Bioniche Life Sciences Inc. Reports Q1, Fiscal 2012 Results

- first financial report under International Financial Reporting Standards (IFRS) -

(all figures are in Canadian dollars unless otherwise noted)

BELLEVILLE, ON, Dec. 8, 2011 /PRNewswire/ - Bioniche Life Sciences Inc. (TSX: BNC) (ASX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for the first quarter of its 2012 fiscal year (ended September 30, 2011).

Q1, Fiscal 2012 represents the first quarter for which the Company is reporting its financial results according to International Financial Reporting Standards (IFRS). The conversion to IFRS has been a major undertaking and the Canadian Securities Commissions' regulations allow first-time IFRS reporters to take an additional month to prepare their financial statements.

"The IFRS conversion has involved generating an IFRS compliant consolidated opening balance sheet at July 1, 2010 and regenerating consolidated financial statements for each quarter since then," said Mr. Brian Ford, Chief Financial Officer at Bioniche Life Sciences Inc. "One of the most significant accounting changes under IFRS is that the US$20 million up-front payment to the Company by its Urocidin^TM licensing partner - Endo Pharmaceuticals - in July, 2009 is now taken into income before the IFRS transition date of July 1, 2010 and, therefore, equity instead of being considered deferred revenue. This increased the Company's shareholders' equity position by $19.4 million with an offsetting reduction in liabilities. After all IFRS adjustments are accounted for, the net increase to equity as of July 1, 2010 amounted to about $14.8 million."

Fiscal 2012 First Quarter Financial Results Highlights

Consolidated revenues for the quarter were $6.8 million, as compared to $7.5 million in the same period in Fiscal 2011. This decline in revenues relates to a drought affecting sales of cattle reproductive products in the southern U.S., as well as delays in the timing of certain sales that are expected to occur in subsequent quarters.

Cash and cash equivalents, including short-term investments amounted to $11.1 million at September 30, 2011, as compared to $16.8 million at June 30, 2011. When all current assets are taken into account, the Company has $27 million in current assets at September 30, 2011, compared with $33.2 million in current assets at June 30, 2011. At September 30, 2011, the Company's net working capital totalled $18.7 million, as compared to net working capital of 23.0 million at June 30, 2011.

During the calendar year 2011, the Company has invested $8.3 million in meeting a number of capital projects, including completing the Animal Health and Food Safety Vaccine Manufacturing Centre in Belleville, Ontario and the adjacent pilot-scale fermentation facility, as well as making renovations to the Company's human health plant in Pointe-Claire, Québec, which currently produces Urocidin^TM for the ongoing Phase III clinical trial and will be producing commercial product for market launches.

Further funds ($5.4 million) have been invested in advancing new human health applications for the Company's proprietary Mycobacterial Cell Wall-DNA Complex (MCC) technology and advancing the development of new animal health and food safety products from the Company's pipeline. The Company has also invested $2.0 million in acquiring new products, technologies, and licenses in animal health to extend its product offering to veterinarians.

The Company's burn rate (cash used in operations) was approximately $1.2 million per month during the first quarter of Fiscal 2012. This compares to a monthly burn rate of $1.4 million for the last quarter of Fiscal 2011 ($1.0 million on average for Fiscal 2011 overall). The increase in Q1 from the overall average in Fiscal 2011 relates to the lack of milestone revenue in Human Health and the lack of government assistance income for the Vaccine Manufacturing Centre. It is important to note that the Company has been working to reduce its burn rate going forward and a number of cost containment initiatives are now underway that are beginning to have a positive effect. "We remain committed to progressively reducing the burn rate through the second half of Fiscal 2012," said Mr. Graeme McRae, Chairman, President & CEO of Bioniche Life Sciences Inc. "In Fiscal 2013, our goal is to eliminate our burn rate altogether and show sustainable profitability by the end of that year."

In addition to cost containment efforts, the reduction of the corporate burn rate will be achieved by:

1. Increasing revenues from Animal Health product sales, with a focus on launching new products from the Company's internal development pipeline.
2. Increasing Animal Health profits, by focusing on high margin products.
3. Reducing overheads as some of the Company's late-stage research projects mature.

Research and Development expenditures for the quarter ending September 30, 2011 were $4.8 million, as compared to $4.7 million for the same period in Fiscal 2011. The increased expenditure relates to the above-noted investments in advancing new human applications for MCC, as well as new animal health and food safety products in the corporate pipeline.

Administrative expenditures for the quarter ending September 30, 2011 were $2.5 million, as compared to $2.0 million in the same period in Fiscal 2011. This increase primarily relates to additional administrative personnel hired over the past year in connection with the transition to IFRS, management of the Vaccine Manufacturing Centre, corporate development, and other support services in relation to planned growth. Marketing and selling expenditures were up slightly in the first quarter of Fiscal 2012 - to $1.8 million from $1.6 million in the same period in Fiscal 2011. This can also be attributed to increased investment in preparing for pending new product launches.

The basic and fully-diluted net loss for the three-month period ending September 30, 2011 was (0.04) per share, no change from the same period in Fiscal 2011. The weighted average number of Common Shares outstanding as at September 30, 2011 is 102,274,109. This compares to 73,036,406 at September 30, 2011. The completion of concurrent Share Offers in Canada and Australia in December, 2010/January, 2011 contributed to this change.

Amendment to MCC Agreement with Industrial Technologies Office

Subsequent to the quarter end, the Company reached an agreement with the Industrial Technologies Office (ITO - formerly Technology Partnerships Canada (TPC)) to amend the existing agreement in support of the Company's Mycobacterial Cell Wall-DNA Complex (MCC) research project. The amendment revises the Company's repayment obligation of $960,000 per year for five years that was triggered by the signing of a license agreement with an external partner for Urocidin^TM. An initial repayment of $960,000 was made in January 2011, and a new repayment schedule was struck for the remaining payments whereby $240,000 will be paid by the Company in each of October, 2013 and 2014, and $960,000 will be paid in each of October, 2015, 2016 and 2017, with a final payment of $1,031,000 in October, 2018.

Vaccine Manufacturing Centre Validation/Commissioning

The Company's Animal Health and Food Safety Vaccine Manufacturing Centre (VMC) in Belleville, Ontario continues to undergo validation and commissioning. This process remains on track for completion by early 2012, after which production scale-up will occur whereby the Company's Econiche^TM cattle vaccine against E. coli O157 will be moved from the production laboratory into the VMC fermenters. It is expected that a first commercial batch of the product will be made in the VMC by mid-2012.

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 and innovative products for human and animal health markets worldwide. The fully-integrated company employs more than 200 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company's primary goal is to develop and commercialize products that advance human or animal health and increase shareholder value.

Bioniche Life Sciences Inc. has been named one of the Top 50 Best Small and Medium-Sized Employers in Canada for 2010. For more information, please visit 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

Bioniche Life Sciences Inc.

SOURCE Bioniche Life Sciences Inc.