- BLP25 Liposome Vaccine Median Survival in Stage IIIB Locoregional NSCLC
Determined -
EDMONTON, Oct. 27 /CNW/ - Biomira Inc. (Nasdaq:BIOM) (TSX:BRA), a leading
developer of cancer vaccines, today reported financial results for the nine
months ended September 30, 2005. The Company also announced that median
survival for patients with Stage IIIB locoregional non-small cell lung cancer
who received BLP25 Liposome Vaccine (L-BLP25) in a phase 2b study has been
determined (30.6 months compared with 13.3 months for the unvaccinated group).
"This has been a significant quarter for Biomira," said Dr. Alex
McPherson, M.D., Ph.D., President and CEO of Biomira. "The preliminary median
survival data for the phase 2b study we have announced today underlines our
confidence in the potential of L-BLP25 in the treatment of non-small cell lung
cancer. We now look forward to the opportunity to demonstrate statistical
significance for these promising results in a broader phase 3 program."
Financial Update
Financial results for the nine months ended September 30, 2005 reflect a
consolidated net loss from operations of $14.6 million or $0.19 per share
compared to $8.6 million or $0.12 per share for the same period in 2004. The
increased net loss of $6.0 million in 2005 arises from lower revenues of
$4.7 million and higher research and development expenditures of $2.1 million,
offset by higher investment and other income of $0.1 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 $0.2 million. The
higher revenues in 2004 primarily relate to 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 $25.4 million in cash and short-term
investments as at September 30, 2005, a decrease of $13.2 million from the
year end position due to funding of operations.
For a further discussion of the Company's financial results for the nine
months ended September 30, 2005, please refer to the Company's unaudited
consolidated financial statements and the Company's Management Discussion &
Analysis of Financial Condition and Results of Operations included in this
news release.
Highlights From the Third Quarter
L-BLP25 Update
- Biomira and its collaborator Merck KGaA today announced that
through ongoing, regular follow-up of patients enrolled in the
phase 2b non-small cell lung cancer (NSCLC) trial, sufficient
events have now been observed to determine that the median
survival for the vaccinated subset of Stage IIIb locoregional
patients has been reached. Median survival is 30.6 months compared
to 13.3 months observed for the same stage patients who did not
receive the vaccine, a difference of 17.3 months. As previously
announced, the protocol has been amended to allow additional
survival data to be collected. Although this will have no impact
on the median survival outcome, it will provide additional clarity
for additional statistical analyses. This additional data should
be available in the first quarter of 2006.
- In September, Biomira and Merck KGaA announced a change to the
anticipated timetable for the start of its planned L-BLP25 phase 3
study in the treatment of NSCLC. The change will allow an
accelerated stability issue, which was discovered during the
manufacturing of the vaccine to be used in the phase 3 trial, to
be addressed. An investigation with the contract manufacturer
indicates that residual moisture in stoppers used in the
manufacturing process was the likely cause of the instability and
work is now underway to resolve this issue as quickly as possible.
- Biomira and Merck KGaA also announced completion of enrolment of a
phase 2 single arm, multi-centre open label study of L-BLP25. The
purpose of this study is to assess the safety of the formulation
of the vaccine for use in the planned phase 3 study. This trial
enrolled 22 patients in total and safety results are due by the
end of 2005.
- An article entitled, "Phase 2b Trial of BLP25 Liposome Vaccine in
Stage IIIB and IV Non-Small Cell Lung Cancer" was published in the
September 20, 2005 issue of the Journal of Clinical Oncology
(JCO). The primary author of the article is Dr. Charles Butts of
the Cross Cancer Institute, Edmonton, Alberta, and the lead
investigator for the phase 2b study.
- PRA International, a leading global clinical research
organization, was engaged to assist Biomira and Merck KGaA with
the planned phase 3 trial of L-BLP25 for the treatment of
non-small cell lung cancer. The trial design is currently being
discussed with the FDA.
