EDMONTON, July 27 /CNW/ - Biomira Inc. (Nasdaq:BIOM) (TSX:BRA) today
reported financial results for the six months ended June 30, 2005.
Financial Update
Financial results for the six months ended June 30, 2005 reflect a
consolidated net loss from operations of $9.2 million or $0.12 per share
compared to $3.8 million or $0.05 per share for the same period in 2004. The
increased net loss of $5.4 million in 2005 arises from lower revenues of
$5.5 million and higher research and development expenditures of $0.7 million,
offset by higher investment and other income of $0.2 million and reductions in
general and administrative expenses of $0.4 million, marketing and business
development expenses of $0.1 million and other expenses of $0.1 million. The
higher revenues in 2004 resulted from the recognition into income of the
remaining deferred licensing revenues related to Theratope(R) vaccine,
totalling $5.9 million, due to the return of the Theratope development and
commercialization rights from Merck KGaA of Darmstadt, Germany announced in
June 2004.
Biomira's financial reserves total $30.1 million in cash and short-term
investments as at June 30, 2005, a decrease of $8.5 million from the year end
position due to funding of operations.
For a further discussion of the Company's financial results for the six
months ended June 30, 2005, please refer to the Company's unaudited
consolidated financial statements and the Company's full Management Discussion
& Analysis of Financial Condition and Results of Operations included in this
news release.
Highlights From the Second Quarter
- L-BLP25 phase 2b protocol-specified survival update and data in
non-small cell lung cancer (NSCLC) presented at 41st annual meeting of
the American Society of Clinical Oncology (ASCO) Meeting held in
Orlando, FL - May 2005; Merck KGaA and Biomira remain encouraged by
two-year survival data.
- Enrolment into L-BLP25 phase 2 safety study continues in preparation
for pivotal phase 3 study, expected to begin late 2005 - Trial to
assess safety of the vaccine formulation planned to be used in phase 3
study. Both studies are for the NSCLC indication.
- Biomira to seek a partner for its third-generation vaccine, L-BGLP40.
- Synthetic Biologics Unit formed to take advantage of strong potential
in chemically synthesized biologicals for use in protective and
therapeutic vaccines.
Biomira Inc.
Biomira is a biotechnology company specializing in the development of
innovative therapeutic approaches to cancer management. Biomira's commitment
to the treatment of cancer currently focuses on the development of synthetic
vaccines and novel strategies for cancer immunotherapy. We are The Cancer
Vaccine People(TM).
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Management's Discussion and Analysis of Financial Condition and Results
of Operations (MD&A), prepared as at July 15, 2005, should be read in
conjunction with the unaudited consolidated financial statements and
accompanying notes for the six months ended June 30, 2005, included hereafter,
as well as the audited consolidated financial statements and MD&A for the
fiscal year ended December 31, 2004. Except as discussed below, all other
factors referred to and discussed in the MD&A for the fiscal year end December
31, 2004 remain substantially unchanged.
Overview of the Business
Biomira Inc. is an international biotechnology company operating
primarily in a single business segment, the research and development of
innovative therapeutic approaches to cancer management. We are focused on
developing synthetic vaccines and novel strategies for cancer immunotherapy.
Immunotherapy is a treatment approach designed to induce protective immune
responses that will control the growth of cancers, prevent or delay metastasis
or spreading, and increase the survival of cancer patients. Our strategic
mission is to become a forward integrated, global products-oriented
biotechnology company.
BLP25 Liposome Vaccine (L-BLP25)
Data from the phase 2b study of L-BLP25 in NSCLC, originally announced in
December 2004 were presented at the 41st annual meeting of the American
Society of Clinical Oncology (ASCO) held in Orlando, FL in May 2005. Biomira
and Merck KGaA of Darmstadt, Germany remain encouraged by the survival data,
particularly after two years.
The poster presented at ASCO centered on the 65-patient subset of
patients with Stage IIIB locoregional disease. In this subset, those who
received L-BLP25 in addition to best supportive care survived considerably
longer than those with the same stage disease who received best supportive
care alone. The median survival for the vaccine arm is encouraging. At the
time of the November 2004 formal analysis, the median survival in the vaccine
arm had not been reached, but will not be less than 23 months compared with
median survival of 13.3 months for patients who did not receive the vaccine.
Additionally, the hazard ratio, a statistical test used to describe relative
risk, is 0.5652. In this clinical trial, a hazard ratio of less than one
indicates a decrease in the risk of death for patients who received L-BLP25.
However, the difference in survival between patients who received vaccine and
those who did not receive the vaccine remained statistically non-significant
(p(equal sign)0.0924), in line with expectations given the relatively small
numbers of patients in each group.
