Bioniche Life Sciences Inc. Reports Q1, Fiscal 2013 Results

Bioniche Life Sciences Inc. (BNC.TO) (BNC.AX), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for the first quarter of its 2013 fiscal year (ended September 30, 2012).

"The Company continues to invest in several late-stage development projects and in facilities where commercial products will be made," said Mr. Graeme McRae, President & CEO of Bioniche Life Sciences Inc. "We are nearing commercialization of some important products in the next 12 to 18 months and this requires an intensive resource allocation. Once these products reach the marketplace, we expect the new revenues will neutralize the corporate burn rate."

Further to the Company's news release of Monday, November 5, 2012, the Company continues to discuss with its licensing partner, Endo Pharmaceuticals, potential next steps for the Urocidin™ clinical program following the discontinuation of the current Phase III clinical trial in non-muscle-invasive bladder cancer. Urocidin™ remains a valuable asset and the Company is committed to ensuring that this valuable product becomes commercialized.

Fiscal 2013 First Quarter Financial Results Highlights
Revenues from the sale of Animal Health products increased by $0.5 million in the quarter, offset by a decrease in collaborative research revenue of $0.6 million. Animal Health revenues out of Canada, which includes sales into South America, declined by 17% compared to the same quarter last year due to the timing of sales orders. Sales in the United States increased 30% over the same quarter last year primarily from the introduction of new products. Sales in Australia and Europe also saw modest increases. Consolidated revenues for the quarter were $6.7 million, as compared to $6.8 million in the same period in Fiscal 2012.

The cost of sales related to product sales in the Animal Health business unit has decreased by 2% in Q1, Fiscal 2013 from the same quarter in Fiscal 2012. This decrease is directly related to increased sales from new products. Gross margins were 54.2% in Q1, Fiscal 2013, compared to 49.8% in the first quarter of last year.

The Company generated Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization (EBITDA) - before research and development expenses - of ($107,000) for Q1, Fiscal 2013, as compared to ($242,000) for the same period in Fiscal 2012.

Cash, cash equivalents and short-term investments amounted to $14.4 million at September 30, 2012, as compared to $9.6 million in the same period last year and $20.0 million at June 30, 2012. A further $14 million was available to the Company at September 30, 2012 through trade and other receivables and inventories. In the same period last year, $14.6 million was available through these sources.

At September 30, 2012, the Company's net working capital totalled $21.2M as compared to working capital of $27.5M at June 30, 2012, reflecting the decrease in cash primarily used to invest in late-stage development and commercialization activities.

The Company's cash flow used in operations for the quarter ended September 30, 2012 was $5.0 million, as compared to cash used in operations of $3.9 million in the same period in Fiscal 2012. As a result, the average monthly burn rate for Q1, Fiscal 2013 was $1.8 million, vs. $1.2 million for the same quarter in Fiscal 2012.

"The Company remains committed to reducing the average monthly burn rate progressively throughout the year as it completes the development and commercialization of several new products," said Mr. Brian Ford, Chief Financial Officer of Bioniche Life Sciences Inc. "The Company's goal is to neutralize its burn rate and develop sustainable cash flows in Fiscal 2014."

The value of the Company's Property, Plant and Equipment has increased to $40.2 million at September 30, 2012, compared to $40.1 million at June 30, 2011. This increase reflects an ongoing investment in the Animal Health and Food Safety Vaccine Manufacturing Centre at the Company's corporate headquarters in Belleville, Ontario. This facility is undergoing validation to meet global GMP production standards.
Administrative expenses were $2.3 million in Q1, Fiscal 2013, as compared to $2.5 million in the same quarter last year. Marketing, selling and distribution expenses were $1.8 million in Q1, Fiscal 2013, as compared to $1.8 million in the same quarter last year. The additional expenditure in this category is related to increased staffing to support the launch and distribution of several new Animal Health products.

Research and development (R&D) expenditures for Q1, Fiscal 2013 were $4.3 million, as compared to $4.8 million in the same quarter last year. R&D resources are focused on the advancement of certain development programs in Animal Health and Food Safety. Additionally, there is continued investment in the staffing and infrastructure associated with the GMP production of the Company's UrocidinTM bladder cancer treatment. Further, until such time as the Company's Vaccine Manufacturing Centre in Belleville is making commercial product, the carrying costs associated with this facility are also accounted for under R&D.

The Company incurred financial expenses of $1.5 million (including non-cash financial expenses of $737,000) during Q1, Fiscal 2013 as a result of its US$20 million debt financing with Capital Royalty Partners. This compares to financial expenses of $0.2 million in the same quarter of Fiscal 2012.
The basic and fully-diluted net loss per share for Q1, Fiscal 2013 is ($0.06), as compared to a net loss per share of ($0.04) in the same period last year. Total Common Shares outstanding at September 30, 2012 were 103,738,712, as compared to 102,375,477 at September 30, 2011.

The Company has incurred significant losses and has an accumulated deficit of $125.5 million as at September 30, 2012, including a current loss of $6.7 million for the first quarter of Fiscal 2013. The Company's committed cash obligations and expected level of expenditures for the next twelve months exceed its committed resources of funds and funds available as at September 30, 2012.

The Company expects to finance its future expenditures by obtaining additional financing and the exploration of new partnering agreements on technologies under development. If the Company is unable to accomplish either of these initiatives, which are outside of management's control, the Company will be required to curtail its development activities and operations.

More information on the Company's year-end financial results is provided in the Company's Q1, Fiscal 2013 Management's Discussion and Analysis dated November 7, 2012.