Quarterly Report • May 19, 2020
Quarterly Report
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During these challenging times for so many people around the world due to the COVID-19 crisis, we continue to execute on our strategy while prioritising the health, safety and well-being of our employees and their families, our patients and collaborators. As the COVID-19 pandemic evolves we will continue to monitor the impact on our business and research operations. The impact of COVID-19 on our clinical trials started to become visible towards the end of the first quarter and on our preclinical research operations in April. As far as feasibly possible whilst protecting enrolled patients, their families and hospital staff, we are pleased to have been able to ensure that the dozens of patients currently participating in our clinical trials with our lead candidate bemcentinib are continuing their treatment throughout the current restrictions. Additional drug supplies have been made available to patients and in some hospitals outpatient visits have been staggered or completed by telemedicine. However, recruitment into trials has slowed as many sites have temporarily postponed new patient enrolment due to the on-going pandemic and BerGenBio is unable to provide guidance on the timing of enrolment completion. Enrolment is expected to regain momentum as conditions permit across the various geographies of our studies.
In April we were delighted to be invited to take part in a groundbreaking partnership between government, academia and industry to respond to COVID-19, with bemcentinib chosen as the first potential treatment to be fast-tracked in a new UK national multicentre randomised Phase II clinical ACCORD (ACcelerating COVID-19 Research & Development platform) trial initiative.
The aim of the trial is to get an early indication of bemcentinib's effectiveness in treating hospitalised patients with COVID-19. With strong pre-clinical data showing the role that AXL plays in infectious disease and promising anti-viral activity shown by bemcentinib, we are hopeful that we can play a significant role in the global effort to find suitable treatment options for COVID-19 patients.
Overall, the Company is in a robust cash position, with good control of costs and is well placed to weather the current global disruption. We have completed two significant fundraises so far this year; a private placement funding providing NOK 220m which closed in January and February, and an over-subscribed private placement which closed post the period end, in May, raising gross proceeds of NOK 500 million (EUR 45 million). This new funding allows us to expand the clinical development potential of our AXL drug candidates to treat patients with serious aggressive diseases without any effective treatment option. I'd like to thank our current loyal shareholders for their continued support of BerGenBio and welcome our new domestic and international investors to the register.
I would like to reassure our shareholders in the wake of this ongoing crisis that BerGenBio remains well positioned operationally and financially to regain momentum in our existing trials and continuing to investigate the potential of our pipeline in broader indications. I look forward to providing you with further updates in due course.
Full year 2019
OVERVIEW &
BerGenBio maintained its clinical research focus with its lead drug candidate bemcentinib, a novel once-a-day, orally administered, highly selective AXL inhibitor. BerGenBio's primary focus is to confirm the clinical position of bemcentinib in second line treatment AML and NSCLC patients. Phase II trials remain ongoing to achieve this. In addition, post-period end, the Company announced its participation in a UK-Government backed Phase II programme, which will test bemcentinib in hospitalised COVID-19 patients.
All patients currently enrolled into BerGenBio's clinical trials can remain on study and continue their treatment during the current COVID-19 situation. As bemcentinib is orally administered once-a-day and is very well tolerated by patients, the Company can ensure that patients are able to be issued with several months of dosage, reducing the need to visit hospital pharmacies.
Patients enrolled in combination trials with low dose chemotherapy or checkpoint inhibitor drugs currently require redosing every three or six weeks respectively. However, the Company can confirm that dose adjustments will be made where marketing authorisations permit, and this should not adversely impact the efficacy signal of the combination trials.
| (NOK million) | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Operating revenues | 0,0 | 8,7 | 8,9 |
| Operating expenses | 56,2 | 54,5 | 213,3 |
| Operating profit (-loss) | -56,2 | -45,8 | -204,4 |
| Profit (-loss) after tax | -48,6 | -44,3 | -199,3 |
| Basic and diluted earnings (loss) per share | |||
| (NOK) | -0.73 | -0.81 | -3.43 |
| Net cash flow in the period | 158,9 | -54,2 | -107,2 |
| Cash position end of period | 419,4 | 306,7 | 253,6 |
(100) (50) - 50 100 150 200 Cash flow
OVERVIEW &
Bemcentinib is currently undergoing clinical development as a treatment for Acute Myeloid Leukaemia (AML) and Myelodysplastic syndrome (MDS).
Trials are currently in progress to evaluate the safety and efficacy of bemcentinib in AML and MDS patients as; a monotherapy in second line or later patients with relapsed or refractory AML or MDS; or in combination with low-dose cytarabine (LDAC) in second-line relapsed or refractory AML patients.
The Company anticipates that an update on clinical and translational data for the Phase II bemcentinib / LDAC combination study will be presented at the American Society of Haematology (ASH) in December 2020.
Bemcentinib is also being investigated as a potential combination treatment to improve the effectiveness of immune check point inhibitor (CPI) drugs in refractory NSCLC patients.
In January BerGenBio announced that it had met the efficacy endpoint for the first stage of its Phase II clinical trial combining bemcentinib with Merck's anti-PD-1 therapy KEYTRUDA® in patients with advanced NSCLC having progressed on previous CPI therapy (BGBC008, cohort B1) enabling the trial to advance to the second stage enrolling an additional 16 patients. A third cohort of the study (BGBC008, cohort C) is actively enrolling patients that have progressed on a first line combination therapy of CPI plus chemotherapy.
The Company will present cohort B1 clinical and translational data at the Next Gen Immuno-Oncology Congress on June 25th.
Bemcentinib selectively inhibits AXL kinase activity, blocking viral entry and enhancing the anti-viral type I interferon response, a key cellular defence mechanism against viral infection. Furthermore it is well tolerated by patients and administered in a simple once a day capsule format.
Bemcentinib has previously been reported to exhibit potent anti-viral activity in preclinical models against several enveloped viruses, including Ebola and Zika virus. Recent data have expanded this to SARS-CoV-2.
