Chemokine Therapeutics Corp.
TSX : CTI
OTC Bulletin Board : CHKT

Chemokine Therapeutics Corp.

August 11, 2008 08:30 ET

Chemokine Therapeutics Announces Second Quarter 2007 Financial and Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 11, 2008) - Chemokine Therapeutics Corp. (the "Company") (TSX:CTI)(OTCBB:CHKT), a biotechnology company developing chemokine-based therapies to treat cancer, blood disorders and vascular diseases, today announced the financial and operating results of the second quarter ended June 30, 2008.

Second Quarter Highlights:

- Final results of CTCE-9908 Phase I/II clinical trial in late stage cancer patients

- Walter Korz appointed President and Chief Executive Officer

- Positive breast cancer preclinical data presented at the AACR meeting on lead drug candidate CTCE-9908

- Positive liver cancer preclinical data presented at AACR meeting on lead drug candidate CTCE-9908

- Closes $885,000 offering

- Issuance of two new U.S. patents

Subsequent events

- Ed Taylor and Walter Korz join the Board of Directors

- Issuance of U.S. patent "CXC Chemokine Receptor 4 Agonist Peptides"

- Positive breast cancer data presented at Joint Metastasis Research Society - American Association for Cancer Research Conference

- Dr. Andrew Zhu joins the Oncology Advisory Board

"CTCE-9908 has continued to show positive results by our collaborators," stated Walter Korz, President and Chief Executive Officer. "This positive data reinforces our belief that CTCE-9908 has the potential to be a new therapeutic approach for treating cancer."

Financial Results - Unaudited

(All amounts in U.S. dollars and in accordance with U.S. GAAP unless otherwise specified)

The Company incurred a net loss of $863,647 ($0.02 per share) for the three months ended June 30, 2008 compared to $306,078 ($0.01 per share) for the three months ended June 30, 2007. The variance in net loss was principally caused by cost recoveries in the three months ended June 30, 2007. The normalized loss for the three months ended June 30, 2007 would have been $1,383,989 ($0.03 per share). The decrease in the net loss would have been $520,342, which is attributed to a reduction in research and development, and general and administrative expenditures.

The Company had no revenues in the three months ended June 30, 2008, or in the three months ended June 30, 2007.

Research and development expenses for the three months ended June 30, 2008 were $348,027, compared to a net recovery of $394,661 for the three months ended June 30, 2007, being an increase of $742,688.

The variance of $742,688 in research and development expenses in the current three month period is primarily attributable to the recovery of costs of $506,911 (for fiscal 2005) and $571,000 (for fiscal 2006) from Globe Laboratories under the terms of the development agreement with Globe Laboratories which was terminated by us on January 1, 2007 as well as the terms of the settlement agreement with Globe Laboratories.

Our normalized research and development costs, excluding the above mentioned cost recoveries would have amounted to $683,250 for the three months ended June 30, 2007 compared to $348,027 for the corresponding period in 2008, a decrease of $335,223, which is attributed to the reduced expenses for research and development salaries amounting to approximately $149,000, lab expenses of approximately $151,000 and contract research expenses of approximately $35,000 following the surrender of the laboratory leases and reductions in laboratory personnel implemented in December 2007.

The Company recorded direct costs for CTCE-9908 of approximately $278,384 for the three months ended June 30, 2008. This compares to a net recovery of $562,428 for the three months ended June 30, 2007. The variance of $840,852 in direct costs for CTCE-9908 in the current period is a result of cost recoveries in 2007 referred to above.

Direct costs for CTCE-0214 were approximately $24,948 for the three months ended June 30, 2008 compared to $75,411 for the three months ended June 30, 2007. The decrease in CTCE-0214 of $50,463 in direct costs in the current period reflects a reduction of spending on clinical and preclinical studies.

Assuming that the Company is able to raise the required financing, research and development expenses are expected to increase in the future as and when the Company incurs costs for clinical trials. Completion dates and completion costs to bring a drug candidate to market vary significantly for each drug candidate given the nature of the clinical trials and the fact that more clinical trials may need to be conducted to advance a drug candidate based upon the results of each phase. In addition, the Company anticipates partnering with larger pharmaceutical companies to conduct and finance later stage clinical trials and therefore the timing of completion of the approval of a drug will likely not be within our control. Based on these factors the Company cannot reasonably estimate the completion dates and completion costs required to gain regulatory approval of our compounds for sale. Drug candidates are required to successfully complete Phase III clinical trials before gaining regulatory approval for sale which for the drug candidates is not expected to occur for several years.

General and administrative expenses for the three months ended June 30, 2008 were $448,387, compared to $926,795 for the three months ended June 30, 2007. The decrease of $478,408 was in respect of reduced expenditures of approximately $194,000 in salaries and directors fees, approximately $225,000 in professional fees, and approximately $59,000 for travel and other expenses. Other general and administrative expenses included consulting, marketing and promotion expenses incurred for business development.

