Company announcement no. 23/2008 To: OMX Nordic Exchange Copenhagen Interim Report for the 3 months ended March 31, 2008 (Unaudited) May 14, 2008 LifeCycle Pharma A/S Kogle Allé 4 DK‐2970 Hørsholm CVR no. 26 52 77 67 LifeCycle Pharma A/S Page 1 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Highlights for the first quarter of 2008 • LifeCycle Pharma announced the initiation of the For the first quarter of 2008, LifeCycle Phase II clinical trial program using LCP‐Tacro, for reported a net loss of DKK 65.2 the treatment of Autoimmune Hepati- million (approximately is EUR 8.7 million) compared to a net loss of DKK 35.1 million (approximately • LifeCycle Pharma announced positive interim EUR 4.7 million) for the same period in 2007. results from an ongoing Phase II clinical During the first three trial for months of 2008, LifeCycle Pharma recogn- DKK 2.9 million LCP‐Tacro in stable liver transplan- zed patients. These (approximately EUR 0.4 million) in results were based on a pre‐planned revenues compared assessment to DKK 3.8 million of 11 stable liver transplan- patients and (approximately EUR 0.5 million) in the same period of 2- demonstrated that LCP‐Tacro has a superior 07. profile when compared to Prograf®. For the first quarter of 2008, LifeCycle Pharma's research and development costs • amounted to DKK Fenoglide™ was launched on the US market in 52.9 million (approximately EUR 7.1 mil- February 2008, by the Company's partner ion) compared Sciele to DKK 32.1 million (approximately Pharma. It is LifeCycle Pharma's tablet EUR 4.3 million) formulation during the same period in 2007. The of fenofibrate, a cholesterol‐lowering higher research therapeutic and development costs reflect substance for the treatment of the increased activity in hyperlipidemia and the company's pipeline, primarily hypertriglyceridemia. Fenoglide™ contains the costs related to 120 mg / the clinical trials being carried 40 mg of active substance, the lowest out, including three marketed Phase II clinical studies for standard dose without any significant LCP‐Tacro and a Phase II food effect. clinical study for LCP‐AtorFen, but also - Fenoglide™ was approved by the US FDA in osts related to August the increased number of employees working with 2007. research and development. • LifeCycle Pharma announced positive top‐line Administrative expenses increased results from a completed Phase II from DKK 10.4 clinical trial for million (approximately EUR 1.4 LCP‐Tacro in stable kidney transplant million) in the first patients. quarter of 2007 to DKK 17.5 million Data demonstrated that LCP‐Tacro has (approximately a potential EUR 2.4 million) in the first best‐in‐cla- profile when compared to the quarter of 2008. This s increase is attributable to the general s- currently marketed twice rengthening of daily tacrolimus capsule administrative functions and related costs following Prograf®. the company's IPO in November 2006, and the preparation of the rights issue announced in March Outlook for 2008 2008. LifeCycle Pharma retains its 2008 guidance, with the expectance of the financial impact of the successful On March 31, 2008, LifeCycle Pharma had cash rights issue in April 2008.- and cash equivalents of DKK 265.5 million (approximately EUR 35.6 million). LifeCycle Pharma is projecting an operating loss of DKK 260 - 290 million. The net loss is expected to be in the During the first quarter of 2008, LifeCycle range of 250 - 280 million- Pharma continued the positive development from 2007 and achieved the following major business As of 31 December 2007, and scientific the Company's cash position milestones: equaled DKK 331.7 million and the Company's 31 LifeCycle Pharma A/S Page 2 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) December 2008 cash position is expected to be initiated in the second expected to be in the half of 2008 range of DKK 445 ‐ 485 mi- while at the same time seeking a partner for lion. completion of the phase III clinical trial program and Subsequent Events subsequent commercialization. On April 17, 2008 LifeCycle Pharma announced the successful completion of its rights issue. The rights Conference call issue was 99.62% subscribed Today at 6.00 pm (CET), LifeCycle Pharma with 23,987,771 offered will be new shares of DKK 1 nominal hosting a conference call. To access the call value subscribed at DKK please dial 17 per share. The gross proceeds one of the following numbers: +1 866 966 will be DKK 407.8 5335 (US), million, and