2016-05-12 08:02:11 CEST
2016-05-12 08:02:11 CEST
REGULATED INFORMATION
Biotie Therapies - Interim report (Q1 and Q3)
Biotie Interim Report 1 January - 31 March 2016
BIOTIE THERAPIES CORP. INTERIM REPORT May 12, 2016 at
9.00 a.m.
Biotie Interim Report 1 January - 31 March 2016
Biotie (Nasdaq Helsinki: BTH1V; NASDAQ: BITI) announces its interim report for
the three month period ended March 31, 2016.
Company Highlights
January - March 2016
* On January 19, 2016 Biotie announced that it entered into a combination
agreement with Acorda Therapeutics, Inc. (Acorda) whereby Acorda, either
directly or through a wholly-owned subsidiary, would make a public tender
offer in Finland and in the United States to purchase all of the issued and
outstanding shares, American Depositary Shares (ADSs), stock options, share
units and warrants in Biotie that are not owned by Biotie or any of its
subsidiaries (the Tender Offer). The Board of Directors of Biotie
unanimously recommended that the holders of Biotie shares, ADSs, option
rights, share units and warrants accept the Tender Offer. The tender offer
from Acorda valued the Company at approximately €334 million, or
approximately $363 million based on the exchange rate on January 18 the day
before the Tender Offer was announced, which represented a premium to the
closing price of approximately 95% for the Biotie shares on Nasdaq Helsinki
Ltd and approximately 94% of the Biotie ADSs on the Nasdaq Stock Market LLC
on January 18, 2016, the last trading day preceding the announcement.
* Tozadenant, Biotie's lead pipeline program, is in Phase 3 development in
Parkinson's disease. Patient recruitment continued during the first quarter
into the TOZ-PD study, a 450-patient double-blind, placebo-controlled Phase
3 study with an open-label extension that is being conducted under a Special
Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA).
* Phase 2 studies with SYN120 in Parkinson's disease dementia and BTT1023 in
primary sclerosing cholangitis, which are being conducted by third parties,
continued to recruit patients.
* Biotie's revenue for three months ended March 31, 2016 (three months ended
March 31, 2015) was €0.8 million (€0.9 million) and the financial result was
a net loss of €11.7 million (net loss of €5.9 million).
* At March 31, 2016 Biotie had cash and cash equivalents and short term
investments (reported as financial assets held at fair value through profit
and loss), which together are referred to as liquid assets, of €68.0 million
(€79.0 million, December 31, 2015; €27.8 million, March 31, 2015). Operating
cash outflow for the three months ended March 31, 2016 was €8.3 million
outflow (€5.4 million outflow for the three months ended March 31, 2015).
Key events after the reporting period
* On April 13, 2016 Acorda announced the final results of the Tender Offer. As
all the conditions to complete the Tender Offer had been satisfied it was
confirmed that Acorda would complete the Tender Offer in accordance with its
terms and conditions. The offer consideration was paid to the holders of
Equity Interests who validly accepted the Tender Offer by April 8, 2016 in
accordance with the terms and conditions of the Tender Offer, on or about
April 18, 2016.
* Acorda also confirmed on April 13, 2016 it would commence a subsequent offer
period in accordance with the terms and conditions of the Tender Offer (the
"Subsequent Offer Period"). The Subsequent Offer Period commenced on April
14, 2016 and expired on April 28, 2016. The offer consideration was paid to
the holders of Equity Interests who validly accepted the Tender Offer by
April 28, 2016 in accordance with the terms and conditions of the Tender
Offer, on or about May 4, 2016.
* 694,904,307 Shares, 3,178,662 ADSs, 435,000 2011 Option Rights,
4,280,125 2014 Option Rights, 12,401,120 2016 Option Rights, 1,949,116 Swiss
Option Rights, 25,000 2011 Share Rights, 3,972,188 2014 Share Rights and
220,400,001 Warrants were tendered in the Tender Offer and Subsequent Offer
Period, representing approximately 96.77 percent of all the shares and votes
in Biotie on a fully-diluted basis as defined in the terms and conditions of
the Tender Offer.
* On April 20, 2016 Acorda announced it would commence a compulsory redemption
proceeding in respect of the remaining Biotie shares under the Finnish
Limited Liability Companies Act in respect of the Biotie shares held by the
minority shareholders. According to Acorda, it will initiate arbitral
proceedings as provided in the Finnish Limited Liability Companies Act to
effectuate the redemption of the Biotie shares held by minority
shareholders.
Key figures (unaudited)
(€ in thousands) 3 months to March 3 months to March
31, 2016 31, 2015
-------------------------------------------------------------------------------
Revenues 762 871
Research and development (5,620) (4,766)
costs
Net loss (11,672) (5,894)
Loss per share (€) (0.01) (0.01)
Cash flow used in operating (8,320) (5,384)
activities
March 31, 2016 December 31,
(€ in thousands) 2015
---------------------------------------------
Liquid assets 68,013 79,044
Equity 92,028 105,720
Equity ratio (%) 71.2 74.6
Product Portfolio Review:
Selincro(®) (nalmefene) is a dual-acting opioid system modulator and the first
therapy approved in Europe for the reduction of alcohol consumption in alcohol
dependent individuals.
Biotie has licensed global rights to Selincro to Lundbeck. Under the terms of
the agreement with Lundbeck, Biotie is eligible for up to €94 million in upfront
and milestone payments, of which €22.5 million had been received at March
31, 2016, plus royalties on sales of Selincro. Biotie is eligible to receive
further potential milestone payments on launches in certain ex-EU markets and if
the product reaches certain pre-determined sales. Biotie will continue to
receive royalties on sales and will make a contribution to Lundbeck towards post
approval commitment studies.
Lundbeck received European marketing authorization for Selincro in February
2013 and the product has since been introduced in Europe. Favorable
reimbursement decisions were made in the second half of 2014 in a number of key
markets, including France, Spain and the United Kingdom.
Lundbeck and Otsuka Pharmaceutical Co. Ltd. are collaborating, as part of their
existing alliance, to develop and commercialize nalmefene in Japan, and a 660-
patient Phase 3 study in Japan was commenced in Q1 2015.
Tozadenant (SYN115) is an orally administered, potent and selective adenosine
A2a receptor antagonist being developed for the treatment of Parkinson's
disease.
In a 420-patient Phase 2b trial, tozadenant displayed clinically important and
statistically significant effects across pre-specified primary and multiple
secondary endpoints at a number of doses. In addition, tozadenant has been found
to be generally safe and well tolerated in the ten clinical trials that have
been conducted to date. Full data from the Phase 2b study were published in
Lancet Neurology in July 2014.
In July 2015, Biotie announced the start of the tozadenant Phase 3 study in
Parkinson's disease (study TOZ-PD). The Company has agreed on a Special Protocol
Assessment for TOZ-PD with the FDA. Based on discussions with the FDA at the End
of Phase 2 meeting, Biotie believes that the planned Phase 3 clinical program,
together with existing data, could form the basis for approval of tozadenant as
an adjunctive treatment to levodopa in Parkinson's patients experiencing end-of-
dose wearing off episodes. The TOZ-PD study will use the primary and secondary
endpoints and enrollment criteria used in the Phase 2b clinical trial. The study
is expected to enroll 450 patients experiencing levodopa related end-of-dose
wearing off, who will be randomized to receive twice daily doses of 60mg or
120mg of tozadenant or placebo in addition to their standard anti-Parkinson's
disease medications for 24 weeks. The primary endpoint will be the reduction in
the number of hours spent in the "off" state in patients taking tozadenant as
compared to placebo between baseline and week 24, as assessed by patient-
completed diaries and averaged over three consecutive days. The double-blind
placebo controlled period is expected to be followed by a 52 week open label
treatment period to collect additional clinical safety data. The study is
currently planned to be conducted in the United States, Canada and selected
European countries. Based on current estimates top-line data from the double-
blind portion is expected to be available by the end of 2017.
Providing the double-blind portion of TOZ-PD meets its primary efficacy
endpoint, another open label trial is expected to be initiated in a separate
population of 450 patients to establish the requisite number of unique exposures
required for approval.
Biotie has exclusive worldwide rights to develop and commercialize tozadenant
for all uses to treat or prevent human diseases and disorders under a license
agreement with F. Hoffmann-La Roche Ltd (Roche).
SYN120 is an oral, dual antagonist of the 5-HT6 and 5-HT2A receptors. These two
distinct properties could result in a unique therapeutic profile for SYN120
combining pro-cognitive and antipsychotic activities in neuro-degenerative
diseases, such as Parkinson's and Alzheimer's. SYN120 has completed single and
multiple ascending dose Phase 1 clinical studies and a Phase 1 positron emission
tomography imaging study to determine therapeutic dose for subsequent Phase 2
studies. In these trials, doses well above the anticipated therapeutic dose were
well tolerated.
In July 2014, Biotie was awarded a grant of up to $2.0 million from the Michael
J. Fox Foundation (MJFF) to investigate SYN120 in Parkinson's disease patients
with dementia, and patient enrollment into a Phase 2a study primarily funded
under the grant was commenced in December 2014. The SYNAPSE study is an 80
patient, Phase 2a, randomized, double-blind, multi-center, placebo-controlled
trial in patients with Parkinson's disease dementia. Patients are randomized
1:1 to placebo or SYN120 dosed once daily over a 16 week treatment period. In
addition to assessing safety and tolerability, the main focus of the study is to
establish efficacy of SYN120 on cognition using the Cognitive Drug Research
(CDR) Computerized Cognition Battery as the primary efficacy endpoint. The study
is being conducted by the Parkinson Study Group (PSG) at approximately 12
specialist sites in the United States. Biotie and the PSG share responsibility
for the design and execution of the study, and top-line results of the study are
expected around the end of 2016.
Biotie has exclusive worldwide rights to develop and commercialize SYN120 under
a license agreement with Roche and will be able to use data from the MJFF-funded
study for any future regulatory submission for SYN120, including Alzheimer's
disease, although further clinical development plans in such indications will
depend on the availability of funding.
