TMX group

TSX symbol: SBS

CALGARY, March 30, 2012 /CNW/ - SemBioSys Genetics Inc. (TSX: SBS), a plant-based technology development company utilizing its renewable, patented, seed-based oilbody, genetic expression, and manufacturing technology platforms to develop, manufacture and commercialize healthy living and pharmaceutical products, today announced its financial and operational results for the year ended December 31, 2011.

"During 2011, our primary objective was to execute a partnership with a leading commercially focused life sciences company where there were synergies with our technology platform and core competencies. We successfully executed a definitive agreement with Tianjin Tasly Pharmaceutical Co., Ltd of Tianjin, China and its wholly owned U.S.-based subsidiary Tasly Pharmaceuticals Inc ("Tasly") in the 4^th quarter of 2011. Both SemBioSys' and Tasly's core technologies are based on plant based intellectual property with Tasly also having very strong research & development, manufacturing and a well-established sales channel in China and other markets," stated James Szarko, SemBioSys' CEO. "Our goal for 2012 is to develop a strong technology transfer and integration plan where we learn to work very efficiently together to build on the strengths of both companies.  The most immediate term challenge is to develop appropriate budgets and work-plans that both parties can agree upon. Additionally, we have retained SemBioSys core technology separate from the Tasly Joint Venture to allow us to partner with other leading industry partners. Securing immediate additional capital and further reducing our fixed overhead is imperative for our financial viability."

Full Year 2011

• Executed a Joint Venture agreement with Tasly, China's second largest producer of Traditional Chinese Medicine ("TCM") and fifth largest Pharmaceutical Company
• The newly formed Joint Venture Company is called Tasly-SemBioSys (Tianjin) Bio-Pharmaceuticals Technology Co., Ltd. (the "Joint Venture"), and is incorporated and based in Tianjin, China;
• Tasly is required to pay 100 percent of all Joint Venture development and commercialization expenses; and
• SemBioSys is required to contribute certain intellectual property and know-how to the Joint Venture for a 30% equity ownership and profit sharing interest;
• Further reduced our fixed operating burn by approximately 11%;
• Raised $4 million dollars in funding from Concept Capital Management Ltd. ("Concept Capital");
• Successfully entered into a non-dilutive $750,000 promissory note with Agriculture Finance Service Corporation ("AFSC");
• Received an additional $250,000 in funding from AVAC Ltd. for the development of our insulin product;
• Recruited Ms. En Man Ma to the position of Chief Financial Officer;
• Initiated a program to develop functional food ingredients including high quality protein isolates and oilbodies from non-transgenic oilseeds using our proprietary aqueous processing technology;
• Initiated a program to load TCMs into oilbodies with the objective of masking the smell and taste of TCMs and providing an innovative delivery system; and
• Subsequent to year end, the Company received additional financing from Concept Capital in the amount of $500,000, in the form of a promissory note and warrants.

Financial Highlights
Operating burn for the year ended December 31, 2011 was $4,899,650 compared to $5,493,010 for the year ended December 31, 2010, meeting the Company's goal of keeping cash expenditures down, while focusing primarily on strategic partnering and development of its product candidates.

Net loss for the year ended December 31, 2011 was $8,127,418 or $0.16 per share compared to $8,422,209 or $0.17 per share for the same period last year.

Revenue for the year ended December 31, 2011 was $83,085 compared to $479,516 for the same period last year.  The Company recorded no licensing fees in the year ended December 31, 2011 while there was $315,789 in licensing fees in the year 2010.

Expenditures for the year ended December 31, 2011 compared to the same period last year:

• $3,371,412 research & development costs (net of $223,902 SR&ED tax credit), compared to $5,091,335 (net of $318,994 SR&ED tax credit);
• $1,917,282 operating costs compared to $1,913,536; and
• $1,042,669 depreciation expense compared to $1,366,501.

The overall decrease in expenditures for the year is primarily due to the general cost-cutting implemented in the third quarter of 2010. In addition, we incurred a one-time non-cash research and development expense in 2010 related to renegotiating certain terms of our existing technology license agreement with UTI Limited Partnership. No such transaction occurred in the year ended December 31, 2011.  Finally, certain capital assets have become fully depreciated in the year ended December 31, 2011, further contributing to the decreased expenditures.

