emphasis mine, no fixed font with intent........
Thursday October 18, 6:40 am Eastern Time
Press Release
SOURCE: Biacore
Biacore Interim Report January - September 2001
LONDON, Oct. 18 /PRNewswire/ --
* Biacore (Nasdaq: BCOR; SSE: BCOR; Reuters: BCOR.N) continued the
positive sales trend seen during the first half of the year. Sales
increased by 29% in the third quarter. During the first three quarters
of 2001, sales increased by 35%.
* Biacore continued its strategy of investing in marketing to support the
introduction of two new systems for the pharmaceutical and
biotechnology industries and in development to commercialize its unique
SPR array chip technology. As a result of these investments, earnings
per share in the third quarter fell by 9% to SEK 1.07 (1.17). Earnings
per share for the first nine months of 2001 increased by 6% to
SEK 3.37 (3.19).
* Biacore(R)S51, the Company's first new high-performance system for lead
optimization and certain specific ADME applications, was launched in
the third quarter. Millennium Pharmaceuticals Inc. was the first
customer for this system.
* Biacore also launched its new Biacore(R)C system. This system, which
was developed with Boehringer Ingelheim Pharma, is used for quality
control applications in manufacturing. Biacore(R)C extends further
Biacore's product offering to the pharmaceutical and biotechnology
industries.
* A decision has been made to co-locate the Group Management and the
Pharmaceutical/Biotechnology Industry Business Unit in Switzerland in
order to support the continued build-up of this key Business Unit.
This co-location is planned to take place in the third quarter 2002.
* Biacore's rapid sales increase during the first three quarters of the
year could well serve as a strong argument for raising the forecast for
the full-year 2001. However, in view of the current world political
and economic uncertainties, we maintain the previous forecast:
Full-year sales 2001 are expected to increase by more than 20%.
January - September July - September
2001 2000 Change 2001 2000 Change
Sales,
SEK million 368.7 273.5 35% 113.8 88.1 29%
Operating income,
SEK million 38.4 40.4 -5% 9.2 14.8 -38%
Operating margin, % 10 15 8 17
Income after
financial items,
SEK million 50.2 46.1 9% 16.2 17.4 -7%
Earnings per share,
SEK 3.37 3.19 6% 1.07 1.17 -9%
OPERATIONAL REVIEW JANUARY-SEPTEMBER 2001
Amounts stated in this report pertain to the Biacore Group, unless indicated otherwise. Figures in parentheses refer to the
corresponding period 2000.
Biacore's third quarter results reflect the key trends that have been seen in the Company's business through the first half of
2001. Sales continued to grow rapidly as both of Biacore's key customer groups -- the pharmaceutical and biotechnology
industries and the life science research market -- continued to buy into the value that the Company's SPR technology can
deliver. In the third quarter, Biacore's sales increased by 29% to SEK 113.8 million with demand being particularly strong from
life science researchers working in the area of proteomics. Overall sales for the first three quarters of 2001 were up 35% to
SEK 368.7 million. Excluding the impact of changes in exchange rates, sales increased by 24%.
The driving force of Biacore's strong sales growth continues to be Biacore®3000, a system that can perform an impressive
range of molecular binding studies. Biacore®3000 has played an important role in the Company's aggressive strategic move to
become a value added technology supplier to the drug discovery industry.
Biacore®3000 is used for applications in the critical areas of drug discovery upstream of high-throughput screening (HTS).
These include target identification and validation, and assay development for HTS. The system has also been well accepted by
academic customers in Biacore's core basic life science research market where it is used to solve a wide range of biological
research problems, increasingly in the field of proteomics.
Sales were divided geographically as follows:
January-September July-September
SEK million 2001 2000 Change 2001 2000 Change
Americas 185.9 129.8 43% 57.1 40.6 41%
Europe 87.5 92.6 -6% 24.9 32.5 -23%
Asia-Pacific 95.3 51.1 86% 31.8 15.0 112%
Sales during the third quarter were strong in the important American market where Biacore's life science customers in particular
contributed to a 41% increase in third quarter sales. In Europe, sales fell in the third quarter by 23%, mainly due to a delay in
funding. In Asia Pacific, Biacore's sales more than doubled in the third quarter, mainly due to a significant increase in sales to
the pharmaceutical industry in Japan.
The 82.2% gross margin achieved in the third quarter of 2001 was consistent with prior periods.
