Biotie Therapies Corp. interim report January 1 - June 30, 2009
(Thomson Reuters ONE) - BIOTIE THERAPIES CORP. INTERIM REPORT August 7, 2009at 8.30 a.m.Biotie Therapies Corp. interim report January 1 - June 30, 2009January - June 2009 in brief- On August 6, 2009 the Board of Directors have taken the decision topool capacities and strengthen the Company's focus on the moreadvanced key research and development programs and terminatedevelopment of certain early R&D programs as a result of thecompletion of the integration process with the German subsidiaryBiotie Therapies GmbH.- In February and March 2009, Biotie initiated two clinical studiesin rheumatoid arthritis and psoriasis patients with its fully humanVAP-1 monoclonal antibody. Results from these studies are expected tobecome available during the first half of 2010.- In March 2009, Lundbeck acquired the North-American and Mexicanrights for Nalmefene from Somaxon Pharmaceuticals. In April 2009,Lundbeck acquired the Turkish marketing and distribution rights forNalmefene from Eczacibasi Ilac Pazarlama A.S. and now has worldwiderights, excluding South-Korea- Biotie's Annual General Meeting was held on 29 May 2009.- Revenue for January - June 2009 amounted to EUR 2.7 million (EUR3.2 million in 2008). Cash flow in January - June from operatingactivities was EUR -6.7 million (EUR -5.8 million in 2008).- The net loss for January - June 2009 stood at EUR 5.7 million (netloss for comparable period in 2008 was EUR 3.3 million) excludingextraordinary items in relation to write-offs of certain intangibleassets. Total net loss for January-June 2009 including extraordinaryitems in relation to write-offs of intangible assets was EUR 9.6million (net loss for January - June 2008 was EUR 3.3 million) andearnings per share for the period was EUR -0.07 (EUR -0.04 in 2008).- As of June 30, 2009, the company's liquid assets amounted to EUR18.8 million (EUR 23.0 million as of June 30, 2008).Q2/2009 in brief:- The net loss in April - June, 2009 stood at EUR 2.9 million (netloss of comparable period in 2008 was EUR 1.3 million) excludingextraordinary items in relation to write-offs of certain intangibleassets. Total net loss for April - June 2009 including extraordinaryitems amounted to 6.7 million (net loss for April - June 2008 was 1.3million). Cash flow in April - June, 2009 from operating activitieswas EUR -3.3 million (EUR -2.5 million in 2008).- Revenue for April - June, 2009 stood at EUR 1.4 million (EUR 1.8million in 2008) and earnings per share was EUR -0.05 (EUR -0.01 in2008).Strengthening focus on key programs- As a result of the completion of the integration process with theGerman subsidiary Biotie Therapies GmbH, on August 6, 2009 the Boardof Directors have taken the decision to pool capacities andstrengthen the Company's focus on the more advanced research anddevelopment programs and terminate certain early R&D programs.The key programs in the central nervous system disease area continueto be nalmefene for alcohol dependence and the PDE10 inhibitorprogram for schizophrenia. In the inflammatory disease area the focusremains in the clinical phase programs: the PDE4 inhibitor programfor COPD and the VAP-1 fully human monoclonal antibody program forrheumatoid arthritis and psoriasis.The company has a portfolio of earlier phase R&D programs. Activedevelopment of the PDE platform program, SSAO inhibitor program, andintegrin alpha2beta1 inhibitor program will continue. Activedevelopment and investing in the immunosuppression program, thebuprenorphin depot program, the bioheparin program, and the HCVinfection program will be terminated. Gilead informed the Companyduring Q2 about its decision to terminate the license agreementpertaining to certain research compounds and their development forthe treatment of HCV infection. Related to this, Biotie has decidedto wind-down its wholly owned Belgian subsidiary 4AZA IP NV, whichheld the patents for the immunosuppression and the HCV infectionprograms.These decisions lead to a write-off of intangible assets which wereoriginally recorded in the balance sheet as a result of restructuringof former elbion group prior to the purchase of elbion GmbH. Theseone-time impairment losses amount to EUR 5.4 million and have noimpact on the cash position of the group. There is also no change inthe future outlook of the Company. Biotie is now more focused topursuing the development programs it expects to deliver highcommercial value for the Company.Timo Veromaa, Biotie's President and CEO:"Over the past quarters since the acquisition of our Germansubsidiary we have achieved our strategic goal of integrating andstreamlining the operations and clinical development programs fromboth companies. While we are discontinuing development of certainearlier stage candidates, we continue to see strong clinical progressfor our partnered alcohol dependence candidate and our VAP-1 antibodyand PDE10 inhibitor programs for inflammation and CNS disorders. Withrenewed focus and improved structure, we are well-positioned forfuture growth and evolution."About Biotie TherapiesBiotie is a drug discovery and development company focused on centralnervous system and inflammatory diseases. It has a broad range ofinnovative small molecule and biological drug candidates at differentstages of clinical and