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
| Source: Veloxis Pharmaceuticals A/S
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