(all figures are in Canadian dollars unless otherwise noted)
BELLEVILLE, ON, Feb. 6, 2014 /PRNewswire/ - Bioniche Life Sciences Inc. (TSX:
BNC), a leading clinical stage biotechnology company, today announced
financial results for the second quarter of Fiscal 2014 (ended December
31, 2013). Highlights include:
Bioniche Animal Health generated 100% year-over-year EBITDA increase;
Negotiations continuing for the sale of the Animal Health business:
No public announcement until a binding agreement is executed;
Implementation of strategic expenditure review and substantial workforce
Focused strategy for One Health partnering and divestment:
Significant reduction in ongoing operational spend;
Positioning the Company for sustainable future with a focus on Human
Bioniche Animal Health Posts Strong Year-to-Date Results
Bioniche Animal Health (an asset held for sale) generated an EBITDA of
$4.0 million on a year-to-date basis at December 31, 2013 as compared
to $2.0 million at December 31, 2012. This was achieved through a
combination of a 19.2% reduction in expenses, a 2% improvement in
margins, and a 4% increase in revenues as compared to the same period
in Fiscal 2013.
"Our U.S. business is largely driving these positive results," said Dr.
Michael Berendt, Chief Executive Officer of Bioniche Life Sciences Inc.
"Improvements in the U.S. economy, a strong U.S. dollar, and positive
trends in the livestock industry are fuelling improved revenues. In
addition, our European and Export businesses are seeing better results,
in part due to the expanded registrations of our lead product, Folltropin, in seven new EU countries."
Bioniche Animal Health Divestment Update
The Company is currently in negotiations with regard to the divestment
of its Animal Health business. The divestment process has taken longer
than expected. A number of counterparties have completed due diligence
and submitted bids in late 2013 and early 2014 and negotiations are
ongoing. If successfully concluded, a definitive agreement will be
signed and a special shareholders' meeting will be scheduled, at which
time shareholders will be asked to vote on the transaction.
Strategic Expenditure Review
Over the last three months, management initiated a strategic review of
program expenditures to ensure that the Company's financial resources
are dedicated to activities and resources that will drive shareholder
value in the short, medium and long term with a focus on optimizing the
Company's ability to add value to its Human Health franchise. At the
same time, the Company is focused on ensuring that the sales process of
Animal Health is successfully completed, and that its investment to
date in the One Health division can be recouped through the sale and/or
partnership of its associated assets, including the Econiche® vaccine technology and the Vaccine Manufacturing Centre (VMC) in
As a direct result of the strategic expenditure review, the Company has
taken the difficult decision to reduce more than 40 employee positions.
In the short term, this will result in severance expenses of
approximately $1.2 million, while annual salary and benefits expenses
will be reduced by approximately $3 million. In addition, the Company
has delisted from the Australian Securities Exchange (ASX), has listed
two non-core properties for immediate sale, and has undertaken numerous
smaller transactions dedicated to reducing operating expenses on an
ongoing basis by negotiating reductions in past supplier invoices and
discounts and lower rates for future goods and services. Management is
considering additional measures to continue to ensure that the Company
is run as efficiently as possible, and will finalize, implement, and
announce these measures as the divestment of Animal Health is achieved
and as the U.S. regulatory pathway for Urocidin is clarified.
Fiscal 2014 Second Quarter and Year-to-Date Financial Results
As a result of the Company's decision to divest the Animal Health
business last year, the Fiscal 2014 second quarter financial statements
have been segmented into continuing operations (Human Health and One
Health business units) and discontinued operations (Animal Health
The Company's continuing operations recorded no revenues in the quarter,
as compared to $0.008 million in the same period in Fiscal 2013. On a
year-to-date basis, there was no revenues at December 31, 2013, as
compared to $0.08 million at December 31, 2012. In Fiscal 2013, the
Company received reimbursement from its former development partner for Urocidin-related development costs. Such reimbursement was discontinued when the
Company regained global rights to Urocidin in December, 2012.
Cash and cash equivalents from continuing operations amounted to $11.2
million at December 31, 2013, as compared to $4.2 million at June 30,
2013. This improvement reflects the completion of a $9.8 million
Canadian equity offering and related private placement in September,
2013, as well as loan advances from Paladin Labs Inc., less operating
and research and development activities and higher financial expenses.
The Company's total liabilities and shareholders' deficiency at December
31, 2013 is $50.5 million, as compared to $61.5 million at June 30,
Financial expenses settled in cash continue to be a substantial
contributor to the Company's average monthly burn rate. These amounted
to $1.4 million for the second quarter of Fiscal 2014 compared to $0.9
million recorded in Q2, Fiscal 2013. On a year-to-date basis, such
expenses were $2.7 million at December 31, 2013, as compared to $1.7
million at December 31, 2012.
