YM BIOSCIENCES REPORTS SECOND QUARTER 2008 OPERATIONAL AND FINANCIAL RESULTS



    MISSISSAUGA, ON, Feb. 7 /CNW/ - YM BioSciences Inc. (AMEX:  YMI, TSX:YM,
AIM:YMBA), an oncology company that identifies, develops and commercializes
differentiated products for patients worldwide, today reported operational and
financial results for the second quarter of fiscal 2008, ended December 31,
2007.
    "Highlighting the second quarter, we completed enrollment in our Phase II
colorectal cancer study combining nimotuzumab with irinotecan which concluded
at 59 patients. We look forward to reporting data from this trial in the
coming quarter," said David Allan, Chairman and CEO of YM BioSciences. "Beyond
our direct efforts to develop nimotuzumab for North America, our
EGFR-targeting antibody is in a number of advanced clinical trials in a
coordinated effort by YM and its licensees globally to extend the number of
indications in which nimotuzumab has the prospect of being best-in-class."

    Nimotuzumab:

    Nimotuzumab, is a humanized monoclonal antibody that targets the
epidermal growth factor receptor (EGFR). The drug has principally been
developed to date within radiation-containing regimens in which it has
demonstrated significant efficacy without the serious side-effects of the
other drugs in its class. While the FDA recently required a competing
anti-EGFR antibody to carry a label warning that serious reactions could occur
when it is administered with radiation, to date nimotuzumab has not produced
any of these serious adverse events. Nimotuzumab together with radiation has
been approved in India and other jurisdictions in certain indications and
additional trials have explored the utility of this combination therapy in
pediatric glioma, adult glioma and non-small-cell lung cancer. As well,
studies investigating the prospects of a broadened approach into
chemotherapeutic applications are being conducted in colorectal and pancreatic
cancers. During the second quarter of fiscal 2008:

    
    -   YM's licensee in Japan, Daiichi-Sankyo Co., Ltd., advised that it had
        completed its safety trial with nimotuzumab, permitting it to proceed
        to more advanced trials in 2008.
    -   The Department of Medical Oncology, Kinki University School of
        Medicine (Osaka, Japan) reported data on the synergistic cytotoxic
        effect of nimotuzumab plus radiation on EGFR-expressing cancer cells
        and the inhibition of ligand-dependant downstream signaling.
    -   YM's licensee in Europe, Oncoscience AG, expanded enrollment in both
        its Phase III randomized trial in adult glioma and its Phase IIb/IIIa
        randomized trial in patients with advanced pancreatic cancer. These
        studies are designed to be supportive of registration.
    -   YM received clearance from Health Canada to extend the European Phase
        IIb/IIIa pancreatic cancer study into Canada.
    -   YM completed enrollment of its Phase II colorectal cancer study
        combining nimotuzumab with irinotecan in 59 patients. Data are
        expected to be reported in the first half of calendar 2008.
    

    In addition, data from the fully recruited Phase III trial conducted by
Oncoscience in Europe in children with inoperable brain cancer, if positive,
are expected to be submitted to the EMEA for marketing approval in 2008,
building on a submission based on earlier stage data that Oncoscience made to
EMEA in late 2007.

    AeroLEF(TM):

    AeroLEF(TM) is a proprietary, inhaled-delivery composition of free and
liposome-encapsulated fentanyl in development for the treatment of moderate to
severe pain, including cancer pain. AeroLEF(TM) uniquely permits patients to
identify and select the appropriate dose in real-time for each pain episode to
achieve both rapid onset and extended duration of analgesia.
    YM received clearance from the U.S. Food and Drug Administration (FDA) in
2007 to initiate a Phase II Acute Pain Study (AP5) of AeroLEF(TM) in the US in
opioid-tolerant or opioid-naive patients. Subsequent to the end of the current
fiscal quarter, YM received a letter from the FDA informing the Company that
the Phase II study, upon re-review of data submitted for the IND application,
was placed on clinical hold. The FDA has requested additional safety
information on specific patients in previous clinical studies. The additional
requested data is limited to a group of patients that experienced oxygen
desaturation, an effect common to a class of opioids including fentanyl. None
of the patients of interest in the prior studies had required pharmacological
intervention for the events. The Company is conducting a subgroup analysis on
these patients for submission to the FDA in support of the resolution of the
matter. To date, no patients have been dosed in the US AP5 study and there are
no other clinical trials involving AeroLEF(TM) currently ongoing. The Company
is confident it can provide the information that the FDA has requested in a
timely manner.
    Also subsequent to the end of the current quarter, YM reported that it
held its scheduled End-of-Phase 2 (EoP2) meeting with the FDA as planned to
discuss the designs of Phase III trials.

