Interim / Quarterly Report • Apr 26, 2018
Interim / Quarterly Report
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| Content | Financial Calendar | |
|---|---|---|
| About BioArctic | 3 | Annual General Meeting 2018, May 15, 2018 |
| CEO statement | 4 | Interim Report Jan – Jun, Aug 23, 2018 |
| Project portfolio | 5 | Interim Report Jan – Sep, Nov 8, 2018 |
| Comments on the report | 7 | Full Year Report 2018, tentatively Feb 13, |
| Other information | 8 | 2019 |
| Financial reports | 9 | |
| Notes | 12 | |
| Consolidated quarterly data | 14 | |
| Calculation of key figures | 15 | |
| Glossary | 16 |
Unless otherwise stated in this report, all data refers to the Group. Figures in parentheses relate to the corresponding period in 2017.
• The inclusion of patients with complete spinal cord injury in the first panel of three was completed in BioArctic's ongoing Phase 1/2 study with SC0806
| Jan-Mar | Jan-Mar | Jan-Dec | |
|---|---|---|---|
| SEKm | 2018 | 2017 | 2017 |
| Net sales | 52.3 | 26.2 | 140.7 |
| Other operating income | 11.4 | 0.7 | 19.0 |
| Operating profit | 18.9 | 1.5 | 19.3 |
| Profit for the period | 15.4 | 1.1 | 15.2 |
| Earnings per share, SEK 1, 2 | 0.18 | 0.02 | 0.22 |
| Equity per share, SEK 1, 2 | 7.40 | 0.98 | 7.22 |
| Cash flow from operating activities | -42.0 | -38.4 | -135.3 |
| Cash flow from operating activities per | |||
| share, SEK 1, 2 | -0.48 | -0.61 | -1.99 |
| Equity/assets ratio, % | 58.8% | 9.2% | 55.8% |
| Return on equity, % | 2.4% | 1.8% | 4.3% |
| Number of shares | 88,059,985 | 4,203,999 | 88,059,985 |
1 There are no potential shares, thus there is no dilutive effect.
2 The comparative figures have been recalculated as a result of the 15:1 split executed on August 1, 2017.
For further information, please contact:
Gunilla Osswald, CEO, [email protected], telephone + 46 (0)8 695 69 30 Jan Mattsson, CFO, [email protected], telephone + 46 (0)703 52 27 72
BioArctic invites to an audiocast with teleconference (in English) for investors, analysts and media today, April 26, at 09:30 – 10:30 a.m. CET.
CEO Gunilla Osswald and CFO Jan Mattsson present BioArctic, comment on the Interim Report for the period January – March 2018 and answer questions.
Webcast:https://tv.streamfabriken.com/bioarctic-q1-2018
Dial-in telephone number from: Sweden: + 46 8 566 426 62 Belgium: + 32 240 406 35 Germany: + 49 692 222 290 46 The Netherlands: + 31 207 168 416 Norway: + 47 235 002 53 Switzerland: + 41 225 675 548 UK: + 44 203 008 9814 US: + 1 855 831 5946
BioArctic AB (publ) is a research based biopharmaceutical company focusing on disease modifying treatments and diagnostics for neurodegenerative diseases, such as Alzheimer's disease and Parkinson's disease. The company also develops a treatment for complete spinal cord injury. The company focuses on new types of treatments in areas with great unmet medical needs.
In the company there are high scientific cutting-edge competence and experience in developing drugs from idea to market. Collaborations with universities are of great importance to the company together with the strategically important global partners in the Alzheimer and Parkinson projects. BioArctic conducts its own clinical development in the field of complete spinal cord injury. Through long-term collaboration agreements with global pharmaceutical companies, BioArctic has demonstrated high skills and great ability to deliver innovative pharmaceutical projects.
In Alzheimer's disease, BioArctic has collaborated with Eisai since 2005. The company has entered into a total of three research collaboration agreements and two license agreements relating to the antibodies BAN2401 and BAN2401 back-up. The total aggregated value of these agreements may amount to EUR 218 million and in addition there are payments of royalty. So far, EUR 47 million has been received. In Parkinson's disease, BioArctic has collaborated with AbbVie since 2016, when a research collaboration agreement was entered including, among other things, the antibody BAN0805. AbbVie is entitled to acquire a license to develop and commercialize the antibodies. The total aggregated value of the agreement may amount to USD 755 million and in addition there are payments of royalty. So far, USD 80 million has been received.
The project portfolio consists of fully funded projects run in partnership with global pharmaceutical companies and innovative in-house projects with significant market and out-licensing potential. For information about the projects, see the section Project portfolio.
