BELLEVILLE, Ontario, Feb. 7 /PRNewswire-FirstCall/ -- Bioniche Life Sciences Inc. , a research-based, technology-driven Canadian biopharmaceutical company, today released results for its second quarter of fiscal 2006 (for the period ended December 31, 2005).
The most significant recent event for the Company -- subsequent to the closing of the quarter -- was the sale of Bioniche Pharma Group Ltd., Bioniche’s sterile injectable manufacturing business, to RoundTable Healthcare Partners, a U.S. private equity group from Lake Forest, Illinois. The transaction yielded approximately $13.25 million U.S. in cash, prior to transaction expenses and bridge repayment, and with a combination of cash, debt assumption, equity in the business going forward and deferred sale proceeds, this transaction has a additional potential value to Bioniche of approximately $19.75 million U.S.
During the quarter, on December 8, 2005, Bioniche closed a private financing of $18.5 million U.S. -- the Company’s largest single financing -- with Laurus Master Funds, a U.S.-based institutional investor. This financing included a $7.5 million U.S. bridge loan, which has now been repaid from proceeds of the Pharma sale. It also provided a $4 million U.S. operating facility and a $7 million U.S. secured convertible term loan, both three-year arrangements.
“These two events are significant for the Company in terms of improving our financial flexibility and increasing our focus on those projects that are key to our future growth,” noted Graeme McRae, President & CEO of Bioniche Life Sciences Inc. “The combination of a reduced debt load and increased capital resources through the Pharma Group sale and the Laurus financing allow us to focus on our proprietary cancer treatment -- Mycobacterial Cell Wall-DNA Complex (MCC) -- which is expected to soon begin a planned multi-centre Phase III/pivotal clinical trial in superficial bladder cancer; and our E. coli O157:H7 cattle vaccine, which should be registered in the U.S. by the U.S. Department of Agriculture (USDA) later this year.”
Q2 Financial Highlights
In the second quarter of fiscal 2006, consolidated revenues from marketed products totaled $7.4 million Cdn. as compared to $6.8 million Cdn. in the same quarter last year, an increase of 9%.
Animal Health sales were $6.1 million Cdn. for the second quarter of fiscal 2006 as compared to $5.6 million Cdn. recorded in the same period last year. This increase of $0.5 million Cdn., or 9%, reflects increased sales of Folltropin(R)-V, the Company’s top-selling follicle stimulating hormone product for cattle and sheep, across all market jurisdictions.
On the Human Health side of the Bioniche business, sales of Cystistat(R), the Company’s proprietary sodium hyaluronate product for the treatment of cystitis, were $1.1 million compared to $1.0 million Cdn. recorded in the same period last year.
Overall gross profit improved to 63% in this quarter, compared to 55% in the same period last year, reflecting a proportional increase in sales of the Company’s proprietary products, which have higher margins than non-branded products.
“We are pleased with the top line sales improvement in our Animal Health business,” said Patrick Montpetit, Chief Financial Officer at Bioniche Life Sciences Inc. “We are also pleased to have improved our gross margins.”
Expenses in the second quarter were $7.5 million Cdn., compared to $4.3 million Cdn. for the same period last year. The quarterly expense amounts include a one-time charge of $2.5 million associated with the debt refinancing that closed on December 8, 2005. This reflects the Company’s continued investment in an integrated infrastructure that is required to move its key strategic priorities forward: the initiation of a Phase III/pivotal clinical trial using MCC for bladder cancer and the registration of its E. coli O157:H7 vaccine for cattle.
Earnings before interest, taxes, depreciation and amortization (EBITDA) before Research and Development in the second quarter were $1.2 million Cdn., which compares to $0.4 million Cdn. recorded in the same period last year.
Gross research and development expenses in the second quarter totaled $3.2 million Cdn. as compared to $2.9 million Cdn. reported in the same period last year. Some of these expenses were incurred in Food Safety due to ongoing field trials related to the E. coli O157:H7 cattle vaccine.
Net loss for the period reached $5.7 million or ($0.15) per share compared with $4.9 million or ($0.13) for the previous year.
Year-to-Date (6 months) Financial Results
On a year-to-date basis, consolidated revenues remained constant at $13.7 million Cdn. this year compared to $13.8 million Cdn. last year. Gross margins on product sales improved to 60% compared to 53% last year, despite the strengthening of the Canadian dollar. This is attributable to a higher margin product mix.
Expenses were $11.8 million Cdn., compared to $8.3 million Cdn. for the same period last year. This increase is mostly attributable to a one-time debt refinancing charge and certain professional fees and overhead costs associated with the transactions described above.
EBITDA before research and development were $2.0 million Cdn., which compares to a gain of $1.3 million Cdn. recorded in the same period last year.
Gross research and development expenses totaled $6.1 million Cdn. as compared to $5.8 million Cdn. reported in the same period last year.
Net loss for the period reached $9.0 million Cdn. or ($0.25 Cdn.) per share compared with $9.6 million Cdn. or ($0.27 Cdn.) per share for the previous year.
