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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