Interest income was $2,904 for the three months ended June 30, 2008 compared with $42,812 for the three months ended June 30, 2007. The decrease of interest income of $39,908 was due to decreases in short-term investments and cash equivalents.

Foreign exchange gain was $9,189 for the three months ended June 30, 2008, compared to a gain of $288,513 for the three months ended June 30, 2007. The gain in 2007 principally resulted from short-term investments and foreign currency transactions and the strengthening of other currencies against the US currency.

At June 30, 2008, the Company had approximately $850,000 in cash and cash equivalents and short term investments on hand, compared to approximately $3.4 million as of June 30, 2007, a decrease of approximately $2.5 million. The working capital at June 30, 2008 was approximately $180,000 compared to working capital of approximately $3.3 million at June 30, 2007, a decrease of $3.1 million.

About Chemokine Therapeutics Corp. (TSX:CTI)(OTCBB:CHKT)

Chemokine Therapeutics is a product-focused biotechnology company developing drugs in the field of chemokines. Chemokines are a class of signaling proteins which play a critical role in the growth, differentiation, and maturation of cells necessary for fighting infection as well as tissue repair and regeneration. Chemokines also have an important role in cancer metastasis and growth. Chemokine Therapeutics is a leader in research in the field of chemokines and has several products in various stages of development.

Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: Statements in this document regarding management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. For this purpose, any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "projects", and similar expressions are intended to identify forward-looking statements. 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 statements. These risks include, but are not limited to, those associated with the success of research and development programs, the regulatory approval process, competition, securing and maintaining corporate alliances, market acceptance of the Company's products, the availability of government and insurance reimbursements for the Company's products, the strength of the Company's intellectual property, the ability of the Company to obtain adequate financing to fund its operations, the potential dilutive effects of any financing, reliance on subcontractors and key personnel and other risks detailed from time-to-time in the Company's public disclosure documents and other filings with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities. Forward-looking statements are made as of the date hereof, and the Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.



CHEMOKINE THERAPEUTICS CORP.
(A Development Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

June 30, December 31,
2008 2007
------------ ------------
(Unaudited) (Audited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 774,779 $ 688,388
Short-term investments 75,366 75,658
Amounts receivable 17,851 27,353
Prepaid expense and deposits 100,649 41,122
------------ ------------

TOTAL CURRENT ASSETS 968,645 832,521

PROPERTY AND EQUIPMENT, net 212,932 337,751

LICENSE COSTS, net 4,758 8,605

AMOUNT DUE FROM AFFILIATE - 50,439
------------ ------------

$ 1,186,335 $ 1,229,316
------------ ------------
------------ ------------
LIABILITIES

CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 783,472 $ 897,996
Current portion of capital lease obligation 2,659 10,254
------------ ------------

TOTAL CURRENT LIABILITIES 786,131 908,250
------------ ------------
COMMITMENTS

STOCKHOLDERS' EQUITY

PREFERRED STOCK
Authorized - 6,000,000 shares; par
value $0.001 per share at June 30, 2008
Issued and outstanding: June 30, 2008 - Nil;
December 31, 2007 - Nil - -

COMMON STOCK
Authorized - 200,000,000 shares; par value
$0.001 per share at June 30, 2008 and
December 31, 2007
Issued and outstanding: June 30, 2008 -
53,333,575
December 31, 2007 - 42,183,748 53,334 42,184

ADDITIONAL PAID-IN CAPITAL 32,745,746 31,062,180

(DEFICIT) ACCUMULATED DURING THE DEVELOPMENT
STAGE (32,398,876) (30,783,298)
------------ ------------

400,204 321,066
------------ ------------

$ 1,186,335 $ 1,229,316
------------ ------------
------------ ------------

See notes to the interim consolidated financial statement on SEDAR or
EDGAR.


CHEMOKINE THERAPEUTICS CORP.
(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Cumulative
from
inception
Three months ended Six months ended on July 15,
June 30, June 30, 1998 to
-------------------- ------------------------ June 30,
2008 2007 2008 2007 2008
--------- --------- ----------- ----------- ------------

REVENUE $ - $ - $ - $ - $ 275,000
--------- --------- ----------- ----------- ------------
EXPENSES
Research and
development 348,027 (394,661) 540,638 320,585 17,116,460
General and
administrative 448,387 926,795 928,005 1,789,600 15,686,196
Stock-based
compensation 13,122 27,739 30,291 62,574 693,231
Amortization of
license 1,924 1,924 3,847 3,847 45,845
Depreciation &
amortization
of property
and equipment 65,592 75,606 131,130 150,167 773,635
--------- --------- ----------- ----------- ------------

877,052 637,403 1,633,911 2,326,773 34,315,367
--------- --------- ----------- ----------- ------------
OTHER INCOME
Interest income 2,904 42,812 8,781 99,384 747,067
Foreign
exchange
gain (loss) 9,189 288,513 7,546 303,374 913,547
Gain (loss) on
sale of
property and
equipment 1,312 - 2,006 - (19,123)
--------- --------- ----------- ----------- ------------
13,405 331,325 18,333 408,758 1,641,491
--------- --------- ----------- ----------- ------------

