Calgary, Canada
March 15, 2007
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 fiscal year which ended on December
31, 2006.
2006 Highlights
Pharmaceutical Products
- Commercial viability
achieved by exceeding the Company's commercial target levels
of human insulin (insulin) accumulation in safflower by 20%
with 1.2 percent of total seed protein.
- Functional equivalence
results demonstrated the Company's proprietary
safflower-produced insulin is functionally equivalent to
U.S. pharma grade human insulin in animal models, subsequent
to the end of the fiscal year. 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.
- Regulatory path confirmed
as 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), subsequent
to the end of the fiscal year.
- Preclinical and clinical
material processing secured through a Technology Transfer
and Manufacturing Agreement with Cangene Corporation to
prepare batches of the Company's safflower-produced insulin
in preparation for the preclinical and early stage clinical
development.
- Increased levels of Apo AI
expression in Arabidopsis, the Company's model plant system,
and continued development progress in safflower, the
commercial plant system.
Non-Pharmaceutical Products
- Continued the
commercial scale-up of the Company's proprietary
transgenic safflower-produced ImmunoSphere™ Feed
Additive in the U.S. and Chile in preparation for
product launch expected in late
2007 or early 2008.
- Announced the
completion of key milestones in its gamma linolenic acid
(GLA)-rich safflower oil project with Arcadia
Biosciences, Inc. with the delivery of safflower seeds
from plant lines containing GLA transformed utilizing
Arcadia's proprietary genes.
- Announced an agreement
to acquire technology assets and in-license intellectual
property from Syngenta Crop Protection AG related to the
manufacture of biopharmaceuticals in safflower, which
allows SemBioSys to further increase its efficiency in
the development of transgenic safflower.
- Announced the Company
will continue to manufacture and supply DermaSphere(R)
to its customers in the personal care market after
reaching an agreement to conclude the distribution
relationship with Lonza Inc.
- Amended the
collaboration agreement with Martek Biosciences
Corporation, subsequent to the end of the fiscal year.
SemBioSys has received a one-time license fee payment in
relation to the amended agreement and agreed to a
potential additional license fee and royalty payments
from Martek, which in return is entitled to select an
alternative seed oil production system to meet its
future docosahexaenoic acid (DHA) supply.
"Over the course of 2006 and into
2007 we have delivered on four critical scientific, operational
and regulatory milestones within our insulin program. In our
view the insulin expression and the insulin equivalence results
represent an important achievement and position us to address a
large and growing market for insulin. While other projects have
produced pharmaceutical proteins in plant systems, no one, to
our knowledge, has been able to develop plant-produced insulin
at commercially viable levels," said Andrew Baum, President and
CEO of SemBioSys Genetics Inc. "We believe that with these
scientific results in hand and the outcome of our meeting with
the FDA that clarified the regulatory path for our
plant-produced insulin, the risks associated with our insulin
program have decreased significantly. Our team is now scaling-up
our insulin production and completing the preclinical work
necessary to file an Investigational New Drug Application (IND)
later this year. We intend to initiate a Phase II trial for our
safflower-produced insulin in late 2007 or early 2008 with
pharmacokinetics and pharmacodynamics as the primary endpoints."
Financials
Total revenue for the fiscal year ended December 31, 2006 was
$523,258 compared to $2,459,202 for the corresponding period in
2005. The $523,258 of revenue for the fiscal year period ended
December 31, 2006 consisted entirely of contract research
revenue compared with contract research revenue of $1,696,171 in
2005. The difference in contract research is a result of the
completion of collaboration agreements with Arcadia
Biosciences Inc. and Dow AgroSciences LLC in late 2006, such
that the contract research revenue from the 2006 fiscal year
relates solely to the ongoing collaboration agreement with
Martek Biosciences Corporation. In 2006 there were no license
fees earned, as a result of the agreements with Lonza Inc. and
Arcadia moving from a research and development stage to a
commercialization stage, compared with license fees of $763,031
generated during the 2005 fiscal year.
Total expenditures for the year
ended December 31, 2006 were $15,082,560 compared with
$9,734,220 for the year ended December 31, 2005. Research and
development expenses for the fiscal year ended December 31, 2006
were $5,480,972, an increase of $1,060,086 from $4,420,886 for
the 2005 fiscal year. This difference is primarily from
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 year ended December 31, 2006 were $4,013,653
compared with $3,516,871 for the 2005 fiscal year. The
difference is due mainly to the expansion of the Company's
indoor plant growth facilities resulting in increased operating
costs such as utilities. Increases also resulted from increased
staff costs, including additional support costs. Intellectual
property costs for the year ended December 31, 2006 were
$3,467,045 compared with $1,586,788 for the year ended December
31, 2005. The difference is primarily due to the $1,516,906
non-cash expense in the second quarter of 2006 for the
acquisition of intellectual property from Syngenta Crop
Protection AG in exchange for warrants to purchase 550,000
common shares of the Company, and the US$500,000 payment to
re-acquire the rights to the DermaSphere(R) Oleosome Technology
from Lonza at the end of the fourth quarter of 2006. Excluding
these one-time items, intellectual property costs decreased
modestly.
Net loss for the year ended
December 31, 2006 was $14,127,086 or ($0.85) per share, compared
to a net loss of $6,824,545 or ($0.54) per share for 2005.
As at December 31, 2006 the
Company had cash and cash equivalents totaling $16,328,459
compared to $28,513,095 at December 31, 2005. Total long-term
debt at December 31, 2006 was $2,084,103 compared with
$1,877,330 at December 31, 2005.
As at December 31, 2006 the
Company had 16,781,890 common shares outstanding, 3,102,796
warrants, and 1,056,144 options.
Subsequent to the end of the year,
on February 20, 2007 the Company completed an underwritten
public offering of 4,251,496 common shares at a price of $3.00
per share, for total gross proceeds to SemBioSys of
approximately $12,750,000. Concurrent with the public offering,
certain shareholders of the Company sold 2,748,504 previously
issued common shares of the Company at a price of $3.00 per
share by way of a secondary offering. On March 7, 2007, the
underwriters of the public offering exercised the entire
over-allotment option and purchased an additional 1,050,000
common shares from treasury at $3.00 per common share, resulting
in an additional $3,150,000 in gross proceeds to SemBioSys,
raising the total gross proceeds to the Company from the
transaction to $15,900,000.
Outlook
The Company has completed the major scientific milestones
necessary to proceed into first-in-man clinical trials of
safflower-produced insulin in late 2007 or early 2008. Upcoming
milestone events expected in 2007 include:
- Complete scale-up and preclinical work 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 FDA and initiate Phase II trial
- Achieve commercial levels of Apo AI expression in safflower
- Increase production capacity of personal care topical oilbody
products and establish distribution channels for
commercialization
- Complete scale-up of ImmunoSphere(TM) product for commercial
launch
- Achieve key DHA proof-of-concept milestone
- 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.
Click
HERE for full report in PDF format.
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 derived
from genetically engineered safflower to serve the expanding
diabetes market in the developed and developing world and to
facilitate the commercialization of 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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