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YM BioSciences Reports Operational and Financial Results for the Second Quarter of Fiscal 2013

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MISSISSAUGA, ON, Feb. 7, 2013 /PRNewswire/ - YM BioSciences Inc. (NYSE MKT: YMI) (TSX: YM), today reported operational and financial results for the second quarter of fiscal 2013, ended December 31, 2012.

During the quarter, YM announced a plan of arrangement (the "Arrangement") involving the Company, Gilead Sciences, Inc. ("Gilead") and 3268218 Nova Scotia Limited, a wholly-owned subsidiary of Gilead (the "Purchaser").   Under the Arrangement, the Purchaser will acquire all of the issued and outstanding common shares ("Common Shares") of the Company for cash consideration of U.S.$2.95 per Common Share. In addition, holders of warrants and options will each receive a cash payment equal to the difference between U.S.$2.95 and the exercise price of such warrants or options. The Supreme Court of Nova Scotia has issued a final order approving the Arrangement and assuming all other conditions precedent are satisfied or waived, it is anticipated that the Arrangement will become effective on February 8, 2013.

Summary Financial Results (CDN dollars)

The interim consolidated financial statements and comparative information for the second quarter of fiscal 2013 have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Revenue for the second quarter of fiscal 2013 ending December 31, 2012 was $3.9 million compared to $0.4 million for the second quarter of fiscal 2012 ending December 31, 2011. Revenue for the first six months of fiscal 2013 was $4.2 million compared to $0.6 million for the first six months of fiscal 2012. The increase was due to the sale of nimotuzumab licenses and subsequent recognition of all remaining deferred revenue relating to nimotuzumab licenses in December 2012.

Net finance costs were $5.8 million for the second quarter of fiscal 2013 compared to net finance income of $1.5 million for the second quarter of fiscal 2012. Net finance costs were $5.5 million for the first six months of fiscal 2013 compared to net finance income of $9.0 million for the first six months of fiscal 2012. The changes in net finance income are primarily attributable to changes in the fair value adjustment for USD warrants. Under IFRS, warrants denominated in a different currency than the Company's functional currency must be classified as a financial liability and measured at fair value, with changes reflected in profit or loss. For the second quarter of fiscal 2013, the Company realized a loss of $6.6 million on the revaluation of warrants, compared to a gain of $1.9 million for the second quarter of fiscal 2012. For the first six months of fiscal 2013, the Company realized a loss of $5.0 million on the revaluation of warrants, compared to a gain of $7.3 million for the first six months of fiscal 2012.

Licensing and product development expenses were $6.1 million for the second quarter of fiscal 2013 compared with $7.3 million for the second quarter of fiscal 2012. Licensing and product development expenses were $13.3 million for the first six months of fiscal 2013 compared with $13.7 million for the first six months of fiscal 2012. Licensing and product development expenses are primarily associated with the clinical trials for CYT387.

General and administrative expenses were $3.3 million for the second quarter of fiscal 2013 compared to $1.2 million for the second quarter of fiscal 2012. General and administrative expenses were $5.3 million for the first six months of fiscal 2013 compared to $3.3 million for the first six months of fiscal 2012. The increases in both the three and six months ending December 31, 2013, are due to the additional legal and other costs relating to CYT387 and the Acquisition Agreement.

Net loss for the second quarter of fiscal 2013 was $11.3 million ($0.07 per share) compared to $6.6 million ($0.06 per share) for the same period last year. Net loss for the first six months of fiscal 2013 was $20.0 million ($0.13 per share) compared to $7.5 million ($0.06 per share) for the same period last year.

As at December 31, 2012 the Company had cash and short-term deposits totaling $121.2 million and accounts payable and accrued liabilities totaling $5.3 million compared to $132.5 million and $3.1 million respectively as at June 30, 2012.

As at December 31, 2012 the Company had 157,967,659 common shares and 7,008,751 warrants outstanding.

