Financial review 2010
The Annual Report comprises the parent company Topotarget A/S and the 5 wholly owned subsidiaries: Topotarget UK Ltd., Topotarget Germany AG, Topotarget USA, Inc., Topotarget Switzerland S.A. and Topotarget Netherlands B.V. (the Group).
Unless otherwise stated, the financial review is based on the Group’s consolidated financial information for the year ended 31 December 2010 as included in this Annual Report with comparative figures for the Group in 2009 in rackets.
A profit before tax and before writedown activities of DKK 23.3mio. (2009: loss of DKK 121.5mio.) was recorded for the year. The financial performance is in line with our guidance announced at the Annual General Meeting 22 April 2010.
The Group’s net cash and cash equivalents as of 31 December 2010 totalled DKK 205.0mio. (2009: DKK 130.2mio.) and equity stood at DKK 360.2mio. (2009: DKK 411.8mio).
Consolidated income statement
Topotarget recognised revenues of DKK 129mio. in 2010 (2009: DKK 44mio.). Revenues are primarily composed of income of DKK 90mio. from the Spectrum upfront payment of USD 30mio. as well as revenues from Totect®/Savene® sales.
Production costs, which amounted to DKK 10.9mio. (2009: DKK 10.1mio.), include Topotarget personnel costs related to the Spectrum collaboration agreement and production of Totect®/Savene®. The 2009 numbers only include production cost for Totect®/Savene®.
Research and development costs were DKK 71.6mio. (2009: DKK 89.9mio.) The reduction is primarily due to the Spectrum agreement as all costs for the PTCL study are now being funded by Spectrum. The saving is partly offset by a large increase in activities in the CUP phase II study sponsored 100% by Topotarget.
Writedown of research and development projects acquired from 3rd parties amounted to DKK 189.5mio. (2009 DKK 21.2mio.). For a more detailed decription on the individual projects please see note 10 in our annual report 2010 (attached).
As a consequense of the write down of the APO projects previously recognised as liability is reversed as financial income. Furthermore, deferred tax regarding the APOproject previously recognized as liability is reversed.
Profit related to divestiture of rights to Savene® was DKK 32.5mio. (2009: DKK 0).
Sales and distribution costs were DKK 19,1mio. (2009: DKK 29.1mio.). The reduction is primarily due to the divestiture of Savene® to SpePharm Holding, BV. on 2 March 2010.
Administrative expenses were DKK 38.8mio. (2009: DKK 26.1). The increase mainly due to restructuring and termination expenses, recruitment cost and investor relation activities.
Net financial income was DKK 68.8mio. (2009: net expense of DKK 10.2mio.). Primarily consisting of the reversal of the APO provision for debt with the amount of DKK 66.5mio. as mentioned above.
The tax income was DKK 44.0mio. (2009: 2.3mio.). and relates solely to Topotarget Switzerland S.A.
Topotarget recorded a loss of DKK 55.7mio. (2009: DKK 140.5mio.).
Consolidated balance sheet
Total assets amounted to DKK 465.8mio. (2009: DKK 585.4mio.), which primarily consist of acquired R&D projects, cash and cash equivalents, while the Group’s liabilities mainly comprise equity and trade payables.
Cash and cash equivalents were DKK 205.0mio. (2009: DKK 130.2mio.). The change is due to the USD 30mio. upfront payment from Spectrum and EUR 5mio. Payment from SpePharm for the Savene rights.
Non current liability is reduced from DKK 114.7mio. to DKK 14.1mio primarily due to the reversal of the APO milestone and deferred tax. Current liability is increased from DKK 58.9mio.to DKK 91.5mio.
Consolidated equity
Equity amounted to DKK 360.2mio. (2009: DKK 411.8). The change in equity consists of the loss for the year of DKK 55.7mio. and share-based payment of DKK 3.9mio.
Consolidated cash flow
Topotarget’s cash flow from operating activities for 2010 was an inflow of DKK 76mio. (2009: out-flow DKK 99mio.). The Group’s 2010 cash flow from investing activities excluding the buying and selling of securities was an out-flow of DKK 1mio. (2009: inflow DKK 38mio.). The Group’s cash flow from financing activities was an inflow of DKK 0,1mio. (2009: DKK 119mio.).
Comparing the actual financial performance with financial guidance
The Group recorded a pre-tax profit, before writedown activities of certain R&D projects, of DKK 23.3mio. The financial performance is in line with our guidance announced at the Annual General Meeting 22 April 2010.
Parent company financial statements
The parent company recorded a loss of DKK 55.7mio. (2009: DKK 140.5mio.).
The parent company’s equity amounted to DKK 360.2mio. (2009: DKK 411.8mio.).
The change in equity consists of the loss for the year of DKK 55.7mio. and share-based payment of DKK 3.9mio.
Treatment of profit
The Board of Directors proposes that the loss for the year be carried forward to next year.
Conference call
A teleconference will be held on 8 March 2011 at 2:00 pm local time. CEO Francois Martelet and CFO Anders Vadsholt will present the 2010 Annual Report 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 conference call. To participate in the conference call please dial:
- From Denmark: 70 26 50 40
- Outside Denmark: +45 70 26 50 40 or 0800 634 5205 (UK) or 1866 629 2704 (US) or 0200 125 785 (SE)
A replay of the conference call will be available approximately two hours after the conference call and until 8 June 2011 at: +353 1 436 4267 or +44 207 769 6425, pass code: 4416 863#. A replay will also be available on Topotarget's homepage www.topotarget.com.
Topotarget A/S
For further information, please contact:
Annette Lykke, Director of Investor and Public Relations: Direct: +45 39178344; Mobile: +45 23289814
Background information
About Topotarget
Topotarget (NASDAQ OMX: TOPO.CO) is a Scandinavian based international biotech company headquartered in Denmark, dedicated to improve cancer therapies. In collaboration with Spectrum Pharmaceuticals, Inc. Topotarget currently focuses on the development in pivotal studies of its lead drug candidate, belinostat, which has demonstrated a clear anti-neoplastic effect in both hematological malignancies and solid tumors. Belinostat can be used in combination with full doses of chemotherapy, and is currently in a pivotal trial within PTCL (peripheral T-cell lymphoma) and Phase 2 in cancer of unknown primary site (CUP). Topotarget’s key cancer drug targets are HDAC, NAD+, mTOR, Fas ligand and topoisomerase II. Totect® is a product on the market developed from Topotarget’s drug discovery technology. Totect® is marketed by the company’s own sales specialists in the US. The European rights to Savene® were divested in March 2010 as a consequence of the focus to develop and commercialise belinostat. For more information, please refer to www.topotarget.com.
Topotarget Safe Harbour Statement
This announcement may contain forward-looking statements, including statements about our expectations of the progression of our preclinical and clinical pipeline including the timing for commencement and completion of clinical trials and with respect to cash burn guidance. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Topotarget cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, the following: The risk that any one or more of the drug development programs of Topotarget will not proceed as planned for technical, scientific or commercial reasons or due to patient enrolment issues or based on new information from non-clinical or clinical studies or from other sources; the success of competing products and technologies; technological uncertainty and product development risks; uncertainty of additional funding; Topotarget's history of incurring losses and the uncertainty of achieving profitability; Topotarget's stage of development as a biopharmaceutical company; government regulation; patent infringement claims against Topotarget's products, processes and technologies; the ability to protect Topotarget's patents and proprietary rights; uncertainties relating to commercialization rights; and product liability exposure; We disclaim 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 law.