Updated Milestones
The Company has updated its list of value-creating events based upon recent developments. These corporate milestones should be considered targets only. The particulars and/or timing are subject to change.
Division Event Timing (calendar year) Human Health Acceptance of Phase III/pivotal Q2, 2006 trial submission by U.S. FDA for MCC in bladder cancer Human Health Signing of a European marketing Q2-Q3, 2006 partnership agreement for MCC Food Safety Registration of E. coli O157:H7 Q2-Q3, 2006 cattle vaccine in U.S. Human Health Out-licensing of oligonucleotides Q3-Q4, 2006 to strategic partner
The Company’s Board of Directors approved the extension by one year of the expiry date of 200,000 warrants previously granted in connection with an investment in the Company. The amendment extends the expiry date of the warrants to December 1, 2008. The amendment is effective on the tenth day following this release.
Quarterly Conference Call/Audio Web Cast
Bioniche will host a conference call and audio web cast to discuss its second quarter fiscal 2006 results on Wednesday, February 8, 2006 at 9:00 a.m. (EST). To participate in the conference call, please phone (416) 644-3427 (Toronto area) or toll-free 1-800-814-4853. A listen-only audio web cast will be available at the following locations:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1363780 (English) http://www.cnw.ca/fr/webcast/viewEvent.cgi?eventID=1363780 (French)
or through the link on the home page of the Bioniche website (http://www.Bioniche.com)
A replay of the conference call will be available until February 15, 2006 by calling (416) 640-1917 or toll-free 1-877-289-8525 (passcode: 21175141#). The web cast will be available for replay using the above links until May 8, 2006.
About Bioniche Life Sciences
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 175 skilled personnel and has three principal 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 these three segments. For more information, please visit http://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.
For further information, please contact: Patrick Montpetit, CA Vice-President and Chief Financial Officer Bioniche Life Sciences Inc. Telephone: (514) 697-6636 ext. 2245 Patrick.Montpetit@Bioniche.com Jennifer Shea Corporate Communications & Investor Relations Manager Bioniche Life Sciences Inc Telephone: (613) 966-8058 ext. 1250 Cell: (613) 391-2097 Jennifer.Shea@Bioniche.com Bioniche Life Sciences Inc. Amalgamated under the laws of Ontario Unaudited CONSOLIDATED BALANCE SHEETS As at Dec 31 As at June 30 2005 2005 $ $ ASSETS Current Cash 2,295,621 3,527,408 Accounts receivable 6,261,052 7,281,010 Inventories 6,818,178 6,791,729 Prepaid expenses and deposits 872,853 778,273 Current assets - discontinued operations 10,801,852 12,012,577 27,049,556 30,390,997 Long-term Capital assets 10,074,647 10,422,860 Goodwill 2,049,791 2,049,791 Intangible assets, net 9,985,296 10,403,251 Deferred financing fees, net 2,395,868 838,055 Other assets - deferred costs 576,000 576,000 Long-term assets - discontinued operations 29,611,065 28,868,602 81,742,223 83,549,556 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Revolving credit facility 4,080,650 -- Term bridge loan 8,744,250 -- Accounts payable and accrued liabilities 7,798,326 7,015,841 Income taxes payable 538,688 584,101 Deferred government incentives 2,986,572 3,162,577 Current portion of senior and other long-term debt 1,579,805 3,634,986 Current liabilities - discontinued operations 16,525,418 17,276,398 42,253,709 31,673,903 Long-term Senior debt 6,165,304 2,458,946 Other long-term debt -- 10,800,000 Obligations under capital lease 941,327 994,457 Deferred government incentives 400,118 363,167 Long-term liabilities - discontinued operations 16,618,002 15,926,257 66,378,460 62,216,730 Shareholders’ equity Share capital 72,356,378 70,382,951 Other paid-in capital 4,373,013 3,038,050 Deficit (61,730,913) (52,726,240) Cumulative translation amount 365,285 638,065 15,363,763 21,332,826 81,742,223 83,549,556 Bioniche Life Sciences Inc. Unaudited CONSOLIDATED STATEMENTS OF LOSS For the three and six months ended December 31 Current Last Year Current Last Year Year to Year to Quarter Quarter Date Date 2005 2004 2005 2004 $ $ $ $ REVENUE Sales 7,422,051 6,813,702 13,736,024 13,816,452 Cost of sales 2,732,356 3,065,287 5,411,487 6,466,379 Gross profit 4,689,695 3,748,415 8,324,537 7,350,073 EXPENSES Administration 1,418,054 871,009 2,424,639 1,720,646 Marketing and selling 1,735,915 1,993,533 