SOURCE: Speedel Holding AG

August 15, 2007 01:08 ET

SPEEDEL ANNOUNCES FINANCIAL RESULTS FOR SECOND QUARTER 2007

BASEL, SWITZERLAND--(Marketwire - August 15, 2007) - First recurring revenues from SPP100 recognised and estimated at CHF 1 million


Basel/Switzerland and Bridgewater NJ/USA, 15 August 2007

Speedel (SWX: SPPN) today announced financial results for the three and six months ending 30 June 2007.

Financial Highlights

  * CHF 1 million recognised as estimated revenue  from sales of
    SPP100 (Tekturna/Rasilez[1]) by Novartis
  * At 30 June 2007 liquid assets on hand were CHF 134.8 million
  * Cash-burn was CHF 27.0 million for the second quarter and CHF
    41.9 million for the first half 2007
  * Remaining 2005 convertible loan fully converted into equity by
    end July 2007

Konrad P. Wirz, Chief Financial Officer, commented: "This is the first quarter in which we have recognised recurring revenue from sales of SPP100 (Tekturna/Rasilez) by our partner Novartis. This marks a new phase in the financial health of our company. The cash-burn of CHF 41.9 million for the first six months is in line with our full year guidance of CHF 75-85 million as we continue to invest in our mature and diverse pipeline."

Financial Key Data [i] (CHF million)

+-------------------------------------------------------------------------+
|                           |Q2 2007|Q2 2006|Change|6m 2007|6m 2006|Change|
|---------------------------+-------+-------+------+-------+-------+------|
|Revenues                   |    1.0|    0.0|  +1.0|    1.0|    0.0|  +1.0|
|---------------------------+-------+-------+------+-------+-------+------|
|Research & Development     | (22.2)| (16.9)|  -5.3| (33.8)| (31.0)|  -2.8|
|---------------------------+-------+-------+------+-------+-------+------|
|General & Administration   |  (2.3)|  (2.9)|  +0.6|  (5.7)|  (5.9)|  +0.2|
|---------------------------+-------+-------+------+-------+-------+------|
|Total operating            | (24.5)| (19.7)|  -4.8| (39.5)| (36.8)|  -2.7|
|expenses                   |       |       |      |       |       |      |
|---------------------------+-------+-------+------+-------+-------+------|
|Operating loss             | (23.5)| (19.7)|  -3.8| (38.5)| (36.8)|  -1.7|
|---------------------------+-------+-------+------+-------+-------+------|
|Finance costs, net         |  (0.1)|  (6.2)|  +6.1|  (0.2)|  (7.1)|  +6.9|
|---------------------------+-------+-------+------+-------+-------+------|
|Taxes                      |    0.4|    0.5|  -0.1|    0.4|    0.6|  -0.2|
|---------------------------+-------+-------+------+-------+-------+------|
|Loss for the period        | (23.2)| (25.4)|  +2.2| (38.2)| (43.3)|  +5.1|
|---------------------------+-------+-------+------+-------+-------+------|
|Basic & diluted loss per   | (3.00)| (3.65)| +0.65| (4.97)| (6.57)| +1.60|
|share/CHF [ii]             |       |       |      |       |       |      |
|---------------------------+-------+-------+------+-------+-------+------|
|                           |       |       |      |       |       |      |
|---------------------------+-------+-------+------+-------+-------+------|
|Cash-burn [iii]            |   27.0|   16.5| +10.5|   41.9|   33.3|  +8.6|
|---------------------------+-------+-------+------+-------+-------+------|
|                           |       |       |      |       |       |      |
|---------------------------+-------+-------+------+-------+-------+------|
|                           |30 June|31 Dec |Change|       |       |      |
|                           |07     |06     |      |       |       |      |
|---------------------------+-------+-------+------+-------+-------+------|
|Liquid assets [iv]         |  134.8|  121.1| +13.7|       |       |      |
+-------------------------------------------------------------------------+

Footnotes i-iv can be found on last page of this press release. Consolidation is based on IFRS, but these results for the period are unaudited. Complete financial statements and notes for the 6 months ending 30 June 2007 can be accessed at http://www.speedel.com/section/6/subsections/4


Revenues

The company has recognised its first recurring revenues from sales of SPP100 (Tekturna/Rasilez[1]) on an accrual basis in accordance with International Accounting Standard (IAS)18 The product was approved by the FDA in March 2007, and subsequently launched by Novartis in the US. Novartis has not reported the sales of SPP100 (Tekturna/Rasilez) and therefore according to IAS 18 Speedel management is using its best estimate of revenues earned on an accrual basis. For the period since launch up to 30 June 2007, Speedel estimates based on publicly available information, including summary data reported by Novartis with their first half results on 17 July, that it has earned revenues of CHF 1 million. This estimate is subject to revision in future earnings statements.

