Biora AB Report for the First Quarter 2002.Business Editors MALMO, Sweden--(BUSINESS WIRE)--April 29, 2002 Biora develops, manufactures and sells biology-based products to dentists Dentists can refer to one of the following:
Its principal product, Emdogain(R)Gel, which is approved for sale in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Japan, naturally regenerates the
tooth-supporting structure that the tooth has lost due to periodontitis periodontitisInflammation of soft tissues around the teeth (see tooth). Poor dental hygiene leads to deposition of bacterial plaque on the teeth below the gum line, irritating and eroding nearby tissues. . Biora's American Depositary Shares American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. are quoted on the OTC market Noun 1. OTC market - a stock exchange where securities transactions are made via telephone and computer rather than on the floor of an exchange over-the-counter market in the U.S. and Biora's ordinary shares are listed on the "O-list" of the Stockholm Stock Exchange The Stockholm Stock Exchange (Swedish: Stockholmsbörsen) is a stock exchange located in Stockholm, Sweden. Founded in 1863 [1] it is the primary securities exchange of the Nordic Countries. in Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. .
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1st Qtr 1st Qtr Full year
2002 2001 2001
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Net sales, SEK million 35.0 27.0 110.7
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Operating loss, SEK million -1.0 -9.0 -26.5
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Net loss, SEK million -0.7 -8.6 -25.1
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- An enamel matrix protein-based product for endodontic therapy (treatment of
dental pulp) - a phase I trial is underway.
- A product to treat xerostomia (dry mouth)- a phase I study on healthy
volunteers with this patent-protected pharmaceutical product was initiated
during 2001.
- Development of a new product for growth of hard tissues, such as bone and
dentin (MATRIX project). For this project, Biora and four University clinics
received a grant of 2.5 million euro over the next four years from the European
Commission. Biora retains the commercial rights to all products derived from
the project.
Report for the first quarter 2002. (Throughout this report, figures for the comparable period in year 2001 are noted in parentheses See parenthesis. parentheses - See left parenthesis, right parenthesis. immediately following the year 2002 figures.) Biora's net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first quarter 2002 amounted to SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 35.0 million (SEK 27.0 million). This represents an increase in revenue of 30% (24% at fixed rates of exchange). The increase in sales occurred primarily in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and Markets. The first delivery of EmdogainGel to Japan was made during January January: see month. 2002. No deliveries were made to Japan during the corresponding period 2001. MARKETS Continued strong sales growth in the U.S market The United States is Biora's single largest market. Sales in the first quarter 2002 were SEK 16.3 million (SEK 13.2 million), an increase of 23% in SEK and 15% in local currency compared to the corresponding period 2001. The continued strong sales growth can be attributed to a more efficient regional sales organization. This structure has provided stronger communication and improved service to U.S. customers. The sales growth is also a result of a more focused sales strategy to increase product usage within the current customer base. In addition, EmdogainGel has become more established due to the product's continued presence at scientific meetings and through the publication of a number of articles about the product in professional journals. Limited sales growth in the German market during the period Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). is Biora's largest market in Europe. Sales in the first quarter 2002 amounted to SEK 6.6 million (SEK 6.4 million), an increase of 3% (1% in local currency) compared to the corresponding period 2001. Launch of EmdogainGel in Japan The Japanese regulatory authority Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities registered EmdogainGel in December December: see month. 2001. The initial launch of EmdogainGel to key opinion leaders through a series of seminars introducing the benefits of the new product by Biora's partner Seikagaku, took place in mid March. The official launch of EmdogainGel took place during mid April in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with The Japanese Association of Clinical Periodontology periodontology, n See periodontics. , one of the largest periodontal periodontal /peri·odon·tal/ (per?e-o-don´t'l) 1. pertaining to the periodontal ligament or periodontium. 2. near or around a tooth. per·i·o·don·tal adj. 1. congresses in Japan for dentists who treat patients with periodontal disease Periodontal Disease Definition Periodontal diseases are a group of diseases that affect the tissues that support and anchor the teeth. Left untreated, periodontal disease results in the destruction of the gums, alveolar bone (the part of the jaws where . Biora's initial delivery of EmdogainGel to Seikagaku took place during the first quarter 2002 and amounted to SEK 4.2 million. No shipments had been made during the corresponding period in 2001. Introduction of EmdogainGel TS in selected distributor markets The introduction of EmdogainGel TS began in Germany and the Nordic markets during the month of October October: see month. and in Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. during November November: see month. ,2001. The introduction of the EmdogainGel TS has received a positive response from Biora's customers. In April, Biora plans to launch EmdogainGel TS in selected distributor markets, including France, Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. and Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. . RESEARCH AND DEVELOPMENT Biora's research efforts are focused on developing new, proprietary products for the dental dental /den·tal/ (den´t'l) pertaining to a tooth or teeth. den·tal adj. 1. Of, relating to, or for the teeth. 