In April, BerGenBio announced the selection of bemcentinib in a UK Government-backed national ACCORD study. The ACCORD study is a multicentre, seamless, Phase II adaptive randomisation platform trial to assess the efficacy and safety of multiple candidate agents, the first of which is bemcentinib, for the treatment of COVID-19 in hospitalised UK NHS patients.
The study, is fully funded by the UK Department of Health and Social Care and UK Research and Innovation, sponsored by University Hospital Southampton, with drug material and trial resources provided by BerGenBio. 120 hospitalised COVID-19 patients (60 will receive bemcentinib and 60 control group patients receiving standard of care treatment) will be enrolled across 6 UK NHS hospital trusts.
If positive results are seen, bemcentinib will advance rapidly into the large-scale Phase III trials currently in progress across the UK.
The Company remains well placed to deliver its stated strategic priorities:
BerGenBio's broad Phase II clinical development programme with bemcentinib, pipeline of AXL inhibitors and financial position, strengthened by two successful placings in 2020, collectively provide a strong foundation to create and deliver significant value for shareholders.
The Board considers that the results emerging from the clinical development programmes, particularly in NSCLC and AML, have established proof-of-concept for AXL inhibition as a potentially valuable approach for cancer therapy. This also provides valuable information to inform the future development strategy for bemcentinib. Further clinical data will be reported at future medical congresses and as appropriate by the company.
Robust measures taken by authorities across many jurisdictions to reduce the spread of COVID-19 have increased the likelihood of delays to clinical trials throughout the sector and will invariably impact patient recruitment into BerGenBio clinical studies and extend previously anticipated timelines. Management will be continuously reviewing timelines for the progression of studies and data readouts and will update the market accordingly.
Preclinical data suggest that bemcentinib is potentially useful for the treatment of early SARS-CoV-2 infection, responsible for the current COVID-19 pandemic. A Phase II trial funded by the UK government is currently underway and the Company will provide an update on initial data as soon as is practicable.
The Group operates in a highly competitive industry sector with many large players and may be subject to rapid and substantial technological change.
BerGenBio is currently in a development phase involving activities that entail exposure to various risks. BerGenBio's lead product candidate bemcentinib is currently in Phase II clinical trials. This is regarded as an early stage of development and the clinical studies may not prove to be successful. Timelines for completion of clinical studies are to some extent dependent on external factors outside the control of the Group, including resource capacity at clinical trial sites, competition for patients, etc.
The financial success of BerGenBio and / or its commercial partners requires obtaining marketing authorisation and securing an acceptable reimbursement price for its drugs. There can be no guarantee that the drugs will obtain the selling prices or reimbursement rates foreseen.
BerGenBio and / or its commercial partners will need approvals from the US Food & Drug Administration (FDA) to market its products in the US, and from the European Medicines Agency (EMA) to market its products in Europe, as well as equivalent regulatory authorities in other worldwide jurisdictions to commercialise in those regions. The future earnings are likely to be largely dependent on the timely marketing authorisation of bemcentinib for various indications.
The Group holds cash and cash equivalents and does not have any borrowings. The Group's interest rate risk is therefore in the rate of return of its cash on hand. Bank deposits are exposed to market fluctuations in interest rates, which affect the financial income and the return on cash.
The value of non-Norwegian currency denominated costs will be affected by changes in currency exchange rates or exchange control regulations. The Group undertakes various transactions in foreign currencies and is consequently exposed to fluctuations in exchange rates. The exposure arises largely from the clinical trials and research expenses. The Group is mainly exposed to fluctuations in euro (EUR), pounds sterling (GBP) and US dollar (USD). The Group are holding part of the bank deposit in EUR, GBP and USD depending on the need for such foreign exchange.
The foreign currency exposure is also mostly linked to trade payables with short payment terms. The Group might consider changing its current risk management of foreign exchange rate if it deems it appropriate.
Credit risk is the risk of counterparty's default in a financial asset, liability or customer contract, giving a financial loss. The Group's receivables are generally limited to receivables from public authorities by way of government grants. The credit risk generated from financial assets in the Group is limited since it is cash deposits. The Group places its cash in bank deposits in recognised financial institutions to limit its credit risk exposure.
The Group has not suffered any loss on receivables during 2020 and the Group considers its credit risk as low.
Liquidity is monitored on a continued basis by Group management. The Group works continuously to ensure financial flexibility in the short and long term to achieve its strategic and operational objectives. Management considers the Group's liquidity situation to be satisfactory. The Group secured equity funding of NOK 220 million in January 2020 and additional NOK 500 million in May 2020.
The Group's lead product candidate, bemcentinib (BGB324), is currently in Phase II clinical trials and the Group's clinical studies may not prove to be successful.
The Group operates in a highly competitive industry sector with many large players and is subject to rapid and substantial technological change.
The financial success of the Group requires obtaining marketing authorisation and achieving an acceptable reimbursement price for its drugs. There can be no guarantee that the Group's drugs will obtain the selling prices or reimbursement rates foreseen by the Group. The Group will need approvals from the US Food and Drug Administration (FDA) to market its products in the US, and from the European Medicines Agency (EMA) to market its products in Europe, as well as equivalent regulatory authorities in other worldwide jurisdictions to commercialise in those regions. The Group's future earnings are likely to be largely dependent on the timely marketing authorisation of bemcentinib for various indications.
(Figures in brackets = same period 2019 unless stated otherwise)
Revenue for the first quarter 2020 amounted to NOK 0.0 million (NOK 8.7 million). The revenue in 2019 was clinical milestone payments from ADCT.
Total operating expenses for the first amounted to NOK 56.2 million (NOK 54.5 million).
Employee expenses in the first quarter were NOK 9.8 million (NOK 7.5 million). The increase in Q1 2020 compared to Q1 2019 is a result of increased head count as part of a planned organisational build out in preparation for late stage clinical development.
Other operating expenses amounted to NOK 46.2 million (NOK 46.8 million) for the first quarter. Operating expenses are driven by the expansion of ongoing clinical trials and preparations for new clinical trials. The Company incurs costs when clinical trials meet specific milestones of progress.
The operating loss for the first quarter came to NOK 56.2 million (NOK 45.8 million), reflecting the level of activity related to the clinical trials BerGenBio are conducting. The 2019 operational loss where reduced by milestone revenues in 2019.
