Earnings Release • Feb 15, 2017
Earnings Release
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Press release 15 February 2017
1 January – 31 December 2016
"We finished the year with the signing of a research collaboration and license agreement with Pfizer to develop a portfolio of antibodies targeting tumour-associated myeloid cells to potentially treat a range of cancer indications. We believe this agreement is an endorsement of our cancer antibody biology and immuno-oncology expertise.
Our lead antibody BI-1206 is in a Phase I/II clinical trial evaluating this novel antibody for the treatment of patients with non-Hodgkin lymphoma and chronic lymphocytic leukaemia, two important haematological cancers. BI-1206 has the potential to become an important drug for treating haematological cancers by helping address the 50% of patients who relapse when their cancer becomes resistant to rituximab, the current standard of care.
Our scientific collaboration with the University of Southampton has identified a preclinical lead candidate that is able to regulate OX40. We believe it has differentiated functionality compared to other OX40 antibodies.
It was encouraging to be able to report in January that our partner ThromboGenics had dosed the first patients in a phase II study evaluating THR-317 for the treatment of diabetic macular edema.
BioInvent has strengthened its leadership team with the appointment of Setareh Shamsili MD, PhD, as Chief Medical Officer and a member of the management team on a full time consultancy basis. Setareh brings broad expertise in clinical oncology drug development to BioInvent. Setareh was previously Chief Medical Officer at Merus and prior to that Global Medical Leader in Oncology at Astellas in the Netherlands and USA." said Michael Oredsson, CEO of BioInvent.
Any questions regarding this report will be answered by Michael Oredsson, CEO, phone +46 (0)46 286 85 67, mobile +46 (0)707 18 89 30. The report is also available at www.bioinvent.com
BioInvent is generating value for shareholders by employing its antibody and cancer biology expertise to identify antibodies with novel mechanisms-of-action and novel oncology targets. The Company employs this approach to generate therapeutic immuno-modulating antibodies that can be developed for a broad range of cancer indications. The Company plans to bring these antibodies to the clinic through its own resources and together with partners.
To achieve these goals the Company is currently:
BioInvent's lead drug candidate BI-1206 is a fully human antibody targeting CD32b, an immunosuppressive protein that is expressed in some patients with B-cell cancers. Research has shown that the expression of CD32b could lead to the development of resistance to rituximab, the current standard of care treatment of non-Hodgkin lymphoma (NHL) and chronic lymphocytic leukaemia (CLL). As a result, BI-1206 is being developed as a drug candidate in combination with rituximab, in B-cell cancers.
The first clinical study (Phase I/II) with BI-1206 is currently ongoing in patients with NHL and CLL who are resistant to rituximab. The initial safety and dose readouts from this study are expected in the first half of 2018. The study is financed and executed by Cancer Research UK (CRUK), Cancer Research Technology (CRT) and Leukaemia & Lymphoma Research (LLR).
TB-403 is a humanised antibody directed against the PlGF protein, which is believed to inhibit its signaling via the Nrp-1 receptor. PlGF is expressed in patients with medulloblastoma, Ewing's sarcoma, neuroblastoma and alveolar rhabdomyosarcoma.
TB-403 is currently in a Phase I/II study for the treatment of patients with medulloblastoma in cooperation with a US based pediatric oncology network, Neuroblastoma and Medulloblastoma Translational Research Consortium. TB-403 has recently received Orphan Drug Designation for medulloblastoma from the European Medicines Agency.
BioInvent has a 40% equity stake in TB-403, developed in conjunction with Oncurious. This is the result of a collaboration agreement signed in 2004 with Oncurious' parent company ThromboGenics. Under the terms of the agreement BioInvent pays 50% of development costs of TB-403.
In addition to TB-403, the collaboration agreement with ThromboGenics also allows for BioInvent to have a 40% equity stake in THR-317, an ophthalmologic formulation of TB-403, provided it contributes half of historical and future development costs. As earlier communicated, BioInvent is currently evaluating how to ensure that the value of this project is optimized. The product is currently in a Phase II clinical study for the treatment of patients with diabetic macular edema. The study will evaluate the safety and efficacy of two dose levels of THR-317 and plans to include a total of 50 patients.
