BIOTIE THERAPIES CORP. INTERIM REPORT 5 August 2011 at 9.00 a.m.
Biotie Therapies Corp. Interim report 1 January - 30 June 2011
Acquisition of Synosia Therapeutics, completion of phase 3 trials for nalmefene
in alcohol dependence, successful share offering and pipeline prioritization:
The Company has made substantial progress in the first-six months of 2011. In
January, Biotie acquired Synosia Therapeutics, a drug development specialist
with key operations in the US and a strategic alliance with UCB Pharma. In
March, Biotie raised EUR 27 million in a directed share issue to institutional
and strategic investors, strengthening its financial position. In June, Biotie's
partner, Lundbeck, concluded an extensive phase 3 program for nalmefene in
alcohol dependence, following initial positive data in January. Lundbeck plans
to file a marketing authorization application (MAA) in the EU for nalmefene by
the end of 2011. Biotie advanced SYN115 into a large phase 2b trial in
Parkinson's disease in April and, after the reporting period in July, completed
an extensive a pipeline review to ensure that it is prioritizing those compounds
that it believes have the greatest opportunity to create value. As a result,
Biotie enters the second half of 2011 with a firm strategy in place to develop
products in areas of high unmet medical need and create long term value for its
shareholders.
Financial review for January - June 2011
Financial statements for January - June 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 2011
onwards.
Biotie corrected on July 28, 2011 the comparison figures of interim report
January - March 2011 from the period of January-March 2010. The correction
affected comparison figures January - March 2010, it did not affect the figures
reported for January - March 2011. The comparison figures for the period January
- June 2010 have been classified according to IFRS 5.
EUR thousand 1.1. - 1.1. -
30.6. 2011 30.6. 2010
Continuing operations 6 months 6 months
---------------------------------------------------------
Revenues 946 1,009
Financial result (net loss): -12,320 -4,597
Basic earnings per share (EUR) -0.04 -0.03
Cash flow from operating activities -10,520 -5,485
Investments 34 180
30.6.2011 30.6.2010
------------------------------------
Liquid assets 40,882 11,638
Equity 86,543 -15,949
Equity ratio (%) 63.5 -67.2
Q2/2011 in brief:
Completion of phase 3 program with nalmefene in alcohol dependence; European
marketing authorization application (MAA) expected by the end of 2011: Biotie's
partner, H. Lundbeck A/S (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 plans to file a marketing authorization
application (MAA) in Europe by the end of 2011.
Start of a Phase 2b trial of SYN115 in Parkinson's disease: In April, Biotie
initiated a large phase 2b study in levodopa-treated Parkinson's disease (PD).
Results from the study are expected in H1 2013. The compound is partnered with
UCB Pharma.
Topline data from an exploratory phase 2a study with SYN118 in Parkinson's
disease: Biotie announced results from an exploratory phase 2a study of its HPPD
inhibitor SYN118 in Parkinson's disease (PD) in May. These data did not show a
significant improvement in measures of PD motor function when compared to
placebo. Biotie is considering development options for SYN118 together with its
partner UCB.
Financial review Q2 2011:
Financial statements for Q2 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 2011 onwards.
EUR thousand 1.4. - 1.4.-
30.6.2011 30.6 2010
Continuing operations 3 months 3 months
-------------------------------------------------------
Revenues 473 473
Financial result (net loss): -4,610 -2,169
Basic earnings per share (EUR) -0.01 -0.01
Cash flow from operating activities -6,324 -2,380
Timo Veromaa, Biotie's President and CEO:
"We have made tremendous progress since the beginning of the year, with
nalmefene for alcohol dependence completing Phase 3 studies and nearing the
market, and with the start of a large Phase 2b trial of SYN115 in Parkinson's
disease. We have conducted a thorough pipeline review to ensure that we are
investing in those products that have the greatest opportunity to create value.
We have also uncovered interesting new opportunities for our VAP-1 antibody in
niche indications. We are confident and excited about these opportunities and
believe that Biotie is ideally positioned to create value for our shareholders".