BTT1023 is a fully human monoclonal antibody that specifically binds to vascular
adhesion protein 1 (VAP-1), an endothelial cell adhesion receptor expressed on
blood vessels. Recent investigation has shown that VAP-1, in addition to its
previously demonstrated role in inflammation, is also involved in the process of
fibrosis, which can occur in several organs and is poorly treated with current
drugs.
In July 2014, Biotie partnered with the University of Birmingham, UK, who were
awarded grant funding to conduct an investigator-sponsored, Phase 2, proof of
concept study with BTT1023 in primary sclerosing cholangitis (PSC), a chronic
and progressive orphan fibrotic disease for which there are currently no FDA-
approved treatments. The grant was awarded by the UK's National Institute for
Health Research (NIHR) Efficacy and Mechanism Evaluation Programme, funded and
managed by NIHR on behalf of the Medical Research Council - NIHR partnership.
The grant holder and Co-Investigator for the study is Professor David Adams,
Director of the NIHR Biomedical Research Unit in Liver Disease and Centre for
Liver Research at the University of Birmingham.
The BUTEO study being funded under the grant opened for patient recruitment in
March 2015. It is an open label, single arm, multi-center study that will
evaluate efficacy, safety and pharmacokinetic properties of BTT1023 in 41
patients with PSC. Patients will receive BTT1023 via intravenous infusion every
two weeks over an 11 week treatment period. The primary efficacy endpoint is a
reduction of elevated levels of alkaline phosphatase, a blood biomarker of bile
duct inflammation; secondary endpoints include various measures of liver injury
and fibrosis.
The two-stage study design includes a pre-planned interim analysis. Based on
current estimates, it is expected that the requisite number of patients will
have been treated by the end of 2016 to enable the interim analysis to be
completed.
The European Commission has granted BTT1023 Orphan Drug Designation in the EU
for the treatment of PSC. After the reporting period in April 2016, Biotie
submitted an application to the FDA for Orphan Drug Designation in the United
States for BTT1023 in the treatment of PSC. Biotie retains full rights to
BTT1023.
Management Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion and analysis should be read in conjunction with the
unaudited condensed consolidated financial information contained herein, which
has been prepared in accordance with International Accounting Standard 34,
Interim Financial Reporting. The Company presents its consolidated financial
information in euros.
Overview
In the periods presented the Company has earned revenue from Lundbeck, in the
form of royalties for Selincro, and from UCB in the form Phase 3 development
funding for tozadenant. The accounting policies that the Company applies in
recognizing these revenues are set out in detail in note 2 to the consolidated
financial statements for the year ended December 31, 2015.
The Company's research and development activities are central to its business
model and expenditure on research and development is recognized as an expense in
the period in which it is incurred. The Company's current research and
development activities mainly relate to the following key programs, which are
all currently recruiting patients: Phase 3 clinical trial of tozadenant in
Parkinson's disease; Phase 2a clinical trial of SYN120 in Parkinson's disease
dementia; and Phase 2 clinical trial of BTT1023 in primary sclerosing
cholangitis.
General and administrative expenses consist of salary-related and external costs
related to the Company's executive, finance and other support functions,
including the costs associated of compliance with the on-going requirements of
being a listed company on Nasdaq in the United States and on the Nasdaq OMX
market in Helsinki, including insurance, general administration overhead,
investor relations, legal and professional fees and audit fees.
Other operating income consists primarily of grant income and rent received on a
sub-lease.
Our policy is to invest funds in low-risk investments, which primarily consists
of money market funds and interest-bearing saving and investment accounts.
Savings and deposit accounts generate a small amount of interest income.
Interest expenses consist primarily of non-cash interest in respect of the Tekes
loans and the convertible capital loan.
Other net financial income (expense) primarily relates to all non-interest
related items and comprises net foreign exchange gains (losses) that arise from
our intercompany borrowings, and unrealized and realized gains from money market
funds, that are reflected as financial assets held at fair value through profit
and loss.
The Company does not generally pay any corporate income taxes, as there are
currently cumulative operating losses in each subsidiary company.
Results of Operations: comparison of the three months ended March 31, 2016 and
March 31, 2015
Revenue
Revenue decreased by €0.1 million to €0.8 million for the three months ended
March 31, 2016 compared to €0.9 million for the three months ended March
31, 2015. The decrease was primarily due to the increase in the level of
royalties from the Lundbeck license agreement of €0.1 million, being more than
offset by the final phase 3 development funding from UCB for tozadenant of €0.2
million recognized in the first quarter of 2015.
Research and development expenses
Research and development expenses increased by €0.8 million for the three months
ended March 31, 2016 to €5.6 million, compared to €4.8 million for the three
months ended March 31, 2015. The majority of the expenditure in each period was
in relation to tozadenant, with the increase mainly being due to the stage of
the development activities.
General and administrative expenses
General and administrative expenses increased by €3.1 million to €4.8 million
for the three months ended March 31, 2016, as compared to €1.7 million for the
three months ended March 31, 2015. The increase was mainly due to professional
advisor fees in respect of the Acorda Tender Offer.
Other operating income
Other operating income for the three months ended March 31, 2016 was minimal and
comprised sub-lease rental income. There was no other operating income
recognized in for the three months ended March 31, 2015.
Interest income
Interest income was minimal for both of the three months ended March 31, 2016
and 2015.
Interest expenses
Interest expenses consist of non-cash interest expenses accrued on the Tekes
loans and the convertible capital loans, which remained broadly stable. As a
result, interest expenses were minimal for both of the three month periods ended
March 31, 2016 and 2015.
Other net financial income (expenses)
Other net financial income (expenses) mainly comprises net foreign exchange
differences and was a net loss of €2.0 million for the three months ended March
31, 2016 and a net loss of €0.1 million for the three months ended March
31, 2015.
Other comprehensive income
Other comprehensive income comprises currency translation differences, which
mainly arise from the translation of in-process R&D assets and goodwill in our
foreign subsidiaries. It was a loss of €2.5 million for the three months ended
March 31, 2016, compared to a gain of €8.2million for the three months ended
March 31, 2015.
Liquidity and Capital resources
Cash flows
Net cash outflow from operating activities for the three months ended March
31, 2016 was €8.3 million, an increase of €2.9 million as compared to the net
cash outflow of €5.4 million during the same period in 2015, mainly due to
higher general and administrative expenses.
Net cash inflow from investing activities was €6.3 million for the three months
ended March 31, 2016, an increase of €2.4 million as compared to the net cash
inflow of €3.9 million in the same period in 2015, due to net investment in and
proceeds from sale of financial assets at fair value through profit or loss.
Net cash inflow from financing activities was minimal for both the three months
ended March 31, 2016 and March 31, 2015 and related solely to the proceeds from
share issues in respect of employee equity plans.
Liquid assets, comprising cash and cash equivalents and financial assets at fair
value through profit and loss, totaled €68.0 million at March 31, 2016 as
compared to €79.0 million at December 31, 2015. The decrease of €11.0 million
was mainly due to the utilization of cash flow for financing the operating
activities, principally research and development expenses.
Cash and funding sources
Our main sources of revenue during the periods presented were from UCB in
relation to tozadenant and royalties from Lundbeck in relation to Selincro
sales.
We have no ongoing material financial commitments, such as lines of credit or
guarantees, which are expected to affect our liquidity over the next five years,
other than research and development loans, some of which are due for repayment
as described in note 10 to the unaudited condensed consolidated financial
statements for the three months ended March 31, 2016.
Personnel
During the reporting period January - March 2016 (2015), the average number of
employees amounted to 39 (39) and at the end of the reporting period, Biotie
employed 39 people (40 people).
Equity rights
All equity based incentive programs were a part of the Tender Offer and all
option and other instruments initially allocated to the personnel of Biotie are
in possession of Acorda.
Share capital and shares
Biotie has shares quoted on Nasdaq (Small Cap) in Helsinki (ticker: BTH1V) and
ADS quoted on NASDAQ (Global Select Market) in the United States (ticker: BITI),
where each ADS represents 80 of the Company's shares. The Company's shares all
have equal rights and each share entitles the holder to one vote at the general
meeting of shareholders.
On January 5 2016, the Company announced that the Board had resolved to issue a
total of 2,667,812 new shares to be delivered to employees who are participants
of the Company's option and equity incentive plans on the exercise of share
options and for the settlement of stock units in accordance with Chapter 10
Section 7 and Chapter 9 Section 4 of the Finnish Companies Act (624/2006, as
amended). The new shares were registered with the Finnish Trade Register on
January 18, 2016, and admitted to trading on Nasdaq Helsinki Ltd on January
19, 2016.
On March 31, 2016 the registered number of shares in Biotie Therapies Corp. was
1,089,608,083; of these shares 108,686,288 were held by the Company or its group
companies, so that there were 980,921,795 outstanding shares at that date. The
registered share capital of Biotie was € 279,218,058.55 (FAS).
After the reporting period on April 13, 2016 Acorda announced the final results
of the Tender Offer and on May 2, 2016 the final results of the Subsequent Offer
Period. Following this 694,904,307 Shares, 3,178,662 ADSs, 435,000 2011 Option
Rights, 4,280,125 2014 Option Rights, 12,401,120 2016 Option Rights, 1,949,116
Swiss Option Rights, 25,000 2011 Share Rights, 3,972,188 2014 Share Rights and
220,400,001 Warrants were tendered, representing approximately 96.77 percent of
all the shares and votes in Biotie on a fully-diluted basis as defined in the
terms and conditions of the Tender Offer.
Market capitalization and trading
The key data for each of the shares listed in Helsinki and the ADS listed in the
United States during the twelve month period ended March 31, 2016 is shown
below.
Shares listed ADS listed
in Helsinki in the United States
-------------------------------------------------------------------------------
Price at end of period €0.29 $26.39
Highest price during period €0.29 $26.66
Lowest price during period €0.15 $13.03
Average price during period €0.28 $23.99
Market capitalization at end of period €312.7 million $359.4 million
Trading volume during period 198,008,970 shares 3,551,596 ADS
Turnover during period €56,086 thousand $85,286 thousand
Changes in ownership
During the first quarter, the Company has received two flagging notifications
(pursuant to Chapter 9, Section 5 of the Securities Markets Act) dated 12
February 2016 and 19 February 2016 from FMR LLC and its controlled entity FMR
CO., Inc. whose holdings of shares and votes in the Company had decreased below
the threshold of 5 per cent.