pre-clinical development.Current Status of Drug Development Projects in Clinical orPre-clinical Stages:Nalmefene, a new treatment paradigm for alcohol dependence. Nalmefenebuilds on a novel principle of treating alcohol dependence. Unlikeexisting therapies, the treatment with Nalmefene is not aimed atkeeping the patients from drinking. Nalmefene instead removes thedesire to drink, thereby controlling and limiting the intake ofalcohol. Nalmefene distinguishes itself by being available as an oraltablet formulation to be taken on an as needed basis.At the end of 2008, Lundbeck launched three phase III trials, whichseek to enroll about 1,800 patients. The first two trials, in whichpatients are treated over a period of six months, serve to confirmthe efficacy of Nalmefene, whilst the objective of the last study, inwhich patients are treated for 12 months, is to assess the safetyand tolerability of the compound. We expect preliminary trial data tobecome available during the first half of 2011. Biotie isparticipating in financing some of the clinical development costs.In March 2009, Lundbeck acquired the North-American and Mexicanrights to Nalmefene from Somaxon Pharmaceuticals. In April 2009Lundbeck acquired the Turkish rights from Eczacibasi Ilac PazarlamaA.S. and has now worldwide rights for Nalmefene, excludingSouth-Korea. Under the terms of the Biotie-Lundbeck licenseagreement, Biotie is eligible for up to EUR 84 million in upfront andmilestone payments plus royalties on sales.ELB353, an oral PDE4 inhibitor for COPD in clinical development.ELB353 is a once-daily, oral phosphodiesterase 4 (PDE4) inhibitorwith therapeutic potential in chronic inflammatory disorders,particularly in chronic obstructive pulmonary disease (COPD), aserious disorder with major unmet medical need.ELB353 has been well tolerated in a Phase I single and multipledosing studies, particularly with respect to central nervous systemand gastrointestinal side effects, areas which have posed asignificant development hurdles for PDE4 inhibitors in the past.Futhermore, blood plasma profiles of ELB353 showing pronounced andlong lasting exposure support once-daily dosing.Biotie intends to initiate additional clinical studies later in 2009with the aim to obtain proof of pharmacodynamic activity inhumans, corroborate the safety profile and establish dose ranges forfurther therapeutic studies.VAP-1, a key inflammation receptor. Vascular Adhesion Protein-1(VAP-1) is Biotie's proprietary target. VAP-1 has been shown to playa key role in mediating the inflammatory events associated withchronic diseases such as rheumatoid arthritis, psoriasis anddiabetes. VAP-1 also may be potentially applicable to other chronicinflammatory diseases for which there is a clear unmet medical need.VAP-1 function can be blocked by either antibody (biologic) drugs orsmall molecule drugs which target the enzyme (SSAO) domain of thereceptor. Both approaches are being pursued by Biotie for varioustherapeutic indications.VAP-1 antibody, a high value biologic for inflammatory diseases inclinical development. Biotie is developing a fully human monoclonalantibody which blocks VAP-1 function. Biotie completed thefirst-in-man, single dose, placebo-controlled clinical study with theVAP-1 antibody in 2008 and is now conducting two multiple doseclinical studies in rheumatoid arthritis and psoriasis patients,which were respectively initiated in February and March 2009. Thesestudies aim to establish appropriate dosing regimens for subsequenttherapeutic studies and provide initial information on the antibody'stherapeutic potential.In 2006, Biotie and Roche have signed an option agreement forBiotie's fully human antibody program targeting VAP-1 in inflammatorydisease. Roche has paid Biotie EUR 5 million, which grants Roche anexclusive option right to an exclusive, worldwide license agreementfor Biotie's VAP-1 antibody, excluding Japan, Taiwan, Singapore, NewZealand, and Australia. The initial option right will end uponcompletion of phase I.Seikagaku Corporation has licensed the rights for the product forJapan, Taiwan, Singapore, New Zealand, and Australia against up toUSD 16.7 million in milestone payments plus royalties of sales in theterritory. Biotie has already received USD 2.7 million fromSeikagaku.VAP-1 SSAO inhibitors. Biotie and Roche also collaborate on thedevelopment of small molecule VAP-1 SSAO inhibitors. Under the termsof the collaboration, both parties carry their own costs, but Biotieretains ownership of the developed compounds until Roche chooses toexercise its option for in-licensing. Under the terms of thecollaboration and option agreement, Roche may pay Biotie up to EUR 5million to maintain its exclusive option for rest-of-world rightsexcluding Seikagaku's territory (Japan, Taiwan, Singapore, NewZealand and Australia).Seikagaku has an option to license a VAP-1 enzyme inhibitor in itsterritory. If Seikagaku exercises its option, Biotie will receive upto USD 16.7 million in milestone payments plus royalties of sales inthe territory based on the pre-negotiated licensing agreement.Seikagaku will also be responsible for clinical development costs tobring the product to market in the territory.Phosphodiesterase 10 (PDE10) inhibitors, a novel treatment paradigmfor Schizophrenia. PDE10 is a novel molecular drug