BioArctic's B-share is listed on Nasdaq Stockholm Mid Cap (Nasdaq Stockholm: BIOA B).
BioArctic's most important task is to improve the quality of life for patients with diseases in the central nervous system. We have continued to progress the company's innovative projects in the three treatment areas, which all have great medical needs, well in line with our objectives.
During the quarter, BioArctic obtained regulatory approval in Estonia and Norway for including patients with complete spinal cord injury in the company's ongoing Phase 1/2 study with the product candidate SC0806. Work is in progress to also include specialist clinics in Finland in the study. In April, the inclusion of patients with complete spinal cord injuries in the first panel of three was completed in the ongoing clinical study with SC0806. The product candidate is a combination of a medical device and a drug. BioArctic's patent was granted by the patent offices in the US and Japan for the medical device which is one of the main components of SC0806 during the period. Today there is no effective treatment for patients with complete spinal cord injury and the patients require lifelong therapy and care, which means high costs for the society.
Among BioArctic's five projects for treatment of patients with early Alzheimer's disease BAN2401, in collaboration with Eisai, is the one that has advanced furthest. On December 21, 2017 BioArctic announced that the Phase 2b study with BAN2401 in 856 patients with early stage Alzheimer's disease will continue towards final analysis after 18 months treatment, and that the ADCOMS efficiency criteria (primary endpoint) was not met at a 12-month interim analysis based on an innovative Bayesian design with high requirements for meeting the efficiency criteria. According to the predetermined study protocol, the trial will continue to completion and remain blinded. 18 months is considered to be a more relevant treatment period for demonstrating clinical effect of a disease
modifying drug for Alzheimer's disease. We look forward to the results at completion of the 18 months treatment that are expected to be available during the third quarter 2018. Final results after completed study with 18 months treatment, including the three months follow-up of the patients, are expected to be available during the fourth quarter 2018.
The research collaboration with AbbVie in Parkinson's disease progressed well according to the agreed project plan. According to the collaboration agreement, BioArctic has the primary responsibility for the preclinical research phase. Focus is on conducting the preclinical activities with the drug candidate BAN0805 as efficiently as possible preparing for the clinical development and for the application of the start-up of clinical studies in the U.S. (IND).
During the period we have strengthened the organization with additional cutting-edge expertise and resources with new employees and key consultants who quickly have adapted to their roles and the operations.
I am pleased with the continued progress of the project portfolio during the quarter and that BioArctic continued to show a positive financial result. BioArctic is well positioned to carry the projects forward towards our goals and potential new collaborations in accordance with the company's strategy. In conclusion, I would like to thank all who have contributed to a successful quarter and start of the fiscal year 2018.
Gunilla Osswald President and CEO, BioArctic AB
| PRODUCT CANDIDATE | INDICATION | PARTNER | DISCOVERY | PRECLINICAL | PHASE 1 | PHASE 2 | PHASE 3 | |
|---|---|---|---|---|---|---|---|---|
| BAN2401: anti-Aß antibody |
Alzheimer's Disease, Biogen 1) |
Biogen. 1) Eisai |
||||||
| BAN2401: anti-Aß antibody |
Down's Syndrome 2) Traumatic Brain Injury |
|||||||
| VE DISEASES | BAN2401 BACK-UP: anti-Aß antibody |
Alzheimer's Disease | Eisai | |||||
| AE1501: undisclosed information |
Alzheimer's Disease | Eisai | ||||||
| NEURODEGENERAT | AD1502: undisclosed information |
Alzheimer's Disease | ||||||
| AD1503: undisclosed information |
Alzheimer's Disease | |||||||
| BAN0805: anti-a-synuclein antibody |
Parkinson's Disease | abbvie | ||||||
| Imaging and biochemical biomarkers: Aβ |
Alzheimer's Disease | |||||||
| DIAGNOSTICS & TECHNOLOGY |
Imaging and biochemical biomarkers: α-synuclein |
Parkinson's Disease | abbvie | |||||
| BBB-technology: blood-brain barrier |
Multiple application areas | |||||||
| SPINE | SC0806: FGF1/medical device |
Complete Spinal Cord Injury | ||||||
| $\mathbf{r}$ |
1) Partner with Eisai on BAN2401 for treatment of Alzheimer's Disease. Eisai partnered with Biogen on BAN2401 in 2014 2) Dementia and cognitive impairment associated with Down's syndrome and Traumatic Brain Injury
BioArctic has two projects in the clinical phase: BAN2401 for Alzheimer's disease and SC0806 for patients with Complete Spinal Cord Injury.