The company re-affirms its previous guidance that it will take a number of quarters before the market can rely on IMS Health[2] reported prescriptions of SPP100 (Tekturna/Rasilez) to give a fair indication of SPP100 sales performance. It takes time for assessment of the performance of a newly launched product to evolve over several quarters before a consistent trend is apparent, and this is perfectly normal within the biopharmaceutical industry.

To help those who are tracking Speedel's financial progress, management reiterates what it has previously stated in public documents as the basis upon which Speedel earns revenues from Novartis: "Under Speedel's license-back arrangements for SPP100, Speedel is entitled to royalties on worldwide net sales of SPP100, and to payments equivalent to a portion of the savings resulting from reduction in the cost-of-goods below a predetermined threshold, if Novartis Pharma uses the production method developed by Speedel for the commercial supply of SPP100."

Research & Development Expenses

R&D expenses increased by CHF 5.3 million for the second quarter and by CHF 2.8 million for the first six months compared to the corresponding periods in 2006. We continue to incur closure costs for the SPP301 Phase III trial which are being both accrued and paid out in cash during each quarter of 2007. Moreover we continue to invest in our next generation renin inhibitor programmes both in clinical development and in research (SPP635 Phase IIa, SPP1148 Phase I and others).

General & Administration Expenses

G&A expenses decreased by CHF 0.6 million for the second quarter and decreased by CHF 0.2 million for the first six months compared to the corresponding periods in 2006.This difference was due principally to lower non-cash charges for the expensing of employee share options.

Finance Costs, net

Net finance costs decreased by CHF 6.1 million for the second quarter and by CHF 6.9 million for the first six months compared to the corresponding periods in 2006. This difference mainly reflects the lower amortisation costs of the CHF 55.5 million gross convertible bond issued in January 2007 compared to those of the CHF 70.0 million gross convertible loan issued in 2005. The company is also benefiting from the increased funds available for investment and improved money market rates, and therefore expects that the net financial result will be significantly improved for 2007 compared with 2006.

Balance Sheet

As of 30 June 2007, liquid assets on hand were CHF 134.8 million compared to CHF 121.1 million at 31 December 2006. These funds provide a comfortable base to finance the company's current pipeline until at least the end of 2008. This is a conservative statement as it excludes any possible sources of revenue such as from sales of SPP100 or from licensing activities.

During Q1 2007 and Q2 2007 some 25,000 shares and 15,000 shares respectively were issued for conversion by holders of the 2005 CHF 70 million loan, which matured on 31 July 2007. This conversion generated a premium of CHF 625,000 booked in equity for the first quarter and CHF 375,000 for the second quarter respectively. The remaining face value of this convertible loan at 30 June 2007 was CHF 2.4 million. During July this remaining portion of the loan was converted into 23,800 shares, and so there is no outstanding liability for this loan.

Share Capital

On 30 June 2007, Speedel Holding Ltd had 7,767,885 registered shares with a nominal value of CHF 2 per share which are listed on the SWX Swiss Exchange under the symbol SPPN. In addition the company had outstanding conditional share capital of 552,710 shares with a nominal value of CHF 2 per share, mainly to cover the 2007 convertible bond and the company's employee share option plan.

Cash-burn

Historically the company has provided guidance on cash-burn excluding any revenues from sources such as sales of SPP100 or other licensing agreements. It will continue to use this definition for the remainder of 2007, to ensure like-for-like comparisons with previous years when it had no recurring revenues.

Recent news flow

  * In May extensive data was presented at the American Society of
    Hypertension meeting showing the favourable safety and efficacy
    profile of SPP100 (Tekturna/Rasilez[1]) both as monotherapy and
    in co-administration with other therapies
  * In May the US Food and Drug Administration accepted for
    regulatory review the fixed dose combination of SPP100
    (Tekturna/Rasilez) with the diuretic HCTZ
  * In June SPP635, Speedel's next generation renin inhibitor,
    completed a Phase IIa proof-of-concept trial in hypertension. The
    compound will continue to be developed in Phase II in a special
    population of diabetic patients with mild-to-moderate
    hypertension
  * In June the Committee for Medicinal Products for Human Use (CHMP)
    issued a positive opinion recommending European Union approval
    for SPP100 (Tekturna/Rasilez).


Calendar 2007-8

Q3 2007              14 November 07

Q4 2007              07 March 08
Annual Report        25 March 08
R&D Day              31 March 08
AGM                  15 April 08
Q1 2008              15 May 08
Q2 2008              19 August 08
Q3 2008              14 November 08

Webcast Podcast and Conference Call

At 14.00 CET /13:00 London/ 08:00 EST today 15 August 2007, the company will host a webcast which can be accessed at http://www.speedel.com/section/6/subsections/8. In addition participants may join a teleconference facility using the following telephone numbers:

Switzerland:            0445 804 858
UK:                     0845 302 2566
USA:                    1866 595 6357
International           +44 (0) 1452 586 157
Passcode for all      : 11685834

Slides for the web cast will be downloadable from 10:00 CET today and the webcast will be accessible on the company's website until 14 September 2007. A podcast will also be available for the first time.