After the end of the first quarter, the Company received several flagging
notifications (pursuant to Chapter 9, Section 5 of the Securities Markets Act)
from shareholders whose holdings of shares and votes in the Company either
increased or decreased as a result of the close of the tender offer. The
information in the flagging notifications has been disclosed by several stock
exchange releases dated April 12, 2016, April 14, 2016 and April 20, 2016.
Acorda Therapeutics informed on April 18, 2016 and May 2, 2016 that the share
transfers relating to the Tender Offer have been carried out and as a result,
Acorda Therapeutics holds in excess of 90 per cent of the outstanding number of
shares in Biotie.
Risk factors
Set forth below is a description of risk factors that could affect the Company.
There may, however, be additional risks unknown to the Company and other risks
currently believed to be immaterial that could turn out to be material. Our
business, financial condition or results of operations could be materially and
adversely affected if any of these risks occurs, either individually or
together.
Risks related to the Company's financial position and capital requirements
· The Company has incurred net losses since our inception and anticipates
that it will continue to incur substantial operating losses for the foreseeable
future
· The Company may never achieve or sustain profitability
· The Company cannot assure its investors of the adequacy of its capital
resources to successfully complete the development and commercialization of its
product candidates, and a failure to obtain additional capital, if needed, could
force the Company to delay, limit, reduce or terminate its product development
or commercialization efforts
· The adequacy of the Company's capital resources is particularly dependent
on cash generation from milestones and royalties in connection with sales of
Selincro and other sources of non-dilutive funding
· Raising additional capital may cause dilution to the Company's existing
shareholders, restrict its operations or require the Company to relinquish, or
license on unfavorable terms, its rights to its product candidates and may
impact any future potential revenue streams
· In connection with the Convertible Notes Financings the Company has
indemnification obligations to certain investors pursuant to the subscription
agreement with such investors. These obligations could subject the Company to
substantial liabilities
· Impairment charges or write-downs on the Company's assets could have a
significant adverse effect on its results of operations and financial results
· The Company is exposed to risks related to currency exchange rates
· We conduct a significant portion of our operations outside Finland and
other eurozone countries, principally in the United States
Risks related to the development and clinical testing of the Company's product
candidates
· The Company depends significantly on the success of tozadenant and its
other product candidates. Tozadenant and its other product candidates are still
in clinical development. If the Company's clinical trials are not successful,
the Company does not obtain regulatory approval or is unable, or unable to find
a partner, to commercialize tozadenant or our other product candidates, or the
Company experiences significant delays in doing so, its business, financial
condition and results of operations will be materially adversely affected
· Clinical drug development involves a lengthy and expensive process with
uncertain timelines and uncertain outcomes
· The results of previous clinical trials may not be predictive of future
results and clinical trials of product candidates may not be successful
· The design and conduct of a clinical trial can determine whether its
results will support approval of a product and flaws in the design of a clinical
trial may not become apparent until the clinical trial is well advanced or
completed
· If clinical trials of the Company's product candidates are prolonged or
delayed, it may be unable to obtain required regulatory approvals, and therefore
be unable to commercialize its product candidates on a timely basis or at all
· If serious adverse, undesirable or unacceptable side effects or preclinical
findings are identified during the development of the Company's product
candidates or following approval, the Company may need to abandon our
development of such product candidates, the commercial profile of any approved
label may be limited, or the Company may be subject to other significant
negative consequences following marketing approval
· The Company depends on enrollment of patients in its clinical trials for
our product candidates. If the Company is unable to enroll patients in its
clinical trials, its research and development efforts could be materially
adversely affected
· Due to the Company's limited resources and access to capital, the Company
must and has in the past decided to prioritize development of certain product
candidates; these decisions may prove to have been wrong and may adversely
affect the Company's revenues
Risks related to regulatory approval of the Company's product candidates
· Clinical development, regulatory review and approval by the U.S Food and
Drug Administration (FDA), the European Medicines Agency (EMA) and comparable
foreign regulatory authorities are lengthy, time consuming, expensive and
inherently unpredictable activities. If the Company is ultimately unable to
obtain regulatory approval for its product candidates, its business will be
substantially harmed
· The FDA's agreement to the Company's special protocol assessment for its
Phase 3 trial of tozadenant does not guarantee any particular outcome from
regulatory review, including ultimate approval and may not lead to a faster
development or regulatory review or approval process
· If the Company fails to obtain regulatory approval in any jurisdiction, it
will not be able to market our products in that jurisdiction
· Even if the Company's product candidates obtain regulatory approval, it
will be subject to ongoing regulatory review, which may result in significant
additional expense. Additionally, the Company's product candidates, if approved,
could be subject to restrictions, and it may be subject to penalties if it fails
to comply with regulatory requirements or experience unanticipated problems with
its products
· The Company may be unable to obtain orphan drug designation or exclusivity
in the United States for BTT1023. If the Company's competitors are able to
obtain orphan drug exclusivity for their products in the same indication for
which the Company is developing BTT1023, the Company may not be able to have its
product candidate approved by the applicable regulatory authority for a
significant period of time. Conversely, the Company may not be able to benefit
from the associated marketing exclusivity from orphan drug exclusivity that it
obtains
Risks related to commercialization of the Company's product candidates
· The Company is likely to face significant competition and if its
competitors develop and market products that are more effective, safer or less
expensive than the Company's product candidates, the Company's commercial
opportunities will be negatively impacted
· The successful commercialization of the Company's product candidates will
depend in part on the extent to which governmental authorities and health
insurers establish adequate reimbursement levels and pricing policies
· Even if approved, if any of the Company's products or product candidates do
not achieve broad market acceptance among physicians, patients, the medical
community and third-party payors, the Company's revenue generated from their
sales will be limited
· The market for tozadenant and the Company's other product candidates may
not be as large as it expects
· The Company has never commercialized a product candidate before and may
lack the necessary expertise, personnel and resources to successfully
commercialize its products on its own or together with suitable partners
Risks related to the Company's reliance on third parties
· Collaborations on products and product candidates are important to the
Company's business, and future collaborations may also be important to the
Company. If the Company is unable to maintain any of these collaborations, if
these collaborations are not successful, or if it fails to enter into new
strategic relationships, the Company's business could be adversely affected
· The success of the Company's strategic partnerships and collaborations
depends, to a significant degree, on the performance of the Company's partners,
over which it has little or no control
· The Company relies on third parties to conduct its nonclinical and clinical
trials and perform other tasks for the Company. If these third parties do not
successfully carry out their contractual duties, meet expected deadlines, or
comply with regulatory requirements, the Company may not be able to obtain
regulatory approval for, or commercialize, our product candidates and its
business could be substantially harmed
· The Company currently relies on third-party suppliers and other third
parties for production of its product candidates and the Company's dependence on
these third parties may impair the advancement of its research and development
programs and the development of its product candidates
· Certain of the drug substances and drug products for the Company's product
candidates are currently acquired from single-source suppliers. The loss of
these suppliers, or their failure to supply the Company with the drug substance
or drug product, could materially and adversely affect the Company's business
Risks related to the Company's intellectual property
· If the Company is unable to obtain and maintain sufficient intellectual
property protection for its product or product candidates, or if the scope of
its intellectual property protection is not sufficiently broad, the Company's
ability to commercialize its product and product candidates successfully and to
compete effectively may be adversely affected
· Changes in patent law could diminish the value of patents in general,
thereby impairing the Company's ability to protect its product candidates
· The Company's commercial success depends significantly on its ability to
operate without infringing the patents and other proprietary rights of third
parties
· The Company is dependent on third parties for the prosecution, protection,
and enforcement of intellectual property rights relating to some of its products
and product candidates
· The Company depends on licenses for development and commercialization
rights to its products, product candidates and technologies. Termination of
these rights or the failure to comply with obligations under these or other
agreements under which the Company obtains such rights could materially harm its
business and prevent the Company from developing or commercializing its products
and product candidates
· If trademarks and trade names related to the Company's products or product
candidates are not adequately protected, then the Company may not be able to
build name recognition in its markets of interest and its business may be
adversely affected
· If the Company is unable to protect the confidentiality of its proprietary
information, the value of its technology and products could be adversely
affected
· Obtaining and maintaining the Company's patent protection depends on
compliance with various procedural, documentary, fee payment and other
requirements imposed by governmental patent agencies, and its patent protection
could be reduced or eliminated for noncompliance with these requirements
· Certain of the Company's current and former employees and patents are
subject to Finnish law and therefore may be eligible to receive compensation
based on the Company's future income related to intellectual property invented
or coinvented by these employees
· The Company's internal computer systems, or those of its collaborators or
other contractors or consultants, may fail or suffer security breaches, which
could result in a material disruption of its product development programs
Risks related to the Company's business and industry
· The Company's relationships with health care professionals, institutional
providers, principal investigators, consultants, customers (actual and
potential) and third-party payors are, and will continue to be, subject,
directly and indirectly, to federal and state health care fraud and abuse, false
claims, marketing expenditure tracking and disclosure, government price
reporting, and health information privacy and security laws. If the Company is
unable to comply, or has not fully complied, with such laws, it could face
penalties, including, without limitation, civil, criminal, and administrative
penalties, damages, fines, exclusion from government-funded health care
programs, such as Medicare and Medicaid in the US, and the curtailment or
restructuring of the Company's operations
· The Company may become exposed to costly and damaging liability claims,
either when testing its product candidates in the clinic or at the commercial
stage; and the Company's product liability insurance may not cover all damages
from such claims
· Price controls may be imposed in certain markets, which may adversely
affect the Company's future profitability
· The impact of recent health care reform legislation in the US and other
changes in the health care industry and in health care spending on the Company
is currently unknown, and may adversely affect its business model
· The Company and its contract manufacturers and its suppliers could be
subject to liabilities, fines, penalties or other sanctions under environmental,
health and safety laws and regulations if the Company or they fail to comply
with such laws or regulations or otherwise incur costs that could have a
material adverse effect on the success of the Company's business
Risks related to employee matters and managing growth
· If the Company fails to attract and keep senior management and key
scientific personnel, the Company may be unable to successfully develop its
products, conduct its clinical trials and commercialize its product candidates
· The Company may encounter difficulties in managing its growth and expanding
its operations successfully
· The Company has broad discretion in the use of the net proceeds from the US
public offering and may not use them effectively
· The Company may lose its foreign private issuer status in the US in the
future, which could result in significant additional cost and expense
· If the Company fails to maintain an effective system of internal control
over financial reporting, it may not be able to accurately report its financial
results or prevent fraud. As a result, shareholders could lose confidence in its
financial and other public reporting, which would harm its business and the
trading price of its shares
Risks related to the Company's shares
· As a result of the closing of the Tender Offer, Acorda has purchased
approximately 97% of our outstanding Equity Interests. Therefore, liquidity in
our shares and ADSs is substantially decreased
· The Company does not currently intend to pay dividends on its securities
and, consequently, an investor's ability to achieve a return on their investment
will depend on appreciation in the price of the Company's shares. In addition,
any distribution of dividends must be in accordance with the rules and
restrictions applying under Finnish law
Financial calendar 2016
Due to the ongoing squeeze out proceedings and contemplated delisting of the
Company's shares from the stock exchanges they are currently listed on, and
subject to regulatory requirements, it is possible that the Company may not
issue any further interim reports. Should a report for the period ending on 30
June and 30 September 2016 be issued, the release dates of the reports are as
follows
Interim report for January - June 2016 August 11, 2016
Interim report for January - September 2016 November 10, 2016
Outlook for 2016 and key upcoming milestones
Selincro(®) (nalmefene): Biotie anticipates that Lundbeck will continue to make
sales of Selincro in European markets during 2016, albeit that following the
announcement made by Lundbeck in August 2015 it may devote fewer resources to
Selincro going forward. In addition to royalties, Biotie may also receive
further milestone payments if the product reaches certain pre-determined sales.
