Bioniche Life Sciences Inc. Reports Fiscal 2012 Year-End Results
- Animal Health product sales revenues increase by 10% over Fiscal 2011 -
(all figures are in Canadian dollars unless otherwise noted)
BELLEVILLE, ON, September 12, 2012 – Bioniche Life Sciences Inc. (TSX: BNC) (ASX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced financial results for its fiscal year ended June 30, 2012.
“During the course of its history, Bioniche Life Sciences Inc. has evolved from a modest animal health business with a focus on researching and developing alternatives to antibiotics in food producing animals to a three-pronged business (Animal Health, Human Health and Food Safety) with consistent revenues, successful commercialization of internally developed technologies, late-stage human clinical development, top-of-the-line production facilities in both animal and human health, and significant potential for future growth and value creation,” said Graeme McRae, President & CEO. “The evolution of the Company continues as many of our R&D projects are nearing the end of their development cycle and approaching the marketplace. The next five years will be particularly important in this respect, as several significant technologies become commercialized globally.”
View Fiscal 2012 Year-End Results
Fiscal 2012 Financial Results Highlights
Consolidated revenues related to Bioniche Animal Health product sales for the fiscal year were $29.8 million, as compared to $27.3 million in Fiscal 2011. Gross margins were 50% for the year ended June 30, 2012, as compared to 51% in the year ended June 30, 2011. This reduction in margins is largely the result of cost increases relative to sales processes, and in particular, products acquired through licensing and distribution agreements, many of them introduced over the last 2 quarters of the year ended June 30 2012. These margins are expected to improve progressively as the markets for these new products grow over the next year.
In addition to product sales revenues, the Company recorded research collaboration income of $2.0 million in Fiscal 2012, as compared to $3.1 million in Fiscal 2011. This is related to certain reimbursements by the Endo Health Solutions Inc. (Endo), with whom the Company has a license, development and supply agreement for its human bladder cancer therapy, UrocidinTM. Total revenues from all sources for Fiscal 2012 were $31.8 million, as compared to $34.6 million in Fiscal 2011. The difference in revenues was largely due to a non-recurring milestone payment of US$4 million that was received from Endo in November, 2010, which is included in the Fiscal 2011 revenues.
The Company generated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) - before research and development expenses - of $0.3 million, as compared to $4.4 million in Fiscal 2011.
Fiscal year-end cash, cash equivalents and short-term investments amounted to $20.0 million at June 30, 2012, as compared to $15.4 million at June 30, 2011. At June 30, 2012, the Company’s net working capital totaled $27.5 million, compared to net working capital of $22.9 million at June 30, 2011.
The Company’s cash flow used in operations for the year ended June 30, 2012 was $14.7 million, as compared to cash used in operations of $12.9 million in 2011. A $4.0 million milestone offset the cash flow used in operations in Fiscal 2011, where no milestone revenue was recorded in Fiscal 2012. Further, minor variations in income and changes in non-cash working capital balances affected the cash flow used in operations in Fiscal 2012. The average monthly burn rate was $1.4 million for Fiscal 2012, vs. $1.1 million for Fiscal 2011. In the year ahead, the Company expects to reduce the average monthly burn rate progressively throughout the year as it completes the development and commercialization of several new products. The Company’s goal is to neutralize its burn rate and develop sustainable cash flows in Fiscal 2014.
The value of the Company’s Property, Plant and Equipment has increased to $40.1 million at June 30, 2012, compared to $37.6 million at June 30, 2011. This increase reflects an ongoing investment in the Animal Health and Food Safety Vaccine Manufacturing Centre at the Company’s corporate headquarters in Belleville, Ontario. This facility has been undergoing commissioning and validation to meet North American production standards.
“The Vaccine Manufacturing Centre initially was constructed to produce EconicheTM,” said Mr. McRae. “Sales of EconicheTM have been limited to date, as there is presently no mandatory requirement for cattlemen in Canada to vaccinate their animals, nor do they receive any compensation or incentive to do so. Additionally, the Company has not yet achieved a conditional license for the vaccine in the U.S. market, and the Company is just beginning to access ex-North American markets. Beyond EconicheTM, the Company expects to manufacture other vaccine products, including internally developed products, such as our Rhodococcus equi vaccine for horses, and to offer manufacturing services for companies seeking high quality production.”