About YM BioSciences

YM BioSciences Inc. is a drug development company primarily focused on advancing CYT387, an orally administered inhibitor of both the JAK1 and JAK2 kinases, which have been implicated in a number of hematological and immune cell disorders including myeloproliferative neoplasms and inflammatory diseases as well as certain cancers. Positive results have been reported from a Phase I/II trial of CYT387 in 166 patients with myelofibrosis.

This press release may contain forward-looking statements, which reflect YM's current expectation regarding future events. These forward-looking statements involve risks and uncertainties that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, YM's ability to obtain other approvals in connection with the proposed arrangement; uncertainties as to the timing of the arrangement; the satisfaction of the conditions precedent to the completion of the arrangement; 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 or the ability to obtain drug product in sufficient quantity or at standards acceptable to health regulatory authorities to complete clinical trials or to meet commercial demand; and other risks detailed from time to time in YM's ongoing quarterly and annual reporting. Except as required by applicable securities laws, YM undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
YM BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian dollars, unless otherwise noted)
(Unaudited)
             
      December 31,     June 30,
      2012      2012 
Assets            
             
Current assets:            
  Cash and cash equivalents   $    83,588,628    $ 87,140,020 
  Short-term deposits     37,628,393      45,310,288 
  Accounts receivable     342,394      252,884 
  Prepaid expenses     84,984      257,780 
  Total current assets     121,644,399      132,960,972 
             
Non-current assets:            
  Property and equipment     49,096      62,118 
  Intangible assets     375,674      2,629,682 
  Total non-current assets     424,770      2,691,800 
             
Total assets   $ 122,069,169    $ 135,652,772 
             
Liabilities and Equity            
             
Current liabilities:            
  Accounts payable   $  1,124,770    $  803,421 
  Accrued liabilities     4,164,545      2,262,972 
  Share purchase warrants     11,593,961      7,221,040 
  Deferred revenue         381,270 
  Total current liabilities     16,883,276      10,668,703 
             
Non-current liabilities:            
  Deferred revenue         1,556,853 
  Total non-current liabilities         1,556,853 
             
Equity:            
  Share capital     341,491,581      340,173,078 
  Contributed surplus     17,015,594      16,712,315 
  Deficit     (253,321,282)     (233,458,177)
  Total equity     105,185,893      123,427,216 
             
Subsequent events            
             
Total liabilities and equity   $ 122,069,169    $ 135,652,772 

Approved by the Board and authorized for issue on February 6, 2013:

Tryon M. Williams, Director                  Dr. Nick Glover, Director

 

 
YM BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(Expressed in Canadian dollars, unless otherwise noted)
(Unaudited)
         
  Three months ended     Six months ended
  December 31,     December 31,
  2012 2011     2012 2011
         
Revenue:        
  Out-licensing $ 1,866,563  $ 380,117    $ 2,176,708  $ 630,845 
  Sale of Nimotuzumab licenses   1,989,800        1,989,800 
      3,856,363    380,117      4,166,508  630,845 
         
Expenses:        
  Licensing and product development   6,081,713    7,260,481      13,285,560  13,748,328 
  General and administrative   3,255,177    1,154,883      5,276,876  3,315,031 
    9,336,890    8,415,364      18,562,436  17,063,359 
                 
Loss before the undernoted   (5,480,527)   (8,035,247)     (14,395,928) (16,432,514)
                 
Finance income   784,671    2,058,174      567,365  8,980,046 
Finance costs   (6,617,681)   (580,705)     (6,034,542)
                 
Net loss and comprehensive loss for the period $ (11,313,537) $ (6,557,778)   $ (19,863,105) $(7,452,468)
                 
Basic and diluted loss per common share  (0.07) $ (0.06)   $ (0.13) $ (0.06)
                 

 
YM BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Changes in Equity
(Expressed in Canadian dollars, unless otherwise noted)
(Unaudited)
                   
