Quarterly Report • Oct 22, 2018
Quarterly Report
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Ladenburg, 11 October 2018 – Heidelberg Pharma AG (FSE: WL6) today reported on the first nine months of fiscal year 2018 (1 December 2017 – 31 August 2018) and the Group's financial figures.
Dr. Jan Schmidt-Brand, CEO and CFO of Heidelberg Pharma AG, commented: "We have seen a positive trend in our revenues, and we are making good progress in all areas of the Company. The collaboration with our ATAC partners Takeda and Magenta is developing promisingly.
In recent months, Heidelberg Pharma has been focusing on establishing external GMP manufacturing capacity for our toxin Amanitin and our BCMA antibody drug conjugate HDP-101. The synthesis for Amanitin is highly complex and presented us with major challenges that have since been overcome by carrying out some additional process steps. As far as we are aware, this is the world's first and so far only industrial source of chemically produced Amanitin, which is essential for both HDP-101 and our partner projects.
At the same time, we have been working on the design of our clinical development program for HDP-101. After presenting the preclinical program to the authorities in Germany and the USA in the second quarter, we were able to bring several important and renowned clinical centers in Germany, Spain and the USA on board for our HDP-101 project and will continue to push ahead with trial planning together with these institutions. As it is now easier to determine a timeline for production, we are planning to submit the trial application in the second quarter of 2019. Depending on how the approval procedure unfolds, the first patients could start receiving treatment in the second half of 2019."
Establishing GMP production: One of the key projects in recent months was the transfer of the manufacturing technology for both Amanitin and selected linkers from the Heidelberg Pharma laboratories to an industrial plant at production partner Carbogen Amcis AG, Bubendorf, Switzerland ("Carbogen") in accordance with Good Manufacturing Practice (GMP) standards. Amanitin is manufactured on an industrial scale at Carbogen to enable Heidelberg Pharma to supply its own clinical studies and that of its partners going forward. The complexity of the synthesis posed new challenges that Heidelberg Pharma and Carbogen were able to overcome. Manufacturing has now been established, although with a delay to the original schedule. The compound is now available in the necessary quantity and quality, as is the BCMA antibody required for the production of HDP-101. The HDP-101 end product will be combined and synthesized in the next few weeks.
The Heidelberg Pharma Group – as of the reporting date comprising Heidelberg Pharma AG and its subsidiary Heidelberg Pharma Research GmbH – reports consolidated figures. The reporting
period referred to below concerns the period from 1 December 2017 to 31 August 2018 (9M 2018).
In the first nine months of the 2018 fiscal year, the Group generated sales revenue and income totaling EUR 3.5 million (previous year: EUR 1.6 million). This figure includes sales revenue of EUR 3.1 million (previous year: EUR 1.4 million), which stems from the collaboration agreements for the ATAC technology (EUR 2.0 million), the service business (EUR 0.8 million) and income from license agreements signed by the parent company (EUR 0.3 million).
At EUR 0.4 million, other income was up on the prior-year figure (EUR 0.2 million). It primarily consisted of German and European grants and of the reversal of unutilized accrued liabilities and provisions.
Operating expenses including depreciation and amortization amounted to EUR 10.9 million in the reporting period (previous year: EUR 9.1 million). Cost of sales concerns costs were incurred for the service business and the ATAC collaborations; they amounted to EUR 1.3 million (previous year: EUR 0.6 million). Research and development (R&D) costs of EUR 7.4 million were up EUR 1.0 million compared to the prior-year period (EUR 6.4 million) due to an increase in costs related to preparations for GMP production and GLP studies incurred by Heidelberg Pharma Research GmbH. At 67% of operating expenses, R&D was by far the largest cost item as expected. Administrative costs in the third quarter of 2018 edged up slightly to EUR 2.1 million compared to the prior-year period (EUR 2.0 million). Among others, this figure includes holding company costs and costs related to the stock market listing. Other expenses for business development, marketing and commercial market supply activities in the current reporting period remained steady year-over-year at EUR 0.1 million.
The net loss for the first nine months of the fiscal year fell to EUR 7.4 million (previous year: EUR 7.6 million).
Earnings per share improved from EUR -0.55 in the previous year to EUR -0.27, mainly due to the higher average number of shares.
Total assets as of 31 August 2018 decreased to EUR 34.9 million compared to the 30 November 2017 reporting date (EUR 41.5 million) as a result of a decrease in cash and cash equivalents. At EUR 30.0 million, equity was also down compared to the end of fiscal year 2017 (EUR 37.0 million). This corresponds to an equity ratio of 86.0% (30 November 2017: 89.2%). The exercise of (mandatory) convertible bonds in the first nine months of the fiscal year resulted in 5,677,174 new no par value shares that increased the share capital of Heidelberg Pharma AG from EUR 22,452,570 to EUR 28,129,744, divided into 28,129,744 no par value bearer shares.
