AB Science: 2012 Annual Financial Results and 2013 First Quarter Revenue

AB Science: 2012 Annual Financial Results and 2013 First Quarter Revenue 
PARIS -- (Marketwired) -- 04/29/13 -- 


 
--  2012 Annual financial results
    
--  2013 First quarter revenue
--  Filing to the European Medicines Agency of two conditional Marketing
    Authorization Applications in oncology
    
--  2012 Revenue of 1,340 KEUR, up 21%
--  2013 First quarter revenue of 571 KEUR, up 78%

  
AB Science SA (NYSE Euronext - FR0010557264 - AB), a pharmaceutical
company specialized in research, development and marketing of protein
kinase inhibitors (PKIs), reports today its annual financials as of
31 December 2012, as well as its revenue for the first quarter of
2013, and provides an update on its activities. The Board who met on
April 24th, 2013, reviewed and approved the consolidated financial
statement for the year closing on 31 December 2012. Audit procedures
on consolidated financial statements were performed. The audited
financial report is available on the Company's website. 
Commenting on this announcement, Alain Moussy, Chairman and CEO of AB
Science declared: "The acceptance by the European Medicines Agency to
review our requests for conditional marketing authorization shows
that the authorities consider masitinib as a potential candidate for
registration in gastrointestinal stromal tumor (GIST) and in
pancreatic cancer. Based on these results, the Company intends to
actively pursue the development of masitinib in oncology where a
major program of four phases 3 studies and twelve phase 2 studies is
on-going, with the aim of demonstrating that masitinib increases
survival for patients under treatment. The steady increase of
masitinib sales in veterinary medicine reflects the increasing use of
masitinib by the veterinarians because of its effectiveness in
oncology." 
I. Key events of year 2012:  
In human medicine 


 
--  Masitinib generated promising results in gastro-intestinal stromal
    tumor (GIST) cancer, a cancer of the digestive system that affects 15
    new patients per one million inhabitants each year.
    
    
    --  In second-line of treatment, that is patients with resistance to
        Gleevec(R) which is the first-line treatment, AB Science
        announced on 1 February 2012 encouraging results from a phase I
I
        study with masitinib.
        
        
        In this study, 44 patients with inoperable, locally advanced or
        metastatic GIST and showing disease progression while treated with
        Gleevec(R) (imatinib) (400 to 800 mg/day) received either
        masitinib (23 patients) at 12 mg/kg/day or Sutent(R) (21
        patients) until progression. After a median follow-up of 14
        months, median overall survival was not reached for masitinib
        (superior to 21.2 months) versus 15.2 months for Sutent(R) (p =
        0.016). After 18 months, 79.9% of patients treated with masitinib
        were still alive, versus 21.6% for patients treated with
        Sutent(R). The Hazard Ratio was 0.29 (95% CI [0.10 ; 0.85],
        meaning that the risk of death was decreased by 71% for the
        patients treated with masitinib versus the patients treated with
        Sutent(R).
        
        
        These results have been presented orally during the American
        Society of Clinical Oncology (ASCO) 2012 Annual Meeting,
        (http://meetinglibrary.asco.org/content/96397-114).
        
        
    --  On the basis of these results, AB Science initiated a phase III
        study in GIST in second-line of treatment, in resistance to
        Gleevec(R). This is a phase III, multicenter, randomized,
        open-label, controlled, two-parallel group study evaluating the
        efficacy and safety of masitinib as compared with sunitinib
        (Sutent(R)) in GIST patients after progression under imatinib
        (Gleevec(R)). The primary end-point is overall survival.
        
        
        The study is currently recruiting.
        
        
    --  AB Science filed a conditional Marketing Authorization Application
        (MAA) of masitinib in GIST resistant to Gleevec(R). Filing has
        been accepted by the European Medicines Agency (EMA).
        
        
--  AB Science announced the results from the phase III study evaluating
    the effect of masitinib in combination with Gemzar(R) (gemcitabine,
    Eli Lilly and Company) on overall survival (OS) in patients with
    pancreatic cancer. Masitinib in combination with Gemzar(R)
    significantly extended median OS by 6 and 2.7 months in two
    independent patient populations, representing 65% and 45% of the
    overall population; namely, patients with a genetic biomarker --
    collected from simple blood sample -- indicative of aggressive disease
    progression, and patients with cancer pain. Pain intensity and the
    discovered genetic biomarker were shown to be of prognostic value for
    survival under Gemzar(R) alone and at the same time predictive of
    increased survival with masitinib in combination with Gemzar(R) for
    those patients identified as having a poor prognosis with Gemzar(R)
    alone.
    