Corporate Update
- In July, Biomira exercised its put option to acquire an equity
position in Prima BioMed Ltd. (ASX: PRR) ("Prima"), an Australian
biotech company. In March 2004, Biomira announced a technology
licensing and commercial agreement with CancerVac, a subsidiary of
Prima, acquiring a 10 percent equity stake in CancerVac. Biomira
had the right to convert this stake to shares in Prima, which it
has now exercised.
"Although the timetable for the start of the trial has moved into 2006,
we made several important advances in the development of L-BLP25 in the three
months to the end of September, including completion of enrolment for another
phase 2 trial to assess the safety of the formulation of the vaccine to be
used in the next phase," continued Dr. McPherson. We also announced the
engagement of PRA International, a leading global clinical research
organization, to assist us with the planned phase 3 trial. The draft phase 3
trial design will have been presented for comment to leading lung cancer
specialists, to experts in oncology trial design and conduct, and to various
regulatory authorities, including the FDA, prior to the protocol being
finalized. The acquisition of a 1.62% equity position in Prima BioMed during
the quarter underlined our strategy of maximizing returns from our technology
through licensing agreements with other companies."
About 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). www.biomira.com.
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 October 14, 2005, should be read in
conjunction with the unaudited consolidated financial statements and
accompanying notes for the nine months ended September 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.
Corporate resources in the third quarter of 2005 continue to be primarily
directed towards the ongoing development of BLP25 Liposome Vaccine (L-BLP25).
Biomira and its collaborator for L-BLP25, Merck KGaA of Darmstadt, Germany,
recently announced completion of enrolment of a phase 2 single arm, multi-
centre open label study. This trial has enrolled a total of 22 patients with
non-small cell lung cancer (NSCLC) from eight clinical trial sites in Canada
and safety results are due by the end of 2005. The trial is designed to assess
the safety of the formulation of L-BLP25 that the Companies plan to use in the
upcoming phase 3 study. The new formulation incorporates manufacturing changes
intended to secure the future commercial supply of the vaccine.
In September, we announced the engagement of PRA International, one of
the world's leading global clinical research organizations, to assist Biomira
and Merck KGaA with the planned phase 3 trial of L-BLP25 for the treatment of
NSCLC. The contract related to PRA International's involvement in the planned
phase 3 trial remains under negotiation and the Companies continue to operate
on a month to month basis under the terms of a Letter of Intent. PRA
International is an ISO 9001:2000 registered company, with over 2,500
employees in North America, Europe, South America, Africa, Australia, and
Asia. Experts in oncology trial design and conduct from PRA and other
organizations have contributed to the draft phase 3 protocol. The trial design
will also have been presented for comment to leading lung cancer specialists
and various regulatory authorities, including the FDA, prior to the protocol
being finalized.
In September, Biomira and Merck KGaA also announced a change to the
anticipated timetable for the start of the planned L-BLP25 phase 3 study in
the treatment of NSCLC. The change is to address an accelerated stability
issue discovered during the manufacturing of the vaccine to be used in the
phase 3 trial. An investigation with the contract manufacturer indicates that
residual moisture in stoppers used in the manufacturing process was the likely
cause of the instability and work is now underway to resolve this issue as
quickly as possible. As a result, the start of the trial, which was planned
for the end of 2005, is now expected to move into 2006.
In July we exercised our put option to acquire a 1.62% equity position in
Prima BioMed Ltd. (ASX: PRR) ("Prima"), an Australian biotech company. In
March 2004, we announced a technology licensing and commercial agreement with
CancerVac, a subsidiary of Prima, acquiring a 10 percent equity stake in
CancerVac. Biomira had the right to convert this stake to shares in Prima,
which we have now exercised.
Results of Operations
Financial results for the nine months ended September 30, 2005 reflect a
consolidated net loss from operations of $14.6 million or $0.19 per share
compared to $8.6 million or $0.12 per share for the same period in 2004. The
increased net loss of $6.0 million in 2005 arises from lower revenues of $4.7
million and higher research and development expenditures of $2.1 million,
offset by higher investment and other income of $0.1 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 $0.2 million. The
higher revenues in 2004 primarily relate to 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 announced in June 2004.
