Bionovo Announces Third Quarter 2009 Highlights and Financial Results

EMERYVILLE, Calif., Nov. 5 /PRNewswire-FirstCall/ -- Bionovo, Inc. (Nasdaq:
BNVI), a drug discovery and development company focused on the unmet needs in
women's health and oncology, today announced third quarter highlights and
financial results for the three months ended September 30, 2009.

Subsequent to the end of the quarter, in October 2009, Bionovo successfully
completed a public offering and issued approximately 31 million shares of
common stock together with approximately 29 million warrants. The net
proceeds to the Company were approximately $17.7 million. The Company intends
to use these proceeds to conduct a Phase 3 trial of Menerba, its lead product
candidate for the treatment of menopausal vasomotor symptoms.

"The third quarter was an extremely productive quarter for Bionovo," stated
Isaac Cohen, Bionovo's Chairman and Chief Executive Officer. "Not only did we
publish and present a considerable amount of scientific data and make
significant progress in the Menerba manufacturing and quality control process,
but we also completed an important financing that sets the stage for the next
chapter in the history of Bionovo. This financing provides us with the
necessary funds to conclude our preparation for the FDA submission and conduct
the first of two pivotal clinical trials for Menerba. This is an exciting
time at Bionovo, and we eagerly anticipate the accomplishment of important
milestones in the upcoming quarters."

Third Quarter 2009 Company Highlights

-- During the third quarter of 2009, Bionovo completed the raw material
characterization, analytical method development and pilot
manufacturing
process development that constitutes a large part of the Chemistry,
Manufacturing and Control (CMC) specifications necessary to satisfy
the
FDA's requests for clarification of the Company's manufacturing and
analytical strategy for guaranteeing the consistency of its drug
products. The Company is currently concluding work on the analytical
method application and the commercial scale manufacturing batches.
-- Bionovo presented the positive results of its Phase 2 clinical trial
of
Menerba to the international women's health community at the 8th
Annual
European Society for Gynecology (EGS) in Rome, Italy. The overall
reaction of the European scientific, clinical, and pharmaceutical
community was extremely positive and demonstrated an international
interest in finding a safer alternative to hormone therapy for the
treatment of menopausal vasomotor symptoms.
-- The Company presented the results of a study on the effects of two
plant-derived, tissue-selective estrogen receptor alpha (ERa)
modulators
(TSERaM) on menopausal obesity at the 20th Annual Meeting of the North
American Menopause Society. In this study, plant-derived TSERaMs,
like
estrogens, were shown to reduce body fat in mice, but while estrogens
also caused cell proliferation in the mammary gland and uterus, the
plant-derived TSERaMs did not elicit these potentially cancer-causing
side effects. These results suggest that the development of
botanically-derived, tissue-selective ERa modulators could result in a
safer alternative for the treatment of menopausal weight gain, a
condition that can lead to the development of metabolic syndrome, a
combination of risk factors for cardiovascular disease and diabetes.
-- Bionovo published a paper describing the molecular mechanisms
underlying
the selective cytotoxic activity of its preclinical drug candidate
BN108
and its active compound, timosaponin AIII (TAIII), in the
peer-reviewed,
open-access journal, Public Library of Science One. BN108 and TAIII
kill tumor cells by eliciting two responses: first, they inhibit
mTORC1, an oncogenic pathway that is abnormally activated in many
tumors, and second, they induce a profound stress in the endoplasmic
reticulum (ER) of tumor cells. This dual effect of the drug activates
cell suicide, or apoptosis, in tumor cells, but because these drugs do
not inhibit mTORC1 and induce little ER stress in normal cells, normal
cells are left unharmed.
-- Bionovo published the results of its study on the inhibitory effect of
tamoxifen on estrogen receptor beta (ERb) gene regulation in the
peer-reviewed journal, Molecular and Cellular Endocrinology. The
results of this study demonstrate that tamoxifen inhibits the
beneficial
effects of ERb in the prevention of breast cancer cell proliferation.
This suggests that there is a biological rationale for the development
of ERb drugs for the treatment of breast cancer.

-- The Company announced the addition of Dr. Debu Tripathy, a leading
researcher and clinician in the area of breast cancer, to its Medical
Advisory Board. Dr. Tripathy is a Professor of Medicine at the Keck
School of Medicine at the University of Southern California (USC) and
Co-Leader of the Women's Cancer Program at USC Norris Comprehensive
Cancer Center.

Third Quarter Results

Total operating expenses for the three months ended September 30, 2009 were
$3.9 million compared to $5.2 million for the same period in 2008 and $4.1
million for the second quarter of 2009. The decrease in year-over-year
spending was primarily a result of a decrease in clinical activity and reduced
employee headcount. Operating expenses in the third quarter of 2009 were
primarily related to the Menerba manufacturing process development and
commercial quality assurance procedures. Company management expects operating
expenses to remain consistent through the fourth quarter at a burn rate of
between $1 million and $1.5 million per month.

The Company reported a net loss for the three months ended September 30, 2009
of $3.7 million, or $0.05 per share, compared with a net loss of $5.1 million,
or $0.07 per share, for the same period in 2008.

The Company commenced the quarter with $5.4 million in cash, cash equivalents
and short-term investments. As of September 30, 2009, the Company had cash,
cash equivalents and short-term investments of $2.3 million. In October 2009,
the Company successfully completed a registered public offering of
approximately 31 million shares of common stock together with approximately 29
million warrants, resulting in net proceeds to the Company of approximately
$17.7 million. As of the close of the financing on October 7, 2009, the
Company's cash and cash equivalents balance stood at $19.9 million.

