PAION AG REPORTS FINANCIAL RESULTS FOR THE FIRST HALF-YEAR 2021
- Remimazolam partner activities: Market launches in the U.S. and South Korea, total product sales of licensees of EUR 2.7 million.
- EU market approval for remimazolam (Byfavo(R)) in procedural sedation; approval and product launch of Byfavo(R) in UK
- Expansion of European product portfolio with GIAPREZA(R) and XERAVA(R) and transformation into commercial specialty pharma company; recent launch of GIAPREZA(R) in Germany
- EUR 7.8 million raised in rights issue and EUR 20 million loan drawn from EIB
- Revenues of EUR 3.6 million
- Cash and cash equivalents of EUR 21.2 million as of 30 June 2021
- Conference call today at 2:00 p.m. CEST (1:00 p.m. BST/8:00 a.m. EDT)
Aachen (Germany), 23 August 2021 - 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 2021.
Dr. Jim Phillips, CEO of PAION AG, commented: "We are delighted with the recent launches of two of our three products - GIAPREZA(R) and Byfavo(R) - in Germany and the United Kingdom, respectively. Further product launches in selected European markets and also the launch of our third product XERAVA(R) will take place in the coming months as part of our staggered country-specific rollout. In the U.S. and Asia, we recognise the progress our remimazolam partners are making despite the challenges of working during a global pandemic. We hope to serve all of our markets, especially physicians and patients, in the coming months. We are working hard to implement our plans so that we can successfully continue our transformation into a commercial specialty pharmaceutical company."
Update and outlook
Regulatory activities with remimazolam in Europe
Procedural sedation: The European Commission approved Byfavo(R) (remimazolam) in the EU (including European Economic Area (EEA) countries) in March 2021. The decision of the UK Medicines & Healthcare products Regulatory Agency (MHRA) for approval in the United Kingdom followed in June 2021.
General anesthesia: Based on the positive results in the Phase III trial in general anesthesia and the approval in procedural sedation, PAION plans to submit an extension of the market approval application (MAA) for remimazolam for general anesthesia until the end of 2021. The approval process for an extension application is generally faster than for an MAA.
Remimazolam partner activities in the first half of 2021
Remimazolam licensees had product revenues in the amount of EUR 2.7 million in the first half of 2021. Based on these, PAION receives royalty payments in varying amounts. Sales of remimazolam in China are growing particularly well and China is currently the largest market globally, whilst in Japan the market is strong, but a previous batch recall and therefore limited supply hindered the sales in market. In the U.S., access to clinics and prescribers has been severely limited in the first half of 2021 by Covid-19 effects on the healthcare system, and PAION is hoping to see growth accelerating in the second half of 2021.
In the U.S., the launch of remimazolam (trade name BYFAVOTM) in the indication procedural sedation by licensee Acacia Pharma (Acacia) was announced in January 2021. Due to the Covid-19 pandemic, access to clinics and prescribing doctors was severely limited, but according to Acacia, initial market response was very positive. At the end of June 2021, Acacia reported BYFAVOTM to be on track to meet its full year 2021 formulary acceptance goals. Until the end of June 2021, BYFAVOTM had been put on formulary in 47 accounts, against an expectation of 150 for the full year 2021; this represents an increase of 40 accounts since March 2021. For the indication general anaesthesia, the license agreement with Cosmo/Acacia originally provided for an option for the U.S. rights to develop and commercialize remimazolam. As this option was not exercised by the licensee, it has now lapsed. An advisory meeting with the FDA (U.S. Food and Drug Administration) on suitability of the European clinical program for filing of a New Drug Application (NDA) in the U.S. is now planned. Thereafter, PAION will intensify the discussion with interested parties for this license.
For the license territory Japan, PAION and Mundipharma have agreed on an amendment of the royalty calculation in the first half-year 2021. A corresponding contract amendment has been put in place. Under the terms of the amendment, PAION will receive 15.5% royalties on net sales. From mid-2023 onwards, the royalty rate could be reduced in case of (too) high cost of goods in relation to net sales, but not below 5%. The remaining royalties from the fiscal year 2020 of EUR 0.2 million were paid in the second quarter 2021 and are disclosed as revenue in the first half-year 2021 accordingly. Mundipharma initiated a Phase II/III clinical trial in May 2021 to evaluate the efficacy and safety of remimazolam in Japanese patients undergoing gastrointestinal endoscopy. Following approval in general anesthesia, this will develop an additional indication in Japan.
