Bioenvision Reports Second Quarter 2007 Financial Results; Evoltra(R) Sales Double over Last Quarter

Bioenvision, Inc. (NasdaqGM:BIVN) today announced financial results for the second quarter ended December 31, 2006. Results and recent events include: Bioenvision marks record quarterly revenue of $4.5 million as Evoltra® (clofarabine) sales doubled from the first quarter of 2007 Bioenvision files with the EMeA for label extension of Evoltra® in elderly AML ASH conference spotlights pivotal filing data from study BIOV-121 Bioenvision appoints new Chief Financial Officer Bioenvision appoints General Manager for Bioenvision JapanCo. Bioenvision out-licenses worldwide rights to its Oligon® technology "We are very pleased with the impact our sales and marketing organization has had since the formal launch of Evoltra® in September,” said Christopher B. Wood, M.D., Bioenvision’s Chairman and Chief Executive Officer. "The revenue growth in the pediatric indication, our filing for a label extension into adult Acute Myeloid Leukemia (AML) and our progress towards bringing Evoltra into Japan are significant achievements for Bioenvision, and we remain focused on continuing to execute on our global development and commercialization strategy for Evoltra in the months ahead.” Financial Review Total revenue for the quarter ended December 31, 2006 was $4.5 million, compared to $1.1 million for the same period in 2005. This increase of approximately 309% is due to an increase in net product sales of Evoltra®, as well as an increase in license and royalty revenue of approximately $265,000. Net product sales of Evoltra® for the quarter ended December 31, 2006 totaled $3.6 million compared to $1.8 million for the previous quarter ending September 30, 2006 representing an increase of 100%. Revenues for the six months ended December 31, 2006 were approximately $7.4 million and $1.8 million, respectively, representing an increase of 311%. This increase is due to the approval of Evoltra® in May 2006 and commercial sales commencing in the fourth quarter of 2006. Selling, general and administrative expenses for the quarter ended December 31, 2006 were $6.3 million, compared to $2.6 million for the same period in 2005 representing an increase of 142%. The increase is primarily due to the expansion of the sales force in Europe. The Company also recognized an increase in stock-based compensation of $712,000. Selling, general and administrative expenses for the six months ended December 31, 2006 and 2005 were approximately $11.8 million and $5.5 million, respectively, representing an increase of 115%. This increase is due to the build out of the sales force in the EU after receiving marketing authorization for Evoltra® in May of 2006 as well as the launch of Evoltra® during the first quarter of 2007, and increased overhead costs of the company. The Company also recognized an increase in stock-based compensation of $923,000. Research and development costs for the three months ended December 31, 2006 and 2005 were approximately $4.3 million and $2.0 million, respectively. This increase of 115% is due to the Company’s increased development activities, including the cost of participation in the ongoing AML-16 study, BIOV-111, BIOV-121, and psoriasis studies. Research and development costs for the six months ended December 31, 2006 and 2005 were approximately $13.6 million and $4.4 million, respectively. This increase of 209% is due to the signing of the Japanese license agreement of approximately $4.0 million during the first quarter of fiscal 2007, along with the costs associated with clinical development and regulatory activities. Net loss applicable to shareholders was approximately $7.0 million or $0.16 loss per share for the three months ended December 31, 2006 compared with net loss available to shareholders of approximately $3.9 million or $0.10 per share for the three months ended December 31, 2005. Net loss applicable to shareholders was approximately $19.2 million or $0.46 per share for the six months ended December 31, 2006 as compared to approximately $8.8 million or $0.22 per share for the six months ended December 31, 2005. Bioenvision had cash and cash equivalents and short-term investments at December 31, 2006 of $29.1 million compared with $45.0 million at June 30, 2006. The decrease in the cash position is due to the cash burn associated with an increase in the Company’s development activities and clinical studies of Evoltra® in Europe, including the process of filing for approval of the first label expansion for Evoltra® and the general administrative costs associated with the marketing of Evoltra®. Conference Call and Webcast Information: Management will conduct a conference call today, February 8, 2007 at 10:00AM Eastern Time to review the financial and corporate results for the second quarter 2007. The dial-in number and passcode information are as follows and a replay of the call and webcast will be available for 14 days from today: Toll free (US & Canada): 866-585-6398 International: 416-849-9626 Webcast: www.bioenvision.com Replay number (US & Canada): 866-245-6755 Replay number international: 416-915-1035 Replay passcode: 752762 Webcast replay: www.bioenvision.com About Bioenvision Bioenvision's primary focus is the acquisition, development and marketing of compounds and technologies for the treatment of cancer. Bioenvision has a broad pipeline of products for the treatment of cancer, including: Evoltra®, Modrenal®(for which Bioenvision has obtained regulatory approval for marketing in the United Kingdom for the treatment of post-menopausal breast cancer following relapse to initial hormone therapy), and other products. Bioenvision is also developing Suvus®, its anti-infective technology, which is currently in clinical development for refractory chronic hepatitis C infection. For more information on Bioenvision please