Biotie interim report 1 January - 30 June 2015
(Thomson Reuters ONE) -
BIOTIE THERAPIES CORP. INTERIM REPORT 20 August, 2015 at 9.00 a.m.
Biotie interim report 1 January - 30 June 2015
Company Highlights
April - June 2015
* Biotie raised ?83.3 million gross proceeds from the issue of convertible
notes (gross proceeds of ?33.1 million) in May 2015 and from the issue of
shares represented by American Depositary Shares (ADS) through a US public
offering (gross proceeds of ?50.2 million) in June 2015 and the ADS were
listed on Nasdaq Stock Market LLC under the ticker BITI. The proceeds will
be used in the funding of the tozadenant Phase 3 clinical study. The
convertible notes automatically converted into shares on completion of the
US public offering and a total of 524,883,761 new shares in the Company were
issued in the financing transaction pursuant to authorization by the
shareholders at the May 2015 Annual General Meeting.
* Preparations to advance tozadenant into Phase 3 development in Parkinson's
disease as part of Biotie's proprietary portfolio continued during the
quarter. During the reporting period, Biotie provided further information on
the design and conduct of the Phase 3 program and in May 2015 reached
agreement with the U.S. Food and Drug Administration (FDA) on a Special
Protocol Assessment (SPA) for the study. Patient recruitment commenced after
the reporting period in July 2015, as planned.
* Biotie's partner H. Lundbeck A/S (Lundbeck) continued its sales and
marketing efforts for Selincro in Europe.
* The Phase 2 study for SYN120 in Parkinson's disease dementia, largely funded
by a grant from the Michael J Fox Foundation (MJFF), continued to recruit
patients.
* The Phase 2 study investigating Biotie's monoclonal anti-VAP-1 antibody
BTT1023 in primary sclerosing cholangitis (PSC) continued to recruit
patients.
* Biotie's revenue for three months ended June 30, 2015 (three months ended
June 30, 2014) was ?1.3 million (?0.8 million) and the financial result was
a net loss of ?9.0 million (net loss of ?5.6 million).
* Biotie ended the second quarter on June 30, 2015 with cash and cash
equivalents and short term investments (reported as financial assets held at
fair value through profit and loss), which together are referred to as
liquid assets, of ?94.2 million (?27.8 million, March 31, 2015; ?32.4
million, December 31, 2014). Operating cash flow for the six months ended
June 30, 2015 was ?12.8 million outflow (?9.8 million outflow for the six
months ended June 30, 2014).
* Biotie Therapies Corp. will from now on publish the complete interim report
as a stock exchange release and will discontinue the previous practice where
only a summary of the interim report was published as a stock exchange
release.
Key figures (unaudited)
(? in thousands) 3 months 3 months 6 months to 6 months to
to June 30, to June 30, June 30, June 30,
2015 2014 2015 2014
Revenues 1,330 763 2,201 5,859
Research and development (7,593) (2,907) (12,359) (7,710)
costs
Net loss (9,004) (3,853) (14,898) (5,572)
Loss per share (?) (0.02) (0.01) (0.03) (0.01)
Cash flow used in operating (12,799) (9,776)
activities
June 30, December 31,
(? in thousands) 2015 2014
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Liquid assets 94,155 32,393
Equity 119,477 52,623
Equity ratio (%) 75.6 61.0
Timo Veromaa, Biotie's President and CEO commented, "The second quarter was a
particularly gratifying one for Biotie; raising net proceeds of ?74.3 million
from two successful financings has substantially fortified our cash position and
we expect it will enable us to fund our Phase 3 double-blind clinical study (and
extension) of tozadenant in patients with Parkinson's disease through to
completion. We have continued to make progress with the Phase 2a study
evaluating BTT1023 in primary sclerosing cholangitis as well as our SYN120 Phase
2a trial in Parkinson's dementia." Dr. Veromaa continued "We also welcomed two
new Board members in the second quarter, including Don Bailey who is now
Chairman of the Audit Committee and Mahendra Shah. We anticipate these new
members will provide considerable insights and guidance as we continue to
advance our product portfolio. We look forward to forging ahead with our mission
to improve the lives of those with severe and debilitating neurodegenerative and
psychiatric diseases."
Product Portfolio Review:
Selincro(®) (nalmefene) is a dual-acting opioid system modulator and the first
therapy approved in Europe for the reduction of alcohol consumption in alcohol
dependent individuals.
Biotie has licensed global rights to Selincro to Lundbeck. Under the terms of
the agreement with Lundbeck, Biotie is eligible for up to ?94 million in upfront
and milestone payments, of which ?22.5 million had been received at June
30, 2015, plus royalties on sales of Selincro. Biotie is eligible to receive
further potential milestone payments on launches in certain ex-EU markets and if
the product reaches certain pre-determined sales. Biotie will continue to
receive royalties on sales and will make a contribution to Lundbeck towards post
approval commitment studies.
Lundbeck received European marketing authorization for Selincro in February
2013 and the product has since been introduced in Europe. Favorable
reimbursement decisions were made in the second half of 2014 in a number of key
markets, including France, Spain and the United Kingdom.
Lundbeck and Otsuka Pharmaceutical Co. Ltd. are collaborating, as part of their
existing alliance, to develop and commercialize nalmefene in Japan, and a 660-
patient Phase 3 study in Japan was commenced in Q1 2015.
