FINANCIAL STATEMENT BULLETIN OF BIOHIT 1
BIOHIT OYJ STOCK EXCHANGE RELEASE 12.2.2004 AT 10:00
FINANCIAL STATEMENT BULLETIN OF BIOHIT 1.1. 31.12.2003
The net sales of the Biohit Group totalled MEUR 26.3 (MEUR 25.4) and
the loss was MEUR 0.7 (MEUR -1.8). The growth in net sales was
generated from increased liquid handling sales in the market areas of
North America and Europe.
Net Sales
The net sales of the Biohit Group increased by 4% compared with the
previous year and totalled MEUR 26.3 (MEUR 25.4). During the fourth
quarter the net sales increased by 20% in comparison with the previous
quarter, mainly due to new liquid handling products. The Group net
sales increased especially in the U.S, and France. In 2003 the Group
net sales was generated primarily from the sales of liquid handling
products. Regarding diagnostics, Biohit is currently in the process
for receiving the FDA Approval in the U.S., which enables Biohit to
sell the diagnostic products also for clinical use, in addition to
research use.
The share of exports of Group net sales was approx. 94%. The primary
market area continued to be Europe which constituted approx. 57% of
the Group net sales. Biohit considers North America and Asia to be
important growth markets; especially in China the sales of liquid
handling products demonstrated growth. The decrease of the USD
exchange rate slowed down the growth of net sales considerably.
Result
The loss for 2003 was MEUR 0.7 (MEUR 1.8 in 2002). The operating loss
amounted MEUR 0.2 (MEUR 1.2 loss). The operating loss before goodwill
amortization was MEUR 0.2 (MEUR 0.6 loss). The EBITDA increased by 97%
and was MEUR 1.8 (MEUR 0.9).
The fixed expenses related to the diagnostics business had a negative
impact on the group result.
The distribution of Biohit products in Italy has been reorganized and
it will be conducted in the future solely by local distributors. The
activities of the Biohit Italy subsidiary will therefore be
discontinued. One-time costs MEUR 0.5 relating to the discontinuation
of this subsidiary are included in the 2003 income statement.
The operating expenses include legal expenses of TEUR 150 incurred
during the third quarter. The decision made on the third quarter of
2002 to prolong the goodwill amortization period related to Locus
genex Oy improves the 2003 operating profit by MEUR 0.2 during the
financial year when compared with the prior year.
The net financial expenses totalled MEUR 0.2 (MEUR 0.3).
The income taxes (MEUR 0.3) have been accounted for on the basis of
the result for the financial year. However, deferred tax assets
relating to the taxable losses have not been accounted for. MEUR 0.2
of the income taxes charged to the income statement result from the
decrease in the deferred tax assets relating to the dissolution loss
on Locus genex Oy.
Earnings per share were EUR -0.06 (EUR -0.14). The shareholders´
equity per share totalled EUR 1.08 (EUR 1.15).
Liquidity
The net cash flow provided by operating activities was MEUR 0.9
positive (MEUR 0.5 negative). At the end of the fiscal year the liquid
assets of the Group totalled MEUR 1.1 (MEUR 1.4).
The equity ratio was 64.7% on December 31, 2003 (66.9%).
Investments
The gross investments totalled MEUR 1.2 (MEUR 1.6). The major part of
the investments consisted of machinery and equipment acquired to the
Kajaani plant for the automatization of liquid handling production, as
well as of injection moulding tools used in the production of liquid
handling devices.
The Group research and development expenditure totalled MEUR 1.4 (MEUR
1.8), i.e., 5.5% (7.1%) of net sales.
Personnel
The average number of personnel in 2003 totalled 298 (303), of which
174 (181) were employed by the parent company and 124 (122) by the
subsidiaries.
Main Events of the Financial Year
Liquid Handling
In the area of liquid handling Biohit continued to develop new
pipettor generations. This development work is based on Biohits
liquid handling product strategy in which new market segments have
been identified and created. These segments differ from each other in
terms of the area of application, performance and price.
