Bioenvision (NASDAQ:BIVN)
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Bioenvision (NASDAQ NM:BIVN) announced financial results
for the fiscal year ended June 30, 2005. Highlights of the year and
the fourth quarter include:
-- Patient enrollment completed in a Phase II clinical trial for
treatment of chronic hepatitis C with Virostat
-- Patient enrollment commenced in Phase II pre-menopausal and
Phase IV post-menopausal advanced breast cancer trials with
Modrenal
-- Public offering Bioenvision stock raised $56.4 million
-- Revenues increased 50.0%
Prior to the fourth quarter of 2005, we tested for impairment our
methylene blue intangibles acquired in connection with the Pathagon
acquisition and determined that, based on our assumptions, the sum of
the expected future cash flows, undiscounted and pertaining solely and
exclusively to approved indications, exceeded the carrying value of
its long-lived assets and therefore we did not recognize an
impairment. At June 30, 2005, we estimated that our undiscounted
future cash flows, again relating solely and exclusively to approved
uses of methylene blue, were less than the carrying value. As a
result, we recognized a non-cash impairment loss of $5,276,000, equal
to the difference between the estimated future cash flows for approved
uses of methylene blue, discounted at an appropriate rate, and the
carrying amount of the asset.
"We have made considerable progress in developing our product
portfolio over the past 12 months and now have multiple products in
clinical trials," commented Christopher B. Wood, M.D., chairman and
chief executive officer of Bioenvision. "We have submitted a Marketing
Authorization Application, the European equivalent of a U.S. New Drug
Application, with the European Medicines Evaluation Agency (EMeA) for
European approval of clofarabine in relapsed or refractory pediatric
acute leukemia. We anticipate an opinion from the EMeA in the
immediate future, which is our next important clofarabine-related
milestone."
Dr. Wood continued, "In addition, we are currently selling our
second product, Modrenal(R), in the United Kingdom using our own sales
force. Modrenal(R) is approved in the U.K. for the treatment of
post-menopausal advanced breast cancer. In addition to these approved
cancer therapeutics, the Company has completed enrollment of a Phase
II clinical trial with Virostat for the treatment of Hepatitis C.
"We were delighted to have reported in the past quarter good
results from the ongoing clinical studies of clofarabine in pediatric
and adult acute leukemia trials. These encouraging results, to date,
compare favorably to those reported in the Phase II pivotal trial,
which led to FDA approval of clofarabine for the treatment of
relapsed/refractory pediatric Acute Lymphoblastic Leukemia (ALL). We
expect to use these data to support our current Marketing
Authorization Application in Europe for pediatric leukemia. It also
offers an encouraging sign for our adult AML trial."
For the three months ended June 30, 2005 and 2004, Bioenvision
recorded revenues of $991,000 and $1.3 million, respectively. This
decrease of 26.3% is due to a decrease in license and royalty revenue
of $350,000 and R&D contract revenue of $250,000 offset by an increase
in product sales of $247,000. The decrease in R&D contract revenue is
due to the Company's exclusion of approximately $1.1 million of
revenues. However, based upon the provisions in the contract with our
co-development partner, these revenues, if not paid, can be offset by
future royalty earnings from European sales.
SG & A expenses for the three months ended June 30, 2005 and 2004
were approximately $3.3 million and $2.0 million, respectively. This
increase of 64.6% is due both to an increase in costs associated with
an increase in head count in both the New York and Edinburgh offices
and increases in consulting and legal fees due to the expansion of
regulatory and investor relations initiatives, and the restatement of
the Company's financial statements included in the Company's 2004
annual report on Form 10-KSB.
Research and development costs for the three months ended June 30,
2005 were $4.9 million, compared with $2.3 million for the three
months ended June 30, 2004. This increase of 110.0% is due to costs
primarily associated with the increased development activities and
ongoing clinical trials for clofarabine for pediatric leukemia in
Europe, adult AML (Acute Myeloid Leukemia) and Virostat for ongoing,
multi-center investigator sponsored Phase II clinical trials being
conducted in Egypt and Southern Europe.