BioInvent´s preclinical research is focused on developing novel immuno-modulatory antibodies to significantly improve on the efficacy of currently available checkpoint inhibitor therapies. These novel antibodies may also activate anti-cancer immunity in currently non-responding patients and cancer types.
BioInvent is developing antibodies that can overcome the effects of two key cells that suppress the immune system in the tumour micro-environment. These are:
Developing antibodies that act on regulatory T cells (Tregs) via either novel or validated targets Tregs can substantially inhibit various immune responses enabling tumour cells to escape detection. BioInvent is currently developing antibodies specific for currently undetermined Treg targets and functions as well as for known targets such as OX-40 and 4-1BB.
BioInvent currently works at expanding the pool of antibodies and targets that have been shown associated with Treg specificity and Treg depleting activity.
BioInvent is working in cooperation with Cancer Research Technology and the University of Southampton in the UK to develop new immunotherapeutic cancer drugs based on antibodies that target OX-40 and 4-1BB, two known co-receptors that help activate T cells, to produce long-lasting anti-tumour immune responses.
In December 2016, BioInvent announced that it has entered into a cancer immunotherapy research collaboration and license agreement with Pfizer Inc. to develop antibodies targeting tumour-associated myeloid cells. BioInvent will leverage its expertise to identify novel oncology targets and therapeutic antibodies that inhibit cancer growth either by reversing the immunosuppressive activity of tumourassociated myeloid cells or by reducing the number of tumour-associated myeloid cells in the tumour.
Under the terms of the agreement BioInvent could be eligible for potential future development milestones in excess of \$0.5 billion (assuming five antibodies are developed through to commercialisation). The Company could also receive up to double digit royalties related to product sales. In return Pfizer will have the right to develop and commercialise any antibodies generated from this agreement.
Pfizer has paid BioInvent an upfront payment of \$3 million and is committed to paying \$1 million in research funding during 2017. Pfizer has also made a \$6 million equity investment in new shares of BioInvent.
The Company currently has a number of antibody manufacturing agreements with major pharma and biotech companies. Given its production capacity and expertise, BioInvent is actively seeking to secure more manufacturing contracts.
The Company has also several licensing agreements and, in some cases, research collaborations with a number of external partners including Bayer Pharma, Daiichi Sankyo, Mitsubishi Tanabe Pharma, Servier and Xoma. The structure and terms of these agreements and partnerships vary, but they all have in common that BioInvent receives license fees, research financing, milestone payments and royalties on the sale of commercial products. Of these external drug development programmes, four projects are currently in Phase I and three are in the preclinical phase.
Net sales amounted to SEK 31 million (10). Revenues for the period are derived from an upfront payment of USD 3 million in December 2016 from the research collaboration and license agreement with Pfizer and as well production of antibodies for clinical studies.
The Company's total costs amounted to SEK 38 million (36). Operating costs are divided between external costs of SEK 22 million (24), personnel costs of SEK 16 million (11) and depreciation of SEK 0.5 million (0.4). Research and development costs amounted to SEK 26 million (27).
Profit/loss after tax amounted to SEK -7.3 million (-21). The net financial items amounted to SEK 0.0 million (0.0). Earnings per share before and after dilution amounted to SEK -0.03 (-0.13).
Net sales amounted to SEK 71 million (16). Revenues for the period are derived from an upfront payment of USD 3 million in December 2016 from the research collaboration and license agreement with Pfizer and as well as production of antibodies for clinical studies and from partners developing therapeutic antibodies from the n-CoDeR® antibody library. BioInvent announced in February 2016 that a EUR 2 million milestone payment had been received under the collaboration with Daiichi Sankyo pertaining to the progression of a Phase I clinical trial.
The Company's total costs amounted to SEK 135 million (112). Operating costs are divided between external costs of SEK 82 million (72), personnel costs of SEK 52 million (39) and depreciation of SEK 1.0 million (1.7). Research and development costs amounted to SEK 99 million (81).
