Earnings Release • Mar 12, 2019
Earnings Release
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Paris (France), March 12, 2019 – 6.00 pm CET - Onxeo S.A. (Euronext Paris, NASDAQ Copenhagen: ONXEO - FR0010095596), ("Onxeo" or "the Company"), a clinical-stage biotechnology company specializing in the development of innovative drugs targeting tumor DNA Damage response (DDR) in oncology, in particular against rare or resistant cancers, today reported its consolidated full-year financials, as of December 31, 2018, and provided a business update.
Judith Greciet, Chief Executive Officer of Onxeo, said: "2018 was marked by major achievements that confirmed the potential of our unique approach to DNA Damage response (DDR) with our first-in-class lead drug candidate AsiDNA™. In terms of development, we obtained remarkable data from several preclinical studies of AsiDNA™ in combination with other cancer treatments such as chemotherapy and PARP inhibitors, especially on tumor cell lines resistant to PARP inhibitors. We also identified predictive biomarkers of response to AsiDNA™, opening the way for its use in personalized medicine.
From a clinical standpoint, our phase 1 dose escalation study, DRIIV-1, of AsiDNA™ administered intravenously in advanced solid tumors continues at full speed and has already demonstrated the activity of AsiDNA™ through the activation of its tumor cell targets, with a good tolerance profile. We are now ready to start an extension Phase 1b study of AsiDNA™ in combination with chemotherapies, using the active doses determined in DRIIV-1. Preliminary results of this DRIIV-1b trial are expected before the end of the year and will be a major milestone for AsiDNA™.
In addition to our positive momentum with AsiDNA™, our first compound sourced from platON™ is ready to enter the preclinical proof-of-concept phase. This new candidate, which benefits from a differentiated set of features from AsiDNA™, will enlarge our pipeline and reinforce our unique positioning in the DDR field."
In parallel, Onxeo sought to retrieve its 50% share of SpeBio cash (about €5 million including a €1.5 million intercompany loan). Following an negative decision early March from the other shareholder, SpePharm BV, during SpeBio 2019 general meeting as regards the cash distribution, the Company decided to negotiate an extension of its current equity line with Nice & Green, in order to secure sufficient financial resources to support the Company's operations beyond the critical milestones expected in the upcoming 12 months and to provide a cash runway into Q2 2020. The detailed terms of this financing will be announced when the operation is implemented.
Revenues for the full-year 2018 stood at €6.1 million and consisted of:
Operating expenses stood at €9.7 million in 2018, which represented a decrease of 66% compared to 2017. This significant variation results from the termination in late 2017 of all Livatag®-related activities including a reduction of the workforce and a strict control of all expenses thereafter. R&D expenses for the year amounted to €7.5 million, i.e. 77% of operating expenses, and were fueled by the sustained development of AsiDNA™.
Non-current operating expenses amounted to €12.1 million, principally made of an impairment charge of €8.6 million pursuant to value tests performed in accordance with IFRS accounting standards already recognized at June 30, 2018. The impairment triggered a reduction of the deferred tax liability by €1.7 million, recognized as income tax credit. The Company also recorded a €2.8 million expense following the decision of the Paris Court of Appeal in the dispute with the companies SpeBio and SpePharm. Considering that SpeBio is 50% owned by Onxeo, a €5.2 million share of profit resulting from the penalties paid by Onxeo has been recorded in the group accounts as "Share of profit from equity affiliates".
| Consolidated income statement (IFRS) In thousands of euros |
31/12/2018 | 31/12/2017 |
|---|---|---|
| Revenues, of which: | 6,127 | 9,505 |
| Recurring revenues | 2,310 | 3,042 |
| Non-recurring revenues | 3,817 | 6,463 |
| Operating expenses, of which | (9,654) | (28,694) |
| R&D expenses (net of R&D tax credit) | (7,539) | (18,857) |
| Operating income/(loss) before non-recurring items | (3,527) | (19,189) |
| Non-recurring operating income, of which | (12,117) | (47,188) |
| impairment of R&D assets related to Beleodaq® | (8,559) | (38,111) |
| Share of profit from equity affiliates | 5,176 | 0 |
| Financial income | (691) | (491) |
| Income tax | 1,760 | 7,797 |
| Net profit/loss | (9,399) | (59,071) |
2018 total net loss amounted to €9.4 million, compared to €59.1 million in 2017.
The audit procedures on the consolidated accounts have been performed. The certification report will be issued after verification of the management report.
At December 31, 2018, the Company had a consolidated cash position of €11.3 million compared with €14.3 million at December 31, 2017.
The cash consumed in operation amounted to €11.3 million over the period, which is related to the operating costs of the Company, including research and development expenses net of R&D tax credit. This net payment was notably partly compensated by new financing schemes put in place during the year (royalty monetization and equity line), which have brought a total of €8.7 million.
Annual and consolidated 2018 accounts were approved by the Board of Directors on March 12, 2019 and will be submitted to shareholders' approval on April 26, 2019.
