The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from PR Newswire

Bioniche Life Sciences Inc. Reports Q2, Fiscal 2013 Results

Wednesday, February 06, 2013

Bioniche Life Sciences Inc. Reports Q2, Fiscal 2013 Results17:00 EST Wednesday, February 06, 2013 -Animal Health product sales revenues are 14% ahead of Fiscal 2012 on a year-to-date basis- (all figures are in Canadian dollars unless otherwise noted) BELLEVILLE, ON, Feb. 6, 2013 /PRNewswire/ - Bioniche Life Sciences Inc. (TSX: BNC) (ASX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for the second quarter of its 2013 fiscal year (ended December 31, 2012). "The return of global rights to our Phase III human health bladder cancer product - Urocidin? - from Endo in December was a significant event in the life of the Company," said Mr. Graeme McRae, President & CEO of Bioniche Life Sciences Inc. "We are already in discussions with new potential partners for the technology and are actively strategizing around a new clinical plan to advance the product to registration, bearing in mind that we will be unable to meet with regulatory authorities until after the end of March, when clinical sponsorship is returned to us from Endo." The Company continues to invest in several late-stage development projects and in facilities where commercial products will be made," added Mr. McRae. "These intensive resource allocations have impacted our corporate burn rate, but this will be alleviated as new products reach the market over the next 12 to 18 months. To sustain the Company through this period, additional financial resources will be required and management is in discussions with potential new investors." Fiscal 2013 Second Quarter Financial Results Highlights Revenues from the sale of Animal Health products were $8.8 million in the quarter, as compared to $7.4 million in the same period in Fiscal 2012 - a 19% increase. On a year-to-date basis, Animal Health product revenues have reached $15.4 million, compared to $13.5 million in Fiscal 2012. This represents growth of 14% year-over-year. Consolidated revenues for the quarter were 8% higher compared to the same period last year and 4% higher on a year-to-date basis, in spite of a decline in research collaboration revenue. Gross margins were 50% in Q2, Fiscal 2013, compared to 52% in the second quarter of last year. The margins are 52% on a year-to-date basis, versus 51% in the first six months of Fiscal 2012. The Company generated Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization (EBITDA) - before research and development expenses and income taxes - of $1.0 million for Q2, Fiscal 2013, as compared to $0.9 million for the same period in Fiscal 2012. On a year-to-date basis, the EBITDA amount to $0.9 million as compared to $0.6 million at the six-month point in Fiscal 2012. This increase relates to increased Animal Health revenues and reduced administration expenses, partially offset by reduced collaborative research revenues. Cash and cash equivalents amounted to $8.7 million at December 31, 2012, as compared $20.0 million at June 30, 2012. A further $15.0 million was available to the Company at December 31, 2012 through trade and other receivables and inventories. At June 30, 2012, $14.6 million was available through these sources. At December 31, 2012, the Company's working capital totalled $16.9 million as compared to working capital of $27.5 million at June 30, 2012, reflecting the decrease in cash primarily used to invest in late-stage development and commercialization activities. The Company's cash flow used in operations for the quarter ended December 31, 2012 was $4.7 million, as compared to cash used in operations of $3.0 million in the same period in Fiscal 2012. On a year-to-date basis, cash flow used in operations was $9.7 million, versus $7.0 million after the first six months of Fiscal 2012. The average monthly burn rate for the Company was $1.4 million, vs. $1.1 million for the same six-month period in Fiscal 2012. Cash requirements to support financing have increased the average monthly burn rate by $0.3 million compared to last year. "The Company remains committed to reducing the average monthly burn rate as it completes the development and commercialization of several new products," said Mr. Brian Ford, Chief Financial Officer of Bioniche Life Sciences Inc. "However, there will be some short-term expenditures incurred to support new product launches and to advance the Urocidin data package for regulators, including Health Canada. The Company expects to conclude one or more partnering deals related to its core technologies, which could involve up-front payments to the Company that would offset the burn rate. The Company remains committed to neutralizing the burn rate and developing sustainable positive cash flows by the end of Fiscal 2014." Administrative expenses were $1.9 million in Q2, Fiscal 2013, as compared to $2.5 million in the same quarter last year. On a year-to-date basis, administrative expenses were $4.3 million in Fiscal 2013 versus $5.0 million in the first six months of Fiscal 2012. Marketing, selling and distribution expenses were $1.9 million in Q2, Fiscal 