BIOTIE THERAPIES CORP. FINANCIAL STATEMENT RELEASE 24 February 2012
at 9.00 a.m.
Biotie Therapies Corp. financial statement release 1 January - 31 December 2011
Key drivers of business progressed during 2011: internal pipeline expanded
through acquisition of Synosia, partnered programs advanced towards
commercialization, management team strengthened and additional cash resources
secured.
Selincro(TM) (nalmefene) completed an extensive Phase 3 program during 2011, and
in December Biotie's partner, Lundbeck, submitted a marketing authorization
application (MAA) through the centralized procedure to the European Medicines
Agency (EMA). The dossier has been accepted for review by the EMA.
In February, Biotie completed the acquisition of Synosia Therapeutics, a drug
development specialist with operations in the US, broadening its pipeline and
adding mid-stage novel CNS products. Progress with the newly expanded pipeline
remained on track during integration of the companies and in April Biotie
announced the start of a Phase 2b study with SYN115 in Parkinson's disease. In
July, Biotie started a Phase 1 positron emission tomography (PET) imaging study
with SYN120, a potential treatment for cognitive disorders, including
Alzheimer's and schizophrenia. Results from an exploratory Phase 2a study of its
HPPD inhibitor SYN118 in Parkinson's disease (PD) were reported in May. These
data did not show a significant improvement in measures of PD motor function
versus placebo and, in November, Biotie fully impaired the carrying value of
this asset and UCB confirmed that it would not exercise its option to license
the compound.
In March, Biotie raised EUR 27 million in a directed share issue to
institutional and strategic investors, strengthening its financial position.
In September, Biotie proposed to acquire Newron Pharmaceuticals through a
European Union cross-border merger. Shortly after this announcement, Merck
Serono indicated that it would return to Newron the full global rights for
safinamide, Newron's lead asset which is currently in Phase 3 development for
Parkinson's disease. After reviewing this development, Biotie exercised its
right to terminate the merger plan and combination agreement. As a result,
Biotie was entitled to and consequently received a break-up fee of EUR 1.5
million from Newron.
In December, non-dilutive funding was secured through a Collaborative Research
and Development Agreement with the National Institute on Drug Abuse (NIDA) at
the US National Institutes of Health to investigate the safety and efficacy of
nepicastat (SYN117) in the treatment of cocaine dependence.
Financial review for January - December 2011
Financial statements for January - December 2011 are not directly comparable to
the same period in 2010 due to the Synosia Therapeutics acquisition and the
consolidation of the new subsidiaries' results into the Biotie group's
consolidated financial statements from the acquisition date of 1 February 2011
onwards.
Biotie corrected on July 28, 2011 the comparison figures of the interim report
for the period of January - March 2010. The correction affected only the
comparison figures for January - March 2010, it did not affect the figures
reported for January - March 2011. The comparison figures for the period January
- December 2010 have been classified according to IFRS 5.
EUR thousand 1.1. - 1.1. -
31.12.2011 31.12.2010
Continuing operations 12 months 12 months
Revenues 1,007 1,955
Financial result (net loss): -31,727* -8,462
Basic earnings per share (EUR) -0.09 -0.06
Cash flow from operating activities -18,765 -7,856
Investments in tangible assets 65 270
31.12.2011 31.12.2010
---------------------------------------------------------
Liquid assets 33,938 4,059
Equity 73,337 -29,466
Equity ratio (%) 62.0 -263.0
*Financial result for 2011 was impacted by a non-cash impairment charge of EUR
11.7 million for SYN118.
Q4/2011 in brief:
In December, Lundbeck submitted a marketing authorization application (MAA) in
the EU for Selincro(TM) (nalmefene).
In December, Biotie announced that the National Institute on Drug Abuse (NIDA)
at the US National Institutes of Health will start a clinical study with
Biotie's nepicastat (SYN117) in the treatment of cocaine dependence.
In December the Board of Directors of Biotie approved two new share-based
incentive plans for the Group employees.
In November, Biotie announced that The Finnish Funding Agency for Technology and
Innovation (Tekes) decided to forgive certain capital loans and accrued interest
by altogether EUR 2.6 million.
In November, Biotie fully impaired the carrying value of SYN118 and confirmed
that UCB would not exercise its option to license the compound.
Proposal and subsequent termination of agreement to acquire Newron
Pharmaceuticals S.p.A.:
In September, Biotie proposed to acquire Newron Pharmaceuticals. Shortly after
this announcement in October, Merck Serono indicated that it would return to
Newron the full rights for safinamide, Newron's lead asset for Parkinson's
disease. Biotie exercised its right to terminate the agreement and received a
break-up fee of EUR 1.5 million from Newron.
Financial review Q4 2011:
Financial statements for Q4 2011 are not directly comparable to the same period
in 2010 due to the Synosia Therapeutics acquisition and the consolidation of the
new subsidiaries' results into the Biotie group's consolidated financial
statements from the acquisition date of 1 February 2011 onwards.
EUR thousand 1.10. - 1.10.-
31.12.2011 31.12.2010
Continuing operations 3 months 3 months
---------------------------------------------------------
Revenues 30 473
Financial result (net loss): -3,221 -2,449
Basic earnings per share (EUR) -0.01 -0.02
Cash flow from operating activities -4,437 -778
Timo Veromaa, Biotie's President and CEO:
"2011 was a great year for Biotie. Our partner Lundbeck submitted a marketing
application in Europe for Selincro(TM) in alcohol dependence, bringing us closer
to having our first product on the market, and we joined forces with Synosia, in
a deal that strengthened our pipeline and added further expertise in CNS. The
next 12-18 months have the potential to dramatically transform Biotie's
business, as we eagerly await data on key pipeline drugs and look forward to the
launch of Selincro(TM). Despite the challenging macroeconomic environment,
Biotie is in a strong position and we are truly excited about the opportunities
that lay ahead for our Company".
