Bioniche Reports Fiscal 2010 Second Quarter Results
- consolidated revenues in the quarter 62% higher than the previous year due to receipt of licensing milestone revenue -
(all figures are in Canadian dollars unless otherwise noted)
BELLEVILLE, ON, Feb. 10 /PRNewswire-FirstCall/ - Bioniche Life Sciences Inc. (TSX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for its Fiscal 2010 second quarter, ended December 31, 2009.
"This was a very positive quarter for the Company, the first one in its history to show a profit," stated Graeme McRae, Chairman, President & CEO of Bioniche Life Sciences Inc. "The milestone revenue associated with the July, 2009 licensing agreement with Endo Pharmaceuticals Inc. ("Endo") for exclusive rights to develop and market Urocidin(TM) in North America has enabled this situation. We continue to work diligently with Endo to complete the development of Urocidin(TM) and anticipate future positive financial results at such time as the product is successfully commercialized."
Urocidin(TM) is a patented intravesical formulation of Mycobacterial Cell Wall-DNA Complex (MCC) developed by Bioniche for the treatment of non-muscle-invasive bladder cancer. A U.S. Food and Drug Administration (FDA) fast tracked Phase III registration study of the product for the treatment-refractory indication is currently underway and is expected to report results later this year.
Fiscal 2010 Q2 Financial Results Highlights
Consolidated revenues for the quarter totaled $13.8 million, an increase of $5.3 million, or 62%, over the same period in Fiscal 2009. This positive result is attributed to the receipt of the first milestone payment to the Company from Endo related to an achievement under the above-mentioned licensing agreement. The incoming $6.4 million milestone payment was somewhat offset by decreased sales of Animal Health products in the quarter as compared to last year. The sales decrease relates to sales promotions in the last quarter of Fiscal 2009, recessionary conditions in all markets and the effect of foreign exchange.
Gross profit on product sales totaled $3.7 million in the quarter, as compared to $5.1 million in the same quarter last year. Gross profit as a percentage of product sales totaled 53% this quarter, compared to 59.5% in the second quarter of Fiscal 2009.
For the quarter ended December 31, 2009, expenses before research and development totaled $6.4 million, as compared to $6.8 million in the same quarter last year. This decrease can be attributed to lower sales levels translating to lower cost of sales, and to reductions in sales and marketing expenses due to personnel changes. Management expects sales and marketing costs to increase over the remainder of Fiscal 2010 to sustain and grow the business.
Gross research and development (R&D) expenses in this quarter totaled $4.8 million, compared to $3.2 million for the same period in Fiscal 2009. This increase of $1.6 million, or 49%, relates to the ongoing Phase III clinical program for the Company's Urocidin(TM) bladder cancer therapy, as well as an increased focus on the development of Animal Health reproductive products and vaccines.
The basic and fully-diluted net gain per share for the second quarter of Fiscal 2010 was $0.04, compared to a loss per share of ($0.04) for the corresponding period in Fiscal 2009. Total common shares outstanding at December 31, 2009 were 72,120,814, as compared to 71,160,544 for the corresponding period in Fiscal 2009.
Earnings before interest, taxes, depreciation, amortization and foreign exchange (before research and development) during the second quarter of Fiscal 2010 were $7.4 million, as compared to $1.8 million for the same period in Fiscal 2009, a 321% increase. This significant increase relates to the intake of licensing milestone revenue in the quarter.
At December 31, 2009, the Company's net working capital totaled $19.4 million including $14.5 million in cash, excluding the current portion of non-refundable deferred licensing revenue, as compared to negative working capital of $0.5 million at June 30, 2009.
Long-term liabilities at December 31, 2009 totaled $10.6 million, excluding non-refundable deferred licensing revenue of $20.1 million, which compares to $8.2 million reported at June 30, 2009. The increase reflects the long-term portion of the required repayment of government assistance to the Industrial Technologies Office (ITO - formerly TPC) of $3.1 million, less repayments of capital leases and long-term debt. The up-front payment related to the licensing agreement with Endo is reflected as non-refundable deferred licensing revenue, the current portion being $1.5 million and long-term portion - $20.1 million. The total revenue received was $22.3 million, which will be brought into income over the next 15 years.
About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a research-based, technology-driven Canadian biopharmaceutical company focused on the discovery, development, manufacturing, and marketing of proprietary products for human and animal health markets worldwide. The fully-integrated company employs approximately 190 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company's primary goal is to develop proprietary cancer therapies supported by revenues from marketed products in human and animal health. Bioniche has been named one of the Top 50 Best Small and Medium-Sized Employers in Canada for 2009. For more information, please visit www.Bioniche.com or www.sedar.com.
Except for historical information, this news release may contain forward-looking statements that reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, which may cause, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process, and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.
Bioniche Life Sciences Inc.