Key events after the reporting period
Completion of pipeline review: Following completion of the Synosia integration,
Biotie - as planned - conducted a pipeline review to ensure it is focusing on
those products that it believes will have the greatest opportunity to create
value. The company will continue to focus on areas of high unmet medical need in
central nervous system (CNS) disorders with nalmefene, SYN115, SYN118, SYN120,
and SYN117, and will pursue its vascular adhesion protein-1 (VAP-1) antibody in
inflammatory disease, including certain niche indications. As part of the
pipeline prioritization, the company will now seek a partner for its PDE4
inhibitor ronomilast (phase 1b; respiratory disease) and will not invest in
further clinical trials with the compound without a partner. Biotie will
discontinue SYN111 (rufinamide; phase 2a; bipolar disease).
Biotie Advances Clinical Programme for SYN120: Biotie announced on July 22 the
start of a Phase 1 clinical study using positron emission tomography (PET)
imaging to investigate brain concentrations of SYN120, a potential treatment for
cognitive disorders including Alzheimer's disease and schizophrenia.
The trial of healthy volunteers is being conducted by Dr Dean Wong at the John
Hopkins University in the United States to determine occupancy of the 5-HT6
receptor in the brain following different doses of SYN120. This will help to
establish the appropriate dose for subsequent Phase 2 trials.
Outlook for 2011
Outlook for key development programs
· Nalmefene: Small molecule opioid receptor antagonist for alcohol
dependence partnered with H. Lundbeck A/S (Lundbeck). Phase 3 program complete
marketing authorization application (MAA) in Europe expected by end of 2011;
potential launch in 2012. Detailed efficacy and safety data expected to be
submitted by Lundbeck for presentation at scientific and medical meetings in the
next 12 months.
· SYN115 (tozadenant): Small molecule adenosine A2a receptor antagonist
for Parkinson's disease, partnered with UCB. Phase 2b ongoing (sponsored by
Biotie) with results expected H1 2013.
· SYN118 (nitisinone): Small molecule inhibitor of 4-
hydroxyphenylpyruvate dioxygenase (HPPD). Biotie is considering development
options for the compound together with its partner UCB and will announce further
plans later in the year.
· SYN120: Small molecule 5HT-6 receptor antagonist for cognitive
disorders associated with Alzheimer's disease and schizophrenia. Phase 1 PET
("positron emission tomography") imaging study to determine therapeutic dose for
subsequent phase 2 studies ongoing; expected completion H1 2012. Roche has an
option to license this compound from Biotie.
· SYN117 (nepicastat): Small molecule dopamine beta-hydroxylase (DBH)
inhibitor in phase 2 trial in post-traumatic stress disorder (PTSD), funded by
US Department of Defense; results expected in 2013. Strong scientific and
medical rationale in the treatment of cocaine dependency; in discussions with US
government agencies for further funding in this indication.
· BTT-1023 (VAP-1 antibody): Fully human monoclonal antibody targeting
Vascular Adhesion Protein-1. Manufacturing scale-up optimization program
ongoing and proof-of-concept clinical studies in selected indications are
planned to start H2 2012. Biotie is also in discussions with potential
additional partners, outside Seikagaku's territory, for indications targeting
large markets.
· Ronomilast: Potential best-in-class small molecule phosphodiesterase-4
(PDE4) inhibitor for COPD; Phase1 complete. Biotie will seek a corporate
partner to drive development of ronomilast and will not invest in further
clinical studies without a partner.
Financial calendar 2011:
Interim Report for January - September 4 November 2011
Conference call
An analyst and media conference call will take place on 5 August 2011 at 2.00
p.m. Central European Time. The conference call will be held in English.
Callers may access the conference directly at the following telephone numbers:
US: +1 212 444 0481, UK: +44 (0)20 7136 2053 and Finland: +358 (0)9 2319 4345
access code 8705943. 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
products for neurodegenerative and psychiatric disorders (Parkinson's disease,
Alzheimer's disease and other cognitive disorders, alcohol and drug dependence)
and inflammatory diseases. It has 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. Biotie's
most advanced product, nalmefene for alcohol dependence, has completed Phase 3
clinical development by licensing partner H. Lundbeck A/S.