NET LOSS $(863,647) $(306,078) $(1,615,578) $(1,918,015) $(32,398,876)
--------- --------- ----------- ----------- ------------
--------- --------- ----------- ----------- ------------
NET LOSS PER
COMMON SHARE
FOR THE PERIOD
- BASIC AND
DILUTED $ (0.02) $ (0.01) $ (0.03) $ (0.05)
--------- --------- ----------- -----------
--------- --------- ----------- -----------
WEIGHTED
AVERAGE
NUMBER OF
COMMON
SHARES
OUTSTANDING 48,600,747 42,183,748 46,949,940 42,183,748
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

See notes to the interim consolidated financial statement on SEDAR or
EDGAR.


CHEMOKINE THERAPEUTICS CORP.
(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)

Cumulative
from
inception
Three months ended Six months ended on July 15,
June 30, June 30, 1998 to
-------------------- ------------------------ June 30,
2008 2007 2008 2007 2008
--------- --------- ----------- ----------- ------------

CASH FLOW
FROM
OPERATING
ACTIVITIES
Net loss $(863,647) $(306,078) $(1,615,578) $(1,918,015) $(32,398,876)
Adjustments
to reconcile
net cash
provided by
operating
activities
Depreciation
and
amortization 67,516 77,530 134,977 154,014 819,480
Patent
application
expensed - - - - 81,858
Loss (gain)
on sale of
property and
equipment (1,312) - (2,006) - 19,123
Realized
foreign
exchange
loss (gain) (88) - (280) - (11,902)
Common shares
issued for
consulting
services - - - - 1,033,669
Warrants
issued for
consulting
services - - - - 404,842
Options
issued for
consulting
services - - - - 87,968
Stock-based
compensation 13,122 27,739 30,291 62,574 693,231
Decrease
(increase)
in Amounts
receivable 19,599 2,338 9,502 (4,836) (17,851)
Prepaid
expense and
deposits (25,037) 32,513 (59,527) 48,893 (100,649)
Increase
(decrease)
in Accounts
payable and
accrued
liabilities 72,040 422,459 (114,524) 536,565 783,472
--------- --------- ----------- ----------- ------------

Cash provided
(used) by
operating
activities (717,807) 256,501 (1,617,145) (1,120,805) (28,605,635)
--------- --------- ----------- ----------- ------------

CASH FLOW
FROM
FINANCING
ACTIVITIES
Stock issued
for cash 852,728 - 1,894,832 - 33,542,308
Stock issued
for
settlement
of debt - - - - 200,000
Offering costs (81,936) - (230,405) - (3,205,001)
Net advances
(to) from
affiliates - (474,689) 50,435 (485,355) (35,044)
Promissory
note payable
to affiliate - (219,778) - - -
Deferred
financing
costs - (713,655) - (713,655) -
Capital lease
payments (3,700) (1,832) (7,595) (4,687) (31,991)
--------- --------- ----------- ----------- ------------

Cash provided
(used) by
financing
activities 767,092 (1,409,954) 1,707,267 (1,203,697) 30,470,272
--------- --------- ----------- ----------- ------------

CASH FLOW FROM
INVESTING
ACTIVITIES
Cash held by
disposed
subsidiary - - - - (4,754)
Purchase of
investments (955) (5,534) (955) (933,617) (17,310,207)
Redemption of
investments - 926,340 1,247 2,504,295 17,234,842
Payment under
license
agreement - - - - (50,603)
Proceeds on
sale of
property and
equipment 2,173 - 5,531 - 57,337
Purchase of
property and
equipment (8,755) (5,358) (9,554) (359,874) (1,016,473)
--------- --------- ----------- ----------- ------------

Cash provided
(used) by
investing
activities (7,537) 915,448 (3,731) 1,210,804 (1,089,858)
--------- --------- ----------- ----------- ------------

INCREASE
(DECREASE)
IN CASH AND
CASH
EQUIVALENTS
DURING THE
PERIOD 41,748 (238,005) 86,391 (1,113,698) 774,779

CASH AND CASH
EQUIVALENTS,
beginning of
period 733,031 3,570,975 688,388 4,446,668 -
--------- --------- ----------- ----------- ------------

CASH AND CASH
EQUIVALENTS,
end of
period $ 774,779 $3,332,970 $ 774,779 $ 3,332,970 $ 774,779
--------- --------- ----------- ----------- ------------
--------- --------- ----------- ----------- ------------

See notes to the interim consolidated financial statement on SEDAR or
EDGAR.

Contact Information

  • Chemokine Therapeutics Corp.
    Mr. Don Evans
    Vice President, Corporate Communications
    (604) 738-6643 or 1-888-822-0305
    (604) 738-6645 (FAX)
    Email: devans@chemokine.net
    Website: www.chemokine.net