Tozadenant (SYN115) is an orally administered, potent and selective adenosine
A2a receptor antagonist being developed for the treatment of Parkinson's
disease. Biotie considers tozadenant to potentially be its most valuable asset
given the high unmet medical need in Parkinson's disease and stage of
development and has concluded that the most suitable development strategy to
maximize its value to shareholders can be best met by continuing development
within its current portfolio.
Tozadenant has displayed clinically relevant and statistically significant
effects in Parkinson's disease, across multiple pre-specified evaluation
metrics, in a 420 patient Phase 2b study. It is expected that this successful
study will be accepted as one of the two pivotal studies required for
registration in the United States. Full data from the study were published in
Lancet Neurology in July 2014.
After the reporting period in July 2015, Biotie announced that the tozadenant
Phase 3 study in Parkinson's disease (study TOZ-PD) had started. The Company has
agreed on a Special Protocol Assessment for TOZ-PD with the US Food and Drug
Administration, which confirms that, if successful, it is expected to be the
second pivotal study required for registration. The TOZ-PD study protocol
largely replicates that of the successful Phase 2b study. The study will enroll
450 patients experiencing levodopa related end of dose wearing off, who will be
randomized to receive twice daily doses of 60mg or 120mg of tozadenant or
placebo in addition to their standard anti-Parkinson's disease medications for
24 weeks. The primary endpoint will be reduction in time spent in the "off"
state in patients taking tozadenant as compared to placebo between baseline and
week 24. The placebo controlled period will be followed by 52 week open label
treatment period to collect additional clinical safety data. The study will be
conducted in the United States, Canada and selected European countries. Based on
current estimates top-line data from the double-blind portion is expected to be
available by the end of 2017.
Providing the double-blind portion of TOZ-PD meets its primary efficacy
endpoint, another open label trial will be initiated in a separate population of
450 patients to establish the requisite number of unique exposures required for
approval.
SYN120 is an oral, potent, dual antagonist of the 5-HT6 and 5-HT2A receptors.
These two distinct properties could result in a unique therapeutic profile for
SYN120 combining pro-cognitive and antipsychotic activities. SYN120 has
completed single and multiple ascending dose Phase 1 clinical studies and a
Phase 1 positron emission tomography imaging study to determine therapeutic dose
for subsequent Phase 2 studies.
In July 2014, Biotie was awarded a $2.0 million research contract with the
Michael J. Fox Foundation (MJFF) to investigate SYN120 in Parkinson's disease
patients with dementia, and patient enrollment into a Phase 2a study funded
under the contract was commenced in December 2014. The SYNAPSE study is an 80
patient, Phase 2a, randomized, double-blind, multi-center, placebo-controlled
trial in patients with Parkinson's disease dementia. Patients are randomized
1:1 to placebo or SYN120 dosed once daily over a 16 week treatment period. In
addition to assessing safety and tolerability, the main focus of the study is to
establish efficacy of SYN120 on cognition using the Cognitive Drug Research
(CDR) Computerized Cognition Battery as the primary efficacy endpoint. The study
is being conducted by the Parkinson Study Group (PSG) at approximately 12
specialist sites in the United States. Biotie and the PSG share responsibility
for the design and execution of the study, and top-line results of the study are
expected in the second half of 2016.
Biotie retains the rights to SYN120 and will be able to use data from the MJFF-
funded study for any future regulatory submission. Development opportunities for
SYN120 in other indications, including Alzheimer's disease, will be assessed
based on the availability of funding and the status of other products in the
development portfolio, but are not being actively pursued at present.
BTT1023 is a fully human monoclonal antibody targeting Vascular Adhesion Protein
1 (VAP-1). In addition to its clinically demonstrated role in inflammatory
diseases, VAP-1 has an important role in fibrotic diseases and treatment with
the VAP-1 antibody may have important therapeutic potential e.g. in the
treatment of certain inflammatory fibrotic diseases of the liver.
In July 2014, Biotie announced that it will be working in partnership with the
University of Birmingham, UK, who had been awarded grant funding to conduct an
investigator-sponsored, Phase 2, proof of concept study with BTT1023 in primary
sclerosing cholangitis (PSC), a chronic and progressive orphan fibrotic disease
for which there are currently no effective therapeutic treatments. The grant was
awarded by the UK's National Institute for Health Research (NIHR) Efficacy and
Mechanism Evaluation Programme, funded and managed by NIHR on behalf of the
Medical Research Council - NIHR partnership. The grant holder and Co-
Investigator for the study is Professor David Adams, Director of the NIHR
Biomedical Research Unit in Liver Disease and Centre for Liver Research at the
University of Birmingham.
On March 31, 2015 Biotie announced that the study was open for recruitment. The
BUTEO study being funded under the grant is an open label, single arm, multi-
center study that will evaluate efficacy, safety and pharmacokinetic properties
of BTT1023 in 41 patients with PSC. Patients will receive BTT1023 via
intravenous infusion every two weeks over an 11 week treatment period. The
primary efficacy endpoint is a reduction of elevated levels of alkaline
phosphatase, a blood biomarker of bile duct inflammation; secondary endpoints
include various measures of liver injury and fibrosis.
The two-stage study design includes a pre-planned interim analysis. Based on
current estimates, it is expected that the requisite number of patients will
have been treated by the end of 2016 to enable the interim analysis to be
completed.
In March 2015, the European Commission granted BTT1023 Orphan Drug Designation
in the EU for the treatment of PSC. We intend to pursue orphan drug designation
for BTT1023 in the United States. Biotie retains full rights to BTT1023.
Management Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion and analysis should be read in conjunction with the
condensed consolidated financial information contained herein, which has been
prepared in accordance with International Accounting Standard 34, Interim
Financial Reporting. The Company presents its consolidated financial information
in euros.