      Share capital   Contributed         
  Number    Amount    surplus    Deficit    Total 
                   
Balance, June 30, 2012  157,546,793    $ 340,173,078    $ 16,712,315    $ (233,458,177)   $ 123,427,216 
Capital transactions                        
Net loss for the period            (19,863,105)     (19,863,105)
Transactions affecting owners of the                        
  Company, recognized directly in equity:
   
 
   
   
    Share-based compensation        369,479          369,479 
    Shares issued on exerciseof options  63,199      163,170    (66,200)         96,970 
    Shares issued on exercise
of warrants 
357,667      564,270    -         564,270 
    Fair value of warrants exercised      591,063              591,063 
Total transactions affecting owners
    of the Company 
420,866      1,318,503    303,279          1,621,782 
                         
Balance, December 31, 2012 157,967,659    $ 341,491,581  $ 17,015,594    $ (253,321,282)   $ 105,185,893 
               
               
               
               
               
      Share capital   Contributed             
  Number    Amount    surplus    Deficit    Total 
                   
Balance, June 30, 2011  116,681,948    $ 264,548,643  $ 15,144,062    $ (213,141,438)   $ 66,551,267 
Capital transactions                        
Net loss for the period            (7,452,468)     (7,452,468)
Transactions affecting owners of the                        
  Company, recognized directly in equity:
   
 
   
   
    Share-based compensation        1,507,684          1,507,684 
    Shares issued on exercise
    of options 
29,500      38,008    (15,558)         22,450 
Total transactions affecting owners
    of the Company 
29,500      38,008    1,492,126          1,530,134 
                             
Balance, December 31, 2011  116,711,448    $ 264,586,651  $ 16,636,188    $ (220,593,906)   $ 60,628,933 
                         

 

 
YM BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian dollars, unless otherwise noted)
(Unaudited)
 
           Six months ended
         December 31,
  2012   2011
Cash provided by (used in):          
Operating activities:          
  Net loss for the period  (19,863,105)   $ (7,452,468)
  Items not involving cash:          
    Depreciation of property and equipment    21,095      33,134 
    Amortization of intangible assets    2,254,008      2,254,008 
    Interest earned    (567,365)     (309,168)
    Gain on disposal of property and equipment    (10,636)    
    Unrealized (gain)loss on cash and cash equivalents    (233,885)     (1,406,658)
    Share-based compensation    369,479      1,507,684 
    Change in fair value of share purchase warrants    4,963,984      (7,264,221)
  Changes in non-cash working capital balances:          
    Short-term deposits    (275,927)     (305,277)
    Accounts receivable    (89,510)     (78,535)
    Prepaid expenses    172,796      240,064 
    Accounts payable    321,349      (181,892)
    Accrued liabilities   1,901,573      (482,473)
    Deferred revenue    (1,938,123)     (297,036)
  Net cash used in operating activities    (12,974,267)     (13,742,838)
           
Investing activities:          
  Proceeds from sale of short-term deposits    35,457,822      35,806,437 
  Purchase of short-term deposits    (27,500,000)     (34,300,000)
  Interest earned    567,365      309,168 
  Additions to property and equipment    (18,537)     (10,220)
  Proceeds from sale of property and equipment    21,100     
  Net cash provided by investing activities    8,527,750      1,805,385 
           
Financing activities:          
  Issuance of common shares on exercise of options    96,970      22,450 
  Issuance of common shares on exercise of warrants    564,270     
  Net cash provided by financing activities    661,240      22,450 
           
Decrease in cash and cash equivalents    (3,785,277)     (11,915,003)
           
Impact of foreign exchange rates on cash    233,885      1,406,658 
           
Cash and cash equivalents, beginning of period    87,140,020      32,046,630 
           
Cash and cash equivalents, end of period  $ 83,588,628    $ 21,538,285 
           

  

SOURCE YM BioSciences Inc.



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