BELLUS Health reports results for the year ended December 31, 2014
25 Feb, 2015, 07:00 ET
LAVAL, QC, Feb. 25, 2015 /CNW/ - BELLUS Health Inc. (TSX: BLU) (BELLUS Health or the Company), a drug development company focused on rare diseases, today reported its financial and operating results for the year ended December 31, 2014.
2014 and Early 2015 Highlights
- Enrollment for the KIACTA™ Phase III Confirmatory Study in AA amyloidosis completed, with a total of 261 patients participating in the study;
- More than two-thirds (2/3) of the required events to complete the KIACTA™ Phase III Confirmatory Study have occurred; the study is on track to conclude in 2016;
- The exploratory sale process for KIACTA™, initiated in May 2014 with financial advisor Lazard, is on-going;
- License agreement for the development of KIACTA™ in sarcoidosis entered into by BELLUS Health's partner, Auven Therapeutics, with Mount Sinai Hospital;
- Shigamab™ proof of concept studies demonstrated prevention of toxicity of Shiga toxin type 2 in a lethal sHUS mouse model;
- Sold all ABCP Notes and used proceeds thereof to settle credit facilities;
- Concluded the year with a cash position of $12.3 million, which should enable the Company to finance its operations beyond the end of the Phase III Confirmatory Study for KIACTA™;
- Subsequent to year end, launched a suite of online corporate communication channels on major social media platforms to maintain on-going communication with shareholders and other interested parties;
- Subsequent to year end, Ms. Murielle Lortie, CPA, CA, Vice President, Finance and Chief Financial Officer of Pharmascience Inc., joined BELLUS Health's Board of Directors;
- Subsequent to year end, regained exclusive rights to AL amyloidosis program and related compounds.
"2014 was a highly productive year for BELLUS Health," said Roberto Bellini, President and Chief Executive Officer of BELLUS Health. "The KIACTA™ Phase III Confirmatory Study has now concluded its enrollment and more than two-thirds (2/3) of the required events to complete the study have occurred. During the year, we diversified and strengthened our growing pipeline of rare disease projects, and we ended 2014 with ample financial resources to take us through the completion of the KIACTA™ study, which is anticipated to occur in 2016. In 2015, we intend to continue with the process aimed at monetizing KIACTA™, and it is expected that a Phase II trial will be initiated for KIACTA™ in sarcoidosis."
KIACTA™ for AA Amyloidosis
In January 2015, the KIACTA™ Phase III Confirmatory Study completed its enrollment, with a total of 261 patients participating in the study. Previously in 2014, the study reached its targeted enrollment of 230 patients. The enrollment was extended beyond 230 patients as eligible patients who were in pre-screening and screening at the time the target was reached were also given the opportunity to enroll in the study. The study is designed to confirm the safety and efficacy of KIACTA™ in preventing renal function decline in patients diagnosed with AA amyloidosis, an orphan indication resulting in renal dysfunction that often leads to dialysis and death.
The Phase III Confirmatory Study is an event-driven trial that will conclude when 120 patients have experienced an event linked to the deterioration of kidney function. To date, more than two-thirds (2/3) of the required events have occurred, and based on the current event rate, the KIACTA™ Phase III Confirmatory Study is expected to conclude in 2016.
KIACTA™ is partnered with global private equity firm Auven Therapeutics. Auven Therapeutics is conducting the KIACTA™ study and funding 100% of the development costs, including the Phase III Confirmatory Study and other related activities, which total costs are currently estimated to be in excess of US$60 million.
In May 2014, Auven Therapeutics and BELLUS Health agreed upon modified terms to the KIACTA™ asset sale and license agreement in relation to the share of proceeds from a potential divestiture of KIACTA™. Overall proceeds from potential future revenue of KIACTA™ will be shared between Auven Therapeutics and BELLUS Health based on a pre-agreed formula included in the agreement, and assuming that total divestiture transaction proceeds reach a pre-determined threshold, the parties will share aggregate proceeds equally.
The process to explore the sale of KIACTA™, which was initiated in May 2014 with the engagement of financial advisor Lazard by Auven Therapeutics, is on-going. This initiative provides more flexibility to divest KIACTA™ at the most opportune time for stakeholders, whether that is prior to or following the conclusion of the KIACTA™ Phase III study.
KIACTA™ for Sarcoidosis
In May 2014, Auven Therapeutics and BELLUS Health announced that Auven Therapeutics had entered into a license agreement with Icahn School of Medicine at Mount Sinai Hospital, New York, under which Auven Therapeutics obtained rights to develop KIACTA™ (eprodisate) as a treatment for chronic sarcoidosis, a rare inflammatory condition that affects the lungs. There is no cure for sarcoidosis, and treatment options are limited and can have serious adverse effects. Obtaining the rights to move KIACTA™ into a second indication further expands its commercial potential.
