BioSyntech Inc.
TSX VENTURE : BSY

BioSyntech Inc.

July 28, 2006 16:01 ET

BioSyntech Reports Major Progress in Fiscal 2006

Strengthens Balance Sheet with $28 Million Financing, Enhances Board with Additional Members

LAVAL, CANADA--(CCNMatthews - July 28, 2006) - BioSyntech, Inc. ("BioSyntech" or "the Company") (TSX VENTURE:BSY) today reported its results for the fiscal year ended March 31, 2006.

"2006 was a year of major progress for BioSyntech", said Claude LeDuc, President and Chief Executive Officer of the Company. "We forged significant partnerships with biopharmaceutical companies, reaffirming the strong potential of our technology, products and business strategy. We strengthened our financial position substantially by raising more than $28 million in the past 12 months, and we advanced our three late-stage products even closer to commercialization. As a result, BioSyntech is now well-positioned to execute on the strategic milestones which are critical to building shareholder value in the years to come."

"In addition to fortifying our financial resources, we also took steps to enhance the BioSyntech team by hiring some of the top people in their fields, including orthopaedics and clinical affairs. Also, in keeping with our strong commitment to corporate governance, Mr. Joseph Benarrosh was appointed as independent chairman to our board of directors, and furthermore, two new highly qualified members, Mr. Rudy Huber and Ms. Joyce Tsang, were also added," stated Mr. LeDuc.

Financial results

BioSyntech posted revenues of $61,505 for the fiscal year ended March 31, 2006, compared to $178,001 in the previous year. Research and development expenses amounted to $3,202,617 compared to $1,851,425 in the previous year. The net loss for the year was $6,855,050 ($0.17 per share) compared to $5,142,335 ($0.14 per share) in the previous year.

The increase in net loss was mainly due to the hiring of new employees related to product development activities and to increases in clinical trial expenses incurred for BST-CarGel®.

As of March 31, 2006, liquidities comprising cash, cash equivalents and short-term investments totalled $10,888,964 compared to $900,780 on March 31, 2005. This increase in working capital reflects the proceeds of the financings realized during the year, less the funds used for the Company's operations. Furthermore, additional closings in April and May 2006 of its private placement raised gross proceeds of approximately $11 million after that date.

Product development review

BST-CarGel®, the Company's lead product, addresses the enormous problem of cartilage damage and the inadequacies of current treatment options. This was scientifically supported by the results of a major pre-clinical study, recently published in the prestigious Journal of Bone and Joint Surgery, which found that BST-CarGel® regenerates more, higher quality cartilage than a common treatment called microfracture.

The US FDA, Health Canada and European Authorities have all classified this product as a medical device, which offers BioSyntech a quicker path to approval compared to drugs and biological products. As such, the Company continues to take the necessary steps to move BST-CarGel® towards commercialization. In November 2005, Health Canada approved BioSyntech's randomized trial, which is now ongoing and studying the repair of knee cartilage lesions in 80 subjects. Interim data from the first 20 patients will be submitted to the US FDA as pilot data in support of an Investigational Device Exemption application, leading to a pivotal trial in the US.

BST-DermOn™, our second late-stage product, is a topical treatment that holds the potential to be adopted as a first-line therapy for the treatment of chronic wounds, a market worth billions annually. This product provides a moist healing environment while at the same time allowing for the gas exchange needed to promote wound healing. A multi-centre pivotal trial for BST-DermOn™ is currently underway to evaluate its capacity to close chronic diabetic foot ulcers. Results of this trial will determine our regulatory approach, and shareholders will be updated accordingly on the Company's progress in this regard.

BioSyntech is also continuing to advance BST-InPod™, for the treatment for chronic heel pain, an affliction that affects up to 14% of adults. Using natural fatty acids to augment the foot's natural cushion, this injectable product offers a minimally invasive and viable alternative to the chronic use of pain killers, insoles or orthotics. The Company plans to begin Canadian clinical trials for BST-InPod™ in the fall of 2006 for Canada and European registration and will open discussions with the US FDA regarding the clinical requirements.

And, while these three products form the core of our product pipeline, BioSyntech continues to pursue the use of our platform technology, BST-Gel®, for other potential applications.

About BioSyntech

BioSyntech is a biotechnology company specializing in the discovery, development and manufacturing of innovative, cost-effective, and physician-friendly biotherapeutic thermogels for regenerative medicine and therapeutic delivery. BioSyntech's Quality Management System is registered to ISO 9001:2000 standard. For additional information, visit www.biosyntech.com.

Forward Looking Statements

This press release contains forward-looking statements and information which are subject to material risks and uncertainties. Such statements are not historical facts and are based on the current expectations of management. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances, or events to differ materially from those projected in the forward-looking information. These risks include, but are not limited to the results of our clinical trials, the regulatory approval process, competition, securing and maintaining corporate alliances, market acceptance of our products, the availability of government and insurance reimbursements for the Company's products, the strength of intellectual property, the success of research and development programs, reliance on subcontractors and key personnel, and other risks and uncertainties detailed from time-to-time in our filings with the Canadian securities commissions.

Readers should not place undue reliance on the forward-looking information, given that (i) our actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and (ii) certain material factors or assumptions which were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, could prove to be inaccurate. Additional information about (i) the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and (ii) the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, is contained in the Company's annual report and other documents filed from time to time with the Canadian securities commissions which are available at www.sedar.com.

Any statements that are contained in this analysis that are not statements of historical facts may be deemed to be forward looking statements made pursuant to the safe harbour provisions of the Private Securities Litigation Reformation Act of 1995. Without limiting the foregoing, the words "believe", "anticipates", "plans", "estimates", intends", "will", "should", "expects", "projects", and similar expressions are intended to identify forward looking statements.

These statements speak only as of the date they are made, and we assume no obligation to revise such statements as a result of any event, circumstance or otherwise, except in accordance with law.

NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • BioSyntech, Inc.
    Claude LeDuc
    President and CEO
    (450) 686-2437, ext. 233
    or
    The Equicom Group Inc.
    Eric Bouchard
    (514) 844-7997
    ebouchard@equicomgroup.com