Stressgen Biotechnologies announces first quarter 2006 financial results

SAN DIEGO, CA, May 11 /PRNewswire-FirstCall/ -- Stressgen Biotechnologies Corporation (TSX: SSB) announced today financial results for the first quarter ended March 31, 2006. All amounts, unless specified otherwise, are in Canadian dollars.

For the three months ended March 31, 2006, the Company reported a net loss from continuing operations of $2,745,000, or $0.03 per share, compared to a net loss from continuing operations of $7,139,000, or $0.10 per share for the three months ended March 31, 2005. The Company had cash and short-term investments of $8,155,000 at March 31, 2006. In addition, the Company has a $3,000,000 receivable related to its recent corporate reorganization that will be released from escrow pending satisfaction of certain conditions.

"Our corporate restructuring and implementation of a refocused product development strategy, along with lower spending on manufacturing, have enabled us to decrease our underlying burn rate significantly over the past year," commented Gregory M. McKee, President and Chief Executive Officer at Stressgen. "We believe we are making the most efficient use of our resources to move our fusion product candidates ahead including our reformulated HspE7 compound for the treatment of diseases caused by the human papillomavirus (HPV)."

About Stressgen Biotechnologies Corporation: --------------------------------------------

Stressgen is developing innovative therapeutics for the treatment of viral infections and cancer, with a focus on diseases caused by the human papillomavirus (HPV). The corporation is publicly traded on the Toronto Stock Exchange under the symbol SSB.

For more information about Stressgen, please visit the Company's website located at http://www.stressgen.com/.

This press release contains forward-looking statements regarding the development of our HspE7 program, our business strategy, our burn rate and the release of funds from escrow. Actual results could be materially different from those implied by these forward-looking statements due to factors over which we have limited control, including but not limited to our ability to continue as a going concern, our ability to enter into corporate partnering relationships (and the effects and terms of those relationships), our ability to raise additional funds, the outcomes from clinical trials, our ability to meet regulatory approval requirements, difficulties inherent in the manufacture of commercial-grade drug supplies, the risk that even if successfully developed, our products may not be commercially successful and the failure to satisfy all of the conditions to the release of funds from escrow. Please refer to our filings with Canadian securities regulators available on the SEDAR website at http://www.sedar.com/ for more information on these and other applicable risks. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect events or circumstances after the date of this news release or to reflect the occurrence of subsequent events.

Gregory McKee Donna Slade President and Chief Executive Officer Director, Investor Relations 6055 Lusk Boulevard 6055 Lusk Boulevard San Diego, CA USA 92121 San Diego, CA USA 92121 Tel: [phone] Dir: 858/202-4945 Dir: 858/202-4940 Fax: [phone](financial information attached) CONSOLIDATED STATEMENT OF OPERATIONS (Canadian dollars in thousands, except per share amounts) (Unaudited) Three months ended March 31, ------------------------- 2006 2005 ------------ ------------ Revenue: Collaborative R&D revenue $ 155 $ 163 Operating expenses: Research and development 2,207 5,539 Selling, general and administrative 684 2,006 ------------ ------------ 2,891 7,545 ------------ ------------ Operating loss (2,736) (7,382) ------------ ------------ Other income (expenses): Interest income 19 359 Net foreign exchange loss (28) (102) Interest expense - (14) ------------ ------------ (9) 243 ------------ ------------ Net loss from continuing operations (2,745) (7,139) ------------ ------------ Net income from discontinued operations - 417 ------------ ------------ Net loss $ (2,745) $ (6,722) ------------ ------------ ------------ ------------ Basic and diluted (loss) income per common share: From continuing operations $ (0.03) $ (0.10) From discontinued operations - 0.01 ----------- ------------ $ (0.03) $ (0.09) ----------- ------------ ----------- ------------ Weighted average common shares outstanding (in thousands) 83,070 72,506 CONSOLIDATED BALANCE SHEET INFORMATION (Canadian dollars in thousands) (Unaudited) March 31, December 31, 2006 2005 ------------ ------------ Cash and short-term investments $ 8,155 $ 4,361 Total assets 12,639 7,598 Stockholders' equity 9,162 3,521 Total shares outstanding (in thousands) 83,196 83,036