ProMetic Life Sciences Inc.

ProMetic Life Sciences Inc.

November 14, 2007 16:50 ET

ProMetic Provides Business Update and Reports Financial Results for the Period Ended September 30, 2007

- Abstract on PBI-1402 data posted on American Society of Hematology's web site - Pre-adoption trials underway in Ireland and in the UK for P-Capt® prion filter

MONTREAL, QUEBEC--(Marketwire - Nov. 14, 2007) - ProMetic Life Sciences Inc. (TSX:PLI) ("ProMetic") today provided an update on PBI-1402 and on protein technologies business activities, 2008 financial guidance, near term milestones, and reported financial results for the three and nine months ended September 30, 2007.

"The company has made significant progress throughout 2007 with impressive clinical results with PBI-1402 and revenue growth in our protein technologies division. We are poised for even greater achievements in the months and year to come," said Mr. Pierre Laurin, President and Chief Executive Officer of ProMetic.

A web cast to discuss ProMetic's highlights and upcoming milestones, including data presented at the upcoming 49th Annual Meeting of the American Society of Hematology ("ASH"),is being scheduled for the week of December 10th, following our presentation at ASH.


PBI -1402

Following the selection of ProMetic's abstract on the PBI-1402 Phase II clinical trial in chemotherapy-induced anemia ("CIA") patients for presentation during the 49th Annual Meeting of ASH in December, ProMetic's abstract is now available on the ASH web site at More substantive information will be reported in conjunction with a poster to be presented at ASH's annual meeting on December 9, 2007.

- ProMetic announced the expansion of the original Phase II clinical trial in CIA patients to enroll more patients at the lowest dose showing efficacy. Results from the expanded trial are expected in the second quarter of 2008;

- The Company has additionally initiated a clinical trial in patients that develop anemia related to their cancer ("Cancer Related Anemia" or "CRA"). Today, a very small number of CRA patients are treated with recombinant erythropoietin (rhEPO). New FDA guidelines are likely to lead to a further reduction of the use of rhEPO in CIA or CRA patients. CIA and CRA indications represent a significant opportunity for ProMetic because the orally active PBI-1402 is a first in class drug candidate to treat anemia via a different mechanism of action than rhEPO. Results from the CRA trail are also expected in 2008;

- The Company has also released information confirming the ability of PBI-1402 to boost red blood cells and hemoglobin level in a pre-clinical model that simulates the most severe case of chronic kidney disease ("CKD") requiring renal dialysis in humans. This is a breakthrough discovery in that PBI-1402, given orally, was shown to correct anemia even when there was very little or no EPO present in the body. This new data is instrumental in the design of the PBI-1402 clinical trial targeting anemia in CKD patients where their anemia, unlike that of CIA or CRA patients, is caused by a reduced production of EPO from their compromised kidneys;

- Partnering discussions have been accelerated with the positive Phase II clinical data in CIA patients and additional data now available. The novel mechanism of action of PBI-1402 is opening up a new field for the treatment of anemia which further enhances the potential value of PBI-1402.

Protein Technologies

In 2008 we anticipate that our Protein Technologies business to generate revenue exceeding $30 million. An estimated $8 million - $10 million revenue will come from the Bioseparation business, revenue from Tecpar will range from $5 million to $7 million, the plasma derived therapeutics revenue will range from $8 million to- $10 million and PRDT will contribute revenues of between $7 million to $10 million.

- Further expansion of our relationship with Kedrion for additional and valuable therapeutics is expected in the fourth quarter. We also anticipate the adoption of ProMetic's technology by a large and established plasma fractionator in Asia the fourth quarter. This is following on the agreement that has been entered into by Kedrion in which ProMetic's proprietary plasma process has been adopted by Kedrion for the manufacturing of hyperimmunes. This agreement contributes short term cash to ProMetic as well as royalties on Kedrion's sales. In addition, ProMetic retains the rights to the finished hyperimmune products for the North American market.