Overview
In the periods presented the Company has earned revenue from Lundbeck, in the
form of royalties and commercial milestones for Selincro, and from UCB in the
form of Phase 3 development milestones and Phase 3 development funding for
tozadenant. The accounting policies that the Company applies in recognizing
these revenues are set out in detail in note 2 to the consolidated financial
statements for the year ended December 31, 2014.
The Company's research and development activities are central to its business
model and expenditure on research and development is recognized as an expense in
the period in which it is incurred. The Company's current research and
development activities mainly relate to the following key programs: Phase 3
clinical trial of tozadenant in Parkinson's disease which started recruiting
patients in July 2015; Phase 2a clinical trial of SYN120 in Parkinson's disease
dementia which is currently recruiting patients; and Phase 2 clinical trial of
BTT1023 in primary sclerosing cholangitis, which is currently recruiting
patients.
General and administrative expenses consist of salary-related and external costs
related to the Company's executive, finance and other support functions,
including the costs associated of compliance with the on-going requirements of
being a listed company on Nasdaq in the United States and on the Nasdaq-OMX
market in Helsinki, including insurance, general administration overhead,
investor relations, legal and professional fees and audit fees.
Other operating income consists primarily of grant income and rent received on a
sub-lease; prior to September 2014 it also included rent from an investment
property.
Our policy is to invest funds in low-risk investments, which primarily consists
of money market funds and interest-bearing saving and investment accounts.
Savings and deposit accounts generate a small amount of interest income.
Interest expenses consist primarily of non-cash interest in respect of the Tekes
loans and the convertible capital loan.
Other net financial income (expense) primarily relates to all non-interest
related items and comprises net foreign exchange gains (losses) that arise from
our intercompany borrowings, and unrealized and realized gains from money market
funds, that are reflected as financial assets held at fair value through profit
and loss.
The Company does not generally pay any corporate income taxes, as there are
currently cumulative operating losses in each subsidiary company.
Results of Operations: comparison of the six months ended June 30, 2015 and June
30, 2014
Revenue
Revenue decreased 62% by ?3.7 million to ?2.2 million for the six months ended
June 30, 2015 compared to ?5.9 million for the six months ended June 30, 2014.
The decrease was primarily due to the payment of the Phase 3 development
milestones from UCB for tozadenant of ?5.0 million in the first three months of
2014, which did not recur thereafter due to the termination of the related
agreement. This was partially offset by an increase in royalties from Lundbeck
for Selincro of ?1.5 million as a result of increased sales and the first
commercial milestone for Selincro received in 2015 of ?0.5 million in the three
months ended June 30, 2015. The Company also recognized revenue related to Phase
3 development funding from UCB in the periods that ended June 30, 2014 and March
31, 2015, but not in the three months ended June 30, 2015.
Research and development expenses
Research and development expenses increased by ?4.7 million for the six months
ended June 30, 2015 to ?12.4 million, compared to ?7.7 million for the six
months ended June 30, 2014. The majority of the expenditure in each quarter was
in relation to tozadenant, with the increase mainly being due to the stage of
the development activities.
General and administrative expenses
General and administrative expenses decreased by ?0.2 million to ?3.5 million
for the six months ended June 30, 2015, as compared to ?3.7 million for the six
months ended June 30, 2014.
Other operating income
Other operating income for the six months ended June 30, 2015 amounted to ?0.1
million, comprising ?0.1 million of sub-lease rental income. This is ?0.2
million lower than the ?0.3 million for the six months ended June 30, 2014,
comprising rental income from an investment property in Germany that was sold in
September 2014.
Interest income
Interest income was minimal for both of the six months ended June 30, 2015 and
2014.
Interest expenses
Interest expenses consist of non-cash interest expenses accrued on the Tekes
loans and the convertible capital loans, which remained broadly stable. As a
result, interest expenses were ?0.3 million for both of the six month periods
ended June 30, 2015 and 2014.
Other net financial income (expenses)
Other net financial income (expenses) mainly comprises net foreign exchange
losses and was a greater net expense of ?1.0 million for six months ended June
30, 2015, compared to a minimal amount for the six months ended June 30, 2014.
Other comprehensive income (loss)
Other comprehensive income (loss) comprises currency translation differences,
which mainly arise from the translation of in-process R&D assets and goodwill in
our foreign subsidiaries. It was a gain of ?7.0 million for the six months ended
June 30, 2015, an increase of ?6.0 million as compared to the gain of ?1.0
million for the six months ended June 30, 2014. The movement for the six month
period ended June 30, 2015 is due to the significant devaluation in the Euro
against the United States Dollar and Swiss Franc mainly during the three month
period ended March 31, 2015.
Liquidity and Capital resources
Cash flows
Net cash outflow from operating activities for the six months ended June
30, 2015 was ?12.8 million, an increase of ?3.0 million as compared to the net
cash outflow of ?9.8 million during the same period in 2014, due to a higher net
loss and working capital movements.
Net cash inflow from investing activities was ?17.7 million for the six months
ended June 30, 2015, an increase of ?15.7 million as compared to the net cash
inflow of ?2.0 million in the same period in 2014, due to proceeds from sale of
financial assets at fair value through profit or loss.
