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ConjuChem Announces Fiscal 2009 Second Quarter Financial Results

^{Published on 2009-06-11 14:08:39, Last Modified on 2009-06-11 14:12:06 - Market Wire}
 

 MONTREAL, June 11 /CNW/ - ConjuChem Biotechnologies (TSX:CJB) today announced financial results for the second quarter of fiscal 2009, ended April 30, 2009. "We recently presented results at American Diabetes Association's 69th Annual Scientific Sessions from two randomized Phase II trials of PC-DAC(TM):Exendin-4 as well as preclinical data for PC-Insulin, generating significant scientific interest in our two diabetes drugs and our proprietary approach to overcoming the limitations of short-lived therapeutic peptides," said Mark Perrin, President and CEO of ConjuChem. "This conference was also an important venue for advancing licensing discussions for our products. Our current highest priority is to secure a partner who will support our efforts to bring PC-DAC(TM):Exendin-4 to market." Financial Results Net loss for the quarter ended April 30, 2009 amounted to $6.1 million compared to $7.9 million for the quarter ended April 30, 2008. Net loss for the six-month period ended April 30, 2009 amounted to $11.9 million compared to $19.8 million for the six-month period ended April 30, 2008. The decrease in the net loss is mainly attributable to a decrease in the accretion in the carrying value of the convertible senior unsecured notes and interest due to the early redemption of the convertible senior unsecured notes during the first six-month period of the 2008 fiscal year, a decrease in R&D expenses and by the reversal of tax-related reserves following the results of tax audits in the first six-month period of the 2009 fiscal year. The Company recorded interest income on cash and investments that amounted to $32,276 for the quarter ended April 30, 2009, compared to $375,926 for the quarter ended April 30, 2008. The Company recorded interest income on cash and investments that amounted to $138,517 for the six-month period ended April 30, 2009, compared to $948,581 for the six-month period ended April 30, 2008. The decreases in interest income were a result of a reduced investment portfolio base combined with a general decrease in market rates. Gross research and development expenses amounted to $2.9 million for the quarter ended April 30, 2009, compared to $5.4 million for the quarter ended April 30, 2008. Gross research and development expenses amounted to $7.1 million for the six-month period ended April 30, 2009, compared to $9.1 million for the six-month period ended April 30, 2008. The decreases are due to the completion of phase II clinical trials in November 2008 for PC-DAC(TM):Exendin-4. General and administrative costs amounted to $1.5 million for the quarter ended April 30, 2009, compared with $1.2 million for the quarter ended April 30, 2008. General and administrative costs amounted to $2.5 million for the six-month period ended April 30, 2009, compared with $2.8 million for the six-month period ended April 30, 2008. The decrease in general and administrative expenses is largely attributable to fees related to the early redemption of the convertible senior unsecured notes in the six-month period ended April 30, 2008. The increase in general and administrative expenses in the quarter ended April 30, 2009 is largely attributable to professional fees and to severance costs related to a reduction in headcount. During the quarter ended April 30, 2009, the Company completed a consolidation of its operations, focusing its resources on securing a partner for PC-DAC(TM):Exendin-4 and the rapid development of PC-Insulin, a long-acting basal insulin in preclinical testing. The restructuring included a workforce reduction of approximately 50% of the Company's personnel. As at April 30, 2009, the Company had cash and cash equivalents and investments totaling $8.7 million compared to $21.1 million as at October 31, 2008. As at April 30, 2009, working capital amounted to $3.1 million, compared to $12.0 million as at October 31, 2008. ConjuChem believes that its current cash and cash equivalents, marketable securities and interest income will be sufficient to carry out current research and development plans and operations into the fourth quarter of 2009. About ConjuChem ConjuChem, a developer of next generation medicines from therapeutic peptides, creates long-acting compounds based on its proprietary bioconjugation platform technology. The Company has two major development programs: PC-DAC(TM):Exendin-4, a GLP-1 receptor agonist in Phase II clinical development and PC-Insulin, a long-acting basal insulin in preclinical development. 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, 2009 2008 $ $ ---------------------------- ASSETS Current Cash and cash equivalents 2,689,621 2,187,423 Investments 5,972,581 18,934,737 Accounts receivable 80,104 160,644 Investment tax credits receivable 1,022,000 542,000 Prepaid expenses 146,236 229,006 ---------------------------- Total current assets 9,910,542 22,053,810 Property, plant and equipment 732,514 841,685 Intangible assets 8,331 11,108 ---------------------------- 10,651,387 22,906,603 ---------------------------- ---------------------------- LIABILITIES AND SHAREHOLDERS' DEFICIENCY Current liabilities Accounts payable and accrued liabilities 6,858,482 10,080,463 ---------------------------- Total current liabilities 6,858,482 10,080,463 Convertible unsecured subordinated debentures 15,018,184 13,634,906 ---------------------------- 21,876,666 23,715,369 ---------------------------- Shareholders' deficiency Capital stock 266,858,635 266,823,735 Warrants 10,817,394 10,817,394 Equity portion of convertible unsecured subordinated debentures 5,184,867 5,193,793 Contributed surplus 50,211,587 48,818,826 Deficit (344,298,290) (332,390,857) Accumulated other comprehensive income (loss) 528 (71,657) ---------------------------- Total shareholders' deficiency (11,225,279) (808,766) ---------------------------- 10,651,387 22,906,603 ---------------------------- ---------------------------- ConjuChem