- In the forthcoming months, ProMetic's prion reduction affinity resin will be used by multiple European plasma fractionators. In addition to Kedrion, who has confirmed the use of the prion reduction resin for its future hyperimmune products, we anticipate another fractionator to integrate ProMetic's prion reduction technology for one of its plasma-derived products;

- All studies on the P-Capt® prion filter, requested by the National Blood Services of the U.K. and Ireland, in addition to those required for regulatory approval, have been completed. A pre-adoption clinical evaluation of the P-Capt® filters in patients is underway in Ireland and in the U.K. These studies are undertaken by the National Blood Services as standard procedures prior to concluding any long-term procurement agreement, such as would be the case with MacoPharma;

- We will also announce a strategic partnership with a leading company in the bioseparation industry that would expand ProMetic's reach and increase our market share in the bioprocess of antibodies. The market for monoclonal antibodies (MAbs and Fabs), currently estimated at $16 B, continues to demonstrate strong growth (CAGR greater than 20%).


Protein Technologies

- Year to date revenues more than quadruple in the nine months ended September 30, 2007 over same period last year;

- Contract for prion-reduction technology with a leading European plasma fractionator signed. Contract valued at US $1.7 million over the next 12 months, plus expected recurring revenues from sale of affinity resins;

- The $19 million Tecpar Project was launched following the agreement singed earlier this year to develop an initial biopharmaceutical product and adapt Tecpar's facility to enable local manufacturing of high-value biopharmaceuticals relying on ProMetic's technology;

- Unveiling of ProMetic's new human plasma technology transfer center for protein- based therapeutics in Rockville, MD, U.S. The facility provides turn-key infrastructures to successfully implement the licensees' technology transfer programs. The new center will also serve for internal product development and, in addition, will offer pilot- plant facilities suitable for scale-up. In the near future this site will allow for cGMP production, enabling ProMetic BioTherapeutics, Inc. ("PBT") to supply therapeutic products for clinical trials during integration of PBT's manufacturing process into the licensees' facilities;

- ProMetic BioSciences Ltd ("PBL"), ProMetic's U.K.- based facility, achieved key performance milestones for its new Mabsorbent® ligands targeted at the purification of monoclonal antibodies ("Mabs") and recombinant antibody fragments ("Fabs"). The performance of ProMetic's new ligands against set targets was validated in collaboration with seven leading antibody producer companies in the U.S. and Europe;

- ProMetic, in collaboration with a biomanufacturing client, once again successfully implemented a large-scale purification bioprocess using a ProMetic Mimetic Ligand™ affinity adsorbent, which has met all of its client's performance targets. Approximately 800 liters of a commercial Mimetic Ligand™ product were packed and successfully operated in a 1.8 meter diameter process chromatography column. This column will be used for the GMP manufacture of a biological product, providing highly purified material for the next phase of a clinical trials program. Currently, twelve different PBL bioseparation materials have been adopted for the manufacture of licensed biopharmaceuticals or from components of biomedical products approved for sale in the U.S. and/or Europe.


- Positive pre-clinical data was reported for PBI-1402 in 5/6 nephrectomized rats (renal failure). To date ProMetic had reported efficacy of PBI-1402 in humans and in animal models where bone marrow was suppressed by chemotherapy, another major leading cause of anemia. These new results indicate for the first time the ability of PBI-1402 to reverse anemia when kidneys have failed to secrete sufficient amounts of EPO to maintain normal levels of red blood cells and hemoglobin;

- An agreement was signed with Laboratorios Dermatologicos Darier S.A regarding ProMetic's synthetic anti-inflammatory compound PBI-1308 for the treatment of dermatological disorders;


All amounts are in Canadian dollars unless otherwise indicated.

The following information should be read in conjunction with the financial statements for the third quarter 2007 as well as the Management Discussion and Analysis for the same period.

