Bioniche Reports Fiscal 2011 First Quarter Results

- revenues from product sales increase; loss per share improves over the same period in Fiscal 2010 -

(all figures are in Canadian dollars unless otherwise noted)

BELLEVILLE, ON, Nov. 10 /CNW/ - Bioniche Life Sciences Inc. (TSX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for the first quarter of its 2011 fiscal year (ended September 30, 2010).

"I'm pleased with the Company's performance in the first quarter of Fiscal 2011," said Graeme McRae, Chairman, President & CEO of Bioniche Life Sciences Inc. "We are progressing well with the construction of our world class Animal Health and Food Safety Vaccine Manufacturing Centre, while maintaining an active Animal Health and Food Safety business and considering new opportunities for our core Mycobacterial Cell Wall-DNA Complex (MCC) in Human Health."

Fiscal 2011 First Quarter Financial Results Highlights

Consolidated revenues related to Bioniche Animal Health product sales for the first quarter were $6.7 million, as compared to $5.9 million in the first quarter of Fiscal 2010. Research collaborations and licensing revenue in Q1, Fiscal 2011 brought total revenue for the quarter to $7.9 million, compared to $7.1 million in the same period last year. Licensing revenue reflects the amortization of the up-front payment from Endo Pharmaceuticals Inc. upon signing of the Urocidin^TM license, development and supply agreement. The total up-front payment received, C$22.3 million (non-refundable), will be recognized over 15 years, which is the term over which the Company maintains substantive contractual obligations. (per Canadian Generally Accepted Accounting Principles - GAAP).

Fiscal 2011 first quarter cash and cash equivalents amounted to $6.3 million, as compared to $11 million at Fiscal 2010 year-end (June 30, 2010). This decrease in cash relates to an intensive investment in the Animal Health & Food Safety Vaccine Manufacturing Centre under construction at the Company's Belleville, Ontario corporate headquarters. This facility is being funded through a consortium of government and quasi-government repayable long-term loans. The Company is required to expend resources, after which, reimbursement for eligible expenditures is provided by the lenders.

Research and development expenditures increased in the first quarter of Fiscal 2011 by $1 million over the same period in Fiscal 2010. This increase relates to ongoing expenditures for the Urocidin^TM clinical development program, as well as development programs in Animal Health. The majority of research and development costs can be attributed to the ongoing Phase III clinical program for the Company's Urocidin^TM bladder cancer treatment and to an increased focus on the development of Animal Health reproduction products and vaccines. Starting in February, 2010, Endo assumed financial responsibility for the external costs of clinical activities as they relate to Urocidin^TM, and the Company is refocusing its development activities toward MCC for other indications.

The basic and fully-diluted net loss per share for the first quarter of Fiscal 2011 was ($0.05) compared to a net loss per share of ($0.09) in the same quarter in Fiscal 2010. Total common shares outstanding at September 30, 2010 were 80,499,679, as compared to 71,959,642 for the corresponding period in Fiscal 2010.

2010 Annual Meeting of Shareholders

At the Annual Meeting of Shareholders held yesterday afternoon in Belleville, Ontario, shareholders voted to elect the following individuals as members of the Board of Directors:

• Dr. Stanley Alkemade
  
  
• Albert Beraldo
  
  
• Dr. Margaret Cunningham
  
  
• Dr. James Johnson
  
  
• Graeme McRae
  
  
• Nick Photiades
  
  
• Lyle Vanclief

Dr. Armen Aprikian remains an Observer on the Board. Also at yesterday's meeting, the shareholders voted to appoint Ernst & Young, LLP, Chartered Accountants, as auditors of the Corporation.

About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a research-based, technology-driven Canadian biopharmaceutical company focused on the discovery, development, manufacturing, and marketing of proprietary products for human and animal health markets worldwide. The fully-integrated company employs 214 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company's primary goal is to develop proprietary cancer therapies supported by revenues from marketed products in human and animal health. The Company was named one of the Top 50 Small and Medium-Sized Employers in Canada for 2010, based on employee opinion. For more information, please visit www.Bioniche.com.

Except for historical information, this news release may contain forward-looking statements that reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, which may cause, 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.

