Announcement no. 10/2007
To OMX Nordic Exchange. Hørsholm, Denmark, 9 May 2007
LifeCycle Pharma Announces Financial Results for the first 3 Months of 2007
Summary: LifeCycle Pharma announces financial results for the first three months
of 2007
LifeCycle Pharma A/S (OMX:LCP) announced today financial results for the three
months ended 31 March 2007. The results reported are as follows -
Revenues were DKK 3.8 million (approximately EUR 0.5 million) for the three
months ended 31 March 2007. No revenues were recognized in the similar period of
2006.
An Operating Loss of DKK 38.7 million (approximately EUR 5.2 million). This
compares to an Operating Loss reported for the same period in 2006 of DKK 36.9
million (approximately EUR 5.0 million).
A Net Loss of DKK 35.1 million (approximately EUR 4.7 million). For the same
period in 2006 the company reported a Net Loss of DKK 36.7 million
(approximately EUR 4.9 million).
The Net Loss per share was DKK 1.15 (approximately EUR 0.15) compared to the Net
Loss per share reported for the first three months of 2006 of DKK 8.29
(approximately EUR 1.11). The 2006 figures have been stated prior to the
issuance of bonus shares in the ratio 1:3 in July 2006.
Net Financial Income totaled DKK 3.6 million (approximately EUR 0.5 million),
compared to Net Financial Income of DKK 0.1 (approximately EUR 0.02 million) in
the same period of 2006.
At 31 March 2007, LifeCycle Pharma had cash and cash equivalents of DKK 432.6
million (approximately EUR 58.1 million), which is a decrease of DKK 32.1
million (approximately EUR 4.3 million) to the cash position at the end of 2006.
Highlights for the Period
Positive Phase I data for LCP-AtorFen demonstrating that the product was safe
and well-tolerated and that the product had a similar rate and extent of
absorption compared to Lipitor® and Tricor®. A Phase II program is expected to
start during Q2.
Regulatory approval of LifeCycle Pharma's LCP-FenoChol product would not be
subject to a so-called 30-month stay under the Hatch-Waxman Act and LifeCycle
therefore expects that the product will advance through regulatory approval
during 2007.
Subsequent to the balance sheet date, on 1 May 2007, LifeCycle Pharma signed an
exclusive license agreement with Sciele Pharma, Inc. to market fenofibrate in
the US, Canada, and Mexico, in 120 milligram and 40 milligram strengths.
Fenofibrate is prescribed for the treatment of hyperlipidemia and
triglyceridemia. Under the terms of the agreement, LifeCycle Pharma will receive
an upfront payment of USD 5 million, milestone payments of up to USD 12 million
upon FDA approval and meeting certain sales targets, and tiered mid-teen to
high-teen royalty payments on product sales. At the same time, Sciele Pharma
also entered into a technology collaboration with LifeCycle Pharma utilizing
LifeCycle Pharma's MeltDose® Technology for the life-cycle management of one of
its products. Under the terms of that agreement, LifeCycle Pharma will be
responsible for the development of the product and in return LifeCycle Pharma
will be entitled to receive R&D reimbursement, development milestones and mid
single-digit royalties on eventual sales.
Outlook
LifeCycle Pharma's financial guidance for the year is unchanged relative to the
expectations expressed in the Annual Report for 2006, dated 5 March 2007, as the
upfront payment received in connection with the license agreement with Sciele
Pharma, Inc. for LCP-FenoChol, was in line with the management´s expectations of
entering into a partnership for LCP-FenoChol during 2007.
During 2007, LifeCycle Pharma will continue to advance the development of the
company's six named product candidates, one of which is under FDA registration
review and the other five are in various stages of clinical development. The
company will continuously investigate promising new product candidates for
potential addition to our growing product pipeline.
Subsequent to the balance sheet date, on 1 May 2007, LifeCycle Pharma entered
into a US partnership with Sciele Pharma, Inc. regarding the commercialization
of LCP-FenoChol for the US market. In 2007, LifeCycle Pharma expects to be
advancing LCP-FenoChol through the FDA review process to ensure that the product
is ready for Sciele Pharma for introduction on the US market.