    
    AB Science also announced that the European Medicines Agency (EMA)
    has accepted to review a Marketing Authorization Application (MAA) for
    conditional approval of masitinib in combination with Gemzar(R) in
    the treatment of pancreatic cancer, following filing of this dossier.
    
    
    Full data has been submitted for presentation at the American
    Society of Clinical Oncology (ASCO) Gastrointestinal Cancers Symposium
    (24-26 January 2013, in San Francisco, California).

  
Other events 


 
--  A bond loan agreement, convertible or repayable in ordinary shares,
    for the nominal amount of 10,000,500 euros (100 bonds with nominal
    amount of 10,005 euros), authorized by the Board of Directors on 2
    March 2012, using the delegation given by the General Shareholder's
    Meeting on 23 May 2011, was subscribed and fully issued on 17 April
    2012. The bonds bear 1.25% interest to be paid annually. They also
    bear 4.75% accrued interest to be paid only in case of repayment of
    the loan in cash. The bonds are convertible into shares at any time at
    the initiative of the bondholder, one bond giving right to a preset
    number of ordinary shares, determined as follows: "O/P", where O is
    the nominal value of the bonds and P is equal to 15.00 euros. The
    bonds are automatically repaid in shares, if after 31 December 2014,
    the three-month moving average share price of the Company with a 1
    euro cent nominal value is greater or equal to 20 euros. The bonds may
    be repaid by anticipation in cash at the option of AB Science under
    certain conditions. If not, they will be repayable in full on the
    seventh anniversary of the issue date at their nominal value, by 17
    April 2019.
    
    
--  AB Science set-up an equity financing facility (PACEO(R)) with
    Societe Generale on 3 May 2012. Societe
    Generale has subscribed warrants issued by AB Science (bons
    d'emission d'actions, or "BEA") that AB Science may exercise at
    its sole discretion, with the view to enabling the Company to carry
    out successive capital increases representing a maximum of 2,000,000
    shares (approximately 6.3% of the current share capital). AB Science
    will decide to carry out share issues in accordance with its actual
    financing requirements over the next 3 years, in tranches of up to
    400,000 shares (i.e. 1.3% of the 
current share capital). The issue
    price of the shares at the time of each capital increase will
    represent a 5% discount on the weighted average share price for the
    three trading days preceding the pricing date. When issued, the shares
    are not intended to be kept by Societe Generale,
    which aims at selling them in the market.
    
    
--  AB Science ended on 17 April 2012 the liquidity contract with SG
    Securities. 100,000 euros in cash were held on the liquidity account
    at the date of liquidity contract signature and 85,000 euros on 17
    April 2012.
    
    
--  Following the exercise of BSCPEs and BSAs (stock warrants), 110,300
    shares of 0.01 euro nominal value were issued in 2012, resulting in a
    1,003 euros capital increase.
    
    
--  A bond loan agreement, convertible or repayable in ordinary shares,
    for the nominal amount of 7.539.400 euros (149 bonds with nominal
    amount of 50,600 euros), authorized by the Board of Directors on 23
    May 2011, subscribed and fully issued on 19 August 2011, was converted
    into shares on 6 December 2012. 596,000 new shares have been issued.
    
    
--  Since February 24th 2012, AB Science shares are eligible to
    "long-only" deferred settlement service (SRD) on NYSE-Euronext. Any
    potential investor has therefore the possibility to acquire AB Science
    shares through the SRD, while benefiting from leverage and differed
    payment.
    
    
--  AB Science is listed on the SBF 120 since 24 December 2012.

