YM BioSciences reports fiscal year end 2010 operational and financial results

Sep 23, 2010, 17:00 ET from YM BioSciences Inc.

MISSISSAUGA, ON, Sept. 23 /PRNewswire-FirstCall/ - YM BioSciences Inc. (NYSE Amex: YMI, TSX:YM), today reported operational and financial results for its fiscal year end, ended June 30, 2010.

"This has been a transformative year for YM. Our most notable development was the merger of the public Australian company, Cytopia, into YM BioSciences, completed in January, from which we gained two important clinical stage drug candidates, CYT387 and CYT997, as well as a library of more than 4,000 novel compounds in addition to the ongoing advancement of nimotuzumab by us and our four licensees," said David Allan, Chairman and CEO of YM BioSciences. "Work on CYT387, a potent, orally-administered JAK1/JAK2 inhibitor, has resulted in favorable biological activity and safety data observed in recent months and as such have announced the expansion of our current Phase I/II program in myelofibrosis initiated at Mayo Clinic from 60 to up to 120 patients and the inclusion of up to six centers in the United States, Canada and Australia. We also look forward to the American Society of Hematology (ASH) meeting in Orlando, Florida, in early December 2010, where detailed safety and preliminary activity data for CYT387 are expected to be presented."

"During the fiscal period we raised an additional $20 million in two financings that brought in a number of highly regarded life-sciences investors as shareholders and we also recently announced the appointment of Dr. Nick Glover as President and COO of YM. By strengthening both our balance sheet and leadership team we have positioned YM to seize the significant new opportunities that our expanded pipeline presents," added Mr. Allan.

    Highlights from Fiscal 2010:

    CYT387

    -   Pivotal preclinical efficacy data for CYT387 in myeloproliferative
        neoplasms were published in Blood, the Journal of the American
        Society of Hematology (Blood, 24 June 2010, Vol. 115, # 25, pp.
        5232-5240).

    -   Subsequent to quarter end, Mayo Clinic concluded dose-escalation in
        the Phase I portion of the Phase I/II clinical trial of CYT387 in
        patients with myelofibrosis, a chronic debilitating condition where
        the patient's bone marrow is replaced by scar tissue. In total, 21
        patients were treated in Phase I, with no voluntary withdrawals
        reported. CYT387 showed significant activity in reducing spleen size
        and controlling constitutional symptoms in these patients. To date,
        27 patients have been enrolled into the Phase II tranche bringing the
        total number in the study to 48. Given the favorable biological
        activity and safety data, the Company intends to expand enrolment for
        the trial and include centers in the US, Canada and Australia,
        subject to regulatory approval.

    -   Subsequent to quarter end, CYT387 was granted Orphan Drug Designation
        by the US FDA. Orphan Drug Designation is granted to novel drugs or
        biologics that treat a rare disease or condition affecting fewer than
        200,000 patients in the US.

    Nimotuzumab

    -   Wholly-owned subsidiary, YM BioSciences USA Inc. (YM-USA) received a
        license from the US Department of the Treasury's Office of Foreign
        Assets Control (OFAC) to further develop its humanized monoclonal
        antibody, nimotuzumab, for patients with solid tumor cancers in the
        US. YM-USA subsequently received FDA clearance to enroll patients
        from US clinical sites into two ongoing randomized, double-blind
        Phase II trials of its product, nimotuzumab. Subsequent to quarter
        end, YM enrolled the first US patient in its randomized, double-blind
        trial evaluating nimotuzumab in patients with brain metastases from
        non-small-cell lung cancer (NSCLC) at the Florida Cancer Institute -
        New Hope.

    -   YM reported that its licensee for nimotuzumab, Daiichi Sankyo Co.,
        Ltd. in Japan advised that it has completed enrollment of a Phase II
        trial evaluating nimotuzumab in combination with radiation
        therapy/cisplatin/vinorelbine in first-line curative intent patients
        with Stage III NSCLC. YM further anticipates that Daiichi Sankyo will
        be in possession of data from its Phase II gastric cancer trial
        evaluating nimotuzumab in combination with irinotecan in calendar
        2010.

    -   YM reported in an oral presentation at the American Society for
        Therapeutic Radiology and Oncology (ASTRO) 2009 Annual Meeting
        positive 48-month survival data for its product, nimotuzumab. The
        "BEST" trial was a randomized four-arm study treating patients with
        inoperable, locoregionally-advanced, Stage III/IVa head and neck
        cancer with radiation alone, chemoradiation alone, or radiation or
        chemoradiation in combination with nimotuzumab.

