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Bioniche Receives $10 Million of Provincial Government Support to Scale-up Vaccine Production in Ontario

Wednesday, December 19, 2007 General News
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BELLEVILLE, ON, Dec. 18 /PRNewswire-FirstCall/ - Bioniche Life SciencesInc. (TSX: BNC), a research-based, technology-driven Canadianbiopharmaceutical company, today announced that it has received $10 million inOntario government financing in support of its vaccine production facilityscale-up in Belleville, Ontario. The $10 million repayable loan has beenprovided through the Ministry of Economic Development and Trade (MEDT)'sAdvanced Manufacturing Investment Strategy (AMIS). MEDT Minister SandraPupatello, in conjunction with Ontario Minister of Agriculture, Food and RuralAffairs, Leona Dombrowsky, made the announcement at Bioniche's Bellevilleheadquarters this morning.
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"With the support of our AMIS program, Bioniche will become the firstcompany to bring innovation-driven animal vaccine expertise to Ontario," saidMinister Pupatello. "The McGuinty government is investing in this kind ofadvanced manufacturing across key sectors to spur major investment and createhigh value jobs for hard working Ontarians, including 73 right here atBioniche."
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Added Minister Dombrowsky, "Our government is helping to position Ontarioas a leader in animal and food safety technology and expertise. This fundingsupport is good news for the community of Belleville and for our province'sagri-food sector."

Bioniche has developed the world's first and only cattle vaccine that maybe used as an on-farm intervention to reduce the amount of E. coli O157:H7shed by cattle. This will be the first product manufactured in the scaled-upproduction facility in Belleville. The vaccine is unique in that it helps toreduce shedding of an organism that, while potentially lethal to humans,causes no disease in cattle. The Company obtained approval to distribute itsvaccine under the Permit to Release Veterinary Biologics regulations by theCanadian Food Inspection Agency (CFIA) last December.

The Company plans to scale-up vaccine production at its Bellevillefacility over the next two years to provide capacity of 40 million doses ofthe E. coli O157:H7 vaccine. The scale-up is expected to cost approximately$25 million, and is part of a long-term, $100 million project to create anAnimal Health and Food Safety Vaccine Manufacturing Centre. Financing for theremainder of the $25 million for the first phase of scale-up is in the processof being secured from other sources, the details of which will be announcedwhen finalized.

"This provincial government funding represents the cornerstone of thefinancing we need to achieve our vision for a state-of-the-art vaccinemanufacturing facility to produce not only our E. coli O157:H7 cattle vaccine,but other vaccines to reduce the likelihood of human illness from animaldiseases," said Graeme McRae, President & CEO of Bioniche Life Sciences Inc."The Ontario Ministry of Economic Development and Trade, through AMIS, hasgiven a strong endorsement to our efforts to address serious human healththreats that cause illness and death in thousands of people each and everyyear."

Approximately 100,000 cases of human infection with the E. coli O157:H7bacteria are reported each year in North America. Health reports indicate that2% to 7% of those people develop hemolytic uremic syndrome (HUS), a diseasecharacterized by kidney failure. However, the percentage of HUS has risen toas much as 16% in recent outbreaks. Approximately five percent of HUS patientsdie, many of them children and senior citizens, whose kidneys are moresensitive to damage. Surviving persons may also be left with long-termimpairment to the function of their kidneys and other organ systems.

The most serious case of E. coli O157:H7 water contamination in Canadianhistory occurred in Walkerton, Ontario, Canada (population: 5,000) in May,2000. Walkerton is approximately 145 km west of Toronto. After heavy stormsand flooding, E. coli contaminated run-off from farms entered the town
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