The differences in the number of patients who remain alive, one year, two
years and three years after entering this trial suggest a positive survival
impact for those who received the vaccine. The two-year survival data show
33.3 per cent of patients on the best supportive care arm remained alive,
while 57.1 per cent of patients on the vaccine arm were still alive two years
after their enrolment in the trial. The three-year survival data are also
promising, but are less mature and will be re-calculated using additional data
following the next survival analysis. The protocol will be amended to allow
further survival documentation to be collected, and a further analysis is
expected to be completed by the end of 2005.
A second poster at ASCO described the patients' quality of life outcomes
by stage of disease. Statistically significant differences in quality of life
were identified at two separate time-points on the trial for patients with
Stage IIIB locoregional disease, favouring patients who received vaccine. No
differences were found between the patients with the more advanced Stage IIIB
with pleural effusion and Stage IV disease. The quality of life data for
vaccinated patients with Stage IIIB locoregional disease is encouraging.
We see an important trend worth exploring in a phase 3 study.
Additionally, we believe that L-BLP25 may be beneficial to patients with Stage
IIIA disease, in addition to those with Stage IIIB locoregional disease, and
patients with either disease stage will be potentially eligible for our
phase 3 trial. By adding patients with Stage IIIA unresectable disease to our
trial, we will also increase the potential market, should the trial outcome be
successful.
We are currently enrolling patients in a L-BLP25 phase 2 safety study in
preparation for the large multinational pivotal phase 3 study. The phase 2
safety study incorporates manufacturing changes to the vaccine intended to
secure the future commercial supply of the vaccine. The phase 2 study is
expected to enroll approximately 20 patients in eight sites across Canada and
should complete enrolment in the third quarter of 2005. Shortly thereafter,
towards the end of 2005, the phase 3 trial is expected to commence.
Business Development
"With our collaboration with Merck KGaA for L-BLP25 in place, we will now
focus our efforts and resources on finding a collaborator for our follow-on
vaccine, L-BGLP40, which we believe offers the best elements of both L-BLP25
and Theratope," said Alex McPherson, MD, PhD, President and CEO.
L-BGLP40 is a third generation vaccine. L-BGLP40 is a completely
synthetic MUC1 based liposomal, multiple target cancer vaccine, which we
believe may provide benefit in several cancer indications. L-BGLP40 is a
vaccine designed to evoke both a cellular and humoral immune response against
major cancer-associated target epitopes expressed on adenocarcinomas.
Synthetic Biologics Unit
In April 2005, we created a Synthetic Biologics Unit headed by Vice
President and General Manager, R. Rao Koganty, PhD. This business unit was
created to take advantage of the strong potential in chemically synthesized
biologicals for use in protective and therapeutic vaccines. We have developed
technologies that can be used by other companies developing non-competing
vaccine technology. Our expertise in this area will complement our current
programs and provide new upside business potential.
Synthetic organic chemistry has been the foundation of our vaccine
development program. Our scientists design and synthesize both antigens and
immune stimulants, essential components of every vaccine, to achieve safety,
specificity, purity and dependability in performance.
Synthetic structures carry an impeccable structural definition that
eludes natural macromolecules. With structural definition, you are assured of
consistency in production and performance and we are able to provide a variety
of synthetic immune stimulants (adjuvants) that will assist companies in
vaccine development and clinical testing. We are actively seeking licensing
opportunities for synthetic adjuvants.
Results of Operations
Financial results for the six months ended June 30, 2005 reflect a
consolidated net loss from operations of $9.2 million or $0.12 per share
compared to $3.8 million or $0.05 per share for the same period in 2004. The
increased net loss of $5.4 million in 2005 arises from lower revenues of
$5.5 million and higher research and development expenditures of $0.7 million,
offset by higher investment and other income of $0.2 million and reductions in
general and administrative expenses of $0.4 million, marketing and business
development expenses of $0.1 million and other expenses of $0.1 million. The
higher revenues in 2004 resulted from the recognition into income of the
remaining deferred licensing revenues related to Theratope, totalling
$5.9 million, due to the return of the Theratope development and
commercialization rights from Merck KGaA announced in June 2004.
Revenues
Contract research and development revenue for the six months ended
June 30, 2005, totalling $1.7 million compared to $0.8 million for the same
period in 2004, represents contract research and development funding received
from Merck KGaA associated with L-BLP25. The increase in contract research and
development revenue is attributable to increased clinical expenditures
incurred by Biomira in relation to the L-BLP25 phase 2 safety study commenced
in the second quarter of this year and in preparation of the planned phase 3
clinical trial expected to commence towards the end of 2005.