Net financial items amounted to a gain of NOK 7.7 million (NOK 1.5 million) for the first quarter results from a foreign exchange rate development.
Losses after tax for the first quarter were NOK 48.6 million (NOK 44.3 million).
Total assets at 31 March 2020 increased to NOK 433.8 million (NOK 270.4 million at year end 2019), mainly due to the operational loss in the period and reflecting the private placement completed in January raising gross NOK 220.0 million.
Total liabilities were NOK 54.6 million at year end 2019 (NOK 50.6 million at year end 2019).
Total equity as of 31 March 2020 was NOK 379.2 million (NOK 219.8 million at year end 2019), corresponding to an equity ratio of 87.4% (81.3% at year end 2019).
Net cash flow from operating activities was negative by NOK 59.1 million in the quarter (negative by 55.6 million), mainly driven by the level of activity in the clinical trials.
Net cash flow from investing during the quarter was NOK 0.2 million (NOK 0.2 million).
Net cash flow from financing activities was NOK 217.8 million (NOK 1.2 million) representing the private placement completed in the quarter at gross NOK 220.0 million.
Cash and cash equivalents increased to NOK 419.4 million (NOK 253.6 at year end 2019).
Sveinung Hole, Chairman Pamela A. Trail
Stener Kvinnsland Grunde Eriksen
Debra Barker Richard Godfrey, CEO
| (NOK 1000) Unaudited | Note | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|---|
| Revenue | 0 | 8,682 | 8,900 | |
| Expenses | ||||
| Employee benefit expenses | 3, 10 | 9,829 | 7,460 | 35,717 |
| Depreciation | 2 | 196 | 196 | 785 |
| Other operating expenses | 6 | 46,212 | 46,844 | 176,773 |
| Total operating expenses | 56,237 | 54,500 | 213,274 | |
| Operating profit | -56,237 | -45,818 | -204,374 | |
| Finance income | 8,507 | 1,761 | 11,530 | |
| Finance expense | 833 | 254 | 6,434 | |
| Financial items, net | 7,675 | 1,507 | 5,096 | |
| Profit before tax | -48,563 | -44,311 | -199,278 | |
| Income tax expense | 0 | 0 | 0 | |
| Profit after tax | -48,563 | -44,311 | -199,278 | |
| Other comprehensive income | ||||
| Items which will not be reclassified over profit and loss | ||||
| Actuarial gains and losses on defined benefit pension plans |
0 | 0 | 0 | |
| Total comprehensive income for the period | -48,563 | -44,311 | -199 278 | |
| Earnings per share: | ||||
| - Basic and diluted per share | 7 | -0.73 | -0.81 | -3.43 |
| (NOK 1000) Unaudited | Note | 31 MAR 2020 | 31 MAR 2019 | 31 DEC 2019 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 2 | 778 | 1,563 | 974 |
| Total non-current assets | 778 | 1,563 | 974 | |
| Other current assets | 5, 8 | 13,604 | 22,854 | 15,818 |
| Cash and cash equivalents | 419,397 | 306,717 | 253,586 | |
| Total current assets | 433,001 | 334,571 | 269,404 | |
| TOTAL ASSETS | 433,779 | 336,134 | 270,378 | |
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Paid in capital | ||||
| Share capital | 9 | 7,330 | 5,485 | 6,108 |
| Share premium | 9 | 344,932 | 266,952 | 187,786 |
| Other paid in capital | 4, 9 | 26,915 | 22,754 | 25,860 |
| Total paid in capital | 379,176 | 295,191 | 219,754 | |
| Total equity | 379,176 | 295,191 | 219,754 | |
| Non-current liabilities | ||||
| Long term debt | 0 | 0 | 0 | |
| Total non-current liabilities | 0 | 0 | 0 | |
| Current liabilities | ||||
| Accounts payable | 31,492 | 29,781 | 26,746 | |
| Other current liabilities | 22,630 | 6,824 | 21,803 | |
| Provisions | 481 | 4,030 | 2,074 | |
| Total current liabilities | 54,603 | 40,635 | 50,624 | |
| Total liabilities | 54,603 | 40,942 | 50,624 | |
| TOTAL EQUITY AND LIABILITIES | 433,779 | 336,134 | 270,378 |
| (NOK 1000) Unaudited | Note | Share capital |
Share premium | Other paid in capital |
Total equity |
|---|---|---|---|---|---|
| Balance at 1 January 2020 | 6,108 | 187,786 | 25,860 | 219,754 | |
| Loss for the period | -48,563 | -48,563 | |||
| Other comprehensive income (loss) for the period, net of income tax |
0 | 0 | |||
| Total comprehensive income for the period | 0 | -48,563 | 0 | -48,563 | |
| Recognition of share-based payments | 3, 4 | 1,054 | 1,054 | ||
| Issue of ordinary shares | 9 | 1,222 | 218,769 | 219,991 | |
| Share issue costs | -13,061 | -13,061 | |||
| Transactions with owners | 1,222 | 205,708 | 1,054 | 207,984 | |
| Balance at 31 March 2020 | 7,330 | 344,931 | 26,915 | 379,176 |
| (NOK 1000) Unaudited | Note | Share capital |
Share premium | Other paid in capital |
Total equity |
|---|---|---|---|---|---|
| Balance at 1 January 2019 | 5,471 | 309,791 | 22,018 | 337,280 | |
| Loss for the period | -44,311 | -44,311 | |||
| Other comprehensive income (loss) for the period, net of income tax |
0 | 0 | |||
| Total comprehensive income for the period | 0 | -44,311 | 0 | -44,311 | |
| Recognition of share-based payments | 3, 4 | 736 | 736 | ||
| Issue of ordinary shares | 9 | 14 | 1,473 | 1,487 | |
| Share issue costs | |||||
| Transactions with owners | 14 | 1,473 | 736 | 2,223 | |
| Balance at 31 March 2019 | 5,485 | 266,952 | 22,754 | 295,192 |
| (NOK 1000) Unaudited | Note | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|---|
| Cash flow from operating activities | ||||
| Loss before tax | -48,563 | -44,311 | -199,278 | |
| Adjustments for: | ||||
| Depreciation of property, plant and equipment | 196 | 196 | 785 | |
| Share-based payment expense | 3, 4 | 1,054 | 736 | 3,842 |
| Movement in provisions and pensions | -1,593 | -395 | -2,658 | |
