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Acrux Reports Maiden Profit of $46.6 Million
25 August 2010
Highlights:
- Maiden profit after tax $46.6 million (2009: loss $7.7 million)
- Diluted earnings per share 28.7 cents (2009: loss 4.8 cents)
- Cash reserves $58.6 million (2009: $14.7 million)
- Revenue $56.1 million (2009: $3.5 million)
- Axiron™ transforms Acrux financial position:
- Global licence agreement with Eli Lilly, with milestone payments of up to US$335 million, plus royalties
on sales of Axiron
- Next milestone payment of US$87 million, subject to FDA approval of Axiron
- New Drug Application submitted to US FDA for review – with decision expected in first quarter of 2011
- Axiron commercial supply established at Orion Corporation
- Dividends to commence in 2011, subject to FDA approval of Axiron
Acrux (ASX: ACR) today announced a maiden profit of $46.6 million, resulting in diluted earnings of 28.7 cents per share. The result was driven by revenue of $56.1 million. Acrux’s financial position was transformed in March 2010 following the signing of an exclusive agreement with the pharmaceutical company Eli Lilly for the global commercialisation of Axiron™. Acrux received US$50 million on signing and is eligible for further milestones of up to US$285 million, as well as royalties on worldwide sales of Axiron.
In September 2009, Acrux announced positive results from the Phase 3 trial of Axiron and then in January 2010 submitted a New Drug Application to the US Food and Drug Administration (FDA). The outcome of the FDA review of that application is expected in the first quarter of 2011. Acrux is eligible for US$87 million under the agreement with Eli Lilly if the FDA issues a marketing authorisation.
“We are delighted to report this substantial first profit to our shareholders, who have been so supportive during Acrux’s development into a profitable business”, said Acrux CEO Richard Treagus. “Subject to FDA approval of Axiron, the board intends to commence paying dividends to shareholders in 2011” he added.
Summary of financial results:
|
|
30 June 2010 $m |
30 June 2009 $m |
|
Revenue from product agreements |
54.9 |
0.6 |
|
Grant income |
0.2 |
0.7 |
|
Interest and other income |
1.0 |
2.2 |
|
Total Revenue |
56.1 |
3.5 |
|
Total Expenditure |
(12.8) |
(23.9) |
|
Profit before capitalised development costs |
43.3 |
(20.4) |
|
Capitalised Axiron |
5.6 |
12.4 |
|
Capitalised Ellavie |
0.3 |
0.3 |
|
Profit before tax |
49.2 |
(7.7) |
|
Income tax expense |
(2.6) |
- |
|
Profit after tax |
46.6 |
(7.7) |
|
Diluted earnings per share |
28.7 cents |
(4.8) cents |
|
Net cash inflow before new capital |
42.6 |
(19.7) |
|
Net share capital net proceeds |
1.3 |
0.1 |
|
Net cash inflow |
43.9 |
19.6 |
|
Net cash |
58.6 |
14.7 |
Revenue
Total revenue for the financial year was $56.1 million (2009: $3.5 million). Revenue from product agreements totalled $54.9 million (2009: $0.6 million). Interest income contributed $1.0 million (2009: $1.6 million) and government grant income added $0.2 million (2009: $0.7 million). Prior year revenue also included foreign currency gains of $0.6 million.
Expenses
Reported operating expenditure was $6.9 million (2009: $11.2 million). Total expenditure before the capitalisation of development costs relating to Axiron and Ellavie™ fell to $12.8 million from $23.9 million in the prior financial year. The total expenditure before capitalisation included $3.8 million of external research and development expenditure, down from $13.1 million in the prior financial year. Phase 3 development expenditure for Axiron was $5.5 million, with $0.3 million product registration expenditure for Ellavie.
Employee benefits expense, before the capitalisation of development costs and excluding the non-cash share options expense, fell to $3.9 million (2009: $4.4 million), as the level of Axiron development activity reduced. The non-cash employee share options expense also reduced to $0.1 million (2009: $0.8 million), with no further options granted during the reporting period.
Professional fees reduced to $0.9 million from $3.4 million in the prior financial year. The prior year included expenses associated with action taken to enforce the contractual performance obligations of Vivus Inc. under the Development and Commercialisation Agreement relating to the testosterone spray for women (Luramist™). The agreement was terminated following that action.
Royalty expenses for the reporting period increased to $1.9 million, representing royalties due to Monash University following the receipt of the revenue on signing of the Axiron licence agreement.
Income tax expense of $2.6 million reflects the first time recognition of the benefit of tax losses, offset by a deferred tax liability for temporary differences between taxable profit and accounting profit that are expected to reverse in future periods. There was no current tax liability at 30 June 2010.
Cash flow
Net cash inflow before new share capital was $42.6 million (2009: $19.6 million outflow). The exercise of employee share options contributed a further $1.3 million to the inflow of cash. Cash reserves at 30 June 2010 were $58.6 million (2009: $14.7 million)
Contact:
Richard Treagus, CEO +61 417 520 509
Jon Pilcher, CFO +61 438 422 271
About Acrux
www.acrux.com.au
- Acrux is an Australian drug delivery company, developing and commercialising a range of patient-preferred, patented pharmaceutical products for global markets, using its innovative technology to administer drugs through the skin.
- Fast-drying, invisible sprays or liquids provide a delivery platform with low or no skin irritation, superior cosmetic acceptability and simple, accurate and flexible dosing. The technology platform is covered by broad and well-differentiated, issued patents.
- Acrux has one product marketed by a licensee in the USA, two products in registration in the USA, one product in registration in Europe and further products at earlier stages of development.
