6 August 2010 -- Biotie reported positive data from a clinical study with its VAP-1 antibody in rheumatoid arthritis patients earlier in 2010 and expects to report data from a currently ongoing, similarly designed, clinical trial in psoriasis patients in September 2010.
- After Roche notified Biotie that it does not intend to exercise its option to license the VAP-1 antibody, Biotie decided to continue development of the product. Preparatory activities towards start of phase 2 studies are underway. - Biotie announced positive data from a clinical study with its oral PDE4 inhibitor in healthy volunteers. ELB353 (INN ronomilast) was well tolerated and showed clear pharmacological activity. Enabling work for a phase 2 program has been initiated. - The research collaboration with Pfizer for the identification of novel PDE10 inhibitors for schizophrenia ended in June 2010. Pfizer retains the commercial rights for all product candidates discovered as part of the research collaboration. - Revenues for January - June amounted to EUR 2.5 million (EUR 2.7 million in 2009). Net loss for January - June was EUR 7.1 million (EUR 5.7 million in 2009 excluding extraordinary items in relation to write-offs of certain intangible assets. Total net loss for January - June 2009 including extraordinary items in relation to write-offs of intangible assets was EUR 9.6 million). Basic earnings per share amounted to EUR -0.04 (EUR -0.07 for 2009). - Cash flow from operations in January - June amounted to EUR -8.1 million (EUR -6.7 million in 2009). As of 30 June, liquid assets amounted to EUR 11.6 million (EUR 18.8 million as of 30 June, 2009). Q2/2010 in brief: - Revenues for April - June, 2010 amounted to EUR 1.3 million (EUR 1.4 million for comparable period in 2009). The net loss in April - June was EUR 3.4 million (net loss of comparable period in 2009 was EUR 2.9 million excluding extraordinary items in relation to write-offs of certain intangible assets; net loss for April - June 2009 was EUR 6.7 million including extraordinary items). Basic earnings per share for April - June amounted to EUR -0.02 (EUR 0.05 in 2009). - Cash flow from operating activities in April - June was EUR -3.7 million (EUR -3.3 million during April - June 2009).
Timo Veromaa, Biotie’s President and CEO: “We have generated positive early clinical data for our two anti-inflammatory programs - our proprietary VAP-1 antibody and our third generation PDE4 inhibitor ronomilast. Enabling activities for further development are underway. We may enter into collaborations to move the programs forward if commercially attractive terms can be achieved. Our lead program, nalmefene for the treatment of alcohol dependence, is on track and our partner Lundbeck expects to report top-line data from the ongoing phase 3 program towards the end of the year.”
Outlook for 2010
- Biotie will continue to support its licensing partner Lundbeck in the development of nalmefene for the treatment of alcohol dependence. Phase 3 clinical data from the ongoing studies is expected towards the end of 2010; a possible marketing authorization submission in the EU is anticipated in 2011. - Biotie will continue with the development of its proprietary VAP-1 antibody. Top-line data from an ongoing study in psoriasis patients is expected in September 2010. While the rights to the product in Japan, Taiwan, Singapore, Australia and New Zealand have been granted to Seikagaku, Biotie retains ownership in the rest of the world and will be looking for additional collaboration opportunities. - Biotie intends to continue active development of ronomilast (previously ELB 353) for the treatment of COPD. Further clinical trials are planned and Biotie will be looking for potential collaboration opportunities for this product. - Pfizer retains the commercial rights for all product candidates discovered so far in a discovery alliance regarding the identification of PDE10 inhibitors for schizophrenia which ended in June and Biotie is committed to support Pfizer in all further development aspects. - Biotie will need to secure its working capital beyond Q2 2011 in order to execute its intended product development activities. Income generated from commercial agreements relating to Biotie’s clinical programs may significantly improve the company’s financial position, but no reliable forecast on any potential income from such commercial agreements can be provided. Biotie may therefore need to secure additional financing through the issue of shares, either by exercising its existing standby equity distribution agreement with Yorkville or through share issues.
