SemBioSys announces 2007 financial and operational results



    - Canadian Biotechnology Company advances pharmaceutical programs while
    executing on non-pharmaceutical opportunities -

    TSX symbol: SBS

    CALGARY, March 17 /CNW/ - SemBioSys Genetics Inc. (TSX:SBS), a
biotechnology company developing a portfolio of therapeutic proteins for
metabolic and cardiovascular diseases, today announced its operational and
financial results for the twelve-month period ended December 31, 2007.
    "We made progress on multiple product candidates during 2007 that was
essential to setting the stage for significant value creating milestones in
2008. We believe that each of our candidates individually represent an
exciting and material opportunity to the growth of our company. The basis for
this growth is the flexibility of our proprietary oilbody-oleosin technology
which allows us to target multiple markets that require high volume,
cost-effective pharmaceutical and non-pharmaceutical products," said Andrew
Baum, President and CEO of SemBioSys Genetics Inc. "Establishing Botaneco as a
separate operating company with genuine value creating potential and achieving
commercially viable levels of Apo AI accumulation were some of the key
highlights of the year for us. Additionally, we have made significant progress
on the insulin program including the necessary preclinical work to submit an
IND in order to begin the Phase I/II clinical trial in the second half of
2008. While we have adjusted the expected start date of the insulin clinical
trial, we believe the insulin program represents just one of the important
upcoming milestones for SemBioSys in 2008. We also expect in vivo functional
and efficacy results from Apo AI(Milano), which has the potential to attract
partnership opportunities as well as further growth and business development
opportunities from Botaneco. Our recent achievements have also begun to
attract interest from new potential partners that believe the capabilities of
our technology could address production and manufacturing challenges in their
market."

    
    Operational Highlights

    Pharmaceutical Products

    -  Successfully developed commercially viable levels of both
       apolipoprotein AI (Apo AI) and apolipoprotein AI Milano
       (Apo AI(Milano)) in safflower seed.
    -  Demonstrated the functional equivalence of the Company's proprietary
       safflower-produced insulin to U.S. pharma grade human insulin in
       animal models.
    -  Demonstrated with in vitro and in vivo assay studies that the
       Company's safflower-produced insulin is chemically, structurally and
       physiologically indistinguishable from U.S. pharma grade human
       insulin.
    -  Confirmed the Company is eligible to pursue a Section 505(b)(2)
       regulatory path for safflower-produced insulin after meeting with the
       U.S. Food and Drug Administration (FDA).
    -  Continued the necessary preclinical work, including preparations for
       an animal toxicology study, to submit an Investigational New Drug
       application (IND) to the FDA in order to initiate a Phase I/II trial
       for safflower-produced insulin in the second half of 2008.

    Non-pharmaceutical Products

    -  Established Botaneco, a subsidiary dedicated to the commercialization
       of SemBioSys' non-transgenic oilbody products for the cosmetics,
       personal care and prescription topical dermatology markets.
    -  Commissioned Botaneco's 10,000 square foot, state-of-the-art,
       commercial scale manufacturing facility located in Calgary.
    -  Launched Hydresia(TM), Botaneco's first branded line of natural
       oilbody-based ingredients, and subsequently signed the Company's first
       national brand customer, Burt's Bees, the largest natural personal
       care company in North America. Subsequent to the end of the year,
       Burt's Bees launched three products in the U.S. market containing
       Hydresia(TM), two body washes and a hand soap.
    -  Produced sufficient safflower-produced ImmunoSphere(TM) Feed Additive
       in Chile and the United States to enable the next stage of the
       Company's development and commercialization plans.
    

