TURKU, FINLAND--(Marketwire - May 13, 2011) - Biotie has undergone significant changes
during the first quarter that have transformed the nature of its operations
and its financial status. Most notably, in February 2011, Biotie acquired
Synosia Therapeutics, a drug development specialist with key operations in
the US and a strategic alliance with UCB Pharma. In January 2011 Biotie was
informed by its licensing partner H. Lundbeck A/S of positive phase 3
results with nalmefene, its lead product for the treatment of alcohol
dependence. In March 2011 Biotie raised EUR 27 million in a directed share
issue to institutional and strategic investors, strengthening its financial
position. The company now employs approximately 40 people, has operations
in Finland, the United States and Switzerland and is exclusively focused on
the development of its promising pipeline of clinical-stage drug
candidates.
Financial review Q1 2011
Financial statements for the Q1 2011 are not directly comparable to the
same period in 2010 due to the Synosia Therapeutics acquisition and the
consolidation of the new subsidiaries' results into the Biotie group's
consolidated financial statements from the acquisition date 1 February
onwards.
Revenues in January - March 2011 amounted to EUR 0.5 million (EUR 1.2
million in the same period in 2010). Net loss in January - March was EUR
7.7 million (EUR 3.7 million in the same period in 2010). Total
comprehensive income including the currency translation differences
amounted to EUR -9.5 million (EUR -3.7 million in the same period 2010).
Basic earnings per share amounted to EUR -0.03 (EUR -0.02 for the same
period 2010).
Cash flow from operating activities in January - March amounted to EUR -4.2
million for continuing operations (EUR -4.4 million in the same period in
2010) and EUR -1.2 million for discontinued operations (no discontinued
operations reported in Q1 2010).
As of 31 March 2011, liquid assets amounted to EUR 46.8 million (EUR 15.2
million as of 31 March 2010).
Timo Veromaa, Biotie's President and CEO:
"We have had a very successful first quarter, which was underpinned by
positive data from the first set of phase 3 nalmefene studies from
Lundbeck, the transformational merger with Synosia and our directed share
offer. We have made rapid progress with integration activities and have
continued to advance our newly enlarged pipeline which now includes nine
clinical development candidates. In the coming months, we expect to receive
important data from Lundbeck for nalmefene in alcohol dependence and for
our Parkinson's disease product SYN118, for which UCB Pharma has an option
to license. These are exciting times for Biotie and we believe that with
our broad pipeline, strong balance sheet and experienced management team,
we are well positioned to drive long-term growth and shareholder value".
Key events after the reporting period
Start of a Phase 2b trial of SYN115 in Parkinson's disease: As announced on
7 April 2011, the phase 2b trial is a randomized, double-blind,
placebo-controlled study that will evaluate four doses of SYN115 versus
placebo as adjunctive therapy in 400 levodopa-treated Parkinson's disease
(PD) patients with end of dose wearing off. In these patients, treatment
with levodopa is insufficient to control PD symptoms until their next dose,
resulting in an 'off' period when symptoms reappear. The aim of the phase
2b study is to determine the efficacy and safety of SYN115 in reducing the
mean time spent in the 'off' state over a 12 week treatment period. The
trial will also assess the impact of SYN115 on various measures of motor
symptom severity, dyskinesia and non-motor symptoms. Results from the
study are expected in H1 2013.
Re-election of Board members: All existing board members, Bradley J.
Bolzon, William M. Burns, Peter Fellner, Merja Karhapää, Bernd Kastler,
Ismail Kola, Guido Magni, Andrew J. Schwab, Piet Serrure and James S.
Shannon were re-appointed at Biotie's Annual General Meeting on 6 May 2011.
At the organization meeting of the re-appointed Board of Directors, which
convened immediately after the Annual General Meeting on 6 May 2011, Peter
Fellner was re-elected as the Chairman of the Board of Directors and
Bradley J. Bolzon was re-elected as the deputy chairman.
Outlook for 2011
Biotie will continue to support its licensing partner Lundbeck in the
development of nalmefene for the treatment of alcohol dependence. Final
clinical data from the ongoing phase 3 study is expected Q2 2011; a
possible marketing authorization submission in the EU is anticipated H2
2011.
SYN118, for the treatment of Parkinson's disease, is currently in a phase
2a study and data from this trial is expected to become available Q2 2011.
UCB Pharma has an option to license this product after the clinical data is
available for their review.
SYN120, for the treatment of cognitive disorders associated with
Alzheimer's disease and schizophrenia, is expected to enter a phase 1 PET
("positron emission tomography") imaging study during Q2 2011. The study is
scheduled to be completed H1 2012. Roche has an option to license this
compound from Biotie.
Biotie will announce development plans for its proprietary VAP-1 antibody
later this year. While the rights to the product in Japan, Taiwan,
Singapore, Australia and New Zealand have been granted to Seikagaku, Biotie
retains ownership in the rest of the world and will be looking for
additional collaboration opportunities.
Biotie will announce development plans for ronomilast for the treatment of
COPD later this year. Biotie will be looking for potential collaboration
opportunities for this product.
Biotie is currently assessing options for evaluating rufinamide (SYN115) in
the treatment of bipolar disorder.
Financial calendar 2011
Interim Report for January - June 5 August 2011
Interim Report for January - September November 2011
Conference call
An analyst and media conference call will take place on 13 May 2011 at 2.00
p.m. Central European Time. The conference call will be held in English.