Tozadenant (SYN115): The Phase 3 clinical study, which is expected to be the
second pivotal study required for registration, will continue to recruit
patients during 2016, with top-line data from the double-blind part of the study
expected by the end of 2017. This will be followed by the open-label portion of
the study and a separate open-label study. Additional studies required for a
regulatory filing package will continue to be completed prior to regulatory
submissions.
SYN120: The 80-patient Phase 2 study with SYN120 in Parkinson's disease dementia
(the SYNAPSE study), funded by MJFF, is being conducted by the Parkinson Study
Group at approximately 12 specialist sites in the United States. Patient
enrollment will continue and top-line results of the study are expected around
the end of 2016.
BTT1023: The 41-patient investigator-sponsored Phase 2 study in primary
sclerosing cholangitis (the BUTEO study) is being conducted in the UK and is
supported by grant funding from the UK's National Institute for Health Research.
Patient recruitment will continue and it is expected that the requisite number
of patients will have been treated by the end of 2016 to enable a pre-planned
interim analysis in this two-stage study.
Financial: The Company expects to continue its investment in its development
products in 2016 and will incur significant research and development expenses as
the current studies progress. The Company has a strong level of liquid resources
after the financing obtained in 2015 and this, together with further Selincro
royalties, is expected to be sufficient for all the Company's currently planned
development activities; these liquid resources will decrease over time, as they
are invested in the Company's product development programs.
Strategic: The Company's primary focus is to ensure that the Phase 3 clinical
study for tozadenant is efficiently and effectively executed, with the top-line
data expected by the end of 2017. SYN120 and BTT1023, funded largely by non-
dilutive financing, are both expected to reach significant potential inflection
points around the end of 2016. The completion of the Tender Offer by Acorda is
not expected to have a significant impact on these objectives.
Key events after the reporting period
On April 13, 2016 Acorda announced the final results of the Tender Offer. As all
the conditions to complete the Tender Offer had been satisfied it was confirmed
that Acorda would complete the Tender Offer in accordance with its terms and
conditions. The offer consideration was paid to the holders of Equity Interests
who validly accepted the Tender Offer by April 8, 2016 in accordance with the
terms and conditions of the Tender Offer, on or about April 18, 2016.
Acorda also confirmed on April 13, 2016 it would commence a subsequent offer
period in accordance with the terms and conditions of the Tender Offer (the
"Subsequent Offer Period"). The Subsequent Offer Period commenced on April
14, 2016 and expired on April 28, 2016. The offer consideration was paid to the
holders of Equity Interests who validly accepted the Tender Offer by April
28, 2016 in accordance with the terms and conditions of the Tender Offer, on or
about May 4, 2016.
694,904,307 Shares, 3,178,662 ADSs, 435,000 2011 Option Rights, 4,280,125 2014
Option Rights, 12,401,120 2016 Option Rights, 1,949,116 Swiss Option Rights,
25,000 2011 Share Rights, 3,972,188 2014 Share Rights and 220,400,001 Warrants
were tendered in the Tender Offer and Subsequent Offer Period, representing
approximately 96.77 percent of all the shares and votes in Biotie on a fully-
diluted basis as defined in the terms and conditions of the Tender Offer.
On April 20, 2016 Acorda announced it would commence a compulsory redemption
proceeding in respect of the remaining Biotie shares under the Finnish Limited
Liability Companies Act in respect of the Biotie shares held by the minority
shareholders has arisen. According to Acorda, it will initiate arbitral
proceedings as provided in the Finnish Limited Liability Companies Act to
effectuate the redemption of the Biotie shares held by minority shareholders.
The Annual General Meeting of Biotie Therapies Corp. was held on May 3, 2016 and
resolved the following items:
* The financial statements 2015 were adopted and no dividend for the financial
year 2015 will be paid and that the losses of the parent company for the
financial year amounting to EUR 5.2 million (FAS), will be carried forward
to shareholders' equity.
* Discharge from liability the members of the Board of Directors and the
President and CEO concerning the financial year 1 January - 31 December
2015.
* The number of the members of the Board of Directors was resolved to be
three. The following members were elected as the members of the Board of
Directors: Ron Cohen, Michael Rogers and Jane Wasman.
* It was resolved that no remuneration is payable to board members. Reasonable
travel and other expenses related to Board work shall be covered by the
company.
* The number of auditors was resolved to be one, being Ernst & Young Oy, a
firm of Authorised Public Accountants, Mr. Erkka Talvinko, Authorised Public
Accountant, acting as the auditor in charge. It was further resolved that
the auditors' fees shall be paid pursuant to a reasonable invoice.
* At the organization meeting of the new Board of Directors, which convened
immediately after the Annual General Meeting, Ron Cohen was elected as the
Chairman of the Board of Directors and the Board resolved not to set up any
Board committees. Based on the evaluation of independence, the Board of
Directors concluded that all members of the Board of Directors are
independent of the company, but dependent of its significant shareholder.
The stock exchange release regarding the resolutions of the Annual General
meeting of Biotie was published on 3 May 2016.
About Biotie
Biotie is a biopharmaceutical company focused on products for neurodegenerative
and psychiatric disorders. Biotie's development has delivered Selincro
(nalmefene) for alcohol dependence, which received European marketing
authorization in 2013 and is currently being rolled out across Europe by partner
Lundbeck. The current development products include tozadenant for Parkinson's
disease, which is in Phase 3 development, and two additional compounds which are
in Phase 2 development for cognitive disorders including Parkinson's disease
dementia, and primary sclerosing cholangitis (PSC), a rare fibrotic disease of
the liver.
Biotie's shares are listed on NASDAQ Helsinki (BTH1V) and ADS on Nasdaq Stock
Market LLC (BITI).
Group structure: The parent company of the group is Biotie Therapies Corp. The
domicile of the company is Turku, Finland. The Company has two operative
subsidiaries, Biotie Therapies Inc, located in South San Francisco, United
States of America and Biotie Therapies AG, located in Zurich, Switzerland.
The Group also has two non-operational subsidiaries, Biotie Therapies GmbH
located in Radebeul, Germany and Biotie Therapies International Ltd located in
Finland.
Acorda Therapeutics currently holds approximately 97 per cent of the outstanding
shares in the Company and Biotie belongs to the Acorda group of companies
Forward looking statements: This interim report may contain statements that
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are statements other than historical fact and may
include statements that address future operating, financial or business
performance or Biotie's strategies or expectations. In some cases, you can
identify these statements by forward-looking words such as "may," "might,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "projects," "potential," "outlook" or "continue," and other
comparable terminology. Forward-looking statements are based on management's
current expectations and beliefs and involve significant risks and uncertainties
that could cause actual results, developments and business decisions to differ
materially from those contemplated by these statements. These risks and
uncertainties include, but are not limited to, the timing and conduct of
clinical trials of Biotie's product candidates, plans to pursue research and
development of product candidates, the clinical utility of Biotie's product
candidates, the timing or likelihood of regulatory filings and approvals,
Biotie's intellectual property position, expectations regarding payments under
Biotie's collaborations and Biotie's competitive position. These risks and
uncertainties also include those described under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Biotie's 2015 Annual Report on Form 20-F and future filings with
the Securities and Exchange Commission. Forward-looking statements speak only as
of the date they are made, and Biotie does not undertake any obligation to
update them in light of new information, future developments or otherwise,
except as may be required under applicable law. All forward-looking statements
are qualified in their entirety by this cautionary statement.
Turku, May 12, 2016
Biotie Therapies Corp.
Board of Directors
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the three month period ended
March 31,
(€ in thousands, except per share Note 2016 2015
data)
Revenue 3 762 871
Research and development expenses (5,620) (4,766)
General and administrative expenses (4,762) (1,730)
Other operating income 33 -
-------------------------------------------------------------------------------
Operating loss (9,587) (5,625)
Interest income 26 1
Interest expenses (146) (151)
Other net financial income (1,965) (119)
(expenses)
-------------------------------------------------------------------------------
Loss before taxes (11,672) (5,894)
Income tax 4 - -
-------------------------------------------------------------------------------
Net loss (11,672) (5,894)
-------------------------------------------------------------------------------
Other comprehensive income
Items that may be subsequently
reclassified to profit or loss:
Currency translation differences* (2,532) 8,181
-------------------------------------------------------------------------------
Total other comprehensive income (2,532) 8,181
-------------------------------------------------------------------------------
Total comprehensive income (14,204 2,287
-------------------------------------------------------------------------------
Net loss attributable to equity (11,672) (5,894)
holders of the parent
Total comprehensive loss (14,204) 2,287
attributable to equity holders of
the parent
Loss per share (EPS) basic & 5 (0.01) (0.01)
diluted, €
*The translation differences mainly arise in relation to in-process R&D assets
and goodwill.