Financial calendar 2010
Publication of interim report January - September 2010: October 29, 2010
Conference call An analyst and media conference call will take place on August 6, 2010 at 2.00 p.m. Central European Time. The conference call will be held in English. The interim report will be presented by Biotie’s President and CEO Timo Veromaa and CFO Thomas Taapken.
Callers may access the conference directly at the following telephone numbers:US: +1 212 444 0898 UK: +44 (0)20 7806 1968 Finland: +358 (0)9 2319 4349 access code 6094903. Lines are to be reserved ten minutes before the start of conference call. The event can also be viewed as a live webcast at www.biotie.com. An on demand version of the conference will be published on Biotie´s website later during the day.In case you need additional information or assistance, please contact: Virve Nurmi, IR Manager Biotie Therapies, Tel.+358 2 2748 911
_______________________________________________________________________________ Biotie Therapies detailed interim report
About Biotie
Biotie is a drug discovery and development company focused on central nervous system and inflammatory diseases. It has a broad range of innovative small molecule and biological drug candidates at different stages of clinical and pre-clinical development. Biotie’s products address diseases with high unmet medical need and significant market potential, including addiction and psychotic disorders, rheumatoid arthritis, psoriasis and chronic obstructive pulmonary disease (COPD).
Drug development projects and operations: Nalmefene, a new treatment paradigm for alcohol dependence. Nalmefene builds on a novel principle of treating alcohol dependence. Unlike existing therapies, the treatment with Nalmefene is not aimed at keeping the patients from drinking. Nalmefene instead removes the desire to drink, thereby controlling and limiting the intake of alcohol. Nalmefene distinguishes itself by being available as an oral tablet formulation to be taken on an as needed basis.
Biotie has granted worldwide rights for Nalmefene to Lundbeck, with the exception of Korea. Currently, Lundbeck is undertaking three phase 3 clinical trials with Nalmefene for the treatment of alcohol dependence. We expect top-line data from the ongoing clinical trials to become available towards the end of 2010. Biotie is participating in financing some of the clinical development costs.
Ronomilast (previously known as ELB353), an oral PDE4 inhibitor for COPD in clinical development. Ronomilast is a once-daily, oral phosphodiesterase 4 (PDE4) inhibitor with therapeutic potential in chronic inflammatory disorders, particularly in chronic obstructive pulmonary disease (COPD), a serious respiratory disorder with major unmet medical need. In previously completed clinical studies, ronomilast has been demonstrated to be safe and well tolerated at all tested doses up to 100mg once daily. No serious or severe adverse events were reported in any of the study subjects. The pharmacokinetic characteristics of ronomilast demonstrated its suitability for a once daily dosing regimen. Robust and statistically highly significant biomarker responses confirmed the pharmacological activity of well tolerated doses of ronomilast in man.
Vascular Adhesion Protein-1 (VAP-1), a key inflammation receptor. VAP-1 has been shown to play a key role in inflammatory chronic diseases such as rheumatoid arthritis, psoriasis and diabetes. Potentially it also plays a role in other chronic inflammatory diseases for which there is a clear unmet medical need. Biotie has a vast knowledge and strong intellectual property position around this target.
VAP-1 function can be blocked by either antibody (biologic) drugs or small molecule drugs which target the enzyme (SSAO) domain of the receptor. Both approaches are being pursued by Biotie for various therapeutic indications. VAP-1 antibody, a high value biologic for inflammatory diseases in clinical development. Biotie is developing a fully human monoclonal antibody which blocks VAP-1 function. Biotie previously reported that it has successfully completed a clinical trial with its VAP-1 antibody (BTT-1023) in rheumatoid arthritis patients, demonstrating the safety, tolerability, and pharmacokinetics of repeated doses of intravenously administered antibody in 24 rheumatoid arthritis patients. Although the study was not designed to enable formal statistical evaluation of therapeutic activity, in several assessments of treatment effect such as Disease Activity Score based on 28 joint assessment (DAS28) criteria, American College of Rheumatology (ACR) criteria, physician’s global assessment and erythrocyte sedimentation rate, responses in the higher dose groups were greater than in the placebo group. Several patients receiving higher doses of BTT-1023 reached an ACR50 response (i.e. a 50% reduction in their ACR score) during treatment whereas none of the placebo patients reached an ACR50 response.
