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BIONOVO, INC.

$N/A (N/A)

BNVI.PK

Press Release

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Bionovo Announces Second Quarter 2010 Highlights and Financial Results

Key Regulatory Meetings Completed; Company Looks to Initiate Phase 3 Trials for Menerba

EMERYVILLE, Calif., Aug. 4 /PRNewswire-FirstCall/ -- Bionovo, Inc. (Nasdaq: BNVI) today announced second quarter highlights and financial results for the three months ended June 30, 2010.

"We have now had critical discussions with both the FDA and the EMA. Both agencies have provided guidance and requirements for marketing license approval of Menerba," said Isaac Cohen, O.M.D., Bionovo's Chairman and Chief Executive Officer. "We can now turn our attention to initiating pivotal clinical trials for Menerba by year end."

"Any potential treatment for such a large indication as menopausal symptom alleviation will require careful consideration and review by the regulatory agencies," said Mary Tagliaferri, M.D., Bionovo's President and Chief Medical Officer. "The details of the regulatory agencies' review will be particularly useful to a prospective partner for assessing the development costs and market potential of Menerba."

Key Events To Date


         The Company announced that it had received final guidance from the
         European Medicines Agency (EMA) in order to advance Menerba, the
         company's lead drug candidate for menopausal symptoms, to Phase 3
    --   clinical trials in Europe.
      "The EMA guidance is an essential step in our clinical development of
       Menerba in Europe, and defines the regulatory and clinical path for
       eventual approval. We are eager to start our late stage pivotal
       studies for Menerba with this guidance in hand," said Dr.
       Tagliaferri.
         The Company has also had a meeting with the U.S. Food and Drug
         Administration (FDA) on the development of Menerba in the U.S.
         Earlier this month, the Company had a meeting with the FDA
         regarding Menerba's Chemistry, Manufacturing and Controls (CMC)
    --   package.
      "As a result of the meeting with the FDA, we are confident we can now
       satisfy all the details and requirements with the proposed CMC
       package. Unfortunately we cannot comment further on the meeting
       details until the FDA minutes are finalized", said Dr. Isaac Cohen.
       "We have ongoing discussions with the FDA concerning the rest of the
       clinical development of Menerba that should conclude swiftly."
         The Company published a study in the Public Library of Science
         (PLoS) One, describing a novel model for thermoregulatory control
         with neurons that are differentiated from stem cells, and express
         native estrogen receptors. The company's drug candidate, Menerba,
         an estrogen receptor beta selective modulator, was shown to
         regulate calcium influx, which is related to temperature
    --   regulation.
      "This is a novel and valuable model for investigating
       thermoregulation. This study provides further explanation on how
       Menerba is able to control hot flashes," said Isaac Cohen, Bionovo's
       Chairman and Chief Executive Officer.
         The Company announced the publication of results from a study
         demonstrating the three distinct classes of genes regulated by
         estrogen receptor beta (ERb). The results are published in the
         Journal of Biological Chemistry. This is an important discovery for
    --   future development of selective drugs regulating this pathway.
      "Bionovo's mission to discover and develop unique drugs for women's
       health and cancer is further enriched by the discovery of the unique
       classes of genes regulated by ERb. We now know we can selectively
       regulate via the ERb genes similar to estrogen as well as enhance the
       activity of genes regulated independently by ERb. This opens the door
       for new cancer preventive drugs and inflammatory diseases afflicting
       women far more than men. It also further elucidates the potential
       need for multiple compounds pharmacologically causing gene activation
       of various classes of genes along a single path," said Dr. Cohen.
         The Company announced that it entered into a common stock purchase
         agreement with Aspire Capital Fund LLC, an Illinois limited
         liability company, which provides that, subject to certain
         conditions and limitations, Aspire Capital is committed to purchase
         up to an aggregate of $15.0 million of Bionovo shares of common
         stock over a two year term, based on prevailing market prices over
    --   a period preceding each sale.
      "The intent of this agreement is to continue that strategy, to provide
       a flexible and fair source of committed capital, with a known cost -
       at market prices -and without warrant overhang. This agreement with
       Aspire meets that intent and provides the Company flexibility from a
       timing perspective and favorable terms," said Tom Chesterman,
       Bionovo's Senior Vice President and Chief Financial Officer.

Second Quarter Results

For the quarter ending June 30, 2010 total revenue was $14,000 compared with $7,000 for the same period in 2009. This revenue was the result of limited research services the Company performed for one customer. The Company does not expect to continue performing these services for the remainder of 2010.

Total operating expenses for the three months ending June 30, 2010 were $4.1 million compared to $4.1 million for the same period in 2009 and $4.7 million for the first quarter of 2010. Total operating expenses for the second quarter included the purchase of manufacturing supplies and raw materials and testing in support of the Menerba manufacturing process development. The Company expects operating expenses to increase in the last half of the year as clinical trials begin.

The Company reported a net loss for the three months ended June 30, 2010 of $4.1 million, or $0.04 per share, compared with a net loss of $4.1 million, or $0.05 per share, for the same period in 2009.