The company has four projects in preclinical development: BAN2401 for Down's Syndrome with dementia and Traumatic Brain Injury, BAN2401 back-up for Alzheimer's disease, BAN0805 for Parkinson's disease and biomarker and diagnostics projects for Alzheimer's disease.
There are three projects in the research phase for Alzheimer's disease (AE1501, AD1502, AD1503), Parkinson's disease follow-up projects, biomarker and diagnostics projects for Parkinson's disease, as well as a blood-brain barrier technology project.
The key molecular event in Alzheimer's disease and Parkinson's disease is believed to be protein misfolding and aggregation. The spreading of soluble aggregates leads to neuronal dysfunction, cell death, brain damage and symptoms of disease. Each neurodegenerative disease is characterized by its unique aggregated protein. The hallmark of Alzheimer's disease is amyloid-beta, whereas alpha-synuclein is the signature protein of Parkinson's disease. BioArctic's disease modifying treatment strategy is to eliminate toxic aggregated forms of amyloid beta (oligomers/protofibrils) in the brain by means of the company's selective antibodies.
The goal is to increase the effect of the treatment without increasing the risks of side effects.
Alzheimer's disease: BAN2401 is a disease modifying drug candidate (an anti-amyloid beta protofibril selective antibody) for the treatment of early Alzheimer's disease. A clinical Phase 2b study is ongoing in the US, Canada, Europe, Japan and South Korea comprising 856 patients. The 17th and final interim analysis has been carried out. According to the predetermined study protocol, the study will remain blinded for the 18 months treatment followed by final analysis of the study results. The efficacy criteria at the 12-month interim analysis of
ADCOMS (primary endpoint) were not met, as announced on December 21, 2017. The results from the interim analysis at 12 months were based on an innovative Bayesian design with high requirements for meeting the efficacy criteria. The results after 18 months treatment are now expected to be available during the third quarter 2018. Final results after completed study with 18 months treatment and three months follow-up of the patients are expected to be available during the fourth quarter 2018. Eisai is responsible for the clinical development. The project is based on research at Uppsala University, Sweden.
Down's syndrome with dementia: BAN2401, which is now being clinically evaluated for the treatment of Alzheimer's disease, can potentially also be used for other indications, such as Down's syndrome with dementia, as these patients develop dementia at around 40 years of age.
Traumatic brain injury (TBI): BioArctic has submitted a patent application for the antibodies BAN2401/BAN2401 back-up for the treatment of Traumatic Brain Injury. Some of these patients develop dementia after the injury.
The antibody is a further developed version of BAN2401 for the treatment of Alzheimer's disease. The antibody was developed by BioArctic in collaboration with Eisai, which led to a new license agreement in 2015. The project is driven by Eisai and is in late preclinical phase.
The collaboration with Eisai also includes a project jointly owned by BioArctic and Eisai regarding disease modifying treatment of Alzheimer's disease with a different target than those targeted in the projects BAN2401 and BAN2401 back-up.
At BioArctic research is in progress to develop new antibodies for the treatment of
Alzheimer's disease aimed at slowing down or stopping disease progression by addressing two new targets.
BAN0805 is a drug candidate (an antibody) for the treatment of Parkinson's disease. The aim is to develop a disease modifying treatment that stops or slows down disease progression. Collaboration with AbbVie was started in 2016 regarding the continued development of the company's Parkinson program, focusing on BAN0805 with follow-up projects and diagnostics. The project is based on research at Uppsala University.
Alzheimer's disease diagnostics: In collaboration with Uppsala University, BioArctic is developing a new type of PET tracer for imaging of the brain in Alzheimer's disease by using BioArctic's antibodies. The goal is to create tools to better diagnose the disease, follow the disease progression and objectively measure the effect of drug treatment.
Improved biochemical methods: BioArctic develops improved biochemical methods for the identification and precise measurement of responses to treatment of Alzheimer's disease and Parkinson's disease, and for the measurement of disease progression. This is done in collaboration with the University of Gothenburg.
Blood-brain barrier technology: Together with Uppsala University, BioArctic is developing a technology that enables better passage of antibodies into the brain across the bloodbrain barrier. This technology has great technical and commercial potential and could be a general technology for improved and more effective treatment of brain diseases.
SC0806 is an innovative treatment for patients with traumatic Complete Spinal Cord Injury. The product candidate is a combination of a biodegradable medical device and a drug
substance (FGF1). The first patient was treated in 2016 at Karolinska University Hospital, Sweden, with subsequent rehabilitation for 18 months. Since August 2017, the patients receiving SC0806 treatment in the ongoing Phase 1/2 clinical trial have been given the option of 12 months additional participation in an extension study. Approvals by the regulatory authorities and ethic committees are obtained in Estonia and Norway to include patients in the study. Work is ongoing to include Finnish rehabilitation clinics as well. The product obtained orphan drug designation in 2010 in the EU and in 2011 in the US, which gives the company 10 and 7 years of market exclusivity in Europe and the US, respectively.
