ProMetic Life Sciences Inc.

ProMetic Life Sciences Inc.

March 27, 2007 22:42 ET

ProMetic Reports on Business Highlights and Financial Results for 2006

MONTREAL, QUEBEC--(CCNMatthews - March 27, 2007) - ProMetic Life Sciences Inc. (TSX:PLI) ("ProMetic") today reported on its business highlights and financial results for the year ended December 31, 2006. Additionally, ProMetic announces that its 2006 Annual Report is now available on its web site at

2006 Highlights

"A number of important milestones in the progress of ProMetic Life Sciences were reached during the course of the year. On each and every front where our scientists were engaged, ProMetic moved forward impressively. We enjoyed continued and growing success in relation to worldwide recognition and application of our proprietary technologies," commented Pierre Laurin, President and Chief Executive Officer of ProMetic. "This has lead to recently announced strategic agreements, such as with Kedrion Biopharmaceuticals and Tecpar in Brazil, which should allow two (2) of ProMetic's business units to achieve near term profitability, as well as bringing the promise of increased forthcoming revenues".

ProMetic BioSciences Ltd (UK) ("PBL")

- The Lancet study reported "significant breakthrough" in the quest to prevent vCJD transmission through blood transfusion.

- ProMetic will supply $3.9 Million worth of proprietary affinity adsorbent to one of its existing multinational clients.

- CE Mark, regulatory approval of the P-Capt™ filter, substantiating full conformity with all essential requirements of the European Medical Device Directive EC 93/42 and confirming the performance of the device, was received in September.

- Novartis selected PBL's technology to purify a new recombinant protein vaccine under development.

- Octapharma engaged PBL to provide scale-up quantities of a Mimetic Ligand™ affinity adsorbent to purify its new recombinant protein product. The agreement also involves project management and extensive regulatory support.

- Novozymes Delta chose PBL's purification technology for the manufacture of Recombumin®, a protein excipient. The transaction involves long-term supply by PBL of two synthetic-ligand affinity adsorbents.

- PBL entered a research agreement with a large multinational pharmaceutical company to investigate new ways of applying its technology.

- Results of PRDT's brain spike study published in Transfusion Today.

- Signing of license and co-development agreements with MacoPharma.

- Announcement of a collaborative agreement with Sartorius.

- PRDT Infectivity study results show reduction in TSE prions to below limit of detection.

ProMetic BioTherapeutics, Inc. (USA) ("PBT")

- Pursuant to the restructuring plans announced late in 2005, PBT became a U.S.-based, operationally independent and entrepreneurial subsidiary in 2006.

- All of the assets, as well as the human resources, of the Plasma Protein Purification System (PPPS), developed in a co-venture with the American Red Cross, were acquired by PBT.

- Nabi Biopharmaceuticals signed license and associated services agreements with PBT for the use of ProMetic's Mimetic Ligands™ in the manufacture of selected plasma-derived hyperimmune products. Under separate services and supply agreements, ProMetic will provide technology transfer and support to Nabi, as well as the supply of resins required. Royalties will be paid upon product sales, and milestone payments over the next several years could reach US$18 million if Nabi develops and obtains licensure of all the products governed by its agreement with PBT.

- Sartorius AG, based in Germany, agreed to act as a preferred supplier and technology provider to PBT's licensees for PPPS filtration equipment and consumables. The alliance is designed to assist manufacturers overcome production bottlenecks and more quickly launch commercial-scale recovery of plasma-derived proteins.

- PBT turned back a legal challenge resulting from the insolvency of its former North American partner Hemosol. The Plan Purchaser of Hemosol had claimed an exclusive right to market PBT's fractionation technology in North America for the production of hyperimmune products. The judgment vindicated ProMetic's claims, left no doubt as to PBT's rights and, by extension, confirmed PBT's full entitlement to the transaction with Nabi Biopharmaceuticals.

ProMetic BioSciences Inc. ("PBI")

- The Phase Ib/II clinical trial of ProMetic's orally active drug targeting anemia in cancer patients undergoing chemotherapy, PBI-1402, was expanded to multiple sites in Canada and Europe, following initial delays in patient enrollment in Canada. The provision of efficacy results in 2007 is considered highly likely.

- Toxicology studies of PBI-1393 were completed. Preliminary analysis of the results showed the absence of the severe toxicity displayed by other immunostimulants, and indicated a promising safety profile for the compound. The results supported the immediate preparation of offshore clinical trials in advanced cervical cancer patients.

- A select group of clinical specialists was added to ProMetic's advisory team in preparation for the Company's anticipated expansion of its PBI-1402 clinical program into the United States.

- In a mouse xenograph model (engraftment of a human prostate cancer onto the animal), ProMetic's research compound PBI-1737, administered orally in combination with a standard cytotoxic, regressed the tumor.

- PBI-3941, a compound with promising application in the treatment of neutropenia was discovered.

- Immediately subsequent to year end, the Company received regulatory approval from Health Canada for the expansion of the clinical program of its lead compound, PBI-1402, to include the treatment of anemic patients with Chronic Kidney Disease.

BSafE Innovations Inc.