Licensing revenue from collaborative arrangements for the six months
ended June 30, 2005, totalling $0.1 million compared to $6.4 million for the
same period in 2004, represents the amortization of upfront payments received
from Merck KGaA and upfront sub-licensing fee from CancerVac upon commencement
of the respective collaborations. The decreased revenue results from return of
the Theratope vaccine development and commercialization rights by Merck KGaA
in June 2004 and the immediate recognition into income of the remaining
related deferred revenues totalling $5.9 million.
Licensing, royalties and other revenue for the six months ended
June 30, 2005, totalling $0.2 million, was similar to the same period in 2004.
Licensing, royalties and other revenue relates to contract manufacturing
activities utilizing various Biomira patented technologies and compounds for
external customers.
Research and Development
Research and development expenditures for the six months ended
June 30, 2005 totalled $7.8 million compared to $7.1 million for the same
period in 2004. The increase in research and development expenditures is
attributable to increased spending associated with the L-BLP25 phase 2 safety
study commenced in the second quarter of this year and the planned L-BLP25
phase 3 clinical trial that is expected to commence towards the end of 2005.
Expenditures include development of clinical protocols and procurement and
manufacturing of clinical materials along with ongoing costs associated with
clinical site wrap up expenses of existing clinical trials.
General and Administrative
General and administrative expenses for the six months ended
June 30, 2005 totalled $3.3 million compared to $3.7 million for the same
period in 2004. The decrease of $0.4 million is mainly due to incremental
costs incurred in the first half of 2004 relating to the settlement of an
outstanding litigation.
Marketing and Business Development
Marketing and business development expenditures for the six months ended
June 30, 2005, totalled $0.7 million compared to $0.8 million for the same
period in 2004. Marketing and business development expenditures include
corporate administrative expenses associated with these functions, as well as
costs associated with licensing activities related to pre-clinical and early
stage technologies.
Amortization
Amortization expense for the six months ended June 30, 2005, totalling
$0.2 million, was similar to the same period in 2004. Amortization expense
relates to facility leaseholds and equipment, certain licensing rights, and
other assets.
Investment and Other Income
Investment and other income for the six months ended June 30, 2005,
totalling $0.9 million compared to $0.7 million for the same period in 2004,
comprises income from cash and investments and foreign exchange gains and
losses. The increased income is due to a higher net foreign exchange gain of
$0.1 million and higher income from cash and investments of $0.1 million.
Liquidity and Capital Resources
Liquidity
Biomira's financial reserves total $30.1 million in cash and short-term
investments as at June 30, 2005, a decrease of $8.5 million from the year end
position due to funding of operations. Current and projected cash burn is
expected to remain at this level until we have finalized our clinical strategy
and received clearance from the regulatory agencies to undertake the pivotal
phase 3 registration trial for L-BLP25 in NSCLC.
Working capital, defined as current assets less current liabilities,
decreased by $7.7 million from the year end position, to $29.4 million from
$37.1 million and is attributable to the $8.5 million decrease in cash
reserves offset by a $0.4 million increase in accounts receivable, a
$0.2 million increase in prepaid expenses and a $0.2 million decrease in the
current portion of deferred revenue. The increase in accounts receivable
relates to the higher contract research and development revenues in the second
quarter of 2005 compared to same period in 2004.
Capital Resources
Under the U.S. $100 million Base Shelf Prospectus registered with the
applicable regulatory authorities in Canada and the U.S. on July 13, 2004, and
expected to remain in place into the third quarter of 2006, just over U.S.
$87 million is still available for future financings. In addition, there are
3.2 million warrants outstanding from previous financings, at a
weighted-average exercise price of U.S. $2.69. Based on our NASDAQ closing
share price of U.S. $1.72 on June 30, 2005, none of the warrants outstanding
are currently in the money. Assuming continuing investor support for our
equity offerings, the Base Shelf Prospectus should allow us to pursue
financing opportunities sufficient to fund our expected programs in the
foreseeable future.
Contractual Obligations and Contingencies
In our continuing operations, we have entered into long-term contractual
arrangements from time to time for our facilities, debt financing, the
provision of goods and services, and acquisition of technology access rights,
among others. The contractual obligations arising from these arrangements,
currently in force over the next ten years, are disclosed in the MD&A section
of our 2004 Annual Report. During the six months ended June 30, 2005, we did
not enter into any new material long-term contractual obligations.
Off-Balance Sheet Arrangements
During the six months ended June 30, 2005, we have not entered into any
off-balance sheet arrangements.
Transactions with Related Parties
During the six months ended June 30, 2005, we have not entered into any
material transactions with related parties.
Outlook
Until one of our products receives regulatory approval and is
successfully commercialized, we will continue to incur operating losses. The
magnitude of these operating losses will be largely affected by the timing and
scope of future clinical trials and pre-launch activities related to our lead
products, as well as any new initiatives. Finally, the duration of the
pre-operating losses will depend on the scientific results of such clinical
trials.
