ConjuChem Announces Fiscal 2010 Second Quarter Financial Results
MONTREAL, June 14 /CNW/ - ConjuChem Biotechnologies today announced financial results for the second quarter of fiscal 2010, ended April 30, 2010.
On June 11, 2010, ConjuChem's creditors approved the Company's plan of reorganization and compromise under the CCAA and the Canada Business Corporations Act. Pursuant to the terms of the Plan, new investors will recapitalize ConjuChem by subscribing for new common shares which will represent the only issued and outstanding shares of the Company. ConjuChem's motion to obtain the sanction of the Plan by the Superior Court of Québec is presentable on June 15, 2010. Once the Sanction Order is obtained, the Plan will be implemented and distributions will be made to the creditors in accordance with the terms of the Plan. Pursuant to the terms of the Plan, existing common shares of ConjuChem will be effectively cancelled for no consideration.
Financial Results
Net loss for the quarter ended April 30, 2010 amounted to $3.6 million compared to $6.1 million for the quarter ended April 30, 2009. Net loss for the six-month period ended April 30, 2010 amounted to $7.3 million compared to $11.9 million for the six-month period ended April 30, 2009. The decrease in the net loss is mainly attributable to a decrease in net R&D expenses of $3.6 million resulting from a decline of development activities due to the completion of the Phase IIa clinical trials for PC-DAC(TM):Exendin-4 in November 2008 and a general reduction in research activities. There was also a reduction in headcount resulting in a decrease in compensation and benefits.
Gross research and development expenses amounted to $871,872 for the quarter ended April 30, 2010, compared to $2.9 million for the quarter ended April 30, 2009. Gross research and development expenses amounted to $2.2 million for the six-month period ended April 30, 2010, compared to $7.1 million for the six-month period ended April 30, 2009. The decrease is due to an important decline of development activities due to the completion of the Phase IIa clinical trials for PC-DAC(TM):Exendin-4 in November 2008 and to a reduction in research activities as explained above.
General and administrative costs amounted to $1.2 million for the quarter ended April 30, 2010, compared to $1.5 million for the quarter ended April 30, 2009. General and administrative costs amounted to $1.9 million for the six-month period ended April 30, 2010, compared to $2.5 million for the six-month period ended April 30, 2009. The decrease in general and administrative expenses is largely attributable to a decrease in headcount which reduced employee compensation and benefits expenses in the six-month period ended April 30, 2010.
As at April 30, 2010, the Company had cash and cash equivalents and investments totaling $2.6 million compared to $7.5 million as at October 31, 2009. As at April 30, 2010, working capital is negative and amounts to $16.7 million given the December 2010 maturity of the 20.3 million convertible unsecured subordinated debentures.
About ConjuChem
ConjuChem, a developer of next generation medicines from therapeutic peptides, is creating long-acting compounds based on bioconjugation platform technologies. When applied to peptides, the Company's systemic PC-DAC(TM) technologies enable the creation of new drugs with significantly enhanced therapeutic properties as compared to the original peptide.
The Company has two major development programs: PC-DAC(TM):Exendin-4, a GLP-1 agonist in Phase II for the treatment of Type II diabetes and PC-Insulin, a long-acting basal insulin in preclinical testing.
Detailed descriptions of the Company and its technologies can be viewed on the Company's website www.conjuchem.com.
Forward-Looking Statements
Some of the statements made herein may constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause ConjuChem's actual results, performance or achievements to be materially different from those expressed or implied by any of the Company's statements. Actual events or results may differ materially. We disclaim any intention, and assume no obligation, to update these forward-looking statements.
ConjuChem Biotechnologies Inc.
UNAUDITED INTERIM BALANCE SHEETS
As at
April 30, October 31,
2010 2009
$ $
-----------------------------
ASSETS
Current
Cash and cash equivalents 1,470,988 1,743,327
Investments 1,104,502 5,717,766
Accounts receivable 1,113,154 1,087,670
Investment tax credits receivable 584,000 524,000
Prepaid expenses 56,365 181,799
-----------------------------
Total current assets 4,329,009 9,254,562
Property, plant and equipment 569,464 635,550
Intangible assets 4,165 5,554
-----------------------------
4,902,638 9,895,666
-----------------------------
-----------------------------
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities 2,909,373 3,135,216
Convertible unsecured subordinated
debentures 18,079,553 -
-----------------------------
Total current liabilities 20,988,926 3,135,216
Convertible unsecured subordinated
debentures - 16,548,369
-----------------------------
20,988,926 19,683,585
-----------------------------
Shareholders' deficiency
Capital stock 267,190,642 266,858,635
Warrants 2,207,519 10,817,394
Equity portion of convertible unsecured
subordinated debentures 5,169,565 5,184,867
Contributed surplus 64,843,549 55,533,174
Deficit (355,501,594) (348,182,669)
Accumulated other comprehensive income 4,031 680
-----------------------------
Total shareholders' deficiency (16,086,288) (9,787,919)
-----------------------------
4,902,638 9,895,666
-----------------------------
-----------------------------
ConjuChem Biotechnologies Inc.