2. Of, relating to, or intended for dentistry. market, and on expanding the indications for EmdogainGel. Ongoing research projects include: - An enamel matrix protein-based product for endodontic therapy (treatment of dental pulp) - a phase I trial is underway. - A product to treat xerostomia (dry mouth)- a phase I study on healthy volunteers with this patent-protected pharmaceutical product was initiated during 2001. - Development of a new product for growth of hard tissues, such as bone and dentin (MATRIX project). For this project, Biora and four University clinics received a grant of 2.5 million euro over the next four years from the European Commission. Biora retains the commercial rights to all products derived from the project. One project, which was initiated during 2001 to develop an enamel enamel, a siliceous substance fusible upon metal. It may be so compounded as to be transparent or opaque and with or without color, but it is usually employed to add decorative color. It was used to decorate jewelry in ancient Egypt, Greece, and Rome. matrix protein-based product to reduce pain and discomfort Discomfort may refer to pain, an unpleasant sensation, or to suffering, an unpleasant feeling or emotion. following scaling and root planing The objective of scaling and root planing, otherwise known as conventional periodontal therapy, is to remove or eliminate the etiologic agents which cause inflammation: dental plaque, its products and calculus,[1] of periodontal pockets, has been terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: . The decision to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. this project was due to the results of a phase II study, which were unable to demonstrate clinical significance in the efficacy efficacy /ef·fi·ca·cy/ (ef´i-kah-se) 1. the ability of an intervention to produce the desired beneficial effect in expert hands and under ideal circumstances. 2. parameters compared with conventional treatment. OTHER INFORMATION Lars Hammarstrom - appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. Chairman of Biora's Scientific Advisory Board Lars Hammarstrom, one of the founders of Biora, has been appointed as Chairman of Biora's Scientific Advisory Board. This Board was recently formed with the objective to evaluate Biora's research projects and patent applications and to provide advice and recommendations on the future direction of Biora's R&D efforts. Due to this appointment, Professor Hammarstrom has declined re-election re-election n → reelección f re-election n → réélection f re-election n → Wiederwahl f as a member of Biora's Board of Directors at the Company's Annual General Meeting today in Malmo. In March, Svein Svein: see Sweyn. G. Eskedal informed the Board that he is resigning from his position as a Director. FINANCIAL INFORMATION Net sales The group's net sales during the first quarter 2002 increased to SEK 35.0 million (SEK 27.0 million). This corresponds to an increase of 30% (24 % at fixed rates of exchange). Results Gross profit during the first quarter 2002 was SEK 28.2 million (SEK 20.7 million). The improvement is primarily attributed to increased sales in the United States and the launch of EmdogainGel in Japan. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in the first quarter 2002 amounted to SEK 1.0 million (SEK 9.0 million loss). This is due to the increase in sales. Selling expenses were increased by SEK 1.3 million and research and development costs decreased by SEK 2.5 million. The reduction in R&D expenses is primarily due to completion of some R&D projects during 2001. Administrative expenses during the first quarter 2002 were decreased by SEK 0.8 million. The change in other operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and expenses can be explained by installment payments Installment payments Distribution of plan assets to beneficiaries based upon a regular schedule. (SEK 1.0 million) for a license agreement related to the development of the xerostomia xerostomia /xe·ro·sto·mia/ (zer?o-sto´me-ah) dryness of the mouth due to salivary gland dysfunction. xe·ro·sto·mi·a n. (dry mouth) project during the first quarter 2001. Net financial items for the first quarter 2002 were SEK 0.3 million (SEK 0.4 million). The net loss after tax in the first quarter 2002 was SEK 0.7 million (SEK 8.6 million loss) corresponding to a loss of SEK 0.03 per share (SEK 0.41 loss) calculated on the average number of shares outstanding (23,753,800, compared to 21,203,800 during the corresponding period 2001). Capital Expenditures Capital expenditures for tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. long term assets and patents during the period were SEK 0.4 million (SEK 0.4 million). Financial position The net change in cash and cash equivalents during the first quarter 2002 was negative SEK 3.5 million (negative SEK 11.5 million). At the end of the reporting period (figures for December 31, 2001, for comparison, are given below in parentheses) the group's liquid funds amounted to SEK 48.0 million (SEK 51.5 million), the equity/assets ratio was 63.2 % (60.6 %) and the group's equity amounted to SEK 55.3 million (SEK 55.9 million). Employees As of March 31, 2002, the Group had 79 employees, compared to 83 at December 31, 2001. Accounting principles The accounting principles and calculation methods used in this report for the first quarter 2002 are the same as those used in the annual report 2001. Coming financial information Biora will publish financial information on the following dates: Interim Report for the first six months 2002 August 23, 2002 Interim Report for the first nine months 2002 November 7, 2002 Biora's auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together have not audited this interim report Biora AB has registered the trademarks Emdogain(R) and PrefGel(TM). In this report these registrations are only publicized pub·li·cize tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es To give publicity to. Adj. 1. publicized - made known; especially made widely known publicised in this paragraph. This report may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that relate to future events or future business and financial performance. Such statements can only be predictions and the actual events or results may differ from those discussed. The Company cautions that these statements are subject to important factors that could cause actual results to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in such forward looking statements and are more fully discussed in periodic reports filed with the Securities and Exchange Commission.