Group structure: The parent company of the group is Biotie Therapies Corp. The
domicile of the company is Turku, Finland. The company has two non-operational
subsidiaries named Biotie Therapies GmbH, located in Radebeul, Germany and
Biotie Therapies International Ltd in Finland.
Following the acquisition of Synosia Therapeutics, the company has a holding
subsidiary, Biotie Therapies Holding AG, located in Basel, Switzerland, which
has two operative subsidiaries, Biotie Therapies AG, located in Basel,
Switzerland and Biotie Therapies, Inc. located in South San Francisco,
California.
Drug development projects:
Nalmefene is a small molecule opioid receptor antagonist that inhibits the
reward pathway in the brain that reinforces the desire and craving for alcohol
and other addictive substances. 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 plans to file a marketing authorization application (MAA) in Europe by
the end of 2011.
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 prior studies conducted by Biotie, the total clinical
database now contains more than 3,000 patients with alcohol dependence.
SYN115 (tozadenant) 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, 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.
Nitisinone (SYN118) is a potent and selective inhibitor of hydroxyphenylpyruvate
dioxygenase (HPPD), an enzyme responsible for the catabolism of tyrosine, the
precursor of the neurotransmitter dopamine. Preclinical studies have shown that
nitisinone is active in animal models of PD. Clinical studies and patient
experience with nitisinone have shown pronounced and predictable elevations in
the circulating concentrations of tyrosine. The company has completed an open
label, proof-of-mechanism study with nitisinone for PD and a proof-of-concept
trial in restless leg syndrome, both of which demonstrated encouraging efficacy
and safety.
Biotie announced results from an exploratory phase 2a study of its HPPD
inhibitor SYN118 in Parkinson's disease (PD) in May. These data do not show a
significant improvement in measures of PD motor function when compared to
placebo. Biotie will consider development options for the compound together with
its partner UCB and will announce further plans later in the year.
SYN120 is an orally bioavailable, potent and selective antagonist of the 5-HT6
receptor. The 5-HT6 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 it has recently entered a phase 1
PET ("positron emission tomography") imaging study 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 Biotie's fully human VAP-1 antibody (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
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.
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 is ongoing, funded by the US Department of Defense. No data from
this study is expected to become available before 2013. There is strong
scientific and medical rationale for the use of SYN117 in the treatment of
cocaine dependency and discussions are ongoing to seek further funding for this
indication.
Rufinamide (SYN111): Following discussions with various funding agencies and key
opinion leaders Biotie has decided to discontinue all development of SYN111
(rufinamide). Rights to this compound will be returned to Novartis.
Financial review for reporting period January - June 2011
Financial statements for the period January-June 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 0.9 million (EUR
1.0 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 12.3 million
(EUR 4.6 million for continuing operations in the same period in 2010). Research
and development costs for the reporting period amounted to EUR 9.3 million (EUR
3.4 million in the same period in 2010). 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 -11.7 million (EUR -7.1 million in the same period 2010).
Discontinued operations relate to the restructuring plan initiated in October
2010. The restructuring plan targeted achieving annual savings of at least EUR
4.0 million from 2011onwards. The group is on track to achieve the expected
savings by the end of 2011.
Financing: Cash and cash equivalents and short term investments totaled EUR
40.9 million on 30 June 2011 (EUR 11.6 million on 30 June 2010). The groups'
financial position has been 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 ordinary no-par 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 three times since
August 2010 and has raised a total amount of EUR 1.1 million.
Shareholder's equity:
The shareholders' equity of the group amounted to EUR 86.5 million (IFRS) on 30
June 2011. Biotie's equity ratio was 63.5% on 30 June 2011 (-67.2% on 30 June
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 - June amounted to EUR -10.5
million for continuing operations (EUR -5.5 million in the same period in 2010)
and EUR -2.4 million for discontinued operations (EUR -2.6 million in Q2 2010).
