ConjuChem second-quarter net loss decreases to $3.6 million

ConjuChem Biotechnologies today announced financial results for the second quarter of fiscal 2010, ended April 30, 2010.

On June 11, 2010, ConjuChem's creditors approved the Company's plan of reorganization and compromise under the CCAA and the Canada Business Corporations Act. Pursuant to the terms of the Plan, new investors will recapitalize ConjuChem by subscribing for new common shares which will represent the only issued and outstanding shares of the Company. ConjuChem's motion to obtain the sanction of the Plan by the Superior Court of Québec is presentable on June 15, 2010. Once the Sanction Order is obtained, the Plan will be implemented and distributions will be made to the creditors in accordance with the terms of the Plan. Pursuant to the terms of the Plan, existing common shares of ConjuChem will be effectively cancelled for no consideration.

Financial Results

Net loss for the quarter ended April 30, 2010 amounted to $3.6 million compared to $6.1 million for the quarter ended April 30, 2009. Net loss for the six-month period ended April 30, 2010 amounted to $7.3 million compared to $11.9 million for the six-month period ended April 30, 2009. The decrease in the net loss is mainly attributable to a decrease in net R&D expenses of $3.6 million resulting from a decline of development activities due to the completion of the Phase IIa clinical trials for PC-DAC(TM):Exendin-4 in November 2008 and a general reduction in research activities. There was also a reduction in headcount resulting in a decrease in compensation and benefits.

Gross research and development expenses amounted to $871,872 for the quarter ended April 30, 2010, compared to $2.9 million for the quarter ended April 30, 2009. Gross research and development expenses amounted to $2.2 million for the six-month period ended April 30, 2010, compared to $7.1 million for the six-month period ended April 30, 2009. The decrease is due to an important decline of development activities due to the completion of the Phase IIa clinical trials for PC-DAC(TM):Exendin-4 in November 2008 and to a reduction in research activities as explained above.

General and administrative costs amounted to $1.2 million for the quarter ended April 30, 2010, compared to $1.5 million for the quarter ended April 30, 2009. General and administrative costs amounted to $1.9 million for the six-month period ended April 30, 2010, compared to $2.5 million for the six-month period ended April 30, 2009. The decrease in general and administrative expenses is largely attributable to a decrease in headcount which reduced employee compensation and benefits expenses in the six-month period ended April 30, 2010.

As at April 30, 2010, the Company had cash and cash equivalents and investments totaling $2.6 million compared to $7.5 million as at October 31, 2009. As at April 30, 2010, working capital is negative and amounts to $16.7 million given the December 2010 maturity of the 20.3 million convertible unsecured subordinated debentures.

Source: CONJUCHEM BIOTECHNOLOGIES INC.