Advitech Inc.

Advitech Inc.

October 26, 2006 08:12 ET

Advitech Announces its First Significant Dermylex'TM' Sales and its 2006 Third-Quarter Financial Results

QUEBEC CITY, QUEBEC--(CCNMatthews - Oct. 26, 2006) - Today, Advitech Inc. (TSX VENTURE:AVI) announced its first significant sales of Dermylex™ and its financial results for the third quarter ended September 30, 2006.


Advitech today announced that it had generated total sales of $ 298 098 in the third quarter of 2006, of which $ 292 594 from the sales of Dermylex™. This first commercialized product originating from Advitech's XP-828L platform is for patients suffering from mild-to-moderate psoriasis. Most of the sales were carried out in Canada through Jamieson Laboratories, our commercial partner. Since April 2006, within a market test program, Dermylex™ has been distributed, on a selected basis, by Jamieson Laboratories in some drugstores and pharmacies in Quebec City and Toronto. The results have demonstrated the interest of patients in the product, because of its efficacy and safety. "Dermylex™ is now available in all pharmaceutical chains in Quebec, and its introduction in other Canadian provinces will be completed in November 2006," Renaud Beauchesne, Advitech President and Chief Executive Officer, pointed out.

"Along with its distribution partners announced earlier, Advitech just signed an agreement in principle with 'Associated Medical Supplies Co. Ltd' from Hong Kong for the distribution of Dermylex™ in the Hong Kong and Macao markets. This new partnership should lead to a definitive sales agreement for 2007," Renaud Beauchesne added.

Furthermore, the Company is still continuing negotiations with other partners in other countries to expand its distribution and accelerate its sales program for 2007. "According to the results obtained in Canada, and with the other signed distribution partnerships, Advitech is confident that it will be able to reach its objectives quickly, thus increasing its revenues, and ensuring the Company's profitability," the CEO explained.


From the financial standpoint, the impact of revenues generated by Dermylex™ sales and the contingency plan, started at the end of 2005, has made it possible to reduce the net operating loss for the last quarter significantly. "We will continue our efforts and push forward our marketing plan to meet our sales and growth forecasts," the President and Chief Executive Officer indicated.

For the third quarter ended September 30, 2006, the net loss stood at $ 266 435, or $ 0.005 per share, compared to a net loss of $ 528 108, or $ 0.01 per share, for the same period in 2005, a decrease of $ 261 673. Revenues for the third quarter of 2006 were $ 298 098, compared to $ 89 169 in 2005. The 2005 sales were generated primarily by the distribution of Lactium, the sale of which has since been terminated by the Company. The third quarter revenues for 2006 comprised sales of Dermylex™, the first commercial product originating from the XP-828L platform. During this quarter, the Company shipped out its first orders, and made significant sales. Gross R&D expenses reached $ 138 644 during the third quarter of 2006, down from $ 204 038 for the same period last year. This decrease is due primarily to the higher R&D expenses incurred during the same period last year for the double-blind, placebo-controlled study of Dermylex™.

As at September 30, 2006, cash and cash equivalents totaled $ 468 558, compared to $ 859 937 as at June 30, 2006, a decrease of $ 391 379. This variation is due to current operating activities of the Company, which is in line with the Company's expectations.

Selected Financial Information
Quarter ended September 30
(In thousands of dollars, except per share amounts)
Three-month period Nine-month period
ended September 30 ended September 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Financial Results

Total revenues $ 298.1 $ 89.2 $ 465.3 $ 472.5
Operating expenses $ 564.5 $ 617.3 $ 1,452.5 $ 2,208.1
Research and
development costs,
net of tax credits $ 103.9 $ 134.9 $ 299.3 $ 756.3
Net loss $(266.4) $(528.1) $(987.2) $(1,735.5)
Net loss per share,
basic and diluted $(0.005) $(0.01) $(0.02) $(0.03)

2006 2005
(Unaudited) (Unaudited)
Balance Sheet
Cash and cash equivalents $ 468.6 $ 1,219.7
Other current assets $ 359.8 $ 407.9
Long-term assets $ 240.1 $ 256.1
Current liabilities $ 436.0 $ 494.1
Long-term liabilities $ 1,080.4 $ 669.3
Shareholders' equity $(447.9) $ 720.3


In compliance with our 2006 plan, Advitech's objective is to finalize, for the last quarter of 2006, new financing from convertible debentures and to prepare equity financing for the first quarter of 2007. To date, we have completed an interim financing round of $ 550 000.

The third quarter financial statements and the fiscal year financial statements, as well as the management's discussion and analysis of results of operations and financial condition, are available on the Company's website at the following address:

About Advitech

Advitech is a life science and technology Company with the mission of discovering and commercializing scientifically supported, patented natural health products. Effective and safe, these products are designed to help counter Immune-Mediated Inflammatory Disorders (IMID), such as psoriasis and inflammatory bowel diseases. Advitech's common shares are listed on the TSX Venture Exchange under the symbol AVI. The number of common shares outstanding is 54 799 818.

About Dermylex™

Dermylex™, developed by Advitech, is an oral natural health product relieving mild-to-moderate psoriasis symptoms. Its efficacy has been clinically proven by two clinical trials, one of them multi-center, double-blind and placebo-controlled, for 112 days and on 84 patients, confirming Dermylex™'s efficacy and safety for that type of psoriasis. Dermylex™ is currently available in Canada. For more information, please visit the website.

About Associated Medical Supplies (AMS) Co. Ltd

Associated Medical Supplies (AMS) is one of the Hong Kong Government's registered medical suppliers of all kinds of medical products to government hospitals, laboratories and medical institutions in Hong Kong. In China AMS established five regional sales and service centers in Beijing, Shanghai, Guangzhou, Tianjin and Hangzhou. These regional centers control a nationwide distribution and after-sale service network. AMS has also established dealerships in Macao, Thailand, Malaysia and the Philippines.

This press release contains forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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