    -   YM was advised that nimotuzumab had been approved for marketing in
        Mexico, the 20th country to have approved the drug.

    -   YM anticipates reporting data from its North American Phase II
        pediatric glioma trial in calendar 2010; that its licensee for
        Europe, Oncoscience AG, will be in possession of European Phase III
        adult glioma data for nimotuzumab in calendar 2010; and that it will
        continue to support the scale-up and process enhancement for
        manufacturing of nimotuzumab which are required for increased late-
        stage clinical activity and in anticipation of requirements for
        commercial volumes of product.

    CYT997

    -   A poster presentation at the 2009 AACR-NCI-EORTC Molecular Targets
        and Cancer Therapeutics conference in Boston, Massachusetts,
        demonstrated CYT997's potent vascular disrupting effects and enhanced
        antitumor effects in combination with cisplatin in preclinical
        models. In August 2010, Phase I clinical trial results of CYT997 were
        published in the premier cancer journal, the British Journal of
        Cancer, demonstrating that CYT997 was well tolerated at doses that
        were associated with changes in plasma and imaging biomarkers
        consistent with vascular disruption in tumors.

    Corporate Highlights

    -   Created YM Australia from the merger into YM of an Australian
        biotechnology company, Cytopia Ltd., a company focused on the
        discovery and development of new drugs to treat cancer and other
        diseases.

    -   Raised US$17.5 million in March 2010, followed by a subsequent
        investment of US$3.2 million made in June by a leading international
        health-care-specific investment fund management company specifically
        in support of the CYT387 program.

    -   Appointed Dr. Nick Glover to the newly created position of President
        and Chief Operating Officer. Dr. Glover will provide broad leadership
        to the Company and have primary responsibility for its operations and
        infrastructure, in particular the development and commercialization
        of YM's pipeline. The Company also announces that Mr. Robert Watson
        has resigned as a director of YM BioSciences effective September
        2010, that Mr. Sean Thompson, Vice President, Corporate Development,
        has left YM BioSciences, effective August 2010, and that Ms. Wendy
        Chapman and Dr. Ernest Wong have been appointed as Vice President,
        Clinical Operations and Vice President, Business Development
        respectively.

    -   Terminated all further expenditures related to the AeroLEF(R)
        program.

Financial Results (CDN dollars)

Total revenue (out-licensing revenue and interest income) for the fiscal year ended June 30, 2010 was $2.7 million compared to $5.6 million for fiscal 2009. Total revenue for the fourth quarter of fiscal 2010 was $0.5 million compared to $0.8 million for the fourth quarter of fiscal 2009. Revenue from out-licensing was $2.6 million for fiscal 2010 compared to $4.5 million for fiscal 2009. The decrease is mainly attributable to the full recognition of all contracts related to the development of tesmilifene because all of YM's obligations under the licensing agreement have been met.

Licensing and product development expenses were $17.0 million for the fiscal year ended June 30, 2010 compared with $14.2 million for fiscal 2009. Licensing and product development expenses were $7.6 million for the fourth quarter of fiscal 2010 compared to $2.6 million for the fourth quarter of fiscal 2009. The increases were almost entirely the consequence of non-cash write-off of the AeroLEF intangible assets and the amortization of the Cytopia intangible asset.

Costs associated with development activities for nimotuzumab were $5.6 million for the fiscal year ended June 30, 2010 compared to $6.0 million for the previous year. Costs associated with development activities for nimotuzumab were $1.8 million for the fourth quarter of fiscal 2010, compared with $1.3 million for the same quarter of the previous year. The minor differences mainly relate to two clinical trials, one for brain metastases from non-small cell lung cancer (NSCLC) and the other for NSCLC patients ineligible for radical chemotherapy. Recruitment into both trials lags expectations and the targeted recruitment period is under review as a consequence. Total development expenses decreased as result of the conclusion of the Phase II pediatric pontine glioma and colorectal trials.

Costs associated with development activities for AeroLEF were $0.6 million for the fiscal year ended June 30, 2010 compared to $1.7 million for the previous year. Costs associated with development activities for AeroLEF were $0.1 million for the fourth quarter of fiscal 2010, compared to $0.2 million the previous year. In June 2010, the Company decided to no longer pursue the AeroLEF program, and to terminate the development program associated with the product. Accordingly, the net asset remaining on the balance sheet was written off in Q4 of fiscal 2010.

General and administrative expenses were $6.9 million for the fiscal year ended June 30, 2010 compared to $4.8 million for the previous year with the majority of the increase accounted for by acquisition costs and non-cash expenses. General and administrative expenses for the fourth quarter of fiscal 2010 were $1.8 million compared to $1.3 million for the same quarter in the prior year. This increase is largely attributable to increased travel and salaries with the acquisition of YM Australia.