target inschizophrenia and Biotie has shown antipsychotic activity of PDE10inhibitors in animal models. Biotie's PDE10 inhibitors are believedto serve the unmet medical need for novel anti-psychotic drugs withan improved side effect profile and improved efficacy inschizophrenia.PDE10 discovery and development program is partnered with WyethPharmaceuticals in December 2006. Biotie is eligible for up to USD110 million in signing fee, milestone payments and research funding.Biotie will in addition be eligible for royalties on sales.RevenuesRevenue for the period of January 1 to June 30, 2009 was EUR 2.7million (in the same period 2008, EUR 3.2 million). Revenue consistedof income from the ongoing research collaboration with Wyeth andperiodization of previously received up-front payments of thelicensing agreements the company has in place with several licensingpartners. No new milestones or signing fees were received during thereporting period.In August 2007, the central development agency for the state ofSaxony (Sächsische Aufbaubank, SAB) awarded a research and technologygrant for drug discovery and early development activities to theGerman subsidiary Biotie Therapies GmbH in the amount of EUR 3.8million. The money has been awarded as a non-refundable grant to bedrawn down during the period between August 2007 and July 2010against reported realized costs. As of June 30, 2009, EUR 1.8 millionof this grant were still available to the company. The grant covers65% of personnel and project related cost, so Biotie Therapies GmbHmust show a total expenditure of EUR 2.8 million until July 2010 inrelation to the research projects in order to benefit from the fullamount still available. Payments to Biotie Therapies GmbH in relationto this grant are reported as other operating income.Financial resultsThe net loss for the reporting period was EUR 5.7 million excludingextraordinary items in relation to write-offs of intangible assets.Total net loss for January-June 2009 including extraordinary itemsamounted to EUR 9.6 million. The corresponding loss for the previousyear was EUR 3.3 million, no extraordinary items were reported.Research and development costs for the period amounted to EUR 7.5million, excluding extraordinary items (in 2008 EUR 5.2 million).Impairment losses were recorded due to the decision of the Board ofDirectors as of August 6, 2009 to pool capacities for the developmentof the more advanced projects and terminating active development ofthe immunosuppression program (EUR 1,0 million), termination of thedevelopment of the Buprenorphine Depot product (EUR 2 million),termination of the HCV infection program after the termination of thelicense agreement with Gilead, and subsequent winding down ofBiotie's wholly owned Belgian subsidiary 4AZA IP NV (EUR 2,4million).Patent costs have been booked as expenses and were not capitalized.FinancingCash and cash equivalents totaled EUR 18.8 million on June 30, 2009(EUR 23.0 million on June 30, 2008).The company has predominantly invested its liquid assets into bankdeposits and money market funds. Bank deposits with maturity morethan 3 months are reported in "investments held to maturity" whereasdeposits with maturity less than 3 months are reported in the "cashand cash equivalents". Money market funds are reported at fair valuein financial assets at fair value through profit or loss.In September 2008, The Finnish Funding Agency for Technology andInnovation (Tekes) granted EUR 0.6 million additional funding forBiotie Therapies' VAP-1 antibody program. The R&D funding grantedcovers drug development costs of the project from August 2008 toDecember 2009.The funding granted is in the form of a loan and it covers about 70per cent of the costs of the project. The loan will be paid to Biotieagainst reported realized costs. In order to receive the full amountof granted financing, Biotie must show a total expenditure of EUR 0.8million in the project.In January 2008, The Finnish Funding Agency for Technology andInnovation (Tekes) granted EUR 1.7 million additional funding forBiotie Therapies' integrin alpha2beta1 inhibitor program forthrombosis. The R&D funding granted covers drug development costs ofthe project from July 2007 to December 2009.The funding granted is in the form of loan and it covers 50 per centof the costs of the project. The loan will be paid to Biotie againstreported realized costs. In order to receive the full amount ofgranted financing, Biotie must show a total expenditure of EUR 3.4million in the project.New option program On April 26, 2009, Biotie's Board resolved to issue option rights.The resolution of the Board of Directors is based on the resolutionof the company's Extraordinary General Meeting of 14 November 2008according to which the Board of Directors was authorised to resolveon the issuance of a maximum of 7,000,000 shares through a shareissue or by granting option rights or other specific rights to theshares pursuant to chapter 10 of the Companies Act in order to, forexample, create new incentive schemes.The company issued a total of 7,000,000 option rights that entitlethe option holders to subscribe for a total 7,000,000 new shares inthe company.In the event the shares subscribed on the basis of the issued optionrights are subscribed in full, the proportion of the subscribedshares