We believe that our cash and short-term investments, together with
expected cash inflows from collaborative funding arrangements, investment
income, and technology licensing efforts will be sufficient to meet operating
and capital requirements into 2006. However, we will be required to obtain
additional financing in order to fund the expected L-BLP25 phase 3
registration trial and operations in the second half of 2006 and beyond.
Risks and Uncertainties
As described in the Outlook, the immediate risks and uncertainties facing
Biomira may include: changing market and industry conditions; the impact of
competitive products and their pricing; timely and favourable regulatory
clearance for an expected phase 3 registration trial for L-BLP25 in NSCLC;
outcomes associated with the exploration of potential early registration
opportunities for L-BLP25 in regions other than the U.S. and Europe based on
the results of the phase 2b trial in NSCLC; the ability to attract a new
collaborator to further develop L-BGLP40 and Theratope; the ability to patent
and defend our intellectual property; recruitment and retention of key
personnel; and our success in generating sufficient new capital on acceptable
terms and on a timely basis. In the near and long term, the ability to secure
financing will depend on several factors, such as: regulatory support for a
phase 3 pivotal L-BLP25 registration trial; the costs and timelines required
to obtain regulatory approval for our products; timely progression and
favourable outcomes of current and future clinical studies; the availability
of new financing through private and/or public offerings on acceptable terms;
and our ability to in-license complementary products and technology and secure
collaborative arrangements to build up our pipeline.
Other business risks and uncertainties have not changed significantly
from those disclosed in the MD&A in our 2004 annual report and in other
regulatory filings.
Critical Accounting Policies and Estimates
All of our accounting policies are in accordance with Canadian GAAP
including some which require management to make assumptions and estimates that
could significantly affect the results of operations and financial position.
The significant accounting policies that we believe are the most critical in
fully understanding and evaluating the reported financial results are
disclosed in the MD&A section of our 2004 Annual Report. As well, our
significant accounting policies are disclosed in Note 2, Significant
Accounting Policies, of the notes to our audited consolidated financial
statements for the fiscal year ended December 31, 2004.
Changes in Accounting Policies
Variable Interest Entities
Effective January 1, 2005, we adopted the recommendations of CICA
Handbook Accounting Guideline 15 (AcG-15), Consolidation of Variable Interest
Entities, effective for annual or interim periods beginning on or after
November 1, 2004. Variable interest entities (VIEs) refer to those entities
that are subject to control on a basis other than ownership of voting
interests. AcG-15 provides guidance for identifying VIEs and criteria for
determining which entity, if any, should consolidate them.
We have determined that adoption of AcG-15 does not have an effect on our
financial position, results of operations or cash flows in the current period
or the prior period presented.
Financial Instruments - Disclosure and Presentation
Effective January 1, 2005, we adopted the amended recommendations of CICA
Handbook Section 3860, Financial Instruments - Disclosure and Presentation,
effective for fiscal years beginning on or after November 1, 2004. Section
3860 requires that certain obligations that may be settled at the issuer's
option in cash or the equivalent value by a variable number of the issuer's
own equity instruments be presented as a liability.
The adoption of the amendments to Section 3860 has resulted in a
restatement of the financial statements for all interim and annual periods
ended after September 26, 2001 and up to and including the interim period
ended June 30, 2003 and the annual period ended December 31, 2003, to present
the September 26, 2001 convertible debentures, which were fully repaid in
May 2003, as a liability instead of an equity instrument on the consolidated
balance sheets. The related interest, foreign exchange gain (loss), carrying
charges and accretion charges have been reclassified to the Consolidated
Statements of Operations instead of being presented as an adjustment on the
Consolidated Statements of Deficit.
Summary of Quarterly Results
The following is selected quarterly consolidated financial information
from our unaudited quarterly financial statements for each of the eight most
recently completed quarters ending June 30, 2005. Certain of the comparative
figures have been reclassified to conform to the current period's
presentation.
