Bioniche Life Sciences Inc. Reports Q3, Fiscal 2013 Results
(all figures are in Canadian dollars unless otherwise noted)
TORONTO, May 8, 2013 /PRNewswire/ - Bioniche Life Sciences Inc. (TSX: BNC) (ASX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for the third quarter of its 2013 fiscal year (ended March 31, 2013).
Management has been making concerted efforts to unlock corporate value for the benefit of all shareholders, and these efforts have been progressing on a number of fronts. "The actions by a group of dissident shareholders in recent weeks was unexpected, and has presented a challenge that the Company is dealing with in consultation with external advisors," added Mr. McRae. "These actions appear to be motivated by recognition of the significant inherent value within the Company."
"Meanwhile, Animal Health product sales remain ahead of Fiscal 2012 on a year-to-date basis, and we are encouraged by the interest in Immunocidin™ and Sin Susto™ - two new companion animal products that were launched within the last six months," said Mr. Graeme McRae, President & CEO of Bioniche Life Sciences Inc. "At the same time, we are pleased with the level of engagement with new potential partners for our Phase III human bladder cancer product - Urocidin™. Since the return of global rights from Endo Pharmaceuticals in December, 2012, more than 30 companies have approached us about becoming our new marketing partners in various jurisdictions."
The Company just received clinical sponsorship for Urocidin™ back from Endo in early April, but has already scheduled a meeting with Health Canada in late June, 2013 to discuss the potential for Urocidin™ to be considered under the regulator's Notice of Compliance with conditions (NOC/c) policy. If the Company is successful in obtaining access to the Canadian market under the NOC/c policy, a new drug submission will be made to Health Canada within 60 days of the meeting. Approximately one year of review would follow and, if Health Canada is satisfied with the submission, an approval under NOC/c could follow in 2014, giving the Company full access to the Canadian market.
Fiscal 2013 Third Quarter Financial Results Highlights
Revenues from the sale of Animal Health products were $7.4 million in the quarter, as compared to $8.4 million in the same period in Fiscal 2012 - a 12% decrease. The timing of sales orders contributed to this decline. However, on a year-to-date basis, Animal Health product revenues have reached $22.8 million,
compared to $21.9 million in Fiscal 2012. This represents growth of 4% year-over-year. Consolidated revenues for the quarter were 16% lower than the same period last year and 4% lower on a year-to-date basis, due to reduced collaborative research revenues and the drop in product revenues in the third quarter.
Gross margins were 51.5 % in Q3, Fiscal 2013, compared to 48.7% in the third quarter of last year. The margins are 51.8% on a year-to-date basis, versus 50.3% in the first nine months of Fiscal 2012.
The Company generated Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization (EBITDA) - before research and development expenses and income taxes - of $0.5 million for Q3, Fiscal 2013, as compared to $0.6 million for the same period in Fiscal 2012. On a year-to-date basis, the EBITDA before R&D amounted to $1.4 million as compared to $1.2 million at the nine-month point in Fiscal 2012. This increase relates to increased Animal Health revenues and reduced administration expenses, partially offset by reduced collaborative research revenues.
Cash and cash equivalents amounted to $6.5 million at March 31, 2013, as compared $20 million at June 30, 2012. Further, non-cash working capital of $6.1 million was available to the Company at March 31, 2013. At June 30, 2012, non-cash working capital totaled $7.5 million.
"In terms of corporate finances, the Company has been exploring a number of options to boost its cash reserves," said Mr. Brian Ford, Chief Financial Officer, Bioniche Life Sciences Inc. "Our lender - Capital Royalty Partners II L.P. - has been involved in these discussions, and is investigating possible ways to assist with the Company as our value-creating events are consummated."
At March 31, 2013, the Company's net working capital totalled $12.6 million as compared to working capital of $27.5 million at June 30, 2012, reflecting the decrease in cash primarily used to invest in late-stage development and commercialization activities.
The Company's cash flows used in operations before net changes in working capital for the nine-month period ended March 31, 2013 was $12.5 million, as compared to cash flows used in operations of $11.0 million in the same period in Fiscal 2012. This increase is primarily related to an increased net loss which reflects increased financing expenses as a result of the long-term debt financing that was established in April, 2012.
On a year-to-date basis, the average monthly burn rate for the Company was $1.4 million, vs. $1.2 million for the same nine-month period in Fiscal 2012. Cash requirements to support financing have increased the average monthly burn rate by $0.2 million compared to last year. This relates to the cash interest associated with the Capital Royalty debt of US$20 million, received in April, 2012.