Patents and other exclusive rights are crucial to the company's future commercial opportunities. BioArctic has therefore an active patent strategy covering all major geographic markets, including the US, EU, Japan and China. BioArctic's patent portfolio consisted at the end of the period of 12 patent families with 151 granted patents.
The Group is referred to unless otherwise stated in this interim report. Figures in parentheses refer to the corresponding period last year. Amounts are expressed in kSEK (SEK thousands) unless otherwise stated. All amounts stated are rounded up or down, which may lead to some totals not matching exactly.
Because of the nature of the business operations, there may be large fluctuations between revenue for different periods.
Net sales in the first quarter amounted to SEK 52.3 million (26.2), an increase of SEK 26.1 million compared with the same period the previous year. The increase during the quarter is attributable to the increased activities in the
Parkinson program in collaboration with AbbVie.
Other operating income relates to research grants, operating exchange rate gains, rental income and one-time payment for subleasing and amounted to SEK 11.4 million (0.7) for the first quarter. The increase amounting to SEK 9.4 million during 2018 is explained by the exchange rate gains due to the weakening of the Swedish krona.
Operating costs amounted to SEK 44.8 million (25.4) for the first quarter. The increase is primarily explained by more R&D costs in the Parkinson program and by increased expenses as BioArctic is now a listed company.
Other operating expenses consisted of operating exchange rate losses.
Since BioArctic did not meet all the conditions to capitalize R&D costs, all such costs have been charged to the P&L.
Operating profit before financial items (EBIT) amounted to SEK 18.9 million (1.5) for the first quarter. The increase in the operating profit is attributable to the increased activity in the Parkinson project with AbbVie and to operating exchange rate gains.
Net financial items totaled SEK 0.9 million (0.0) for the first quarter and consisted mainly of financial exchange rate gains.
Profit for the period amounted to SEK 15.4 million (1.1) for the first quarter.
Earnings per share before and after dilution amounted to SEK 0.18 (0.02) for the first quarter.
Equity amounted to SEK 651.6 million (61.9) at March 31, 2018. This corresponds to an equity per outstanding share of SEK 7.40 (0.98) before and after dilution.
The equity/asset ratio has increased from 9.2% at March 31, 2017 to 58.8% at March 31, 2018. The increase is due to the acquisition of
capital that took place in connection with the listing of BioArctic on Nasdaq Stockholm in October 2017.
The Group's cash and cash equivalents consist of bank balances and at the end of the period they amounted to SEK 1,078.7 million (650.3). There were no loans at March 31, 2018, and no loans have been taken since this date. The Group has no other credit facility or loan commitments.
The Group's liquid funds are intended to be used mainly for agreed commitments and for progressing the internal projects. In order to reduce foreign exchange exposure some liquid funds are invested in foreign currency. This has reporting effects in connection with the recalculation of currency to the current rate. These effects are recognized in the operating profit and in financial income and expenses.
The Board of Directors proposes that no dividend is paid for the fiscal year 2017.
Investments in the first quarter amounted to SEK 0.2 million (0.1). The investments are mainly related to laboratory equipment.
Cash flow from operating activities for the first quarter amounted to SEK -42.0 million (-38.4).
The Annual General Meeting will be held on Tuesday, May 15, 2018, at 5 p.m. at Grant Thornton Sweden AB, Sveavägen 20, Stockholm. More information is available at www.bioarctic.com under the Governance section.
At the end of the period, the number of employees in the Group was 29 (25) of which 12 (11) are men and 17 (16) women. Approximately 90 percent are active in R&D and approximately 80 percent are PhDs; of these, two are Associate Professors and one is Professor.
A cost efficient organization at BioArctic is achieved by hiring key consultants for specific assignments and for tasks in competence areas that the company lacks or only has a need for periodically. As of March 31, 2018, these amounted to a total corresponding to 12 (7) full-time positions.
The management makes assumptions, judgments and estimates that affect the content of the financial statements. Actual results may differ from these assumptions and estimates, as is also stated in the accounting principles. The objective of the Group's risk management is to identify, measure, control and limit the risks of the business. Significant risks are the same for the Parent Company and the Group. The risks can be divided into financial risks on the one hand and operational and external risks on the other. BioArctic's operational and external risks mainly consist of risks related to research and development, clinical trials and dependence on key employees.
A detailed description of exposure and risk management is presented in the Annual Report for 2017, pp 41-42.