All activities relate to continuing operations.
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at As at
March 31, December 31,
2016 2015
(€ in thousands) Note (unaudited)
-------------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets 6 51,016 52,572
Goodwill 6 6,261 6,462
Property, plant and equipment 7 498 564
Non-current pre-payments 8 3,537 3,698
Other financial assets 332 345
-------------------------------------------------------------------------------
Total non-current assets 61,644 63,641
-------------------------------------------------------------------------------
Current assets
Accounts receivable and other receivables 1,628 1,017
Financial assets at fair value through profit or 9 25,113 32,282
loss
Cash and cash equivalents 42,900 46,762
-------------------------------------------------------------------------------
Total current assets 69,641 80,061
-------------------------------------------------------------------------------
Total assets 131,285 143,702
-------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Shareholders' equity
Share capital 11 267,418 267,418
Reserve for invested unrestricted equity 5,437 5,417
Other reserves 12,872 15,404
Retained earnings (193,699) (182,519)
-------------------------------------------------------------------------------
Total equity 92,028 105,720
-------------------------------------------------------------------------------
Non-current liabilities
Non-current financial liabilities 9 20,690 20,690
Other non-current liabilities 10,326 10,302
Non-current deferred revenues 2,000 2,000
-------------------------------------------------------------------------------
Total non-current liabilities 33,016 32,992
Current liabilities
Accounts payable and other current liabilities 6,241 4,990
-------------------------------------------------------------------------------
Total current liabilities 6,241 4,990
-------------------------------------------------------------------------------
Total liabilities 39,257 37,982
-------------------------------------------------------------------------------
Total shareholders' equity and liabilities 131,285 143,702
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNaudited)
Attributable to equity holders of the parent company
Reserve Share-
for invested holders'
Share unrestricted Other Retained equity
(€ in thousands) Note capital equity reserves earnings total
-------------------------------------------------------------------------------
Balance at January 193,285 5,378 9,029 (155,069) 52,623
1, 2015
-------------------------------------------------------------------------------
Net loss for the - - - (5,894) (5,894)
period
Other comprehensive - - 8,181 - 8,181
income
-------------------------------------------------------------------------------
Total comprehensive - - 8,181 (5,894) 2,287
income (loss)
Share based 12 - - - 174 174
compensation
Options and RSU 12 - 11 - - 11
exercised
-------------------------------------------------------------------------------
- 11 8,181 (5,720) 2,472
-------------------------------------------------------------------------------
Balance at March 193,285 5,389 17,210 (160,789) 55,095
31, 2015
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Balance at January 267,418 5,417 15,404 (182,519) 105,720
1, 2016
-------------------------------------------------------------------------------
Net loss for the - - - (11,672) (11,672)
period
Other comprehensive - - (2,532) - (2,532)
income
-------------------------------------------------------------------------------
Total comprehensive - - (2,532) (11,672) (14,204)
income (loss)
Share based 12 - - - 492 492
compensation
Options and RSU 12 - 20 - - 20
exercised
-------------------------------------------------------------------------------
- 20 (2,532) (11,180) (13,692)
-------------------------------------------------------------------------------
Balance at March 267,418 5,437 12,872 (193,699) 92,028
31, 2015
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these condensed consolidated
interim financial statements
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the three month period ended
March 31,
(€ in thousands) Note 2016 2015
-------------------------------------------------------------------------------
Cash flow from operating activities
Net loss (11,672) (5,894)
Adjustments for:
Other non-cash transactions 13 480 301
Interest income (26) (1)
Interest expenses 146 151
Other net financial income (expenses) 1,965 119
Change in working capital:
Change in accounts receivables and (611) (3,333)
other receivables
Change in accounts payable and other 1,251 3,300
liabilities
Change in non-current prepayments 161 -
Change in other financial assets 13 -
Interest paid (27) (27)
-------------------------------------------------------------------------------
Net cash used in operating activities (8,320) (5,384)
-------------------------------------------------------------------------------
Cash flow from investing activities
Investments in financial assets at (12) -
fair value through profit and loss
Proceeds from sale of financial assets 6,352 3,996
at fair value through profit and loss
Investments in property, plant and - (51)
equipment
-------------------------------------------------------------------------------
Net cash (used in)/from investing 6,340 3,945
activities
-------------------------------------------------------------------------------
Cash flow from financing activities
Proceeds from option exercise and RSU 20 11
delivery
-------------------------------------------------------------------------------
Net cash from financing activities 20 11
-------------------------------------------------------------------------------
Net increase/(decrease) in cash and (1,960) (1,428)
cash equivalents
Effect of changes in exchange rates on (1,902) 291
cash and cash equivalents
Cash and cash equivalents at the 46,762 7,452
beginning of the period
-------------------------------------------------------------------------------
Cash and cash equivalents at the end 42,900 6,315
of the period
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these condensed consolidated
interim financial statements
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General Information
Biotie Therapies Oyj (Biotie or the Company) is a biopharmaceutical company
incorporated and domiciled in Finland, with its headquarters at Joukahaisenkatu
6, Turku, Finland, focused on products for neurodegenerative and psychiatric
disorders. Biotie operates primarily in Finland and in the United States.
Biotie's development has delivered Selincro (nalmefene) for alcohol dependence,
which received European marketing authorization in 2013 and is currently being
rolled out across Europe by partner Lundbeck. The current development products
include tozadenant for Parkinson's disease, which is in Phase 3 development, and
two additional compounds which are in Phase 2 development for cognitive
disorders including Parkinson's disease dementia and primary sclerosing
cholangitis, a rare fibrotic disease of the liver. Biotie's shares are listed on
NASDAQ Helsinki (BTH1V) and on Nasdaq Stock Market LLC (BITI). As used in these
condensed consolidated financial statements, unless the context indicates
otherwise, all references to "Biotie" or the "Company" or the "Group" refer to
Biotie Therapies Oyj and all its consolidated subsidiaries.
The unaudited condensed consolidated financial statements were approved for
issue by the Board of Directors on May 12, 2016.
2. Summary of Significant Accounting Policies
2.1 Basis of Preparation
These unaudited condensed consolidated financial statements for the three months
ended March 31, 2016 of the Company have been prepared in accordance with
International Accounting Standard IAS 34, "Interim Financial Reporting". Certain
information and disclosures normally included in consolidated financial
statements prepared in accordance with International Financial Reporting
Standards (IFRS) have been condensed or omitted. However, in the opinion of
management, these financial statements contain all adjustments necessary to
present a fair statement of results. All adjustments are deemed to be of a
normal, recurring nature. The results of operations for the interim periods are
not necessarily indicative of the results to be expected for the full year.
Accordingly, these condensed consolidated financial statements should be read in
conjunction with the annual consolidated financial statements for the year ended
December 31, 2015.
The preparation of financial statements in conformity with IFRS requires
management to make judgments, estimates and assumptions that affect the reported
amounts of assets and liabilities, and the disclosure of contingent assets and
liabilities at the end of the reporting period, as well as the reported amounts
of income and expenses during the reporting period. Although these estimates are
based on management's best knowledge of current events and actions, actual
results may ultimately differ from them. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are significant
to the unaudited condensed consolidated financial statements are disclosed in
note 2.11.
The notes to the condensed consolidated financial statements have been rounded
to thousand Euros, unless otherwise stated.
2.2 Changes in Accounting Policies and Disclosures
The accounting policies applied are consistent with those discussed in the
Company's annual consolidated financial statements.
a. New and amended IFRS standards and IFRIC interpretations not yet adopted by
the Company
The following standards have been issued, but are not effective until after
December 31, 2016, and are considered relevant for the Company, The Company is
currently assessing their potential impact on the accounting policies, financial
position and performance of the Company.
* IFRS 9, Financial instruments
* IFRS15, Revenue from Contracts with Customers
2.3 Consolidation
Subsidiaries are all entities over which the Company has control. The Company
controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are consolidated from the date
at which control is transferred to the Company and are de-consolidated from the
date that control ceases. The acquisition method of accounting is used to
account for subsidiaries acquired through a business combination.
Intra-group transactions, balances and unrealized gains and losses on
transactions between group companies are eliminated. Unrealized losses are also
eliminated, unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Company.
2.4 Segment Reporting
Biotie continues to operate in one reportable segment, which comprises the
development of pharmaceutical products. The Chief Executive Officer is
identified as the chief operating decision maker. The Chief Executive Officer
reviews the consolidated operating results regularly to make decisions about the
resources and to assess overall performance.
2.5 Seasonality of Operations
The Company's results have varied substantially, and are expected to continue to
vary, from quarter to quarter depending on the royalty streams and level of
development activities within the quarter. The Company, therefore, believes that
period to period comparisons should not be relied upon as indicative of future
financial results. The Company believes that its ordinary activities are not
linked to any particular seasonal factors.
2.6 Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and other
short-term highly liquid investments with original maturities of less than three
months.
2.7 Share capital
Shares are classified as equity. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds of the share issue.
When a Group company purchases Parent Company's shares (treasury shares), the
consideration paid, including any directly attributable incremental costs (net
of income taxes) is deducted from equity attributable to the Company's equity
holders until the shares are cancelled, reissued or disposed of. Where such
shares are subsequently sold or reissued, any consideration received net of any
directly attributable incremental transaction costs and the related income tax
effect is included in the equity attributable to the Company's equity holders.
