IBEX TECHNOLOGIES INC.
TSX : IBT

IBEX TECHNOLOGIES INC.

June 14, 2005 07:30 ET

IBEX Reports Fiscal 2005 Third Quarter Results

NONTREAL, QUEBEC--(CCNMatthews - June 14, 2005) - All amounts are expressed in Canadian dollars unless otherwise indicated

IBEX Technologies Inc. (TSX:IBT), a Montreal-based biopharmaceutical company, today reported its financial results for the three and nine-month periods ended April 30, 2005. The Company also provided an update on its cancer and arthritis programs.

"Sales of our arthritis biomarker products to customers in the research community, including five of the world's leading pharmaceutical companies, are growing and we look forward to building on our momentum as we continue to roll out the next generation of our arthritis assays," said Paul Baehr, President and CEO of IBEX Technologies Inc. "In cancer, by the end of our fiscal year we expect to launch our second kallikrein assay for ovarian cancer research purposes. As previously announced preliminary results from our in vivo study examining the utility of our kallikrein-based assays in ovarian cancer are encouraging and we are now planning our second animal study, results of which are expected to be available prior to the end of calendar 2005."

Financial Results

Revenue for the three-month period ended April 30, 2005 increased 12% to $403,000 compared to $359,000 in the third quarter of fiscal 2004. Sales of IBEX Arthritis products increased 54% in the quarter compared to the corresponding period a year ago, while the Company's enzyme sales were down 12% versus the third quarter of fiscal 2004. Revenue for the nine months ended April 30, 2005 increased 17% to $1.1 million compared to $976,000 in the first nine months of fiscal 2004.

Net loss for the third quarter of fiscal 2005 was $1.1 million or ($0.05) per share, compared to a net loss of $871,000 or ($0.04) per share in the third quarter a year ago. The Company's increased net loss for the third quarter is primarily attributable to increased selling, general, administrative and costs of goods sold expenses, partially offset by decreased research and development expenses. Net loss for the nine months ended April 30, 2005 was $3.1 million or ($0.15) per share compared to a net loss of $2.7 million or ($0.13) per share in the first nine months of fiscal 2004. The Company's increased net loss in the first nine months of fiscal 2005 is primarily attributable to increased selling, general administrative and costs of goods sold expenses, resulting primarily from the Company's defense of an unsolicited take over bid by a third party during the second quarter of fiscal 2005.

Research and development expenses for the third quarter of fiscal 2005 were $544,000 compared to $767,000 in the corresponding period a year ago. Research and development expenses for first nine months of fiscal 2005 were $1.6 million compared to $1.7 million in the first nine months of fiscal 2004.

Selling, general and administrative expenses and cost of goods sold for the third quarter of fiscal 2005 increased to $952,000 from $540,000 in the third quarter a year ago. Selling, general and administrative expenses and cost of goods sold for the first nine months of fiscal 2005 increased to $2.6 million from $1.7 million in the first nine months of fiscal 2004.

At April 30, 2005, IBEX's cash, cash equivalents and marketable securities totaled $8.4 million, and the Company's net working capital was $7.5 million. The Company believes that it currently has adequate financial resources to support its anticipated expenditures for the next two years.

Cancer Program Update

On May 18, 2005, subsequent to the end of the third quarter, IBEX provided an update on preliminary results from the first in vivo study of its kallikrein program in ovarian cancer. The study is being conducted under the guidance of Dr. Barbara C. Vanderhyden at the Ottawa Regional Cancer Centre, Centre for Cancer Therapeutics. Full results from these animal studies are expected to be available prior to calendar year end.

IBEX completed the technical development of hK6, its second kallikrein assay, during the third quarter of fiscal 2005 and expects to be able to release this assay to the research community prior to its fiscal year end. IBEX seeks to initially establish hK10 (its first kallikrein assay) 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. In addition, IBEX expects to complete validation studies with one or more major diagnostic companies that will enable IBEX to determine whether kallikreins will prove to be useful as clinical diagnostic biomarkers. In the meantime, IBEX plans to continue to release additional kallikrein assays for research purposes.

During the third quarter of fiscal 2005, IBEX re-negotiated the terms of its kallikrein related May 2003 Share Purchase Agreement with the former shareholders of Oncotherapeutics Inc. ("Onco"). The new agreement lowers the upfront payments and replaces them with higher downstream royalties. The consideration for this modification was the issuance of 446,561 common shares valued at $150,000 and $150,000 in cash.

Arthritis Program Update

During the third quarter of fiscal 2005, IBEX completed the development of a next generation CS846 assay for the measurement of fetal aggrecan, a biomarker that is present in adults with early osteoarthritis and rheumatoid arthritis. This new assay, FA-846® is expected to have significant utility within the research community in the conduct of animal studies, and in human clinical studies.

IBEX is now selling four arthritis assays to the research community for use in animal models to assist in the identification of promising new drug candidates, and for use in human clinical trials to assist in the selection of appropriate patients.

IBEX plans to release improved versions of its CP II and C2C arthritis assays in the fourth quarter of calendar 2005. CPII measures 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.

During the third quarter of fiscal 2005, IBEX re-negotiated the terms of its milestone payments with the former shareholders of HDM Diagnostics & Imaging Inc. ("HDM"). IBEX acquired HDM and the rights to certain novel arthritis biomarkers in June 2002. The new agreement lowers the overall payments to the former shareholders of HDM.

