Readers are referred to the cautionary notes regarding Forward-looking Information and non-IFRS Financial Measures at the end of this release. Unless noted otherwise, dollar amounts are in U.S. dollars

Listed TSX, Symbol:  CNJ

TORONTO & WINNIPEG, Canada, Dec. 14, 2011 /CNW/ - Cangene Corporation today reports financial results for the first quarter of fiscal 2012, ended October 31, 2011, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board.

Revenues for the quarter were $21.5 million, compared with $23.0 million in the same quarter of last year, a decrease of $1.6 million or 7%. The prior-year quarter included $0.9 million in royalty revenues; fiscal 2011 was the final year for this revenue stream. In the current period, a quarter-over-quarter increase in HepaGam B^® sales and a sale of non-specialty plasma offset lower sales of WinRho^® SDF, leading to consistent product sales in the biopharmaceutical segment, quarter over quarter. There were no deliveries on U.S. government contracts during the current or comparative quarter; however, related R&D revenues were earned in both periods. As there were no deliveries on government contracts during either the current or prior-year first quarters, the majority of product-services revenues in the contract-services segment in both fiscal periods results from commercial contract-manufacturing services at Cangene bioPharma, Inc. in Baltimore, which decreased by $1.0 million compared with the year-earlier period due largely to customer-driven scheduling changes. Partially offsetting this decrease, R&D-services revenue in this segment was $0.8 million higher in the current-year quarter, compared with last year.

Independent R&D expense was $6.7 million in the current quarter, compared with $4.6 million in the prior year; an increase of $2.1 million or 47%. This increase results largely from activities aimed at development of the immune globulin intravenous ("IGIV") product. During the quarter, Cangene completed four clinical production runs and incurred additional labour and other charges related to this product.

A net loss of $4.4 million in the first quarter of 2012 compares with a net loss of $3.5 million in the comparative quarter. The net loss increased due to a combination of factors including lower gross profit due to the absence of royalty revenues, which were all profit; increased independent R&D expense and a tax expense compared with a tax benefit in the prior-year quarter. However, these impacts were partially offset by a foreign-exchange gain of $3.1 million, compared with a foreign-exchange loss of $1.4 million in the prior-year quarter, due to the strengthening U.S. dollar.

"We're now implementing strategies aimed at short-, mid- and long-term growth, and at re-creating our entrepreneurial culture. We have set up internal cross-functional teams that will work toward addressing key corporate priorities, including organizational and operational efficiencies. Going forward, we'll increase focus and work toward our redefined goals," says John Sedor, President and CEO of Cangene.

Cash used in operating activities was $5.7 million in the current quarter, compared with $12.9 million in the comparative 2011 quarter. In the comparative prior-year quarter, a net change in non-cash working capital balances of $13.2 million was the main contributor to cash used in operating activities. This compares with a net change in non-cash working capital balances of $0.2 million in the current period. Cash used in investing and financing activities in the current quarter was $0.8 million compared with $4.5 million last year; the use of cash in the prior-year quarter consisted primarily of capital expenditures and share repurchases. The lower capital spending in the current quarter is consistent with the Company's budget for additions to property, plant and equipment in 2012.

The Company had $38.7 million in cash at October 31, 2011 compared with $45.2 million at July 31, 2011. At October 31, 2011 and July 31, 2011, Cangene had no debt.

Readers are reminded that the full, unaudited condensed consolidated interim financial statements and associated notes, along with the management's discussion and analysis of financial condition and results of operations, will be available on SEDAR at www.sedar.com.

Readers are referred to the cautionary notes regarding forward-looking information and non-IFRS financial measures at the end of this release. Certain comparative figures in the following financial statements have been reclassified to conform with the current year's presentation.

Cangene Corporation
Incorporated under the laws of Ontario

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (unaudited)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (unaudited)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (unaudited)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (unaudited)

1. Amounts paid and received for interest were reflected as operating cash flows in the consolidated statements of cash flows.
2. Amounts paid and received for income taxes were reflected as either operating or investing cash flows in the consolidated statements of cash flows, depending upon the nature of the underlying transaction.

About Cangene Corporation
Cangene is one of Canada's largest and earliest biopharmaceutical companies. It was founded in 1984 and is headquartered in Winnipeg, Manitoba. Cangene has approximately 700 employees in six locations across North America and its products are sold worldwide. It operates manufacturing facilities in Winnipeg, Manitoba and Baltimore, Maryland where it produces its own products and undertakes contract manufacturing for a number of companies. Cangene operates three U.S. and one Canadian plasma-collection facilities branded as Cangene Plasma Resources (www.cangeneplasma.com). In addition, it has a regulatory affairs, sales and corporate communications office in Toronto, Ontario.

Cangene is focused on developing therapeutics for infectious diseases, and the Company uses patented manufacturing processes to produce plasma-derived and recombinant therapeutic proteins. Cangene has four FDA and/or Health Canada-approved hyperimmune products. In addition, the Company has several more products in development at various stages. Three of Cangene's products have been accepted into the U.S. Strategic National Stockpile—botulism antitoxin (investigational product), anthrax immune globulin (investigational product) and a vaccinia immune globulin, a product that may be used to counteract certain complications that may arise from smallpox vaccination. Capitalizing on its drug manufacturing expertise, Cangene also operates a significant contract-research and manufacturing business using the resources of Baltimore, Maryland-based Cangene bioPharma, Inc. (a wholly-owned subsidiary; www.cangenebiopharma.com). Cangene's website, www.cangene.com, includes product and investor information, including past news releases.

Forward-looking and risk information
The reader should be aware that Cangene's businesses are subject to risks and uncertainties that cannot be predicted or quantified; consequently, actual results may differ materially from past results and those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the regulatory environment including the difficulty of predicting regulatory outcomes; changes in the value of the Canadian dollar; the Company's reliance on a small number of customers including government organizations; the demand for new products and the impact of competitive products, service and pricing; availability and cost of raw materials, especially the cost, availability and antibody concentration in plasma; fluctuations in operating results; government policies or actions; progress and cost of clinical trials; reliance on key strategic relationships; costs and possible development delays resulting from use of legal, regulatory or legislative strategies by the Company's competitors; uncertainty related to intellectual property protection and potential costs associated with its defence; the Company's exposure to lawsuits; and other matters beyond control of management. Risks and uncertainties are discussed more extensively in the Company's most recent annual financial statements and management's discussion and analysis, which are available on the Company's website or on SEDAR at www.sedar.com.

The preceding cautionary statements should be considered in connection with all written or oral statements, especially forward-looking statements, that are made by the Company or by persons acting on its behalf and in conjunction with its periodic filings with Securities Commissions, including those contained in the Company's news releases and most recently filed annual information form. Forward-looking statements can be identified by the use of words such as "expects", "plans", "will", "believes", "estimates", "anticipates", "intends", "may", "bodes" and other words of similar meaning (including negative and grammatical variations). Should known or unknown risks or uncertainties materialize, or should management's assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly make or update any forward-looking statements, except as required by applicable law.

Cautionary Note Regarding Non-IFRS Financial Measures
This news release may contain non-IFRS financial measures. Terms by which non-IFRS financial measures are identified include but are not limited to "net cash", "total assets", "sales" and other similar expressions. Non-IFRS financial measures are used to provide management and investors with additional measures of performance. However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies. Please refer to the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.

"Cangene", "HepaGam B", "WinRho" and "WinRho SDF" are trademarks belonging to Cangene Corporation.