into Medwell Capital

The Company has been reorganized into three separate business units:

  • Medwell Investments
    • Manages the $40 million assets under management.
  • Medwell Consulting
    • Performs internal pharma-level diligence analysis in support of investments, and provides clinical, advisory, regulatory and consulting services to companies.
  • Medwell Securities
    • Acquired a licensed Exempt Market Dealer and award winning healthcare investment banking team to provide strategic advisory, financing and M&A services; and
    • Supports Medwell's investment model by identifying investment opportunities and advises companies in their financing, licensing and M&A strategies.

"As we advance, our focus will be to generate revenues from these business units as well as through potential gains in Medwell Investments," said Mr. Giese. "We will utilize our team to help us make specialized healthcare investments, and to provide clinical and "exit" advisory services to client companies."

Transaction Summary

Medwell Investments has invested $12.8 million in a total of four healthcare companies to date. Medwell Investments has also invested approximately $0.5 million in two non-healthcare companies. Investments in healthcare have followed the merchant bank "investment with influence" model. As such, Medwell has invested:

  • $12 million in Spectral Diagnostics, a company undertaking a Phase III sepsis trial in the U.S. with a therapeutic device licensed from Toray Industries, Inc. of Japan. Medwell owns approximately 37% of Spectral, has the right to nominate two board seats, and has a $3 million contract to provide clinical and corporate advisory services. To learn more please visit: http://www.spectraldx.com/

  • $250k in the form of a convertible debenture in Novation, with which Medwell has the right to nominate a board seat. Novation, a private company, focuses on discovering and developing small-molecule therapeutics that modulate messenger RNA ("mRNA") to treat a broad range of diseases. For further information please visit http://www.novation-pharma.com/

  • $250k in Bioniche Life Sciences Inc. (TSX: BNC), a public company developing proprietary cancer therapies with revenues from marketed products in human and animal health. Medwell Securities also provided advisory services to Bioniche as part of its recent $20 million financing. To learn more please visit: http://www.bioniche.com/

Medwell Securities has been engaged by several biotechnology, service and pharmaceutical companies to provide advisory services involving strategic, M&A and financing transactions. Recent engagements include:

  • $90k advisory contract with Plantform Corporation, a private company with a novel, plant-based monoclonal antibody production technology that is expected to enable low-cost production of therapeutic antibodies.  Medwell has the opportunity to provide future investment in, and clinical, strategic and financial advisory services to the company. To learn more about Plantform please visit: http://www.plantformcorp.com/

Financial Results:

Medwell Capital is reporting results from both continuing and discontinued operations. Continuing operations consist of activities related to Medwell Capital as an investment and advisory service provider. Medwell Capital's discontinued operations relate to the late-stage clinical development program for dirucotide, a drug for the treatment of multiple sclerosis.

The consolidated net loss from continuing operations for the year ended December 31, 2010 was $8.6 million or $(0.09) per share compared with a consolidated net loss from continuing operations of $8.8 million or $(0.09) per share for the same period in the previous year. These results include the recognition of an unrealized loss of $0.3 million on Medwell's investments for the year, due to changes in the fair value of the Company's investments. Medwell Capital's lead investment in Spectral Diagnostics represents approximately 40% of Spectral's issued and outstanding common shares. The closing market price of Spectral as at December 31, 2010 was $0.35 per common share compared to $0.40 as at December 17, 2009 when the investment was made.

Revenue earned from the services agreement initiated with Spectral amounted to $1.0 million for the year ended December 31, 2010. Interest income earned on funds invested was $0.2 million for the year ended December 31, 2010, compared to $0.3 million in the previous year.

Total consolidated expenses from continuing operations for the year ended December 31, 2010 were $9.8 million compared with $9.2 million in the year ended December 31, 2009.

The consolidated net loss from discontinued operations for the year ended December 31, 2010 was $1.3 million or $(0.01) per share compared with a consolidated net income from discontinued operations of $11.7 million or $0.12 per share in the previous year. Upon the conclusion of the MAESTRO-01 clinical trial the Company discontinued the other dirucotide clinical trials, MAESTRO-02 and MAESTRO-03, and completed final collection of data and records.

At December 31, 2010, cash and cash equivalents and short-term investments totaled $27.5 million as compared to $51.4 million at December 31, 2009. At December 31, 2010, the Company had working capital of $26.1 million as compared to $47.5 million at December 31, 2009. Management estimates that the current working capital is sufficient for the Company to meet its obligations.

As at December 31, 2010 there were 91,008,923 Class "A" common shares of the Company issued and outstanding.

About Medwell Capital Corp.