    Financial Results (CDN dollars)

    Total revenue for the second quarter of fiscal 2008, ended December 31,
2007 was $1.9 million compared with $2.0 million for the second quarter of
fiscal 2007, ended December 31, 2006. Total revenue for the first six months
of fiscal 2008 was $3.7 million compared with $3.8 million for the first six
months of fiscal 2007. Revenue from out-licensing was $1.2 million for second
quarter of fiscal 2008 compared with $1.2 million for the second quarter of
fiscal 2007. Interest income for the second quarter of fiscal 2008 was
$0.7 million compared with $0.8 million for the second quarter of fiscal 2007.
    Total operating expenditures for the second quarter of fiscal 2008 were
$6.3 million compared to $10.4 million for the second quarter of fiscal 2007.
Total operating expenditures for the first six months of fiscal 2008 were
$11.9 million compared with $20.2 million for the first six months of fiscal
2007. General and administrative expenses were $2.1 million for the second
quarter of fiscal 2008 compared with $2.0 million for the second quarter of
fiscal 2007. Licensing and product development expenses decreased to
$4.2 million for the second quarter of fiscal 2008 compared to $8.5 million
for the second quarter of fiscal 2007. The change is mainly the result of
reduced development activity for tesmilifene, for which a Phase III trial was
terminated in January 2007, and reduced clinical development costs for
nimotuzumab and AeroLEF(TM), for both of which certain trials have finished
and others are just starting up.
    Net loss for the second quarter of fiscal 2008 was $4.5 million ($0.08
per share) compared to $8.4 million ($0.15 per share) for the same period last
year. Net loss for the first six months of fiscal 2008 was $8.1 million ($0.15
per share) compared to $18.1 million ($0.32 per share) for the same period
last year.
    As at December 31, 2007 the Company had cash and cash equivalents and
short-term deposits totaling $65.9 million and payables and accrued
liabilities totaling $2.2 million compared to $75.6 million and $3.3 million
respectively at June 30, 2007.
    As at December 31, 2007 the Company had 58,216,309 common shares
outstanding, of which 2,380,953 common shares are held in escrow for
contingent additional payment related to the acquisition of Delex Therapeutics
Inc., 5,799,765 warrants, and 6,117,245 options.

    About YM BioSciences

    YM BioSciences Inc. is an oncology company that identifies, develops and
commercializes differentiated products for patients worldwide. The Company has
two late-stage products: nimotuzumab, a humanized monoclonal antibody that
targets the epidermal growth factor receptor (EGFR) and is approved in several
countries for treatment of various types of head and neck cancer; and
AeroLEF(TM), a proprietary, inhaled-delivery composition of free and
liposome-encapsulated fentanyl in development for the treatment of moderate to
severe pain, including cancer pain.

    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
Company's ongoing quarterly and annual reporting. Certain of the assumptions
made in preparing forward-looking statements include but are not limited to
the following: that nimotuzumab will continue to demonstrate a competitive
safety profile in ongoing and future clinical trials; that AeroLEF(TM) will
continue to generate positive efficacy and safety data in future clinical
trials; and that YM and its various partners will complete their respective
clinical trials within the timelines communicated in this release. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

    Summary financial statements attached:



    
    YM BIOSCIENCES INC.
    (A DEVELOPMENT STAGE COMPANY)

    Interim Consolidated Balance Sheets
    (Expressed in Canadian dollars)

    -------------------------------------------------------------------------
                                                 December 31,        June 30,
                                                        2007            2007
    -------------------------------------------------------------------------
                                                  (Unaudited)
    Assets
    Current assets:
      Cash and cash equivalents                $  11,519,666   $   5,847,351
      Short-term deposits                         54,374,575      69,724,438
      Accounts receivable                            893,868         370,011
      Prepaid expenses                               233,683         347,010
    -------------------------------------------------------------------------
                                                  67,021,792      76,288,810

