Calgary, Alberta
May 3, 2007
Canadian biotechnology company achieves insulin milestones
and strengthens balance sheet.
SemBioSys Genetics Inc.
(TSX:SBS), a biotechnology company developing insulin and other
metabolic and cardiovascular protein-based pharmaceuticals and a
series of non-pharmaceutical products, today announced its
operational and financial results for the 2007 first quarter
which ended on March 31, 2007.
First Quarter Highlights
- Demonstrated the
functional equivalence of the Company's proprietary
safflower-produced insulin to U.S. pharma grade human
insulin in animal models. The Company also announced in
vitro and in vivo assay results that demonstrate the
Company's safflower-produced insulin is chemically,
structurally and physiologically indistinguishable from U.S.
pharma grade human insulin.
- Confirmed that the Company
is eligible to pursue a Section 505(b)(2) regulatory path
for safflower-produced insulin after meeting with the U.S.
Food and Drug Administration (FDA).
- Harvested over 300 acres
of the Company's proprietary transgenic safflower-produced
ImmunoSphere(TM) Feed Additive in Chile as part of its
counter seasonal commercial scale-up in preparation for
product launch later this year or early in 2008.
- Renegotiated the Company's
docosahexaenoic acid (DHA) collaboration agreement with
Martek Biosciences Corporation (Martek). Under the terms of
the amended agreement, SemBioSys received a license fee of
US$750,000 in January 2007 and was entitled to receive an
additional license fee of up to US$250,000 upon delivery of
seed and the achievement of expression of at least five
percent of DHA in Arabidopsis prior to April 19th, 2007.
Subsequent to the end of the quarter, the Company reported
to Martek the existing proof-of-concept results from its
DHA-rich safflower oil program. To date, SemBioSys has not
achieved the five percent DHA accumulation threshold in
Arabidopsis, although progress in this direction has been
achieved. SemBioSys is, therefore, no longer eligible for
the additional (US$250,000) license fee. However, SemBioSys
is continuing to analyze the remaining DHA Arabidopsis lines
from the development program to determine its ability to
establish proof-of-concept. These results will be reported
to Martek shortly.
- Completed an underwritten
public offering, concurrent with a secondary offering, for
aggregate gross proceeds of $24,150,000. The total gross
proceeds to the Company from the treasury offering,
including the over-allotment option, were $15,904,488. The
secondary offering involved certain shareholders of the
Company that sold 2,748,504 previously issued common shares
of the Company representing $8,245,512.
"With our two critical insulin
announcements in the first quarter, we continue to advance the
development of our safflower-produced insulin program toward the
initiation of a Phase II clinical trial which we expect to
commence
in early 2008 with pharmacokinetics and pharmacodynamics as the
primary endpoints," said Andrew Baum, President and CEO of
SemBioSys Genetics Inc. "In parallel to our insulin development,
we are also advancing our Apo AI program and our
non-pharmaceutical pipeline. Specifically, during the next few
months we intend to actively pursue business development
alternatives to maximize the value of the DermaSphere(R)
Oleosome Technology to the Company and execute pond trials with
our ImmunoSphere(TM) Shrimp Feed Additive product."
Financials
Total revenues for the three-month
period ended March 31, 2007 were $542,788 compared with $100,086
for the corresponding period in 2006. Total revenues for the
three-month period ended March 31, 2007 consisted of $437,012 in
license fees, compared with $nil during the same period last
year and $105,776 in contract research compared with $100,086
for the corresponding period last year. The change in license
fee revenue relates entirely to the partial recognition of the
upfront license fee payment received from Martek as part of the
amended collaboration agreement which included a US$750,000
license fee payment that was received upon signing of the
contract in January 2007.
Total expenditures for the
three-month period ended March 31, 2007 were $3,943,408,
compared with $2,748,954 for the corresponding period last year.
Research and development expenses for the three-month period
ended March 31, 2007 were $1,905,422, compared with $1,107,526
for the three-month period ended March 31, 2006. The difference
is primarily due to increased personnel and the related support
costs in all areas of research and development with an expanded
focus on insulin. This included an enhanced quality control and
assurance program and further development of a stronger
preclinical and clinical team.
General and administrative
expenses for the three-month period ended March 31, 2007 were
$1,023,711, compared with $972,260 for the corresponding period
last year.
Intellectual property costs for
the three-month period ended March 31, 2007 were $528,249
compared with $263,037 for the three-month period ended March
31, 2006. The difference is mainly attributable to the timing
of, and an increase in, patent costs and as a result of the
final remaining US$100,000 payment to re-acquire rights to the
DermaSphere(R) Oleosome Technology from Lonza Inc., which became
due during the first quarter of 2007.
Business development costs for the
three-month period ended March 31, 2007 were $148,005 compared
with $184,805 for the corresponding period last year.
Net loss for the three-month
period ended March 31, 2007 was $3,228,411 or ($0.17) per share,
compared to a net loss of $2,504,339 or ($0.15) per share for
the three-month period ended March 31, 2006. As at March 31,
2007 the Company had cash and cash equivalents totaling
$28,805,937 compared to $16,328,459 at December 31, 2006.
Management believes the existing capital resources are adequate
to fund its current plans for research and development
activities into early 2009. Total long-term debt at March 31,
2007 was $1,877,377 compared to $2,084,103 at December 31, 2006.
The increase in cash resulted from an underwritten public
offering, including the exercise of the over-allotment option,
of 5,301,496 common shares at a price of $3.00 per share, for
total gross proceeds to SemBioSys of $15,904,488.
As at March 31, 2007 the Company
had 22,083,886 common shares outstanding, 3,102,796 warrants,
and 1,436,494 options.
Outlook
The Company has completed the
major scientific milestones necessary to proceed into
first-in-man clinical trials of safflower-produced insulin in
early 2008. Additional insulin milestone events expected in 2007
include:
- Complete the scale-up
and preclinical development of safflower-produced
insulin
- Complete the
technology transfer and production of clinical grade
material for early stage human trials
- Initiate business
development activities toward an insulin partnership
- Submit insulin IND to
the FDA and prepare for Phase II trial
The Company is also advancing the
development of its other pharmaceutical and non-pharmaceutical
products. The 2007 milestone events expected from these programs
include:
- Announce results
of animal trials from Arabidopsis-produced Apo AI
- Achieve commercial
levels of Apo AI expression in safflower
- Increase
production capacity of personal care topical oilbody
products and establish distribution channels for
commercialization
- Initiate and
complete pond trials for ImmunoSphere(TM)
- Complete
processing of harvested ImmunoSphere(TM) product
- Initiate a new
pharmaceutical product development program
Additional information about the
Company, including the MD&A and financial results may be found
on SEDAR at www.sedar.com.
Full report:
www.investorlook.com/adminv2/downloads/119/05.03.07%20SBS%20Q1%20earnings%20FINAL.pdf
Calgary, Alberta-based SemBioSys Genetics Inc. is a
biotechnology company developing insulin and other protein-based
pharmaceuticals for metabolic and cardiovascular diseases. The
Company's lead candidate is recombinant human insulin produced
in the plant host safflower, to serve the rapidly expanding
global diabetes market and to supply insulin for inhalation and
other alternative insulin delivery technologies. The Company's
other protein-based pharmaceutical candidate is a cardiovascular
drug called Apo AI. SemBioSys is also developing a series of
non-pharmaceutical products addressing animal and aquaculture
health, nutritional oils and human topical markets. |
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