All the Group's business operations are conducted in the Parent Company.
| Jan-Mar | Jan-Mar | Jan-Dec | |
|---|---|---|---|
| kSEK | 2018 | 2017 | 2017 |
| Net sales (Note 4) | 52,303 | 26,174 | 140,706 |
| Cost of goods sold | - | -266 | -266 |
| Gross Profit | 52,303 | 25,909 | 140,441 |
| Other operating income | 11,420 | 738 | 19,044 |
| Marketing expenses | -351 | -343 | -1,397 |
| Administrative expenses | -7,047 | -3,761 | -31,522 |
| Research and development costs | -37,256 | -17,356 | -101,583 |
| Other operating expenses | -165 | -3,718 | -5,689 |
| Operating profit | 18,903 | 1,469 | 19,294 |
| Financial income | 1,273 | - | 1,043 |
| Financial expenses | -363 | -12 | -647 |
| Profit before tax | 19,813 | 1,457 | 19,690 |
| Tax | -4,394 | -341 | -4,534 |
| Profit for the period | 15,419 | 1,116 | 15,157 |
| Earnings per share | |||
| Earnings per share, SEK 1, 2 | 0.18 | 0.02 | 0.22 |
1 There are no potential shares. Thus there is no dilutive effect.
2 The comparative figures have been recalculated as a result of the 15:1 split executed on August 1, 2017.
| kSEK | Jan-Mar 2018 |
Jan-Mar 2017 |
Jan-Dec 2017 |
|---|---|---|---|
| Profit for the period | 15,419 | 1,116 | 15,157 |
| Other comprehensive income | - | - | - |
| Comprehensive income for the period | 15,419 | 1,116 | 15,157 |
| kSEK | Mar 31, 2018 |
Mar 31, 2017 |
Dec 31, 2017 |
|---|---|---|---|
| ASSETS | |||
| Tangible fixed assets | 6,720 | 5,324 | 7,093 |
| Deferred tax assets | 2,675 | 186 | 230 |
| Other financial assets | 244 | 2,675 | 2,675 |
| Current assets excluding cash and cash equivalents | 20,278 | 13,195 | 20,119 |
| Cash and cash equivalents | 1,078,746 | 650,302 | 1,110,367 |
| TOTAL ASSETS | 1,108,664 | 671,682 | 1,140,483 |
| EQUITY AND LIABILITIES | |||
| Equity | 651,553 | 61,875 | 636,134 |
| Deferred tax liabilities | 5,487 | 4,136 | 5,487 |
| Other current liabilities | 15,790 | 10,688 | 12,160 |
| Accrued expenses and deferred income | 435,833 | 594,983 | 486,702 |
| EQUITY AND LIABILITIES | 1,108,664 | 671,682 | 1,140,483 |
| kSEK | Mar 31, 2018 |
Mar 31, 2017 |
Dec 31, 2017 |
|---|---|---|---|
| Opening balance at 1 January | 636,134 | 60,760 | 60,760 |
| Comprehensive income for the period | 15,419 | 1,116 | 15,157 |
| Transactions with shareholders: | |||
| Share issue | - | - | 600,000 |
| Expenses for share issue | - | - | -39,782 |
| Closing balance | 651,553 | 61,875 | 636,134 |
| Jan-Mar | Jan-Mar | Jan-Dec | |
|---|---|---|---|
| kSEK | 2018 | 2017 | 2017 |
| Cash flow from operating activities | |||
| before changes in working capital | -44,724 | -26,072 | -132,481 |
| Change in working capital | 2,721 | -12,305 | -2,846 |
| Cash flow from operating activities | |||
| after changes in working capital | -42,004 | -38,377 | -135,327 |
| Cash flow from investing activities | -215 | -121 | -2,813 |
| Cash flow from financing activities | - | - | 560,218 |
| Cash flow for the period | -42,218 | -38,498 | 422,078 |
| Cash and cash equivalents at beginning | |||
| of period | 1,110,367 | 692,530 | 692,530 |
| Exchange rate differences in cash and | |||
| cash equivalents | 10,597 | -3,730 | -4,241 |
| Cash and cash equivalents at end of | |||
| period | 1,078,746 | 650,302 | 1,110,367 |
| kSEK | Jan-Mar 2018 |
Jan-Mar 2017 |
Jan-Dec 2017 |
|---|---|---|---|
| Net sales | 52,303 | 26,174 | 140,706 |
| Cost of goods sold | - | -266 | -266 |
| Gross profit | 52,303 | 25,909 | 140,441 |
| Marketing expenses | -351 | -343 | -1,397 |
| Administrative expenses | -7,047 | -3,761 | -31,521 |
| Research and development costs | -37,256 | -17,356 | -101,583 |
| Other operating income | 11,420 | 738 | 19,044 |
| Other operating expenses | -165 | -3,718 | -5,689 |
| Operating profit | 18,903 | 1,469 | 19,295 |
| Financial income | 1,273 | - | 1,043 |
| Financial expenses | -363 | -12 | -647 |
| Profit after financial items | 19,813 | 1,457 | 19,691 |
| Change in tax allocation reserves | - | - | -6,141 |
| Profit before tax | 19,813 | 1,457 | 13,550 |
| Tax | -4,394 | -341 | -3,183 |
| Profit for the period | 15,419 | 1,116 | 10,367 |
| kSEK | Jan-Mar 2018 |
Jan-Mar 2017 |
Jan-Dec 2017 |
|---|---|---|---|
| Profit for the period | 15,419 | 1,116 | 10,367 |
| Other comprehensive income | - | - | - |