shall be approximately 4.6 per cent of the shares of thecompany after the registration of the increase in the share capital,without taking into account the new shares to be possibly subscribedpursuant to the convertible loans and other option schemes issued bythe company.The subscription periods and prices for the shares are as follows:+-------------------------------------------------------------------+| Tranche | Subscription period | Subscription | Number of || | | price | option rights || | | | ||---------+---------------------+-------------------+---------------|| 2009 A | 1 Jan 2010 - 31 Dec | EUR 0.4 per share | 2,000,000 || | 2013 | | ||---------+---------------------+-------------------+---------------|| 2009 B | 1 Jan 2011 - 31 Dec | EUR 0.7 per share | 2,500,000 || | 2013 | | ||---------+---------------------+-------------------+---------------|| 2009 C | 1 Jan 2012 - 31 Dec | EUR 1 per share | 2,500,000 || | 2013 | | ||---------+---------------------+-------------------+---------------|| Total | | | 7,000,000 |+-------------------------------------------------------------------+The determination of the subscription price of the share is based onthe market price of the Company's share and, thus, it sets anincentive to the key personnel in order to add ownership value. Thesubscription price of the shares shall be recorded in the company'sreserve for invested unrestricted equity.The Board of Directors may decide on other than essential amendmentsand specifications to the terms and conditions of the option rights,as well as other matters related to the option rights.The board has made a resolution on the allocation of 5,000,000 optionrights to the management team of the company; 2,000,000 option rightswere granted to the Managing Director and 3,000,000 to othermanagement team members. 2,000,000 option rights were leftunallocated for eventual future use.Out of the 5 million option rights that have been allocated to themanagement, the rights to subscribe shares with 1,250,000 options areconditional to achieving certain set targets. The full cost is bookedalso for conditional option rights.Shareholder's equityThe shareholders' equity of the group amounts to EUR -9.4 million.Biotie's equity ratio was -29.8 % on June 30, 2009 (-57.6 % in 2008).According to Finnish Accounting Standards (FAS), shareholders' equityis less than half of the parent company's share capital. Thecompany's share capital is EUR 44.3 million, shareholders' equity isEUR 10.0 million and capital loans stand at EUR 21.3 million. Thus,shareholders' equity plus capital loans add up to EUR 31.3 million.The Company does not have funds that could be used for profitdistribution.Investments and cash flowThe cash flow from operations was EUR -6.7 million for January - June2009 (comparable period in 2008 EUR -5.8 million). The group'sinvestments during the reporting period amounted to EUR 86 thousand(EUR 109 thousand in 2008).PersonnelDuring the reporting period January - June 2009, the company'spersonnel was on average 80 (35 during January - June, 2008) and atthe end of the reporting period 81 (36 on June 30, 2008). Theincrease is due to the inclusion of the German subsidiary, which wasacquired in November 2008.Annual General MeetingThe Annual General Meeting (AGM) of Biotie Therapies Corp. was heldon 29 May 2009. The key resolutions of the AGM are summarized below.The AGM of Shareholders adopted the financial statements for thefinancial year 1 January - 31 December 2008. The Annual GeneralMeeting resolved in accordance with the proposal of the Board ofDirectors that the loss of the financial year shall be transferred tothe unrestricted equity and no dividend shall be paid.The AGM discharged the members of the Board of Directors and thePresident and CEO from liability concerning the financial year from 1January - 31 December 2008.The number of the members of the Board of Directors was resolved tobe seven. Juha Jouhki, Ann Hanham, Bernd Kastler, Pauli Marttila,Riku Rautsola, Christoph Schröder and Pierre Serrure were re-electedas the members of the Board of Directors.The Annual General Meeting resolved that the remuneration payable tothe members of the Board of Directors be EUR 3,000 per month for theChairman and each member residing abroad and EUR 1,500 per month foreach member residing in Finland. In addition, reasonable travellingexpenses for the meetings shall be compensated.PricewaterhouseCoopers Oy, Authorized Public Accountants, and JanneRajalahti, Authorized Public Accountant, were re-elected as auditorsof the company.At the organization meeting of the new Board of Directors, whichconvened immediately after the Annual General Meeting, Juha Jouhkiwas elected as the Chairman of the Board of Directors and PauliMarttila as the deputy chairman.Juha Jouhki, Christoph Schröder, and Pauli Marttila were elected tothe Board's internal Nomination and Remuneration Committee and BerndKastler, Riku Rautsola, and Piet Serrure were elected to the AuditCommittee.The AGM authorised the Board of Directors to resolve on the right toissue new shares or dispose of the shares in the possession of thecompany and to issue options or other specific rights to the sharespursuant to chapter 10 of the Finnish Companies Act. Theauthorisation consists of up to 25,000,000 shares in the