Revenues
Contract research and development revenue for the nine months ended
September 30, 2005, totalling $2.9 million compared to $1.3 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 in 2006.
Licensing revenue from collaborative arrangements for the nine months
ended September 30, 2005, totalling $0.2 million compared to $6.5 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 primarily
results from return of the Theratope 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 nine months ended
September 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 nine months ended
September 30, 2005 totalled $12.5 million compared to $10.4 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 in 2006. Expenditures to
date 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 nine months ended
September 30, 2005 totalled $4.9 million compared to $5.3 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 nine months ended
September 30, 2005, totalled $1.0 million compared to $1.1 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 nine months ended September 30, 2005,
totalling $0.3 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 nine months ended September 30, 2005,
totalling $0.6 million compared to $0.5 million for the same period in 2004,
comprises income from cash and investments and foreign exchange gains and
losses. The increased income is primarily due to higher income from cash and
investments of $0.1 million.
Liquidity and Capital Resources
Liquidity
Biomira's financial reserves total $25.4 million in cash and short-term
investments as at September 30, 2005, a decrease of $13.2 million from the
year end position due to funding of operations. The current and projected cash
burn rate 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. Cash
requirements are anticipated to increase significantly in 2006 upon initiation
of the planned phase 3 L-BLP25 trial.
Working capital, defined as current assets less current liabilities,
decreased by $13.0 million from the year end position, to $24.1 million from
$37.1 million and is primarily attributable to the $13.2 million decrease in
cash reserves.
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 1.1 million warrants outstanding from the December 2004 financing at an
exercise price of U.S. $3.45. Based on our NASDAQ closing share price of U.S.
$1.38 on September 30, 2005, the warrants outstanding are currently not in the
money. Assuming continuing investor support for our equity offerings, the Base
Shelf Prospectus will enable us to make equity drawdowns that are sufficient
to fund our expected programs in the foreseeable future.
Contractual Obligations and Contingencies
In our 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 following table presents contractual obligations arising
from these arrangements currently in force over each of the next five years
and thereafter.
<<
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Payments Due by Period
------------------------------------------
(expressed in $000's) Less
than 1 - 3 4 - 5 After
Total 1 year years years 5 years
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Operating leases - premises 1,078 699 379 - -
Operating leases - equipment 22 18 4 - -
Capital lease obligations 144 51 93 - -
Licensing fees and royalties 1,115 231 425 306 153
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Total contractual obligations 2,359 999 901 306 153
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We have exercised our right to renew the corporate facilities lease for a
further 2 year term and expect the renewal rates to be similar to the previous
term. As well, we have entered into new 3 year capital lease agreements for
computer equipment and renewed our software licensing agreement for a further
3 years. In September, we also announced the engagement of PRA International,
one of the world's leading global clinical research organizations, to assist
Biomira and Merck KGaA with the planned phase 3 trial of L-BLP25 for the
treatment of NSCLC. As at September 30, 2005, this contract remains under
negotiation and both Biomira and PRA International continue to operate on a
month to month basis under the terms of a Letter of Intent.
Off-Balance Sheet Arrangements
During the nine months ended September 30, 2005, we have not entered into
any off-balance sheet arrangements.
Transactions with Related Parties
During the nine months ended September 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
product, as well as any new initiatives. The duration of the operating losses
will depend on the scientific results of such clinical trials, successful
regulatory approval, and commercialization.
In preparation for the L-BLP25 phase 3 trial, manufacturing changes
intended to secure a future commercial supply of the vaccine have been made.
Upon successful resolution of the current manufacturing stability issue, these
changes are designed to ensure that the resulting pivotal phase 3 data will be
considered representative of the safety and effectiveness of the commercial
supply of vaccine. A comparability plan to evaluate the changes includes a
small previously announced clinical safety study with safety results of the
study due at the end of 2005.
