LAVAL, QC, Feb. 27, 2013 /CNW/ - BELLUS Health Inc. (TSX: BLU) ("BELLUS Health" or the "Company") today reported its financial results for the year ended December 31, 2012, and provided an update on its pipeline of products.
2012 Highlights
- Recruitment continued for the Phase III Confirmatory Study for KIACTA™ for the treatment of AA amyloidosis, with more than 50% of patients recruited to date, and expected to be completed in the first half of 2014;
- Completed a $17.25 million strategic partnership and financing with Pharmascience Inc., including $8.15 million in non-dilutive capital and a $9.1 million investment for a 10.4% ownership stake;
- Settled all outstanding convertible securities principally through the issuance of common shares of the Company, and consolidated its common shares on the basis of one new post-consolidation common share for every 30 pre-consolidation common shares;
- Entered into a partnership with Asclepios Bioresearch (UK) Limited for the development of BLU8499, BELLUS Health's drug candidate for the treatment of Alzheimer's disease;
- Further expanded VIVIMIND™'s marketing and sales network through the conclusion of three new distribution agreements in Israel, Taiwan and South Korea; and
- Concluded the year with a cash position of $18.6 million as of December 31, 2012.
"This past year marked a period of significant progress for the Company," said Roberto Bellini, President and Chief Executive Officer of BELLUS Health. "We now have sufficient funding to complete the ongoing Phase III Confirmatory Study for KIACTA™, and we have the financial resources to evaluate additional opportunities to strengthen our pipeline. We have also simplified our capital structure and, most importantly, our clinical assets are making consistent headway."
Phase III Confirmatory Study for KIACTA™ (eprodisate)
During the fourth quarter of 2012, recruitment continued for the Phase III Confirmatory Study for KIACTA™ for the treatment of 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.
It is expected that patient recruitment will be completed in the first half of 2014. The Phase III Confirmatory Study is an event-driven study that will end when 120 patients reach an event linked to deterioration of kidney function. It is currently projected that the study will reach 120 events in 2017. BELLUS Health is actively working with its partner Celtic Therapeutics Inc. (Celtic Therapeutics) on actions to accelerate patients' recruitment.
Celtic Therapeutics is funding 100% of the development costs of KIACTA™ including the Phase III Confirmatory Study and other related activities. The total cost of the development activities of KIACTA™ is currently estimated to be in excess of US$50 million. Celtic 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 open label extension study (OLES). The first patients are expected to be enrolled in the OLES in the first half of 2013.
BLU8499
During the third quarter of 2012, the Company entered into a partnership with Asclepios Bioresearch (UK) Limited (Asclepios) for the development of BLU8499, BELLUS Health's drug candidate for the treatment of Alzheimer's disease. Under the terms of the agreement, Asclepios will fund all Phase IIa enabling activities and has committed to a second tranche of additional capital for the conduct of a Phase IIa clinical trial in mild Alzheimer's disease patients. The total investment and commitment by Asclepios towards the development of BLU8499 is expected to be approximately $4 million. Under the terms of the agreement, BELLUS Health will earn study management fees equal to 15% of direct development costs and will also be reimbursed for certain intellectual property costs. According to the agreement, it is expected that the two parties will share the overall proceeds from the future monetization of BLU8499 approximately equally.
The Phase IIa clinical trial is currently expected to be initiated in the second half of 2014.
VIVIMIND™
In 2012, the Company entered into three new distribution agreements for VIVIMIND™ in Israel, Taiwan and South Korea.
Total revenues in relation to VIVIMIND™ distribution agreements amounted to $448,000 for the year ended December 31, 2012, an increase of 68% compared to 2011. VIVIMIND™ is a natural health product designed to protect memory function. The Company currently has distribution agreements with partners in several countries, including Italy, Canada, Taiwan, Greece, certain countries in the Middle East, Israel and South Korea.
Summary of Financial Results
All currency figures reported in this press release are in Canadian dollars, unless otherwise specified. Comparative per share data for 2011 have been retrospectively adjusted to reflect the consolidation of the Company's common shares.
| Year ended December 31, 2012 |
Year ended December 31, 2011 |
|
| (in thousands of dollars, except per share data) | ||
| Revenues | 2,298 | 3,066 |
| Research and development expenses, net |
(954) | (1,315) |
| General and administrative expenses |
(4,961) | (3,543) |
| Finance income | 1,272 | 13,254 |
| Finance costs | (19,625) | (8,038) |
| Gain on sale of unrecognized assets |
8,150 | - |
| Other income | 650 | - |
| Net (loss) income | (13,170) | 3,424 |
| Net (loss) income attributable to owners of the Company |
(13,255) | 3,424 |
| Basic (loss) earnings per share | (0.41) | 0.39 |
| Diluted loss per share | (0.41) | (0.19) |
The Company's full consolidated financial statements and accompanying management's
discussion and analysis for the year ended December 31, 2012, will be available shortly on
SEDAR at www.sedar.com and on the Company's website at www.bellushealth.com.
