Biota Holdings reports total revenue of $61.7M for half-year of 2009

Half year highlights

• Net profit up 364% to a record $33.5 million for the half-year
• Laninamivir shown to be effective for the treatment of influenza in Phase III clinical trials in Asia, with NDA filed in Japan in February. Phase III trials for prevention underway in Japan
• Research pipeline strengthened with the addition of the antibacterial programs from Prolysis
• Strong cash position maintained: $52 million at 31 December 2009 after $20 million capital return to shareholders
• Biota added to S&P/ASX 200 Index in December 2009

Biota Holdings Limited (ASX: BTA) today announced a half year net profit after tax of $33.5 million, (1H F09: $7.2m). Profit before tax was $41.4 million (1H F09: $10.1m) benefiting significantly from an increase in Relenza royalties.

Total revenue was $61.7 million, up 84% from $33.5 million on the comparable period last year. Revenue included $56.7 million of Relenza royalties (1H F09: $3.8m), $1.4 million (1H F09:$6.6m) of collaboration income from licensing agreements with AstraZeneca and Boehringer Ingelheim and grant income of $2.1 million (1H F09 $1.1m) from the US National Institutes of Health.

Commenting on the results today, Biota CEO Peter Cook said “This is a very strong result for Biota. Whilst growth in Relenza royalties is the major financial driver, progress with our key projects and particularly laninamivir and the expansion of our pipeline sets the scene for a very exciting future. The implementation of our strategy, to have 2 or 3 royalty generating products in the market at the same time, is well underway.”

Expenses were $20.3 million (1H F09: $23.4m) which included the increase in research costs from the antibacterial programs of Prolysis, the reduction in product development costs given the HRV Phase IIa trial in F09 and the conclusion of the GSK litigation in F09.

Additionally, the Company has provided for an income tax expense at $7.9 million, assuming full year profitability and recovery of all tax losses. Any tax payment would not occur until late 2010.

Other Significant Events

• Royalties have increased with improved Relenza sales as a result of the swine flu pandemic, resistance issues and side-effects with Tamiflu. In response GSK invested heavily to significantly increase its production capacity by December 2009. Governments worldwide have indicated their intention to rebalance their anti-viral stockpiles with higher proportions of Relenza;

• Biota’s long acting neuraminidase inhibitor (second generation influenza antiviral) laninamivir, successfully completed Phase III clinical trials for influenza treatment with a series of multi-centred Asian studies and an NDA was filed in Japan in February 2010. Phase III prevention studies commenced in November 2009 in Japan, with results possible by August 2010;
• Additional clinical studies to those completed in Japan with laninamivir and funded by the US National Institutes of Health, were also completed in the UK during the period;
• The Hepatitis C program licensed in 2006 has transferred to Boehringer Ingelheim. Future payments under the Licence & Collaboration Agreement will occur when pre-agreed development milestones are achieved. Biota will continue to be involved in strategic development of its compounds;
• The MaxThera programs are advancing although formal completion of their acquisition remains subject to one outstanding condition which is expected to be met in the near future; and
• A capital return of $20 million was paid to shareholders in December 2009, after shareholder approval was obtained at the Annual General Meeting.

Outlook

Based on the first half year, F2010 will be a record year, considering:

• Relenza royalty income should remain solid with market updates provided on a quarterly basis;
• Strong cash flows from Relenza royalties to 31 December 2009 of $62.9 million will significantly add to the $52.0 million cash on hand;
• The development pipeline is extensive and well funded;
• The commercial interest being expressed in laninamivir and the intention to secure a licensee outside of Japan, in the near future; and
• Costs remain under tight control.

Returns to shareholders will be considered on the completion of the financial year. Key drivers of cash and profit, which could significantly affect the Company’s franking account balance, including Relenza royalties and cash receipts, developments within the laninamivir program and confirmation of the forecasted expenditure rate on the new acquisitions, will have been confirmed.

SOURCE Biota Holdings Limited