BIOTIE THERAPIES CORP. STOCK EXCHANGE RELEASE
August 10, 2007
January - June 2007 in brief
In May 2007 the H. Lundbeck A/S licensing agreement entered into
force on worldwide rights for nalmefene, excluding North America,
Mexico, UK, Ireland, Turkey, and South-Korea.
In May 2007 Biotie revised its outlook for 2007 and announced that
2007 financial result is expected to improve compared to year 2006,
but the company expects to report a loss for the full year 2007.
In June 2007 Biotie withdrew its UK national marketing authorisation
application on nalmefene to enable a centralised EU-wide registration
procedure in due course.
EUR 4 million was booked as revenue in the second quarter of 2007 of
the total execution fee of EUR 12 million paid by Lundbeck to Biotie.
EUR 2 million was paid on the license entering into force in May,
2007 and EUR 10 million was paid on signing in November, 2006.
The net income in January - June, 2007 was EUR 1.6 million positive
(in 2006 EUR -4.4 million). Cash flow from operating activities was
EUR -2.9 million (EUR -3.8 million in 2006).
The company's liquid assets amounted to EUR 30.2 million as at June
30, 2007 (at June 30, 2006, EUR 5.0 million).
Drug development programs
Nalmefene program
Biotie announced on May 23, 2007 that the licensing agreement entered
into force on H. Lundbeck A/S worldwide rights for nalmefene,
excluding North America, Mexico, UK, Ireland, Turkey, and
South-Korea.
In June 2007 Biotie withdrew the UK national marketing authorisation
application on nalmefene in its alcoholism indication to enable a
centralised EU-wide registration procedure in due course. A
centralised EU-wide registration procedure is not feasible if the
product already has a granted or a pending national marketing
authorisation in the EU.
To maximise nalmefene's potential in the treatment of alcoholism
Biotie and Lundbeck have jointly decided to seek marketing
authorisation simultaneously in all 27 EU member states via the
centralized procedure. To this end, Lundbeck plans to further
strengthen the existing nalmefene registration dossier in its
alcoholism indication with additional phase III clinical studies
before submitting the marketing authorisation application. The
studies are expected to start in 2008.
The license agreement terms were amended to reflect the planned
additional Lundbeck investment to strengthen the registration dossier
for the centralized procedure. Under the terms of the amended
agreement, Biotie received an execution fee of EUR 12 million, of
which EUR 10 million was paid on signing in November 2006 and EUR 2
million was paid on the license entering into force in May 2007. In
total, Biotie is eligible for up to EUR 80 million in upfront and
milestone payments plus royalty on sales. Biotie will participate in
financing some of the clinical development costs.
The June 22, 2007 issue of "Alcoholism: Clinical and Experimental
Research", a leading journal in addiction therapies, featured a
scientific article on nalmefene in the treatment of patients with
alcohol problems. The featured study describes the results of the
company's phase III clinical study that was conducted in Finland and
enrolled about 400 patients with impaired control over their alcohol
drinking. According to the results, targeted use of nalmefene during
the 28 weeks of treatment decreased heavy drinking statistically
significantly. The reduction in the number of heavy drinking days
compared to placebo was about 32%. The company has communicated the
main results of this study first in 2003.
VAP-1 antibody program
The company is ready to start the first phase I clinical trial with
its fully human VAP-1 monoclonal antibody, pending final regulatory
approval. A separate stock exchange release will be issued at the
start of the study.
The intellectual property rights of the VAP-1 antibody program were
further strengthened by filing a new patent application in the EU and
US in April, 2007.
In November 2006, Biotie and F. Hoffmann La Roche (Roche) signed an
option agreement for Biotie's fully human antibody program targeting
Vascular Adhesion Protein-1 (VAP-1) in inflammatory diseases.
Inhibiting VAP-1 reduces inflammation by regulating the migration of
leukocytes, or white blood cells, to inflamed tissues.
