Net research and development expenses have decreased significantly in the quarter ended October 31, 2009 to a recovery of expenses of $89,654 as compared to $6.6 million for the quarter ended October 31, 2008. Net research and development expenses amounted to $5.7 million for the year ended October 31, 2009 compared to $21.5 million for fiscal 2008. The decrease is largely attributable due to the completion of the Phase II clinical trials for PC-DAC(TM):Exendin-4 in November 2008, a reduction in research activities and to the recovery of the clinical trials costs from a clinical research organization for a PC-DAC(TM):Exendin-4 study.

General and administrative costs amounted to $819,839 for the quarter ended October 31, 2009 compared to $2.0 million for the quarter ended October 31, 2008. For the year ended October 31, 2009 general and administrative costs amounted to $2.9 million, compared to the $6.0 million incurred for the same period the previous year. The decrease in general and administrative expenses is largely attributable to fees related to the early redemption of the convertible senior unsecured notes in the year ended October 31, 2008 and by the reversal of a tax withholding contingency amounting to $1,257,000 in 2009.

At October 31, 2009, the Company had cash and cash equivalents and short-term investments totalling $7.5 million and an additional $1.6 million in accounts receivables and investment tax credits receivable, compared to $21.1 million as at October 31, 2008. As at October 31, 2009, working capital amounted to $6.1 million. The Company believes that its current cash and cash equivalents, investments and interest income will be sufficient to carry out operations into the third quarter of the year ending 2010.

Source: CONJUCHEM BIOTECHNOLOGIES INC.