In its development of liquid handling products Biohit has paid special
attention to the safety and ergonomic aspects of pipettors, which
contribute, e.g., to reducing the risk of work-related upper limb
disorders.
In 2003 Biohit launched the multichannel, electronic eLINE pipettors
(8 and 12 channel versions) for the volume range; 0.2 1,200 ul.
Thus, the eLINE-range has been completed. Previously Biohit has
launched the single-channel versions of the eLINE for the volume range
0.2 5.000 ul).
The electronic eLINE pipettor range has been developed for the most
demanding liquid handling applications. The microprocessor control and
novel construction enable maximum liquid handling performance
providing high accuracy and precision. The ergonomic design of the
eLINE together with electronic tip ejection reduce considerably reduce
the risk of work-related upper limb disorders.
In the area of mechanical liquid handling products Biohit launched the
new mLINE -product family, which covers the volume range 0.5-5,000 ul.
The launched single-channel pipettor is completely autoclavable, and
in its development work special attention has been paid to its
ergonomic properties.
In 2003 Biohit launched new tip boxes and the Refill System for the
tips of liquid handling products. The tip boxes are available both as
presterilized or non-sterilized. The Refill System is environmentally
friendly as the packaging is totally recyclable.
Biohit took into use new automated production lines for pipettor tips.
The clean room -based production method enables, i.e., also the
manufacture of the aforementioned Refill Systems.
Biohit continued to develop further the maintenance, calibration and
training services offered by its subsidiaries and distributors. The
calibration laboratories of Biohit S.A (in France) and Biohit Ltd. (in
the United Kingdom) were accredited by COFRAC (Comité Francais
d´Accreditation) and UKAS (United Kingdom Accreditation Service),
respectively.
In the business area of liquid handling Biohit concluded the following
major agreements in the U.S.:
- OEM-agreement with Hamilton for the electronic ePET pipettor range.
- Private label -agreement for the production of electronic pipettors
for Tyco Healthcare Group LP.
- OEM-agreement with MicroTyping Systems for electronic pipettors. As
a result, Biohit has thus far concluded sales agreements with two
companies belonging to the Johnson & Johnson Group.
- OEM-Agreement with 3M: Three-year additional agreement for the sales
of electronic pipettors and pipettor tips.
- Private Label agreemeent with the distributor chain Fisher
Scientific for all eLINE pipettors. Fisher Scientific sells both in
North and South America all Biohit-labelled pipettor models.
In the area of liquid handling Biohit was awarded in 2003 the
following patents: European patent: 0837731 for the invention Method
for Correcting a Liquid Dispensing Error, and a Liquid Dispensing
Deviceö. Chinese patent: 99803815.6 for the invention Suction
Deviceö, and Russian patent 2217235 for the invention Suction
Deviceö.
Diagnostics
The serum-based diagnostic tests: GastroPanel as well as tests for
diagnosing Systemic lupus erythematosus (SLE) and celiac disease, are
applicable both for research and clinical use. The quick tests for
lactose intolerance and the determination of Helicobacter pylori
infection are performed during gastroscopy. In addition, Biohit
offers 30 monoclonal antibodies primarily for research purposes and
for diagnosing different types of cancer. The cellular fibronectin
(cFn) test kit is intended primarily for research use for studying,
e.g., gastric and colon cancers. The instruments and diagnostic tests
offered by Biohit enable the company to offer complete analyzing
systems for use in various research and clinical purposes. Currently,
the focus of Biohit is to concentrate on the screening, prevention and
diagnostics of diseases related to the gastrointestinal tract.
In 2003 Biohit finished the development work of the quick tests for
lactose intolerance and Helicobacter pylori. These tests will be
launched in early 2004. The preliminary market feedback has been
promising. Approx. 17% of adult population in Finland, and in some
countries even as many as 90%, suffer from lactose intolerance, i.e.,
the deficiency or lack of the lactase enzyme in the small intestine.
