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Bioniche Reports Fiscal 2008 Second Quarter
Date:2/8/2008

- year over year sales decrease; gross profit margin increases; net loss

remains stable -

(all figures are in Canadian dollars unless otherwise noted)

BELLEVILLE, ON, Feb. 8 /PRNewswire-FirstCall/ - Bioniche Life Sciences Inc. (TSX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for the second quarter of its 2008 fiscal year, ending December 31, 2007.

"The second quarter of Fiscal 2008 and subsequent weeks have been very positive for us with three announcements related to financing in support of the scale-up of vaccine manufacturing at our Belleville, Ontario facility," said Graeme McRae, President & CEO of Bioniche Life Sciences Inc. "The $20 million that was announced goes a long way toward covering the costs of $25 million first phase of scale-up, which is critical to prepare for market demand for our E. coli O157:H7 cattle vaccine as regulatory approvals are received." The vaccine is available to Canadian veterinarians under the Permit to Release Veterinary Biologics regulations of the Canadian Food Inspection Agency (CFIA). Earlier this week, the United States Department of Agriculture (USDA) gave notice that the E. coli O157:H7 vaccine is eligible for a conditional license, providing access to the U.S. market.

Fiscal 2008 Second Quarter Financial Results Highlights

Consolidated revenues for the six-month period ending December 31, 2007 totalled $12.4 million, a decrease of $1.2 million, or 9% from the $13.6 million recorded in the same period in Fiscal 2007.

The overall gross profit margin was 58% for the six-month period ending December 31, 2007 as compared to 57% for the same period last year.

Expenses before research and development totalled $8.8 million for the six months ending December 31, 2007, the same amount recorded in the same period in Fiscal 2007. Expenses include increased costs related to the Car to Date

2007 2006 2007 2006

$ $ $ $

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

REVENUE

Sales 6,514,261 5,912,276 12,419,045 13,656,902

Cost of sales 2,687,177 2,745,283 5,166,481 5,936,128

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Gross profit 3,827,084 3,166,993 7,252,564 7,720,774

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EXPENSES

Administration 1,973,720 1,601,948 3,603,134 2,732,239

Marketing

and selling 1,729,968 1,484,573 3,370,091 2,906,037

Quality assurance 200,354 169,539 370,784 338,046

Interest on

long-term debt 35,980 299,924 73,930 494,745

Other

interest (income) (21,526) 71,527 (84,346) 144,731

Accreted interest

on convertible

term note - 510,587 - 619,413

Amortization of

property, plant

and equipment 282,375 295,562 564,162 590,846

Amortization of

intangible assets 214,130 214,130 428,259 428,259

Amortization of

deferred financing

fees 117,641 634,930 152,807 809,258

Foreign exchange

loss (gain) 118,541 (271,665) 316,514 (283,851)

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4,651,183 5,011,055 8,795,335 8,779,723

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Loss before

research and

development

expenses and

other items (824,099) (1,844,062) (1,542,771) (1,058,949)

Research and

development

expenses, gross 3,663,747 3,561,692 7,230,414 7,151,440

Less: government

incentives, net (374,735) (413,907) (718,583) (836,534)

Change in

unrealized loss

(gain) on foreign

currency embedded

derivatives 44,453 - (138,203) -

Impairment

of investment - - - 175,000

Loss on sale

of investment - 17,157 - 17,157

Gain on sale of

right to future

royalty stream - (2,127,587) - (2,127,587)

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Loss before

income taxes (4,157,564) (2,881,417) (7,916,399) (5,438,425)

Provision for

income taxes 59,601 31,654 113,524 215,510

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Net loss for

the period (4,217,165) (2,913,071) (8,029,923) (5,653,935)

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Basic and diluted

net loss per share (0.07) (0.07) (0.13) (0.14)

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Weighted-average

number of

common shares

outstanding 62,073,503 40,225,172 61,977,023 39,759,475

Bioniche Life Sciences Inc.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the three and six months ended December 31

Current Last Year Current Last

Quarter Quarter Year to Date Year to Date

2007 2006 2007 2006

$ $ $ $

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OPERATING

ACTIVITIES

Net loss for the

period (4,217,165) (2,913,071) (8,029,923) (5,653,935)

Add (deduct)

non-cash items:

Amortization 614,146 1,144,622 1,145,228 1,828,363

Accreted interest

on convertible

term note - 510,587 - 619,413

Change in unrealized

loss (gain) on

foreign currency

embedded

derivatives 44,453 - (138,203) -

Foreign exchange

loss (gain) 21,667 351,777 (53,451) 345,644

Stock-based

compensation 94,228 55,242 178,974 111,022

Share compensation 253,437 81,000 253,437 81,000

Employee share

ownership plan 163,553 212,662 311,322 212,662

Impairment of

investment - - - 175,000

Loss on sale of

investment - 17,157 - 17,157

Gain on sale of

right to future

royalty stream - (2,127,587) - (2,127,587)

