Biota Pharmaceuticals Reports Second Quarter Financial Results and Corporate Update

Biota Pharmaceuticals Reports Second Quarter Financial Results and Corporate 
Update 
ROCKVILLE, MD -- (Marketwire) -- 02/12/13 --  Biota Pharmaceuticals,
Inc. (NASDAQ: BOTA) 


 
--  LANI Influenza Program Advancing Toward Phase 2 Clinical Development
    
    
--  Merger between Nabi Biopharmaceuticals and Biota Holdings Limited
    Successfully Completed

  
Biota Pharmaceuticals, Inc. (NASDAQ: BOTA) today announced its
financial results for the three month period ended December 31, 2012
and recent corporate developments. The Company's fiscal year end is
June 30. 
"We are pleased with the progress of the LANI program such that we
anticipate initiating a large, global Phase 2 clinical trial in
patients with influenza in mid-2013," stated Russell H. Plumb,
President and CEO of Biota Pharmaceuticals, Inc. "With the merger
behind us and our balance sheet strengthened with the related net
cash proceeds, we are now focused on integrating operations and
completing an in-depth strategic, operational and financial review of
our development programs, which we expect to complete by the end of
this quarter."  
Recent Corporate Developments 
Merger between Nabi Biopharmaceuticals and Biota Holdings Limited -
On November 8, 2012, the Company announced the completion of the
merger between Nabi and Biota Holdings Limited, resulting in the
formation of Biota Pharmaceuticals, Inc. Former Biota Holdings
Limited shareholders retained approximately 83% of the Company's
shares of common stock, while former Nabi shareholders retained
approximately 17% as consideration for Nabi's net assets, which
consisted primarily of $27 million in net cash on the date of the
merger. The merger has been accounted for as a reverse merger, such
that Biota Holdings Limited is considered the accounting acquirer for
financial reporting purposes even though Nabi was the legal acquirer. 
Reverse Stock Split - Concurrent with the completion of the merger, a
reverse stock split of Nabi common stock occurred, resulting in each
six shares of Nabi common stock issued and outstanding immediately
prior to the reverse split being automatically combined into one
share of Nabi common stock. As a result of the reverse split, the per
share exercise price of, and the number of shares of common sto
ck
underlying all stock options outstanding immediately prior to the
reverse split were automatically proportionally adjusted based on the
1:6 ratio in accordance with the terms of such options.  
Laninamivir Octanoate (LANI) - Laninamivir octanoate is marketed in
Japan by Daiichi Sankyo as Inavir(R) for the treatment of influenza A
and B in adults and children. In November 2012, Daiichi Sankyo
submitted an application for a label change in Japan to manufacture
and market the influenza antiviral product Inavir(R) for the
prevention of influenza A and B.  
Under the contract the Company has with the U.S. Office of Biomedical
Advanced Research and Development Authority ("BARDA"), in January
2013 the Company initiated a Phase 1 clinical trial designed to
assess the pharmacokinetics and metabolite profile of laninamivir
octanoate following an inhaled dose administered via TwinCaps(R).
This study is a single center, single dose, open-label study in six
healthy male subjects. The Company anticipates that top-line results
from this study will be available in mid-2013. Further, the Company
anticipates initiating a 636-patient, randomized, placebo-controlled
Phase 2 clinical trial of laninamivir octanoate in mid-2013. The
primary objective of the study is to evaluate the safety and efficacy
of two doses of inhaled laninamivir octanoate (40 and 80 mg)
delivered via TwinCaps(R) in adults with symptomatic presump
tive
influenza A or B infection. The primary endpoint for this study is
time to alleviation of influenza symptoms and fever for ≥ 24
hours. 
Executive Management Changes - In connection with the merger, on
November 14, 2012, the Company announced the appointment of Russell
H. Plumb as its President and Chief Executive Officer, as well as a
director, and Joseph M. Patti, M.S.P.H., Ph.D. as its Executive Vice
President, Corporate Development & Strategy. Peter Cook, who resigned
as the Chief Executive Officer of Biota Holdings Limited upon the
completion of the merger, continues to serve as a director.  
Mr. Plumb previously served as President, Chief Executive Officer and
