Veloxis Pharmaceuticals announces financial results for the first nine months of 2012

Veloxis Pharmaceuticals announces financial results for the first nine months
                                   of 2012

PR Newswire

HORSHOLM, Denmark, Nov. 14, 2012

HORSHOLM, Denmark, Nov. 14, 2012 /PRNewswire/ --

Highlights:

  oVeloxis has in October 2012 entered into an exclusive distribution
    agreement with Chiesi Farmaceutici S.p.A, a fully integrated European
    Pharmaceutical company focused on respiratory disease and special care
    products, for the commercialization and distribution of its novel
    formulation immunosuppressant drug candidate LCP-Tacro in certain
    countries, including Europe, Turkey and CIS countries (Russia and former
    USSR republics). Under the terms of the agreement, Veloxis will receive
    up-front and milestone payments of up to USD 47.5 million (in aggregate).
    The milestone payments are subject to the achievement of certain
    regulatory milestones and sales targets.
  oFully subscribed offering of 1,206,779,946 new shares at DKK 0.35 per
    share yielding approximately DKK 405 million in net proceeds.
  oVeloxis reported an operating loss before restructuring costs of DKK 195.5
    million for the first nine months of 2012 compared to a loss of DKK 196.7
    million for the same period in 2011.
  oFor the first nine months of 2012, Veloxis' research and development costs
    amounted to DKK 168.8 million compared to DKK 160.3 million during the
    same period in 2011.
  oOn 30 September, 2012, Veloxis had cash and cash equivalents of DKK 86.7
    million. The fully subscribed offering will increase the cash position
    with approximately DKK 405 million.

Outlook for 2012

Veloxis maintains its 2012 outlook with an operating and net loss of DKK
240-270 million for the financial year 2012.

As at 30 September 2012, the Company's cash position equaled DKK 87 million,
and as at 31 December 2012, the Company's cash position is expected to be in
the range of DKK 490-530 million, including the proceeds from the completed
offering.

Conference call

A conference call will be held tomorrow, 15 November, 2012 at 2:00 PM CET
(Denmark); 1:00 PM GMT (London), 8:00 AM EST (New York),

To access the live conference call, please dial one of the following numbers:

+45 32 72 80 18 (Denmark)
+44 (0) 1452 555 131 (UK)
+1 866 682 8490 (USA)
Access code 64372811

Following the conference call, a recording will be available on the company's
website http://www.veloxis.com.

Research & development update

LCP-Tacro™ in kidney transplant patients

Veloxis has completed one Phase III study and has commenced a second Phase III
study of LCP-Tacro™ in kidney transplant recipients as the basis for its
development programme for LCP-Tacro™ as a once-daily agent for the prophylaxis
of organ rejection in kidney transplantation. The first of these studies, the
3001 Study was a non-inferiority study performed in 326 stable kidney
transplant recipients, and was successfully completed in 2011, meeting its
primary efficacy and safety endpoints when compared to Prograf® (tacrolimus,
Astellas Pharma Inc.). The second study, Study 3002 is being undertaken in de
novo kidney transplant recipients. This study is a randomized, double-blind,
multicenter study that compares once-daily LCP-Tacro™ against twice-daily
Prograf® in de novo adult kidney transplant patients. The primary endpoint of
the study, a composite endpoint (biopsy proven acute rejection, graft failure,
loss to follow up or death), will be evaluated after a 12-month treatment
period to demonstrate the non-inferiority of LCP-Tacro™ compared to Prograf®.
Secondary endpoints will include safety, tolerability and renal function
assessments. The study completed enrollment in March 2012 of 543 patients at
approximately 90 transplant centers, primarily in the U.S and Europe. Results
from this study are expected mid-2013. Patients will participate in a 12-month
extension period on treatment for follow-up safety assessments.