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 April 30, 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
---------------------------------------------------------------------
April 30, July 31,
---------------------------------------------------------------------
(unaudited) 2005 2004
---------------------------------------------------------------------
$ $
ASSETS
Current assets
Cash and cash equivalents 512,183 680,855
Marketable securities (note 3) 7,886,208 10,655,367
Accounts receivable 664,735 606,259
Prepaid expenses 130,014 116,126
---------------------------------------------------------------------
9,193,140 12,058,607
Property and equipment 640,927 645,220
Identifiable intangible assets 4,458,692 4,002,886
---------------------------------------------------------------------
14,292,759 16,706,713
---------------------------------------------------------------------
---------------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 1,336,339 1,218,084
Balance of payments (note 5a) 376,471 307,382
---------------------------------------------------------------------
1,712,810 1,525,466
Balance of payments (note 5b) 339,200 -
---------------------------------------------------------------------
2,052,010 1,525,466
---------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock (note 6(b)) 52,216,049 52,082,081
Contributed surplus (note 2) 216,081 3,412
Deficit (40,191,381)(36,904,246)
---------------------------------------------------------------------
12,240,749 15,181,247
---------------------------------------------------------------------
14,292,759 16,706,713
---------------------------------------------------------------------
---------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF DEFICIT
---------------------------------------------------------------------
For the nine months ended April 30th 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 (3,131,181) (2,666,998)
---------------------------------------------------------------------
Balance - End of period (40,191,381)(36,678,984)
---------------------------------------------------------------------
---------------------------------------------------------------------



CONSOLIDATED STATEMENTS OF LOSS
Three months ended Nine months ended
April 30th April 30th
---------------------------------------------------------------------
(unaudited) 2005 2004 2005 2004
---------------------------------------------------------------------
$ $ $ $
Revenue 403,225 358,948 1,138,963 975,640
---------------------------------------------------------------------
(Expenses) income
Research and
development
expenditures (544,292) (767,411) (1,616,519) (1,671,613)
Selling, general
and administrative
expenses and cost
of goods sold (952,276) (539,653) (2,649,680) (1,735,438)
Amortization of
property and
equipment (32,556) (29,753) (90,917) (86,226)
Amortization of
identifiable
intangible assets (809) (809) (2,427) (2,427)
Other interest and
bank charges (25,455) (36,647) (75,796) (110,853)
Foreign exchange
gain (loss) 5,049 21,569 (3,507) (405,104)
Investment income 59,669 119,592 168,702 358,806
---------------------------------------------------------------------
(1,490,670) (1,233,112) (4,270,144) (3,652,855)
---------------------------------------------------------------------
Loss before income
taxes (1,087,445) (874,164) (3,131,181) (2,677,215)
Recovery of income
taxes - future - 3,405 - 10,215
---------------------------------------------------------------------
Net loss (1,087,445) (870,759) (3,131,181) (2,667,000)
---------------------------------------------------------------------
---------------------------------------------------------------------

Net loss per share
Basic and diluted $(0.05) $(0.04) $(0.15) $(0.13)
---------------------------------------------------------------------
---------------------------------------------------------------------



CONSOLIDATED CASH FLOW STATEMENTS
Three months ended Nine months ended
April 30th April 30th
---------------------------------------------------------------------
(unaudited) 2005 2004 2005 2004
---------------------------------------------------------------------
$ $ $ $
Cash flows provided by
(used in):
Operating activities
Net loss for the
period (1,087,445) (870,759) (3,131,181) (2,667,000)
Items not affecting
cash -
Amortization of
property and
equipment 46,654 32,007 128,506 90,796
Amortization of
identifiable
intangible assets 61,131 61,131 183,394 183,393
Stock-based
compensation costs 22,456 - 40,685 -
Accretion of interest
on balance of
payments 23,030 34,400 69,090 103,200
Foreign Exchange
loss on marketable
securities - - - 362,676
Recovery of future
income taxes - (3,405) - (10,215)
---------------------------------------------------------------------
(934,174) (746,626) (2,709,506) (1,937,150)
---------------------------------------------------------------------

Net changes in
non-cash working
capital items -
Decrease (increase)
in accounts
receivable (14,381) (77,465) (58,483) 95,475
Decrease in income
taxes receivable - - - 180,130
Decrease (increase)
in prepaid expenses 12,370 (47,290) (13,863) (1,614)
Increase in accounts
payable and accrued
liabilities 268,016 486,983 118,234 68,297
---------------------------------------------------------------------
266,005 362,228 45,888 342,288
---------------------------------------------------------------------
(668,169) (384,398) (2,663,618) (1,594,862)
---------------------------------------------------------------------
Investing activities
Additions to marketable
securities (2,261,622) (1,673,926)(10,757,624)(13,352,926)
Proceeds on disposal
of marketable
securities 2,828,763 2,281,426 13,526,783 14,930,259
Addition to
identifiable
intangible assets
(note 4) (150,000) - (150,000) -
Additions to property
and equipment (41,446) (26,693) (124,213) (200,784)
---------------------------------------------------------------------
375,695 580,807 2,494,946 1,376,549
---------------------------------------------------------------------

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

Increase (decrease) in
cash and cash
equivalents during
the year (292,474) 196,409 (168,672) (214,813)
Cash and cash
equivalents -
Beginning of period 804,657 472,527 680,855 883,749
---------------------------------------------------------------------
Cash and cash
equivalents -
End of period 512,183 668,936 512,183 668,936
---------------------------------------------------------------------
---------------------------------------------------------------------


Contact Information

  • IBEX Technologies Inc.
    Paul Baehr
    President & CEO
    (514) 344-4004
    or
    The Equicom Group Inc.
    Bruce Wigle
    Investor Relations
    (416) 815-0700 ext. 228