The Company ended the quarter with $6.9 million in cash, cash equivalents and short term investments, and began the quarter with $11.8 million. The cash balance at the end of the quarter reflects the cash expenses mentioned above combined with $1.0 million in capital equipment purchases during the year.

Conference Call

The Company will conduct a conference call and webcast to review the financial results and the Company's plans for 2010 later today, Wednesday, August 4th, at 5:00 p.m. (Eastern).

Interested parties can access the call by dialing (877) 317-6789 or (412) 317-6789, or can listen via a live internet webcast, which can be found at http://bionovo.com/investors/events. A replay of the call will be available via webcast at http://bionovo.com/investors/events or by playback at (877) 344-7529 or (412) 317-0088, conference code 442845, through August 10, 2010.

About Bionovo, Inc.

Bionovo, Inc. 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: http://www.bionovo.com.

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 http://www.sec.gov. 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.

Financial Tables on Following Pages

                                          Bionovo, Inc.
                                  (A Development Stage Company)
                         Condensed Consolidated Statements of Operations
                       (Unaudited, in thousands, except per share amounts)
                              Three months ended        Six months ended
                                   June 30,                 June 30,
                                   --------                 --------
                               2010          2009     2010          2009
                               ----                   ----

    Revenues                    $14            $7      $14            $7
                                ---           ---      ---           ---

    Operating expenses:
      Research and
       development            3,328         2,954    7,135         6,555
      General and
       administrative           788         1,175    1,639         2,184
      Merger cost                 -             -        -             -
    Total operating
     expenses                 4,116         4,129    8,774         8,739
                              -----         -----    -----         -----

    Loss from operations     (4,102)       (4,122)  (8,760)       (8,732)

      Change in fair value
       of warrant liability       -             -        -             -
      Interest income             6            16       14            70
      Interest expense          (10)          (22)     (24)          (55)
      Other expense             (14)           (6)     (11)          (85)
                                ---           ---      ---           ---
    Net loss                $(4,120)      $(4,134) $(8,781)      $(8,802)
                            =======       =======  =======       =======
      Basic and diluted net
       loss per common
       share                 $(0.04)       $(0.05)  $(0.08)       $(0.12)
                             ======        ======   ======        ======

      Shares used in
       computing basic and
       diluted              107,619        76,363  107,580        76,363
        net loss per share  =======        ======  =======        ======



                                       Accumulated
                                       from February
                                             1,
                                      2002 (Date of
                                      inception) to
                                         June 30,
                                         --------
                                                2010
                                                ----

    Revenues                                  $1,194
                                              ------

    Operating expenses:
      Research and development                46,841
      General and administrative              19,241
      Merger cost                              1,964
    Total operating expenses                  68,046
                                              ------

    Loss from operations                     (66,852)

      Change in fair value of
       warrant liability                         831
      Interest income                          2,088
      Interest expense                          (485)
      Other expense                             (177)
                                                ----
    Net loss                                $(64,595)
                                            ========
      Basic and diluted net loss per
       common share                           $(1.27)
                                              ======

      Shares used in computing basic
       and diluted                            50,895
        net loss per share                    ======


                                    Bionovo, Inc.
                            (A Development Stage Company)
                             Consolidated Balance Sheets
                        (in thousands, except share amounts)
                                                                    December
                                                           June 30,    31,
                                                                2010     2009
                                                                ----     ----
                                                         (unaudited)
                                           ASSETS
    Current assets:
        Cash and cash equivalents                             $3,981   $2,799
        Short-term investments                                 2,951   13,135
        Receivables                                               49      251
        Prepaid expenses                                         456      214
        Other current assets                                     299      161
                                                                 ---      ---
              Total current assets                             7,736   16,560
    Property and equipment, net                                6,445    6,197
    Patent pending, net                                        1,085      822
    Other assets                                                 530      570
              Total assets                                   $15,796  $24,149
                                                             =======  =======

                          LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
        Accounts payable                                        $352     $311
        Accrued compensation and benefits                        403      367
        Current portion of lease obligations                     247      476
        Current portion of notes payable                          62       59
        Other current liabilities                                968      823
                                                                 ---      ---
              Total current liabilities                        2,032    2,036
        Non-current portion of lease
         obligations                                              12       96
        Non-current portion of notes payable                      90      121
              Total liabilities                                2,134    2,253
                                                               -----    -----

    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,
         107,618,690 and 107,518,690 shares
         outstanding at June 30, 2010 and
         December 31, 2009, respectively                          11    11
        Additional paid-in capital                            78,246   77,704
        Accumulated other comprehensive loss                       -       (5)
        Accumulated deficit                                  (64,595) (55,814)
                                                             -------  -------
              Total shareholders' equity                      13,662   21,896
                                                              ------   ------
                   Total liabilities and shareholders'
                    equity                                   $15,796  $24,149
                                                             =======  =======


* The balance sheet at December 31, 2009 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.