| Currency gains not related to operating activities | -6,903 | -504 | -332 | |
| Net interest received | -151 | -176 | -2,206 | |
| Working capital adjustments: | ||||
| Decrease in trade and other receivables and prepayments | 2,214 | -10,023 | 2,013 | |
| Increase in trade and other payables | -5,319 | -1,128 | 11,151 | |
| Net cash flow from operating activities | -59,065 | -55,604 | -186,683 | |
| Cash flows from investing activities | ||||
| Net interest received | 151 | 176 | 2,206 | |
| Purchase of property, plant and equipment | 0 | 0 | 0 | |
| Net cash flow used in investing activities | 151 | 176 | 2,206 | |
| Cash flows from financing activities | ||||
| Proceeds from issue of share capital | 9 | 219,991 | 1,487 | 82,785 |
| Share issue costs | 9 | -1,911 | -4 875 | |
| Repayment of lease liabilities | -259 | -259 | -593 | |
| Net cash flow from financing activities | 217,821 | 1 228 | 77,317 | |
| Effects of exchange rate changes on cash and cash equivalents |
6,903 | 504 | 332 | |
| Net increase/(decrease) in cash and cash equivalents | 158,907 | -54,201 | -107,160 | |
| Cash and cash equivalents at beginning of period | 253,586 | 360,413 | 360,413 | |
| Cash and cash equivalents at end of period | 419,397 | 306,717 | 253,586 |
BerGenBio ASA ("the Company") and its subsidiary (together "the Group") is a clinical stage biopharmaceutical company focused on developing novel medicines for aggressive diseases, including advanced, treatment-resistant cancers.
BerGenBio ASA is a limited public liability company incorporated and domiciled in Norway. The address of the registered office is Jonas Lies vei 91, 5009 Bergen, Norway.
The condensed interim financial information is unaudited. These interim financial statements cover the three-months period ended 31 March 2020 and were approved for issue by the Board of Directors on 18 May 2020.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2019, except for the adoption of new standards and interpretations effective as of 1 January 2020.
The new and amended standards and interpretations from IFRS that were adopted by the EU with effect from 2020 did not have any significant impact on the reporting for Q1 2020.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
The consolidated financial statements comprise the financial statements of the Company and its subsidiary as of 31 March 2020. The subsidiary is BerGenBio Limited, located in Oxford in the United Kingdom and is 100% owned and controlled by the parent company BerGenBio ASA
Preparation of the accounts in accordance with IFRS requires the use of judgment, estimates and assumptions that have consequences for recognition in the balance sheet of assets and liabilities and recorded revenues and expenses. The use of estimates and assumptions are based on the best discretionary judgment of the Group's management. The Group works continuously to ensure financial flexibility in the short and long term to achieve its strategic and operational objectives.
Capital markets are used as a source of liquidity when this is appropriate and when conditions in these markets are acceptable. A private placement and capital increase of gross NOK 220 million was completed in January 2020, and thus the Board of Directors has reasonable expectation that the Group will maintain adequate resources to continue in operational existence for the foreseeable future. The interim financial statements are prepared under the going concern assumption.
In addition a private placement was completed in May 2020 raising gross NOK 500 million.
| For the three months ended 31 March | |||
|---|---|---|---|
| 2020 | 2019 | ||
| Salaries | 8,677 | 6,104 | |
| Social security tax | 1,245 | 1,107 | |
| Pension expense | 646 | 483 | |
| Bonus | 0 | 0 | |
| Share option expense employees | 1,054 | 736 | |
| Accrued social security tax on share options |
-1,593 | -702 | |
| Other remuneration | 103 | 149 | |
| Government grants 1) | -303 | -418 | |
| Total payroll and related expenses | 9,829 | 7,460 | |
| Average number of full time equivalent employees |
28 | 24 |
1) See also note 5 for government grants
| Option holder |
Number of options outstanding |
Grant date | Expiry date | Exercise price (NOK) |
|---|---|---|---|---|
| Richard Godfrey | 150,000 | 3-Sep-13 | 3-Sep-21 | 10.62 |
| 75,000 | 13-Jun-13 | 13-Jun-21 | 10.62 | |
| 120,000 | 11-Jun-14 | 11-Jun-22 | 11.15 | |
| 275,000 | 22-May-15 | 22-May-23 | 16.01 | |
| 100,000 | 1-Jan-16 | 1-Jan-24 | 24.00 | |
| 122,484 | 23-May-18 | 23-May-26 | 45.70 | |
| 50,000 | 31-Oct-18 | 31-Oct-26 | 28.50 | |
| 236,800 | 17-Apr-19 | 17-Apr-27 | 25.00 | |
| James B Lorens | 55,000 | 3-Sep-13 | 3-Sep-21 | 10.62 |
| 100,000 | 13-Jun-13 | 13-Jun-21 | 10.62 | |
| 70,000 | 11-Jun-14 | 11-Jun-22 | 11.15 | |
| 275,000 | 22-May-15 | 22-May-23 | 16.01 | |
| 50,000 | 1-Jan-16 | 1-Jan-24 | 24.00 | |
| 10,707 | 23-May-18 | 23-May-26 | 46.70 | |
| 7,000 | 31-Oct-18 | 31-Oct-26 | 28.50 | |
| 20,800 | 17-Apr-19 | 17-Apr-27 | 25,00 | |
| Rune Skeie | 24,090 | 23-May-18 | 23-May-26 | 46.70 |
| 20,000 | 31-Oct-18 | 31-Oct-26 | 28.50 | |
| 52,000 | 17-Apr-19 | 17-Apr-27 | 25,00 | |
| James Barnes | 59,400 | 17-Apr-19 | 17-Apr-27 | 25.00 |
| 1,873,281 |
In the annual general meeting on the 22nd of March 2017 it was resolved a split of the shares so that 1 share with a nominal value of NOK 10 was split into 100 shares with a nominal value of NOK 0.10. The overview above takes into account the share split.
