BIVN Bioenvision (MM)

Bioenvision (NASDAQ:BIVN) today announced financial results for the three and nine months ended March 31, 2005. Highlights of the quarter and recent weeks include: -- Bioenvision reported excellent interim results from clinical studies of clofarabine at the 6th International Symposium on Leukemia and Lymphoma -- First patients were enrolled in a Phase II clinical trial for treatment of chronic hepatitis C with Virostat -- Public offering Bioenvision stock raised $56.4 million -- Revenues increased 65% and net loss narrowed 17% (previously disclosed at 29%) The Company had previously released its earnings on May 16, 2005, prior to the identification of an error in the accounting for income taxes in connection with the purchase of Pathagon, Inc, which took place in February, 2002. These adjustments and the related restatement to our historical financial statements, as disclosed in our Form 8-K filed May 26, 2005, are further discussed in our Annual Report Form 10-KSB for the fiscal year ended June 30, 2004, as amended on June 29, 2005 and our Quarterly Report on Form 10-QSB for the fiscal third quarter ended March 31, 2005 which we filed on June 29, 2005. "We have made considerable progress in developing our product portfolio over the past 12 months and now have multiple products in clinical trials," commented Christopher Wood, M.D., chairman and chief executive officer of Bioenvision. "We have submitted a Marketing Authorization Application, the European equivalent of a U.S. New Drug Application, with the European Medicines Evaluation Agency (EMeA) for European approval of clofarabine in relapsed or refractory pediatric acute leukemia, and we await an opinion from the EMeA, which is our next important milestone." Dr. Wood continued, "In addition, we are currently selling our second product, Modrenal(R), in the United Kingdom using our own sales force. Modrenal(R) is approved in the U.K. for the treatment of post-menopausal advanced breast cancer. In addition to these approved cancer therapeutics, during this quarter, the Company began Phase II clinical trials with Virostat for the treatment of Hepatitis C. Total revenues for the third quarter of fiscal 2005 were $1.4 million, up 65% over $0.85 million for the third quarter of fiscal 2004. The increase was primarily due to an increase in licensing and royalty revenue attributed to R&D reimbursements, royalties and amortization of milestone payments. For the third quarter of 2005, the Company's net loss narrowed significantly to $3.1 million, (previously disclosed at $2.9 million) or $0.08 per share, compared with a net loss of $3.7 million, (previously disclosed at $4.1 million) or $0.19 per share, (previously disclosed at $0.21 per share) for the third quarter of fiscal 2004. Selling, general and administrative expenses for the three months ended March 31, 2005 and 2004 were approximately $2.1 million and $3.7 million, respectively, representing a decrease of approximately $1.6 million. This decrease was primarily due to a decrease in costs associated with the variable accounting treatment associated with certain options issued to an officer of the Company of approximately $2.6 million, offset by an increase in costs associated with the Company's increased headcount. Research and development costs for the three months ended March 31, 2005 were $2.1 million, compared with $0.99 million in the prior year's period. The increase in research and development expenses was due to costs primarily associated with increased development activities and ongoing clinical trials for clofarabine for pediatric leukemia in Europe, adult AML (Acute Myeloid Leukemia) and Modrenal(R) for breast cancer and prostate cancer. Bioenvision had cash and cash equivalents as of March 31, 2005 of $70.3 million, compared with $18.9 million as of June 30, 2004. The increase in the cash position is due to the public offering of 7.5 million shares of common stock in February 2005, which raised $56.4 million in net proceeds to the Company. For the nine months ended March 31, 2005 and 2004, Bioenvision recorded revenues of $3.7 million and $1.8 million, respectively. SG & A expenses for the nine months ended March 31, 2005 and 2004 were approximately $6.9 million and $7.1 million, respectively. Research and development costs for the nine months ended March 31, 2005 were $6.0 million, compared with $2.5 million for the nine months ended March 31, 2004. Net loss was $10.2 million, (previously disclosed at $9.8 million) or $0.32 per share for the first nine months of fiscal 2005, compared with net loss of $7.8 million, (previously disclosed at $8.4 million) or $0.43 per share (previously disclosed at $0.50 per share) in the same period last year. About Bioenvision Bioenvision's primary focus is the acquisition, development and distribution of compounds and technologies for the treatment of cancer. Bioenvision has a broad pipeline of products for the treatment of cancer, including: Clofarabine (in co-development with Genzyme Corporation), Modrenal(R) (for which Bioenvision has obtained regulatory approval for marketing in the United Kingdom for the treatment of post-menopausal breast cancer following relapse to initial hormone therapy), and other products in clinical trials. Bioenvision is also developing anti-infective technologies, including the OLIGON technology; an advanced biomaterial that has been incorporated into various FDA