A similarly designed clinical study in psoriasis patients is currently ongoing and results from this study are expected in September 2010.
Biotie has granted a license to Seikagaku Corporation for the commercial rights to the product in Japan, Taiwan, Singapore, New Zealand, and Australia against up to USD 16.7 million in milestone payments plus royalties on sales in the territory.
Biotie is committed to continuing development of its VAP-1 antibody and preparatory activities towards the start of phase 2 studies are underway. If deemed necessary and if commercially attractive terms can be achieved, Biotie will seek additional development and commercial partners in addition to Seikagaku.
VAP-1 SSAO inhibitors. Biotie is pursuing the development of small molecule inhibitors of VAP-1 SSAO. Currently the program is at the pre-clinical stage. Biotie has granted options to the program to Roche and Seikagaku (for Japan, Taiwan, Singapore, Australia and New Zealand). Under the terms of the option agreements, the parties carry their own costs, but Biotie retains ownership of the developed compounds until the partners choose to exercise its option rights to in-license the product.
Phosphodiesterase 10 (PDE10) inhibitors, a novel treatment paradigm for schizophrenia. PDE10 is a novel molecular drug target in schizophrenia and Biotie has shown antipsychotic activity of PDE10 inhibitors in animal models. Biotie’s PDE10 inhibitors are believed to serve the unmet medical need for novel anti-psychotic drugs with an improved side effect profile and improved efficacy in schizophrenia.
Biotie and Pfizer were engaged in a discovery alliance to jointly identify novel PDE10 inhibitors which ended in June 2010. Pfizer retains the commercial rights for all product candidates discovered until then.
Financial review Revenues: Revenues for the reporting period January - June 2010 amounted to EUR 2.5 million (EUR 2.7 million in the same period 2009) and consisted of income from the ongoing research collaboration with Pfizer, periodization of previously received up-front payments from licensing agreements that the company has in place with several licensing partners and grant income under a grant from the central development agency for the state of Saxony (Sächsische Aufbaubank, SAB, Germany).
Financial result: The net loss for the reporting period amounted to EUR 7.1 million (Total net loss for January-June 2009 including extraordinary items amounted to EUR 9.6 million.). Research and development costs for the reporting period amounted to EUR 7.3 million (Research and development costs for the comparable period in 2009 amounted to EUR 7.5 million, excluding extraordinary items).
Financing: Cash and cash equivalents totaled EUR 11.6 million on June 30 (EUR 18.8 million on June 30, 2009). The company has invested its liquid assets into bank deposits. Bank deposits with maturity more than 3 months are reported in “investments held to maturity” whereas deposits with maturity less than 3 months are reported in the “cash and cash equivalents”.
Biotie has a standby equity distribution agreement with US fund Yorkville in place. Yorkville is obliged to subscribe and pay for ordinary no-par Biotie shares up to a total value of EUR 20 million during the period until September 2012 at Biotie’s discretion (Biotie option). The purpose of this arrangement is to have an option to secure the financing of Biotie’s working capital in the short and medium term.
Shareholder’s equity: The shareholders’ equity of the group amounts to EUR -15.9 million (IFRS). Biotie’s equity ratio was -67.2% on 30 June 2010 (-29.8% on 30 June 2009).
Investments and cash flow: Cash flow from operations was EUR -8.1 million for January - June (EUR -6.7 million during January - June 2009). The group’s investments during the reporting period amounted to EUR 180 thousand (EUR 86 thousand in 2009).
Personnel During the reporting period January - June 2010, the company´s personnel average was 82 (80 during January - June, 2009) and at the end of the reporting period it was 80 (81 on June 30, 2009).
Share capital and shares Biotie shares are all of the same class and have equal rights. Each share entitles the holder to one vote at the general meeting of shareholders. All shares are freely transferable and are quoted on NASDAQ OMX Helsinki Ltd (Small cap, Healthcare).
