BIVN Bioenvision (MM)

Bioenvision (NasdaqGM:BIVN) today announced financial results for its fourth quarter and fiscal year ended June 30, 2006. Highlights of the year include: -- EMeA formally approves Evoltra(R) (clofarabine) for the treatment of acute lymphoblastic leukemia (ALL) in pediatric patients who have relapsed or are refractory to at least two prior regimens and where there is no other treatment option anticipated to result in a durable response; -- Bioenvision files a marketing authorization application with Egyptian authorities for Suvus(TM) for the treatment of chronic hepatitis C; -- Revenues for the fourth quarter 2006 increased 82.3% to $1.8 million, up from $991k for the fourth quarter of 2005. -- Net loss applicable to common stockholders for the fourth quarter 2006 decreased 52.6% to $0.18 per share, down from $0.38 per share for the fourth quarter of 2005. -- Revenues for the year ended June 30, 2006 increased 14.1% to $5.3 million, up from $4.7 million for the year ended June 30, 2005; -- Net loss applicable to common stockholders for the year ended June 30, 2006 decreased 18.1% to $0.59 per share from $0.72 per share for the year ended June 30, 2005; -- Net loss applicable to common stockholders for the year ended June 30, 2006, adjusted to exclude employee stock-based compensation recorded for the year, decreased 31.5% to $0.50 per share, down from a net loss of $0.73 per share, for the year ended June 30, 2005. (Refer to our reconciliation table of GAAP net loss applicable to common stockholders to the adjusted net loss applicable to common stockholders). "We will now focus our Evoltra(R) development efforts on other, larger patient populations to expand Evoltra(R)'s commercial potential," said Dr. Christopher B. Wood, Bioenvision's Chairman and Chief Executive Officer. "Our next target in Evoltra development is our filing for approval with the European Commission before year's end to treat elderly patients with AML who are unfit for intensive chemotherapy," Dr. Wood added. "We continue to make strong progress both fiscally and in terms of achieving our regulatory, development and marketing milestones, primarily with Evoltra(R) (clofarabine) but also with Modrenal(R) and Suvus(R), which may become significant value drivers for the company in the future," commented David P. Luci, Chief Financial Officer and General Counsel of Bioenvision. "We are delighted especially with the EMeA approval of Evoltra(R) which virtually eliminates the regulatory risk inherent in the EU drug development process," added Mr. Luci. For the fourth quarters ended June 30, 2006 and 2005, the Company recorded revenues of approximately $1,806,000 and $991,000, respectively. The increase in revenues of 82.3% or approximately $815,000 is primarily due to the increase, research and development contract revenue of approximately $855,000 due to an increase in Evoltra(R) sales and certain research and development reimbursements, offset by decreases in product sales. For the years ended June 30, 2006 and 2005, Bioenvision recorded revenues of approximately $5,309,000 and $4,651,000, respectively. This increase of 14.1% or approximately $658,000 is primarily due to an increase in license and royalty revenue of approximately $466,000 due to an increase in royalties received from Genzyme on North American sales of Clofarabine, research and development contract revenue of approximately $134,000 due to an increase in Named Patient Program sales and certain research and development reimbursements, and product sales of approximately $58,000. Selling, General and Administrative expenses for the fourth quarters ended June 30, 2006 and 2005 were approximately $4,200,000 and $3,501,000 respectively. This increase of 20.0% or approximately $699,000 is primarily due to the increase in the internal build-out of the Company upon approval of Evoltra(R) of approximately $449,000. Selling, General and Administrative expenses for the years ended June 30, 2006 and 2005 were approximately $16,563,000 and $10,182,000, respectively. This increase of 62.7% is primarily due to the Company recognizing stock-based compensation expense, a non-cash item, due to the adoption of SFAS 123(R) on July 1, 2005 as well as an increase in costs associated with the expanded sales and marketing and administrative infrastructure and costs associated with the internal build out of the