A turnover of €47.4 million, including €37.1 million related to the partnership signed with the Chinese company Tonghua Dongbao and €10.3 million following the judgment rendered in favor of Adocia in the first phase of the arbitration against Eli Lilly & Co
Cash position of approximately €40 million on December 31
st
, 2018 compared to €35million on December 31
st
, 2017
A turnover of €47.4 million, including €37.1 million related to the partnership signed with the Chinese company Tonghua Dongbao and €10.3 million following the judgment rendered in favor of Adocia in the first phase of the arbitration against Eli Lilly & Co
Lyon, France, March 12
th
, 2019 -
6:00 pm CET
-
ADOCIA
(Euronext Paris: FR0011184241 – ADOC – the “Company”) announced today its financial results for 2018. The financial statements have been approved by the board of directors on March 11
th
, 2019 and will be submitted to the shareholders for approval at the next general shareholder’s meeting on May 16
th
, 2019.
“In 2018, we are very happy to have concluded a strategic alliance with Chinese insulin leader Tonghua Dongbao. This alliance’s objective is, on the one hand, to commercialize our leading assets BioChaperone Lispro and BioChaperone Combo in China, with milestone payments totaling up to $135 million and on the other hand, to supply Adocia with insulin lispro and glargine for global commercialization of our two products. Our companies are actively preparing the launch of clinical trials in China and Adocia is working towards a BioChaperone Lispro bridging study in Europe”, commented
Gérard Soula, President and CEO of Adocia.
“We’re also very satisfied with the promising results obtained by our Pramlintide Insulin combination in its first clinical trial and we plan to initiate a second, multi-week repeated administration trial, during the second quarter. Finally, it is important to note that the Arbitration Tribunal ruled in favor of Adocia regarding the first phase of the arbitration proceeding against Eli Lilly, awarding us $11.6 million plus interests. We are expecting the ruling for the second phase of the arbitration in Q3 2019.”
Financial Highlights
The following table summarizes the financial statements under IFRS for the years ended December 31
st
, 2017 and December 31
st
, 2018:
In (€) thousands
FY 2018
(12 months)
FY 2017
(12 months)
Revenue
47 389
19 469
Grants, Research tax credit and others
6 541
7 708
Operating revenue
53 930
27 177
Research and development expenses
(25 760)
(27 074)
General and administrative expenses
(18 463)
(8 284)
Operating expenses
(44 223)
(35 358)
OPERATING INCOME (LOSS)
9 707
(8 180)
FINANCIAL INCOME (LOSS)
2 051
(335)
Tax
(4 144)
(35)
NET INCOME (LOSS)
7 615
(8 550)
The consolidated financial statements on December 31
st
, 2018 as well as detailed explanations on the evolution of accounts are presented in the Appendix.
Key results of the Company for 2018 are:
A net gain of €7.6 million in 2018,
compared to a net loss of €8.6 million in 2017, mainly constituted of:
- Revenue of €47.4 million in 2018 (compared to €19.5 million in 2017) which is for €37.1 million the result of the licenses agreements signed with Tonghua Dongbao Pharmaceuticals Co. Ltd (THDB) at the end of April 2018;
Licensing revenues also include $11.6 million (€10.3 million) as a milestone payment initially contested by Eli Lilly & co (“Lilly”), for which Adocia obtained a favorable judgement in August 2018. The payment is expected in 2019;
- Other operating income of €6.5million, come mainly from the research tax credit (CIR) generated on 2018 expenses;
- €44.2 million operating expenses, an €8.9 million increase compared to 2017. If we exclude the expenses related to the legal proceedings, which impacted 2017 and, more significantly, 2018, other operating expenses were stable compared to 2017;
- A fiscal tax profit (by French standards) resulted in a reduced rate tax of €4.1million. This tax has no impact on the cash as the Company will use the withholding tax paid in China when receiving the initial payment from THDB to clear that tax payment.
A cash position of €39.8 million,
impacted by the payment of €37.2 million by THDB and up €5 million compared to December 31
st
, 2017 position.
- Over the full year 2018, the net amount of cash needed to finance operations amounted to €32 million. If we exclude the expenses related to the legal proceedings, cash flow amounted to €23.1 million compared to €21.1 million over the same period in 2017.