Net loss available to shareholders was $14.2 million, or $0.31 per
share for the three months ended June 30, 2005, compared with net loss
available to shareholders of $3.1 million, or $0.13 per share for the
three months ended June 30, 2004.
For the years ended June 30, 2005 and 2004, Bioenvision recorded
revenues of $4.7 million and $3.1 million, respectively. This increase
of 50.0% is due to an increase in license and royalty revenue of
$449,000, product sales of $611,000, and research and development
contract revenue of $489,000. The decrease in R&D contract revenue is
due to the Company's exclusion of approximately $1.1 million of
revenues. However, based upon the provisions in the contract with our
co-development partner, these revenues, if not paid, can be offset by
future royalty earnings from European sales.
SG & A expenses for the years ended June 30, 2005 and 2004 were
approximately $10.2 million and $9.1 million, respectively. This
increase of 12.1% is due both to an increase in costs associated with
an increase in head count in both the New York and Edinburgh offices
and increases in consulting and legal fees due to the expansion of
regulatory and investor relations initiatives, and the restatement of
the Company's financial statements included in the Company's 2004
annual report on Form 10-KSB.
Research and development costs for the years ended June 30, 2005
were $10.9 million, compared with $4.9 million for the year ended June
30, 2004. This increase of 123.1% is due to costs primarily associated
with the increased development activities and ongoing clinical trials
for clofarabine for pediatric leukemia in Europe, adult AML (Acute
Myeloid Leukemia) and Virostat for ongoing, multi-center investigator
sponsored Phase II clinical trials being conducted in Egypt and
Southern Europe.
Net loss available to shareholders was $24.7 million, or $0.72 per
share for the year ended June 30, 2005, compared with net loss
available to shareholders of $11.5 million, or $0.57 per share for the
year ended June 30, 2004.
Bioenvision had cash and cash equivalents and short-term
investments at June 30, 2005 of $64.1 million, compared with $18.9
million at June 30, 2004. The increase in the cash position is due to
the public offering of 7.5 million shares of common stock in February
2005, which raised $56.4 million in net proceeds to the Company.
Conference Call
Bioenvision management will host a conference call to discuss
these results on Thursday, October 13, 2005 at 8:00 a.m. EDT. To
participate in the live call by telephone, please dial 877-825-5811
from the U.S. and Canada or 973-582-2767 from outside the U.S. A
telephone replay of the call will be available beginning at 10:00 a.m.
EDT October 13, 2005 until 11:59 p.m. EDT October 27, 2005 by dialing
877-519-4471 or 973-341-3080 and entering reservation number 6517269.
Those interested in listening to the conference call live via the
Internet may do so by visiting Bioenvision's web site at
www.bioenvision.com. To listen to the live call, please go to the web
site 15 minutes prior to its start to register, download, and install
the necessary audio software. A replay will be available on the web
site for 14 days.
About Bioenvision
Bioenvision's primary focus is the acquisition, development and
distribution of compounds and technologies for the treatment of
cancer. Bioenvision has a broad pipeline of products for the treatment
of cancer, including: Clofarabine (in co-development with Genzyme
Corporation), Modrenal(R) (for which Bioenvision has obtained
regulatory approval for marketing in the United Kingdom for the
treatment of post-menopausal breast cancer following relapse to
initial hormone therapy), and other products in clinical trials.
Bioenvision is also developing anti-infective technologies, including
the OLIGON technology; an advanced biomaterial that has been
incorporated into various FDA approved medical devices. For more
information on Bioenvision please visit our Web site at
www.bioenvision.com.
Certain statements contained herein are "forward-looking"
statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995). Because these statements include risks
and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Specifically,
factors that could cause actual results to differ materially from
those expressed or implied by such forward-looking statements include,
but are not limited to: risks associated with preclinical and clinical
developments in the biopharmaceutical industry in general and in
Bioenvision's compounds under development in particular; the potential
failure of Bioenvision's compounds under development to prove safe and
effective for treatment of disease; uncertainties inherent in the
early stage of Bioenvision's compounds under development; failure to
successfully implement or complete clinical trials; failure to receive
marketing clearance from regulatory agencies for our compounds under
development; acquisitions, divestitures, mergers, licenses or
strategic initiatives that change Bioenvision's business, structure or
projections; the development of competing products; uncertainties
related to Bioenvision's dependence on third parties and partners; and
those risks described in Bioenvision's filings with the SEC.