In addition to the pivotal Phase III studies, Veloxis is planning a series of
Phase IIIb/IV studies to further evaluate potential differences in clinical
profile provided by LCP-Tacro's unique PK profile. The first study initiated
is the STRATO (Switching kidney TRAnsplant patients with Tremor to LCP-tacrO)
study of LCP-Tacro™ in kidney transplant recipients experiencing drug-induced
tremors. The STRATO study is designed to explore whether a conversion of
patients who have symptomatic tremor from treatment with standard immediate
release twice-daily tacrolimus capsules to extended release once-daily
LCP-Tacro™ tablets leads to a measurable improvement in tremor.

LCP-Tacro™ Regulatory Strategy

The U.S. submission for LCP-Tacro™, for the prophylaxis of organ rejection, to
the FDA (Food and Drug Administration) is planned for the second half of
2013. The MAA (Marketing Authorization Application) filing for LCP-Tacro™ for
the prophylaxis of organ rejection with the EMA (European Medicines Agency) is
projected to take place in 2013. The exact timing of this filing will be
determined based on discussions with the EMA rapporteur regarding the optimal
timing for regulatory submission, including consideration of timing the MAA
submission relative to the availability of the 3002 de novo study data.





Financial
Highlights
                   YTD         YTD         Q3          Q3          Year
                   2012        2011        2012        2011        2011
                   DKK'000     DKK'000     DKK'000     DKK'000     DKK'000
Income Statement
Revenue            -           -           -           -           -
Research and       (168,849)   (160,291)   (49,362)    (43,079)    (222,053)
development costs
Administrative     (26,654)    (36,429)    (6,961)     (12,568)    (47,814)
expenses
Operating loss
before             (195,503)   (196,720)   (56,323)    (55,647)    (269,867)
restructuring cost
Restructuring cost (21,462)    -           -           -           -
Operating loss     (216,965)   (196,720)   (56,323)    (55,647)    (269,867)
Net financial
income /           1,452       11,521      993         11,363      16,048
(expenses)
Loss before tax    (215,513)   (185,199)   (55,330)    (44,284)    (253,819)
Tax for the period (671)       820         (223)       1,120       1,193
Net loss for the   (216,184)   (184,379)   (55,553)    (43,164)    (252,626)
period
Balance Sheet
Cash and cash      86,683      348,252     86,683      348,252     297,727
equivalents
Total assets       99,590      370,865     99,590      370,865     320,927
Share capital      45,254      452,543     45,254      452,543     452,543
Total equity       42,103      322,516     42,103      322,516     255,900
Investment in
property, plant    217         1,858       0           602         2,981
and equipment
Cash Flow
Statement
Cash flow from
operating          (205,472)   (182,498)   (62,707)    (60,481)    (234,637)
activities
Cash flow from
investing          113,093     (195,879)   59,486      25,878      (169,778)
activities
Cash flow from
financing          (5,844)     (4,277)     (3,450)     (1,445)     (5,948)
activities
Cash and cash
equivalents at     86,683      348,252     86,683      348,252     297,727
period end
Financial Ratios
Basic and diluted  (0.48)      (0.41)      (0.12)      (0.10)      (0.56)
EPS
Weighted average   452,542,480 452,542,480 452,542,480 452,542,480 452,542,480
number of shares
Average number of  53          52          49          51          52
employees (FTEs)
Assets/equity      2.37        1.15        2.37        1.15        1.25



The interim report is unaudited.

Revenue

For the first nine months of 2012 Veloxis had no revenue as in the same period
of 2011.

Research and development costs

For the first nine months of 2012, Veloxis' research and development costs
amounted to DKK 168.8 million compared to DKK 160.3 million during the same
period in 2011. Research and development costs are attributable to the ongoing
phase III trial in LCP-Tacro™ (de novo patients, Study 3002).

Administrative expenses

For the first nine months of 2012, Veloxis' administrative cost amounted to
DKK 26.7 million compared to DKK 36.4 million during the same period in 2011.

Restructuring cost

Restructuring cost includes salary payments to former employees in connection
with the reduction in headcount effected in May 2012 and a write-down of
laboratory equipment and laboratory improvements due to the discontinuation of
pipeline activities not related to LCP-Tacro™.

