(all figures are in Canadian dollars unless otherwise
noted)
BELLEVILLE, ON,
May 14, 2014 /CNW/ - Bioniche Life
Sciences Inc. (TSX: BNC), a clinical stage biotechnology company,
today announced financial results for the third quarter of Fiscal
2014 (ended March 31, 2014).
Highlights of the year-to-date include:
- Successful execution of Animal Health division sale to
Vétoquinol for $61 million plus
working capital adjustment;
- Repayment of $47.9 million of
corporate debt and reduction of annual cash interest carrying
charges from $5.2 million to
$0.4 million on the remaining
$7.8 million of interest-bearing debt
associated with the Vaccine Manufacturing Centre (VMC);
- Initiation of sale/partnering of Econiche Corp. assets, led by
PharmaBioSource Inc.;
- Ongoing dialogue with U.S. FDA on the regulatory pathway for
Urocidin™; and
- Initiation of process to identify and acquire additional human
therapeutics to build a product pipeline.
As a result of the Company's decision to divest
the Animal Health business last year, the Fiscal 2014 third quarter
financial statements have been segmented into continuing operations
(Human Health and One Health business units) and discontinued
operations (Animal Health business unit).
Subsequent Event: Sale of Bioniche Animal
Health Business to Vétoquinol and Debt Repayment
As announced on April 15,
2014, the Bioniche Animal Health business was sold to
Vétoquinol. Vétoquinol paid $61
million cash for the business, $58
million of which was received by the Company upon closing of
the transaction. An amount of $3
million is being held in escrow and will be paid over three
years. The Share Purchase Agreement also specifies that a purchase
price adjustment will be calculated and paid within 90 days of
closing based upon the working capital at transaction closing
compared to the working capital at June 30,
2013.
"The Company has utilized the sale proceeds to
repay in full its expensive debt with Paladin Labs Inc.
($34.8 million with penalties and
interest), $5 million of its debt
with the Ontario Ministry of Economic Development, Trade, and
Employment, its debt with Capital Royalty L.P. ($7.4 million), $0.5
million of its debt with the Business Development Bank, and
the remainder of its mortgage in Armidale, Australia ($0.2
million)," said Dr. Michael
Berendt, CEO of Bioniche Life Sciences Inc. "Following these
repayments and the payment of transaction-related fees, together
with cash on hand at closing, the Company has approximately
$12.2 million in cash and cash
equivalents. This represents approximately 14 months of operations
for the Company, based upon including the first escrow payment of
$0.6 million and the anticipated
positive working capital adjustment of $2.4
million from Vétoquinol."
"Management is continuing to assess
opportunities for additional cost savings and will implement all
such initiatives that are feasible and that contribute to a longer
financial runway," added Mr. Donald
Olds, Chief Operating Officer for Bioniche Life Sciences
Inc. "To date, these efforts have included workforce and executive
management position reductions of more than 145 employees,
resulting in a streamlined workforce of approximately 50
individuals today."
Update on One Health/VMC
Partnering/Sale
Through its agent, PharmaBioSource, Inc., the
Company has identified a number of companies that have expressed
interest in acquiring the Vaccine Manufacturing Centre (VMC) in
Belleville, Ontario and/or the
Econiche® vaccine technology.
Urocidin™ Regulatory Update
The Company has submitted additional information
to the U.S. FDA in order to seek specific guidance as to potential
regulatory approval paths for Urocidin™ in the U.S. Once the
Company receives such guidance from the U.S. FDA, it will be able
to advance licensing discussions with third parties.
In Canada, the
Company is completing a clinical assessment package that will be
submitted to Health Canada in mid-May. This package will address
clinical questions asked by, and additional information requested
by, the Canadian regulator after the Company asked if
Urocidin™ may qualify under Health Canada's Notice of
Compliance with Conditions (NOC/c) policy.
Fiscal 2014 Third Quarter and Year-to-Date
Financial Results
Continuing Operations
The Company's continuing operations recorded no
revenues in the quarter in Fiscal 2014 or Fiscal 2013. On a
year-to-date basis, there were no revenues at March 31, 2014, as compared to $0.08 million at March 31,
2013. 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 $6.3 million
at March 31, 2014, 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., offset by operating and research and development
activities and financial expenses related to debt. The cash
position has been improved with the sale of the Animal Health
business in mid-April.