visit our Web site at www.bioenvision.com. Certain statements contained herein are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because these statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Specifically, factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to: risks associated with preclinical and clinical developments in the biopharmaceutical industry in general and in Bioenvision's compounds under development in particular; the potential failure of Bioenvision's compounds under development to prove safe and effective for treatment of disease; uncertainties inherent in the early stage of Bioenvision's compounds under development; failure to successfully implement or complete clinical trials; failure to receive marketing clearance from regulatory agencies for our compounds under development; acquisitions, divestitures, mergers, licenses or strategic initiatives that change Bioenvision's business, structure or projections; the development of competing products; uncertainties related to Bioenvision's dependence on third parties and partners; and those risks described in Bioenvision's filings with the SEC. Bioenvision disclaims any obligation to update these forward-looking statements. Reconciliation of Non-US GAAP Financial Measure Adjusted net loss applicable to common stockholders defined as net loss applicable to common shareholders less one-time expense for the Japanese license agreement and stock-based compensation recorded for the three and six months ended December 31, 2006 and 2005, respectively. Three Months Ended December 31, (unaudited) Six Months Ended December 31, (unaudited)   2006    2005    2006    2005    Net loss applicable to common stockholders, as reported $ (6,997,477) $ (3,878,931) $ (19,208,239) $ (8,768,591)   Add: Stock-based compensation $ 1,137,752  $ 496,571  $ 1,760,247  $ 978,319  Add: One-time charge for Japanese license agreement $ -  $ -  $ 3,953,074  $ -    Adjusted net loss applicable to common stockholders $ (5,859,725) $ (3,382,360) $ (13,494,918) $ (7,790,272)   Basic and diluted net loss per share of common stock, as reported $ (0.16) $ (0.10) $ (0.46) $ (0.22)   Adjusted basic and diluted net loss per share of common stock $ (0.14) $ (0.08) $ (0.32) $ (0.19)   Weighted-average shares used in computing basic & diluted net loss per share   42,455,186    40,762,508    41,956,064    40,761,636  BIOENVISION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS   December 31, June 30, 2006  2006  ASSETS (unaudited) Current assets Cash and cash equivalents $ 7,721,121  $ 3,377,937  Short-term investments 21,393,202  41,637,106  Accounts receivable, net of allowances of $871,000 and $899,000 5,559,085  2,369,446  Inventories 887,269  427,514  Other current assets   1,707,092    844,810  Total current assets 37,267,769  48,656,813    Property and equipment, net 329,278  273,632  Intangible assets, net 7,130,065  7,549,520  Goodwill 1,540,162  1,540,162  Other assets 242,771  706,840  Deferred costs   3,402,897    3,523,497  Total assets $ 49,912,942  $ 62,250,464    LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities Accounts payable $ 3,654,581  $ 1,557,507  Accrued expenses 9,114,318  6,464,445  Accrued dividends payable 57,328  56,404  Deferred revenue   513,662    513,662  Total current liabilities 13,339,889  8,592,018    Deferred revenue   6,813,888    7,070,725  Total liabilities   20,153,777    15,662,743    Commitments and contingencies   Stockholders’ equity Convertible participating preferred stock - $0.001 par value; 20,000,000 shares authorized; 2,250,000 shares issued and 2,250  2,250  outstanding at December 31, 2006 and June 30, 2006 (liquidation preference $6,750,000) Common stock - par value $0.001; 70,000,000 shares authorized; 42,983  41,457  42,982,740 and 41,456,616 shares issued and outstanding at December 31, 2006 and June 30, 2006, respectively Additional paid-in capital 135,780,446  133,604,996  Accumulated deficit (105,775,507) (86,567,268) Receivable from stockholder -  (340,606) Accumulated other comprehensive loss   (291,007)   (153,108) Total stockholders’ equity   29,759,165    46,587,721    Total liabilities and stockholders’ equity $ 49,912,942  $ 62,250,464  BIOENVISION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)   Three months ended Six months ended December 31, December 31, 2006  2005  2006  2005    Revenue Net product sales $ 3,687,285  $ 173,980  $ 5,561,779  $ 368,976  Licensing and royalty revenue 809,355  543,919  1,799,433  944,049  Research and development contract revenue   -    373,408    -    448,500    Total revenue   4,496,640    1,091,307    7,361,212    1,761,525    Costs and expenses Cost of products sold, including royalty expense of $759,000 and $331,000 for the three months ended December 31, 2006 and 2005, respectively and $1,120,000 and $532,000 for the six months ended December 31, 2006 and 2005 897,593  438,018  1,320,321  766,309    Research and development 4,314,851  2,011,263  13,584,433  4,442,181    Selling, general and administrative 6,322,151  2,582,191  11,791,042  5,469,653    Depreciation and amortization   240,133    256,872    481,833    481,155    Total costs and expenses   11,774,728    5,288,344    27,177,629    11,159,298    Loss from operations (7,278,088) (4,197,037) (19,816,417) (9,397,773)   Interest and finance charges (9,384) -  (57,068) (66,761) Interest income   375,064    403,175    835,383    866,080    Net loss (6,912,408) (3,793,862) (19,038,102) (8,598,454)   Preferred stock dividend   (85,069)   (85,069)   (170,137)   (170,137)   Loss applicable to common stockholders $ (6,997,477) $ (3,878,931) $ (19,208,239) $ (8,768,591)   Basic and diluted net loss per share applicable to common stockholders $ (0.16) $ (0.10) $ (0.46) $ (0.22) Weighted average shares used in computing basic and diluted net loss per share         42,455,186  40,762,508  41,956,064  40,761,636