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(3,025,681) (2,667,611) (6,332,616) (4,391,261)

Net change in

non-cash working

capital balances (1,475,702) 792,819 (830,764) 1,097,708

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Cash used in

operating

activities (4,501,383) (1,874,792) (7,163,380) (3,293,553)

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INVESTING ACTIVITIES

Proceeds from

maturity of

short-term

investments - - 9,500,000 -

Proceeds from

sale of investment - 3,196,200 - 3,196,200

Proceeds from sale

of right to future

royalty stream - 3,652,800 - 3,652,800

Government incentives

received on account

of property, plant

and equipment 2,807 30,224 4,641 30,224

Purchase of property,

plant and equipment (73,688) (74,671) (272,397) (182,076)

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Cash provided by

(used in) investing

activities (70,881) 6,804,553 9,232,244 6,697,148

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FINANCING ACTIVITIES

Proceeds from

deferred government

incentives 18,701 74,282 49,965 74,282

Proceeds from

revolving credit

facility 8,505,017 5,560,270 13,451,976 10,052,318

Repayment of

revolving credit

facility (5,281,835) (5,548,157) (10,380,520) (10,705,685)

Repayment of

obligations under

capital lease (29,164) (25,584) (64,323) (58,259)

Repayment of senior

and other long-term

debt (4,861) (2,956,883) (9,612) (3,234,149)

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Cash provided by

(used in) financing

activities 3,207,858 (2,896,072) 3,047,486 (3,871,493)

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Net increase

(decrease) in cash

and cash equivalents

during the period (1,364,406) 2,033,689 5,116,350 (467,898)

Cash and cash

equivalents,

beginning of period 8,004,353 1,591,706 1,523,597 4,093,293

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Cash and cash

equivalents, end

of period 6,639,947 3,625,395 6,639,947 3,625,395

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ompany's education and awareness program focused on the dangers of E. coli O157:H7 and the importance of food and environmental safety.

Gross research and development expenses were $7.2 million for the six-month period ending December 31, 2007. This is unchanged from the same period in Fiscal 2007. The majority of these costs can be attributed to the ongoing Phase III clinical program with Urocidin(TM) in bladder cancer.

The basic net loss per share for the six-month period ending December 31, 2007 was ($0.13), compared to a net loss per share of ($0.14) recorded in the same period last year.

The balance sheet at December 31, 2007 shows:

- Total assets of $36.8 million, as compared to $41.5 million at

June 30, 2007.

- Working capital of $7.1 million, as compared to $14.4 million at

June 30, 2007.

- Shareholders' equity of $21.7 million, as compared to $29.1 million

at June 30, 2007.

- Cash and cash equivalents of $6.6 million, as compared to cash, cash

equivalents and short-term investments of $11.0 million at June 30,

2007.

- Unused revolving credit facilities of $1.6 million, as compared to

$1.8 million at the end of June 30, 2007.

"It is important to note that despite some going concern with our cash position, our commercial operations continue to perform nicely," said Patrick Montpetit, Chief Financial Officer of Bioniche Life Sciences Inc. "We are well positioned and committed to execute a strategic partnership transaction related to the financing of our bladder cancer therapy, Urocidin(TM), at the earliest opportunity."

The Company will discuss its second quarter results and other recent news during a:

Conference Call & Audio Web Cast

Tuesday, February 12, 2008

9:00 a.m. (Eastern)

To participate in the teleconference, call 416-644-3418/toll-free 1-800-731-6941.

A listen-only audio web cast will be available at:

http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2167660

(English)

http://www.cnw.ca/fr/webcast/viewEvent.cgi?eventID=2167660 (French)

A replay of the conference call will be available until February 19, 2008 by calling (416) 640-1917 or toll-free 1-877-289-8525 (passcode: 21262743 followed by the number sign).

The web cast will be available for replay using the above links until May 12, 2008.

About Bioniche Life Sciences Inc.

Bioniche Life Sciences Inc. is a research-based, technology-driven Canadian biopharmaceutical company focused on the discovery, development, manufacturing, and marketing of proprietary products for human and animal health markets worldwide. The fully-integrated company employs approximately 200 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company's primary goal is to develop proprietary cancer therapies supported by revenues from marketed products in human and animal health. Bioniche has been named one of Canada's Top Ten Life Sciences Companies for 2008. For more information, please visit http://www.Bioniche.com.

Except for historical information, this news release may contain forward-looking statements that reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, which may cause, but are 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 quarterly and annual reporting.

Bioniche Life Sciences Inc.