the net proceeds will +44 2030 032 666 (UK), +45 8088 8649 be approximately (DK). A DKK 375 million. recording will be available on the company's website www.lcpharma.com from Thursday May 15, 2008 at 7 On April 24, 2008 LifeCycle Pharma announced the pm (CET). passing of the annual general meeting. The existing 5 members of the Board of Directors were re‐elected Key Figures and in addition Paul Edick and The foll- key figure- comply with the Anders Götzsche were wing elected as new members. Peter G. Nielsen and requirements under IFRS and the Danish financial Michael Beckert were appointed reporting requirements. All key figures and as new executive financial officers. Executive management ratios are in conformity with the current hereafter consist s of accounting Flemming Ørnskov, Hans Christian policies. The figures have been stated in Teisen, Michael thousands, Beckert and Peter G. Nielsen. except for the financial ratios. On May 7, 2008 LifeCycle Pharma Key figures and financial ratios have been cal- announced positive ulated in results from the company's Phase accordanc- with the recommendatio- of the II clinical program s with LCP‐AtorFen, a fixed‐dose Association of Danish Financial Analy- combination product ts. of atorvastatin and fenofibrate for the treatment of mixed dyslipidemia. A Phase III clinical program is LifeCycle Pharma A/S Page 3 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Key Figures Q1 Q1 Year Q1 Q1 Year 2008 2007 2007 2008 2007 2007 DKK'000 DKK'000 DKK'000 EUR'000 EUR'000 EUR'000 (unaud.) (unaud.) (aud.) (unaud.) (unaud.) (aud.) Income Statement Revenue 2,928 3,789 64,705 393 508 8,677 Research and development co- (52,916) (32,096) (183,608) (7,096) (4,304) (24,623) ts Administrative expenses (17,545) (10,400) (54,033) (2,353) (1,395) (7,246) Operating loss (67,533) (38,707) (172,936) (9,057) (5,191) (23,192) Net fina ncia l in come 2,323 3,605 12,697 312 483 1,703 / (expenses) Net loss for the period (65,210) (35,102) (160,239) (8,745) (4,707) (21,489) Balance Sheet Cash and cash equivalents 265,501 432,568 331,740 35,605 58,010 44,488 Total assets 311,892 475,829 381,912 41,827 63,811 51,217 Share capital 32,105 30,514 31,771 4,305 4,092 4,261 Total equity 266,277 427,804 325,689 35,709 57,371 43,677 Investment in prop 801 140 5,900 107 19 791 erty, plant and equipment Cash Flow Sta teme nt Cash flow fr om ope rating (66,244) (31,091) (130,727) (8,884) (4,169) (17,531) activities Cash flow fr (801) (140) (7,298) (107) (19) (979) om investing activities Cash flow fr om fi nan cing 897 (859) 3,769 120 (115) 505 activities Cash and cash equivalents a- 265,501 432,568 331,740 35,605 58,010 44,488 period end Financial Ratios Basic and dil- (2.05) (1.15) (5.19) (.27) (.15) (.70) ted EPS Weighted avera- 31,833,188 30,401,868 30,875,434 31,833,188 30,401,868 30,875,434 e number of sh- res Average number- 98 45 64 98 45 64 of employees (- TEs) Assets/equity 1.17 1.11 1.17 1.17 1.11 1.17 Revenues In the first quarter of 2008, LifeCycle Pharma In addition, LifeCycle Pharma has a recognized DKK 2.9 million in revenu- subsidiary in the US to monitor the clinical , generated under activities in the company's collaboration the US and to maintain a close contact agreements compared to to the US DKK 3.8 million in the same peri- authorities and market. Currently, all our d of 2007. clinical trials are being conducted in the US and Canada. Research and Development Costs Research and development costs were DKK 52.9 million Administrative Expenses for the first quarter of Administrati- expenses increased from DKK 10.4 2008 compared to DKK 32.1 e million for the same period in 2007. - million in the first quarter of 2007 to DKK 17.- he higher research million in and development costs reflect the first quarter of 2008. the increased activity in This increase is attributable to the company's pipeline, primarily the general strengthening of the costs related to administrative functions the clinical trials carried out, but and related costs following the also costs related to company's IPO in the increased number of employees November 2006, and the preparation of working with the rights issue research and development. On March 31, 2008 announced in March 2008. 