- Canadian biotechnology company achieves insulin milestones and strengthens balance sheet -
CALGARY, May 3 /PRNewswire-FirstCall/ - 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® 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® 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.
About SemBioSys Genetics Inc. (www.sembiosys.com)
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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