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ARIUS announces first quarter fiscal 2008 financial results

TORONTO, April 11 /PRNewswire-FirstCall/ - ARIUS Research Inc., (TSX: ARI), a biotechnology company discovering and developing the next wave of antibody therapeutics, today announced its financial and operational results for the first fiscal quarter of 2008, ended February 29, 2008.

"During the quarter, we continued to focus on advancing our antibody drugs efficiently and rapidly towards human clinical trials. Most significantly, we completed our pre-IND meeting with the US FDA for our lead CD44 Cancer Stem Program," said Dr. David Young, President and CEO of ARIUS. "We also presented new findings from our lead programs, including data from our CD9 Cancer Stem Cell program in collaboration with Dr. John Dick, a pioneer in the cancer stem cell field. Maintaining this momentum, five ARIUS abstracts have been selected for presentation in the upcoming AACR Annual meeting this month, demonstrating the scientific community's ongoing interest in our programs and the high quality of our research."

Program Updates:

CD44 Cancer Stem Cell Program

- Selected to present two CD44-focused posters at AACR the American

Association for Cancer Research (AACR) Annual Meeting held from

April 12-16, 2008 in San Diego, California.

- Held meeting with FDA to discuss plans for the upcoming

IND submission.

- Prepared to file a Phase I IND application and begin human

clinical trials for the CD44 Cancer Stem Cell program in 2008.

Trop-2 Signal Transduction Program

- Completed first toxicology studies.

- Selected to present a Trop-2-focused poster at AACR Annual


- Engaged Laureate Pharma Inc. for cGMP manufacturing of humanized

antibody for Phase 1 clinical supply. A cell line producing the

humanized anti-Trop-2 antibody was successfully transferred to


- Pr - - (2,408,886)

Exercise of compensation

warrants 1,697,446 - 1,706,027

Exercise of stock options 35,092 - 35,092

Draw of bank line of credit - - 655,000

Repayment of bank line of credit - - (655,000)

Bridge loan - - 300,000

Repayment of bridge loan - - (300,000)

Repayment of capital lease and

equipment financing obligations (6,260) (11,492) (296,691)


1,726,278 (11,492) 39,513,939

Investing activities:

Purchase of short-term

investments (1,299,844) (7,662,879) (44,450,921)

Maturity of short-term

investments 6,825,190 9,998,138 43,151,077

Leasehold inducements - - 243,780

Long-term investment - - (20,000)

Acquisition of facilities and

equipment (10,217) (222,258) (2,979,510)

Disposal of equipment - - 8,986


5,515,129 2,113,001 (4,046,588)


Increase in cash and cash

equivalents 4,124,908 747,831 9,760,273

Cash and cash equivalents,

beginning of period 5,635,365 4,077,065 -


Cash and cash equivalents,

end of period 9,760,273 4,824,896 9,760,273



Forward-Looking Statements

Certain statements in this news release constitute "forward-looking

statements" within the meaning of the Private Securities Litigation

Reform Act of 1995, which involve known and unknown risks, uncertainties

and other factors that may cause our actual results to be materially

different from any future results, performance or achievements expressed

or implied by such statements. Forward-looking statements in this release

include, but are not limited to, ARIUS successfully advancing its new

product programs as well as licensing opportunities. These statements are

only predictions and actual events or results may differ materially.

Factors that could cause such actual events or results expressed or

implied by such forward-looking statements to differ materially from any

future results expressed or implied by such statements include, but are

not limited to: early stage of development; technology and product

development; dependence on and management of current and future corporate

collaborations; future capital needs; uncertainty of additional funding;

no assurance of market acceptance; dependence on proprietary technology

and uncertainty of patent protection; intense competition; manufacturing

and market uncertainties; and government regulation. These and other

factors are described in detail in ARIUS' Annual Report, forthcoming news

releases and other filings with Canadian securities regulatory

authorities available at Forward-looking statements are

based on our current expectations and ARIUS is not obligated to update

such information to reflect later events or developments.

eparing for a pre-IND meeting with the FDA planned for the third

quarter of 2008, and the filing of a Phase I IND application

anticipated in late 2008.

CD59 Complement Inhibitor Program

- Selected to present a CD59-focused poster at AACR Annual Meeting.

