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2008-04-25 08:00:00 CEST 2008-04-25 08:02:13 CEST REGULATED INFORMATION Biotie Therapies - Quarterly reportInterim Report on Biotie Therapies Corp. January 1 - March 31, 2008BIOTIE THERAPIES CORP. STOCK EXCHANGE RELEASE April 25, 2008 at 9.00 a.m. INTERIM REPORT ON BIOTIE THERAPIES CORP. JANUARY 1 - MARCH 31, 2008 January - March 2008 in brief - In January Lundbeck acquired the United Kingdom and Ireland rights for nalmefene from Britannia Pharmaceuticals (now part of STADA Group, headquartered in Germany). Following the new agreement Lundbeck has worldwide rights for nalmefene, excluding North America, Mexico, Turkey, and South-Korea. - In January The Finnish Funding Agency for Technology and Innovation (Tekes) granted EUR 1.7 million additional debt funding for Biotie's integrin alpha2beta1 inhibitor program for thrombosis. - The Annual General Meeting of Biotie was held on March 28, 2008. - The net loss in January - March stood at EUR 2.0 million (in 2007 EUR 1.1 million). Cash flow from operating activities was EUR -3.3 million (EUR -2.6 million in 2007). - The company's liquid assets amounted to EUR 24.6 million as at March 31, 2008 (EUR 29.4 million as at March 31, 2007). General: Biotie is a drug development company focusing on dependence disorders, inflammatory diseases and thrombosis. Drug development projects: Nalmefene program In January, Lundbeck acquired the United Kingdom and Ireland rights for nalmefene from Britannia Pharmaceuticals (now part of STADA Group, headquartered in Germany). Following the new agreement Lundbeck has worldwide rights for nalmefene, excluding North America, Mexico, Turkey, and South-Korea. Biotie-Lundbeck license agreement terms were amended due to Lundbeck acquiring the United Kingdom and Ireland rights. Under the terms of the amended agreement, Biotie is now eligible for up to EUR 82 million in upfront and milestone payments (previously up to EUR 80 million) plus royalty on sales. Of the EUR 82 million, Biotie has already received an execution fee of EUR 12 million from Lundbeck. To maximise nalmefene's potential in the treatment of alcoholism Biotie and Lundbeck have jointly decided to seek marketing authorisation simultaneously in all 27 EU member states via the centralized procedure. To this end, Lundbeck plans to further strengthen the existing nalmefene registration dossier in its alcoholism indication with additional phase III clinical studies before submitting the marketing authorisation application. The studies are expected to start in 2008. Biotie will participate in financing some of the clinical development costs. Subsequent to the Biotie clinical program for nalmefene in alcoholism having been completed, there is currently a regulatory requirement for an electrocardiogram (ECG) study. In October 2007 Biotie started a clinical trial with nalmefene evaluating the potential cardiac effects on healthy volunteers measured using an electrocardiogram. The study is expected to enroll 240 healthy volunteers and to be completed in 2008 and included in the eventual registration dossier. VAP-1 antibody program The first phase I clinical trial with Biotie's fully human VAP-1 monoclonal antibody is ongoing. This first-in-man study evaluates the safety, tolerability, and pharmacokinetics of intravenously administered antibody in healthy volunteers. Results are expected during the second quarter of 2008. In November 2006, Biotie and Roche signed an option agreement for Biotie's fully human antibody program targeting Vascular Adhesion Protein-1 (VAP-1) in inflammatory diseases. Under the terms of the agreement, Roche has paid an option initiation fee of EUR 5 million, which grants Roche an exclusive option right to an exclusive, worldwide license agreement for Biotie's fully human antibody targeting VAP-1, excluding Japan, Taiwan, Singapore, New Zealand, and Australia. The initial option right will end upon completion of Phase I. Roche may extend the option right to later development points by paying additional fees. Biotie will retain all rights to the program until a license is granted to Roche. Inhibiting VAP-1 reduces inflammation by regulating the migration of leukocytes, or white blood cells, to inflamed tissues. Pathological accumulation of white blood cells in tissue is a common feature in many autoimmune diseases, such as rheumatoid arthritis, ulcerative colitis, and psoriasis. Co-operation with Seikagaku Corporation proceeded as planned. Pre-clinical programs Pre-clinical programs (VAP-1 SSAO small molecule inhibitor program and alfa2beta1 integrin inhibitor program) progressed as planned. In the bioheparin program the company continued to look for a partner to finance the future development of the program. To date, partnering efforts have not been successful. Revenues Revenue for the reporting period 