QUEBEC – May 5, 2006 - Advitech Inc. (TSX-V: AVI) today announced its highlights and financial results for the first quarter ended March 31, 2006.
At its annual shareholders’ meeting held on May 3, Renaud Beauchesne, President and Chief Executive Officer of Advitech presented the highlights of 2005 and the prospects for 2006.
At that meeting, CEO Beauchesne announced: “Our two major priorities for 2006 are the commercialization of DermylexTM on markets currently covered by our existing agreements, so that we can maximize revenues for 2007, and the completion of a new round of financing to support the development of our business plan. We will also continue developing our technology platform for two applications: ulcerative colitis and atopic dermatitis.”
Sales and Commercial Activities
Up to now, four agreements in principle for marketing and distributing DermylexTM have been signed, and these agreements are for the U.S., Canadian, French and Taiwanese markets. During the first months of 2006, the first market tests started on the U.S. and Canadian markets. These tests were carried out by PhotoMedex (Nasdaq PHMD) on the U.S. market and by Jamieson Laboratories on the Canadian market.
For the French market, the Company concluded, in December 2005, an agreement in principle with Cothera S.A.S. After securing the appropriate authorizations from the French Regulatory Office (the “AFFSA”), Cothera S.A.S. initiated discussions with Advitech to finalize and sign a definitive exclusive agreement for the commercialization of DermylexTM in France. In April 2006, a fourth agreement in principle was signed with Enbio-Life Biotechnology & Medical Co. for the Taiwanese market. The launching in these markets is planned for 2006 and the first significant sales are forecast for the end of 2006. Further discussions are taking place with potential partners for other markets.
The existing agreements in principle, that all have to be transform in definitive agreements before the end of August 2006, are confirming the demand for a safe, effective and oral product for patients suffering from mild to moderate psoriasis. DermylexTM is well positioned for meeting this need.
On the financial side, the Company expects to finalize new interim financing before the end of the first semester that will permit the Company to pursue the implementation of its business plan, and to secure an additional round of financing before the last quarter of 2006. The public announcement of four agreements in principle for the commercialization of DermylexTM is helping the discussions for the next round of financing.
Research and Development
During the first quarter of 2006, the Company continued its pre-clinical research on ulcerative colitis for which the first positive results were announced in the last quarter of 2005. The Company expects to complete this work during the third quarter of 2006. The pre-clinical evaluation of a third potential application for a derivative of the XP-828L platform, atopic dermatitis, has also been initiated. The first results for this application should be announced in the third quarter of 2006.
For the first quarter ended March 31, 2006, net loss stood at $361,872 or $0.01 per share, compared to a net loss of $671,269 or $0.01 per share for the same period in 2005, an increase of $309,397. Gross research and development expenses were $133,212 during the first quarter of 2006, compared to $463,520 for the same period last year. This decrease is due primarily to the higher research and development expenses incurred during the same period last year for the double-blind, placebo-controlled study of DermylexTM. Research and development changes also explain the net operating loss.
As at March 31, 2006, cash and cash equivalents totalled $730,229, compared to $686,742 as at December 31, 2005, or an increase of $43,487 during this quarter, which is in line with the Company’s expectations.
Commenting on results for the first quarter of 2006, CEO Beauchesne explained: “During the first quarter, Advitech completed a major phase of its business plan, the initial sales of DermylexTM. This is the first commercial product originating from the Company’s XP 828L platform and it is used by patients suffering from mild to moderate psoriasis. The revenue stream expected from DermylexTM is seen as potentially significant and the signing of four agreements in principle in four different markets confirms the interest of marketing partners for this product.”
Advitech is a biotechnology company specializing in the development of bioactive ingredients from dairy proteins. Its key focus areas are in the fields of immunology and inflammation. Its main platform, XP-828L, is a growth factor complex aimed at treating psoriasis, inflammatory bowel diseases and other chronic immune-mediated inflammatory diseases (I.M.I.D.). Advitech’s common shares are listed on the TSX Venture Exchange under the symbol AVI. The number of outstanding common shares is 54,799,818.
Dermylex™ is Advitech’s orally administered product for mild to moderate plaque psoriasis. Dermylex™ is based on Advitech’s XP-828L, a bioactive ingredient with proven clinical efficacy. On July 5, 2005, the Company reported positive results from its Phase II clinical trial of XP-828L for treating mild to moderate psoriasis. The 112-day, multi-center, double blind, placebo-controlled study, involving 84 patients, confirmed the efficacy and excellent safety profile of XP 828L for treating mild to moderate psoriasis.
This press release contains forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.