    Financials

    Please note that prior to the third quarter of 2007, SemBioSys operated
under one segment. During the third quarter, Botaneco completed the
construction of its manufacturing facility and SemBioSys began operating in
two reportable segments: (i) the Biopharmaceutical, Animal Health, and
Nutritional Oils segment focused on the Company's lead pharmaceutical
candidates, recombinant human insulin and Apo AI, in addition to its animal
health product, ImmunoSphere(TM) and nutritional oils, DHA and GLA and (ii)
the Specialty Ingredients segment which will manufacture and market branded
lines of naturally derived base emulsions and delivery systems used in the
development of cosmetic, personal care and prescription topical/dermatology
products through the Botaneco subsidiaries.
    Total revenue for the twelve-month period ended December 31, 2007 was
$1,222,823 compared with $523,258 for the corresponding period in 2006. The
difference is due mainly to a license fee payment earned from our
collaboration agreement with Martek BioSciences Corporation in the first half
of 2007, and from product sales from Hydresia(TM).
    Total expenditures for the year ended December 31, 2007 were $17,599,775
compared with $15,082,560 for the year ended December 31, 2006.
    Research and development expenses for the twelve-month period ended
December 31, 2007 were $8,044,121, compared with $5,480,972 for the same
period last year. The increase in research and development costs is primarily
from increased laboratory supplies, personnel and outsourcing costs related to
preclinical activity and the related support costs in all areas of research
and development with an expanded focus on insulin and Apo AI, as well as
increased field planting costs for ImmunoSphere(TM).
    General and administrative expenses for the twelve-month period ended
December 31, 2007 were $4,528,184 compared with $4,013,653 for the
corresponding period last year. The difference is due mainly to the increased
general and administration support required for the overall increased company
activity including newly added staff and the additional related support costs
as well as increased recruiting activities for senior management in Botaneco.
    Intellectual property costs for the twelve-month period ended
December 31, 2007 were $1,569,095 compared with $3,467,045 for the
twelve-month period ended December 31, 2006. This difference is primarily
attributable to a $1,516,906 non-cash license fee incurred in the second
quarter of 2006 for the acquisition of technology from Syngenta Crop
Protection AG in exchange for warrants.
    Business development costs for the twelve-month period ended December 31,
2007 were $1,213,634, compared with $745,964 for the corresponding period last
year. The difference is primarily related to the commercialization activities
of Botaneco including increased staffing levels and increased contractor and
consulting time.
    Net loss for the twelve-month period ended December 31, 2007 was
$15,418,677 or $0.71 per share, compared to a net loss of $14,127,086 or $0.85
per share for the twelve-month period ended December 31, 2006.
    As at December 31, 2007 the Company had cash and cash equivalents
totaling $20,444,013 and a net positive working capital balance of $19,518,408
compared to $16,328,459 and $15,576,155, respectively, at December 31, 2006.
Total long-term debt at December 31, 2007 was $1,389,047 compared with
$2,084,103 at December 31, 2006.
    The increase in cash and working capital resulted primarily from the
completion of a $14,379,010 (net of issue costs) public offering in the first
quarter of 2007 and an $8,672,040 (net of issue costs) private placement
completed in November of 2007.
    As at December 31, 2007 the Company had 25,886,676 common shares
outstanding, 4,322,000 warrants, and 1,335,224 options.

    
    Outlook

    SemBioSys is currently conducting all the necessary preclinical work for
safflower-produced insulin to enable it to file an IND application with the
FDA to proceed into human clinical trials in the second half of 2008. The
upcoming insulin milestone events include:
    -  Completion of the toxicology studies of safflower-produced insulin
    -  Completion of the production of clinical grade insulin supply for use
       in Phase I/II human clinical trials
    -  Submission of an IND to the FDA in the second half of 2008
    -  Initiation of a 30 patient Phase I/II clinical trial of safflower-
       produced insulin in the second half of 2008
    -  Continuation of business development activities toward an insulin
       partnership

    During 2007, SemBioSys successfully achieved commercial levels of both Apo
AI and Apo AI(Milano) accumulation in safflower. The Company is currently
conducting laboratory testing in an animal model to establish equivalent
functionality in animals of safflower-produced Apo AI(Milano) to the Apo
AI(Milano) that has already been successfully used in human clinical trials.
The upcoming milestone events include:
    -  Completion of in vivo efficacy studies of cholesterol mobilization
       with safflower-produced Apo AI and Apo AI(Milano)
    -  Completion of in vivo efficacy studies of plaque regression with
       safflower-produced Apo AI(Milano)
    -  Initiation of formal partnering process for Apo AI and Apo AI(Milano)
       upon receiving the initial in vivo efficacy results
    -  Initiation of the preparatory work in order to submit an IND to the
       FDA for a Phase I clinical trial of Apo AI or Apo AI(Milano) in the
       first half of 2009