Compensation costs

For the first nine months of 2012, a total of DKK 4.4 million was recognized
as share-based compensation. The cost is included in R&D and G&A. The
comparable cost for 2011 was DKK 8.7 million.

In the third quarter of 2012, a total of 1,957,654 warrants have been
cancelled and a total of 1,649,280 warrants have expired.

As of 30 September, 2012, there were a total of 24,031,296 warrants
outstanding at an average strike price of DKK 2.8. Members of the Board of
Directors held 474,735 warrants at an average strike price of DKK 6.0. Members
of the Executive Management held 8,914,466 warrants at an average strike price
of DKK 1.6, while other current and former employees held 14,642,095 warrants
at an average strike price of DKK 3.4.

Please refer to Veloxis' latest annual report for additional details on the
Company's warrant programs.

Operating loss

Veloxis' operating loss for the first nine months of 2012 was DKK 217.0
million compared to DKK 196.7 million in the corresponding period of 2011.

Financial income

During the first nine months of 2012, the Company recognized net financial
income of DKK 1.5 million compared to net financial income of DKK 11.5 million
in the corresponding period of 2011. The gain is mainly attributable to
interest income and gains on investment bonds.

Net loss

Veloxis' net loss for the first nine months of 2012 was DKK 216.2 million
compared to DKK 184.4 million in the corresponding period of 2011.

Cash flow

As at 30 September, 2012, the balance sheet reflects cash and cash equivalents
of DKK 86.7 million compared to DKK 297.7 million as at 31 December, 2011.
This represents a decrease of DKK 211.0 million primarily reflecting the
Company's operating activities for the period.

Balance sheet

As per 30 September, 2012, total assets were DKK 99.6 million compared to DKK
320.9 million at the end of 2011.

Shareholders' equity equalled DKK 42.1 million as of 30 September, 2012,
compared to DKK 255.9 million at the end of 2011.

Financial review

Veloxis reports its financial statements in Danish Kroner (DKK), which is the
functional currency of the Company and the group. Solely for the convenience
of the reader, this Interim Report contains a conversion of certain DKK
amounts into Euro (EUR) at a specified rate. These converted amounts should
not be construed as representations that the DKK amounts actually represent
such EUR amounts or could be converted into EUR at the rate indicated or at
any other rate. Unless otherwise indicated, conversion herein of financial
information into EUR has been made using the Danish Central Bank's spot rate
on 30 September, 2012, which was EUR 1.00 = DKK 7.4555.

For more information, please contact:

John D. Weinberg                      Johnny Stilou
EVP, Chief Commercial Officer EVP, Chief Financial Officer
Mobile: +1 908 302 3389            Mobile: +45 21 227 227
Email: jdw@veloxis.com                Email: jst@veloxis.com 

The forward looking statements and targets contained herein are based on the
current view and assumptions of the Executive Management and the Board of
Directors of Veloxis Pharmaceuticals A/S. Such statements involve known and
unknown risks and uncertainties that may cause actual results, performance or
events to differ materially from those anticipated herein. Veloxis
Pharmaceuticals A/S expressly disclaim any obligation or undertaking to update
or revise any forward looking statements, targets or estimates contained in
this interim report to reflect any change in events, conditions, assumptions,
or circulations on which any such statements are based unless required by
applicable law.

About LCP‐Tacro™ and tacrolimus

Tacrolimus is a leading immunosuppression drug used for the prevention of
transplant allograft rejection after transplantation. LCP-Tacro is an
investigational drug that is being developed as a once-daily tablet version of
tacrolimus with improved bioavailability, consistent pharmacokinetic
performance and reduced peak-to-trough variability when compared to currently
approved tacrolimus products. Transplant patients need to maintain a minimum
blood level of tacrolimus for the prevention of transplant allograft
rejection, but excessive levels may increase the risk of serious side effects
such as nephrotoxicity, tremor, diabetes, high blood pressure, and
opportunistic infections. Therefore, tacrolimus levels need to be managed
carefully, and transplant patients are typically obliged to make frequent
visits to the hospital for monitoring and dose adjustments after receiving a
new organ.

