SYGNIS Pharma AG has reported results for the fiscal year 2011/2012 ending on March 31, 2012.
In the past twelve months, focus of the business operations was on the clinical development of its drug candidate AX200 for the treatment of acute stroke and further development of the pre-clinical KIBRA project.
Additionally, SYGNIS examined options to extend its pipeline, possibly with strategic partnerships or business transactions. Following the negative AXIS 2 results and termination of the development project AX200 these activities were intensified.
In this context, SYGNIS has signed a binding term sheet with GENETRIX, after period end, to combine SYGNIS with GENETRIX’s subsidiary X-Pol Biotech S.L.
X-Pol Biotech is active in the field of DNA sequencing. The goal is to further develop and market X-Pol Biotech’s DNA sequencing technologies and products.
Peter Willinger, Chief Financial Officer, comments: “The fiscal year 2011/2012 was characterized by the completion of the AXIS 2 trial in December 2011. Data published did not show sufficient efficacy of AX200 in the treatment of stroke patients. Since this ruled out the commercialization of AX200, we had to completely write off the project. At the same time, we explored different opportunities for a strategic realignment of the Company and were able to announce a first success in July. After the planned merger with X-Pol Biotech, SYGNIS will continue to operate in the biotech sector, but with a new focus, a lower risk profile and the opportunity to generate revenues already in the short term.”
Net loss in fiscal 2011/2012 amounted to -€17.4 million (2010/11: -€12.4 million). This further decline in net loss resulted mainly from an impairment loss of goodwill and other intangible assets of €20.2 million in connection with the discontinuation of the AX200 project.
This was partially offset by income from the purchase of an outstanding loan. With effect as of March 31, 2012, SYGNIS had purchased the claims combined with the loan amounting to €8.0 million for a price of €1.00 from BASF SE and thus realized gains of €8.0 million.
R&D expenditure was down by €3.9 million to €6.6 million (2010/11: €10.5 million). The decrease in R&D expenses mainly resulted from a higher level of investment in the AXIS 2 trial in the previous year and reduced personnel expenditure due to restructuring measures executed in the previous year.
Results from available-for-sale financial investments increased to €0.8 million (2010/11: -€0.1 million). This was mainly due to realized gains from the sale of shares in Noema Life S.p.A.
Income taxes include income of €2.0 million due to the reversal of deferred tax liabilities (2010/11: €0.3 million). Impairment losses on intangible assets, following termination of the AX200 project, led to a reduction of corresponding deferred tax liabilities.
Cash outflow from operating activities was up from €8.3 million in the previous year to €8.7 million. Though other operating expenses were reduced in the reporting period, a part of the expenditure of the previous year only affected liquidity in fiscal year 2011/2012.
Cash flow from investing activities was positive and amounted to €2.4 million (2010/11: €0.9 million), mainly caused by the sale of securities. Due to the capital increase, cash flow from financing activities increased to €6.1 million (2010/11: €0.0 million).
Cash and cash equivalents including available-for-sale securities were €4.2 million (2010/11: €6.8 million) as at March 31, 2012. Long-term debt was reduced from €10.8 million to €0.6 million as a result of the loan acquired from BASF SE and the reduction of deferred tax liabilities. Short-term debt was also down, decreasing from €3.8 million to €2.2 million.
Compared to the previous year, the balance sheet total was down from €32.3 million to €8.6 million, primarily due to the impairment losses of intangible assets.
As a result of the net loss for the year, equity was down to €5.7 million (2010/11: €17.7 million). Equity ratio was 66%, accordingly (2010/11: 55%).
For the current financial year 2012/2013 emphasis is being placed on securing sufficient funding and the further implementation of the strategic realignment through the proposed merger with X-Pol Biotech. With this merger and the marketing of existing products and technologies, SYGNIS expects to generate initial revenues.
For the KIBRA project SYGNIS is looking for a pharma partner. The Company has therefore started a systematic partnering process and is in ongoing discussions with potential partners for the project.
However, should the Company not succeed in winning a partner for KIBRA, the management will have to reconsider the future of this project.
The Company’s available financial assets as of March 31, 2012 secure the liquidity of SYGNIS until approximately March 2013. This estimation does not include revenues that may result from potential research co-operations for the KIBRA project. To further finance its business activities, the Company will have to rely on further funding from March 2013 on.