No corporate actions were implemented during the reporting period.
Cash and cash equivalents as of the end of the quarter amounted to EUR 22.7 million (30 November 2017: EUR 30.4 million). This represents an average monthly cash outflow of EUR 0.85 million in the first nine months of the fiscal year (previous year: EUR 0.56 million without taking into account the capital increase in May 2017).
Heidelberg Pharma has adjusted its full-year financial guidance issued for Heidelberg Pharma Group in mid-March 2018. This is due to costs being shifted into the following year.
The Group expects to generate between EUR 3.5 million and EUR 4.5 million in sales revenue and other income (previously: EUR 3.0 million to EUR 5.0 million; 2017: a total of EUR 2.5 million) for the 2018 fiscal year. According to current plans, operating expenses should be in the range of EUR 14.0 million to EUR 16.0 million (previously: EUR 16.0 million to EUR 20.0 million; 2017: EUR 13.2 million). Earnings before interest and taxes (EBIT) for the 2018 fiscal year are projected to be between EUR -10.0 million and EUR -12.0 million (previously: EUR -12.0 million and EUR -16.0 million; 2017: EUR -10.8 million).
Heidelberg Pharma expects to require funds of EUR 10.0 million to EUR 13.0 million in 2018 (previously: EUR 13.0 million to EUR 17.0 million). Monthly cash use should be in the range of EUR 0.8 million and EUR 1.1 million (previously: EUR 1.1 million and EUR 1.4 million). Based on the updated planning, the Company's financing remains secured into 2020.
Heidelberg Pharma will not host a conference call on this interim management statement. The complete figures for the interim financial statements can be downloaded from http://www.heidelberg-pharma.com/ "Press & Investors > Financial Reports > Interim Management Statement of 11 October 2018".
| 9M 2018 1 | 9M 2017 1 | |
|---|---|---|
| In EUR thsd. | EUR thsd. | EUR thsd. |
| Earnings | ||
| Sales revenue | 3,052 | 1,393 |
| Other income | 417 | 235 |
| Operating expenses | (10,886) | (9,079) |
| of which research and development costs | (7,344) | (6,407) |
| Operating result | (7,417) | (7,451) |
| Earnings before tax | (7,417) | (7,619) |
| Net loss for the period | (7,417) | (7,619) |
| Basic earnings per share in EUR | (0.27) | (0.55) |
| Balance sheet as of the end of the period | ||
| Total assets | 34,881 | 15,112 |
| Cash and cash equivalents | 22,709 | 4,491 |
| Equity | 30,009 | 7,208 |
| Equity ratio2 in % | 86.0 | 47.7 |
| Cash flow statement | ||
| Cash flow from operating activities | (6,859) | (4,705) |
| Cash flow from investing activities | (811) | (333) |
| Cash flow from financing activities | 0 | 4,975 |
| Employees (number) | ||
| Employees as of the end of the period3 | 62 | 55 |
| Full-time equivalents as of the end of the period3 | 56 | 50 |
1 The reporting period begins on 1 December and ends on 31 August
Key figures for the Heidelberg Pharma Group
2 Equity / total assets
3 Including members of the Executive Management Board
Rounding of exact figures may result in differences.
Heidelberg Pharma AG Corporate Communications Sylvia Wimmer Tel.: +49 89 41 31 38-29 Email: investors[at]hdpharma.com Schriesheimer Str. 101, 68526 Ladenburg
MC Services AG Katja Arnold (CIRO) Managing Director & Partner Tel.: +49 89 210 228-40 Cell: +49 160 9360 3022 Email: katja.arnold[at]mc-services.eu
Heidelberg Pharma AG is a biopharmaceutical company based in Ladenburg, Germany. Heidelberg Pharma is an oncology specialist and the first company to develop the toxin Amanitin into cancer therapies using its proprietary Antibody Targeted Amanitin Conjugate (ATAC) technology and to advance the biological mode of action of the toxin as a novel therapeutic principle. This proprietary technology platform is being applied to develop the Company's proprietary therapeutic ATACs as well as in third-party collaborations to create a variety of ATAC candidates. The proprietary lead candidate HDP-101 is a BCMA ATAC for multiple myeloma.
The Company has entered into partnerships to further develop and commercialize its clinical assets MESUPRON® and REDECTANE®, while RENCAREX® is available for out-licensing and further development. Heidelberg Pharma AG is listed on the Frankfurt Stock Exchange: ISIN DE000A11QVV0 / WKN A11QVV / Symbol WL6. More information is available at www.heidelberg-pharma.com.