About Veloxis Pharmaceuticals

Based in Horsholm, Denmark, with an office in New Jersey, Veloxis is a
specialty pharmaceutical company. The company's lead product candidate is
LCP-Tacro for immunosuppression, specifically organ transplantation. Veloxis'
unique, patented delivery technology, MeltDose®, can improve absorption and
bioavailability at low scale up costs. Veloxis has a lipid lowering product,
Fenoglide®, currently on the U.S. market that is commercialized through
partner Santarus, Inc. Veloxis is listed on the NASDAQ OMX Copenhagen under
the trading symbol OMX: VELO.

For further information, please visit http://www.veloxis.com.

Executive Management's and the Board of Directors' Statement on the Interim
Report

The Executive Management and the Board of Directors have considered and
adopted the Interim Report of Veloxis Pharmaceuticals A/S.

The Interim Report is prepared in accordance with International Accounting
Standard No. 34 (IAS 34), "Interim Financial Reporting" and additional Danish
disclosure requirements for financial reporting of listed companies.

We consider the applied accounting policies to be appropriate and, in our
opinion, the Interim Report gives a true and fair view of the assets and
liabilities, financial position, results of the operation and cash flow of the
group for the period under review. Furthermore, in our opinion the management
review includes a fair review of the development and performance of the
business and the financial position of the group, together with a description
of the material risks and uncertainties the group faces.

Horsholm, 14 November, 2012

Executive Management
Dr. William J. Polvino Johnny Stilou
President & CEO       Executive Vice President & CFO
Board of Directors
Kim Bjornstrup        Thomas Dyrberg               Kurt Anker Nielsen
(Chairman)           (Deputy Chairman)
Anders Gotzsche        Mette Kirstine Agger          Ed Penhoet





Financial
Highlights
Quarterly
Numbers in DKK
               Q3          Q2          Q1           Q4          Q3          Q2          Q1
               2012        2012        2012         2011        2011        2011        2011
               DKK'000     DKK'000     DKK'000      DKK'000     DKK'000     DKK'000     DKK'000
Income
Statement
Revenue        -           -           -            -           -           -           -
Research and
development    (49,362)    (56,639)    (62,848)     (61,763)    (43,079)    (64,951)    (52,261)
costs
Administrative (6,961)     (9,462)     (10,231)     (11,385)    (12,568)    (12,137)    (11,724)
expenses
Operating loss
before         (56,323)    (66,101)    (73,079)     (73,148)    (55,647)    (77,088)    (63,985)
restructuring
cost
Restructuring  -           (21,462)    -            -           -           -           -
cost
Operating loss (56,323)    (87,563)    (73,079)     (73,148)    (55,647)    (77,088)    (63,985)
Net financial
income /       993         2,051       (1,592)      4,528       11,363      2,008       (1,850)
(expenses)
Loss before    (55,330)    (85,512)    (74,671)     (68,620)    (44,284)    (75,080)    (65,835)
tax
Tax for the    (223)       (130)       (318)        373         1,120       (300)       -
period
Net loss for   (55,553)    (85,642)    (74,989)     (68,247)    (43,164)    (75,380)    (65,835)
the period
Balance Sheet
Cash and cash  86,683      152,720     213,786      297,727     348,252     402,213     462,319
equivalents
Total assets   99,590      167,799     235,187      320,927     370,865     426,860     490,578
Share capital  45,254      45,254      452,543      452,543     452,543     452,543     452,543
Total equity   42,103      98,968      182,545      255,900     322,516     363,606     436,200
Investment in
property,      0           126         91           1,123       602         635         621
plant and
equipment
Cash Flow
Statement
Cash flow from
operating      (62,707)    (62,400)    (80,364)     (52,139)    (60,481)    (56,621)    (65,396)
activities
Cash flow from
investing      59,486      24,174      29,433       26,101      25,878      77,845      (299,602)
activities
Cash flow from
financing      (3,450)     (1,085)     (1,310)      (1,670)     (1,445)     (1,426)     (1,407)
activities
Cash and cash
equivalents at 86,683      152,720     213,786      297,727     348,252     402,213     462,319
period end
Financial
Ratios
Basic and      (0.12)      (0.19)      (0.17)       (0.15)      (0.10)      (0.17)      (0.15)
diluted EPS
Weighted
average number 452,542,480 452,542,480 452,542,480  452,542,480 452,542,480 452,542,480 452,542,480
of shares
Average number
of employees   49          55          55           51          51          52          54
(FTEs)
Assets/equity  2.37        1.70        1.29         1.25        1.15        1.17        1.12