Biacore continued its strategy of investing in its future growth. Total costs for marketing, administration and research and
development increased by 40% to SEK 85.3 million (60.8) in the third quarter. This represents a slowdown in the growth seen
during the first half of 2001. Marketing and sales costs rose by 41% compared with the third quarter last year, mainly as a
result of the launch of two new systems, Biacore®S51 and Biacore®C. However, marketing and sales costs were lower in the
third quarter than in the second quarter 2001. In total marketing and sales costs amounted to SEK 45.6 million (32.4) in the
third quarter.
R&D spending increased by 74% in the third quarter to SEK 22.8 million (13.1). This increase reflects the investment that was
made in the Company's overall research efforts as well as the SEK 8.0 million that was spent to commercialize Biacore's unique
SPR array chip technology. This technology will provide major throughput advantages and as a result will transform Biacore's
product offering to both of its key customer groups. A total of SEK 21.6 million has been spent on SPR array chip technology
during the period January-September 2001 (10.0).
In the third quarter, administration expenses increased by 10% to SEK 16.9 million (15.3).
Operating income for the third quarter amounted to SEK 9.2 million (14.8), a decrease of 38% as a result of the Company's
much higher investment in research and development and marketing activities. The operating margin was 8% (17). Currency
differences amounted to SEK 2.1 million (5.6) in 'Other income and expenses' and SEK 0.2 million (1.0) in 'Financial items'.
The sale of one million shares in Axiom Biotechnologies Inc. for USD 3 million to Axiom resulted in a capital gain of SEK 4.6
million, which is included in financial items.
The tax charge in the first three quarters was 33% (32) of income after financial items.
Net income in the third quarter was SEK 10.6 million (11.5), giving a 9% decrease in diluted earnings per share to SEK 1.07
(1.17).
CAPITAL EXPENDITURES
During the first three quarters of 2001, capital expenditures totaled SEK 32.1 million (8.8). Approximately SEK 16 million
related to buildings and construction-in-progress.
PERSONNEL
At the end of September 2001, Biacore had 280 (218) permanent employees. During 2001, the number of employees has
increased by 3 people in the third quarter, by 28 in the second quarter and by 21 in the first quarter.
CO-LOCATION OF GROUP MANAGEMENT/PHARMACEUTICAL & BIOTECHNOLOGY BUSINESS
UNIT
A decision has been made to co-locate the Group Management with the Pharmaceutical & Biotechnology Industry Business
Unit in Switzerland. This co-location is designed to have positive effects on the continued build-up of this Business Unit, which
is expected to contribute substantially to the Group's future sales growth. In addition, the co-location is expected to result in
positive financial effects long-term for the Group.
Uppsala will remain the base of the Company and the Group's center for R&D and manufacturing. Biacore expects to expand
further these core activities in Uppsala.
The co-location is planned to take place during the third quarter 2002. The Board has commissioned the President to begin
negotiations with the unions, as required under Swedish law.
BUSINESS UNIT REVIEW
All of Biacore's three key business units made good progress during the third quarter with the Pharmaceutical/Biotechnology
Business Unit in particular enjoying an important milestone with the introduction of not one but two new systems --
Biacore®S51 and Biacore®C.
Pharmaceutical/Biotechnology Business Unit
Biacore's strategic focus on the drug discovery market is based on its confidence that its systems are able to overcome some of
the key bottlenecks faced by the pharmaceutical and biotechnology industries in the development of new medicines.
The success that Biacore has achieved over the last three years with this customer base has fully validated this strategy and as a
result the Company is now seeking to build its market position further with the launch of two systems that have been designed
to meet the clear market needs of the pharmaceutical and biotechnology industries.
New High-Performance System Launched
The first new system that Biacore introduced during the third quarter was Biacore®S51, the Company's initial new
high-performance system. Biacore®S51 has been designed for lead optimization and certain specific ADME applications, two
of the key problem areas faced by the drug discovery industry, particularly downstream of HTS. The new high-performance
systems will complement the Biacore®3000 system, which targets important applications such as target identification and
validation upstream of HTS.
Biacore®S51 is well suited to meet the needs of the pharmaceutical industry in the key areas which it is targeting. This is
because it has been developed in collaboration with a number of major pharmaceutical partners such as SmithKline Beecham,
Pharmacia Corporation and Millennium Pharmaceuticals who purchased the first system. The key benefits that Biacore®S51
brings are its high sensitivity, the high-quality data that it is able to generate and its high-throughput capabilities for the specific
applications for which it has been designed.