1.1-31.3.2008 was EUR 1.3 million. Revenue consisted of periodization of the signing fees of the licensing agreements signed with Seikagaku Corporation in 2003 and with Somaxon Pharmaceuticals in 2004, periodization of the option fee of the option agreement signed with Roche in 2006 as well as periodization of the execution fee of the licensing agreement signed with Lundbeck that entered into force in May 2007. No new milestones or signing fees were received during the reporting period. Revenue for the period 1.1-31.3.2007 consisted of periodization of the signing of the licensing agreement signed with Seikagaku Corporation in 2003 and periodization of the signing fee of the licensing agreement in nalmefene project signed with Somaxon Pharmaceuticals in 2004 and periodization of the option fee of the option agreement signed with Roche in 2006. The revenue was in total EUR 0.6 million. No new milestone or signing fees were received during the period. Financial results The net loss for the reporting period was EUR 2.0 million. The corresponding figure for the previous year was EUR 1.1 million. Research and development costs for the period amounted to EUR 2.4 million (in 2007 EUR 1.5 million). Patent costs have been booked as expenses. Financing Biotie's equity ratio was -48.8 % on March 31, 2008 (-56.6 % in 2007). Cash and cash equivalents totaled EUR 24.6 million on March 31, 2008 (EUR 29.4 million in 2007). Financial expenses amounted to EUR 0.7 million (EUR 0.2 million in 2006) mainly due to recognition of financial assets at fair value. In January 2008, The Finnish Funding Agency for Technology and Innovation (Tekes) granted EUR 1.7 million additional funding for Biotie Therapies' integrin alpha2beta1 inhibitor program for thrombosis. The R&D funding granted covers drug development costs of the project from July 2007 to December 2009. The funding granted is in the form of loan and it covers 50 per cent of the costs of the project. The loan will be paid to Biotie against reported realised costs. In order to receive the full amount of granted financing, Biotie must show a total expenditure of EUR 3.4 million in the project. Shareholder's equity The shareholders' equity (FAS) of the company is less than half of the company's share capital when capital loans are not included in shareholders' equity. Shareholders' equity and capital loans add up to EUR 15.2 million. Annual General Meeting was held on March 28, 2008 and considered measures relating to the level of shareholder's equity. It was resolved that no special measures are necessary at this point in time. Investments and cash flow The cash flow from operations was EUR -3.3 million (in 2007 EUR -2.6 million The company's investments during the reporting period amounted to EUR 17 thousand (EUR 7 thousand in 2007). Personnel During the reporting period, the company's personnel was on average 35 (36 in 2007, 41 in 2006) and at the end of the reporting period 35 (36 on March 31, 2007 and 37 on March 31, 2006). Decisions taken at Biotie's Annual General Meeting The Annual General Meeting of Biotie Therapies Corp. was held on March 28, 2008. The General Meeting of Shareholders adopted the income statement and balance sheet and the consolidated income statement and balance sheet for the financial year 1 January, 2007 - 31 December, 2007. The General Meeting of Shareholders resolved pursuant to the proposal of the Board of Directors that the loss of the financial year, EUR 1,624,388.72 shall be transferred to the company's equity. The General Meeting of Shareholders discharged the members of the Board of Directors and the President and CEO from liability concerning the financial year from 1 January - 31 December 2007. The Board of Directors and Auditors The number of the members of the Board of Directors was resolved to be five. Juha Jouhki, Pauli Marttila, Riku Rautsola and Piet Serrure were re-elected as the members of the Board of Directors and Mr. Krish Krishnan was appointed as a new Board member. Janne Rajalahti, Authorized Public Accountant, and PricewaterhouseCoopers Oy, Authorized Public Accountants, were elected as auditors of Biotie Therapies Corp. At the organization meeting of the new Board of Directors, which convened immediately after the Annual General Meeting, Juha Jouhki was elected as the Chairman of the Board of Directors and Pauli Marttila as the deputy chairman. Authorisation of the Board of Directors to resolve on a share issue and granting of option and other specific rights entitling to the shares The Annual General Meeting authorized the Board of Directors to resolve on one or more share issues, which contains the right to issue new shares or dispose of the shares in the possession of the company and to issue options or other specific rights to the shares pursuant to chapter 10 of the Finnish Companies Act. The authorisation consists of up