Biota Pharmaceuticals, Inc. (Nasdaq:BOTA) (the "Company") today
announced its financial results for the three month and six month
periods ended December 31, 2013, and provided an update on recent
corporate developments.
"Our financial results and lower overhead expenses for the
quarter, notwithstanding a $1.5 million restructuring charge,
reflect our ongoing commitment to align our cost structure with our
anticipated revenues," stated Russell H. Plumb, President and CEO
of Biota Pharmaceuticals, Inc. "We are also pleased with the
significant increase in royalty revenue we achieved in the quarter
based on higher royalties from net sales of Relenza®, which were
greater this quarter than the amount we earned from Relenza®
royalties during all of our last fiscal year."
Recent Corporate Developments
Public Offering - In January, 2014, the Company reported that it
priced a public offering of 5,813,900 shares of its common stock at
a purchase price of $4.30 per share. On January 14, 2014, the
Company further reported that the underwriter had exercised its
option to purchase 872,085 additional shares at the same price per
share to cover over-allotments. The net proceeds to the
Company from the sale of the shares, including the over-allotment,
and after underwriting discounts and commissions and other offering
expenses, were approximately $26.9 million. The Company
intends to use the net proceeds from the offering for working
capital and general corporate purposes.
Laninamivir Octanoate – In November 2013, the
Company reported that it had commenced dosing patients in the
Northern Hemisphere portion of its Phase 2, randomized, double
blind, placebo controlled, parallel arm clinical trial of
laninamivir octanoate. The trial, referred to as "IGLOO",
compares the safety and efficacy of 40 mg and 80 mg of laninamivir
octanoate with placebo, all delivered by a TwinCaps® inhaler in
adults with symptomatic influenza A or B infection. The
Company reported today that is has enrolled over 60% of the 636
subjects targeted for the trial; however, the rate of PCR-confirmed
influenza patients is trending lower than the Company originally
planned. In the event the PCR-confirmed rate remains below
planned levels, the Company believes it will become challenging to
achieve its goal of completing the IGLOO trial by the end of the
influenza season in the Northern Hemisphere.
In November 2013, the Company also reported that it had
initiated two additional Phase 1 clinical trials of laninamivir
octanoate; one to evaluate its safety and pharmacokinetics in
patients with chronic asthma and the other being a QT/QTc study to
evaluate effect of therapeutic and supra-therapeutic doses of
laninamivir octanoate on the QT-interval in healthy
volunteers. The Company has also initiated a Phase 1/2
clinical trial of laninamivir octanoate in pediatric patients, aged
5-17, infected with influenza. All three trials are
ongoing.
In December 2013, the Company reported that Daiichi Sankyo
Company, Limited ("Daiichi Sankyo") was granted regulatory approval
in Japan to manufacture and market Inavir® Dry Powder Inhaler 20mg
(generic name laninamivir octanoate) for the prevention of
influenza A and B. Inavir® was successfully developed and launched
by Daiichi Sankyo in Japan for the treatment of influenza A and B
viruses in October 2010. The Company is developing laninamivir
octanoate outside of Japan for the treatment of influenza.
Operations – In November 2013, the Company's Board of Directors
adopted a change in the Company's operations whereby it suspended
further investment in the Company's preclinical antibiotic program
and indicated it would seek collaborations, license agreements or
other arrangements to advance the development of this program and
the associated intellectual property. The Company estimated at
that time that it could incur up to $2.9 million in total costs
associated with the related termination, exit or disposal
activities, including up to $2.0 million in one-time termination
benefits during the second and third quarters of its 2014 fiscal
year.
Financial Results for the Three Month Period Ended
December 31, 2013
The Company reported a net loss of $0.1 million for the three
month period ended December 31, 2013, as compared to net income of
$4.6 million in the same period of 2012. The $4.7 million
increase in net loss from 2012 to 2013 was primarily the result of
a non-operating gain of $7.6 million recorded in 2012 as a result
of the merger in November 2012 and the receipt of a $4.4 million
research and development credit in 2012 that were not received in
2013, offset in part by an $8.1 million increase in revenue related
to higher revenue from services and royalties in 2013 than in
2012. Additionally, a decrease of $0.5 million in foreign
exchange gain and a $0.4 million decrease in interest income also
contributed to the increase in net loss in 2013. Basic and
diluted net loss per share were $0.00 for the three month period
ended December 31, 2013, as compared to a basic and diluted net
income per share of $0.16 in the same period of 2012.
Revenue increased to $18.5 million for the three months
ended December 31, 2013 from $10.4 million in the same period of
2012, primarily as a result of a $4.3 million increase in service
revenue under the BARDA contract related to the ongoing Phase 2 and
Phase 1clinical trials of laninamivir octanoate and related
manufacturing activities, as well as an increase in royalty
revenues of $4.1 million, offset in part by a decrease of a $0.3
million in other revenue.