In July 2021, the NDA for remimazolam in general anesthesia was accepted for review by the National Medical Products Administration (NMPA) in China. Yichang Humanwell had recently completed the clinical development for remimazolam in general anesthesia. In Shanghai, the first Securities Times journal's "Drug Innovation Award" ceremony was held on 10 June 2021. On site, Yichang Humanwell won the annual drug innovation achievement award. Ruima(R) (remimazolam) was selected for the "Annual Pharmaceutical Innovation Achievement Award". Supported by Yichang Humanwell, Chinese investigators are currently exploring the use of Ruima(R) in additional indications, in multi-center trials in intensive care unit (ICU) sedation of patients during and after mechanical ventilation. Another multi-center investigator-initiated trial (IIT) is studying Ruima(R) for use in spinal anesthesia, with a focus on elderly patients.
In South Korea, licensee Hana Pharm received market approval for ByfavoTM (remimazolam) in general anesthesia in January 2021 and launched in South Korea at the end of March 2021. Hana Pharm has recently reported that the domestic landing and market positioning strategy of ByfavoTM was successful in the three months after its launch. Hana Pharm has initiated various academic activities and clinical trial promotion strategies to increase the accessibility of ByfavoTM starting with the ByfavoTM launch symposium held at the end of April 2021.
In March 2021, PAION and TTY Biopharm (TTY) entered into a license agreement for remimazolam with PAION granting TTY an exclusive license for the development and commercialization of remimazolam in Taiwan.
GIAPREZA(R) and XERAVA(R)
In January 2021, PAION entered into an exclusive license agreement with La Jolla Pharmaceutical Company for the intensive care products GIAPREZA(R) (angiotensin II) and XERAVA(R) (eravacycline). The agreement grants PAION an exclusive license for the commercialization of these two approved products in the European Economic Area, the United Kingdom and Switzerland. GIAPREZA(R) is a vasoconstrictor indicated for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite other therapeutic measures. XERAVA(R) is a novel fluorocycline type of antibiotic indicated for the treatment of complicated intra-abdominal infections in adults.
With the addition of GIAPREZA(R) and XERAVA(R) to its commercial portfolio, PAION has started to establish its own commercial structures in certain core countries in Western Europe including Germany, UK, the Netherlands and Denmark to market GIAPREZA(R) and XERAVA(R) together with Byfavo(R). PAION has started the commercialization of Byfavo(R) and GIAPREZA(R) in the second half of 2021 in a staggered manner by country so that by the end of 2022, launches are planned to have been conducted in most key European markets.
In June 2019, PAION signed a financing agreement for a loan of up to EUR 20 million with the European Investment Bank (EIB). The first two tranches amounting to EUR 12.5 million in total were drawn down in February 2021. The third tranche in the amount of EUR 7.5 million was drawn down in June 2021.
In April 2021, a rights issue was completed with gross proceeds of EUR 7.8 million. The subscription rate was over 92%. Thereby, the share capital of PAION AG was increased to EUR 71,336,992.00 by using the Authorized Capital 2020 through the issuance of 5,095,499 new shares.
Results of operations, financial position and net assets
Revenues in the first half-year 2021 amounted to EUR 3.6 million of which EUR 2.6 million resulted from milestone payments and EUR 1.0 million from remimazolam API sales to licensees (EUR 0.5 million) and royalties (EUR 0.5 million). In the prior-year period, revenues amounted to EUR 3.5 million and mainly resulted from milestone payments.
Cost of sales amounted to EUR 0.5 million in the first half-year 2021.
Research and development expenses in the first half-year 2021 amounted to EUR 2.9 million (prior-year period: EUR 6.4 million) and decreased as planned particularly due to the completion of the EU Phase III study in general anesthesia in the previous year.
General administrative and selling expenses increased by EUR 5.1 million to EUR 8.7 million in the first half-year 2021 compared to the prior-year period. General administrative expenses increased by EUR 0.9 million to EUR 2.5 million, mainly due to financing activities and the expansion of IT systems and infrastructure. Selling expenses increased as planned by EUR 4.2 million to EUR 6.2 million, mainly due to commercialization and supply chain activities for the three products Byfavo(R), GIAPREZA(R) and XERAVA(R) in Europe.