  
II. Recent events since the closing of the financial year  
2013 First quarter revenue 
AB Science revenues in the first quarter of 2013 amounted to EUR 571
thousand versus EUR 321 thousand in the first quarter of 2012, up
78%. 
These revenues derive from the commercial exploitation of masitinib
in veterinary medicine in Europe and in the United States. 
2013 First quarter other events 
The company was subject to a tax audit for the research tax credit
for 2010 and 2011.  
A proposal for revision from the Public Finance Department was
received in April 2013. The adjustment amounts to EUR 646 thousand
and mainly relates to the exclusion by the Tax Administration of
employee profit-sharing in the tax base for the research tax credit
calculation (EUR 489 thousand). Due to this adjustment, a EUR 226
thousand accrual was booked. 
It should be noted that a judgment of the Administrative Court of
Montreuil and a judgment of the Court of Appeal of Nantes made in
2012 considered the employee profit-sharing as part of salary and
therefore eligible for research tax credit. In the absence of a
decision of the State Council, the Company has maintained the
accruals booked. 
III. 2012 and 2011 consolidated financial statements   


 
                                                                            
                                                                            
(in thousands of euros)                     Dec 31st, 2012   Dec 31st, 2011 
                                           ---------------- ----------------
Revenues from Sales                                   1 340            1 104
Other operating revenues                                  0                0
                                           ---------------- ----------------
Total operating income                                1 340            1 104

 
Operating revenues as of 31 December 2012 amounted to EUR 1,304
thousand, compared with EUR 1,104 thousand in the previous year. 
Sales as of 31 December 2012 amounted to EUR 1,340 thousand, compared
with EUR 1,104 thousand as of 31 December 2011 -- which represents a
growth of 21.4% -- and were entirely generated by the
commercialization of a drug in veterinary medicine. 


 
                                                                            
                                                                            
(in thousands of euros)                     Dec 31st, 2012   Dec 31st, 2011 
                                           ---------------- ----------------
Cost of goods sold                                      238              301
Marketing costs                                       1 080            1 091
Administrative costs                                  1 909            1 843
R&D costs                                             8 725            7 586
Other operating expenses                                  0                0
                                           ---------------- ----------------
Total operating expenses                             11 953           10 820

 
Operating expenses as of 31 December 2012 amounted to EUR 11,953
thousand, as compared with EUR 10,820 thousand in the previous year,
which is an increase of 10.5%. 
The Company's marketing expenses amounted to EUR 1,080 thousand as of
31 December 2012, as compared with EUR 1,091 thousand in the previous
year, which is a decrease of 1%. 
Administrative expenses increased by 3.6%, up from EUR 1,843 thousand
as of 31 December 2011 to EUR 1,909 thousand as of 31 December 2012.  
Research and development expenses increased by 15%, up from EUR 7,586
thousand as of 31 December 2011 to EUR 8,725 thousand as of 31
December 2012.  
This increase is explained mainly by the following factors: 


 
--  Decrease of the research tax credit by EUR 344 thousand, from EUR
    3,154 thousand in 2011 to EUR 2,810 thousand in 2012.
--  Increase of other research and development expenses (+ EUR 795
    thousand) due to the continuation of the program of clinical studies.

  
Operating profit/loss 
The operating loss as of 31 December 2012 amounted to EUR 10,613
thousand, compared with EUR 9,716 thousand as of 31 December 2011,
which is an increase of the operating loss by EUR 897 thousand (9.2%)
for the reasons provided above.  
Financial profit/loss 
The financial loss as of 31 December 2012 was EUR 411 thousand, as
compared with a EUR 51 thousand income a year earlier.  
Financial expenses, excluding currency effects and discounting
effect, and after taking into account the cancellation of capitalized
interest (EUR 131 thousand) related to the bond loan converted in
2012, increased from EUR 257 thousand as of 31 December 2011 to EUR
570 thousand as of 31 December 2012. This increase results primarily
from higher capitalized interest related to bond loans (EUR 456
thousand as of 31 December 2012 against EUR 178 thousand as of 31
December 2012) and to a lesser extent to the annual current interests
(+EUR 125 thousand since 31 December 2011). 
Capitalized interests are calculated at the rate of 4.75% and are
payable only in case of loan repayment in cash. The annual interests
are calculated at the rate of 1.25% payable annually. 
For the year 2012, interests earned from the investment of the
obligations exceeded the interest payable annually. 
Net profit/loss 
The total net loss on 31 December 2012 amounts to EUR 10,985
thousand, compared with EUR 9,651 thousand on 31 December 2011,
increasing by 13.8
% for the reasons provided above. 
IV. Consolidated balance sheet information  
Assets 
Given the expected sales perspectives, development costs were
expensed. Fixed assets correspond essentially to the cost of
registration of the Company's patents. Registration costs of the
Company's patents booked as net fixed assets increased by 17.3% as of
31 December 2012, from EUR 1,069 thousand as of 31 December 2011 to
EUR 1,254 thousand as of 31 December 2012. 
Inventories amounted to EUR 523 thousand as of 31 December 2011 as
compared with EUR 621 as of 31 December 2011. They are related to the
inventory of raw materials and principal ingredient (EUR 193
thousand), to the inventory of work-in-progress products (EUR 186
thousand) and to the inventory of finished products (EUR 144
thousand). 
Trade receivable increased from EUR 136 thousand at the end of 2011
to EUR 149 thousand as of 31 December 2012. This increase was induced
by the increase in sales. 
Current financial assets increased by 36.8% between 31 December 2011
and 31 December 2012, i.e. from EUR 8,558 thousand to EUR 11,706
thousand. These financial assets correspond mainly to cash
instruments, the term of which is beyond 3 months. This increase
results from the investment of money raised through the collection of
subsidies and conditional advances in January 2012, and also the
release of the bond loan. 
Other current assets of the Company amount to EUR 3,837 thousand as
of 31 December 2012, compared with EUR 6,901 thousand as of 31
December 2011, i.e. a 44.4% decrease over the period.  
This decrease is explained by the main following factors: 


