IBEX TECHNOLOGIES INC.

IBEX TECHNOLOGIES INC.

March 09, 2005 10:30 ET

IBEX Reports Fiscal 2005 Second Quarter Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: IBEX TECHNOLOGIES INC.

TSX SYMBOL: IBT

MARCH 9, 2005 - 10:30 ET

IBEX Reports Fiscal 2005 Second Quarter Results

MONTREAL, QUEBEC--(CCNMatthews - March 9, 2005) -

Company Provides Update on Cancer and Arthritis Programs

IBEX Technologies Inc. (TSX:IBT), a Montreal-based biopharmaceutical
company, today reported its financial results for the second quarter and
six months ended January 31, 2005. The Company also provided an update
on its cancer and arthritis programs.

"Increased interest within the medical research community for our
arthritis assays has had favorable impact on sales of these assays
during the second quarter of fiscal 2005," said Paul Baehr, President
and CEO of IBEX Technologies Inc. "We are now focused on launching three
improved, next generation arthritis assays that we expect will have
increased utility for researchers."

"In cancer, we continue to advance both our diagnostic and therapeutic
research programs. We released for sale our first kallikrein assay,
hK10, to the research community in September 2004 and we recently
completed the technical development of hK6, our second kallikrein assay.
We are focused on establishing hK10 and hK6 as complementary assays to
CA125, the standard biomarker for ovarian cancer. Further, we are
currently evaluating a large cancer sample bank on behalf of a major
international diagnostics company. This is our first study conducted in
conjunction with a potential licensing partner. Data from this study
are expected to be available by the middle of this year, said Mr. Baehr.
"On the therapeutic side, we have completed the initial evaluation of
our kallikreins in in vitro models with encouraging results and we plan
to enter into in vivo studies later this year."

Financial Results

Revenue for the three-month period ended January 31, 2005 increased 49%
to $433,000 compared to $291,000 in the second quarter of fiscal 2004.
Sales of IBEX Arthritis and Enzyme products increased 81% and 29%
respectively in the second quarter of fiscal 2005 compared to the
corresponding period a year ago. Revenue for the six months ended
January 31, 2005 increased 16% to $736,000 compared to $617,000 in the
first six months of fiscal 2004.

Net loss for the second quarter of fiscal 2005 was $1.2 million or
($0.06) per share, compared to a net loss of $692,000 or ($0.03) per
share in the same period a year ago. Net loss for the six months ended
January 31, 2005 was $2.0 million or ($0.10) per share compared to a net
loss of $1.8 million or ($0.09) per share in the first six months of
fiscal 2004. The Company's increased net loss in the current year is
primarily attributable to increased research and development
expenditures, a decline in investment income, and an increase in general
and administrative expenses, resulting primarily from costs incurred in
the Company's successful defense of an unsolicited take over bid by a
third party during the second quarter of fiscal 2005.

Research and development expenses for the second quarter of fiscal 2005
were $556,000 compared to $456,000 in the corresponding period a year
ago. Research and development expenses for first six months of fiscal
2005 were $1.1 million compared to $904,000 in the first half of fiscal
2004. Increased research and development expenses in fiscal 2005
resulted primarily from expanded activities related to the Company's
kallikrein program.

Selling, general and administrative expenses and cost of goods sold for
the second quarter of fiscal 2005 increased to $1.1 million from
$613,000 in the second quarter a year ago. Selling, general and
administrative expenses and cost of goods sold for the first six months
of fiscal 2005 increased to $1.7 million from $1.2 million in the first
six months of fiscal 2004. As noted previously, this increase resulted
primarily from costs incurred by the Company in its defense against an
unsolicited take over bid by a third party during the second quarter of
fiscal 2005.

At January 31, 2005, IBEX's cash, cash equivalents and marketable
securities totaled $9.3 million, and the Company's net working capital
was $8.6 million. The Company believes that it currently has adequate
financial resources to support its anticipated expenditures for at least
two more years.