Chief Financial Officer of Inhibitex, Inc., a publicly-traded
clinical-stage drug development company, from December 2006 through
February 2012, when it was acquired. From 2000 to December 2006, Mr.
Plumb was the Chief Financial Officer of Inhibitex. 
Dr. Patti was a co-founder of Inhibitex, and served as its Chief
Scientific Officer and Senior Vice President of Research and
Development from 2007 through February 2012. Prior to that, he served
as the Vice President, Research and Development and Chief Scientific
Officer from 2005 to 2007 and Vice President of Preclinical
Development from 1998 to 2005. 
Financial Results for the Three Month Period Ended December 31, 2012 
As of December 31, 2012, the Company held $74.1 million in cash and
cash equivalents.   
The Company reported net income in the three month period ended
December 31, 2012 of $4.8 million, as compared to a net loss of $7.0
million in the second quarter of 2011. The $11.8 million change from
net loss in 2011 to net income in 2012 was primarily the result of an
$8.2 million increase in revenue, the recording of a $7.8 million
gain related to the merger, and the receipt of a $4.4 million
research and development credit, offset in part by a $7.7 million
increase in total operating expenses, a $0.4 million decrease in
interest income and a $0.5 million decrease in income tax benefits.
Basic and diluted net income per share were $0.17 for the three month
period ended December 31, 2012, as compared to a net basic and
diluted loss per share of $0.31 in the same period of 2011.  
Revenue increased to $10.4 million for the three months ended
December 31, 2012 from $2.1 million in the same period of 2011,
primarily as a result of increased service revenue in 2012 due
principally to the advancement of the laninamivir octanoate program
under the BARDA contract and higher royalty revenue. 
Cost of revenue increased to $7.1 million in the three months ended
December 31, 2012 from $2.9 million in the same three month period in
2011 due principally to the advancement of the laninamivir octanoate
program under the BARDA contract. 
Research and development expense decreased to $4.0 million in the
second quarter of 2012 from $5.7 million in the second quarter of
2011, due largely to the completion of the vapendavir Phase 2
clinical trial during the quarter ended June 30, 2012, as well as
lower preclinical costs associated with our antibacterial and
hepatitis C virus programs and lower personnel-related and other
indirect costs in general. 
General and administrative expense increase to $7.1 million in the
second quarter of 2012 as compared to $1.9 million in the second
quarter of 2011 primarily due to merger-related costs of $3.3 million
in 2012, an increase in salaries, benefits, stock-based compensation
and recruiting costs related to the addition of executive and
administrative staff in the U.S., as well as generally higher
insurance, rent, and maintenance costs. 
About Influenza and Laninamivir Octanoate 
Influenza is a contagious and potentially fatal disease caused by a
virus which infects the respiratory tract. Influenza viruses
replicate in the cells lining the airways of the lungs and are
generally spread directly to and from the respiratory tract by
coughing and sneezing. Influenza can seriously affect anyone, but the
people at highest risk of severe disease include young children,
adults older than 65, and people of any age with underlying medical
conditions, such as chronic heart, lung, kidney, liver, blood or
metabolic diseases (for example, diabetes), or weakened immune
systems. 
Influenza spreads rapidly around the world in seasonal epidemics
affecting between 5-15% of the population each year. According to the
Centers for Disease Control and Prevention, in the U.S. alone, more
than 200,000 people are hospitalized on average every year with
influenza complications, and about 36,000 people die due to the
disease. The World Health Organization estimates that annual
epidemics around the world cause between three and five million cases
of severe influenza, resulting in between 250,000 and 500,000 deaths
every year.  
The Company has developed first and second generation neuraminidase
inhibitors, the first of which is zanamivir, which is marketed as
Relenza(R) by GlaxoSmithKline. The Company's second generation
neuraminidase inhibitors are referred to as long-acting neuraminidase