Company. For the year ended June 30, 2006, the Company recorded approximately $3,223,000 of stock based compensation expense as compared to approximately $794,000 for the year ended June 30, 2005. The Company also saw an increase in sales and marketing expenses of approximately $1,333,000 relating to the build-up of a sales and marketing and administrative infrastructure throughout Europe upon approval of Clofarabine in May 2006. Research and development costs for the fourth quarters ended June 30, 2006 and 2005 were approximately $4,500,000 and $4,908,000, respectively. The decrease in research and development costs of 8.3% or approximately $408,000 is due to the accrual of $1.5 million of milestone expenses to SRI in the fourth quarter of 2005 partially offset by an increase in Evoltra development costs of approximately $400,000 during the fourth quarter of 2006. Research and development costs for the years ended June 30, 2006 and 2005 were approximately $11,727,000 and $10,895,000, respectively. This increase of 7.6% is due to costs primarily associated with the increased development activities and ongoing clinical trials for clofarabine for pediatric leukemia in Europe, adult AML (Acute Myeloid Leukemia), along with pre-menopausal breast cancer studies in Europe and Suvus for ongoing, multi-center investigator sponsored Phase II clinical trials being conducted in Egypt and Southern Europe. Net loss applicable to common stockholders was approximately $7,246,000, or $0.18 per share for the fourth quarter ended June 30, 2006, compared with net loss applicable to common stockholders of approximately $14,175,000, or $0.38 per share for the fourth quarter ended June 30, 2005. Net loss applicable to common stockholders was approximately $24,236,000, or $0.59 per share for the year ended June 30, 2006, compared with net loss applicable to common stockholders of approximately $24,667,000, or $0.72 per share for the year ended June 30, 2005. Bioenvision had cash and cash equivalents at June 30, 2006 of approximately $3,378,000, compared with approximately $31,408,000 at June 30, 2005. The Company has also invested an additional $41,637,000 of cash in short-term certificates of deposit with maturities ranging from 3 to 12 months. Reconciliation of Non-US GAAP Financial Measure Adjusted net loss applicable to common stockholders defined as net loss applicable to common shareholders less employee stock-based compensation recorded for the years ended June 30, 2006 and 2005, respectively. -0- *T Quarter ended June 30, Years ended June 30, 2006 2005 2006 2005 ---- ---- ---- ---- Net loss applicable to common stockholders, as reported $(7,246,151) $(14,175,137) $(24,236,263) $(24,666,864) Add: Employee stock-based compensation expense (income) recorded 660,796 137,599 3,717,763 (227,417) ------------ ------------- ------------- ------------- Adjusted net loss applicable to common stockholders $(6,585,355) $(14,037,538) $(20,518,500) $(24,894,281) ============ ============= ============= ============= Basic and diluted net loss per share of common stock, as reported $(0.18) $(0.38) $(0.59) $(0.72) Adjusted basic and diluted net loss per share of common stock $(0.16) $(0.37) $(0.50) $(0.73) Weighted- average shares used in computing basic & diluted net loss per share 41,260,120 37,685,570 40,865,384 34,042,391 *T Conference Call Bioenvision management will host a conference call to discuss these results today at 12:00 p.m. EDT. To participate in the live call by telephone, please dial 866-585-6398 from the U.S. or 416-849-9626 from outside the U.S. A telephone replay of the call will be available beginning at 4:00 p.m. EDT September 11 until 11:59 p.m. EDT October 25 by dialing 866-245-6755 (U.S.) or 416-915-1035 (International) and entering reservation number 739924. Those interested in listening to the conference call live via the Internet may do so by visiting Bioenvision's web site at www.bioenvision.com. To listen to the live call, please go to the Web site 15 minutes prior to its start to register, download, and install the necessary audio software. A replay will be available on the Web site for 14 days. About Bioenvision Bioenvision's primary focus is the acquisition, development, distribution and marketing of compounds and technologies for the treatment of cancer. Bioenvision has a broad pipeline of products for the treatment of cancer, including: Evoltra(R), 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. Bioenvision is also developing anti-infective technologies, including the OLIGON(R) technology; an advanced biomaterial that has been incorporated into various FDA approved medical devices and Suvus(TM), an antimicrobial agent currently in clinical development for refractory chronic hepatitis C infection. 