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 through Q3 2006. However, we will be required to
obtain additional financing within the next 12 months in order to fund the
planned L-BLP25 phase 3 registration trial and operations in the last quarter
of 2006 and beyond.
Risks and Uncertainties
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; our ability to secure and
manufacture vaccine supplies for future clinical trials and commercialization
activities on a consistent and economical basis; 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 receive continued support from our current
collaborator, Merck KGaA and to attract new collaborators to further develop
pipeline products; 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 through
private and/or public offerings on acceptable terms 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; successful outcome of the L-BLP25 comparability
plan; timely progression and favourable outcomes of current and future
clinical studies; 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 September 30, 2005. Certain of the
comparative figures have been reclassified to conform to the current period's
presentation.
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For the three month period ended
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(expressed in 000's Sept. 30, June 30, Mar. 31, Dec. 31,
except per share data) 2005 2005 2005 2004
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Total Revenue $1,338 $1,120 $804 $974
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Research and development
cost $4,625 $4,320 $3,507 $3,198
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Net loss $(5,476) $(4,803) $(4,358) $(3,581)
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Basic and diluted loss
per share $(0.07) $(0.06) $(0.06) $(0.05)
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Common shares outstanding 78,817 78,817 78,360 78,340
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Weighted average number
of common shares
outstanding 78,607 78,500 78,352 72,941
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For the three month period ended
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(expressed in 000's Sept. 30, June 30, Mar. 31, Dec. 31,
except per share data) 2004 2004 2004 2003
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Total Revenue $531 $6,493(1) $943 $674
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Research and development
cost $3,229 $3,358 $3,791 $2,853
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Net (loss) income $(4,804) $1,012 $(4,852) $(4,632)
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Basic and diluted (loss)
income per share $(0.06) $0.01 $(0.07) $(0.07)
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Common shares outstanding 72,562 72,562 72,559 72,545
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Weighted average number
of common shares
outstanding 72,560 72,558 72,555 62,498
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(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 October 14, 2005, the following classes of shares and equity
securities potentially convertible into common shares were outstanding:
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Class A Preference Shares (non-voting) 12,500
Class B Preference Shares (non-voting) nil
Common shares 78,816,564
Convertible equity securities:
Stock options 4,457,315
Restricted Share Units nil
Warrants 1,077,121
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Upon exercise, the stock options, restricted share units and warrants are
convertible into an equal number of common voting shares. Had the outstanding
stock options and warrants been fully exercised, the aggregate number of
common shares outstanding would be 84,351,000 as at September 30, 2005.
For details relating to the stock options, restricted share units and
warrants, 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 5 of the unaudited interim consolidated financial
statements for the nine months ended September 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; ability to secure and manufacture vaccine supplies; successful
outcome of the L-BLP25 comparability plan; 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 Canada and the United
States.
