YEAR-END REPORT JANUARY-DECEMBER 2012
The January–December period and the fourth quarter 2012 in brief
• Net sales increased to MSEK 33.2 (0.0), whereof the fourth quarter increased to MSEK 8.6 (0.0), mainly attributed to the RoRgamma deal with Pfizer
• Net loss for the group improved to MSEK -98.3 (-226.6), whereof the fourth quarter improved to MSEK -9.0 (-50.6). The net loss was positively impacted by a reversal of provisions of MSEK I.5 related to the eprotirome project
• Loss per share was SEK -0.25 (-0.59) SEK, whereof the fourth quarter SEK -0.02 (-0.13)
• Cash flow from operating activities was MSEK -127.8 (-198.3), whereof the fourth quarter MSEK -20.1 (-37.9)
• Cash and cash equivalents and other short-term investments totaled MSEK 54.1 (158.5) at the end of the period
• The rights issue brought a total of MSEK 28.3 net after transaction costs, whereof MSEK 23.9 in the quarter
• Costs attributed to the termination of the eprotirome project amounted to MSEK 33 during 2012. No further costs are expected to burden the project.
Significant events after end of reporting period
• The composition of the Nomination Committee based on shareholdings as of January 31 will be announced in late February.
Conference call / audiocast today at 9.30 a.m. CET
CEO Per Bengtsson will present the report today at 9.30 a.m. in an audiocast, held in Swedish, available via a link on http://www.karobio.se/ and telephone: +46 8 505 56474 or +44 203 364 5374.
Karo Bio’s transformation continued in the fourth quarter. The rights issue in late 2012 raised MSEK 28.3, which will enable us to continue to steer our business to become more cost efficient and commercially oriented. A satisfying message and a positive sign is that the Board has increased its commitment to the company in connection with the rights issue. Both Göran Wessman and Per Anders Johansson increased their respective ownership in Karo Bio to 0.8 percent and 3.9 percent.
Our focus is on creating a better financial balance and at the top of our list is of course increasing our revenue. More cooperations and increased revenues improve our ability to maintain a faster development pace without weakening our financial position as our efforts increase. It is therefore very satisfying that the RORgamma project has continued to advance. This enables us to achieve additional revenue soon, in addition to those already secured. The next opportunity is that we reach a first milestone in the project. A continued positive progression of the project will probably result in an extension of the collaboration with Pfizer after our current research funding expires at year-end. We are proud of our expertise efforts in the project thus far and are working hard to ensure that we succeed in our tasks for 2013 in order to secure additional revenue in the project.
Besides RORgamma we have several other commercial opportunities within our portfolio. The most advanced projects are in the ERbeta field. In the MS project we are awaiting new results from animal studies that could provide additional security in the valuation of the mechanism of action. We believe that these results will further strengthen the project, which increases the opportunity for new revenue.
As for ERbeta in the cancer field, we have the opportunity to secure alternative funding through various forms of grants. Those of you who follow us know that we have planned to move the project to the state of Texas due to the favorable conditions that the state has created for public funding in oncology, a field where Texas has an advanced position. In 2012, however, there has been some turbulence in the funding agency CPRIT which has resulted in the resignation of the senior executives. Consequently, the authorizations for grants have been negatively affected. Karo Bio has therefore decided to postpone the planned re-submission of the grant application until the situation has been clarified. We are working simultaneously on other alternatives for securing grant funding for this project.
Our project in GR inflammation and the preparatory work we do on the NURR1 receptor is at an early stage, so traditional licensing agreements are deemed difficult to establish. Our aim with these projects is rather to generate revenue faster through so-called "feasibility studies" funded by potential partners. A positive outcome from such a study would increase the potential for Karo Bio to sign a license agreement in the next stage.
The net operating expenses have been substantially reduced down to a present level of MSEK 4 – 4.5. With continued work on the cost side and success in any of our projects 2013, Karo Bio will be able to take a further step towards a neutral cash flow. In summary, we continue to work hard to achieve success in the business in order to create the necessary conditions for a commercially successful Karo Bio.
För ytterligare information, vänligen kontakta:
Per Bengtsson, Chief Executive Officer
Telephone: +46 8 608 6020
Karo Bio AB (publ), Novum, 141 57 Huddinge, Sweden
Telephone: +46 8 608 60 00
The information in this report is such that Karo Bio is required to disclose under the Swedish Securities Market Act. The information was disclosed on Febuary 12, 2013 at 8.30 a.m. CET.