Advitech Inc.

Advitech Inc.

October 26, 2005 09:00 ET

Advitech Announces its Third-Quarter Highlights and Financial Results: 2nd Application for its XP-828L Platform

QUEBEC CITY, QUEBEC--(CCNMatthews - Oct. 26, 2005) - Advitech Inc. (TSX VENTURE:AVI) today announced its financial results and operating highlights for the third quarter ended September 30, 2005.

Commenting on the recent developments of the third quarter, Renaud Beauchesne, President and CEO of Advitech mentioned: "In accordance with our business plan, we have completed a preclinical study on Inflammatory Bowel Diseases, the second application for our XP-828L platform. On October 6, we published promising results during the BioContact Quebec 2005 conference. These results confirm the potential of our XP-828L platform in the development of additional applications for chronic inflammatory diseases."

Beauchesne added: "Our strategy at this time consists in identifying the best possible partner for continuing the development of this application, and for bringing it to market. Discussions are already under way to develop a partnership for this application."



Further to the positive results of the clinical trial of XP-828L, the Company has already signed confidentiality agreements and met with companies from the United States, Europe and Asia regarding potential agreements for these markets. The Company has also received letters of interest from companies that are willing to distribute XP-828L. The Company received positive feedback from the discussions which confirm the strong demand for an orally administered, safe product for people suffering from mild-to-moderate psoriasis. XP-828L appears to be well positioned to meet this need. The objective of the Company is to sign an agreement in principle with its first marketing partner before the end of 2005.

Inflammatory Bowel Diseases

On October 6, the Company reported positive results from a preclinical study for a potentially new treatment for inflammatory bowel diseases, such as Crohn's disease and similar autoimmune colitis. The study, which began in the first quarter of 2005, was conducted in collaboration with Patrice E. Poubelle, M.D., Ds.C., scientific advisor for the Company and researcher at the Centre de Recherche du Centre Hospitalier de l'Universite Laval (CRCHUL), Quebec. This study involved two scientifically well-recognized animal models, one representing an acute phase, while the second was representative of chronic inflammation. The in vivo results obtained with two models have demonstrated statistically significant improvements of several clinical parameters associated with inflammatory colitis and shown a dose-dependent effect of XP-828L. This preclinical study also confirmed the excellent safety profile of XP-828L throughout the eight-month study and at different dosages. These results represent an important scientific advancement for the Company and achievement of an important component of its business plan. The next step is to identify the best partner possible to develop this opportunity, and bring it to market.


On the financing front, the Company is currently reviewing options to ensure continuous funding of its activities, with the objective of completing a financing operation in the coming months.

During the third quarter of 2005, the Company also announced it has obtained an advance ruling from the Ministere du Revenu du Quebec confirming that its common shares are eligible as valid shares pursuant to the SME Growth Stock Plan. Consequently, common shares of Advitech have been included on the list of valid shares drawn up by the "Autorite des marches financiers".


The results obtained so far in resale activities for the ingredient Lactium have not met the expectations of the Company. Nor has the Company been able to sign new distribution agreements for the U.S. market, as hoped. Given those elements, the Company will be reassessing the status of such activities in the future and may decide not to renew its distribution agreement for this product.


For the third quarter ended September 30, 2005, net loss stood at $528,108, or $0.01 per share, compared to a net loss of $446,081, or $0.01 per share for the same period in 2004, an increase of $82,027. Gross research and development expenses were $204,038 during the third quarter of 2005, compared to $173,111 for the same period last year.

For the nine-month period ended September 30, 2005, net loss stood at $1,735,545, or $0.03 per share, compared to a net loss of $921,094, or $0.02 per share for the same period in 2004, an increase of $814,451. Gross research and development expenses were $977,175 during the nine-month period ended September 30, 2005, compared to $565,112 for the same period last year. This increase is due mainly to expenses incurred for the XP-828L development program.

As at September 30, 2005, cash and cash equivalents totalled $1,219,714, compared to $1,273,360 as at June 30, 2005, or a decrease of $53,646 during this quarter, which is in line with the Company's expectations.

Selected financial information
(In thousands of dollars, except per share amounts)

Financial Results Periods of 3-months Periods of 9-months
ended September 30, ended September 30,
2005 2004 2005 2004

Total revenues 89.2 160.2 472.5 1,194.3
Operating expenses 617.3 606.3 2,208.1 2,115.4
Research and development
costs, net of tax credits 134.9 134.7 756.3 308.9
Net loss (528.1) (446.1) (1,735.5) (921.1)
Loss per share basic and
diluted before discontinued
operations $ (0.01) $ (0.01) $ (0.03) $ (0.02)
Net loss per share basic and
diluted $ (0.01) $ (0.01) $ (0.03) $ (0.02)

Balance Sheet As at September 30,
2005 2004
Cash and cash equivalents 1,219.7 2,982.7
Other current assets 407.9 866.3
Long-term assets 256.1 274.7

Current liabilities 494.1 613.7
Long-term liabilities 669.3 667.5
Shareholders' equity 720.3 2,842.5

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

About Advitech

Advitech is a biotechnology company specializing in the development of bioactive ingredients from dairy proteins. Its key focus areas are in the fields of immunology and inflammation. Its main platform, XP-828L, is a growth factor complex aimed at treating psoriasis, inflammatory bowel diseases and other chronic immune-mediated inflammatory diseases (I.M.I.D.). 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.

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 Company disclaims any obligation to update these forward- looking statements.

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

Contact Information

  • Advitech Inc.
    Michel Lamontagne, MBA
    Vice-President and Chief Financial Officer
    (418) 686-7498, ext. 237
    For Investors
    Echoes Financial Network Inc.
    Dominic Sicotte
    (514) 842-9551, ext. 236
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    Martin Lavoie
    (514) 842-9551, ext. 231