SemBioSys announces third quarter 2009 financial and operational results
"We entered into an agreement with Cathedral Energy Services Income Trust, subsequent to the end of the quarter, which will provide us with gross proceeds of approximately
Highlights
Corporate
- Botaneco entered into an agreement with Advitech Inc., whereby
Advitech will acquire all of the issued and outstanding shares of
Botaneco Specialty Ingredients Inc. (Botaneco). SemBioSys will hold
an initial 9.48 percent shareholding in Advitech, in return for the
19.35 percent share of Botaneco it held prior to the agreement. A
subsequent $2.5 million financing for the combined entity is also
anticipated to close in the fourth quarter.
- SemBioSys entered into an exclusive commercial license agreement with
Instituto de Agrobiotecnologia Rosario S.A. (INDEAR) whereby, in
exchange for an undisclosed upfront technology access fee, INDEAR was
granted an exclusive royalty-bearing license to SemBioSys' technology
to extract chymosin from modified safflower seeds and sell the protein
for use in the manufacture of cheese in Argentina. Under the terms of
the agreement, SemBioSys granted INDEAR a time-limited right of first
refusal to expand the territory beyond Argentina.
- Reduced the Company's burn rate, net of recoveries, to a level of
approximately $500,000 per month while still ensuring the appropriate
maintenance and development capabilities for its core programs.
Apo AI(Milano)
- Completed a pre-IND (Investigational New Drug) meeting during which
the U.S. Food and Drug Administration (FDA) confirmed the development
plan presented by SemBioSys to file an IND application and addressed
the proposed design of clinical trials for Apo AI(Milano).
- Harvested more than 10 tonnes of safflower in Chile and initiated
bench to pilot scale manufacturing scale-up.
- Harvested a second 10 tonnes of safflower in the U.S. providing the
Company a surplus of Apo AI(Milano) safflower seed for the current
scale-up process, subsequent to the end of the quarter.
- Received additional interest from potential partners and continue to
advance partnering discussions.
Insulin Program
- Continued the development and analysis of next generation seed lines
designed to meet targeted economics, simplify the manufacturing
process and ensure the commercial viability of plant-produced insulin
program.
- Received further partnership interest as a result of the completion
of the first clinical trial earlier in the year.
Outlook
The Company anticipates a number of milestone events in the coming months
including:
- Closing of a plan of arrangement with Cathedral Energy Services
Income Trust and Cathedral Energy Services Ltd, providing gross
proceeds of approximately $3.3 million in new non-dilutive capital to
SemBioSys.
- Scale-up of pilot plant operations for the extraction and purification
of Apo AI(Milano) in gram quantities.
- Achievement of commercial economic targets for next generation insulin
seed lines.
Financials
SemBioSys has historically operated in two reportable segments: (i) Biopharmaceuticals and Bioproducts focused on the Company's lead pharmaceutical candidates, recombinant human insulin and Apo AI(
Net loss/income for the three-month period ended
- $2,472,008 or $0.07 per share from continuing operations compared to
$4,860,627 or $0.19 per share;
- $2,544,986 or $0.07 per share in net income from discontinued
operations compared to $883,739 or $0.03 per share in net loss from
discontinued operations; and
- $72,978 or $0.002 per share in total net income compared to $5,744,366
or $0.22 per share in total net loss.
Net loss for the nine-month period ended
- $7,545,095 or $0.24 per share from continuing operations compared to
$14,340,189 or $0.55 per share;
- $96,492 or $0.003 per share in net loss from discontinued operations
compared to $2,836,088 or $0.11 per share; and
- $7,641,587 or $0.24 per share in total net loss compared to
$17,176,277 or $0.66 per share.
Revenue for the three-month period ended
- $24,540 in revenue from continuing operations compared to $nil;
- $41,670 in revenue from discontinued operations compared to $228,201;
and
- $66,210 in total revenue compared to $228,201.
Revenue for the nine-month period ended
- $1,476,234 in revenue from continuing operations compared to $50,110;
- $378,970 in revenue from discontinued operations compared to $450,325;
and
- $1,855,204 in total revenue compared to $500,435.
The increase in the nine-month period for continuing operations is due mainly to the recognition of licensing option fees in the first quarter of 2009 from an option agreement entered into with MannKind Corporation in the fourth quarter of 2008 and licensing fees recognized in the second quarter of 2009 related to the Company's GLA program.