Total finance income for the year ended December 31, 2011 was $677,891 compared to finance expenditures of $520,448 for the same period last year. The variance was mainly due to positve non-cash changes in value for royalty liabilities and warrant liabilities of $1,370,492, compared to a negative non-cash change of $149,903 in the prior year.  A one-time non-cash expenditure of $2,563,353 unidentified consideration in bond and warrants issuance related to the $4.0 million financing was recorded in the first quarter of 2011.

At December 31, 2011, the Company had cash and cash equivalents of $264,108 as compared to $267,436 at December 31, 2010. The increase in cash during the period, which had resulted primarily from the successful closing of a $4,000,000 financing, the receipt of $250,000 non-dilutive financing from AVAC Ltd. and $750,000 from Alberta Finacial Services Corporation "AFSC" during the period, was offset by net cash burn over the year, resulting in an overall slight decrease in cash.

Total short-term debt, long-term debt, long-term bonds and convertible debentures was $6,868,774 at December 31, 2011, compared to $2,665,176 at December 31, 2010. The increase in debt relates mainly to the $4.0 million financing and $750,000 AFSC debt noted above.

At December 31, 2011, the Company had a net negative working capital balance of $2,686,521 as compared to a net negative working capital of $2,168,783 at December 31, 2010. The decrease in working capital is primarily due to a $347,138 increase of current portion of long term debt from AVAC and AFSC and a $304,872 increase in accounts payable and accrued liabilities offset by a $98,877 increase in prepaid expenses, deposits and others and $56,788 increase in receivables.

As at March 29, 2012, the Company had 51,829,818 common shares outstanding, 83,307,401 warrants, 4,361,613 options,  905,928 deferred share units and debentures which are convertible into 10,193,019 common shares.

About SemBioSys
SemBioSys employs its patented, renewable plant seed oilbody and protein expression technology platforms to develop and commercialize high value proteins and oils including health and wellness products and drug candidates. SemBioSys is listed on the Toronto Stock Exchange under the ticker SBS. More information is available at www.sembiosys.com.

Forward-Looking Statements
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to the fact that, the Company is a development stage entity and currently relies on investments and funding from strategic partners and not profits to fund it operations and it is possible that our ability to continue as a going concern may change within a very short period of time and have adverse effects on the Company's ability to continue under its current business model. The Company's ability to continue to obtain sufficient and suitable financing from both our partnerships and outside our partnerships to support operations, pre-clinical and clinical trials and commercialization of products and no assurances can be made that the Company will be successful in raising such capital, realizing assets, discharging liabilities or achieving successful partnership collaborations to generate sufficient cash flows to continue as a going concern. The Company's ability to execute partnerships and corporate alliances or ensure that its existing strategic partnerships will continue to be successful.  The risk that partners are unable to meet projected development, commercialization, distribution or sales targets.  The risks relating to uncertainties of the regulatory approval process for our products and processes. The Company's ability to develop seed lines and manufacturing processes that result in competitive advantage and commercial viability.  The impact of competitive products and pricing and the assumption that we will be able to successfully compete in the targeted markets.  The assumption that we will be able to successfully complete in a timely manner in pre-clinical and clinical studies.  The risk that we may be unable to attract and/or retain key personnel and key collaborators.  The Company's ability to adequately protect proprietary information and technology from competitors. The Company's' ability to continue to successful development its existing and future product candidates or effectively enter the market and commercialize its products with partners or independently.  On June 17, 2011, at our Annual and Special Meeting of Shareholders, shareholders unanimously approved a special resolution, approving an amendment to the Company's articles of incorporation to consolidate its issued and outstanding Common Shares. This provides the board of directors of the Company the authority, in its discretion, prior to June 17, 2012, to select the exact consolidation ration, provided that (i) the ration may be no smaller than one post-consolidation Share for every (8) pre-consolidation Common Shares and no larger than one post-consolidation Share for every thirty (30) pre-consolidation Common Shares, and (ii) the number of pre-consolidation Common Shares in the ratio must be a whole number of common shares. The risks associated with a potential Share Consolidation and further risks regarding the Company are set out in the annual information form and other ongoing filings with the Canadian securities regulatory authorities which can be found at www.sedar.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.