Operating cash outflow for continuing operations was EUR 5.0 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 during the reporting period amounted to EUR 34 thousand
(EUR 180 thousand in the same period in 2010).
Personnel
During the reporting period January - June 2011, the average number of employees
amounted to 41 (82 during January - June 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 (80 on 30 June 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 entitle to subscribe one share in the
company.
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.
The Swiss subsidiary of Biotie Therapies Corp. Biotie Therapies Holding AG
(previously Synosia Therapeutics Holding AG) conveyed 2,132,860 (reported in 6
June, 2011) and conveyed 899,071 (reported in 5 July, 2011) of Biotie shares (a
total of 3,031,931 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 3,031,931 votes to 375,714,233 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 11,880,224 shares. The parent company Biotie does
not own any treasury shares.
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 (GICS - Global Industry
Classification Standard) by MSCI (Morgan Stanley Capital International).
On 30 June 2011 the registered number of shares in Biotie Therapies Corp. was
387,594,457. Of these shares 11,880,224 were held by the company or its group
companies (in 5 July 2011). The registered share capital of Biotie was EUR
165,919,181.95
Market capitalization and trading
At the end of the reporting period the share price was EUR 0.54 the highest
price during the reporting period January - June 2011 was EUR 0.82, the lowest
was EUR 0.49, and the average price was EUR 0.62. Biotie's market capitalization
at the end of the reporting period was EUR 209.3 million.
The trading volume on NASDAQ OMX Helsinki during the reporting period January -
June was 174 383 076 shares, corresponding to a turnover of EUR 107,038,351.
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.
IFRS and accounting principles
This interim financial report has been prepared in accordance with IFRS
recognition and measurement principles, and applying the same accounting
policies as for the 2010 financial statements. The interim report has 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 in its Q2 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 the income statement as
part of the gain or loss on sale.
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 as part of the gain or loss on sale.
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 interim report is unaudited.
Turku, 5 August 2011
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
Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.biotie.com
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS)
1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
30.6.2011 30.6.2010 30.6.2011 30.6.2010 31.12.2010
EUR 1,000 3 months 3 months 6 months 6 months 12 months
--------------------------------------------------------------------------------
Continuing operations
Revenue 473 473 946 1,009 1,955
Research and -4,418 -1,474 -9,346 -3,418 -5,538
development expenses
General and -1,667 -1,027 -4,739 -1,927 -4,216
administrative expenses
Other operating income 248 41 506 83 166
--------------------------------------------------------------------------------
Operating profit/loss -5,364 -1,986 -12,633 -4,253 -7,633
Financial income 129 21 147 66 101
Financial expenses -1,556 -204 -2,016 -409 -930
--------------------------------------------------------------------------------
Profit/loss before taxes -6,791 -2,169 -14,502 -4,597 -8,462
Taxes 2,181 0 2,181 0 0
--------------------------------------------------------------------------------
Net income/loss, continuing -4,610 -2,169 -12,320 -4,597 -8,462
operations
Net income/loss, discontinued 0 -1,238 0 -2,496 -13,111
operations
--------------------------------------------------------------------------------
Net income/loss -4,610 -3,407 -12,320 -7,093 -21,573
Other comprehensive income:
Currency translation 2,430 0 599 0 0
differences
--------------------------------------------------------------------------------
Total comprehensive income of -2,180 -3,407 -11,721 -7,093 -21,573