Biacore®C System Introduced for QC Applications
The third quarter also saw the launch of the new Biacore®C system for rapid concentration analysis in drug development,
manufacturing quality control (QC) and in-process control applications. Biacore®C is the first SPR-based system for QC
applications, designed specifically for compliance with regulatory requirements and was developed in collaboration with
Boehringer Ingelheim Pharma KG.
As drug companies are increasingly faced with the pressure of bringing new products to market faster while at the same time
still maintaining strict compliance with Good Laboratory (GLP)/Good Manufacturing Practice (GMP), the validation of
analytical systems and procedures becomes a major rate-limiting step. Biacore®C was specifically developed with regulatory
requirements in mind, and is expected to reduce the time for biomolecular analysis while meeting the highest demands for
accuracy, sensitivity and reproducibility.
Biacore®C combines the advantages of the Company's non-label Surface Plasmon Resonance (SPR) technology with
advanced instrumentation and software to offer an unparalleled level of performance and reliability. Biacore®C Control
Software is designed to support the GLP/GMP regulated working processes with built-in validation features in order to comply
with worldwide regulations.
Biacore Acquires Cell-Based Assay Technology
In the third quarter, Biacore acquired from Axiom Biotechnologies Inc. an exclusive license to all of Axiom's proprietary
fluorescent cell-based assay technology, with the exception of flow cytometry-based applications, for a price of USD 5 million.
Biacore's decision to acquire this exclusive license results from its desire to drive the commercialization of this important
technology, which is complementary to Biacore's own molecular-based SPR assay systems.
A new cell-based assay system, which is being licensed from Axiom, is designed to complement the recently launched
Biacore®S51. It is expected that, together, these two systems can provide detailed information on the biological activity of
potential drug candidates in a competitive timeframe and to a depth and quality superior to existing analytical instrumentation,
allowing critical Go / No Go decisions on the development of drug candidates to be made with much greater confidence.
Biacore expects the new cell-based assay system to be launched at the end of 2002.
SPR Array Chip Technology -- A Transforming Technology
The key to Biacore achieving its aggressive medium term growth ambitions is its unique SPR array chip technology. This
technology represents a major breakthrough as it has the potential to increase 1,000 fold the number of binding assays that can
be performed per day. It is this dramatic increase in throughput that Biacore expects will allow it to become a major player in
the proteomics field that is rapidly becoming one of the most important areas of life science research.
The third quarter has seen further progress in Biacore's collaboration with Millennium Pharmaceuticals to commercialize its SPR
array chip technology for proteomics and drug discovery applications.
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 genomic
research as potential therapeutic targets.
Higher Investment to Continue
Biacore's confidence in the substantial commercial potential of its unique SPR array chip technology has led the Company to
invest significantly in this technology in order to bring it to the market as rapidly as possible.
In the year 2001, Biacore is on track to spend in the region of SEK 30 million on commercializing its SPR array chip
technology. This level of spending is in line with plans and is in addition to the Company's on-going level of R&D spending. The
Company expects this level of investment to enable it to launch the first SPR array based systems in 2004.
Life Science Business Unit
The benefits of Biacore's unique SPR array chip technology will also be of major importance for the customers of the
Company's core Life Science Business Unit, particularly those focusing on proteomics research, an area were Biacore's current
systems are increasingly being used.
Biacore continued its life science marketing activities in the proteomics area in the third quarter, focusing on the benefits of using
SPR technology to study protein-protein interactions and for ligand fishing, two key areas of proteomics research.
The third quarter also saw the Life Science Business Unit continue its major marketing campaign highlighting the benefits of
SPR technology as a key tool for cancer research.
The life science research business unit was also active in the third quarter planning the re-launch of Biacore®X, a
semi-automated system for the accurate kinetic characterization of individual samples, to the academic researchers, particularly
in the United States.
Food Business Unit
The third quarter was a busy period for the Company's Food Business Unit. The success of the EC FoodSense project has
acted as an important catalyst in increasing the recognition of the potential uses of Biacore's SPR technology in the area of food
analysis.
The third quarter saw Biacore continue to increase its range of food analysis kits with the launch of Qflex(TM) Kit
Streptomycin. This kit is designed to allow the rapid reliable automated analysis of residues of this important animal health
antibiotic in samples of milk, meat and honey.
