Biota under the microscope
This is the fourth post in my Biota series. Time to dig deeper. First up Pipeline and then Management.
Major Milestones from 1983 on.
Financial reports and key dates
Biota Bullentin May 2007
Compounds
LANI long-acting neuraminidase inhibitors CS8958
Second generation (LANIs) are also inhaled, they “provide a longer period of action which allows them to be administered only once a week, instead of twice daily as is the case with current products.
LANI’s high potency and reduced frequency of administration offers a practical response to the reduced storage bulk needed for pandemic stockpiling. Biota has a joint venture with Japanese based Daiichi-Sankyo for the development of LANIs.”
LANI Phase II completed – Phase III scheduled 31 July 2008 “Phase III trial is scheduled to commence later this year… PII, double-blinded trial, inhaled CS-8958 administered once only was statistically indistinguishable from 75mg of oseltamivir administered twice daily for 5 consecutive days.”
Launch PII 22 Nov 07
LANI PI completed in Japan and starts in the UK
From 2007 Annual Report “owned by Biota and co-owner Daiichi-Sankyo and are fully funded from our own resources or government grants. They may be available for licensing at an appropriate stage in the future” p8 and “Daiichi-Sankyo’s candidate, CS8958 completed Phase I clinical evaluation in a new dry powder inhaler in Japan during April 2007 and is currently undergoing complementary Phase I studies in western subjects in the UK. This additional clinical work has been supported by US National Institutes of Health (NIH) funding of US$5.6 million, awarded to Biota in October 2004.”
PIPELINE
HRV Human Rhinovirus BTA798
HRV 2a Trial commences 11 August 2008
“Dosing is expected to be completed by December/January, subject to adequate enrolment rates with volunteers. The full results are expected by the end of April 2009.”
Successfully completes second stage of PI safety trial. Safe and well tolerated in single and multi-doses. 26 March 2007
Hepatitis C virus
$102M deal with BI, specific terms not disclosed, “but certain clinical, regulatory and commercialisation milestones, including an initial technology access fee and research support. In addition, Biota would receive royalties on future sales”
“There is a compelling need for an effective antiviral treatment for HCV. Biota has discovered and is developing a novel class of antiviral nucleoside drugs which inhibit the HCV polymerase.
HCV polymerase is an essential enzyme involved in the replication of the virus. Polymerase inhibitors are a successful class of drugs and numerous examples are on the market (eg HIV/AIDS and herpes drugs).
Biota has licensed its HCV program to Boehringer Ingelheim. Click here to view further information.”
more ->
RSV Respiratory syncytial virus (RSV) BTA9881.
AstraZeneca’s takes over MedImmune licence August 2008.” Under the agreement, all existing milestone [$107M milestone after $5M upfront] and royalty entitlements are preserved and Biota’s research and development program has been extended. The lead candidate BTA9881 entered Phase I clinical trials in July 2007, which are continuing.” Extra $3.5M USD for Asia.
Hepatitis C non-nucleoside (HCV-NN)
“The HCV-NN program has a different target than the HCV program licensed to Boehringer Ingelheim.
more ->
Human cytomegalovirus (CMV)
“In late June 2008, Biota reached a commercial agreement for the use of assays developed by HarvardMedicalSchool to assist in the development of small molecule inhibitors of specific enzymes to CMV.” more ->
General
Shares on Issue and options grant. 174,563,999 shares and 3,522,137 options. 520,000 LTIOs granted to CEO as per 2008 AGM.
Basic and Diluted
2008 182,926k 184,856k
2007 180,217k 181,791k
Final Share Buy Back Announcement 9,166,734 bought for AUD$7,592,564 high $1.29 20/03/08 low $0.63 on 6/10/08. The world is awash with companies whose management bought there shares back at higher prices. The hardest part of management is capital allocation.
Cash Flow
The 2008 B/S shows a drop in trade receivables of $5M and a rise in trade payables of $6M. Cash flow from ops was +4.8M. Though how about that $11M swing in trade assets on the B/S? Does that make it a $6M operating cash loss? Alternatively, backing out interest of $3.2M it’s $1.6M net operating cash. Need to watch cash flow. If cash at end of Q1 09 was $55M as stated in AGM slides then I guess trade payables were paid down, maybe to past levels of around $6M while trade receivables grew. Could that have been $4M up thus explaining the $10M cash difference from expected?
2007
2007 Annual Report
HIGHLIGHTS
• Profit after tax $20.2 million (F2006 loss $11.3 million)
• Strong cash balances at $62 million
• US$102m HCV collaboration agreement with Boehringer Ingelheim
• Three products into clinic
- LANI (CS8958) Phase I completed in Japan, commenced in UK
- HRV (BTA798) Phase I completed
- RSV (BTA9881) Phase I commenced
• Amended Statement of Claim filed in March and the updated
Peter Cook CEO comments August 07. Check What He Promised And Delivered (WHePAD)
Employed Dec 2005
Earlier Biota Analysis and Thoughts.
Article One: Biota Analysis and Valuation Part 1 Quick look, good value.
Two: Biota Analysis and Valuation Part 2 Closer at the down and upside with probabilities and catalysts.
Three: Biota 2008 AGM
Four: Biota under the microscope A closer look at the pipeline and management.
Five: Biota Analysis and Valuation
[Edit 3 Nov 08 - On top of the usual disclaimers I will soon list another disclaimer that could easily be misconstrued or claimed to be a conflict of interest and should have been declared. I am not yet at liberty to list the extra disclaimer. The to be announced disclaimer has only influenced my analysis in that it increased the priority and to a degree the depth of the analysis. Though the current analysis of four posts is an average level for any company I invest in. ]
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