Amalgamated under the laws of Ontario

INTERIM CONSOLIDATED BALANCE SHEETS

(Unaudited)

As at As at

December 31, June 30,

2007 2007

$ $

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

ASSETS

Current

Cash and cash equivalents 6,639,947 1,523,597

Short-term investments - 9,500,000

Accounts receivable 5,125,946 5,495,836

Inventories 5,313,158 5,480,167

Prepaid expenses and deposits 711,359 658,867

Foreign currency embedded derivatives 242,969 -

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

18,033,379 22,658,467

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Long-term

Property, plant and equipment 9,302,202 9,557,359

Intangible assets 8,116,957 8,545,215

Goodwill 456,155 456,155

Deferred financing fees - 209,578

Foreign currency embedded derivatives 81,915 -

Other assets 803,621 100,000

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36,794,229 41,526,774

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LIABILITIES AND SHAREHOLDERS' EQUITY

Current

Revolving credit facility 2,872,562 895,619

Accounts payable and accrued liabilities 6,912,470 6,399,382

Income and other taxes payable 418,964 283,845

Deferred government incentives 597,848 541,282

Current portion of long-term debt and

obligations under capital leases 127,445 123,769

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10,929,289 8,243,897

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Long-term

Long-term debt 399,497 421,396

Obligations under capital leases 737,362 764,933

Deferred government incentives 2,986,572 2,986,572

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15,052,720 12,416,798

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Shareholders' equity

Share capital 90,386,332 90,038,524

Special warrants 2,174,008 2,174,008

Other paid-in capital 5,707,033 5,528,059

Deficit (76,525,864) (68,630,615)

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21,741,509 29,109,976

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36,794,229 41,526,774

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Bioniche Life Sciences Inc.

INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

Preferred

shares -

Common shares Series 1

# $ # $

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

Balance, June 30, 2006 39,198,140 60,794,185 167 161,000

Net loss for the period - -

Issued under employee

share ownership plan 307,385 209,791 - -

Stock-based compensation - - - -

Shares issued to directors 109,998 76,999 - -

Share bonus 5,264 4,001 - -

Term debt repayment

made in shares 1,234,358 804,352 - -

Warrants issued in

connection with the

convertible term note - - - -

Revolving debt principal

payments made in shares 1,595,712 1,014,413 - -

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Balance, December 31, 2006 42,450,857 62,903,741 167 161,000

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Balance, June 30, 2007 61,711,867 81,078,737 167 161,000

Transition adjustment - - - -

Net loss for the period - - - -

Issued under employee share

ownership plan 386,113 271,306 - -

Stock-based compensation - - - -

Shares issued to directors 73,560 76,502 - -

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Balance, December 31, 2007 62,171,540 81,426,545 167 161,000

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Other

Preferred shares - Special paid-in

Series ll warrants capital

# $ $ $

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

Balance, June 30, 2006 12,000,000 11,731,716 - 4,556,290

Net loss for the period - - - -

Issued under employee

share ownership plan - - - 2,871

Stock-based compensation - - - 111,022

Shares issued to directors - - - -

Share bonus - - - -

Term debt repayment

made in shares - - - -

Warrants issued in

connection with the

convertible term note - - - 93,023

Revolving debt principal

payments made in shares - - - -

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

Balance,

December 31, 2006 12,000,000 11,731,716 - 4,763,206

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

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

Balance, June 30, 2007 9,000,000 8,798,787 2,174,008 5,528,059

Transition adjustment - - - -

Net loss for the period - - - -

Issued under employee share

ownership plan - - - -

Stock-based compensation - - - 178,974

Shares issued to directors - - - -

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Balance, December 31, 2007 9,000,000 8,798,787 2,174,008 5,707,033

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

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Cumulative

translation

Deficit adjustment Total

$ $ $

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

Balance, June 30, 2006 (53,869,621) (23,379) 23,350,191

Net loss for the period (5,653,935) 23,379 (5,630,556)

Issued under employee

share ownership plan - - 212,662

Stock-based compensation - - 111,022

Shares issued to directors - - 76,999

Share bonus - - 4,001

Term debt repayment

made in shares - - 804,352

Warrants issued in

connection with the

convertible term note - - 93,023

Revolving debt principal

payments made in shares - - 1,014,413

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Balance,

December 31, 2006 (59,523,556) - 20,036,107

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Balance, June 30, 2007 (68,630,615) - 29,109,976

Transition adjustment 134,674 - 134,674

Net loss for the period (8,029,923) - (8,029,923)

Issued under employee share

ownership plan - - 271,306

Stock-based compensation - - 178,974

Shares issued to directors - - 76,502

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Balance, December 31, 2007 (76,525,864) - 21,741,509

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Bioniche Life Sciences Inc.

INTERIM CONSOLIDATED STATEMENTS OF LOSS

(Unaudited)

For the three and six months ended December 31

Current Last Year Current Last

Quarter Quarter Year to Date Ye
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SOURCE Bioniche Life Sciences Inc.
Copyright©2008 PR Newswire.
All rights reserved

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