- KIACTA™ intellectual property position further strengthened by granting of new US patent -
LAVAL, QC, Aug. 7, 2013 /CNW/ - BELLUS Health Inc. (TSX: BLU) ("BELLUS Health" or the "Company") today reported its financial results for the second quarter ended June 30, 2013.
Second Quarter 2013 Highlights
- Announced an agreement to acquire all outstanding common shares of Thallion Pharmaceuticals Inc. (TSXV: TLN) ("Thallion"). On closing, transaction will strengthen the Company's cash position by more than $1.1 million and add a clinical stage drug candidate in a rare disease indication. Transaction is expected to close on or before August 20, 2013;
- Recruitment continued for the Phase III Confirmatory Study for KIACTA™ for the treatment of AA amyloidosis;
- KIACTA™ intellectual property further strengthened through the issuance of a US patent expiring in 2026;
- KIACTA™ granted Orphan Disease Drug Status in Japan. Japanese drug development grant also received for KIACTATM;
- Recommendation of the Data and Safety Monitoring Board to continue KIACTA™ Phase III Confirmatory Study as per protocol, based on last review;
- Settled one of its credit facilities, leading to estimated savings of more than $200,000 in future interest payments;
- Concluded the quarter with a cash position of $15.7 million, enabling the Company to finance its operations through the end of KIACTA™ Phase III Confirmatory Study, expected in 2017.
"During the second quarter, we announced an agreement to acquire Thallion, which will strengthen our balance sheet and further diversify our orphan drug pipeline through the addition of Shigamabs®, a clinical-stage drug candidate for the treatment of Hemolytic Uremic Syndrome," said Roberto Bellini, President and Chief Executive Officer of BELLUS Health. "Following this transaction, our asset base will include a late-stage orphan drug pipeline and the financial resources with which to continue developing our assets and build further value in the Company."
Acquisition Agreement with Thallion
On June 18, 2013, the Company announced that it had entered into an agreement with Thallion to acquire all of its outstanding common shares by way of a plan of arrangement (the "Acquisition Agreement"). Thallion is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. Thallion's lead clinical program Shigamabs® is a dual antibody product for the treatment of Shiga toxin-producing E. coli bacterial infections and has recently completed a Phase II clinical trial. The transaction was approved by Thallion's shareholders on August 6, 2013, and is subject to court approval. The transaction is expected to close on or before August 20, 2013.
Phase III Confirmatory Study for KIACTA™
During the second quarter of 2013, recruitment continued for the Phase III Confirmatory Study for KIACTA™. The study is designed to confirm the safety and efficacy of KIACTA™ in preventing renal function decline in patients diagnosed with AA amyloidosis, an orphan indication resulting in renal dysfunction that often rapidly leads to dialysis and death. The study will involve approximately 230 patients enrolled from more than 70 sites and 30 countries worldwide.
Based on the current recruitment rate, the Company continues to expect that patient recruitment will be completed in the first half of 2014. The Phase III Confirmatory Study is an event-driven clinical trial that will end when 120 events linked to deterioration of kidney function have occurred, which is currently expected to be reached in 2017. BELLUS Health's partner, Auven Therapeutics, is funding 100% of the development costs of KIACTA™, including the Phase III Confirmatory Study and other related activities, which are estimated to be in excess of US$50 million. Auven Therapeutics and BELLUS Health are expected to share the overall proceeds from potential future revenue of KIACTA™ approximately equally.
Patients completing the Phase III Confirmatory Study will be offered to continue in an extended program. The first patients are expected to be enrolled in the extended program in the second half of 2013.
As part of the Phase III Confirmatory Study, there are periodic meetings of the Data Safety Monitoring Board (DSMB), which independently assesses the safety of KIACTA™ throughout the study. Based on its last review on April 16, 2013, the DSMB recommended that the study continue as per protocol.
On July 23, 2013, the Company announced that KIACTA™ was granted Orphan Disease Drug Status in Japan. As a result, KIACTA™ will receive priority review from Japanese regulatory authorities as a New Drug Application, once it is submitted. In addition, the drug will be granted 10 years of market exclusivity as a treatment for patients with AA amyloidosis. The Company also announced that a Japanese government research organization had granted up to the equivalent of C$500,000 towards KIACTA™ clinical development expenses incurred in Japan. Five clinical sites in Japan are currently participating in the global Phase III Confirmatory Study for KIACTA™.
In July 2013, the U.S. Patent and Trademark Office ("USPTO") granted U.S. Patent No. 8,178,580, offering strengthened intellectual property protection for KIACTA™. The patent, which will expire in 2026 with a possible extension available up to 2031, covers the dosing regimen of daily administration of KIACTA™ relative to AA Amyloidosis patients' kidney impairment. The patent has also been granted in Canada, Australia and certain countries in Eurasia.
VIVIMIND™
VIVIMIND™, the Company's natural health product designed to protect memory function, is currently commercialized in Canada, Italy and Greece. The Company expects commercial launches in each of Iran, Israel and Taiwan over the course of 2013.
Other
Management continues to pursue additional sources of funds including through asset sale and/or out-licensing, as well as further arrangements relating to the distribution of VIVIMIND™.
In addition, the Company is currently exploring opportunities in order to expand its pipeline, including through acquisitions and/or in-licensing.
Summary of Financial Results
All currency figures reported in this press release are in Canadian dollars, unless otherwise specified.
