ProMetic Life Sciences Inc.
TSX : PLI

ProMetic Life Sciences Inc.

May 12, 2006 16:12 ET

ProMetic Announces First Quarter 2006 Financial Results Important Corporate Resolutions Were Voted Upon by Shareholders

MONTREAL, QUEBEC--(CCNMatthews - May 12, 2006) - ProMetic Life Sciences Inc. (TSX:PLI) today reported its financial results for the first quarter period ended March 31, 2006. It also reported on a number of important resolutions which were voted upon by shareholders at the Annual and Special Meeting of Shareholders held on May 3rd 2006.

First, all of the issued and outstanding multiple voting shares of ProMetic have been exchanged for subordinate voting shares on the basis of one (1) subordinate voting share for each multiple voting share. As a result, at the time of the exchange, Mr. Pierre Laurin, President and Chief Executive Officer of ProMetic, directly and indirectly held or exercised control over 10.44% of the votes attached to all the issued and outstanding shares of the Company.

Second, both shareholder rights plans of the Company also came into effect upon completion of the exchange. The Company believes that the best way of maximizing shareholder value in the event of a take-over is to ensure that a strong board is in place, and effective shareholder rights plans at its disposal. This will enable the Board to foster better offers or more fruitful alternatives to a take-over, if the Board is of the view that this will achieve the best value available for shareholders.

The Board of Directors is now composed of eight members, the majority of which is independent. Three committees will be led by seasoned members who have extensive experience in finance, financial markets and business development. The Audit committee will be chaired by Robert Lacroix, who will be supported by Roger Garon and Branko Jankovic. The Compensation Committee will be chaired by Roger Garon and supported by Branko Jankovic and Kym Anthony and the Governance Committee will be chaired by Robert Lacroix and supported by Kym Anthony and Benjamin Wygodny.

First Quarter Highlights

During the first quarter of 2006, the Company completed the placement of senior secured convertible notes with US-based institutional investors in the aggregate principal amount of US$11.2 million for aggregate proceeds of US$8.9 million.

ProMetic BioSciences Ltd, the Company's enabling technology unit reported that its client, Halozyme Therapeutics, Inc. (Amex: HTI) had received U.S. Food and Drug Administration (FDA) approval for Hylenex recombinant (hyaluronidase human injection), for use as an adjuvant agent to increase the absorption and dispersion of other injected drugs. As part of its manufacturing process, Hylenex is purified using a proprietary synthetic-ligand affinity adsorbent manufactured by ProMetic BioSciences Ltd.

The therapeutic unit of the Company received authorization from the Therapeutic Products Directorate of Health Canada to begin a Phase Ib/II clinical trial of PBI-1402, its novel therapeutic compound in development to treat patients with anemia and has started enrollment of patients for the clinical trial. The study is designed to monitor the safety and efficacy of its compound in cancer patients undergoing chemotherapy and suffering from anemia.

Pathogen Removal and Diagnostic Technologies Inc. (PRDT), a joint venture between the Company and the American Red Cross completed its endogenous (blood-borne) infectivity study and the results of the study were presented by its lead scientific researcher, Dr Robert G. Rohwer, at the Cambridge Healthtech Institute's 10th Annual Transmissible Spongiform Encephalopathies Conference in Baltimore, MD. The results show removal of blood-borne TSE (transmissible spongiform encephalopathy) infectivity from whole blood to below the limit of detection of the bioassay. TSEs are fatal brain diseases that include Bovine Spongiform Encephalopathy (BSE) or "mad cow disease" in cattle and variant Creutzfeldt-Jakob disease (vCJD) in humans. The Company anticipates a successful CE Mark and the commercial launch of the prion filter in Europe in 2006.

The Ontario Superior Court of Justice approved yesterday a final extension of time to May 23, 2006, by which Hemosol Corp. is required to file proposals to its creditors. ProMetic is therefore anticipating a near-term resolution for the commercialization of its PPPS technology in North America.

First quarter results

The following information should be read in conjunction with the unaudited financial statements for the three-month period ended March 31, 2006. These interim financial statements have been prepared by the management of ProMetic and have not been subject to an engagement review by the Company's auditors. All amounts are in Canadian dollars unless otherwise indicated.

Revenues for the first quarter of 2006 amounted to $0.5 million compared to $5.2 million in the same period last year. Lower revenues are mainly explained by the recognition of a licence fee received in 2005 of $4.0 million from Hemosol, a licensee of the PPPS technology. Other causes are the delay in signing product development agreements and delay in shipment of products due to the Hemosol insolvency.