Pre-clinical programs
Pre-clinical programs (VAP-1 SSAO small molecule inhibitor program
and alfa2beta1 integrin inhibitor program) progressed as planned. The
intellectual property rights of the alfa2beta1 integrin program were
further strengthened by filing a new patent application in the EU and
US in April, 2007. In the recombinant heparin program the company
continued to look for a partner to finance the future development of
the program.
Revenues
Revenue for the reporting period January - June 2007 consists of
periodization of the signing fee of the licensing agreement signed
with Seikagaku Corporation in 2003, periodization of the signing fee
of the licensing agreement signed with Somaxon Pharmaceuticals in
2004, periodization of the option fee of the option agreement signed
with Roche in 2006 as well as periodization of the execution fee of
the licensing agreement signed with Lundbeck that entered into force
in May 2007. EUR 4 million was booked as revenue in the second
quarter of 2007 of the execution fee of EUR 12 million paid by
Lundbeck to Biotie. The rest of the EUR 12 million is expected to be
recognized as revenue against clinical development costs in
2007-2009. Of the EUR 12 million, EUR 10 million was paid on signing
in November 2006 and EUR 2 million was paid on the license entering
into force in May 2007. The revenue for the reporting period January
- June, 2007 was in total EUR 5.2 million.
Revenue for the period January - June, 2006 consisted of
periodization of the signing fee of the licensing agreement signed
with Seikagaku Corporation in 2003 and periodization of the signing
fee of the lisensing agreement signed with Somaxon Pharmaceuticals in
2004. The revenue was in total 0.5 million euros. No new milestone or
signing fees were received during the period.
Financial results
The net profit for the reporting period January - June 2007 was EUR
1.6 million. The comparable loss for the previous year was EUR 4.4
million. Research and development costs for the period amounted to
EUR 3.5 million (in 2006 EUR 3.3 million). Patent costs have been
booked as expenses.
Financing
Biotie's equity ratio was -25.5 % on June 30, 2007 (-366.0 % in
2006). Cash and cash equivalents totalled EUR 30.2 million on June
30, 2007 (EUR 5.0 million in 2006).
Equity
A total of 231,200 new shares in Biotie Therapies Corp. have been
subscribed for by exercising the series A option rights of the
company's option scheme issued on March 30, 2006. The subscription
price of the shares was EUR 0.60 per share. The new shares have been
entered in the Finnish Trade Register on April 30, 2007. Following
the increase, the total number of shares in Biotie Therapies Corp.
was 90,031,860. The share capital was not increased.
So far, a total of 231,200 new shares have been subscribed for
pursuant to the series A option rights of the company's option scheme
issued by the company on March 30, 2006.
Pursuant to the convertible capital loan issued on March 25, 2004, a
total of 450,000 new shares has been subscribed for. The new shares
have been entered in the Finnish Trade Register on April 2, 2007 and
May 11, 2007. Following the increase, the total number of shares in
Biotie Therapies Corp. is 90.211.860. The loan capital converted in
connection with the subscription amounts to EUR 840,939.62. The
exercise price paid has been recorded in the reserve for invested
unrestricted equity.
Relating to the company's option programs, the company has signed a
stock lending agreement with EVLI Bank in January, 2007.
Investments and cash flow
The company's investments during the reporting period amounted to EUR
10 thousand (EUR 51 thousand in 2006). The investments mainly
comprised of equipment purchased for research and development
operations. Cash flow from operating activities was EUR -2.9 million
(EUR -3.8 million in 2006). Research and development expenses are
booked as costs.
Personnel
During the reporting period, the company's personnel was on average
35 (39 in 2006) and at the end of the period 33 (36 on June 30,
2006).
The ten biggest shareholders of Biotie on June 30, 2007
Number of
shares %
Pequot group: 21 925 024 24.53
- Pequot Healthcare Fund, L.P. (7 765 345)
- Pequot Healthcare Offshore Fund, Inc.
(5 937 983)
- Premium Series PCC Limited (998 490)
- Pequot Diversified Master Fund Ltd.
