LAVAL, QC, June 29 /CNW/ - BioSyntech, Inc. (TSX: BSY), a biotechnology
company developing biotherapeutic thermogels for regenerative medicine, today
announced its financial and operational results for the fiscal year, ending
March 31, 2009.
BioSyntech also announced that Mr. Michel Lagueux, Executive Chairman of
the Board of Directors and Interim President and Chief Executive Officer, and
Mr. Louis Lemire, Chief Financial Officer, have informed the Board of
Directors that they will leave the Company effective July 17, 2009 and July
10, 2009 respectively. Mr. Lagueux also resigns, effective immediately, as
Director and Chairman of the Board.
"We would like to thank Mr. Lagueux and Mr. Lemire for their contribution
to BioSyntech, including completing the implementation of the streamlined
business plan, adopted by the Board on July 18, 2008, resulting in a greatly
reduced monthly burn rate and highly effective and efficient operations. Under
Mr. Lagueux's direction, the BioSyntech team was able to complete the
enrolment of the 80 patient pivotal trial for BST-CarGel(R) and release
positive data from a well conducted interim analysis," said Dr. Joyce Tsang,
Director and Chair of the Governance Committee of BioSyntech. "The Board of
Directors will evaluate different options to ensure appropriate management of
the operations of the Company in light of these departures and taking into
account the on-going review of strategic alternatives by the Special Committee
of the Board, created in March 2009, as well as the positive scientific
developments disclosed on June 17, 2009."
Subsequent to the fiscal year end, the Company announced positive results
from an analysis of patients who completed their 12 month follow-up in its
BST-CarGel(R) randomized clinical trial. According to the analyses performed
on tissues biopsied from the knees of 22 patients, treatment of cartilage
lesions with BST-CarGel(R) produced statistically significant evidence of
improved repair tissue quality. These findings are initial results of a subset
component of this Interim Analysis. The Company expects to have the final
results on all 80 patients in the first half of calendar year 2010.
HIGHLIGHTS OF THE YEAR
One of the Company's key milestones was to complete enrolment for the
Canadian-European pivotal trial of its cartilage repair device, BST-CarGel(R).
The Company completed enrolment of 80 patients into the randomized trial on
February 2, 2009.
The Company is also working to complete the Investigational Device
Exemption ("IDE") application process with the U.S. Food and Drug
Administration (the "FDA"), which will define the data requirements for the
regulatory clearance of BST-CarGel(R) in the United States of America.
Management believes that obtaining this clarity will enhance the
attractiveness of the Company's product to potential partners and, as such, is
an important near term milestone for the Company to achieve.
On March 12, 2009, the Company announced that it will conduct an interim
analysis of the available clinical data from 40 subjects who have completed
their 12 month follow-up in the 80 subject trial for its cartilage repair
device, BST-CarGel(R). The Company expects to have the results from this
analysis available in the summer of 2009. On June 17, 2009, the Company
announced statistically significant evidence of improved tissue quality from
an analysis of 22 consenting patients having completed the 12 month follow up
in the BST-CarGel(R) randomized clinical trial.
The final results from this 80 patient study are intended to support
marketing applications in Canada and Europe. These final results are
anticipated in the first half of calendar year 2010.
On July 15, 2008, the Company closed its previously announced financing.
The syndicate, led by Dundee Securities Corporation, and including Macquarie
Capital Markets Canada Ltd., Versant Partners Inc. and Laurentian Bank
Securities Inc. has purchased an aggregate of 11,000 Units, each comprised of
$1,000 principal amount of subordinated secured convertible debentures and
2,500 common share purchase warrants, representing aggregate gross proceeds of
$11,000,000 to the Company. On July 18, 2008, the Company announced that as
part of the exercise of the over-allotment option in its previously announced
financing, the Company has sold to the syndicate, an aggregate of 1,550 Unit,
each comprised of $1,000 principal amount of subordinated secured convertible
debentures and 2,500 common share purchase warrants, representing aggregate
gross additional proceeds of $1,550,000 to the Company. As a result, total
aggregate gross proceeds to the Company from the financing increased to
$12,550,000. During the year, 120 units have been converted into 600,000
common shares and 5,227,133 common shares were issued in lieu of payment of
accrued interest in the amount of $689,102.