to 18,000,000 shares in the aggregate. A maximum of 819,000 own shares in the possession of the company may be conveyed. The authorisation does not exclude the Board of Directors' right to decide on a directed share issue. The authorisation is used for possible material arrangements from the company's point of view, such as financing or implementing business arrangements or investments or for other such purposes determined by the Board in which case a weighty financial reason for issuing shares, options or other specific rights and possibly directing a share issue would exist. However, the authorisation could not be used to create new share-based incentive schemes. The authorisation shall be effective until 30 June 2009. The Board of Directors was authorised to decide on all other terms and conditions of the issuance of shares, options and other specific share entitlements as referred to in chapter 10, section 1 of the Finnish Companies Act, including the payment period, determination grounds for the subscription price and subscription price or allocation of shares, stock options or specific rights free of charge or that the subscription price may be paid besides in cash also by other assets either partially or entirely. Issuance of new stock options The Annual General Meeting decided to issue up to 3,000,000 stock options in the aggregate which would entitle to subscribe for up to 3,000,000 new shares in the company. The stock options shall be given free of charge to the company's key personnel and Biotie Therapies International Oy, which is the company's wholly owned subsidiary. The Board of Directors will send a written notification of the issuance of the stock options to those being entitled to the stock options. The stock options will be delivered to the recipient when the recipient has accepted the Board of Directors' offer. 1,000,000 of the stock options shall be marked with the symbol 2008A, 1,000,000 with the symbol 2008B and 1,000,000 with the symbol 2008C. Each stock option entitles to subscribe for one (1) new share in the company. The subscription period for the shares: 1 January 2009 to 31 December 2013 for the 2008A stock option 1 January 2010 to 31 December 2013 for the 2008B stock option 1 January 2011 to 31 December 2013 for the 2008C stock option The subscription price of a share is the volume-weighted average trading price of the company's share on the Helsinki Stock Exchange during the period between 1 March 2008 and 30 March 2008 with an increase as follows: - increase of 10% for A stock option - increase of 20% for B stock option and - increase of 30% for C stock option. The subscription price of the shares determined this way is based on the market price of the company's share while at the same time setting an incentive for the key personnel in order to add ownership value. The shares shall be paid to the bank account announced by the company upon subscription. The subscription price of the shares shall be entered into the invested non-restricted equity fund. The company has a weighty financial reason for the issuance of stock options because the stock options are intended to form a part of the company's incentive and commitment program for the company's key personnel. More detailed terms of the issuance of the stock options are presented in the proposal of the Board of Directors which has been published as stock exchange release on 29 February 2008. The ten biggest shareholders of Biotie on March 31, 2008 Number of shares % Pequot group: 21,869,624 24.45 - Pequot Healthcare Fund, L.P. (7,765,345) - Pequot Healthcare Offshore Fund, Inc. (5,937,983) - Premium Series PCC Limited (998 490) - Pequot Diversified Master Fund Ltd. (1,201,800) - Pequot Healthcare Institutional Fund, L.P (1 521 406) - Pequot Healthcare Emerging Markets Fund, Ltd. (4,444,600) Finnish Innovation Fund (Sitra) 14,585,350 16.30 Finnish Industry Investment Ltd 6,778,592 7.58 Juha Jouhki and his controlled companies 6,537,672 7.31 - Dreadnought Finance Oy (2,098,416) - Jouhki Juha (1,501,356) - Thominvest Oy (2,937,900) Funds administered by BioFund Management Oy: 2,519,775 2.82 - BioFund Ventures III Ky (2,485,715) - BioFund Ventures I Ky (34,060) Harri Markkula and his controlled company: 1,301,545 1.45 - Tilator Oy (654,000) - Markkula Harri (647,545) Oy H. Kuningas & Co AB 1,058,371 1,18 Oksanen Markku 575,000 0.64 Siven Pertti 350,000 0.39 Funds administered by Aboa Venture Management Oy: 344,618 0.39 - Aboa Venture Ky II (336,747) - Karhu Pääomarahasto Ky (7,871) 55,920,547 62.51 Nominee registered shares total 7,648,967 8.55 Other shareholders 25,893,346 28.94 Outstanding shares 89,462,860 100.00 The number of the company's own shares held by Biotie Therapies 749,000*) Total 90,211,860 *) The company has in its possession 819.000 of its own shares. Relating to the company's option programs, the company has