Bioniche reports loss, focuses on animal health

Dual-listed biopharma Bioniche (ASX:BNC) has posted a Q2 loss of $4m, and shareholders have been warned the company may have inadequate cash reserves for the next 12 months.

Dylan Bushell-Embling (Australian Life Scientist)
10 February, 2012 11:44
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Bioniche Life Sciences (ASX:BNC) has reported a 72% wider net loss for the second quarter of FY12, despite strong growth from its animal health operations.

The Canadian dual-listed biotech posted a net loss of C$4 million ($4.01 million) for the December quarter, compared to a C$2.3 million loss for the same period a year earlier.

In Bioniche's quarterly financial statements shareholders were warned that the company has insufficient cash resources on hand for a 12 month operating runway.

But Bioniche CEO Graeme McRae said this warning “does not reflect ... the concerted efforts by the Company to curtail non-core expenditures going forward, which will enable our cash resources to last longer.”

The company's burn rate has fallen to $1 million per month during the second quarter, compared to $1.3 million per month for the first quarter, he said.

McRae added that the company is also seeking non-dilutive financing, such as a revolving credit facility, to address the cash shortfall.

Group revenue fell 26.3% to C$8.1 million during the quarter, and 19.5% to C$14.9 million for the year to date. Human health and food safety income was affected by the absence of some non-recurring license fees booked in 2011.

However, revenue from the company's animal products division increased by C$1.3 million in the second quarter, with gross margins improving slightly to 52.4%.

McRae said the division's growth “reflects double-digit increases in sales of key products in Australia and South America, and stabilising sales in North America and Europe.”

R&D expenses fell to $4.7 million for the quarter from $5 million a year earlier, as a result of a reduction in some human health preclinical development activities. Administrative and marketing expenses also declined.

Bioniche listed on the ASX in January last year, after completing a $12.47 million CDI placement to Australian investors. The company has a manufacturing facility and an R&D facility in Australia. Bioniche is also listed on the Toronto exchange.

Bioniche (ASX:BNC) shares fell to $0.72 as of Thursday’s close.

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