Key events after the reporting period
Panu Miettinen appointed Chief Financial Officer (CFO) of Biotie Therapies
Corp., effective March 15, 2012. He will become a member of the Group's
management team. Zack McNealy, interim CFO, will resume his prior duties as Vice
President, Finance and Administration at the Group's U.S. subsidiary.
Outlook for 2012 and key pipeline newsflow
* Selincro(TM) (nalmefene): A novel opioid receptor ligand for alcohol
dependence. A marketing authorization application (MAA) for Selincro(TM) was
submitted by Biotie's partner Lundbeck in December and has been accepted for
review by the European Medicines Agency (EMA). .
Biotie has licensed global rights to nalmefene to Lundbeck. Under the terms of
the agreement, Biotie is eligible for up to EUR 84 million in upfront and
milestone payments plus royalties on sales from Lundbeck. Biotie has already
received EUR 12 million from Lundbeck. Further milestone payments are expected
on commercial launch of Selincro(TM) and on the product reaching certain
predetermined sales.
* Tozadenant (SYN115): An orally administered, potent and selective inhibitor
of the adenosine 2a (A2a) receptor in Phase 2b development for the treatment
of Parkinson's disease. Biotie has granted a worldwide license to UCB Pharma
for the development of the compound through Phase 3 trials and subsequent
commercialization. Phase 2b ongoing (sponsored by Biotie) with results
expected H1 2013.
* SYN120: An orally administered antagonist of the 5-HT(6) receptor in
development for the treatment of Alzheimer's disease and other cognitive
disorders, including schizophrenia. Roche has an option on the development
and commercialization of SYN120 following an ongoing clinical imaging study
using Positron Emission Tomography which is expected to complete in H1
2012.
* Nepicastat (SYN117): An orally administered, potent and selective inhibitor
of the enzyme dopamine beta-hydroxylase (DBH). The compound is in a Phase 2
study, funded by the US Department of Defense, for the treatment of post-
traumatic stress disorder (PTSD); results are expected in H2 2012.
Biotie signed a Collaborative Research and Development Agreement with the
National Institute on Drug Abuse (NIDA) at the US National Institutes of Health.
Under the agreement, NIDA and Biotie will investigate the safety and efficacy of
Biotie's nepicastat (SYN117) in the treatment of cocaine dependence. The trial
is expected to start in H2 2012.
* BTT-1023 (VAP-1 antibody): A fully human antibody against vascular adhesion
protein-1 (VAP-1). BTT-1023 has completed two Phase 1b studies in rheumatoid
arthritis and psoriasis and Biotie expects to start proof-of-concept
clinical studies in selected indications in H2 2012. Biotie has licensed the
rights to develop and commercialize its VAP-1 antibody in Japan, Taiwan,
Singapore, New Zealand and Australia to Seikagaku Corporation.
* Ronomilast: A small-molecule, phosphodiesterase-4 (PDE4) inhibitor in
development for the treatment of chronic obstructive pulmonary disease
(COPD). Biotie is seeking a partner for further development and
commercialization of this product.
* Nitisinone (SYN118). Biotie is evaluating the potential to out-license this
compound.
Financial calendar 2012:
Financial Statements 2011 will be published March 8, 2012.
Biotie Therapies Corp. will publish its Corporate Governance Statement 2011 on
March 8, 2012. The statement will be published separately from the Board of
Directors' report and it will be available on Biotie's website www.biotie.com.
Interim report January - March May 4, 2012
Interim Report for January - June August 3, 2012
Interim Report for January - September November 2, 2012
Biotie's Annual General Meeting will be held on March 29, 2012.
Conference call
An analyst and media conference call will take place on 24 February 2012 at
10:00 a.m. Central European Time. The conference call will be held in English.
Callers may access the conference call directly at the following telephone
numbers: US: +1 646 254 3363 UK: +44(0)20 7136 2050 and Finland:
+358(0)9 6937 9590 access code 4189166. Lines are to be reserved ten minutes
before the start of conference call. The event can also be viewed as a live
webcast at www.biotie.com. An on demand version of the conference will be
published on Biotie's website later during the day. In case you need additional
information or assistance, please contact: Virve Nurmi, IR Manager Biotie
Therapies, Tel: +358 2 2748 911
About Biotie
Biotie is a specialized drug development company focused on the development of
drugs for neurodegenerative and psychiatric disorders (e.g. Parkinson's disease,
Alzheimer's disease and other cognitive disorders, alcohol and drug dependence
(addiction) and post traumatic stress disorder ), and inflammatory and fibrotic
liver disease. The company has a strong and balanced development portfolio with
several innovative small molecule and biological drug candidates at different
stages of clinical development. Biotie's products address diseases with high
unmet medical need and significant market potential.
Partnerships with top-tier pharmaceutical partners are in place for several
programs as well as a strategic collaboration with UCB Pharma S.A. The Marketing
Authorization Application for Biotie's most advanced product, Selincro(TM)
(nalmefene) for alcohol dependence was filed in the EU by our partner H.
Lundbeck A/S and was accepted for review by the European Medicines Agency in
December 2011.
Biotie shares are listed on NASDAQ OMX Helsinki Ltd.
Group structure: The parent company of the group is Biotie Therapies Corp. The
domicile of the Company is Turku, Finland. The company has an operative
subsidiary Biotie Therapies Inc, located in San Francisco, United States of
America and a holding subsidiary, Biotie Therapies Holding AG, located in Basel,
Switzerland, which has an operative subsidiary, Biotie Therapies AG, located in
Basel, Switzerland.
The Group also has two non-operational subsidiaries named Biotie Therapies GmbH,
located in Radebeul, Germany and Biotie Therapies International Ltd in Finland.
Drug development projects:
Selincro(TM) (nalmefene) is a small molecule opioid receptor antagonist that
inhibits the reward pathway in the brain that reinforces the desire and craving
for alcohol. As a result, nalmefene removes a person's desire to drink.
Biotie has licensed global rights to nalmefene to H. Lundbeck A/S (Lundbeck).