Callers may access the conference directly at the following telephone
numbers: US: +1 212 444 0481, UK: +44 (0)20 7138 0825 and Finland: +358
(0)9 2319 4344 access code 4052511. Lines are to be reserved ten minutes
before the start of conference call. The event can also be viewed as a live
webcast at www.biotie.com. An on demand version of the conference will be
published on Biotie's website later during the day. In case you need
additional information or assistance, please contact: Virve Nurmi, IR
Manager Biotie Therapies, Tel +358 2 2748 911
About Biotie
Biotie is a specialized drug development company focused on the development
of drugs for neurodegenerative and psychiatric disorders (Parkinson's
disease, Alzheimer's disease and other cognitive disorders, bipolar
disorder, and alcohol and drug dependence) and inflammatory diseases
(rheumatoid arthritis, psoriasis, chronic obstructive pulmonary disease and
others). It has several innovative small molecule and biological drug
candidates at different stages of clinical development. Biotie's products
address diseases with high unmet medical need and significant market
potential.
Partnerships with top tier pharmaceutical partners are in place for several
programs as well as a strategic collaboration with UCB Pharma S.A. Biotie's
most advanced product, nalmefene for alcohol dependence, is currently in
Phase 3 clinical development by licensing partner H. Lundbeck A/S.
Drug development projects:
Nalmefene, a new treatment paradigm for alcohol dependence. Nalmefene
builds on a novel principle of treating alcohol dependence. Unlike existing
therapies, the treatment with Nalmefene is not aimed at keeping the
patients from drinking. Nalmefene instead removes the desire to drink,
thereby controlling and limiting the intake of alcohol. Nalmefene
distinguishes itself by being available as an oral tablet formulation to be
taken on an as needed basis.
Biotie's partner Lundbeck announced in January 2011 that it had completed
two phase 3 clinical trials evaluating nalmefene for the treatment of
alcohol dependence (ESENSE1, SENSE). The data from these studies was
consistent with the profile of nalmefene observed in previous clinical
studies and demonstrated that nalmefene was safe and efficacious in helping
patients to reduce drinking. Lundbeck expects to complete a further
efficacy study (ESENSE2) in Q2 2011 and is on track to file a marketing
authorization application (MAA) in Europe in H2 2011, depending on the
outcome of the final study. Lundbeck plans to submit detailed efficacy and
safety data for presentation at scientific and medical meetings after all
three trials have been completed. Launch of the product in the EU is
expected H2 2012. Biotie is participating in financing some of the clinical
development costs. Biotie has granted worldwide rights for nalmefene to
Lundbeck.
SYN115 is an orally bioavailable, potent and selective adenosine A2a
receptor antagonist in development for Parkinson's disease (PD). Adenosine
A2a inhibition with SYN115 has been shown in preclinical studies to reverse
motor deficits and enhance the effect of current PD therapies, e.g.
levodopa and dopamine agonists, without inducing troublesome dyskinesia
(involuntary movements). In addition, SYN115 also displays activity in
preclinical models on non-motor symptoms of PD including depression,
cognition and anxiety.
After the reporting period, Biotie announced the start of a phase 2b trial
evaluating SYN115 in PD. The trial is a randomized, double-blind,
placebo-controlled study that will evaluate four doses of SYN115 versus
placebo as adjunctive therapy in 400 levodopa-treated PD patients with end
of dose wearing off. In these patients, treatment with levodopa is
insufficient to control PD symptoms until their next dose, resulting in an
'off' period when symptoms reappear. The aim of the trial is to determine
the efficacy and safety of SYN115 in reducing the mean time spent in the
'off' state over a 12 week treatment period. The study will also assess the
impact of SYN115 on various measures of motor symptom severity, dyskinesia
and
non-motor symptoms. Results from the phase 2b trial are expected H1 2013.
Biotie has granted UCB Pharma S.A. a license for exclusive, worldwide
rights to SYN115. UCB will be responsible for phase 3 development and
commercialization.
Nitisinone (SYN118) is a potent and selective inhibitor of
hydroxyphenylpyruvate dioxygenase (HPPD), an enzyme responsible for the
catabolism of tyrosine, the precursor of the neurotransmitter dopamine.
Preclinical studies have shown that nitisinone is active in animal models
of PD. Clinical studies and patient experience with nitisinone have shown
pronounced and predictable elevations in the circulating concentrations of
tyrosine. The company has completed an open label, proof-of-mechanism study
with nitisinone for PD and a proof-of-concept trial in restless leg
syndrome, both of which demonstrated encouraging efficacy and safety. A
randomized, placebo controlled phase 2a study in PD patients is currently
ongoing and data are expected in Q2 2011. UCB has an option to obtain an
exclusive license to this product.
SYN120 is an orally bioavailable, potent and selective antagonist of the
5-HT6 receptor. The 5-HT6 receptors are exclusively located in the brain
and antagonism of these receptors modulates the release of acetylcholine
and glutamate, two neurotransmitters known to be involved with memory
function. Cognitive deficits are an important component of many CNS
diseases, especially Alzheimer's and schizophrenia. SYN120 has completed
single and multiple ascending dose phase 1 clinical studies. Biotie plans
to initiate a PET imaging study for SYN120 in Q2 2011. The compound was
originally licensed from Roche and Roche has an option to reacquire this
program after the results of the planned study have been obtained.
VAP-1 antibody. VAP-1 (vascular adhesion protein-1) has been shown to play
a key role in chronic inflammatory diseases such as COPD, rheumatoid
arthritis, psoriasis and diabetes. Biotie has significant know-how and a
strong intellectual property position around this target and is developing
a fully human monoclonal antibody, BTT-1023, which blocks VAP-1 function.
