YM BioSciences reports third quarter 2004 results MISSISSAUGA, ON, May 27 /PRNewswire-FirstCall/ -- YM BioSciences Inc. (TSX:YM, AIM:YMBA), the cancer drug development company with an advanced-stage portfolio, today reported operational and financial results for the third quarter of fiscal 2004, ended March 31, 2004. Highlights: - The Company initiated a 65-center international 700 patient registration trial for its lead drug, tesmilifene. - Positive results from the first tesmilifene Phase III trial performed by the National Cancer Institute of Canada were published in the peer-reviewed Journal of Clinical Oncology. - The independent industry analyst group Frost & Sullivan declared YM BioSciences the 2004 Breast Cancer Therapies Entrepreneurial Company of the Year. - Subsequent to the end of the quarter, positive Phase II clinical trial results for TheraCIM hR3, YM's EGFr monoclonal antibody, were also published in the Journal of Clinical Oncology. "During fiscal third quarter, we achieved a major milestone for the Company, initiating on schedule the pivotal Phase III trial for our lead drug, tesmilifene," said David Allan, Chairman and CEO. "Our second anti-cancer drug, TheraCIM hR3, has also received further validation and is poised to commence trials designed to lead to approval." Net loss for the quarter ended March 31, 2004 was $2,106,982 and for the first nine months of this year was $4,072,318, compared to $2,056,653 and $6,229,931 respectively for the same periods last year. Total expenditures for the quarter were $2,981,550 compared to $1,417,857 for the same period last year. Total expenditures for the first nine months were $4,965,398 compared to $4,591,227 for the same period last year. General and Administrative expenses for the quarter were $736,827 and for the nine months were $1,831,252, up from $474,824 and $1,398,527 respectively for the prior year, principally due to increased travel and expenses relating to the recent financing. Licensing and Product Development expenses were $2,244,723 for the quarter and $3,134,146 for the first nine months compared to $943,033 for the third quarter last year and $3,192,700 for the first nine months of last year. Last year's expenses included manufacturing of tesmilifene which was not repeated this year. This year's expenses included $1,817,000 for the tesmilifene Phase III clinical trial in metastatic breast cancer that commenced this quarter. As at March 31, 2004 the Company had cash and short-term deposits totaling $22,410,170 and payables of $1,460,589 compared to $7.7 million at June 30, 2003. On December 15, 2003 the Company completed the sale of 10,895,658 special warrants for total gross proceeds of $19,067,402 (net $17,047,001). On February 17, 2004 the Company cleared its prospectus with the Ontario Securities Commission and issued 10,895,658 common shares and 5,447,829 share purchase warrants in exchange for the special warrants. Management expects that the current cash reserves will be sufficient to fund the Company's development program beyond the 2005 fiscal year. About YM BioSciences YM BioSciences Inc. is a cancer drug development company. Its lead drug, tesmilifene, is a small molecule chemopotentiator (for taxanes and anthracyclines) currently undergoing a pivotal Phase III trial in metastatic breast cancer, which was initiated in March 2004. Tesmilifene previously completed a positive Phase III trial. In addition to tesmilifene, the Company is developing an EGFr humanized monoclonal antibody that has completed Phase II trials and a GnRH anti-cancer vaccine that is in Phase I/II clinical trials. YM BioSciences is also supporting the pre-clinical development of two additional cancer products. Except for historical information, this press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, which may cause but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting. YM BioSciences Inc. Consolidated Balance Sheet March 31 June 30 ASSETS 2004 2003 (Unaudited) (audited) Current assets Cash and short-term deposits $ 22,410,456 $ 7,675,466 Accounts receivable and prepaid expenses 133,975 168,187 Marketable securities (cost - $350,128) 19,715 783,622 ------------- ------------- 22,564,146 8,627,275 Capital assets 11,381 22,567 ------------- ------------- Total assets $ 22,575,527 $ 8,649,842 ------------- ------------- ------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 1,253,756 $ 101,506 Accrued liabilities 206,833 221,077 ------------- ------------- 1,460,589 322,583 Shareholders' equity Share capital 58,807,212 44,729,104 Share purchase warrants 2,922,343 - Contributed surplus 26,215 9,965 Deficit (40,640,832) (36,411,810) ------------- ------------- 21,114,938 8,327,259 ------------- ------------- Total Liabilities and Shareholders' equity $ 22,575,527 $ 8,649,842 ------------- ------------- ------------- ------------- See accompanying notes YM BioSciences Inc. Consolidated Statements of Operations and Deficit (Unaudited) For the periods ended March 31, 2004 and March 31, 2003 Three months ended Nine months ended March 31 March 31 2004 2003 2004 2003 ---- ---- ---- ---- REVENUE Interest income $ 120,441 $ 74,601 $ 225,203 $ 211,796 ------------- ------------- ------------- ------------- 120,441 74,601 225,203 211,796 ------------- ------------- ------------- ------------- EXPENSES General and administrative 736,827 474,824 1,831,252 1,398,527 Licensing and product development 2,244,723 943,033 3,134,146 3,192,700 ------------- ------------- ------------- ------------- 2,981,550 1,417,857 4,965,398 4,591,227 ------------- ------------- ------------- ------------- Loss before the undernoted (2,861,109) (1,343,256) (4,740,195) (4,379,431) Gain on foreign exchange 115,545 29,545 Gain on sale of marketable securities 638,332 638,332 Loss on marketable securities (713,397) - (1,850,500) ------------- ------------- ------------- ------------- Loss for the period (2,107,232) (2,056,653) (4,072,318) (6,229,931) ------------- ------------- ------------- ------------- Cost of purchasing shares for cancellation in excess of book value - (27,740) (156,704) (39,239) Deficit, beginning of period (38,553,600) (33,154,670) (36,411,810) (28,969,893) Deficit, end of period $(40,640,832) $(35,239,063) $(40,640,832) $(35,239,063) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Basic and diluted loss per common share $ (0.09) $ (0.16) $ (0.20) $ (0.48) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Weighted Average number of common shares outstanding 22,427,475 12,998,094 19,952,844 12,998,094 See accompanying notes YM BioSciences Inc. Consolidated Statements of Cash Flows (Unaudited) For the periods ended March 31, 2004 and March 31, 2003 Three months ended Nine months ended March 31 March 31 2004 2003 2004 2003 ---- ---- ---- ---- Operating activities ------------ Net loss for the period $ (2,107,232) $ (2,056,653) $ (4,072,318) $ (6,229,931) Items not involving cash: Depreciation - 14,910 14,910 44,730 Unrealized loss on marketable securities - 713,397 - 1,850,500 Stock-based compensation - 16,250 Changes in non-cash operating working capital: Restricted cash 600,000 600,000 Accounts receivable and prepaid expenses 74,285 23,214 148,472 100,329 Accounts payable and accrued liabilities 958,392 (148,165) 1,138,006 (61,191) ------------- ------------- ------------- ------------- (1,074,555) (853,279) (2,754,680) (3,695,563) Financing activities ------------ Net proceeds from issuance of special warrants 17,047,001 Exercise of options 27,125 - 27,125 Purchase of shares for cancellation - (44,081) (230,379) (64,107) ------------- ------------- ------------- ------------- 27,125 (44,081) 16,843,747 (64,107) Investing activities ------------ Disposal of marketable securities 649,647 649,647 Additions to capital assets - - (3,724) (2,361) ------------- ------------- ------------- ------------- 649,647 645,923 (2,361) Increase (decrease) in cash and term deposits (397,783) (897,378) 14,734,990 (3,762,031) Cash and term deposits, beginning of period 22,808,239 9,842,869 7,675,466 12,707,522 ------------- ------------- ------------- ------------- Cash and term deposits, end of period $ 22,410,456 $ 8,945,491 $ 22,410,456 $ 8,945,491 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation These consolidated financial statements of YM BioSciences Inc. ("Company") follow the same accounting policies and methods of their application as the audited annual financial statements for the year ended June 30, 2003. These consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements. 2. Share Capital and Contributed Surplus a) On December 15, 2003, the Company completed the sale of 10,895,658 special warrants for total proceeds of $19,067,402 by way of private placement. Each special warrant sold for $1.75 and entitles the holder to receive one common share and one-half of a share purchase warrant. On February 17, 2004, pursuant to a prospectus filed with the Ontario Securities Commission, the special warrants were automatically exercised and the Company issued 10,895,658 common shares and 5,447,829 share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional common share for $2.50 for five years. b) The Company purchased for cancellation 169,900 common shares during the first two quarters ended December 31, 2003 under a normal course issuer bid, at a total cost of $230,339. The excess of the cost of purchase over the book value of the shares, $156,704 has been added to the deficit for the YTD. 3. Marketable securities On January 9, 2004, the Company completed a transaction whereby it sold 1,100,000 ordinary shares of NOIT at their market value of pnds stlg 0.55 (approximately $1.29) per share, resulting in a net gain of approximately $633,000. As at March 31, 2004 the marketable securities consist of 220,000 share purchase warrants in NOIT that had a market value on March 31, 2004 of $68,972. 4. The opening accumulated deficit has been restated to include $86,000 loss on foreign exchange that should have been recorded in the last quarter. DATASOURCE: YM BioSciences Inc. CONTACT: Enquiries: James Smith, The Equicom Group Inc., Tel. (416) 815-0700 x 229, Fax (416) 815-0080, Email: ; YM BioSciences Inc., Tel. (905) 629-9761, Fax (905) 629-4959, Email:

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