The net sales of the Biohit Group tota
BIOHIT OYJ STOCK EXCHANGE RELEASE 6.11.2002 AT 10:00
The net sales of the Biohit Group totalled MEUR 18.9 (MEUR 18.7 1-
9/2001), the operating loss before goodwill amortization was MEUR 0.2
(MEUR 1.3 profit) and the loss for the period MEUR 1.1 (MEUR 0.1 profit).
Biohit continued investing strongly in research and development and
especially in the evaluations and international marketing of
diagnostic products.
Net Sales
The net sales of the Biohit Group for the reporting period totalled
MEUR 18.9 (MEUR 18.7), i.e., demonstrating a 1% growth. The net sales
were generated primarily by the sales of liquid handling products,
their disposable tips as well as maintenance services. Primarily a
decrease in the sales of liquid handling products in the U.S. and
German markets slowed down the growth of the group net sales. During
the reporting period Biohit received the first major orders for the
GastroPanel.
Result
The operating loss before goodwill amortization for the period was
MEUR 0.2 (MEUR 1.3 profit). During the last quarter of the period the
profit before goodwill amortization was MEUR 0.1 (MEUR 0.5). The
operating loss was MEUR 0.7 (MEUR 0.5 profit), and the loss for the
period MEUR 1.1 (MEUR 0.1 profit). The income taxes (MEUR 0.2) have
been accounted for on the basis of the result for the period. However,
deferred tax assets relating to the taxable losses have not been
accounted for.
The board of Biohit has 27.8.2002 decided to prolong the goodwill
amortization period related to Locus genex Oy from seven to 20 years.
The decision of this change is based on the information on the market
and, e.g., on the feedback of GastroPanel evaluations, according to
which the company estimates that the accumulated income effect is
longer than it was estimated at first, and at least 20 years.
According to the board decision there will be no amortizations from
the Locus genex goodwill during the last half of the year 2002,
because the amortization according to plan (MEUR 0.4) was based on the
original 7 years' write-off period.
The additional investments made in the launch of the diagnostic
business continued to weaken the group result, in addition to the
stagnation of the U.S. and German markets. These upfront investments
are very typical for biotechnology companies. Since the products are
finished and the application procedures of approvals by authorities
and the establishment of sales channels have proceeded favorably, it
is expected that the investments made will in the future have a
positive effect on the development of the Group result.
Balance Sheet
As a result of the dissolution of Locus genex Oy, the subsidiary
company specializing in diagnostics, the balance sheet of September
30,2002 includes a deferred tax receivable of MEUR 1.1 under
receivables.
Liquidity
The cash flow provided by operating activities during the reporting
period was approx. MEUR 0.6 negative (MEUR 1.5 positive). The cash
flow from operating activities was weakened considerably during the
period by the payment of 2001 taxes related to the voluntary
dissolution of Locus genex Oy. The Group's liquid assets totalled MEUR
1.0 (MEUR 2.6) at the end of the reporting period. The equity ratio
was 69.2 % (66.7 %) at the end of the reporting period.
Investments
The gross investments of the reporting period totalled MEUR 1.3 (MEUR
1.5). The major part of the investments consisted of machinery,
equipment and injection moulding tools for improving the efficiency of
production, and patent costs. During the reporting period the
expansion of the production premises for diagnostics was completed at
the Helsinki office.
Personnel
The average number of personnel totalled 306 during the reporting
period (285 during the corresponding period in 2001), of which 185
were employed by the parent company (174 in 2001) and 121 by the
subsidiaries (111 in 2001). The increase in personnel resulted from
investments made in 2001 in research & development, production, as
well as personnel increases in subsidiaries made to strengthen
internation sales.
Main Events of the Reporting Period
Liquid Handling
In the area of liquid handling Biohit continued to broaden its eLINE-
range. During the reporting period Biohit launched the single-channel
model for the volume range of 100 - 5000 ul. As a result, the entire
single-channel eLINE -product range has been completed. The said
single-channel family covers the volume range of 0.2 - 5000 ul.
Biohit's new generation electronic eLINE-range has been developed for
the most demanding liquid handling applications. The microprocessor-
control and novel construction enable maximum liquid handling
performance with very high levels of accuracy and precision. The
ergonomical design of the eLINE-range together with electronic tip
ejection reduce considerably the risk of work-related upper limb
disorders.