In 2010 Biotie reported the successful completion of phase 1b clinical
trials with BTT-1023 in 24 rheumatoid arthritis and 26 psoriasis patients.
The compound has demonstrated a favorable safety profile in a total of 83
study subjects and has shown promising signals of clinical activity,
especially with higher doses in the rheumatoid arthritis study. These data
support further clinical development of the product, plans for which will
be announced later this year. Biotie has granted a license to Seikagaku
Corporation for the commercial rights to the product in Japan, Taiwan,
Singapore, New Zealand, and Australia, and is seeking additional
collaboration partners.
Ronomilast is a once-daily, oral phosphodiesterase 4 (PDE4) inhibitor with
therapeutic potential in chronic inflammatory disorders, particularly in
chronic obstructive pulmonary disease (COPD), a serious respiratory
disorder with major unmet medical need. In three clinical studies with a
total of 126 study subjects ronomilast has been demonstrated to be safe and
well tolerated at all tested doses up to 100mg once daily. No serious or
severe adverse events were reported in any of the study subjects. Robust
and statistically highly significant biomarker responses confirmed the
pharmacological activity of well tolerated doses of ronomilast in man.
These data support further clinical development, plans for which will be
announced later this year. Biotie will be looking for potential
collaboration opportunities for this product.
Nepicastat (SYN117) is a potent, competitive, and selective inhibitor of
the enzyme dopamine beta-hydroxylase. The inhibition of this enzyme has
been shown to raise dopamine levels in the central nervous system (CNS).
Nepicastat is available as an oral treatment and has been well-tolerated in
preclinical models at doses significantly above the expected therapeutic
range for the current CNS indications under investigation. A phase 2 study
of nepicastat in post traumatic stress disorder is ongoing, funded by the
US Department of Defense. No data from this study is expected to become
available before 2013.
Rufinamide (SYN111) is a potent, specific, and orally bioavailable sodium
channel blocker with proven anti-epileptic activity. The compound is
marketed in the EU and the US as adjunctive therapy in Lennox Gastaut
Syndrome (LGS), a severe form of epilepsy. Biotie holds rights to
rufinamide in medical indications outside of LGS and is currently assessing
options for evaluating this product in the treatment of bipolar disorder.
Financial review for reporting period January - March 2011
Biotie acquired Synosia Therapeutics Holding AG in February 2011. The
acquisition and its impacts on consolidated financial statements are
described in more detail in the notes of this financial statements (see
acquisition of Synosia Therapeutics Holding AG),
Financial statements for the Q1 2011 are not directly comparable to the
same period in 2010 due to the Synosia Therapeutics acquisition and the
consolidation of the new subsidiaries' results into the Biotie group's
consolidated financial statements from the acquisition date 1 February
onwards.
Revenues: Revenues for the reporting period Q1 2011 amounted to EUR 0.5
million (EUR 1.2 million in the same period in 2010). Revenues consisted of
periodization of previously received upfront payments from licensing
agreements.
Financial result: Net loss for the reporting period 2011 was EUR 7.7
million (EUR 3.7 million in the same period in 2010). Total comprehensive
income including the currency translation differences amounted to EUR -9.5
million (EUR -3.7 million in the same period 2010). Research and
development costs for the reporting period amounted to EUR 4.9 million (EUR
3.8 million in the same period in 2010).
Financing: Cash and cash equivalents and short term investments totaled EUR
46.8 million on 31 March 2011 (EUR 15.2 million on 31 March 2010).
Biotie announced in March 11 execution of a private placement of shares in
the amount of EUR 27 million. The shares were allocated to Finnish and
international institutional and strategic investors. A total of 35,230,000
newly issued and 14,747,084 treasury shares were offered at a subscription
price of EUR 0.54 per share.
Biotie has a standby equity distribution agreement (SEDA) in place with US
fund Yorkville. Yorkville is obliged to subscribe and pay for ordinary
no-par Biotie shares up to a total value of EUR 20 million during the
period until September 2012 at Biotie's discretion (Biotie option). The
purpose of this arrangement is to have an option to secure the financing of
Biotie's working capital in the short and medium term. Biotie has made use
of this arrangement three times since August 2010 and has raised a total
amount of EUR 1.1 million.
Shareholder's equity: The shareholders' equity of the group amounted to EUR
87.7 million (IFRS) on 31 March 2011. Biotie's equity ratio was 62.4% on 31
March 2011 (-46.2% on 31 March 2010).
Investments and cash flow: Cash flow from operating activities in January -
March amounted to EUR -4.2 million for continuing operations (EUR -4.4
million in the same period in 2010) and EUR -1.2 million for discontinued
operations (no discontinued operations reported in Q1 2010). The group's
investments during the reporting period amounted to EUR 20 thousand (EUR 80
thousand in the same period in 2010).
Personnel
During the reporting period January - March 2011, the average number of
employees amounted to 41 (82 during January - March 2010) and at the end of
the reporting period, after the restructuring in Q4 2010 and acquisition of
Synosia in Q1 2011, Biotie employed 40 people (83 on 31 March 2010).
Changes in the management team
In connection with the acquisition of Synosia Therapeutics, Steve Bandak
replaced Antero Kallio as Chief Medical Officer and Ian Massey joined as
Chief Operating Officer and President of US Operations in February 2011.