- Generated a cell line producing humanized CD59 antibody that

successfully retained binding characteristics and potent in vivo


- Preparing to perform preclinical toxicology studies planned for

2008 in preparation for filing a Phase I IND application.

CD9 Cancer Stem Cell Program

- Selected to present a CD9-focused poster at AACR Annual Meeting.

- Presented positive findings demonstrating the ability of the lead

anti-CD9 antibody to kill cancer stem cells in an in vivo model

using cells from human leukemia patients at the American

Association of Cancer Research Special Conference on Cancer Stem


CD63 Antibody Program

- Licensed to Genentech, Inc. in March 2006, the CD63 program

continues to advance in preclinical studies in a variety of cancer

indications as part of a program to move the lead antibody towards

the clinic.

Takeda Collaboration

- Discovered and delivered novel antibodies to Takeda. Under the

terms of the research collaboration agreement, ARIUS has

successfully met its obligations to date and has received all

scheduled research payments from Takeda.

Additional Product Updates

- Currently, ARIUS has antibody programs targeting the MCSP antigen

and 37LRP, in addition to several other undisclosed programs.

- ARIUS currently has 23 issued or allowed patents covering its

antibody programs and discovery platform and over 228 patents

pending worldwide.

Corporate Updates:

- Appointed Mr. James Rae to the Board of Directors. Mr. Rae brings

to ARIUS more than 30 years of experience in manufacturing,

marketing, finance and research & development for pharmaceutical

and biotechnology firms and is currently the President and CEO of

Viron Therapeutics.

- Promoted Susan Hahn, PhD to the position of Vice President of


- Subsequent to quarter-end, at ARIUS' annual meeting, William

Bodenhamer, retired from ARIUS' Board of Directors.

Mr. Bodenhamer, has been a valued member of ARIUS' Board since

1999, and we would like to thank him for his commitment and the

wise counsel he has provided us with over the years. Replacing

Mr. Bodenhamer, we have appointed Graham Strachan to the Board of

Directors. Mr. Strachan will be a valuable addition to ARIUS as he

has been involved in the Canadian biotechnology sector for twenty

five years. He is the former President and CEO of Allelix

Biopharmaceuticals Inc., has been a founder of several life

science companies and also serves as a Director on several boards

of publicly-listed companies.

- Continued to discuss potential partnering opportunities with

various parties.

Financial Results:

All amounts are in Canadian dollars unless otherwise indicated.

For the three-month period ended February 29, 2008, the Company recorded a net loss of $2,584,081 ($0.06 per share) compared to a net loss of $2,306,695 ($0.05 per share) for the three-month period ended February 28, 2007. The increase in net loss was primarily the result of higher research and development, general administrative and foreign exchange expenses, partially offset by higher revenues.

For the three-month period ended February 29, 2008, the Company's revenue increased to $1,047,294 compared with $108,454 for the same period in fiscal 2007. The increase was primarily the result of the recognition of product and research contract revenue from the Takeda collaboration.

Interest income decreased to $106,792 for the three-month period ended February 29, 2008, compared with $199,923 for the same period in fiscal 2007. The decrease was primarily the result of lower average cash and investment balances.

Research and development costs increased to $2,595,906 for the three-month period ended February 29, 2008, compared to $1,957,328 for the same period in fiscal 2007. The increase was primarily the result of an increase in staffing levels related to an overall increase in activity as the Company is preparing three products for the clinic, accompanied by increased patent and licensing activity.

General and administrative expenses increased to $1,021,281 for the three-month period ended February 29, 2008, compared to $674,336 for the same period in fiscal 2007. The increase was primarily the result of an increase in staffing levels, consulting fees and legal expenses.

As at February 29, 2008, ARIUS' cash and cash equivalents, short-term investments and net working capital position were $9,760,273, $1,299,844 and $8,245,154, respectively, compared with November 30, 2007 balances of $5,635,365, $6,825,190 and $9,088,712, respectively. The Company currently believes that it has adequate financial resources to continue into the fourth quarter of fiscal 2008 based on planned research and development expenditures and operating costs.