aggregate. Amaximum of 819,000 own shares in the possession of the company may beconveyed.The authorisation does not exclude the Board of Directors' right todecide on a directed share issue. The authorisation may be used formaterial arrangements from the company's point of view, such asfinancing or implementing business arrangements or investments or forother such purposes determined by the Board in which case a weightyfinancial reason for issuing shares, options or other specific rightsand possibly directing a share issue exists. Further, theauthorisation may be used to create new share-based incentiveschemes.The Board of Directors was authorised to decide on all other termsand conditions of a share issue, options and other specific shareentitlements as referred to in chapter 10 of the Finnish CompaniesAct, including the payment period, determination grounds for thesubscription price and subscription price or allocation of shares,option rights or specific rights free of charge or that thesubscription price may be paid besides in cash also by other assetseither partially or entirely.The authorisation is effective until 30 June 2010 and it does notsupersede earlier authorisations.Group structureThe parent company of the group is Biotie Therapies Corp. Thedomicile of the Company is Turku, Finland. The group has an operativesubsidiary, Biotie Therapies GmbH, located in Radebeul, Germany.Furthermore, Biotie Therapies GmbH has a wholly owned subsidiary,4AZA IP NV, based in Leuven, Belgium. This company is a specialpurpose company with the sole activity of holding certainintellectual property rights. On August 6, 2009, the Board ofDirectors has taken the decision to wind down the wholly ownedBelgian subsidiary 4AZA IP NV.The parent company also has a non-operational subsidiary named BiotieTherapies International Ltd in Finland and an associated company withno activities, Contral USA which is domiciled in Delaware, USA.Share capital and SharesBiotie's shares are quoted on the NASDAQ OMX Helsinki Ltd (Small cap,Healthcare). Biotie Therapies has 144,320,560 shares outstanding andthe share capital amounts to EUR 44,290,678.10 (under FinnishAccounting Standards, FAS). All the company's shares are of the sameseries and have equal rights. All the shares are freely transferableand contain one voting right each.The company has in its possession 819.000 of its own shares. Thecompany has a stock lending agreement with EVLI Bank in place inrelation to the company's option programs. Pursuant to thisagreement, the number of the company's own shares in its possessionmay be temporarily less than 819,000.At the end of June, 2009, the share price was EUR 0.33, the highestprice during January - June was EUR 0.48, the lowest was EUR 0.23,and the average price was EUR 0.30. Biotie's market capitalization atthe end of June was EUR 47.6 million.The trading volume during the reporting period January - June, 2009was 20,710,329, corresponding to a turnover of approximately EUR 6.2million.Changes in ownershipIn February 2009, the company became aware of a notice of change inownership exceeding the disclosure threshold. Information on noticesof change in ownership are available on the company's website atwww.biotie.com/investors.Short-term risks and uncertaintiesBiotie's strategic risks are predominantly related to the technicalsuccess of the drug development programs, regulatory issues, thestrategic decisions of its commercial partners, ability to obtain andmaintain intellectual property rights for its products, validity ofits patents, launch of competitive products and the development ofthe sales of its products and availability of funds to support itsoperations. For example, even though the commercialization andcollaboration agreements on the company's product developmentprojects have been concluded, there can be no assurance that thecontracting partner will act in accordance with the agreement, theauthorities will approve the product under development or theapproved product will be commercialized. The development and successof the company's products depends to a large extent on third parties.Any adverse circumstance in relation to any of its R&D programs mightjeopardize the value of the asset and thus, represent a severe riskto the company. Such adverse events could happen on a short termnotice and are not possible to foresee.The key operational risks of Biotie's activities include thedependency on key personnel, assets (especially assets in relation tointellectual property rights) and dependency on its license partners'decisions.Significant financial resources are required to advance the drugdevelopment programs into commercialized pharmaceutical products. Tofund the operations, the group relies on its ability to securefinancing from four major sources: income from its license partners,grant income, loans from TEKES and raising equity financing in thecapital markets.Entering into commercialization, collaboration and licensingagreements with larger pharmaceutical companies entitles the Companyand its subsidiaries to receive up-front, milestone dependent androyalty payments from these partners. Although Biotie has currentlyseveral active license agreements in place, any decision by one ofits partners to terminate an agreement would have a negative effecton the short