CHF 149.1 Million Liquid Assets on Hand and Cash-Burn on Track for Full Year
BASEL, Switzerland and BRIDGEWATER, N.J., Aug. 16 /PRNewswire-FirstCall/ -- Speedel today announced financial results for the three months ending 30 June 2006.
Financial Highlights * At 30 June 2006 liquid assets on hand were CHF 149.1 million * Cash-burn was CHF 16.5 million for the second quarter and CHF 33.3 million for the first half 2006 * CHF 63.6 million of loan converted into Speedel shares during Q2 and Q3 before maturity in July 2007
Konrad P. Wirz, Chief Financial Officer, commented: “Our cash-burn rate of CHF 16.5 million for the second quarter will increase during the second half and is expected to reach our full year guidance of about CHF 80 million as we continue to invest in our mature and diverse pipeline. The early conversion of the convertible loan demonstrates the confidence of the loan holders in Speedel’s prospects, strengthens the balance sheet, improves the free float of shares and results in a cash inflow of CHF 15.9 million.”
Financial Key Data(i) (CHF million) Q2 2006 Q2 2005 Change 6m 2006 6m 2005 Change Revenues 0.0 0.0 - 0.0 0.0 - Research & Development (16.9) (14.6) +2.3 (31.0) (29.3) +1.7 General & Administration (2.9) (3.5) -0.6 (5.9) (5.4) +0.5 Total operating expenses (19.7) (18.1) +1.6 (36.8) (34.7) +2.1 Operating loss (19.7) (18.1) +1.6 (36.8) (34.7) +2.1 Finance costs, net (6.2) 0.3 +6.5 (7.1) (0.4) +6.7 Taxes 0.5 0.0 -0.5 0.6 0.6 - Loss for the period (25.4) (17.8) +7.6 (43.3) (34.6) +8.7 Basic & diluted loss per share/CHF(ii) (3.65) (2.84) +0.81 (6.57) (6.60) -0.03 Cash-burn(iii) 16.5 16.5 - 33.3 32.2 +1.1 30 June 06 31 Dec 05 Change Liquid assets(iv) 149.1 101.1 +48.0 Footnotes i-iv can be found on last page of this press release.
Consolidation is based on IFRS, but these results for the period are unaudited. Complete financial statements and notes for the 6 months ending 30 June 2006 can be accessed at http://www.speedel.com/section/6/subsections/3
Early conversion of loan into Speedel shares
Holders of over 90% of the company’s outstanding CHF 70 million of loan notes have converted them into Speedel shares during the second and third quarters of 2006. The convertible loan had been funded by a small group of investors in August 2005 when Speedel was still a private company with a coupon of 2% per annum and a maturity date of 31 July 2007.
The terms of the loan allow conversion at any time into registered voting shares at a total price of CHF 125 per share, comprised of a fixed conversion rate of CHF 100 loan amount and an additional exercise payment in cash of CHF 25 per share. During the second and third quarters, holders representing CHF 63.6 million of the loan converted their notes into 636,200 shares, resulting in a cash inflow of CHF 15.9 million to Speedel. CHF 6.4 million of the loan remains unconverted as per the terms of the loan agreement.
Research & Development Expenses
R&D expenses increased by CHF 2.3 million for the second quarter and by CHF 1.7 million for the first six months compared to the corresponding periods in 2005. This difference is due to two main factors which partially offset each other: during Q1 2005 there was a CHF 4.0 million license fee payment to a licensor upon reaching a development milestone, whereas during the first six months 2006 there was an increase in ongoing R&D costs, mainly for the development program of SPP301 which only entered Phase III in the second half of 2005.
General & Administration Expenses
G&A expenses decreased by CHF 0.6 million for the second quarter and increased by CHF 0.5 million for the first six months compared to the corresponding periods in 2005, mainly due to the non-cash expensing of new share options and increased investor relations activities.
Finance Costs, net
Net finance costs increased by CHF 6.5 million for the second quarter and by CHF 6.7 million for the first six months compared to the corresponding periods in 2005. The significant increase by CHF 6.5 million during the second quarter was largely due to the early conversion of CHF 63.6 million of the CHF 70 million convertible loan, which has resulted in a bringing forward of the non-cash amortisation charge as the loan has a maturity date of 31 July 2007. It is expected that financial expenses will revert to normal levels going forward. Meanwhile financial income has improved due to the increased funds available for investment.
Balance Sheet
As of 30 June 2006, liquid assets on hand were CHF 149.1 million compared to CHF 101.1 million at 31 December 2005. This reflects the public offering of 500,000 existing treasury shares during March 2006 which raised net proceeds of CHF 78.7 million. With the early conversion of CHF 8.0 million of the convertible loan the company received a cash inflow of CHF 2.0 million during the second quarter and with the early conversion of another CHF 55.6 million during the third quarter will also receive CHF 13.9 million, due to the exercise fee of CHF 25 per share. The impact of this conversion during the second quarter is shown on the company’s financial statements at 30 June 2006, but in addition there is a pro-forma table in the notes to the financial statements highlighting the effect of the third quarter conversion as if it had occurred by 30 June 2006.
Outlook
The company reiterates its previous guidance that it has sufficient funds to finance its current pipeline through Q1 2008.
Share Capital
On 30 June 2006, Speedel Holding Ltd had 7,089,760 registered shares with a nominal value of CHF 2 per share which are listed on the SWX Swiss Exchange under the symbol SPPN.
After the conversion of the loan into issued capital and taking into account shares issued for the recent exercises of employee options, the company’s share capital consists of:
* Issued capital 7,645,960 registered voting shares, with nominal value of CHF 2.00 each. * Conditional capital Up to 674,635 registered voting shares with nominal value of CHF 2.00 each. This mainly covers the company’s employee share option plan and the remaining element of the convertible loan.