The Company remains committed to reducing operating expenses and increasing revenues through the commercialization of new products and strategic partnering deals related to its core technologies. The Company remains committed to neutralizing the monthly burn rate and developing sustainable positive cash flows by the end of Fiscal 2014.
Administrative expenses were $1.8 million in Q3, Fiscal 2013, as compared to $2.4 million in the same quarter last year. On a year-to-date basis, administrative expenses were $6.0 million in Fiscal 2013 versus $7.4 million in the first nine months of Fiscal 2012. Marketing, selling and distribution expenses were $1.8 million in Q3, Fiscal 2013, no change from the same quarter last year. On a year-to-date basis, these expenses were $5.6 million this year versus $5.1 million last year. The additional expenditure in this category is related to increased expenditures to support the launch and promotion of several new Animal Health products.
Research and development (R&D) expenditures for Q3, Fiscal 2013 were $4.5 million, as compared to $5.5 million in the same quarter last year. For the nine months ending March 31, 2013, R&D expenditures were $13.0 million versus $15.0 million for the same period last year. R&D resources are focused on the advancement of certain development programs in Animal Health and Food Safety, and continued investment in the staffing and infrastructure associated with the GMP production of the Company's UrocidinTM bladder cancer treatment. Further, until such time as the Company's Vaccine Manufacturing Centre in Belleville is making commercial product, the carrying costs associated with this facility are also accounted for under R&D. The Vaccine Manufacturing Centre continues to undergo GMP validation, a process which is expected to be completed this summer.
The Company continues its efforts to encourage the Canadian government to adopt a national E. coli cattle vaccination program. The Canadian Cattlemen's Association has finally acknowledged that there is an E. coli problem with beef and urged the government to adopt irradiation as a solution, ignoring the existence of an approved vaccine - Econiche® - that targets the reduction of E. coli O157 at the source: cattle. Human illnesses from this deadly pathogen come from many sources other than beef consumption.
The Company incurred financial expenses of $4.7 million during the first nine months of Fiscal 2013, partly as a result of its US$20 million debt financing with Capital Royalty Partners, but also including interest accretion on repayable government assistance. This compares to financial expenses of $0.5 million in the same period of Fiscal 2012, $0.4 million of which was related to non-cash interest accretion.
The basic and fully-diluted net loss per share for Q3, Fiscal 2013 was ($0.05), as compared to ($0.06) in the same period last year. Total Common Shares outstanding at March 31, 2013 were 104,809,572, as compared to 103,127,506 at March 31, 2012.
The Company has incurred significant losses and has an accumulated deficit of $136.1 million as at March 31, 2013, including a current loss of $17.3 million for the first nine months of Fiscal 2013. The Company's committed cash obligations and expected level of expenditures for the next twelve months exceed its committed resources of funds and funds available as at March 31, 2013.
As earlier reported, the Company has formed a Special Committee of its Board of Directors to, among other things, oversee a broad exploration of strategic alternatives to address the Company's liquidity needs and to unlock value in its assets. The Company is exploring all financing alternatives, including additional debt and/or equity financing, licensing arrangements, and the monetization of assets through a sale of technologies, assets and/or business units, or strategic partnering of technologies under development. If the Company is unable to accomplish these initiatives, which are outside of management's control, the Company will be required to curtail its development activities and operations.
About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a research-based, technology-driven Canadian biopharmaceutical company focused on the discovery, development, manufacturing, and marketing of proprietary and innovative products for human and animal health markets worldwide. The fully-integrated company employs more than 200 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company's primary goal is to develop and commercialize products that advance human or animal health and increase shareholder value.
For more information, please visit www.Bioniche.com.
Except for historical information, this news release may contain forward-looking statements that reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, which may cause, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process, and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.
Bioniche Life Sciences Inc.
