Bioniche third-quarter consolidated revenues increase 111% to $15.6 million

May 12 2010

- consolidated revenues for the quarter totalled $15.6 million including $9.5 million in licensing revenues -

(all figures are in Canadian dollars unless otherwise noted)

Bioniche Life Sciences Inc. (TSX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for its Fiscal 2010 third quarter, ended March 31, 2010.

"The third quarter was another solid one for our Company in which further income was generated through licensing revenues from our U.S. pharmaceutical partner over and above revenues from animal health product sales," stated Graeme McRae, Chairman, President & CEO of Bioniche Life Sciences Inc.

The Company entered a partnership with Endo Pharmaceuticals Inc. (Endo) in July, 2009 for Urocidin(TM), a patented intravesical formulation of Mycobacterial Cell Wall-DNA Complex (MCC) developed by Bioniche for the treatment of non-muscle-invasive bladder cancer. A U.S. Food and Drug Administration (FDA) fast tracked Phase III registration study of the product for the refractory indication is currently underway and is expected to report results later this year. Milestone incentives under the agreement total up to US$110 million. These are linked to the achievement of future clinical, regulatory, and commercial milestones. The Company achieved the first milestone of $6.4 million (US$6.0 million) in October, 2009, and achieved two additional milestones in February, 2010 amounting to $8.3 million (US$8.0 million).

Fiscal 2010 Q3 Financial Results Highlights

Consolidated revenues for the quarter totalled $15.6 million, an increase of $8.2 million, or 111%, over the same period in Fiscal 2009. This figure includes $9.5 million in licensing and research collaboration revenues, in the form of payments to Bioniche from Endo for milestones achieved in the period. This positive result is somewhat offset by decreased sales of Animal Health products in the quarter as compared to last year. The sales decrease relates to recessionary conditions in all markets and the effect of unfavourable foreign exchange rate changes related to the high percentage of products that are exported by the Company.

Gross profit on product sales totalled $3.0 million in the quarter, as compared to $4.1 million in the same quarter last year. Gross profit as a percentage of product sales totalled 49.3% this quarter, compared to 54.9% in the third quarter of Fiscal 2009. The decrease is primarily due to recessionary effects on product sales.

For the quarter ended March 31, 2010, expenses before research and development totalled $7.2 million, as compared to $7.3 million in the same quarter last year. Management expects sales and marketing costs to increase over the remainder of Fiscal 2010 to sustain and grow the business.

Gross research and development (R&D) expenses in this quarter totalled $5.1 million, compared to $3.6 million for the same period in Fiscal 2009. The majority of these costs can be attributed to the ongoing Phase III clinical program for the Company's Urocidin(TM) bladder cancer treatment and to an increased focus on the development of animal health reproduction products and vaccines.

The basic and fully-diluted net gain per share for the second quarter of Fiscal 2010 was $0.06, compared to a loss per share of ($0.04) for the corresponding period in Fiscal 2009. Total common shares outstanding at March 31, 2010 were 72,499,759 as compared to 71,532,411 for the corresponding period in Fiscal 2009.

Earnings before interest, taxes, depreciation, amortization and foreign exchange (before research and development) during the third quarter of Fiscal 2010 were $9.2 million, as compared to $1.1 million for the same period in Fiscal 2009, a 736% increase. This significant increase relates to the intake of licensing milestone revenue in the quarter.

At March 31, 2010, the Company's net working capital totalled $22.5 million including $15.5 million in cash, excluding the current portion of non-refundable deferred licensing revenue, as compared to negative working capital of ($0.5 million) at June 30, 2009.

Long-term liabilities at March 31, 2010 totalled $10.5 million, excluding non-refundable deferred licensing revenue of $19.7 million, which compares to $8.2 million reported at June 30, 2009. The increase reflects the long-term portion of the required repayment of government assistance to the Industrial Technologies Office (ITO - formerly TPC) of $3.2 million, less repayments of capital leases and long-term debt. The up-front payment related to the licensing agreement with Endo is reflected as non-refundable deferred licensing revenue, the current portion being $1.5 million and long-term portion - $19.7 million. The total revenue received was $22.3 million, which will be brought into income over the next 15 years.

Source: BIONICHE LIFE SCIENCES INC.