    Capital assets                                   166,251         325,040

    Intangible assets                              4,595,679       5,125,950

    -------------------------------------------------------------------------
                                               $  71,783,722   $  81,739,800
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable                         $     618,030   $   1,169,211
      Accrued liabilities                          1,582,535       2,103,755
      Deferred revenue                             4,623,340       4,702,132
    -------------------------------------------------------------------------
                                                   6,823,905       7,975,098

    Deferred revenue                               6,725,925       8,929,900

    Shareholders' equity:
      Share capital                              172,921,153     172,921,153
      Share purchase warrants                      4,553,308       4,553,308
      Contributed surplus                          7,160,369       5,657,082
      Deficit accumulated during the
       development stage                        (126,400,938)   (118,296,741)
    -------------------------------------------------------------------------
                                                  58,233,892      64,834,802
    Basis of presentation
    Commitments
    -------------------------------------------------------------------------
                                               $  71,783,722   $  81,739,800
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YM BIOSCIENCES INC.
    (A DEVELOPMENT STAGE COMPANY)

    Interim Consolidated Statements of Operations
    (Expressed in Canadian dollars)

    ---------------------------------------------------------
                                         Three months ended
                                            December 31,
                                        2007            2006
    ---------------------------------------------------------
                                           (Unaudited)
    Out-licensing revenue      $   1,155,833   $   1,196,126
    Interest income                  727,242         801,673
    ---------------------------------------------------------
                                   1,883,075       1,997,799
    Expenses:
      General and
       administrative              2,075,506       1,950,975
      Licensing and
       product development         4,220,627       8,466,106
      Impairment                           -               -
      -------------------------------------------------------
                                   6,296,133      10,417,081
    ---------------------------------------------------------
    Loss before the undernoted    (4,413,058)     (8,419,282)
    Gain (loss) on foreign
     exchange                        (29,773)        112,891
    Gain on short-term deposits       33,086               -
    Loss on marketable
     securities                            -               -
    Loss on disposal of capital
     assets                          (70,143)              -
    ---------------------------------------------------------
    Loss before income taxes      (4,479,888)     (8,306,391)
    Income taxes                           -          46,080
    ---------------------------------------------------------
    Loss and comprehensive
     loss for the period       $  (4,479,888)  $  (8,352,471)
    ---------------------------------------------------------
    ---------------------------------------------------------

    Basic and diluted loss per
     common share              $       (0.08)  $       (0.15)
    ---------------------------------------------------------
    ---------------------------------------------------------
    Weighted average number of
     common shares outstanding,
     excluding 2,380,953 common
     shares held in escrow for
     contingent additional
     payment related to the
     Delex acquisition            55,835,356      55,782,023
    ---------------------------------------------------------
    ---------------------------------------------------------



    -------------------------------------------------------------------------
                                                                 Period from
                                                                inception on
                                                                   August 17,
                                         Six months ended            1994 to
                                            December 31,         December 31,
                                        2007            2006            2007
    -------------------------------------------------------------------------
                                           (Unaudited)            (Unaudited)
    Out-licensing revenue      $   2,282,766   $   2,056,824   $   8,589,811
    Interest income                1,417,634       1,696,385       9,547,023
    -------------------------------------------------------------------------
                                   3,700,400       3,753,209      18,136,834
    Expenses:
      General and
       administrative              4,109,516       3,831,865      40,196,051
      Licensing and
       product development         7,765,486      16,330,971      98,561,869
      Impairment                           -               -       1,829,538
      -----------------------------------------------------------------------
                                  11,875,002      20,162,836     140,587,458
    -------------------------------------------------------------------------
    Loss before the undernoted    (8,174,602)    (16,409,627)   (122,450,624)
    Gain (loss) on foreign
     exchange                         14,132          27,074        (349,050)
    Gain on short-term deposits      126,416               -         126,416
    Loss on marketable
     securities                            -               -      (1,191,329)
    Loss on disposal of capital
     assets                          (70,143)              -         (70,143)
    -------------------------------------------------------------------------
    Loss before income taxes      (8,104,197)    (16,382,553)   (123,934,730)
    Income taxes                           -       1,668,775       1,676,075
    -------------------------------------------------------------------------

