IBEX Reports Fiscal 2005 Second Quarter Results.MONTREAL Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. -- Company Provides Update on Cancer and Arthritis arthritis, painful inflammation of a joint or joints of the body, usually producing heat and redness. There are many kinds of arthritis. In its various forms, arthritis disables more people than any other chronic disorder. Programs IBEX ibex (ī`bĕks), wild goat, genus Capra, found in rugged country on mountain ranges from central Asia to the Himalayas, S Europe, and NE Africa. Technologies Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :IBT (1) (Instructor Based Training) Training courses conducted by human teachers. (2) (Internet Based Training) Training courses provided via the Internet. ), a Montreal-based biopharmaceutical company, today reported its financial results for the second quarter and six months ended January January: see month. 31, 2005. The Company also provided an update on its cancer and arthritis programs. "Increased interest within the medical research community for our arthritis assays has had favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact on sales of these assays during the second quarter of fiscal 2005," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Baehr, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of IBEX Technologies Inc. "We are now focused on launching three improved, next generation arthritis assays that we expect will have increased utility for researchers." "In cancer, we continue to advance both our diagnostic and therapeutic research programs. We released for sale our first kallikrein kallikrein /kal·li·kre·in/ (kal?i-kre´in) any of several serine proteinases that cleave kininogens to form kinins. plasma kallikrein assay, hK10, to the research community in September September: see month. 2004 and we recently completed the technical development of hK6, our second kallikrein assay. We are focused on establishing hK10 and hK6 as complementary assays to CA125, the standard biomarker biomarker /bio·mark·er/ (bi´o-mahr?ker) 1. a biological molecule used as a marker for a substance or process of interest. 2. tumor marker. bi·o·mark·er n. 1. for ovarian cancer ovarian cancer Malignant tumour of the ovaries. Risk factors include early age of first menstruation (before age 12), late onset of menopause (after age 52), absence of pregnancy, presence of specific genetic mutations, use of fertility drugs, and personal history of breast . Further, we are currently evaluating a large cancer sample bank on behalf of a major international diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler company. This is our first study conducted in conjunction with a potential licensing partner.Data from this study are expected to be available by the middle of this year, said Mr. Baehr. "On the therapeutic side, we have completed the initial evaluation of our kallikreins in in vitro in vitro /in vi·tro/ (in ve´tro) [L.] within a glass; observable in a test tube; in an artificial environment. in vi·tro adj. In an artificial environment outside a living organism. models with encouraging results and we plan to enter into in vivo in vivo /in vi·vo/ (ve´vo) [L.] within the living body. in vi·vo adj. Within a living organism. in vivo adv. studies later this year." Financial Results Revenue for the three-month period ended January 31, 2005 increased 49% to $433,000 compared to $291,000 in the second quarter of fiscal 2004. Sales of IBEX Arthritis and Enzyme enzyme, biological catalyst. The term enzyme comes from zymosis, the Greek word for fermentation, a process accomplished by yeast cells and long known to the brewing industry, which occupied the attention of many 19th-century chemists. products increased 81% and 29% respectively in the second quarter of fiscal 2005 compared to the corresponding period a year ago. Revenue for the six months ended January 31, 2005 increased 16% to $736,000 compared to $617,000 in the first six months of fiscal 2004. Net loss for the second quarter of fiscal 2005 was $1.2 million or ($0.06) per share, compared to a net loss of $692,000 or ($0.03) per share in the same period a year ago. Net loss for the six months ended January 31, 2005 was $2.0 million or ($0.10) per share compared to a net loss of $1.8 million or ($0.09) per share in the first six months of fiscal 2004. The Company's increased net loss in the current year is primarily attributable to increased research and development expenditures, a decline in investment income, and an increase in general and administrative expenses, resulting primarily from costs incurred in the Company's successful defense of an unsolicited un·so·lic·it·ed adj. Not looked for or requested; unsought: an unsolicited manuscript; unsolicited opinions. unsolicited Adjective take over bid by a third party during the second quarter of fiscal 2005. Research and development expenses for the second quarter of fiscal 2005 were $556,000 compared to $456,000 in the corresponding period a year ago. Research and development expenses for first six months of fiscal 2005 were $1.1 million compared to $904,000 in the first half of fiscal 2004. Increased research and development expenses in fiscal 2005 resulted