During the reporting period the accredited calibration laboratory of
Biohit was certified in accordance with the ISO 17025 -quality
standard. Moreover, the capacity of the plastics production at the
plant in Kajaani was increased considerably and the automation of
production was continued.
Diagnostics
The evaluations of the test panel for determining Helicobacter pylori
-infection and atrophic gastritis and for screening the risk of
gastric cancer and peptic ulcer from blood samples (GastroPanel)
continued according to plans.
By the end of the reporting period ten clinical evaluations related
with the GastroPanel had been completed in Europe, four in Asia and
one in North America. The number of patients studied in the
evaluations totalled 2,916. During the reporting period eight
evaluations were in progress in Europe, two in Africa, one in Asia and
one in the Near East. The number of patients to be studied in these
evaluations totals 4,520. By the end of the reporting period
agreements had been made to commence ten new evaluations in Europe,
three in North America and one in Asia.
During the reporting period Biohit received the first significant
customer orders for the GastroPanel test. Moreover, numerous
distribution agreements were concluded for Biohit's diagnostic product
range. During the reporting period the GastroPanel was used at the
Jorvi Hospital (HUCH: The Helsinki University Central Hospital) in
Finland and in two service laboratories in Finland and in Germany.
Biohit is expecting to conclude an agreement before the end of 2002
with a leading pharmaceutical company who will market the GastroPanel
in conjunction with their drugs for patients with dyspepsia. This will
enable general practitioners (GP's) and hospital specialists to use
the principles of "evidence-based medicine" as a more desirable
alternative to the empirical prescription of drugs - often
unnecessarily, which has been the case until now. This close linking
and co-marketing of drug prescribing and diagnostics, i.e.,
"theranostics" is expected to increase rapidly in the future as novel
diagnostic tests such as GastroPanel are developed.
In the area of diagnostics Biohit was awarded during the reporting
period the U.S. patent 6,416,961 for the Diagnosis of Early Gastric
Cancer (July 9, 2002) and the European patent 0804737 for the Method
for Screening the Risk of Gastric Cancer (Feb. 13, 2002). Moreover,
Biohit was awarded the European patent 0812421 for a method for
diagnosing systemic lupus erythematosus (SLE). SLE is a connective
tissue disease, which resembles rheumatic diseases. Additional
information on the GastroPanel is provided at the end of this release.
Subscription of Shares on the Basis of Option Rights
On the basis of Biohit's personnel option program 1999 and the option
program 1999/II targeted to Jencons Scientific Ltd. altogether 294,250
B-shares of Biohit were subscribed between 1.1.-30.9.2002.
Increases in Share Capital
As a result of the subscription of shares made on the basis of the
1999 personnel option program and the option program targeted to
Jencons Scientific Ltd., the share capital of Biohit increased during
the reporting period by EUR 50,022.50 (294,250 shares) to EUR
2,199,396.59 (12,937,627 shares). The share premium of EUR 518,657.50
has been recorded in the premium fund.
Equity Turnover and Price Development
The turnover of Biohit's B-shares on the NM-list of the Helsinki
Exchanges was during the reporting period EUR 2,551,919 and the number
of shares 893,864. The highest price was EUR 4.40 and the lowest EUR
1.72. The average price was EUR 2.85.
Prospects for 2002
Biohit estimates that the net sales of the group for 2002 will be
generated primarily by the sales of liquid handling products, and that
the net sales will increase approx. 2-3%. It is estimated that the
result after taxes for year 2002 will be negative.
The most important factors affecting the development of the result of
Biohit are the development of the liquid handling product market in
the U.S. and Germany. However, as Biohit is concluding significant
marketing agreements, it is estimated that the diagnostics sales will
increase substantially this year.
In order to improve the development of the result Biohit took into use
an adaptation program of its activities. In accordance with the
program the company aims, e.g., to intensify marketing efforts and cut
costs. The measures to cut costs included also the reduction of
personnel by temporary dismissals. The related industrial co-operation
procedure began in August 2002. The industrial co-operation procedure
affected altogether 22 persons. This personnel will be partially
dismissed and partially the employment contract will be terminated as
a result of externalization or early retirement.