About Speedel

Speedel is a public biopharmaceutical company that seeks to create value for patients, partners and investors by developing innovative therapies for cardiovascular and metabolic diseases. Speedel is a world leader in renin inhibition, a promising new approach with significant potential for treating cardiovascular diseases. Our lead compound SPP100 (Tekturna/Rasilez[v][1]), the first-in-class direct renin inhibitor, was in-licensed from Novartis in 1999 and licensed-back to Novartis Pharma in 2002 for further development and commercialisation; SPP100 was approved by the FDA in the US in March 2007, and filed by Novartis with the EMEA in the EU in Q3 2006. Our pipeline covers three different modes of action, and in addition to SPP100, includes SPP301 in Phase III (on hold), SPP200 in Phase II, SPP635 in Phase Il, SPP1148 in Phase I and several pre-clinical projects.

Speedel develops novel product candidates through focused innovation and smart drug development from lead identification to the end of Phase II. We either partner with big pharma for Phase III and commercialisation in primary-care indications, or we may ourselves complete Phase III development in specialist indications. Candidate compounds for development and the company's intellectual property come from our late-stage research unit Speedel Experimenta and from in-licensing. Our team of approximately 70 employees, including over 30 experienced pharmaceutical scientists, is located at our headquarters and laboratories in Basel, Switzerland and at offices in New Jersey, USA and Tokyo, Japan.

In January 2007 the company raised gross proceeds of CHF 55.5 million (approximately EUR 34.3 million or USD 44.5 million) through a convertible bond issue. In March 2006 the company raised gross proceeds of CHF 83.95 million (approximately EUR 53m or USD 64m) through the public offering of 500,000 treasury shares. Previously, as a private company, we raised gross proceeds of CHF 255 million (approximately EUR 157 million or USD 204 million) from private placements of equity securities and two convertible loans including the conversion premiums. We have had total revenues, principally from milestone payments, of CHF 57.7 million (approximately EUR 37 million or USD 44 million). The company's shares were listed in September 2005 on the SWX Swiss Exchange under the symbol SPPN.


Forward looking statements

This press release includes forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are based on our current expectations and projections about future events. All statements, other than statements of historical facts, regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The word "may" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations described in these forward-looking statements and you should not place undue reliance on them. There can be no assurance that actual results of our research and development activities and our results of operations will not differ materially from these expectations. Factors that could cause actual results to differ from expectations include, among others: our or our partners' ability to develop safe and efficacious products; our or our partners' ability to achieve positive results in clinical trials; our or our partners' ability to obtain marketing approval and market acceptance for our product candidates; our ability to enter into future collaboration and licensing agreements; the impact of competition and technological change; existing and future regulations affecting our business; changes in governmental oversight of pharmaceutical product development; the future scope of our patent coverage or that of third parties; the effects of any future litigation; general economic and business conditions, both internationally and within our industry, including exchange rate variations; and our future financing plans.


End Notes to Financial Key Data

[1] Tekturna/ Rasilez ® are Novartis trademarks
[2] IMS Health is a consultancy providing prescription data to the
pharmaceutical industry

[i] Numbers may not add up due to rounding
[ii] Earnings per share are calculated on the weighted average of
registered shares outstanding for the
periods: Q2 2007 = 7,722,832; Q2 2006 = 6,973,539 ; 6m 2007=
7,683,392; 6m 2006 =
6,596,535

[iii] Cash-burn is defined as the difference in liquid assets between
the beginning and end of the period, minus any cash inflow during the
period
[iv] Includes cash and cash equivalents and financial assets at fair
value through profit or loss





Copyright © Hugin ASA 2007. All rights reserved.

Contact Information

  • For further information please contact:

    Nick Miles
    Director Communications & Investor Relations
    Speedel
    Hirschgässlein 11
    CH - 4051 Basel
    Switzerland

    T +41 (0) 61 206 40 00
    D +41 (0) 61 206 40 14
    F +41 (0) 61 206 40 01
    M +41 (0) 79 446 25 21
    E Email Contact
    www.speedel.com


    Frank LaSaracina
    Managing Director
    Speedel Pharmaceuticals Inc
    1661 Route 22 West
    P.O. Box 6532
    Bridgewater, NJ 08807
    United States of America

    T +1 732 537 2290
    F +1 732 537 2292
    M +1 908 338 0501
    E frank.lasaracina@spee