Expenditures (net of cost recoveries in each case) for the three-month
period ended September 30, 2009 compared to the same period last year:
- $2,461,085 in expenditures from continuing operations compared to
$4,847,213;
- $376,645 in expenditures from discontinued operations compared to
$955,122; and
- $2,837,730 in total expenses net of cost recoveries compared to
$5,802,335.
Expenditures (net of cost recoveries in each case) for the nine-month period ended
- $8,955,871 in expenditures from continuing operations compared to
$14,510,694;
- $2,774,345 in expenditures from discontinued operations compared to
$3,091,510; and
- $11,730,216 in total expenses compared to $17,602,204.
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 for the nine-month period ended
As of
As at
About SemBioSys
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(
SemBioSys Genetics Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
September 30, December 31,
2009 2008
$ $
------------ ------------
ASSETS
Current assets
Cash and cash equivalents 1,737,150 1,926,966
Accounts receivable 286,504 723,259
GST receivable 34,808 213,981
Prepaid expenses, deposits and other 319,715 406,054
Current assets related to
discontinued operations - 3,849,220
------------ ------------
2,378,177 7,119,480
Property and equipment 4,049,991 5,154,044
Long-term assets related to
discontinued operations - 2,855,580
------------ ------------
6,428,168 15,129,104
------------ ------------
------------ ------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 1,053,109 1,489,757
Deferred revenue - 612,295
Short-term portion of long-term debt 255,711 522,052
Current liabilities related to
discontinued operations - 764,963
------------ ------------
1,308,820 3,389,067
Deferred cost recoveries 702 23,371
Long-term debt 1,127,276 230,592
Long-term liabilities related to
discontinued operations - 4,373,876
------------ ------------
2,436,798 8,016,906
------------ ------------
------------ ------------
SHAREHOLDERS' EQUITY
Capital stock 73,726,414 70,428,431
Warrants 4,561,399 2,550,880
Contributed surplus 12,441,448 11,802,064
Equity component of convertible debenture,
discontinued operations - 1,427,127
Deficit (86,737,891) (79,096,304)
------------ ------------
3,991,370 7,112,198
------------ ------------
6,428,168 15,129,104
------------ ------------
------------ ------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF INCOME (LOSS), COMPREHENSIVE INCOME (LOSS)
AND DEFICIT
(Unaudited)
(expressed in Canadian dollars, except shares)
-------------------------------------------------------------------------
Three month period ended Nine month period ended
September 30, September 30,
2009 2008 2009 2008
$ $ $ $
------------ ------------ ------------ ------------
REVENUE
Licensing option fees - - 1,161,495 50,110
Licensing fees - - 252,048 -
Contract research 24,540 - 62,691 -
------------ ------------ ------------ ------------
24,540 - 1,476,234 50,110
EXPENSES
Research and
development 1,012,262 2,547,676 3,995,994 8,329,137
General and
administration 638,071 1,110,216 2,258,801 3,386,379
Intellectual property
costs 216,359 373,130 763,097 1,180,434
Business development 95,516 175,945 374,708 491,097
Stock-based compensation 147,045 289,919 503,744 625,947
Amortization 364,332 375,327 1,104,832 1,093,864
Cost recoveries (12,500) (25,000) (45,305) (596,164)
------------ ------------ ------------ ------------
2,461,085 4,847,213 8,955,871 14,510,694
------------ ------------ ------------ ------------
Loss before the
undernoted (2,436,545) (4,847,213) (7,479,637) (14,460,584)
------------ ------------ ------------ ------------
Interest income 131 57,468 7,629 323,252
Interest expense (69,481) (26,276) (117,792) (94,284)
Foreign exchange
gain (loss) 33,887 (44,606) 44,705 (108,573)
------------ ------------ ------------ ------------
(35,463) (13,414) (65,458) 120,395
------------ ------------ ------------ ------------
Net loss from
continuing
operations (2,472,008) (4,860,627) (7,545,095) (14,340,189)
Discontinued
operations 2,544,986 (883,739) (96,492) (2,836,088)
------------ ------------ ------------ ------------
Net income (loss)
and comprehensive
income (loss) for
the period 72,978 (5,744,366) (7,641,587) (17,176,277)
Deficit - Beginning
of period (86,810,869) (67,591,074) (79,096,304) (56,159,163)
------------ ------------ ------------ ------------
Deficit - End of
period (86,737,891) (73,335,440) (86,737,891) (73,335,440)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings (loss)
per share
Basic and diluted
from continuing
operations (0.07) (0.19) (0.24) (0.55)
Basic and diluted