FACING THE FUTURE WITH CONFIDENCE
Biacore is confident about its future prospects based on:
* the growth that it expects from its Pharmaceutical/Biotechnology
Business Unit through both its present products and the new systems
that it has recently launched
* the growth prospects for the Company's Life Science Business Unit as a
result of its technology's ability to provide valuable data in the
rapidly growing field of proteomics
* the significant opportunity that exists for its SPR technology to gain
acceptance as a routine analytical/screening tool for the food industry
* the potential of the Company's new high-throughput SPR array chip
technology which will allow Biacore to become a significant player in
the proteomics revolution
* the Company's strong financial position, its broad patent portfolio and
the determination and experience of the Biacore management team.
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with the Swedish Financial Accounting Standards Council's
recommendation No. 20 (RR 20), Interim Financial Reporting.
QUARTERLY SALES VARIATIONS
Biacore's total sales during the period 1998-2000 were divided between the quarters as follows:
Quarter 1 22% Quarter 3 18%
Quarter 2 22% Quarter 4 38%
OUTLOOK FOR THE FULL-YEAR 2001
Biacore's rapid sales increase during the first three quarters of the year could well serve as a strong argument for raising the
forecast for the full-year 2001. However, in view of the current world political and economic uncertainties, we maintain the
previous forecast: Full-year sales are expected to increase by more than 20%.
Uppsala, Sweden, October 18, 2001
BIACORE INTERNATIONAL AB (publ)
Ulf Jonsson
President
This interim report has not been subject to examination by the Company's auditors.
FINANCIAL INFORMATION
Biacore's Year-end Report 2001 will be published on Thursday, February 21, 2002.
Biacore is the global market leader in Surface Plasmon Resonance (SPR) based biosensor technology with its own operations
in the U.S., across Europe, Japan, Australia and New Zealand. A strong patent portfolio protects Biacore's technology. Target
groups consist primarily of medical and life science research laboratories and pharmaceutical and biotechnology companies all
over the world. Biacore focuses on drug discovery as its prime area for future growth. Based in Uppsala, Sweden, the
Company is listed on the Stockholm Stock Exchange and Nasdaq in the U.S.
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.
Biacore Consolidated Income Statements
Full
January-September July-September year
SEK million 2001 2000 Change 2001 2000 Change 2000
Sales 368.7 273.5 35% 113.8 88.1 29% 438.8
Cost of goods sold -67.7 -51.0 33% -20.3 -16.7 22% -78.1
Marketing -132.4 -94.5 40% -45.6 -32.4 41% -147.4
Administration -58.4 -45.4 29% -16.9 -15.3 10% -60.8
Research and development -77.7 -44.2 76% -22.8 -13.1 74% -72.8
Other income and
expenses 9.6 5.7 2.2 5.5 3.3
Amortization of goodwill -3.7 -3.7 -1.2 -1.3 -5.0
Operating income 38.4 40.4 -5% 9.2 14.8 -38% 78.0
Financial items, net 11.8 5.7 7.0 2.6 8.7
Income after financial
items 50.2 46.1 9% 16.2 17.4 -7% 86.7
Income taxes -16.6 -14.9 -5.6 -5.9 -27.6
Net income 33.6 31.2 10.6 11.5 59.1
Basic earnings per
share, SEK 3.45 3.20 1.09 1.18 6.06
Diluted earnings per
share, SEK 3.37 3.19 1.07 1.17 6.02
No. of shares, average,
diluted, thousands 9,977 9,773 9,930 9,820 9,817
Net income 33.6 31.2 10.6 11.5 59.1
Stock options issued 12.8 -- -- -- --
Currency translation
differences 12.8 9.2 2.2 8.2 5.9