In April and May 2015, the Company issued convertible notes and warrants in
exchange for cash in an arms' length transaction that had been approved by the
Company's shareholders. The convertible notes and warrants issued by the Company
have a fixed-to-fixed ratio and do not contain an obligation for a cash
redemption by the Company. Accordingly, both instruments met the equity
classification criteria at inception and the proceeds received, net of directly
attributable incremental costs, were recorded as share capital. In accordance
with the terms and conditions of the note agreements, all the convertible notes
automatically converted into the Company's shares at the date of the US Offering
on June 16, 2015. The warrants continue to be outstanding at March 31, 2016 and
upon exercise of a warrant, the subscription price to be paid in cash for each
warrant exercised will be recorded as share capital.
Under the Finnish Companies Act reserve for unrestricted equity includes the
part of a subscription price of a share that is not credited to share capital as
well as other equity inputs that are not to be credited to some other reserve.
Exercise prices of the share options are included in the reserve for
unrestricted equity.
2.8 Income taxes
Income tax expense consists of current and deferred taxes. The income tax
effects of items recognized in other comprehensive income or directly in equity
are similarly recognized in other comprehensive income or equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted
in the countries where the Company operates and generates taxable income. Taxes
on income in interim periods are accrued using tax rates that would be expected
to be applicable to total annual profit or loss.
Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.
Deferred income tax is recognized on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial
statements. Temporary differences arise primarily from in-process R&D intangible
assets, R&D credits and deferrals, depreciation on property, plant and equipment
and net operating loss tax carryforwards.
Deferred income tax assets are recognized only to the extent that it is probable
that future taxable profit will be available against which the temporary
differences can be utilized.
Deferred taxes are determined using a tax rate enacted, or substantially
enacted, as of the date of the balance sheet date in the respective countries.
However, deferred taxes are not recognized if they arise from the initial
recognition of goodwill, or in the initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit nor loss.
2.9 Earnings (loss) per share
Basic earnings (loss) per share is calculated by dividing the net income (loss)
attributable to shareholders by the weighted average number of ordinary shares
in issue during the period, excluding ordinary shares purchased by the Company
and held as treasury shares.
Diluted earnings (loss) per share is calculated by adjusting the weighted
average number of ordinary shares outstanding assuming the conversion of all
dilutive potential ordinary shares.
2.10 Provisions and Contingent Liabilities
Provisions are recognized when the Company has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate of
the amount can be made. Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation using a pre-tax
rate that reflects the current market assessments of the time value of money and
the risks specific to the obligation. The increase in a provision due to passage
of time is recognized in interest expenses.
2.11 Critical Accounting Estimates and Judgments
The preparation of condensed consolidated financial statements requires
management to make judgments, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results
may differ from these estimates.
In preparing these condensed consolidated financial statements, the significant
judgments made by management in applying the Company's accounting policies and
the key sources of estimation uncertainty were the same as those that applied to
the Company's annual consolidated financial statements. The condensed
consolidated financial statements do not include all disclosures for critical
accounting estimates and judgment that are required for the annual consolidated
financial statements and should be read in conjunction with the Company's annual
consolidated financial statements for the year ended December 31, 2015.
3. Revenue
For the three month period ended
March 31,
(€ in thousands) 2016 2015
-------------------------------------------------------------------------------
Royalties from Lundbeck license 762 658
agreement
Phase 3 development funding from UCB - 213
-------------------------------------------------------------------------------
Total 762 871
-------------------------------------------------------------------------------
4. Income Tax
No income tax charge or benefit has been recognized in the three month period
ended March 31, 2016, or the corresponding period in 2015. Management's judgment
is that sufficient evidence is not currently available that future taxable
profits will be available against which the unused tax losses or unused tax
credits can be utilized by the fiscal entities and, therefore, a deferred tax
asset has not been recognized.
5. Loss Per Share
(a) Basic loss per share
Basic loss per share is calculated by dividing the net loss attributable to
shareholders of the parent by the weighted average number of ordinary shares in
issue during the period, excluding ordinary shares purchased by the Company and
held as treasury shares.
For the three month period ended March
31,
2016 2015
-------------------------------------------------------------------------------
Net loss attributable to equity
holders of the parent (€ in (11,672) (5,894)
thousands)
Weighted average number of 980,775 452,273
outstanding shares (in thousands)
-------------------------------------------------------------------------------
Basic loss per share (€ per share) (0.01) (0.01)
-------------------------------------------------------------------------------
(b) Diluted loss per share
Diluted loss per share is calculated by adjusting the weighted average number of
ordinary shares outstanding assuming conversion of all dilutive potential
ordinary shares. The Company has four kinds of potentially dilutive instruments
comprising stock options, restricted share units (RSU), a convertible capital
loan and warrants over its shares. For the three month periods ended March
31, 2016 and March 31, 2015, because there was a loss for the period the
potential dilutive shares have an anti-dilutive effect (i.e. decrease the loss
per share) and are, therefore, excluded from the calculation of diluted loss per
share. Consequently, the dilutive loss per share is the same as the basic loss
per share shown above.
6. Intangible Assets and Goodwill
Other Intangible
(€ in In-process Production intangible assets
thousands) R&D licenses Software assets total Goodwill
-------------------------------------------------------------------------------
Book value
January
1, 2016 52,119 416 37 - 52,572 6,462
Additions - - - -
Amortization - (10) (8) - (18) -
Translation
differences (1,537) - (1,537) (201)
-------------------------------------------------------------------------------
Book value
March 31, 2016 50,582 406 29 - 51,017 6,261
-------------------------------------------------------------------------------
At March
31, 2016
Acquisition
cost 98,297 762 338 10 99,407 5,549
Accumulated
amortization
and impairment (55,368) (356) (309) (10) (56,043)
Translation
differences 7,653 - 7,653 712
-------------------------------------------------------------------------------
Book value
March 31, 2016 50,582 406 29 - 51,017 6,261
-------------------------------------------------------------------------------
The amortization charge was €18 thousand for the three month period ended March
31, 2016 (€47 thousand for the three month period ended March 31, 2015).
In-process R&D assets represents the fair value assigned to development projects
that the Company acquired through business combinations, which at the time of
the acquisition had not led to marketing approvals that are required for
commercialization. At March 31, 2016 in-process R&D assets only comprised the
tozadenant (SYN115) and SYN120 in-process R&D assets. Amounts capitalized as in-
process R&D assets are not amortized until marketing approval has been received
for the relevant regulatory authorities. In-process R&D assets are tested for
impairment annually, at December 31, and whenever there is an indication that
the asset may be impaired; there have been no such indications during the three
months ended March 31, 2016.
For goodwill, the Company assesses the aggregate fair value of the business as a
whole, as there is only one cash generating unit, on an annual basis at December
31 and whenever there is an indication that goodwill may be impaired; there have
been no such indications during the three months ended March 31, 2016.
7. Property Plant & Equipment
(€ in thousands) Machinery and equipment
---------------------------------------------------
Book value January 1, 2016 564
Depreciation (52)
Translation differences (14)
---------------------------------------------------
Book value March 31, 2016 498
---------------------------------------------------
At March 31, 2016
Acquisition cost 4,964
Accumulated depreciation (4,474)
Translation differences 8
---------------------------------------------------
Book value March 31, 2016 498
---------------------------------------------------
The depreciation charge was €52 thousand for the three month period ended March
31, 2016 (€36 thousand for the three month period ended March 31, 2015).
8. Non-current pre-payments
The Company has made advances to the CRO (Contract Research Organization) in
connection with the tozadenant Phase 3 trial in Parkinson's disease. These
advances cover various activities that are expected to take place near the
completion of the project. The CRO will hold such advances in escrow until the
activities are performed. The Company classifies these deposits as non-current
assets as they are not expected to be utilized within the next 12 month period.
9. Financial Assets Held at Fair Value through Profit and Loss and
Non-Current Financial Liabilities
As at
(€ in thousands) March 31, 2016 (unaudited) December 31, 2015
-------------------------------------------------------------------------------
Assets
Financial assets held at fair
value through profit or loss 25,113 32,282
Liabilities
Non-current financial liabilities 20,690 20,690
Financial assets held at fair value through profit or loss, consisting mainly of
investments to money market funds, are measured at their fair value based on
quoted bid prices at the reporting date. The fair values are based on fund
manager reports and are classified within Level 1or Level 2 in the fair value
hierarchy. For Level 1, the fair value measurement is directly obtained from an
active market. For Level 2, the fair value measurement is based on observable
quoted market information, although it is not directly obtained from an active
market (Level 1). According to the Company's investment policy, money market
funds held in Europe must have a Morning Star rating of three stars or higher.
Money market funds in the U.S. must be rated AAA by Moody's or AAA by Standard
and Poor's.
Non-current financial liabilities consist of non-convertible capital loans from
Tekes, long-term R&D loans from Tekes and a convertible capital loan which are
carried at cost. For fair value disclosure purposes only, the valuation
technique that would be used to measure the non-current financial liabilities
would rely on unobservable market data and therefore the fair value measures of
the loans would be classified as Level 3 in the fair value hierarchy. The
Company has determined that it would not be reasonable to present fair values
for the loans, as the Group only has access to Tekes loans and a convertible
loan, i.e. similar government grant loans the Company already has with largely
identical terms to the current loans.
10. Financial Risk Management and Financial Instruments
The operations of the Company expose it to financial risks. The main risk that
the Company is exposed to is liquidity risk, with capital management being
another important area given the Company's financing structure. The Company's
risk management principles focus on the unpredictability of the financial
markets and aims at minimizing any undesired impacts on the Group's financial
result. The Board of Directors defines the general risk management principles
and approves operational guidelines concerning specific areas including but not
limited to liquidity risk, foreign exchange risk, interest rate risk, credit
risk, the use of derivatives and investment of the Company's liquid assets.
During the periods presented, the Company or its subsidiaries have not entered
into any derivative contracts.
The condensed consolidated financial statements do not include all financial
risk management information and disclosures required in the annual consolidated
financial statements and should be read in conjunction with the Company's annual
consolidated financial statements as at December 31, 2015. There have been no
changes in the financial management team that is responsible for financial risk
management or in the Company's financial risk management policies since December
31, 2015.