- Applying in the veterinary field the research and proven efficacy of ProMetic's Pathogen Removal and Diagnostic Technologies, BSafE's scientists sourced BSE-infected material, tested various ligands with a series of experiments, and identified the ligands which could concentrate BSE infectious prions. The findings led BSafE to believe that its technology is one hundred times (subject to confirmation in forthcoming results) more sensitive than existing technologies in post-mortem testing for Mad Cow Disease, putting it in a position to develop either its own post-mortem test or a filter device designed to complement current screening tests - and ultimately to pursue development of an ante-mortem test for Mad Cow Disease.

ProMetic Life Sciences Inc. (Corporate)

- Senior secured convertible notes were issued in the aggregate principal amount of US$10 million in January for aggregate proceeds of US$8 million.

- Two shareholder rights plans were adopted in March.

- In May, all of the issued and outstanding multiple voting shares of the Company were exchanged for subordinate voting shares; the shareholder rights plans adopted in March came into effect.

- In June, a private placement was closed for 29,600,000 subordinate voting shares at CDN$0.365 per share with JPMorgan and Third Point LLC.

- In November, approval was obtained from the Autorite des Marche financiers for the use of a CDN$42 million short form base shelf prospectus with the securities regulators in each Canadian province

- A US$10 million Senior secured non convertible debt was used to replace the convertible notes.

- Two tranches of financing closed involving prominent U.S. and Canadian institutional investors for gross proceeds of $17,141,600.

- Cash position as at December 31, 2006 was $20.8 million.

2006 Financial Results

Year ended December 31, 2006

The following information should be read in conjunction with the audited financial statements for the year ended December 31, 2006 as well as the annual Management Discussion and Analysis for the year ended December 31, 2006 including results of the fourth quarter.

Cash and cash equivalents as at December 31, 2006 was $20.8 million compared to $10.5 million as at December 31, 2005.

Revenues for 2006 were $2.6 million compared with $8.1 million in 2005. Lower revenues are largely attributable to the insolvency of Hemosol which caused delays in collecting milestones and shipping products. Postponement of certain new ligand development contracts also contributed to the lower sales in 2006.

Research and development expenses increased to $15.3 million for the year ended December 31, 2006 from $13.3 million for the same period in 2005. The variance is mainly attributable to the establishment of a US subsidiary for the Plasma Protein Purification System (PPPS) technology and lower investment tax credits as prior year adjustments for investment tax credits were recorded in 2005.

General and administrative expenses increased to $8.0 million for the year ended December 31, 2006 from $6.7 million for the year ended December 31, 2005. This increase was mainly due to the preparation of an IPO for ProMetic BioSciences Ltd which was postponed and will be reconsidered if and when a higher value is attributed to this unit and the legal expenses related to the litigation with the potential buyer of Hemosol. In September of 2006, the court rendered a favourable decision for the Company which removed all obstacles to Prometic licensing hyperimmune products in North America and around the world.

Depreciation and amortization expenses for the year ended December 31, 2006 were lower at $2.2 million compared to $2.9 million in December 31, 2005. The decrease is mostly due to deferred development costs that were fully amortized at the beginning of the year.

Cash and cash equivalent as at December 31, 2006 was $20.8 million compared to $10.5 million in 2005.

Consolidated Balance Sheets
(In thousands of Canadian dollars)

December 31, December 31,
2006 2005

Current assets
Cash and cash equivalents $20,825 $10,525
Accounts receivable 2,298 2,914
Inventories 2,223 1,935
Prepaid expenses 647 518
25,993 15,892

Investments 2,224 2,876
Capital assets 4,484 5,324
Licenses and patents 5,442 5,098
Deferred financing expenses 2,584 563
Deferred development costs - 43
$40,727 $29,796

Current liabilities
Bank loan $- $1,029
Accounts payable and accrued liabilities 5,696 5,319
Provision related to a lawsuit 3,084 -
Deffered revenues 2,199 -
Current portion of liability component
of the convertible term notes - 524
Current portion of long-term debt 2,678 366
13,657 7,238

Liability component of the convertible
term notes - 3,490
Long-term debt 8,899 46
Provision related to a lawsuit - 2,921
Preferred shares, retractable at the
holder's option 2,916 2,248
25,472 15,943

Share capital 181,412 150,697
Contributed surplus 8,022 5,929
Deficit (174,179) (142,773)
15,255 13,853
$40,727 $29,796

Consolidated Statements of Operations
(In thousands of Canadian dollars except for per share amounts)

Years ended December 31

2006 2005

Sales and contract $2,605 $4,028
Licensing 42 4,024
2,647 8,052

Research and development expenses 15,288 13,338
Administration, marketing and other
expenses 8,001 6,742
Amortization of capital assets 1,040 1,110
Amortization of license and patents
and deferred development costs 1,204 1,782
25,533 22,972


Provision related to a lawsuit (163) (206)
Write-down of short-term investment - (5,085)
Recovery (write-down) of long-term
investments 153 (2,558)
Net interest expenses (7,563) (163)
Net loss ($30,459) ($22,932)
Net loss per share (basic and diluted) (0.20) (0.20)

Weighted average number of outstanding
shares (in thousands) 148,621 115,717

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™ enabling 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 UK, the USA and Canada, manufacturing facilities in the UK and business development activities in the US, 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, the Company'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 the Company 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 the Company'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.

(i) All amounts are in Canadian dollars unless otherwise indicated.

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