Bioniche reduces net loss per share from $0.15 in fiscal 2009 to $0.02 in fiscal 2010

Sep 10 2010

- revenues for the year - including licensing payments - total $45.9 million -

(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 2010 fiscal year ended June 30, 2010.

"Fiscal 2010 represents a banner year for our Company, in which we executed a license, development and supply agreement for our proprietary product, Urocidin(TM), for the treatment of non-muscle-invasive bladder cancer," stated Graeme McRae, Chairman, President & CEO of Bioniche Life Sciences Inc. "The up-front payment of US$20 million, combined with three milestone payments received to date totaling US$14 million, and revenues from animal health product sales, have resulted in total revenues of $45.9 million."

"The loss per share was reduced from $0.15 in Fiscal 2009 to $0.02 this year," added Mr. McRae.

Bioniche has the potential to receive up to US$110 million in payments associated with the achievement of certain clinical, regulatory and commercial milestones under the license agreement with Endo Pharmaceuticals Inc. (NASDAQ: ENDP). Future milestones will be announced as they are achieved and, with its exclusive manufacturing supply contract, Bioniche will also receive a net-sales-based revenue stream upon product approval.

Urocidin(TM) is a patented intravesical formulation of Mycobacterial Cell Wall-DNA Complex (MCC) developed by Bioniche for the treatment of non-muscle-invasive bladder cancer that is currently undergoing Phase III clinical testing. As reported by the Company on August 19, 2010, a protocol for an additional clinical trial - expected to begin enrolling patients in 2010 - is currently being finalized. Details of this new protocol, when finalized, will be made publicly available via the U.S. National Institutes of Health clinical trial registration service at http://www.clinicaltrials.gov. Concurrently, 12-month data from the ongoing U.S. Food and Drug Administration (FDA) Phase III registration trial with Urocidin(TM) for non-muscle-invasive bladder cancer refractory to current therapy are undergoing thorough analysis. This process is expected to be completed in the near-term.

More information on the Company's year-end financial results is provided in the Company's Fiscal 2010 Management's Discussion and Analysis dated September 9, 2010.

Fiscal 2010 Financial Results Highlights

Consolidated revenues related to Bioniche Animal Health product sales for the fiscal year were $27 million, as compared to $33 million in Fiscal 2009. This 19% decrease is primarily attributed to the economic recession in some markets, which impacted the sales of livestock reproduction products and performance horse products. In spite of these recessionary challenges, the Animal Health business unit continued to generate Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). It should be noted that this is before Research and Development expenditures of $8.6 million, as compared to $12.2 million in Fiscal 2009.

The increase in the value of the Canadian dollar versus the U.S. dollar over the course of the fiscal year also contributed to the decline in revenues over Fiscal 2009.

As previously noted, beyond product sales revenues, the Company recorded licensing revenue of $1.5 million in Fiscal 2010 (there was no such revenue in Fiscal 2009), reflecting the amortization of the up-front payment by Endo upon signing of the Urocidin(TM) license, development and supply agreement. The total up-front payment received, C$22.3 million, will be recognized over 15 years, which is the term over which the Company maintains substantive contractual obligations (per Canadian Generally Accepted Accounting Principles - GAAP). Milestone revenue of C$14.8 million earned under the same agreement was also recognized to income during Fiscal 2010.

Fiscal year-end cash and cash equivalents amounted to $11 million, as compared to $6 million at June 30, 2009. At June 30, 2010, the Company's net working capital totalled $16.3 million, excluding the current portion of non-refundable deferred licensing revenue, as compared to negative working capital of ($0.5 million) at June 30, 2009.

Research and development expenditures increased in Fiscal 2010 by $4.6M over Fiscal 2009, or 34%. This increase relates to ongoing expenditures for the Urocidin(TM) clinical development program, as well as the reintroduction of certain development programs in animal health that were deferred in Fiscal 2009 due to cash constraints.

The majority of research and development 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. Going forward, Endo has assumed financial responsibility for the external costs of clinical activities as they relate to Urocidin(TM), and the Company intends to refocus its development activities for MCC on other indications.

The basic and fully-diluted net loss per share for Fiscal 2010 was ($0.02) compared to a net loss per share of ($0.15) in Fiscal 2009. Total common shares outstanding at June 30, 2010 were 72,890,247, as compared to 71,681,147 for the corresponding period in Fiscal 2009.