- For the year ended December 31, 2012, net loss attributable to owners of the Company amounted to $13,255,000 ($0.41 per share), compared to a net income of $3,424,000 ($0.39 per share) for the previous year. The increase in net loss is primarily due to items recorded in relation to the strategic partnership, financing and capital reorganization in the second quarter of 2012, namely a non-cash loss on settlement of convertible securities in the amount of $15,751,000 (including the change in fair value of the embedded conversion option liability on the 2009 Notes), partially offset by a gain on sale of unrecognized assets in the amount of $8,150,000. In addition, results for the year ended December 31, 2011, included finance income in relation to the decrease in the fair value of the embedded conversion option liability on the 2009 Notes in the amount of $13,105,000.
- Revenues amounted to $2,298,000 for the year ended December 31, 2012, compared to $3,066,000 for the previous year. The decrease is primarily due to lower revenue recognized for accounting purposes in relation to the agreements entered into with Celtic Therapeutics for the development of KIACTA™.
- Research and development expenses, net of research tax credits and grants, amounted to $954,000 for the year ended December 31, 2012, compared to $1,315,000 for the previous year. The decrease is mainly attributable to a reduction in expenses incurred in relation to the BLU8499 Phase I clinical trial for the treatment of Alzheimer's disease, which ended in the first quarter of 2011, and a reduction in the workforce and other cost reduction initiatives in 2011.
- General and administrative expenses amounted to $4,961,000 for the year ended December 31, 2012, compared to $3,543,000 for the previous year. The increase is due to transaction costs incurred in relation to the strategic partnership, financing and capital reorganization.
- Finance income amounted to $1,272,000 for the year ended December 31, 2012, compared to $13,254,000 for the previous year. The decrease is mainly attributable to finance income recorded in 2011 in relation to the decrease in the fair value of the embedded conversion option liability on the 2009 Notes in the amount of $13,105,000, mainly attributable to the decrease in the Company's share price, partially offset by an increase in fair value of the New ABCP Notes in the amount of $1,135,000 recorded in 2012.
- Finance costs amounted to $19,625,000 for the year ended December 31, 2012, compared to $8,038,000 for the previous year. The increase is primarily due to a non-cash loss on the settlement of convertible securities (including the change in fair value of the embedded conversion option liability on the 2009 Notes) in the amount of $15,751,000, recorded in relation to the strategic partnership, financing and capital reorganization, partially offset by a reduction in accretion expense as a result of the settlement of convertible securities, as part of the same transaction.
- Gain on sale of unrecognized assets amounted to $8,150,000 for the year ended December 31, 2012 (nil for the previous year), in relation to the non-dilutive capital payment received from Pharmascience Inc., as part of the strategic partnership and financing in 2012.
- Other income amounted to $650,000 for the year ended December 31, 2012 (nil for the previous year), and represents a milestone payment received from Advanced Orthomolecular Research Inc. (AOR) during the second quarter of 2012 in relation to AOR's acquisition of BELLUS Health's wholly-owned Canadian subsidiary, OVOS Natural Health Inc., in December 2010.
As at December 31, 2012, the Company had available cash, cash equivalents and short-term investments totalling $18.6 million.
About BELLUS Health
BELLUS Health is a development-focused healthcare company concentrating on products that provide innovative health solutions and address critical unmet medical needs. The Company's lead program is KIACTA™, a novel drug candidate 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 Celtic Therapeutics. AA amyloidosis affects approximately 35,000 to 50,000 individuals in the United States, Europe and Japan.
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 suggests that peak annual revenues of $400 million to $600 million are achievable.
Because patients diagnosed with AA amyloidosis tend to quickly progress to a costly regimen of dialysis, healthcare payers are anxious to find alternative treatments for this deadly condition. KIACTA™ has been granted Orphan Drug designation or its equivalent in the United States and Europe, which provide seven 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 immediately in current markets, the impact of general economic conditions, general conditions in the pharmaceutical and/or nutraceutical 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, 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. In addition, the length of KIACTATM Phase III Confirmatory Study is dependent upon many factors including clinical sites activation, patients' enrollment rate, patients' drop-out rate and occurrence of worsening 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.
Adam Peeler
TMX Equicom
416-815-0700 ext. 225 | [email protected]
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