to medium term access to liquidity of the Company.In addition, the Company relies on different sources of research anddevelopment grants and loans. These funds, which are provided throughregional, national or EU level institutions with the aim of fosteringeconomic and technological progress in the region in which the groupoperates, have been historically available to Biotie at substantiallevels. Availability of such funds in the mid- to long term futurecannot be guaranteed and thus this poses a potential risk to theincome situation of the group in the future. Income and loans fromsuch sources have been secured until 2009. So far, the Company has noindication that this source of financing will be available beyond2009.Furthermore, the Company relies on capital market to raise equity anddebt financing from time to time. There can be no assurance thatsufficient financing can be secured in order to permit the Company tocarry out its planned activities. Current capital market conditionsare volatile and it is currently uncertain whether the Company cansecure equity financing if and when it needs it from capital markets.To protect the continuity of Biotie's operations, sufficientliquidity and capital has to be maintained and the Company and itssubsidiaries. The group aims to have cash funds to finance at leastone year's operations at all times. The group can influence theamount of capital by adapting its cost basis according to thefinancing available. Management monitors the capital and liquidity onthe basis of the amount of equity and cash funds. These are reportedto the Board on a monthly basis.Events after the reporting periodStrengthening focus on key programsOn August 6, 2009, the Board of Directors decided to strengthen thecompany's focus on the more advanced key research and developmentprojects and decided to terminate certain early R&D programs.The key programs in the central nervous system disease area continueto be nalmefene for alcohol dependence and the PDE10 inhibitorprogram for schizophrenia. In the inflammatory disease area the focusremains in the clinical phase programs: the PDE4 inhibitor programfor COPD and the VAP-1 fully human monoclonal antibody program forrheumatoid arthritis and psoriasis.The company has a portfolio of earlier phase R&D programs. Activedevelopment of the PDE platform program, SSAO inhibitor program, andintegrin alpha2beta1 inhibitor program will continue. Activedevelopment and investing in the immunosuppression program, thebuprenorphin depot program, the bioheparin program, and the HCVinfection program will be terminated.Gilead informed the Company during Q2 about its decision to terminatethe license agreement pertaining to certain research compounds andtheir development for the treatment of HCV infection. Related tothis, Biotie has decided to wind-down its wholly owned Belgiansubsidiary 4AZA IP NV, which held the patents for theimmunosuppression and the HCV infection programs.These decisions lead to a write-off of intangible assets which wereoriginally recorded in the balance sheet as a result of restructuringof former elbion group prior to the purchase of elbion GmbH. Theseone-time impairment losses amount to EUR 5.4 million and have noimpact on the cash position of the group and have no immediate impactin the future outlook of the Company. Biotie is now more focused topursuing the development programs it expects to deliver highcommercial value for the Company.Changes in ownershipBiotie has on July 22, 2009 gained knowledge of the notificationsregarding the following changes in holdings in accordance withChapter 2, Section 9 of the Finnish Securities Markets Act.Elbion NV, Biotie's current largest shareholder notified the Companythat as a result of a series of share transactions carried out onJuly 20, 2009, the holdings of elbion NV in the Company havedecreased from above 31.20% to below 5%. As a consequence, elbion NVhas no longer the obligation to make a public tender offer inaccordance with Chapter 6, Section 10 of the Finnish SecuritiesMarkets Act. In November 2008, elbion NV was granted an exemptionfrom the obligation to make such a public tender offer for all theBiotie shares even though its holdings exceeded 3/10 of the votingrights attached to all shares of the Company. The originally grantedexemption provided for a reduction of the elbion NV voting rights inBiotie referred to in Chapter 6, Section 10 of the Finnish SecuritiesMarkets Act to or below 3/10 within nine months from the date theShares issued to elbion NV in connection with the Exchange Offer hadbeen entered into the Trade Register.Moreover, TVM Life Science Ventures VI GmbH & Co. KG and Burrill &Company LLC have notified the Company that as a result of these sharetransactions carried out on July 20, 2009, the aggregate holdings ofthese shareholders have increased to above 10% and 5% respectively.Future outlook- During 2009, Biotie will provide support to its license partnerLundbeck for the ongoing phase III studies with Nalmefene in alcoholdependence.- Biotie will perform two clinical studies with its proprietary VAP-1antibody in psoriasis and rheumatoid arthritis patients in the courseof 2009. Results of these studies will become available in the firsthalf of 2010.