Cancer Program Update

IBEX has licensed from Mt. Sinai Hospital in Toronto and others, the
intellectual property rights associated with a series of serine
proteases known as kallikreins. It was previously held that the human
kallikrein family consisted of only three members, including human
kallikrein 3 (hK3), which is also known as Prostate Specific Antigen
(PSA), the most widely used biomarker/diagnostic test for prostate
cancer that has annual sales in the U.S., Europe and Japan of more than
US$350 million. Over the last several years the entire human kallikrein
locus has been discovered and found to contain 15 genes. Of these 12 new
kallikreins, IBEX holds license to patents and patent applications to
eight of the new genes, and rights to patents and patent applications
for various diagnostic and therapeutic uses of all 12 new kallikreins.
Research published in recent years has shown that some of these
kallikreins are present in abnormal levels in certain forms of cancer,
and are associated with altered rates of patient survival.

IBEX is studying the role of kallikreins in various cancers, with the
objective of developing new and better cancer therapies. IBEX is also
examining the feasibility of utilizing these kallikreins as clinical
diagnostic biomarkers for cancer detection and for improved patient
management.

IBEX launched its first kallikrein assay, hK10, to the research
community in September 2004. In published studies, hK10 has been shown
to be elevated in ovarian carcinoma. In a recent study examining the
serum of 100 ovarian cancer patients (80 with stage I/II disease), hK6
identified 42% more ovarian cancer patients than CA125. This is a
significant and positive finding, and if verified by additional studies
(ongoing) suggests a valuable role for hK6 in the management of ovarian
cancer. IBEX completed the technical development of hK6, its second
kallikrein assay, during the first quarter of calendar year 2005 and
expects to be able to release this assay to the research community in
the second quarter of calendar year 2005. IBEX seeks to initially
establish hK10 and hK6 as complementary assays to CA125, the current
biomarker standard for ovarian cancer, in order to improve patient
management. CA125 has combined annual sales of approximately US$80
million in the U.S., Europe and Japan.

By the end of March 2005, IBEX and its collaborators at Mt. Sinai
Hospital expect to complete the assay phase of an evaluation of a large
cancer sample bank on behalf of a major international diagnostics
company. Data from this study are expected to be available by the
middle of this year.

With regards to the therapeutics, IBEX has completed the initial
evaluation of its kallikreins in in vitro models with very encouraging
results and plans to enter into in vivo proof of concept studies later
this year. Results from these animal studies are expected to be
available prior to calendar year end, and if positive, the Company will
proceed with plans to complete pre-clinical development and file an
investigational new drug application ("IND") for human studies with the
U.S. Food and Drug Administration.

Arthritis Program Update

Over the first three quarters of calendar year 2005, IBEX plans to
release three improved versions of its already-marketed arthritis
assays. During the first quarter of calendar year 2005, IBEX completed
the development of its next generation CS-846 assay for the measurement
of fetal aggrecan. Fetal aggrecan is present in adults with early
osteoarthritis and rheumatoid arthritis. The new fetal aggrecan assay is
expected to have significant utility within the pharmaceutical research
community in the conduct of animal studies, and in human clinical
studies.

IBEX expects to follow the release of new fetal aggrecan assay with the
release later this year of two additional next-generation arthritis
assays, CPII and C2C, for use by the pharmaceutical community. CPII will
measure the synthesis of type II collagen and is initially targeted for
diagnosis of early rheumatoid arthritis. C2C is an assay for the
measurement of increased collagen degradation and is initially targeted
for osteoarthritis applications.

IMI Unsolicited Takeover Offer

On November 2, 2004, IMI International Medical Innovations ("IMI")
announced an unsolicited takeover offer for all of IBEX's outstanding
common shares for a consideration of $0.42 per share. The offer
comprised $0.42 in cash or 0.1254 common shares of IMI for each IBEX
common share, with 75% of the consideration being common shares of IMI.