signed a stock lending agreement with EVLI Bank in January, 2007. Pursuant to this program, the number of the company's own shares in its possession may be temporarily less than 819,000. On 24 January, 2008 Biotie gained knowledge of the following change in holdings under Chapter 2, Section 9 of the Finnish Securities Market Act: Pequot Healthcare Emerging Markets Master Fund has decreased its holding from 5,01 % to 4,99 % of the voting rights and share capital in the Company, calculated on the basis of the number of shares registered in the Finnish Trade Register on 30 April 2007. Risks and Risk Management Biotie's strategic risks are related to the technical success of the drug development programs, regulatory issues, the strategic decisions of its commercial partners, ability to obtain and maintain intellectual property rights for its products, validity of its patents, launch of competitive products and the development of the sales of its products. For example, even though the commercialisation and collaboration agreements on the company's product development projects have been concluded, there can be no assurance that the contracting partner will act in accordance with the agreement, the authorities will approve the product under development or the approved product will be commercialised. The development and success of the company's products depends on third parties. The operational risks include dependency of key personnel, assets and dependency on partners' decisions. Future outlook - Results from the first phase I clinical trial with Biotie's VAP-1 fully human monoclonal antibody are expected during the second quarter of 2008. - Lundbeck is expected to start additional phase III studies with nalmefene in its alcohol indication in 2008. - Due to Biotie having two programs in the clinical development phase the operating costs are expected to increase to a somewhat higher level for 2008 than in 2007. - Revenue in 2008 is estimated to be approximately EUR 5 to 6 million and consists of periodization of already received payments based on established revenue recognition principles. The company is not expecting new milestone payments based on existing agreements in 2008. IFRS and Accounting principles The interim report does not comply with all requirements of IAS 34, Interim Financial Reporting. Biotie has applied the same accounting principles as in the closing of year 2007. This interim report is unaudited. In Turku, April 25, 2008 Biotie Therapies Corp. Board of Directors For further information, please contact: Timo Veromaa, President and CEO, Biotie Therapies Corp. tel. +358 2 274 8901, e-mail: timo.veromaa@biotie.com www.biotie.com Distribution: OMX Nordic Exchange Helsinki Main Media APPENDICES TO THE FINANCIAL STATEMENTS Income statement Balance sheet Statement of changes in shareholders' equity Cash flow statement Key figures FINANCIAL STATEMENT 1.1.- 1.1.- 1.1.- 31.3.2008 31.3.2007 31.12.2007 EUR 1,000 3 months 3 months 12 months Revenue 1,321 605 7,895 Research and -2,403 -1,475 -9,053 development expenses General and -475 -597 -1,655 administrative Expenses Other operating income 59 258 1,044 Operating profit/loss -1,498 -1,209 -1,769 Financial income 214 302 860 Financial expenses -736 -211 -817 Profit/loss before taxes -2,020 -1,119 -1,726 Taxes 0 0 0 Net income/loss -2,020 -1,119 -1,726 Distribution To parent company -2,020 -1,119 -1,726 Shareholders Earnings per share (EPS) basic & -0.02 -0.01 -0.02 diluted, EUR BALANCE SHEET EUR 1,000 31.3.2008 31.3.2007 31.12.2007 Assets Non-current assets Intangible assets 733 787 747 Property, plant and equipment 313 96 332 Financial assets at fair value through 11,240 20,000 14,938 profit or loss 12,286 20,883 16,017 Current assets Accounts receivables and other 1,128 713 753 receivables Financial assets at fair value through 13,000 9,168 13,000 profit or loss Cash and cash equivalents 377 274 305 14,505 10,155 14,058 Total 26,791 31,038 30,075 Equity and liabilities Shareholders' equity Share capital 19,850 19,850 19,850 Reserve for invested unrestricted 980 980 equity Retained earnings -31,884 -30,638 -30,220 Net income/loss -2,020 -1,119 -1,726 Shareholders' equity total -13,075 -11,907 -11,117 Long-term liabilities Provisions 8 23 14 Non-current financial liabilities 23,614 23,508 23,603 Other non-current liabilities 9,796 6,310 10,098 33,418 29,840 33,715 Current liabilities Provisions 20 16 20 Current financial liabilities 124 18 104 Accounts payable and other current 6,304 13,071 7,353 debts 6,448 13,105 7,477 Liabilities total 39,866 42,945 41,192 Total 26,791 31,038 30,075 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Attributable to equity holders of the parent company EUR 1,000 Shares Share Reserve Own Retained Share- (1000 Capital For Shares Earnings holders' pcs) invested equity Un- total restricted equity Balance at 89,531 19,850 0 -15 -30,641 -10,807 1.1.2007 Net income/loss -1,119 -1,119 for the period Options granted 19 19 0 0 0 0 -1,100 -1,100 BALANCE AT 89,531 19,850 0 -15 -31,741 -11,907 31.3.2007 Net income/loss -607 -607 for the period Options granted 418 418 Share subscription 450 841 841 with Convertible capital loans Share subscription 231 139 139 with option rights 681 0 980 0 -189 791 BALANCE AT 90,212 19,850 980 -15 -31,930 -11,117 31.12.2007 Net income/loss -2,020 -2,020 for the period Options granted 62 62 0 0 0 0 -1,958 -1,958 BALANCE AT 90,212 19,850 980 -15 -33,888 -13,075 31.3.2008 CASH FLOW STATEMENT 1.1.