Cost of revenue increased to $11.4 million in the three month
period ended December 31, 2013 from $7.1 million in the same period
in 2012 due to an increase in direct third-party clinical and
product development expenses associated with the ongoing Phase 2
and Phase 1clinical trials of laninamivir octanoate as well as
related manufacturing activities under the BARDA contract.
Research and development expense decreased to $4.2 million for
the three months ended December 31, 2013 from $4.6 million in the
same period of 2012. The decrease was the result of a $0.8
million decrease in recurring salaries, benefits and share-based
compensation expenses resulting from reductions in the Company's
workforce that occurred in April and November of 2013, and a $1.0
million decrease in other direct expenses related to a reduced
number of research programs at the Company, offset in part by a
charge of $1.4 million the Company recorded in 2013 for severance
and one-time termination obligations as a result of the staff
reductions made in November 2013.
General and administrative expense decreased to $3.1 million for
the three months ended December 31, 2013 from $7.1 million in the
same period of 2012, primarily due to merger-related expenses of
$3.4 million that were incurred in 2012 in connection with the
merger with Nabi Pharmaceuticals, Inc. that were not incurred in
2013, and lower salaries, benefits, share-based compensation and
other related expenses as a result of less corporate personnel in
2013 than in 2012.
About Biota
Biota Pharmaceuticals, Inc. is a biopharmaceutical company
focused on the discovery and development of products to prevent and
treat serious and potentially life-threatening infectious
diseases. The Company currently has two Phase 2 clinical-stage
product candidates: laninamivir octanoate, which the Company is
developing for the treatment of influenza A and B infections in the
United States. through a contract with the U.S. Office of
Biomedical Advanced Research and Development Authority (BARDA) that
provides up to $231 million in financial support to complete its
clinical development; and vapendavir, a potent, oral broad spectrum
capsid inhibitor of enteroviruses, including human rhinovirus. In
addition to these clinical-stage development programs, the Company
has preclinical programs focused on developing treatments for
respiratory syncytial virus. For additional information about the
Company, please visit www.biotapharma.com.
Conference Call and Webcast Information
Russell H. Plumb, President and Chief Executive Officer of Biota
Pharmaceuticals Inc., and other members of management will review
the Company's second quarter operating results and financial
position, as well as provide a general update on the Company via a
webcast and conference call today at 9:00 a.m. EST. To access the
conference call, dial (877) 312 5422 (domestic) or (253) 237 1122
(international). A live audio webcast of the call and the archived
webcast will be available in the Investors section of the Biota
website at http://www.biotapharma.com.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve known and unknown risks and uncertainties. All
statements, other than historical facts, including statements
related to the Company's ongoing commitment to align its cost
structure with its anticipated revenue, the intended use of net
proceeds from the recent public offering, the Company's ability to
achieve its goal of completing its ongoing IGLOO trial by the end
of the influenza season in the Northern Hemisphere, and the
estimated future charges that the Company may incur related to the
suspension of further investment in its antibiotic program are
forward looking statements. Various important factors could
cause actual results, performance, events or achievements to
materially differ from those expressed or implied by the
forward-looking statements, including royalty revenues the Company
receives in fiscal 2014 not being materially less than anticipated
levels; the ability of the principal investigators participating in
the ongoing IGLOO trial to correctly diagnose patients with
influenza A and B; the Company, BARDA, the FDA or a similar
regulatory body in another country, a data safety monitoring board,
or an institutional review board, delaying, limiting, suspending or
terminating the clinical development of laninamivir octanoate at
any time for a lack of safety, tolerability, anti-viral activity,
commercial viability, regulatory or manufacturing issues, or any
other reason whatsoever; BARDA terminating or significantly
amending the Company's existing contract to develop laninamivir
octanoate; the Company's ability to secure, manage and retain
qualified third-party clinical research, preclinical research, data
management and contract manufacturing organizations which it relies
on to assist in the design, development and implementation of the
clinical development of laninamivir octanoate; the Company's
ability to recruit and manage clinical trials worldwide; the
severity and seasonality of influenza in regions where the Company
is conducting its clinical trials of laninamivir octanoate; future
changes in the Company's strategy and the implementation of those
changes; the Company's ability to successfully manage its expenses,
operating results and financial position in line with its plans and
expectations, and other cautionary statements contained elsewhere
in this press release and in the Company's Annual Report on Form
10-K for the year ended June 30, 2013, as filed with the U.S.
Securities and Exchange Commission, or SEC, on September 27, 2013
and its Form 10-Q as filed with the SEC on November 12, 2013.