On November 17, 2004, the Board of Directors of IBEX, upon the
recommendation of its Special Committee, unanimously resolved to
recommend to IBEX shareholders that they reject the unsolicited offer by
IMI and not tender their IBEX shares. A Directors' Circular, which
contained the recommendation that IBEX shareholders reject the IMI Offer
and the extensive reasons for the recommendation, including a fairness
opinion from independent financial advisor, Orion Securities Inc., was
mailed to IBEX shareholders on November 19, 2004. This document is
accessible via the SEDAR Web site at www.sedar.com.

On December 16, 2004, the IMI's tender offer expired.

The Board of Directors of IBEX, supported by the Company's financial and
legal advisors, are continuing to explore other strategic,
value-enhancing opportunities and remain focused on maximizing value for
IBEX shareholders.

About IBEX Technologies

IBEX Technologies (TSX:IBT) is a Montreal-based biopharmaceutical
company focused on the development of therapeutics and diagnostics for
the management of cancer and arthritis. For more information, please
visit the Company's Web site at www.ibex.ca.

Safe Harbour Statement

All of the statements contained in this news release, other than
statements of fact that are independently verifiable at the date hereof,
are forward-looking statements. Such statements, based as they are on
the current expectations of management, inherently involve numerous
risks and uncertainties, known and unknown. Some examples of known risks
are: the impact of general economic conditions, general conditions in
the pharmaceutical industry, changes in the regulatory environment in
the jurisdictions in which IBEX does business, stock market volatility,
fluctuations in costs, and changes to the competitive environment due to
consolidation or otherwise. Consequently, actual future results may
differ materially from the anticipated results expressed in the
forward-looking statements. IBEX disclaims any intention or obligation
to update these statements.



TO THE SHAREHOLDERS OF IBEX TECHNOLOGIES INC.

The interim consolidated balance sheet of IBEX Technologies Inc. as
of January 31, 2005 and the interim consolidated statements of loss
and deficit and cash flows for the period then ended have not been
reviewed by the Company's auditors, PricewaterhouseCoppers LLP.
These financial statements are the responsibility of management and
have been reviewed and approved by the Audit Committee.

CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------
January 31, July 31,
(unaudited) 2005 2004
---------------------------------------------------------------------
$ $
ASSETS

Current assets
Cash and cash equivalents 804,657 680,855
Marketable securities (note 3) 8,453,349 10,655,367
Accounts receivable 650,354 606,259
Prepaid expenses 142,360 116,126
---------------------------------------------------------------------
10,050,720 12,058,607
Property and equipment 646,135 645,220
Identifiable intangible assets 3,880,648 4,002,886
---------------------------------------------------------------------
14,577,503 16,706,713
---------------------------------------------------------------------
---------------------------------------------------------------------
LIABILITIES

Current liabilities
Accounts payable and accrued
liabilities 1,068,322 1,218,084
Balance of payments (note 4) 353,442 307,382
---------------------------------------------------------------------
1,421,764 1,525,466
---------------------------------------------------------------------

SHAREHOLDERS' EQUITY

Capital stock 52,082,081 52,082,081
Contributed surplus (note 2) 177,594 3,412
Deficit (39,103,936) (36,904,246)
---------------------------------------------------------------------
13,155,739 15,181,247
---------------------------------------------------------------------
14,577,503 16,706,713
---------------------------------------------------------------------
---------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF DEFICIT
---------------------------------------------------------------------
For the six months ended January 31st
2005 2004
--------------------------------------------------------------------
$ $

Balance - Beginning of period (36,904,246) (34,011,986)
Adjustment resulting from a
change in accounting
policy for stock based
compensation (note 2) (155,954) -
---------------------------------------------------------------------
Restated balance - Beginning of
period (37,060,200) (34,011,986)

Net loss for the period (2,043,736) (1,796,239)
--------------------------------------------------------------------
Balance - End of period (39,103,936) (35,808,225)
---------------------------------------------------------------------
---------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF LOSS