- The company intends to initiate a clinical trial for itsproprietary, small molecule PDE-4 inhibitor ELB353 with the aim toobtain proof of pharmacodynamic activity in humans, corroborate thesafety profile and establish dose ranges for further therapeuticstudies.- In its collaboration with Wyeth on the discovery and development ofnovel PDE10 inhibitors for the treatment of psychiatric disorders,Biotie and its partner intend to identify development candidates.- Due to the increasing clinical trial activity it is foreseeablethat the company's R&D expenses excluding the extraordinaryimpairment costs will increase in comparison to previous financialyear. At the same time, income will also be higher due to theadditional income generated through the company's newly acquiredsubsidiary. Overall, negative cash flow from operational activitiesis expected to moderately increase in comparison to previousfinancial year.Next financial reportBiotie's interim report for the January - September 2009 period willbe published on October 23, 2009.IFRS and Accounting principlesThe 2009 interim report has been prepared in accordance with IFRSrecognition and measurement principles, and applying the sameaccounting policy as for the 2008 financial statements. In addition,the changes in the presentation of statement of comprehensive incomeand the statement of changes in equity according to the revised IAS 1have been applied in the interim report. The IFRS 8 'operatingsegments' standard does not have an impact on the presentation of theGroup's financial statements since the Group is operating as onesegment. The interim report has been prepared in accordance with IAS34, Interim Financial Reporting.Financial statements for the period from January 1, 2009 to June 30,2009 are not directly comparable to those of the same period in 2008due to the inclusion of the operating result of the wholly ownedsubsidiary Biotie Therapies GmbH (formerly elbion GmbH) in 2009.This interim report is unaudited.In Turku, August 7, 2009Biotie Therapies Corp.Board of DirectorsFor further information, please contact:Virve Nurmi, Investor Relations Managertel. +358 2 274 8900, e-mail: virve.nurmi(at)biotie.comDistribution:NASDAQ OMX Helsinki LtdMain Mediawww.biotie.comCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(IFRS) 1.4.- 1.4.- 1.1.- 1.1.- 1.1.- 30.6.2009 30.6.2008 30.6.2009 30.6.2008 31.12.2008EUR 3 months 3 months 6 months 6 months 12 months1,000Revenue 1,357 1,838 2,740 3,159 5,127Research and -8,988 -2,797 -12,913 -5,200 -8,730developmentexpensesGeneral and -937 -424 -1,899 -899 -2,020administrativeexpensesOther operating 352 61 760 120 502incomeOther operating -8 0 -12 0 0expenseOperating -8,224 -1,322 -11,324 -2,820 -5,121profit/lossFinancial income 187 231 446 235 1,432Financial expenses -267 -191 -544 -717 -1,864Profit/loss before -8,304 -1,282 -11,422 -3,302 -5,553taxesTaxes 1,624 0 1,859 0 76Net income/loss -6,680 -1,282 -9,563 -3,302 -5,477Total -6,680 -1,282 -9,563 -3,302 -5,477comprehensiveincome of theperiodNet income/lossattributable to Parent company -6,680 -1,282 -9,563 -3,302 -5,477shareholdersTotalcomprehensiveincomeattributable to: Parent company -6,680 -1,282 -9,563 -3,302 -5,477shareholdersEarnings per share -0.05 -0.01 -0.07 -0.04 -0.06(EPS)basic & diluted,EURCONSOLIDATED STATEMENT OF FINANCIAL POSITION(IFRS)EUR 1,000 30.6.2009 30.6.2008 31.12.2008AssetsNon-current assetsIntangible assets 7,217 720 10,352Goodwill 379 0 379Property, plant and equipment 2,903 370 2,792Other shares 10 0 0 10,509 1,090 13,523Current assetsPrepaid expenses 0 0 2,400Available for sale investment 131 0 131Investments held to maturity 10,000 17,500 18,500Accounts receivables and other 2,170 726 1,512receivablesFinancial assets at fair value through 3,011 0 0profit or lossCash and cash equivalents 5,769 5,504 6,738 21,081 23,730 29,281Total 31,590 24,820 42,804Equity and liabilitiesShareholders' equityShare capital 36,361 19,850 36,361Reserve for invested unrestricted 980 980 980equityRetained earnings -37,204 -31,832 -31,754Net income/loss -9,563 -3,302 -5,477Shareholders' equity total -9,426 -14,304 110Non-current liabilitiesProvisions 153 3 121Non-current financial liabilities 25,403 24,538 24,930Pension benefit obligation 586 0 574Other non-current liabilities 6,359 5,375 5,881Non-current deferred revenues 1,593 3,253 2,966Deferred tax liabilities 0 0 1,859 34,094 33,169 36,331Current liabilitiesProvisions 641 20 641Pension benefit obligation 15 0 10Current financial liabilities 233 143 144Current deferred revenues 3,056 4,497 3,501Accounts payable and other current 2,977 1,294 2,067liabilities 6,922 5,955 6,363Liabilities total 41,016 39,124 42,694Total 31,590 24,820 42,804CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITYAttributable to equity holders of the parent companyEUR 1,000 Shares Share Reserve Own Retained Share- (1000 Capital For Shares Earnings holders' pcs) invested equity Un- total restricted equityBalance at 90,212 19,850 980 -15 -31,930 -11,1171.1.2008Total -3,302 -3,302comprehensiveincome for theperiodOptions granted 115 115 0 0 0 0 -3,187 -3,187BALANCE AT 90,212 19,850 980 -15 -35,117 -14,30430.6.2008Total -2,175 -2,175comprehensiveincome for theperiodOptions granted 78 78Share issue 54,109 16,873 16,873Cost of share -362 -362issue 54,109 16,511 0 0 -2,097 14,414BALANCE AT 144,321 36,361 980 -15 -37,215 11031.12.2008Total -9,563 -9,563comprehensiveincome for theperiodOptions granted 27 27 0 0 0 0 -9,536 -9,536BALANCE AT 144,321 36,361 980 -15 -46,751 -9,42630.6.2009CONSOLIDATED STATEMENT OF CASH FLOWS 1.1.