Under the terms of the agreement, Biotie is eligible for up to EUR 84 million in
upfront and milestone payments plus royalties on sales from Lundbeck. Biotie has
already received EUR 12 million from Lundbeck. Further milestone payments are
expected on commercial launch of nalmefene and on the product reaching certain
predetermined sales. Lundbeck will be responsible for manufacturing and
registration of the product.
Lundbeck announced in June the completion of ESENSE2, the last study in its
Phase 3 program evaluating nalmefene for the treatment of alcohol dependence.
Results from this 718 patient, double-blind, placebo controlled trial were
consistent with the profile observed in previous clinical studies of nalmefene.
Lundbeck assessed a wide range of primary and secondary endpoints in its Phase
3 program for nalmefene including: number of heavy drinking days per month,
total alcohol consumption, proportion of responders based on drinking measures,
alcohol dependence symptoms and clinical status, liver function and other
laboratory tests, pharmaco-economic outcomes and treatment discontinuation
effects. All assessments were consistently in favour of nalmefene compared to
placebo, though some were not statistically significant at every single time
point. Overall, nalmefene reduced heavy drinking days and total alcohol
consumption by more than 50% compared to pre-treatment baseline. The effect was
observed during the first month of treatment and was maintained throughout the
study period in the three trials.
Furthermore, data from the 12-month safety study (SENSE) confirmed that the
treatment effect of nalmefene was maintained and even improved after 1 year of
treatment. Approximately two-thirds of the individuals in the studies had
previously not been treated for alcohol dependence, despite an ongoing
affliction, indicating that reduction of alcohol intake represents an attractive
treatment objective compared to current treatments which all require abstinence.
The safety profile of nalmefene was consistent with observations and data
provided in earlier studies, including Biotie's previously completed Phase 3
program. The most frequent adverse events in patients taking nalmefene were
dizziness, insomnia and nausea. These adverse events were usually mild and
transient in nature. The three studies in the Lundbeck Phase 3 clinical program
were conducted in Europe and enrolled about 2,000 individuals with alcohol
dependence. Including the prior studies conducted by Biotie, the total clinical
database now contains more than 3,000 patients with alcohol dependence.
In December, Biotie's partner Lundbeck submitted a marketing authorization
application (MAA) through the centralized procedure to the European Medicines
Agency (EMA) for nalmefene (Selincro(TM)). The dossier has been accepted for
review by the EMA.
Tozadenant (SYN115) is an orally bioavailable, potent and selective adenosine
A2a receptor antagonist in development for Parkinson's disease (PD). Adenosine
A2a inhibition with SYN115 has been shown in preclinical studies to reverse
motor deficits and enhance the effect of current PD therapies, e.g. levodopa and
dopamine agonists, without inducing troublesome dyskinesia (involuntary
movements). In addition, SYN115 also displays activity in preclinical models on
non-motor symptoms of PD including depression, impaired cognition and anxiety.
Biotie announced in April the start of a Phase 2b trial evaluating SYN115 in PD.
The trial is a randomized, double-blind, placebo-controlled study that will
evaluate four doses of SYN115 versus placebo as adjunctive therapy in 400
levodopa-treated PD patients with end of dose wearing off. In these patients,
treatment with levodopa is insufficient to control PD symptoms until their next
dose, resulting in an 'off' period when symptoms reappear. The aim of the trial
is to determine the efficacy and safety of SYN115 in reducing the mean time
spent in the 'off' state over a 12 week treatment period. The study will also
assess the impact of SYN115 on various measures of motor symptom severity,
dyskinesia and non-motor symptoms. Results from the Phase 2b trial are expected
H1 2013.
Biotie has granted UCB Pharma S.A. a license for exclusive, worldwide rights to
SYN115. UCB will be responsible for Phase 3 development and commercialization.
SYN120 is an orally bioavailable, potent and selective antagonist of the 5-HT(6)
receptor. The 5-HT(6) receptors are exclusively located in the brain and
antagonism of these receptors modulates the release of acetylcholine and
glutamate, two neurotransmitters known to be involved with memory function.
Cognitive deficits are an important component of many CNS diseases, especially
Alzheimer's and schizophrenia. SYN120 has completed single and multiple
ascending dose Phase 1 clinical studies and a Phase 1 PET ("positron emission
tomography") imaging study is currently underway to determine therapeutic dose
for subsequent Phase 2 studies. This trial is expected to conclude during H1
2012. The compound was originally licensed from Roche and Roche has an option to
reacquire this program after the results of the ongoing study have been
obtained.
BTT-1023 (VAP-1 antibody) Biotie has recently generated new data indicating that
its proprietary target VAP-1, in addition to its clinically demonstrated role in
inflammatory diseases, has an important role in fibrotic diseases. These data,
generated in part in collaboration with National Institute for Health Research
Liver Biomedical Research Unit at the University of Birmingham, UK, reveal
significant potential for BTT-1023 in certain niche liver inflammatory fibrotic
diseases. These data will be published at upcoming scientific and medical
conferences and represent potentially new and exciting development opportunities
for BTT-1023 in a range of conditions. Biotie is currently optimizing the scale-
up of the manufacturing process for BTT-1023 and expects to start proof-of-
concept clinical studies in selected indications in H2 2012. Biotie has
previously demonstrated encouraging efficacy and safety for BTT-1023 in early
clinical studies in rheumatoid arthritis and psoriasis patients and in a range
of preclinical models of inflammatory diseases, including COPD and certain
neurological conditions. The company will continue discussions with potential
partners, outside Seikagaku's territory, for the indications targeting large
markets
Nepicastat (SYN117) is a potent, competitive, and selective inhibitor of the
enzyme dopamine beta-hydroxylase. The inhibition of this enzyme has been shown
to raise dopamine levels in the central nervous system (CNS). Nepicastat is
available as an oral treatment and has been well-tolerated in preclinical models
at doses significantly above the expected therapeutic range for the current CNS
indications under investigation. A Phase 2 study of nepicastat in post traumatic
stress disorder (PTSD) is ongoing, funded by the US Department of Defense, and
is expected to complete in H2 2012.
