(all figures are in Canadian dollars unless otherwise
noted)
BELLEVILLE, ON,
Feb. 6, 2014 /CNW/ - Bioniche Life
Sciences Inc. (TSX: BNC), a leading clinical stage biotechnology
company, today announced financial results for the second quarter
of Fiscal 2014 (ended December 31,
2013). Highlights include:
- Bioniche Animal Health generated 100% year-over-year EBITDA
increase;
- Negotiations continuing for the sale of the Animal Health
business:
-
- No public announcement until a binding agreement is
executed;
- Implementation of strategic expenditure review and substantial
workforce reduction;
- Focused strategy for One Health partnering and divestment:
-
- Significant reduction in ongoing operational spend;
- Positioning the Company for sustainable future with a focus on
Human Health.
Bioniche Animal Health Posts Strong
Year-to-Date Results
Bioniche Animal Health (an asset held for sale)
generated an EBITDA of $4.0 million
on a year-to-date basis at December 31,
2013 as compared to $2.0
million at December 31, 2012.
This was achieved through a combination of a 19.2% reduction in
expenses, a 2% improvement in margins, and a 4% increase in
revenues as compared to the same period in Fiscal 2013.
"Our U.S. business is largely driving these
positive results," said Dr. Michael
Berendt, Chief Executive Officer of Bioniche Life Sciences
Inc. "Improvements in the U.S. economy, a strong U.S. dollar, and
positive trends in the livestock industry are fuelling improved
revenues. In addition, our European and Export businesses are
seeing better results, in part due to the expanded registrations of
our lead product, Folltropin, in seven new EU
countries."
Bioniche Animal Health Divestment
Update
The Company is currently in negotiations with
regard to the divestment of its Animal Health business. The
divestment process has taken longer than expected. A number of
counterparties have completed due diligence and submitted bids in
late 2013 and early 2014 and negotiations are ongoing. If
successfully concluded, a definitive agreement will be signed and a
special shareholders' meeting will be scheduled, at which time
shareholders will be asked to vote on the transaction.
Strategic Expenditure Review
Over the last three months, management initiated
a strategic review of program expenditures to ensure that the
Company's financial resources are dedicated to activities and
resources that will drive shareholder value in the short, medium
and long term with a focus on optimizing the Company's ability to
add value to its Human Health franchise. At the same time, the
Company is focused on ensuring that the sales process of Animal
Health is successfully completed, and that its investment to date
in the One Health division can be recouped through the sale and/or
partnership of its associated assets, including the
Econiche® vaccine technology and the Vaccine Manufacturing
Centre (VMC) in Belleville,
Ontario.
As a direct result of the strategic expenditure
review, the Company has taken the difficult decision to reduce more
than 40 employee positions. In the short term, this will result in
severance expenses of approximately $1.2
million, while annual salary and benefits expenses will be
reduced by approximately $3 million.
In addition, the Company has delisted from the Australian
Securities Exchange (ASX), has listed two non-core properties for
immediate sale, and has undertaken numerous smaller transactions
dedicated to reducing operating expenses on an ongoing basis by
negotiating reductions in past supplier invoices and discounts and
lower rates for future goods and services. Management is
considering additional measures to continue to ensure that the
Company is run as efficiently as possible, and will finalize,
implement, and announce these measures as the divestment of Animal
Health is achieved and as the U.S. regulatory pathway for
Urocidin™ is clarified.
Fiscal 2014 Second Quarter and Year-to-Date
Financial Results
As a result of the Company's decision to divest
the Animal Health business last year, the Fiscal 2014 second
quarter financial statements have been segmented into continuing
operations (Human Health and One Health business units) and
discontinued operations (Animal Health business unit).
Continuing Operations
The Company's continuing operations recorded no
revenues in the quarter, as compared to $0.008 million in the same period in Fiscal 2013.
On a year-to-date basis, there was no revenues at December 31, 2013, as compared to $0.08 million at December
31, 2012. In Fiscal 2013, the Company received reimbursement
from its former development partner for Urocidin™-related
development costs. Such reimbursement was discontinued when the
Company regained global rights to Urocidin™ in December,
2012.
Cash and cash equivalents from continuing
operations amounted to $11.2 million
at December 31, 2013, as compared to
$4.2 million at June 30, 2013. This improvement reflects the
completion of a $9.8 million Canadian
equity offering and related private placement in September, 2013,
as well as loan advances from Paladin Labs Inc., less operating and
research and development activities and higher financial
expenses.
The Company's total liabilities and
shareholders' deficiency at December 31,
2013 is $50.5 million, as
compared to $61.5 million at
June 30, 2013.
Financial expenses settled in cash continue to
be a substantial contributor to the Company's average monthly burn
rate. These amounted to $1.4 million
for the second quarter of Fiscal 2014 compared to $0.9 million recorded in Q2, Fiscal 2013. On a
year-to-date basis, such expenses were $2.7
million at December 31, 2013,
as compared to $1.7 million at
December 31, 2012.