Net losses for the fiscal year and fourth quarter ended June 30, 2010 were $21.0 million ($0.33 per share) and $8.6 million ($0.11 per share) respectively, compared to $13.1 million ($0.23 per share) and $3.3 million ($0.06 per share) for the same periods last year.

As at June 30, 2010 the Company had cash and short-term deposits totalling $45.6 million and accounts payables and accrued liabilities totalling $2.8 million compared to $42.1 million and $0.9 million respectively at June 30, 2009. Management believes that the cash and short-term deposits at June 30, 2010 are sufficient to support the Company's activities for at least the next twelve months.

As at June 30, 2010 the Company had 80,359,623 common shares and 8,166,480 warrants outstanding.

The Company's annual financial statements and management's discussion and analysis will be available on www.sedar.com, www.edgar.com and at www.ymbiosciences.com

AGM Announcement

YM BioSciences' Annual Meeting of Shareholders will be held on November 18, 2010 at 4:00 p.m. at the offices of Ogilvy Renault, 200 Bay Street, Suite 3800, Toronto, Ontario

About YM BioSciences

YM BioSciences Inc. is a life sciences product development company focused in oncology. Together with the products from YM BioSciences Australia (formerly Cytopia Limited), the Company is currently developing three clinical-stage products: CYT387, a JAK1/2 small molecule inhibitor; nimotuzumab, a humanized monoclonal antibody; and CYT997, a potent, vascular disrupting agent (VDA). YM has proven regulatory and clinical trial expertise and a diversified business model designed to reduce risk while advancing clinical products toward international approval, marketing and commercialization.

The products discovered by YM's recently acquired Australian subsidiary, YM BioSciences Australia, include the JAK1/2 inhibitor CYT387 and the novel VDA molecule CYT997. Both were discovered through Cytopia's internal medicinal chemistry program, based on research led by Dr. Andrew Wilks, who identified the JAK1/2 kinase enzymes. Both products are currently in clinical development. Nimotuzumab is a humanized monoclonal antibody in development worldwide, targeting multiple tumor types. It is importantly differentiated from other currently marketed EGFR-targeting agents due to its benign side-effect profile. Nimotuzumab's anti-tumor activity has led to its approval for marketing in 23 countries. In more than 9,000 patients reported as having been treated with nimotuzumab worldwide to date, incidents of severe rash have been only rarely observed and reports of the other severe side-effects that are typical of EGFR-targeting molecules have been equally rare. Nimotuzumab is licensed to YM's majority-owned, Canadian subsidiary, CIMYM BioSciences Inc., by CIMAB S.A., and was developed at the Center of Molecular Immunology.

This press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, 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. Certain of the assumptions made in preparing forward-looking statements include but are not limited to the following: that nimotuzumab will continue to demonstrate a competitive safety profile in ongoing and future clinical trials; that JAK1/2 and the VDA molecule will generate positive efficacy and safety data in future clinical trials; that YM and its various partners will complete their respective clinical trials within the timelines communicated in this release. Except as required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

    YM BIOSCIENCES INC.
    Consolidated Balance Sheets
    (Expressed in Canadian dollars, unless otherwise noted)

    June 30, 2010 and 2009
    -------------------------------------------------------------------------
                                                        2010            2009
    -------------------------------------------------------------------------

    Assets

    Current assets:
      Cash and cash equivalents                $  19,460,141   $   2,337,716
      Short-term deposits                         26,184,991      39,713,042
      Accounts receivable                            161,184         564,584
      Prepaid expenses                               237,962         352,850
      -----------------------------------------------------------------------
                                                  46,044,278      42,968,192

    Property and equipment                            84,775          96,876

    Intangible asset                              11,645,714       3,004,868

    -------------------------------------------------------------------------
                                               $  57,774,767   $  46,069,936
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
      Accounts payable                         $     699,277   $     431,028
      Accrued liabilities                          2,085,824         486,723
      Deferred revenue                             1,523,916       2,549,568
      -----------------------------------------------------------------------
                                                   4,309,017       3,467,319

    Deferred revenue                               1,650,909       2,898,292

    Shareholders' equity:
      Share capital                              203,498,239     172,921,153
      Share purchase warrants                      1,473,246               -
      Contributed surplus                         14,088,671      13,035,123
      Deficit                                   (167,245,315)   (146,251,951)
      -----------------------------------------------------------------------
                                                  51,814,841      39,704,325
    Basis of presentation
    Commitments