Antero Kallio now reports to Steve Bandak. In January 2011, Biotie
announced that its Chief Financial Officer Thomas Taapken would leave the
company as of 31 March 2011. He has been replaced ad interim by Biotie's VP
Finance & Administration Ms. Ulla Sjöblom.
Changes in the Board of Directors
Composition of the Board of Directors elected at the Extraordinary General
Meeting 1 February 2011
The number of the members of the Board of Directors was resolved to be ten.
Bradley J. Bolzon, William M. Burns, Peter Fellner, Merja Karhapää, Bernd
Kastler, Ismail Kola, Guido Magni, Andrew J. Schwab, Piet Serrure and James
S. Shannon, were elected as the members of the Board of Directors.
At the organization meeting, which convened after the Extraordinary General
Meeting in February 2011, Peter Fellner was elected as the Chairman of the
Board of Directors and Bradley J. Bolzon was elected as the Deputy
Chairman.
Option rights
Biotie has issued option rights to certain of its employees and managers
pursuant to two different option programs in 2006 and 2009. Each option
right granted based on these two option programs entitle to subscribe one
share in the company.
The Swiss company Synosia Therapeutics Holding AG (currently Biotie
Therapies Holding AG) acquired by Biotie in February 2011 also has a stock
option plan based on which stock options have been granted to employees,
directors and consultants. In connection with the completion of the
acquisition of Synosia, the option plan was amended so that instead of
shares in former Synosia Therapeutics Holding AG an aggregate maximum of
14,912,155 shares in Biotie Therapies Corp. may be subscribed based on the
plan. Biotie Therapies Corp. issued these 14,912,155 shares to its current
subsidiary Biotie Therapies Holding AG in connection with the acquisition
to be further conveyed to the option holders when they potentially exercise
their option rights in accordance with the terms and conditions of the
option rights. At the end of the reporting period, on 31 March 2011, the
total number of shares which can be subscribed by virtue of these option
rights deriving from Synosia Therapeutics Holding AG amounts to 14,912,155,
which represents 3.8% of the total amount of shares in the company as of 31
March 2011.
Share capital and shares
Biotie shares are all of the same class and have equal rights. Each share
entitles the holder to one vote at the general meeting of shareholders. All
shares are quoted on NASDAQ OMX Helsinki Ltd (Small cap, Healthcare).
As described in more detail in Biotie's stock exchange releases issued on 1
and 2 February 2011, resolutions necessary for the completion of the
acquisition of Synosia Therapeutics Holding AG (currently Biotie Therapies
Holding AG) were passed at the Extraordinary General Meeting held on 1
February 2011 and, as a result, Biotie issued 161,448,371 shares to the
shareholders and warrant holders of Synosia as consideration for the entire
issued share capital and outstanding warrants of Synosia. In connection
with this transaction, the company also issued 14,912,155 new shares to
Synosia to be held in treasury and used to fulfill the requirements of
future potential exercise of Synosia's options. The new shares were
registered on 3 February 2011.
Furthermore, Biotie announced on 11 March 2011 the successful placement of
35,230,000 new shares and 14,747,084 treasury shares to institutional and
strategic investors.
On 31 March 2011 the registered number of shares in Biotie Therapies Corp.
was 387,594,457. Of these shares 14,912,155 were held by the company or its
group companies. The registered share capital of Biotie was EUR
165,919,181.95
Market capitalization and trading
At the end of the reporting period the share price was EUR 0.56, the
highest price during the reporting period January - March 2011 was EUR
0.82, the lowest was EUR 0.49, and the average price was EUR 0.61. Biotie's
market capitalization at the end of the reporting period was EUR 217.1
million.
The trading volume on NASDAQ OMX Helsinki during the reporting period was
121,439,322 shares, corresponding to a turnover of EUR 72,874,030.
Changes in ownership
During the reporting period, January - March 2011, Biotie made eleven
announcements according to Chapter 2, Section 10 of the Finnish Securities
Market Act.
Information on notices of changes in ownership and a monthly updated list
of Biotie's major shareholders is available on the company's website at
www.biotie.com/investors.
Group structure
The parent company of the group is Biotie Therapies Corp. The domicile of
the company is Turku, Finland. The company has two non-operational
subsidiaries named Biotie Therapies GmbH, located in Radebeul, Germany and
Biotie Therapies International Ltd in Finland.
The company now also has a holding subsidiary, Biotie Therapies Holding AG,
located in Basel, Switzerland, which has two operative subsidiaries, Biotie
Therapies AG, located in Basel, Switzerland and Biotie Therapies, Inc.
located in South San Francisco, California.
Shareholders' meetings
Extraordinary General meeting held on 1 February:
On 1 February 2011, the Extraordinary General Meeting of Biotie passed
resolutions necessary for the completion of the acquisition of Synosia
Therapeutics Holding AG ("Synosia"), deciding on the issue of 161,448,371
new Biotie shares to the shareholders and warrant holders of
privately-owned Synosia in exchange for the entire issued share capital and
outstanding warrants of Synosia.
The stock exchange release regarding the resolutions of the Extraordinary
General Meeting of Biotie Therapies Corp. was published on 1 February 2011.
After the reporting period, on 6 May 2011, the Annual General Meeting was
held and resolved the following items:
- The financial statements 2010 were adopted
- It was resolved to transfer of loss of the financial year 2010 to the
unrestricted equity and that no dividend shall be paid
- Discharge from liability was granted for the members of the Board of
Directors and the Managing Director
- It was resolved that the remuneration payable to the members of the Board
of Directors will be as follows: EUR 4,000 per month for the Chairman and
EUR 3,000 per month for other Board members. In addition, it is proposed
that reasonable travelling expenses for the meetings would be compensated.