Net cash inflow from financing activities was ?74.3 million for the six months
ended June 30, 2015, an increase of ?74.3 million compared to the inflow of
?0.03 million for the same period in 2014. The reason for the increase was the
net proceeds received from the issue of the convertible notes on May 28, 2015 of
?30.2 million and the issue of share capital associated with the US public
offering on June 16, 2015 of ?44.1 million. The remaining inflows relate solely
to the proceeds from share issues in respect of employee equity plans and are
minimal in both periods.
Liquid assets, comprising cash and cash equivalents and financial assets at fair
value through profit and loss, totaled ?94.2 million at June 30, 2015 as
compared to ?32.4million at December 31, 2014. The increase of ?61.8 million was
mainly due to the net proceeds received from the issue of the convertible notes
and US public offering of ?74.3 million, which was partially offset by
utilization of cash flow for financing the operating activities, principally
research and development expenses.
Cash and funding sources
Our main sources of revenue during the periods presented were from UCB in
relation to tozadenant and milestones and royalties from Lundbeck in relation to
Selincro sales.
On May 29, 2015, the Company announced that it had completed the issuance of in
total 220,400,001 convertible notes and 220,400,001 warrants, which may be
exercised at an exercise price of ?0.17 within a period of five years starting
six months after their date of issue, to certain US investors and certain
existing shareholders pursuant to the authorization granted by the Annual
General Meeting of shareholders on May 26, 2015. The total principal amount
raised from the issuance of the convertible notes was ?33.1 million. The
warrants were issued free of charge to the subscribers of the convertible notes.
On June 16, 2015, the Company announced that it had closed its US public
offering. It was confirmed that the Company had offered 3,806,047 American
Depositary Shares (ADS) in its US public offering at a price to the public of
$14.888 per ADS for gross proceeds of $56.7 million (?50.2 million at the fixed
ECB exchange rate of $1.1279 per euro as at June 10, 2015, the date of pricing).
The share to ADS ratio is 80 to one, and the ADS represent 304,483,760 newly
issued shares in the Company with a subscription price of ?0.165 (rounded
figure) per new share (at the above mentioned fixed exchange rate). This
includes the full exercise of the underwriters' over-allotment option. The
issuance of new shares by the Company for the purpose of the completion of the
US public offering was based on the authorization granted by the Annual General
Meeting of shareholders on May 26, 2015. Following the completion of the US
public offering the automatic conversion of the convertible notes issued by the
Company to certain US investors and existing shareholders and the issue of
220,400,001 new shares to such noteholders at the pre-determined conversion
price of ?0.15 per new share has also been effected.
We have no ongoing material financial commitments, such as lines of credit or
guarantees, which are expected to affect our liquidity over the next five years,
other than research and development loans, some of which are due for repayment
as described in note 13 to the unaudited condensed consolidated financial
statements for the six months ended June 30, 2015.
Personnel
During the reporting period January - June 2015(2014), the average number of
employees amounted to 38 (36) and at the end of the reporting period, Biotie
employed 38 people (34 people).
Equity rights
Swiss Option Plan
The Swiss company Biotie Therapies AG has a stock option plan under 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 Synosia an aggregate maximum of 14,912,155 shares
in Biotie may be subscribed for based on the plan.
The Swiss subsidiary holds and has held Biotie's shares and such shares have
been conveyed to satisfy the terms and conditions of the Swiss option plan. The
conveyed shares previously held by the Company's subsidiary have been treated as
treasury shares and such shares have not carried any voting rights. As of June
30, 2015 a total of 9,794,865 shares have already been delivered on the basis of
the Swiss option plan. As a result of certain of the stock options being
cancelled, a total of 2,209,863 stock options remain outstanding and as a
result, the outstanding shares and votes of Biotie may be further increased.
As at June 30, 2015, Biotie Therapies AG holds 2,605,691 shares in the Company
as treasury shares to settle the remaining options.
2011 Plans
In December 2011, the Board of Directors of Biotie approved two share-based
incentive plans for the Group employees; a stock option plan for mainly its
European employees and an equity incentive plan for mainly its US employees
(together the 2011 plans).
On December 17, 2014, pursuant to the authorization of the Annual General
Meeting of Shareholders held on April 3, 2014, the Board of Directors resolved
to issue 2,447,375 new shares to the company itself without consideration in
accordance with Chapter 9 Section 20 of the Finnish Companies Act (624/2006, as
amended). The shares were issued for the purposes of conveying them to employees
entitled to the shares pursuant to the terms and conditions of the 2011 plans.
The treasury shares are of the same class as the existing shares in the Company.
The shares were registered in the Finnish Trade Register on December 23, 2014.
At June 30, 2015 none of these shares were still held by the Company.
Stock Option Plan 2011: The maximum total number of stock options issued is
7,401,000, and they entitle their owners to subscribe for a maximum total of
7,401,000 new shares in the company or existing shares held by the company.
After giving effect to shares already issued, forfeitures and some of the
instruments based on the plan having been left unallocated, a maximum of
1,957,500 shares on June 30, 2015 may still be issued pursuant to the plan.
A total of 1,793,000 shares were subscribed for during the period January - June
2015 under the plan and 1,793,000 of the treasury shares issued on December
17, 2014 were used for these share subscriptions.
Equity Incentive Plan 2011: The maximum number of share units to be granted and
the number of corresponding shares to be delivered on the basis of the plan will
be total of 4,599,000 shares. However, due to share issues already made pursuant
to the plan, forfeitures and some of the instruments based on the plan having
been left unallocated, a maximum of 660,000 shares on June 30, 2015 may still be
issued pursuant to the plan.