Bioniche Life Sciences Inc.
Amalgamated under the laws of Ontario

INTERIM CONSOLIDATED BALANCE SHEETS
[Unaudited]

(thousands of Canadian dollars)		As at September 30, 2010  $	As at June 30, 2010  $
ASSETS
Current
Cash and cash equivalents		6,345	11,070
Accounts receivable		7,497	8,601
Income taxes receivable		57	63
Future income tax assets		77	197
Inventories		7,671	6,668
Prepaid expenses and deposits		706	793
		22,353	27,392
Long-term
Property, plant and equipment		20,135	16,584
Intangible assets		6,475	6,500
Goodwill		456	456
Long-term accounts receivable		1,092	1,156
Future income tax assets		34	51
		50,545	52,139
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities		8,808	9,716
Current portion of long-term debt and obligations under capital leases		440	256
Current portion of repayable government assistance		1,870	960
Current portion of non-refundable deferred licensing revenue		1,486	1,486
		12,604	12,418
Long-term
Long-term debt		1,297	1,341
Obligations under capital leases		1,190	1,184
Repayable government assistance		8,827	6,965
Deferred government incentives		2,434	2,382
Non-refundable deferred licensing revenue		18,981	19,353
		45,333	43,643
Shareholders' equity
Share capital		96,880	96,677
Other paid-in capital		8,723	8,700
Deficit		(100,391)	(96,881)
		5,212	8,496
		50,545	52,139

Bioniche Life Sciences Inc.

INTERIM CONSOLIDATED STATEMENTS OF LOSS,
COMPREHENSIVE LOSS, AND DEFICIT
[Unaudited]

For the three months ended September 30

		2010	2009
(thousands of Canadian dollars, except share and per share amounts)		$	$
REVENUES
Sales		6,692	5,906
Research collaborations		790	—
Licensing		372	333
Gain on sale of intangible assets		—	883
		7,854	7,122
EXPENSES
Cost of sales (excluding amortization)		3,167	2,707
Administration		1,900	1,785
Marketing and selling		1,517	1,481
Financial expenses		153	188
Amortization of property, plant and equipment		238	307
Amortization and write-down of intangible assets		199	241
Foreign exchange loss		107	121
		7,281	6,830
Income before research and development expenses and other items		573	292
Research and development expenses, gross		4,441	3,465
Repayable government assistance		—	3,884
Less: government assistance, net		(504)	(403)
Loss before income taxes		(3,364)	(6,654)
Provision for income taxes		129	130
Net loss and comprehensive loss for the period		(3,493)	(6,784)
Deficit, beginning of period		(96,881)	(95,291)
Premium on share redemption		(17)	—
Deficit, end of period		(100,391)	(102,075)
Basic and diluted net loss per share		(0.05)	(0.09)
Weighted-average number of common shares outstanding		73,036,406	71,874,883

Bioniche Life Sciences Inc.

INTERIM CONSOLIDATED STATEMENTS
OF CASH FLOWS
[Unaudited]

For the three months ended September 30

		2010	2009
(thousands of Canadian dollars)		$	$
OPERATING ACTIVITIES
Net loss for the period		(3,493)	(6,784)
Add (deduct) non cash items:
	Amortization	437	502
	Unrealized foreign exchange loss (gain)	42	(24)
	Accreted interest on discounted receivables and interest free loans	98	102
	Stock-based compensation	62	60
	Employee share ownership plan	194	—
	Warrants issued to consultant	1	—
	Government assistance obligation	—	3,884
	Amortization of deferred government incentive	(289)	(177)
	Licensing revenue	(372)	(333)
	Future income taxes	129	—
	Write-off of intangible assets	—	52
	Gain on sale of intangible assets	—	(883)
	Deemed government assistance	(15)	(59)
		(3,206)	(3,660)
Decrease in restricted cash		—	126
Net change in non-cash working capital balances		(353)	(4,995)
Net change in deferred licensing revenue		—	22,286
Cash provided by (used in) operating activities		(3,559)	13,757
INVESTING ACTIVITIES
Proceeds on settlement of long-term accounts receivable		100	—
Proceeds on sale of intangible assets		—	606
Purchase of intangible assets		(173)	—
Government incentives received on account of property, plant and equipment		1,144	—
Purchases of property, plant and equipment		(6,160)	(239)
Cash provided by (used in) investing activities		(5,089)	367
FINANCING ACTIVITIES
Proceeds from government assistance		3,726	54
Proceeds from deferred government incentives		350	—
Proceeds on exercise of stock options		127	—
Redemption of common shares		(173)	—
Repayment of revolving credit facility		—	(4,416)
Payment of financing fees - debt		—	(2,117)
Repayment of capital lease obligations		(98)	(84)
Repayment of other long-term debt		(9)	(9)
Cash provided by (used in) financing activities		3,923	(6,572)
Net increase (decrease) in cash and cash equivalents during the period		(4,725)	7,552
Cash and cash equivalents, beginning of period		11,070	5,950
Cash and cash equivalents, end of period		6,345	13,502

%SEDAR: 00013159EF

For further information:

Jennifer Shea, Vice-President, Communications, Investor & Government Relations
Bioniche Life Sciences Inc.
Telephone: [phone] ext. 1250
Cell: [phone]
[email protected]