Thus far a fast and reliable method for the detection of lactose
intolerance has not been available. The lactose intolerance test
patented by Biohit may become a part of all gastroscopies, which are
performed 100,000 annually in Finland. The price for the lactose
intolerance quick test is EUR 10-15. Due to the fact that the
Helicobacter pylori quick test is easy and rapid to perform, and
competitive in pricing (EUR 8.00), it can be estimated that it may
become part of gastroscopical examinations.
The GastroPanel comprises the following four test kits: Pepsinogen-I,
Pepsinogen-II, Gastrin-17 and Helicobacter pylori. Thus, depending on
the number of patients, the price for testing one patient totals EUR
20-30 for a laboratory. During the financial year the preservation
time concerning Gastrin-17 samples has been improved. Moreover, the
Gastrin-17 test has been made more easy to use, sensitive, and the
duration time for the analysis has been reduced. Finding the solutions
to these problems enables to strengthen possibilities for co-operation
with major diagnostic companies and service laboratory chains.
Moreover, the new sensitive G-17 test enables a more reliable
determination of the esophageal reflux disease (symptom: e.g.,
pyrosis) and the related risk for Barretts oesophagus.
During the financial year a stochastic model had been incorporated
into the GastroSoft program. This probability calculation provides
information on the different diagnostic choices available during the
testing period. The basis of the stochastic model has been derived
from patient data gathered from numerous studies. As to the said
studies both the GastroPanel-examination, as well as gastroscopy and
the related histological examination of biopsy samples have been
performed. The probabilities, as indicated by the program, can be
used, e.g., to follow the curing of the damage of the mucosa of the
stomach or atrophic gastritis subsequent to Helicobacter pylori
eradication therapy. GastroPanel as a method can be stated to be a
more sensitive method for determining the positive or negative changes
in the severity of atrophic gastritis.
In 2003 the following major discovery was made. On the basis of the
result of the GastroPanel, if the patient does not suffer from
Helicobacter pylori infection and the fasting level of G-17 is below
2 pmol/l, the patient may suffer from gastroesophageal reflux disease
or faces the probability of the said disease, and in related severe
complication, Barretts oesophagus, which may lead to cancer. The
lower the level of G-17 in blood, the higher is the risk for the said
diseases.
The prevalence of the gastroesophageal reflux disease is approx. 25 %
of the global population. It would be beneficial to use the
GastroPanel examination when commencing the treatment and during the
follow-up of patients suffering from the said disease. In 2003
Professor Francesco DiMario, a specialist having consulted
AstraZeneca, completed the following booklet, which is related to the
GastroPanel and its benefits: Non-Invasive Diagnosis for Gastric
Diseasesö. The publication will be distributed by AstraZeneca as the
Italian version: Un Approccio Non Invasivo Alla Diagnosi Delle
Malattie Dello Stomacoö for 32,000 General Practitioners during
February 2004. Prof. DiMario leads a research project, in which the
general practitioner performs the GastroPanel examination before
medication for a dyspeptic patient.
Summary on the Areas of Use and Benefits of the GastroPanel
1. Examination of the causes of dyspepsia. Approx. 30% of the global
population suffer from dyspepsia at some stage of their lives.
1.1. Functional dyspepsia. Over half of the dyspeptic cases are
functional. In these cases, the results from GastroPanel and
gastroscopy indicate that the mucosa of the stomach is healthy and
functions normally, i.e., no Helicobacter -pylori infection, no
atrophic gastritis. The GastroPanel distinguishes between functional
dyspeptic cases from those patients suffering from atrophic gastritis
(possible inflammation, damage or malfunctioning of the gastric
mucosa). Atrophic gastritis may by asymptmless or produce very few
symptoms.