Profit/loss after tax amounted to SEK -63 million (-91). The net financial items amounted to SEK 0.3 million (-0.1). Earnings per share before and after dilution amounted to SEK -0.25 (-0.64).
As of 31 December 2016, the Group's liquid funds amounted to SEK 226 million (40). The cash flow from current operations and investment activities for the January - December period amounted to SEK -77 million (-73).
The Board of Directors of BioInvent resolved in February 2016 on a private placement of SEK 43 million to the US-based healthcare investor Omega Funds and a rights issue of SEK 191 million. The Extraordinary General Meeting in March 2016 resolved to approve the Board's decision on the rights issue. The new share issues amounts to a total of SEK 234 million before issue costs. The subscription price for the new share issues was set to SEK 1.95 per share. 85.4 percent of the new share issue was subscribed for with subscription rights. 7.8 percent of the share issue was subscribed for without subscription rights and 6.8 percent was subscribed for by guarantors.
As part of the agreement with Pfizer, the Board of Directors of BioInvent on 21 December 2016 resolved, based on the authorization of the annual general meeting on 12 May 2016, on a directed issue of 21,973,594 new shares to Pfizer at a subscription price per share of SEK 2.56, corresponding to a total investment of USD 6 million before issue costs. The subscription price corresponds to an approximately 30% premium to the average volume weighted price for BioInvent's share during the 10 trading days prior to 21 December 2016. The reason for the derogation from the shareholders' preferential right is that the investment, in addition to providing BioInvent with new capital, brings Pfizer as a new strategic partner, in alignment with shareholders' interests as a new shareholder.
After the share issue the share capital consists of 304,695,213 shares.
The shareholders' equity amounted to SEK 230 million (29) at the end of the period. The Company's share capital at the end of the period was SEK 24 million. The equity/assets ratio at the end of the period was 83 (54) per cent. Shareholders' equity per share amounted to SEK 0.76 (0.18). The Group had no interest-bearing liabilities.
Investments in tangible fixed assets amounted to SEK 5.3 million (0.3).
All operations of the Group are conducted by the Parent Company. The Group's and the Parent Company's financial statements coincide in every material way.
As of 31 December 2016, BioInvent had 51 (40) employees. 45 (34) of these work in research and development.
The 2013 Annual General Meeting voted in favour of establishing a new, long-term employee incentive programme involving the allotment of a maximum of 900,000 employee options free of charge to all Group employees.
The employees will receive options based on their performance in the 2013, 2014 or 2015 financial years and allotment will take place in connection with the publication of the year-end financial statement for the subsequent year. Each employee option will entitle the holder to acquire 1.207 new share in BioInvent for a subscription price of SEK 2.92 during the period from the date of publication of the Company's year-end financial statement for the 2016 financial year up to and including 1 December 2017. Subscription price and number of shares that each employee option entitles to are converted pursuant to rights issues carried out. Allotment of 100,747 employee options took place in February 2014, 74,516 employee options took place in February 2015 and 50,250 employee options in February 2016.
To guarantee BioInvent's commitment and cover the costs associated with Employee Incentive programme 2013/2017, the 2013 Annual General Meeting resolved to issue a maximum of 1,182,780 warrants to BioInvent Finans AB.
Assuming that all allotted employee options relating to Employee Incentive Programme 2013/2017 are exercised for subscription of new shares and the additional warrants ensuring BioInvent's costs in relation to the allotted employee options, the Company's share capital will increase by SEK 28,617 equivalent to about 0.1 percent of shares and votes in the Company after full exercise.
The 2016 Annual General Meeting resolved to adopt an incentive programme for the company's employees in the form of a subscription warrants programme. Under the programme 957,571 subscription warrants have been transferred with a maximum dilution effect of approximately 0.3 percent.
