many more details, but nothing about percent interest.....
Monday July 17, 10:51 am Eastern Time
Company Press Release
SOURCE: Biacore
Biacore: Half-Year Report January - JUNE 2000
-- Biacore's rapid growth continues. Sales increased by 30%.
-- Accelerated growth in Europe, strong recovery in Asia.
-- Operating income increased by 12%. Accelerated development of the new SPR array chip
technology is progressing according to plan.
-- Collaboration agreement signed with Millennium regarding the SPR array chip technology.
-- Agreement with Axiom to market their cell based analysis system.
-- New pharmaceutical & biotechnology industry business unit established in Switzerland.
-- For the full-year 2000, a sales increase in the range of 20% is expected. The previous forecast
indicated an increase of at least 15%.
LONDON, July 17 /PRNewswire/ --
January - June April - June
2000 1999 Change 2000 1999 Change
Sales, SEK million 185.4 142.7 +30% 94.4 71.6 +32%
Operating income,
SEK million 25.6 22.9 +12% 8.5 10.8 -21%
Operating margin, % 14 16 9 15
Income after financial
Items, SEK million 28.7 27.1 +6% 9.7 12.8 -24%
Earnings per share, SEK 2.02 2.01 0% 0.68 0.88 -23%
OPERATIONAL REVIEW JANUARY-JUNE 2000
Amounts stated in this report pertain to the Biacore Group (Nasdaq: BCOR - news), unless indicated otherwise. Figures in
parentheses refer to January-June 1999.
Biacore's rapid growth continues. Sales during the first six months of 2000 increased by 30% compared with the same period
last year. The growth is to a great extent attributable to Biacore's most advanced system, BIACORE®3000. Excluding
currency effects, sales increased by 22%.
Sales were divided geographically as follows:
January-June April-June
SEK million 2000 1999 Change 2000 1999 Change
Americas 89.2 62.5 +43% 43.8 37.1 +18%
Europe 60.1 42.5 +41% 30.9 17.2 +80%
Asia-Pacific 36.1 37.7 -4% 19.7 17.3 +14%
The sales increase in the Americas (mainly the U.S.) continues. The increase moderated somewhat during the last quarter after
two quarters of exceptionally strong growth. The sales development in Europe was extremely strong with most major markets
showing good growth in the second quarter. The strong demand for Biacore's systems was led by pharmaceutical and
biotechnology companies both in the Americas and in Europe. In Asia-Pacific, a pronounced recovery was seen and sales
developed favorably in the period April-June.
The gross margin was 81.5% (81.6). In the second quarter, the gross margin was 79.1% (84.0). The difference is largely
attributable to currency effects, increased payroll expenses and shipping costs, and the margin is within normal variations.
Total costs for marketing, administration and research and development amounted to SEK 123.3 million (89.4), an increase of
38%. Of this increase, SEK 6.6 million relates to investments in Biacore's new SPR array chip technology. Included in
administrative costs are SEK 10.4 million from provisions for employee bonuses and stock option programs, which have
resulted from the very positive development of Biacore during 2000. Administrative expenses were higher also as a result of
costs for external services related to the higher level of business development activity seen in the second quarter.
Operating income amounted to SEK 25.6 million (22.9), an increase of 12%. The operating margin was 14% (16). Currency
differences amounted to SEK 0.2 million (-0.9) in 'Other income and expenses' and SEK -0.1 million (0.9) in 'Financial items.'
The tax charge was 31% (28) of income after financial items.
Net income was SEK 19.7 million (19.6), giving earnings per share of SEK 2.02 (2.01).
INVESTING ACTIVITIES
Capital expenditures totaled SEK 6.9 million (12.8).
PERSONNEL
At the end of June 2000, Biacore had 206 (178) permanent employees.
DRUG DISCOVERY -- CONTINUED POSITIVE DEVELOPMENT WITH IMPORTANT COLLABORATIVE
AGREEMENTS
Biacore expects that sales of systems and technology to the drug discovery industry will be the company's main source of
growth over the remainder of this decade. Biacore continues to be well positioned to achieve sales in excess of SEK 1 billion in
five years' time based on the prospects for its existing products, its new high performance systems and the potential of
technologies such as its new SPR array chips. Biacore's present core business, basic life science research, which is growing at
an attractive rate, will also make a significant contribution to this sales target.
