SemBioSys announces 2009 financial and operational results
CALGARY, March 31 /CNW/ - SemBioSys Genetics Inc. (TSX:SBS), specializing in the manufacture of high-value proteins and oils in plant seeds, today announced its 2009 year end financial and operational results.
"We continue to advance our Apo AI(Milano) and insulin programs with positive results from our preclinical Apo AI(Milano) study conducted by leading cardiologists, and the completion of a positive Phase I/II trial for our plant-produced insulin. We intend to pursue commercial partners for each of these programs with the expectation of securing an agreement in one of the two programs in 2010," said James Szarko, President and Chief Executive Officer of SemBioSys. "We have undertaken a number of capital transactions, including non-dilutive events and new equity issues, in order to fund our insulin and Apo AI(Milano) programs to their next value driving milestones: a partnership transaction. Our proprietary protein production platform is an attractive technology for partners searching for a low-cost, scalable and high volume supply of therapeutic proteins."
Highlights
Corporate
- Raised a total of approximately $14,100,000 in new capital consisting
of $5,200,000 in non-dilutive capital and $8,900,000 in new equity
including;
- A non-brokered private placement offering of 10,163,398 shares of
the Company at a price of $0.175 per share for total gross
proceeds to the Company of $1,778,595, subsequent to the end of
the year.
- A non-dilutive financing through a plan of arrangement providing
approximately $3.7 million in capital to the Company.
- A public offering of 11,865,341 units at a price of $0.35 per unit
for total gross proceeds to SemBioSys of $4,152,869.
- Announced, subsequent to the end of the year, that its partner
Arcadia Biosciences Inc., had successfully completed the U.S. Food
and Drug Administration (FDA) regulatory process for GLA-rich
safflower. Under the terms of the agreement, SemBioSys is entitled to
receive royalties from Arcadia on GLA-associated commercial product
sales and an additional milestone payment.
Apo AI(Milano)
- Received positive results from in vivo plaque remodelling and
regression studies, conducted by Dr. Prediman K. Shah, confirming the
anti-atherosclerotic effects of plant-derived Apo AI(Milano). The
studies successfully demonstrate that a phospholipid complex
containing SemBioSys' Apo AI(Milano) positively impacted the three
key components required to achieve a therapeutic effect. The data
demonstrated an increase in cholesterol efflux capacity (the ability
to remove cholesterol from the vessel wall), an increase in
circulating levels of free cholesterol and a reduction in total
plaque volume vs. controls.
- Successfully completed the harvest of approximately 15 tonnes of Apo
AI(Milano) seed, demonstrating the ability to eliminate seed
production as a rate limiting step.
- Completed a pre-IND (Investigational New Drug) meeting during which
the FDA confirmed SemBioSys' development plan necessary to file an
IND application and addressed the proposed design of clinical trials
for Apo AI(Milano).
- Completed bench to pilot plant scale-up of its Apo AI(Milano)
manufacturing process.
Insulin Program
- Announced in March 2009 the results of a single-dose three-arm Phase
I/II clinical trial of SBS-1000 wherein safflower-produced insulin
was shown to be bioequivalent to Humulin(R) R.
- Granted U.S. patent US 7,547,821 entitled "Methods for the Production
of Insulin in Plants".
Outlook
The Company anticipates a number of insulin and Apo AI(Milano) milestone events in the coming months including:
- Insulin: optimization of process production and scale-up of seed
inventory;
- Apo AI(Milano): receipt of additional in vivo data, advancing to
optimal process development; and
- Further progress with the partnering of both insulin and Apo AI
(Milano).
Financials
SemBioSys has historically operated in two reportable segments: (i) Biopharmaceuticals and Bioproducts and (ii) Specialty Ingredients. Effective July 29, 2009, the Company divested its majority interest in Botaneco Specialty Ingredients Inc. and Botaneco Inc. (collectively referred to as "Botaneco"), and, therefore, it no longer has control nor significant influence over these entities. As a result, the Specialty Ingredients segment is no longer being consolidated and its operating results are included in discontinued operations. On November 20, 2009 the Company disposed of our remaining investment in Botaneco.
Net loss for the year ended December 31, 2009 compared to the same period last year:
- $6,492,390 or $0.19 per share from continuing operations compared to
$18,725,014 or $0.72 per share;
- $96,492 or $0.00 per share from discontinued operations compared to
$4,212,127 or $0.16 per share; and
- $6,588,882 or $0.19 per share in total net loss compared to
$22,937,141 or $0.88 per share.
Net loss decreased in 2009 as a result of completing the insulin clinical trials in the first quarter of the year, combined with the savings realized from the cost reduction programs implemented in the fourth quarter of 2008 and third quarter of 2009. The net loss was further offset by a one-time gain on the exchange of shares as part of the corporate reorganization and a gain on the disposal of our remaining shares of Botaneco.
Revenue for the year ended December 31, 2009 compared to the same period last year:
- $1,571,114 in revenue from continuing operations compared to $50,110;
- $378,970 in revenue from discontinued operations compared to
$611,577; and
- $1,950,084 in total revenue compared to $661,687.