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 SHEETS June 30, June 30, 2006 2005 ---- ---- ASSETS Current assets Cash and cash equivalents $3,377,937 $31,407,533 Restricted cash - 290,000 Short-term securities 41,637,106 32,746,948 Accounts receivable, less allowances of $898,714 and of $869,220, respectively 2,369,446 1,785,779 Inventories 427,514 277,908 Prepaids and other current assets 844,810 342,628 ------------ ------------ Total current assets 48,656,813 66,850,796 Property and equipment, net 273,632 279,778 Intangible assets, net 7,549,520 8,252,936 Goodwill 1,540,162 1,540,162 Other assets 706,840 209,665 Deferred costs 3,523,497 3,656,798 ------------ ------------ Total assets $62,250,464 $80,790,135 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $1,557,507 $1,602,267 Accrued expenses and other current liabilities 6,464,445 4,581,444 Accrued dividends payable 56,404 56,404 Deferred revenue 513,662 498,607 ------------ ------------ Total current liabilities 8,592,018 6,738,722 Deferred revenue 7,070,725 7,437,598 ------------ ------------ Total liabilities 15,662,743 14,176,320 ------------ ------------ Commitments and contingencies - - Stockholders' equity Convertible participating preferred stock - $0.001 par value; 20,000,000 shares authorized; 2,250,000 issued and outstanding at June 30, 2006 and June 30, 2005, respectively (liquidation preference $6,750,000 and $6,750,000, respectively) 2,250 2,250 Common stock - $0.001 par value; 70,000,000 shares authorized; 41,456,616 and 40,558,948 shares issued and outstanding at June 30, 2006 and June 30, 2005, respectively 41,457 40,559 Additional paid-in capital 133,604,996 128,946,717 Deferred compensation - (145,646) Accumulated deficit (86,567,268) (62,331,005) Receivable from stockholder (340,606) Accumulated other comprehensive income (loss) (153,108) 100,940 ------------ ------------ Total stockholders' equity 46,587,721 66,613,815 ------------ ------------ Total liabilities and stockholders' equity $62,250,464 $80,790,135 ============ ============ BIOENVISION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2006, 2005, and 2004 2006 2005 2004 ------------- ------------- ------------- Revenue License and royalty revenue $1,929,526 $1,463,326 $1,014,717 Product sales 668,975 611,346 - Research and development contract revenue 2,710,571 2,576,502 2,087,497 ------------- ------------- ------------- Total revenue 5,309,072 4,651,174 3,102,214 ------------- ------------- ------------- Costs and expenses Cost of products sold (including royalty expense of $1,277,411, $524,755 and $0 for the years ended June 30, 2006, 2005 and 2004, respectively) 1,662,975 921,262 - Research and development 11,726,981 10,894,925 4,882,574 Provision for bad debts 24,564 869,220 - Selling, general and administrative 16,562,770 10,181,711 9,082,420 Depreciation and amortization 974,440 1,438,517 1,348,064 Loss on impairment - 5,276,162 - ------------- ------------- ------------- Total costs and expenses 30,951,730 29,581,797 15,313,058 ------------- ------------- ------------- Loss from operations (25,642,658) (24,930,623) (12,210,844) Interest income (expense) Interest and finance charges (66,762) (79,484) - Interest income 1,810,657 747,322 99,763 ------------- ------------- ------------- Net loss before income tax benefit (23,898,763) (24,262,785) (12,111,081) Income tax benefit - - 1,459,814 ------------- ------------- ------------- Net loss (23,898,763) (24,262,785) (10,651,267) Cumulative preferred stock dividend (337,500) (404,079) (856,776) ------------- ------------- ------------- Net loss applicable to common stockholders $(24,236,263) $(24,666,864) $(11,508,043) ============= ============= ============= Basic and diluted net loss per share applicable to common stockholders $(0.59) $(0.72) $(0.57) ============= ============= ============= Weighted-average shares used in computing basic and diluted net loss per share of common stock 40,865,384 34,042,391 20,257,482 ============= ============= ============= *T