The Company has low risk securities (money market funds) and bank accounts which
are as follows:
As at
(€ in thousands) March 31, 2016 December 31, 2015
----------------------------------------------------
Money market funds 25,113 32,282
Bank accounts 42,900 46,762
----------------------------------------------------
Total 68,013 79,044
----------------------------------------------------
As at March 31, 2016, the contractual maturities of loans and interest are as
follows:
(€ in thousands) 2016 2017 2018 2019 - thereafter Total
-------------------------------------------------------------------------------
Capital loans
Repayment of loans - - - 18,000 18,000
Interest expenses - - - 10,096 10,096
R&D loans
Repayment of loans - 538 538 1,614 2,690
Interest expenses - 22 16 16 54
-------------------------------------------------------------------------------
Total - 560 554 29,726 30,840
-------------------------------------------------------------------------------
As at March 31, 2016, the Company also had accounts payables of €1,426
thousand and other current liabilities of €4,815 thousand due within one year.
11. Share Capital
Movements in the Company's shares outstanding, treasury shares and total
registered shares during the three months ended March 31, 2016 are shown in the
table below.
Number of shares Outstanding shares Treasury shares Total registered shares
-------------------------------------------------------------------------------
As at January 978,253,983 108,686,288 1,086,940,271
1, 2016
Share options and 2,667,812 - 2,667,812
RSU exercised
-------------------------------------------------------------------------------
As at March 980,921,795 108,686,288 1,089,608,083
31, 2016
-------------------------------------------------------------------------------
The Company's total authorized number of shares is 1,089,608,083. All issued
shares are fully paid. The shares have no par value. On March 31, 2016 the total
number of shares held in treasury represented approximately 9.97% (December
31, 2015: 9.99%) of the total registered shares. Treasury shares have been
issued without consideration for the purpose of the Company's share-based
compensation plans.
The total number of stock options and restricted stock units outstanding as at
March 31, 2016 was 49,999,989, of which 1,949,116, are vested options under the
Swiss plan and for which the Company holds an equivalent amount of treasury
shares which it will use to settle these if they are exercised.
At March 31, 2016, the Company also had 220,400,001 warrants that were
outstanding, following their issuance on May 28, 2015. The warrants entitle the
holders to one share for each warrant at a subscription price of €0.17 per share
and they may only be subscribed during a five year period beginning on the date
five months after their issuance. The Company has authorization from the Annual
General Meeting of the shareholders on May 26, 2015 to issue 220,400,001 shares
to settle the warrants should they be exercised and on October 7, 2015, after
the reporting date, issued 106,088,336 shares to itself using this authorization
and will continue to hold them as treasury shares until such time as the
warrants are exercised.
12. Share Based Payments
The condensed consolidated financial statements do not include all disclosures
for share based payments that are required in the annual consolidated financial
statements and should be read in conjunction with the Company's annual
consolidated financial statements for the year ended December 31, 2015.
(a) Stock Option Plan 2011 and Equity Incentive Plan 2011
The Stock Option Plan 2011, primarily for European employees, and the Equity
Incentive Plan 2011, primarily for US employees, were approved at the Company's
2011 general shareholders' meeting as part of the Company's incentive scheme
determined by the Board of Directors. These plans contain both a service
requirement condition at vesting and individual specified non-market performance
targets during the year of grant.
i. Stock Option Plan 2011
The fair value of the options was determined at the grant date by using the
Black-Scholes option valuation model and expensed over the vesting period. The
maximum number of stock options that could be awarded under the plan was
7,401,000, in three equal tranches designated as 2011A, 2011B and 2011C.
There were no options outstanding for the 2011A or 2011B tranches as at December
31, 2015. The changes in the number of options in the plan during the three
months ended March 31, 2016 is shown in the table below.
Number of options 2011C
-------------------------------------------
Outstanding at January 1, 2016 1,957,500
Exercised (1,522,500)
-------------------------------------------
Outstanding at March 31, 2016 435,000
-------------------------------------------
All options were fair valued at grant date and recognized as an expense, over
the vesting period, to personnel expenses included in research and development
costs and general and administrative costs based on the employee's function over
the vesting period. The expense recognized during the three months ended March
31, 2016 was €0 thousand (the expense for three months ended March 31, 2015 was
€(7) thousand). The subscription price for all options is €0.01.
ii. Equity Incentive Plan 2011
The Equity Incentive Plan 2011 includes three consecutive discretionary periods,
calendar years 2011 (2011A), 2012 (2011B) and 2013 (2011C) in which the
restricted share units may be granted. Each discretionary period is followed by
an approximately two year vesting period, ending on January 5, 2014, January
5, 2015 and January 5, 2016, respectively after which the Company's shares will
be delivered to employees on the basis of the granted share units. A maximum of
4,599,000 shares may be delivered under the plan, but there is no maximum that
can be issued in any one year. As at December 31, 2015, all shares had been
delivered under the 2011A and 2011B tranches.
The changes in the number of share units in the plan during the three months
ended March 31, 2016 is shown in the table below.
Number of share units 2011C
-----------------------------------------
Outstanding at January 1, 2016 640,000
Exercised (615,000)
-----------------------------------------
Outstanding at March 31, 2016 25,000
-----------------------------------------
The fair value of the restricted share units was determined as the closing share
price for Biotie share on the grant date. The expense recognized during the
three months ended March 31, 2016 was €0 thousand (the expense for the three
months ended March 31, 2015 was €30 thousand). The exercise price for all share
units is €0.
(b) Swiss option plan
The Company's Swiss subsidiary, Biotie Therapies AG, also has a stock option
plan approved in 2008. Vesting of the options is related to continued service to
the Company. The maximum contractual term of each option is ten years. The plan
has been closed to new grants from February 1, 2011. An aggregate maximum of
14,912,155 shares in Biotie Therapies Corp. has been subscribed to under the
plan and such shares have been issued to Biotie Therapies AG to be further
conveyed to the option holders when they potentially exercise their option
rights in accordance with the terms and conditions of the option rights. The
last day for the share subscriptions based on the option rights in the Swiss
option plan is December 7, 2020.
The changes in the number of options in the plan during the three months ended
March 31, 2016 is shown in the table below.
Number of options Options Weighted average exercise price
-------------------------------------------------------------------------
Outstanding at January 1, 2016 2,027,628 €0.26
Forfeitures (78,512)
-------------------------------------------------------------------------
Outstanding at March 31, 2016 1,949,116 €0.26
-------------------------------------------------------------------------
The expense recognized during the three months ended March 31, 2016 was nil
thousand (three months ended March 31, 2015 was €nil thousand).
(c) Stock Option Plan 2014 and Equity Incentive Plan 2014
The Stock Option Plan 2014, primarily for European employees, and the Equity
Incentive Plan 2014, primarily for US employees, were approved at the Company's
2014 general shareholders' meeting as part of the Company's incentive scheme
determined by the Board of Directors. These plans contain both a service
requirement condition at vesting for all awards and for the management awards,
designated 2014M awards, there is an additional specified market performance
requirement that determines the number of awards earned.
i. Stock Option Plan 2014
The fair value of the options was determined at the grant date by using the
Black-Scholes option valuation model and expensed over the vesting period. The
maximum number of options that could be awarded under the plan is 10,337,500, of
which 4,320,000 are 2014M awards that are subject to an additional specified
market performance requirement at vesting. The 2014M awards include an
additional incentive (a market condition) for the senior management team to have
a portion of their potential awards over the three years ending December
31, 2016 to be based solely on an increase in the share price of the Company for
the vesting period. The 2014M awards will not vest unless the Company's share
price growth during that three year period is greater than 35%; however, if the
share price growth is greater than 35%, there will be an increasing return up to
a maximum of three times the initial awards for a share price growth of at least
100% over the three year vesting period. The 2014M market condition has been
incorporated into the Black-Scholes model, by determining the probability of the
share price growth increase over the three year period based on historical share
price movements.
The changes in the number of options, or senior management option units in the
case of the 2014M tranche, in the plan during the three months ended March
31, 2016 is shown in the table below.
Number of options /option
units 2014A 2014B 2014C 2014D 2014M
-------------------------------------------------------------------------------
Outstanding at January 1, 2016 383,750 1.151,250 389,250 1,167,750 1,440,000
Exercised (251,875) - - - -
-------------------------------------------------------------------------------
Outstanding at March 31, 2016 131,875 1,151,250 389,250 1,167,750 1,440,000
-------------------------------------------------------------------------------
The expense recognized during the three months ended March 31, 2016 was €72
thousand (for the three months ended March 31, 2015: €56 thousand).
ii. Equity Incentive Plan 2014
The Equity Incentive Plan 2014 includes three consecutive discretionary periods,
calendar years 2014, 2015 and 2016 in which the restricted share units, or
senior management units, may be granted. Each discretionary period is followed
by a subscription period of approximately two years (for 2014A, 2014C and 2014E
awards) or approximately three years (for 2014B, 2014D, 2014F and 2014M awards),
ending on January 5, 2016, January 5, 2017, January 5, 2018 or January 5, 2019,
after which the Company's shares will be delivered to employees on the basis of
the granted share units. A maximum of 14,002,500 shares may be delivered under
the plan, of which 2,520,000 are 2014M awards that are subject to an additional
specified market performance requirement at vesting, which is the same as that
described in the Stock Option Plan 2014 above. There is no maximum number of
share units that can be awarded in any one year, but all the 2014M awards must
be awarded in 2014.
The changes in the number of share units, or senior management share units in
the case of the 2014M tranche, in the plan during the twelve months ended March
31, 2016 is shown in the table below.
Number of units 2014A 2014B 2014C 2014D 2014M
-----------------------------------------------------------------------------
Outstanding at January 1, 2016 370,312 1,099,688 500,938 1,502,812 840,000
Forfeitures - (28,125) (8,750) (26,250) -
Exercised (278,437) - - - -
-----------------------------------------------------------------------------
Outstanding at March 31, 2016 91,875 1,071,563 492,188 1,476,562 840,000
-----------------------------------------------------------------------------
The effect on the Company's earnings for the three months ended March 31, 2016
was €74 thousand (for the three months ended March 31, 2015: €95 thousand).
