ViRexx Medical Corp.
TSX : VIR
AMEX : REX

ViRexx Medical Corp.

August 14, 2007 15:21 ET

ViRexx Announces Second Quarter Results

EDMONTON, ALBERTA--(Marketwire - Aug. 14, 2007) - ViRexx Medical Corp. (TSX:VIR)(AMEX:REX), a company focused on immunotherapy treatments for certain cancers, chronic hepatitis B & C and embolotherapy treatments for tumours, today announced its financial and operational results for the three and six-month periods ended June 30, 2007.

"We have made significant progress from a corporate perspective since the Annual General Meeting in May. After a thorough review of all existing development programs, management has recommended to the Board of Directors a number of operational changes that we are now implementing. Specifically we have recruited Dr. Richard Ascione as acting Chief Scientific Officer, we have reached out to our existing Scientific Advisory Board to play a more active role in our development planning and we have reviewed our development expenditures to ensure they align with our existing resources and appropriately reflect the potential of each of our innovative platform technologies," said Peter P. Smetek, Jr., Chairman and Chief Executive Officer of ViRexx Medical Corp. "As the second of two OvaRex® MAb Phase III clinical trials nears completion in the U.S. we have made the appropriate arrangements with our European partners and our regulatory advisors in Europe to ensure preparations are underway for the European filings for OvaRex® MAb to occur in a timely manner."

Operational Update

- The primary data analysis for the two identical Phase III trials of OvaRex® MAb for the treatment of late-stage ovarian cancer will occur after each trial, IMPACT I and IMPACT II have achieved the 118th relapse event.. The two trials, being conducted by ViRexx's licensee, Unither Pharmaceuticals, Inc. (Unither), a subsidiary of United Therapeutics Corporation (NASDAQ:UTHR), enrolled a total of 362 patients. The primary endpoint for each trial is time-to-relapse comparing OvaRex® MAb to placebo. As of June 30, 2007, Unither reports that 128 relapse events have occurred in IMPACT I and 112 relapse events have occurred in IMPACT II. It is projected that IMPACT II, will reach the 118th relapse event in the second half of 2007.

- ViRexx' licensee, Unither, presented preliminary results from a 40 patient OvaRex® MAb Phase II trial at the American Society of Clinical Oncology Annual Meeting in June 2007. The Phase II trial was designed to study the use of OvaRex® MAb as an adjunct to platinum-based front line chemotherapy in the treatment of advanced ovarian cancer.

- ViRexx has completed the safety assessment of the Phase I trial for CHB-111 Vaccine. The trial enrolled and treated its target of 15 healthy volunteers with a single dose subcutaneous injection of the vaccine; no significant adverse events associated with the treatment were reported. As updated on July 25, 2007, on the advice of the Company's Scientific Advisory Board the clinical development of CHB-111 has been suspended to allow the Company to test the original material created at ViRexx for efficacy prior to proceeding with further clinical development.

- ViRexx is continuing to develop its Chimigen™ Vaccine technology for multiple disease applications including the treatment of Hepatitis C Virus (HCV) and Biodefense purposes. Specifically, two potential HCV candidates have been identified for further development.

- ViRexx is currently reviewing the manufacturing processes in place for its Occlusin™ 50 Injection and Occlusin™ 500 Device candidates as announced on July 25, 2007. The Company has retained expert counsel that has experience with the Occlusin candidates for assistance in this regard.

Financial Highlights

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

The Company recorded a net loss for the three-month period ended June 30, 2007 of $3,187,594 or ($0.04) per share, as compared with a net loss of $3,326,002 or ($0.05) per share for the three-month period ended June 30, 2006. The Company reported a net loss for the six-month period ended June 30, 2007 of $6,111,621 or ($0.08) per share, as compared with $5,634,649 or ($0.08) per share, for the same period last year.

Research and development expenses for the three-month and six-month periods ended June 30, 2007, totalled $1,354,544 and $2,479,796 respectively, compared with $1,475,656 and $3,019,323 for the corresponding periods ended June 30, 2006. The difference in research and development expenses was due to a reduction of six full time research scientists as a result of the November 2006 restructuring announcement and reduced contract research as more of this activity is now performed in-house.

Corporate administrative expenses for the three-month period ended June 30, 2007 totaled $1,506,871 and $2,971,781 respectively, compared with $1,311,694 and $2,239,129 for the corresponding periods last year. The difference was mainly due to work performed and activities related to the proposed $15 million public offering. On April 7, 2007, management discontinued the public offering subsequent to the agreement reached with a group of shareholders of ViRexx that filed a Schedule 13D with the United States Securities and Exchange Commission.

At June 30, 2007, the Company's cash and cash equivalents totalled $5,716,213 as compared with $10,742,191 at December 31, 2006. The Company believes it will be able to fund planned operations into the first quarter of 2008. As previously disclosed on July 25, 2007, Management is currently pursuing a five year term debt financing in the amount of $11,000,000 (CAD) and is currently evaluating all future financing alternatives that would minimize further dilution to existing shareholders. The timing and required amount of funding requirements may vary depending on a number of factors including: the progress of the Company's research programs, its ability to meet milestones and receipt of approvals from government regulators. Monthly development expenses have also been reduced from $1.1 million to $642,000 allowing the company to continue to develop platforms for another nine months, with current cash on hand.

At June 30, 2007, the Company had 72,760,617 shares outstanding. The number of stock options and warrants outstanding at June 30, 2007 is 6,587,485 and 17,039,571 respectively and could generate proceeds of $28,881,776 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 and C and solid tumors.