(expressed in 000's except per share data)
<<
-------------------------------------------------------------------------
For the three month period ended
-------------------------------------------------------------------------
June 30, Mar. 31, Dec. 31, Sept. 30,
2005 2005 2004 2004
-------------------------------------------------------------------------
Total Revenue $ 1,120 $ 804 $ 974 $ 531
-------------------------------------------------------------------------
Research and development
cost $ 4,320 $ 3,507 $ 3,198 $ 3,229
-------------------------------------------------------------------------
Net loss $ (4,803) $ (4,358) $ (3,581) $ (4,804)
-------------------------------------------------------------------------
Basic and diluted loss per
share $ (0.06) $ (0.06) $ (0.05) $ (0.06)
-------------------------------------------------------------------------
Common shares outstanding 78,817 78,360 78,340 72,562
-------------------------------------------------------------------------
Weighted average number of
common shares outstanding 78,500 78,352 72,941 72,560
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For the three month period ended
-------------------------------------------------------------------------
June 30, Mar. 31, Dec. 31, Sept. 30,
2004 2004 2003 2003
-------------------------------------------------------------------------
Total Revenue $ 6,493(1) $ 943 $ 674 $ 679
-------------------------------------------------------------------------
Research and development
cost $ 3,358 $ 3,791 $ 2,853 $ 3,433
-------------------------------------------------------------------------
Net (loss) income $ 1,012 $ (4,852) $ (4,632) $ (4,450)
-------------------------------------------------------------------------
Basic and diluted (loss)
income per share $ 0.01 $ (0.07) $ (0.07) $ (0.07)
-------------------------------------------------------------------------
Common shares outstanding 72,562 72,559 72,545 63,546
-------------------------------------------------------------------------
Weighted average number of
common shares outstanding 72,558 72,555 62,498 59,145
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) The increased revenues for the three months ended June 30, 2004
resulted from the recognition into income of the remaining deferred
licensing revenues related to Theratope, totalling $5.9 million, due
to the return of the Theratope development and commercialization
rights from Merck KGaA announced in June 2004.
Updated Share Information
As at July 15, 2005, the number of issued and outstanding common shares
of the Company was 78,816,564. In addition, there were 3,177,121 warrants and
4,493,801 stock options outstanding that are potentially convertible into an
equal number of common shares. Had the warrants and options been fully
exercised, the aggregate number of common shares outstanding as at July 15,
2005 would be 86,487,486.
For details relating to the warrants and stock options, please refer to
Notes 10 and 11, respectively, of the notes to the audited consolidated
financial statements for the fiscal year ended December 31, 2004 and Note 3 of
the unaudited interim consolidated financial statements for the period ended
June 30, 2005.
Forward-Looking Statements
This report may contain forward-looking statements. Various factors could
cause actual results to differ materially from those projected in forward-
looking statements, including those predicting the timing or availability of
clinical trial analyses; efficacy, safety and clinical benefit of products;
ability to secure, and timing of, regulatory clearances; timing of product
launches in different markets; ability to retain or secure collaborative
partners; adequacy of financing and reserves on hand; retention and
performance of contractual third parties, including key personnel; the
achievement of contract milestones; currency exchange rate fluctuations;
changes in general accounting policies; and general economic factors. Although
we believe that the forward-looking statements contained herein are
reasonable, we can give no assurance that our expectations are correct. All
forward-looking statements are expressly qualified in their entirety by this
cautionary statement. For a detailed description of our risks and
uncertainties, you are encouraged to review the official corporate documents
filed with the securities regulators in the United States and Canada.
Additional Information
Additional information relating to Biomira, including a copy of our
Annual Information Form and Proxy Circular, can be found on SEDAR at
www.sedar.com or U.S. EDGAR at www.sec.gov.
Biomira Inc.
Consolidated Balance Sheets
(expressed in thousands of Canadian dollars, except share amounts)
(unaudited)
June 30 December 31
2005 2004(x)
-------------------------------------------------------------------------
ASSETS
CURRENT
Cash and cash equivalents $ 3,664 $ 19,887
Short-term investments 26,434 18,751
Accounts receivable 1,115 736
Prepaid expenses 464 320
-------------------------------------------------------------------------
31,677 39,694
CAPITAL ASSETS, net 402 383
INTANGIBLE ASSET, net 428 480
LONG-TERM INVESTMENT (Note 7) 264 264
-------------------------------------------------------------------------
$ 32,771 $ 40,821
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 1,984 $ 2,031
Current portion of deferred revenue 334 556
-------------------------------------------------------------------------
2,318 2,587
DEFERRED REVENUE 1,139 1,241
CLASS A PREFERENCE SHARES 30 30
-------------------------------------------------------------------------
3,487 3,858
SHAREHOLDERS' EQUITY
Share capital (Notes 3 and 4) 375,497 374,007
Issued and outstanding - 78,816,564 and 78,339,978
Warrants (Note 3) 6,978 7,442
Contributed surplus (Note 4) 15,117 14,661
Deficit (368,308) (359,147)
-------------------------------------------------------------------------
29,284 36,963
-------------------------------------------------------------------------
$ 32,771 $ 40,821
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(See accompanying notes to the consolidated financial statements)
(CAD $1.00 (equal sign) USD $0.82)
(x) Figures excerpted from the 2004 audited consolidated financial
statements.
Biomira Inc.
