ViRexx Medical Corp.

ViRexx Medical Corp.

March 22, 2005 07:01 ET

ViRexx Reports 2004 Results and Provides Update


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: VIREXX MEDICAL CORP.

TSX SYMBOL: VIR

MARCH 22, 2005 - 07:01 ET

ViRexx Reports 2004 Results and Provides Update

EDMONTON, ALBERTA--(CCNMatthews - March 22, 2005) - ViRexx Medical Corp.
(TSX:VIR) a company focused on immunotherapy and embolotherapy
treatments of cancer and chronic hepatitis B and C, today announced its
fourth quarter and 2004 fiscal year operational and financial results.

Highlights

Over the past twelve months, the Company has accomplished:

- Completion of manufacturing and initiation of Occlusin™ 50
Injection Phase I clinical trial

- Addition of a late-stage clinical product, OvaRex®, and oncology
platform through acquisition of AltaRex Medical Corp.

- Strengthening of distribution capabilities for OvaRex® with signing
of distribution agreement with Dompe International S.A. for territories
that include, include Italy, Spain, Portugal, Hungary, Poland, Czech
Republic, Switzerland, Austria as well as other Eastern European
countries

- Strengthening of management team with the addition of Marc Canton,
President and COO, and Irwin Griffith, VP Drug Development, Infectious
Diseases

- Transition to state-of-the-art office and laboratory facility with
capacity to handle growth needs for coming years

- Successful public offering of $8.8mm on TSX Venture Exchange in April
and graduation to the Toronto Stock Exchange in December

"Over the past year, ViRexx has transformed itself from a pre-clinical
stage company to a company with a broad product pipeline, including a
Phase III product, for the treatment of cancer and viral infections.
This transformation into a leader in immunotherapy and embolotherapy
forms the foundation for the future growth of the company," commented
Dr. Antoine Noujaim, Chairman and CEO. "With anticipated milestones from
each of our platform technologies including completion of enrollment of
the OvaRex® Phase III trial, we see the coming twelve months to be an
exciting time for ViRexx".

Upcoming Milestones

ViRexx anticipates the following milestones in the coming twelve months:

- Initiate HepaVaxx B GMP Manufacturing (Q2 2005)

- Initiate HepaVaxx B Phase I Clinical Trial (Q3 2005)

- Complete Occlusin™ 50 Injection Phase I liver cancer clinical trial
(Q4 2005)

- Select HepaVaxx C clinical candidate (Q4 2005)

- Complete enrollment in OvaRex® Phase III trial (Q1 2006)

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

The Company recorded a net loss for the twelve months ended December 31,
2004 of $3,398,477or $0.13 per share, as compared to a net loss of
$1,458,386 or $0.16 per share for the year ended December 31, 2003. The
expenditure increase is due to increased preclinical, product
development, clinical trial activity and additional costs and resources
associated with operating as a public company. In 2004, the Company
completed preclinical activities and initiated a Phase I clinical trial
for Occlusin™ Injection and accelerated preclinical activity
(including manufacturing) for HepaVaxx B.

Revenue for the twelve months ended December 31, 2004 totaled $992,158,
an increase of $829,881 from the $162,277 recorded for the year ended
December 31, 2003. Revenue related to interest from investments,
Industrial Research Assistance Program ("IRAP") grants from the National
Research Council of Canada ("NRC") and a technology commercialization
award from the Alberta Heritage Foundation for Medical Research
("AHFMR"). The increase in revenue is attributed to increased interest
earned on investments due to higher cash resources and the continued and
increased levels of IRAP support and the technology commercialization
award from the AHFMR.

Research and development expenses for the year ended December 31, 2004,
totaled $2,348,355, an increase of $1,284,203 from the $1,064,152
incurred for the year ended December 31, 2003. The increase of research
and development expenses due to:

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

- Elevated use of third party consultants to accelerate HepaVaxx B
preclinical activities (initial manufacturing)

- Completion of Occlusin™ Injection preclinical activities (including
manufacturing) and initiation of Phase I clinical trial (costs
associated with contract research organization and regulatory filing)

General and administrative expenses for the year ended December 31, 2004
totaled $1,577,263, an increase of $896,527 from the $680,736 recorded
for the year ended December 31, 2003. The increase of general and
administrative expenses 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

- Lease and relocation costs associated with new office and laboratory
facility

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

- TSX and TSX Venture Exchange filing and listing fees

At December 31, 2004, the Company's cash and cash equivalents totalled
$10,121,988 as compared to $2,708,599 at December 31, 2003. The Company
believes that its available cash and cash equivalents, interest earned
thereon should be sufficient to finance its operations and capital needs
into the second quarter of 2006.

At December 31, 2004, the Company had 53,276,477 common shares
outstanding. The number of stock options and warrants outstanding at
December 31, 2004 is 6,369,168 and 12,543,095 respectively and could
generate proceeds of $18,448,389 if exercised.

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

ViRexx's lead product, OvaRex® MAb, a therapy for the treatment of
late-stage ovarian cancer, is currently the subject of a Phase III
clinical trial funded by ViRexx's partner United Therapeutics
Corporation (NASDAQ: UTHR). For additional information about ViRexx,
please see www.virexx.com.

Summary financial statements attached:



ViRexx Medical Corp.