The programme includes all employees except the CEO and other senior executives comprised by the retention bonus programme implemented in 2015. The subscription warrants are transferred at market value and each employee may be allotted a maximum of 50,000 subscription warrants. 855,000 subscription warrants were transferred in the second quarter 2016 and 102,571 subscription warrants were transferred by the end of December 2016. Subscription of shares by exercise of subscription warrants shall take place during the period from and including 1 July 2019 up to and including 1 December 2019. The subscription price per share shall be SEK 2.81. As part of the incentive programme, participants who remain in their employment with the company as per 1 June 2019 receive a stay-on bonus corresponding to two times the amount paid for the acquired subscription warrants, however no more than SEK 60,000.
For description of benefits to senior executives, see page 45 in the company's annual report 2015. The Company has, in accordance with the decision of the Annual General Meeting 2015 decided to implement a retention bonus programme which for a three year period may amount to a maximum of 100 per cent of the fixed salary for a year. Otherwise there are no transactions with related parties, in accordance with IAS 24, to report.
The Company's operations are associated with risks related to factors such as pharmaceutical development, clinical trials and product responsibility, commercialisation and partners, competition and fast technological development, biotechnology and patent risk, compensation for pharmaceutical sales, qualified personnel and key individuals, additional financing requirements, currency risk and interest risk. The aforementioned risks summarize the factors of significance for BioInvent and thus an investment in the BioInvent share.
No significant changes to the risks and uncertainty factors occurred during the period. For a more detailed description of risk factors, see section "Risks and Risk Management", page 29, in the company's annual report 2015.
This financial statement was prepared in accordance with IAS 34, Interim Financial Reporting, and applicable sections of the Swedish Annual Accounts Act. Disclosures in accordance with IAS 34.16A are incorporated in the financial statements and its accompanying notes or in other parts of this interim report.
The accounting principles applied here are the same as those applied in the preparation of the most recent annual report. Changes in IFRS standards entered into force in 2016 has had no material impact on the financial statements. The financial statements of the Parent company coincide in every material way with the consolidated financial statements.
The Annual General Meeting will be held on Wednesday 17 May 2017 at 4 p.m., Elite Hotel Ideon, Scheelevägen 27, Lund. Notice to attend will be announced in the Swedish press in Post- och Inrikes Tidningar and on the Company's website.
Shareholders wishing to attend the AGM must be registered in the shareholders' register kept by the Swedish Securities Register Centre (Euroclear) Thursday 11 May 2017 and must inform BioInvent of their intention to attend no later than 4 p.m. on Thursday 11 May 2017 by sending a letter to: Sölvegatan 41, SE-223 70 Lund, attn: Stefan Ericsson, or by phone +46 (0)46 286 85 50, or by e-mail to [email protected].
In order to participate in the AGM, shareholders with nomineeregistered shares must request that their shares be temporarily owner-registered in the Euroclear shareholders' register. Such registration must be completed no later than Thursday 11 May 2017 and the nominee must be informed of this well in advance of this date.
Shareholders must include their name, personal/company registration number, shareholding, telephone number and the name of any assistants that will be attending. Proxy to act on behalf of a shareholder shall be sent together with the notice of attendance. Representative of a legal person shall hand in a copy of a registration certificate or similar papers of authorisation. The company will supply proxy forms upon request from a shareholder.
The Board of Directors and the CEO do not propose the payment of any dividend for the 2016 business year.