Auven Therapeutics intends to conduct a Phase II proof-of-concept trial to evaluate KIACTA™'s effectiveness in treating certain medical manifestations of sarcoidosis. The Phase II trial is expected to begin in mid-2015. All costs in relation to the development of KIACTA™ in sarcoidosis will be borne by Auven Therapeutics. Proceeds from potential future revenue of KIACTA™, including the rights to KIACTA™ for sarcoidosis, are subject to the proceeds sharing agreement between Auven Therapeutics and BELLUS Health.
Shigamab™ for sHUS
Shigamab™ is a monoclonal antibody therapy being developed for the treatment of Hemolytic Uremic Syndrome caused by Shiga toxin-producing E. coli (STEC) (sHUS), which principally affects the kidneys and often leads to acute dialysis, and in certain cases, chronic kidney disease and death, primarily in children.
During 2014, in studies performed in collaboration with the Uniformed Services University of the United States Department of Defense, Shigamab™ was shown to prevent toxicity of Shiga toxin type 2 in a sHUS mouse model, as measured by body weight loss, renal biomarkers and renal histopathology. Further pre-clinical studies are being conducted to evaluate Shigamab™ in the treatment of toxicity of Shiga toxin type 2.
Shigamab™ previously completed a Phase II clinical trial, where it was shown to be safe and well tolerated in a STEC-positive pediatric population.
Co-development Agreement for AL Amyloidosis
In February 2015, the agreement entered into by BELLUS Health with AmorChem Holdings Inc. in October 2013 was terminated. This agreement focused on the development of drug candidates for the treatment of AL amyloidosis, a rare disease in which amyloid protein builds up and causes dysfunction in various parts of the body. As a result of the termination, BELLUS Health regained exclusive rights to its AL amyloidosis program and related compounds.
Launch of Digital Corporate Communication Channels
BELLUS Health announced today a suite of online corporate communication channels to maintain on-going direct communication with shareholders and other interested parties. The Company has launched official portals on social media channels including Facebook, Twitter, LinkedIn and Google+. The Company will also launch an official blog on its website. Through this blog, BELLUS Health's executives will be able to address important topics as they relate to Company projects, rare diseases, industry trends and specific points of discussion as they relate to key events at BELLUS Health. Links to the new communication tools can be found on the BELLUS Health website at www.bellushealth.com.
The BELLUS Health blog entries will also be posted on TheChairmansBlog.com, an exclusive, online media publication where publicly and privately held firms alike share insights about their companies and industries, enabling upper tier management to discuss issues that are of importance to their stakeholders, shareholders, and interested parties in an informal environment. The official BELLUS Health Chairman's Blog profile can be found at http://www.thechairmansblog.com/bellus-health.
Ms. Murielle Lortie, CPA, CA, Joins BELLUS Health's Board of Directors
Effective February 24, 2015, Ms. Murielle Lortie joined BELLUS Health's Board of Directors.
Ms. Lortie is Vice President, Finance and Chief Financial Officer of Pharmascience Inc. (Pharmascience), a top ten Canadian pharmaceutical company based in Montreal. Prior to this position, Ms. Lortie was Advisor to the CEO, Global Strategy and Mergers & Acquisitions at Pharmascience. Prior to joining Pharmascience, Ms. Lortie held a number of senior finance positions at Bristol-Myers Squibb Co., Bristol-Myers Squibb Canada Co., Lafarge North America and Arthur Anderson.
Ms. Lortie replaces Mr. Donald Olds, who stepped down from the Board of Directors effective February 24, 2015.
"We would like to thank Mr. Olds for his contribution and sound advice during the past years," said Dr. Francesco Bellini, Chairman of BELLUS Health. "We are pleased to welcome Murielle Lortie and believe that she will be a valuable addition to our Board."
Sale of ABCP Notes and Settlement of Credit Facilities
In November 2014, the Company sold all of its asset-backed commercial paper notes (ABCP Notes) for a total consideration of $5.3 million and used the proceeds thereof to settle its credit facilities which were scheduled to mature in April 2016. Net cash generated from these transactions amounted to $152,000. Early settlement of its credit facilities will enable the Company to save approximately $150,000 in future interest payments, and fully eliminated its bank indebtedness. The sale of ABCP Notes also eliminated the market risk associated with these assets.
Summary of Financial Results
All currency figures reported in this press release are in Canadian dollars, unless otherwise specified.
| Year Ended December
| Year Ended December
|(in thousands of dollars, except per share data)|
|Research and development expenses||(1,695)||(1,270)|
|General and administrative expenses||(3,150)||(4,275)|
|Net finance income||452||646|
|Gain on acquisition||-||1,672|
|Deferred tax recovery||49||-|
|Net loss for the year||(1,968)||(971)|
|Net loss attributable to shareholders||(1,931)||(872)|
|Basic and diluted loss per share||(0.04)||(0.02)|
The Company's full consolidated financial statements and accompanying management's discussion and analysis for the year ended December 31, 2014 will be available shortly on SEDAR at www.sedar.com and on the Company's website at www.bellushealth.com.
