(all figures are in Canadian dollars unless otherwise noted)
BELLEVILLE, ON, May 14, 2014 /CNW/ - Bioniche Life Sciences Inc. (TSX:
BNC), a clinical stage biotechnology company, today announced financial
results for the third quarter of Fiscal 2014 (ended March 31, 2014).
Highlights of the year-to-date include:
Successful execution of Animal Health division sale to Vétoquinol for
$61 million plus working capital adjustment;
Repayment of $47.9 million of corporate debt and reduction of annual
cash interest carrying charges from $5.2 million to $0.4 million on the
remaining $7.8 million of interest-bearing debt associated with the
Vaccine Manufacturing Centre (VMC);
Initiation of sale/partnering of Econiche Corp. assets, led by
Ongoing dialogue with U.S. FDA on the regulatory pathway for Urocidin™; and
Initiation of process to identify and acquire additional human
therapeutics to build a product pipeline.
As a result of the Company's decision to divest the Animal Health
business last year, the Fiscal 2014 third quarter financial statements
have been segmented into continuing operations (Human Health and One
Health business units) and discontinued operations (Animal Health
Subsequent Event: Sale of Bioniche Animal Health Business to Vétoquinol
and Debt Repayment
As announced on April 15, 2014, the Bioniche Animal Health business was
sold to Vétoquinol. Vétoquinol paid $61 million cash for the business,
$58 million of which was received by the Company upon closing of the
transaction. An amount of $3 million is being held in escrow and will
be paid over three years. The Share Purchase Agreement also specifies
that a purchase price adjustment will be calculated and paid within 90
days of closing based upon the working capital at transaction closing
compared to the working capital at June 30, 2013.
"The Company has utilized the sale proceeds to repay in full its
expensive debt with Paladin Labs Inc. ($34.8 million with penalties and
interest), $5 million of its debt with the Ontario Ministry of Economic
Development, Trade, and Employment, its debt with Capital Royalty L.P.
($7.4 million), $0.5 million of its debt with the Business Development
Bank, and the remainder of its mortgage in Armidale, Australia ($0.2
million)," said Dr. Michael Berendt, CEO of Bioniche Life Sciences Inc.
"Following these repayments and the payment of transaction-related
fees, together with cash on hand at closing, the Company has
approximately $12.2 million in cash and cash equivalents. This
represents approximately 14 months of operations for the Company, based
upon including the first escrow payment of $0.6 million and the
anticipated positive working capital adjustment of $2.4 million from
"Management is continuing to assess opportunities for additional cost
savings and will implement all such initiatives that are feasible and
that contribute to a longer financial runway," added Mr. Donald Olds,
Chief Operating Officer for Bioniche Life Sciences Inc. "To date, these
efforts have included workforce and executive management position
reductions of more than 145 employees, resulting in a streamlined
workforce of approximately 50 individuals today."
Update on One Health/VMC Partnering/Sale
Through its agent, PharmaBioSource, Inc., the Company has identified a
number of companies that have expressed interest in acquiring the
Vaccine Manufacturing Centre (VMC) in Belleville, Ontario and/or the Econiche® vaccine technology.
Urocidin™ Regulatory Update
The Company has submitted additional information to the U.S. FDA in
order to seek specific guidance as to potential regulatory approval
paths for Urocidin™ in the U.S. Once the Company receives such guidance from the U.S. FDA,
it will be able to advance licensing discussions with third parties.
In Canada, the Company is completing a clinical assessment package that
will be submitted to Health Canada in mid-May. This package will
address clinical questions asked by, and additional information
requested by, the Canadian regulator after the Company asked if Urocidin™ may qualify under Health Canada's Notice of Compliance with Conditions
Fiscal 2014 Third Quarter and Year-to-Date Financial Results
The Company's continuing operations recorded no revenues in the quarter
in Fiscal 2014 or Fiscal 2013. On a year-to-date basis, there were no
revenues at March 31, 2014, as compared to $0.08 million at March 31,
2013. In Fiscal 2013, the Company received reimbursement from its
former development partner for Urocidin™-related development costs. Such reimbursement was discontinued when the
Company regained global rights to Urocidin™ in December, 2012.
Cash and cash equivalents from continuing operations amounted to $6.3
million at March 31, 2014, as compared to $4.2 million at June 30,
2013. This improvement reflects the completion of a $9.8 million.
Canadian equity offering and related private placement in September,
2013, as well as loan advances from Paladin Labs Inc., offset by
operating and research and development activities and financial
expenses related to debt. The cash position has been improved with the
sale of the Animal Health business in mid-April.