    Loss and comprehensive
     loss for the period       $  (8,104,197)  $ (18,051,328)  $(125,610,805)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss per
     common share              $       (0.15)  $       (0.32)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of
     common shares outstanding,
     excluding 2,380,953 common
     shares held in escrow for
     contingent additional
     payment related to the
     Delex acquisition            55,835,356      55,782,009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YM BIOSCIENCES INC.
    (A DEVELOPMENT STAGE COMPANY)

    Interim Consolidated Statements of Deficit Accumulated During the
    Development Stage
    (Expressed in Canadian dollars)

    ---------------------------------------------------------
                                         Three months ended
                                            December 31,
                                        2007            2006
    ---------------------------------------------------------
                                           (Unaudited)
    Deficit accumulated during
     the development stage,
     beginning of period       $(121,921,050)  $ (96,265,358)
    Cost of purchasing shares
     for cancellation in excess
     of book value                         -               -
    Loss for the period           (4,479,888)     (8,352,471)
    ---------------------------------------------------------
    Deficit accumulated during
     the development stage, end
     of period                 $(126,400,938)  $(104,617,829)
    ---------------------------------------------------------
    ---------------------------------------------------------


    -------------------------------------------------------------------------
                                                                 Period from
                                                                inception on
                                                                   August 17,
                                         Six months ended            1994 to
                                            December 31,         December 31,
                                        2007            2006            2007
    -------------------------------------------------------------------------
                                           (Unaudited)            (Unaudited)
    Deficit accumulated during
     the development stage,
     beginning of period       $(118,296,741)  $ (86,566,501)  $           -
    Cost of purchasing shares
     for cancellation in excess
     of book value                         -               -        (790,133)
    Loss for the period           (8,104,197)    (18,051,328)   (125,610,805)
    -------------------------------------------------------------------------
    Deficit accumulated during
     the development stage, end
     of period                 $(126,400,938)  $(104,617,829)  $(126,400,938)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YM BIOSCIENCES INC.
    (A DEVELOPMENT STAGE COMPANY)

    Interim Consolidated Statements of Cash Flows
    (Expressed in Canadian dollars)

    ---------------------------------------------------------
                                         Three months ended
                                            December 31,
                                        2007            2006
    ---------------------------------------------------------
                                           (Unaudited)
    Cash provided by (used in):
    Operating activities:
      Loss for the period      $  (4,479,888)  $  (8,352,471)
      Items not involving cash:
        Amortization of capital
         assets                       51,436          25,352
        Amortization of
         intangible assets           265,136         633,050
        Impairment of
         intangible asset                  -               -
        Loss on disposal of
         capital assets               70,143               -
        Loss on marketable
         securities                        -               -
        Unrealized gain on
         financial
         instruments                  77,251               -
        Stock-based employee
         compensation                456,659         473,369
        Stock-based
         consideration                     -               -
        Warrants-based
         consideration                     -               -
      Change in non-cash
       operating working
       capital:
        Accounts receivable and
         prepaid expenses           (427,522)       (193,290)

        Accounts payable,
         accrued liabilities
         and deferred revenue     (1,160,302)       (452,558)
      -------------------------------------------------------
                                  (5,147,087)     (7,866,548)
    Financing activities:
      Issuance of common shares
       on exercise of warrants             -               -
      Repayment of debenture               -               -
      Net proceeds from
       issuance of shares and
       warrants                            -               -
      Issuance of common
       shares on exercise of
       options                             -               -
      Redemption of preferred
       shares                              -               -
      Purchase of shares for
       cancellation                        -               -
      -------------------------------------------------------
                                           -               -
    Investing activities:
      Purchase and sale of
       short-term  deposits,
       net                        (3,951,708)    (13,888,114)
      Proceeds on sale of
       marketable securities               -               -
      Additions to capital and
       intangible assets             (35,933)        (66,647)
      Proceeds from sale of
       capital assets                 38,996               -
      -------------------------------------------------------
                                  (3,948,645)    (13,954,761)
    ---------------------------------------------------------
    Increase (decrease) in cash
     and cash equivalents         (9,095,732)    (21,821,309)
    Net cash assumed on
     acquisition                           -               -
    Cash and cash equivalents,
     beginning of period          20,615,398      42,285,660
    ---------------------------------------------------------
    Cash and cash equivalents,
     end of period             $  11,519,666   $  20,464,351
    ---------------------------------------------------------
    ---------------------------------------------------------
    Supplemental cash flow
     information:
      Non-cash items:
        Issuance of shares from
         escrow on Delex
         acquisition           $           -   $           -
        Issuance of common
         shares on Eximias
         acquisition                       -               -
        Issuance of common
         shares in exchange
         for licensed patents              -               -
    ---------------------------------------------------------
    ---------------------------------------------------------