Consolidated Statements of Operations
(expressed in thousands of Canadian dollars, except share and per share
amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
-------------------------------------------------------------------------
REVENUE
Contract research and
development $ 1,068 $ 323 $ 1,659 $ 843
Licensing revenue from
collaborative agreements
(Note 5) 52 6,170 104 6,435
Licensing, royalties, and
other revenue - - 161 158
-------------------------------------------------------------------------
1,120 6,493 1,924 7,436
-------------------------------------------------------------------------
EXPENSES
Research and development 4,320 3,358 7,827 7,149
General and administrative 1,562 1,831 3,285 3,738
Marketing and business
development 389 499 657 824
Amortization 84 88 168 201
-------------------------------------------------------------------------
6,355 5,776 11,937 11,912
-------------------------------------------------------------------------
OPERATING (LOSS) INCOME (5,235) 717 (10,013) (4,476)
Investment and other income 432 322 852 682
Interest expense - (1) - (3)
-------------------------------------------------------------------------
(LOSS) INCOME BEFORE INCOME
TAXES (4,803) 1,038 (9,161) (3,797)
Income tax provision - (26) - (43)
-------------------------------------------------------------------------
NET (LOSS) INCOME $ (4,803) $ 1,012 $ (9,161) $ (3,840)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
BASIC AND DILUTED (LOSS)
INCOME PER SHARE $ (0.06) $ 0.01 $ (0.12) $ (0.05)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 78,499,836 72,558,185 78,499,836 72,558,185
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated Statements of Deficit
(expressed in thousands of Canadian dollars)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
-------------------------------------------------------------------------
DEFICIT, BEGINNING OF
PERIOD $(363,505) $(351,774) $(359,147) $(346,922)
Net (loss) income for
period (4,803) 1,012 (9,161) (3,840)
-------------------------------------------------------------------------
DEFICIT, END OF PERIOD $(386,308) $(350,762) $(368,308) $(350,762)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(See accompanying notes to the consolidated financial statements)
Biomira Inc.
Consolidated Statements of Cash Flow
(expressed in thousands of Canadian dollars)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
-------------------------------------------------------------------------
OPERATING
Net (loss) income $ (4,803) $ 1,012 $ (9,161) $ (3,840)
Amortization 84 88 168 201
Stock compensation
expense (Note 4) 297 263 487 552
Decrease in deferred
revenue (Note 5) (156) (6,170) (324) (6,435)
Unrealized foreign
exchange loss (gain) on
cash and cash equivalents 34 (46) (20) (70)
Net change in non-cash
working capital balances
from operations
Accounts receivable (503) 391 (379) 83
Prepaid expenses (149) (190) (144) (210)
Accounts payable and
accrued liabilities 335 350 53 (1,028)
-------------------------------------------------------------------------
(4,861) (4,302) (9,320) (10,747)
-------------------------------------------------------------------------
INVESTING
Purchase of short-term
investments (19,302) (19,204) (34,280) (36,337)
Redemption of short-term
investments 10,991 15,808 26,597 29,746
Purchase of capital assets (95) (68) (135) (68)
-------------------------------------------------------------------------
(8,406) (3,464) (7,818) (6,659)
-------------------------------------------------------------------------
FINANCING
Payment of accrued share
issuance costs - - (100) -
Proceeds from exercise of
stock options 3 6 45 35
Proceeds from exercise of
warrants 950 - 950 -
Repayment of capital lease
obligation - (21) - (60)
-------------------------------------------------------------------------
953 (15) 895 (25)
-------------------------------------------------------------------------
NET CASH OUTFLOW (12,314) (7,781) (16,243) (17,431)
EFFECT OF EXCHANGE RATE
FLUCTUATIONS ON CASH
AND CASH EQUIVALENTS (34) 46 20 70
-------------------------------------------------------------------------
DECREASE IN CASH AND CASH
EQUIVALENTS (12,348) (7,735) (16,223) (17,361)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 16,012 14,436 19,887 24,062
-------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 3,664 $ 6,701 $ 3,664 $ 6,701
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Amount of interest paid
in the period $ - $ 1 $ - $ 3
Amount of income taxes
paid in the period $ - $ - $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(See accompanying notes to the consolidated financial statements)
BIOMIRA INC.
Notes to the Consolidated Financial Statements
(expressed in thousands of Canadian dollars, except share and per share
amounts)
(unaudited)
-------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated interim financial statements
have been prepared by the Company in accordance with Canadian
generally accepted accounting principles (Canadian GAAP) for interim
financial statements. The accounting principles and methods of
computation adopted in these interim consolidated financial
statements are the same as those of the audited consolidated
financial statements for the year ended December 31, 2004, except as
disclosed in Note 2 below.
Omitted from these statements are certain information and note
disclosures normally included in the annual consolidated financial
statements prepared in accordance with Canadian GAAP. The
consolidated financial statements and notes presented should be read
in conjunction with the audited consolidated financial statements for
the year ended December 31, 2004 filed with the appropriate
securities commissions.
Comparative figures for prior periods have been restated to conform
to the current period's presentation.