As a result of the Company's budgetary constraints and the implementation
of the streamlined business plan we limited our spending in research and
development and focused our efforts on the development of BST-CarGel(R). Other
development programs such as BST-DermOn(TM), BST-InPod(TM) were suspended.
Accordingly, on August 22, 2008, a significant reduction of our work force
The consolidated financial statements have been prepared in accordance
with Canadian generally accepted accounting principles ("GAAP") on a going
concern basis, which assumes that the Company will continue its operations for
the foreseeable future and be able to realize its assets and discharge its
liabilities in the normal course of business. The use of the going concern
basis may not be appropriate because, as at March 31, 2009, there was
substantial doubt that the Company will be able to continue as a going concern
without securing additional financial resources.
On March 30, 2009, the Company's Board of Directors formed a Special
Committee to review the strategic alternatives of the Company, including
partnering activities with the orthopaedic industry, and recommend appropriate
actions to the Board. The members of the Special Committee are Dr. Joyce Tsang
(chair of the committee), Mr. Jean-Pierre Desmarais and Mr. Rudy Huber. The
Board intends to engage external advisors to assist the Company in such tasks.
There can be no assurance that such strategic and financing alternatives will
materialize on a timely basis or be obtained on favourable terms.
The Company's anticipated level of annual expenditures exceeds the
Company's cash and cash equivalents on hand on March 31, 2009.
For the three-month period ended March 31, 2009, the Company had revenues
of $23,701 compared to $148,568 for the three-month period ended March 31,
2008. For the twelve-month period ended March 31, 2009, the Company had
revenues of $40,766 compared to revenues of $273,925 for the twelve-month
period ended March 31, 2008. Revenues were mainly due to non-core activities
including sales of instrumentation products and research contracts.
Interest revenue for the three-month period ended March 31, 2009 was
$20,537 compared to $43,559 for the three-month period ended March 31, 2008.
Interest revenue for the year ended March 31, 2009 was $141,370 compared to
$322,868 for the year ended March 31, 2008. The decreases in interest revenue
were mainly due to the decrease in the average cash position as well as an
overall reduction in interest rates compared to the same periods last year.
Interest on long-term debt was $50,963 for the three-month period ended
March 31, 2009 compared to $92,687 for the three-month period ended March 31,
2008. Interest on long-term debt was $255,972 for the year ended March 31,
2009 compared to $380,674 for the year ended March 31, 2008. The decrease is
due to lower interest rates and lower debt levels.
Research and development expenses were $1,168,855 for the three-month
period ended March 31, 2009 compared to $1,619,995 for the three-month period
ended March 31, 2008. Research and development expenses were $5,800,068 for
the twelve-month period ended March 31, 2009 compared to $6,024,121 for the
same period a year ago. The decreases were mainly due to reductions in
staffing following the termination of certain research projects.
General and administrative expenses were $762,994 for the three-month
period ended March 31, 2009 compared to $901,855 for the three-month period
ended March 31, 2008. General and administrative expenses were $3,006,713 for
the year-ended March 31, 2009 compared to $3,668,513 for the same period a
year ago. The decreases were mainly due to lower remuneration as a result of
the restructuring, lower compensation expenses related to options granted and
lower marketing and investor relations expenses partly offset by higher
The accretion in the carrying value of the convertible debenture and
interest was respectively of $1,183,733 and $3,002,988 for the quarter and
twelve-month periods ended March 31, 2009 compared to nil for the three-month
and twelve-month periods ended March 31, 2008.