Since the expiry of the lock ups for board and management members related to the March public offering, and together with the increase in issued capital, Speedel’s free float on the SWX Swiss Exchange has improved from about 35% to about 40%.
Recent news flow * In April Novartis confirmed that the U.S. Food and Drug Administration (FDA) have accepted for review the new drug application (NDA) for SPP100 (Rasilez(1)) as a treatment for hypertension both as monotherapy and in co-administration with other anti-hypertensives. The NDA includes data from more than 6,000 patients with high blood pressure treated with SPP100 in 34 clinical trials. * During the Annual Scientific Meeting and Exposition of the American Society of Hypertension (ASH), held in New York 16-20 May, further data on SPP100 was presented. Phase III data from trials conducted by Novartis showed that SPP100 provides a significant and sustained blood pressure response over 24 hours both when used as a monotherapy and in co-administration with the diuretic hydrochlorothiazide HCTZ. * At the meeting of the European Society of Hypertension (ESH) in Madrid on 13 June, further Phase III data from trials conducted by Novartis showed that SPP100 has potential in diabetic patients both as a monotherapy and in co-administration with the ACE inhibitor ramipril. Web Cast and Conference Call
At 15.00 CET /14:00 London/ 09:00 EDT today 16 August 2006, the company will host a web cast which can be accessed at http://www.speedel.com/section/6/subsections/7. In addition participants may join a teleconference facility using the following telephone numbers:
Switzerland: +41 (0) 44 580 3409 UK: +44 (0) 845 245 0248 USA: +1 866 789 2220 Passcode for all: 4162568
Slides for the web cast will be downloadable from 10:00 CET today and the web cast will be accessible on the company’s website until 15 September 2006.
Calendar 2006 Q3 2006 15 November R&D Day 29 November About Speedel
Speedel is a public biopharmaceutical company that seeks to create value for patients, partners and investors by developing innovative therapies for cardiovascular and metabolic diseases. Speedel is a world leader in renin inhibition, a promising new approach with significant potential for treating cardiovascular diseases. Our lead compound SPP100 (Rasilez), the first-in- class renin inhibitor, is partnered with Novartis for development and commercialization in hypertension, and the NDA was filed with the FDA in the US in Q12006. Our pipeline covers three different modes of action, and in addition to SPP100, includes SPP301 in Phase III, SPP200 in Phase II, SPP635 in Phase I, and several pre-clinical projects.
Speedel develops novel product candidates through focused innovation and smart drug development from lead identification to the end of Phase II. We either partner with big pharma for Phase III and commercialisation in primary- care indications, or we may ourselves complete Phase III development in specialist indications. Candidate compounds for development and the company’s intellectual property come from our late-stage research unit Speedel Experimenta and from in-licensing. Our team of approximately 70 employees, including over 30 experienced pharmaceutical scientists, is located at our headquarters and laboratories in Basel, Switzerland and at offices in New Jersey, USA and Tokyo, Japan.
In March 2006 the company raised gross proceeds of CHF 83.95 million (approximately EUR 53m or USD 64m) through the public offering of 500,000 treasury shares. As a private company, we have previously raised gross proceeds of CHF 239 million (approximately EUR 154 million or USD 183 million) from private placements of equity securities and two convertible loans and we have had total revenues, principally from milestone payments, of CHF 57.7 million (approximately EUR 37 million or USD 44 million). The company’s shares were listed on the SWX Swiss Exchange under the symbol SPPN on 08 September 2005.
Forward looking statements
This press release includes forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are based on our current expectations and projections about future events. All statements, other than statements of historical facts, regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “may,” “expects” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We or our partners may not actually achieve the plans, intentions or expectations described in these forward-looking statements and you should not place undue reliance on them. There can be no assurance that actual results of our research and development activities and our results of operations will not differ materially from these expectations. Factors that could cause actual results to differ from expectations include, among others: our or our partners’ ability to develop safe and efficacious products; our or our partners’ ability to achieve positive results in clinical trials; our or our partners’ ability to obtain marketing approval and market acceptance for our product candidates; our ability to enter into future collaboration and licensing agreements; the impact of competition and technological change; existing and future regulations affecting our business; changes in governmental oversight of pharmaceutical product development; the future scope of our patent coverage or that of third parties; the effects of any future litigation; general economic and business conditions, both internationally and within our industry, including exchange rate variations; and our future financing plans.
(1) Rasilez (SPP100, aliskiren) is a Novartis trade name pending regulatory approval End Notes to Financial Key Data (i) Numbers may not add up due to rounding (ii) Earnings per share are calculated on the weighted average of registered shares outstanding for the periods: Q2 2006 = 6,973,539; Q2 2005 = 6,267,685; 6m 2006 = 6,596,535; 6m 2005 = 5,235,482 (iii) Cash-burn is defined as the difference in liquid assets between the beginning and end of the period, minus any cash inflow during the period (iv) Includes cash and cash equivalents and financial assets at fair value through profit and loss
Speedel Pharmaceuticals, Inc.
CONTACT: Nick Miles, Director Communications & Investor Relations, T:+41-0-61-206-40-00, D: +41-0-61-206-40-14, F: +41-0-61-206-40-01, M:+41-0-79-446-25-21, E: nick.miles@speedel.com; or Frank LaSaracina,Managing Director, T: +1-732-537-2290, F: +1-732-537-2292, M:+1-908-338-0501, E: frank.lasaracina@speedel.com, both of SpeedelPharmaceuticals, Inc.