ViRexx's lead product candidate, 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.

Financial statements attached:



ViRexx Medical Corp.
(a development stage company)
Interim Consolidated Balance Sheets
As at June 30, 2007
(expressed in Canadian dollars)

June 30, December 31,
2007 2006
$ $
(Unaudited)

Assets

Current assets
Cash 1,368,555 405,354
Short-term investments 4,347,658 10,336,837
Prepaid expenses and deposits 430,080 168,502
Other current assets 218,053 194,476
-------------------------

6,364,346 11,105,169
Property and equipment 417,845 475,079
Acquired intellectual property 26,124,922 27,369,445
-------------------------

32,907,113 38,949,693
-------------------------
-------------------------

Liabilities

Current liabilities
Accounts payable 226,015 412,441
Accrued liabilities 1,505,411 1,185,762
-------------------------

1,731,426 1,598,203
Obligations under capital lease 2,566 5,351
Future income taxes 4,858,235 5,346,990
-------------------------

6,592,227 6,950,544
-------------------------

Commitments and contingencies

Shareholders' Equity

Common shares - no par value, unlimited shares
authorized, 72,760,717 shares issued and
outstanding 54,064,680 54,064,680
Contributed surplus 12,175,998 11,748,640
Deficit accumulated during development stage (39,925,792) (33,814,171)
-------------------------

26,314,886 31,999,149
-------------------------

32,907,113 38,949,693
-------------------------
-------------------------



ViRexx Medical Corp.
(a development stage company)
Interim Consolidated Statements of Loss, Comprehensive Loss and Accumulated
Deficit
(Unaudited)
(expressed in Canadian dollars)

Three-month period ended Six-month period ended
------------------------- -----------------------

June 30, June 30, June 30, June 30,
2007 2006 2007 2006
$ $ $ $

Revenue - - - -
------------------------- -----------------------

Expenses
Corporate
administration 1,506,871 1,311,694 2,971,781 2,239,129
Research and
development 1,354,544 1,475,656 2,479,796 3,019,323
Amortization 650,878 658,332 1,301,757 1,444,592
------------------------- -----------------------

3,512,293 3,445,682 6,753,334 6,703,044
------------------------- -----------------------

Loss from operations (3,512,293) (3,445,682) (6,753,334) (6,703,044)
------------------------- -----------------------

Other income (expenses)
Gain (loss) on foreign
exchange - net 2,622 (7,508) 6,833 (12,872)
Interest 61,515 127,188 146,125 194,820
------------------------- -----------------------

64,137 119,680 152,958 181,948
------------------------- -----------------------

Loss before income
taxes (3,448,156) (3,326,002) (6,600,376) (6,521,096)

Future income tax
recovery (260,562) - (488,755) (886,447)
------------------------- -----------------------

Net loss and
comprehensive loss (3,187,594) (3,326,002) (6,111,621) (5,634,649)

Accumulated deficit -
Beginning of period (36,738,198) (18,629,443) (33,814,171) (16,320,796)
------------------------- -----------------------

Accumulated deficit -
End of period (39,925,792) (21,955,445) (39,925,792) (21,955,445)
------------------------- -----------------------
------------------------- -----------------------

$ $ $ $

Basic and diluted loss
per share (0.04) (0.05) (0.08) (0.08)
------------------------- -----------------------
------------------------- -----------------------

# # # #

Basic and diluted
weighted average
number of common
shares outstanding 72,760,717 70,280,997 72,760,717 67,079,341
------------------------- -----------------------
------------------------- -----------------------



ViRexx Medical Corp.
(a development stage company)
Interim Consolidated Statements of Cash Flows
(Unaudited)
(expressed in Canadian dollars)

Three-month period ended Six-month period ended
-------------------------- -----------------------

June 30, June 30, June 30, June 30,
2007 2006 2007 2006
$ $ $ $

Cash provided by
(used in)

Operating activities
Net loss for the period (3,187,594) (3,326,002) (6,111,621) (5,634,649)
Items not affecting cash
Amortization 650,878 658,332 1,301,757 1,444,592
Stock-based
compensation 325,228 114,061 427,358 329,107
Future income taxes (260,562) - (488,755) (886,447)
-------------------------- -----------------------

(2,472,050) (2,553,609) (4,871,261) (4,747,397)
Net change in non-cash
working capital items
Increase in other
current assets (32,629) 25,490 (23,577) (51,138)
Increase in prepaid
expenses and
deposits (29,709) 57,520 (261,578) (177,134)
Increase in accounts
payable and accrued
liabilities 27,106 408,565 133,223 529,948
-------------------------- -----------------------

(2,507,282) (2,062,034) (5,023,193) (4,445,721)
-------------------------- -----------------------

Financing activities
Repayment of capital
lease (1,417) - (2,785) -
Issuance of share
capital - net of share
issue costs - 893,971 - 12,159,397
-------------------------- -----------------------

(1,417) 893,971 (2,785) 12,159,397
-------------------------- -----------------------

Investment activities
Acquisition of property
and equipment - (51,163) - (74,945)
Decrease (increase) in
short term investments 3,586,178 1,234,388 5,989,179 (7,556,713)
-------------------------- -----------------------

3,586,178 1,183,225 5,989,179 (7,631,658)
-------------------------- -----------------------

Increase in cash 1,077,479 15,162 963,201 82,018

Cash - Beginning of
period 291,076 304,318 405,354 237,462
-------------------------- -----------------------

Cash - End of period 1,368,555 319,480 1,368,555 319,480
-------------------------- -----------------------
-------------------------- -----------------------


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