2013, as compared to $1.6 million in the same quarter last year, or $3.7 million this year versus $3.3 million last year on a year-to-date basis. The additional expenditure in this category is related to increased staffing to support the launch and promotion of several new Animal Health products. Research and development (R&D) expenditures for Q2, Fiscal 2013 were $4.2 million, as compared to $4.7 million in the same quarter last year. For the six months ending December 31, 2012, R&D expenditures were $8.5 million versus $9.5 million for the same period last year. R&D resources are focused on the advancement of certain development programs in Animal Health and Food Safety. Additionally, there is continued investment in the staffing and infrastructure associated with the GMP production of the Company's UrocidinTM bladder cancer treatment. Further, until such time as the Company's Vaccine Manufacturing Centre in Belleville is making commercial product, the carrying costs associated with this facility are also accounted for under R&D. The Vaccine Manufacturing Centre continues to undergo GMP validation, a process which is expected to be completed this Spring. The Company incurred financing expenses of $3.2 million during the first six months of Fiscal 2013 as a result of its US$20 million debt financing with Capital Royalty Partners. This compares to financing expenses of $0.2 million in the same period of Fiscal 2012. The basic and fully-diluted net loss per share for Q2, Fiscal 2013 is ($0.05), as compared to a net loss per share of ($0.04) in the same period last year. Total Common Shares outstanding at December 31, 2012 were 104,005,809, as compared to 102,749,670 at December 31, 2011. The Company has incurred significant losses and has an accumulated deficit of $130.6 million as at December 31, 2012, including a current loss of $5.1 million for the second quarter of Fiscal 2013 ($11.8 million year-to-date, as compared to $8.5 million in the first six months of Fiscal 2012). The Company's committed cash obligations and expected level of expenditures for the next twelve months exceed its committed resources of funds and funds available as at December 31, 2012. The Company expects to finance its future expenditures by obtaining additional financing and the exploration of new partnering agreements on marketed products and/or technologies under development. If the Company is unable to accomplish either of these initiatives, which are outside of management's control, the Company will be required to curtail its development activities and operations, or potentially dispose of certain assets. Company representatives will discuss the Q2, Fiscal 2013 (half-year) results during a: Conference Call & Audio Webcast February 11, 2013 5:00 p.m. EST To participate in the conference call from North America, call (888) 231-8191 (conference ID: 89590179). To participate in the conference call from Australia, call 1-800-287-011 (conference ID: 89590179). A listen-only audio webcast will be available at: http://event.on24.com/r.htm?e=565698&s=1&k=FC5CA7D17AD739E05E3C798EDD7E10ED A replay of the conference call will be available until February 18, 2013 at midnight by calling 1-855-859-2056 (passcode: 89590179). The webcast will be available for replay using the above link until February 11, 2014. 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 and innovative products for human and animal health markets worldwide. The fully-integrated company employs more than 200 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company's primary goal is to develop and commercialize products that advance human or animal health and increase shareholder value. For more information, please visit www.Bioniche.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 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited - see going concern uncertainty)   As at December 31, 2012 June 30, 2012 (thousands of Canadian dollars) $ $ ASSETS Current       Cash and cash equivalents   8,734 20,020 Trade and other receivables   7,134 6,787 Inventories   7,822 7,776 Prepayments   552 1,081     24,242 35,664 Non-current       Property, plant and equipment   40,397 40,134 Intangible assets   4,936 5,206 Goodwill   456 456 Other non-current receivables   140 183 Deferred tax assets   271 509 Total assets   70,442 82,152         LIABILITIES AND SHAREHOLDERS' EQUITY       Current       Trade and other payables   5,325 6,713 Income taxes payable   176 94 Current portion of long-term debt   1,003 997 Current portion of repayable government   assistance   866 366     7,370 8,170 Non-current       Long-term debt   25,412 25,438 Repayable government assistance   31,382 30,921 Employee benefit liability   1,937 1,875     66,101 66,404 Shareholders' equity       Share capital   126,516 126,354 Other paid-in capital   9,528 9,327 Deficit   (130,595) (118,807) Foreign currency translation reserve   (1,108) (1,126) Total shareholders' equity   4,341 15,748 Total liabilities and shareholders' equity   70,442 82,152 Bioniche Life Sciences Inc. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited - see going concern uncertainty)   (thousands of Canadian dollars)   Common shares $   Preferred shares Series I $   Total Share Capital $   Other paid-in Capital $   Deficit $   Foreign currency translation reserve $   Total $ Balance, June 30, 2012   126,354   ?   126,354   9,327   (118,807)   (1,126)   15,748 Net loss for the period   ?   ?   ?   ?   (11,788)   ?   (11,788) Exchange difference on   translation of foreign   operations   ?   ?   ?   ?   ?   18   18 Issued under employee share   ownership plan   142   ?   142   ?   ?   ?   142 Fair value of stock options  vested   ?   ?   ?   201   ?   ?   201 Shares issued to Directors   19   ?   19   ?   ?   ?   19 Options exercised   1   ?   1   ?   ?   ?   1 Balance, December 31, 2012   126,516   ?   126,516   9,528   (130,595)   (1,108)   4,341 Balance, June 30, 2011   125,469   161   125,630   8,771   (95,687)   (1,174)   37,540 Net loss for the period   ?   ?   ?   ?   (8,547)   ?   (8,547) Exchange difference on   translation of foreign   operations   ?   ?   ?   ?   ?   26   26 Issued under employee share   ownership plan   419   ?   419   ?   ?   ?   419 Fair value of stock options  vested   ?   ?   ?   404   ?   ?   404 Share redemption   ?   (161)   (161)   5   ?   ?   (156) Options issued to a consultant   ?   ?   ?   1   ?   ?   1 Options exercised   2   ?   2   (1)   ?   ?   1 Balance, December 31, 2011   125,890   ?   125,890   9,180   (104,234)   (1,148)   29,688 Bioniche Life Sciences Inc. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited - see going concern uncertainty)   For the three and six months ended December 31 (thousands of Canadian dollars, except share and per share amounts)   2012 $ 2011 $ 2012 $ 2011 $             REVENUES           Product   8,793 7,358 15,388 13,480 Research collaborations   8 757 82 1,451     8,801 8,115 15,470 14,931 EXPENSES           Cost of sales   4,379 3,504 7,400 6,577 Administrative   1,928 2,461 4,266 4,954 Marketing and selling   1,886 1,562 3,713 3,334 Financial expenses   1,636 (2) 3,154 225 Foreign exchange loss (gain)   (69) (93) 220 (526)     9,760 7,432 18,753 14,564 Income before research and development expenses and  income taxes   (959) 683 (3,283) 367 Research and development expenses, gross   4,210 4,679 8,526 9,499 Less: government assistance   (247) (173) (345) (372) Loss before income taxes   (4,922) (3,823) (11,464) (8,760) Income tax expense (recovery)   195 208 324 (213) Net loss for the period   (5,117) (4,031) (11,788) (8,547) OTHER COMPREHENSIVE (LOSS) INCOME Exchange difference on translation of foreign operations   (79) (241) 18 26 Total comprehensive loss for the period   (5,196) (4,272) (11,770) (8,521) Basic and diluted net loss per share   (0.05) (0.04) (0.11) (0.08) Weighted-average number of common shares  outstanding   103,848,063 102,613,484 103,791,122 102,443,797 Bioniche Life Sciences Inc. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - see going concern uncertainty)   For the six months ended December 31          (thousands of Canadian dollars)   2012 $    2011 $ OPERATING ACTIVITIES          Net loss for the period   (11,788)    (8,547) Items not affecting cash and other reconciling items:            Depreciation of property, plant and equipment   735    734   Amortization of intangible assets   751    486   Unrealized foreign exchange gain   (372)    (331)   Finance expense on government incentives, long-term debt   and repayable government assistance    1,539    195   Stock-based compensation expense   201    404   Shares issued to directors   19    -   Employee share ownership plan   144    419   Employee future benefit   62    58   Deemed government assistance   -    (7)   Write off of intangible asset   -    143   Deferred income taxes   107    (153)   Other   -    1     (8,602)    (6,598) Net change in non-cash working capital balances   (1,114)    (384) Cash used in operating activities   (9,716)    (6,982) INVESTING ACTIVITIES          Purchases of property, plant and equipment   (284)    (3,672) Proceeds on disposal of other current financial asset   -    1,493 Proceeds on disposal of property, plant and equipment   5    7 Purchases of intangible assets   (481)    (36) Cash used in investing activities   (760)    (2,208) FINANCING ACTIVITIES          Proceeds from repayable government assistance   -    1,230 Proceeds on exercise of stock options   1    1 Redemption of shares   -    (156) Repayment of repayable government assistance   (320)      Repayment of finance lease obligations   (228)    (210) Repayment of long-term debt   (263)    (174) Cash provided by (used in) financing activities   (810)    691 Net decrease in cash and cash equivalents during the period   (11,286)    (8,499) Cash and cash equivalents, beginning of period   20,020    15,353 Cash and cash equivalents, end of period   8,734    6,854           SOURCE Bioniche Life Sciences Inc.For further information: <p> Jennifer Shea, Vice-President, Communications, Investor & Government Relations<br/> Bioniche Life Sciences Inc.<br/> Telephone: (613) 966-8058; from Australia: 0011 1 613-966-8058<br/> Cell: (613) 391-2097; from Australia: 0011 1 613-391-2097<br/> <a href="mailto:Jennifer.Shea@Bioniche.com">Jennifer.Shea@Bioniche.com</a> </p>