ViRexx Medical Corp.
TSX : VIR

ViRexx Medical Corp.

August 15, 2005 07:00 ET

Virexx Announces Second Quarter Results

EDMONTON, ALBERTA--(CCNMatthews - Aug. 15, 2005) - ViRexx Medical Corp. (TSX:VIR) a company focused on immunotherapy treatments for cancer, chronic hepatitis B & C and embolotherapy treatments for tumors, today announced its 2005 second quarter financial and operational results.

"Development of ViRexx's clinical stage pipeline products continued to progress during the second quarter with enrollment increasing in each of the on-going clinical trials," said Marc Canton, president and chief operating officer of ViRexx. "The progress of the two Phase III OvaRex® MAb trials to treat ovarian cancer in consolidation as a monotherapy, together with a Phase II trial of OvaRex® MAb used in conjunction with chemotherapy to treat ovarian cancer in the front line setting, and the Phase I Occlusin™ 50 Injection, demonstrates the depth of our product pipeline."

Product Development Highlights

During the second quarter of 2005, the operational highlights included:

- Enrollment continued in the two Phase III trials for OvaRex® MAb, a therapy for the treatment of late-stage ovarian cancer. To date 273 of a targeted 354 patients have been enrolled in the combined trials. The trial is on pace to complete enrollment by the first quarter of 2006.

- Enrollment in the OvaRex® MAb Phase II trial to study the use of OvaRex® MAb as an adjuvant to platinum-based front line chemotherapy in the treatment of advanced ovarian cancer patients reached 24 of a targeted 40 patients.

- Enrollment continued in the Occlusin™ 50 Injection Phase I liver cancer trial and is on track for completion in the fourth quarter of 2005.

- ViRexx signed an agreement with Protein Sciences Corporation, a contract manufacturer, to produce clinical grade material in quantities sufficient for a Phase I clinical trial of HepaVaxx B, a therapy for the treatment of chronic hepatitis B.

Financial Highlights

(All amounts reported are in Canadian dollars unless otherwise stated)

The Company reported a net loss of $2,008,677 or ($0.04) per share for the second quarter ended June 30, 2005, as compared with $853,798 or ($0.03) per share, for the corresponding period last year. The Company reported a net loss for the six months ended June 30, 2005 of $3,711,510 or ($0.07) per share, as compared with $1,343,203 or ($0.05) per share, for the same period last year. The expenditure increase is primarily attributable to an increase in preclinical, product development and clinical trial activity.

Government assistance for the second quarter totaled $45,000, a decrease of $148,936 from the corresponding period last year. Government assistance for the six months ended June 30, 2005, totaled $45,000 a decrease of $410,461 compared with $455,461 for the corresponding period last year. Government assistance related to Industrial Research Assistance Program ("IRAP") grants from the National Research Council of Canada and a technology commercialization award from the Alberta Heritage Foundation for Medical Research ("AHFMR").

Research and development expenses for the second quarter were $1,075,476, an increase of $711,395 compared with $364,081 for the corresponding period last year. Research and development expenses for the six months ended June 30, 2005, totaled $1,988,460, an increase of $1,431,716 compared with $556,744 for the same period last year. The increase in research and development expenses was due to:

- Manufacturing of clinical material for the HepaVaxx B Phase I trial

- Increase in number of staff members and salary increases awarded to staff

- Elevated use of third party consultants to accelerate HepaVaxx B preclinical activities

- Completion of Occlusin™ 50 Injection preclinical activities (including manufacturing) and ongoing Phase I clinical trial

General and administrative expenses for the second quarter were $866,646, an increase of $371,511 compared with $495,135 for the corresponding period last year. General and administrative expenses for the six months ended June 30, 2005, totaled $1,609,006 an increase of $842,307 compared with $766,699 for the same period last year. The increase in general and administrative expenses was due to:

- Consulting and professional fees associated with investor relations and corporate communication activities

- Increase in number of staff members and salary increases awarded to staff

- Costs related to the acquisition of AltaRex Medical Corp.