The Group has a Long Term Incentive Program for employees, an option scheme program. Each option gives the right to acquire one share in BerGenBio at exercise.
The Group has a share option program to ensure focus and align the Group's long term performance with shareholder values and interest. Most of the employees in the Group take part in the option program. The program also serves to retain and attract senior management.
The exercise price for options granted is set at the market price of the shares at the time of grant of the options. In general, for options granted after 2012 the options expire eight years after the date of grant.
Primarily the options vest annually in equal tranches over a three-year period following the date of grant.
The following equity incentive schemes grant have been granted since 2010:
| Number of options |
Grant date | Expiry date | Exercise price |
|
|---|---|---|---|---|
| Granted in September 2010 | 225,000 | Sep 2010 | Dec 2017/2019 | 5,65 |
| Granted in May 2011 | 175,000 | May 2011 | Dec 2017/2019 | 7,56 |
| Granted in June 2012 | 285,000 | Jun 2012 | Dec 2017/2019 | 10,62 |
| Granted in June 2012 | 225,000 | Jun 2012 | Jun 2020 | 10,62 |
| Granted in June 2013 | 360,000 | Jun 2013 | Jun 2021 | 10,62 |
| Granted in September 2013 | 400,000 | Sep 2013 | Sep 2021 | 10,62 |
| Granted in June 2014 | 280,000 | Jun 2014 | Jun 2022 | 11,15 |
| Granted in May 2015 | 650,000 | May 2015 | May 2023 | 16,01 |
| Granted in September 2015 | 260,000 | Sep 2015 | Sep 2021 | 16,01 |
| Granted in January 2016 | 400,000 | Jan 2016 | Jan 2024 | 24,00 |
| Granted in February 2016 | 122,500 | Feb 2016 | Feb 2024 | 24,00 |
| Granted in December 2017 | 50,000 | Dec 2017 | Dec 2025 | 22,00 |
| Granted in May | 385,027 | May 2018 | May 2026 | 46,70 |
| Granted in October 2018 | 277,000 | Oct 2018 | Oct 2026 | 28,50 |
| Granted in April 2019 | 784,629 | April 2019 | April 2027 | 25,00 |
| Forfeited in 2015 | -7,500 | 10,62 | ||
| Forfeited in 2016 | -50,000 | 16,01 | ||
| Forfeited and cancelled in 2017 * | -220,000 | 12,33 | ||
| Exercised in 2017 | -230,000 | 9,98 | ||
| Exercised in 2018 | -160,000 | 19,01 | ||
| Forfeited in 2018 | -245,513 | 26,27 | ||
| Exercised in 2019 | -870,000 | 9,89 | ||
| Forfeited in 2019 | -511,596 | 28,19 | ||
| Cancelled in 2019 | -15,000 | 24,00 | ||
| Cancelled in 2020 | -44,150 | 26,13 | ||
| Total | 2,525,397 |
In the annual general meeting on the 22nd of March 2017 it was resolved a split of the shares so that 1 share with a nominal value of NOK 10 was split into 100 shares with a nominal value of NOK 0.10. The overview above takes into account the share split.
* The exercise price is calculated as the weighted average exercise price of the forfeited and cancelled options.
| For the three months ended 31 March | ||||
|---|---|---|---|---|
| Total options | 2020 | 2019 | ||
| Number of options |
Weighted average exercise price |
Number of options |
Weighted average exercise price |
|
| Balance at 1 January | 2,569,547 | 21.07 | 3,181,514 | 18.20 |
| Granted during the period | ||||
| Exercised during the period | -140,000 | 10.62 | ||
| Forfeited and cancelled | -44,150 | 26.13 | -51,999 | 36.65 |
| Balance at 31 March | 2,525,397 | 20.98 | 2,989,515 | 18.23 |
0 options were granted in the three months period ended 31 March 2020 and 0 options were granted in the three months period ended 31 March 2019.
| Vested options | For the three months ended 31 March | ||
|---|---|---|---|
| 2020 | 2019 | ||
| Options vested at 1 January | 1,701,981 | 2,598,334 | |
| Exercised and forfeited in the period | - 22,370 | -191,999 | |
| Vested in the period | |||
| Options vested at 31 March | 1,679,611 | 2,406,335 | |
| Total outstanding number of options | 2,525,397 | 2,989,515 |
The options are valued using the Black-Scholes model.
The risk free interest rates are based on rates from Norges Bank and Oslo Børs on the Grant Date (bonds and certificates) equal to the expected term of the option being valued. Where there is no exact match between the term of the interest rates and the term of the options, interpolation is used to estimate a comparable term.
The vesting period is the period during which the conditions to obtain the right to exercise must be satisfied. Most of the options vest dependent on certain conditions. The Group has estimated an expected vesting date and this date is used as basis for the expected lifetime. The Group expects the options to be exercised earlier than the expiry date. For Options granted earlier than 2014, the mean of the expected vesting date and expiry date has been used to calculate expected lifetime due to the lack of exercise pattern history for the Group and experience from other companies in combination with the relatively long lifetime of these options (up to 8 years).
For valuation purposes 43% expected future volatility has been applied. As the Group recently went public it has limited history of volatility in its share price, therefore the historical volatility of similar listed companies has been used as a benchmark for expected volatility.
For the three month period ending 31 March the value of the share options expensed through the profit or loss amounts to NOK 1.1 million (for the same period in 2019: NOK 0.7 million). In addition a provision for social security contributions on share options of NOK - 1.6 million (for the same period in 2019: NOK - 0.7 million) is recognised based on the difference between the share price and exercise price on exercisable option as at the end of the period.
