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Press Release


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Bionovo Reports Third Quarter 2008 Financial Results

EMERYVILLE, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Bionovo, Inc. (Nasdaq: BNVI) today announced results for the third quarter of 2008.

Quarter Results

The company did not report any revenue for the three and nine months ended September 30, 2008.

Total operating expenses for the three and nine months ending September 30, 2008 were $5.2 million and $13.7 million, respectively, compared to $3.6 million and $9.9 million, respectively, for the same period in 2007. This reflects the increase in costs related to the clinical trials of our leading drug candidates.

The Company reported a net loss for the three and six months ended September 30, 2008 of $5.1 million, or $0.07 per share, and $13.2 million, or $0.17 per share, respectively, compared with a net loss of $3.2 million, or $0.05 per share, and $9.2 million, or $0.15 per share, respectively, for the same periods in 2007.

The Company ended the quarter with $17.3 million in cash, cash equivalents and short term investments, and began the quarter with $24.6 million, a difference of $7.3 million. This difference includes $3.4 million in non- recurring capital expenditures associated with tenant improvements for laboratory and production capability expansion.

Company Highlights

The Company has continued the scientific and clinical development of its drug candidates for the treatment of advanced breast cancer, menopausal hot flashes, and menopausal vaginal atrophy. Recent advances have included:

    --   The Phase 1 portion of the BZL101 Phase 1/2 clinical trial for
         advanced metastatic breast cancer has now been completed
         successfully, showing  positive safety and tolerability profiles, as
         well as the early signs of clinical efficacy. The Phase 2 part of
         the trial is now open for enrollment at 17 clinical sites in the
         U.S., and is expected to enroll 80 patients in the trial. There are
         currently over 160,000 women living with metastatic breast cancer in
         the U.S.
    --   The Company presented an analysis of the metabolism of one of the
         active chemical ingredients of MF101, the Company's drug candidate
         for the treatment of menopausal hot flashes. The presentation, to
         the American Society for Pharmacology and Experimental Therapeutics,
         Drug Metabolism and Disposition, adds to the growing body of data
         supporting MF101's mechanism of action, safety and potential
         potency, as well as furthering the intellectual property protection
         for the Company.
    --   Also on MF101, the Company released data from its previous Phase 2
         study that showed MF101's superior efficacy with respect to "night
         sweats" or "night awakenings due to hot flashes" -- a particularly
         debilitating form of hot flash for which many women seek medical
         treatment and improved quality of life. This adds to the increasing
         evidence of the possible efficacy of MF101 and the market
         opportunity awaiting MF101 if and when it is approved by the FDA and
         put on the market.
    --   The Company is currently in discussions with the FDA on the specific
         requirements for progression to Phase 3 pivotal trials of MF101. The
         Company expects to have resolution, and to be in a position to
         continue the clinical development and trials for MF101, by the end
         of the year.
    --   The Company presented a report to the North American Menopause
         Society (NAMS), showing laboratory results of superior efficacy for
         VG101, the Company's drug candidate for menopausal vaginal dryness,
         over other treatments. The Company expects to begin human clinical
         trials for VG101 late in 2008 or early in 2009.

"The third quarter of the year continued the positive scientific progress for Bionovo," said Dr. Isaac Cohen, O.M.D., Bionovo's Chairman and Chief Executive Officer. "After much preparation and discussion with the FDA and our advisors, we are now poised to begin the next phase of clinical testing for our portfolio of women's health and oncology drug candidates. We are also continuing promising discussions with potential pharmaceutical partners."

"With over seventeen million dollars in cash, cash equivalents and short- term investments, and a lower than industry clinical trial cost profile, we are poised to progress our lead drug candidates through these challenging economic times," added Tom Chesterman, Bionovo's Senior Vice President and Chief Financial Officer. "Given our current plans and expectations, this funding will be sufficient for at least the next 12 months"

A full financial report on Form 10-Q is expected to be filed by Tuesday, November 4, 2008.

Bionovo, Inc.

Bionovo is a pharmaceutical company focused on the discovery and development of safe and effective treatments for women's health and cancer, markets with significant unmet needs and billions in potential annual revenue. The company applies its expertise in the biology of menopause and cancer to design new drugs derived from botanical sources which have novel mechanisms of action. Based on the results of early and mid-stage clinical trials, Bionovo believes they have discovered new classes of drug candidates within their rich pipeline with the potential to be leaders in their markets. Bionovo is headquartered in Emeryville, California and is traded on the NASDAQ Capital Market under the symbol, "BNVI". For more information about Bionovo and its programs, visit