primarily from expanded activities related to the Company's kallikrein program. Selling, general and administrative expenses and cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold for the second quarter of fiscal 2005 increased to $1.1 million from $613,000 in the second quarter a year ago. Selling, general and administrative expenses and cost of goods sold for the first six months of fiscal 2005 increased to $1.7 million from $1.2 million in the first six months of fiscal 2004. As noted previously, this increase resulted primarily from costs incurred by the Company in its defense against an unsolicited take over bid by a third party during the second quarter of fiscal 2005. At January 31, 2005, IBEX's cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled $9.3 million, and the Company's net working capital was $8.6 million. The Company believes that it currently has adequate financial resources to support its anticipated expenditures for at least two more years. Cancer Program Update IBEX has licensed from Mt. Sinai Hospital Sinai Hospital is a Baltimore, Maryland hospital originally founded in 1866 as the Hebrew Hospital and Asylum. It is now a Jewish-sponsored teaching hospital that provides care for all people. in Toronto and others, the intellectual property rights associated with a series of serine proteases In biochemistry, serine proteases or serine endopeptidases (newer name) are a class of peptidases (enzymes that cleave peptide bonds in proteins) that are characterised by the presence of a serine residue in the active site of the enzyme. known as kallikreins. It was previously held that the human kallikrein family consisted of only three members, including human kallikrein 3 (hK3), which is also known as Prostate Specific Antigen PSA (Prostate specific antigen) A tumor marker associated with prostate cancer. Mentioned in: Tumor Markers (PSA (Professional Services Automation) An information system designed to organize, track and manage all opportunities, work, resources, costs, revenues and invoices to improve the productivity and efficiency of the workforce. ), the mostwidely used biomarker/diagnostic test for prostate cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. that has annual sales in the U.S., Europe and Japan of more than US$350 million. Over the last several years the entire human kallikrein locus has been discovered and found to contain 15 genes. Of these 12 new kallikreins, IBEX holds license to patents and patent applications to eight of the new genes, and rights to patents and patent applications for various diagnostic and therapeutic uses of all 12 new kallikreins. Research published in recent years has shown that some of these kallikreins are present in abnormal levels in certain forms of cancer, and are associated with altered rates of patient survival. IBEX is studying the role of kallikreins in various cancers, with the objective of developing new and better cancer therapies. IBEX is also examining the feasibility of utilizing these kallikreins as clinical diagnostic biomarkers for cancer detection and for improved patient management. IBEX launched its first kallikrein assay, hK10, to the research community in September 2004. In published studies, hK10 has been shown to be elevated in ovarian ovarian /ovar·i·an/ (o-var´e-an) pertaining to an ovary or ovaries. ovarian pertaining to an ovary. ovarian agenesis carcinoma carcinoma: see neoplasm. . In a recent study examining the serum of 100 ovarian cancer patients (80 with stage I/II disease), hK6 identified 42% more ovarian cancer patients than CA125. This is a significant and positive finding, and if verified ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. by additional studies (ongoing) suggests a valuable role for hK6 in the management of ovarian cancer. IBEX completed the technical development of hK6, its second kallikrein assay, during the first quarter of calendar year 2005 and expects to be able to release this assay to the research community in the second quarter of calendar year 2005.IBEX seeks to initially establish hK10 and hK6 as complementary assays to CA125, the current biomarker standard for ovarian cancer, in order to improve patient management. CA125 has combined annual sales of approximately US$80 million in the U.S., Europe and Japan. By the end of March 2005, IBEX and its collaborators at Mt. Sinai Hospital expect to complete the assay phase of an evaluation of a large cancer sample bank on behalf of a major international diagnostics company. Data from this study are expected to be available bythe middle of this year. With regards to the therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , IBEX has completed the initial evaluation of its kallikreins in in vitro models with very encouraging results and plans to enter into in vivo proof of concept studies later this year. Results from these animal studies are expected to be available prior to calendar year end, and if positive, the Company will proceed with plans to complete pre-clinical development Pre-clinical development is a stage in the development of a new drug that begins before clinical trials (testing in humans) can begin, and during which important safety and pharmacology data