Calgary, Alberta, Canada
October 30, 2009

SemBioSys Genetics Inc. ("SemBioSys") (TSX:SBS) today announced that it has entered into an arrangement agreement in respect of a plan of arrangement and corporate reorganization with Cathedral Energy Services Income Trust ("Cathedral") to reorganize SemBioSys and provide it with additional resources in the form of approximately $3.3 million in new, non-dilutive capital, comprised of both cash and securities.

"This transaction enables us to strengthen our cash position in a non-dilutive method to extend the development runway for, and further increase value in, our Apo AIMilano and Biosimilar Insulin programs," said James Szarko, President and Chief Executive Officer of SemBioSys. "The past twelve months have been an extremely challenging period for development-stage biotechnology companies. Yet this transaction, together with the AVAC financing in May and the equity issue in July, demonstrates our ability to successfully pursue multiple financing opportunities to strengthen our balance sheet during difficult market conditions."

The non-dilutive transaction involves a corporate reorganization of SemBioSys to be completed under a court supervised plan of arrangement. Under the corporate reorganization, SemBioSys will transfer its assets and liabilities, including the proceeds from this transaction, to a newly incorporated subsidiary company ("New SemBioSys Subco"). On completion of the transaction, SemBioSys securityholders will have exchanged their existing SemBioSys securities on a one-for-one basis for securities of a parent company of New SemBioSys Subco which shall subsequently amalgamate with New SemBioSys Subco ("New SemBioSys").

New SemBioSys will carry on SemBioSys' business operations as a public entity and will retain all rights to related intellectual property and the management team members as before the transaction.

Completion of the transaction is subject to receipt of court and other regulatory approvals and consents. It must also be approved by at least 66 2/3 percent of votes cast by both SemBioSys securityholders and Cathedral unitholders. SemBioSys' Board of Directors unanimously recommends that SemBioSys securityholders approve the transaction.
Additional details of the transaction will be in an information circular expected to be mailed to SemBioSys securityholders in November. The information circular will also be available at www.sembiosys.com and www.sedar.com. A special meeting of securityholders is expected to be held in December 2009 at the corporate offices of SemBioSys, 110, 2985 - 23rd Avenue N.E. Calgary, Alberta. The transaction is expected to close on or before December 21, 2009 subject to the satisfaction of customary closing conditions.

Calgary, Alberta-based SemBioSys is focused on leveraging its unique proprietary platform to manufacture high-value proteins and oils. SemBioSys' seed-based protein production system can provide for its partners product enablement, exceptionally low cost and unprecedented scalability. SemBioSys is applying the platform with high selectivity to products with tremendous clinical promise and value potential. The Company's current pharmaceutical development programs include insulin (SBS-1000, regulated as a biosimilar in Europe) and Apo AIMilano, a next-generation cardiovascular therapy. SemBioSys is listed on the Toronto Stock Exchange under the ticker SBS. More information is available at www.sembiosys.com. 

Website: http://www.sembiosys.ca

Published: October 30, 2009