- The number of members of the Board of Directors will be ten (10)
- Peter Fellner, Bradley J. Bolzon, William M. Burns, Merja Karhapää, Bernd
Kastler, Ismail Kola, Guido Magni, Andrew J. Schwab, Piet Serrure and James
S. Shannon were re-elected as members of the Board of Directors for the
term expiring at the end of the following Annual General Meeting.
- The auditors' fees will be paid pursuant to a reasonable invoice
- PricewaterhouseCoopers Oy, a firm of auditors approved by the Central
Chamber of Commerce, and Mr. Janne Rajalahti, Authorized Public Accountant,
were elected as the auditors of the company
- The Board of Directors was authorized to resolve on one or more issues,
containing the right to issue new shares or dispose of the shares in the
possession of the company and to issue options or other rights to the
shares pursuant to chapter 10 of the Companies Act. The authorization
consists of up to 115,000,000 shares in aggregate, is effective until 30
June 2012 and supersedes earlier authorizations.
The stock exchange release regarding the resolutions of the Annual General
Meeting of Biotie Therapies Corp. was published on 6 May 2011.
Short-term risks and uncertainties
Biotie's strategic risks are predominantly related to the technical success
of the drug development programs, regulatory issues, strategic decisions of
its commercial partners, ability to obtain and maintain intellectual
property rights for its products, launch of competitive products and the
development of the sales of its products. The development and success of
Biotie's products depends to a large extent on third parties. Any adverse
circumstance in relation to any of its R&D programs might impair the value
of the asset and thus, represent a severe risk to the company. Such adverse
events could happen on a short term notice and are not possible to foresee.
The key operational risks of Biotie's activities include the dependency on
key personnel, assets (especially in relation to intellectual property
rights) and dependency on its license partners' decisions.
Furthermore, significant financial resources are required to advance the
drug development programs into commercialized pharmaceutical products. To
fund the operations, Biotie relies on financing from two major sources:
income from its license partners and raising equity financing in the
capital markets.
The company relies on capital markets to raise equity financing from time
to time. There can be no assurance that sufficient funds can be secured in
order to permit the company to carry out its planned activities. Current
capital market conditions are very volatile. While in March 2011 the
company was able to raise a significant amount of cash from a share issue
to fund its operations in the mid-term future, there can be no assurance
that the company can secure equity financing in the future if and when it
needs it.
Although Biotie has currently active license agreements in place, the
termination of any such agreement would have a negative effect on the short
to medium term access to liquidity for the company. While income generated
from commercial agreements with third parties relating to its clinical
programs might significantly improve Biotie's financial position, a
forecast on possible income from future licensing arrangements cannot be
provided reliably. Therefore it is possible that Biotie will need to secure
additional financing from share issues in the future.
The group can influence the amount of capital used in its operations by
adapting its cost base according to the financing available. The
restructuring measures announced in Q4 2010 highlight such an approach.
Management monitors the capital and liquidity on the basis of the amount of
equity and cash funds. These are reported to the Board on a monthly basis.
IFRS and accounting principles
This interim financial report has been prepared in accordance with IFRS
recognition and measurement principles, and applying the same accounting
policies as for the 2010 financial statements. The interim report has not
been prepared in accordance with IAS 34, Interim Financial Reporting.
In addition, as a result of the acquisition of Synosia Therapeutics, Biotie
has applied the following principle in its Q1 2011 financial statements:
The results and financial position of all the group entities that have a
currency different from the presentation currency are translated into the
presentation currency as follows:
a. Assets and liabilities for each balance sheet presented are translated
at the closing rate at the date of that balance sheet.
b. Income and expenses for each income statement are translated at average
exchange rates.
c. All resulting exchange differences are recognised in the income
statement as part of the gain or loss on sale.
On consolidation, exchange differences arising from the translation of the
net investment in foreign operations, and of inter-company borrowings that
are considered of being part of the net investment, are taken to other
comprehensive income. When a foreign operation is disposed of or sold
(either partially or as a whole), exchange differences that were recorded
in equity are recognised in the income statement as part of the gain or
loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
This interim report is unaudited.
Turku, 13 May 2011
Biotie Therapies Corp.
