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) $ $ ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 28,065 16,874 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 46,069 34,641 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------- 10,158 17,353 ------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------- 40,814 25,538 ------------------------------------------------------------------------- Shareholders' equity Share capital 96,025 95,855 Other paid-in capital 8,649 8,540 Deficit (99,419) (95,292) ------------------------------------------------------------------------- 5,255 9,103 ------------------------------------------------------------------------- 46,069 34,641 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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) $ $ $ $ ------------------------------------------------------------------------- REVENUE, Sales 7,029 8,551 12,935 16,595 Gain on sale of intangible assets - - 883 - Licensing 6,757 - 7,090 - ------------------------------------------------------------------------- 13,786 8,551 20,908 16,595 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 7,166 8,059 14,060 16,084 ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- Income (loss) before income taxes 2,656 (2,203) (3,997) (5,513) Provision for income taxes - 162 130 177 ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- Deficit, end of period (99,419) (90,481) (99,419) (90,481) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted net income (loss) per share 0.04 (0.04) (0.06) (0.08) ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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) $ $ $ $ ------------------------------------------------------------------------- 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) - ------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------- Cash provided by (used in) operating activities 2,219 214 15,976 (2,571) ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- Cash used in investing activities (1,079) (332) (712) (470) ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- Cash provided by (used in) financing activities (292) 1,469 (6,864) 4,276 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- Cash and cash equivalents, end of period 14,350 5,634 14,350 5,634 ------------------------------------------------------------------------- -------------------------------------------------------------------------
SOURCE Bioniche Life Sciences Inc.
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