Three-months ended June 30, 2013 |
Three-months ended June 30, 2012 |
|
(in thousands of dollars, except per share data) | ||
Revenues | 383 | 706 |
Research and development expenses |
(245) | (343) |
General and administrative expenses |
(1,136) | (1,880) |
Finance income | 139 | 95 |
Finance costs | (35) | (16,800) |
Gain on sale of unrecognized assets | - | 8,150 |
Other income | - | 650 |
Net loss | (894) | (9,422) |
Net loss attributable to owners of the Company |
(867) | (9,479) |
Basic and diluted loss per share | (0.02) | (0.39) |
The Company's full consolidated financial statements and accompanying management's discussion and analysis for the three and six-month periods ended June 30, 2013, will be available shortly on SEDAR at www.sedar.com and on the Company's website at www.bellushealth.com.
- For the three-month period ended June 30, 2013, net loss attributable to owners of the Company amounted to $867,000 ($0.02 per share), compared to $9,479,000 ($0.39 per share) for the corresponding period the previous year. The decrease is primarily due to items recorded in the second quarter of 2012 in relation to the strategic partnership, financing and capital reorganization that occurred in May 2012, namely a non-cash loss on settlement of convertible securities, partially offset by a gain on sale of unrecognized assets.
- Revenues amounted to $383,000 for the three-month period ended June 30, 2013, compared to $706,000 for the corresponding period the previous year. Revenues mainly consist of revenue recognized for accounting purposes from the asset sale and license agreement as well as the service agreement entered into with Auven Therapeutics in 2010 for KIACTA™. Revenues also include revenue recognized for accounting purposes from the agreement with Asclepios Bioresearch (UK) Limited, as well as revenue from distribution agreements in relation to VIVIMIND™. The decrease is mainly due to lower revenue recognized for accounting purposes in relation to agreements entered into with Auven Therapeutics as well as lower VIVIMIND™ revenue.
- General and administrative expenses amounted to $1,136,000 for the three-month period ended June 30, 2013, compared to $1,880,000 for the corresponding period the previous year. The decrease is mainly due to transaction costs recorded in the second quarter of 2012 in relation to the strategic partnership, financing and capital reorganization that occurred in May 2012.
- Finance costs amounted to $35,000 for the three-month period ended June 30, 2013, compared to $16,800,000 for the corresponding period the previous year. The decrease is primarily due a non-cash loss on settlement of convertible securities in the amount of $15,084,000 (including the change in fair value of the embedded conversion option liability on the 2009 Notes) for the three-month period ended June 30, 2012, recorded in relation to the strategic partnership, financing and capital reorganization that occurred in May 2012. The decrease is also due to a reduction in accretion expense and change in fair value of embedded derivative on convertible notes following the settlement of convertible securities, as part of the strategic partnership, financing and capital reorganization.
Effective April 19, 2013, the Company exercised the put option on one of its credit facilities, which reduced both the aggregate credit facilities and nominal value of the related New ABCP Notes by $3,087,000 (US$3,009,000). Upon the exercise of the put option, the Company transferred to the bank ownership of the MAV3 IA Tracking Notes, and paid an amount of $1,282,000 (US$1,250,000) to settle the credit facility. The put option exercise will enable the Company to save more than $200,000 in future interest payments.
As at June 30, 2013, the Company had available cash, cash equivalents and short-term investments totalling $15,659,000, compared to $18,569,000 as at December 31, 2012. Based on management's estimate, the current cash position should enable the Company to finance its operations through the end of Phase III Confirmatory Study for KIACTA™, expected in 2017.
About BELLUS Health
BELLUS Health is a development-focused healthcare company concentrating on products that provide innovative health solutions and address critical unmet medical needs. The Company's lead program is KIACTA™, a novel drug candidate currently in a Phase III Confirmatory Study for the treatment of AA amyloidosis, an orphan indication resulting in renal dysfunction that often rapidly leads to dialysis and death. KIACTA™ is partnered with global private equity firm Auven Therapeutics. AA amyloidosis affects approximately 35,000 to 50,000 individuals in the United States, Europe and Japan.
About AA Amyloidosis
AA amyloidosis is a deadly condition that progresses from chronic inflammatory diseases such as rheumatoid arthritis. The disease causes a protein called amyloid A to accumulate in major organs, particularly the kidneys, which leads to organ dysfunction, failure, and eventually death.
There is currently no available treatment for AA amyloidosis and it is estimated that approximately 35,000 to 50,000 patients are living with the disease in the United States, Europe and Japan. Independent research conducted by the Frankel Group in 2009 estimates peak annual revenues of $400 million to $600 million.
KIACTA™ has been granted Orphan Drug designation or its equivalent in the United States, Europe and Japan, which provide seven, ten and ten years of market exclusivity, respectively, once the drug is approved, as well as a reduction in application and review fees.
Forward Looking Statements
Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks include but are not limited to: the ability to obtain financing, the impact of general economic conditions, general conditions in the pharmaceutical and/or nutraceutical industry, changes in the regulatory environment in the jurisdictions in which the BELLUS Health Inc. does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation, achievement of forecasted burn rate, achievement of forecasted clinical trial milestones, and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. The length of KIACTATM Phase III Confirmatory Study is dependent upon many factors including clinical sites activation, patient enrolment rate, patient drop-out rate and occurrence of clinical endpoint events. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These statements speak only as of the date made and BELLUS Health Inc. is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see the Company's public fillings including the Annual Information Form of BELLUS Health Inc. for further risk factors that might affect the Company and its business.
SOURCE: BELLUS Health Inc.
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Adam Peeler
TMX Equicom
416-815-0700 ext. 225 | [email protected]
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