1.2 Organic dyspepsia. In these cases the findings of the GastroPanel
examination is nearly always pathological (atrophic gastritis in the
corpus, antrum or both). The diseases related to organic dyspepsia
are: Gastric cancer, and peptic ulcer.
2. GastroPanel provides a diagnosis of Helicobacter pylori
infection and atrophic gastritis as well as risk assessment for
gastric cancer and peptic ulcer. The prevalence of Helicobacter pylori
-infection is on the average over 50% of the global population. Of
these patients approx. 50% will develop atrophic gastritis during
their lifetime. The prevalence of gastric cancer is 0.1-1.0% and that
of peptic ulcer over 10% of the global population.
3. Diagnosis and screening of corpus atrophy, which may cause a
deficiency of vitamin B12. The deficiency may increase the risk of
dementia, depression and polyneuropathies. The deficiency of vitamin
B12 is one factor which increases the level of homocysteine in the
blood and tissues in the body, which is an independent risk factor for
atherosclerosis, and heart and brain strokes. In Finland even as many
as 10% of those over 65 years of age may suffer from the deficiency of
vitamin B12. Especially vegetarians face the risk of the deficiency of
vitamin B12.
4. GastroPanel enables the assessment of the risk of gastroesophageal
reflux disease and its complication, Barretts oesophagus. The
Reflux Chain: From normal to gastroesophageal reflux disease,
erosive esophagitis, Barretts oesophagus and then to cancer. The
prevalence of gastroesophageal reflux disease is approx. 25% of
global population.
Benefits of the GastroPanel
- Simple blood sample-based test
- Non-invasive; risk-free and comfortable for the patient
- Results available quickly fast to diagnose
- Easy and reliable interpretation of the results with the GastroSoft
computer program
- Promotes prioritizing patients needing gastroscopy urgently, which,
as method, is invasive and expensive
- Promotes screening of patients at risk and receive early treatment
- Promotes the following of the medical status of the patient at
regular intervals
- Promotes preventive medicine
- Reduces trial treatments, related possible complications and costs
- Promotes Evidence-Based Medicine, i.e., first, reaching a correct
diagnosis and second, receive proper treatment
- Improves the level of healthcare and quality of life
- Reduces healthcare costs and time both for the patient and the
overall health care system
By the end of 2003 nineteen clinical evaluations related with the
GastroPanel had been completed. Fourteen had been made in Europe,
three in Asia and two in North America. The number of patients studied
in the evaluations totalled 3,697. The results of the said evaluations
have been published internationally in scientific articles and
abstracts. The research results indicate that the GastroPanel
examination is as specific as gastroscopy and the examination of
biopsy samples in the evaluation of atrophic gastritis and related
risks.
By the end of 2003 altogether twenty-five evaluations were in progress
of which fifteen in Europe, four in Asia, two in North America, one in
South America, two in Africa, and one in the Near East. The number of
patients to be studied in these on-going evaluations totals 29,424.
Biohit began negotiations to commence the following six evaluations:
Three in Europe, one in North America, one in South America and one in
the Near East. The number of patients to be studied totals 700.
In September Biohit concluded a distribution agreement with the U.S.
company Techlab Inc. The agreement enables the sales of the
GastroPanel, the GastroSoft, Biohits other diagnostic tests,
monoclonal antibodies and instruments for research use and service
laboratories in the U.S., as well as for clinical and research use in
Canada.
The GastroPanel was taken into use in service laboratories in the
following countries: Finland, France, Germany, Italy, Portugal, Spain,
Sweden, the U.K and the U.S. During the financial year Biohit received
the possibility for receiving patient reimbursement from the Social
and Insurance Institution of Finland for the test kits of the
GastroPanel.
During the financial year Biohit continued the preparation of new
distribution agreements for the GastroPanel test kits. Biohit has
focused especially on concluding new distribution agreements in South
America, the Near East, India and China. These are countries in which
70-90% of the population suffers from H. pylori infection. Nearly 50%
of the said patients will suffer from atrophic gastritis, which
increases the risk of other severe diseases.
