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SemBioSys announces third quarter 2009 financial and operational results

^{Published on 2009-11-13 04:07:50 - Market Wire}
 

 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. 

 - $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. 

 - $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. 

 - $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. 

 - $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. 

 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. 

 - $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. 

 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 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------