| Comprehensive income for the period | 15,419 | 1,116 | 10,367 |
| kSEK | Mar 31, 2018 |
Mar 31, 2017 |
Dec 31, 2017 |
|---|---|---|---|
| ASSETS | |||
| Tangible fixed assets | 6,720 | 5,324 | 7,093 |
| Deferred tax assets | 244 | 186 | 230 |
| Other financial assets | 2,775 | 2,775 | 2,775 |
| Current assets excluding cash and cash equivalents | 20,278 | 13,194 | 20,119 |
| Cash and cash equivalents | 1,078,648 | 650,203 | 1,110,269 |
| TOTAL ASSETS | 1,108,665 | 671,682 | 1,140,484 |
| EQUITY AND LIABILITIES | |||
| Equity | 632,101 | 47,211 | 616,682 |
| Tax allocation reserve | 24,941 | 18,800 | 24,941 |
| Other current liabilities | 15,790 | 10,688 | 12,160 |
| Accrued expenses and deferred income | 435,833 | 594,982 | 486,702 |
| EQUITY AND LIABILITIES | 1,108,665 | 671,682 | 1,140,484 |
This Interim Report covers the Swedish Parent Company BioArctic AB, Swedish corporate identity number 556601-2679, and the two fully owned subsidiaries SpineMedical AB, corporate identity number 559003-7080, and LPB Sweden AB, corporate identity number 559035-9112. All the Group's business operations are conducted in the Parent Company.
The Parent Company is a Swedish limited liability company registered in and with its registered office in Stockholm. The head office is located at Warfvinges väg 35, SE-112 51, Stockholm, Sweden.
The BioArctic Group's Interim Report for the period January – March 2018 was approved by the Board on April 25, 2018.
The consolidated financial statements for BioArctic AB have been prepared in accordance with IFRS (International Financial Reporting Standards) as adopted by the EU, the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's RFR 1 Supplementary Accounting Rules for Groups. The Parent Company's financial statements are presented in accordance with the Swedish Annual Accounts Act and RFR2, Accounting for Legal Entities.
The Interim Report for the period January – March 2018 is presented in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. Disclosures in accordance with IAS 34 are presented both in notes and elsewhere in the Interim Report.
The guidelines of the European Securities and Markets Authority (ESMA) on alternative performance measures have been applied. This involves disclosure requirements for financial measures that are not defined by IFRS. For performance measures not defined by IFRS, see the Calculations of key figures section.
As from January 1, 2018 the IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial instruments are implemented. None of the new standards has had an effect on the reporting.
IFRS 16 replaces IAS 17 Leases and the appropriate interpretations IFRIC 4, SIC-15 and SIC-27. This standard requires that assets and liabilities attributable to all leasing agreements, with a few exceptions, are recognized in the balance sheet. This reporting is based on the view that an asset is used for a specific period of time and at the same time an obligation arises to pay for this right. The standard is to be applied for financial years commencing on January 1, 2019 or later. BioArctic has elected not to apply the standard in advance. An evaluation of its impact is ongoing.
The accounting principles and calculation methods applied are in all other respects in line with those described in the Annual Report for 2017.
An operating segment is a part of the Group that conducts operations from which it can generate income and incur costs and for which independent financial information is available. The highest executive decision-maker in the Group follows up the operations on aggregated level, which means that the operations constitute one and the same segment and thus no separate segment information is presented. The Board of Directors is identified as the highest executive decision maker in the Group.
A breakdown of the Group's net sales is shown below:
| Jan-Mar | Jan-Mar | Jan-Dec | |
|---|---|---|---|
| kSEK | 2018 | 2017 | 2017 |
| Income from research collaborations | 52,303 | 25,743 | 140,275 |
| Other items | - | 431 | 431 |
| Net sales | 52,303 | 26,174 | 140,706 |
BioArctic's net sales essentially consist of income from the research collaborations concerning Parkinson's disease with AbbVie and Alzheimer's disease with Eisai.