Board of Directors
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS)
1.1.- 1.1.- 1.1.-
31.3.2011 31.3.2010 31.12.2010
EUR 1,000 3 months 3 months 12 months
--------- --------- ---------
Continuing operations
Revenue 473 1,201 1,955
Research and development expenses -4,928 -3,769 -5,538
General and administrative expenses -3,072 -1,045 -4,216
Other operating income 258 95 166
--------- --------- ---------
Operating profit/loss -7,268 -3,518 -7,633
Financial income 18 45 101
Financial expenses -460 -213 -930
--------- --------- ---------
Profit/loss before taxes -7,711 -3,687 -8,462
Taxes 0 0 0
--------- --------- ---------
Net income/loss, continuing operations -7,711 -3,687 -8,462
Net income/loss, discontinued operations 0 0 -13,111
--------- --------- ---------
Net income/loss -7,711 -3,687 -21,573
Other comprehensive income:
Currency translation differences -1,831 0 0
--------- --------- ---------
Total comprehensive income of the period -9,542 -3,687 -21,573
Net income/loss attributable to
Parent company shareholders -7,711 -3,687 -21,573
Total comprehensive income attributable to:
Parent company shareholders -9,542 -3,687 -21,573
Earnings per share (EPS)
basic & diluted, EUR, continuing operations -0.03 -0.02 -0.06
Earnings per share (EPS)
basic & diluted, EUR, discontinued
operations - - -0.09
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(IFRS) EUR 1,000
31.3.2011 31.3.2010 31.12.2010
--------- --------- ---------
Assets
Non-current assets
Intangible assets 84,773 7,204 4,042
Goodwill 5,100 379 0
Property, plant and equipment 394 2,588 365
Investment property 1,466 0 1,468
Other shares 10 10 10
--------- --------- ---------
91,743 10,181 5,885
Current assets
Available for sale investment 0 34 0
Investments held to maturity 19,000 0 0
Accounts receivables and other receivables 2,008 1,761 1,261
Financial assets at fair value through
profit or loss 6,786 8,881 0
Cash and cash equivalents 21,005 6,351 4,059
--------- --------- ---------
48,799 17,028 5,320
Total 140,542 27,209 11,205
Equity and liabilities
Shareholders' equity
Share capital 166,510 43,057 43,378
Share issue 0 0 500
Reserve for invested unrestricted equity 3,842 1,180 1,180
Cumulative translation adjustment -1,831 0 0
Retained earnings -73,090 -53,130 -52,951
Net income/loss -7,711 -3,687 -21,573
--------- --------- ---------
Shareholders' equity total 87,720 -12,580 -29,466
Non-current liabilities
Provisions 0 150 0
Non-current financial liabilities 25,623 25,552 25,640
Pension benefit obligation 430 549 430
Other non-current liabilities 9,673 6,913 7,442
Non-current deferred revenues 338 902 368
Deferred tax liabilities 9,929 0 0
--------- --------- ---------
45,993 34,066 33,880
Current liabilities
Provisions 582 597 589
Pension benefit obligation 16 16 16
Current financial liabilities 115 219 144
Current deferred revenues 563 1,891 1,006
Accounts payable and other current
liabilities 4,353 3,000 2,637
Liability related to discontinued operations 1,200 0 2,400
--------- --------- ---------
6,830 5,723 6,791
Liabilities total 52,822 39,789 40,671
Total 140,542 27,209 11,205
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Attributable to equity holders of the parent company
Reserve
for invested
Shares Share Share unrestricted
EUR 1,000 (1,000 pcs) Capital issue equity
------------ ------------ ------------ ------------
BALANCE AT 1.1.2010 158,753 43,057 0 1,180
------------ ------------ ------------ ------------
Total comprehensive
income for the period
Options granted
SEDA costs
Share issue to the
company itself without
consideration 17,251
Directed issue of
treasury shares 550 500
Cost of share issue -229
------------ ------------ ------------ ------------
17,251 321 500 0
------------ ------------ ------------ ------------
BALANCE AT 31.12.2010 176,004 43,378 500 1,180
------------ ------------ ------------ ------------
Total comprehensive
income for the period
Options granted 2,662
Directed issue of
treasury shares 500 -500
Directed issues of new
shares 211,590 115,893
Directed offer of
treasury shares 7,964
Cost of share issue -1,224
------------ ------------ ------------ ------------
211,590 123,133 -500 2,662
------------ ------------ ------------ ------------
BALANCE AT 31.3.2011 387,594 166,511 0 3,842
------------ ------------ ------------ ------------
Own Retained Shareholders'
EUR 1,000 Shares Earnings equity total
------------ ------------ ------------
BALANCE AT 1.1.2010 -15 -53,160 -8,938
------------ ------------ ------------
Total comprehensive income for the
period -21,573 -21,573
Options granted 108 108
SEDA costs 116 116
Share issue to the company itself
without consideration 0
Directed issue of treasury shares 1,050
Cost of share issue -229
------------ ------------ ------------
0 -21,349 -20,528
------------ ------------ ------------
BALANCE AT 31.12.2010 -15 -74,509 -29,466
------------ ------------ ------------
Total comprehensive income for the
period -9,542 -9,542
Options granted 1,434 4,096
Directed issue of treasury shares 0
Directed issues of new shares 115,893
Directed offer of treasury shares 7,964
Cost of share issue -1,224
------------ ------------ ------------
0 -8,108 117,187
------------ ------------ ------------
BALANCE AT 31.3.2011 -15 -82,617 87,720
------------ ------------ ------------
CONSOLIDATED STATEMENT OF CASH FLOWS
1.1.- 1.1.- 1.1.-
31.3.2011 31.3.2010 31.12.2010
EUR 1,000 3 months 3 months 12 months
--------- --------- ---------
Cash flow from operating activities
Continuing operations
Net income/loss -7,711 -3,687 -8,462
Adjustments:
Non-cash transactions 3,136 -297 -1,287
Acquisition related costs 704 0 0
Addition/disposal due to revaluation of
financial assets at fair value through
profit or loss 0 -28 0
Interest and other financial expenses 215 213 930
Interest income -15 -17 -101