Biotie has signed a Collaborative Research and Development Agreement with the
National Institute on Drug Abuse (NIDA) at the US National Institutes of Health.
Under the agreement, NIDA and Biotie will investigate the safety and efficacy of
nepicastat (SYN117) in the treatment of cocaine dependence. NIDA will fund the
conduct of a randomized, double-blind placebo-controlled trial, lasting 11
weeks, in 180 treatment-seeking cocaine-dependent subjects using nepicastat
supplied by Biotie. The study will be conducted at approximately 12 US clinics
specializing in the treatment of drug dependence. The trial is expected to start
in H2 2012.
Biotie and NIDA have previously collaborated on preclinical studies evaluating
potential pharmacokinetic and pharmacodynamic interactions between nepicastat
and drugs of abuse. Biotie retains rights to nepicastat and will be able to use
data from studies conducted with NIDA to support future potential regulatory
submissions.
Ronomilast is a once-daily, potentially best-in-class oral phosphodiesterase-4
(PDE4) inhibitor with therapeutic potential in chronic inflammatory disorders,
particularly in chronic obstructive pulmonary disease (COPD), a serious
respiratory disorder with major unmet medical need. In three clinical studies
with a total of 126 subjects ronomilast has been demonstrated to be safe and
well tolerated at all tested doses up to 100mg once daily. Robust and
statistically highly significant biomarker responses confirmed the
pharmacological activity of well tolerated doses of ronomilast in man. Due to
the complexity and size of studies required for the development of medicines for
the treatment of COPD, Biotie has decided that a corporate partnership is
required to optimize the development path for ronomilast. The company will not
invest in further clinical studies without a partner.
Nitisinone (SYN118)
Nitisinone SYN118 is a potent and selective inhibitor of 4-hydroxyphenylpyruvate
dioxygenase (HPPD). Biotie announced in May 2011 the results from an exploratory
Phase 2a study of its HPPD inhibitor SYN118 in Parkinson's disease (PD). These
data did not show a significant improvement in measures of PD motor function
when compared to placebo. SYN118 was subject to an option agreement with UCB as
part of a broader partnership for the development of new treatments for
neurological disorders. Biotie did not expect UCB to exercise its option to
license the compound based on the results generated in the Phase 2a study and
has fully impaired the balance sheet value of this asset. UCB subsequently
confirmed that it would not exercise its option to license the compound for
further development.
Financial review for reporting period January - December 2011
Financial statements for the period January-December 2011 are not directly
comparable to the same period in 2010 due to the Synosia Therapeutics
acquisition and the consolidation of the new subsidiaries' results into the
Biotie group's consolidated financial statements from the acquisition date 1
February onwards.
Revenues: Revenues for the reporting period amounted to EUR 1.0 million (EUR
2.0 million in the same period in 2010). Revenues consisted of periodization of
previously received upfront payments from licensing agreements.
Financial result: Net loss for the reporting period 2011 was EUR 31.7 million
(EUR 8.5 million for continuing operations in the same period in 2010). This has
been impacted by a non-cash impairment charge of EUR 11.7 million for SYN118.
UCB confirmed it would not exercise its option to license the compound for
further development.
Research and development costs for the reporting period amounted to EUR 35.3
million including the impairment of SYN118 (EUR 5.5 million in the same period
in 2010, continuing operations). The increase in research and development costs
and in net loss was due to the acquisition of Synosia. Total comprehensive
income including the currency translation differences amounted to EUR -26.3
million (EUR -8.5 million in the same period 2010).
Discontinued operations were defined in the restructuring plan initiated in
October 2010. The restructuring plan achieved the targeted annual savings of
approximately EUR 4.0 million in 2011
Financing: Cash, cash equivalents and short term investments totaled EUR 33.9
million on 31 December 2011 (EUR 4.1 million on 31 December 2010). The groups'
financial position was strengthened by a private placement of EUR 27 million in
March 2011 and furthermore by the liquid assets of Synosia acquired in February
2011.
Biotie has a standby equity distribution agreement (SEDA) in place with US fund
Yorkville. Yorkville is obliged to subscribe and pay for Biotie shares up to a
total value of EUR 20 million during the period until September 2012 at Biotie's
discretion (Biotie option). The purpose of this arrangement is to have an option
to secure the financing of Biotie's working capital in the short and medium
term. Biotie has made use of this arrangement in H2 2010 and raised a total
amount of EUR 1.1 million and in 2011 Biotie did not exercise any shares under
this agreement.
The Finnish Funding Agency for Technology and Innovation (Tekes) decided, based
on an application from Biotie, that it would forgive certain capital loans
relating to Biotie's bioheparin project that was discontinued in 2006. Biotie's
justification for the application was that the Tekes funded R&D project did not
lead to commercially profitable business.
The loan forgiveness reduced the group's non-current financial liabilities on
the consolidated statement of financial position by EUR 2.2 million and
increased financial income on the consolidated statement of comprehensive income
by EUR 2.2 million in the full year financial statements for 2011. In addition,
all accrued interest relating to these loans is also forgiven. This reduced
other non-current liabilities on the consolidated statement of financial
position by EUR 0.4 million and increased financial income on the consolidated
statement of comprehensive income by EUR 0.4 million in the full year financial
statements for 2011.
Shareholder's equity: The shareholders' equity of the group amounted to EUR
73.3 million (IFRS) on 31 December 2011. Biotie's equity ratio was 62.0% on 31
December 2011 (-263.0% on 31 December 2010). Equity was strengthened by the
share issues related to Synosia acquisition as well as the private placement
executed in Q1 2011.
