Veloxis Pharmaceuticals announces financial results for the first half 2013

 Veloxis Pharmaceuticals announces financial results for the first half 2013

PR Newswire

HORSHOLM, Denmark, Aug. 21, 2013

HORSHOLM, Denmark, Aug. 21, 2013 /PRNewswire/ --

Highlights:

  oLCP-Tacro™ has successfully demonstrated non-inferiority compared to
    tacrolimus (Prograf®; Astellas Pharma) in its Phase III clinical trial,
    Study 3002. The Phase III randomized, double-blind and double-dummy study
    in 543 de novo kidney transplant recipients, with Prograf® as the
    comparator, met its primary efficacy and primary safety endpoints. The
    study was conducted under a Special Protocol Agreement with the FDA and
    the results are considered pivotal for the planned U.S. regulatory filing
    expected to occur in the second half of 2013.

  oThe European Medicines Agency (EMA) has accepted for review the company's
    Marketing Authorization Application (MAA) to market LCP-Tacro™ for the
    prevention of organ rejection in kidney transplant patients in the
    European Union. Veloxis expects the decision from the European Union in
    2014.

  oFinal STRATO clinical study data have demonstrated the potential for
    LCP-Tacro™ to improve tacrolimus-induced tremors in stable kidney
    transplant patients.

  oVeloxis reported a net loss of DKK 80.5 million for the first half of 2013
    compared to a net loss of DKK 160.6 million for the same period in 2012.
    The reported net loss is in line with expectations and the financial
    outlook for 2013 is maintained.

  oFor the first half of 2013, Veloxis' research and development costs
    amounted to DKK 81.7 million compared to DKK 119.5 million during the same
    period in 2012.

  oOn 30 June, 2013, Veloxis had cash and cash equivalents of DKK 399.7
    million.

Outlook for 2013
Veloxis maintains its 2013 outlook with an operating and net loss of DKK
170-200 million for the financial year 2013.

As at 30 June 2013, the Company's cash position equaled DKK 399.7 million, and
as at 31 December 2013, the Company's cash position is expected to be in the
range of DKK 270-310 million.

Conference call
A conference call will be held tomorrow, 22 August, 2013 at 3:00 PM CET
(Denmark); 2:00 PM GMT (London), 9:00 AM EDT (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 30348398

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 two Phase III studies 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 was a randomized, double-blind, multicenter study
that compared once-daily LCP-Tacro™ against twice-daily Prograf® in 543 de
novo adult kidney transplant patients and met its primary efficacy and primary
safety endpoints. The primary endpoint of the study was a composite endpoint
of treatment failure (biopsy-proven acute rejection or BPAR, graft failure,
loss to follow up or death) that was evaluated after a 12-month treatment
period to demonstrate the non-inferiority of LCP-Tacro™ compared to Prograf®.
The treatment failure rate for LCP-Tacro™ was 18.3% compared to 19.6% for
Prograf®, well within the 10% pre-specified non-inferiority margin. The
primary safety analyses were the differences between LCP-Tacro™ and Prograf®
treatment groups at Month 12 (Day 360) with respect to the incidence of
adverse events (AEs) and the incidence of predefined potentially clinically
significant laboratory measures including: fasting plasma glucose; platelet
count; white blood cell (WBC) count; aminotransaminases; total cholesterol;
low density lipoprotein (LDL) cholesterol; triglycerides; and estimated
glomerular filtration rate (eGFR). In all instances, there were no
statistically significant differences between the two treatments.
Specifically, renal function was similar between the two groups at 12 months,
as was the incidence of malignancy, infections and new onset diabetes during
this period. 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 was 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. Results from
this study demonstrated that patients switched to LCP-Tacro™ demonstrated a
statistically significant improvement in hand tremors based on improvement in
the FTM Tremor rating scale. Additionally, both the patient- and
physician-reported global assessments demonstrated significant overall
improvements following the switch to LCP-Tacro™.