the period
Net income/loss attributable
to
Parent company shareholders -4,610 -3,407 -12,320 -7,093 -21,573
Total comprehensive income
attributable to:
Parent company shareholders -2,180 -3,407 -11,721 -7,093 -21,573
Earnings per share (EPS)
basic & diluted, EUR, -0.01 -0.01 -0.04 -0.03 -0.06
continuing operations
Earnings per share (EPS)
basic & diluted, EUR, - -0.01 - -0.02 -0.09
discontinued operations
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(IFRS) EUR 1,000
30.6.2011 30.6.2010 31.12.2010
-----------------------------------------------------------------------------
Assets
Non-current assets
Intangible assets 86,364 7,169 4,042
Goodwill 5,203 379 0
Property, plant and equipment 371 2,502 365
Investment property 1,430 0 1,468
Other shares 10 10 10
-----------------------------------------------------------------------------
93,377 10,060 5,885
Current assets
Available for sale investment 0 34 0
Investments held to maturity 19,000 3,000 0
Accounts receivables and other receivables 1,934 1,997 1,261
Financial assets at fair value through 4,267 0 0
profit or loss
Cash and cash equivalents 17,615 8,638 4,059
-----------------------------------------------------------------------------
42,816 13,669 5,320
Total 136,193 23,729 11,205
Equity and liabilities
Shareholders' equity
Share capital 166,451 43,057 43,378
Share issue 0 0 500
Reserve for invested unrestricted equity 4,359 1,180 1,180
Cumulative translation adjustment 599 0 0
Retained earnings -72,546 -53,093 -52,951
Net income/loss -12,320 -7,093 -21,573
-----------------------------------------------------------------------------
Shareholders' equity total 86,543 -15,949 -29,466
Non-current liabilities
Provisions 0 143 0
Non-current financial liabilities 25,830 25,714 25,640
Pension benefit obligation 430 554 430
Other non-current liabilities 9,829 7,095 7,442
Non-current deferred revenues 307 429 368
Deferred tax liabilities 7,930 0 0
-----------------------------------------------------------------------------
44,325 33,935 33,880
Current liabilities
Provisions 576 597 589
Pension benefit obligation 16 16 16
Current financial liabilities 110 199 144
Current deferred revenues 120 1,891 1,006
Accounts payable and other current liabilities 4,502 3,040 2,637
Liability related to discontinued operations 0 0 2,400
-----------------------------------------------------------------------------
5,325 5,743 6,791
Liabilities total 49,650 39,678 40,671
Total 136,193 23,729 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 -11,721 -11,721
comprehensive
income for the
period
Options granted 2,662 1,979 4,641
Options exercised 517 517
Directed issue of 500 -500 0
treasury shares
Directed issues of 211,590 115,893 115,893
new shares
Directed offer of 7,964 7,964
treasury shares
Cost of share -1,284 -1,284
issue
--------------------------------------------------------------------------------
211,590 123,073 -500 3,179 0 -9,742 116,010
--------------------------------------------------------------------------------
BALANCE AT 387,594 166,451 0 4,359 -15 -84,251 86,543
30.6.2011
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
1.1.- 1.1.- 1.1.-
30.6.2011 30.6.2010 31.12.2010
EUR 1,000 6 months 6 months 12 months
--------------------------------------------------------------------------------
Cash flow from operating activities
Continuing operations
Net income/loss -12,320 -4,597 -8,462
Adjustments:
Non-cash transactions 3,173 -756 -1,287
Acquisition related costs 759 0 0
Interest and other financial expenses 405 409 930
Interest income -141 -127 -101
Foreign exchange losses/gains on operating -166 0 0
activities
Taxes -2,181 0 0
Change in working capital:
Change in accounts receivables and other 559 -54 626
receivables
Change in accounts payable and other -590 -359 436
liabilities
Change in mandatory provisions -12 -12 -25
Interests paid -42 -21 -42
Interests received 32 32 68
Taxes paid 6 0 0
--------------------------------------------------------------------------------
Net cash from operating activities, continuing -10,520 -5,485 -7,856
operations
Net cash from operating activities, discontinued -2,400 -2,574 -7,011
operations
--------------------------------------------------------------------------------
