PAION AG REPORTS FINANCIAL RESULTS FOR THE FIRST HALF-YEAR 2019
DGAP-News: PAION AG / Key word(s): Half Year Results
PAION AG REPORTS FINANCIAL RESULTS FOR THE FIRST HALF-YEAR 2019
- NDA for remimazolam filed in the U.S. in April 2019 accepted for review by the FDA in June 2019
- Positive pre-submission meeting with EMA for the indication procedural sedation in the EU
- Financing agreement for EUR 20 million with the European Investment Bank
- Cash and cash equivalents of EUR 19.2 million as of 30 June 2019
- Conference call today at 2:00 p.m. CEST (1:00 p.m. BST/8:00 a.m. EDT)
Aachen (Germany), 07 August 2019 - The specialty pharmaceutical company PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange, Prime Standard: PA8) today reports its consolidated financial results according to International Financial Reporting Standards (IFRS) for the first half-year 2019.
Dr. Wolfgang Söhngen, CEO of PAION AG, commented: "A lot of positive news shaped the first half year 2019. With the filing for market approval for remimazolam in the U.S., our licensee Cosmo has taken an important step towards market entry. In this context, PAION received a milestone payment of EUR 7.5 million. The positive pre-submission meeting in Europe provides the opportunity to file for market approval for remimazolam in the indication procedural sedation with the European Medicines Agency by the end of this year. In this indication, we may be able to launch remimazolam on the European market earlier than expected. In addition, we signed a financing agreement with the European Investment Bank - a significant demonstration of confidence and strong support for our strategy."
Update and outlook on remimazolam development
With a regular course of the approval process, the U.S. market approval and subsequent launch of remimazolam can be expected in 2020.
Currently, more than 200 patients have been treated. The opening of additional sites has been initiated in order to accelerate the recruitment process. Completion of patient recruitment is expected in the first quarter of 2020. Due to the new approval strategy for Europe, this adjustment will probably have no time implication on the planned start of commercialization in general anesthesia. The complete data from the EU phase III study, which are required for the regulatory process of an indication extension by general anesthesia, are expected to be available at the time of approval of the MAA in procedural sedation allowing for the timely application for an extension of the remimazolam MAA for the indication general anesthesia afterwards.
Licensee activities in other territories
Japanese licensee Mundipharma submitted a market approval dossier for remimazolam in the indication general anesthesia to the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) in December 2018. Market approval could be granted end of 2019 at the earliest.
Chinese licensee Yichang Humanwell submitted a market approval dossier for remimazolam in the indication procedural sedation to the Chinese National Medical Products Administration (NMPA) in November 2018. Market approval could be granted end of 2019 at the earliest.
In November 2018, Russian licensee R-Pharm announced the successful completion of a Phase III trial with remimazolam in general anesthesia. R-Pharm currently plans to file for market approval in Russia by the end of 2019. For the license territory Turkey, Middle East and North Africa, it is planned to file for market approval in Turkey based on the U.S. or Japanese dossier.
For Canada, PAION expects its licensee Pharmascience to use the U.S. market approval dossier as the basis for their own filing for market approval of remimazolam.
PAION's South Korean licensee Hana Pharm successfully completed patient recruitment of a Phase III trial with remimazolam in general anesthesia in October 2018. Hana Pharm plans to file for market approval by the end of 2019.
Results of operations, financial position and net assets
Revenues in the first half-year 2019 amounted to EUR 7.5 million and resulted entirely from the milestone payment from Cosmo in connection with the submission of the NDA for remimazolam in the indication procedural sedation in the U.S. Revenues in the prior-year period primarily resulted from the license agreement with Mundipharma.
General administrative and selling expenses increased by EUR 0.6 million to EUR 2.3 million in the first half-year 2019 compared to the prior-year period. The increase mainly relates to an increase in selling expenses particularly in connection with the set-up of the supply chain for remimazolam.
Income taxes amounted to EUR 1.2 million in the first half-year 2019 (prior-year period: EUR 1.5 million) and relate to tax claims for reimbursement of parts of the research and development expenses from the British tax authorities. The decrease is primarily attributable to a cap of the claim based on the net result.
The net income for the first half-year 2019 amounted to EUR 0.6 million compared to a net loss of EUR 6.2 million in the prior-year period. This means an increase of the net result in the amount of EUR 6.8 million compared to the first half-year 2018, which is mainly attributable to higher revenues than in the prior-year period.
The increase in equity of EUR 0.6 million, compared to 31 December 2018, to EUR 21.4 million as of 30 June 2019 mainly results from the positive net result of the first half-year 2019. As of 30 June 2019, the equity ratio was 83.3% (31 December 2018: 85.6%).
Cash and cash equivalents increased by EUR 2.0 million in the first half-year 2019 to EUR 19.2 million at the end of the current reporting period.
The increase of cash and cash equivalents particularly stems from positive cash flows from operating activities of EUR 2.0 million in the first half-year 2019. These primarily resulted from the net income and receipt of the milestone payments from Mundipharma and Hana Pharm recognized as trade receivables at the beginning of the fiscal year.
Risks and opportunities
Outlook on Development and Commercialization Activities
Also, PAION is conducting small-scale pre-marketing activities for the preparation of an own commercialization for remimazolam in selected European markets.
Financial outlook 2019
Due to the ongoing investment in the development of remimazolam including the EU Phase III study, PAION expects research and development expenses to amount to between approx. EUR 13 million and approx. EUR 15 million, depending on the progress of development. Income from tax credits on parts of research and development expenses from British tax authorities is expected to amount to approx. EUR 2 million. General administrative and selling expenses are expected to amount to between approx. EUR 4 million and approx. EUR 5 million depending on the volume of precommercial activities. Net loss is expected to amount to between approx. EUR 7 million and approx. EUR 10 million in 2019.
This outlook assumes that PAION and licensee activities progress as expected. In case of delays, essential cost blocks would shift into 2020 or subsequent periods. Plans are also based on the current status of discussions with regulatory authorities.
Based on current planning, cash and cash equivalents at hand, including expected tax credits from the British tax authorities on parts of research and development expenses, secure a liquidity runway into the second half of 2020. PAION expects to require further funds of approx. EUR 10 million until filing for market approval in general anesthesia in the EU. This cash requirement could partially or completely be covered by the financing agreement with the EIB. In addition, PAION is looking into complementing financing measures as additional funds will be required in the next years for the planned own commercialization in selected European markets as well as the intended development of the indication ICU sedation and for the multi-year PIP. The magnitude of the required funds will be dependent on the actual setup of commercialization and which European countries PAION will initially focus on as well as the timing and the amount of milestone payments and royalties from licensees.
Key Consolidated Financial Figures, IFRS
The full half-year financial report will be available as of 07 August 2019 on PAION's website at http://www.paion.com/media-and-investors/investorcenter/financial-reports/.
Conference call and webcast
To access the call, please dial:
* Germany +49 (0) 69 7104 45598,
* UK +44 (0) 20 3003 2666 and
* U.S. +1 212 999 6659
* Other countries: please use the UK number
When prompted, please provide the password "PAION". The conference call will be supplemented by a webcast presentation which can be accessed during the call at the following link: view-w.tv/819-1574-22109/en.
In Europe, PAION is seeking approval for remimazolam in the indications general anesthesia and procedural sedation. For the development of remimazolam in general anesthesia, PAION is currently conducting a Phase III trial in Europe. The submission of an MAA in procedural sedation in the EU is planned based on the U.S. development program.
Development of remimazolam for intensive care unit (ICU) sedation is part of the longer-term life-cycle plan for remimazolam.
07.08.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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