is collected. and file an investigational new drug application ("IND") for human studies with the U.S. Food and Drug Administration. Arthritis Program Update Over the first three quarters of calendar year 2005, IBEX plans to release three improved versions of its already-marketed arthritis assays. During the first quarter of calendar year 2005, IBEX completed the development of its next generation CS-846 assay for the measurement of fetal fetal /fe·tal/ (fe´tal) of or pertaining to a fetus or the period of its development. fe·tal adj. Of, relating to, or being a fetus. aggrecan aggrecan the shortened name for the large aggregating chondroitin sulphate proteoglycan. . Fetal aggrecan is present in adults with early osteoarthritis osteoarthritis or osteoarthrosis or degenerative joint disease Most common joint disorder, afflicting over 80% of those who reach age 70. It does not involve excessive inflammation and may have no symptoms, especially at first. and rheumatoid arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. . The new fetal aggrecan assay is expected to have significant utility within the pharmaceutical research community in the conduct of animal studies, and in human clinical studies. IBEX expects to follow the release of new fetal aggrecan assay with the release later this year of two additional next-generation arthritis assays, CPII CPII Characteristics & Performance Intelligence Information CPII Communications & Power Industries International and C2C (Client to Client) An earlier term for peer-to-peer (P2P), in which one user communicates with another user without going through a server in between. See peer-to-peer. , for use by the pharmaceutical community. CPII will measure the synthesis of type II collagen collagen (kŏl`əjən), any of a group of proteins found in skin, ligaments, tendons, bone and cartilage, and other connective tissue. Cells called fibroblasts form the various fibers in connective tissue in the body. and is initially targeted for diagnosis of early rheumatoid arthritis. C2C is an assay for the measurement of increased collagen degradation DEGRADATION, punishment, ecclesiastical law. A censure by which a clergy man is deprived of his holy orders, which he had as a priest or deacon. and is initially targeted for osteoarthritis applications. IMI IMI International Masonry Institute (Washington, DC) IMI Israel Military Industries IMI Institute of the Motor Industry IMI International Market Insight IMI Imposto Municipal Sobre Imóveis (Portugal) Unsolicited Takeover Offer On November 2, 2004, IMI International Medical Innovations ("IMI") announced an unsolicited takeover offer for all of IBEX's outstanding common shares for a consideration of $0.42 per share. The offer comprised $0.42 in cash or 0.1254 common shares of IMI for each IBEX common share, with 75% of the consideration being common shares of IMI. On November 17, 2004, the Board of Directors of IBEX, upon the recommendation of its Special Committee, unanimously resolved to recommend to IBEX shareholders that they reject the unsolicited offer by IMI and not tender their IBEX shares. A Directors' Circular, which contained the recommendation that IBEX shareholders reject the IMI Offer and the extensive reasons for the recommendation, including a fairness opinion Fairness Opinion A report put together by qualified analysts or advisors providing to key decision makers an evaluation of and facts about a merger or acquisition. Notes: A fairness opinion serves as a document used for guidance in a merger, takeover, or acquisition. from independent financial advisor, Orion Securities Inc., was mailed to IBEX shareholders on November 19, 2004. This document is accessible via the SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review Web site at www.sedar.com. On December 16, 2004, the IMI's tender offer expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. . The Board of Directors of IBEX, supported by the Company's financial and legal advisors, are continuing to explore other strategic, value-enhancing opportunities and remain focused on maximizing value for IBEX shareholders. About IBEX Technologies IBEX Technologies (TSX:IBT) is a Montreal-based biopharmaceutical company focused on the development of therapeutics and diagnostics for the management of cancer and arthritis. For more information, please visit the Company's Web site at www.ibex.ca. Safe Harbour Statement All of the statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown. Some examples of known risks are: the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which IBEX does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation or otherwise. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. IBEX disclaims any intention or obligation to update these statements.
TO THE SHAREHOLDERS OF IBEX TECHNOLOGIES INC.
The interim consolidated balance sheet of IBEX Technologies Inc. as
of January 31, 2005 and the interim consolidated statements of loss
and deficit and cash flows for the period then ended have not been
reviewed by the Company's auditors, PricewaterhouseCoppers LLP.
These financial statements are the responsibility of management and
have been reviewed and approved by the Audit Committee.
CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------
January 31, July 31,
(unaudited) 2005 2004
---------------------------------------------------------------------
$ $
ASSETS
Current assets
Cash and cash equivalents 804,657 680,855
Marketable securities (note 3) 8,453,349 10,655,367
Accounts receivable 650,354 606,259
Prepaid expenses 142,360 116,126
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10,050,720 12,058,607
Property and equipment 646,135 645,220
Identifiable intangible assets 3,880,648 4,002,886
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14,577,503 16,706,713
---------------------------------------------------------------------
---------------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities 1,068,322 1,218,084
Balance of payments (note 4) 353,442 307,382
---------------------------------------------------------------------
1,421,764 1,525,466
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SHAREHOLDERS' EQUITY
Capital stock 52,082,081 52,082,081
Contributed surplus (note 2) 177,594 3,412
Deficit (39,103,936) (36,904,246)
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13,155,739 15,181,247
---------------------------------------------------------------------
14,577,503 16,706,713
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---------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF DEFICIT
---------------------------------------------------------------------
For the six months ended January 31st
2005 2004
--------------------------------------------------------------------
$ $
Balance - Beginning of period (36,904,246) (34,011,986)
Adjustment resulting from a
change in accounting
policy for stock based
compensation (note 2) (155,954) -
---------------------------------------------------------------------
Restated balance - Beginning of
period (37,060,200) (34,011,986)
Net loss for the period (2,043,736) (1,796,239)
--------------------------------------------------------------------
Balance - End of period (39,103,936) (35,808,225)
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CONSOLIDATED STATEMENTS OF LOSS
Three months ended Six months ended
January 31st January 31st
---------------------------------------------------------------------
(unaudited) 2005 2004 2005 2004
---------------------------------------------------------------------
$ $ $ $
Revenue 433,229 291,324 735,737 616,692
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(Expenses) income
Research and
development
expenditures (556,060) (456,074)(1,072,228) (904,199)
Selling, general
and administrative
expenses and costs
of goods sold (1,102,312) (612,664)(1,697,403)(1,195,786)
Amortization of
property and
equipment (30,168) (31,652) (58,361) (56,473)
Amortization of
identifiable
intangible assets (809) (809) (1,618) (1,618)
Other interest and
bank charges (25,357) (37,744) (50,341) (74,206)
Foreign exchange gain
(loss) 8,861 29,006 (8,555) (426,673)
Investment income 42,396 124,146 109,033 239,214
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(1,663,449) (985,791)(2,779,473)(2,419,741)
--------------------------------------------------------------------
Loss before income
taxes (1,230,220) (694,467)(2,043,736)(1,803,049)
Recovery of income
taxes - future - 3,405 - 6,810
-------------------------------------------------------------------
Net loss (1,230,220) (691,062)(2,043,736)(1,796,239)
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Net loss per share
Basic and diluted $(0.06) $(0.03) $(0.10) $(0.09)
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CONSOLIDATED CASH FLOW STATEMENTS
Three months ended Six months ended
January 31st January 31st
--------------------------------------------------------------------
(unaudited) 2005 2004 2005 2004
--------------------------------------------------------------------
$ $ $ $
Cash flows provided
by (used in):
Operating activities
Net loss for the
period (1,230,220) (691,062) (2,043,736) (1,796,239)
Items not affecting
cash -
Amortization of
property and
equipment 41,712 32,836 81,852 58,789
Amortization of
identifiable
intangible assets 61,132 61,131 122,262 122,262
Stock-based
compensation costs 6,697 - 18,229 -
Accretion of interest
on balance of
payments 23,030 34,400 46,060 68,800
Foreign Exchange loss
(gain) on marketable
securities - (20,634) - 362,676
Recovery of future
income taxes - (3,405) - (6,810)
--------------------------------------------------------------------
(1,097,649) (586,734) (1,775,333) (1,190,522)
--------------------------------------------------------------------
Net changes in non-cash
working capital items -
Decrease (increase)
in accounts
receivable 75,283 (35,975) (44,102) 172,940
Decrease in income
taxes receivable - 169,077 - 180,130
Decrease (increase)
in prepaid
expenses (70,907) 2,104 (26,234) 45,676
Decrease in accounts
payable and accrued
liabilities (117,218) (107,357) (149,781) (418,689)
--------------------------------------------------------------------
(112,842) 27,849 (220,117) (19,943)
--------------------------------------------------------------------
(1,210,491) (558,885) (1,995,450) (1,210,465)
--------------------------------------------------------------------
Investing activities
Additions to
marketable
securities (8,496,002)(7,021,000) (8,496,002)(11,679,000)
Proceeds on disposal
of marketable
securities 10,071,337 7,483,634 10,698,020 12,648,833
Additions to property
and equipment (48,512) (118,008) (82,766) (174,091)
--------------------------------------------------------------------
1,526,823 344,626 2,119,252 795,742
--------------------------------------------------------------------
Financing activities
Issuance of capital
stock - 3,500 - 3,500
--------------------------------------------------------------------
Increase (decrease)
in cash and cash
equivalents during
the year 316,332 (210,759) 123,802 (411,223)
Cash and cash
equivalents -
Beginning of
period 488,325 683,285 680,855 883,749
--------------------------------------------------------------------
Cash and cash
equivalents -
End of period 804,657 472,526 804,657 472,526
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