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)
September 30 December 31
2005 2004(x)
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ASSETS
CURRENT
Cash and cash equivalents $ 8,066 $ 19,887
Short-term investments 17,325 18,751
Accounts receivable 1,265 736
Prepaid expenses 314 320
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26,970 39,694
CAPITAL ASSETS, net 644 383
INTANGIBLE ASSET, net 401 480
LONG-TERM INVESTMENT (Note 3) 264 264
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$ 28,279 $ 40,821
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LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 2,663 $ 2,031
Current portion of capital lease obligation
(Note 4) 45 -
Current portion of deferred revenue 207 556
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2,915 2,587
CAPITAL LEASE OBLIGATION (Note 4) 89 -
DEFERRED REVENUE 1,088 1,241
CLASS A PREFERENCE SHARES 30 30
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4,122 3,858
SHAREHOLDERS' EQUITY
Share capital (Notes 5 and 6) 375,497 374,007
Issued and outstanding - 78,816,564 and 78,339,978
Warrants (Note 5) 2,959 7,442
Contributed surplus (Note 6) 19,485 14,661
Deficit (373,784) (359,147)
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24,157 36,963
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$ 28,279 $ 40,821
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(See accompanying notes to the consolidated financial statements)
(CAD $1.00 (equal sign) USD $0.86)
(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 Nine Months Ended
September 30 September 30
2005 2004 2005 2004
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REVENUE
Contract research and
development $ 1,206 $ 418 $ 2,865 $ 1,261
Licensing revenue from
collaborative agreements
(Note 7) 51 52 155 6,487
Licensing, royalties, and
other revenue 81 61 242 219
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1,338 531 3,262 7,967
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EXPENSES
Research and development 4,625 3,229 12,452 10,378
General and administrative 1,569 1,557 4,854 5,295
Marketing and business
development 296 277 953 1,101
Amortization 102 89 270 290
Gain on disposal of capital
assets - (2) - (2)
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6,592 5,150 18,529 17,062
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OPERATING LOSS (5,254) (4,619) (15,267) (9,095)
Investment and other
(expense) income (283) (167) 569 515
Interest expense (Note 4) (1) (2) (1) (5)
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LOSS BEFORE INCOME TAXES (5,538) (4,788) (14,699) (8,585)
Income tax benefit
(provision) 62 (16) 62 (59)
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NET LOSS $ (5,476) $ (4,804) $ (14,637) $ (8,644)
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BASIC AND DILUTED LOSS
PER SHARE $ (0.07) $ (0.06) $ (0.19) $ (0.12)
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WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 78,606,571 72,559,587 78,606,571 72,559,587
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Consolidated Statements of Deficit
(expressed in thousands of Canadian dollars)
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
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DEFICIT, BEGINNING OF
PERIOD $ (368,308) $ (350,762) $ (359,147) $ (346,922)
Net loss for period (5,476) (4,804) (14,637) (8,644)
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DEFICIT, END OF PERIOD $ (373,784) $ (355,556) $ (373,784) $ (355,566)
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(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 Nine Months Ended
September 30 September 30
2005 2004 2005 2004
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OPERATING
Net loss $ (5,476) $ (4,804) $ (14,637) $ (8,644)
Amortization 102 89 270 290
Stock compensation
expense (Note 6) 350 260 837 812
(Decrease) increase in
deferred revenue
(Note 7) (178) 542 (502) (5,893)
Gain on disposal of
capital assets - (2) - (2)
Unrealized foreign
exchange loss (gain)
on cash and cash
equivalents 144 103 124 33
Net change in non-cash
working capital
balances from
operations
Accounts receivable (150) 47 (529) 130
Prepaid expenses 150 483 6 273
Accounts payable and
accrued liabilities 678 (501) 731 (1,529)
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(4,380) (3,783) (13,700) (14,530)
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INVESTING
Purchase of short-term
investments (7,240) (13,115) (41,520) (49,452)
Redemption of short-term
investments 16,349 16,845 42,946 46,591
Purchase of capital assets (178) (47) (313) (115)
Proceeds on disposal of
capital assets - 2 - 2
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8,931 3,685 1,113 (2,974)
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FINANCING
Payment of accrued share
issuance costs - - (100) -
Proceeds from exercise of
stock options - - 45 35
Proceeds from exercise of
warrants - - 950 -
Repayment of capital lease
obligation (5) (23) (5) (83)
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(5) (23) 890 (48)
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NET CASH INFLOW (OUTFLOW) 4,546 (121) (11,697) (17,552)
EFFECT OF EXCHANGE RATE
FLUCTUATIONS ON CASH AND
CASH EQUIVALENTS (144) (103) (124) (33)
-------------------------------------------------------------------------
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 4,402 (224) (11,821) (17,585)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 3,664 6,701 19,887 24,062
-------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 8,066 $ 6,477 $ 8,066 $ 6,477
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Amount of interest paid
in the period $ 1 $ 2 $ 1 $ 5
Amount of income taxes
paid in the period $ - $ - $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(See accompanying notes to the consolidated financial statements)
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. LONG-TERM INVESTMENT
In July, 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 of Prima BioMed Ltd.