In 2003 Biohit established a representative office in Shanghai, the
purpose of which is to promote the registration, marketing and sales
of the products of Biohit in China.
As to the business area of diagnostics Biohit Oyj was awarded the
following patents: Japanese patent 3433231: Method for Screening the
Risk of Gastric Cancerö, and Russian patent 2204835: Diagnosis of
Early Gastric Cancerö.
Development of the Share Price
In 2003 the turnover of Biohits B-share at the Helsinki Exchanges was
EUR 2,382,014 and 1,287,467 in pieces. The highest price was EUR 3.30,
the lowest EUR 1.22, and the average price EUR 1.85. The closing price
at the end of 2003 was EUR 2.50. The market capitalization value was
EUR 22,655,318.
Administration
During the financial year the members of the Board of Directors of
Biohit Oyj were professor Reijo Luostarinen as the Chairman, and
docent Arto Alanko, professor Hannu Seristö, professor Osmo
Suovaniemi, M.D., Ph.D. and professor Mårten Wikström as members. Osmo
Suovaniemi acted as the Managing Director of Biohit Oyj.
PricewaterhouseCoopers Oy have acted as auditors and Hannele Selesvuo,
Authorized Public Accountant, as the responsible auditor.
Adoption of IFRS
Biohit Group will adopt IFRS Reporting as of 2005. In the 2005 interim
reports the comparative figures for 2004 will be presented according
to IFRS.
During 2003 Biohit began the transition to IFRS. The new reporting
system supporting IFRS reporting will be taken into full use at the
beginning of 2004.
According to the preliminary assessment, most significant changes will
relate to development expenses, subordinated loans and related
interests and goodwill.
Prospects for 2004
The net sales of the Biohit Group is expected to develop favorably in
2004.
However, the growth of net sales is affected primarily by the market
penetration of the diagnostic product range. In 2003 Biohit concluded
distribution agreements related with diagnostics as well as concluded
a significant number of national evaluations. Biohit forecasts that,
if the company will be able to capture the market potential related to
diagnostics in 2004, it most likely will have a significant effect on
the net sales and profit for 2004 and for the following years.
In 2003 Biohit launched new liquid handling products, which have
received a positive response from the customer base. Biohit estimates
that the launch of the new pipettor models will have a positive impact
on the net sales in 2004.
Group Income Statement
1-12 2003 Change Change 1-12 2002
MEUR MEUR % MEUR
Net sales 26.3 0.9 4 25.4
Operating expenses -24.5 0.0 1 -24.5
Ebitda 1.8 0.9 97 0.9
Depreciation without
goodwill amortization -1.6 0.1 5 -1.5
Operating profit before 0.8
goodwill amortization 0.2 133 -0.6
Goodwill amortization -0.4 -0.2 -34 -0.6
Operating profit/Loss -0.2 1.0 83 -1.2
Financial expenses, net -0.2 -0.1 -21 -0.3
Profit/loss before
extraordinary items -0.5 1.0 70 -1.5
Extraordinary income 0.0 0.0 0 0.0
Extraordinary expenses 0.0 0.0 0 0.0
Profit/Loss before -0.5 0.0 70 -1.5
taxes
Loss for the period -0.7 1.1 60 -1.8
Quarterly Net sales and operating profit/loss before goodwill
amortizations
2003 2002
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Net sales 7.5 6.1 6.3 6.4 6.5 6.1 6.3 6.5
Operating