81 employees was working within research and development compared to 37 on March 31, 2007. Warrant Compensation Costs LifeCycle Pharma A/S Page 4 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) For the first quarter of 2008, Net loss for the first quarter of 2008 a total of DKK 3.1 million was DKK 65.2 was recognized as share‐based The million compared to DKK 35.1 million in compensation. the same comparable figures for 2007 were DKK 4.2 million for period 2007. the first quarter. Cash Flow The warrant compensation costs for As per March 31, 2008, the balance the first quarter of sheet reflects cash 2008 were allocated to research and d- and cash equivalents of DKK 265.5 velopment costs million compared to at DKK 1.3 million and to DKK 331.7 million as of December 31, administrative expenses at 2007. This DKK 1.8 million. represents a decrease of DKK 66.2 million primarily related to the company's operating activities for the In the first quarter of 2008 a total of 80,000 warrants period. was granted members of the Executive Management at a strike price of DKK, while other employees was Balance Sheet granted a total of 105,000 warrants As per March 31, 2008, total assets at a strike price of were DKK 311.9 DKK 33. In the first quarter of million compared to DKK 381.9 million at 2008 a total of 198,015 the end of warrants have been cancelled. During the first quarter 2007. in 2008 a total of 334,469 have been exercised. Shareholders' equity equalled DKK 266.3 million as of On March 31, 2008 there were a March 31, 2008 compared to DKK total of 3,728,658 325.7 million at the outstanding warrants at an average strike price of DKK end of 2007. 36.2. Members of the Executive Management held 1,716,027 warrants at an average strike price of Accounting Policies DKK 40.5, while other employees held 2,01- The interim report has been prepared in ,631 warrants at accordance an average strike price of D- wi- th- Copenhagen Stock Exchange's financial K 32.6. h report- requirements listed companies. ng Please refer to LifeCycle interim report compliance with Pharma's latest annual report International for details of the company's warrant Accounting Standard No. 34 (IAS 34), “Interim Financial programs. Reporting”. Operating Loss The accounting policies used for the interim report are LifeCycle Pharma's operating loss for t- consistent with the accounting policies e first quarter of used in the 2008 was DKK 67.5 million company's latest annual report, which was compared to DKK 38.7 prepared in million in the corresponding perio- accordance with the IFRS as adopted by the of 2007. EU and the additional Danish disclosure requirements for financial Financial Income reporting of listed companies. During the first quarter of 2008, the company recognized net financial income of DKK 2.3 million Financial Review compared to DKK 3.6 million in the fir- LifeCycle Pharma publishes its financial t quarter of 2007. statements in The decrease in financial income Danish Kroner (DKK), which is the functional - is reflecting the urrency of negative cash flow in 2007- the company and the group. Solely for the convenience of the reader, this Interim Report contains a conversion Net Loss of certain DKK amounts into Euro (EUR) at a specified rate. These converted amounts should not be construed as representations that the DKK amounts actually LifeCycle Pharma A/S Page 5 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) represent such EUR amounts or could be converted into EUR at the rate indicated or at any other rate. Unless otherwise indicated, conversion herein of financial information into EUR has been made using the Danish Central Bank's spot rate on March 31, 2008, which was EUR 1.00 = DKK 7.4568. Additional information: Hans Christian Teisen CFO & Executive Vice President Telephone +45 70 33 33 00 The forward looking statements disclaim any obligation or undertaking to and targets contained update or herein are based on LifeCycle Pharma A/S's revise any forwa- statements, d targets or looki- g management's current view and estimates contained in this interim assumptions. Such report to reflect any statements involve known and change in events, conditions, assumptions or unknown risks and u- that may cause actual results, circulations on which any such statements are based c- r- a- n- i- s performance or events to differ materially unless so required by applicable l- from those w. anticipated herein. LifeCycle Pharma A/S expressly LifeCycle Pharma A/S Page 6 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Executive Management's and the Board of Directors' Statement on the Interim Rep- rt The Executive Management and Standard No. 34 (IAS 34), “Interim Financial