Biacore views the drug discovery market as an important strategic opportunity because its technology has the potential to
significantly improve the economics of the drug discovery process. This is because the data generated from Biacore's systems
allow its customers in the pharmaceutical/biotechnology industry to make better-informed decisions at a number of key points in
the drug discovery process. This in turn enables them to develop better drug candidates and move them into clinical trials faster
and more efficiently than is currently the case.
The drug discovery market represents a sizeable opportunity for Biacore. In 2000, the pharmaceutical industry is expected to
invest well in excess of USD 2 billion* in analytical instruments and reagents. Current projections forecast that this market will
continue to grow at over 15%* per annum.
Building a Market Position: BIACORE®3000
Biacore has already made significant inroads into the drug discovery market. The BIACORE®3000 system has been well
accepted by both pharmaceutical and biotech customers. This automated system is targeted at applications upstream of high
throughput screening (HTS), particularly target identification and validation, areas which are increasingly based on
proteomics** research. The growing sales of this system provide clear evidence of companies in the drug discovery market
recognizing the value of Biacore's core SPR technology.
Next step: High-Performance Systems
Biacore has continued to make further progress with the development of the new generation of high-performance systems that
will help solve some of the major analytical problems facing the drug discovery industry, particularly downstream of HTS.
These include hit characterization, lead optimization and ADME***.
The new systems which are being developed in collaboration with companies such as SmithKline Beecham, Pharmacia and
Millennium will be more sensitive, provide higher quality data and have a throughput capability that will meet the growing
requirements of the customers. Biacore expects that these collaborations will also generate data that will be important for
marketing these systems once they are commercialized. The first of these new systems will be launched in 2001.
Broadening the Portfolio -- The Axiom Deal
A key element of Biacore's strategy in the drug discovery market is to become a high value added technology supplier based
around its unique SPR platform. In May, the company took a major step to achieving this goal when it acquired exclusive
global rights to market a new cell based pharmacology system, HT-PS 100 from Axiom Biotechnologies Inc. As part of this
deal Biacore made a USD 4 million equity investment in Axiom in order to provide the funds necessary to complete the
development of this state of the art cell based system.
The new HT-PS 100 system will complement Biacore's own molecular based high performance systems that are currently
under development. In combination these two systems will allow Biacore to offer pharmaceutical/biotechnology companies an
integrated solution of both cellular and molecular based assays that is designed to accelerate significantly the identification of
quality lead compounds. Both of these new systems are expected to reach the market in the latter half of 2001.
The agreement also includes co-promotion rights to selected cell lines developed by Axiom and an option for Biacore to license
Axiom's multi channel high throughput system, HT-PS Ultra.
Mr. Lars-Goeran Andren, Executive Chairman of Biacore, will become a Non-Executive Director of Axiom. Biacore has also
been granted an option to increase its stake in the company further at a pre-determined price.
SPR Array Chip Technology -- New Collaboration Agreement with Millennium
The key to Biacore achieving its longer-term growth ambitions is its unique SPR array chip technology. This technology is a
major breakthrough for Biacore as it can potentially increase 1,000 fold the number of binding assays that can be analyzed per
day. This will allow products based on Biacore's affinity biosensor technology to be used in many more applications than is the
case today. This dramatic increase in throughput should allow Biacore to become a major player in the so-called proteomics
revolution that is set to have a great impact on the life science industry.
Biacore has recently entered a very important three-year co-development deal with Millennium Pharmaceuticals Inc. as part of
its program to successfully commercialize its new SPR array chip technology in the drug discovery market. This new agreement
is in addition to the collaboration on Biacore's high-performance systems that was signed with Millennium in late 1999.
Each company will commit a dedicated research team to the joint development program. Biacore will supply and develop all
necessary SPR technology expertise, instrumentation, array chips, consumables and software. Millennium will contribute
specific assay and drug discovery applications to develop defined assay methodologies.
Biacore will retain the right to commercialize technology-related developments arising from this collaboration. Millennium will
benefit from early access to the technology, and an anticipated positive uplift in the productivity of its own drug discovery
programs.
