Trading Statement
08/01/2010
Farnham UK, 8 January 2010: Biocompatibles International plc (LSE:BII), the medical technology company, is pleased to provide an update on 2009 trading. The key points are as follows:
2009 Results
- Revenue of £26.6m, representing growth of 50% on 2008 (29% on a constant currency basis, hereafter referred to as “CC”) and compared with previous guidance of between £24m and £26m.
- Year-end net funds of £30.5m compared with previous guidance of £28m.
Principal 2010 Operating Goals
- Complete recruitment in the CM31 Phase I clinical trials in Type 2 Diabetes.
- Commence recruitment in the CM3 Phase II clinical trial.
- File regulatory submission (PMA) for the DC Bead in Japan.
- Complete recruitment in the clinical trial supporting the DC Bead regulatory submission for China.
- Updates from our principal Drug-Eluting Bead clinical trials, which include SPACE, PARAGON II and PARAGON Louisville.
2010 Guidance
- Revenue in the range of £28m to £32m (13% increase on 2009 at the mid-point; 21% CC).
- Pay a dividend of 6.25 pence per share in May; an increase of 25%.
- Closing cash of £25m after payment of the dividend of £2.5m.
2009 Results
Revenue increased by 50% to £26.6m (29% CC) - ahead of our expectations at the start of the year.
Bead sales grew 100% (73% CC) to £12.0m and BrachySciences’ sales were £6.1m. BrachySciences’ sales grew by 24% (4% CC) over 2008 including the pre acquisition period. PC Licensing revenue decreased by 44% (-52% CC) to £4.6m due to the absence of the one-off milestone received in H1 2008 and CellMed revenue increased by 239% (202% CC) to £3.9m driven by the AstraZeneca agreement.
Year end net funds were £30.5m compared with previous guidance of £28m and £33.6m at 1 January 2009. The net funds comprised cash of £33.0m less a financial liability of £2.5m, which is funding received from our marketing partner, Merz Pharmaceuticals GmbH, to establish sufficient manufacturing capacity for the NovabelTM product. Our cash position benefited significantly from our strong sales in 2009 together with lower than anticipated operating expenses.
We had five principal operating goals for 2009:
1. First patient treated in Bayer’s “SPACE” trial (Drug-Eluting Bead +/- Nexavar in HCC). This goal was achieved. The trial is currently recruiting patients and we will report on any information released by Bayer.
2. Launch of DC Bead in China. This goal was not achieved. We announced on 7 August 2009 that our marketing partner, SciClone Pharmaceuticals Inc. had reported that a small trial was required in China and that regulatory approval was not expected until the second half of 2010.
3. Presentation of data from the Drug-Eluting Bead Surgical Registry at The American Hepato-Pancreato-Billiary Association (AHPBA) Annual Meeting (12-15 March, Miami Beach, Florida). This goal was achieved. Dr Robert Martin presented positive data at the AHPBA meeting.
4. AstraZeneca programme update. This goal was achieved. We were delighted to announce on 7 December 2009 that AstraZeneca had agreed to initiate the clinical trial phase. The first treatment of a patient in a Phase I trial is planned for early 2010.
5. Completion of recruitment in the CellBeadsTM stroke trial. This goal was not achieved. Six patients have been recruited and the trial is not expected to complete recruitment of the remaining 14 until the end of 2010.
A full review of the goals will be provided with the Preliminary Results statement which is scheduled for release on 18 March 2010.
2010 Financial Guidance
The Company expects to achieve consolidated revenue for 2010 in the range of £28m to £32m, the mid point of which represents growth of 13% over 2009 (21% CC). - This growth will be generated by the Oncology Products Division. In addition to unfavourable foreign exchange impacts, the Company’s overall growth rate is held back by flat revenues from the lower growth components of our sales mix, namely the Medtronic ENDEAVOR® Drug-Eluting Stent royalty and revenues recognised from the AstraZeneca development agreement.
The Company expects cash to be £25m at 31 December 2010. The outflow of £8.0m results from an expected operating utilisation of £5.5m and the proposed dividend payment of £2.5m. The operating utilisation includes capital expenditure of around £3.5m, a significant part of which is for the Novabel manufacturing facility at CellMed. The majority of this expenditure is funded by our marketing partner, Merz Pharmaceuticals GmbH, the cash having been received in 2009.
Ian Ardill, Finance Director of Biocompatibles, commented:
“The Company had an excellent year in 2009. Our Oncology Products Division delivered strong sales growth and partnered with Eisai for the DC Bead in Japan. Elsewhere in the Company, payment of our maiden dividend and AstraZeneca’s agreement to take the CM3 protein into the clinic were highlights. We look forward to maintaining our progress in 2010 and the confidence of the Board in the outlook for the Company is reflected in the proposed increase in the dividend.”
1 CM3 is a drug for Type 2 diabetes which is under devlopment for AstraZeneca
-Ends-
Contact:
Biocompatibles +44 (0) 1252 732706
Crispin Simon, Chief Executive
Ian Ardill, Finance Director
Anna Keeble +44 (0)7879 818876
Biocompatibles International plc (www.biocompatibles.com)
Biocompatibles International plc is a leading medical technology company in the field of drug-device combination products.
The Oncology Products Division supplies medical devices from facilities in Farnham, UK and Oxford, CT. These include Drug-Eluting Bead Products which are used in more than 35 countries for the treatment of primary liver cancer (HCC), liver metastases from colorectal cancer, and other cancers; and Brachytherapy products (Radiation-Delivering Seeds) which are used in the treatment of prostate cancer. Our distribution partners include AngioDynamics Inc., Terumo Corporation and Eisai Co. Ltd. We have a clinical collaboration agreement with Bayer Healthcare Pharmaceuticals Inc.
Our Licensing Division includes CellMed, in Alzenau, Germany, which is developing a Drug-Eluting Bead product for the treatment of stroke, based on proprietary stem cell technology; a GLP-1 analogue for the treatment of diabetes and obesity partnered with AstraZeneca; and a cosmetic Dermatology Bead partnered with Merz Pharmaceuticals GmbH. We also have a PC Licensing agreement with Medtronic Inc. in the field of Drug-Eluting Stents.
This news release contains forward-looking statements that reflect Biocompatibles’ current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of Biocompatibles’ research strategy, the applicability of the discoveries made therein, the successful and timely completion of clinical studies and the uncertainties related to the regulatory and commercialisation processes.