Amalgamated under the laws of Ontario
|CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION|
(thousands of Canadian dollars)
March 31, 2013
June 30, 2012
|Cash and cash equivalents||6,468||20,020|
|Trade and other receivables||7,095||6,787|
|Property, plant and equipment||40,534||40,134|
|Other non-current receivables||126||183|
|Deferred tax assets||340||509|
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)|
|Trade and other payables||8,317||6,713|
|Income taxes payable||287||94|
|Current portion of long-term debt||969||997|
|Current portion of repayable government assistance||1,116||366|
|Repayable government assistance||31,642||30,921|
|Employee benefit liability||1,962||1,875|
|Shareholders' equity (deficiency)|
|Other paid-in capital||9,662||9,327|
|Foreign currency translation reserve||(1,316)||(1,126)|
|Total shareholders' equity (deficiency)||(1,056)||15,748|
|Total liabilities and shareholders' equity (deficiency)||69,410||82,152|
Bioniche Life Sciences Inc.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIENCY)
|(thousands of Canadian dollars)||
|Balance, June 30, 2012||126,354||—||126,354||9,327||(118,807)||(1,126)||15,748|
|Net loss for the period||—||—||—||—||(17,341)||—||(17,341)|
|Exchange difference on translation of foreign operations||—||—||—||—||—||(190)||(190)|
|Issued under employee Share ownership plan||354||—||354||—||—||—||354|
|Fair value of stock Options vested||—||—||—||335||—||—||335|
|Shares issued to Directors||37||—||37||—||—||—||37|
|Balance, March 31, 2013||126,746||—||126,746||9,662||(136,148)||(1,316)||(1,056)|
|Balance, June 30, 2011||125,469||161||125,630||8,771||(95,687)||(1,174)||37,540|
|Net loss for the period||—||—||—||—||(14,437)||—||(14,437)|
|Exchange difference on translation of foreign operations||—||—||—||—||—||59||59|
|Issued under employee Share ownership plan||659||—||659||—||—||—||659|
|Fair value of stock Options vested||—||—||—||541||—||—||541|
|Options issued to a consultant||—||—||—||1||—||—||1|
|Balance, March 31, 2012||126,136||—||126,136||9,315||(110,124)||(1,115)||24,212|
Bioniche Life Sciences Inc.
|CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS|
For the three and nine months ended March 31
(thousands of Canadian dollars, except Share and per Share amounts)
|Cost of sales||3,572||4,294||10,972||10,871|
|Marketing and selling||1,843||1,759||5,557||5,092|
|Foreign exchange loss (gain)||(106)||280||114||(246)|
|(Loss) income before research and development expenses and income taxes||(1,227)||(271)||(4,511)||96|
|Research and development expenses, gross||4,507||5,532||13,034||15,031|
|Less: government assistance||(229)||—||(574)||(372)|
|Loss before income taxes||(5,505)||(5,803)||(16,971)||(14,563)|
|Income tax expense (recovery)||46||87||370||(126)|
|Net loss for the period||(5,551)||(5,890)||(17,341)||(14,437)|
OTHER COMPREHENSIVE (LOSS) INCOME
Exchange difference on translation of foreign operations
|Total comprehensive loss for the period||(5,759)||(5,857)||(17,531)||(14,378)|
|Basic and diluted net loss per Common Share||(0.05)||(0.06)||(0.17)||(0.14)|
|Weighted-average number of Common Shares outstanding||104,532,477||102,998,425||104,034,633||102,627,328|
Bioniche Life Sciences Inc.
|CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS|
|For the nine months ended March 31|
|(thousands of Canadian dollars)||
|Net loss for the period||(17,341)||(14,437)|
|Items not affecting cash and other reconciling items:|
|Depreciation of property, plant and equipment||1,108||1,121|
|Amortization of intangible assets||1,022||730|
|Unrealized foreign exchange gain||(397)||(142)|
Finance expense on government incentives, long-term debt
and repayable government assistance
|Stock-based compensation expense||335||541|
|Shares issued to directors||37||—|
|Employee Share ownership plan||354||659|
|Employee future benefit||87||88|
|Deemed government assistance||—||(7)|
|Write off of intangible asset||—||143|
|Deferred income taxes||37||(126)|
|Net change in non-cash working capital balances||945||203|
|Cash used in operating activities||(11,550)||(10,779)|
|Purchases of property, plant and equipment||(380)||(3,966)|
|Proceeds on disposal of other current financial asset||—||1,493|
|Proceeds on disposal of property, plant and equipment||5||8|
|Purchases of intangible assets||(523)||(46)|
|Cash used in investing activities||(898)||(2,511)|
|Proceeds from repayable government assistance||—||1,230|
|Proceeds on exercise of stock Options||1||5|
|Proceeds from long-term debt||—||2,750|
|Redemption of Shares||—||(156)|
|Repayment of repayable government assistance||(343)||(57)|
|Repayment of finance lease obligations||(336)||(322)|
|Repayment of long-term debt||(426)||(255)|
|Cash provided by (used in) financing activities||(1,104)||3,195|
|Net decrease in cash and cash equivalents during the period||(13,552)||(10,095)|
|Cash and cash equivalents, beginning of period||20,020||15,353|
|Cash and cash equivalents, end of period||6,468||5,258|
SOURCE Bioniche Life Sciences Inc.