 
--  Decrease in the research tax credit receivable (EUR 2,810 thousand as
    of 31 December 2012, compared with EUR 3,154 thousand as of 31
    December 2011, i.e. a EUR 344 thousand decrease)
--  Decrease of conditional advances receivable (EUR 1,956 thousand),
    advance received in January 2012
--  Decrease of subsidies receivable (EUR 974 thousand), subsidy received
    in January 2012

  
Cash remained stable between 31 December 2011 and 31 December 2012,
amounting to EUR 11,476 thousand as of 31 December 2012 and EUR
11,808 thousand as of 31 December 2011. 
The total cash and financial current assets amounted to EUR 23,452
thousand as of 31 December 2012 compared with EUR 20,366 thousand as
of 31 December 2011. 
Liabilities 
Funding used by the Company comes mainly from capital increases and
various public aids (research tax credits, reimbursable advances and
subsidies), and issue of bond loan agreements. 
The table hereafter shows the change in the Company's equity between
31 December 2011 and 31 December 2012. 


 
                                                                            
                                                                            
(in thousands of euros) - IFRS norms                         Company Equity 
                                                            ----------------
Equity as of 31 December 2011                                          7 731
Capital increases and additional paid-in capital net of                     
 issue costs                                                           7 676
Total profit/loss over the period                                   (10 968)
Conversion options                                                       361
Payments in shares                                                        67
Own shares                                                                31
                                                            ----------------
Equity as of 31 December 2012                                          4 899
                                                            ----------------

 
As of 31 December 2012, the Company's net equity stood at EUR 4,899
thousand. 
Over the last 2 years, the main variations, except for the annual
profits/losses, derived from the capital increases in 2012 and 2011
respectively for EUR 7,676 thousand and EUR 1,315 thousand, and the
booking of the equity component of the bond loan for EUR 361
thousand. 
Current liabilities amount to EUR 9,710 thousand as of 31 December
2012 as compared with EUR 9,359 thousand at the end of 2011, i.e. an
increase of 3.8%.  
This increase (EUR 351 thousand) is explained in particular by the
following factors: 


 
--  Increase in current accruals (EUR 116 thousand) related to the
    adjustment of the tax accrual;
--  increase in trade payable (EUR 553 thousand);
--  decrease in current financial liabilities (EUR 632 thousand) related
    to the reimbursement of current financial liability of EUR 1,000
    thousand in February 2012;
--  increase of other current liabilities (EUR 314 thousand), mainly
    related to the increase of social debts.