UNAUDITED INTERIM STATEMENTS OF DEFICIT
Three-months ended Six-months ended
April 30, April 30, April 30, April 30,
2010 2009 2010 2009
$ $ $ $
--------------------------------------------------------
Deficit,
beginning
of period (351,868,681) (338,219,066) (348,182,669) (332,390,857)
Net loss for the
period (3,632,913) (6,079,224) (7,318,925) (11,907,433)
--------------------------------------------------------
Deficit, end of
period (355,501,594) (344,298,290) (355,501,594) (344,298,290)
--------------------------------------------------------
--------------------------------------------------------
ConjuChem Biotechnologies Inc.
UNAUDITED INTERIM STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
Three-months ended Six-months ended
April 30, April 30, April 30, April 30,
2010 2009 2010 2009
$ $ $ $
------------------------------------------------------
REVENUES
Contract revenues - 15,443 - 15,443
Interest income 2,207 32,276 16,381 138,517
------------------------------------------------------
2,207 47,719 16,381 153,960
------------------------------------------------------
EXPENSES
Research and
development 871,872 2,937,049 2,215,003 7,064,280
Investment tax
credits (10,000) (250,000) (60,000) (1,330,000)
------------------------------------------------------
Net research and
development
expenses 861,872 2,687,049 2,155,003 5,734,280
General and
administrative
expenses 1,206,002 1,458,416 1,929,860 2,511,160
Amortization of
property, plant
and equipment 33,043 40,572 66,086 84,686
Amortization of
intangible assets 695 1,388 1,389 2,777
Stock-based
compensation 407,227 791,056 824,500 1,392,761
Financial charges 2,365 5,545 4,726 8,897
Foreign exchange loss (37,371) 26,829 (25,151) 117,292
Accretion in carrying
value of convertible
unsecured
subordinated
debentures and
interest 1,161,287 1,116,088 2,378,893 2,209,540
------------------------------------------------------
3,635,120 6,126,943 7,335,306 12,061,393
------------------------------------------------------
Net loss (3,632,913) (6,079,224) (7,318,925) (11,907,433)
Other comprehensive
loss
Unrealized gain
(loss) on
investments 2,260 (63) 3,351 72,185
------------------------------------------------------
Comprehensive loss (3,630,653) (6,079,287) (7,315,574) (11,835,248)
------------------------------------------------------
------------------------------------------------------
Basic and diluted
loss per share (0.01) (0.02) (0.03) (0.05)
------------------------------------------------------
------------------------------------------------------
Weighted average
number of common
shares
outstanding during
the period 252,576,168 250,456,997 251,803,867 250,444,504
------------------------------------------------------
------------------------------------------------------
ConjuChem Biotechnologies Inc.
UNAUDITED INTERIM STATEMENTS OF CASH FLOWS
Three-months ended Six-months ended
April 30, April 30, April 30, April 30,
2010 2009 2010 2009
$ $ $ $
------------------------------------------------------
OPERATING
ACTIVITIES
Net loss (3,632,913) (6,079,224) (7,318,925) (11,907,433)
Items not
affecting cash:
Amortization of
property, plant
and equipment 33,043 40,572 66,086 84,686
Amortization of
intangible
assets 695 1,388 1,389 2,777
Stock-based
compensation 407,227 791,056 824,500 1,392,761
Accretion in
carrying value
of convertible
unsecured
subordinated
debentures 765,881 719,752 1,580,637 1,409,252
Gain on proceeds
for sales of
property, plant
and equipment - (5,253) - (5,253)
------------------------------------------------------
(2,426,067) (4,531,709) (4,846,313) (9,023,210)
Net changes in
non-cash working
capital balances
relating to
operations 511,936 (390,402) (185,893) (3,538,671)
------------------------------------------------------
Cash flows relating
to operating
activities (1,914,131) (4,922,111) (5,032,206) (12,561,881)
------------------------------------------------------
INVESTING
ACTIVITIES
Acquisition of
investments (978,501) (4,236,904) (978,501) (9,043,104)
Proceeds on
maturities of
investments 2,000,000 7,331,130 5,595,118 22,077,445
Acquisition of
property, plant
and equipment - (958) - (11,652)
Proceeds for sales
of property,
plant and equipment - 41,390 - 41,390
------------------------------------------------------
Cash flows relating
to investing
activities 1,021,499 3,134,658 4,616,617 13,064,079
------------------------------------------------------
FINANCING ACTIVITIES
Issuance of common
shares for cash - - 143,250 -
------------------------------------------------------
Cash flows relating
to financing
activities - - 143,250 -
------------------------------------------------------
Net change in cash
and cash equivalents
during the period (892,632) (1,787,453) (272,339) 502,198
Cash and cash
equivalents,
beginning of period 2,363,620 4,477,074 1,743,327 2,187,423
------------------------------------------------------
Cash and cash
equivalents, end of
period 1,470,988 2,689,621 1,470,988 2,689,621
------------------------------------------------------
------------------------------------------------------
Supplemental cash
flow information:
Interest paid - 52 813,200 814,661
------------------------------------------------------
For further information: Mark Perrin, President and CEO, ConjuChem Biotechnologies Inc., 514-844-5558 ext 311, [email protected]; James Smith, Investor Relations, 416-815-0700 ext. 229, [email protected]
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