- Elevated insurance premiums and expanded insurance coverage (director & officer insurance)

At June 30, 2005, the Company's cash and cash equivalents totaled $8,079,817 as compared with $9,462,988 as at December 31, 2004. As such, the Company believes it has adequate financial resources to fund planned operations into the second quarter of 2006. During the three and six month periods ended June 30, 2005 the Company raised $315,839 and $1,355,124 respectively, from the exercise of warrants and stock options net of share issuance and normal course issuer bid costs.

At June 30, 2005, the Company had 55,229,655 shares outstanding. The number of stock options and warrants outstanding at June 30, 2005 is 6,273,950 and 10,543,345 respectively and could generate proceeds of $16,295,878 if exercised.

About ViRexx Medical Corp.

ViRexx is an Edmonton, Alberta based biotechnology company focused on the development of novel therapeutic products for the treatment of certain cancers and specified chronic viral infections. ViRexx's most advanced programs include drug candidates for the treatment of ovarian cancer, chronic hepatitis B & C and solid tumors.

ViRexx's lead product, OvaRex® MAb, a therapy for the treatment of late-stage ovarian cancer, is currently the subject of two Phase III clinical trials being funded by ViRexx's licensing partner Unither Pharmaceuticals, Inc., a subsidiary of United Therapeutics Corporation. For additional information about ViRexx, please see www.virexx.com.

This news release contains certain forward-looking statements that reflect the current views and/or expectations of the Company with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.



Summary financial statements attached:


ViRexx Medical Corp.
(a development stage company)
Interim Consolidated Balance Sheet

(expressed in Canadian dollars)

June 30, December 31,
2005 2004
$ $
(Unaudited) (Restated)
Assets

Current assets
Cash and cash equivalents 8,079,817 9,462,988
Restricted cash - 659,000
Accounts receivable - 18,527
Goods and services tax recoverable 55,211 94,903
Prepaid expenses and deposits 245,601 383,143
-------------------------------
8,380,629 10,618,561

Property and equipment 559,191 533,202

Acquired intellectual property rights 33,240,654 34,570,682
-------------------------------
42,180,474 45,722,445
-------------------------------
-------------------------------

Liabilities

Current liabilities
Accounts payable and accrued
liabilities 401,417 744,805
Convertible debentures 1,010,274 1,037,106
-------------------------------
1,411,691 1,781,911

Future income taxes 5,468,377 6,749,947
-------------------------------
6,880,068 8,531,858
-------------------------------

Shareholders' Equity

Share capital 44,040,658 42,371,313

Contributed surplus 3,280,051 3,010,575

Equity component of convertible
debenture 49,265 59,118

Deficit accumulated during
development stage (12,069,568) (8,250,419)
-------------------------------
35,300,406 37,190,587
-------------------------------
42,180,474 45,722,445
-------------------------------
-------------------------------



ViRexx Medical Corp.
(a development stage company)
Interim Consolidated Statement of Loss

(expressed in Canadian dollars)

Three-month Six-month
period ended period ended
------------------------------------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
$ $ $ $
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated)

Revenue - - - -
------------------------------------------------
Operating expenses
Research and
development 1,075,476 364,081 1,988,460 556,744
Corporate
administration 866,646 495,135 1,609,006 766,699
Depreciation and
amortization 694,974 11,330 1,387,516 21,579
Debenture interest 61,116 15,782 76,469 31,123
Interest income (53,182) (34,470) (106,286) (34,470)
Loss on foreign
exchange 19,302 2,903 37,915 2,491
Other income - (963) - (963)
------------------------------------------------
2,664,332 853,798 4,993,080 1,343,203
------------------------------------------------

Loss before income
taxes (2,664,332) (853,798) (4,993,080) (1,343,203)

Income taxes
recovery (655,655) - (1,281,570) -
------------------------------------------------

Net loss for the
period (2,008,677) (853,798) (3,711,510) (1,343,203)
------------------------------------------------
------------------------------------------------
$ $ $ $