The increase in revenue in 2009 for continuing operations is due mainly to the recognition of licensing option fees in 2009 from an option agreement entered into with MannKind in the fourth quarter of 2008 and licensing fees related to the Company's GLA program.
Expenditures (net of cost recoveries in each case) for the year ended December 31, 2009 compared to the same period last year:
- $11,270,330 in expenditures from continuing operations compared to
$18,740,332;
- $2,774,345 in expenditures from discontinued operations compared to
$4,326,980; and
- $14,044,675 in total expenses net of cost recoveries compared to
$23,067,312.
The overall decrease in expenditures is primarily due to the cost reductions implemented in the fourth quarter of 2008 and the third quarter of 2009, in addition to decreased preclinical costs as the majority of the preclinical work for the insulin clinical trial was completed in 2008. The reduction in cost recoveries in 2009 as compared to the prior year resulted from the achievement of all outstanding milestones related to our agreement with AVAC Ltd. for the insulin program in 2008.
As of December 31, 2009 the Company had cash and cash equivalents from continuing operations of $3,687,548 and a net positive working capital balance of $1,595,217, compared to $1,926,966 ($3,819,796 including cash related to discontinued operations), and $646,156 ($3,730,413 including working capital from discontinued operations), respectively at December 31, 2008. Total long-term debt, including the short-term portion thereof was $1,534,535 at December 31, 2009 compared to $752,644 ($5,127,829 including long-term debt from discontinued operations) at December 31, 2008.
Subsequent to the end of the year, the Company brought in an additional $1,800,000 of gross proceeds from a private placement. Based on the current cash on hand and a planned net burn rate of $500,000 per month the Company anticipates sufficient resources to fund operations into the third quarter of 2010.
As at March 30, 2010 the Company had 51,259,536 common shares outstanding, 12,655,341 warrants, 2,582,948 options, 711,920 broker warrants and 385,717 DSUs.
About SemBioSys
Calgary, Alberta-based SemBioSys is focused on leveraging its unique proprietary platform to manufacture high-value proteins and oils. SemBioSys' seed-based protein production system can provide for its partners product enablement, exceptionally low cost and unprecedented scalability. SemBioSys is applying the platform with high selectivity to products with tremendous clinical promise and value potential. The Company's current pharmaceutical development programs include insulin (SBS-1000, regulated as a biosimilar in Europe) and Apo AI(Milano), a next-generation cardiovascular therapy. SemBioSys' proprietary safflower-derived Apo AI(Milano) is a des-1,2- variant of Apo AI(Milano) as previously described in the literature. SemBioSys is listed on the Toronto Stock Exchange under the ticker SBS. More information is available at www.sembiosys.com.
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, changing market conditions and market size, the acceptance of an IND by the FDA in respect of clinical studies, the submission of a CTA to the appropriate European authorities, the successful initiation and timely and successful completion of clinical studies, the fact that Apo AI(Milano) is currently a development stage drug, 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 filings with the Canadian securities regulatory authorities which filings can be found at www.sedar.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.
SemBioSys Genetics Inc.
CONSOLIDATED BALANCE SHEETS
As at December 31, 2009 2008
(expressed in Canadian dollars) $ $
-------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents 3,687,548 1,926,966
Investment 380,601 -
Accounts receivable 124,083 723,259
GST receivable 52,649 213,981
Prepaid expenses, deposits and other 175,894 406,054
Current assets related to discontinued
operations - 3,849,220
------------ ------------
4,420,775 7,119,480
Property and equipment 3,683,462 5,154,044
Long-term assets related to discontinued
operations - 2,855,580
------------ ------------
8,104,237 15,129,104
------------ ------------
------------ ------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 1,291,023 1,489,757
Deferred revenue - 612,295
Short-term portion of long-term debt 1,534,535 522,052
Current liabilities related to discontinued
operations - 764,963
------------ ------------
2,825,558 3,389,067
Deferred cost recoveries - 23,371
Long-term debt - 230,592
Long-term liabilities related to discontinued
operations - 4,373,876
------------ ------------
2,825,558 8,016,906
------------ ------------
------------ ------------
SHAREHOLDERS' EQUITY
Capital stock 73,726,414 70,428,431
Warrants 3,527,425 2,550,880
Contributed surplus 13,764,398 11,802,064
Equity component of convertible debenture,
discontinued operations - 1,427,127
Accumulated other comprehensive loss (54,372) -
Deficit (85,685,186) (79,096,304)
------------ ------------
5,278,679 7,112,198
------------ ------------
8,104,237 15,129,104
------------ ------------
------------ ------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
For the years ended December 31, 2009 2008
(expressed in Canadian dollars, except shares) $ $
-------------------------------------------------------------------------
REVENUE
Licensing option fees 1,161,495 50,110
Licensing fees 307,048 -
Contract research 102,571 -
------------ ------------
1,571,114 50,110
EXPENSES
Research and development 4,672,020 10,901,553
General and administration 3,041,425 4,379,717