The Company's total liabilities and shareholders' deficiency at March
31, 2014 was $43.6 million, as compared to $61.5 million at June 30,
Financial expenses settled in cash amounted to $1.5 million for the
third quarter of Fiscal 2014 compared to $0.8 million recorded in Q3,
Fiscal 2013. On a year-to-date basis, such expenses were $4.2 million
at March 31, 2014, as compared to $2.4 million at March 31, 2013. The
increase reflects the increase in the debt from US$20 million to US$30
million, but at an interest rate of 13.25% versus 15%, and the end of
the interest-free period on one of the repayable government assistance
loans. Going forward, with the sale of Animal Health, financial
expenses settled in cash are expected to amount to $30,000 per month.
Administration expenses for continuing operations were $1.3 million in
the third quarter of Fiscal 2014, as compared to $1.0 million in the
third quarter of Fiscal 2013. On a year-to-date basis, administration
expenses were $4.1 million in Fiscal 2014, identical to the same period
of Fiscal 2013. Marketing and selling expenses were $0.7 million in the
third quarter of Fiscal 2014, as compared to $0.2 million in the same
period last year, or $1.0 million year-to-date versus $0.7 million in
the first nine months of last year. The increased marketing and selling
expenses are attributable to severance costs as a result of corporate
Research and development (R&D) expenditures for continuing operations
were $3.5 million in the third quarters of Fiscal 2014 compared to $3.6
in the same quarter of Fiscal 2013. On a year-to-date basis, such
expenditures amounted to $29.6 million at March 31, 2014, as compared
to $10.0 million at March 31, 2013. This significant change relates to
a $20 million impairment of the VMC in Belleville, Ontario due to the
corporate decision to scale-back the VMC operations pending the
identification of a purchaser or partner for this asset.
The basic and fully diluted net loss per Share for the Company's
continuing operations for Q3, Fiscal 2014 is ($0.05), as compared to a
basic and fully diluted net loss per share of ($0.05) in Q3, Fiscal
2013. On a year-to-date basis, the basic and fully diluted loss per
Share for continuing operations is ($0.32), as compared to ($0.18) in
Discontinued Operations (Animal Health)
Revenues for this business unit in Q3, Fiscal 2014 were $6.5 million, as
compared to $7.4 million in the same period in Fiscal 2013. On a
year-to-date basis, revenues at March 31, 2014 were $22.6 million, as
compared to $22.8 million at March 31, 2013. Net income after expenses
on a year-to-date basis was $1.9 million as compared to $1.6 million in
the same nine months of Fiscal 2013.
The basic and fully diluted net loss per Share for the Company's
discontinued operations for Q3, Fiscal 2014 was ($0.02) compared to
$0.00 for Q3, Fiscal 2013. On a year-to-date basis, the basic and fully
diluted earnings per Share for discontinued operations were $0.01, no
change from the same period in Fiscal 2013.
Q3, Fiscal 2014 Summary
The Company's consolidated cash flow used in operations for the quarter
ended March 31, 2014 (both continuing and discontinued operations) was
$4.9 million, as compared to cash used in operations of $1.9 million in
Q3, Fiscal 2013. On a year-to-date basis, consolidated cash flow used
in operations was $13.3 million, as compared to $11.6 million for the
first nine months of Fiscal 2013. The increases over Fiscal 2013 relate
to increased financing expenses associated with corporate debt.
The average monthly burn rate was $1.6 million for Q3, Fiscal 2014, as
compared to $1.3 million for the same quarter in Fiscal 2013. On a
year-to-date basis, the average monthly burn rate was $1.6 million, as
compared to $1.4 million per month in the first nine months of Fiscal
2013. The increases over Fiscal 2013 relate to increased financial
expenses associated with corporate debt and expenses related to the
Animal Health divestment. Going forward, the Company expects the
average monthly burn rate to be $0.8 million after one-time expenses
related to restructuring.
The Company has total Common Shares outstanding at May 13, 2014 of
141,957,653. In addition, the Company has 22,270,912 outstanding
Warrants and 10,738,607 outstanding Options, exchangeable for one
Common Share upon exercise.
More information on the Company's year-end financial results is provided
in the Company's Q3, Fiscal 2014 Management's Discussion and Analysis.
About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a clinical stage Canadian
biopharmaceutical company focused on the discovery, development,
manufacturing, and marketing of proprietary and innovative therapies
for the global human health market. The Company's primary goal is to
develop and commercialize products that advance human health and
increase shareholder value. For more information, please visit www.Bioniche.com.
Except for historical information, this news release may contain
forward-looking statements that reflect the Company's current
expectation regarding future events. These forward-looking statements
involve risk and uncertainties, which may cause, but are not limited
to, changing market conditions, the successful and timely completion of
clinical studies, the establishment of corporate alliances, the impact
of competitive products and pricing, new product development,
uncertainties related to the regulatory approval process, and other
risks detailed from time to time in the Company's ongoing quarterly and
SOURCE: Bioniche Life Sciences Inc.
For further information:
Donald Olds, Chief Operating Officer
Bioniche Life Sciences Inc.
Telephone: (613) 966-8058 ext. 1254