Change in shareholders'
equity 59.2 40.4 12.8 19.7 65.0
Quarterly Income Statements
July- April- Jan.- Oct.- July- April- Jan.-
Sept. June March Dec. Sept. June March
SEK million 2001 2001 2001 2000 2000 2000 2000
Sales 113.8 122.4 132.5 165.3 88.1 94.4 91.0
Cost of goods sold -20.3 -23.8 -23.6 -27.1 -16.7 -19.7 -14.6
Marketing -45.6 -47.8 -39.0 -52.9 -32.4 -33.4 -28.7
Administration -16.9 -18.5 -23.0 -15.4 -15.3 -17.6 -12.5
Research and development -22.8 -29.7 -25.2 -28.6 -13.1 -14.8 -16.3
Other income and
expenses 2.2 2.1 5.3 -2.4 5.5 0.8 -0.6
Amortization of goodwill -1.2 -1.3 -1.2 -1.3 -1.3 -1.2 -1.2
Operating income 9.2 3.4 25.8 37.6 14.8 8.5 17.1
Financial items, net 7.0 2.6 2.2 3.0 2.6 1.2 1.9
Income after financial
items 16.2 6.0 28.0 40.6 17.4 9.7 19.0
Income taxes -5.6 -2.0 -9.0 -12.7 -5.9 -3.1 -5.9
Net income 10.6 4.0 19.0 27.9 11.5 6.6 13.1
Basic earnings per
share, SEK 1.09 0.41 1.95 2.86 1.18 0.68 1.34
Diluted earnings per
share, SEK 1.07 0.40 1.91 2.80 1.17 0.68 1.34
No. of shares, average,
diluted, thousands 9,930 10,023 9,943 9,957 9,820 9,750 9,750
Sales by region
Jan.- Jan.- July- April- Jan.-
Sept. Sept. Sept. June March
SEK million 2001 2000 2001 2001 2001
Americas 185.9 129.8 57.1 54.7 74.1
Europe 87.5 92.6 24.9 39.8 22.8
Asia-Pacific 95.3 51.1 31.8 27.9 35.6
368.7 273.5 113.8 122.4 132.5
Sales by region
Oct.- July- April- Jan.-
Dec. Sept. June March
SEK million 2000 2000 2000 2000
Americas 62.1 40.6 43.8 45.4
Europe 46.5 32.5 30.9 29.2
Asia-Pacific 56.7 15.0 19.7 16.4
165.3 88.1 94.4 91.0
Biacore Consolidated Balance Sheets
September 30 Dec. 31
SEK million 2001 2000 2000
Intangible assets 86.8 36.5 32.8
Property, plant & equipment 106.5 83.8 83.4
Long-term investments 40.5 55.6 68.0
Other long-term assets 23.2 19.5 22.8
Other current assets 209.6 162.7 169.0
Liquid funds 247.1 243.6 267.8
Total assets 713.7 601.7 643.8
Shareholders' equity 553.3 469.5 494.1
Provisions 58.6 45.2 54.4
Liabilities 101.8 87.0 95.3
Total shareholders' equity and
liabilities 713.7 601.7 643.8
Financial structure
Operating capital 287.0 196.1 188.3
Long-term investments 40.5 55.6 68.0
Net interest-bearing assets 220.8 215.9 243.6
Net payable and deferred income tax
asset 5.0 1.9 -5.8
Shareholders' equity 553.3 469.5 494.1
Biacore Consolidated Statements of Cash Flows
January-September Full year
SEK million 2001 2000 2000
Net income 33.6 31.2 59.1
Less: Depreciation and amortization 14.7 14.4 19.4
Change in working capital -15.6 6.3 13.9
Other 2.8 4.3 5.9
Cash flows from operating activities 35.5 56.2 98.3
Payments for purchase of businesses -- -0.8 -0.8
Purchase of intangible assets -56.3 -- --
Purchase of property, plant and
equipment -32.1 -8.8 -14.2
Repayment of purchase price for real
estate -- -- --
Proceeds from sale of property, plant
and equipment -- -- 1.5
Purchase of long-term investments -- -42.2 -50.8
Proceeds from sale of long-term
investments 32.2 -- --
Cash flows from investing activities -56.2 -51.8 -64.3
Change in current financial
liabilities 0.0 -2.5 -7.9
Cash flows from financing activities 0.0 -2.5 -7.9
Net change in liquid funds -20.7 1.9 26.1
Key figures
Operating margin 10.4% 14.8% 17.8%
Return on operating capital 21.5% 26.7% 39.4%
Return on equity 8.6% 9.3% 12.8%
Equity ratio 78% 78% 77%
Shareholders' equity per share,
diluted, SEK 55.41 47.14 49.66
No. of shares, thousands 9,750 9,750 9,750
No. of shares, end of period,
diluted, thousands 9,986 9,960 9,950
No. of shares, average, diluted,
thousands 9,977 9,773 9,817
SOURCE: Biacore |