- 1.1.- 1.1.- 30.6.2009 30.6.2008 31.12.2008EUR 1,000 6 months 6 months 12 monthsCash flow from operating ActivitiesNet income/loss -9,563 -3,302 -5,477Adjustments: Non-cash transactions 4,141 240 -4,303 Addition/disposal due to -11 0 0 revaluation of financial assets at fair value through profit or loss Interest and other 544 717 1,863 financial expenses Interest income -445 -235 -1,431 Taxes -1,859 0 -76Change in working capital: Change in accounts receivables and -589 245 446 other receivables Change in accounts payable and 904 -3,499 -277 other liabilities Change in mandatory provisions 32 -10 -152Interests paid -81 -2 -29Interests received 242 31 66Taxes paid -5 0 0Net cash from operating activities -6,690 -5,815 -9,370Cash flow from investing activitiesAcquisition of subsidiary, net of cash 1,881acquiredChange in financial assets atfair value through profit or loss Additions -3,000 0 0 Disposals 0 27,685 27,685Change in investments held to maturity Additions -900 -22,500 -46,300 Disposals 9,400 5,000 28,321Investments to tangible assets -86 -27 -34Net cash used in investing activities 5,414 10,158 11,553Cash flow from financing activitiesPayments from share issue 0 0 3,300Share issue costs 0 0 -362Proceeds from borrowings 360 888 1,374Repayment of loans 0 0 -40Repayment of lease -52 -32 -21CommitmentsNet cash from financing activities 308 856 4,250Net increase (+) or decrease (-) -969 5,199 6,433in cash and cash equivalentsCash and cash equivalents in the 6,738 305 305beginning of the periodCash and cash equivalents in the 5,769 5,504 6,738end of the periodContingent liabilitiesEUR 30.6.2009 30.6.2008 31.12.20081,000Operating lease 145 152commitments 123Due within a year 82 62 64Due later 63 90 59Rent commitments 454 578 532Due within a year 233 222 233Due later 221 356 299Total 599 730 655The Group leases motor vehicles, machines and equipment with leasesof 3 to 5 years.Rent commitments include Pharmacity premises until 30 November 2011.These premises have been subleased.CommitmentsOn June 30, 2009 Biotie had outstanding purchase obligations,primarily for contract research work services, totaling EUR 5.4million.RELATED PARTY TRANSACTIONSThere have not been other material changes than option allocation toManaging Director and management team within the related partytransactions in 2009. More information in section new optionprograms.KEYFIGURES 1.1.- 1.1.- 1.1.- 30.6.2009 30.6.2008 31.12.2008EUR 1,000 6 months 6 months 12 monthsBusinessdevelopmentRevenues 2,740 3,159 5,127Personnel on average 80 35 42Personnel at the end of period 81 36 80Research and development costs 12,913 5,200 8,730Capital expenditure 86 109 116ProfitabilityOperating profit/loss -11,324 -2,820 -5,121 as percentage of revenues, % -413.3 -89.3 -99.9Profit/loss before taxes -11,422 -3,302 -5,553 as percentage of revenues, % -416.9 -104.5 -108.3Balance sheetCash and cash equivalents 18,780 23,004 25,238Shareholders equity -9,426 -14,304 110Balance sheet total 31,590 24,820 42,804Financial ratiosReturn on equity, % - - -Return on capital employed, % -53.9 -45.0 -18.3Equity ratio, % -29.8 -57.6 0.3Gearing, % -72.7 -11.7 -148.5Per share dataEarnings per share (EPS) basic & -0.07 -0.04 -0.06diluted, EURShareholders'equity per share, EUR -0.07 -0.16 0.0008Dividend per share, EURPay-out ratio, %Effective dividend yield, %P/E-ratioShare price Lowest share price, EUR 0.23 0.50 0.24 Highest share price, EUR 0.48 0.94 0.94 Average share price, EUR 0.30 0.70 0.51 End of period share price, EUR 0.33 0.53 0.26Market capitalization 47.6 47.8 37.5at the end of period MEURTrading of shares Number of shares traded 20,710,329 7,103,973 15,350,613 As percentage of all 14.4 7.9 10.6Adjusted weighted average 144,320,560 90,211,860 96,734,553number of shares during the periodAdjusted number of shares 144,320,560 90,211,860 144,320,560 at the end of the periodFormulas for the Calculation of the Key figuresReturn on capital employed, %Profit (loss) before taxes + interest expenses and other financialexpenses--------------------------------------------------------------- x 100Balance sheet total - non-interest bearing liabilitiesEquity ratio, %Shareholders' equity--------------------------------------------------------------- x 100Balance sheet total - advanced receivedGearing, %Interest bearing liabilities - cash and cash equivalents-------------------------------------------------------------- x 100Shareholders' equityEarnings per share (EPS)Profit attributable to parent company shareholders------------------------------------------------------------------Adjusted average number of outstanding shares during the periodShareholders' equity per shareShareholders' equity------------------------------------------------------------------Adjusted number of shares at the end of the periodhttp://hugin.info/132030/R/1333178/315932.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 07.08.2009 - 07:30 Uhr
Sprache: Deutsch
News-ID 4460
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"Biotie Therapies Corp. interim report January 1 - June 30, 2009"
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