A total of 654,375 shares have been conveyed to employees without consideration
during the period January - June 2015 pursuant to the authorization of the
Annual General Meeting of the Shareholders held on April 3, 2014 under the plan
and 654,375 of the treasury shares issued on December 17, 2014 have been used
for these share conveyances.
2014 Plans
On January 2, 2014 the Board of Directors of Biotie approved three year
incentive plans for employees. A stock option plan mainly for its European
employees and an equity incentive plan mainly for its US employees.
Stock Option Plan 2014: The maximum total number of stock options to be awarded
is 10,337,500, of which 4,320,000 relate to the Senior Management team only.
Stock options entitle their owners to subscribe for a maximum total of
10,337,500 new shares in the company or existing shares held by the Company. The
Board of Directors shall decide on the distribution of the stock options.
Equity Incentive Plan 2014: The maximum number of share units to be granted and
the number of corresponding shares to be delivered under the plan will be a
total of 14,002,500 shares, of which 2,520,000 relate to the Senior Management
team only.
Available Facilities
Biotie has a standby equity distribution agreement (SEDA) in place with US fund
Yorkville. Yorkville is under certain pre-agreed terms and conditions obliged to
subscribe and pay for Biotie shares in multiple tranches up to a total value of
?20 million during the period until November 2015 at Biotie's discretion. 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 last made use of
this arrangement in 2010, raising a total amount of ?1.1 million, but since then
has not conveyed any shares under this agreement.
Share capital and shares
After the US public offering, which closed on June 16, 2015, Biotie has shares
quoted on NASDAQ OMX (Small Cap) in Helsinki (ticker: BTH1V) and American
Depositary Shares (ADS) quoted on NASDAQ (Global Select Market) in the United
States (ticker: BITI), where each ADS represents 80 of the Company's shares. The
Company's shares all have equal rights and each share entitles the holder to one
vote at the general meeting of shareholders.
On June 30, 2015 the registered number of shares in Biotie Therapies Corp. was
980,851,935. Of these shares 2,605,691 were held by the Company or its group
companies. The registered share capital of Biotie was ?279,218,058.55 (FAS).
During the second quarter, the Company has received several flagging
notifications (pursuant to Chapter 9, Section 5 of the Securities Markets Act)
from shareholders whose holdings of shares and votes in the Company has either
increased as a result of financing arrangements or decreased as a consequence of
dilution resulting from financing arrangements. Further, according to some of
the notifications, the potential exercise of warrants would result in additional
changes in holdings of shares and votes in the Company. The information in the
flagging notifications has been disclosed by several stock exchange releases
dated April 24, 2015, June 16, 2015 and June 17, 2015.
Market capitalization and trading
The key data for each of the shares listed in Helsinki and the ADS listed in the
United States during the six month period ended June 30. 2015 is shown below.
Shares listed ADS listed
in Helsinki in the United States*
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Price at end of period ?0.23 $19.97
Highest price during period ?0.26 $25.39
Lowest price during period ?0.14 $16.11
Average price during period ?0.20 $20.87
Market capitalization at end of ?225.6 million $243.6 million
period
Trading volume during period 115,812,568 shares 2,930,000 ADS
Turnover during period ?22.7 thousand $57.7 thousand
* All trading information in relation to ADS listed on the NASDAQ market in the
United States relates to the period since June 11, 2015, which was the first day
of trading on that market.
Annual General Meeting
The Annual General Meeting of Biotie Therapies Corp. was held on May 26, 2015
and the resolutions of the meeting were published in a stock exchange release on
the same day.
* The financial statements 2014 were adopted the result of the financial year
was booked.
* No dividend for the financial year 2014 will be paid and that the net income
of the parent company for the financial year of ?5.1 million (FAS) will be
carried forward to shareholders' equity.
* Discharge from liability the members of the Board of Directors and the
President and CEO
* The number of the members of the Board of Directors was to be five. The
following current members of the Board of Directors William Burns, Merja
Karhapää, Bernd Kastler, Ismail Kola and Guido Magni were elected as the
members of the Board of Directors for a new term.
* The remuneration payable to the Chairman of the Board of Directors shall be
?52,000 per year, to the Deputy Chairman of the Board of Directors ?46,000
per year and to other Board members ?36,000 per year. Further, annual
remuneration shall be paid to the Committees of the Board of Directors:
?10,000 for the Chairman of the Audit Committee, ?8,000 for the other Audit
Committee members, ?8,000 for the Chairman of the Nomination and
Remuneration Committee and ?4,000 for other Nomination and Remuneration
Committee members. In addition, reasonable travelling expenses in connection
with the meetings shall be compensated.
* The number of auditors was to be one, being PricewaterhouseCoopers Oy, a
firm of Authorised Public Accountants, Mr. Samuli Perälä, Authorised Public
Accountant, acting as the auditor in charge. It was further resolved that
the auditors' fees shall be paid pursuant to a reasonable invoice.
* At the organization meeting of the new Board of Directors which convened
immediately after the Annual General Meeting, William Burns was elected as
Chairman of the Board of Directors.
* The General Meeting authorized the Board of Directors to resolve by one or
several decisions on issuances, which contains the right to issue new shares
or dispose of the shares in the possession of the company, and to issue
options or other special rights entitling to shares pursuant to Chapter 10
of the Companies Act. The authorization consists of up to 95,000,000 shares
in aggregate. The authorization is effective until 30 June 2016 and it
supersedes earlier authorizations.