Re- the Board of orting” Directors have today considered and additional Danish disclosure and adopted the requirements for Interim Report of LifeCycle Pharma A/S financial reporting of listed compan- for the 3 es. months which ended March 31, 2008. We consider the applied accounting policies to be The Interim Report is prepared in acc- appropriate and, in our opinion, the rdance with the Interim Report Copen- Stock Exchan- financial reporting gives a true and fair view of the agen e's assets and liabilities, requirements for listed companies. Th- financial position, results of operation and ca- Interim Report h flow of is in compliance with International Accounting the Group. Hørsholm, May 14, 2008 Executive Management Flemming Ørnskov Hans Christian Teisen Michael Beckert President & CEO Executive Vice President & CFO Executive Vice President Peter G. Nielsen Executive Vice President Board of Directors Claus Braestrup Kurt Anker Nielsen Thomas Dyrberg (Chairman) Jean Deleage Gérard Soula Paul Edick Anders Götzsche LifeCycle Pharma A/S Page 7 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Income Statement Consolidated (DKK'000) Q1 Q1 Year 2008 2007 2007 (unaud.)(unaud.) (aud.) Revenue 2,928 3,789 64,705 Research and development costs (52,916) (32,096) (183,608) Administrative expenses (17,545) (10,400) (54,033) Operating loss (67,533) (38,707) (172,936) Financial income 4,290 4,088 18,553 Financial expenses (1,967) (483) (5,856) Loss before tax (65,210) (35,102) (160,239) Tax for the period ‐‐‐ Net loss for the period (65,210) (35,102) (160,239) Basic and diluted EPS (2.05) (1.15) (5.19) Weighted average number of shares 31,833,188 30,401,868 30,875,434 LifeCycle Pharma A/S Page 8 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Assets Consolidated (DKK'000) Q1 Q1 Year 2008 2007 2007 (unaud.)(unaud.) (aud.) Licenses and rights 717 767 729 Intangibl e assets 717 767 729 Property, plant and equipment 20,871 22,019 21,837 Leasehold improv ements 5,920 5,627 6,220 Proper ty, plant and equipmen t 26,791 27,646 28,057 Non‐current assets 27,508 28,413 28,786 Trade receivables 3,937 7,185 3,842 Other receivables 10,249 6,492 14,379 Prepayments 4,697 1,171 3,165 Receivables 18,883 14,848 21,386 Cash and cash equiv alents 265,501 432,568 331,740 Current assets 284,384 447,416 353,126 Assets 311,892475,829 381,912 LifeCycle Pharma A/S Page 9 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Equity & liabilities Consolidated (DKK'000) Q1 Q1 Year 2008 2007 2007 (unaud.)(unaud.) (aud.) Share capital 32,105 30,514 31,771 Share premium 726,456 717,518 724,645 Tra nsl atio n reserves 1,332 ‐ 821 Retained earnings/loss (493,616) (320,228) (431,548) Equity 266,277 427,804 325,689 Finance lease 19,266 23,359 20,416 Non‐current liabilities 19,266 23,359 20,416 Finance lease 4,993 5,904 5,092 Trade payables 11,451 14,563 15,066 Defer red reven ue 858 ‐ 1,716 Other payables 9,047 4,199 13,933 Current liabilities 26,349 24,666 35,807 Liabilities 45,615 48,025 56,223 Equity and liabilities 311,892 475,829 381,912 LifeCycle Pharma A/S Page 10 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Cash Flow Statement Consolidat ed (DKK'000) Q1 Q1 Year 200820072007 (unaud.) (unaud.) (aud.) (67,533) (38,707) (172,936) 3,142 4,200 18,017 2,049 1,635 7,004 Net loss on sale of fixed assets ‐‐60 Chang es in working capital (6,285) (1,349) 3,558 Cash flow from operating activities before interest (68,627) (34,221) (144,297) Interest receiv ed 4,200 3,613 17,914 Interest paid (1,817) (483) (4,344) Cash flow from operating activities (66,244) (31,091) (130,727) Purchase of prope rty, pla nt and equipme nt (801) (140) (5,900) Net loss on sale of pr operty, plant and equipment ‐‐(60) Cash transfer to restricted security deposit ‐‐(1,338) Cash flow from investing activities (801) (140) (7,298) Proceed s from bank borrowings and finance lease ‐‐1,118 Installments on bank borrowings and finance lease (1,249) (1,483) (6,356) Proceed s from issuance of shares, net 2,146 624 9,007 Cash flow from financing activities 897 (859) 3,769 Increase/(decr ease) in cash and cash equival ents (66,148) (32,090) (134,256) Cash and cash equivalents at beginning of period 330,402 464,658 464,658 Cash and cash equiv alents at end of period 264,253 432,568 330,402 Cash and cash equiv alents at end of period comprise: Restricted bank deposit 1,248 ‐ 1,338 Deposit on demand and cash 264,253 432,568 330,402 265,501432,568 331,740 LifeCycle Pharma A/S Page 11 