There may be events in the future that the Company is unable to
predict, or over which it has no control, and the Company's
business, financial condition, results of operations and prospects
may change in the future. The Company may not update these
forward-looking statements more frequently than quarterly unless it
has an obligation under U.S. Federal securities laws to do so.
Biota is a registered trademark of Biota Holdings Limited.
Relenza® is a registered trademark of GlaxoSmithKline plc, Inavir®
is a registered trademark of Daiichi Sankyo Company, Ltd and
TwinCaps® is a registered trademark of Hovione FarmaCiencia SA.
BIOTA PHARMACEUTICALS,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in millions, except per share
amounts) |
|
|
December 31,
2013 |
June 30, 2013 |
|
(unaudited) |
|
ASSETS |
Current assets |
|
|
Cash and cash equivalents |
$51.4 |
$66.8 |
Accounts receivable |
26.9 |
11.0 |
Prepaid and other current
assets |
1.0 |
2.2 |
Total current assets |
79.3 |
80.0 |
Non-current assets: |
|
|
Property and equipment,
net |
3.1 |
3.7 |
Intangible assets, net |
0.3 |
0.6 |
Total non-current assets |
3.4 |
4.3 |
Total assets |
$82.7 |
$84.3 |
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
Current liabilities: |
|
|
Accounts payable |
$9.6 |
$4.4 |
Accrued expenses |
6.6 |
8.4 |
Accrued severance
obligations |
2.1 |
3.0 |
Deferred revenue |
-- |
0.3 |
Total current liabilities |
18.3 |
16.1 |
Non-current liabilities: |
|
|
Other liabilities, net of
current portion |
0.2 |
0.2 |
Total liabilities |
18.5 |
16.3 |
Stockholders' equity: |
|
|
Common stock, $0.10 par value;
200,000,000 shares authorized 28,363,326 shares issued and
28,352,326 shares outstanding at December 31, 2013 and June 30,
2013, respectively |
2.8 |
2.8 |
Additional paid-in capital |
119.6 |
118.7 |
Accumulated other comprehensive
income |
24.6 |
25.3 |
Accumulated deficit |
(82.8) |
(78.8) |
Total stockholders' equity |
64.2 |
68.0 |
Total liabilities and
stockholders' equity |
$82.7 |
$84.3 |
|
BIOTA PHARMACEUTICALS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(in millions, except per share
amounts) |
|
|
|
Three Months
Ended December 31, |
Six Months Ended
December 31, |
|
2013 |
2012 |
2013 |
2012 |
Revenue: |
|
|
|
|
Royalty revenue and
milestones |
$6.0 |
$1.9 |
$6.0 |
$1.9 |
Revenue from services |
12.4 |
8.1 |
24.6 |
9.4 |
Other |
0.1 |
0.4 |
0.2 |
0.5 |
Total revenue |
18.5 |
10.4 |
30.8 |
11.8 |
|
|
|
|
|
Operating expense: |
|
|
|
|
Cost of revenue |
11.4 |
7.1 |
22.2 |
8.6 |
Research and development |
4.2 |
4.6 |
7.1 |
9.1 |
General and administrative |
3.1 |
7.1 |
5.5 |
10.3 |
Foreign exchange (gain)
loss |
(0.1) |
(0.6) |
0.2 |
(0.5) |
Total operating expense |
18.6 |
18.2 |
35.0 |
27.5 |
(Loss) income from operations |
(0.1) |
(7.8) |
(4.2) |
(15.7) |
|
|
|
|
|
Non-operating income: |
|
|
|
|
Gain recorded on merger |
-- |
7.6 |
-- |
7.6 |
Research and development
credit |
-- |
4.4 |
-- |
4.4 |
Interest income |
-- |
0.4 |
0.1 |
1.0 |
Total non-operating income |
-- |
12.4 |
0.1 |
13.0 |
|
|
|
|
|
(Loss) income before tax |
(0.1) |
4.6 |
(4.1) |
(2.7) |
Income tax benefit (expense) |
-- |
-- |
0.1 |
0.1 |
Net (loss) income |
$(0.1) |
$4.6 |
$(4.0) |
$(2.6) |
|
|
|
|
|
|
|
|
|
|
Basic (loss) income per share |
$(0.00) |
$0.16 |
$(0.14) |
$(0.09) |
Diluted (loss) income per share |
$(0.00) |
$0.16 |
$(0.14) |
$(0.09) |
|
|
|
|
|
Basic weighted-average shares
outstanding |
28,291,665 |
28,137,346 |
28,286,404 |
28,137,346 |
Diluted weighted-average shares
outstanding |
28,291,665 |
28,352,329 |
28,286,404 |
28,137,346 |
CONTACT: Russell H. Plumb
Chief Executive Officer
(678) 221-3351
r.plumb@biotapharma.com
Lee M. Stern
The Trout Group
(646) 378-2922
lstern@troutgroup.com
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