    -------------------------------------------------------------------------
                                               $  57,774,767   $  46,069,936
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    YM BIOSCIENCES INC.
    Consolidated Statements of Operations and Comprehensive Loss and Deficit
    (Expressed in Canadian dollars, unless otherwise noted)

    -------------------------------------------------------------------------
                                                Years ended June 30,
                                        2010            2009            2008
    -------------------------------------------------------------------------
    Out-licensing revenue      $   2,610,560   $   4,543,280   $   4,859,085
    Interest income                   84,391       1,070,264       2,584,080
    -------------------------------------------------------------------------
                                   2,694,951       5,613,544       7,443,165

    Expenses:
      Licensing and product
       development                16,974,790      14,172,845      15,631,550
      General and
       administrative              6,898,209       4,839,870       6,831,955
      -----------------------------------------------------------------------
                                  23,872,999      19,012,715      22,463,505
    -------------------------------------------------------------------------

    Loss before the undernoted   (21,178,048)    (13,399,171)    (15,020,340)

    Gain on foreign exchange         194,036          67,075          32,463
    Gain (loss) on short-term
     deposits                         (9,352)        (40,200)        172,276
    Loss on disposal of
     property and equipment                -               -         (70,143)
    Other income                           -         307,140               -
    -------------------------------------------------------------------------

    Loss before income taxes     (20,993,364)    (13,065,156)    (14,885,744)

    Current income taxes                   -           4,310               -
    -------------------------------------------------------------------------

    Loss and comprehensive loss
     for the year                (20,993,364)    (13,069,466)    (14,885,744)

    Deficit, beginning of year  (146,251,951)   (133,182,485)   (118,296,741)

    -------------------------------------------------------------------------
    Deficit, end of year       $(167,245,315)  $(146,251,951)  $(133,182,485)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss
     per common share          $       (0.33)  $       (0.23)  $       (0.27)

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

    Weighted average number
     of common shares
     outstanding                  63,607,316      55,835,356      55,835,356
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    YM BIOSCIENCES INC.
    Consolidated Statements of Cash Flows
    (Expressed in Canadian dollars, unless otherwise noted)
    -------------------------------------------------------------------------
                                                Years ended June 30,
                                        2010            2009            2008
    -------------------------------------------------------------------------
    Cash provided by (used in):

    Operating activities:
      Loss for the year        $ (20,993,364)  $ (13,069,466)  $ (14,885,744)
      Items not involving cash:
        Amortization of
         property and equipment       63,837          91,896         125,271
        Amortization of
         intangible asset          2,938,891       1,060,541       1,060,541
        Impairment of intangible
         asset                     1,944,317               -               -
        Loss on disposal of
         property and equipment            -               -          70,143
        Unrealized loss on
         short-term deposits           9,352          41,912               -
        Stock-based
         compensation                983,242         760,760       2,063,973
      Change in non-cash
       operating working capital:
        Accounts receivable and
         prepaid expenses            705,474        (138,930)        (61,483)
        Accounts payable, accrued
         liabilities and deferred
         revenue                  (2,395,174)     (4,694,597)     (5,844,790)
      -----------------------------------------------------------------------
                                 (16,743,425)    (15,947,884)    (17,472,089)

    Financing activities:
      Issuance of common shares
       on exercise of options         89,139               -               -
      Net proceeds from issuance
       of shares and warrants     19,389,596               -               -
      -----------------------------------------------------------------------
                                  19,478,735               -               -

    Investing activities:
      Short-term deposits, net    13,518,699      15,226,783      14,742,701
      Additions to property and
       equipment                     (41,163)        (60,372)        (37,770)
      Proceeds from sale of
       property and equipment              -               -          38,996
      -----------------------------------------------------------------------
                                  13,477,536      15,166,411      14,743,927
    -------------------------------------------------------------------------

    Increase (decrease) in cash
     and cash equivalents         16,212,846        (781,473)     (2,728,162)

    Net cash assumed on
     acquisition                     909,579               -               -

    Cash and cash equivalents,
     beginning of year             2,337,716       3,119,189       5,847,351

    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of year               $  19,460,141   $   2,337,716   $   3,119,189
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental disclosure of
     non-cash transactions:
      Issuance of common shares
       on acquisition of
       Cytopia Limited         $  12,515,903   $           -   $           -
      Issuance of stock
       options on acquisition
       of Cytopia Limited            126,000               -               -
      Issuance of broker
       warrants                      175,371               -               -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

SOURCE YM BioSciences Inc.