Investments and cash flow: Cash flow from operating activities in January -
December amounted to EUR -18.8 million for continuing operations (EUR -7.9
million in the same period in 2010) and EUR -2.4 million for discontinued
operations (EUR -7.0 million in the same period in 2010). Operating cash outflow
for continuing operations was EUR 10.9 million higher than in the same period in
2010 mainly due to the acquisition of Synosia. Cash flow for discontinued
operations related to the restructuring plan and spin-off of Biotie's operations
in Radebeul, Germany (now Biocrea GmbH) initiated in October 2010. No further
cash out-flow related to the Biocrea spin-off is expected in the future.
The group's investments in tangible and intangible assets during the reporting
period amounted to EUR 65 thousand (EUR 270 thousand in the same period in
2010).
Changes in the management team
Zack McNealy, Vice President, Finance of the group's US subsidiary assumed the
role of acting Chief Financial Officer starting September 1, 2011.
After the reporting period Panu Miettinen appointed Chief Financial Officer
(CFO) of Biotie Therapies Corp., effective March 15, 2012. He will become a
member of the Group's management team.
Zack McNealy, interim CFO, will resume his prior duties as Vice President,
Finance and Administration at the Group's U.S. subsidiary.
Personnel
During the reporting period January - December 2011, the average number of
employees amounted to 39 (70 during January - December 2010) and at the end of
the reporting period, after the restructuring in Q4 2010 and acquisition of
Synosia in Q1 2011, Biotie employed 39 people (23 on 30 December 2010).
Option rights
Biotie has issued option rights to certain of its employees and managers
pursuant to two different option programs in 2006 and 2009. Each option right
granted based on these two option programs entitles the holder to subscribe one
share in the company. The total number of granted options (programs 2006 and
2009) on December 31, 2011 amounted to (program 2006: 2,768,800 and
2009: 7,000,000) total 9,768,800, which represents 2.52% of the total amount of
shares.
The option program instated in 2006 expired at the end of 2011.
The Swiss company Synosia Therapeutics Holding AG (currently Biotie Therapies
Holding AG) acquired by Biotie in February 2011 also has a stock option plan
based on which stock options have been granted to employees, directors and
consultants. In connection with the completion of the acquisition of Synosia,
the option plan was amended so that instead of shares in Synosia an aggregate
maximum of 14,912,155 shares in Biotie may be subscribed based on the plan.
The Swiss subsidiary of Biotie Therapies Corp. Biotie Therapies Holding AG
(previously Synosia Therapeutics Holding AG) conveyed as follows:
2,132,860 (reported in 6 June, 2011), 899,071 (reported in 5 July,
2011), 374,161 (reported in 3 August), 89,728 (reported in 2 September),
1,239,816 (reported in 2 December) and 137,152 (reported in 4 January 2012) a
total of 4,872,788 Biotie shares against consideration pursuant to the option
programs.
The conveyed shares previously held by the Company's subsidiary have not carried
any voting rights. As a result of the conveyances, the total number of votes
attached to Biotie's shares increased by 4,872,788 votes to 377,555,090 votes.
The conveyance does not affect the number of registered shares (total of
387,594,457 shares) but the number of the Company's shares held by the Biotie
Therapies group is reduced to 10,039,367 shares. The parent company Biotie does
not own any treasury shares.
The total number of future subscription (Swiss option plan) on December
31, 2011 amounted to 9,759,192, which represents 2.52 % of the total amount of
shares.
In December, The Board of Directors of Biotie approved two new share-based
incentive plans for the Group employees; a stock option plan for mainly its
European employees and an equity incentive plan for mainly its US employees. The
plans are intended to form part of the incentive and commitment program for the
employees. The incentives support the attainment of the targets established by
the Company and the implementation of the Company's strategy, as well as the
Company's long-term productivity.
Stock Option Plan 2011
The maximum total number of stock options issued is 7,401,000, and they entitle
their owners to subscribe for a maximum total of 7,401,000 new shares in the
company or existing shares held by the company. The Board of Directors will
decide on the distribution of the stock options. The stock options will be
issued at no cost. The stock options are divided into three (3) tranches, of
which 2,467,000 will be marked as 2011A, 2,467,000 will be marked as 2011B and
2,467,000 will be marked as 2011C.
The number of shares subscribed by exercising stock options now issued
corresponds to a maximum total of 1.87 per cent of the shares and votes in the
company, if new shares are issued in the share subscription.
Equity Incentive Plan
The maximum number of share units to be granted and the number of corresponding
shares to be delivered on the basis of the plan will be a total of 4,599,000
shares, which corresponds to 1.17 per cent of the shares and votes in the
company, should new shares be delivered.
The Board of Directors approved in its meeting on 23 February 2012 that a total
of 1,558,600 share unit awards are granted for 2011 under the company's equity
incentive plan. Each granted share unit award entitles to one share in the
company, subject to a vesting period of approximately two (2) years pursuant to
the terms and conditions of the equity incentive plan. For 2012, a maximum of
2,020,000 share unit awards may be granted under the equity incentive plan.
Shares and options held by management
At the end of financial year 2011 the amount of company's shares held by the
Board of Directors and the company's management and their controlled companies
amounted to 2,994,570 shares and 8,425,082 option rights of which 750,000
options are conditional achieving certain set targets.
Share capital and shares
Biotie shares are all of the same class and have equal rights. Each share
entitles the holder to one vote at the general meeting of shareholders. All
shares are quoted on NASDAQ OMX Helsinki Ltd (Small cap). Since July, 2011
Biotie has been classified as Biotechnology, sector: Health Care (GICS - Global
Industry Classification Standard) by MSCI (Morgan Stanley Capital
International).
On 31 December 2011 the registered number of shares in Biotie Therapies Corp.
was 387,594,457. Of these shares 10,039,367 were held by the company or its
group companies. The registered share capital of Biotie was EUR 165,919,181.95.
Biotie has a standby equity distribution agreement (SEDA) in place with US fund
Yorkville. Yorkville is obliged to subscribe and pay for Biotie shares up to a
total value of EUR 20 million during the period until September 2012 at Biotie's
discretion (Biotie option). The purpose of this arrangement is to have an option
to secure the financing of Biotie's working capital in the short and medium
term. Biotie has made use of this arrangement in H2 2010 and raised a total
amount of EUR 1.1 million and in 2011 Biotie did not conveyed any shares under
this agreement.
