Canadian biotechnology company demonstrates significant progress on product development

SemBioSys Genetics Inc. (TSX:SBS), a biotechnology company developing a broad pipeline of protein-based pharmaceutical product candidates and non-pharmaceutical products, today announced its 2005 third quarter operational and financial results.

"SemBioSys has already met a number of significant non-pharmaceutical product milestones this year in collaboration with our partners Lonza and Dow AgroSciences. As we approach the important insulin and Apo AI milestones relating to the commercial level of expression in safflower, we intend to demonstrate the same disciplined execution on these milestones as we have with our non-pharmaceutical product milestones," said Andrew Baum, President and CEO of SemBioSys Genetics Inc. "Achievement of our non-pharmaceutical product milestones allows us to generate short and intermediate term income and build our product development infrastructure as we advance our pharmaceutical product candidates through the clinic."

Operational Highlights

• Announced successful completion of animal vaccine feasibility program with Dow AgroSciences LLC.

• Expanded the in-house plant growth facility to provide additional capacity for plant research and development operations.

• Demonstrated progress through increased levels of insulin and Apo AI expression in Arabidopsis.

Also this quarter the FDA advisory committee on Endocrinologic and Metabolic Drugs recommended approval of Exubera(R), the first inhaled insulin product submitted to the FDA. Approval and commercialization of alternate insulin delivery technologies and increased incidence of diabetes are the two leading factors that will drive future demand of insulin production.

Financial Highlights

Total revenues for the third quarter were $682,678 compared with $455,760 for the same period last year. Revenues were generated from licensing fees, which were $304,331 for the third quarter compared with $124,052 for the same period last year, and contract research, which was $378,347 for the third quarter compared with $331,708 for the same period last year. Total revenues for the nine-month  period ended September 30, 2005 were $1,731,092 compared with $952,292 for the corresponding period last year.

Total expenditures for the three-month and nine-month periods ended September 30, 2005 were $2,616,685 and $6,842,304 respectively, compared with $1,758,284 and $5,218,818 for the corresponding periods last year.

Research and development expenses for the three-month and nine-month periods ended September 30, 2005 were $1,186,560 and $3,266,128 respectively, compared with $1,001,989 and $2,829,115 for the corresponding periods last year.

General and administrative expenses for the three-month and nine-month periods ended September 30, 2005 were $867,271 and $2,565,659 respectively, compared with $625,102 and $2,093,093 for the corresponding periods last year.

Net loss for the 2005 third quarter was $1,845,181 or ($0.15) per share, compared to a net loss of $1,288,652 or ($0.24) per share for the same period last year. Net loss for the nine-month period ended September 30, 2005 was $4,799,115 or ($0.38) per share compared with $4,277,476 or ($0.79) per share for the same nine-month period last year.

As at September 30, 2005 the Company had cash and cash equivalents totaling $14,291,626, compared with $18,836,396 cash and cash equivalents at December 31, 2004.

These unaudited financial statements are prepared in accordance with Canadian generally accepted accounting principles.

Outlook

SemBioSys' current pharmaceutical product candidate priorities are to achieve commercial levels of expression of insulin and Apo AI in safflower.

Its non-pharmaceutical product priorities include the continued development of its ImmunoSphere(TM) Feed Additive and DHA rich safflower oil programs. The upcoming milestone events include:

       -  First royalties from sales of DermaSphere(TM);
       -  Apo AI animal data results;
       -  Final delivery of GLA pre-commercial safflower lines to Arcadia Biosciences;
       -  Achievement of commercial levels of insulin expression in safflower; and
       -  Achievement of commercial levels of Apo AI expression in safflower.

Calgary, Alberta-based SemBioSys Genetics Inc. is a biotechnology company focused on the development, commercialization and production of protein-based pharmaceuticals and non-pharmaceutical products based on its plant genetic engineering skills and proprietary oilbody-oleosin technology platform – the  Stratosome(TM) Biologics System. Its two lead pharmaceutical product candidates are insulin and a developmental cardiovascular drug called Apo AI. It also has a series of non-pharmaceutical products addressing animal health, industrial and human topical markets. SemBioSys currently has five major funded partnership agreements with Syngenta Participations AG, Martek Biosciences Corporation, Lonza Inc., Dow AgroSciences LLC and Arcadia Biosciences, Inc.