CONSOLIDATED STATEMENTS OF OPERATIONS
2002 2002 2001 2001
(Swedish GAAP, unaudited) First First First Full year
quarter quarter quarter
(TUSD) 1) (TSEK) (TSEK) (TSEK)
Net sales 3 322 35 006 27 007 110 677
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Costs of goods sold -647 -6 814 -6 306 -22 797
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Gross profit 2 675 28 192 20 701 87 880
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Selling expenses -1 823 -19 215 -17 910 -76 998
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Administrative expenses -505 -5 319 -6 158 -22 880
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Research and
development costs -412 -4 344 -6 877 -26 787
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Other operating income
and expenses 2) -30 -321 1 219 12 321
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Operating loss -96 -1 007 -9 025 -26 464
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Financial net 33 346 400 1 403
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Loss after financial items -63 -661 -8 625 -25 061
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Income tax 3) -5 -50 - -34
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Net loss for the period -68 -711 -8 625 -25 095
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Loss per share 4) -0.003 -0.03 -0.41 -1.14
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Number of shares
outstanding at the end
of the period (000s) 23 754 23 754 21 204 23 754
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Average number of shares
outstanding (000s) 23 754 23 754 21 204 22 014
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1) Average exchange rate Jan-Mar, 2002, USD 1 = 10.5375
2) Instalments for license agreement regarding a development project
for xerostomia are included in other operating income by 1,039 TSEK in
the first quarter and by 4,965 TSEK during the full year 2001. The
Consolidated Other operating income for the full year 2001 also
includes a lump sum amounting to 10,000 TSEK ( 0 TSEK in the first
quarter) for a licence agreement regarding a BioEx development project
in woundhealing (non dental). The Consolidated Other expenses for the
full year 2001 include 1,200 TSEK ( 0 TSEK in the first quarter) in
royalty expenses to the Swedish Industrial fund for the latter licence
agreement as well as 1,447 TSEK ( 0 TSEK in the first quarter) in
administrative expenses in connection with the outlicencing of the
woundhealing project.
3) The Company does not account for any tax income, neither regarding
the loss for the full year nor regarding accumulated losses. Deferred
tax assets have been reduced by a valuation allowance to the amount
that is "more likely than not" to be realized. The net deferred tax
asset is zero.
4) Loss per share has been calculated by dividing the loss for the
period by the average number of shares. Since the present value of the
options' exercise prices are higher than the net realizable value of
the shares, the loss per share before and after dilution is the same.