Market capitalization and trading
At the end of the reporting period the share price was EUR 0.50 the highest
price during the reporting period January - December 2011 EUR 0.82, the lowest
was EUR 0.34, and the average price was EUR 0.58. Biotie's market capitalization
at the end of the reporting period was EUR 193.8 million.
The trading volume on NASDAQ OMX Helsinki during the reporting period January -
December was 243,335,806 shares, corresponding to a turnover of EUR 140,878,886
Changes in ownership
During the financial year 2011, Biotie made twelve announcements according to
Chapter 2, Section 10 of the Finnish Securities Market Act.
Information on notices of changes in ownership and a monthly updated list of
Biotie's major shareholders is available on the company's website at
www.biotie.com/investors.
Ten largest shareholders of Biotie registered in the shareholders' register
maintained by Euroclear Finland Ltd on December 31, 2011
Finnish Innovation Fund (Sitra) 12,685,350 3.27 %
Ilmarinen Mutual Pension Insurance Company 12,536,932 3.23 %
Veritas pension Insurance Company 7,607,668 1.96 %
Jouhki and his controlled companies:
- Thominvest Oy (2,937,900)
- Dreadnought Finance (2,098,416)
- Juha Jouhki (1,501,356) 6,537,672 1.69 %
Sijoitusrahasto Alfred Berg Finland 5,850,923 1.51 %
Finnish Industry Investment Ltd 2,757,893 0.71 %
Harri Markkula and his controlled companies
-Harri Markkula (2,458,868)
-Tilator Oy (114,700) 2,573,568 0.66 %
FIM Fenno Sijoitusrahasto 2,340,744 0.60 %
Alfred Berg Small Cap finland Fund 1,744,799 0.45 %
Sijoitusrahasto Alfred Berg Optimal 1,341,429 0.35 %
-----------------------------------------------------------------
55,976,978 14.44 %
Nominee registered shares total 237,469 ,295 61.27 %
Others 94,148 184 24.29 %
Number of shares, total 387,594,457 100.00 %
A subsidiary of Biotie Therapies Corp. owns 10,039,367 shares of the Company
which do not carry any voting rights.
The parent company Biotie does not own any treasury shares
Shareholders' meetings
Extraordinary General meeting held on 1 February:
The stock exchange release regarding the resolutions of the Extraordinary
General Meeting of Biotie Therapies Corp. was published on 1 February 2011.
Annual General Meeting was held on 6 May
The stock exchange release regarding the resolutions of the Annual General
Meeting of Biotie Therapies Corp. was published on 6 May 2011.
Short-term risks and uncertainties
Biotie's strategic risks are predominantly related to the technical success of
the drug development programs, regulatory issues, strategic decisions of its
commercial partners, ability to obtain and maintain intellectual property rights
for its products, launch of competitive products and the development of the
sales of its products. The development and success of Biotie's products depends
to a large extent on third parties. Any adverse circumstance in relation to any
of its R&D programs might impair the value of the asset and thus, represent a
severe risk to the company. Such adverse events could happen on a short term
notice and are not possible to foresee.
The key operational risks of Biotie's activities include the dependency on key
personnel, assets (especially in relation to intellectual property rights) and
dependency on its license partners' decisions.
Furthermore, significant financial resources are required to advance the drug
development programs into commercialized pharmaceutical products. To fund the
operations, Biotie relies on financing from two major sources: income from its
license partners and raising equity financing in the capital markets.
The company relies on capital markets to raise equity financing from time to
time. There can be no assurance that sufficient funds can be secured in order to
permit the company to carry out its planned activities. Current capital market
conditions are very volatile. While in March 2011 the company was able to raise
a significant amount of cash from a share issue to fund its operations in the
mid-term future, there can be no assurance that the company can secure equity
financing in the future if and when it needs it.
Although Biotie has currently active license agreements in place, the
termination of any such agreement would have a negative effect on the short to
medium term access to liquidity for the company. While income generated from
commercial agreements with third parties relating to its clinical programs might
significantly improve Biotie's financial position, a forecast on possible income
from future licensing arrangements cannot be provided reliably. Therefore it is
possible that Biotie will need to secure additional financing from share issues
in the future.
The group can influence the amount of capital used in its operations by adapting
its cost base according to the financing available. The restructuring measures
announced in Q4 2010 highlight such an approach. Management monitors the capital
and liquidity on the basis of the amount of equity and cash funds. These are
reported to the Board on a monthly basis.
The Board of Directors proposal for handling of the loss
The Board of Directors proposes that no dividend from the financial year 2011
will be paid, and that the loss of the parent company for the financial year EUR
44.9 million (FAS) will be carried forward to shareholders' equity.
Annual General Meeting
Biotie's annual General Meeting will be held at the auditorium of Mauno Koivisto
Centre in Turku on Thursday, March 29, 2012 at 10.00 a.m.
IFRS and accounting principles
The 2011 financial statements has been prepared in accordance with IFRS
recognition and measurement principles, and applying the same accounting
policies as for the 2010 financial statements. The financial statement release
has not been prepared in accordance with IAS 34, Interim Financial Reporting.
In addition, as a result of the acquisition of Synosia Therapeutics, Biotie has
applied the following principle beginning with the Q1 2011 financial statements:
The results and financial position of all the group entities that have a
currency different from the presentation currency are translated into the
presentation currency as follows:
a. Assets and liabilities for each balance sheet presented are translated at
the closing rate at the date of that balance sheet.
b. Income and expenses for each income statement are translated at average
exchange rates.
c. All resulting exchange differences are recognised in other comprehensive
income.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations, and of inter-company borrowings that are
considered of being part of the net investment, are taken to other comprehensive
income. When a foreign operation is disposed of or sold (either partially or as
a whole), exchange differences that were recorded in equity are recognised in
the income statement.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
This financial statement report is unaudited.