Group Income Statement
1-9 1-9 Change Change 1-12/01
2002 2001 MEUR % MEUR
MEUR MEUR
Net sales 18.9 18.7 0.2 1 25.5
Operating expenses -17.9 -16.6 1.3 8 -23.0
Depreciation excluding
goodwill amortization -1.1 -0.9 0.2 27 -1.3
Operating profit/loss
before goodwill
amortization -0.2 1.3 -1.5 -113 1.2
Amortization on
goodwill -0.6 -0.7 -0.1 -25 -1.0
Operating profit/loss -0.7 0.5 -1.2 -239 0.2
Financial expenses
(net) -0.2 0.1 -0.1 21 -0.2
Profit/loss before
extraordinary items -0.9 0.4 -1.3 -334 0.1
Extraordinary income 0.0 0.0 0.0 0 0.0
Extraordinary expenses 0.0 0.0 0.0 0 0.0
Profit/loss before
taxes -0.9 0.4 -1.1 -334 0.1
Profit/loss for the
period -1.1 0.1 -1.2 -1833 -0.2
Group Balance Sheet
30.9.2002 30.9.2001 31.12.2001
MEUR % MEUR % MEUR %
Assets
Non-current assets 11.0 48 11.3 45 11.4 46
Current assets
Inventories 3.9 17 4.2 17 4.3 17
Receivables 6.8 30 7.0 28 6.8 27
Cash and cash
equivalents 1.0 5 2.6 10 2.5 10
Total assets 22.7 100 25.1 100 25.0 100
Liabilities and
shareholders'
equity
Shareholders'
equity
Share capital 2.2 10 2.2 9 2.2 9
Share premium
fund 15.4 67 14.9 59 14.9 60
Accumulated
profits/losses -2.1 -9 -0.6 -2 -0.8 -3
Capital loans 1.2 5 1.2 5 1.2 5
Minority interest 0.1 0 0.1 0 0.1 0
Long-term
liabilities 2.4 11 2.3 9 2.1 8
Short-term
liabilities 3.5 16 5.0 20 5.3 21
Total liabilities
and shareholders'
equity 22.7 100 25.1 100 25.0 100
Cash Flow
1-9/02 1-9/01 Change 1-12/01
MEUR MEUR MEUR MEUR
Cash Flows from
operating activities
Profit/loss before -0.9 0.4 -1.3 0.1
extraordinary items
Adjustments 1.9 1.8 0.1 2.4
Change in net working -0.2 -0.3 0.1 -0.1
capital
Interest and other -0.2 -0.3 0.1 -0.4
financial items paid
Interests received 0.0 0.1 -0.1 0.1
Income taxes paid -1.2 -0.2 -1.0 -0.2
Net cash flow from -0.6 1.5 -2.1 1.9
operating activities
Net cash flow from
investing activities:
Investments in tangible -1.5 -1.5 0.0 -2.2
and intangible assets
Grants received 0.1 0.0 0.1 0.4
Net cash flow from -1.4 -1.5 0.1 -1.8
investing activities
Net cash flow from
financing activities
Proceeds from share 0.6 0.0 0.6 0
issue
Increase in long-term 0.4 0.1 0.3 0.1
loans
Repayments of long-term -0.4 -0.7 0.3 -0.9
loans
Increase in capital 0.0 0.1 -0.1 0.1
loans
Net cash flow from 0.6 -0.5 1.1 -0.7
financing activities
Net increase -1.4 -0.5 -0.9 -0.6
(+)/decrease (-)in cash
and cash equivalents
Cash and cash 2.4 3.0 -0.6 3.0
equivalents 1.1.