Earnings before interest and tax amounted to EUR -8.6 million in the first half-year 2021 and decreased by EUR 1.9 million compared to the prior-year period (earnings before interest and tax in the prior-year period: EUR -6.7 million).
The financial result amounted to EUR -2.2 million in the first half of 2021 (prior-year period: EUR -0.1 million) and mainly comprises expenses in connection with the EIB loan drawn down in the reporting period totaling EUR 20 million. In the prior-year period, the financial result mainly comprised expenses in connection with convertible notes issued in fiscal year 2019.
Income taxes amounted to EUR 0.4 million in the first half-year 2021 (prior-year period: EUR 0.7 million) and mainly relate to tax claims for reimbursement of parts of the research and development expenses from the British tax authorities. The decrease in comparison to the prior-year period is mainly due to lower research and development expenses.
The net result for the first half-year 2021 amounted to EUR -10.4 million compared to a net result of EUR -6.1 million in the prior-year period. This corresponds to a decrease of the net result in the amount of EUR 4.3 million compared to the first half-year 2020 which is mainly attributable to lower expenses for research and development on the one hand and higher financial expenses as well as general administrative and selling expenses than in the prior-year period on the other hand.
Compared to 31 December 2020, cash and cash equivalents increased by EUR 1.5 million to EUR 21.2 million at the end of the current reporting period.
Equity amounted to EUR 18.2 million as of 30 June 2021 (31 December 2020: EUR 21.3 million). The decrease of EUR 3.1 million mainly results from the negative net result of the first half-year 2021 on the one hand, and the proceeds from the issue of new shares in the course of a rights issue completed in April 2021 on the other hand. As of 30 June 2021, the equity ratio was 37.5% (31 December 2020: 75.6%).
Risks and opportunities
Material risks and opportunities relating to future development are presented in detail in the group management report for the fiscal year 2020. The overall evaluation of opportunities and risks has not changed significantly in the first half-year 2021.
Business Outlook 2021
PAION's focus in 2021 remains on preparing and starting the commercialization of its product portfolio, consisting of Byfavo(R), GIAPREZA(R) and XERAVA(R), and on further building a distribution infrastructure in selected European countries. In addition, PAION plans to submit the MAA for Byfavo(R) for general anesthesia in Europe by the end of 2021. PAION has started launching its products in a staggered manner by country beginning in the second half of 2021 so that by the end of 2022, launches are planned to have been conducted in most key European markets.
It is planned to grant the commercialization rights for Byfavo(R), GIAPREZA(R) and XERAVA(R) to licensees in selected territories in Europe where no own commercialization is planned, and to also out-license remimazolam for additional markets outside Europe as well.
Research and development activities are planned to a minor extent and mainly relate to final evaluations and documentation of the Phase III study with remimazolam in general anesthesia and the subsequent submission of the MAA for this indication. In addition, minor work is taking place in the area of production development.
After the launches of remimazolam in the U.S., Japan, China and South Korea with total product revenues in the amount of EUR 2.7 million in the first half of 2021, PAION expects that the good market acceptance observed so far will translate into increasing revenues of our licensees and resulting royalties for PAION.
Financial outlook 2021
PAION expects revenues of about EUR 8 million to about EUR 9.5 million in fiscal year 2021. The sale of remimazolam API and royalties from the commercialization of remimazolam account for approx. EUR 4 million to approx. EUR 4.5 million (previous guidance: approx. EUR 5 million to approx. EUR 6 million). For milestones and upfront payments, including potential new license agreements in minor territories, approx. EUR 4 million to approx. EUR 5 million (previous guidance: approx. EUR 2.5 million to approx. EUR 3 million) are expected. Revenues from the own commercialization of Byfavo(R), GIAPREZA(R) and XERAVA(R) are not included in this guidance since commercialization has only just started, and are expected in an amount of up to EUR 0.2 million (previous guidance: approx. EUR 0.5 million). Cost of revenues will amount to approx. EUR 3 million (previous guidance: approx. EUR 3.5 million to approx. EUR 4 million).
