LAVAL, QC, Nov. 5, 2013 /CNW/ - BELLUS Health Inc. (TSX: BLU) ("BELLUS Health" or the "Company") today reported its financial and operational results for the third quarter ended September 30, 2013.
Third Quarter 2013 Highlights
- Acquired all outstanding common shares of Thallion Pharmaceuticals Inc. The acquisition adds a clinical stage drug candidate in a rare disease indication and strengthens the Company's cash position by more than $1.1 million;
- Continued recruitment for the Phase III Confirmatory Study for KIACTA™ for the treatment of AA amyloidosis. Based on the current recruitment rate, it is expected that patient recruitment will be completed in the first half of 2014;
- KIACTA™ intellectual property further strengthened through the issuance of a U.S. patent expiring in 2026;
- KIACTA™ granted Orphan Disease Drug Status in Japan. Japanese drug development grant also received for KIACTA™;
- Concluded the quarter with a cash position of $16.0 million, enabling the Company to finance its operations into 2018, beyond the end of KIACTA™ Phase III Confirmatory Study;
- Subsequent to quarter-end, recommendation of the Data and Safety Monitoring Board to continue KIACTA™ Phase III Confirmatory Study as per protocol, based on last review;
- Subsequent to quarter-end, announced the divestiture of two non-core assets: VIVIMIND™, a natural health product for memory protection, and BLU8499, a drug candidate for the treatment of CNS diseases including Alzheimer's disease;
- Subsequent to quarter-end, announced an agreement with AmorChem Holdings Inc. to develop drug candidates for the treatment of AL amyloidosis.
"BELLUS Health has emerged as a significantly stronger and more focussed company," said Roberto Bellini, President and Chief Executive Officer of BELLUS Health. "We have greater financial resources to move our promising pipeline of rare disease assets forward, and we now have the opportunity to deploy all of our drug development expertise towards this compelling therapeutic area."
Acquisition of Thallion Pharmaceuticals Inc.
On August 15, 2013, the Company acquired all of the issued and outstanding common shares of Thallion Pharmaceuticals Inc. ("Thallion"), for a purchase price of $6.266 million or $0.1889 per common share and the issuance of one contingent value right ("CVR") per common share. The transaction was done by way of a court approved plan of arrangement.
Thallion is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. Thallion's lead clinical program Shigamabs™ is a monoclonal antibody therapy being developed for the treatment of Hemolytic Uremic Syndrome ("HUS") related to Shiga toxin-producing E. coli ("STEC") bacterial infections. HUS principally affects the kidneys and often leads to acute dialysis, and in certain cases chronic kidney disease and death, primarily in children. Shigamabs™ has recently completed a Phase II clinical trial.
This transaction strengthens BELLUS Health's pipeline by adding a clinical stage drug candidate in a rare renal indication and also strengthens BELLUS Health's cash position by more than $1.1 million, Thallion having cash, cash equivalents and short-term investments of approximately $7.4 million on closing of the transaction.
Phase III Confirmatory Study for KIACTA™
During the third quarter of 2013, recruitment continued for the Phase III Confirmatory Study for KIACTA™. 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 rapidly leads to dialysis and death. The study will involve approximately 230 patients enrolled from more than 70 sites and 30 countries worldwide.
Based on the current recruitment rate, it is expected that patient recruitment will be completed in the first half of 2014. The Phase III Confirmatory Study is an event-driven clinical trial that will end when 120 events linked to deterioration of kidney function have occurred, which is currently expected to be reached in 2017. BELLUS Health's partner, Auven Therapeutics, is funding 100% of the development costs of KIACTA™, including the Phase III Confirmatory Study and other related activities, which are estimated to be in excess of US$50 million. Auven Therapeutics and BELLUS Health are expected to share the overall proceeds from potential future revenue of KIACTA™ approximately equally.
Patients completing the Phase III Confirmatory Study will be offered to continue in an extended program. The first patients are expected to be enrolled in the extended program in the fourth quarter of 2013.
As part of the Phase III Confirmatory Study, there are periodic meetings of the Data Safety Monitoring Board (DSMB), which independently assesses the safety of KIACTA™ throughout the study. Based on its last review on October 21, 2013, the DSMB recommended that the study continue as per protocol.
On July 23, 2013, the Company announced that KIACTA™ was granted Orphan Disease Drug Status in Japan. As a result, KIACTA™ will receive priority review from Japanese regulatory authorities as a New Drug Application, once it is submitted. In addition, the drug will be granted 10 years of market exclusivity as a treatment for patients with AA amyloidosis. The Company also announced that a Japanese government research organization had granted up to the equivalent of C$500,000 towards KIACTA™ clinical development expenses incurred in Japan. Five clinical sites in Japan are currently participating in the global Phase III Confirmatory Study for KIACTA™.
In July 2013, the U.S. Patent and Trademark Office ("USPTO") granted a U.S. Patent offering strengthened intellectual property protection for KIACTA™. The patent, which will expire in 2026 with a possible extension available up to 2031, covers the dosing regimen of daily administration of KIACTA™ relative to AA Amyloidosis patients' kidney impairment. The patent has also been granted in Canada, Australia and certain countries in Eurasia.
VIVIMIND™ and BLU8499 divestiture
On October 23, 2013, BELLUS Health announced the divestiture of two non-core assets: VIVIMIND™, a natural health product for memory protection, and BLU8499, a drug candidate for the treatment of central nervous system diseases including Alzheimer's disease.
BELLUS Health licensed the worldwide rights to VIVIMIND™ to FB Health S.p.A. ("FB Health") for a cash consideration of more than $2 million to be paid over the next four years. FB Health is an Italy-based distributor of specialty natural health and pharmaceutical products targeting neurologists and geriatricians.