Administration expenses for continuing operations were $1.5 million in
the second quarter of Fiscal 2014, as compared to $1.4 million in the
second quarter of Fiscal 2013. On a year-to-date basis, administration
expenses were $2.8 million in Fiscal 2014 as compared to $3.1 million
in the same period of Fiscal 2013. Marketing and selling expenses were
$0.2 million in the second quarter of Fiscal 2014, as compared to $0.4
million in the same period last year.
Research and development (R&D) expenditures for continuing operations
were $23 million in the second quarter of Fiscal 2014, as compared to
$3.1 million in Q2, Fiscal 2013. On a year-to-date basis, such
expenditures amounted to $26.1 million at December 31, 2013, as
compared to $6.4 at December 31, 2012. This significant change relates
to a $20 million impairment of the VMC in Belleville, Ontario due to
the corporate decision to scale-back the VMC operations pending the
identification of a purchaser or partner for this asset.
"The VMC and Econiche® remain valuable corporate assets," said Mr. Donald Olds, Chief Operating
Officer of Bioniche Life Sciences Inc. "Unfortunately, the Company has
been unable to capitalize on this asset to date, as uptake of the
Company's E. coli O157 cattle vaccine (Econiche®) has been limited, and efforts to gain government support for a
national E. coli vaccination program in Canada have not met with success. Our efforts
going forward will be focused on the identification of a strategic
partner who can bring this vaccine technology and facility forward to
The VMC was purpose-built to make this vaccine, but could be modified to
make other products. The Company will preserve the VMC for future use
by a strategic alliance partner, and it will limit investment to those
activities that will drive a partnership.
The basic and fully diluted net loss per Share for the Company's
continuing operations for Q2, Fiscal 2014 is ($0.19), as compared to a
basic and fully diluted net loss per share of ($0.06) in Q2, Fiscal
2013. On a year-to-date basis, the basic and fully diluted loss per
Share for continuing operations is ($0.27), as compared to ($0.12) in
Discontinued Operations (Animal Health)
Revenues for this business unit in Q2, Fiscal 2014 were $8.3 million, as
compared to $8.8 million in the same period in Fiscal 2013. Net income
in Q2, Fiscal 2014 was $2.1 million, as compared to net income of $1.1
million in Q2, Fiscal 2013. On a year-to-date basis, revenues at
December 31, 2013 were $16.1 million, as compared to $15.4 million at
December 31, 2012.
The basic and fully diluted net earnings per Share for the Company's
discontinued operations for Q2, Fiscal 2014 is $0.02, as compared to
earnings of $0.01 in Q2, Fiscal 2013. On a year-to-date basis, the
basic and fully diluted earnings per Share for continuing operations is
$0.03, as compared to $0.01 in Fiscal 2013.
Q2, Fiscal 2014 Summary
The Company's consolidated cash flow used in operations for the quarter
ended December 31, 2013 (both continuing and discontinued operations)
was $3.7 million, as compared to cash used in operations of $4.7
million in Q2, Fiscal 2013. On a year-to-date basis, consolidated cash
flow used in operations was $8.4 million, as compared to $9.7 million
for the first six months of Fiscal 2013.
The average monthly burn rate (before changes in working capital) was
$1.0 million for Q2, Fiscal 2014, as compared to $1.1 million for the
same quarter in Fiscal 2013. On a year-to-date basis, the average
monthly burn rate was $1.1 million, as compared to $1.4 million per
month in the first half of Fiscal 2013.
The Company has total Common Shares outstanding at February 5, 2014 of
141,246,810. In addition, the Company has 22,270,912 outstanding
Warrants and 11,124,665 outstanding Options, exchangeable for one
Common Share upon exercise.
More information on the Company's year-end financial results is provided
in the Company's Q2, Fiscal 2014 Management's Discussion and Analysis.
The Company's securities are no longer trading on the Australian
Securities Exchange (ASX) effective at close of trading on Monday,
February 3, 2014. Holders of CHESS Depositary Interests (CDIs) may
continue to access Company news via its website www.Bioniche.com or on www.SEDAR.com.
Shareholder Conference Call and Audio Webcast
Shareholders are reminded that Company representatives will discuss the
Q2, Fiscal 2014 (half-year) results and operational changes during a:
Conference Call & Audio Webcast
Wednesday, February 12, 2014
5:00 p.m. EST
To participate in the conference call from North America, call (888)
231-8191 (conference ID: 53209337). A listen-only audio webcast will be
available at: http://event.on24.com/r.htm?e=745870&s=1&k=96A58D58177E944F61C95515B0D837F8
A replay of the conference call will be available until February 19,
2014 at midnight by calling 1-855-859-2056 (passcode: 53209337). The
webcast will be available for replay using the above link until
February 12, 2015.
About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a clinical stage Canadian
biopharmaceutical company focused on the discovery, development,
manufacturing, and marketing of proprietary and innovative products for
the global human health market. The Company's primary goal is to
develop and commercialize products that advance human 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
SOURCE Bioniche Life Sciences Inc.