(d) Stock Option Plan 2016
The Stock Option Plan 2016 was approved at the Company's 2015 general
shareholders' meeting as part of the Company's incentive scheme determined by
the Board of Directors. The plan contains a service requirement condition at
vesting for all awards
The fair value of the options was determined at the grant date by using the
Black-Scholes option valuation model and expensed over the vesting period. The
maximum number of options that could be awarded under the plan is 80,000,000.
The changes in the number of options in the plan during the three months ended
March 31, 2016 is shown in the table below.
Number of options /option units 2016A
-------------------------------------------
Outstanding at January 1, 2016 -
Granted 34,934,440
Forfeited (155,880)
-------------------------------------------
Outstanding at March 31, 2015 34,778,560
-------------------------------------------
All options were fair valued at grant date and will be recognized to personnel
expenses, as research and development expenses or general and administrative
expenses, over the vesting periods. The most significant inputs used to estimate
the fair value of the stock options granted during the three months ended March
31, 2016 are as follows:
Option plan 2016A
---------------------------------------------------
Share price at grant date €0.16
Subscription price €0.16
Volatility* 53%
Maturity, years 5-8
Interest rate 0.06%
Expected dividends -
Valuation model Black-Scholes
Option fair value, € 0.07-0.09
Effect on earnings, € in thousands 346
* Expected volatility was determined by calculating the historical volatility of
the Company's share using monthly observations over corresponding maturity.
The expense recognized during the three months ended March 31, 2016 was €346
thousand (for the three months ended March 31, 2015: €nil thousand).
13. Non-cash Transactions to Cash Flow from Operating Activities
For the three month period ended
March 31,
(€ in thousands) 2016 2015
-------------------------------------------------------------------------------
Depreciation and amortization 71 73
Share-based compensation 492 174
Other adjustments (83) 54
-------------------------------------------------------------------------------
Non-cash adjustments to cash flow from 480 301
operating activities
-------------------------------------------------------------------------------
14. Commitments and Contingencies
Operating lease commitments
As at
March 31,
(€ in thousands) 2016 December 31, 2015
--------------------------------------------------------
Due within a year 781 866
Due in 1-5 years 1,174 1,331
Due later than 5 years - -
--------------------------------------------------------
Total 1,955 2,197
--------------------------------------------------------
Operating lease commitments comprise rent commitments for leasehold properties
and lease commitments for motor vehicles, machines and equipment with leases of
3 to 5 years. The Company's operating leases are non-cancellable and they do not
include redemption or extension options.
On March 31, 2016, Biotie had outstanding contractual payment obligations
(contractual commitments), primarily for contract research work services related
to ongoing clinical development programs, totaling €751 thousand (December
31, 2015: €529 thousand).
15. Transactions with Related Parties
During the periods ended March 31, 2016 and 2015, the Company's management team
was paid regular salaries and contributions to post-employment benefit schemes.
Additionally, the members of the Board of Directors were paid regular Board and
committee fees. No loans, advances or guarantees were made to the management
team or Board of Directors as of March 31, 2016 or 2015.
The unaudited condensed consolidated financial statements do not include all
disclosures for related party transactions that are required in the annual
consolidated financial statements and should be read in conjunction with the
Company's annual consolidated financial statements for the year ended December
31, 2015.
16. Events After the Reporting Date
On April 13, 2016 Acorda announced the final results of the Tender Offer. As all
the conditions to complete the Tender Offer had been satisfied it was confirmed
that Acorda would complete the Tender Offer in accordance with its terms and
conditions. The offer consideration was paid to the holders of Equity Interests
who validly accepted the Tender Offer by April 8, 2016 in accordance with the
terms and conditions of the Tender Offer, on or about April 18, 2016.
Acorda also confirmed on April 13, 2016 it would commence a subsequent offer
period in accordance with the terms and conditions of the Tender Offer (the
"Subsequent Offer Period"). The Subsequent Offer Period commenced on April
14, 2016 and expired on April 28, 2016. The offer consideration was paid to the
holders of Equity Interests who validly accepted the Tender Offer by April
28, 2016 in accordance with the terms and conditions of the Tender Offer, on or
about May 4, 2016.
694,904,307 Shares, 3,178,662 ADSs, 435,000 2011 Option Rights, 4,280,125 2014
Option Rights, 12,401,120 2016 Option Rights, 1,949,116 Swiss Option Rights,
25,000 2011 Share Rights, 3,972,188 2014 Share Rights and 220,400,001 Warrants
were tendered in the Tender Offer and Subsequent Offer Period, representing
approximately 96.77 percent of all the shares and votes in Biotie on a fully-
diluted basis as defined in the terms and conditions of the Tender Offer.
On April 20, 2016 Acorda announced it would commence a compulsory redemption
proceeding in respect of the remaining Biotie shares under the Finnish Limited
Liability Companies Act in respect of the Biotie shares held by the minority
shareholders has arisen. According to Acorda, it will initiate arbitral
proceedings as provided in the Finnish Limited Liability Companies Act to
effectuate the redemption of the Biotie shares held by minority shareholders.
As a result of the completion of the Tender Offer, Biotie has incurred directly
related costs of approximately €9 million since March 31, 2016.
The Annual General Meeting of Biotie Therapies Corp. was held on May 3, 2016
and resolved the following items:
* No dividend for the financial year 2015 will be paid and that the losses of
the parent company for the financial year amounting to EUR 5,2 million
(FAS), will be carried forward to shareholders' equity.
* Discharge from liability the members of the Board of Directors and the
President and CEO concerning the financial year 1 January - 31 December
2015.
* The number of the members of the Board of Directors was resolved to be
three. The following members were elected as the members of the Board of
Directors: Ron Cohen, Michael Rogers and Jane Wasman.
* It was resolved that no remuneration is payable to board members. Reasonable
travel and other expenses related to Board work shall be covered by the
company.
* The number of auditors was resolved to be one, being Ernst & Young Oy, a
firm of Authorised Public Accountants, Mr. Erkka Talvinko, Authorised Public
Accountant, acting as the auditor in charge. It was further resolved that
the auditors' fees shall be paid pursuant to a reasonable invoice.
* At the organization meeting of the new Board of Directors, which convened
immediately after the Annual General Meeting, Ron Cohen was elected as the
Chairman of the Board of Directors and the Board resolved not to set up any
Board committees. Based on the evaluation of independence, the Board of
Directors concluded that all members of the Board of Directors are
independent of the company, but dependent of its significant shareholder.
The stock exchange release regarding the resolutions of the Annual General
meeting of Biotie was published on 3 May 2016.
KEY FIGURES
The formulas for the calculation of the key figures are presented in the notes
of the consolidated financial statements for the year ended December 31, 2015
For the three months ended March For the year ended
31, December 31,
(€ in thousands, unless 2016 2015 2015
stated)
-------------------------------------------------------------------------------
Business development
Revenues 762 871 3,736
Personnel on average 39 39 38
Personnel at end of 39 40 38
period
Research and (5,620) (4,766) (25,864)
development costs
Capital expenditure - 51 108
Profitability
Operating (loss) (9,587) (5,625) (29,296)
as percentage of (1,257.7) (645.8) (784.2)
revenues, %
(Loss) before taxes (11,672) (5,894) (28,323)
as percentage of (1,531.3) (676.7) (758.1)
revenues, %
Financial positon
Liquid assets 68,013 27,828 79,044
Shareholders' equity 92,028 55,095 105,720
Balance sheet total 131,285 94,575 143,702
Financial ratios
Return on equity, % (47.2) (43.8) (35.8)
Return on capital (31.9) (30.8) (28.2)
employed, %
Equity ratio, % 71.2 59.5 74.6
Gearing, % (51.4) (13.0) (55.2)
Per share data
(Loss) per share (EPS) (0.01) (0.01) (0.04)
basic, €
(Loss) per share (EPS) (0.01) (0.01) (0.04)
diluted, €
Shareholders' equity 0.08 0.12 0.12
per share, €
Dividend per share, € - - -
Pay-out ratio, % - - -
Effective dividend - - -
yield, %
P/E-ratio - - -
Share price
On NASDAQ-OMX market in
Helsinki
Lowest share price, € 0.15 0.18 0.14
Highest share price, € 0.29 0.23 0.26
Average share price, € 0.28 0.20 0.19
End of period share 0.29 0.18 0.16
price, €
Market capitalization, 312.7 83.0 172.8
€ million
On NASDAQ market in the
United States*
Lowest ADS price, $ 13.03 n/a 12.43
Highest ADS price, $ 26.66 n/a 25.39
Average ADS price, $ 23.99 n/a 17.81
End of period ADS 26.39 n/a 14.35
price, $
Market capitalization, 359.4 n/a 195.0
$ million
Trade of shares
On NASDAQ-OMX market in
Helsinki
Number of shares traded 198,008,970 38,769,636 201,081,835
as percentage of all 18.2 8.5 18.5
shares, %
On NASDAQ market in the
United States*
Number of ADS traded 3,551,596 n/a 7,421,501
as percentage of all 26.1 n/a 54.6
shares (after
conversion factor), %
Number of shares during 1,089,461,500 455,968,174 766,843,179
the period
Number of shares at end 1,089,608,083 455,968,174 1,086,940,271
of the period
Number of shares during 1,311,506,230 455,968,174 888,925,834
the period, fully
diluted
Number of shares at end 1,311,652,813 455,968,174 1,308,985,001
of the period fully
diluted
* All trading information in relation to shares listed on the NASDAQ market in
the United States relates to the period since June 11, 2015, which was the first
day of trading on that market
Biotie Therapies Corp.
Joukahaisenkatu 6
FI-20520 Turku
Finland
Tel. +358 2 274 89 00
Fax +358 2 274 89 10
www.biotie.com
For further information please contact:
David Cook
Chief Financial Officer
email: david.cook@biotie.com
Tel: +358 2 2748 900
Virve Nurmi
Senior Manager, Investor Relations
email: virve.nurmi@biotie.com
Tel: +358 2 2748 911
The Trout Group LLC
Lauren Williams
Managing Director
email: lwilliams@troutgroup.com
Tel: +44 203 780 4972
Jennifer Porcelli
Vice President
email: jporcelli@troutgroup.com
Tel: +1 646 378 2962
[HUG#2011963]
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