Biotechnologies Inc. UNAUDITED INTERIM STATEMENTS OF DEFICIT Three-months ended Six-months ended April 30, April 30, April 30, April 30, 2009 2008 2009 2008 $ $ $ $ ------------------------------------------------------- Deficit, beginning of period (338,219,066) (304,814,216) (332,390,857) (292,973,699) Net loss for the period (6,079,224) (7,925,350) (11,907,433) (19,765,867) ------------------------------------------------------- Deficit, end of period (344,298,290) (312,739,566) (344,298,290) (312,739,566) ------------------------------------------------------- ------------------------------------------------------- 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, 2009 2008 2009 2008 $ $ $ $ ------------------------------------------------------- REVENUES Contract revenues 15,443 24,557 15,443 51,904 Interest income 32,276 375,926 138,517 948,581 ------------------------------------------------------- 47,719 400,483 153,960 1,000,485 ------------------------------------------------------- EXPENSES Research and development 2,937,049 5,422,425 7,064,280 9,080,282 Investment tax credits (250,000) (100,000) (1,330,000) (200,000) ------------------------------------------------------- Net research and development expenses 2,687,049 5,322,425 5,734,280 8,880,282 General and administrative expenses 1,458,416 1,211,310 2,511,160 2,797,951 Amortization of property, plant and equipment 40,572 54,979 84,686 110,100 Amortization of intangible assets 1,388 2,443 2,777 4,924 Stock-based compensation 791,056 657,959 1,392,761 1,372,838 Financial charges 5,545 6,101 8,897 10,307 Foreign exchange loss 26,829 12,324 117,292 191,275 Accretion in carrying value of convertible senior unsecured notes and interest - - - 5,504,427 Accretion in carrying value of convertible unsecured subordinated debentures and interest 1,116,088 1,058,292 2,209,540 1,626,809 Loss on redemption of long-term investments - - - 267,439 ------------------------------------------------------- 6,126,943 8,325,833 12,061,393 20,766,352 ------------------------------------------------------- Net loss (6,079,224) (7,925,350) (11,907,433) (19,765,867) OTHER COMPREHENSIVE INCOME Unrealized gain/ (loss) on investments (63) 405 72,185 2,732 ------------------------------------------------------- Comprehensive loss (6,079,287) (7,924,945) (11,835,248) (19,763,135) ------------------------------------------------------- ------------------------------------------------------- Basic and diluted loss per share (0.02) (0.03) (0.05) (0.08) ------------------------------------------------------- ------------------------------------------------------- Weighted average number of common shares outstanding during the period 250,456,997 240,213,668 250,444,504 240,213,668 ------------------------------------------------------- ------------------------------------------------------- ConjuChem Biotechnologies Inc. UNAUDITED INTERIM STATEMENTS OF CASH FLOWS Three-months ended Six-months ended April 30, April 30, April 30, April 30, 2009 2008 2009 2008 $ $ $ $ ------------------------------------------------------- OPERATING ACTIVITIES Net loss (6,079,224) (7,925,350) (11,907,433) (19,765,867) Items not affecting cash: Amortization of property, plant and equipment 40,572 54,979 84,686 110,100 Amortization of intangible assets 1,388 2,443 2,777 4,924 Amortization of premium on long-term investments - - - (8,436) Stock-based compensation 791,056 657,959 1,392,761 1,372,838 Accretion in carrying value of convertible senior unsecured notes and interest - - - 5,504,427 Accretion in carrying value of convertible unsecured subordinated debentures 719,752 389,639 1,409,252 958,156 Gain on proceeds for sales of property, plant and equipment (5,253) - (5,253) - Loss on redemption of long-term investments - - - 267,439 ------------------------------------------------------- (4,531,709) (6,820,330) (9,023,210) (11,556,419) Net changes in non-cash working capital balances relating to operations (390,402) 2,102,413 (3,538,671) 526,257 ------------------------------------------------------- Cash flows relating to operating activities (4,922,111) (4,717,917) (12,561,881) (11,030,162) ------------------------------------------------------- INVESTING ACTIVITIES Acquisition of investments (4,236,904) (8,784,180) (9,043,104) (21,694,881) Proceeds on maturities of investments 7,331,130 11,115,581 22,077,445 21,515,408 Acquisition long-term investments - - - (167,037) Proceeds on redemption of long-term investments - - - 59,644,132 Acquisition of property, plant and equipment (958) - (11,652) (9,772) Proceeds for sales of property, plant and equipment 41,390 - 41,390 - Acquisition of intangible assets - - - (1,179) ------------------------------------------------------- Cash flows relating to investing activities 3,134,658 2,331,401 13,064,079 59,286,671 ------------------------------------------------------- FINANCING ACTIVITIES Repayment of convertible senior unsecured notes - - - (58,006,914) Issuance of convertible unsecured subordinated debentures - - - 22,000,000 Issuance costs paid in cash - - - (1,764,414) ------------------------------------------------------- Cash flows relating to financing activities - - - (37,771,328) ------------------------------------------------------- Net change in cash and cash equivalents during the period (1,787,453) (2,386,516) 502,198 10,485,181 Cash and cash equivalents, beginning of period 4,477,074 14,107,401 2,187,423 1,235,704 ------------------------------------------------------- Cash and cash equivalents, end of period 2,689,621 11,720,885 2,689,621 11,720,885 ------------------------------------------------------- ------------------------------------------------------- Supplemental cash flow information: Interest paid 52 - 814,661 13,006,914 ------------------------------------------------------- 

For further information: Mark Perrin, President and CEO, ConjuChem Biotechnologies Inc., (514) 844-5558 ext 311, [ perrin@conjuchem.com ]; James Smith, Investor Relations, (416) 815-0700 ext. 229, [ JSmith@equicomgroup.com ]