During fiscal 2009 as a condition of the 2008 financing, the Company
restructured its operations focusing its efforts and capital expenditure on
the advancement of BST-CarGel(R) for cartilage repair. The restructuring costs
were $1,563,652 for the year ended March 31, 2009 compared to nil for the year
ended March 31, 2008. The restructuring costs are mainly comprised of
severances as dictated by contractual agreements and termination fees in
accordance with Quebec common practice.
Net loss for the fourth quarter was $3,056,127 or ($0.03 per share),
compared to a net loss of $2,414,429 or ($0.03 per share) for the same period
last year. The loss for the year ended March 31, 2009 amounted to $12,938,767
($0.13 per share), compared $9,269,131 ($0.10 per share) for the year ended
March 31, 2008.
As of March 31, 2009, the Company had cash and cash equivalents in the
amount of $3,803,036 compared to $2,835,806 at March 31, 2008. The Company
believes that the current cash and cash equivalents will not be sufficient to
carry out its current research and development plans and operations for the
next twelve months. The Company's ability to continue as a going concern is
dependent upon our ability to obtain additional financing. Management is
currently exploring various strategic and financing alternatives; a
restructuring is also under way. If the Company is unable to obtain additional
financing, it may be required to curtail its operations. There can be no
assurance that such strategic and financing alternatives will materialize on a
timely basis or be obtained of favourable terms.
Furthermore, the Company gave notice to its debenture holders on June 5,
2009 that it exercised its right to make the interest payment due on June 30,
2009, of an amount of $745,800, by issuing common shares. The number of common
shares to be issued on June 30, 2009 will be equal to the amount of the
interests, divided by 95% of the volume weighted average trading price per
common share for the five trading days immediately preceding.
The Company's Management's Discussion and Analysis is available on the
BioSyntech website at www.biosyntech.com and with the Company's regulatory
filings at www.sedar.com.
BioSyntech is a medical device company specialized in the development,
manufacturing and commercialization of advanced biotherapeutic thermogels for
regenerative medicine (tissue repair) and therapeutic delivery. BioSyntech's
platform technology is a family of hydrogels called BST-Gel(R), some of which
are liquid at low temperature and solid at human body temperature. These gels
can be injected or applied to a specific local site and offer beneficial
properties for the local repair of damaged tissue such as cartilage, bone and
chronic wounds and provide the benefit of avoiding invasive surgery. For
additional information, visit www.biosyntech.com.
This press release contains forward-looking statements and information
which are subject to material risks and uncertainties. Such statements are not
historical facts and are based on the current expectations of management. You
are cautioned that such statements are subject to a multitude of risks and
uncertainties that could cause actual results, future circumstances, or events
to differ materially from those projected in the forward-looking information.
These risks include, but are not limited to, those associated with our
capacity to finance our activities, the adequacy, timing, and results of our
clinical trials, the regulatory approval process, competition, securing and
maintaining corporate alliances, market acceptance of the Company's products,
the availability of government and insurance reimbursements for the Company's
products, the strength of intellectual property, the success of research and
development programs, reliance on subcontractors and key personnel, and other
risks and uncertainties detailed from time-to-time in our filings with the
Canadian securities commissions.
Readers should not place undue reliance on the forward-looking
information, given that (i) our actual results could differ materially from a
conclusion, forecast or projection in the forward-looking information, and
(ii) certain material factors or assumptions which were applied in drawing a
conclusion or making a forecast or projection as reflected in the
forward-looking information, could prove to be inaccurate. Additional
information about (i) the material factors that could cause actual results to
differ materially from the conclusion, forecast or projection in the
forward-looking information, and (ii) the material factors or assumptions that
were applied in drawing a conclusion or making a forecast or projection as
reflected in the forward-looking information, is contained in the Company's
annual report and other documents filed from time to time with the Canadian
securities commissions which are available at www.sedar.com. These statements
speak only as of the date they are made, and we assume no obligation to revise
such statements as a result of any event, circumstance or otherwise, except in
accordance with law.
For further information:
For further information: James Smith, The Equicom Group, (416) 815-0700