Government grants have been recognised in the profit and loss as a reduction of related expense with the following amounts:
| Q1 2020 | Q1 2019 | |
|---|---|---|
| Employee benefit | ||
| expenses | 303 | 418 |
| Other operating expenses | 2,798 | 4,326 |
| Total | 3,101 | 4,743 |
| 31 Mar 2020 | 31 Mar 2019 | ||
|---|---|---|---|
| Grants from Research Council, BIA | 1,914 | 1,675 | |
| Grants from Innovation Norway | -272 | 6,597 | |
| Grants from SkatteFunn | 9,221 | 9,804 | |
| Grants R&D UK | 1,457 | 0 | |
| Total grants receivable | 12,319 | 18,076 |
The Company currently has two grants from the Research Council, programs for user-managed innovation arena (BIA) in 2020. One additional grant ended in April 2019.
The first BIA grant ("Axl targeting therapeutics to treat fibrotic diseases") totals to NOK 12.0 million and covers the period from April 2015 to April 2019. The Group has recognised NOK 0.9 million in Q1 2019 classified partly as reduction of payroll and related expenses and partly as a cost reduction of other operating expenses.
The second BIA grant ("Investigator-Initiated Trials for AXL driven cancers with high unmet clinical need") totals to NOK 15.1 million and covers the period from February 2017 to January 2021. The Group has recognised NOK 0.8 million in Q1 2020 (Q1 2019: NOK 1.0 million) classified partly as reduction of payroll and related expenses and partly as a cost reduction of other operating expenses.
The third BIA grant ("AXL as a therapeutic target in fibrosis; biology and biomarkers") has been awarded from 2019 and amount up to NOK 10.7 million. The Group has recognised NOK 1.1 million in Q1 2020 (Q1 2019: NOK 0.0 million) classified partly as reduction of payroll and related expenses and partly as a cost reduction of other operating expenses.
BerGenBio has been awarded a NOK 24 million (USD2.85m) grant from Innovation Norway to support the clinical development of BGB324 in combination with Merck & Co.'s KEYTRUDA® (pembrolizumab) in patients with advanced lung cancer.
The grant from Innovation Norway is an Industrial Development Award (IFU). The IFU program is directed to Norwegian companies developing new products or services in collaboration with foreign companies. BerGenBio received NOK 7.2 million in Q4 2017 of this grant and further NOK 12 million in Q3 2019. The grant may be withdrawn under certain circumstances. The Group has recognised NOK 0.0 million in Q1 2020 (Q1 2019: NOK 1.2 million) classified as cost reduction of other operating expenses.
R&D projects have been approved for SkatteFunn (a Norwegian government R&D tax incentive program designed to stimulate R&D in Norwegian trade and industry) for the period from 2018 until the end of 2020. The Group has recognised NOK 1.2 million in Q1 2020 (Q1 2019: NOK 1.8 million) classified partly as reduction of payroll and related expenses and partly as a cost reduction of other operating expenses.
BerGenBio Limited, a 100% subsidary of BerGenBio ASA, has been granted R&D tax grants in UK for 2017 and 2018. R&D grants are approved retrospectively by application. Grants for 2017 and 2018 have been approved and received in 2019. Application for R&D grants are expected to be approved for 2019. The Group has in 2019 recognised NOK 3.2 classified as reduction of payroll and related expenses for the years 2017, 2018 and 2019.
| For the three months ended 31 March | ||
|---|---|---|
| 2020 | 2019 | |
| Program expenses, clinical trials and research | 37,332 | 33,626 |
| Office rent and expenses | 557 | 388 |
| Consultants R&D projects | 4,122 | 3,842 |
| Patent and licence expenses | 963 | 736 |
| Other operating expenses | 6,036 | 12,577 |
| Government grants | -2,798 | -4,326 |
| Total | 46,212 | 46,844 |
| For the three months ended 31 March | ||
|---|---|---|
| 2020 | 2019 | |
| Loss for the period (NOK 1,000) | -48,563 | -44,311 |
| Average number of outstanding shares during the year | 66,668,083 | 54,717,824 |
| Earnings (loss) per share - basic and diluted (NOK) | -0.73 | -0.81 |
Share options issued have a potential dilutive effect on earnings per share. No dilutive effect has been recognized as potential ordinary shares only shall be treated as dilutive if their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations. As the Group is currently loss-making an increase in the average number of shares would have anti-dilutive effects.
| 31 Mar 2020 | 31 Mar 2019 | |
|---|---|---|
| Government grants | 12,319 | 18,076 |
| Refundable VAT | 355 | 0 |
| Prepaid expenses | 289 | 1,096 |
| Other receivables | 640 | 8,682 |
| Total | 13,604 | 27,854 |
| As of 31 March | Number of shares |
Nominal value (NOK) |
Book value (NOK) |
|---|---|---|---|
| Ordinary shares 2020 | 73 298 305 | 0.10 | 7 329 830,50 |
| Ordinary shares 2019 | 54 851 446 | 0.10 | 5 471 144,60 |
| For the three months ended 31 March | |||
|---|---|---|---|
| Changes in the outstanding number of shares | 2020 | 2019 | |
| Ordinary shares at 1 January | 61,076,590 | 54,711,446 | |
| Issue of ordinary shares | 12,221,715 | 140,000 | |
| Ordinary shares at 31 March | 73,298,305 | 54,851,446 |
| Shareholder | Number of shares |
% share of total shares |
|
|---|---|---|---|
| METEVA AS | 20 249 475 | 27,6% | |
| INVESTINOR AS | 7 270 780 | 9,9% | |
| VERDIPAPIRFONDET ALFRED BERG GAMBA | 3 008 561 | 4,1% | |
| Northern Trust Global Services SE | NOM | 2 638 105 | 3,6% |
| VERDIPAPIRFONDET KLP AKSJENORGE | 2 237 484 | 3,1% | |
| SARSIA SEED AS | 2 117 900 | 2,9% | |
| BERA AS | 1 445 760 | 2,0% | |
| KOMMUNAL LANDSPENSJONSKASSE | 1 434 022 | 2,0% | |
| MP PENSJON PK | 1 345 555 | 1,8% | |
| VERDIPAPIRFONDET NORDEA KAPITAL | 1 268 740 | 1,7% | |
| VERDIPAPIRFONDET NORDEA AVKASTNING | 1 228 174 | 1,7% | |
| SARSIA DEVELOPMENT AS | 1 175 000 | 1,6% | |
| VERDIPAPIRFONDET ALFRED BERG NORGE | 1 106 606 | 1,5% | |
| Skandinaviska Enskilda Banken AB | NOM | 1 100 000 | 1,5% |
| VERDIPAPIRFONDET NORDEA NORGE VERD | 1 039 488 | 1,4% | |
| NORSK INNOVASJONSKAPITAL II AS | 806 170 | 1,1% | |
| VERDIPAPIRFONDET ALFRED BERG AKTIV | 768 198 | 1,0% | |
| ALTITUDE CAPITAL AS | 715 000 | 1,0% | |
| VERDIPAPIRFONDET NORDEA NORGE PLUS | 623 060 | 0,9% | |
| MARSTIA INVEST AS | 555 556 | 0,8% | |
| Top 20 shareholders | 52 133 634 | 71,1% | |
| Total other shareholders | 21 164 671 | 28,9% | |
| Total number of shares | 73 298 305 | 100,0% |
The Board of Directors has been granted a mandate from the general meeting held on 16 March 2020 to increase the share capital with up to NOK 732,919 by subscription of new shares. The power of attorney was granted for the purpose of issuance of new shares in accordance with the Company's share incentive program and is valid until the earlier of the annual general meeting in 2021 and 30 June 2021. In May 2020 there was issued 102,500 new shares under this proxy at a nominal value of NOK 10,250. See note 4 for more information about the share incentive program and number of option granted.