Further, LifeCycle Pharma plans to initiate two Phase II clinical trials with
LCP-Tacro to treat organ transplant patients and patients with autoimmune
diseases. Also, in February 2007, the company received positive clinical data
for its Phase I program with LCP-AtorFen and the company plans to initiate a
Phase II clinical trial with LCP-AtorFen to treat patients with abnormal lipid
levels. Finally, the company expects to expand its existing product pipeline
with one named product within the area of organ transplantation by advancing one
our internal pre-clinical product candidates into clinical trials during 2007.
As costs will increase for the expanded regulatory and clinical development
activities, LifeCycle Pharma's operating expenses are expected to be
significantly higher in 2007 compared to 2006. As announced in the annual report
for 2006, LifeCycle Pharma is projecting a 2007 operating loss of DKK 260 to 285
million compared to DKK 149 million for 2006. Under the conditions described
above, the net loss for 2007 is expected to be in the range of DKK 255 to 280
million compared to the net loss of DKK 148 million in 2006.
The company's projected 31 December 2007 cash position is expected to be in the
range of DKK 215 to 240 million.
The above estimates are subject to possible change primarily due to the timing
and variation of clinical activities, related costs and fluctuating exchange
rates. The estimates also assume that no further outlicense agreements are
entered into during 2007 that could materially affect the results.
Conference Call
LifeCycle Pharma's management will hold a conference call to discuss the results
for the three months ended 31 March 2007 on
Thursday 10 May 2007 at 3:00pm CET (2:00pm GMT / 9:00am EST)
The conference call will be held in English and the dial-in numbers are as
follows -
Participants in Denmark: 70 26 50 40
Participants outside Denmark: +45 70 26 50 40
Ask for the LifeCycle Pharma conference call.
Grant of Warrants
Also today, the board of directors decided to issue 248,000 warrants to certain
board members and new employees of the company and the company's subsidiary. No
members of the company's management were granted warrants. Of the 248,000
warrants, 55,000 warrants are allocated to board members, 80,000 warrants are
allocated to key employees and 113,000 warrants are allocated to other
employees. 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 10, 2007, to ensure that the
exercise price reflects the fair market price per share following the disclosure
of the interim report for the first quarter of 2007.
By application of the Black-Scholes formula, the market value of the warrant
program can be calculated as DKK 18.70 per warrant assuming an exercise price of
DKK 57.00, equal to the closing price of the company's share at the OMX Nordic
Exchange on May 9, 2007, based on an interest rate of 4.13% and a volatility of
the company's shares set to 35%. The aim of the issue is to give an incentive to
the recipients to work towards a positive development in the company's business
and by extension, an increase in the market price of the company's shares. The
warrants vest by 1/48th per month of employment/affiliation after the date of
grant. The exercise periods are determined as 21 days from the company's
announcements of its preliminary annual report and the interim financial report
for the first half of a year, respectively. The first exercise period is 21 days
after publication of the preliminary annual report for 2007 and the last
exercise period is 21 days from publication of the interim financial period for
the first half of 2013. The board of directors has issued the warrants by partly
exercising the authorization contained in Article 8 of the company's articles of
association according to which the board of directors - for a period ending on
23 April 2012 - on one or more occasions may issue up to 811,619 warrants each
conferring a right to subscribe 1 share of nominally DKK 1 each in Lifecycle
Pharma without preemptive subscription rights for the shareholders. After the
issue of the 248,000 warrants, 563,619 warrants remain available for issue under
the authorization and the total number of warrants issued in the company is
5,087,480 warrants.
For further information please contact:
LifeCycle Pharma A/S
Michael Wolff Jensen
Executive Vice President and CFO
Tel. +45 40 74 62 44
--oo0oo---
About LifeCycle Pharma A/S:
LifeCycle Pharma, headquartered in Hørsholm, Denmark, is an emerging
pharmaceutical company with a broad and late stage product pipeline in
therapeutic areas of cholesterol management, hypertension and organ transplant.
LifeCycle Pharma's product candidates are proprietary and designed to improve
the quality of existing drugs by enhancing the release and absorption of drugs
in the human body. LifeCycle Pharma's proprietary technology platform, MeltDose®
technology, offers lower dosing, reduced side effects and improved safety and
patient compliance, as well as reduced product development time and development
costs. LifeCycle Pharma is listed on the OMX Nordic Exchange under the trading
symbol (LCP). Please visit www.lcpharma.com for further information about
LifeCycle Pharma A/S.
LifeCycle Pharma A/S Announces Financial Results for the first 3 Months of 2007
| Source: Veloxis Pharmaceuticals A/S
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