(1 201 800)
- Pequot Healthcare Institutional Fund, L.P
(1 521 406)
- Pequot Healthcare Emerging Markets Fund,
Ltd. (4 500 000)
Finnish Innovation Fund (Sitra) 14 585 350 16.32
Finnish Industry Investment Ltd 6 778 592 7.58
Juha Jouhki and his controlled companies 6 537 672 7.31
- Dreadnought Finance Oy (2 098 416)
- Jouhki Juha (1 501 356)
- Thominvest Oy (2 937 900)
Funds administered by BioFund Management Oy: 2 599 775 2.91
- BioFund Ventures III Ky (2 485 715)
- BioFund Ventures I Ky (114 060)
Harri Markkula and his controlled company: 1 283 065 1.44
- Tilator Oy (676 264)
- Markkula Harri (606 801)
Oy H. Kuningas & Co AB 1 058 371 1.18
Oksanen Markku 559 300 0.63
Funds administered by Aboa Venture Management
Oy: 492 524 0.55
- Aboa Venture Ky I (140 000)
- Aboa Venture Ky II (336 747)
- Ganal Venture Ky (7 906)
- Karhu Pääomarahasto Ky (7 871)
Siven Pertti 360 000 0.40
56 179 673 62.85
Nominee registered shares total 6 107 701 6.83
Other shareholders 27 105 486 30.32
Outstanding shares 89 392 860 100
The number of the company's own shares held by
Biotie Therapies 819 000
Total 90 211 860
Flagging information
Biotie announced that it has gained knowledge on April 2, 2007 of the
following notification under Chapter 2, Section 9 of the Finnish
Securities Market Act regarding a change in holdings:
Finnish Industry Investment Ltd (Business identity code 1007806-3)
has informed the company the holdings of Finnish Industry Investment
Ltd represent less than one tenth (1/10) of the voting rights and
share capital in Biotie Therapies Corp.
The holdings of Finnish Industry Investment Ltd constitute 8.702.189
shares, i.e., 9.72 % of the voting rights and share capital in Biotie
Therapies Corp.
Biotie gained knowledge on April 4, 2007 of the following
notification under Chapter 2, Section 9 of the Finnish Securities
Market Act regarding a change in holdings on March 30, 2007:
The aggregate holding of Pequot Healthcare Fund, L.P., Pequot
Healthcare Offshore Fund, Inc., Premium Series PCC Limited - Cell 32,
Pequot Diversified Master Fund, Ltd., Pequot Healthcare Institutional
Fund, L.P. and Pequot Healthcare Emerging Markets Fund, Ltd.
(jointly, the "Funds") have increased from 23.16 % to 25.76 % of the
share capital and voting rights of the Company, calculated on the
basis of the number of shares registered in the Finnish Trade
Register on April 4, 2007. No individual Fund has decreased its
holding below or above 5 % of the voting rights and share capital in
the Company.
IFRS and Accounting principles
The interim report has been prepared in accordance with IAS 34,
Interim Financial Reporting. Biotie has applied the same accounting
principles as in the closing of year 2006.
This interim report is unaudited.
Risks and Risk Management
Biotie's strategic risks are related to the technical success of the
drug development programs, regulatory issues, the strategic decisions
of its commercial partners, ability to obtain and maintain
intellectual property rights for its products, validity of its
patents, launch of competitive products and the development of the
sales of its products. For example, even though the commercialisation
and collaboration agreements on the company's product development
projects have been concluded, there can be no assurance that the
contracting partner will act in accordance with the agreement, the
authorities will approve the product under development or the
approved product will be commercialised. The development and success
of the company's products depends on third parties.
The operational risks include dependency of key personnel, assets and
dependency on partners' decisions.
Future outlook
Of the execution fee of EUR 12 million paid by Lundbeck to Biotie
approximately EUR 6-7 million will be booked as revenue in 2007 and
approximately EUR 5-6 million is expected to be booked as revenue in
2008-2009.
Biotie's total revenue in IFRS reporting for 2007 is expected to be
approximately EUR 8-9 million, and the operating costs will increase
to a somewhat higher level for 2007 than in 2006.
Biotie 2007 financial result is expected to improve compared to year
2006, but the company expects to report a loss for the full year
2007.