Under the collaboration agreement with AbbVie, BioArctic received an initial payment of SEK 701.6 million (USD 80 million). This payment is related to compensation for the preclinical development work that BioArctic will carry out under the agreement. Of the initial payment, SEK 70.4 million was reported as a one-time payment in 2016. The rest of the payment will be accrued based on the costs incurred up until the completion of the project. The project is continuously evaluated with the regard to status and remaining costs.
In 2016 SEK 22.7 million was recognized as a revenue in addition to the above-mentioned SEK 70.4 million, during 2017 SEK 135.5 million was recognized as a revenue and in the period January – March 2018 a revenue of SEK 50.9 was recognized. The remaining amount to be recognized as a revenue is SEK 422.1 million up until the completion of the project which is expected to occur by December 31, 2019.
Mikael Smedeby, who by the Nomination Committee is proposed to be elected to the Board of Directors, is active as lawyer and co-owner of Advokatfirman Lindahl KB, which provides ongoing business legal advice to BioArctic against compensation in line with market rates. During 2017, Advokatfirman Lindahl invoiced fees amounting to approximately SEK 5.2 million, which mainly consisted of costs due to the IPO in October 2017, and in the January – March 2018 period an amount of approximately SEK 0.1 million was invoiced.
In addition to the compensation to Advokatfirman Lindahl described above, as well as salaries and director fees to Lars Lannfelt and Pär Gellerfors, no significant transactions have taken place between the Group and related parties. All transactions have been in line with market rates.
| 2018 | 2017 | 2017 | 2017 | 2017 | 2016 | 2016 | 2016 | |
|---|---|---|---|---|---|---|---|---|
| SEKm | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 |
| Income statement | ||||||||
| Net sales | 52.3 | 51.0 | 31.5 | 32.0 | 26.2 | 94.4 | 1.2 | 1.0 |
| Other operating income | 11.4 | 10.4 | 2.8 | 5.2 | 0.7 | 32.6 | 1.1 | 3.2 |
| Operating profit | 18.9 | 14.7 | 0.6 | 2.5 | 1.5 | 97.3 | -10.2 | -11.2 |
| Profit for the period | 15.4 | 11.8 | -0.1 | 2.3 | 1.1 | 75.0 | -7.8 | -8.7 |
| Balance sheet | ||||||||
| Fixed assets | 9.6 | 10.0 | 10.5 | 8.2 | 8.2 | 8.5 | 12.8 | 12.0 |
| Current assets | 20.3 | 20.1 | 9.8 | 8.6 | 13.2 | 7.0 | 8.5 | 6.5 |
| Cash and cash equivalents | 1,078.7 | 1,110.4 | 590.7 | 622.1 | 650.3 | 692.5 | 82.5 | 93.4 |
| Equity | 651.6 | 636.1 | 64.1 | 64.2 | 61.9 | 60.8 | 90.9 | 98.7 |
| Deferred tax liabilities | 5.5 | 5.5 | 4.1 | 4.1 | 4.1 | 4.1 | - | - |
| Current liabilities | 451.6 | 498.9 | 542.7 | 570.5 | 605.7 | 643.1 | 13.0 | 13.2 |
| Cash flow | ||||||||
| From operating activities | -42.0 | -45.7 | -23.6 | -27.6 | -38.4 | 705.6 | -9.8 | -11.3 |
| From investing activities | -0.2 | 0.5 | -2.8 | -0.4 | -0.1 | -1.7 | -1.2 | - |
| From financing activities | - | 560.2 | - | - | - | -105.1 | - | - |
| Cash flow for the period | -42.2 | 515.0 | -26.4 | -28.1 | -38.5 | 598.8 | -11.1 | -11.3 |
| Data per share, SEK 1, 2 | ||||||||
| Earnings per share, SEK | 0.18 | 0.16 | 0.00 | 0.04 | 0.02 | 1.19 | -0.12 | -0.14 |
| Equity per share, SEK | 7.40 | 7.22 | 1.02 | 1.02 | 0.98 | 0.96 | 1.44 | 1.56 |
| Cash flow operating activities | -0.48 | -0.60 | -0.37 | -0.44 | -0.61 | 11.19 | -0.16 | -0.18 |
1 There are no potential shares. Thus there is no dilutive effect.
2 The comparative figures have been recalculated as a result of the 15:1 split executed on August 1, 2017.
In this financial report BioArctic reports key financial figures, some of which are not defined by IFRS. The Company's assesses that these key figures are important additional information, since they enable investors, securities analysts, management of the company and other stakeholders to better analyze and evaluate the company's business and financial trends. These key figures should not be analyzed separately or replace key figures that have been calculated in accordance with IFRS. These key figures should not be compared to other key figures with similar names applied by other companies. This is due to the fact that key figures cannot always be defined in the same way and other companies may calculate them in a different way than BioArctic.