The Board of Directors has been granted a mandate from the general meeting held on 16 March 2020 to increase the share capital with up to NOK 1,465,838 by subscription of new shares. The proxy is valid until the earlier of the annual general meeting in 2021 and 30 June 2021. In May 2020 there was issued 13,325,000 shares under this proxy at a nominal value of NOK 1,332,500.
| Position | Employed since | 31 Mar 2020 | 31 Mar 2020 | |
|---|---|---|---|---|
| Richard Godfrey 1) | Chief Executive Officer |
January 2009 | 221,005 | 160,408 |
| James Bradley Lorens | Chief Scientific Officer |
January 2009 | 280,039 | 250,000 |
| Total shares held by management | 495,488 | 410,408 |
1) Richard Godfrey holds 221,005 shares in the Company at 31 March 2020 through Gnist Holding AS.
| Position | Served since | 31 Mar 2020 | 31 Mar 2019 | |
|---|---|---|---|---|
| Sveinung Hole 1) | Chairman | September 2010 | 107,394 | 0 |
| Stener Kvinnsland | Board Member | February 2015 | 104,444 | 0 |
| Total shares held by members of the Board of Directors | 211,838 | 0 |
1) Sveinung Hole holds 104,444 shares in the Company through Svev AS, a wholly owned company of Sveinung Hole, and 2,950 shares directly
Grunde Eirksen (board member) is CEO in Altitude Capital AS. Altitude Capital AS is holding 715,000 shares in BerGenBio ASA at 31 March 2020.
BerGenBio ASA is required to have an occupational pension scheme in accordance with the Norwegian law on required occupational pension ("lov om obligatorisk tjenestepensjon").
The Company has a pension scheme which complies with the Act on Mandatory company pensions.
| Adenocarcinoma | Cancerous tumour that can occur in several parts of the body and that forms in mucus-secreting glands throughout the body. It can occur in many different places in the body and is most prevalent in the following cancer types; lung cancer, prostate cancer, pancreatic cancer, oesophageal cancer and colorectal cancer. Adenocarcinomas are part of the larger grouping of carcinomas. |
|---|---|
| ADCT601 | BGB601 (ADCT-601) is an antibody drug conjugate (ADC) composed of a humanised IgG1 antibody against human AXL that is linked to a cytotoxic. Being developed by ADC Therapeutics |
| AML | Acute myeloid leukaemia. |
| Anti-AXL MAb | Anti-AXL Monoclonal antibody. A monoclonal antibody that recognises AXL and binds to the AXL receptor blocking its function. |
| Antibody | Proteins produced by the B Lymphocytes of the immune system in response to foreign proteins called antigens. Antibodies function as markers, biding to the antigen so that the antigen molecule can be recognized and destroyed. |
| ASCO | American Society of Clinical Oncology |
| AXL | Cell surface expressed receptor tyrosine kinase, being an essential mediator of the EMT programme. AXL is up regulated in a variety of malignancies and and associated with immune evasion, acquired drug resistance and correlates with poor clinical prognosis. |
| Anti-AXL MAb | AXL Monoclonal antibody. A monoclonal antibody that recognises AXL and binds to the AXL receptor. |
| Anti-PD-1 | Agent that is used to inhibit the PD-1 receptor |
| Bemcentinib | BerGenBio's lead drug candidate; a highly selective inhibitor of AXL currently undergoing Phase Ib/II clinical trials in a range of aggressive cancers. |
| Biomarkers | A measurable indicator of some biological state or condition. More specifically, a biomarker indicates a change in expression or state of a protein that correlates with the risk or progression of a disease, or with the susceptibility of the disease to a given treatment. |
| Checkpoint inhibitors | The immune system depends on multiple checkpoint to avoid overactivation of the immune system on healthy cells. Tumour cells often take advantage of these checkpoints to escape detection by the immune system. Checkpoint inhibitors, inhibit these checkpoints by "releasing the brakes" on the immune system to enhance an anti-tumour T cell response. |
| Clinical Research | The research phases involving human subjects. |
| Clinical Trials | Clinical Trials are conducted with human subjects to allow safety and efficiency data to be collected for health inventions (e.g., drugs, devices, therapy protocols). There trials can only take place once satisfactory information has been gathered on the quality of the non-clinical safety, and Health Authority/Ethics Committee approval is granted in the country where the trial is taking place. |
| CR | Complete response |
| CRO | Contract research organisation. |
| CTL | Cytotoxic T-lymphocytes. Key effector cells of the body's immune response to cancer. |
| Cytarabine | A chemotherapy agent used mainly in the treatment of cancers of white blood cells such as acute myeloid leukaemia (AML). |
| DCR | Disease control rate |
| Decitabine | A cancer treatment drug used for acute myeloid leukaemia (AML). |
| Docetaxel | A clinically well-established anti-mitotic chemotherapy medication that works by interfering with cell division. |
| EHA | European Hematology Association |
| Epithelial state | A state of the cell where the cells are stationary, typically forming layers and tightly connected and well ordered. They lack mobility tending to serve their specific bodily function by being anchored in place. |
| EGFR inhibitors | Epidermal growth factor receptor inhibitors. EGFRs play an important role in controlling normal cell growth, apoptosis and other cellular functions, but mutations of EGFRs can lead to continual or abnormal activation of the receptors causing unregulated EGFR inhibitors are either tyrosine kinase inhibitors or monoclonal antibodies that slow down or stop cell growth. |