The company is ready to start the first phase I clinical trial with
its fully human VAP-1 monoclonal antibody, pending final regulatory
approval. A separate stock exchange release will be issued at the
start of the study.
In Turku, August 10, 2007
Biotie Therapies Corp.
Board of Directors
For further information, please contact:
Timo Veromaa, President and CEO, Biotie Therapies Corp.
tel. +358 2 274 8901, e-mail: timo.veromaa@biotie.com
www.biotie.com
Distribution:
Helsinki Stock Exchange
Main Media
APPENDICES TO THE INTERIM REPORT
Income statement
Balance sheet
Statement of changes in shareholders' equity
Cash flow statement
Key figures
FINANCIAL
STATEMENT
1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
EUR 1,000 30.06.2007 30.06.2006 30.06.2007 30.06.2006 31.12.2006
3 months 3 months 6 months 6 months 12 months
Revenue 4,605 249 5,210 498 1,118
Research and -2,074 -1,542 -3,549 -3,340 -7,970
Development
expenses
General and -366 -812 -963 -1,693 -2,207
administrative
expenses
Other 426 153 684 419 698
operating
income
Operating 2,592 -1,953 1,383 -4,116 -8,361
profit/loss
Financial 299 29 601 70 215
income
Financial -190 -207 -401 -394 -812
expenses
Profit/loss 2,702 -2,130 1,583 -4,440 -8,958
before taxes
Taxes 0 0 0 0 -7
Net 2,702 -2,130 1,583 -4,440 -8,964
income/loss
Distribution
To parent 2,702 -2,130 1,583 -4,440 -8,964
company
Shareholders
Earnings per 0.03 -0.04 0.02 -0.08 -0.16
share (EPS)
basic and
diluted, EUR
BALANCE SHEET
EUR 1,000 30.06.2007 30.06.2006 31.12.2006
Assets
Non-current assets
Intangible assets 774 895 801
Property, plant and equipment 84 155 109
Financial assets at fair value 20,000 0 20,000
through
profit or loss
20,858 1,050 20,910
Current assets
Current receivables 1,031 494 560
Financial assets at fair value 9,302 4,553 7,878
through
profit or loss
Cash and cash equivalents 936 429 3,886
11,270 5,476 12,323
Total 32,128 6,526 33,233
Equity and liabilities
Shareholders' equity
Share capital 19,850 1,054 19,850
Reserve for invested unrestricted 980 0 0
equity
Retained earnigs -30,619 -20,500 -21,692
Net income/loss 1,583 -4,440 -8,964
Shareholders' equity total -8,207 -23,887 -10,807
Long-term liabilities
Provisions 19 24 27
Interest-bearing liabilities 23,350 22,921 23,508
Non-interest-bearing liabilities 14,071 4,817 6,528
37,440 27,762 30,063
Current liabilities
Provisions 16 16 16
Interest-bearing liabilities 15 35 27
Accounts payable and other debts 2,864 2,599 13,934
2,895 2,651 13,977
Liabilities total 40,335 30,413 44,040
Total 32,128 6,526 33,233
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Parent company shareholders' equity
EUR 1,000 Shares Share Reserve for Share Own Retained Share-
(1000 Capital invested Premium Shares Earnings holders'
pcs) unrestricted fund equity
equity total
Balance at 52,675 1,054 0 5,881 -15 -26,502 -19,583
1.1.2006
Net -4,440 -4,440
income/loss
for the
period
Options 137 137
granted
Transfer -5,881 5,881 0
from share
premium fund
0 0 0 -5,881 0 1,577 -4,304
BALANCE AT 52,675 1,054 0 0 -15 -24,925 -23,887
30.06.2006
Net -4,524 -4,524
income/loss
for the
period
Options -35 -35
granted
Share issue 36,855 18,796 -1,157 17,639
36,855 18,796 0 0 0 -5,717 13,079
BALANCE AT 89,531 19,850 0 0 -15 -30,641 -10,807
31.12.2006
Net 1,583 1,583
income/loss
for the
period
Options 38 38
granted
Share 450 139 139
subscription