Foreign exchange losses/gains on operating
activities -86 0 0
Change in working capital:
Change in accounts receivables and other
receivables 318 -196 626
Change in accounts payable and other
liabilities -739 -305 436
Change in mandatory provisions -6 -7 -25
Interests paid -27 -46 -42
Interests received 15 3 68
Taxes paid 0 -49 0
--------- --------- ---------
Net cash from operating activities,
continuing operations -4,196 -4,416 -7,856
Net cash from operating activities,
discontinued operations -1,200 0 -7,011
--------- --------- ---------
Net cash from operating activities -5,396 -4,416 -14,867
Cash flow from investing activities
Continuing operations
Acquisition of subsidiary, net of cash
acquired 15,544 0 0
Change in financial assets at fair value
through profit or loss
Additions 0 0 0
Disposals 0 0 8,886
Change in investments held to maturity
Additions -19,000 0 0
Disposals 0 0 0
Investments to tangible assets -20 -80 -54
--------- --------- ---------
Net cash used in investing activities,
continuing operations -3,476 -80 8,832
Net cash used in investing activities,
discontinued operations 0 0 -1,587
--------- --------- ---------
Net cash used in investing activities -3,476 -80 7,245
Cash flow from financing activities
Continuing operations
Proceeds from issuance of shares 26,988 0 0
Payments from share issue 0 0 1,050
Share issue costs -1,125 0 -229
Proceeds from borrowings 0 0 6
Repayment of loans 0 0 -40
Repayment of lease commitments -46 -43 -177
--------- --------- ---------
Net cash from financing activities,
continuing operations 25,817 -43 610
Net cash from financing activities,
discontinued operations 0 0 180
--------- --------- ---------
Net cash from financing activities 25,817 -43 791
Net increase (+) or decrease (-)
in cash and cash equivalents 16,946 -4,450 -6,832
Effect on changes in exchange rates on cash
and cash equivalents -83 0 0
Cash and cash equivalents in the
beginning of the period 4,059 10,891 10,891
Cash and cash equivalents in the
end of the period 21,005 6,351 4,059
ACQUISITION OF SYNOSIA THERAPEUTICS HOLDING AG
Biotie entered into a combination agreement with Synosia Therapeutics
Holding AG ("Synosia") on 10 January 2011. The acquisition was subject to
the necessary resolutions passed by Biotie's shareholders at the
Extraordinary General Meeting which was held on 1 February 2011. Biotie
issued 161.448.371 new shares to the shareholders and warrant holders of
Synosia to acquire the entire issued share capital and outstanding warrants
of Synosia. In addition, 14.912.155 shares were issued to Synosia and are
held in treasury to satisfy future potential exercise of Synosia's options
in accordance with the terms of the existing option plans. The fair value
of the shares issued as the consideration paid for Synosia is based on the
published share price on 1 February 2011. Synosia is a biopharmaceutical
company focused on developing and commercializing innovative and clinically
differentiated products for neurodegenerative and psychiatric disorders. As
a result of the combination, Synosia is a wholly-owned subsidiary of Biotie
and is consolidated into Biotie's consolidated financial statements from
the acquisition date 1 February 2011 onwards.
Details of net assets acquired and goodwill are as follows:
Purchase consideration
Shares related to the Transaction 161.448.371
EUR per share 0.60
Shares total (million EUR) 96.9
Consideration provided under Synosia option-plan 2.7
Total consideration transferred (million EUR) 99.5
Fair value of assets acquired (see below)
Goodwill
Direct cost relating to the acquisition - charged in P&L
The assets and liabilities arising from the acquisition, provisionally
determined, are as follows:
Fair value
(million EUR)
In process research and development projects IPRD
(Intangible assets) 82,5
Property, plant and equipment 0,1
Investments held-to-maturity 0,0
Accounts receivables and other receivables 1,1
Financial assets at fair value through profit and loss 6,9
Cash and cash equivalents 16,3
Deferred tax liability (net) -10,1
Accounts payable and other current liabilities -2,5
Net assets acquired 94,3
Goodwill 5,2
Fair values of net assets acquired are determined provisionally. Based on
the preliminary fair valuation, in process research and development
projects ("IPRD") have been valued at 82.5 million EUR. The development
projects are not amortized until the start of commercialization and they
are subject to an annual impairment test.
A preliminary goodwill, 5.2 million EUR, arises from expected synergy
benefits in different areas of drug development as well as from the
competent personnel and the integration of functions. Expected synergy
benefits will be gained from the possibility to create new drug development
projects corresponding to the needs of international pharmaceuticals
companies and from the possibility to utilize new knowledge and new
technologies for the development of the existing businesses. Furthermore,
access to the very important US market and established relationships to the
regulatory authorities (FDA) is gained through the existing operations of
Synosia in the US.
Synosia's result is consolidated into Biotie's consolidated financial
statements from the acquisition date of 1 February 2011. The total
acquisition-related costs were EUR 1.1 million. Acquisition-related costs
of EUR 0.7 million are included in general and administrative expenses in
the consolidated income statements for the Q1 2011.
SYNOSIA OPTION PLAN
Biotie Therapies Corp. has issued 14,912,155 shares as a bonus issue to its
subsidiary Biotie Therapies Holding AG to be held in treasury and to be
used to satisfy future potential exercise of Biotie Therapies Holding AG
(formerly Synosia Therapeutics Holding AG) options in accordance with the
existing Biotie Therapies Holding AG option plans. Biotie Therapies Corp.
