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SemBioSys announces first quarter 2008 financial and operational results
Date:5/9/2008

- Canadian Biotechnology Company marks key milestones with insulin and Apo

AI programs -

TSX symbol: SBS

CALGARY, May 9 /PRNewswire-FirstCall/ - SemBioSys Genetics Inc. (TSX:SBS), a biotechnology company developing a portfolio of therapeutic proteins for metabolic and cardiovascular diseases, today announced its 2008 first quarter operational and financial results.

Highlights

- Prepared pilot scale quantities of insulin from its facilities and

initiated the final animal toxicology study for safflower-produced

insulin

- Initiated animal studies of the Company's safflower-produced Apo

AI(Milano) that will provide important cholesterol mobilization data,

subsequent to the end of the quarter

- Announced Burt's Bees launched three products containing Hydresia(TM)

in the U.S. personal care market, representing Botaneco's (a wholly-

owned subsidiary of SemBioSys) first national brand name customer

- Received a $350,000 milestone payment from AVAC Ltd. in recognition

of critical advances in the Company's safflower-produced insulin

program and a $500,000 milestone payment from AVAC to support the

commercial activities of Botaneco

- Launched the second generation oleosome product, Hydresia(TM) G2,

subsequent to the end of the quarter

Outlook

SemBioSys is currently conducting all the necessary preclinical work for safflower-produced insulin to enable it to file an IND application with the FDA in the second half of 2008 which would then, pending feedback from the FDA, allow it to proceed into human clinical trials in the second half of 2008. The upcoming insulin milestone events include:

- Submission of an IND to the FDA in the second half of 2008 upon

completion of the toxicology studies of safflower-produced inGenetics Inc.

Consolidated Statements of Cash Flows

(Unaudited)

-------------------------------------------------------------------------

(expressed in Canadian dollars)

Three month period ended

March 31, March 31,

2008 2007

$ $

Cash provided by (used in)

Operating activities

Net loss for the period (5,017,055) (3,228,411)

Add items not affecting cash:

Amortization 493,834 228,058

Stock-based compensation 179,903 179,050

Unrealized foreign exchange loss (gain) 44,011 (21,010)

Non-cash interest expense 18,780 -

------------ ------------

(4,280,527) (2,842,313)

------------ ------------

------------ ------------

Change in non-cash working capital and

other balances related to operations 209,916 1,481,767

------------ ------------

Cash used in operating activities (4,070,611) (1,360,546)

------------ ------------

------------ ------------

Financing activities

Issuance of capital stock - 15,904,488

Share issue costs (57,884) (1,356,539)

Exercise of stock options 31,750 4,500

Repayment of long-term debt (152,546) (183,969)

Proceeds from long-term debt 634,900 -

Repayment of repayable advances - (85,640)

------------ ------------

Cash provided by financing activities 456,220 14,282,840

------------ ------------

------------ ------------

Investing activities

Acquisition of property and equipment (544,844) (444,816)

------------ ------------

Cash used in investing activities (544,844) (444,816)

------------ ------------

------------ ------------

Increase (decrease) in cash and cash

equivalents (4,159,235) 12,477,478

Cash and cash equivalents - Beginning of

period 20,444,013 16,328,459

------------ ------------

------------ ------------

Cash and cash equivalents - End of period 16,284,778 28,805,937

------------ ------------

------------ ------------

Supplemental Information

Cash interest received 100,607 603,639

Cash interest paid 28,755 51,422

Non-cash transactions

Capital items included in accounts

payable 112,838 469,161

Share issue costs included in accounts

payable - 168,939

------------ ------------

------------ ------------

sulin

- Completion of the production of clinical grade insulin supply for use

in Phase I/II human clinical trials

- Upon FDA approval, initiation of a 30 patient Phase I/II clinical

trial of safflower-produced insulin in the second half of 2008

- Continuation of business development activities toward an insulin

partnership

In 2007, SemBioSys successfully achieved commercial levels of both Apo AI and Apo AI(Milano) accumulation in safflower. The Company is currently conducting laboratory testing in an animal model to establish equivalent functionality in animals of safflower-produced Apo AI(Milano) to the published values for Apo AI(Milano) that has been successfully used in human clinical trials. The upcoming milestone events include:

- Completion of in vivo efficacy studies of cholesterol mobilization

with safflower-produced Apo AI(Milano)

- Completion of in vivo efficacy studies of plaque remodeling with

safflower-produced Apo AI(Milano) followed by studies of plaque

regression

- Initiation of a formal partnering process for Apo AI and

Apo AI(Milano) upon receiving the initial in vivo efficacy results

In addition to its pharmaceutical milestones, the Company is also advancing the development of its non-pharmaceutical products. The upcoming milestone events expected from these programs include:

- Expansion of the commercial distribution of the Company's personal

care topical oilbody products, specifically Hydresia(TM) and

Hydresia(TM) G2, through Botaneco, including Europe

- Collection of milestone payments from Arcadia Biosciences, Inc., upon

their successful commercial scale-up of High GLA Safflower Oil

- Initiation of pond trials for the Company's shrimp feed additive,

ImmunoSphere(TM)

"During the quarter, we took an important step that should allow us to begin the clinical trials for our safflower-produced insulin, with the initiation of the animal toxicology study required before the submission of an IND. We intend to submit that IND in the coming months and, if granted approval by the FDA, initiate a Phase I/II trial during the second half of 2008," said Andrew Baum, President and CEO of SemBioSys Genetics Inc. "Equally as important as insulin, we have initiated preclinical studies to establish functionality of safflower-produced Apo AI(Milano) in animals, the results of which will be critical in confirming our transformative HDL (high density lipoprotein) program. We also continue to execute our growth strategy for our non-pharmaceutical products. In particular, we have launched our second generation oleosome product, Hydresia(TM) G2, and signed Burt's Bees as our first brand name customer. We continue to develop business opportunities to further increase the sales revenues of Botaneco and are currently in discussions with a number of potential customers in this area."

Financials

Please note that prior to the third quarter of 2007, SemBioSys operated under one segment. During the third quarter of 2007, Botaneco completed the construction of its manufacturing facility and SemBioSys began operating in two reportable segments: (i) the Biopharmaceutical, Animal Health, and Nutritional Oils segment focused on the Company's lead pharmaceutical candidates, recombinant human insulin and Apo AI, in addition to its animal health product, ImmunoSphere(TM) and nutritional oils, DHA and GLA and (ii) the Specialty Ingredients segment which will manufacture and market branded lines of naturally derived base emulsions and delivery systems used in the development of cosmetic, personal care and prescription topical/dermatology products through the Botaneco subsidiaries.

Total revenue for the three-month period ended March 31, 2008 was $210,027 compared with $542,788 for the corresponding period in 2007. The difference is due mainly to a license fee payment earned from the Company's collaboration agreement with Martek BioSciences Corporation in the first quarter of 2007 which is partially offset by 2008 product sales revenue from Hydresia(TM) and the option payment received from INDEAR.

Total expenditures for the three-month period ended March 31, 2008 were $5,257,611 compared with $3,943,408 for the three-month period ended March 31, 2007.

Research and development expenses for the three-month period ended March 31, 2008 were $2,794,103, compared with $1,743,973 for the same period last year. The change in research and development costs is primarily from increased preclinical costs including outsourcing costs, laboratory supplies, personnel and the related support costs in all areas of research and development. As the Company prepares to enter clinical trials for its safflower-produced insulin, all related activities continue to substantially increase, resulting in a higher overall cost.

General and administrative expenses for the three-month period ended March 31, 2008 were $1,395,275 compared with $1,023,711 for the corresponding period last year. The difference is due to Botaneco now being operational which includes costs for newly added staff and the additional related support costs.

Intellectual property costs for the three-month period ended March 31, 2008 were $342,330 compared with $528,249 for the three-month period ended March 31, 2007. The change is due mainly to timing of costs throughout the year.

Business development costs for the three-month period ended March 31, 2008 were $159,630, compared with $309,474 for the corresponding period last year. The difference is primarily related to the shift in Botaneco's activities from business development to that of a fully operational manufacturing and sales business. However, SemBioSys expects business development costs to increase over the remainder of 2008 as its products progress further along the commercialization path, the Company initiates partnership activities and augments its product candidate pipeline.

Net loss for the three-month period ended March 31, 2008 was $5,017,055 or $0.19 per share, compared to a net loss of $3,228,411 or $0.17 per share for the three-month period ended March 31, 2007.

As of March 31, 2008 the Company had cash and cash equivalents totaling $16,284,778 and a net positive working capital balance of $15,260,129 compared to $20,444,013 and $19,518,408, respectively, at December 31, 2007. Total long-term debt at March 31, 2008 was $1,930,962 compared with $1,389,047 at December 31, 2007.

As at March 31, 2008 the Company had 25,937,476 common shares outstanding, 4,322,000 warrants, and 1,282,429 options.