BioInvent will present the following financial reports:
| 3 MONTHS 2016 Oct.-Dec. |
3 MONTHS 2015 Oct.-Dec. |
12 MONTHS 2016 Jan.-Dec. |
12 MONTHS 2015 Jan.-Dec. |
|
|---|---|---|---|---|
| Net sales | 30,789 | 9,984 | 71,284 | 15,925 |
| Operating costs Research and development costs Sales and administrative costs Other operating revenues and costs |
-26,186 -12,005 74 -38,117 |
-26,808 -8,737 158 -35,387 |
-99,477 -35,715 1 049 -134,143 |
-80,502 -31,647 1,251 -110,898 |
| Operating profit/loss | -7,328 | -25,403 | -62,859 | -94,973 |
| Profit/loss from financial investments | 44 | -39 | 272 | -55 |
| Profit/loss before tax | -7,284 | -25,442 | -62,587 | -95,028 |
| Tax | - | 4,347 | - | 4,347 |
| Profit/loss | -7,284 | -21,095 | -62,587 | -90,681 |
| Other comprehensive income Items that have been or may be reclassified subsequently to profit or loss Changes in actual value current investments |
- | - | - | - |
| Comprehensive income | -7,284 | -21,095 | -62,587 | -90,681 |
| Other comprehensive income attributable to parent company's shareholders |
-7,284 | -21,095 | -62,587 | -90,681 |
| Earnings per share, SEK Before dilution After dilution |
-0.03 -0.03 |
-0.13 -0.13 |
-0.25 -0.25 |
-0.64 -0.64 |
| 2016 31 dec. |
2015 31 dec. |
|
|---|---|---|
| Assets | ||
| Fixed assets | ||
| Intangible fixed assets | 0 | 0 |
| Tangible fixed assets | 5,648 | 1,323 |
| Total fixed assets | 5,648 | 1,323 |
| Current assets | ||
| Inventories | 1,918 | 464 |
| Current receivables | 42,618 | 12,687 |
| Liquid funds | 226,114 | 39,973 |
| Total current assets | 270,650 | 53,124 |
| Total assets | 276,298 | 54,447 |
| Shareholders' equity and liabilities | ||
| Shareholders' equity | 230,437 | 29,454 |
| Current liabilities | 45,861 | 24,993 |
| Shareholders' equity and liabilities | 276,298 | 54,447 |
| 2016 | 2015 | 2016 | 2015 | |
|---|---|---|---|---|
| Oct.-Dec. | Oct.-Dec. | Jan.-Dec. | Jan.-Dec. | |
| Shareholders' equity at beginning of period | 184,183 | 50,498 | 29,454 | 52,428 |
| Comprehensive income | ||||
| Profit/loss | -7,284 | -21,095 | -62,587 | -90,681 |
| Comprehensive other income | - | - | - | - |
| Total comprehensive income | -7,284 | -21,095 | -62,587 | -90,681 |
| Total, excluding transactions with equity | 176,899 | -33,133 | ||
| holders of the Company | 29,403 | -38,253 | ||
| Transactions with equity holders of the Company | 46 | 58 | ||
| Employee options programme | 51 | 116 | ||
| Transfer of subscription warrants | 108 | 587 | ||
| Rights issue and directed new share issue | 209,541 | |||
| Directed new share issue | 53,384 | 53,384 | ||
| Rights issue | 67,591 | |||
| Shareholders' equity at end of period | 230,437 | 29,454 | 230,437 | 29,454 |
The share capital as of 31 December 2016 consists of 304,695,213 shares and the share's ratio value is 0.08. The rights issue and the directed new share issue carried out in April 2016 raised SEK 209,541 thousands after issue expenses of SEK 24,074 thousands. The directed new share issue carried out in December 2016 raised SEK 53,384 thousands after issue expenses of SEK 2,868 thousands. The rights issue carried out in May 2015 raised SEK 67,591 thousands after issue expenses of SEK 10,108 thousands.