Financial
Highlights
Quarterly
Numbers in EUR
               Q3          Q2          Q1           Q4          Q3          Q2          Q1
               2012        2012        2012         2011        2011        2011        2011
               EUR'000     EUR'000     EUR'000      EUR'000     EUR'000     EUR'000     EUR'000
Income
Statement
Revenue        -           -           -            -           -           -           -
Research and
development    (6,621)     (7,597)     (8,430)      (8,284)     (5,778)     (8,712)     (7,010)
costs
Administrative (934)       (1,269)     (1,372)      (1,527)     (1,686)     (1,628)     (1,572)
expenses
Operating loss
before         (7,555)     (8,866)     (9,802)      (9,811)     (7,464)     (10,340)    (8,582)
restructuring
cost
Restructuring  -           (2,879)     -            -           -           -           -
cost
Operating loss (7,555)     (11,745)    (9,802)      (9,811)     (7,464)     (10,340)    (8,582)
Net financial
income /       134         275         (214)        607         1,524       269         (248)
(expenses)
Loss before    (7,421)     (11,470)    (10,016)     (9,204)     (5,940)     (10,071)    (8,830)
tax
Tax for the    (30)        (17)        (42)         50          150         (40)        -
period
Net loss for   (7,451)     (11,487)    (10,058)     (9,154)     (5,790)     (10,111)    (8,830)
the period
Balance Sheet
Cash and cash  11,627      20,484      28,675       39,934      46,711      53,948      62,010
equivalents
Total assets   13,358      22,507      31,545       43,046      49,744      57,254      65,801
Share capital  6,070       6,070       60,699       60,699      60,699      60,699      60,699
Total equity   5,647       13,274      24,485       34,324      43,259      48,770      58,507
Investment in
property,      0           17          12           151         81          85          83
plant and
equipment
Cash Flow
Statement
Cash flow from
operating      (8,411)     (8,370)     (10,779)     (6,993)     (8,112)     (7,595)     (8,772)
activities
Cash flow from
investing      7,979       3,242       3,948        3,501       3,471       10,441      (40,185)
activities
Cash flow from
financing      (463)       (146)       (176)        (224)       (194)       (191)       (189)
activities
Cash and cash
equivalents at 11,627      20,484      28,675       39,934      46,711      53,948      62,010
period end
Financial
Ratios
Basic and      (0.02)      (0.03)      (0.02)       (0.02)      (0.01)      (0.02)      (0.02)
diluted EPS
Weighted
average number 452,542,480 452,542,480 452,542,480  452,542,480 452,542,480 452,542,480 452,542,480
of shares
Average number
of employees   49          55          55           51          51          52          54
(FTEs)
Assets/equity  2.37        1.70        1.29         1.25        1.15        1.17        1.12