    In addition to its pharmaceutical milestones, the Company is also
advancing the development of its non-pharmaceutical products. The upcoming
milestone events expected from these programs include:
    -  Expansion of the commercial distribution of the Company's personal
       care topical oilbody products, specifically Hydresia(TM), through
       Botaneco
    -  Pursuit of commercial opportunities for Hydresia(TM) in Europe
    -  Collection of two milestone payments from Arcadia Biosciences, Inc.,
       upon their successful commercial scale-up of GLA-rich safflower oil
    -  Initiation of pond trials for the Company's shrimp feed additive,
       ImmunoSphere(TM)
    

    About SemBioSys Genetics Inc. (www.sembiosys.com)

    Calgary, Alberta-based SemBioSys Genetics Inc. is a biotechnology company
developing protein-based pharmaceuticals for metabolic and cardiovascular
diseases. The Company's lead pharmaceutical candidates, produced in the plant
host safflower, are recombinant human insulin to serve the rapidly expanding
global diabetes market and Apo AI, a next generation cardiovascular drug. In
addition to its pharmaceutical products, SemBioSys is developing a series of
non-pharmaceutical products addressing human topical, nutritional oils and
agricultural biotechnology markets.

    This press release contains certain forward-looking statements,
including, without limitation, statements containing the words "believe",
"may", "plan", "will", "estimate", "continue", "anticipate", "intend",
"expect" and other similar expressions which constitute "forward-looking
information" within the meaning of applicable Canadian securities laws.
Forward-looking statements reflect the Company's current expectation and
assumptions, and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those anticipated. These
forward-looking statements involve risks and uncertainties including, but 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 Company's ongoing filings with the Canadian securities
regulatory authorities which filings can be found at www.sedar.com. Given
these risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking statements either
as a result of new information, future events or otherwise, except as required
by applicable Canadian securities laws.


    
    Financial results included below:

    SemBioSys Genetics Inc.
    Consolidated Balance Sheets
    As at December 31,
    -------------------------------------------------------------------------
    (expressed in Canadian dollars)
                                                       2007          2006

                                                   ------------  ------------
                                                         $             $
    Assets

    Current assets

    Cash and cash equivalents                       20,444,013    16,328,459
    Accounts receivable                                583,591       526,002
    Interest receivable                                 30,321       504,551
    Prepaid expenses and deposits                      538,718       392,094
    Inventory                                          426,641        13,365
                                                   ------------  ------------
                                                    22,023,284    17,764,471

    Property and equipment                           9,272,415     5,157,163
                                                   ------------  ------------

                                                    31,295,699    22,921,634
                                                   ------------  ------------
                                                   ------------  ------------

    Liabilities

    Current liabilities

    Accounts payable and accrued liabilities         1,875,397     1,356,018
    Repayable advances                                       -        85,640
    Current portion of long-term debt                  629,479       746,658
                                                   ------------  ------------
                                                     2,504,876     2,188,316

    Deferred cost recoveries                           286,596        84,203

    Long-term debt                                     759,568     1,337,445
                                                   ------------  ------------
                                                     3,551,040     3,609,964
                                                   ------------  ------------
                                                   ------------  ------------

    Shareholders' Equity

    Capital stock                                   70,396,170    48,302,036

    Warrants                                         6,180,690     6,274,716

    Contributed surplus                              7,326,962     5,475,404

    Deficit                                        (56,159,163)  (40,740,486)
                                                   ------------  ------------
                                                    27,744,659    19,311,670
                                                   ------------  ------------

                                                    31,295,699    22,921,634
                                                   ------------  ------------
                                                   ------------  ------------



    SemBioSys Genetics Inc.
    Consolidated Statements of Loss, Comprehensive Loss and Deficit
    For the years ended December 31,
    -------------------------------------------------------------------------
    (expressed in Canadian dollars)
                                                   ------------  ------------
                                                       2007          2006
                                                   ------------  ------------
                                                         $             $

    Revenue

    Licensing fees                                     874,024             -
    Contract research                                  122,304       523,258
    Product sales                                      226,495             -
                                                   ------------  ------------
                                                     1,222,823       523,258

    Expenses

    Research and development                         8,044,121     5,480,972
    General and administration                       4,528,184     4,013,653
    Intellectual property                            1,569,095     3,467,045
    Business development                             1,213,634       745,964
    Sales and marketing                                201,094             -
    Cost of products sold                              198,019             -
    Stock-based compensation                           723,558       713,902
    Amortization                                     1,390,065       832,845
    Cost recoveries                                   (267,995)     (171,821)
                                                   ------------  ------------
                                                    17,599,775    15,082,560
                                                   ------------  ------------