Amalgamated under the laws of Ontario
INTERIM CONSOLIDATED BALANCE SHEETS
As at As at
December 31, June 30,
2009 2009
(thousands of Canadian dollars) $ $
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ASSETS
Current
Cash and cash equivalents 14,350 5,950
Accounts receivable 5,038 3,720
Inventories 6,563 5,408
Prepaid expenses and deposits 1,918 569
Income and other taxes recoverable 6 -
Restricted cash 190 1,227
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28,065 16,874
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Long-term
Property, plant and equipment 10,098 9,494
Intangible assets 6,361 6,792
Goodwill 456 456
Long-term accounts receivable 1,089 1,025
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46,069 34,641
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Revolving credit facility - 4,448
Accounts payable and accrued liabilities 7,087 11,607
Income and other taxes payable - 321
Deferred government assistance 48 342
Current portion of long-term debt and
obligations under capital leases 611 635
Current portion of repayable government
assistance 926 -
Current portion of non-refundable deferred
licensing revenue 1,486 -
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10,158 17,353
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Long-term
Long-term debt 1,016 1,149
Obligations under capital leases 1,169 1,225
Repayable government assistance 5,646 2,476
Deferred government incentives 2,729 3,335
Non-refundable deferred licensing revenue 20,096 -
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40,814 25,538
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Shareholders' equity
Share capital 96,025 95,855
Other paid-in capital 8,649 8,540
Deficit (99,419) (95,292)
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5,255 9,103
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46,069 34,641
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Bioniche Life Sciences Inc.
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS), COMPREHENSIVE
INCOME (LOSS), AND DEFICIT
For the three and six months ended December 31
Current Last Year Current Last
(thousands of Canadian Quarter Quarter Year to Date Year to Date
dollar, except share 2009 2008 2009 2008
and per share amounts) $ $ $ $
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REVENUE,
Sales 7,029 8,551 12,935 16,595
Gain on sale of
intangible assets - - 883 -
Licensing 6,757 - 7,090 -
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13,786 8,551 20,908 16,595
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EXPENSES
Cost of sales
(excluding
amortization) 3,294 3,463 6,065 7,213
Administration 1,646 1,579 3,431 3,098
Marketing and selling 1,469 1,755 2,950 3,425
Financial expenses 164 760 352 1,227
Amortization of
property, plant and
equipment 260 338 567 676
Amortization and
writedown of
intangible assets 189 194 431 408
Foreign exchange loss
(gain) 144 (30) 264 37
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7,166 8,059 14,060 16,084
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Income before research
and development
expenses and other
items 6,620 492 6,848 511
Research and
development expenses,
gross 4,754 3,185 8,154 7,030
Repayable government
assistance - - 3,884 -
Less: government
incentives, net (790) (490) (1,193) (1,006)
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Income (loss) before
income taxes 2,656 (2,203) (3,997) (5,513)
Provision for income
taxes - 162 130 177
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Net income (loss) and
comprehensive income
(loss) for the period 2,656 (2,365) (4,127) (5,690)
Transition adjustment
due to change in
accounting policy - - - (39)
Deficit, beginning of
period (102,075) (88,116) (95,292) (84,752)
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Deficit, end of period (99,419) (90,481) (99,419) (90,481)
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Basic and diluted net
income (loss) per
share 0.04 (0.04) (0.06) (0.08)
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Weighted-average number
of common shares
outstanding 72,008,694 71,018,609 71,941,789 69,106,748
Weighted-average
fully-diluted number
of common shares 72,108,797 71,018,609 72,041,922 69,106,748
Bioniche Life Sciences Inc.
INTERIM CONSOLIDATED STATEMENTS
OF CASH FLOWS
For the three and six months ended December 31
Current Last Year Current Last
Quarter Quarter Year to Date Year to Date
(thousands of Canadian 2009 2008 2009 2008
dollars) $ $ $ $
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OPERATING ACTIVITIES
Net income (loss) for
the period 2,658 (2,365) (4,128) (5,690)
Add (deduct) non-cash
items:
Amortization 449 532 946 1,084
Unrealized foreign
exchange loss (gain) (1) 460 (25) 367
Change in unrealized
loss on foreign
currency embedded
derivatives - - - 60
Accreted interest on
discounted
receivables and
interest-free loans
and amortization of
financial expenses 103 597 211 947
Stock-based
compensation 49 63 109 125
Employee share
ownership plan 137 163 137 340
Government assistance
obligation - - 3,884 -
Amortization of
deferred government
incentive (667) - (844) -
Licensing revenue (371) - (704) -
Write-off of intangible
assets - - 52 -
Gain on sale of
intangible assets - - (883) -
Deemed government
assistance (15) - (74) -
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2,342 (550) (1,319) (2,767)
Decrease in restricted
cash 911 - 1,037 -
Net change in non-cash
working capital
balances (1,034) 764 (6,028) 196
Net change in deferred
licensing revenue - 22,286 -
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Cash provided by (used
in) operating
activities 2,219 214 15,976 (2,571)
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INVESTING ACTIVITIES
Government incentives
received on account of
property, plant and
equipment 51 53 51 53
Proceeds on sale of
intangible assets - - 606 -
Proceeds on disposal of
property, plant and
equipment 6 - 6 -
Purchases of property,
plant and equipment (1,136) (385) (1,375) (523)
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Cash used in investing
activities (1,079) (332) (712) (470)
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FINANCING ACTIVITIES
Proceeds from deferred
government incentives - 102 - 102
Proceeds from repayable
government assistance - 143 54 776
Payment of financing
fees - revolving credit
facility - (11) (2,117) (11)
Proceeds from revolving
credit facility - 8,591 - 16,976
Repayment of revolving
credit facility - (7,147) (4,416) (13,266)
Repayment of capital
lease obligations (151) (71) (235) (130)
Repayment of senior and
other long-term debt (141) (138) (150) (171)
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Cash provided by (used
in) financing
activities (292) 1,469 (6,864) 4,276
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Net increase in cash and
cash equivalents during
the period 848 1,351 8,400 1,235
Cash and cash equivalents,
beginning of period 13,502 4,283 5,950 4,399
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Cash and cash equivalents,
end of period 14,350 5,634 14,350 5,634
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SOURCE Bioniche Life Sciences Inc.
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