Focus of the activities is on marketing and distribution in 2021 so that general administrative and selling expenses of approx. EUR 18 million to approx. EUR 20 million are expected, depending on the progress of commercial activities. Research and development expenses will amount to between approx. EUR 4.5 million and approx. EUR 5.5 million. Earnings before interest and tax of approx. EUR -16 million to approx. EUR -20.5 million (previous guidance: approx. EUR -16.5 million to approx. EUR -21.5 million) are expected for 2021.
This outlook assumes that PAION and licensee activities progress as expected. In case of delays, essential cost blocks and/or revenues would shift into 2022 or subsequent periods. Plans are also based on the current status of discussions with regulatory authorities. Additional unexpected requirements by regulatory authorities could lead to higher costs than planned and to delays in approvals and revenues based thereon. Also, potential effects of the Covid-19 pandemic on our business and the business of our partners could lead to delays and a shift of revenues and/or costs.
PAION expects increasing revenues in the coming years, both from license agreements and from its own commercialization in parts of Europe, and, based on current planning, a break-even towards the end of 2023 or beginning of 2024. Cash and cash equivalents at hand as well as expected payments from revenues secure a liquidity runway into the first half of 2022 based on current planning. Additional funds will be required particularly for the further build-up of the distribution infrastructure, the staggered launch in Europe by countries as well as post-approval commitments towards the respective regulatory authorities, as e.g. possible Phase IV studies after approval or market launch of the products. Based on current planning, there is a financing requirement in the mid double-digit million range in the coming years until break-even, which could be raised through different financing measures and further partnerships.
Key Consolidated Financial Figures, IFRS
|(all figures in KEUR unless otherwise noted)
|Research and development expenses
|General administrative and selling expenses
|Earnings before interest and tax (EBIT)
|Result for the period
|Earnings per share in EUR for the period (basic)
|Earnings per share in EUR for the period (diluted)
|Cash flow from operating activities
|Cash flow from investing activities
|Cash flow from financing activities
|Change in cash and cash equivalents
|Average number of employees in the Group
||30 June 2021
||31 Dec. 2020
|Cash and cash equivalents
|Balance sheet total
The full half-year financial report will be available as of 23 August 2021 on PAION's website at https://www.paion.com/medien-und-investoren/investorcenter/finanzberichte/.
Conference call and webcast
In addition to the publication of results, the Management Board of PAION AG will host a conference call (conducted in English) on 23 August 2021 at 2:00 p.m. CEST (1:00 p.m. BST/8:00 a.m. EDT) to present the financial results of the first six months of 2021 and provide a pipeline and strategy update and financial outlook.
To access the call, please dial:
* Germany +49 (0) 30 3001 90612,
* UK +44 (0) 33 0551 0200,
* 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: PAION AG Conference Call on the Financial Results for the First Half of 2021 (world-television.com).
PAION AG is a publicly listed specialty pharmaceutical company with innovative drugs to be used in hospital-based sedation, anesthesia and critical care services. PAION's lead compound is remimazolam, an intravenous, ultra-short-acting and controllable benzodiazepine sedative/anesthetic. Remimazolam is partnered in multiple territories outside of Europe. Remimazolam is approved in the U.S., the EU/EEA/UK and China for procedural sedation and in Japan and South Korea for general anesthesia.
In addition to Byfavo(R) (remimazolam), PAION has two further products, GIAPREZA(R) (angiotensin II) and XERAVA(R) (eravacycline), in its portfolio. GIAPREZA(R) is a vasoconstrictor indicated for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies. XERAVA(R) is a novel fluorocycline type of antibiotic indicated for the treatment of complicated intra-abdominal infections in adults.
PAION's mission is to be a leading specialty pharmaceutical company in the fields of anesthesia and critical care by bringing novel products to market to benefit patients, doctors and other stakeholders in healthcare.
PAION is headquartered in Aachen (Germany).
Vice President Investor Relations/Public Relations
52078 Aachen - Germany
Phone +49 241 4453-152
E-mail [email protected]
This release contains certain forward-looking statements concerning the future business of PAION AG. These forward-looking statements contained herein are based on the current expectations, estimates and projections of PAION AG's management as of the date of this release. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors. Should actual conditions differ from the Company's assumptions, actual results and actions may differ materially from any future results and developments expressed or implied by such forward-looking statements. Considering the risks, uncertainties and other factors involved, recipients should not rely unreasonably upon these forward-looking statements. PAION AG has no obligation to periodically update any such forward-looking statements to reflect future events or developments.
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