OctoPlus Announces 2011 Annual Results
Published: Feb 17, 2012
LEIDEN, THE NETHERLANDS--(Marketwire - February 17, 2012) -
OctoPlus N.V. ("OctoPlus" or the "Company") (Euronext: OCTO), announces today its unaudited annual results for the year ended 31 December 2011.
The economic climate has made 2011 a challenging year for us, which is reflected in a decrease in revenues to EUR 7.7 million (2010: EUR 8.3 million). However, in the last two months of 2011 we signed a significant number of new contracts. The impact on the 2011 revenues of these new signatures is limited but we expect that these contracts will contribute in a material way to our 2012 revenues, enabling a substantial growth in revenues in 2012.
We have worked hard to improve the efficiency and operational excellence of our organization which resulted in a higher success rate in winning new business. We expect to see more benefits of our efforts in the area of organizational efficiency in the course of 2012 and thereafter.
Moving into 2012, we aim to build on all four of our strategic activities. We will focus on fulfilling our role in projects for clients such as Biolex and ESBATech, a subsidiary of Novartis. We will continue to use our proprietary technologies to develop controlled release formulations for clients. And we will strengthen our efforts in the area of specialty generics because we see a large market opportunity there. In 2012 we aim to generate more than 20% organic growth in our revenues, contributing to our medium term goal to build a company that is operationally cash balanced, while allowing for investments in projects with long term upside potential for our shareholders.
Our four strategic activities and their development in 2011:
1. Difficult economic climate for formulation development and manufacturing fee-for-service
* 2011 revenues amounted to EUR 7.7 million (2010: EUR 8.3 million)
* 42 projects for 36 clients worked on during 2011
* Contracts signed with seven new customers during 2011, of which four in the last quarter
2. Strong clinical results for Locteron
The clinically most advanced product incorporating our PolyActive technology is Locteron, a controlled release formulation of interferon alpha, which we develop and manufacture for our licensee Biolex. The final results of the Phase IIb clinical studies with Locteron confirmed equivalent efficacy compared to the standard of care with a statistically significant reduction of the number of flu-like adverse events and a reduction in the number of depressive symptoms. We have optimized our large scale manufacturing process for Locteron in order to be ready to kick off the preparations for Phase III clinical supplies. 2011 revenues from Locteron were in line with expectations at EUR 0.6 million (2010: EUR 0.8 million). Biolex has been in partnering discussions with potential commercial partners for Locteron. Once a partner has been secured, preparations for Phase III clinical studies will commence, which will result in significant revenues for us.
3. Increased adoption of our proprietary drug delivery technologies: difficult-to-reach areas
Delivery of medicines to the eye (ophthalmology) is a compelling disease area in which we are becoming more active. Our project with ESBATech, a Novartis company, generated significant revenues in 2011. It has progressed into full development, including additional preclinical studies.
4. First projects started in specialty generics with successful initial results Several blockbuster injectable controlled release drugs are coming off patent in the coming years, which opens the way to develop competitive products without infringing patents. Developing and manufacturing a generic version of an injectable controlled release drug is difficult and only a small number of companies in the contract service business have the expertise and infrastructure to do so. We are experts in this field, as we have proven with the development and manufacturing of Locteron and many other products. During 2011, we have performed early-stage formulation development work in this field on a fee-for-service basis and we will expand our activities in this area during 2012.
The economic climate has made 2011 a challenging year for us, which is reflected in lower revenues. However, we have stabilized our revenue stream and are moving towards growth for 2012.
* Total revenues decreased by 8% to EUR 7.7 million (2010: EUR 8.3 million). Revenues from technology evaluation contracts increased (mainly ESBATech), other service revenues decreased as a result of the difficult economic climate, and income from subsidies diminished as a result of the finalization of our subsidized project in 2011 (2010: EUR 0.3 million income from subsidies).
* Total costs (including interest) for the full year reduced by 4% to EUR 14.0 million (2010: EUR 14.5 million). The average number of FTEs (excluding temporary staff) increased from 102 FTEs in 2010 to 108 FTEs in 2011 as a result of a higher headcount in revenue generating areas such as formulation, process and analytical method development. Other costs decreased mainly as a result of a continued focus on cost control.
* Net loss amounted to EUR 6.3 million (2010: net loss of EUR 6.2 million).
* In 2011 OctoPlus incurred a total cash outflow of EUR 1.1 million (2010: EUR 0.6 million cash outflow).
* The cash outflow excluding equity issues increased to EUR 4.8 million as a result of lower revenues (2010: EUR 4.0 million).
* The cash position was EUR 1.6 million on 31 December 2011 (31 December 2010: EUR 2.7 million). We expect to strengthen our balance sheet by raising additional funds in the first half of 2012.
Our prime focus is to build our business into an operationally cash flow balanced company in the medium term, which allows us to fund projects with long term upside potential for our shareholders in the form of royalties, product revenue and milestone payments. The recent difficult economic climate has affected our clients, which has made both 2010 and 2011 challenging years for us: this is reflected in lower revenues. We feel that our focus during 2011 on improved efficiency and effectiveness in virtually all key functions of our organization will allow us to move towards revenue growth during 2012. We expect to meet the increased demand from our customers by increasing the utilization of our expanded facilities in Leiden and making some further modest investments, predominantly in equipment. We aim to generate more than 20% organic growth in revenues during 2012, contributing to our goal to become a sustainable operationally cash balanced business with a large financial upside in the form of royalties, product revenue and milestones in the years thereafter.
Jan Egberts, CEO of OctoPlus comments: "After my first year as CEO, I am looking back at a challenging year. Although our business has been negatively impacted by the current economic environment, I feel that over the past year we have made great strides in strengthening and further professionalizing our organization. We expect to see the results from these efforts in the course of 2012 and are aiming for our revenues to grow by more than 20% in 2012. Our aim is to build a company that is operationally cash balanced, allowing a sustainable business with a large shareholder upside in the form of royalties, milestones and product revenue."
Conference call and webcast presentation
OctoPlus will hold a conference call and webcast presentation today at 10:00 AM CET. This event can also be followed live via OctoPlus' website www.octoplus.nl. If you would like to participate in the conference call, please dial in on telephone number +31 (0) 45 6316903. After the presentation, Jan Egberts, CEO of OctoPlus and Susan Swarte, CFO of OctoPlus, will be available to answer questions. After the event, the webcast will be available for replay on the Company's website.
Click here for the full press release including financial tables: http://hugin.info/137076/R/1586898/497625.pdf
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Source: OctoPlus N.V. via Thomson Reuters ONE
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