Basic and diluted
loss per share (0.04) (0.03) (0.07) (0.05)
------------------------------------------------
------------------------------------------------
# # # #

Weighted average
number of common
shares outstanding 55,051,658 27,005,500 54,204,149 27,005,500
------------------------------------------------
------------------------------------------------




ViRexx Medical Corp.
(a development stage company)
Interim Consolidated Statement of Deficit

(expressed in Canadian dollars)

Three-month Six-month
period ended period ended
---------------------------------------------------------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
$ $ $ $
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Balance - Beginning
of period

As previously
reported (10,031,997) (5,033,642) (8,233,762) (3,857,886)

Accounting changes - (48,422) (16,657) (734,773)
------------------------------------------------
As restated (10,031,997) (5,082,064) (8,250,419) (4,592,659)
Premium on repurchase
of shares (28,894) - (107,639) -
Net loss for the
period (2,008,677) (853,798) (3,711,510) (1,343,203)
------------------------------------------------

Balance - End of
period (12,069,568) (5,935,862)(12,069,568) (5,935,862)
------------------------------------------------
------------------------------------------------


ViRexx Medical Corp.
(a development stage company)
Interim Consolidated Statement of Cash Flows

(expressed in Canadian dollars)


Three-month Six-month
period ended period ended
---------------------------------------------------------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
$ $ $ $
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated)

Cash provided by
(used in)

Cash flows from
operating activities
Cash receipts from
grants and other 51,572 193,936 158,430 455,461
Cash paid to
suppliers and
employees (1,882,280) (1,147,823) (3,495,130) (2,692,604)
Interest received 18,282 34,470 47,590 34,470
------------------------------------------------
(1,812,426) (919,417) (3,289,110) (2,202,673)
------------------------------------------------

Financing activities
Amounts due to
related parties - - - (35,341)
Repayment of
convertible debenture
and accrued interest (106,582) (3,667) (106,582) (3,667)
Issuance of share
capital 543,886 8,805,500 1,799,183 8,805,500
Repurchase of shares (119,388) - (302,375) -
Share issuance costs (2,077) (797,167) (35,102) (887,590)

------------------------------------------------
315,839 8,004,666 1,355,124 7,878,902
------------------------------------------------

Investment activities
Acquisition of
property and
equipment (66,994) (26,418) (87,186) (51,930)
Proceeds on sale of
property and
equipment 10,077 - 10,077 -
------------------------------------------------
(56,917) (26,418) (77,109) (51,930)
------------------------------------------------

Foreign exchange loss
on cash held in
foreign currency (15,063) (2,903) (31,076) (2,491)
------------------------------------------------

(Decrease) increase
in cash and cash
equivalents (1,568,567) 7,055,928 (2,042,171) 5,621,808

Cash and cash
equivalents -
Beginning of period 9,648,384 1,274,479 10,121,988 2,708,599
------------------------------------------------

Cash and cash
equivalents - End
of period 8,079,817 8,330,407 8,079,817 8,330,407
------------------------------------------------
------------------------------------------------

Cash and cash
equivalents
comprised of
Cash on deposit 215,111 697,662 215,111 697,662
Short-term
investments and
deposits 7,864,706 7,632,745 7,864,706 7,632,745
------------------------------------------------
8,079,817 8,330,407 8,079,817 8,330,407
------------------------------------------------
------------------------------------------------


The TSX has not approved or disapproved of the information contained herein

Contact Information

  • ViRexx Medical Corp.
    Rob Salmon
    Chief Financial Officer
    (780) 989-6708
    (780) 436-0068 (FAX)
    Email: rsalmon@virexx.com
    Website: www.virexx.com
    or
    The Equicom Group Inc.
    Ross Marshall
    Investor Relations
    (800) 385 5451 ext. 238
    (416) 815-0080 (FAX)
    Email: rmarshall@equicomgroup.com
    or
    Lippert/Heilshorn & Associates Inc.
    Kim Golodetz
    Investor Relations
    (212) 838 -3777
    (212) 838 -4568 (FAX)
    mail: kgolodetz@lhai.com