* The Board of Directors be authorized to resolve on the issuance of
Convertible Notes and Warrants. The Convertible Notes and Warrants will be
directed to the Investors by way of a directed issue and the combined
aggregate number of new shares and/or treasury shares to be potentially
issued by virtue of the special rights entitling to shares under the
Convertible Notes and Warrants shall not exceed 442,000,000. The issuance of
Convertible Notes and Warrants may be carried out in deviation from the
shareholders' pre-emptive rights by way of a directed issue.
* The Board of Directors be authorized to resolve on the directed issuances of
new shares to the company itself. The number of shares to be issued consists
of up to 221,000,000 shares in the aggregate. The authorization is effective
for five years from the date of decision of the Annual General Meeting.
* That the Board of Directors be authorized to decide on the issuance of new
shares for the purpose of the US IPO and potential other offerings in
connection with the US IPO. The aggregate number of new shares to be issued
in the US IPO and potential other offerings in connection with the US IPO
would not exceed 530,000,000 shares. The issuance of new shares may be
carried out in deviation from the shareholders' pre-emptive rights by way of
a directed issue.
* That, conditional upon the subscription of the Convertible Notes by the
Investors, the number of members of the Board of Directors will be increased
to seven and two new members of the Board of Directors will be elected as
follows: Don Bailey and Mahendra Shah are elected new members of the Board
of Directors, both of them for the term starting on the date on which the
resolution on the issuance of Convertible Notes is registered with the
Finnish Trade Register, and expiring at the end of the following Annual
General Meeting.
The stock exchange release regarding the resolutions of the Annual General
Meeting of Biotie was published on May 26, 2015.
As announced on 29 May 2015, it was announced that Don Bailey was elected the
Chairman and Bernd Kastler and Merja Karhapää the members of the Board's Audit
Committee. Furthermore, William Burns was elected the Chairman and Guido Magni,
Ismail Kola and Mahendra Shah the members of the Nomination and Remuneration
Committee. The Board of Directors has also elected Bernd Kastler as the Vice
Chairman of the Board.
Risks and uncertainties
A detailed analysis of the risks that Biotie faces are set out in the Company's
Registration Statement on Form F-1 as filed with the U.S. Securities and
Exchange Commission on June 10, 2015 and the following summary of the key risks
should be read in conjunction with that document.
* We have incurred net losses since our inception and anticipate that we will
continue to incur substantial operating losses for the foreseeable future.
As of June 30, 2015, our retained earnings were an accumulated deficit of
?169.6 million. We may never achieve or sustain profitability.
* Impairment charges or write-downs on our assets could have a significant
impact on our results of operations and financial results.
* We depend significantly on the success of tozadenant and our other product
candidates. Tozadenant and our other product candidates are still in
clinical development. If our clinical trials are not successful, we do not
obtain regulatory approval or we are unable, or unable to find a partner, to
commercialize tozadenant or our other product candidates, or we experience
significant delays in doing so, our business, financial condition and
results of operations will be materially adversely affected.
* Clinical drug development involves a lengthy and expensive process with
uncertain timelines and uncertain outcomes.
* The results of previous clinical trials may not be predictive of future
results and clinical trials of product candidates may not be successful.
* Clinical development, regulatory review and approval by the FDA, the EMA and
comparable foreign regulatory authorities are lengthy, time consuming,
expensive and inherently unpredictable activities. If we are ultimately
unable to obtain regulatory approval for our product candidates, our
business will be substantially harmed.
* The FDA's agreement to our SPA for our Phase 3 trial of tozadenant does not
guarantee any particular outcome from regulatory review, including ultimate
approval and may not lead to a faster development or regulatory review or
approval process.
* Collaborations on products and product candidates are important to our
business, and future collaborations may also be important to us. If we are
unable to maintain any of these collaborations, if these collaborations are
not successful, or if we fail to enter into new strategic relationships, our
business could be adversely affected.
* We rely on third parties to conduct our nonclinical and clinical trials and
perform other tasks for us. If these third parties do not successfully carry
out their contractual duties, meet expected deadlines, or comply with
regulatory requirements, we may not be able to obtain regulatory approval
for, or commercialize, our product candidates and our business could be
substantially harmed.
* We currently rely on third-party suppliers and other third parties for
production of our product candidates and our dependence on these third
parties may impair the advancement of our research and development programs
and the development of our product candidates.
* If we are unable to obtain and maintain sufficient intellectual property
protection for our product or product candidates, or if the scope of our
intellectual property protection is not sufficiently broad, our ability to
commercialize our product and product candidates successfully and to compete
effectively may be adversely affected.
* We cannot assure of the adequacy of our capital resources to successfully
complete the development and commercialization of our product candidates,
and a failure to obtain additional capital, if needed, could force us to
delay, limit, reduce or terminate our product development or
commercialization efforts. The adequacy of our capital resources is
particularly dependent on cash generation from milestones and royalties in
connection with sales of Selincro and other sources of non-dilutive funding.
* As a foreign private issuer in the United States, we are permitted to adopt
certain Finnish practices in relation to corporate governance matters that
differ significantly from NASDAQ corporate governance listing standards.
These practices may afford less protection to shareholders than they would
enjoy if we complied fully with corporate governance listing standards in
the United States.
Biotie continues to face a number of potential risks and uncertainties which
could have a material effect on the Group's performance over the remaining six
months of the financial year and thereafter and could cause actual results to
differ from expected and historical results.
Outlook for 2015 and key upcoming milestones
Selincro(®) (nalmefene): We anticipate that Lundbeck will continue to make sales
of Selincro in European markets during 2015 following the positive pricing and
reimbursement decisions received in the second half of 2014. In addition to
royalties, Biotie may also receive further milestone payments if the product
reaches certain pre-determined sales.
