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A phase I study for the treatment of multiple myeloma was launched in the US at the beginning of the year. The study will investigate safety, pharmacokinetics and pharmacodynamics and will aim to define the optimal dose of the antibody for upcoming clinical phase II development. The study will involve 30 - 40 patients. The patients will be treated with intravenous doses of BI-505 every other week for a 28-day period with the possibility of extending the treatment until the condition deteriorates again.

Research projects

BioInvent is running a number of projects in the research phase i.e. the stage prior to selection of a Candidate Drug. The company's research portfolio currently includes projects mainly within the areas of cancer and inflammation. The research in the cancer field is aimed at additional product candidates that will impede undesirable vessel growth and thus the blood supply to tumours, as well as at programmed cell death inducing antibodies that kill tumour cells. BioInvent has together with a leading academic group launched a project focusing on new drug concepts based on the role of cancer-associated fibroblasts in tumour development.

The company's inflammation research is being enhanced by a partnership entered into in March with the US company Human Genome Sciences. Under this partnership the companies will work together to develop and commercialise antibody-based drugs based on target proteins from Human Genome Sciences' research and BioInvent's antibody technology.

BioInvent has initiated a new project in cooperation with a leading academic group for the treatment of type I diabetes.

The company is also conducting research and development on antibody-based drugs on behalf of other external partners. Such partners includes Bayer HealthCare, Daiichi Sankyo and Mitsubishi Tanabe. All in all BioInvent has entered into agreements of this kind with the possible development of up to 30 antibody-based products. As well as undisclosed license fees and research funding, BioInvent will receive milestone payments and royalties on sales of any products commercialized.

Revenues and result

Net revenues for the January - June period amounted to SEK 63.1 million (47.1). Revenues for the January - June 2010 period include BioInvent's share, SEK 38.3 million, of the milestone payment received when its partner Roche launched a new clinical study involving TB-403 in May. BioInvent's share, SEK 21.7 million, of the first milestone payment for TB-403 is included in reported net revenues for 2009. Net revenues for the April - June period amounted to SEK 48.0 million (10.3).

The Company's total costs for the January - June period amounted to SEK 124.0 million (137.7). Operating costs are divided between external costs of SEK 68.2 million (86.9), personnel costs of SEK 50.6 million (45.2) and depreciation of SEK 5.2 million (5.6). Restructuring costs (personnel costs) in connection with changes in the manufacturing operation amounting to SEK 6.0 million were charged to the company's second quarter 2010 results.

Research and development costs for January - June amounted to SEK 106.1 million (120.6). Depreciation according to plan reduced the operating result for the period by SEK 5.2 million (5.6), of which depreciation of intangible fixed assets amounts to SEK 2.5 million (2.8).

The loss after tax for January - June amounted to SEK -60.7 million (-88.2). The loss after tax for April - June amounted to SEK -22.8 million (-53.5). The net financial items, January - June, amounted to SEK -0.4 million (2.4). Earnings per share after tax, January - June, amounted to SEK -1.01 (-1.59).

Financial position and cash flow

As of 30 June 2010, the Group's current investments together with cash and bank amounted to SEK 138.7 million, excluding the share of the milestone payment relating to TB-403 received in July, (150.5). The cash flow from current operations and investment activities for January - June amounted to SEK -89.7 million (-61.9). The milestone payment for TB-403 received in July will have a positive effect on cash flow in the third quarter.

In February BioInvent implemented a directed new share issue totalling 5,434,800 shares that raised SEK 150 million for the company before transactions costs. The subscription price was set at SEK 27.60 per share.

The shareholders' equity amounted to SEK 140.5 million (143.5) at the end of the period. The Company's share capital was SEK 30.5 million. The equity/assets ratio at the end of the period was 65.2 (69.5) per cent. Shareholders' equity per share amounted to SEK 2.30 (2.58). The Group had no interest-bearing liabilities.

Investments

Investments in tangible fixed assets amounted to SEK 1.8 million (0.6). No investments were made in intangible assets during the period (-).

Organisation

As of 30 June 2010, BioInvent had 90 (105) employees. 75 (90) of these work in research and development.

Employee incentive program

The annual general meeting on 14 April 2008 resolved to adopt an incentive program comprising a maximum of 1,450,000 employee options (Sw. personaloptioner) and to issue 1,920,090 warrants for the subsidiary BioInvent Finans AB, free of charge, to secure the company's commitment under the incentive program and to cover the company's associated social security contributions. BioInvent Finans AB has subscribed all the warrants. Each employee option entitles the holder to subscribe to a new share at a subscription price of SEK 26.84. A basic allocation of 513,750 employee options took place during 2008 and 2009. Extra allotment of 69,750 employee options took place in February 2009 and in January 2010 with 429,750 employee options.

The annual general meeting on 21 April 2009 resolved to adopt an amendment to the existing employee options program 2008/2012, resolved by the AGM 2008. The amendment program comprise a maximum of 240,250 employee options, directed to the employees of the Company, entitling the holder to subscribe for new shares. Each employee option entitles the holder to subscribe to a new share at a subscription price of SEK 26.84. A basic allocation of 33,750 employee options took place during 2009 and 2010. Extra allotment of 8,127 employee options took place in January 2010.

Risk factors

The Company's operations are associated with risks related to factors such as drug development, competition, collaboration with partners, technology development, patents, capital requirements, currency and interest rates. The aforementioned risks summarize the factors of significance for BioInvent and thus an investment in the BioInvent share.

Accounting principles

This interim report was prepared in accordance with IAS 34, Interim Financial Reporting, the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2.3, Accounting for Legal Entities. The accounting principles applied are consistent with those used in the preparation of the most recent Annual Report. The updates and changes adopted by the EU and applied from 1 January 2010 and that will affect the financial reporting are the following: IFRS 3R Business Combinations and IAS 27R Consolidated and Separate Financial Statements. Their effect on the financial reporting is described in the 2009 Annual Report. The following new standards and amendments have not at this time had any effect on BioInvent's financial reporting: IFRIC 12 Service Concession Arrangements, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 16 Hedges of a Net Investment in a Foreign Operation, IFRIC 17 Distribution of Non-Cash Assets to Owners and IFRIC 18 Transfers of Assets from Customers. These statements will be applied to the extent BioInvent International executes the transactions in question.

SOURCE BioInvent International AB (publ.)