    -------------------------------------------------------------------------
                                                                 Period from
                                                                inception on
                                                                   August 17,
                                         Six months ended            1994 to
                                            December 31,         December 31,
                                        2007            2006            2007
    -------------------------------------------------------------------------
                                           (Unaudited)            (Unaudited)
    Cash provided by (used in):
    Operating activities:
      Loss for the period      $  (8,104,197)  $ (18,051,328)  $(125,610,805)
      Items not involving cash:
        Amortization of capital
         assets                       85,583          50,699         524,372
        Amortization of
         intangible assets           530,271       1,266,101       3,850,229
        Impairment of
         intangible asset                  -               -       1,829,538
        Loss on disposal of
         capital assets               70,143               -          70,143
        Loss on marketable
         securities                        -               -       1,191,329
        Unrealized gain on
         financial
         instruments                   6,874               -           6,874
        Stock-based employee
         compensation              1,503,287         992,584       7,656,763
        Stock-based
         consideration                     -               -         292,750
        Warrants-based
         consideration                     -               -          54,775
      Change in non-cash
       operating working
       capital:
        Accounts receivable and
         prepaid expenses           (410,530)        674,964         (98,829)

        Accounts payable,
         accrued liabilities
         and deferred revenue     (3,355,168)     12,790,945      10,308,186
      -----------------------------------------------------------------------
                                  (9,673,737)     (2,276,035)    (99,924,675)
    Financing activities:
      Issuance of common shares
       on exercise of warrants             -           1,875       4,371,555
      Repayment of debenture               -               -      (1,469,425)
      Net proceeds from
       issuance of shares and
       warrants                            -               -     123,276,729
      Issuance of common
       shares on exercise of
       options                             -               -       2,516,246
      Redemption of preferred
       shares                              -               -      (2,630,372)
      Purchase of shares for
       cancellation                        -               -      (1,029,679)
      -----------------------------------------------------------------------
                                           -           1,875     125,035,054
    Investing activities:
      Purchase and sale of
       short-term  deposits,
       net                        15,342,989      20,071,471     (54,187,524)

      Proceeds on sale of
       marketable securities               -               -       1,404,450
      Additions to capital and
       intangible assets             (35,933)        (68,277)       (613,248)
      Proceeds from sale of
       capital assets                 38,996               -          38,996
      -----------------------------------------------------------------------
                                  15,346,052      20,003,194     (53,357,326)
    -------------------------------------------------------------------------
    Increase (decrease) in cash
     and cash equivalents          5,672,315      17,729,034     (28,246,947)
    Net cash assumed on
     acquisition                           -               -      39,766,613
    Cash and cash equivalents,
     beginning of period           5,847,351       2,735,317               -
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period             $  11,519,666   $  20,464,351   $  11,519,666
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplemental cash flow
     information:
      Non-cash items:
        Issuance of shares from
         escrow on Delex
         acquisition           $           -   $           -   $  11,326,981
        Issuance of common
         shares on Eximias
         acquisition                       -               -      35,063,171
        Issuance of common
         shares in exchange
         for licensed patents              -               -         100,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    


    %SEDAR: 00004652E




For further information:

For further information: Enquiries: Thomas Fechtner, the Trout Group
LLC, Tel. (646) 378-2931, Email: tfechtner@troutgroup.com; James Smith, the
Equicom Group Inc., Tel. (416) 815-0700 x 229, Email: jsmith@equicomgroup.com;
Nominated Adviser: Canaccord Adams Limited, Ryan Gaffney, Tel. +44 (0)20 7050
6500


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