  
Non-current liabilities include mainly a bond loan (EUR 8,156
thousand), which has a maturity over 2 years, two bank debts for EUR
1,473 thousand and conditional advances. They amount to EUR 15,373
thousand as of 31 December 2012, compared with EUR 12,372 thousand as
of 31 December 2011, i.e. an increase of EUR 3,001 thousand related
notably to the issue of a bond loan convertible or reimbursable in
ordinary shares in April 2012 (EUR 10,000 thousand) and to the
reclassification into equity of bonds subscribed in 2011 and
converted into shares in December 2012 (EUR 7.5 thousand). 
Next financial appointments in 2013 
Financial communication on 1st semester 2013: 30 August 2013
 General
Shareholders' Meeting: 18 June 2013 
Find our complete 2012 financial report on www.ab-science.com 
About AB Science
 Founded in 2001, AB Science is a pharmaceutical
company specializing in the research, development and
commercialization of protein kinase inhibitors (PKIs), a new class of
targeted molecules whose action is to modify signaling pathways
within cells. Through these PKIs, the Company targets diseases with
high unmet medical needs (cancer, inflammatory diseases, and central
nervous system diseases), in both human and veterinary medicines. 
AB Science has developed a proprietary portfolio of molecules and the
Company's lead compound, masitinib, has already been registered for
veterinary medicine in Europe and in the USA, and is pursuing 8
on-going phase 3 studies in human medicine in GIST, metastatic
melanoma expressing JM mutation of c-Kit, multiple myeloma,
mastocytosis, severe persistent asthma, rheumatoid arthritis, and
progressive multiple sclerosis. The company is headquartered in
Paris, France, and listed on Euronext Paris (ticker: AB). 
Further information is available on AB Science website:
www.ab-science.com. 
This document contains prospective information. No guarantee can be
given as for the realization of these forecasts, which are subject to
those risks described in documents deposited by the Company to the
Authority of the financial markets, including trends of the economic
conjuncture, the financial markets and the markets on which AB
Science is present. 
FINANCIAL STATEMENTS AS OF 31 DECEMBER 2012 


 
                                                                            
                                                                            
Assets (in thousands of euros)                     31/12/2012    31/12/2011 
                                                 ------------- -------------
Intangible assets                                        1 266         1 103
Tangible assets                                            106           151
Non-current financial assets                               649           159
Other non-current assets                                     0            25
Deferred tax assets                                          0             0
                                                 ------------- -------------
Non-current assets                          
             2 020         1 438
                                                 ------------- -------------
Inventories                                                523           621
Trade receivable                                           149           136
Current financial assets                                11 706         8 558
Other current assets                                     3 837         6 901
Cash and cash equivalents                               11 746        11 808
                                                 ------------- -------------
Current assets                                          27 962        28 024
                                                 ------------- -------------
TOTAL ASSETS                                            29 982        29 462
                                                 ------------- -------------
                                                                            
                                                                            

 
                                                                            
                                                                            
Liabilities (in thousands of euros)               31/12/2012    31/12/2011  
                                                 ------------  ------------ 
Share capital                                             323           316 
Additional paid-in capital                             75 493        67 823 
Translation reserve                                         5           (12)
Other reserves and results                            (70 922)      (60 397)
                                                 ------------  ------------ 
Total equity attributable to equity holders of                              
 the Company                                            4 899         7 731 
                                                 ------------  ------------ 
Non-controlling interests                                                   
Total equity                                            4 899         7 731 
                                                 ------------  ------------ 
Non-current provisions                                    292           273 
Non-current financial liabilities                      14 373        11 532 
Other non-current liabilities                               0             0 
Deferred tax liabilities                                  708           568 
                                                 ------------  ------------ 
Non-current liabilities                                15 373        12 372 
                                                 ------------  ------------ 
Current provisions                                        818           702 
Trade payable                                           5 786         5 233 
Current financial liabilities                           1 188         1 820 
Tax liabilities / Tax payable                               0             0 
Other current liabilities                               1 918         1 604 
                                                 ------------  ------------ 
Current liabilities                                     9 710         9 359 
                                                 ------------  ------------ 
TOTAL EQUITY AND LIABILITIES                           29 982        29 462 
                                                 ------------  ------------ 

 
statement of comprehensive income as OF 31 DECEMBER 2012 


 
                                                                            
                                                                            
(in thousands of euros)                           31/12/2012    31/12/2011  
                                                 ------------  ------------ 
                                                                            