The Millennium -- Biacore collaboration will focus on developing specific high throughput applications that will lead to
important productivity enhancing advances such as:
-- The characterization of novel proteins identified through genomic and
proteomic research as potential drug targets
-- The ability to map pathways by higher-throughput detection and
measurement of protein: protein interactions
-- The ability to perform high throughput characterization of potential
lead compounds to select those most likely to have drug-like
properties
These areas all represent critical bottlenecks in the current drug discovery process and account for a significant proportion of
pharmaceutical R&D spending.
Biacore is confident that the successful development of its new SPR array chip technology will provide the pharmaceutical
industry with a unique tool to both explore protein function and to evaluate the vast number of proteins identified from genomics
as potential therapeutic targets.
New Business Unit Sited in Switzerland
In order to fully capitalize on the exciting prospects that exist for Biacore's drug discovery business, a separate business unit has
been established for Pharmaceutical & Biotechnology Industry operations. Mr. Julian Abery, who has played a crucial role in
developing our drug discovery activities over the last two years, is the head of this new business unit. The business unit is
headquartered in Neuchatel Switzerland. This location was mainly chosen because of its proximity to a number of the world's
leading centers for pharmaceutical/biotech research.
EXTRA GENERAL MEETING
The Board of Directors of Biacore has today decided to call an extra general meeting of shareholders in the near future in order
to present a proposal for a long-term incentive program for all employees in the Biacore Group.
APPOINTMENT
Mr Anders Svenberg, head of Human Resources, has today been appointed Executive Vice President of Biacore International
AB.
PARENT COMPANY
Biacore International AB handles group-wide functions and provides certain intercompany services but has no other business of
its own. Sales during the first half-year 2000 amounted to SEK 3 million (3) and income after financial items was SEK -7
million (-3).
OUTLOOK FOR 2000
For the full year 2000, a sales increase in the range of 20% is expected. The previous forecast indicated an increase of at least
15%.
Uppsala, Sweden, July 17, 2000
Ulf Joensson
President
) Biacore's conclusions of reports from Business Communications Co. Inc. (1998), Hitech Business Decisions (1998)
and market research conducted for Biacore by Scientific Generics Limited (1999).
) Proteomics is the study of structure and function of the proteins expressed in a cell at any one time.
) ADME stands for absorption, distribution, metabolism and excretion and represents the pharma cological
characterization of new drug candidates.
This interim report has not been subject to examination by the Company's auditors.
Biacore's interim report for January-September will be published on Friday, October 20, 2000.
This press release contains certain forward-looking statements within the meaning of the United States Private Securities
Litigation Reform Act of 1995 which, by their nature, involve risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to
differ materially from those expressed or implied by these forward-looking statements.
For further information, please contact:
Lars-Goeran Andren, Executive Chairman, Phone +46-708-54-02-34
Ulf Joensson, President, Phone +46-18-67-57-52
Lars-Olov Forslund, CFO, Phone +46-18-67-57-08 or +46-708-76-56-73
Jan Isoz, Investor Relations, Phone +46-708-10-31-17
More information on Biacore is available at the company's website: www.biacore.com
(SSE: BCOR Nasdaq: BCOR Reuters: BCOR.N)
Biacore is a global market leader in affinity-based biosensor technology with its own operations in the U.S., across Europe,
Japan, Australia and New Zealand. The technology is protected by a strong patent portfolio. Target groups consist primarily of
medical and life science research laboratories and pharma ceutical and biotechnology companies all over the world. Biacore
focuses on drug discovery as the prime area for future growth. Based in Uppsala, Sweden, the company is listed on the OM
Stockholm Exchange and Nasdaq in the U.S.
Biacore Consolidated Income Statements
SEK million January-June April-June Full year
2000 1999 Change 2000 1999 Change 1999
Sales 185.4 142.7 30% 94.4 71.6 32% 340.4
Cost of goods sold -34.3 -26.3 30% -19.7 -12.2 61% -66.2
Marketing -62.1 -50.6 23% -33.4 -27.7 21% -114.0
Administration -30.1 -14.3 110% -17.6 -6.9 155% -34.8
Research and
development -31.1 -24.5 27% -14.8 -12.0 23% -52.9
Other income and
expenses 0.2 -0.8 0.8 -0.3 2.0
Amortization of
goodwill -2.4 -3.3 -1.2 -1.7 -6.9
Operating income 25.6 22.9 12% 8.5 10.8 -21% 67.6
Financial items,
net 3.1 4.2 1.2 2.0 7.7
Income after
financial items 28.7 27.1 6% 9.7 12.8 -24% 75.3
Income taxes -9.0 -7.5 -3.1 -4.2 -24.1
Net income 19.7 19.6 6.6 8.6 51.2
Earnings per share,
SEK 2.02 2.01 0.68 0.88 5.26
Quarterly Income Statements
SEK million April- Jan.- Oct.- July- April- Jan.
