Biotie Financial Statement Release 2013

BIOTIE THERAPIES CORP.      Financial Statement Release   28 February, 2014 at 9.00 a.m.

Biotie Financial Statement Release 2013

This is a summary of the financial statement report 2013 published today. The complete report is attached to this release.  

Company Highlights

October - December 2013

H. Lundbeck A/S (Lundbeck) continued the launch of Selincro (nalmefene) in further European markets, with launches in 17 countries by the end of 2013. Lundbeck expanded its existing alliance with Otsuka Pharmaceutical Co. Ltd. (Otsuka) to include development and commercialization of nalmefene in Japan. Biotie received royalties on sales of Selincro across all markets of EUR 49,000 during the fourth quarter.  

Continued activities to advance tozadenant (SYN115) into Phase 3 development in Parkinson's disease in collaboration with partner UCB Pharma S.A. (UCB). 

Continued to actively develop NRL-1, a proprietary intranasal diazepam that became part of Biotie's development portfolio in June 2013 through an option agreement with Neurelis, Inc. (Neurelis). 

Biotie's loan obligations to Tekes (The Finnish Funding Agency for Technology and Innovation) were reduced by EUR 2.8 million, with Tekes forgiving certain capital loans relating to Biotie's carbohydrate and cancer glycosylation projects that were discontinued in 2005 and an R&D loan relating to Biotie's Integrin project that was discontinued in 2010. 

Biotie has continued discussions for a partnership for further development and commercialization of SYN120. However, the Company has now concluded that Biotie will be better served by progressing SYN120 internally to the next stage of development. 

Biotie's financial result for Q4 2013 was a net income of EUR 2.1 million; the financial result for 12 months ended 31 December 2013 was a net income of EUR 6.3 million.  

Biotie ended 2013 with cash, cash equivalents and short term investments of EUR 43.7 million (EUR 46.9 million, 30 September 2013). Operating cash flow was EUR 10.9 million positive in 2013. 

Key Financials
Figures in brackets, unless otherwise stated, refer to the same period in the previous year (EUR million)

for the period October - December 2013

Revenues EUR 5.8 million (0.6). 

Research and development costs EUR 6.7 million (7.2*) 

Financial result, continuing operations EUR 2.1 million (-8.8*) 

Cash flow from operating activities EUR -2.5 million (-7.7) 

Earnings per share EUR 0.00 (-0.02) 

for the period January - December 2013

Revenues EUR 27.7 million (4.8). 

Research and development costs EUR 17.4 million (24.2*) 

Financial result, continuing operations EUR 6.3 million (-25.6*) 

Cash flow from operating activities EUR 10.9 million (-27.1) 

Earnings per share EUR 0.01 (-0.06) 

Liquid assets at the end of period EUR 43.7 million (33.8).  

*Financial result for 2012 was impacted by a non-cash impairment charge of EUR 3.4 million for ronomilast

The financial statement release is unaudited. Liquid assets are comprised of cash, cash equivalents and investments held to maturity.

Timo Veromaa, Biotie's President and CEO commented,"2013 was a highly successful year for Biotie. Selincro was approved in Europe to treat alcohol dependence, and our partner, Lundbeck, is now launching the product across Europe. We secured a license agreement for our novel A2a antagonist, tozadenant, with UCB Pharma and received a $20 million milestone payment in 2013. With UCB funding we are now preparing to conduct Phase 3 tozadenant trials, which we expect to start in the first half of 2015. Also, a Phase 2 trial commenced for nepicastat in treatment seeking cocaine addicted patients, which is being funded by the U.S. National Institute on Drug Abuse (NIDA). We remain focused on delivering greater returns for our shareholders and as part of our evolving strategy we plan to use our financial strength to create a clinical platform with products that we can develop and commercialize ourselves."

Outlook for 2014 and key upcoming milestones:

Selincro: Lundbeck will continue the rollout of Selincro in additional European markets into 2014. Biotie is eligible for launch milestones in France, Germany and Spain of EUR 2 million in each market, and further royalties on sales in all markets. Due to the early phase of the launch of Selincro no guidance can be given on expected royalty revenue in 2014. The first clinical phase 3 study under the joint Lundbeck/Otsuka development program in Japan is expected to be initiated in 2014, but this will not impact Biotie's financial results.

Tozadenant (SYN115): Phase 3 development plans will continue in collaboration with UCB and a key event this year will be the end-of-Phase 2 meeting with FDA, planned for H1 2014. Biotie is expected to receive additional payments from UCB in the low triple digit millions in total over the next six years, based on the successful completion of defined development, regulatory and commercialization milestones, which are intended to be used to cover the costs of the development program. The Phase 3 program in Parkinson's disease is expected to commence by H1 2015.

NRL-1:  Biotie has concluded that its timely access to market is not guaranteed and that Biotie will not exercise the option to acquire Neurelis in H1 2014 as initially expected. Biotie will not make any further significant investment into this opportunity until further notice.

Nepicastat (SYN117): A Phase 2 trial in cocaine dependence, funded by NIDA, is continuing to recruit, and top-line data from the study is currently expected in H1 2015.