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Consolidated equity Number of Share Share Translation Retained shares capital premium reserve s earnings DKK'000 DKK'000 DKK'000 DKK'000 30,369,816 30,370 717,039 0 (289,326) Compr ehens ive income: Net loss for the period (35,102) (35,102) Total comprehensive income (35,102) Warrant exercises 144,232 144 402 546 Share ‐based paymen t - 4,200 - - - 0 Costs related to capital increases 77 77 Equity as of March 31, 2007 30,514,048 30,514 717,5180427,804 Compr ehens ive income: Net loss for the period (125,137) (125,137) Exchange rate adjustment of investments in subsidiaries 821 821 Total comprehensive income (124,316) Warrant exercises 1,256,657 1,257 7,261 8,518 Share ‐based paymen t - 13,817 - - - - 7 Costs related to capital increas es (134) (134) Equity as of December 31, 2007 31,770,705 31,771 724,645- 325,689 - 1 Compr ehens ive income: Net loss for the period (65,210) (65,210) Exchange rate adjustment of investments in subsidiaries 511 511 Total comprehensive income (64,699) Warrant exercises 334,469 334 1,927 2,261 Share ‐based paymen t - 3,142 - - - 2 Costs related to capital increas es (116) (116) Equity as of March 31, 2008 32,105,174 32,105 726,456- 266,277 - - - 2 The share capital is not available for distribution, while other reserves are d- stributable for dividend purposes subject to the provision of the Danish Company Act. LifeCycle Pharma A/S Page 12 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Grant of Warrants Also today, the board of directors decided to issue 350,000 warrants to the Board of Directors, consultants, and employees the Company and the Company's subsidiary. Out of the 350,600 warrants granted, 80,000 were granted to the Chief Medical Officer Michael Beckert, 65,000 warrants were granted to some of the board members and 205.600 warrants were granted to other employees and consultants. Each warrant entitles the holder to subscribe one share of nominal DKK 1 in the Company against cash contribution equal to the closing price of the Company's shares at the OMX Nordic Exchange on May 15, 2008, to ensure that the exercise price reflects the fair market price per share following the st disclosure of the interim report for 1 quarter of 2008. By application of the Black‐Scholes formula, the market value of the warrant program can be calculated as DKK 11.98 per warrant assuming an exercise price of DKK 27.10, equal to the closing price of the Company's share at the OMX Nordic Exchange on May 13, 2008, based on an interest rate of 3.7251% and a volatility of the Company's shares set to 35%. LifeCycle Pharma A/S Page 13 of 14 Company Announcement No. 23/2008 Interim Report 3 months ended March 31, 2008 (May 14, 2008) Exhibit A - warrant adjustm- page I‐74 in the Offering Circular published nt in c- with rights issue rights issue rights issue n- the the number of the number of the number of e- t- o- Accordi- outstanding warrants as well as the exercise price of g Company- these warrants will thus be adjusted following the s adjustm- c- of the Offering. The ad- ad- ad- nt m- us- us- us- clauses l- me- me- me- apply t- ts ts ts in o- the eve- t of changes to the Company's share capital calculated in the offering circular, page at a price which does not I‐72 was based corres- to market price. In the rights issue on the assumptions was fully - ond ubscribed. announced March 18, 2008, the price per offer share was below market price of the shares As the rights issue was subscribed by 99.- prior to the 2%, the announcement of the rights issue. As Company below announces the actual dilutio- mentioned on after the completion of the rights issue. Dilution following the completion of the rights issue Percentage of Exercise Percentage outstandi n Price in Exercise of total g Shares on DKK per Price per number of a ful ly Share of Share of warrant s diluted nominal nominal outstandin basis DKK 1 DKK 1 g following d) (adjusted) 2.50 2.05 0.00% 0.00% 7.3825 6.06 2.89% 2.89% 7.8850 6.48 10.62% 10.62% 22.30 18.32 10.34% 10.34% 36.372 5 29.87 22.44% 22.44% 44.00 36.14 30.06% 30.06% 44.60 36.63 2.41% 2.41% 53.00 43.53 0.87% 0.87% 55.00 45.17 3.06% 3.06% 56.50 46.40 5.64% 5.64% 52.00 42.71 5.96% 5.96% 41.5 0 34.09 0.75% 0.75% 33.00 27.10 4.96% 4.96% 36.20 29.73 100% 100% LifeCycle Pharma A/S Page 14 of 14 Company Announcement No. 23/2008
LifeCycle Pharma announces interim report for 1st quarter 2008
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