Consolidated Balance Sheet
---------------------------------------------------------------------
(Canadian dollars)

As at As at
December 31, December 31,
2004 2003
$ $
Assets (Restated)
Current assets:
Cash and cash equivalents 10,121,988 2,708,599
Accounts receivable 18,527 52,082
Goods and services tax recoverable 94,903 56,231
Share subscription receivable - 37,500
Investment tax credits recoverable - 447,013
Prepaid expenses and other assets 383,143 4,958
--------------------------
10,618,561 3,306,383

Property and equipment 533,202 173,800
Licenses 17,016 19,100
Intangible assets 33,336,552 -
--------------------------
44,505,331 3,499,283
--------------------------
--------------------------
Liabilities
Current liabilities:
Accounts payable and accrued liabilities 744,805 1,131,154
Convertible debenture 1,056,423 480,365
--------------------------
1,801,228 1,611,519
Amount due to related party - 35,341
Future income taxes 6,065,718 -
--------------------------
7,866,946 1,646,860
Shareholders' Equity
Share capital 41,802,454 5,808,817
Contributed Surplus 3,010,575 85,000
Equity component of convertible
debenture 59,118 59,118
Deficit (8,233,762) (4,100,512)
--------------------------
36,638,385 1,852,423
--------------------------
44,505,331 3,499,283
--------------------------
--------------------------


ViRexx Medical Corp.

Consolidated Statement of Loss
---------------------------------------------------------------------
(Canadian dollars) For twelve months For twelve months
ended December 31, ended December 31,
2004 2003
$ $
(Restated)

Revenues
Interest income 127,728 7,497
Government grants and awards 864,430 154,780
----------------------------------------
992,158 162,277

Expenses
Research & development 2,348,355 1,064,152
Corporate administration
and marketing 1,577,263 680,736
Debenture interest 61,999 76,052
Stock based compensation 380,576 211,300
Deprecation and amortization 71,349 31,596
----------------------------------------
4,439,542 2,063,836
----------------------------------------

(3,447,384) (1,901,559)
----------------------------------------

Other income (expense)
Scientific research and
experimental development tax credits - 451,475
Contract revenue (net of expenses) 15,324 -
Gain (loss) on foreign exchange 31,628 4,401
Loss (gain) on sale of property
and equipment 1,955 (12,703)
----------------------------------------
48,907 443,173

----------------------------------------
Net loss for the period (3,398,477) (1,458,386)
----------------------------------------


Basic and diluted loss per share (0.13) (0.16)
----------------------------------------


Consolidated Statement of Deficit
---------------------------------------------------------------------
---------------------------------------------------------------------
(Canadian dollars) For twelve months For twelve months
ended December 31, ended December 31,
2004 2003
$ $

Balance - Beginning of period (3,857,886) (2,449,826)
Change in accounting policy (242,626) (167,802)
----------------------------------------
(4,100,512) (2,617,628)
Adjustment for stock-based
compensation (734,773) -
Assumed on business combination - (24,498)
Net loss for period (3,398,477) (1,458,386)
----------------------------------------

Balance - End of period (8,233,762) (4,100,512)
----------------------------------------
----------------------------------------


ViRexx Medical Corp.

Consolidated Statement of Cash Flows
---------------------------------------------------------------------
(Canadian dollars) For twelve months For twelve months
ended December 31, ended December 31,
2004 2003
$ $
(Restated)

Cash provided by (used in)
Operating activities
Net loss for the period (3,398,477) (1,458,386)
Items not affecting cash
Debenture interest 54,526 76,052
Depreciation and amortization 71,349 31,596
Loss (gain) on foreign
exchange adjustment (26,128) -
Stock based compensation 380,576 211,300
Loss (gain) on disposal of
property and equipment (1,955) 12,703
---------------------------------------
Net change in non-cash working
capital items (2,920,109) (1,126,735)

Decrease (increase) in accounts
receivable 42,471 (13,460)
Decrease (increase) in goods and
services tax recoverable (17,422) (27,784)
Decrease (increase) in share
subscriptions receivable 37,500 162,500
Decrease (increase) in investment
tax credits recoverable 447,013 (79,659)
Increase (decrease) in prepaid
expenses and deposits (337,114) 1,756
Decrease (increase) in income
taxes recoverable - 8,436
Increase (decrease) in accounts
payable and accrued liabilities (481,052) 587,370
---------------------------------------
(3,228,713) (487,576)
---------------------------------------

Financing activities
Issuance of share capital 7,367,527 3,117,710
Advances from shareholder - 575,000
Repayment of advances from
shareholder - (575,000)
Amounts due to related parties (35,341) 13,368
---------------------------------------
7,332,186 3,131,078
---------------------------------------

Investment activities
Acquisition of property
and equipment (403,364) (94,617)
Cash acquired on business
combinations 3,710,419 19,142
Proceeds on sale of capital assets 2,861 9,210
---------------------------------------
3,309,916 (66,265)
---------------------------------------

Increase in cash
Cash and cash equivalents
- Beginning of period 7,413,389 2,577,236
Cash and cash equivalents
- End of period 2,708,599 131,363
---------------------------------------
10,121,988 2,708,599
---------------------------------------
---------------------------------------


-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    ViRexx Medical Corp.
    Rob Salmon
    Chief Financial Officer
    (780) 989-6708
    (780) 436-0068 (FAX)
    rsalmon@virexx.com
    or
    The Equicom Group Inc.
    Ross Marshall
    Investor Relations
    (800) 385-5451 ext. 238
    (416) 815-0080 (FAX)
    rmarshall@equicomgroup.com
    THE TSX HAS NOT APPROVED OR DISAPPROVED OF THE INFORMATION CONTAINED
    HEREIN