inhibitors (LANIs) and are being evaluated as a once-weekly or
once-only inhaled dose as compared to five day, twice-daily dosing
needed with first generation neuraminidase inhibitors. The Company
and Daiichi Sankyo co-own the rights for the development and
commercialization of LANIs. The lead LANI, known as laninamivir
octanoate, has completed clinical development in Japan and is
marketed by Daiichi Sankyo as Inavir(R).  
In 2011, the Company announced it had been awarded a contract from
BARDA for up to $231 million designed to support the clinical
development and U.S. based manufacturing for laninamivir octanoate
for the treatment of influenza A and B infections.  
About Human Rhinovirus and Vapendavir 
Human rhinoviruses (HRV) are a member of a large family of small
viruses known as picornaviruses which are responsible for human
diseases ranging from mild respiratory tract infections (the common
cold) to paralytic poliomyelitis. HRV are the most commonly isolated
viruses from people with mild upper respiratory tract illness. HRV
can be a much more serious problem for some segments of the
population such as infants and the frail elderly. HRV is a major
cause of hospitalization for patients with underlying respiratory
conditions, such as asthma, chronic obstructive pulmonary disease
(COPD) and cystic fibrosis, where HRV can aggravate their existing
disease. Estimates suggest that HRV is linked to about 70% of all
asthma exacerbations and more than 50% of the hospitalized cases.
Studies also suggest that more than 35% of acute COPD patients
requiring hospitalization are associated with respiratory viruses,
including rhinovirus. 
The Company is developing vapendavir, a potent oral broad spectrum
inhibitor of HRVs for the treatment of human rhinovirus infections
and the reduction of exacerbations in patients with moderate to
severe asthma or COPD. Vapendavir binds to the capsid of the HRVs and
effectively stops the infection by interfering with the early steps
in the infectious cycle. In March 2012, the Company announced that it
had successfully completed a Phase 2b study 
in asthmatics with
naturally acquired HRV infection.  
About Biota 
Biota Pharmaceuticals, Inc. is a biopharmaceutical company focused on
the discovery and development of innovative anti-infective products
to prevent and treat a number of serious and potentially
life-threatening viral and bacterial infectious diseases. The Company
currently has two Phase 2 clinical-stage development programs,
laninamivir octanoate and vapendavir, and also has preclinical
programs focused on developing treatments for respiratory syncytial
virus (RSV) infections, hepatitis C virus (HCV), gram-positive and
gram-negative bacterial infections. For additional information about
the Company, please visit 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 regarding: the timing of commencement and/or completion of
the Company's clinical trials; the planned design, size and timing of
when the Company anticipates initiating a 636-patient,
placebo-controlled Phase 2 clinical trial of laninamivir octanoate;
and the anticipated time to complete management's ongoing strategic,
operational and financial review, 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: BARDA not
terminating or significantly amending the Company's existing contract
to develop laninamivir octanoate for the U.S.; the Company, BARDA,
the FDA, 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;
the Company's ability to comply with extensive government regulations
in various countries and regions in which it expects to conduct
clinical trials; the Company's ability to secure, manage and retain
qualified third-party clinical research, preclinical research, data
management and co
ntract manufacturing organizations who it relies on
to assist in the design, development and implementation of the
clinical development of its product candidates, including laninamivir
octanoate; and other cautionary statements contained elsewhere in
this press release and in the Company's Quarterly Report on Form 10-Q
for the quarter ended December 31, 2012, as filed with the Securities
and Exchange Commission, or SEC, on February 11, 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(TM) is a trademark of GlaxoSmithKline plc, Inavir(R) is a
registered trademark of Daiichi Sankyo Company, Ltd, and TwinCaps(R)
is a registered trademark of Hovione FarmaCiencia SA. 