Bioenvision disclaims any obligation to update these forward-looking
statements.
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BIOENVISION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, June 30,
2005 2004
-------------------------
ASSETS
Current assets
Cash and cash equivalents $31,407,533 $18,875,675
Restricted cash 290,000 290,000
Short-term securities 32,746,948 -
Accounts receivable (less allowances for
bad debts of $869,220 and $0,
respectively) 1,785,779 2,627,773
Inventory 277,908 -
Other current assets 342,628 253,311
-------------------------
Total current assets 66,850,796 22,046,759
Property and equipment, net 279,778 47,857
Intangible assets, net 8,252,936 14,563,660
Goodwill 1,540,162 1,540,162
Security Deposits 209,665 79,111
Deferred costs 3,656,798 3,893,295
-------------------------
Total assets $80,790,135 $42,170,844
=========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $1,602,267 $1,495,866
Accrued expenses and other current
liabilities 4,581,444 1,322,584
Accrued dividends payable 56,404 90,141
Deferred revenue 498,607 551,828
-------------------------
Total current liabilities 6,738,722 3,460,419
Deferred revenue 7,437,598 7,909,598
-------------------------
Total liabilities 14,176,320 11,370,017
-------------------------
Stockholders' equity
Convertible Preferred stock - $0.001 par
value; 20,000,000 shares authorized;
2,250,000 and 3,341,666 shares issued and
outstanding at June 30, 2005 and
June 30, 2004, respectively (liquidation
preference $6,750,000 and $10,024,998,
respectively) 2,250 3,342
Common stock - $0.001 par value; 70,000,000
shares authorized; 40,558,948 and
28,316,163 shares issued and outstanding
at June 30, 2005 and June 30, 2004,
respectively 40,559 28,316
Additional paid-in capital 128,946,717 68,517,702
Deferred compensation (145,646) (223,990)
Accumulated deficit (62,331,005) (37,664,141)
Accumulated other comprehensive income 100,940 139,598
-------------------------
Stockholders' equity 66,613,815 30,800,827
-------------------------
Total liabilities and stockholders'
equity $80,790,135 $42,170,844
=========================
BIOENVISION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended
June 30,
----------------------------
2005 2004
----------------------------
Revenue
License and royalty revenue $1,463,326 $1,014,717
Product sales 611,346 -
Research and development contract
revenue 2,576,502 2,087,497
----------------------------
Total revenue 4,651,174 3,102,214
Costs and expenses
Cost of products sold (including royalty
expense of $524,755 for the year ended
June 30, 2005) 921,262 -
Research and development 10,894,925 4,882,574
Provision for bad debts 869,220 -
Selling, general and administrative 10,181,711 9,082,420
(includes stock based compensation
expense of $793,761 and $3,491,252
for the years ended June 30, 2005 and
2004, respectively)
Depreciation and amortization 1,438,517 1,348,064
Loss on impairment 5,276,162 -
Total costs and expenses 29,581,797 15,313,058
----------------------------
Loss from operations (24,930,623) (12,210,844)
Interest income (expense)
Interest and finance charges (79,484) -
Interest income 747,322 99,763
----------------------------
Net loss before income tax benefit (24,262,785) (12,111,081)
Income tax benefit - 1,459,814
----------------------------
Net loss (24,262,785) (10,651,267)
Cumulative preferred stock dividend (404,079) (856,776)
----------------------------
Net loss available to common stockholders $(24,666,864) $(11,508,043)
============================
Basic and diluted net loss per share of
common stock $(0.72) $(.57)
============================
Weighted-average shares used in
computing basic and diluted
net loss per share of common stock 34,042,391 20,257,482
============================
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