ARIUS is a biotechnology company discovering and developing the next wave of antibody therapeutics. Established in 1999, ARIUS has built a proprietary technology platform, FunctionFIRST(TM), that rapidly identifies and selects antibodies based on their functional ability to affect disease. This antibody generation engine has enabled ARIUS to assemble a portfolio of more than 500 antibody candidates. In addition to the antibodies it is developing in-house, ARIUS has ongoing partnerships with key biotechnology and drug development companies. ARIUS is listed on the TSX under the symbol "ARI". For further information, visit

Financial Information to Follow:






February 29, November 30,

2008 2007

$ $



Current assets:

Cash and cash equivalents 9,760,273 5,635,365

Short-term investments 1,299,844 6,825,190

Receivables 197,542 230,126

Refundable tax credits 549,139 400,000

Prepaid expenses 341,826 387,674


12,148,624 13,478,355

Facilities and equipment, net 1,807,824 1,889,921


13,956,448 15,368,276



Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable and accrued liabilities 1,796,442 2,034,972

Accrued loss on embedded foreign exchange

derivative 317,176 296,064

Current portion of leasehold inducements 41,484 41,484

Current portion of capital lease obligation 21,674 25,710

Current portion of deferred revenue 1,726,694 1,991,413


3,903,470 4,389,643

Leasehold inducements 224,920 235,291

Capital lease obligation - 2,224

Deferred revenue 1,527,304 1,758,898

Shareholders' equity:

Share capital:

Common shares 30,484,195 28,644,454

Warrants 10,432,417 9,603,644

Compensation warrants - 912,377

Contributed surplus 2,501,856 2,355,378

Deficit (35,117,714) (32,533,633)


8,300,754 8,982,220


13,956,448 15,368,276









Three-month Three-month since

period ended period ended inception

February 29, February 28, on August 11,

2008 2007 1999

$ $ $



Research contract 986,862 - 1,733,642

Product 60,432 35,094 219,374

Licensing fees - - 3,284,703

Research grant payments - 73,360 273,663


1,047,294 108,454 5,511,382


Research and development,

net of tax credits 2,595,906 1,957,328 27,994,485

General and administrative 1,021,281 674,336 12,019,092

Foreign exchange loss (gain) 33,385 (84,247) 744,221

Interest expense 1,820 875 906,217


3,652,392 2,548,292 41,664,015


Loss before the undernoted (2,605,098) (2,439,838) (36,152,633)

Interest income 106,792 199,923 2,152,084

Loss on extinguishment of debt - - (782,143)


Loss before income taxes (2,498,306) (2,239,915) (34,782,692)

Income taxes:

Current (85,775) (66,780) (335,022)


Loss and comprehensive loss for

the period (2,584,081) (2,306,695) (35,117,714)

Deficit, beginning of period (32,533,633) (21,476,594) -


Deficit, end of period (35,117,714) (23,783,289) (35,117,714)



Loss per share - basic and

diluted (0.06) (0.05)



Weighted average common shares

outstanding 45,408,138 44,750,964









Three-month Three-month since

period ended period ended inception

February 29, February 28, on August 11,

2008 2007 1999

$ $ $


Cash provided by (used in):

Operating activities:

Loss for the period (2,584,081) (2,306,695) (35,117,714)

Items not involving cash:

Amortization of:

Facilities and equipment 92,314 81,415 1,371,185

Deferred costs - - 55,055

Leasehold inducements (10,371) (10,372) (66,524)

Loss on disposal of equipment - - 23,532

Write-off of leasehold

improvements - - 86,349

Leasehold inducement - - 89,148

Non-cash stock-based

compensation 170,077 210,584 1,800,678

Accretion of convertible

debentures - - 429,905

Loss on extinguishment of debt - - 782,143

Services received for common

shares - - 400,024

Write-off of investment - - 20,000

Interest expense paid in

common shares - - 140,032

Change in non-cash operating

working capital items (784,438) 671,390 4,279,109


(3,116,499) (1,353,678) (25,707,078)

Financing activities:

Issue of shares, warrants and

units, net of issuance costs - - 38,281,778

Issuance of convertible bridge

loan, net - - 2,196,619

Repayment of convertible bridge

loan, including costs

SOURCE ARIUS Research Inc.
Copyright©2008 PR Newswire.
All rights reserved

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