PAION AG REPORTS ON SUCCESSFUL FISCAL YEAR 2020
DGAP-News: PAION AG / Key word(s): Annual Results
PAION AG REPORTS ON SUCCESSFUL FISCAL YEAR 2020
- Significant progress with remimazolam: Market approvals in the U.S., Japan, South Korea and China; launches conducted in Japan and China in 2020, in the U.S. in the beginning of 2021
- EU market approval received for remimazolam in procedural sedation in 2021
- Partners in China & Japan report strong product uptake with combined net sales reaching EUR 2.6 million and bring first royalties of EUR 0.3 million for PAION
- Expansion of European product portfolio with GIAPREZA(R) and XERAVA(R); PAION post year end completes specialty pharma transformation
- Positive results from EU Phase III trial in general anesthesia
- Revenues of EUR 19.7 million
- Net profit of EUR 2.2 million
- Cash and cash equivalents of EUR 19.7 million as of 31 December 2020
- Capital increase with subscription rights of almost EUR 8 million started in March 2021
- Conference call tomorrow at 2:00 p.m. CEST (8:00 a.m. EDT)
Aachen (Germany), 30 March 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 fiscal year 2020.
"The year 2020 kicked off PAION's transformation into a commercial specialty pharma company now offering novel products in anesthesia and critical care. Outstanding milestones were the first approvals of remimazolam in key pharma markets and the first successful launches by our partners. The associated milestone payments have led to a positive full-year result in 2020," commented Dr. Jim Phillips, CEO of PAION AG. "In selected European countries, we are completing the build-up of our commercial affiliates for the launches of our product portfolio starting in the second half of 2021. With the recently in-licensed critical care products GIAPREZA(R) and XERAVA(R) and the recently received European approval of remimazolam in procedural sedation, we look forward to launching these three novel products in Europe and addressing previously unmet medical needs. In general anesthesia, we have completed our European Phase III study with remimazolam with positive data and plan to file for approval in Europe by the end of 2021.
We will use the gross proceeds from the currently ongoing capital increase and the third tranche of the loan from the European Investment Bank totaling approximately EUR 15.3 million to undertake the commercial launch of our product portfolio in selected European countries."
Update and outlook on remimazolam
Procedural sedation: PAION submitted a market approval application (MAA) for procedural sedation to the European Medicines Agency (EMA) in November 2019. On 28 January 2021, the Committee for Medicinal Products for Human Use (CHMP) of the EMA adopted a positive opinion recommending the approval of Byfavo(R) (remimazolam) for procedural sedation in adult patients. The European Commission finally approved Byfavo(R) in the EU (including European Economic Area (EEA) countries) in March 2021. The decision of the UK Medicines & Healthcare products Regulatory Agency (MHRA) on a potential approval in the UK is expected shortly.
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 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.
In Japan, licensee Mundipharma received market approval for Anerem(R) (remimazolam) for general anesthesia in January 2020 and has successfully launched Anerem(R) in mid-2020 with first commercial product sales. By the end of 2020, Mundipharma reported they had about 400 hospitals opening account. According to Mundipharma, this exceeded their original target by close to 100%. In addition, they are supporting Investigator Initiated Trials. Mundipharma plans to start a Phase II/III trial in the first half of 2021 to evaluate the efficacy and safety of remimazolam in Japanese patients undergoing gastrointestinal endoscopy. Following approval in general anesthesia, a further indication is now being developed in Japan.
In China, licensee Yichang Humanwell received market approval for Ruima(R) (remimazolam) in procedural sedation in July 2020 and successfully launched Ruima(R) in the third quarter 2020 as well. By the end of 2020, Yichang Humanwell reported having launched Ruima(R) to hospitals in 31 Chinese provinces. In July 2020, Yichang Humanwell had initiated a Phase III trial in general anesthesia. The multicentre, single-blind randomized comparative clinical trial of efficacy and safety of remimazolam versus propofol in induction and maintenance of general anesthesia in 516 elective surgery patients. Patient enrolment was completed on schedule in December 2020 and headline data are expected in mid-2021.
In South Korea, licensee Hana Pharm received market approval for BYFAVOTM (remimazolam) in general anesthesia in January 2021 and plans to launch in South Korea mid-2021. In January 2020, PAION and Hana Pharm extended their license agreement for remimazolam to include Southeast Asia (Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam). Hana Pharm conducts the regulatory process in each country with local partners.