Cash and cash 1.0 2.5 -1.5 2.4
equivalents at the end of
the period
1-9 1-9 Change Change 1-12/01
2002 2001 MEUR % MEUR
Investments, gross MEUR 1.3 1.5 -0.2 -13 2.1
% net sales 7.1 8.2 8.7
Employees, average 306 285 21 7 289
Pledges given, commitments and contingencies
30.9.2002 30.9.2001 31.12.2001
Loans for which pledges MEUR MEUR MEUR
have been given
Loans from financial
Institutions 1.7 2.1 1.9
Corporate mortgages 3.4 3.4 3.4
Other long-term liabilities 0.8 0.8 0.8
Mortgages 0.8 0.8 0.8
Leasing commitments 4.2 3.7 4.0
Interest on Capital Loans
The unrecorded interest accrued on capital loans on 30.9.2002 totalled
MEUR 0.5 and on 31.12.2001 MEUR 0.4.
30.9.2002 30.9.2001 31.12.2001
Ratios
Equity ratio, % 69.2 66.7 65.7
Earnings per share, EUR -0.08 0.00 -0.02
Shareholders' equity
per share, EUR 1.20 1.30 1.28
Average number of shares 12,790,763 12,643,377 12,643,377
Number of shares at the
end of the period 12,937,627 12,643,377 12,643,377
Derivative Contracts
The Group does not have any off balance sheet financial instruments.
The figures of the Interim Report are unaudited.
Helsinki, November 6, 2002
Board of Directors of Biohit Oyj
Overview on Biohit
Biohit, operating in the areas of biotechnology and high technology,
develops, manufactures and markets liquid handling products and
accessories as well as diagnostic test systems for use in research,
health care and industrial laboratories.
In the area of liquid handling Biohit's main products are electronic
and mechanical pipettors and their disposable tips. Currently,
Biohit's range of electronic and mechanical pipettors is the widest in
the world. Biohit is also the global market leader of electronic
pipettors.
In the area of diagnostics Biohit develops, manufactures and markets
test kits based on the enzyme immunoassay (EIA) -method and monoclonal
antibodies for the diagnosing and screening of different types of
disease. Biohit's diagnostic product range includes, e.g., a test
panel for diagnosing and screening H.pylori -infection and atrophic
gastritis as well as for assessing the risk of gastric cancer and
peptic ulcer from blood samples (the GastroPanel), as well as tests
for the detection of lactose intolerance and systemic lupus
erythematosus (SLE).
In order to be able to offer complete analyzing systems for its
customer base, Biohit's product range includes, in addition to liquid
handling products and diagnostics, instruments used for the analysis
of test results. Moreover, Biohit offers as a part of its product and
marketing strategy maintenance, calibration and training services
through the Group companies and its distributors.
Biohit's production plants are located in Kajaani and Helsinki. The
sales and marketing subsidiaries are located in France, Germany,
Italy, Japan, Russia, the U.K. and the U.S. Biohit's distributor
network covers altogether approx. 450 members and 70 countries.
Moreover, many multinational companies, such as Beckman Coulter,
Becton Dickinson, bioMérieux, Johnson & Johnson and 3M complement
their diagnostic systems with Biohit's electronic liquid handling
products. As to Group net sales, 96% are generated outside of Finland,
and the degree of domestic production is approx. 95%.
The GastroPanel Examination, Areas of Use and Its Utility
One third of the global population suffers from dyspepsia, the
occasional or continuous pain or discomfort in the upper part of the
abdomen. Over half of the cases of dyspepsia are functional, which
means that the mucosa of the stomach functions normally and is
healthy. However, dyspepsia may be related to severe gastric illnesses
which are associated with gastritis and impaired functions of mucosal
glands, i.e., with atrophic gastritis.
Atrophic gastritis, which is symptomless or shows only weak symptoms,
is a disease which develops gradually and associates with various
gastric diseases. Often atrophic gastritis is not diagnosed at all, or
it is diagnosed at a late stage. It is commonly believed that atrophic
gastritis is irreversible. However, most recent research results and
clinical experience indicate that gastric atrophy is reversible and
that it is possible to treat and cure atrophic gastritis.
If atrophic gastritis is diagnosed and treated the risk of gastric
cancer and peptic ulcer decreases. Atrophic gastiris and the related
deficiency of vitamin B12, if untreated, may be the causes that worsen
dementia, damages of the peripheral nervous system, and raise the risk
of heart and brain strokes.
So far gastroscopy with gastric histology have been the only
diagnostic methods for atrophic gastritis. Biohit has developed
together with scientists the GastroPanel-test which enables to screen
and diagnose atrophic gastritis from a blood sample (www.biohit.com).