with
convertible
capital
loans
Share 231 841 841
subscription
with option
rights
681 0 980 0 0 1,621 2,600
BALANCE AT 90,212 19,850 980 0 -15 -29,020 -8,207
30.06.2007
CASH FLOW STATEMENT
1.1.- 1.1.- 1.1.-
30.06.2007 31.06.2006 31.12.2006
EUR 1,000 6 months 6 months 12 months
Cash flow from operating
Activities
Net income/loss 1,583 -4,440 -8,964
Adjustments:
Non-cash transactions 99 377 1,249
Addition/disposal due to -517 -28 -84
revaluation
of financial assets at fair
value through profit or loss
Interest expenses and other 401 394 812
financial expenses
Interest income -601 -14 -215
Taxes 0 0 7
Change in working capital:
Change in trade and other -448 80 -19
receivables
Change in trade creditors and -3,507 -173 12,535
other liabilities
Change in mandatory provisions 8 -15 -12
Interests paid -10 -16 -25
Interests received 85 42 131
Taxes paid 0 0 -7
Net cash from operating activities -2,908 -3,794 5,408
Cash flow from investing
activities
Change in financial assets at
fair value through profit or loss
Additions -3,000 0 -25,000
Disposals 2,154 2,200 4,000
Investments to tangible assets -10 -51 -819
Sale of associated companies 0 45 45
Net cash used in investing -856 2,194 -21,773
activities
Cash flow from financing
activities
Payments from share issue 139 0 17,639
Proceeds from borrowings 689 1,644 2,232
Repayment of lease -12 -10 -15
Commitments
Net cash from financing 815 1,634 19,856
activities
Net increase (+) or decrease (-) -2,949 34 3,490
in cash and cash equivalents
Cash and cash equivalents in the 3,886 395 395
beginning of the period
Cash and cash equivalents in the 936 429 3,886
end of the period
KEY FIGURES
1.1.- 1.1.- 1.1.-
30.06.2007 30.06.2006 31.12.2006
EUR 1,000 6 months 6 months 12 months
Business development
Revenues 5,210 498 1,118
Personnel on average 35 39 37
Personnel at the end of period 33 36 35
Research and development costs 3,549 3,340 7,970
Capital expenditure 10 51 819
Profitability
Operating profit/loss 1,383 -4,116 -8,361
as percentage of revenues, % 26.5 -825.9 -747.6
Profit/loss before taxes 1,583 -4,440 -8,958
as percentage of revenues, % 30.4 -891.0 -800.9
Balance sheet
Cash and cash equivalents 30,239 4,983 31,763
Shareholders equity -8,207 -23,887 -10,807
Balance sheet total 32,128 6,526 33,233
Financial ratios
Return on equity, % - - -
Return on capital employed, % 28.4 -2,012.2 -113.5
Equity ratio, % -25.5 -366.0 -46.5
Gearing, % 83.8 -75.2 76.1
Per share data
Earnings per share (EPS), EUR 0.02 -0.08 -0.16
Shareholders'equity per share, EUR -0.09 -0.45 -0.12
Divided per share, EUR
Pay-out ratio, %
Effective dividend yield, %
P/E-ratio
Share price
Lowest share price, EUR 0.85 0.49 0.49
Highest share price, EUR 1.18 0.91 2.39
Average share price, EUR 0.99 0.63 1.10
30.6. share price, EUR 0.91 0.70 1.18
Market capitalization at the end of 82.1 36.9 105.6
period MEUR
Trading of shares
Number of shares traded 25,749,500 8,489,883 32,470,230
As percentage of all 28.5 16.1 36.3
Adjusted weighted average 89,661,658 52,675,221 54,995,830
number of shares during the period
Adjusted number of shares at the 90,211,860 52,675,221 89,530,660
end
of the period
RELATED PARTY TRANSACTIONS
There have not been material changes within the related party
transactions in 2007.
CONTINGENT LIABILITIES
EUR 1,000 30.06.2007 30.06.2006 31.12.2006
Lease commitments 29 106 73