In Russia, licensee R-Pharm announced the successful completion of a Phase III trial in general anesthesia in November 2018. As the regulatory requirements for remimazolam API (active pharmaceutical ingredient) in Russia differ from those in the EU, PAION and R-Pharm are currently working together to create the necessary conditions for the submission of a marketing authorization application in Russia.
In Canada, PAION expects that its licensee Pharmascience can use the U.S. market approval dossier as the basis for filing for market approval for remimazolam. PAION is currently in discussions with Pharmascience in order to achieve a potentially speedy submission of the marketing authorization application and subsequent launch in Canada, which are expected to be completed shortly.
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)
Supply chain activities
On 19 March 2021, a capital increase with subscription rights with gross proceeds of EUR 7.8 million was resolved. By means of this capital increase, the share capital of PAION AG is planned to be increased by EUR 5,095,499.00 from EUR 66,241,493.00 to EUR 71,336,992.00 by utilization of the Authorized Capital 2020 by issuing 5,095,499 new shares.
Results of operations, net assets and financial position in the reporting period
Revenues recognized in the reporting period amounted to EUR 19.7 million and primarily resulted from milestone payments in connection with the market approvals of remimazolam in the U.S. and Japan as well as the license extension signed with Hana Pharm in January 2020 to include six additional countries in Southeast Asia. Revenues in the amount of EUR 8.0 million in the previous year related to the remimazolam license agreements with Cosmo and R-Pharm.
Research and development expenses amounted to EUR 10.3 million and mainly relate to the EU Phase III trial in general anesthesia completed in the reporting period. The decrease of EUR 2.8 million compared to the prior year mainly results from lower expenses for this study as well as lower expenses for production development.
General administrative and selling expenses amounted to EUR 7.5 million and increased by EUR 2.5 million compared to the previous year. Administrative expenses decreased by EUR 0.3 million to EUR 3.2 million while selling expenses increased by EUR 2.8 million to EUR 4.3 million. The increase of selling expenses is mainly in connection with pre-commercial activities and the build-up of a supply chain for remimazolam. The decrease of administrative expenses mainly results from expenses recognized in the prior year in connection with the conclusion of the loan agreement with the EIB and the issue of convertible notes that were not incurred in the reporting period.
Tax income of the fiscal year relates to tax claims for reimbursement of parts of the research and development expenses from the British tax authorities. The decrease by EUR 1.6 million in comparison to the prior year is mainly due to a cap of the claim based on the net result of PAION UK Ltd.
PAION closes fiscal year 2020 with a net profit of EUR 2.2 million after a net loss of EUR 7.0 million in the previous year.
Cash and cash equivalents amounted to EUR 19.7 million as of 31 December 2020, an increase of EUR 0.9 million compared to EUR 18.8 million as of 31 December 2019.
The cash flow from operating activities mainly results from the net profit of EUR 2.2 million as well as changes in the working capital.
Financial outlook 2021
PAION expects revenues of about EUR 8 million to about EUR 9.5 million in 2021. Approx. EUR 7.5 million to approx. EUR 9 million of the revenues are expected from existing licensees, thereof approx. EUR 5 million to approx. EUR 6 million from the sale of remimazolam API as well as royalties from the commercialization of remimazolam, and approx. EUR 2.5 million to approx. EUR 3 million from milestones. Revenues from the own commercialization of Byfavo(R), GIAPREZA(R) and XERAVA(R) are expected in an amount of approx. EUR 0.5 million. Cost of revenues will amount to approx. EUR 3.5 million to approx. EUR 4 million.
Focus of the activities will be 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 -16.5 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, expected cash inflows from the recently launched rights issue of almost EUR 8 million and the outstanding loan tranche of EUR 7.5 million from the EIB, 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 planned 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
The full annual financial report will be available on 30 March 2021 on PAION's corporate website: https://www.paion.com/medien-und-investoren/investorcenter/finanzberichte/.
Conference call and webcast
To access the call, participants may dial from
* 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 give the password "PAION". The conference call will include a webcast presentation, which can be accessed during the call using the following link: PAION AG Conference Call
In addition to Byfavo(R) (remimazolam), PAION is preparing to launch the two products GIAPREZA(R) (Angiotensin II) and XERAVA(R) (Eravacycline) in Europe. 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 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.
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