    Loss before the undernoted                     (16,376,952)  (14,559,302)
                                                   ------------  ------------

    Interest income                                    893,142       857,595
    Interest expense                                  (195,753)     (182,440)
    Loss on sale of property and equipment              (1,483)      (16,802)
    Write down of property and equipment                     -      (161,732)
    Foreign exchange gain (loss)                       262,369       (64,405)
                                                   ------------  ------------

                                                       958,275       432,216
                                                   ------------  ------------

    Net loss and comprehensive loss for the year   (15,418,677)  (14,127,086)

    Deficit - Beginning of year                    (40,740,486)  (26,613,400)
                                                   ------------  ------------

    Deficit - End of year                          (56,159,163)  (40,740,486)
                                                   ------------  ------------
                                                   ------------  ------------

    Loss per share - basic and diluted                   (0.71)        (0.85)
                                                   ------------  ------------
                                                   ------------  ------------

    Weighted average shares outstanding             21,823,242    16,699,653
                                                   ------------  ------------
                                                   ------------  ------------



    SemBioSys Genetics Inc.
    Consolidated Statements of Cash Flows
    For the years ended December 31,
    -------------------------------------------------------------------------
    (expressed in Canadian dollars)
                                                   ------------  ------------
                                                       2007          2006
                                                   ------------  ------------
                                                         $             $

    Cash provided by (used in)

    Operating activities

    Net and comprehensive loss for the period      (15,418,677)  (14,127,086)
    Add items not affecting cash:
      Amortization                                   1,390,065       832,845
      Acquisition of intellectual
       property for warrants                                 -     1,516,906
      Write down of property and equipment                   -       161,732
      Loss on sale of property and equipment             1,483        16,802
      Stock-based compensation                         723,558       713,902
      Unrealized foreign exchange (gain) loss         (220,554)       41,900
      Non-cash interest expense                          4,994             -
                                                   ------------  ------------
                                                   (13,519,131)  (10,842,999)
    Change in non-cash working capital and
      other balances related to operations             578,174      (251,140)
                                                   ------------  ------------

                                                   (12,940,957)  (11,094,139)
                                                   ------------  ------------

    Financing activities

    Issuance of capital stock                       24,331,688             -
    Share issue costs                               (2,256,728)      (20,284)
    Issuance of warrants                             1,140,800             -
    Warrant issue costs                               (106,826)            -
    Exercise of stock options                           81,242       167,914
    Proceeds from long-term debt                       250,000       777,811
    Repayment of long-term debt                       (704,990)     (612,938)
    Repayment of repayable advances                    (85,640)            -
                                                   ------------  ------------
                                                    22,649,546       312,503

    Investing activities

    Proceeds on sale of property and equipment           6,000         7,000
    Acquisition of property and equipment           (5,599,035)   (1,410,000)
                                                   ------------  ------------

                                                    (5,593,035)   (1,403,000)
                                                   ------------  ------------

    Increase (decrease) in
     cash and cash equivalents                       4,115,554   (12,184,636)

    Cash and cash equivalents - Beginning of year   16,328,459    28,513,095
                                                   ------------  ------------

    Cash and cash equivalents - End of year         20,444,013    16,328,459
                                                   ------------  ------------
                                                   ------------  ------------

    Supplemental Information

    Cash interest received                           1,367,372       444,063
    Cash interest paid                                 175,343       167,026
    Non-cash transactions
      Capital items included in accounts payable       276,373       362,608
      Share issue costs included in accounts payable    57,884             -
      Proceeds from issuance of common
       shares included in accounts receivable                -         4,186
                                                   ------------  ------------

    





For further information:

For further information: SemBioSys Genetics Inc.: Mr. Andrew Baum,
President and Chief Executive Officer, Phone: (403) 717-8767, Fax: (403)
250-3886, E-mail: bauma@sembiosys.com, Internet: www.sembiosys.com; Investor
Relations: Ross Marshall, The Equicom Group Inc., Phone: (416) 815-0700 (Ext.
238), Fax: (416) 815-0080, E-mail: rmarshall@equicomgroup.com

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