LCP-Tacro™ Regulatory Strategy
On 29 April, 2013 a Marketing Authorization Application (MAA) was submitted by
Veloxis to the European Medicines Agency (EMA) seeking approval to market
LCP-Tacro™ for the prevention of organ rejection in kidney transplant patients
in the European Union. The MAA submission was based on the favorable results
of the LCP-Tacro™ Phase III 3001 Study in stable kidney transplant patients
and data from an extensive Phase I and II clinical programme and has been
accepted for review by the EMA. Veloxis expects to receive a decision on the
application in 2014.

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
and will include data from the 3002 de novo study in addition to data from
Phase I, II and Study 3001.

Financial
Highlights
               YTD           YTD         Q2            Q2          Year
               2013          2012        2013          2012        2012
               DKK'000       DKK'000     DKK'000       DKK'000     DKK'000
Income
Statement
Revenue        13,736        -           6,868         -           6,868
Research and
development    (81,719)      (119,487)   (42,772)      (56,639)    (210,739)
costs
Administrative (14,611)      (19,693)    (6,834)       (9,462)     (36,889)
expenses
Operating loss
before         (82,594)      (139,180)   (42,738)      (66,101)    (240,760)
restructuring
cost
Restructuring  -             (21,462)    -             (21,462)    (21,462)
cost
Operating loss (82,594)      (160,642)   (42,738)      (87,563)    (262,222)
Net financial
income /       1,654         459         (2,253)       2,051       (850)
(expenses)
Loss before    (80,940)      (160,183)   (44,991)      (85,512)    (263,072)
tax
Tax for the    485           (448)       241           (130)       363
period
Net loss for   (80,455)      (160,631)   (44,750)      (85,642)    (262,709)
the period
Balance Sheet
Cash and cash  399,743       152,720     399,743       152,720     496,834
equivalents
Total assets   409,371       167,799     409,371       167,799     509,271
Share capital  166,057       45,254      166,057       45,254      165,932
Total equity   334,686       98,968      334,686       98,968      409,737
Investment in
property,      -             217         -             126         260
plant and
equipment
Cash Flow
Statement
Cash flow from
operating      (96,290)      (142,764)   (51,165)      (62,400)    (205,870)
activities
Cash flow from
investing      -             53,607      -             24,174      169,712
activities
Cash flow from
financing      (2,506)       (2,395)     (2,555)       (1,085)     404,304
activities
Cash and cash
equivalents at 399,743       152,720     399,743       152,720     496,834
period end
Financial
Ratios
Basic and      (0.05)        (0.35)      (0.03)        (0.19)      (0.43)
diluted EPS
Weighted
average number 1,660,130,437 452,542,480 1,660,572,426 452,542,480 607,511,489
of shares
Average number
of employees   28            55          27            55          48
(FTEs)
Assets/equity  1.22          1.70        1.22          1.70        1.24

The interim report is unaudited.

Revenue
For the first half of 2013 Veloxis recognized deferred revenue of DKK 13.7
million as revenue compared to no revenue in the same period of 2012. Deferred
revenue consist of up-front and milestone payments under Veloxis' distribution
agreement with Chiesi Farmaceutici S.p.A. and is recognized in the income
statement on a straight line basis based on planned development periods.

Research and development costs
For the first half of 2013, Veloxis' research and development costs amounted
to DKK 81.7 million compared to DKK 119.5 million during the same period in
2012. Research and development costs are mainly attributable to the phase III
trial in LCP-Tacro™ (de novo patients, Study 3002). The reduction in cost
between the two periods is mainly related to effect from the executed
restructuring and discontinuation of other pipeline activities in May 2012.

Administrative expenses
For the first half of 2013, Veloxis' administrative cost amounted to DKK 14.6
million compared to DKK 19.7 million during the same period in 2012. The
reduction in cost is attributable to the continued focus of reducing overall
cost, combined with the effect of the restructuring and reduction in number of
employees that took place in May 2012.