- The cash position by the end of December 2018 does not include the payment due by Lilly following the favorable ruling received by Adocia in the first phase of the arbitration. The payment of $11.6 million (or €10.3 million) as well as the interests accrued of €1.6 million, is expected in 2019, after the conclusion of the second phase of the arbitration.
- Financial debts at the end of December 2018 totaled €7.1 million (compared to €7.6 million by the end of 2017) and consisted essentially of the loan contracted in 2016 to finance the acquisition of the building in which the headquarters and the research center of the Company are located.
“The cash position at the end of 2018 increased by €5 million compared to the previous year thanks to the initial upfront payment of $50 million received from Tonghua Dongbao »,
said Valérie Danaguezian, Chief Financial Officer of Adocia. “
In 2018, the ongoing two phases of the arbitration procedure against Eli Lilly had an exceptional impact on our general and administrative expenses. At the end of December 2018, with a cash position close to €40 million, the Company has greater financial visibility and has the means to continue its development plan.”
Key events in 2018 and perspectives for 2019:
2018 was marked by the signature of a strategic alliance with the company Tonghua Dongbao Pharmaceuticals Co. Ltd (« THDB »), Chinese leader of the production and commercialization of insulin. In April 2018, Adocia and THDB announced the signature of two licenses to develop and commercialize BioChaperone
®
Lispro and BioChaperone
®
Combo in China and other Asian and Middle-East territories. Under the terms of the Licensing Agreements, THDB is responsible for the future development, manufacturing, and commercialization of BioChaperone Combo and BioChaperone Lispro in China and certain other covered territories. Adocia received a total upfront payment of $50 million and is entitled to receive development milestone payments up to $85 million, as well as double-digit royalties on the sale of both products in the territories. Since the signature, the two companies actively worked on technology transfer to enable the manufacturing of the two products. THDB envisaged in 2019 to start a Phase 3 for BioChaperone Lispro in 2019 and a first clinical study for BioChaperone Combo at the end of 2019.
In June 2018, the partnership with THDB, was reinforced by two global supply agreements for insulin lispro and insulin glargine. Under the terms of the Supply Agreements, THDB will manufacture and supply insulin lispro and insulin glargine (APIs) to Adocia worldwide, excluding China. These agreements offer Adocia the opportunity to further develop the BioChaperone Lispro and BioChaperone Combo projects and open additional collaboration opportunities. Adocia is preparing a « bridging » clinical study to qualify the insulin lispro from THDB as a source equivalent to Lilly’s insulin lispro. This study should be the only one required by regulatory agencies to enable BioChaperone Lispro to enter in phase 3.
From a clinical perspective, in 2018 Adocia initiated a first-in-human clinical trial of BioChaperone
®
Pramlintide Insulin (BC Pram Ins). This trial in people with type 1 diabetes, which positive topline results were announced in September 2018, showed a significant 97% decrease in blood glucose excursion over the first two hours after the meal with BC Pram Ins compared to Humalog
®
. The product was well tolerated. Adocia plans to initiate a second, repeated administration trial in Q2 2019.
The development of our varied portfolio products to date revealed unique properties of the BioChaperone technology, which notably enables to significantly improve single agents and to combine multiple therapeutic proteins. In order to expand the use of this technology, Adocia announced early in 2018 that BioChaperone® would now be deployed in a selected range of injectable therapeutics across numerous therapeutic areas. Initial programs added to the portfolio include a ready-to-inject version of teduglutide for the treatment of short bowel syndrome and a fixed dose combination of glucagon and exenatide for the treatment of obesity, both in preclinical stage.
Lastly, regarding legal proceedings, the first phase of the arbitration procedure initiated by Adocia against Lilly concluded in favor of Adocia. The Arbitration Tribunal awarded Adocia USD 11.6 million, as well as interests.
Adocia’s additional claims against Lilly for a revalued amount of USD 1.3 billion and the counterclaims of Lilly for an amount of USD 188 billion, remain pending, with a decision of the court expected in the course of 2019.
