Bioniche Life Sciences announces first quarter fiscal 2011 results

Nov 10 2010

- revenues from product sales increase; loss per share improves over the same period in Fiscal 2010 -

(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 the first quarter of its 2011 fiscal year (ended September 30, 2010).

"I'm pleased with the Company's performance in the first quarter of Fiscal 2011," said Graeme McRae, Chairman, President & CEO of Bioniche Life Sciences Inc. "We are progressing well with the construction of our world class Animal Health and Food Safety Vaccine Manufacturing Centre, while maintaining an active Animal Health and Food Safety business and considering new opportunities for our core Mycobacterial Cell Wall-DNA Complex (MCC) in Human Health."

Fiscal 2011 First Quarter Financial Results Highlights

Consolidated revenues related to Bioniche Animal Health product sales for the first quarter were $6.7 million, as compared to $5.9 million in the first quarter of Fiscal 2010. Research collaborations and licensing revenue in Q1, Fiscal 2011 brought total revenue for the quarter to $7.9 million, compared to $7.1 million in the same period last year. Licensing revenue reflects the amortization of the up-front payment from Endo Pharmaceuticals Inc. upon signing of the Urocidin^TM license, development and supply agreement. The total up-front payment received, C$22.3 million (non-refundable), 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).

Fiscal 2011 first quarter cash and cash equivalents amounted to $6.3 million, as compared to $11 million at Fiscal 2010 year-end (June 30, 2010). This decrease in cash relates to an intensive investment in the Animal Health & Food Safety Vaccine Manufacturing Centre under construction at the Company's Belleville, Ontario corporate headquarters. This facility is being funded through a consortium of government and quasi-government repayable long-term loans. The Company is required to expend resources, after which, reimbursement for eligible expenditures is provided by the lenders.

Research and development expenditures increased in the first quarter of Fiscal 2011 by $1 million over the same period in Fiscal 2010. This increase relates to ongoing expenditures for the Urocidin^TM clinical development program, as well as development programs in Animal Health. 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. Starting in February, 2010, Endo assumed financial responsibility for the external costs of clinical activities as they relate to Urocidin^TM, and the Company is refocusing its development activities toward MCC for other indications.

The basic and fully-diluted net loss per share for the first quarter of Fiscal 2011 was ($0.05) compared to a net loss per share of ($0.09) in the same quarter in Fiscal 2010. Total common shares outstanding at September 30, 2010 were 80,499,679, as compared to 71,959,642 for the corresponding period in Fiscal 2010.

2010 Annual Meeting of Shareholders

At the Annual Meeting of Shareholders held yesterday afternoon in Belleville, Ontario, shareholders voted to elect the following individuals as members of the Board of Directors:

• Dr. Stanley Alkemade
• Albert Beraldo
• Dr. Margaret Cunningham
• Dr. James Johnson
• Graeme McRae
• Nick Photiades
• Lyle Vanclief

Dr. Armen Aprikian remains an Observer on the Board. Also at yesterday's meeting, the shareholders voted to appoint Ernst & Young, LLP, Chartered Accountants, as auditors of the Corporation.