Compensation costs
For the first half of 2013, a total of DKK 5.2 million was recognized as
share-based compensation. The cost is included in R&D and G&A. The comparable
cost for 2012 was DKK 3.5 million.

In the second quarter of 2013, a total of 19,405,513 warrants have been
cancelled.

As of 30 June, 2013, there were a total of 85,572,644 warrants outstanding at
an average strike price of DKK 0.71. Members of the Board of Directors held
375,941 warrants at an average strike price of DKK 3.35. Members of the
Executive Management held 45,631,300 warrants at an average strike price of
DKK 0.35, while other current and former employees held 39,565,403 warrants at
an average strike price of DKK 1.10.

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

Operating loss
Veloxis' operating loss for the first half of 2013 was DKK 82.6 million
compared to DKK 160.6 million in the corresponding period of 2012.

Financial income
During the first half of 2013, the Company recognized net financial income of
DKK 1.7 million compared to net financial income of DKK 0.5 million in the
corresponding period of 2012. The income is mainly due to currency gain
following an increase in the USD / DKK currency rate during the first half of
2013.

Net loss
Veloxis' net loss for the first half of 2013 was DKK 80.5 million compared to
DKK 160.6 million in the corresponding period of 2012.

Cash flow
As per 30 June, 2013, the balance sheet reflects cash and cash equivalents of
DKK 399.7 million compared to DKK 496.8 million as per 31 December, 2012. This
represents a decrease of DKK 97.1 million primarily related to the Company's
operating activities for the period.

Balance sheet
As per 30 June, 2013, total assets were DKK 409.4 million compared to DKK
509.3 million at the end of 2012.

Shareholders' equity equalled DKK 334.7 million as of 30 June, 2013, compared
to DKK 409.7 million at the end of 2012.

Significant risks and uncertainties
Veloxis faces a number of risks and uncertainties related to operations,
research and development, commercial and financial activities. For further
information about risks and uncertainties, we refer to the Annual Report for
2012. As of the date of this Interim Report, there have been no significant
changes to Veloxis' overall risk profile since the publication of the Annual
Report for 2012.

For more information, please contact:

John D. Weinberg Johnny Stilou
EVP, Chief Commercial Officer      EVP, Chief Financial
                                                   Officer
Mobile: +1 908 304 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.

Executive Management

Dr. William J. Polvino Johnny Stilou
President & CEO        Executive Vice President &
                       CFO

Board of Directors

Kim Bjornstrup  Thomas Dyrberg
(Chairman)      (Deputy Chairman)
Anders Gotzsche Mette Kirstine Agger



Financial
Highlights
Quarterly
Numbers in DKK
               Q2            Q1             Q4          Q3          Q2          Q1
               2013          2013           2012        2012        2012        2012
               DKK'000       DKK'000        DKK'000     DKK'000     DKK'000     DKK'000
Income
Statement
Revenue        6,868         6,868          6,868       -           -           -
Research and
development    (42,772)      (38,947)       (41,890)    (49,362)    (56,639)    (62,848)
costs
Administrative (6,834)       (7,777)        (10,235)    (6,961)     (9,462)     (10,231)
expenses
Operating loss
before         (42,738)      (39,856)       (45,257)    (56,323)    (66,101)    (73,079)
restructuring
cost
Restructuring  -             -              -           -           (21,462)    -
cost
Operating loss (42,738)      (39,856)       (45,257)    (56,323)    (87,563)    (73,079)
Net financial
income /       (2,253)       3,907          (2,302)     993         2,051       (1,592)
(expenses)
Loss before    (44,991)      (35,949)       (47,559)    (55,330)    (85,512)    (74,671)
tax
Tax for the    241           244            1,034       (223)       (130)       (318)
period
Net loss for   (44,750)      (35,704)       (46,525)    (55,553)    (85,642)    (74,989)
the period
Balance Sheet
Cash and cash  399,743       456,216        496,834     86,683      152,720     213,786
equivalents
Total assets   409,371       465,939        509,271     99,590      167,799     235,187
Share capital  166,057       166,057        165,932     45,254      45,254      452,543
Total equity   334,686       377,276        409,737     42,103      98,968      182,545
Investment in
property,
plant and      -             -              43          -           126         91