Onxeo (Euronext Paris, NASDAQ Copenhagen: ONXEO) is a clinical-stage biotechnology company developing innovative oncology drugs targeting tumor DNA-binding functions through unique mechanisms of action in the sought-after field of DNA Damage Response (DDR). The Company is focused on bringing early-stage first-in-class or disruptive compounds (proprietary, acquired or in-licensed) from translational research to clinical proof-of-concept, a value-creating inflection point appealing to potential partners.
Onxeo is developing AsiDNA™, a first-in-class, highly differentiatedDNA Damage Response (DDR) inhibitor based on a unique decoy & agonist mechanism acting upstream of multiple DDR pathways. Translational research has highlighted the unique properties of AsiDNA™, notably its ability to oppose and even reverse tumor resistance to PARP inhibitors regardless of the genetic mutation status, and its strong synergy with other tumor DNA-damaging agents such as chemotherapy and PARP inhibitors. The ongoing Phase I study DRIIV-1 (DNA Repair Inhibitor-administered IntraVenously) evaluates AsiDNA™ by systemic administration (IV) in solid tumors and has recently produced favorable tolerability and activity results.
AsiDNA™ is the first compound generated from platON™, the Company's proprietary chemistry platform of decoy oligonucleotides dedicated to generate new innovative compounds and broaden Onxeo's pipeline.
Onxeo's portfolio also includes belinostat, an HDAC inhibitor (epigenetics). Belinostat is already conditionally FDA-approved in the US as a 2nd line treatment for patients with peripheral T cell lymphoma and marketed in the US by Onxeo's partner, Acrotech Biopharma L.L.C., under the name Beleodaq® (belinostat IV form).
For further information, please visit www.onxeo.com.
This communication expressly or implicitly contains certain forward-looking statements concerning Onxeo and its business. Such statements involve certain known and unknown risks, uncertainties and other factors, which could cause the actual results, financial condition, performance or achievements of Onxeo to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Onxeo is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events or otherwise. For a discussion of risks and uncertainties which could cause actual results, financial condition, performance or achievements of Onxeo to differ from those contained in the forward-looking statements, please refer to the section 5.7.1.4 "Risk Factors" ("Facteurs de Risque") of the 2017 registration document filed with the Autorité des marchés financiers on April 25, 2018 under number D.18- 0389, which is available on the Autorité des marchés financiers website (www.amf-france.org) or on the Company's website (www.onxeo.com).
Onxeo Valerie Leroy, Investor Relations [email protected] +33 1 45 58 76 00
Media Relations Nicolas Merigeau NewCap [email protected] +33 1 44 71 94 98
Investor Relations / Strategic Communication Dušan Orešanský / Emmanuel Huynh NewCap [email protected] +33 1 44 71 94 92
Investor Relations US Brian Ritchie LifeSci Advisors [email protected] +1 212 915 2578
The complete 2018 full-year financial report will be made available on the Company's website within the statutory deadlines.
| ASSETS in €k | 31/12/2018 | 31/12/2017 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 38,573 | 47,535 |
| Property, plant and equipment | 296 | 344 |
| Long-term investments | 4,005 | 232 |
| Deferred tax assets | 0 | 0 |
| Total non-current assets | 42,874 | 48,111 |
| Current assets | ||
| Inventories and work in progress | 47 | 30 |
| Trade accounts receivable and related accounts | 1,479 | 552 |
| Other accounts receivable | 7,597 | 15,103 |
| Financial investments | 0 | 0 |
| Cash and cash equivalents | 11,253 | 14,277 |
| Total current assets | 20,376 | 29,962 |
| TOTAL ASSETS | 63,250 | 78,073 |
| LIABILITIES AND SHAREHOLDERS' EQUITY (€k) | 31/12/2018 | 31/12/2017 |
|---|---|---|
| Shareholders' equity | ||
| Share capital | 13,344 | 12,674 |
| Less: treasury shares | -97 | (89) |
| Share premium | 41,824 | 269,060 |
| Reserves | -270 | (172,700) |
| Earnings | -9,399 | (59,071) |
| Total shareholders' equity | 45,402 | 49,873 |
| Non-current liabilities | ||
| Deferred tax liabilities | 2,330 | 4,094 |
| Provisions | 531 | 550 |
| Other financial liabilities | 6,593 | 4,714 |
| Total non-current liabilities | 9,455 | 9,358 |
| Current liabilities | ||
| Short-term debt | 450 | 130 |
| Trade payables and related accounts | 4,145 | 5,956 |
| Other liabilities | 3,798 | 12,755 |
| Total current liabilities | 8,394 | 18,842 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 63,250 | 78,073 |
| In K€ | 31/12/2018 | 31/12/2017 |
|---|---|---|
| Recurring revenue from licensing agreements | 2,310 | 3,042 |