Income statement and statement of comprehensive income

Income Statement   Consolidated
(DKK'000)          YTD         YTD         Q3          Q3          Year
                   2012        2011        2012        2011        2011
Revenue            -           -           -           -           -
Research and       (168,849)   (160,291)   (49,362)    (43,079)    (222,053)
development costs
Administrative     (26,654)    (36,429)    (6,961)     (12,568)    (47,814)
expenses
Operating loss
before             (195,503)   (196,720)   (56,323)    (55,647)    (269,867)
restructuring cost
Restructuring cost (21,462)    -           -           -           -
Operating loss     (216,965)   (196,720)   (56,323)    (55,647)    (269,867)
Financial income   6,907       22,746      1,681       12,493      33,238
Financial expenses (5,455)     (11,225)    (688)       (1,130)     (17,190)
Loss before tax    (215,513)   (185,199)   (55,330)    (44,284)    (253,819)
Tax for the period (671)       820         (223)       1,120       1,193
Net loss for the   (216,184)   (184,379)   (55,553)    (43,164)    (252,626)
period
Basic and diluted  (0.48)      (0.41)      (0.12)      (0.10)      (0.56)
EPS
Weighted average   452,542,480 452,542,480 452,542,480 452,542,480 452,542,480
number of shares
Statements of
comprehensive      Consolidated
income
(DKK'000)          YTD         YTD         Q3          Q3          Year
                   2012        2011        2012        2011        2011
Net loss for the   (216,184)   (184,379)   (55,553)    (43,164)    (252,626)
period
 Other
comprehensive
income:
 Currency
translation        361         (31)        113         (338)       (163)
differences
 Other
comprehensive      361         (31)        113         (338)       (163)
income for the
period
Total
comprehensive      (215,823)   (184,410)   (55,440)    (43,502)    (252,789)
income for the
period

Balance sheet



Assets                                   Consolidated
(DKK'000)                      30 Sept.  30 Sept.      31 Dec.
                               2012      2011          2011
Patent rights and software     2,347     2,111         2,563
Intangible assets              2,347     2,111         2,563
Property, plant and equipment  3,958     9,356         8,967
Leasehold improvements         156       4,414         3,880
Property, plant and equipment  4,114     13,770        12,847
Non-current assets             6,461     15,881        15,410
Other receivables              5,224     5,270         5,480
Prepayments                    1,222     1,462         2,310
Receivables                    6,446     6,732         7,790
Investment bonds               53,487    195,459       166,797
Cash                           33,196    152,793       130,930
Cash and cash equivalents      86,683    348,252       297,727
Current assets                 93,129    354,984       305,517
Assets                         99,590    370,865       320,927

Balance sheet



Equity & Liabilities                Consolidated
(DKK'000)                30 Sept.   30 Sept.      31 Dec.
                         2012       2011          2011
Share capital            45,254     452,543       452,543
Special reserve          407,289    -             -
Translation reserves     2,292      2,063         1,931
Retained earnings/loss   (412,732)  (132,090)     (198,574)
Equity                   42,103     322,516       255,900
Finance lease            722        4,831         3,715
Non-current liabilities  722        4,831         3,715
Finance lease            4,109      5,166         4,612
Trade payables           25,078     16,153        28,263
Other payables           27,578     22,199        28,437
Current liabilities      56,765     43,518        61,312
Liabilities              57,487     48,349        65,027
Equity and liabilities   99,590     370,865       320,927

Cash flow statements



Cash Flow Statement            Consolidated
(DKK'000)                      YTD       YTD       Q3       Q3       Year
                               2012      2011      2012     2011     2011
Operating loss                 (216,965) (196,720) (56,323) (55,647) (269,867)
Share-based payment            4,375     8,688     924      2,412    10,451
Depreciation and amortization  9,168     5,713     440      1,920    7,320
Changes in working capital     (2,151)   (3,638)   (7,694)  (11,060) 13,094
Cash flow from operating       (205,573) (185,957) (62,653) (62,375) (239,002)
activities before interest
Interest received              1,234     4,307     272      963      5,418
Interest paid                  (462)     (1,668)   (103)    (189)    (2,246)
Corporate tax paid             (671)     820       (223)    1,120    1,193
Cash flow from operating       (205,472) (182,498) (62,707) (60,481) (234,637)
activities
Purchase of property, plant    (217)     (1,858)   (0)      (602)    (2,981)
and equipment
Investments in bonds           (16,804)  (386,033) (4,869)  (8,365)  (406,128)
Sale of bonds                  130,114   190,574   64,355   34,845   239,331
Cash transfer to restricted    -         1,438     -        -        -
security deposit
Cash flow from investing       113,093   (195,879) 59,486   25,878   (169,778)
activities
Installments on bank           (3,495)   (4,277)   (1,101)  (1,445)  (5,948)
borrowings and finance lease
Costs related to capital       (2,349)   -         (2,349)  -        -
increases
Cash flow from financing       (5,844)   (4,277)   (3,450)  (1,445)  (5,948)
activities
Increase/(decrease) in cash    (98,223)  (382,654) (6,671)  (36,048) (410,363)
Cash at beginning of period    130,930   530,081   39,747   180,274  531,519
Exchange gains/(losses) on     489       5,366     120      8,567    9,774
cash
Cash at end of period          33,196    152,793   33,196   152,793  130,930
Cash and cash equivalents at
end of period comprise:
Investment bonds               53,487    195,459   53,487   195,459  166,797
Deposit on demand and cash     33,196    152,793   33,196   152,793  130,930
                               86,683    348,252   86,683   348,252  297,727