Tozadenant (SYN115): The Phase 3 clinical study, which is expected to be the
second pivotal study required for registration, commenced patient recruitment in
July 2015. Top-line data from the double-blind part of the study is expected by
the end of 2017. Additional studies required to ensure a strong regulatory
filing package will continue to be performed at the same time as the clinical
study.
SYN120: Patient enrollment into an 80-patient Phase 2 study with SYN120 in
Parkinson's disease dementia (the SYNAPSE study) started in December 2014. The
study, funded by MJFF, is being conducted by the Parkinson Study Group at
approximately 12 specialist sites in the United States. Top-line results of the
study are expected by the end of 2016.
BTT1023: Patient enrollment into an investigator-sponsored Phase 2 study in
primary sclerosing cholangitis (the BUTEO study) started in March 2015. The 41-
patient study is being conducted in the UK and is supported by grant funding
from the UK's National Institute for Health Research. It is expected that the
requisite number of patients will have been treated by the end of 2016 to enable
a pre-planned interim analysis in this two-stage study.
Financial: During the remainder of 2015, the Company expects to continue
receiving Selincro royalties from Lundbeck. Research and development expenses on
all development products are expected to increase, predominantly due to the
start of recruitment in the tozadenant Phase 3 study. Following the financing
received from the convertible notes and the US public offering, the Company has
a strong level of liquid resources that are expected to be sufficient for all
the Company's currently planned development activities; these liquid resources
will decrease over time, as they are invested in the Company's product
development programs.
Strategic: The Company's primary focus is to ensure that the Phase 3 clinical
study for tozadenant is efficiently and effectively executed, with the top-line
data expected by the end of 2017. SYN120 and BTT1023, funded largely by non-
dilutive financing, are both expected to reach significant potential inflection
points by the end of 2016.
Financial calendar 2015
Interim report for January - September 12 November 2015
Key events after the reporting period
On July 21, 2015 Biotie announced the start of the Phase 3 clinical study of
tozadenant.
Conference call
An analyst and media conference call will take place on 20 August 2015 3:00 pm
Finnish time (1:00 pm U.K time). The conference call will be held in English.
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
US callers: +1646 254 3388
UK callers: +44(0)20 3427 1910
Finnish callers: +358(0)9 6937 9543
Access code: 6615120
In case you need additional information or assistance, please contact: Virve
Nurmi, IR Manager, Tel: +358 2 2748 911
About Biotie
Biotie is a specialized drug development company focused on products for
neurodegenerative and psychiatric disorders. Biotie's development has delivered
Selincro (nalmefene) for alcohol dependence, which received European marketing
authorization in 2013 and is currently being rolled out across Europe by partner
Lundbeck. The current development products include tozadenant for Parkinson's
disease, which is in Phase 3 development, and two additional compounds which are
in Phase 2 development for cognitive disorders including Parkinson's disease
dementia, and primary sclerosing cholangitis (PSC), a rare fibrotic disease of
the liver.
Biotie's shares are listed on NASDAQ Helsinki (BTH1V) and ADS on Nasdaq Stock
Market LLC (BITI).
Group structure: The parent company of the group is Biotie Therapies Corp. The
domicile of the company is Turku, Finland. The Company has two operative
subsidiaries, Biotie Therapies Inc, located in South San Francisco, United
States of America and Biotie Therapies AG, located in Basel, Switzerland.
The Group also has two non-operational subsidiaries, Biotie Therapies GmbH
located in Radebeul, Germany and Biotie Therapies International Ltd located in
Finland.
Forward looking statements: This interim report may contain statements that
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are statements other than historical fact and may
include statements that address future operating, financial or business
performance or Biotie's strategies or expectations. In some cases, you can
identify these statements by forward-looking words such as "may," "might,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "projects," "potential," "outlook" or "continue," and other
comparable terminology. Forward-looking statements are based on management's
current expectations and beliefs and involve significant risks and uncertainties
that could cause actual results, developments and business decisions to differ
materially from those contemplated by these statements. These risks and
uncertainties include, but are not limited to, the timing and conduct of
clinical trials of Biotie's product candidates, plans to pursue research and
development of product candidates, the clinical utility of Biotie's product
candidates, the timing or likelihood of regulatory filings and approvals,
Biotie's intellectual property position, expectations regarding payments under
Biotie's collaborations and Biotie's competitive position. These risks and
uncertainties also include those described under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Biotie's Registration Statement on Form F-1 and future filings
with the Securities and Exchange Commission. Forward-looking statements speak
only as of the date they are made, and Biotie does not undertake any obligation
to update them in light of new information, future developments or otherwise,
except as may be required under applicable law. All forward-looking statements
are qualified in their entirety by this cautionary statement.
Turku, 20 August 2015
Biotie Therapies Corp.