BTT-1023: Preparations for a clinical Phase 2 study in primary sclerosing cholangitis are ongoing. The Company is in advanced discussions for non-dilutive co-funding for the study.

SYN120: Preparations for a Phase 2 study in Alzheimer's disease have started, with the study expected to begin recruitment by the end of 2014.

Strategic: The Company will use its financial strength to seek additional pipeline opportunities, including those that it could potentially develop itself through to regulatory approval and beyond.

Financial: The company expects that both its revenue and research and development expenses will increase during 2014, as a result of milestones that will be received on both tozadenant and Selincro, and the development work that will be performed on tozadenant and SYN120.

The Board of Directors proposal for handling of the loss of the parent company

The Board of Directors proposes that no dividend for the financial year 2013 will be paid and that the loss of the parent company for the financial year of EUR 0.1 million (FAS) will be carried forward to shareholders' equity.

Conference call

An analyst and media conference call will take place on 28 February 2014 at 10:00 a.m. Central European Time. The conference call will be held in English.

Lines are to be reserved ten minutes before the start of conference call. The event can also be viewed as a live webcast at www.biotie.com. An on demand version of the conference will be published on Biotie's website later during the day

Telephone conference numbers:

US callers: +1212 444 0481
UK callers: +44(0)20 3427 1918
Finnish callers: +358(0)9 6937 9590

Access code: 6369512

In case you need additional information or assistance, please contact: Virve Nurmi, IR Manager, Tel: +358 2 2748 911

Key events after the reporting period

After the reporting period on 3 January 2014 Biotie announced that pursuant to the authorization of the Annual General Meeting of Shareholders held on 4 April 2013, the Board of Directors resolved to issue 3,321,660 shares to the company itself without consideration in accordance with Chapter 9 Section 20 of the Finnish Companies Act (624/2006, as amended). The shares were issued for the purposes of being conveyed to employees entitled to them pursuant to the terms and conditions of the 2011 equity plans. The shares are of the same class as the existing shares in the company. The new shares issued were registered with the Trade Register on 8 January 2014 and entered into the book-entry system maintained by Euroclear Finland Ltd.; they could be traded together with the company's current series of shares on the stock exchange list of Nasdaq OMX Helsinki Ltd from 9 January 2014.

After the reporting period on 3 January 2014, Biotie announced that the Board of Directors had approved two new share-based incentive plans for the group employees for awards to be made in the period 2014 to 2016 to follow-on from the current incentive plans under which awards have been made in the period 2011 to 2013; the Stock Option Plan 2014 for its European employees and the Equity Incentive Plan 2014 for its US employees (together the 2014 Plans). The 2014 Plans are intended to form part of the remuneration, incentive and commitment program for the employees and to support the hiring of new employees as the group increases the number of its employees to ensure that the currently planned clinical trials are conducted effectively and efficiently. The incentives support the attainment of the targets established by the group and the implementation of the group's strategy, as well as the group's long-term productivity. The 2014 Plans also reflect the competitive environment in which the group operates, particularly in the US, and are an important tool in enabling the group to attract and retain the right quality employees.

After the reporting period on 28 January 2014 and 28 February 2014, Biotie announced that the Company has conveyed Biotie shares held as treasury shares and that were issued on 2 January 2014 pursuant to the Stock Option Plan 2011 (232,500 shares conveyed) and the Equity Incentive Plan 2011 (106,250 shares conveyed).

As a result of the conveyances, the total number of votes attached to Biotie's shares increased to 338,750 votes and the total number of the Company's shares held by the Company or its fully owned subsidiary is 9,479,700 shares. The conveyance does not affect the number of registered shares (total of 456,032,398 shares).

After the reporting period on 28 February 2014, Biotie announced that it will progress SYN120 internally to the next stage of development. Preparations for a Phase 2 study in Alzheimer's disease have started, with the study expected to begin recruitment by the end of 2014. Also, the Company announced that it has concluded that its timely access to market for NRL-1 is not guaranteed and that Biotie will not exercise the option to acquire Neurelis in H1 2014 as initially expected. Biotie will not make any further significant investment into this opportunity until further notice.

About Biotie

Biotie is a specialized drug development company focused primarily on products for neurodegenerative and psychiatric disorders. For the past years, Biotie has successfully operated a strategy built around search, profile and partner. This has delivered Selincro (nalmefene) for alcohol dependency, which received European marketing authorization in February 2013 and is currently being rolled out across Europe by partner Lundbeck, and tozadenant, a novel A2a antagonist which is transitioning into Phase 3 development for Parkinson's disease in collaboration with UCB. Biotie also has exclusive rights through an option to acquire Neurelis, which includes NRL-1, an intranasal formulation of diazepam for epileptic seizure management. Biotie plans to seek further opportunities of this kind to generate a strong portfolio of products. Biotie's shares are listed on NASDAQ OMX Helsinki.

Turku, 28 February 2014

Biotie Therapies Corp.

Board of Directors

For further information, please contact:
Virve Nurmi, Investor Relations Manager
tel. +358 2 274 8900
e-mail: virve.nurmi@biotie.com

Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.biotie.com

Attachment:
Biotie_Financial statement report 2013