2. ACCOUNTING POLICY CHANGES
Variable interest entities
Effective January 1, 2005, the Company adopted the recommendations of
CICA Handbook Accounting Guideline 15 (AcG-15), Consolidation of
Variable Interest Entities, effective for annual and interim periods
beginning on or after November 1, 2004. Variable interest entities
(VIEs) refer to those entities that are subject to control on a basis
other than ownership of voting interests. AcG-15 provides guidance
for identifying VIEs and criteria for determining which entity, if
any, should consolidate them.
The Company has determined that adoption of AcG-15 does not have an
effect on its financial position, results of operations or cash flows
in the current period or the prior period presented.
Financial instruments - disclosure and presentation
Effective January 1, 2005, the Company adopted the amended
recommendations of CICA Handbook Section 3860, Financial Instruments -
Disclosure and Presentation, effective for fiscal years beginning on
or after November 1, 2004. Section 3860 requires that certain
obligations that may be settled at the issuer's option in cash or the
equivalent value by a variable number of the issuer's own equity
instruments be presented as a liability.
The Company has determined that there is no impact on the financial
statements resulting from the adoption of the amendments to
Section 3860 either in the current period or the prior periods
presented. However, the adoption of the amendments to Section 3860
has resulted in a restatement of the financial statements for all
interim and annual periods ended after September 26, 2001 and up to
and including the interim period ended June 30, 2003 and the annual
period ended December 31, 2003, to present the September 26, 2001
convertible debentures, which were fully repaid in May 2003, as a
liability instead of an equity instrument on the consolidated balance
sheets. The related interest, foreign exchange gain (loss), carrying
charges and accretion charges have been reclassified to the
Consolidated Statements of Operations instead of being presented as
an adjustment on the Consolidated Statements of Deficit.
3. SHARE CAPITAL
June 30 December 31
2005 2004
---------------------------------------------------------------------
Common shares
Issued and outstanding, beginning of period 78,339,978 72,545,232
Equity placements - 4,891,051
Exercise of warrants 454,679 722,320
Exercise of stock options 21,907 181,375
---------------------------------------------------------------------
Issued and outstanding, end of period 78,816,564 78,339,978
---------------------------------------------------------------------
---------------------------------------------------------------------
Issued and outstanding as at July 15, 2005 78,816,564
---------------------------------------------------------------------
---------------------------------------------------------------------
June 30 December 31
2005 2004
---------------------------------------------------------------------
Stock options
Issued and outstanding, beginning of period 3,736,599 4,519,418
Granted 1,018,315 535,627
Exercised (21,907) (181,375)
Cancelled (239,206) (1,137,071)
---------------------------------------------------------------------
Issued and outstanding, end of period 4,493,801 3,736,599
---------------------------------------------------------------------
---------------------------------------------------------------------
Issued and outstanding as at July 15, 2005 4,493,801
---------------------------------------------------------------------
---------------------------------------------------------------------
Stock options are exercisable at a range of exercise prices from
$1.51 to $23.10 per share.
June 30 December 31
2005 2004
---------------------------------------------------------------------
Warrants
Issued and outstanding, beginning of period 3,631,800 4,251,999
Issued - 1,077,121
Exercised (454,679) (722,320)
Expired - (975,000)
---------------------------------------------------------------------
Issued and outstanding, end of period 3,177,121 3,631,800
---------------------------------------------------------------------
---------------------------------------------------------------------
Outstanding as at July 15, 2005 3,177,121
---------------------------------------------------------------------
---------------------------------------------------------------------
The warrants provide the holders with the right to purchase common
shares at a range of prices from U.S. $2.30 to U.S. $3.45 per share.
Restricted Share Unit Plan
At the Company's Annual General Meeting on May 18, 2005 a Restricted
Share Unit Plan (the "RSU Plan") for non-employee Directors was
approved by the shareholders. The RSU Plan provides for grants to be
made from time to time by the Board or a committee thereof. Each
grant will be made in accordance with the RSU Plan and terms specific
to that grant and will be converted into one common share of Biomira
at the end of the grant period (not to exceed five years) without any
further consideration payable to Biomira in respect thereof. The
current maximum number of common shares of the Company reserved for
issuance pursuant to the RSU Plan is 500,000. The restricted share
units will be accounted for using the fair value based method of
accounting. Under this method, the estimated fair value of the
restricted share units granted is recognized over the applicable
vesting period as a charge to stock compensation expense. As at
June 30, 2005, no grants have been issued under the RSU Plan.
4. STOCK-BASED COMPENSATION
In the second quarter of 2005, stock compensation expense of $297
(2004 - $263) was recognized ($487 for the six months ended
June 30, 2005 (2004 - $552)), representing the amortization
applicable to the current period of the estimated fair value of
options granted since January 1, 2002. An amount of $31 (2004 - $23)
arising from the exercise of options for the six months ended
June 30, 2005 was credited to share capital from contributed surplus.