Turku, 24 February 2012
Biotie Therapies Corp.
Board of Directors
For further information, please contact:
Virve Nurmi, Investor Relations Manager
tel. +358 2 274 8900
e-mail:virve.nurmi@biotie.com
Media contact:
Julie Walters, Tudor Reilly
Office: +44 (0) 20 7034 7610
Mobile +44 (0) 775 362 6967
Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.biotie.com
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS)
1.10.- 1.10.- 1.1.- 1.1.-
31.12.2011 31.12.2010 31.12.2011 31.12.2010
EUR 1,000 3 months 3 months 12 months 12 months
--------------------------------------------------------------------------------
Continuing operations
Revenue 30 473 1,007 1,955
Research and -5,614 -1,157 -35,315 -5,538
development expenses
General and -2,833 -1,504 -9,721 -4,216
administrative expenses
Other operating income 1,728 41 2,518 166
--------------------------------------------------------------------------------
Operating profit/loss -6,688 -2,147 -41,510 -7,633
Financial income 2,791 12 3,160 101
Financial expenses 308 -314 -1,132 -930
--------------------------------------------------------------------------------
Profit/loss before taxes -3,528 -2,449 -39,482 -8,462
Taxes 368 0 7,755 0
--------------------------------------------------------------------------------
Net income/loss, continuing -3,221 -2,449 -31,727 -8,462
operations
Net income/loss, discontinued 0 -6,111 0 -13,111
operations
--------------------------------------------------------------------------------
Net income/loss -3,221 -8,560 -31,727 -21,573
Other comprehensive income:
Currency translation differences 1,743 0 5,449 0
--------------------------------------------------------------------------------
Total comprehensive income of the -1,478 -8,560 -26,278 -21,573
period
Net income/loss attributable to
Parent company shareholders -3,221 -8,560 -31,727 -21,573
Total comprehensive income
attributable to:
Parent company shareholders -1,478 -8,560 -26,278 -21,573
Earnings per share (EPS)
basic & diluted, EUR, continuing -0.01 -0.02 -0.09 -0.06
operations
Earnings per share (EPS)
basic & diluted, EUR, discontinued - -0.04 - -0.09
operations
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(IFRS) EUR 1,000
31.12.2011 31.12.2010
--------------------------------------------------------------------
Assets
Non-current assets
Intangible assets 75,206 4,042
Goodwill 5,549 0
Property, plant and equipment 305 365
Investment property 1,376 1,468
Other shares 10 10
--------------------------------------------------------------------
82,446 5,885
Current assets
Available for sale investment 0 0
Investments held to maturity 16,000 0
Accounts receivables and other receivables 1,852 1,261
Financial assets at fair value through 169 0
profit or loss
Cash and cash equivalents 17,769 4,059
--------------------------------------------------------------------
35,790 5,320
Total 118,236 11,205
Equity and liabilities
Shareholders' equity
Share capital 166,446 43,378
Share issue 0 500
Reserve for invested unrestricted equity 4,657 1,180
Cumulative translation adjustment 5,449 0
Retained earnings -71,488 -52,951
Net income/loss -31,727 -21,573
--------------------------------------------------------------------
Shareholders' equity total 73,337 -29,466
Non-current liabilities
Provisions 0 0
Non-current financial liabilities 23,492 25,640
Pension benefit obligation 435 430
Other non-current liabilities 7,804 7,442
Non-current deferred revenues 246 368
Deferred tax liabilities 2,619 0
--------------------------------------------------------------------
34,596 33,880
Current liabilities
Provisions 566 589
Pension benefit obligation 16 16
Current financial liabilities 116 144
Current deferred revenues 120 1,006
Accounts payable and other current liabilities 9,485 2,637
Liability related to discontinued operations 0 2,400
--------------------------------------------------------------------
10,303 6,791
Liabilities total 44,899 40,671
Total 118,236 11,205
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Attributable to equity holders of the parent company
EUR 1,000 Shares Share Share Reserve Own Retained Share-
(1000 Capital issue for Shares Earnings holders'
pcs) invested equity
un- total
restricted
equity
--------------------------------------------------------------------------------
BALANCE AT 158,753 43,057 0 1,180 -15 -53,160 -8,938
1.1.2010
--------------------------------------------------------------------------------
Total -21,573 -21,573
comprehensive
income for the
period
Options granted 108 108
SEDA costs 116 116
Share issue to the 17,251 0
company itself
without
consideration
Directed issue of 550 500 1,050
treasury shares
Cost of share -229 -229
issue
--------------------------------------------------------------------------------
17,251 321 500 0 0 -21,349 -20,528
--------------------------------------------------------------------------------
BALANCE AT 176,004 43,378 500 1,180 -15 -74,509 -29,466
31.12.2010
--------------------------------------------------------------------------------
Total -26,278 -26,278
comprehensive
income for the
period
Options granted 2,662 3,037 5,699
Options exercised 815 815
Directed issue of 500 -500 0
treasury shares
Directed issues of 211,590 115,892 115,892
new shares
Directed offer of 7,964 7,964
treasury shares
Cost of share -1,289 -1,289
issue
--------------------------------------------------------------------------------
211,590 123,068 -500 3,477 0 -23,242 102,803
--------------------------------------------------------------------------------
BALANCE AT 387,594 166,446 0 4,657 -15 -97,751 73,337
31.12.2011
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
1.1.- 1.1.-
31.12.2011 31.12.2010
EUR 1,000 12 months 12 months
--------------------------------------------------------------------------------
Cash flow from operating activities
Continuing operations
Net income/loss -31,727 -8,462
Adjustments:
Non-cash transactions 20,663 -1,287
Interest and other financial expenses 1,132 930
Interest income -3,160 -101
Foreign exchange losses/gains on operating activities -124 0
Taxes -7,786 0
Change in working capital:
Change in accounts receivables and other receivables 1,164 626
Change in accounts payable and other liabilities 1,131 436
Change in mandatory provisions -23 -25
Interests paid -42 -42
Interests received 0 68
Taxes paid 6 0
--------------------------------------------------------------------------------
Net cash from operating activities, continuing operations -18,765 -7,856
Net cash from operating activities, discontinued -2,400 -7,011
operations
--------------------------------------------------------------------------------
Net cash from operating activities -21,165 -14,867
Cash flow from investing activities
Continuing operations
Acquisition of subsidiary, net of cash acquired 16,339 0
Change in financial assets at fair value through profit or
loss
Additions 0 0
Disposals 6,653 8,886
Change in investments held to maturity
Additions -26,000 0
Disposals 10,000 0
Interests from investments held to maturity 78 0
Investments to tangible assets -63 -54
Investments to intangible assets -2 0
--------------------------------------------------------------------------------
Net cash used in investing activities, continuing 7,005 8,832
operations
Net cash used in investing activities, discontinued 0 -1,587
operations
--------------------------------------------------------------------------------
Net cash used in investing activities 7,005 7,245
Cash flow from financing activities
Continuing operations
Payments from share issue 27,803 1,050
Share issue costs -1,190 -229
Proceeds from borrowings 226 6
Repayment of loans -40 -40
Repayment of lease commitments 0 -177
--------------------------------------------------------------------------------
Net cash from financing activities, continuing operations 26,799 610
Net cash from financing activities, discontinued 0 180
operations
--------------------------------------------------------------------------------
Net cash from financing activities 26,799 791
Net increase (+) or decrease (-) 12,639 -6,832
in cash and cash equivalents
Effect on changes in exchange rates on cash and cash 1,071 0
equivalents
Cash and cash equivalents at the 4,059 10,891
beginning of the period
Cash and cash equivalents at the 17,769 4,059
end of the period
ACQUISITION OF SYNOSIA THERAPEUTICS HOLDING AG
Biotie acquired Synosia Therapeutics Holding AG ("Synosia") on February 2011.
Today, Synosia is a wholly-owned subsidiary of Biotie and is consolidated into
Biotie's consolidated financial statements from the acquisition date onwards.
Notes required by IFRS3 Business combinations have been presented in Q1 2011
interim report released May 13, 2011.
SYNOSIA OPTION PLAN
As a result of the combination agreement signed with Synosia Therapeutics
Holding AG Biotie Therapies Corp. has issued 14,912,155 shares as a bonus issue
to its subsidiary Biotie Therapies Holding AG to be held in treasury and to be
used to satisfy exercise of Biotie Therapies Holding AG (formerly Synosia
Therapeutics Holding AG) options in accordance with the existing Biotie
Therapies Holding AG option plans.
The option plan has been described more in detail in Q1 2011 interim report
released May 13, 2011.
The following table provides information on the number and pricing of options at
December 31, 2011
Amount Weighted average exercise price
Options exercised 4,872,788 0.17
Options outstanding 9,759,192 0.22
Options exercisable 7,651,645 0.18
Contingent liabilities
EUR 1,000 31.12.2011 31.12.2010
-------------------------------------------------
Operating lease commitments 156 159
Due within a year 101 70
Due later 55 88
Rent commitments 377 243
Due within a year 247 243
Due later 130 0
-------------------------------------------------
Total 533 402
The Group leases motor vehicles, machines and equipment with leases of 3 to 5
years. Rent commitments include subleased Pharmacity premises until 30 November
2011.
Commitments
On 31 December 2011 Biotie had purchase commitments, primarily for contract
research work services, totaling EUR 11.9 million.
TRANSACTIONS WITH RELATED PARTIES
There have not been major changes within the related party transactions in 2011.
KEY FIGURES
The formulas for the calculation of the key
figures are presented in the notes of the
consolidated financial statements 2011
Incl. both continuing and discontinued 1.1.- 1.1.- 1.1.-
operations 31.12.2011 31.12.2010 31.12.2009
EUR 1,000 12 months 12 months 12 month
--------------------------------------------------------------------------------
Business development
Revenues 1,007 2,928 5,628
Personnel on average 39 70 81
Personnel at the end of period 39 23 82
Research and development costs 35,315 12,229 21,109
Capital expenditure 65 270 475
Profitability
Operating profit/loss -41,510 -20,720 -17,631
as percentage of revenues, % -4,122.14 -707.65 -313.27
Profit/loss before taxes -39,482 -21,573 -17,942
as percentage of revenues, % -3,920.75 -736.78 -318.80
Balance sheet
Liquid assets 33,769 4,059 19,744
Shareholders' equity 73,337 -29,466 -8,938
Balance sheet total 118,236 11,205 31,526
Financial ratios
Return on equity, % - - -
Return on capital employed, % -82.8 -341.5 -86.0
Equity ratio, % 62.0 -263.0 -28.4
Gearing, % -14.1 -73.7 -67.9
Per share data
Earnings per share (EPS) basic, EUR -0.09 -0.15 -0.11
Earnings per share (EPS) diluted, EUR -0.09 -0.15 -0.11
Shareholders' equity per share,€ 0.19 -0.17 -0.06
Dividend per share, EUR - - -
Pay-out ratio, % - - -
Effective dividend yield, % - - -
P/E-ratio - - -
Share price
Lowest share price, EUR 0.34 0.30 0.23
Highest share price, EUR 0.82 0.65 0.67
Average share price, EUR 0.58 0.48 0.42
End of period share price, EUR 0.50 0.50 0.55
Market capitalization 193.8 88.0 87.3
at the end of period MEUR
Trading of shares
Number of shares traded 243,335,806 90,049,678 51,471,584
As percentage of all 62.8 51.2 32.4
Adjusted weighted average 365,219,028 161,919,250 144,992,735
number of shares during the period
Adjusted number of shares 387,594,457 176,003,931 158,752,560
at the end of the period
[HUG#1588649]
Biotie Therapies Corp. financial statement release 1 January - 31 December 2011
| Source: Biotie Therapies
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