Statement of changes in equity



Consolidated
Equity
              Number of    Share     Share    Special  Translation Retained  Total
              Shares       Capital   Premium  Reserves Reserves    Earnings
                           DKK'000   DKK'000  DKK'000  DKK'000     DKK'000   DKK'000
Equity as of
1 January     452,542,480  452,543   43,601   -        2,094       -         498,238
2011
Total
comprehensive                                          (31)        (184,379) (184,410)
income
Share-based                                                        8,688     8,688
payment
Transfer of
retained                             (43,601)                      43,601    -
earnings
Equity as of
30 September  452,542,480  452,543   -        -        2,063       (132,090) 322,516
2011
Total
comprehensive                                          (132)       (68,247)  (68,379)
income
Share-based                                                        1,763     1,763
payment
Equity as of
31 December   452,542,480  452,543   -        -        1,931       (198,574) 255,900
2011
Total
comprehensive                                          361         (216,184) (215,823)
income
Reduction of               (407,289)          407,289                        -
share capital
Share-based                                                        4,375     4,375
payment
Costs related
to capital                           (2,349)                                 (2,349)
increases
Transfer of
retained                             2,349                         (2,349)   -
earnings
Equity as of
30 September  452,542,480  45,254    -        407,289  2,292       (412,732) 42,103
2012



Notes

1. Accounting policies

The interim report is prepared in compliance with International Accounting
Standard No. 34 (IAS 34), "Interim Financial Reporting" and in accordance with
the NASDAQ OMX Copenhagen's financial reporting requirements for listed
companies.

There have been no changes in accounting policies used for the interim report
compared to the accounting policies used in the preparation of Veloxis
Pharmaceuticals' annual report for 2011.

The income statement presents expenses by function and a new subtotal
"Operating loss before restructuring costs" which exclude restructuring costs.
This subtotal is considered relevant in understanding the financial
performance and outlook for 2012 of the group.



2. Accounting estimates

Impairment tests

In accordance with IAS 36, property, plant and equipment are tested for
impairment if there are indications of impairment. Due to the restructuring of
the organisation announced on 23 May 2012 Management has performed an
impairment test of the book value of property, plant and equipment primarily
consisting of leasehold improvements and laboratory equipment. According to
Veloxis' accounting policies regarding impairment tests a write-down is made
to the highest value of an estimated sales price or calculated net present
value. Leasehold improvements and certain laboratory equipment will no longer
be deployed by Veloxis due to the restructuring. It has been assessed that the
value in use and the estimated sales price amount to DKK 0 million. The book
value of laboratory equipment still being used by Veloxis as part of the
LCP-Tacro Phase III study is considered by management not to be impaired.

On basis of the impairment test a write-down was made on 30 June 2012 of DKK
6.1 million. At 30 September 2012 write-down for the period 1 January to 30
September 2012 amounts to DKK 6.1 million (30 September 2011: DKK 0 million).



SOURCE Veloxis Pharmaceuticals

Website: http://www.veloxis.com
 
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