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Viragen losses deepen in '05, lists going concern
Wednesday September 14, 4:35 pm ET
Biotechnology firm Viragen is looking for a cure to its financial woes as it discloses a $26.2 million loss in 2005 and a "going concern" note about the company's ability to continue from its independent accountant.
In report for the fiscal year ended June 30, the Plantation-based biotech reported losing $26.2 million, or 71 cents a share, on sales of $278,784. The year before, the loss was $18.2 million, or 55 cents a share, on sales of $266,137.
Viragen (AMEX: VRA - News) ended 2005 with a working capital deficit of $7.3 million and $6.9 million in cash. It finished the 2004 period with working capital of $25.2 million and $22.8 million in cash.
The 2005 loss included a $6.9 goodwill impairment charge as Viragen decreased the value of its division selling Multiferon, its only approved product, because of lower-than-expected sales. The company also took a $16.1 million charge to working capital for shifting convertible notes due March 31 from long-term to short-term debt.
Viragen's annual report stated it has enough cash to operate through at least Dec. 31, but it needs additional funding to continue after that.
"We are currently addressing financial priorities to ensure the company is able to capitalize on expected near-term achievements," Viragen President and Chief Executive Officer Charles A. Rice said. "We hope to be able to announce new agreements that improve our ability to service our debt obligations and raise additional sources of working capital in the very near term."
Viragen has applied for Swedish regulatory approval to make its Multiferon a first-line treatment for malignant melanoma patients, rather than its current second-line status. The company said it expects a decision by the end of this year.
Viragen also said it plans to launch the drug in Chile through a distribution agreement in the fourth quarter.
The company's annual report said it would require significant additional financing to complete additional clinical trials for European Union or U.S. regulatory approval.
Its other major research projects, avian transgenics and antibodies, have no set schedule for commercial development.
Shares closed down 6 cents to 61 cents. The 52-week high was $1.34 on Oct. 5. The 52-week low was 54 cents on May 18.
Published September 14, 2005 by the South Florida Business Journal |