Board of Directors
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the three month For the six month period
period ended June 30, ended June 30,
(? in thousands, except Note 2015 2014 2015 2014
per share data)
Revenue 3 1,330 763 2,201 5,859
Research and (7,593) (2,907) (12,359) (7,710)
development expenses
General and (1,775) (1,720) (3,505) (3,670)
administrative expenses
Other operating income 66 134 66 269
-------------------------------------------------------------------------------
Operating loss (7,972) (3,730) (13,597) (5,252)
Interest income - 1 1 3
Interest expenses (156) (158) (307) (311)
Other net financial (876) 34 (995) (12)
income (expenses)
-------------------------------------------------------------------------------
Loss before taxes (9,004) (3,853) (14,898) (5,572)
Income tax 4 - - - -
-------------------------------------------------------------------------------
Net loss (9,004) (3,853) (14,898) (5,572)
-------------------------------------------------------------------------------
Other comprehensive
income
Items that may be
subsequently
reclassified to profit
or loss:
Currency translation (1,143) 637 7,038 953
differences*
-------------------------------------------------------------------------------
Total other (1,143) 637 7,038 953
comprehensive income
-------------------------------------------------------------------------------
Total comprehensive (10,147) (3,216) (7,860) (4,619)
income (loss)
-------------------------------------------------------------------------------
Net loss attributable (9,004) (3,853) (14,898) (5,572)
to equity holders of
the parent
Total comprehensive
income (loss) (10,147) (3,216) (7,860) (4,619)
attributable to equity
holders of the parent
Loss per share (EPS) 5 (0.02) (0.01) (0.03) (0.01)
basic & diluted, ?
*The translation differences mainly arise in relation to in-process R&D assets
and goodwill. The movement for the six month period ended June 30, 2015 is due
to the significant devaluation in the Euro against the United States Dollar and
Swiss Franc mainly during the three month period ended March 31, 2015.
All activities relate to continuing operations.
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at As at
June 30, December 31,
2015 2014
(? in thousands) Note (unaudited)
-------------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets 6 52,611 47,356
Goodwill 6 6,449 5,799
Property, plant and equipment 7 655 653
Non-current pre-payments 8 3,595 -
Other financial assets 337 324
-------------------------------------------------------------------------------
Total non-current assets 63,647 54,132
-------------------------------------------------------------------------------
Current assets
Accounts receivable and other receivables 2,241 1,806
Financial assets at fair value through profit or 9 7,724 24,941
loss
Cash and cash equivalents 86,431 7,452
-------------------------------------------------------------------------------
Total current assets 96,396 34,199
-------------------------------------------------------------------------------
Total assets 160,043 88,331
-------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Shareholders' equity
Share capital 11 267,586 193,285
Reserve for invested unrestricted equity 5,417 5,378
Other reserves 16,067 9,029
Retained earnings (169,593) (155,069)
-------------------------------------------------------------------------------
Total equity 119,477 52,623
-------------------------------------------------------------------------------
Non-current liabilities
Non-current financial liabilities 9 20,690 20,690
Pension benefit obligation 670 670
Other non-current liabilities 9,990 9,671
Non-current deferred revenues 2,000 2,000
-------------------------------------------------------------------------------
Total non-current liabilities 33,350 33,031
Current liabilities
Accounts payable and other current liabilities 7,216 2,677
-------------------------------------------------------------------------------
Total current liabilities 7,216 2,677
-------------------------------------------------------------------------------
Total liabilities 40,566 35,708
-------------------------------------------------------------------------------
Total shareholders' equity and liabilities 160,043 88,331
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNaudited)
Attributable to equity holders of the parent company
Reserve Share-
for invested holders'
Share unrestricted Other Retained equity
(? in thousands) Note capital equity reserves earnings total
-------------------------------------------------------------------------------
Balance at January 193,285 5,252 2,517 (120,688) 80,366
1, 2014
-------------------------------------------------------------------------------
Net loss for the - - - (5,572) (5,572)
period
Other comprehensive - - 953 - 953
income
-------------------------------------------------------------------------------
Total comprehensive - - 953 (5,572) (4,619)
income (loss)
Share based 12 - - - 411 411
compensation
Options and RSU 12 - 26 - - 26
exercised
-------------------------------------------------------------------------------
- 26 953 (5,161) (4,182)
-------------------------------------------------------------------------------
Balance at June 193,285 5,278 3,470 (125,849) 76,184
30, 2014
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Balance at January 193,285 5,378 9,029 (155,069) 52,623
1, 2015
-------------------------------------------------------------------------------
Net loss for the - - - (14,898) (14,898)
period
Other comprehensive - - 7,038 - 7,038
income
-------------------------------------------------------------------------------
Total comprehensive - - 7,038 (14,898) (7,860)
income (loss)
Share based 12 - - - 374 374
compensation
Options and RSU 12 - 39 - - 39
exercised
Issue of 11 33,060 - - - 33,060
convertible notes
and warrants
Transaction costs (2,844) - - - (2,844)
related to
convertible note
issue
Issue of share 11 50,239 - - - 50,239
capital
Transaction costs (6,154) - - - (6,154)
related to share
issue
-------------------------------------------------------------------------------
74,301 39 7,038 (14,524) 66,854
-------------------------------------------------------------------------------
Balance at June 267,586 5,417 16,067 (169,593) 119,477
30, 2015
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these condensed consolidated
interim financial statements
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the six month period ended June
30,
(? in thousands) Note 2015 2014
-------------------------------------------------------------------------------
Cash flow from operating
activities
Net loss (14,898) (5,572)
Adjustments for:
Non-cash transactions 13 288 711
Interest income (1) (3)
Interest expenses 308 311
Other net financial income 995 12
(expenses)
Change in working capital:
Change in accounts receivables and (3,922) (630)
other receivables
Change in accounts payable and 4,458 (2,851)
other liabilities
Change in deferred revenue - (1,726)
Interest paid (27) (27)
-------------------------------------------------------------------------------
Net cash used in operating (12,799) (9,776)
activities
-------------------------------------------------------------------------------
Cash flow from investing
activities
Investments in financial assets at -
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Datum: 20.08.2015 - 08:02 Uhr
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News-ID 414899
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contact information:
Town:
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