Biotie´s share capital is EUR 51,506,678.10 (FAS), the total number of shares is 158,752,560. Of these shares, 463,255 are owned by Biotie Therapies Corp.
Changes in ownership From April to June 2010, the company did not become aware of changes in ownership exceeding the disclosure thresholds.
Information on notices of changes in ownership and a monthly updated list of Biotie’s major shareholders is available on the company’s website at www.biotie.com/investors.
Short-term risks and uncertainties Biotie’s strategic risks are predominantly related to the technical success of the drug development programs, regulatory issues, strategic decisions of its commercial partners, ability to obtain and maintain intellectual property rights for its products, launch of competitive products and the development of the sales of its products. The development and success of Biotie’s products depends to a large extent on third parties. Any adverse circumstance in relation to any of its R&D programs might impair the value of the asset and thus, represent a severe risk to the company. Such adverse events could happen on a short term notice and are not possible to foresee.
The key operational risks of Biotie’s activities include the dependency on key personnel, assets (especially in relation to intellectual property rights) and dependency on its license partners’ decisions.
Furthermore, significant financial resources are required to advance the drug development programs into commercialized pharmaceutical products. To fund the operations, Biotie relies on financing from three major sources: income from its license partners, grant income and raising equity financing in the capital markets.
Although Biotie has currently active license agreements in place, the termination of any such agreement would have a negative effect on the short to medium term access to liquidity for the company. Grants have been historically available to Biotie at substantial levels. Availability of grants in the future cannot be guaranteed and this thus poses a potential risk to the income situation of the group in the future. Currently ongoing grant programs are available until Q3 2010. The company relies on capital markets to raise equity financing from time to time. There can be no assurance that sufficient funds can be secured in order to permit the company to carry out its planned activities. Current capital market conditions are volatile and it is currently uncertain whether the company can secure equity financing if and when it needs it. To protect the continuity of Biotie’s operations, it will need to secure its working capital beyond Q2 2011 in order to execute its intended product development activities. Although income generated from commercial agreements with third parties relating to its clinical programs might significantly improve its financial position, a forecast on possible income from future licensing arrangements cannot be provided reliably. Therefore it is possible that Biotie will need to secure additional financing from share issues, either through exercise of its existing standby equity distribution agreement with Yorkville or through share issues in the future.
The group can influence the amount of capital used in its operations by adapting its cost base according to the financing available. Management monitors the capital and liquidity on the basis of the amount of equity and cash funds. These are reported to the Board on a monthly basis.
IFRS and accounting principles This interim financial report has been prepared in accordance with IFRS recognition and measurement principles, and applying the same accounting policy as for the 2009 financial statements. The interim report has been prepared in accordance with IAS 34, Interim Financial Reporting.
This interim report is unaudited. Turku, August 6, 2010 Biotie Therapies Corp. Board of Directors For further information, please contact: Virve Nurmi, Investor Relations Manager tel. +358 2 274 8900 e-mail: virve.nurmi@biotie.com