CONSOLIDATED BALANCE SHEETS
Mar 31 Mar 31 Mar 31 Dec 31,
(Swedish GAAP, unaudited) 2002 2002 2001 2001
(TUSD) 1) (TSEK) (TSEK) (TSEK)
Intangible long term assets 655 6 901 7 122 6 948
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Tangible long term assets 315 3 315 5 718 3 738
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Financial long term assets 59 623 641 634
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Total long term assets 1 029 10 839 13 481 11 320
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Inventories 687 7 241 5 487 7 836
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Current receivables 2 031 21 403 18 625 21 495
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Bank deposits 2 657 28 000 27 000 25 951
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Cash and bank 1 900 20 020 15 233 25 520
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Total current assets 7 275 76 664 66 345 80 802
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Total assets 8 304 87 503 79 826 92 122
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Shareholders' equity 2) 5 251 55 337 47 390 55 870
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Provisions 28 296 273 305
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Long term liabilities 2), 3) - - 2 586 -
Current liabilities 3) 3 024 31 870 29 577 35 947
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Total shareholders' equity
and liabilities 8 304 87 503 79 826 92 122
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1) Average exchange rate Jan-Mar 2002, USD 1 = 10,5375
2) Change in shareholders' equity
Share Other Accumu- Total Total Total
capital restricted lated 03.31 03.31 12.31
equity loss 2002 2001 2001
Opening Balance 950 90 004 -35 084 55 870 50 915 50 915
Earlier received
option premiums
matured - 5 320 5 320
Issuance of new shares - - 23 805
Liabilities for
option premiums
received
transferred to
share premium
reserve - - 1 106
Change in
translation
differences -144 322 178 -220 -181
Loss for
the period -711 -711 -8 625 -25 095
Closing Balance 950 89 860 -35 473 55 337 47 390 55 870
3) The interest bearing liabilities amounted to zero on March 31,
2002, and December 31,2001, 2,400 TSEK on March 31,2001.
STATEMENT OF CASH FLOWS
Consolidated (TSEK) 2002 2001 2001
(Swedish GAAP, unaudited) First First Full
quarter quarter year
Loss for the period -711 -8 625 -25 095
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Depreciation and amortization 794 1 246 5 939
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Other adjustments to reconcile net loss
to net cash flow from operating
activities 54 25 89
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Change in assets and liabilities -2 879 -6 089 -6 413
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Net cash used in operating activities -2 742 -13 443 -25 480
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Capital expenditures (tangible assets
and patents) -387 -410 -2 872
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Payments concerning other long-term
receivables - 1 920 1 920
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Net cash used in/ from investing
activities -387 1 510 -952
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Net cash from financing activities - - 23 500
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Effect of exchange rate changes on cash
and cash equivalents -322 411 648
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Net change in cash and cash equivalents -3 451 -11 522 -2 284
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KEY RATIOS
Consolidated 2002 2001 2001 2000 1999
(Swedish GAAP, unaudited) First First Full Full Full
quarter quarter year year year
Net sales (TSEK) 35 006 27 007 110 677 89 160 73 556
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Gross margin, % 2) 80.5 76.7 79.4 76.3 79.0
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R & D costs (TSEK) 3) 4 344 6 877 26 787 42 789 41 597
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Return on capital
employed, % 1), 4) -4.8 -66.1 -45.5 -83.7 -50.7
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Return on equity, % 5) -5.1 -70.2 -47.0 -85.4 -50.8
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Equity / assets ratio, % 6) 63.2 59.4 60.6 55.8 78.3
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Net debt /
equity ratio, % 7) -86.8 -84.1 -92.1 -100.9 -88.5
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Total equity (TSEK) 55 337 47 390 55 870 50 915 127 406
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Average number of shares
outstanding, (000s) 8) 23 754 21 204 22 014 21 204 21 204
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Equity per share, SEK 8) 2.33 2.23 2.54 2.40 6.01
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Loss per share, SEK 8) -0.03 -0.41 -1.14 -3.59 -4.09
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Cash flow per share, SEK 9) -0.15 -0.54 -0.10 -2.78 -3.50
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1) Return on capital employed and return on equity have been
calculated by multiplying the three months operating loss and net loss
by 4 to obtain comparability to the other presented twelve months key
ratios.
2) Gross profit divided by net sales.
3) R&D-costs are shown gross, including capitalized costs. During
2002, as well as during 1999, 2000 and 2001, no present costs have
been capitalized under the caption Capitalized R&D costs, which
explains why the net and gross costs were equal, 4 344.
4) Operating loss plus financial income divided by average total
assets (total assets less non-interest-bearing operating liabilities
including deferred taxes).
5) Net loss divided by average equity.
6) Shareholders' equity divided by total assets.
7) Interest-bearing liabilities less cash and bank deposits divided by
shareholders' equity.
8) The dilution effects of outstanding options have not been
considered when calculating equity, loss and and cash flow per share
for the years 1999-2002 as the present values of the exercise prices
at each year end has been higher than the net realizable value of the
shares.
9) Net change in cash and cash equivalents divided by the
average number of shares in accordance with note 8).
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