BELLUS Health also entered into a worldwide license agreement with FB Health for BLU8499 and a family of analogs, along with an associated platform of chemotypes and clinical datasets, in exchange for an equity stake in FB Health. In turn, FB Health sub-licensed all its rights to Alzheon Inc. ("Alzheon"), as part of an exclusive worldwide license, excluding Italy. BELLUS Health will receive a portion of all future payments received by Alzheon and royalties on net sales of BLU8499. Alzheon is a clinical-stage biotechnology company focused on brain health, memory and aging, developing the next generation of medicines for Alzheimer's and other neurodegenerative diseases.
An independent committee of the BELLUS Health Board of Directors was put in place to review and consider the transactions. They are considered to be "related party transactions" under International Financial Reporting Standards ("IFRS"). FB Health is controlled by Dr. Francesco Bellini, the Chairman of the Board of Directors of BELLUS Health. Alzheon is controlled by Dr. Martin Tolar, a member of the Board of Directors of BELLUS Health. The independent committee was formed of independent members of the BELLUS Health Board of Directors. It was chaired by Mr. Charles Cavell and also included Mr. Donald Olds and Mr. Pierre Larochelle. The independent committee found the transaction fair and unanimously recommended its approval to the BELLUS Health Board of Directors, which voted unanimously in favour of the transaction, excluding Dr. Bellini and Dr. Tolar who declared their interest and recused themselves.
BELLUS Health also announced the termination of its agreement with Asclepios Bioresearch (UK) Limited for the development of BLU8499.
Co-development agreement for AL amyloidosis
On October 28, 2013, BELLUS Health announced an agreement with AmorChem Holdings Inc. ("AmorChem") to develop drug candidates for the treatment of AL amyloidosis. As part of the co-development agreement, BELLUS Health will provide proof-of-concept data, know-how and expertise. AmorChem will fund the synthesis to be done at NuChem Therapeutics inc. and the biological testing to confirm the compounds' potential in established models of AL amyloidosis. Upon completion of the co-development efforts, BELLUS Health will have an exclusive, time-limited option to buy out AmorChem's rights in the project.
AL amyloidosis is a rare disease in which proteins build up in various parts of the body, mainly the kidneys, heart, liver and peripheral nerves. As these proteins accumulate, they disrupt the structure and function of the affected tissues and organs leading to organ failure and eventually, death. The median survival time of patients with AL amyloidosis is one to two years from diagnosis. Currently, there is no specific treatment for the disease; patients are treated with high dose chemotherapy or stem cell transplant. AL amyloidosis affects approximately 15,000 patients in the United States and Europe.
Summary of Financial Results
All currency figures reported in this press release are in Canadian dollars, unless otherwise specified.
| Three-months ended
September 30, 2013
| Three-months ended
September 30, 2012
|(in thousands of dollars, except per share data)|
| Research and development
| General and administrative
|Gain on acquisition||1,672||-|
|Net income (loss)||1,021||(286)|
| Net income (loss) attributable to
owners of the Company
|Basic earnings (loss) per share||0.02||(0.01)|
|Diluted earnings (loss) per share||0.02||(0.01)|
The Company's full consolidated financial statements and accompanying management's discussion and analysis for the three and nine-month periods ended September 30, 2013, will be available shortly on SEDAR at www.sedar.com and on the Company's website at www.bellushealth.com.
- For the three-month period ended September 30, 2013, net income attributable to owners of the Company amounted to $1,039,000 ($0.02 per share), compared to a net loss of $256,000 ($0.01 per share) for the corresponding period the previous year. The increase in net income is primarily due to a gain of $1,672,000 in relation to the acquisition of Thallion in August 2013.
- General and administrative expenses amounted to $987,000 for the three-month period ended September 30, 2013, compared to $768,000 for the corresponding period the previous year. The increase is mainly due to transaction costs incurred in relation to the acquisition of Thallion as well as the transactions concluded in October 2013, discussed above.
- Gain on acquisition amounted to $1,672,000 for the three-month period ended September 30, 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 September 30, 2013, the Company had available cash, cash equivalents and short-term investments totalling $16,004,000, compared to $18,569,000 as at December 31, 2012. Based on management's estimate, the current cash position should enable the Company to finance its operations into 2018, beyond the end of KIACTA™ Phase III Confirmatory Study.
About BELLUS Health
BELLUS Health is developing a portfolio of drugs for rare diseases including KIACTA™ in Phase III for AA amyloidosis, clinical stage Shigamabs™ for STEC-related Hemolytic Uremic Syndrome ("sHUS") and a research-stage project for AL amyloidosis. The Company's 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 rapidly 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 and it is estimated that approximately 35,000 to 50,000 patients are living with the disease in the United States, Europe and Japan. Independent research conducted by the Frankel Group in 2009 estimates peak annual revenues of $400 million to $600 million.
KIACTA™ has been granted Orphan Drug designation or its equivalent in the United States, Europe and Japan, which provide seven, ten and ten years of market exclusivity, respectively, once the drug is approved, as well as a reduction in application and review fees.
Forward Looking Statements
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. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks 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 BELLUS Health Inc. does business, stock market volatility, fluctuations in costs, and 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, and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. The length of KIACTATM Phase III Confirmatory Study is dependent upon many factors including clinical sites activation, patient enrolment rate, patient drop-out rate and occurrence of clinical endpoint events. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These statements speak only as of the date made and BELLUS Health Inc. is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see BELLUS Health Inc.'s public fillings 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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