June March Dec. Sept. June Mar.
2000 2000 1999 1999 1999 1999
Sales 94.4 91.0 137.4 60.3 71.6 71.1
Cost of goods sold -19.7 -14.6 -27.6 -12.3 -12.2 -14.1
Marketing -33.4 -28.7 -36.9 -26.5 -27.7 -22.9
Administration -17.6 -12.5 -15.1 -5.4 -6.9 -7.4
Research and
development -14.8 -16.3 -15.0 -13.4 -12.0 -12.5
Other income and
expenses 0.8 -0.6 2.1 0.7 -0.3 -0.5
Amortization of
goodwill -1.2 -1.2 -1.9 -1.7 -1.7 -1.6
Operating income 8.5 17.1 43.0 1.7 10.8 12.1
Financial items, net 1.2 1.9 2.6 0.9 2.0 2.2
Income after
financial items 9.7 19.0 45.6 2.6 12.8 14.3
Income taxes -3.1 -5.9 -15.8 -0.8 -4.2 -3.3
Net income 6.6 13.1 29.8 1.8 8.6 11.0
Earnings per share,
SEK 0.68 1.34 3.07 0.18 0.88 1.13
Sales by region
SEK million Jan.- Jan.- April- Jan.- Oct.- July- April- Jan.-
June June June Mar. Dec. Sept. June Mar.
2000 1999 2000 2000 1999 1999 1999 1999
Americas 89.2 62.5 43.8 45.4 51.3 27.4 37.1 25.4
Europe 60.1 42.5 30.9 29.2 50.5 23.2 17.2 25.3
Asia-Pacific 36.1 37.7 19.7 16.4 35.6 9.7 17.3 20.4
185.4 142.7 94.4 91.0 137.4 60.3 71.6 71.1
Biacore Consolidated Balance Sheets
SEK million June 30 Dec. 31
2000 1999 1999
Intangible assets 35.5 53.9 38.3
Property, plant & equipment 81.9 81.0 84.6
Shares 54.0 9.7 17.2
Other long-term assets 14.4 8.5 15.8
Other current assets 159.3 106.1 172.4
Liquid funds 225.0 239.1 241.7
Total assets 570.1 498.3 570.0
Shareholders' equity 449.8 387.1 429.1
Provisions 44.7 55.7 44.5
Liabilities 75.6 55.5 96.4
Total shareholders' equity and
liabilities 570.1 498.3 570.0
Financial structure
Operating capital 193.7 158.5 207.2
Shares 54.0 9.7 17.2
Net interest-bearing assets 201.3 219.5 212.7
Net payable and deferred income
tax receivable 0.8 -0.6 -8.0
Shareholders' equity 449.8 387.1 429.1
Biacore Consolidated Statements of Cash Flows
SEK million January-June Full year
2000 1999 1999
Net income 19.7 19.6 51.2
Less: Depreciation and
amortization 8.8 8.4 17.9
Change in working capital 4.3 -2.4 -36.8
Other 0.2 -0.8 5.1
Cash flows from operating
activities 33.0 24.8 37.4
Payments for purchase of
businesses -0.7 -13.1 -13.9
Purchase of intangible assets -- -- -0.2
Purchase of fixed assets -6.9 -12.8 -22.9
Proceeds from sale of fixed
assets -- -- 0.6
Investment in shares -36.7 -- -7.5
Cash flows from investing
activities -44.3 -25.9 -43.9
Change in current financial
liabilities -5.4 -- 8.0
Cash flows from financing
activities -5.4 0.0 8.0
Net change in liquid funds -16.7 -1.1 1.5
Key figures
Operating margin 13.8% 16.0% 19.9%
Return on operating capital 25.5% 30.4% 38.7%
Return on equity 9.0% 10.4% 12.9%
Equity ratio 79% 78% 75%
Shareholders' equity per share,
SEK 46.13 39.70 44.01
No. of shares 9,750,000 9,750,000 9,750,000
SOURCE: Biacore |