Finally, October 2018, Lilly filed a civil complaint against Adocia in the United States District Court of the Southern District of Indiana to seek a declaratory judgment for two of its US patents regarding ultra-rapid insulin formulation (Lilly’s United States Patent Nos. 9,901,623 and 9,993,555 entitled “Rapid-acting insulin compositions”). Lilly contends in its complaint that it filed the action because Adocia has asserted that Lilly’s patents reflect Adocia’s inventive contribution. We do not expect the matter to be resolved during this fiscal year.
About Adocia
Adocia is a clinical-stage biotechnology company that specializes in the development of innovative formulations of already-approved therapeutic proteins and peptides for the treatment of diabetes and other metabolic diseases. In the diabetes field, Adocia’s portfolio of injectable treatments is among the largest and most differentiated of the industry, featuring six clinical-stage products. Additionally, Adocia recently expanded its portfolio to include the development of treatments of obesity and short bowel syndrome.
The proprietary BioChaperone
®
technological platform is designed to enhance the effectiveness and/or safety of therapeutic proteins while making them easier for patients to use. Adocia customizes BioChaperone to each protein for a given application. Adocia’s clinical pipeline includes five novel insulin formulations for the treatment of diabetes: two ultra-rapid formulations of insulin analog lispro (BioChaperone
®
Lispro U100 and U200), a combination of basal insulin glargine and rapid-acting insulin lispro (BioChaperone
®
Combo), a rapid-acting formulation of human insulin (HinsBet
®
U100), and a prandial combination of human insulin with amylin analog pramlintide (BioChaperone
®
Pramlintide Insulin). It also includes an aqueous formulation of human glucagon (BioChaperone
®
Glucagon) for the treatment of hypoglycemia. Adocia preclinical pipeline includes combinations of insulin glargine with GLP-1 receptor agonists (BioChaperone
®
Glargine GLP-1) for the treatment of diabetes, a ready-to-use combination of glucagon and a GLP-1 receptor agonist BioChaperone
®
Glucagon GLP1) for the treatment of obesity and a ready-to-use aqueous formulation of teduglutide (BioChaperone
®
Teduglutide) for the treatment of short bowel syndrome.
Adocia and Chinese insulin leader Tonghua Dongbao entered into a strategic alliance. In April 2018, Adocia granted Tonghua Dongbao licenses to develop and commercialize BioChaperone Lispro and BioChaperone Combo in China and other Asian and Middle-Eastern territories. The licensing included 50 million dollars upfront and up to 85 million dollars development milestones, plus double-digit royalties on sales. In June 2018, Tonghua Dongbao agreed to manufacture and supply active pharmaceutical ingredients insulin lispro and insulin glargine to Adocia globally, excluding China, to support Adocia’s portfolio development in these territories.
Adocia aims to deliver “Innovative medicine for everyone, everywhere.”
To learn more about Adocia, please visit us at
For more information please contact:
Adocia
Gérard Soula
Chairman and CEO
contactinvestisseurs@adocia.
com
Ph.: +33 4 72 610 610
Adocia Press Relations Europe
MC Services AG
Raimund Gabriel
adocia@mc-services.eu
Ph.: +49 89 210 228 0
Adocia Investor Relations USA
The Ruth Group
Tram Bui
tbui@theruthgroup.com
Ph.: +1 646 536 7035
Disclaimer
This press release contains certain forward-looking statements concerning Adocia and its business. Such forward-looking statements are based on assumptions that Adocia considers to be reasonable. However, there can be no assurance that the estimates contained in such forward-looking statements will be verified, which estimates are subject to numerous risks including the risks set forth in the “Risk Factors” section of the Reference Document filed with the French Autorité des marchés financiers on April 19, 2018 (a copy of which is available at
) and to the development of economic conditions, financial markets and the markets in which Adocia operates. The forward-looking statements contained in this press release are also subject to risks not yet known to Adocia or not currently considered material by Adocia. The occurrence of all or part of such risks could cause actual results, financial conditions, performance or achievements of Adocia to be materially different from such forward-looking statements.
This press release and the information contained herein do not constitute an offer to sell or the solicitation of an offer to buy Adocia shares in any jurisdiction.