Forward Looking Statements

This release contains certain forward-looking statements relating to the business of Bionovo, Inc. that can be identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including uncertainties relating to product development, efficacy and safety, regulatory actions or delays, the ability to obtain or maintain patent or other proprietary intellectual property protection, market acceptance, physician acceptance, third party reimbursement, future capital requirements, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission, which are available at Bionovo, Inc. is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

                                 Bionovo, Inc
                        (A Development Stage Company)
                      Condensed Statements of Operations

                          Three months ended            Nine months ended
                             September 30,                 September 30,
                          2008           2007           2008           2007

    Revenues                 $-       $243,375             $-      $250,875

    Operating expenses:
      Research and
       development    3,941,303      2,444,674      8,881,340     7,212,445
      General and
       administrative 1,222,319      1,129,402      4,852,648     2,689,246
      Merger cost             -              -              -             -
         expenses     5,163,622      3,574,076     13,733,988     9,901,691
    Loss from
     operations      (5,163,622)    (3,330,701)   (13,733,988)   (9,650,816)
    Change in fair
     value of warrant
     liability                -              -              -             -

    Interest income     142,815        170,272        638,562       517,958

    Interest expense    (36,286)       (42,370)       (98,198)      (68,898)
    Other income
     (expense)           (1,322)        (5,241)       (16,938)       (5,241)
    Loss before
     income tax      (5,058,415)    (3,208,040)   (13,210,562)   (9,206,997)
      Income tax
       provision              -              -         (3,256)       (2,400)
    Net loss        $(5,058,415)   $(3,208,040)  $(13,213,818)  $(9,209,397)
    Basic and
     diluted net
     loss per common
     share               $(0.07)        $(0.05)         (0.17)        (0.15)
    Shares used in
     computing basic
     and diluted net
     loss per common
     share           76,363,100     65,571,108     76,350,180    63,368,561

                                                   Accumulated from
                                                   February 1, 2002
                                                (Date of Inception) to
                                                  September 30, 2008

    Revenues                                             $659,490
    Operating expenses:
      Research and development                         24,673,545
      General and administrative                       12,304,415
      Merger cost                                       1,964,065
        Total operating expenses                       38,942,025
    Loss from operations                              (38,282,535)
    Change in fair value of warrant liability             831,288
    Interest income                                     1,706,979
    Interest expense                                     (335,216)
    Other income (expense)                                127,959
    Loss before income tax                            (35,951,525)
      Income tax provision                                (12,258)
    Net loss                                         $(35,963,783)
    Basic and diluted net loss per common share            $(0.88)
    Shares used in computing basic and diluted
     net loss per common share                         40,805,306

                                 Bionovo, Inc
                        (A Development Stage Company)
                           Condensed Balance Sheets

                                                 September 30,  December 31,
                                                     2008          2007
                                                  (Unaudited)    (Note 1)
    Current assets:
      Cash and cash equivalents                   $6,664,427    $28,472,485
      Short-term investments                      10,645,621      4,823,938
      Receivables                                    262,233        285,899
      Prepaid expenses and other current assets    1,159,263        405,381
        Total current assets                      18,731,544     33,987,703
    Property and equipment, net                    6,777,308      3,900,248
    Other assets and patent pending, net           1,027,306        277,220
        Total assets                             $26,536,158    $38,165,171

    Current liabilities:
      Accounts payable                              $881,452       $299,677
      Accrued clinical and costs of other studies    102,814        298,559
      Accrued compensation and benefits              870,435        462,485
      Current portion of lease obligation            793,242        706,710
      Other current liabilities                      467,088        949,200
        Total current liabilities                  3,115,031      2,716,631
    Non-current portion of lease obligation          693,519        526,346

    Commitments and contingencies
    Shareholders' equity:
      Preferred stock, $0.0001 par value;
       10,000,000 shares authorized; none issued
       and outstanding                                     -              -
      Common stock, $0.0001 par value,
       190,000,000 shares authorized; 76,363,101
       and 76,343,101 shares issued and outstanding
       as of September 30, 2008 and December 31,
       2007, respectively                              7,636          7,634
      Additional paid-in capital                  58,737,205     57,660,045
      Accumulated other comprehensive income         (53,450)         4,480
      Accumulated deficit                        (35,963,783)   (22,749,965)
        Total shareholders' equity                22,727,608     34,922,194
        Total liabilities and shareholders'
         equity                                  $26,536,158    $38,165,171

    * The balance sheet at December 31, 2007 has been derived from the audited
      financial statements at that date but does not include all of the
      information and footnotes required by accounting principles generally
      accepted in the United States for complete financial statements.

SOURCE  Bionovo, Inc.
    -0-                             11/03/2008
    /CONTACT:  Tom Chesterman of Bionovo, Inc., +1-510-601-2000,
    /Web site: /

CO:  Bionovo, Inc.
ST:  California

-- AQM545 --
5635 11/03/2008 16:38 EST