4. CAPITAL LEASE OBLIGATION
In July, the Company acquired computer equipment under capital leases
totalling $139 and is committed to annual minimum payments as
follows:
2005 $ 13
2006 50
2007 50
2008 31
---------------------------------------------------------------------
144
Less amounts representing interest at 5.03% 10
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134
Less current portion 45
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$ 89
---------------------------------------------------------------------
---------------------------------------------------------------------
Interest expense on capital leases in the amount of $1 (2004 - $5)
has been recorded in the statement of operations.
5. SHARE CAPITAL
September 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
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Issued and outstanding, end of period 78,816,564 78,339,978
---------------------------------------------------------------------
---------------------------------------------------------------------
Issued and outstanding as at October 14,
2005 78,816,564
---------------------------------------------------------------------
---------------------------------------------------------------------
September 30 December 31
2005 2004
---------------------------------------------------------------------
Stock options
Issued and outstanding, beginning of period 3,736,599 4,519,418
Granted 1,049,065 535,627
Exercised (21,907) (181,375)
Cancelled (296,192) (1,137,071)
---------------------------------------------------------------------
Issued and outstanding, end of period 4,467,565 3,736,599
---------------------------------------------------------------------
---------------------------------------------------------------------
Issued and outstanding as at October 14, 2005 4,457,315
---------------------------------------------------------------------
---------------------------------------------------------------------
Stock options are exercisable at a range of exercise prices from
$1.51 to $23.10 per share.
September 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 (2,100,000) (975,000)
---------------------------------------------------------------------
Issued and outstanding, end of period 1,077,121 3,631,800
---------------------------------------------------------------------
---------------------------------------------------------------------
Outstanding as at October 14, 2005 1,077,121
---------------------------------------------------------------------
---------------------------------------------------------------------
The warrants provide the holders with the right to purchase common
shares at a price of 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
September 30, 2005, no grants have been issued under the RSU Plan.
6. STOCK-BASED COMPENSATION
In the third quarter of 2005, stock compensation expense of $350
(2004 - $260) was recognized ($837 for the nine months ended
September 30, 2005 (2004 - $812)), 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 nine months ended
September 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:
Nine Months Ended
September 30
2005 2004
---------------------------------------------------------------------
Weighted average grant-date fair value per
share option $ 1.91 $ 1.85
Expected dividend rate 0.0% 0.0%
Expected volatility 114.27% 112.83%
Risk-free interest rate 3.68% 3.80%
Expected life of options in years 6.0 6.0
---------------------------------------------------------------------
---------------------------------------------------------------------
7. 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.
8. 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 Nine Months Ended
September 30 September 30
2005 2004 2005 2004
---------------------------------------------------------------------
Revenue from operations
in
Canada $ 133 $ 84 $ 380 $ 284
United States - - 1 -
Barbados 1,186 427 2,822 5,002
Europe 19 20 59 2,681
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$ 1,338 $ 531 $ 3,262 $ 7,967
---------------------------------------------------------------------
---------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
---------------------------------------------------------------------
Amortization in
Canada $ 66 $ 76 $ 169 $ 258
United States 9 13 22 32
Barbados 27 - 79 -
---------------------------------------------------------------------
$ 102 $ 89 $ 270 $ 290
---------------------------------------------------------------------
---------------------------------------------------------------------
September 30 December 31
2005 2004
---------------------------------------------------------------------
Long-lived assets,
net, in
Canada $ 596 $ 330
United States 48 53
Barbados 401 480
---------------------------------------------------------------------
$ 1,045 $ 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:
Nine Months Ended September 30 Number of Customers Revenue
---------------------------------------------------------------------
2005 1 $ 3,007
2004 1 $ 7,739
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.
BIOMIRA INC. 2011 - 94 St. Edmonton, AB, Canada T6N 1H1
Tel: (780) 450-3761 Fax: (780) 463-0871
http://www.biomira.com
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