equipment
Cash Flow
Statement
Cash flow from
operating      (51,165)      (45,125)       (399)       (62,707)    (62,400)    (80,364)
activities
Cash flow from
investing      -             -              56,619      59,486      24,174      29,433
activities
Cash flow from
financing      (2,555)       48             410,149     (3,450)     (1,085)     (1,310)
activities
Cash and cash
equivalents at 399,743       456,216        496,834     86,683      152,720     213,786
period end
Financial
Ratios
Basic and      (0.03)        (0.02)         (0.08)      (0.12)      (0.19)      (0.17)
diluted EPS
Weighted
average number 1,660,572,426 1,659,683,537  607,511,489 452,542,480 452,542,480 452,542,480
of shares
Average number
of employees   27            29             33          49          55          55
(FTEs)
Assets/equity  1.22          1.24           1.24        2.37        1.70        1.29



Income statement and statement of comprehensive income
Income         Consolidated
Statement
(DKK'000)      YTD           YTD         Q2            Q2          Year
               2013          2012        2013          2012        2012
Revenue        13,736        -           6,868         -           6,868
Research and
development    (81,719)      (119,487)   (42,772)      (56,639)    (210,739)
costs
Administrative (14,611)      (19,693)    (6,834)       (9,462)     (36,889)
expenses
Operating loss
before         (82,594)      (139,180)   (42,738)      (66,101)    (240,760)
restructuring
cost
Restructuring  -             (21,462)    -             (21,462)    (21,462)
cost
Operating loss (82,594)      (160,642)   (42,738)      (87,563)    (262,222)
Financial      9,872         5,226       1,000         3,649       1,481
income
Financial      (8,218)       (4,767)     (3,253)       (1,598)     (2,331)
expenses
Loss before    (80,940)      (160,183)   (44,991)      (85,512)    (263,072)
tax
Tax for the    485           (448)       241           (130)       363
period
Net loss for   (80,455)      (160,631)   (44,750)      (85,642)    (262,709)
the period
Basic and      (0.05)        (0.35)      (0.03)        (0.19)      (0.43)
diluted EPS
Weighted
average number 1,660,130,437 452,542,480 1,660,572,426 452,542,480 607,511,489
of shares
Statements of
comprehensive  Consolidated
income
(DKK'000)      YTD           YTD         Q2            Q2          Year
               2013          2012        2013          2012        2012
Net loss for   (80,455)      (160,631)   (44,750)      (85,642)    (262,709)
the period
 Other
comprehensive
income:
 Currency
translation    (277)         248         (149)         173         427
differences
 Other
comprehensive  (277)         248         (149)         173         427
income for the
period
Total
comprehensive  (80,732)      (160,383)   (44,899)      (85,469)    (262,282)
income for the
period



Balance sheet
Assets                         Consolidated
(DKK'000)                      30 June  30 June  31 Dec.
                               2013     2012     2012
Patent rights and software     1,981    2,469    2,225
Intangible assets              1,981    2,469    2,225
Property, plant and equipment  2,634    4,236    2,994
Leasehold improvements         39       200      115
Property, plant and equipment  2,673    4,436    3,109
Non-current assets             4,654    6,905    5,334
Other receivables              3,964    5,057    5,181
Prepayments                    1,010    3,117    1,922
Receivables                    4,974    8,174    7,103
Securities                     -        112,973  -
Cash                           399,743  39,747   496,834
Cash and cash equivalents      399,743  152,720  496,834
Current assets                 404,717  160,894  503,937
Assets                         409,371  167,799  509,271