from discontinued
operations 0.07 (0.03) (0.00) (0.11)
Basic and diluted 0.00 (0.22) (0.24) (0.66)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average
shares outstanding 37,558,286 25,938,205 31,582,743 25,937,162
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
ACCUMULATED OTHER COMPREHENSIVE LOSS
(Unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
Nine month period
ended
September 30,
2009
$
-------------
Accumulated other comprehensive income -
beginning of period -
Change in accounting policy - foreign currency
translation adjustment 26,534
Foreign currency translation adjustment (32,365)
Foreign currency translation adjustments
transferred to net income from discontinued
operations during the year 5,831
-------------
Accumulated other comprehensive income - end of period -
-------------
-------------
SemBioSys Genetics Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(expressed in Canadian dollars)
-------------------------------------------------------------------------
Three month period ended Nine month period ended
September 30, September 30,
2009 2008 2009 2008
$ $ $ $
------------ ------------ ------------ ------------
Cash provided by
(used in)
Operating activities
Net loss for the period
from continuing
operations (2,472,008) (4,860,627) (7,545,095) (14,340,189)
Add items not
affecting cash:
Amortization 364,332 375,327 1,104,832 1,093,864
Stock-based
compensation 147,045 289,919 503,744 625,947
Stock-based payments - - 152,985 -
Unrealized foreign
exchange (gain) loss (21,123) 50,316 (35,801) 128,886
Non-cash interest
expense 56,720 72,193 -
------------ ------------ ------------ ------------
(1,925,034) (4,145,065) (5,747,142) (12,491,492)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Change in non-cash
working capital and
other balances
related to operations (347,544) (538,992) (385,059) (35,595)
------------ ------------ ------------ ------------
Cash used in operating
activities (2,272,578) (4,684,057) (6,132,201) (12,527,087)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Financing activities
Issuance of capital
stock 1,779,801 - 3,531,801 -
Share issue costs (237,427) - (298,854) (57,884)
Issuance of warrants 2,373,068 - 2,454,668 -
Warrant issue costs (316,570) - (326,883) -
Exercise of stock
options - 511 - 32,261
Proceeds from
long-term debt 81,118 24,340 1,031,118 159,240
Repayment of
long-term debt (162,501) (172,092) (432,154) (482,676)
------------ ------------ ------------ ------------
Cash provided by
(used in) financing
activities 3,517,489 (147,241) 5,959,696 (349,059)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Investing activities
Advances to subsidiary - - - (1,307,000)
Repayments from
subsidiary - - - 500,000
Acquisition of property
and equipment - (63,627) (17,311) (912,838)
------------ ------------ ------------ ------------
Cash used in investing
activities - (63,627) (17,311) (1,719,838)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net change in cash
from continuing
operations 1,244,911 (4,894,925) (189,816) (14,595,984)
Cash flow from
discontinued
operations
Operating activities (217,383) (304,733) (2,081,450) (2,078,325)
Financing activities 506,232 39,741 951,576 4,539,741
Investing activities (647,390) (95,289) (762,956) 537,272
------------ ------------ ------------ ------------
Net change in cash
from discontinued
operations (358,541) (360,281) (1,892,830) 2,998,688
------------ ------------ ------------ ------------
Increase (decrease)
in cash and cash
equivalents 886,370 (5,255,206) (2,082,646) (11,597,296)
Cash and cash
equivalents -
Beginning of period 850,780 14,101,923 3,819,796 20,444,013
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Cash and cash
equivalents - End
of period 1,737,150 8,846,717 1,737,150 8,846,717
------------ ------------ ------------ ------------
Cash and cash
equivalents -
discontinued
operations - 3,072,071 - 3,072,071
Cash and cash
equivalents - from
continuing
operations 1,737,150 5,774,646 1,737,150 5,774,646
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Supplemental Information
Cash interest received 48 66,546 11,854 255,815
Cash interest paid 12,661 26,234 45,003 79,926
Non-cash transactions
Share issue costs
included in
accounts payable 18,370 - 18,370 -
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
For further information: SemBioSys Genetics Inc., Abby Garfunkel, Investor Relations, Phone: (403) 717-4185, E-mail: [email protected]; The Trout Group, Christine Labaree, Managing Director, Phone: (617) 583-1307, 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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