The Company uses the Black-Scholes option pricing model to value the
options at each grant date, under the following weighted average
assumptions:
Six Months Ended June 30
2005 2004
---------------------------------------------------------------------
Weighted average grant-date fair value per
share option $ 2.24 $ 1.90
Expected dividend rate 0.0% 0.0%
Expected volatility 114.26% 112.63%
Risk-free interest rate 3.69% 3.77%
Expected life of options in years 6.0 6.0
---------------------------------------------------------------------
---------------------------------------------------------------------
The amounts estimated according to the Black-Scholes option pricing
model may not be indicative of the actual values realized upon the
exercise of these options by the holders.
5. COLLABORATIVE AGREEMENTS
On May 3, 2001, the Company entered into a collaborative agreement
with Merck KGaA to pursue joint global product development,
licensing, and commercialization of the Company's two lead
candidates, L-BLP25 vaccine and Theratope(R) vaccine, for the
treatment of various cancer indications.
Upon execution of the collaborative agreements, Merck KGaA made an
upfront payment of $10,534 to the Company comprising technology
access, licensing, and other fees related to L-BLP25 and Theratope.
This payment has been recorded as deferred revenue and is being
recognized as revenue on a straight-line basis over 10 years.
In June 2004, Merck KGaA returned all of their rights to develop and
commercialize Theratope to the Company in accordance with certain
provisions under the collaborative agreements. As a result thereof,
the second quarter of 2004 included an addition to income of $5,903
representing the recognition into income of the remaining deferred
revenue balance from Merck KGaA related to Theratope.
6. SEGMENTED INFORMATION
The Company is engaged worldwide primarily in the biotechnology
healthcare industry in a single business segment, research and
development of therapeutic products for the treatment of cancer.
Operations and long-lived assets by geographic region for the periods
indicated are as follows:
Three Months Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Revenue from operations in
Canada $ 57 $ 18 $ 248 $ 200
United States - - 1 -
Barbados 1,044 3,923 1,636 4,575
Europe 19 2,552 39 2,661
---------------------------------------------------------------------
$ 1,120 $ 6,493 $ 1,924 $ 7,436
---------------------------------------------------------------------
---------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Amortization in
Canada $ 51 $ 77 $ 103 $ 182
United States 7 11 13 19
Barbados 26 - 52 -
---------------------------------------------------------------------
$ 84 $ 88 $ 168 $ 201
---------------------------------------------------------------------
---------------------------------------------------------------------
June December
30 31
2005 2004
---------------------------------------------------------------------
Long-lived assets, net, in
Canada $ 337 $ 330
United States 65 53
Barbados 428 480
---------------------------------------------------------------------
$ 830 $ 863
---------------------------------------------------------------------
---------------------------------------------------------------------
Long-lived assets and amortization consist of capital assets and
intangible assets and the amortization of capital assets and
intangible assets recorded thereon.
The Company derives significant revenue from certain customers. The
number of customers that individually accounts for more than 10% of
revenue and total revenue from transactions with those customers are
as follows:
Six Months Ended June 30 Number of Customers Revenue
---------------------------------------------------------------------
2005 1 $ 1,754
2004 1 $ 7,272
7. SUBSEQUENT EVENT
Subsequent to June 30, 2005, the Company converted its $264
investment in shares of CancerVac Pty. Ltd. for $264 of shares in
Prima BioMed Ltd. (ASX:PRR), an Australian biotech company. The
resulting number of shares received represents approximately
1.62 per cent of the issued and outstanding shares.
Corporate Information
Share Registrar and Transfer Agents
Computershare Trust Company of Canada
Suite 600, 530 - 8 Ave SW
Calgary AB T2P 3S8
Canada
Phone: 1-800-564-6253 (toll free North America)
Phone: 1-514-982-7555 (International)
Fax: 1-888-453-0330 (toll free North America)
Fax: 1-416-263-9394 (International)
E-Mail: service(at)computershare.com
Internet: http://www.computershare.com
Stock Listings and Symbols
Toronto Stock Exchange: BRA
Nasdaq National Market: BIOM
We invite you to visit our web site at www.biomira.com or call our
investor relations department toll free at 1-877-234-0444 Ext. 241.
This release/report may contain forward-looking statements. Various
factors could cause actual results to differ materially from those projected
in such statements, a number of which are set forth under the Management
Discussion and Analysis section above. All forward-looking statements in this
release/report are expressly qualified in their entirety by this cautionary
statement and by the section on Forward-Looking Statements under the
Management Discussion and Analysis section.
>>
Powered by 
Translate
Translate