SemBioSys Genetics Inc., a development stage biotechnology company that utilizes its patented plant seed oilbody expression technology platform to produce bulk proteins for the development of biosimilar drug candidates, high value proteins and oils has announced its operational and financial results for the first quarter ended March 31, 2011.
"We strengthened our balance sheet during the period through a $4 million financing that extends our development runway in order to secure partnerships for our major programs, biosimilar human insulin and Apo AIMilano. We continue to advance discussions with partners for each of these programs," said James Szarko, Chief Executive Officer of SemBioSys.
Szarko continued, "Through our partnering discussions, we have found strong interest not only in our key pharmaceutical programs, but also in our technology platform as a production vehicle for a wide range of other products due to its innovative versatility and plant-based attributes."
Other key highlights include:
• Furthered business development activities in China;
• Recruited Ms. En Man Ma to the postioned of Chief Financial Officer;
• Received an additional $250,000 in funding from AVAC Ltd;
• Advanced optimization of pilot scale manufacturing for biosimilar drug candidates ;
• Continued scale-up of seed lines for our key product candidates; and
• Successfully completed a University of Alberta seed line scale-up project
Operating burn for the first quarter of 2011 was $873,598 (net of disposal of assets), meeting the Company's goal of keeping cash expenditures low while focusing primarily on strategic partnering and development of its therapeutic product candidates.
The quarter ended March 31, 2011 was the Company's first reporting period under International Financial Reporting Standards (IFRS). While IFRS has many similarities to Canadian GAAP, some of the Company's accounting policies have changed as a result of the transition to IFRS.
The most significant impact to our accounting policies relates to the treatment of our funding agreements and recent financing. The impact of these changes have been fully disclosed in Notes 4 and 8 of our unaudited condensed interim consolidated financial statements as at and for the three months ended March 31, 2011.
Net loss for the three months ended March 31, 2011 was $4,633,771 or $0.09 per share compared to $2,133,525 or $0.05 per share for the same period last year.
The net loss in the first quarter of 2011 increased mainly as a result of significant non-cash net finance expenditures and a non-cash one-time charge of unidentified consideration related to a $4,000,000 financing closed in the quarter.
Revenue for the three months ended March 31, 2011 were $50,000 compared to $356,465 for the same period last year. The Company recorded no licensing fees in the first quarter of 2011 while there were $315,789 of licensing fees in the first quarter of 2010.
Expenditures for the three months ended March 31, 2011 compared to the same period last year:
• $814,429 research & development costs compared to $1,293,167;
• $382,082 operating costs compared to $589,371; and
• $305,274 amortization expense compared to $354,038
The overall decrease in expenditures is primarily due to the cost reductions implemented in third quarter of 2010 to extend the Company's current cash runway.
At March 31, 2011, the Company had cash and cash equivalents of $3,616,403 as compared to $267,436 as at December 31, 2010. The increase in cash during the period resulted primarily from the successful closing of a $4,000,000 financing from Concept Capital and the receipt of the final tranche of $250,000 non-dilutive financing from AVAC Ltd., offset by net cash burn.
Total short-term debt, long-term bonds and convertible debentures were $5,587,502 at March 31, 2011 compared to $2,665,176 at December 31, 2010. The increase in debt relates mainly to the $2,846,915 long-term bonds, which will accrete up to the $4,000,000 principal at maturity date.
At March 31, 2011, the Company had a net positive working capital balance of $923,421 as compared to a net negative working capital of $2,168,783 at December 31, 2010. The increase in working capital is primarily due to the increase of cash resulting from the financing activities noted above, offset by the operating cash burn.
As at June 13, 2011, the Company had 51,374,536 common shares outstanding, 80,475,708 warrants, 4,492,481 options, 1,423,840 broker warrants, 1,065,467 deferred share units, and debentures which are convertible into 10,066,649 common shares.