- 1.1.- 1.1.- 31.3.2008 31.3.2007 31.12.2007 EUR 1,000 3 months 3 months 12 months Cash flow from operating Activities Net income/loss -2,020 -1,119 -1,726 Adjustments: Non-cash transactions 145 52 443 Addition/disposal due to 497 -257 -644 revaluation of financial assets at fair value through profit or loss Interest expenses and other 238 211 817 financial expenses Interest income -214 -302 -216 Taxes 0 0 0 Change in working capital: Change in accounts receivables and -370 -153 -190 other receivables Change in accounts payable and -1,574 -1,072 -3,799 other liabilities Change in mandatory provisions -5 4 10 Interests paid -2 -5 -40 Interests received 16 45 57 Taxes paid 0 0 0 Net cash from operating activities -3,288 -2,595 -5,288 Cash flow from investing activities Change in financial assets at fair value through profit or loss Additions 0 -2,000 -4,500 Disposals 3,401 1,000 5,280 Investments to tangible assets -17 -7 -23 Net cash used in investing 3,384 -1,007 757 activities Cash flow from financing activities Payments from share issue 0 0 139 Proceeds from borrowings 0 0 874 Repayment of loans 0 -40 Repayment of lease -24 -10 -23 commitments Net cash from financing -24 -10 950 activities Net increase (+) or decrease (-) 72 -3,611 -3,581 in cash and cash equivalents Cash and cash equivalents in the 305 3,886 3,886 beginning of the period Cash and cash equivalents in the 377 274 305 end of the period KEY FIGURES 1.1.- 1.1.- 1.1.- 31.3.2008 31.3.2007 31.12.2007 EUR 1,000 3 months 3 months 12 months Business development Revenues 1,321 605 7,895 Personnel on average 35 36 36 Personnel at the end of period 35 36 37 Research and development costs 2,403 1,475 9,053 Capital expenditure 17 7 287 Profitability Operating profit/loss -1,498 -1,209 -1,769 as percentage of revenues, % -113.4 -198.9 -22.4 Profit/loss before taxes -2,020 -1,119 -1,726 as percentage of revenues, % -152.9 -185.0 -21.9 Balance sheet Cash and cash equivalents 24,617 29,442 28,243 Shareholders equity -13,075 -11,907 -11,117 Balance sheet total 26,791 31,038 30,075 Financial ratios Return on equity, % - - - Return on capital employed, % -44.2 -29.8 -7.2 Equity ratio, % -48.8 -56.6 -37.0 Gearing, % 6.7 49.7 40.8 Per share data Earnings per share (EPS) basic & -0.02 -0.01 -0.02 diluted, EUR Shareholders'equity per share, EUR -0.15 -0.13 -0.12 Dividend per share, EUR Pay-out ratio, % Effective dividend yield, % P/E-ratio Share price Lowest share price, EUR 0.74 0.85 0.75 Highest share price, EUR 0.94 1.18 1.22 Average share price, EUR 0.81 1.01 0.98 End of period share price, EUR 0.82 0.89 0.76 Market capitalization 74.0 79.7 68.6 at the end of period MEUR Trading of shares Number of shares traded 1,939,651 14,390,615 35,093,743 As percentage of all 2.2 16.1 38.9 Adjusted weighted average 90,211,860 89,530,660 90,003,192 number of shares during the period Adjusted number of shares 90,211,860 89,530,660 90,211,860 at the end of the period Contingent liabilities EUR 1,000 31.3.2008 31.3.2007 31.12.2007 Lease commitments 142 104 159 Formulas for the Calculation of the Financial Ratios Return on equity, % Profit (loss) before extraordinary items - taxes --------------------------------------------------------------- x 100 Shareholders' equity Return on capital employed, % Profit (loss) before taxes + interest expenses and other financial expenses --------------------------------------------------------------- x 100 Balance sheet total - non-interest bearing liabilities Equity ratio, % Shareholders' equity --------------------------------------------------------------- x 100 Balance sheet total - advanced received Gearing, % Interest bearing liabilities - cash and cash equivalents -------------------------------------------------------------- x 100 Shareholders' equity Earnings per share (EPS) Profit before extraordinary items, appropriations and taxes - minority interest - taxes ------------------------------------------------------------------ Adjusted average number of outstanding shares during the period Shareholders' equity per share Shareholders' equity ------------------------------------------------------------------ Adjusted average number of outstanding shares at the end of the period |
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