Total revenue in the third quarter of 2007 was $0.7 million, compared with $0.4 million in the same period last year. Deferred revenues totaling $1.0 million as of September 30, 2007, are for invoiced activities related to the Tecpar project and were not recognized in the third quarter due to Canadian GAAP revenue recognition rules. Year to date revenue was up 335% to $6.7 million compared with $1.5 million for the same nine-month period in 2006. We expect revenue for Tecpar, and for the overall bioseparation and the plasma business unit to increase considerably in the fourth quarter of 2007.

Revenue from the P-Capt® filters was initially expected this quarter. However, the pre-adoption evaluation of the P-Capt® filters in Ireland has been slower, and action has been taken by the National Blood Services to accelerate this process.

"We remain extremely positive that adoption of the P-Capt® filter will occur in Ireland and in the U.K.," stated Peter Edwardson, ProMetic's Vice-President, Medical Technologies. "The P-Capt® product is the only commercially available product that meets the stringent criteria set out by the National Blood Services of the U.K. and Ireland, who remain motivated for the adoption of the product, given all the resources they are currently deploying on pre-adoption clinical trials."

In 2008 we anticipate our protein technologies business to generate revenue exceeding $30 million. An estimated $8 million - $10 million revenue will come from the Bioseparation business, revenue from Tecpar will range from $5 million to $7 million, the plasma derived therapeutics revenue will range from $8 million to- $10 million and PRDT will contribute revenues between $7 million and $10 million.

"ProMetic's revenue growth is solid and based on multiple sources all relying on our core protein technologies," said Mr. Laurin. "This growth is driven by new contracts, along with capturing a recurring revenue stream from our current customers."

Research and development expenses and costs of goods sold were $4.9 million for the quarter ended September 30, 2007, compared with $4.5 million for the same period in 2006. Year to date, research and development expenses and costs of goods sold were $15.0 million compared with $10.5 million in 2006. The expenditures increases were mainly attributed to:

- The continuation of the Phase Ib/II clinical trials for the PBI-1402 program;

- The cost associated with the delivery of a major proprietary affinity product order that was received in late 2006;

- Establishment of a U.S. subsidiary for the Plasma Protein Purification System (PPPS) technology; and;

- The clinical studies related to the Pathogen Removaal and Diagnostic Technologie (PRDT) prion filter program.

General and administrative expenses were $1.4 million for the third quarter ended September 30, 2007, as compared to $2.4 million for the third quarter ended September 30, 2006. For the first nine months of 2007, the general and administrative expenses were $4.3 million, compared to $5.8 million for the same period in 2006. The sharp decline in general and administrative expenses in the nine months and third quarter of 2007 is due mainly to lower legal expenses.

Amortization expenses for the quarter ended September 30, 2007 were $0.6 million compared to $0.5 million in 2006. Year to date amortization expenses were $1.7 million, compared to $1.6 million in 2006.

The Company incurred a net loss of $7.0 million, or $0.03 per share for the quarter ended September 30, 2007, compared with a net loss of $7.0 million, or $0.04 per share, for the same period in 2006. Year to date loss amounted to $16.5 million, compared to $20.5 million for the same period in 2006. The significant decrease in net loss was primarily due to revenues resulting from the increase in activities of ProMetic BioSciences Ltd for its proprietary affinity products and execution of development agreements signed in 2007.

Subsequent Events

Kedrion SpA ("Kedrion") enters into second agreement for multiple hyperimmunes. The integration of ProMetic's technologies into Kedrion's existing manufacturing infrastructure will increase Kedrion's manufacturing capacity and enable both companies to increase market share in Europe and in North America. This agreement provides ProMetic with license fees and royalties on Kedrion sales as well as service fees in relation to the development of Product by ProMetic on behalf of Kedrion. Additional considerations include Prometic retaining the rights for the hyperimmune products for the North American market.