Net cash from operating activities -12,920 -8,059 -14,867
Cash flow from investing activities
Continuing operations
Acquisition of subsidiary, net of cash acquired 15,489 0 0
Change in financial assets at fair value through
profit or loss
Additions 0 0 0
Disposals 2,454 -8,886 8,886
Change in investments held to maturity
Additions -19,000 -3,000 0
Disposals 0 0 0
Investments to tangible assets -34 -46 -54
--------------------------------------------------------------------------------
Net cash used in investing activities, continuing -1,091 5,841 8,832
operations
Net cash used in investing activities, 0 -134 -1,587
discontinued operations
--------------------------------------------------------------------------------
Net cash used in investing activities -1,091 5,707 7,245
Cash flow from financing activities
Continuing operations
Payments from share issue 27,492 0 1,050
Share issue costs -1,185 0 -229
Proceeds from borrowings 226 186 6
Repayment of loans 0 0 -40
Repayment of lease commitments -69 -87 -177
--------------------------------------------------------------------------------
Net cash from financing activities, continuing 26,464 99 610
operations
Net cash from financing activities, discontinued 0 0 180
operations
--------------------------------------------------------------------------------
Net cash from financing activities 26,464 99 791
Net increase (+) or decrease (-) 12,453 -2,253 -6,832
in cash and cash equivalents
Effect on changes in exchange rates on cash and 1,103 0 0
cash equivalents
Cash and cash equivalents in the 4,059 10,891 10,891
beginning of the period
Cash and cash equivalents in the 17,615 8,638 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
June 30, 2011
Amount Weighted average exercise price
Options exercised 3,031,931 0.17
Options outstanding 11,678,560 0.22
Options exercisable 8,913,853 0.17
Contingent liabilities
EUR 1,000 30.6.2011 30.6.2010 31.12.2010
----------------------------------------------------------
Operating lease commitments 129 111 159
Due within a year 76 78 70
Due later 53 33 88
Rent commitments 307 303 243
Due within a year 254 237 243
Due later 53 66 0
----------------------------------------------------------
Total 436 414 402
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 30 June 2011 Biotie had purchase commitments, primarily for contract research
work services, totaling EUR 11.1 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 2010
Incl. both continuing and discontinued 1.1.- 1.1.- 1.1.-
operations 30.6.2011 30.6.2010 31.12.2010
EUR 1,000 6 months 6 months 12 months
--------------------------------------------------------------------------------
Business development
Revenues 946 2,455 2,928
Personnel on average 41 82 70
Personnel at the end of period 39 80 23
Research and development costs 9,346 7,292 12,229
Capital expenditure 34 180 270
Profitability
Operating profit/loss -12,633 -6,734 -20,720
as percentage of revenues, % -1,335.4 -274.3 -707.65
Profit/loss before taxes -14,502 -7,093 -21,573
as percentage of revenues, % -1,533.0 -288.9 -736.78
Balance sheet
Liquid assets 40,882 11,638 4,059
Shareholders' equity 86,543 -15,949 -29,466
Balance sheet total 136,193 23,729 11,205
Financial ratios
Return on equity, % - - -
Return on capital employed, % -30.4 -56.0 -341.5
Equity ratio, % 63.5 -67.2 -263.0
Gearing, % -12.3 -89.5 -73.7
Per share data
Earnings per share (EPS) basic, EUR -0.04 -0.04 -0.15
Earnings per share (EPS) diluted, EUR -0.04 -0.04 -0.15
Shareholders' equity per share,€ 0.22 -0.10 -0.17
Dividend per share, EUR - - -
Pay-out ratio, % - - -
Effective dividend yield, % - - -
P/E-ratio - - -
Share price
Lowest share price, EUR 0.49 0.45 0.30
Highest share price, EUR 0.82 0.65 0.65
Average share price, EUR 0.62 0.55 0.48
End of period share price, EUR 0.54 0.47 0.50
Market capitalization 209.3 74.6 88.0
at the end of period MEUR
Trading of shares
Number of shares traded 174,383,076 39,220,905 90,049,678
As percentage of all 45.0 24.7 51.2
Adjusted weighted average 342,346,366 158,752,560 161,919,250
number of shares during the period
Adjusted number of shares 387,594,457 158,752,560 176,003,931
at the end of the period
[HUG#1536457]