Added Mr. McRae, “We are continuing to the next level of validation in the facility, which will allow the production of vaccines for sale in European and Asian markets, where premium pricing is available. It will take approximately 6-12 months of additional validation work to achieve this Good Manufacturing Practices (GMP) compliance.”
EconicheTM U.S. Regulatory Status
The Company continues to pursue the registration of its E. coli O157 cattle vaccine in the United States. Subsequent to the February, 2008 notice from the United States Department of Agriculture (USDA) that the data for its E. coli O157 cattle vaccine "meets the 'expectation of efficacy' standard" and is eligible for a conditional license, there has been little progress. Ongoing discussions revealed significant additional requirements which the Company has decided are not justifiable in terms of cost and time for a conditional license. The Company is consequently focused on developing a critical path agreement with the USDA for a full license. In the interim, research permits are an option for any U.S. customers wanting access to the Canadian vaccine.
Additional Fiscal 2012 Financial Results Highlights
Administrative expenses were $10.6 million in Fiscal 2012, as compared to $10.8 million at June 30, 2011. Marketing, selling and distributed expenses were $7.4 million in Fiscal 2012, as compared to $6.9 million in Fiscal 2011. The additional expenditure in this category is related to increased staffing to support the launch and distribution of several new Animal Health products.
Research and development (R&D) expenditures were $20.5 million in Fiscal 2012, as compared to $21.0 million in Fiscal 2011. R&D resources are focused on the advancement of certain development programs in Animal Health and Food Safety. Additionally, there is continued investment in the staffing and infrastructure associated with the GMP production of the Company’s UrocidinTM bladder cancer treatment that is in Phase III clinical testing. Endo has assumed financial responsibility for the external costs of clinical activities as they relate to UrocidinTM, and the Company is focusing its human clinical development activities for the underlying technology – Mycobacterial Cell Wall-DNA Complex (MCC) - on other indications. Until such time as the Company’s Vaccine Manufacturing Centre in Belleville is making commercial product, the carrying costs associated with this facility are also accounted for under R&D.
The Company’s financing activities provided $22.4 million during the year ended June 30, 2012 from the closing of the debt financing with Capital Royalty Partners of US$20.million, as compared to the $38.0 million in Fiscal 2011, primarily from the concurrent share offerings netting $26.0 million and from loan advances to fund the Vaccine Manufacturing Centre of $9.8 million.
The basic and fully-diluted net loss per share for Fiscal 2012 is ($0.24), as compared to a net loss per share of ($0.14) in Fiscal 2011. Total Common Shares outstanding at June 30, 2012 were 103,574,370, as compared to 102,108,692 at June 30, 2011.
More information on the Company’s year-end financial results is provided in the Company’s Fiscal 2012 Management’s Discussion and Analysis dated September 12, 2012.
Fiscal 2012 Year-End Results Conference Call
The Company will discuss its year-end results during a:
Conference Call & Audio Web Cast
Wednesday, September 19, 2012
7:00 p.m. (Eastern)
To participate in the conference call from North America, call (888) 231-8191 or (647) 427-7450.
To participate in the conference call from Australia, call 1-800-287-011.
In order to join this conference call, all participants will be required to provide the topic, Company name or conference ID number: 25364133.
A listen-only audio web cast will be available at:
A replay of the conference call will be available until September 24, 2012 at midnight by calling 1-855-859-2056 (passcode: 25364133#).
The web cast will be available for replay using the above link until September 19, 2013.
About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a research-based, technology-driven Canadian biopharmaceutical company focussed on the discovery, development, manufacturing, and marketing of proprietary and innovative products for human and animal health markets worldwide. The fully-integrated company employs more than 200 skilled personnel and has three operating divisions: Human Health, Animal Health, and Food Safety. The Company’s primary goal is to develop and commercialize products that advance human or animal health and increase shareholder value.
Bioniche Life Sciences Inc. has been named one of the Top 50 Best Small and Medium-Sized Employers in Canada for 2011. 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.
For further information, please contact:
Jennifer Shea, Vice-President, Communications, Investor & Government Relations
Bioniche Life Sciences Inc.
Telephone: (613) 966-8058; from Australia: 0011 1 613-966-8058
Cell: (613) 391-2097; from Australia: 0011 1 613-391-2097