The Helicobacter pylori -infection is one of the most common chronic
infections, which causes severe gastric diseases all over the world.
All persons suffering from the H. pylori -infection will develop
chronic gastritis. Approximately half of the world population has H.
pylori -infection, and over 20% of the infected may suffer from peptic
ulcer during their lifetime.
Half of those infected with H. pylori will get atrophic gastritis.
This, on its part, increases considerably the risk of gastric cancer.
Approx. 10% of the patients with H. pylori -related gastritis will
develop severe atrophic gastritis of the corpus area of the stomach.
These patients are at a very high risk of developing diseases related
with the deficiency of vitamin B12.
The Maastricht 2 (2000) consensus recommends that symptomatic patients
with H.pylori are to be treated, and it is recommended further that,
in order to prevent severe complications, the patients with H.pylori -
infection and major gastric pathology (atrophic gastritis), with or
without symptoms, should be treated for H.pylori. These patients
should also undergo a diagnostic endoscopy. At an early asymptomatic
stage, up to 4-6% of such patients are reported to have definite, but
curable, cancerous or precancerous gastric lesions.
GastroPanel
GastroPanel enables the diagnosis of H. pylori -infection and atrophic
gastritis as well as enables to screen by a blood test the subjects at
risk for gastric cancer and peptic ulcer. On the basis of the serum
levels of Pepsinogen I and Gastrin-17 as well as Helicobacter pylori -
antibodies it is possible to establish if the patient has gastritis,
whether the gastritis is atrophic or not, and in which part of the
stomach (antrum, corpus or both) the changes are located. Patients
suffering from atrophic gastritis are at risk for disorders related to
the deficiency of vitamin B12. The tests are based on the enzyme
immunoassay (EIA) -method. Among dyspeptic patients the GastroPanel is
a non-invasive alternative for gastroscopy and gastric histology.
GastroSoft
Biohit has developed the GastroSoft, an easy-to-use computer program,
for the interpretation of the results of the GastroPanel assays
(www.biohit.com/GastroSoft). This program draws up a diagnosis of H.
pylori -infection and possible atrophic gastritis, and gives estimates
of risks for gastric cancer and peptic ulcer. In addition, the program
gives a recommendation for the treatment of H. pylori -infection based
on the Maastricht 2 (2000) consensus. The program further gives a
recommendation whether gastroscopy and the measurement of the serum
levels of vitamin B12 and homocysteine are necessary. Depending on the
symptoms and the results produced by the GastroPanel, GastroSoft
reminds of possible risks of reflux disease and Barrett's esophagus.
Areas of Use of the GastroPanel
GastroPanel enables the diagnosis of atrophic gastritis and the
screening of patients with the gastritis-related diseases. The testing
by GastroPanel helps to draw up the accurate diagnosis and promotes,
thereby, the objectivity in the clinical conclusions and decision-
making (evidence-based medicine) more than is possible to do in the
basis of symptoms and H. pylori testing alone.
GastroPanel is useful in:
1) Diagnosis of dyspepsia, i.e., pain or discomfort in the upper part
of the abdomen (prevalence of dyspepsia: approx. 30% of the global
population):
- Functional dyspepsia (over half of dyspeptic cases). The results
produced by GastroPanel and gastroscopy indicate that the mucosa of
the stomach is normal (no atrophy, no inflammation, no H. pylori -
infection).
- Dyspepsia with H. pylori -infection and non-atrophic gastritis
(prevalence in approx. 30-50% of the population in Western countries)
- Dyspepsia with organic diseases. In these cases the findings of
the GatroPanel are nearly always pathological. Possible causes are,
e.g., atrophic gastritis, gastric cancer, peptic ulcer or reflux
disease. Prevalence of reflux disease: Approx. 20% of the global
population.
- The risk of Barrett's disease can be assessed with the
GastroPanel.
2) Diagnosis of H. pylori -infection (prevalence on the average over
50% of the global population) and atrophic gastritis (prevalence
approx. half of those infected by H. pylori). The assessment of the
risk of gastric cancer (prevalence approx. 0,1%) and peptic ulcer
(prevalence approx. 10%).