| EMT | Epithelial-mesenchymal transition, a cellular process that makes cancer cells evade the immune system, escape the tumour and acquire drug resistant properties. |
MEDICAL AND BIOLOGICAL
| EMT inhibitors | Compounds that inhibit AXL and other targets that in turn prevent the formation of aggressive cancer cells with stem-cell like properties. |
|---|---|
| Erlotinib | A drug used to treat non-small cell lung cancer (NSCLC), pancreatic cancer and several other types of cancer. It is a reversible tyrosine kinase inhibitor, which acts on epidermal growth factor receptor (EGFR). |
| ESMO | European Society for Medical Oncology |
| IHC | Immunohistochemistry |
| In vivo | Studies within living organisms. |
| In vitro | Studies in cells in a laboratory environment using test tubes, petri dishes etc. |
| MAb | Monoclonal antibodies. Monospecific antibodies that are made by identical immune cells that are all clones of a unique parent cell, in contrast to polyclonal antibodies which are antibodies obtained from the blood of an immunized animal and thus made by several different immune cells. |
| Mesenchymal state | A state of the cell where the cells have loose or no interactions, do not form layers and are less well ordered. They are mobile, can have invasive properties and have the potential to differentiate into more specialised cells with a specific function. |
| Mesenchymal cancer cells | Cancer cells in a mesenchymal state, meaning that they are aggressive with stem-cell like properties. |
| Metastatic cancers | A cancer that has spread from the part of the body where it started (the primary site) to other parts of the body. |
| Myeloid leukaemia | A type of leukaemia affecting myeloid tissue. Includes acute myeloid leukaemia (AML) and chronic myelogenous leukaemia. |
| NSCLC | Non-small cell lung cancer. |
| ORR | Overall response rate |
| Paclitaxel | A medication used to treat a number of types of cancer including ovarian cancer, breast cancer, lung cancer and pancreatic cancer among others. |
| PD-L1 | Programmed death-ligand 1 |
| PFS | Progression-free survival |
| Phase I | The phase I clinical trials where the aim is to show that a new drug or treatment, which has proven to be safe for use in animals, may also be given safely to people. |
| Phase Ib | Phase Ib is a multiple ascending dose study to investigate the pharmacokinetics and pharmacodynamics of multiple doses of the drug candidate, looking at safety and tolerability. |
| Phase II | The phase II clinical trials where the goal is to provide more detailed information about the safety of the treatment and its effect. Phase II trials are performed on larger groups than in Phase I. |
| Phase III | In the phase III clinical trials data are gathered from large numbers of patients to find out whether the drug candidate is better and possibly has fewer side effects than the current standard treatment. |
| PR | Partial Response |
| Receptor tyrosine kinase | High-affinity cell surface receptors for many polypeptide growth factors, cytokines and hormones. Receptor tyrosine kinases have been shown not only to be key regulators of normal cellular processes but also to have a critical role in the development and progression of many types of cancer. |
| RECIST | Response Evaluation Criteria In Solid Tumors, a set of published rules that define when cancer patients improve ("respond"), stay the same ("stable") or worsen ("progression") during treatments. |
| R/R | Relapsed/Refractory |
| sAXL | Soluble AXL |
| SITC | Society ImmunoTherapy Cancer |
| Small molecule | A small molecule is a low molecular weight (<900 Daltons) organic compound that may help regulate a biological process, with a size on the order of 10-9m. |
| Squamous cell carcinoma | Is an uncontrolled growth of abnormal cells arising in the squamous cells, which compose most of the skin's upper layers. Squamous cell carcinoma is the second most common form of skin cancer. |
| T790M | Over 50% of acquired resistance to EGFR tyrosine kinase inhibitors is caused by a mutation in EGFR called T790M |
| Tilvestamab | Former BGB149, BerGenBio's AXL inhibitor antibody, currently completed Phase 1a. |
| WCLC | World Conference on Lung Cancer |
Jonas Lies vei 91, 5009 Bergen, Norway Telephone: + 47 535 01 564 E-mail: [email protected]
Richard Godfrey CEO
Rune Skeie CFO Telephone: + 47 917 86 513 E-mail: [email protected]
Jan Petter Stiff, Crux Advisers Telephone: +47 995 13 891 E-mail: [email protected]
Mary-Jane Elliot, Chris Welsh, Lucy Featherstone, Carina Jurs Consilium Strategic Communications Telephone: +44 20 3709 5700 E-mail: [email protected]
Joseph Pantginis Telephone: +1 646 975 6968 E-mail: [email protected]
Soumit Roy Telephone: +1 646 454 2714 E-mail: [email protected]
Pål Falck Telephone:+47 229 37 229 E-mail: [email protected]
Mick Cooper, PhD Telephone: +44 20 3637 5042 [email protected]rg
Link to reports from Trinity Delta: https://www.bergenbio.com/investors/analyst-coverage/
This Report contains certain forward-looking statements relating to the business, financial performance and/or results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Report, including assumptions, opinions and views of the Company or cited from other sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any of their parent or subsidiary undertakings or any such person's officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results.
Telephone: + 47 535 01 564 E-mail: [email protected]
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