Distribution: NASDAQ OMX Helsinki Ltd Main media www.biotie.com CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS) 1.4.- 30.6.2010 1.4.- 30.6.2009 1.1.- 30.6.2010 1.1.- 30.6.2009 1.1.- 31.12.2009 EUR 1,000 3 months 3 months 6 months 6 months 12 months
Revenue 1,254 1,357 2,455 2,740 5,628
Research and development expenses -3,523 -8,988 -7,292 -12,913 -21,109 General and administrative expenses -1,124 -937 -2,169 -1,899 -3,768 Other operating income 177 352 272 760 1,618 Other operating expense 0 -8 0 -12 0 Operating profit/loss -3,216 -8,224 -6,734 -11,324 -17,631
Financial income 20 187 65 446 627 Financial expenses -211 -267 -424 -544 -938 Profit/loss before taxes -3,407 -8,304 -7,093 -11,422 -17,942
Taxes 0 1,624 0 1,859 1,859 Net income/loss -3,407 -6,680 -7,093 -9,563 -16,083
Total comprehensive income of the period -3,407 -6,680 -7,093 -9,563 -16,083
Net income/loss attributable to Parent company shareholders -3,407 -6,680 -7,093 -9,563 -16,083
Total comprehensive income attributable to: Parent company shareholders -3,407 -6,680 -7,093 -9,563 -16,083
Earnings per share (EPS) basic & diluted, EUR -0.02 -0.05 -0.04 -0.07 -0.11
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS) EUR 1,000 30.6.2010 30.6.2009 31.12.2009 Assets
Non-current assets Intangible assets 7,169 7,217 7,186 Goodwill 379 379 379 Property, plant and equipment 2,502 2,903 2,666 Other shares 10 10 10 10,060 10,509 10,241 Current assets Prepaid expenses 101 0 0 Available for sale investment 34 131 34 Investments held to maturity 3,000 10,000 0 Accounts receivables and other receivables 1,896 2,170 1,507 Financial assets at fair value through profit or loss 0 3,011 8,853 Cash and cash equivalents 8,638 5,769 10,891 13,669 21,081 21,285
Total 23,729 31,590 31,526
Equity and liabilities
Shareholders’ equity Share capital 43,057 36,361 43,057 Reserve for invested unrestricted equity 1,180 980 1,180 Retained earnings -53,093 -37,204 -37,092 Net income/loss -7,093 -9,563 -16,083 Shareholders’ equity total -15,949 -9,426 -8,938
Non-current liabilities Provisions 143 153 160 Non-current financial liabilities 25,714 25,403 25,597 Pension benefit obligation 554 586 543 Other non-current liabilities 7,095 6,359 6,729 Non-current deferred revenues 429 1,593 1,375 33,935 34,094 34,404
Current liabilities Provisions 597 641 594 Pension benefit obligation 16 15 17 Current financial liabilities 199 233 217 Current deferred revenues 1,891 3,056 1,953 Accounts payable and other current liabilities 3,040 2,977 3,279 5,743 6,922 6,060
Liabilities total 39,678 41,016 40,464
Total 23,729 31,590 31,526
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Attributable to equity holders of the parent company EUR 1,000 Shares (1000 pcs) Share Capital Reserve For invested Un- restricted equity Own Shares Retained Earnings Share- holders’ equity total BALANCE AT 1.1.2009 144,321 36,361 980 -15 -37,215 110 Total comprehensive income for the period -16,083 -16,083 Options granted 339 339 Share issue 14,432 7,216 7,216 Cost of share issue -520 -520 Reissue of own shares pursuant to SEDA agreement 200 -200 0 14,432 6,696 200 0 -15,944 -9,048 BALANCE AT 31.12.2009 158,753 43,057 1,180 -15 -53,160 -8,938 Total comprehensive income for the period -7,093 -7,093 Options granted 82 82 0 0 0 0 -7,011 -7,011 BALANCE AT 30.6.2010 158,753 43,057 1,180 -15 -60,171 -15,949 CONSOLIDATED STATEMENT OF CASH FLOWS 1.1.- 30.6.2010 1.1.- 30.6.2009 1.1.- 31.12.2009 EUR 1,000 6 months 6 months 12 months Cash flow from operating Activities Net income/loss -7,093 -9,563 -16,083 Adjustments: Non-cash transactions -494 4,141 3,331 Addition/disposal due to revaluation of financial assets at fair value through profit or loss 0 -11 -53 Interest and other financial expenses 424 544 963 Interest income -127 -445 -599 Taxes 0 -1,859 -1,859 Change in working capital: Change in accounts receivables and other receivables -490 -589 -126 Change in accounts payable and other liabilities -255 904 1,172 Change in mandatory provisions -14 32 -8 Interests paid -36 -81 -106 Interests received 32 242 48 Taxes paid -6 -5 -6 Net cash from operating activities -8,059 -6,690 -13,326