The Company's total liabilities and
shareholders' deficiency at March 31,
2014 was $43.6 million, as
compared to $61.5 million at
June 30, 2013.
Financial expenses settled in cash amounted to
$1.5 million for the third quarter of
Fiscal 2014 compared to $0.8 million
recorded in Q3, Fiscal 2013. On a year-to-date basis, such expenses
were $4.2 million at March 31, 2014, as compared to $2.4 million at March 31,
2013. The increase reflects the increase in the debt from
US$20 million to US$30 million, but at an interest rate of 13.25%
versus 15%, and the end of the interest-free period on one of the
repayable government assistance loans. Going forward, with the sale
of Animal Health, financial expenses settled in cash are expected
to amount to $30,000 per month.
Administration expenses for continuing
operations were $1.3 million in the
third quarter of Fiscal 2014, as compared to $1.0 million in the third quarter of Fiscal 2013.
On a year-to-date basis, administration expenses were $4.1 million in Fiscal 2014, identical to the
same period of Fiscal 2013. Marketing and selling expenses were
$0.7 million in the third quarter of
Fiscal 2014, as compared to $0.2
million in the same period last year, or $1.0 million year-to-date versus $0.7 million in the first nine months of last
year. The increased marketing and selling expenses are attributable
to severance costs as a result of corporate restructuring.
Research and development (R&D) expenditures
for continuing operations were $3.5
million in the third quarters of Fiscal 2014 compared to
$3.6 in the same quarter of Fiscal
2013. On a year-to-date basis, such expenditures amounted to
$29.6 million at March 31, 2014, as compared to $10.0 million at March 31,
2013. 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 basic and fully diluted net loss per Share
for the Company's continuing operations for Q3, Fiscal 2014 is
($0.05), as compared to a basic and
fully diluted net loss per share of ($0.05) in Q3, Fiscal 2013. On a year-to-date
basis, the basic and fully diluted loss per Share for continuing
operations is ($0.32), as compared to
($0.18) in Fiscal 2013.
Discontinued Operations (Animal
Health)
Revenues for this business unit in Q3, Fiscal
2014 were $6.5 million, as compared
to $7.4 million in the same period in
Fiscal 2013. On a year-to-date basis, revenues at March 31, 2014 were $22.6
million, as compared to $22.8
million at March 31, 2013. Net
income after expenses on a year-to-date basis was $1.9 million as compared to $1.6 million in the same nine months of Fiscal
2013.
The basic and fully diluted net loss per Share
for the Company's discontinued operations for Q3, Fiscal 2014 was
($0.02) compared to $0.00 for Q3, Fiscal 2013. On a year-to-date
basis, the basic and fully diluted earnings per Share for
discontinued operations were $0.01,
no change from the same period in Fiscal 2013.
Q3, Fiscal 2014 Summary
The Company's consolidated cash flow used in
operations for the quarter ended March 31,
2014 (both continuing and discontinued operations) was
$4.9 million, as compared to cash
used in operations of $1.9 million in
Q3, Fiscal 2013. On a year-to-date basis, consolidated cash flow
used in operations was $13.3 million,
as compared to $11.6 million for the
first nine months of Fiscal 2013. The increases over Fiscal 2013
relate to increased financing expenses associated with corporate
debt.
The average monthly burn rate was $1.6 million for Q3, Fiscal 2014, as compared to
$1.3 million for the same quarter in
Fiscal 2013. On a year-to-date basis, the average monthly burn rate
was $1.6 million, as compared to
$1.4 million per month in the first
nine months of Fiscal 2013. The increases over Fiscal 2013 relate
to increased financial expenses associated with corporate debt and
expenses related to the Animal Health divestment. Going forward,
the Company expects the average monthly burn rate to be
$0.8 million after one-time expenses
related to restructuring.
The Company has total Common Shares outstanding
at May 13, 2014 of 141,957,653. In
addition, the Company has 22,270,912 outstanding Warrants and
10,738,607 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 Q3, Fiscal 2014
Management's Discussion and Analysis.
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 therapies 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.