The key figures "Net sales", "Result for the period", "Earnings per share" and "Cash flow from operating activities" are defined according to IFRS.
| Key figures | Definition |
|---|---|
| Other income | Other income than net sales |
| Operating profit | Result before financial items |
| Cash flow from operating activities | The period's cash flow from operating activities divided by |
| per share, SEK | the weighted number of shares |
| Equity/asset ratio | Adjusted equity as a percentage of the balance sheet total |
| Return on equity | Net income divided by equity as a percentage |
| Equity per share before and after | Adjusted equity divided by the number of shares at the end of |
| dilution | the period |
The Board and the CEO confirm that this interim report provides a true and fair overview of the Company and the Group's operations, position and earnings and describes the material risks and uncertainly factors faced by the Parent Company and the companies within the Group.
This Interim Report has not been reviewed by BioArctic's auditors.
Stockholm, Sweden, April 25, 2018
Wenche Rolfsen Ivar Verner
Chairman Deputy Chairman
Hans Ekelund Pär Gellerfors Board member Board member
Lars Lannfelt Eugen Steiner Gunilla Osswald Board member Board member CEO
Alzheimer's Disease Composite Score – A cognition scale consisting of parts from three different scales (CDR-SB, ADAS-cog and MMSE) developed by Eisai
A protein in the nervous system, present in Lewy bodies in some structures of the brain in Parkinson's Disease
A 40-42 amino acids long peptide, split from the parent protein APP, amyloid precursor protein. Aβ is the main constituent of the plaques found in the brain of Alzheimer patients
Protein used by the body's immune system to detect and destroy foreign substances
A study where collected data is combined with known facts for a complete conclusion
A measurable indicator of a medical condition
A physiological mechanism in which merged capillary walls in the brain's blood vessels regulate the transport of molecules between the blood and the brain tissue, with the function to protect the brain against viruses and other harmful agents
The central nervous system consists of the brain and the spinal cord
Clinical studies Drug trials performed in human subjects
A complete injury means that the spinal cord is complete severed. In an incomplete injury there are still a few nerve contacts left
A treatment that interferes with the processes of the disease and changes it in a positive way
A drug under development that has not yet gained marketing approval
An antibody in which the sequence has been changed to resemble a human antibody
In clinical trials and other scientific studies, an interim analysis is an analysis of data that is conducted before data collection has been completed
Application to the U.S. Food and Drug Administration (FDA) for the initiation of a clinical study in the U.S.
Molecule that binds to the desired target in the body
A medical device that is intended to be totally or partially introduced, surgically or medically, into the human body, or through a medical procedure in a body opening, and intended to remain there after the operation
Financial compensation obtained within the framework of a project or collaboration agreement when a certain specified objective has been achieved
An antibody that can be produced so that all copies are exactly alike
A monomer is the starting molecule in polymerization. The monomers are joined into long molecular chains through the polymerization, resulting a in a polymer with the monomer as the repeating unit
Oligomer A molecular chain consisting of several monomers aggregated
Drugs for patients with rare and serious disease
A molecule made up of amino acids connected into a short chain
Positron emission tomography, an investigation imaging method
Studies mainly of the safety and tolerability of a drug. Performed on a limited number of healthy human volunteers or patients
Studies of the safety and efficacy of a drug and dose finding. Performed on a limited number of patients
Confirmatory studies of the safety and efficacy of a drug in a clinical setting. Performed on a large number of patients
Preclinical studies of drug candidates to prepare for clinical studies
Studies performed in model systems, i.e. not in humans
A product under development that has not yet gained marketing approval
A molecular chain consisting of several monomers aggregated
Early research is focused on studying and elucidating the underlying molecular disease mechanisms and development of potential drug candidates
This information is information that BioArctic AB (publ) is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was released for public disclosure through the agency of Christina Astrén, IR & Communications Director, at 08:00 a.m. CET on April 26, 2018.
Swedish Corporate Identity Number 556601-2679 Warfvinges väg 35, SE-112 51, Stockholm, Sweden Telephone + 46 (0)8 695 69 30 www.bioarctic.com
This report has been prepared in a Swedish original version and translated into English. In the event of any inconsistency between the two versions, the Swedish language version should have precedence.
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