Research and development expenses were $3.8 million during the first quarter compared to $4.0 million in the first quarter of 2005. Administration, marketing and other expenses, excluding amortization, were $1.5 million compared to $1.6 million.

Net loss for the quarter was $6.3 million, or $0.05 per share compared to a net loss of $2.0 million, or $0.02 per share for the same period in 2005.

Cash and cash equivalents totaled $6.4 million as of March 31, 2006.



PROMETIC LIFE SCIENCES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian dollars)
(Unaudited)
March 31 December 31
2006 2005
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ASSETS
Current assets
Cash and cash equivalents $6,363 $10,525
Accounts receivable 3,230 2,914
Inventories 2,184 1,935
Prepaid expenses 689 518
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12,466 15,892

Investments 2,986 2,876
Capital assets 5,091 5,324
Licenses and patents 4,823 5,098
Deferred development costs - 43
Deferred financing expenses 568 563
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$25,934 $29,796
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LIABILITIES
Current liabilities
Bank loan $1,029 $1,029
Accounts payable and accrued liabilities 5,327 5,319
Deferred revenues 128 -
Provision related to a lawsuit 2,955 -
Current portion of long-term debt 286 366
Current portion of liability component of
the convertible term notes 1,067 524
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10,792 7,238

Liability component of the convertible term
notes 4,424 3,490
Long-term debt 42 46
Provision related to a lawsuit - 2,921
Preferred shares, retractable at the holder's
option 2,358 2,248
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17,616 15,943

SHAREHOLDERS' EQUITY
Share capital 150,697 150,697
Contributed surplus 6,812 5,929
Deficit (149,191) (142,773)
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8,318 13,853

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$25,934 $29,796
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The accompanying notes are an integral part of the consolidated
financial statements.
The unaudited quarterly financial statements have not been reviewed
by external auditors.



PROMETIC LIFE SCIENCES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of Canadian dollars except for per share amounts)
(Unaudited)

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Quarter ended
March 31
2006 2005
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Revenues
Sales and contract $456 $1,222
Licensing 40 4,000
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496 5,222
Charges
Research and development expenses 3,809 3,976
Administration, marketing and other expenses 1,484 1,577
Amortization of capital assets 256 273
Amortization of licenses and patents and
deferred development costs 436 391
Amortization of deferred financing expenses 53 -
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6,038 6,217

Loss before the following items (5,542) (995)
Provision related to a lawsuit (34) -
Write-down of short-term investment - (988)
Net interest expenses (771) (32)
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Net loss ($6,347) ($2,015)
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Net loss per share (basic and diluted) (0.05) (0.02)
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Weighted average number of outstanding shares
(in thousands) 129,528 99,516
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The accompanying notes are an integral part of the consolidated
financial statements.
The unaudited quarterly financial statements have not been reviewed
by external auditors.


About ProMetic Life Sciences Inc.

ProMetic Life Sciences Inc. is a biopharmaceutical company specialized in the research, development, manufacture and marketing of a variety of commercial applications derived from its proprietary Mimetic Ligand™ enabling technology. This technology is used in large-scale purification of biologics and the elimination of pathogens. ProMetic is also active in therapeutic drug development with the mission to bring to market effective, innovative, lower cost, less toxic products for the treatment of inflammation and cancer. Its drug discovery platform is focused on replacing complex, expensive proteins with synthetic "drug-like" protein mimetics. Headquartered in Montreal (Canada), ProMetic has R&D and manufacturing facilities in the UK and the Isle of Man and business development activities in the US, Europe, Asia and countries in the Middle East and North Africa.

Additional information is available on the Company's website at www.prometic.com.

Forward Looking Statements

This press release contains forward-looking statements about ProMetic's objectives, strategies and businesses that involve risks and uncertainties. These statements are "forward-looking" because they are based on our current expectations about the markets we operate in and on various estimates and assumptions. Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. Such risks and assumptions include, but are not limited to, the Company's ability to develop, manufacture, and successfully commercialize value-added pharmaceutical products, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of the Company to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. You will find a more detailed assessment of the risks that could cause actual events or results to materially differ from our current expectations on page 17 of the Company's Annual Information Form for the year ended December 31, 2005, under the heading "Risk Factors". As a result, we cannot guarantee that any forward-looking statement will materialize. We assume no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

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