was obliged in the combination agreement to issue 22.432 Biotie Therapies
Corp shares in exchange for each share option granted to employees and
service providers of the acquired Synosia companies (Biotie Therapies
Holding AG, Biotie Therapies AG and Biotie Therapies, Inc). The fair value
for these replacement awards has been included in measuring the
consideration transferred in the business combination. In order to
determine the portion of the replacement award that is part of the
consideration for the Synosia acquisition and the portion that is
remuneration for
post-combination services, Biotie has measured both the value of the
options on the acquisition date closing price (effectively the value of the
replacement awards granted by Biotie) and the existing Synosia awards based
on the consideration in the combination agreement in accordance with IFRS
2. The difference in the fair values of the replacement awards has been
split between pre-combination and
post-combination services based on the vesting periods of the awards. The
amount of EUR 437 thousand of the excess that relates to
pre-combination services is expensed immediately as no further employee
services is required and is included in the consolidated comprehensive
income statement line items Research and Development Expenses and General
and Administrative Expenses. A total of EUR 2,662 thousand of the fair
value relates to
pre-combination services and has been accounted for as part of the purchase
consideration, see note Acquisition of Synosia Therapeutics Holding AG. The
remaining amount of EUR 3,576 thousand represents payment for employees for
post-combination services and will be charged through the income statement
over the remaining vesting periods of the options which extends through Q4
2014. The average vesting period for the options is 3.1 years. Of this
amount, EUR 1,022 thousand has been recorded as post-combination
compensation expense through the interim period comprehensive income
statement for the period ended 31 March 2011 and is included in lines
Research and Development expenses and General and Administrative expenses.
The expense was recorded to retained earnings.
Biotie estimated the fair value of stock options using the Black-Scholes
valuation model with the following assumptions:
Expected volatility 50 %
Expected term 5.74
Risk - free interest rate 2.0 %
Dividend rate 0.0 %
The following table provides information on the number and pricing of
options outstanding and exercisable at the acquisition date (February 1,
2011) and at March 31, 2011:
Options outstanding Options exercisable
Weighted Weighted
Options average Options average
granted exercise price exercisable exercise price
Acquisition date
(February 1, 2011) 14,912,153 0.19 EUR 12,029,097 0.19 EUR
March 31, 2011 14,912,153 0.19 EUR 12,030,032 0.19 EUR
No options have been exercised during the period ending March 31, 2011.
DIRECTED SHARE ISSUE
In March 2011 Biotie executed a private placement of shares (the
"Offering") in the amount of EUR 27 million that had been fully subscribed
for. The shares were allocated to Finnish and international institutional
and strategic investors. A total of 35 230 000 newly issued and 14 747 084
treasury shares were offered in the Offering at a subscription price of EUR
0.54 per share.
As a result of the issue of the new shares and the sale of the treasury
shares, the share capital of Biotie was increased by EUR 26 987 625.36.
After March 18, 2011 after the registration of the new shares with the
Finnish Trade Register and the registration of the share capital increase
related to the new shares and the sale of the treasury shares, the share
capital of Biotie is EUR 165 919 181.95, the total number of shares amounts
to 387 594 457, and the number of votes outstanding is 372 682 302 (taking
into consideration the treasury shares held by Biotie and its
subsidiaries).
Contingent liabilities
EUR 1,000 31.3.2011 31.3.2010 31.12.2010
----------- ----------- -----------
Operating lease commitments 143 125 159
Due within a year 79 84 70
Due later 64 41 88
Rent commitments 386 343 243
Due within a year 316 237 243
Due later 71 106 0
----------- ----------- -----------
Total 529 468 402
The Group leases motor vehicles, machines and equipment with leases of 3 to
5 years. Rent commitments include subleased Pharmacity premises until 30
November 2011.
Commitments
On 31 March 2011 Biotie had purchase commitments, primarily for contract
research work services, totaling EUR 9.9 million.
KEY FIGURES
The formulas for the calculation
of the key figures are presented
in the notes of the consolidated
financial statements 2010
Incl. both continuing and 1.1.- 1.1.- 1.1.-
discontinued operations 31.3.2011 31.3.2010 31.12.2010
EUR 1,000 3 months 3 months 12 months
------------ ------------ ------------
Business development
Revenues 473 1,201 2,928
Personnel on average 41 82 70
Personnel at the end of period 40 83 23
Research and development costs 4,928 3,769 12,229
Capital expenditure 20 80 270
Profitability
Operating profit/loss -7,268 -3,519 -20,720
as percentage of revenues, % -1536.58 -292.9 -707.65
Profit/loss before taxes -7,711 -3,687 -21,573
as percentage of revenues, % -1630.23 -307.0 -736.78
Balance sheet
Liquid assets 46,791 15,232 4,059
Shareholders' equity 87,720 -12,580 -29,466
Balance sheet total 140,542 27,209 11,205
Financial ratios
Return on equity, % - - -
Return on capital employed, % -14.7 -25.9 -341.5
Equity ratio, % 62.4 -46.2 -263.0
Gearing, % 5.4 -83.8 -73.7
Per share data
Earnings per share (EPS) basic, EUR -0.03 -0.02 -0.15
Earnings per share (EPS) diluted,
EUR -0.03 -0.02 -0.17
Shareholders' equity per share, EUR 0.23 -0.02 -
Dividend per share, EUR - - -
Pay-out ratio, % - - -
Effective dividend yield, % - - -
P/E-ratio - - -
Share price
Lowest share price, EUR 0.49 0.53 0.30
Highest share price, EUR 0.82 0.65 0.65
Average share price, EUR 0.61 0.57 0.48
End of period share price, EUR 0.56 0.55 0.50
Market capitalization at the end of
period MEUR 217.1 87.3 88.0
Trading of shares
Number of shares traded 121,439,322 24,649,500 90,049,678
As percentage of all 31.3 15.5 51.2
Adjusted weighted average number of
shares during the period 296,081,465 158,752,560 161,919,250
Adjusted number of shares at the end
of the period 387,594,457 158,752,560 176,003,931
Biotie_interim report Q1 2011
http://hugin.info/132030/R/1515600/451879.pdf