 
                                                                            
                        BIOTA PHARMACEUTICALS, INC.                         
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                                (unaudited)                                 
                  (in thousands, except per share amounts)                  
                                                                            
                                         December 31,2012    June 30,2012   
                                         ----------------  ---------------- 
                                                                            
                                   ASSETS                                   
Current assets                                                              
  Cash and cash equivalents              $         74,111  $         53,790 
  Accounts receivable                              11,383             5,966 
  Prepaid and other current assets                  2,495             1,374 
                                         ----------------  ---------------- 
    Total current assets                           87,
989            61,130 
Non-current assets:                                                         
  Property and equipment, net                       4,454             4,944 
  Intangible assets, net                            1,312             1,804 
  Deferred tax assets                               2,427             1,419 
                                         ----------------  ---------------- 
    Total non-current assets                        8,193             8,167 
                                         ----------------  ---------------- 
    Total assets                         $         96,182  $         69,297 
                                         ================  ================ 
                                                                            
                    LIABILITIES AND STOCKHOLDERS' EQUITY                    
Current liabilities:                                                        
  Accounts payable                       $          4,466  $          2,851 
  Accrued expenses                                  5,649             6,133 
  Accrued severance obligations                     4,423                 - 
  Deferred revenue                                    881               398 
  Deferred tax liabilities                          1,526               130 
                                         ----------------  ---------------- 
    Total current liabilities                      16,945             9,512 
Non-current liabilities:                                                    
  Other liabilities, net of current                                         
   portion                                            275               504 
                                         ----------------  ---------------- 
    Total non-current liabilities                     275               504 
    Total liabilities                              17,220            10,016 
Stockholders' equity:                                                       
  Common stock, $0.10 par value;                                            
   200,000,000 shares authorized                                            
   34,219,690 shares issued and                                             
   182,350,316 shares outstanding at                                        
   December 31, 2012 and June 30, 2012,                                     
   respectively                                     3,422           100,394 
  Additional paid-in capital                      234,384               668 
  Treasury stock, 5,867,361 and                                             
   1,816,178 at cost, at December 31,                                       
   2012 and June 30, 2012, respectively          (117,048)           (1,397)
  Accumulated other comprehensive income           30,517            29,516 
  Accumulated deficit                             (72,313)          (69,900)
                                         ----------------  ---------------- 
    Total stockholders' equity                     78,962            59,281 
                                         ----------------  ---------------- 
    Total liabilities and stockholders'                                     
     equity                              $         96,182  $         69,297 
                                         ================  ================ 
                                                                            
                                                                            
                                                                            
                        BIOTA PHARMACEUTICALS, INC.                         
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                                (unaudited)   
                              
                  (in thousands, except per share amounts)                  
                                                                            
                            Three Months Ended         Six Months Ended     
                               December 31,              December 31,       
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
Revenue:                                                                    
  Royalty revenue and                                                       
   milestones            $     1,943  $    (1,047) $     1,927  $     1,460 
  Revenue from services        8,208        3,121        9,681        4,732 
  Other                          235           19          242           47 
                         -----------  -----------  -----------  ----------- 
Total revenue                 10,386        2,093       11,850        6,239 
                                                                            
Operating expense:                              `                           
  Cost of revenue              7,088        2,929        8,637        4,260 
  Research and                                                              
   development                 4,046        5,727        8,647       12,056 
  General and                                                               
   administrative              7,077        1,853       10,268        3,651 
                         -----------  -----------  -----------  ----------- 
Total operating expense       18,211       10,509       27,552       19,967 
                         -----------  -----------  -----------  ----------- 
Loss from operations          (7,825)      (8,416)     (15,702)     (13,728)
                                                                            
Non-operating income:                                                       
  Gain recorded on                                                          
   merger                      7,805            -        7,805            - 
  Research and                                                              
   development credit          4,428            -        4,428            - 
  Interest income                415          841          952        1,826 
                         -----------  -----------  -----------  ----------- 
                                                                            
Income (loss) before tax       4,823       (7,575)      (2,517)     (11,902)
Income tax benefit                 6          520          104          650 
                         -----------  -----------  -----------  ----------- 
Net income (loss)        $     4,829  $    (7,055) $    (2,413) $   (11,252)
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
Basic income (loss) per                                                     
 share                   $      0.17  $     (0.31) $     (0.09) $     (0.50)
Diluted income (loss)                                                       
 per share               $      0.17  $     (0.31) $     (0.09) $     (0.50)
                                                                            
Basic weighted-average                                                      
 shares outstanding       28,137,346   22,695,081   28,137,346   22,695,081 
Diluted weighted-average                                                    
 shares outstanding       28,352,329   22,695,081   28,137,346   22,695,081 

  
Contacts:
Russell H. Plumb 
President and Chief Executive Officer
(678) 762-3240
r.plumb@biotapharma.com  
Hershel Berry
Blueprint Life Science Group
(415) 375-3340 Ext. 102
hberry@bplifescience.com