Medwell Capital Corp. is a Canadian-based service provider of capital and advisory services. For further information please visit www.medwellcapital.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.  This press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events.  These forward-looking statements involve risks and uncertainties that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Corporation's ongoing quarterly and annual reporting.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Medwell Capital Corp.
(formerly BioMS Medical Corp.)
Consolidated Balance Sheet
As at December 31, 2010 and 2009


(expressed in thousands of Canadian dollars)

                      2010
$
            2009
$
 
                                       
Assets                                      
                                       
Current assets
Cash and cash equivalents
Investments
Short-term investments
Accounts receivable
Prepaid expenses and other current assets
Assets of discontinued operation




























































 
24,959
12,507
2,552
377
255
-






























   
48,774
-
2,662
5
82
800
 
                                       
                      40,650             52,323  
                                       
                                       
Property and equipment                     84             350  
                                       
                      40,734             52,673  
                                       
Liabilities                                      
                                       
Current liabilities
Accounts payable and accrued liabilities
Liabilities of discontinued operation 




















 
516
849










   
346
4,476
 
                                       
                      1,365             4,822  
                                       
                                       
                                       
                                       
Share capital                     175,714             175,714  
                                       
Contributed surplus                     12,319             10,937  
                                       
Accumulated deficit                     (148,664)             (138,800)  
                                       
                      39,369             47,851  
                                       
                      40,734             52,673  
                                       
                                   

Medwell Capital Corp.
(formerly BioMS Medical Corp.)
Consolidated Statements of Operations and Comprehensive Income (Loss)


(expressed in thousands of Canadian dollars, except share and per share amounts)

        Years ended December 31,  
                 
        2010
$
    2009
$
 
                 
Revenue
Unrealized loss on investments
Realized gain on investments
Contract services
Interest
      (275)
39
1,185
234
    -
-
-
333

                 
        1,183     333  
                 
Expenses
Operating, general and administrative
Stock-based compensation
Amortization of property and equipment
Loss on disposal of property and equipment
Foreign exchange loss
       7,833
1,382
126
173
249
    7,070
1,845
164
8
79
 
                 
        9,763     9,166  
                 
Net loss from continuing operations
Net (loss) income from discontinued operation
      (8,580)
(1,284)
    (8,833)
11,702
 
                 
Net (loss) income and comprehensive (loss) income       (9,864)     2,869  
                 
Basic and diluted net loss per common share - continuing
operations
            (0.09)           (0.09)  
Basic and diluted net (loss) net income per common share -
discontinued operation
            (0.01)           0.13  
Basic and diluted net (loss) income per common share             (0.11)           0.03  
Basic and diluted weighted average number of common shares
outstanding
      91,009     91,009  
                   
                     

Medwell Capital Corp.
(formerly BioMS Medical Corp.)
Consolidated Statements of Cash Flows


(expressed in thousands of Canadian dollars)

            Years ended December 31,  
                   
            2010
$
  2009
$
 
Cash provided by (used in)
Operating activities
Net loss from continuing operations
Items not involving cash
  Unrealized loss on investments
  Realized gain on investments
  Stock-based compensation
  Amortization of property and equipment
  Loss on disposal of property and equipment








   















 
 
(8,580)
 
275
(12)
1,382
126
173










(8,833)
 
-
-
1,845
164
8








            (6,636)   (6,816)  
Net change in non-cash working capital items           (197)   179  
            (6,833)   (6,637)  
Investing activities
Purchase of investments
Proceeds from disposal of investments
Net proceeds (purchase) of short-term investments
Purchase of property and equipment




   







 
(12,814)
32
110
(33)




 
-
-
(48)
(7)




            (12,705)   (55)  
Foreign exchange loss on cash and cash equivalents held
in foreign currency
          (177)   (134)  
                   
Cash used in continuing operations           (19,715)   (6,826)  
Cash used in discontinued operation           (4,100)   (32,226)  
Decrease in cash and cash equivalents           (23,815)   (39,052)  
Cash and cash equivalents - Beginning of year           48,774   87,826  
                   
Cash and cash equivalents - End of year           24,959   48,774  
Cash and cash equivalents consists of
Bank accounts
Interest bearing deposits and securities


   



 
3,348
21,611



14,855
33,919


            24,959   48,774  

SOURCE Medwell Capital Corp.

For further information:

Tony Hesby
Ryan Giese
Medwell Capital Corp.
780-413-7152
780-408-3040 Fax
E-mail: info@medwellcapital.com
Internet: http://www.medwellcapital.com
          Ross Marshall
Investor Relations
416-815-0700 ext. 238
416-815-0080 Fax
E-mail:rmarshall@equicomgroup.com
 
 

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