Three months ended Six months ended
January 31st January 31st
---------------------------------------------------------------------
(unaudited) 2005 2004 2005 2004
---------------------------------------------------------------------
$ $ $ $
Revenue 433,229 291,324 735,737 616,692
---------------------------------------------------------------------
(Expenses) income
Research and
development
expenditures (556,060) (456,074)(1,072,228) (904,199)
Selling, general
and administrative
expenses and costs
of goods sold (1,102,312) (612,664)(1,697,403)(1,195,786)
Amortization of
property and
equipment (30,168) (31,652) (58,361) (56,473)
Amortization of
identifiable
intangible assets (809) (809) (1,618) (1,618)
Other interest and
bank charges (25,357) (37,744) (50,341) (74,206)
Foreign exchange gain
(loss) 8,861 29,006 (8,555) (426,673)
Investment income 42,396 124,146 109,033 239,214
--------------------------------------------------------------------
(1,663,449) (985,791)(2,779,473)(2,419,741)
--------------------------------------------------------------------
Loss before income
taxes (1,230,220) (694,467)(2,043,736)(1,803,049)
Recovery of income
taxes - future - 3,405 - 6,810
-------------------------------------------------------------------
Net loss (1,230,220) (691,062)(2,043,736)(1,796,239)
--------------------------------------------------------------------

Net loss per share
Basic and diluted $(0.06) $(0.03) $(0.10) $(0.09)
--------------------------------------------------------------------


CONSOLIDATED CASH FLOW STATEMENTS

Three months ended Six months ended
January 31st January 31st
--------------------------------------------------------------------
(unaudited) 2005 2004 2005 2004
--------------------------------------------------------------------
$ $ $ $
Cash flows provided
by (used in):
Operating activities
Net loss for the
period (1,230,220) (691,062) (2,043,736) (1,796,239)
Items not affecting
cash -
Amortization of
property and
equipment 41,712 32,836 81,852 58,789
Amortization of
identifiable
intangible assets 61,132 61,131 122,262 122,262
Stock-based
compensation costs 6,697 - 18,229 -
Accretion of interest
on balance of
payments 23,030 34,400 46,060 68,800
Foreign Exchange loss
(gain) on marketable
securities - (20,634) - 362,676
Recovery of future
income taxes - (3,405) - (6,810)
--------------------------------------------------------------------
(1,097,649) (586,734) (1,775,333) (1,190,522)
--------------------------------------------------------------------

Net changes in non-cash
working capital items -
Decrease (increase)
in accounts
receivable 75,283 (35,975) (44,102) 172,940
Decrease in income
taxes receivable - 169,077 - 180,130
Decrease (increase)
in prepaid
expenses (70,907) 2,104 (26,234) 45,676
Decrease in accounts
payable and accrued
liabilities (117,218) (107,357) (149,781) (418,689)
--------------------------------------------------------------------
(112,842) 27,849 (220,117) (19,943)
--------------------------------------------------------------------
(1,210,491) (558,885) (1,995,450) (1,210,465)
--------------------------------------------------------------------
Investing activities
Additions to
marketable
securities (8,496,002)(7,021,000) (8,496,002)(11,679,000)
Proceeds on disposal
of marketable
securities 10,071,337 7,483,634 10,698,020 12,648,833
Additions to property
and equipment (48,512) (118,008) (82,766) (174,091)
--------------------------------------------------------------------
1,526,823 344,626 2,119,252 795,742
--------------------------------------------------------------------

Financing activities
Issuance of capital
stock - 3,500 - 3,500
--------------------------------------------------------------------

Increase (decrease)
in cash and cash
equivalents during
the year 316,332 (210,759) 123,802 (411,223)
Cash and cash
equivalents -
Beginning of
period 488,325 683,285 680,855 883,749
--------------------------------------------------------------------
Cash and cash
equivalents -
End of period 804,657 472,526 804,657 472,526
--------------------------------------------------------------------
--------------------------------------------------------------------



-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    IBEX Technologies Inc.
    Paul Baehr
    President & CEO
    (514) 344-4004
    or
    The Equicom Group Inc.
    Bruce Wigle
    Investor Relations
    (416) 815-0700