This communication contains certain forward-looking statements relating to the Company's business, which can be identified by the use of forward-looking terminology such as "estimates", "believes", "expects", "may", "will", "should", "future", "potential" or similar expressions or by a general discussion of the Company's strategy, plans or intentions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results of operations, financial condition, performance, achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, prospective investors and partners are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such forward-looking statements to reflect future events or developments.
| in EUR | 9M 2018 | 9M 2017 |
|---|---|---|
| Sales revenue Other income Income |
3,052,015 416,694 3,468,709 |
1,392,594 235,205 1,627,798 |
| Cost of sales Research and development costs Administrative costs Other expenses Operating expenses |
(1,275,932) (7,343,810) (2,117,972) (148,325) (10,886,039) |
(576,621) (6,407,359) (1,985,909) (109,169) (9,079,059) |
| OPERATING RESULT | (7,417,330) | (7,451,261) |
| Finance income Finance costs Financial result |
0 0 0 |
0 (167,850) (167,850) |
| EARNINGS BEFORE TAX | (7,417,330) | (7,619,111) |
| Income taxes | 0 | 0 |
| NET LOSS FOR THE PERIOD |
(7,417,330) | (7,619,111) |
| Net currency gain/loss from consolidation | 0 | 0 |
| OTHER COMPREHENSIVE INCOME |
0 | 0 |
| COMPREHENSIVE INCOME | (7,417,330) | (7,619,111) |
| Basic earnings per share in EUR |
(0.27) | (0.55) |
| in EUR | 31 Aug 2018 | 30 Nov. 2017 |
|---|---|---|
| Property, plant and equipment | 1,729,353 | 1,299,623 |
| Intangible assets | 2,921,584 | 2,819,272 |
| Goodwill | 6,111,166 | 6,111,166 |
| Other non-current assets | 127,247 | 51,350 |
| Non-current assets | 10,889,350 | 10,281,411 |
| Inventories | 45,243 | 178,032 |
| Prepayments | 678,527 | 154,942 |
| Trade receivables | 443,285 | 232,508 |
| Other receivables | 115,408 | 261,880 |
| Cash and cash equivalents | 22,709,182 | 30,381,061 |
| Current assets | 23,991,646 | 31,208,423 |
| TOTAL ASSETS | 34,880,996 | 41,489,833 |
| Subscribed capital Capital reserve |
28,129,744 214,514,942 |
22,452,570 219,789,793 |
| Accumulated losses | (212,635,826) | (205,218,496) |
| Equity | 30,008,860 | 37,023,866 |
| Pension obligations | 8,803 | 8,803 |
| Non-current liabilities | 8,803 | 8,803 |
| Trade payables | 989,107 | 1,501,090 |
| Provisions | 0 | 408,201 |
| Other current liabilities | 3,874,226 | 2,547,873 |
| Current liabilities | 4,863,333 | 4,457,164 |
| TOTAL EQUITY AND LIABILITIES | 34,880,996 | 41,489,833 |
| in EUR | 9M 2018 | 9M 2017 |
|---|---|---|
| NET LOSS FOR THE PERIOD | (7,417,330) | (7,619,111) |
| Adjustment for items in the statement of | ||
| comprehensive income | ||
| Stock options | 402,324 | 96,244 |
| Depreciation, amortization and impairment losses | 279,443 | 329,081 |
| Exchange rate effects | 1,458 | 20,979 |
| Finance costs | 0 | 36,678 |
| 683,224 | 482,982 | |
| Changes in balance sheet items | ||
| Inventories | 132,789 | 12,802 |
| Prepayments | (523,586) | 16,674 |
| Trade receivables | (210,778) | (77,250) |
| Other receivables | 146,472 | 74,255 |
| Other non-current assets | (75,897) | (19,928) |
| Trade payables | (511,983) | 528,685 |
| Provisions | (408,201) | 0 |
| Other liabilities | 1,326,353 | 1,801,641 |
| Financial liabilities | 0 | 131.172 |
| (124,830) | 2,468,050 | |
| Cash flow from operating activities | (6,858,936) | (4,668,079) |
| Finance costs paid | 0 | (36,679) |
| Finance income received | 0 | 0 |
| Net cash flow from operating activities | ||
| (6,858,936) | (4,704,757) | |
| Cash flow from investing activities | ||
| Purchase of property, plant and equipment | (654,910) | (323,017) |
| Purchase of intangible assets | (156,576) | (9,850) |
| Net cash flow from investing activities | (811,485) | (332,867) |
| Proceeds from capital increases | 0 | 4,999,999 |
| Capital procurement costs of capital increase | 0 | (25,022) |
| Net cash flow from financing activities | 0 | 4,974,977 |
| Influence of exchange rate effects on cash and cash | ||
| equivalents | (1,458) | (20,979) |
| Net change in cash and cash equivalents | (7,671,879) | (83,627) |
| Cash and cash equivalents | ||
| at beginning of period | 30,381,061 | 4,574,382 |
| at end of period | 22,709,182 | 4,490,755 |
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