ConjuChem declares financial results for the third quarter of fiscal 2009

Sep 17 2009

ConjuChem Biotechnologies (TSX:CJB) today announced financial results for the third quarter of fiscal 2009, ended July 31, 2009.

"During our fiscal third quarter, we had the opportunity to showcase the positive results from our Phase II program for PC-DAC(TM):Exendin-4 and from our PC-Insulin program at the American Diabetes Association's 69th Annual Scientific Sessions. We also continued to progress our partnering discussions for these products, focusing in particular on the advantageous features of PC-DAC(TM):Exendin-4, such as its excellent tolerability profile and its administration using a small volume, highly soluble liquid formulation," said Mark Perrin, President and CEO of ConjuChem. "Despite challenging economic conditions, subsequent to the end of the quarter we successfully completed a transaction that provided approximately $5 million in non-dilutive capital, in addition to the $4.3 million in cash and cash equivalents and $1.7 million in receivables available to the Company at the end of the fiscal quarter. These additional resources will provide us with greater flexibility to execute our business plan and drive our partnering discussions."

Financial Results

Net loss for the quarter ended July 31, 2009 amounted to $1.4 million compared to $8.7 million for the quarter ended July 31, 2008. Net loss for the nine-month period ended July 31, 2009 amounted to $13.3 million compared to $28.5 million for the nine-month period ended July 31, 2008. The decrease in the net loss over the nine-month periods is mainly attributable to a decrease in the accretion in the carrying value of the convertible senior unsecured notes and interest due to the early redemption of the convertible senior unsecured notes during the nine-month period of the 2008 fiscal year, a decrease in R&D expenses of $6.6 million, the reversal of tax-related reserves following the results of tax audits and by the reversal of a tax withholding contingency in the nine-month period ended July 31, 2009.

The Company recorded interest income on cash and investments that amounted to $15,772 for the quarter ended July 31, 2009, compared to $306,076 for the quarter ended July 31, 2008. The Company recorded interest income on cash and investments that amounted to $154,289 for the nine-month period ended July 31, 2009, compared to $1,254,657 for the nine-month period ended July 31, 2008. The decrease in interest income was a result of a reduced investment portfolio base combined with a general decrease in market rates.

Gross research and development expenses amounted to $1.5 million for the quarter ended July 31, 2009, compared to $6.2 million for the quarter ended July 31, 2008. Gross research and development expenses amounted to $8.6 million for the nine-month period ended July 31, 2009, compared to $15.2 million for the nine-month period ended July 31, 2008. The decrease is due to the completion of the Company's Phase II clinical trials for PC-DAC(TM):Exendin-4.

General and administrative reflects a recovery amount of $0.5 million for the quarter ended July 31, 2009, compared to an expense $1.2 million for the quarter ended July 31, 2008. General and administrative costs amounted to $2.1 million for the nine-month period ended July 31, 2009, compared to $4.0 million for the nine-month period ended July 31, 2008. The decrease in general and administrative expenses is largely attributable to fees related to the early redemption of the convertible senior unsecured notes in the nine-month period ended July 31, 2008 and by the reversal of a tax withholding contingency in the nine-month period ended July 31, 2009.

As at July 31, 2009, the Company had cash and cash equivalents and investments totaling $4.3 million and an additional $1.7 million in accounts receivables and investment tax credits receivable, compared to $21.1 million as at October 31, 2008. As at July 31, 2009, working capital amounted to $2.5 million, compared to $12.0 million as at October 31, 2008. Subsequent to the end of the quarter, the Company completed a transaction that provided approximately $5 million in non-dilutive capital. ConjuChem believes that its current cash and cash equivalents, marketable securities and interest income will be sufficient to carry out current research and development plans and operations into the second fiscal quarter of 2010.