Cash flow from investing activities Change in financial assets at fair value through profit or loss Additions 0 -3,000 -9,000 Disposals 8,886 0 200 Change in investments held to maturity Additions -3,000 -900 -900 Disposals 0 9,400 20,142 Investments to tangible assets -180 -86 -165 Net cash used in investing activities 5,707 5,414 10,277
Cash flow from financing activities Payments from share issue 0 0 7,216 Share issue costs 0 0 -520 Proceeds from borrowings 186 360 632 Repayment of loans 0 0 -40 Repayment of lease Commitments -87 -52 -86 Net cash from financing activities 99 308 7,202
Net increase (+) or decrease (-) in cash and cash equivalents -2,253 -969 4,153 Cash and cash equivalents in the beginning of the period 10,891 6,738 6,738 Cash and cash equivalents in the end of the period 8,638 5,769 10,891
Contingent liabilities EUR 1,000 30.6.2010 30.6.2009 31.12.2009
Operating lease commitments 111 145 137
Due within a year 78 82 88 Due later 33 63 49
Rent commitments 303 454 382
Due within a year 237 233 237 Due later 66 221 145 Total 414 599 519
The Group leases motor vehicles, machines and equipment with leases of 3 to 5 years. Rent commitments include Pharmacity premises until 30 November 2011. These premises have been subleased. Commitments On June 30, 2010 Biotie had purchase commitments, primarily for contract research work services, totaling EUR 3,1 million. Related party transactions There have not been major changes within the related party transactions in 2010.
KEY FIGURES 1.1.- 30.6.2010 1.1.- 30.6.2009 1.1.- 31.12.2009 EUR 1,000 6 months 6 months 12 months Business development Revenues 2,455 2,740 5,628 Personnel on average 82 80 81 Personnel at the end of period 80 81 82 Research and development costs 7,292 12,913 21,109 Capital expenditure 180 86 475
Profitability Operating profit/loss -6,734 -11,324 -17,631 as percentage of revenues, % -274.3 -413.3 -313.27 Profit/loss before taxes -7,093 -11,422 -17,942 as percentage of revenues, % -288.9 -416.9 -318.80
Balance sheet Cash and cash equivalents 11,638 18,780 19,744 Shareholders equity -15,949 -9,426 -8,938 Balance sheet total 23,729 31,590 31,526
Financial ratios Return on equity, % - - - Return on capital employed, % -56.0 -53.9 -86.0 Equity ratio, % -67.2 -29.8 -28.4 Gearing, % -89.5 -72.7 -67.9
Per share data Earnings per share (EPS) basic & diluted, EUR -0.04 -0.07 -0.11 Shareholders´equity per share, EUR -0.10 -0.07 -0.0563 Dividend per share, EUR - - - Pay-out ratio, % - - - Effective dividend yield, % - - - P/E-ratio - - -
Share price Lowest share price, EUR 0.45 0.23 0.23 Highest share price, EUR 0.65 0.48 0.67 Average share price, EUR 0.55 0.30 0.42 End of period share price, EUR 0.47 0.33 0.55 Market capitalization at the end of period MEUR 74.6 47.6 87.3 Trading of shares Number of shares traded 39,220,905 20,710,329 51,471,584
As percentage of all 24.7 14.4 32.4 Adjusted weighted average number of shares during the period 158,752,560 144,320,560 144,992,735 Adjusted number of shares at the end of the period 158,752,560 144,320,560 158,752,560
Formulas for the Calculation of the Key figures Return on capital employed, % Profit (loss) before taxes + interest expenses and other financial expenses --------------------------------------------------------------- x 100 Balance sheet total - non-interest bearing liabilities Equity ratio, % Shareholders’ equity --------------------------------------------------------------- x 100 Balance sheet total - advanced received Gearing, % Interest bearing liabilities - cash and cash equivalents -------------------------------------------------------------- x 100 Shareholders’ equity Earnings per share (EPS) Profit attributable to parent company shareholders ------------------------------------------------------------------ Adjusted average number of outstanding shares during the period Shareholders’ equity per share Shareholders’ equity ------------------------------------------------------------------ Adjusted number of shares at the end of the period