profit/loss 0.1 0.2 -0.1 0.0 -0.4 0.0 0.1 -0.3
before
goodwill
amortization
-0.1 -0.1 -0.2 -0.3 -0.7 -0.1 -0.4 -0.6
Profit/Loss
Group Balance Sheet
31.12.2003 31.12.2002
MEUR % MEUR %
Assets
Non-current assets
Intangible assets 3.7 17 4.2 19
Tangible assets 6.2 28 6.4 29
Financial assets 0.0 0 0.2 0
Current assets
Inventories 4.1 19 3.6 16
Receivables 5.7 26 5.3 24
Deferred tax assets 1.1 5 1.3 6
Cash and cash
equivalents 1.1 5 1.4 6
Total assets 21.9 100 22.4 100
Liabilities and
shareholders equity
Shareholders equity
Share capital 2.2 10 2.2 10
Share premium fund 15.4 70 15.4 69
Accumulated
losses -3.6 -16 -2.8 -13
Subordinated loans 1.2 6 1.2 6
Minority interest 0.1 0 0.1 0
Long-term liabilities 2.3 11 2.5 11
Short-term
liabilities 4.3 19 3.8 17
Total liabilities
and shareholders
equity 21.9 100 22.4 100
Cash Flow
1-12 1-12
2003 2002
Cash flow from operating
activities:
Profit / loss before -0.4
extraordinary items -1.5
Adjustments 2.2 2.4
Change in net working -0.6 -0.1
capital
Interest and other -0.4 -0.2
financing items paid
Interests received 0.2 0.1
Income taxes paid -0.1 -1.2
Net cash flow from 0.9 -0.5
operating activities
Net cash flow from
investing activities:
Investment in tangible and -1.1 -1.7
intangible assets
Grants received 0.0 0.1
Proceeds from the sales of 0.1 0.0
other investments
Net cash flow from -1.0 -1.6
investing activities
Net cash flow from
financing activities:
Proceeds from issuance of 0.0 0.6
common stock
Increase in long term debt 0.6 0.9
Repayment of long-term debt -0.8 -0.5
Net cash flow from -0.2 1.0
financing activities
Net increase (+) / decrease -0.3 -1.1
(-) in cash and cash
equivalents
Cash and cash equivalents 1.4 2.5
at the beginning of the
period
Cash and cash equivalents 1.1 1.4
at the end of the period
1-12/03 Change Change-% 1-12/02
Investments,
gross
Fixed assets MEUR 1.2 -0.4 -25 1.6
% Net Sales 4.5% 6.2%
Employees, average 298 -5 -2 303
31.12.2003 31.12.2002
MEUR MEUR
Mortgages and shares pledged
for liabilities
Loans from financial
institutions 2.0 2.1
Corporate mortgages 3.4 3.4
Pledges on leaseholds 1.5 1.5
Other long-term liabilities 0.8 0.8
Mortgages 0.8 0.8
Leasing commitments 2.8 4.1
Derivative Contracts
The Group does not have any off balance sheet financial instruments.
Interest on Subordinated Loans
The unrecorded interest accrued on subordinated loans totalled TEUR
540 on Dec. 31, 2003 and to TEUR 480 on Dec. 31, 2002.
31.12.2003 31.12.2002
Ratios
Equity ratio, % 64.7 66.9
Earnings per share, EUR -0.06 -0.14
Shareholders equity
per share, EUR 1.08 1.15
Average number of shares 12,937,627 12,827,781
Number of shares at the
end of the period 12,937,627 12,937,627
Proposal for the Distribution of Profit
The Group does not have distributable earnings. The Board of Directors
proposes that no dividends be paid.
The figures of the Financial Statement Bulletin are unaudited.
Helsinki, February 12, 2004
Board of Directors of Biohit Oyj
Helena Hentola
Corporate Communications
Additional information: Osmo Suovaniemi, Professor, President & CEO,
tel: +358-9-773 861, direct: +358-9-773 86
250, mobile: +358-40 745 5605, fax: +358-9-
773 86 205, osmo.suovaniemi@biohit.com.
http://www.biohit.com
Distribution: Helsinki Exchanges
Financial Supervisory Authority
Press