3) Screening and diagnosis of corpus atrophy, which causes a
deficiency of vitamin B12. The deficiency may increase the risk of,
e.g., dementia, depression and polyneuropathies (www.b12.com). The
diseases related with the deficiency of vitamin B12 begin to develop
before any signs of pernicious anemia. It has been reported that the
low vitamin B12 related neurodegenerative disorders become
irreversible if the diagnosis and treatment of the deficiency of
vitamin B12 are delayed. As many as 30% of persons over 65 years may
suffer from the deficiency of vitamin B12.
The deficiency of vitamin B12 is one cause for increasing the level
of homocysteine in the body, which is an independent risk factor for
atherosclerosis and heart and brain strokes (www.homocysteine.com).
Utility of the GastroPanel
Thus far, gastroscopy and the microscopic examination of the gastric
biopsy have been the only methods to diagnose atrophic gastritis. The
GastroPanel is intended to screen and diagnose atrophic gastritis from
a blood sample.
The GastroPanel enables to find atrophic gastritis and related
diseases. In addition, the GastroPanel helps to assess the need and
urgency of gastroscopy and the gastric biopsy.
The early diagnosis of atrophic gastritis and the subsequent
eradication of the H. pylori -infection is the basis for the
prevention of the diseases related to atrophic gastritis.
The use of the GastroPanel improves the level of diagnostics and the
treatment of patients with dyspepsia. It has been estimated that the
use of the GastroPanel in Finland could save several hundred millions
(EUR) in health care costs if the benefits of the prevention and early
treatment of the dyspepsia and atrophic gastritis -related diseases
are taken into consideration.
The GastroPanel kit comprising the tests for Pepsinogen I, H. pylori
and Gastrin-17 enables the analysis of 50 patients. The taxless end-
user price in Finland for the GastroPanel kit is EUR 1,080. Thus, the
cost of examining one patient with the GastroPanel is approx. EUR 20
for a health care center or a private laboratory. In addition, the
cost of the work related with sample taking and analyses totals EUR 15-
20. The price includes the GastroSoft program which interpretes the
results of the GastroPanel. The most recent version of the GastroSoft
program can be tested and loaded from the internet
(www.biohit.com/GastroSoft).
Gastroscopy is currently the only alternative for the GastroPanel test
in the diagnosis of atrophic gastritis. In Finland commercial service
laboratories charge EUR 65 for the GastroPanel examination whereas the
price of gastroscopy with histology is approx. EUR 300, and
considerably more if special arrangements, e.g., various sedations are
needed and used. In addition, possible complications related with
gastroscopy such as mortality (0.0025% - 0.05%), perforation (0.03%),
hemorrhage (0.01 - 0.1%) and inflammations (3-4%), raise the costs.
It has been estimated that altogether 100,000 gastroscopies are
performed in Finland annually mainly for various dyspeptic symptoms.
Atrophic gastritis is diagnosed in nearly half of the patients with H.
pylori -infection, in old age groups in particular. It can be
estimated that 100,000 gastroscopies are not enough to fulfil the
clinical needs. The GastroPanel as a cost efficient and risk-free
method is a conceivable tool or alternative as a primary diagnostic
mean when determining the severity of dyspepsia and atrophic
gastritis.
The GastroPanel-test, if made before the gastroscopy, enables the
differentiation between patients with non-atrophic gastritis and those
with atrophic gastritis. The GastroPanel provides information on the
severity and typographic location of atrophic gastritis in the
stomach. Moreover, the GastroPanel enables to establish with high
reliability whether the mucosa of the stomach is normal and healthy.
In such patients with healthy gastric mucosa the risk of all main
gastric diseases (gastric cancer and peptic ulcer) is very low. In
everyday practice in Finland today approx. 50% of the patients who
undergo gastroscopy have a normal and healthy stomach.
When taking into consideration the need for gastric examinations
within the areas of clinical diagnostics, screening applications as
well as follow-up and routine studies (occupational health care,
patients at risk, the elderly, patients suffering from the deficiency
of vitamin B12) it can be estimated that more than 500,000 GastroPanel
examinations are needed in Finland annually.
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: The Helsinki Exchanges
The Financial Supervisory Authority
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