3,198,072 3,487,313 Quality assurance 268,992 234,240 517,896 443,520 Interest on long-term debt 441,282 461,119 1,075,004 934,344 Other interest 22,405 10,501 -- 18,851 Share ownership and bonus 99,944 214,182 233,115 430,023 Amortization of capital assets 309,066 218,256 611,362 415,315 Amortization of intangible and other assets 214,130 214,130 428,260 428,259 Amortization of deferred financing fees 221,924 88,290 290,263 174,042 Debt refinancing 2,493,920 -- 2,493,920 -- Foreign exchange loss 260,861 9,875 493,704 209,242 7,486,493 4,315,135 11,766,235 8,261,555 Loss before research and development and other items (2,796,798) (566,720) (3,441,698) (911,482) Research and development expenses, gross 3,170,395 2,870,444 6,159,556 5,847,567 Less government incentives, net (392,035) (354,989) (483,234) (690,677) Loss from continuing operations before income taxes (5,575,158) (3,082,175) (9,118,020) (6,068,372) Provision for income tax expense (6,851) 72,970 (35,462) 14,970 Loss from continuing operations (5,582,009) (3,009,205) (9,153,482) (6,053,402) Income (loss) from discontinued operations (100,201) (1,854,021) 148,809 (3,524,837) Net loss for the period (5,682,210) (4,863,226) (9,004,673) (9,578,239) Basic and diluted net income (loss) per share Continuing operations (0.15) (0.08) (0.25) (0.17) Discontinued operations -- (0.05) -- (0.10) Total basic net loss per share (0.15) (0.13) (0.25) (0.27) Bioniche Life Sciences Inc. Unaudited CONSOLIDATED STATEMENTS OF DEFICIT For the three and six months ended December 31 Current Last Year Current Last Year Quarter Quarter Year to Date Year to Date 2005 2004 2005 2004 $ $ $ $ Balance, beginning of period (56,048,703) (41,838,281) (52,726,240) (37,123,268) Net loss for the period (5,682,210) (4,863,226) (9,004,673) (9,578,239) Balance, end of period (61,730,913) (46,701,507) (61,730,913) (46,701,507) Bioniche Life Sciences Inc. Unaudited CONSOLIDATED STATEMENTS OF CASH FLOWS For the three and six months ended December 31 Current Last Year Current Last Year Quarter Quarter Year to Date Year to Date 2005 2004 2005 2004 $ $ $ $ OPERATING ACTIVITIES Loss from continuing operations (5,582,009) (3,009,205) (9,153,482) (6,053,402) Add (deduct) non cash items: Amortization 745,120 520,676 1,329,885 1,017,616 Foreign exchange 129,936 14,498 103,121 4,101 Share, option, and warrant compensation 127,536 126,492 200,711 132,836 Share bonus -- 284,000 -- 673,000 Employee share ownership plan 141,840 145,225 278,194 279,967 Debt refinancing 1,271,454 -- 1,271,454 -- (3,166,123) (1,918,314) (5,970,117) (3,945,882) Net changes in non-cash working capital balances related to operations 62,532 (828,444) 926,207 (1,312,472) Cash used in operating activities (3,103,591) (2,746,758) (5,043,910) (5,258,354) INVESTING ACTIVITIES Payment relating to acquisition of net assets -- (806,560) (123,120) (1,019,163) Government incentives received on account of capital assets 53,730 -- 53,730 6,458 Purchase of capital assets (193,569) (398,662) (316,913) (747,361) Cash used in investing activities (139,839) (1,205,222) (386,303) (1,760,066) FINANCING ACTIVITIES Proceeds from revolving credit facility 4,051,250 -- 4,051,250 -- Proceeds from term bridge loan 8,681,250 -- 8,681,250 -- Preferred shares issued -- 11,674,854 -- 11,674,854 Common shares issued 1,053,693 -- 1,053,693 -- Proceeds from convertible term note 7,048,807 -- 7,048,807 -- Financing fees - debt (1,368,789) 30,886 (1,368,789) (20,968) Proceeds on account of deferred government incentives 693,861 198,779 693,861 393,298 Repayment of senior and other long-term debt (16,038,627) (195,622) (16,246,731) (386,100) Cash provided by financing activities 4,121,445 11,708,897 3,913,341 11,661,084 Net increase (decrease) in cash from continuing operations 878,015 7,756,917 (1,516,872) 4,642,664 Net increase in cash from discontinued operations 101,962 142,203 285,084 352,405 Net increase (decrease) in cash for the period 979,978 7,899,120 (1,231,787) 4,995,069 Cash, beginning of period 1,315,643 1,018,847 3,527,408 3,922,898 Cash, end of period 2,295,621 8,917,967 2,295,621 8,917,967
Bioniche Life Sciences Inc.
CONTACT: Patrick Montpetit, CA, Vice-President and Chief Financial Officerof Bioniche Life Sciences Inc., Telephone: +1-514-697-6636 ext. 2245,Patrick.Montpetit@Bioniche.com; or Jennifer Shea, Corporate Communications& Investor Relations Manager of Bioniche Life Sciences Inc, Telephone:+1-613-966-8058 ext. 1250, Cell: +1-613-391-2097,Jennifer.Shea@Bioniche.com
Web site: http://www.bioniche.com/