Intellectual property costs 941,583 1,526,702
Business development 518,955 672,029
Stock-based compensation 682,791 804,933
Amortization 1,471,361 1,471,161
Cost recoveries (57,805) (1,015,763)
------------ ------------
11,270,330 18,740,332
------------ ------------
Loss before the undernoted (9,699,216) (18,690,222)
------------ ------------
------------ ------------
Interest income 9,427 343,582
Interest expense (210,648) (111,665)
Foreign exchange gain (loss) 50,621 (266,709)
Gain on exchange of shares 2,941,981 -
Gain on sale of shares 415,445 -
------------ ------------
------------ ------------
3,206,826 (34,792)
------------ ------------
Net loss from continuing operations (6,492,390) (18,725,014)
Discontinued operations (96,492) (4,212,127)
------------ ------------
Net loss (6,588,882) (22,937,141)
Deficit - Beginning of the year (79,096,304) (56,159,163)
------------ ------------
Deficit - End of the year (85,685,186) (79,096,304)
------------ ------------
------------ ------------
Loss per share
Basic and diluted from continuing operations (0.19) (0.72)
Basic and diluted from discontinued operations (0.00) (0.16)
Basic and diluted (0.19) (0.88)
------------ ------------
------------ ------------
Weighted average shares outstanding 33,869,094 25,937,446
------------ ------------
------------ ------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
For the years ended December 31, 2009 2008
(expressed in Canadian dollars) $ $
-------------------------------------------------------------------------
Net loss for the year (6,588,882) (22,937,141)
Other comprehensive loss
Unrealized loss on investment (54,372) -
------------ ------------
Comprehensive loss (6,643,254) (22,937,141)
------------ ------------
------------ ------------
CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE LOSS
As at December 31, 2009 2008
(expressed in Canadian dollars) $ $
-------------------------------------------------------------------------
Accumulated other comprehensive income
- beginning of the year - -
Foreign currency translation adjustments
Change in accounting policy 26,534 -
Adjustments during the year (32,365) -
Transferred to net income from discontinued
operations during the year 5,831 -
------------ ------------
Unrealized loss on Investment (54,372) -
------------ ------------
Accumulated other comprehensive income - end
of the year (54,372) -
------------ ------------
------------ ------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2009 2008
(expressed in Canadian dollars) $ $
-------------------------------------------------------------------------
Cash provided by (used in)
Operating activities
Net loss for the year from continuing
operations (6,492,390) (18,725,014)
Add items not affecting cash:
Amortization 1,471,361 1,471,161
Stock-based compensation 682,791 804,933
Shares issued for services 152,985 -
Deferred stock unit payments 109,929 -
Unrealized foreign exchange (gain) loss (60,952) 217,842
Non-cash interest expense 158,237 -
Gain on sale of assets - 16,268
Gain on exchange of shares (2,941,981) -
Gain on sale of shares (415,445) -
------------ ------------
(7,335,465) (16,214,810)
------------ ------------
------------ ------------
Change in non-cash working capital and other
balances related to operations (138,221) 142,396
------------ ------------
Cash used in operating activities (7,473,686) (16,072,414)
------------ ------------
------------ ------------
Financing activities
Issuance of capital stock 3,531,801 -
Share issue costs (303,609) (57,884)
Issuance of warrants 2,454,668 -
Warrant issue costs (333,223) -
Exercise of stock options - 32,261
Proceeds from corporate reorganization 3,701,929 -
Costs from corporate reorganization (443,933) -
Proceeds from long-term debt 1,431,118 159,240
Repayment of long-term debt (767,822) (679,457)
------------ ------------
Cash provided by (used in) financing
activities 9,270,929 (545,840)
------------ ------------
------------ ------------
Investing activities
Proceeds on sale of property and equipment - 5,000
Purchase of Botaneco convertible debenture (19,350) -
Acquisition of property and equipment (17,311) (969,748)
------------ ------------
Cash used in investing activities (36,661) (964,748)
------------ ------------
------------ ------------
Net change in cash from continuing operations 1,760,582 (17,583,002)
Cash flow from discontinued operations
Operating activities (2,081,450) (3,980,760)
Financing activities 951,576 5,209,273
Investing activities (762,956) (269,728)
------------ ------------
Net change in cash from discontinued
operations (1,892,830) 958,785
------------ ------------
Decrease in cash and cash equivalents (132,248) (16,624,217)
Cash and cash equivalents - Beginning of the
year 3,819,796 20,444,013
------------ ------------
------------ ------------
Cash and cash equivalents - End of of the year 3,687,548 3,819,796
------------ ------------
------------ ------------
Cash and cash equivalents - discontinued
operations - 1,892,830
Cash and cash equivalents - from continuing
operations 3,687,548 1,926,966
------------ ------------
------------ ------------
Supplemental Information (continuing
operations)
Cash interest received 13,079 369,505
Cash interest paid 51,816 97,308
Non-cash transactions
Capital items included in accounts payable - 16,532
Share issue costs included in accounts payable 7,276 -
For further information: SemBioSys Genetics Inc., Abby Garfunkel, Investor Relations, Phone: (403) 717-4185, E-mail: [email protected]; The Equicom Group Inc., Ross Marshall, Vice President, Phone: (416) 815-0700 ext. 238, E-mail: [email protected]
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