Conference Call

The Company will conduct a conference call and webcast to review the financial
results for the third quarter of fiscal year 2009 and the Company's plans for
the remainder of the year at 4:45 p.m. ET on Thursday, November 5, 2009.

Interested parties can access the call by dialing (800) 860-2442 or (412)
858-4600, or can listen via a live Internet webcast, which can be found at
http://bionovo.com/investors/events. A replay of the call will be available
via webcast at http://bionovo.com/investors/events for 30 days or by playback
at (877) 344-7529 or (412) 317-0088, conference code 434779, through November
9, 2009.

About Bionovo, Inc.
Bionovo, Inc. is a pharmaceutical company focused on the discovery and
development of safe and effective treatments for women's health and cancer,
markets with significant unmet needs and billions in potential annual revenue.
The company applies its expertise in the biology of menopause and cancer to
design new drugs derived from botanical sources which have novel mechanisms of
action. Based on the results of early and mid-stage clinical trials, Bionovo
believes they have discovered new classes of drug candidates within their rich
pipeline with the potential to be leaders in their markets. Bionovo is
headquartered in Emeryville, California and is traded on the NASDAQ Capital
Market under the symbol, "BNVI". For more information about Bionovo and its
programs, visit: http://www.bionovo.com.

Forward Looking Statements
This release contains certain forward-looking statements relating to the
business of Bionovo, Inc. that can be identified by the use of forward-looking
terminology such as "believes," "expects," or similar expressions. Such
forward-looking statements involve known and unknown risks and uncertainties,
including uncertainties relating to product development, efficacy and safety,
regulatory actions or delays, the ability to obtain or maintain patent or
other proprietary intellectual property protection, market acceptance,
physician acceptance, third party reimbursement, future capital requirements,
competition in general and other factors that may cause actual results to be
materially different from those described herein as anticipated, believed,
estimated or expected. Certain of these risks and uncertainties are or will be
described in greater detail in our filings with the Securities and Exchange
Commission, which are available at http://www.sec.gov. Bionovo, Inc. is under
no obligation (and expressly disclaims any such obligation) to update or alter
its forward-looking statements whether as a result of new information, future
events or otherwise.

Bionovo, Inc.
(A Development Stage Company)
Consolidated Statements of Operations

(Unaudited, in thousands, except per share amounts)

Accumulated
from
February 1,
2002
(Date of
inception)
Three months Nine months to
ended ended September
September 30, September 30, 30,
------------ ------------ ---------
2009 2008 2009 2008 2009
---- ---- ---- ---- ----
Revenues $155 $- $162 $- $1,054
---- -- ---- -- ------

Operating expenses:
Research and development 2,938 3,942 9,493 8,881 36,701
General and administrative 926 1,222 3,110 4,853 16,660
Merger cost - - - - 1,964
--- --- --- --- -----
Total operating expenses 3,864 5,164 12,603 13,734 55,325
----- ----- ------ ------ ------

Loss from operations (3,709) (5,164) (12,441) (13,734) (54,271)

Change in fair value of
warrant liability - - - - 831
Interest income 5 143 75 639 2,066
Interest expense (22) (36) (77) (98) (443)
Other expense - (1) (86) (21) (162)
--- -- --- --- ----
Net loss $(3,726) $(5,058) $(12,529) $(13,214) $(51,979)
======= ======= ======== ======== ========
Basic and diluted net loss
per common share $(0.05) $(0.07) $(0.16) $(0.17) $(1.14)
====== ====== ====== ====== ======

Shares used in computing
basic and diluted
net loss per share 76,436 76,363 76,388 76,350 45,444
====== ====== ====== ====== ======

Bionovo, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
(in thousands, except share amounts)

September 30, December 31,
2009 2008
---- ----
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $2,252 $3,270
Short-term investments - 10,292
Receivables 56 126
Prepaid expenses and other current assets 651 805
--- ---
Total current assets 2,959 14,493
Property and equipment, net 6,141 6,938
Other assets and patent pending, net 1,349 1,073
----- -----
Total assets $10,449 $22,504
======= =======

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable $406 $521
Accrued clinical and costs of other studies 67 73
Accrued compensation and benefits 406 456
Current portion of lease obligations 544 682
Current portion of notes payable 57 -
Other current liabilities 772 595
--- ---
Total current liabilities 2,252 2,327
Non-current portion of lease obligations 180 545
Non-current portion of notes payable 136 -
--- ---
Total liabilities 2,568 2,872
----- -----

Commitments and contingencies

Shareholders' equity:
Preferred stock, $0.0001 par value; 10,000,000
shares authorized; none issued and outstanding - -
Common stock $0.0001 par value, 190,000,000
shares authorized, 76,585,550 and 76,363,101
shares outstanding at September 30, 2009 and
December 31, 2008, respectively 8 8
Additional paid-in capital 59,852 59,050
Accumulated other comprehensive gain - 24
Accumulated deficit (51,979) (39,450)
------- -------
Total shareholders' equity 7,881 19,632
----- ------
Total liabilities and shareholders' equity $10,449 $22,504
======= =======

SOURCE Bionovo, Inc.

Company, Tom Chesterman of Bionovo, Inc., +1-510-601-2000,
investor@bionovo.com; or Investors, Joe Diaz, Robert Blum or Joe Dorame, All
Of Lytham Partners, LLC, +1-602-889-9700, bnvi@lythampartners.com, For
Bionovo, Inc.