Revenue                                                 1 340         1 104 
                                                 ------------  ------------ 
Other operating revenues                                    0             0 
                                                 ------------  ------------ 
Total revenues                                          1 340         1 104 
                                                 ------------  ------------ 
Cost of sales                                            (238)         (301)
Marketing expenses                                     (1 080)       (1 091)
Administrative expenses                                (1 909)       (1 843)
Research and development expenses                      (8 725)       (7 586)
Other operating expenses                                    -             - 
                                                 ------------  ------------ 
Operating income (loss)                               (10 613)       (9 716)
                                                 ------------  ------------ 
Financial income                                          490           378 
Financial expenses                                       (901)         (327)
                                                 ------------  ------------ 
Financial income (loss)                                  (411)           51 
                                                 ------------  ------------ 
Income tax expense                                         39            15 
                                                 ------------  ------------ 
Net income (loss)                                     (10 985)       (9 651)
                                                 ------------  ------------ 
including:                                                                  
Attributable to non-controlling interests                   -             - 
                                                                            
Attributable to equity holders of the parent                                
 Company                                              (10 985)       (9 651)
                                                 ------------  ------------ 
Translation differences                                    17           (29)
                                                 ------------  ------------ 
Total Comprehensive income for the period             (10 968)       (9 680)
                                                 ------------  ------------ 
including:                                                                  
Attributable to non-controlling interests                   -             - 
                                                                            
Attributable to equity holders of the parent                                
 company                                              (10 968)       (9 680)
                              
                   ------------  ------------ 
Basic earnings per share - in euros                     (0,34)        (0,31)
                                                 ------------  ------------ 
Diluted earnings per share - in euros                   (0,34)        (0,31)
                                                 ------------  ------------ 

 
CONSOLIDATED STATEMENT OF CASH FLOWS 


 
                                                                            
                                                                            
(in thousands of euros)                           31/12/2012    31/12/2011  
                                                 ------------  ------------ 
Net income (loss)                                     (10 985)       (9 651)
Adjustment for:                                           405           478 
- Depreciation, amortization and charges to                                 
 provisions                                                 0             0 
- Income (loss) from asset sale                            67            97 
- Non-cash income and expenses linked to share-                             
 based payments                                           166             5 
- Other non-cash income and expenses                       24           (16)
- Income tax expense                                        0             0 
- Change in deferred tax                                4 016           801 
- Impact of change in working capital                                       
 requirement generated by operating activities            160           (34)
- Income from interest on financial assets             (6 147)       (8 320)
                                                 ------------  ------------ 
Cash flow from operations before tax and                                    
 interest                                                 (64)            0 
                                                 ------------  ------------ 
Income Tax (paid)/received                             (6 211)       (8 320)
                                                 ------------  ------------ 
Net cash flow from operating activities                  (324)         (433)
                                                 ------------  ------------ 
Acquisitions of fixed assets                                0             0 
Sales of tangible and intangible assets               (12 154)       (8 500)
Acquisitions of financial assets                        8 500        17 000 
Proceeds from the sale of financial assets                  0             0 
Changes in loans and advances                             185           319 
Interest received/(paid)                                    0             0 
Other cash flow related to investing activities        (3 793)        8 386 
                                                 ------------  ------------ 
Net cash flow from investing activities                                     
Dividends paid                                            291         1 315 
Capital increase (decrease)                            11 201         7 851 
Issue of loans and receipt of conditional                                   
 advances                                              (1 650)          (75)
Repayments of loans and conditional advances               85             0 
Other cash flows from financing activities              9 926         9 091 
                                                 ------------  ------------ 
Net cash flow from financing activities                    17           (29)
                                                 ------------  ------------ 
Effect of exchange rate fluctuations                        0             0 
Effect of assets held for sale                              0             0 
Impact of changes in accounting principles                (61)        9 128 
                                                 ------------  ------------ 
Net increase (decrease) in cash and cash                                    
 equivalents - by cash flows                                                
                                                                            
Cash and cash equivalents - opening balance            11 808         2 679 
Cash and cash equivalents - closing balance            11 746        11 808 
                                                 ------------  ------------ 
Net increase / decrease in cash and cash                                    
 equivalents - by change in closing balances              (61)        9 128 
                                                 ------------  ------------ 

 
Annual financial results 2012 :
http://hugin.info/155655/R/1697370/559293.pdf 
AB Science
Financial Communication & Media Relations
investors@ab-science.com