Further to the dismissal of ProMetic's appeal by the Quebec Court of Appeal of the judgment issued in December 2004 by the Superior Court of Quebec, in favor of the Bank of Montreal ("BMO") against ProMetic, ProMetic has entered into an agreement with BMO which grants various payment options to ProMetic, including the option to reimburse ProMetic's total obligation of C$3,3 million to BMO via instalments spanning into the second quarter of 2008. Final details of this arrangement are currently being negotiated.

(In thousands of Canadian dollars)
September 30 December 30
2007 2006

Current assets
Cash and cash equivalents $7 348 $20 825
Accounts receivable 2 559 2 298
Inventories 1 889 2 223
Prepaid expenses 673 647
12 469 25 993
Investments 2 578 2 224
Capital assets 4 388 4 484
Licenses and patents 5 089 5 442
Deferred financing expenses - 2 584
$24 524 $40 727

Current liabilities
Bank Loan $205 -
Accounts payable and accrued
liabilities 4 513 5 696
Provision related to a lawsuit 3 214 3 084
Deferred revenues 997 2 199
Current portion of long-term debt 3 049 2 678
11 977 13 657

Long-term debt 4 383 8 899
Preferred shares, retractable
at the holder's option 3 148 2 916
19 508 25 472
Share capital 189 580 181 412
Contributed surplus 6 777 8 022
Deficit (191 341) (174 179)
5 016 15 255
$24 524 $40 727

The accompanying notes are an integral part of the consolidated financial

(In thousands of Canadian dollars
except for per share amounts)
Quarter ended Nine months ended
September 30 September 30
2007 2006 2007 2006

Sales and
contract $594 $421 $6 521 $1 501
Licensing 60 - 102 41
Other revenues - - 91 -
654 421 6 714 1 542
Research and development expenses
and cost of goods sold 4 851 4 487 14 980 10 539
Administration, marketing
and other expenses 1 416 2 371 4 312 5 794
Amortization of
capital assets 300 259 775 773
Amortization of
license and patents
and deferred development
costs 308 277 916 778
6 875 7 393 20 983 17 884

Loss before the
following items (6 221) (6 972) (14 269) (16 342)
Provision related
to a lawsuit (44) (41) (130) (119)
Net interest expenses (717) (33) (2 062) (4 049)
Net loss ($6 983)($7 046) ($16 461) ($20 510)

Net loss per share
(basic and diluted) (0.03) (0.04) (0.07) (0.14)
Weighted average
number of outstanding
shares (in thousands) 238 863 159 817 236 161 142 462

The accompanying notes are an integral part of the consolidated financial

About ProMetic Life Sciences Inc.

ProMetic Life Sciences Inc. ( is a biopharmaceutical company specialized in the research, development, manufacture and marketing of a variety of commercial applications derived from its proprietary Mimetic Ligand™ technology. This technology is used in large-scale purification of biologics and the elimination of pathogens. ProMetic is also active in therapeutic drug development with the mission to bring to market effective, innovative, lower cost, less toxic products for the treatment of hematology and cancer. Its drug discovery platform is focused on replacing complex, expensive proteins with synthetic "drug-like" protein mimetics. Headquartered in Montreal (Canada), ProMetic has R&D facilities in the U.K., the U.S. and Canada, manufacturing facilities in the U.K. and business development activities in the U.S., Europe, Asia and in the Middle-East.

Forward Looking Statements

This press release contains forward-looking statements about ProMetic's objectives, strategies and businesses that involve risks and uncertainties. These statements are "forward-looking" because they are based on our current expectations about the markets we operate in and on various estimates and assumptions. Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. Such risks and assumptions include, but are not limited to, ProMetic's ability to develop, manufacture, and successfully commercialize value-added pharmaceutical products, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of ProMetic to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. You will find a more detailed assessment of the risks that could cause actual events or results to materially differ from our current expectations on page 21 of ProMetic's Annual Information Form for the year ended December 31, 2006, under the heading "Risk Factors". As a result, we cannot guarantee that any forward-looking statement will materialize. We assume no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

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