- Revenues amounted to $2,376,000 for the year ended December 31, 2014, compared to $2,256,000 for the previous year. Revenues primarily consist of revenue recognized for accounting purposes in relation the asset sale and license agreement and the service agreement entered into with Auven Therapeutics in 2010 for KIACTA™.
- Research and development expenses amounted to $1,695,000 for the year ended December 31, 2014, compared to $1,270,000 for the previous year. The increase is primarily attributable to expenses incurred in relation to the development of Shigamab™, which drug candidate was acquired through the acquisition of Thallion Pharmaceuticals Inc. (Thallion) in August 2013.
- General and administrative expenses amounted to $3,150,000 for the year ended December 31, 2014, compared to $4,275,000 for the previous year. The decrease is primarily attributable to transaction costs recorded in 2013 in relation to the acquisition of Thallion, as well as a reduction of expenses in relation to VIVIMIND™, divested in October 2013, and professional fees.
- Net finance income amounted to $452,000 for the year ended December 31, 2014, compared to $646,000 for the previous year. The decrease is primarily attributable to a lower increase in the fair value of the ABCP Notes compared to the previous year, partially offset by an increase in foreign exchange gain that arose from the translation of the Company's net monetary assets denominated in US dollars, due to the appreciation of the US dollar vs the CDN dollar in 2014.
- Gain on acquisition amounted to $1,672,000 for the year ended December 31, 2013, and is in relation to the acquisition of Thallion in August 2013. The gain on acquisition represents the difference between the fair value of the identifiable assets acquired and liabilities assumed and the consideration transferred.
As at December 31, 2014, the Company had available cash, cash equivalents and short-term investments totaling $12,307,000, compared to $15,297,000 as at December 31, 2013. Based on management's estimate, the current cash position should enable the Company to finance its operations beyond the end of the KIACTA™ Phase III Confirmatory Study, expected to be completed in 2016.
About BELLUS Health (www.bellushealth.com)
BELLUS Health is a drug development company focused on rare diseases. It has a portfolio of rare disease projects including KIACTA™ in Phase III for AA amyloidosis, KIACTA™ for sarcoidosis, clinical stage ShigamabTM for sHUS and a research-stage project for AL amyloidosis. The lead program KIACTA™ is currently in a Phase III Confirmatory Study for the treatment of AA amyloidosis, an orphan indication resulting in renal dysfunction that often leads to dialysis and death. KIACTA™ is partnered with global private equity firm Auven Therapeutics.
About AA Amyloidosis
AA amyloidosis is a deadly condition that progresses from chronic inflammatory diseases such as rheumatoid arthritis. The disease causes a protein called amyloid A to accumulate in major organs, particularly the kidneys, which leads to organ dysfunction, failure, and eventually death.
There is currently no available treatment for AA amyloidosis. A recent commercial assessment study conducted by Navigant Consulting on behalf of Auven Therapeutics and BELLUS Health indicated that there are approximately 13,000 diagnosed and addressable patients with AA Amyloidosis worldwide, of which an estimated 10,300 are in the U.S. and the EU5.
KIACTA™ has been granted Orphan Drug designation or its equivalent for the treatment of AA amyloidosis in the United States, Europe and Japan, which provide for market exclusivity for a period of seven to ten years once the drug is approved, as well as a reduction in application and review fees.
Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute "forward-looking statements" within the meaning of Canadian securities legislation and regulations. Such statements, based as they are on the current expectations of management, inherently involve numerous important risks, uncertainties and assumptions, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks factors include but are not limited to: the ability to obtain financing, the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which the BELLUS Health Inc. does business, stock market volatility, fluctuations in costs, changes to the competitive environment due to consolidation, achievement of forecasted burn rate, potential payments in relation to indemnity agreements, achievement of forecasted clinical trial milestones, dependence on Auven Therapeutics for the completion of the KIACTA™ Phase III Confirmatory Study and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. In addition, the length of the KIACTATM Phase III Confirmatory Study is dependent upon many factors, including patient drop-out rate and occurrence of clinical endpoint events, and the sharing of proceeds between Auven Therapeutics and BELLUS Health Inc. from potential future revenue of KIACTA™ is dependent upon a number of factors, including the quantum of proceeds. Consequently, actual future results and events may differ materially from the anticipated results and events expressed in the forward-looking statements. The Company believes that expectations represented by forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These forward-looking statements speak only as of the date made, and BELLUS Health Inc. is under no obligation and disavows any intention to update publicly or revise such statements as a result of any new information, future event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see BELLUS Health Inc.'s public filings with the Canadian securities regulatory authorities, including the Annual Information Form, for further risk factors that might affect BELLUS Health Inc. and its business.
SOURCE BELLUS Health Inc.
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