Balance sheet
Equity & Liabilities     Consolidated
(DKK'000)                30 June    30 June    31 Dec.
                         2013       2012       2012
Share capital            166,057    45,254     165,932
Special reserve          407,289    407,289    407,289
Translation reserves     2,081      2,179      2,358
Retained earnings/loss   (240,741)  (355,754)  (165,842)
Equity                   334,686    98,968     409,737
Finance lease            -          1,718      -
Non-current liabilities  -          1,718      -
Finance lease            721        4,214      3,665
Trade payables           20,179     19,614     18,590
Deferred revenue         34,340     -          48,076
Other payables           19,445     43,285     29,203
Current liabilities      74,685     67,113     99,534
Liabilities              74,685     68,831     99,534
Equity and liabilities   409,371    167,799    509,271



Cash flow statements
Cash Flow Statement             Consolidated
(DKK'000)                       YTD      YTD       Q2       Q2       Year
                                2013     2012      2013     2012     2012
Operating loss                  (82,594) (160,642) (42,738) (87,563) (262,222)
Share-based payment             5,243    3,451     2,310    1,891    7,154
Depreciation and amortization   681      8,728     341      7,488    3,391
Impairment loss                 -        -         -        -        6,141
Net gain on sale of fixed       -        -         -        -        (2,375)
assets
Changes in working capital      (19,587) 5,544     (11,083) 15,670   42,601
Cash flow from operating        (96,257) (142,919) (51,170) (62,514) (205,310)
activities before interest
Interest received               48       962       -        480      1,481
Interest paid                   58       (359)     76       (237)    (568)
Corporate tax paid              (139)    (448)     (71)     (129)    (1,473)
Cash flow from operating        (96,290) (142,764) (51,165) (62,400) (205,870)
activities
Purchase of property, plant and -        (217)     -        (126)    (260)
equipment
Sale of property, plant and     -        -         -        -        3,175
equipment
Investments in securities       -        (11,935)  -        (8,174)  (19,909)
Sale of securities              -        65,759    -        32,474   186,706
Cash flow from investing        -        53,607    -        24,174   169,712
activities
Installments on bank borrowings (2,944)  (2,395)   (2,555)  (1,085)  (4,662)
and finance lease
Proceeds from issuance of       438      -         -        -        408,966
shares, net
Cash flow from financing        (2,506)  (2,395)   (2,555)  (1,085)  404,304
activities
Increase/(decrease) in cash     (98,796) (91,552)  (53,720) (39,311) 368,146
Cash at beginning of period     496,834  130,930   456,216  76,513   130,930
Exchange gains/(losses) on cash 1,705    369       (2,753)  2,545    (2,242)
Cash at end of period           399,743  39,747    399,743  39,747   496,834
Cash and cash equivalents at
end of period comprise:
Securities                      -        112,973   -        112,973  -
Deposit on demand and cash      399,743  39,747    399,743  39,747   496,834
                                399,743  152,720   399,743  152,720  496,834



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   -         -        1,931       (198,574) 255,900
2012
Total
comprehensive                                             248         (160,631) (160,383)
income
Reduction of                 (407,289)           407,289                        -
share capital
Share-based                                                           3,451     3,451
payment
Equity as of  452,542,480    45,254    -         407,289  2,179       (355,754) 98,968
30 June 2012
Total
comprehensive                                             179         (102,078) (101,899)
income
Issuance of   1,206,779,946  120,678   301,695                                  422,373
shares
Share-based                                                           3,703     3,703
payment
Costs related to capital               (13,408)                                 (13,408)
increases
Transfer of
retained                               (288,287)                      288,287   -
earnings
Equity as of
31 December   1,659,322,426  165,932   -         407,289  2,358       (165,842) 409,737
2012
Total
comprehensive                                             (277)       (80,455)  (80,732)
income
Warrant       1,250,000      125       313                                      438
exercises
Share-based                                                           5,243     5,243
payment
Transfer of
retained                               (313)                          313       -
earnings
Equity as of  1,660,572,426  166,057   -         407,289  2,081       (240,741) 334,686
30 June 2013



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 2012.



SOURCE Veloxis Pharmaceuticals

Website: http://www.veloxis.com
 
Press spacebar to pause and continue. Press esc to stop.