approved medical devices. For more information on Bioenvision please visit our Web site at www.bioenvision.com. Certain statements contained herein are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because these statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Specifically, factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to: risks associated with preclinical and clinical developments in the biopharmaceutical industry in general and in Bioenvision's compounds under development in particular; the potential failure of Bioenvision's compounds under development to prove safe and effective for treatment of disease; uncertainties inherent in the early stage of Bioenvision's compounds under development; failure to successfully implement or complete clinical trials; failure to receive marketing clearance from regulatory agencies for our compounds under development; acquisitions, divestitures, mergers, licenses or strategic initiatives that change Bioenvision's business, structure or projections; the development of competing products; uncertainties related to Bioenvision's dependence on third parties and partners; and those risks described in Bioenvision's filings with the SEC. Bioenvision disclaims any obligation to update these forward-looking statements. -0- *T Bioenvision, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEET (Unaudited) March 31, June 30, 2005 2004 ----------- ------------ ASSETS (Restated) Current assets Cash and cash equivalents $70,334,939 $18,875,675 Restricted cash 290,000 290,000 Deferred costs 231,171 241,824 Accounts receivable 2,204,662 2,627,773 Inventory 433,335 - Other current assets 582,415 253,311 ------------ ------------ Total current assets 74,076,522 22,288,583 Property and equipment, net 262,207 47,857 Intangible assets, net 13,799,903 14,563,660 Goodwill 1,540,162 1,540,162 Security deposits 211,796 79,111 Deferred costs 3,483,419 3,651,471 ------------ ------------ Total assets $93,374,009 $42,170,844 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $3,014,427 $1,495,866 Accrued expenses 1,712,585 1,322,584 Accrued dividends payable 55,479 90,141 Deferred revenue 498,607 551,828 ------------ ------------ Total current liabilities 5,281,098 3,460,419 Deferred revenue 7,562,251 7,909,598 Deferred tax liability - - - ------------ ------------ Total liabilities 12,843,349 11,370,017 Commitments and contingencies - - Stockholders' equity Preferred stock - $0.001 par value; 20,000,000 shares authorized; 2,250 3,342 2,250,000 and 3,341,666 shares issued and outstanding at March 31, 2005 and June 30, 2004 (liquidation preference $6,750,000 and $10,024,998, respectively) Common stock - par value $0.001; 70,000,000 shares authorized; 40,449 28,316 40,448,948 and 28,316,163 shares issued and outstanding at March 31, 2005 and June 30, 2004, respectively Additional paid-in capital 128,684,678 68,517,702 Deferred compensation (158,280) (223,990) Accumulated deficit (48,155,869) (37,664,141) Accumulated other comprehensive income 117,432 139,598 ------------ ------------ Stockholders' equity 80,530,660 30,800,827 ------------ ------------ Total liabilities and stockholders' equity $93,374,009 $42,170,844 ============ ============ *T -0- *T CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended Nine months ended March 31, March 31, ------------ ------------ ------------- ------------ 2005 2004 2005 2004 ------------ ------------ ------------- ------------ (Restated) (Restated) Revenue Licensing and royalty revenue $430,411 $76,452 $1,012,068 $212,988 Product sales 149,364 - 364,495 - Research and development contract revenue 819,194 770,042 2,283,657 1,545,042 ------------ ------------ ------------- ------------ Total revenue 1,398,969 846,494 3,660,220 1,758,030 Costs and expenses Cost of products sold 99,061 - 229,417 - Research and development 2,136,849 994,307 5,986,496 2,545,128 Selling, general and administrative 2,074,430 3,721,937 6,885,382 7,079,367 (includes stock based compensation income (expense) of $713,116 and $(2,526,943) for the three months ended March 31, 2005 and 2004, respectively, and $(687,290) and $(3,625,535) for the nine months ended March 31, 2005 and 2004, respectively) Depreciation and amortization 346,504 343,456 1,028,197 1,023,325 ------------ ------------ ------------- ------------ Total costs and expenses 4,656,844 5,059,700 14,129,492 10,647,820 ------------ ------------ ------------- ------------ Loss from operations (3,257,875) (4,213,206) (10,469,272) (8,889,790) Interest income 185,465 14,576 297,479 49,465 ------------ ------------ ------------- ------------ Net loss before income tax benefit (3,072,410) (4,198,630) (10,171,793) (8,840,325) Income tax benefit - 506,087 - 1,065,575 ------------ ------------ ------------- ------------ Net loss (3,072,410) (3,692,543) (10,171,793) (7,774,750) Cumulative preferred stock dividend (83,219) (175,704) (319,935) (587,971) ------------ ------------ ------------- ------------ Net loss available to common stockholders $(3,155,629) $(3,868,247) $(10,491,728) $(8,362,721) ============ ============ ============= ============ Basic and diluted net loss per share of common stock $(0.08) $(0. 19) $(0.33) $(0.46) ============ ============ ============= ============ Weighted average 37,602,163 19,912,396 31,907,864 18,122,445 shares used in ============ ============ ============= ============ computing basic and diluted net loss per share *T