Thursday 26 January 2006
ConjuChem Announces Fiscal 2005 Year-End Financial Results
MONTREAL, Jan. 26 - ConjuChem Inc. (TSX:CJC) today announced
financial results for its fiscal year, ended October 31, 2005.
"2005 was highlighted by the development of our new PC-DAC(TM)
technology, which is a natural extension of our albumin bonding expertise and
intellectual property," said Lennie Ryer, Chief Financial Officer. "We believe
strongly in the power of PC-DAC(TM) to unlock the therapeutic potential of
peptides. In 2006, we will endeavour to advance this technology in multiple
programs."
The Company's net loss for the year ended October 31, 2005 was
$38.5 million or ($0.83) per share, compared to $47.7 million or ($1.13) per
share, for the year ended October 31, 2004. The decrease in the net loss is
mainly attributable to a decrease in net research and development expenses of
$13.7 million.
The Company recorded interest income on cash and short-term investments
of $623,389 for the year versus $812,814 in the same period last year. The
decrease in interest revenue was a result of a reduced investment base in our
portfolio.
Net research and development expenses amounted to $23.9 million for the
year ended October 31, 2005, compared with $37.6 million for the year ended
October 31, 2004. The decrease in these costs is primarily attributable to
reduced costs of the clinical development programs for DAC(TM):GLP-1 and
DAC(TM):GRF compared to the prior fiscal year.
General and administrative costs for the year ended October 31, 2005
amounted to $4.5 million compared to $5.0 million for the same period last
year. The decrease in expenses is the result of cost control implementation in
numerous areas of our operation.
At October 31, 2005, the Company had cash and cash equivalents of
$17.8 million and a working capital position of $14.6 million. These funds are
sufficient to meet all of our current obligations and are sufficient to meet
our committed expenditures into 2006.
Outlook
The Company's development priorities for 2006 will focus on advancing our
clinical programs. We intend to complete the Phase I program on our lead
diabetes compound PC-DAC(TM) Exendin-4. This will enable the Company to build
the data base to satisfy regulatory requirements which would support the
commencement of a Phase II program for this compound. We also anticipate
securing a partnership agreement with a leading pharmaceutical company to
optimize the commercial value of this compound.
The Company also plans to complete in 2006 its initial Phase II clinical
trial with DAC(TM):GRF for the treatment of Lipodystrophy in HIV patients.
About ConjuChem
ConjuChem, developers of next generation medicines from therapeutic
peptides, is creating long-acting compounds based on bioconjugation platform
technologies. When applied to peptides, the Company's systemic DAC(TM) and
PC-DAC(TM) Technologies enable the creation of new drugs with significantly
enhanced therapeutic properties as compared to the original peptide. The
Company is developing compounds to treat various disorders including diabetes,
human growth deficiencies, HIV/AIDS, and congestive heart failure.
Detailed descriptions of the Company can be viewed on the Company's
website www.conjuchem.com.
Financial statements included below.
<<
BALANCE SHEETS
As at October 31
2005 2004
$ $
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ASSETS
Current
Cash and cash equivalents 137,218 2,707,382
Short-term investments 17,708,732 24,087,983
Accounts receivable 331,174 412,489
Investment tax credits recoverable 450,000 551,000
Prepaids 280,029 193,987
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Total current assets 18,907,153 27,952,841
Deferred financing fees 109,563 144,451
Property, plant and equipment 1,327,200 1,394,469
Intangible assets 66,136 83,132
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20,410,052 29,574,893
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities 4,318,493 5,780,305
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Total current liabilities 4,318,493 5,780,305
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Convertible senior unsecured notes 39,183,820 34,047,344
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43,502,313 39,827,649
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Shareholders' deficiency
Capital stock 147,169,448 125,530,006
Warrants 3,276,000 3,276,000
Equity portion of convertible senior
unsecured notes 14,966,780 14,966,780
Contributed surplus 12,413,577 3,031,336
Deficit (200,918,066) (157,056,878)
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Total shareholders' deficiency (23,092,261) (10,252,756)
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20,410,052 29,574,893
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STATEMENTS OF OPERATIONS AND DEFICIT
Year ended October 31,
2005 2004
$ $
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REVENUES
Contract revenue 82,318 7,635
Interest income 623,389 812,814
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705,707 820,449
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EXPENSES
Research and development 25,962,694 38,442,896
Investment tax credits (2,025,233) (807,681)
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Net research and development expenses 23,937,461 37,635,215
General and administrative expenses 4,486,134 4,959,026
Amortization of property, plant and equipment 340,950 399,973
Amortization of intangible assets 49,756 63,699
Amortization of deferred financing fees 34,888 25,914
Non-cash stock based compensation 5,178,167 2,250,462
Financial charges 16,610 23,853
Foreign exchange loss 43,000 22,256
Accretion in carrying value of convertible
senior unsecured notes 5,136,476 3,099,090
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39,223,442 48,479,488
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Net loss (38,517,735) (47,659,039)
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Deficit, beginning of year (157,056,878) (109,397,839)
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Transitional adjustment for stock based
compensation (5,343,453) -
Deficit, end of year (200,918,066) (157,056,878)
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Basic and diluted loss per share (0.83) (1.13)
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Weighted average number of common shares 46,239,541 42,316,171
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STATEMENTS OF CASH FLOWS
Year ended October 31,
2005 2004
$ $
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OPERATING ACTIVITIES
Net loss (38,517,735) (47,659,039)
Items not affecting cash:
Amortization of property, plant and equipment 340,950 399,973
Amortization of intangible assets 49,756 63,699
Amortization of deferred financing fees 34,888 25,914
Amortization of premium on investments 5,466 59,910
Non-cash stock based compensation 5,178,167 2,250,462
Accretion in value of convertible senior
unsecured notes 5,136,476 3,099,090
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(27,772,032) (41,759,991)
Net changes in non cash working capital
balances relating to operations (1,365,539) 2,247,762
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Cash flows relating to operating activities (29,137,571) (39,512,229)
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INVESTING ACTIVITIES
Acquisition of short-term investments (30,175,880) (53,708,836)
Proceeds on maturities of short-term
investments 36,549,665 71,092,786
Acquisition of property, plant and equipment (273,681) (124,665)
Acquisition of intangible assets (32,760) (38,865)
Proceeds on maturities of long-term investments - 3,409,875
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Cash flows relating to investing activities 6,067,344 20,630,295
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FINANCING ACTIVITIES
Issuance of common shares for cash 21,874,245 6,503,516
Share issue costs paid in cash (1,374,182) (182,590)
Issuance of convertible senior unsecured notes - 15,000,000
Issue costs of convertible senior unsecured
notes - (102,017)
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Cash flows relating to financing activities 20,500,063 21,218,909
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Net increase (decrease) in cash and cash
equivalents during the year (2,570,164) 2,336,975
Cash and cash equivalents, beginning of year 2,707,382 370,407
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Cash and cash equivalents, end of year 137,218 2,707,382
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Supplemental cash flow information:
Cash paid during the year for:
Interest 5,827 12,063
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