To NASDAQ OMX Copenhagen A/S
Announcement no. 04-14 / Copenhagen, March 27, 2014
Topotarget A/S announces the Company’s financial results for the year ended December 31, 2013.
The annual report comprises the Parent Company Topotarget A/S and the three wholly-owned subsidiaries Topotarget UK Ltd., Topotarget Germany AG, and Topotarget Switzerland S.A.
Unless otherwise stated, the financial review is based on the Group’s consolidated financial information for the year ended December 31, 2013 as included in this annual report with comparative figures for the Group for 2012 in brackets.
A net loss in continued operations of DKK 36.2 million (2012: Net loss of DKK 81.4 million) was recorded for the year.
The Group’s net cash and cash equivalents as of December 31, 2013 totaled DKK 31.5 million (2012: DKK 41.5 million) and the equity stood at DKK 243.1 million (2012: DKK 251.2 million).
For assumptions and estimates, please refer to Note 2.
Consolidated income statement
Topotarget recognized revenues of DKK 8.3 million in 2013 (2012: DKK 2.4 million). Revenues are composed of milestone payments from the renegotiated agreement with Apricus Biosciences, Inc. and income per our collaboration agreement with Spectrum Pharmaceuticals.
Production costs, which amounted to DKK 1.1 million (2012: DKK 1.4 million), include Topotarget personnel costs related to the agreement with Spectrum Pharmaceuticals.
Research and development costs were DKK 23.0 million (2012: DKK 46.5 million). The reduction in cost of 51% is primarily due to the steps made to ensure a cost effective organization including reductions in the number of employees and the hereto related costs. The finalization of clinical data and related clinical study reports are on-going.
Administrative expenses were DKK 18.4 million (2012: DKK 34.7 million). The decrease in cost of 47% is primarily related to the reduction in the number of employees and Management.
The net financials showed a net expense of DKK 2.0 million (2012: Net expense of DKK 1.1 million). The financial expense is mainly caused by exchange rate fluctuations.
The tax income was DKK 1.2 million (2012: 1.2 million) and relates to the payment of tax value of losses from spending in research and development.
Topotarget recorded a net loss of DKK 35.0 million in 2013 (2012: Net loss of DKK 80.0 million).
Consolidated balance sheet
Total assets amounted to DKK 265.1 million (2012: DKK 278.9 million), which primarily consist of acquired research and development projects and cash and cash equivalents, while the Group’s liabilities mainly comprise equity and current liabilities.
Cash and cash equivalents were DKK 31.5 million (2012: DKK 41.5 million).
Non-current liabilities are reduced to 0.0 million (2012: DKK 3.2 million). The reason for the large reduction is the reclassification of the potential Celldex Therapeutics, Inc. (former CuraGen) milestone payment from non-current liabilities to current liabilities.
Current liabilities have been reduced to DKK 22.0 million (2012: DKK 24.5 million) despite the reclassification of the potential Celldex Therapeutics milestone payment from non-current liabilities to current liabilities.
Equity amounted to DKK 243.1 million (2012: DKK 251.2 million). The change in equity is due to the loss for the year of DKK 35.0 million and a share issuance of DKK 26.8 million.
Consolidated cash flow
Topotarget’s cash flow from operating activities for 2013 was an outflow of DKK 35.6 million (2012: Outflow of DKK 81.0 million). The Group’s 2013 cash flow from investing activities including the buying and selling of securities was DKK 0.2 million (2012: Inflow of DKK 8.1 million). The Group’s cash flow from financing activities was DKK 25.5 million (2012: Inflow of DKK 0 million).
Comparing the actual financial performance with financial guidance
The Group recorded a pretax loss in continued operations of DKK 36.2 million. The financial performance thus exceeded our guidance announced in the interim report for the first 9 months of 2013, which reported a pretax loss in the range of DKK 40-45 million for the year. The Group recorded a cash position of DKK 31.5 million. The guidance announced in the interim report for the first 9 months of 2013 reported a cash position in the range of DKK 27-32 million.
Spectrum Pharmaceuticals filed an NDA with the FDA end 2013 and Topotarget received the expected milestone payment of USD 10 million and 1 million Spectrum Pharmaceuticals shares in Q1 2014.
Topotarget expects an estimated pre-tax profit in the range of DKK 55-65 million for the full-year financial result for 2014. The expected net cash and cash equivalents are expected to be around DKK 78-88 million at year-end 2014. The above numbers are including the milestone payment from Spectrum Pharmaceuticals of USD 10 million and 1 million shares with a current value of approximately USD 8 million, but excluding any extraordinary activities. The second milestone payment related to an NDA approval is not included in this financial outlook.
Parent Company financial statements
The Parent Company recorded a loss of DKK 35.0 million (2012: Net loss of DKK 80.0 million). The Parent Company’s equity amounted to DKK 243.1 million (2012: DKK 251.2 million). The change in equity is due to the loss for the year of DKK 35.0 million and a share issuance of DKK 26.8 million.
Treatment of loss
The Board of Directors proposes that the loss for the year be carried forward to next year.
A teleconference will be held on March 27, 2014 at 2:00 pm CET. Anders Vadsholt, Chief Executive Officer, and Bo Jesper Hansen, Chairman of the Board, will present the annual report 2013 and answer questions. The teleconference will be conducted in English. A presentation will be available on Topotarget’s website, www.topotarget.com, before the start of the teleconference.
To participate in the teleconference, please dial:
Conference ID: 18960673
You will be able to stream the teleconference via the following link:
After the call, a playback will be available via the same link.
For further information, please contact:
Anders Vadsholt, CEO – direct: +45 39178345
Topotarget (NASDAQ OMX: TOPO) is a Scandinavian-based biopharmaceutical company headquartered in Copenhagen, Denmark, dedicated to the clinical development and registration of oncology products. In collaboration with Spectrum Pharmaceuticals, Inc., Topotarget focuses on the development of its lead drug candidate, belinostat, which has shown positive results in the treatment of hematological malignancies and solid tumors, obtained by both mono- and combination therapy. For more information, please refer to www.topotarget.com.
Topotarget Safe Harbor Statement
This announcement may contain forward-looking statements, including statements about Topotarget A/S’ expectations to the progression of Topotarget A/S’ clinical pipeline and with respect to cash burn guidance. Such statements are subject to risks and uncertainties of which many are outside the control of Topotarget A/S, and which could cause actual results to differ materially from those described. Topotarget A/S disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by Danish law.