About SemBioSys Genetics Inc. (http://www.sembiosys.com)

Calgary, Alberta-based SemBioSys Genetics Inc. is a biotechnology company developing protein-based pharmaceuticals for metabolic and cardiovascular diseases. The Company's lead pharmaceutical candidates, produced in the plant host safflower, are recombinant human insulin to serve the rapidly expanding global diabetes market and Apo AI, a next generation cardiovascular drug. In addition to its pharmaceutical products, SemBioSys is developing a series of non-pharmaceutical products addressing human topical, nutritional oils and agricultural biotechnology markets. More information is available and can be accessed at http://www.sembiosys.com.

This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time-to-time in the Company's ongoing filings with the Canadian securities regulatory authorities which filings can be found at http://www.sedar.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.

SemBioSys Genetics Inc.

Consolidated Balance Sheets

(Unaudited)

-------------------------------------------------------------------------

(expressed in Canadian dollars)

March 31, December 31,

2008 2007

$ $

-------------------------------------------------------------------------

Assets

Current assets

Cash and cash equivalents 16,284,778 20,444,013

Accounts receivable 150,468 583,591

Interest receivable 100,572 30,321

Prepaid expenses and deposits 452,613 538,718

Inventory 534,549 426,641

------------ ------------

17,522,980 22,023,284

Property and equipment 9,159,890 9,272,415

------------ ------------

26,682,870 31,295,699

------------ ------------

------------ ------------

Liabilities

Current liabilities

Accounts payable and accrued liabilities 1,643,022 1,875,397

Short-term portion of long-term debt 619,829 629,479

------------ ------------

2,262,851 2,504,876

Deferred cost recoveries 169,629 286,596

Long-term debt 1,311,133 759,568

------------ ------------

3,743,613 3,551,040

------------ ------------

------------ ------------

Shareholders' Equity

Capital stock 70,427,920 70,396,170

Warrants 6,180,690 6,180,690

Contributed surplus 7,506,865 7,326,962

Deficit (61,176,218) (56,159,163)

------------ ------------

22,939,257 27,744,659

------------ ------------

26,682,870 31,295,699

------------ ------------

------------ ------------

SemBioSys Genetics Inc.

Consolidated Statements of Loss, Comprehensive Loss and Deficit

(Unaudited)

-------------------------------------------------------------------------

(expressed in Canadian dollars, except shares)

Three month period ended

March 31, March 31,

2008 2007

$ $

Revenue

Licensing fees 50,110 437,012

Contract research - 105,776

Product sales 159,917 -

------------ ------------

210,027 542,788

Expenses

Research and development 2,794,103 1,743,973

General and administration 1,395,275 1,023,711

Intellectual property costs 342,330 528,249

Business development 159,630 309,474

Sales and marketing 153,160 -

Cost of products sold 271,745 -

Stock-based compensation 179,903 179,050

Amortization 493,834 228,058

Cost recoveries (532,369) (69,107)

------------ ------------

5,257,611 3,943,408

------------ ------------

Loss before the undernoted (5,047,584) (3,400,620)

------------ ------------

------------ ------------

Interest income 170,858 212,233

Interest expense (61,664) (57,973)

Foreign exchange gain (loss) (78,665) 17,949

------------ ------------

------------ ------------

30,529 172,209

------------ ------------

Net loss and comprehensive loss for

the period (5,017,055) (3,228,411)

Deficit - Beginning of period (56,159,163) (40,740,486)

------------ ------------

Deficit - End of period (61,176,218) (43,968,897)

------------ ------------

------------ ------------

Loss per share - basic and diluted (0.19) (0.17)

------------ ------------

------------ ------------

Weighted average shares outstanding 25,935,792 18,916,227

------------ ------------

------------ ------------

SemBioSys
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SOURCE SemBioSys Genetics Inc.
Copyright©2008 PR Newswire.
All rights reserved

Related biology technology :

1. SemBioSys receives milestone payments from AVAC Ltd.
2. SemBioSys initiates toxicology study for safflower-produced insulin
3. SemBioSys announces 2007 financial and operational results
4. SemBioSys GLA Partner Enters Strategic Alliance for the Sales and Marketing of GLA-Rich Safflower Oil
5. SemBioSys awarded key patent for the production of oleosome emulsions by the European Patent Office
6. SemBioSys to present at the 10th Annual BIO CEO & Investor Conference
7. SemBioSys signs option agreement for safflower-produced food ingredient
8. SemBioSys announces 2007 third quarter results
9. SemBioSys to present insulin data at the Seventh Annual Diabetes Technology Meeting
10. SemBioSys updates Apo AI development program
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