| 2016 Oct.-Dec. |
2015 Oct.-Dec. |
2016 Jan.-Dec. |
2015 Jan.-Dec. |
|
|---|---|---|---|---|
| Current operations | ||||
| Operating profit/loss | -7,328 | -25,403 | -62,859 | -94,973 |
| Depreciation | 481 | 430 | 996 | 1,650 |
| Adjustment for other non-cash items | 46 | 51 | 58 | 116 |
| Interest received and paid | 12 | 41 | 34 | 91 |
| Tax | - | 4,347 | - | 4,347 |
| Cash flow from current operations | ||||
| before changes in working capital | -6,789 | -20,534 | -61,771 | -88,769 |
| Changes in working capital | -16,120 | 10,313 | -10,278 | 16,196 |
| Cash flow from current operations | -22,909 | -10,221 | -72,049 | -72,573 |
| Investment activities | ||||
| Acquisition of tangible fixed assets | -887 | -340 | -5,322 | -672 |
| Cash flow from investment activities | -887 | -340 | -5,322 | -672 |
| Cash flow from current operations and | ||||
| investment activities | -23,796 | -10,561 | -77,371 | -73,245 |
| Financing activities | ||||
| Transfer of subscription warrants | 108 | 587 | ||
| Rights issue | 67,591 | |||
| Rights issue and directed new share issue | 209,541 | |||
| Directed new share issue | 53,384 | 53,384 | ||
| Cash flow from financing activities | 53,492 | - | 263,512 | 67,591 |
| Change in liquid funds | 29,696 | -10,561 | 186,141 | -5,654 |
| Opening liquid funds | 196,418 | 50,534 | 39,973 | 45,627 |
| Liquid funds at end of period | 226,114 | 39,973 | 226,114 | 39,973 |
| Liquid funds, specification: | ||||
| Cash and bank | 226,114 | 39,973 | 226,114 | 39,973 |
| 226,114 | 39,973 | 226,114 | 39,973 |
| 2016 31 Dec. |
2015 31 Dec. |
|
|---|---|---|
| Shareholders' equity per share at end of period, SEK | 0.76 | 0.18 |
| Number of shares at end of period (thousands) | 304,695 | 162,919 |
| Equity/assets ratio, % | 83.4 | 54.1 |
| Number of employees at end of period | 51 | 40 |
| 3 MONTHS 2016 Oct.-Dec. |
3 MONTHS 2015 Oct.-Dec. |
12 MONTHS 2016 Jan.-Dec. |
12 MONTHS 2015 Jan.-Dec. |
|
|---|---|---|---|---|
| Net sales | 30,789 | 9,984 | 71,284 | 15,925 |
| Operating costs Research and development costs Sales and administrative costs Other operating revenues and costs |
-26,186 -12,005 74 -38,117 |
-26,808 -8,737 158 -35,387 |
-99,477 -35,715 1,049 -134,143 |
-80,502 -31,647 1,251 -110,898 |
| Operating profit/loss | -7,328 | -25,403 | -62,859 | -94,973 |
| Profit/loss from financial investments | 44 | -39 | 272 | -55 |
| Profit/loss after financial items | -7,284 | -25,442 | -62,587 | -95,028 |
| Tax | - | 4,347 | - | 4,347 |
| Profit/loss | -7,284 | -21,095 | -62,587 | -90,681 |
| Other comprehensive income Changes in actual value current investments |
- | - | - | - |
| Comprehensive income | -7,284 | -21,095 | -62,587 | -90,681 |
| 2016 | 2015 | |
|---|---|---|
| 31 dec. | 31 dec. | |
| Assets | ||
| Fixed assets | ||
| Intangible fixed assets | 0 | 0 |
| Tangible fixed assets | 5,648 | 1,323 |
| Financial fixed assets | 687 | 100 |
| Total fixed assets | 6,335 | 1,423 |
| Current assets | ||
| Inventories | 1,918 | 464 |
| Current receivables | 42,618 | 12,687 |
| Cash and bank | 226,114 | 39,973 |
| Total current assets | 270,650 | 53,124 |
| Total assets | 276,985 | 54,547 |
| Shareholders' equity and liabilities | ||
| Shareholders' equity | ||
| Restricted equity | 52,069 | 40,726 |
| Non-restricted equitys | 178,406 | -11,234 |
| Total shareholders' equity | 230,475 | 29,492 |
| Liabilities | ||
| Current liabilities | 46,510 | 25,055 |
| Total shareholders' equity and liabilities | 276,985 | 54,547 |
Lund, 15 February 2017, The Board of Directors
This report has not been reviewed by the company's auditors.
Co. reg. no. 556537-7263 Address: Sölvegatan 41, 223 70 Lund Tel.: +46 (0)46 286 85 50 [email protected]
This financial statement contains statements about the future, consisting of subjective assumptions and forecasts for future scenarios. Predictions for the future only apply as of the date they are made and are, by their very nature, in the same way as research and development work in the biotech segment, associated with risk and uncertainty. With this in mind, the actual out-come may deviate significantly from the scenarios described in this press release.
This information is information that BioInvent International AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 8.30 a.m. CET, on 15 February, 2017.
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