Administration expenses for continuing
operations were $1.5 million in the
second quarter of Fiscal 2014, as compared to $1.4 million in the second quarter of Fiscal
2013. On a year-to-date basis, administration expenses were
$2.8 million in Fiscal 2014 as
compared to $3.1 million in the same
period of Fiscal 2013. Marketing and selling expenses were
$0.2 million in the second quarter of
Fiscal 2014, as compared to $0.4
million in the same period last year.
Research and development (R&D) expenditures
for continuing operations were $23
million in the second quarter of Fiscal 2014, as compared to
$3.1 million in Q2, Fiscal 2013. On a
year-to-date basis, such expenditures amounted to $26.1 million at December
31, 2013, as compared to $6.4
at December 31, 2012. This
significant change relates to a $20
million impairment of the VMC in Belleville, Ontario due to the corporate
decision to scale-back the VMC operations pending the
identification of a purchaser or partner for this asset.
"The VMC and Econiche® remain valuable
corporate assets," said Mr. Donald
Olds, Chief Operating Officer of Bioniche Life Sciences Inc.
"Unfortunately, the Company has been unable to capitalize on this
asset to date, as uptake of the Company's E. coli O157
cattle vaccine (Econiche®) has been limited, and efforts to
gain government support for a national E. coli vaccination
program in Canada have not met
with success. Our efforts going forward will be focused on the
identification of a strategic partner who can bring this vaccine
technology and facility forward to commercial success."
The VMC was purpose-built to make this vaccine,
but could be modified to make other products. The Company will
preserve the VMC for future use by a strategic alliance partner,
and it will limit investment to those activities that will drive a
partnership.
The basic and fully diluted net loss per Share
for the Company's continuing operations for Q2, Fiscal 2014 is
($0.19), as compared to a basic and
fully diluted net loss per share of ($0.06) in Q2, Fiscal 2013. On a year-to-date
basis, the basic and fully diluted loss per Share for continuing
operations is ($0.27), as compared to
($0.12) in Fiscal 2013.
Discontinued Operations (Animal
Health)
Revenues for this business unit in Q2, Fiscal
2014 were $8.3 million, as compared
to $8.8 million in the same period in
Fiscal 2013. Net income in Q2, Fiscal 2014 was $2.1 million, as compared to net income of
$1.1 million in Q2, Fiscal 2013. On a
year-to-date basis, revenues at December 31,
2013 were $16.1 million, as
compared to $15.4 million at
December 31, 2012.
The basic and fully diluted net earnings per
Share for the Company's discontinued operations for Q2, Fiscal 2014
is $0.02, as compared to earnings of
$0.01 in Q2, Fiscal 2013. On a
year-to-date basis, the basic and fully diluted earnings per Share
for continuing operations is $0.03,
as compared to $0.01 in Fiscal
2013.
Q2, Fiscal 2014 Summary
The Company's consolidated cash flow used in
operations for the quarter ended December
31, 2013 (both continuing and discontinued operations) was
$3.7 million, as compared to cash
used in operations of $4.7 million in
Q2, Fiscal 2013. On a year-to-date basis, consolidated cash flow
used in operations was $8.4 million,
as compared to $9.7 million for the
first six months of Fiscal 2013.
The average monthly burn rate (before changes in
working capital) was $1.0 million for
Q2, Fiscal 2014, as compared to $1.1
million for the same quarter in Fiscal 2013. On a
year-to-date basis, the average monthly burn rate was $1.1 million, as compared to $1.4 million per month in the first half of
Fiscal 2013.
The Company has total Common Shares outstanding
at February 5, 2014 of 141,246,810.
In addition, the Company has 22,270,912 outstanding Warrants and
11,124,665 outstanding Options, exchangeable for one Common
Share upon exercise.
More information on the Company's year-end
financial results is provided in the Company's Q2, Fiscal 2014
Management's Discussion and Analysis.
ASX Delisting
The Company's securities are no longer trading
on the Australian Securities Exchange (ASX) effective at close of
trading on Monday, February 3, 2014.
Holders of CHESS Depositary Interests (CDIs) may continue to access
Company news via its website www.Bioniche.com or on
www.SEDAR.com.
Shareholder Conference Call and Audio
Webcast
Shareholders are reminded that Company
representatives will discuss the Q2, Fiscal 2014 (half-year)
results and operational changes during a:
Conference Call & Audio Webcast
Wednesday, February 12,
2014
5:00 p.m. EST
To participate in the conference call from North America, call (888) 231-8191 (conference
ID: 53209337). A listen-only audio webcast will be available at:
http://event.on24.com/r.htm?e=745870&s=1&k=96A58D58177E944F61C95515B0D837F8
A replay of the conference call will be available until
February 19, 2014 at midnight by
calling 1-855-859-2056 (passcode: 53209337). The webcast will be
available for replay using the above link until February 12, 2015.
About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a clinical stage
Canadian biopharmaceutical company focused on the discovery,
development, manufacturing, and marketing of proprietary and
innovative products for the global human health market. The
Company's primary goal is to develop and commercialize products
that advance human 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.
SOURCE Bioniche Life Sciences Inc.