| Non-recurring revenue from licensing agreements | 3,817 | 6,463 |
| Total revenue | 6,127 | 9,505 |
| Purchases | (215) | (634) |
| Personnel costs | (5,438) | (8,217) |
| External expenses | (8,731) | (17,555) |
| Taxes and duties | (346) | (367) |
| Net decrease in depreciation and amortisation | (540) | (1,796) |
| Net allocations to provisions | 448 | 74 |
| Other operating income | 4,546 | 4 |
| Other operating expenses | 622 | (203) |
| Operating expenses | (9,654) | (28,694) |
| Loss from recurring operating | (3,527) | (19,189) |
| Other operating income and expenses | (12,117) | -47,188 |
| Operating result | (15,644) | -66,378 |
| Share of profit from equity affiliates | 5,176 | 0 |
| Operating loss after share of profit from equity affiliates | (10,468) | -66,378 |
| Income from cash and cash equivalents | 15 | 13 |
| Other financial income | 331 | 615 |
| Financial expenses | (1,037) | -1,119 |
| Net financial income (expense) | (691) | -491 |
| Pre-tax loss | (11,159) | -66,868 |
| Tax expense | 1,760 | 7,797 |
| - Of which deferred tax |
1,764 | 7,801 |
| Net loss | (9,399) | -59,071 |
| Earnings per share | (0.18) | (1.17) |
| Diluted earnings per share | (0.18) | (1.17) |
| In K€ | 31/12/2018 | 31/12/2017 |
|---|---|---|
| Loss for the year | (9,399) | (59,071) |
| Other comprehensive income | 0 | 0 |
| Translation adjustments | (2,899) | (2,528) |
| Gains and losses on derecognition of assets available for sale | 0 | 0 |
| Cash flow hedges | 0 | 0 |
| Tax relating to comprehensive income items | 0 | 0 |
| Other items that may be reclassified to profit or loss | (2,899) | (2,528) |
| Actuarial gains and losses | 11 | 7 |
| Other items that may not be classified to profit or loss | 11 | 78 |
| Other comprehensive income for the year, net of tax | (2,888) | (2,522) |
| Total comprehensive income for the year | (12,287) | (61,592) |
| Total comprehensive income attributable to the | ||
| owners of the parent company | (12,287) | (61,592) |
| Minority interests |
| K€ | 31/12/2018 | 31/12/2017 |
|---|---|---|
| Consolidated net loss | (9,399) | (59,071) |
| +/- Depreciation, impairment and provisions, net (1) | 9,175 | 40,253 |
| (excluding provisions against working capital) | ||
| +/- Unrealized gain and losses associated with changes in fair value | ||
| +/- Non cash income and expenses on stock options and similar items | 927 | 980 |
| +/- Other calculated income and expenses | (173) | (137) |
| +/- Capital gains and losses on disposal | ||
| +/- dilution gains and losses | ||
| +/- Share of earning associates | (5,176) | |
| - Dividends (non-consolidated investments) | ||
| Gross operating cash flow after cost of net debt and taxes | (4,646) | (17,973) |
| + Cost of net debt | 691 | 492 |
| +/- Tax expenses (including deferred taxes) | (1,764) | (7,801) |
| Gross Operating cash flow before cost of net debt and taxes | (5,719) | (25,282) |
| - Taxes paid | ||
| +/- Changes in operating WCR (including debt related to employee benefits) | (5,546) | (2,999) |
| NET CASH FLOW FROM OPERATING ACTIVITIES | (11,266) | (28,281) |
| - Expenditures on acquisition of tangible and intangible assets | (45) | (65) |
| + Proceeds of disposal of tangible and intangible assets | ||
| - Expenditures on acquisition of financial assets | (2) | |
| + Proceeds of disposal of financial assets | ||
| +/- Effect on changes in scope of consolidation | ||
| + Dividends received (equity accounted investment) | ||
| +/- Change in loans and advance granted | ||
| + Capital grants received | ||
| +/- Other changes from investment transactions | 45 | |
| NET CASH FLOW FROM INVESTING ACTIVITIES | 1 | |
| (67) | ||
| Cash flow resulting from the merger | ||
| + Net amount received from shareholders on capital increase | ||
| . Paid by shareholders of the parent company | 2,747 | 14,012 |
| . Paid by minority interest in consolidated companies | ||
| + Amount received on exercise of stock options | ||
| -/+ Purchase and Sale of treasury shares | (150) | (68) |
| - Dividends paid in the year | ||
| - Dividends paid to minority shareholders in consolidated companies | ||
| '- Dividends paid to minority shareholders | ||
| + Amounts received on issuances of new loans | 5,926 | |
| - Reimbursements of loans (including finance leases) | (193) | (154) |
| - Net interest received | ||
| +/- Others flows related to financing activities | (81) | (354) |
| NET CASH FLOW FROM FINANCING ACTIVITIES | 8,250 | 13,437 |
| +/- Effects of fluctuations in foreign exchange rates | (8) | (55) |
| CHANGE IN CASH AND CASH EQUIVALENTS | (3,024) | (14,966) |
| CASH AND CASH EQUIVALENTS at start of year | 14,277 | 29,243 |
| CASH AND CASH EQUIVALENTS at year end | 11,253 | 14,277 |
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