BIOTIE THERAPIES CORP. Â Â Â STOCK EXCHANGE RELEASE Â Â Â 29 October 2010 at
9.00 a.m.
Biotie Announces Restructuring Plan; Future Focus Exclusively on Clinical
Development; Conference Call Today
Biotie announced today that it will implement a restructuring plan to focus its
business exclusively on clinical development and will transfer all operations to
its headquarters in Finland. The restructuring would result in significant
personnel and cost reductions. These initiatives are designed to leverage the
company's development expertise and focus resources on the clinical assets that
the company believes will best enhance shareholder value.
As part of the restructuring process, Biotie will spin-off its site in Radebeul,
Germany in an MBO transaction and will take a minority interest in the spin-off
company, biocrea GmbH. Thomas Kronbach, Biotie's Chief Scientific Officer, will
leave Biotie to become Managing Director of the new entity, into which all
employees and all pre-clinical assets of Biotie Therapies GmbH (Biotie's
subsidiary in Radebeul, Germany) will be transferred.
Biotie will provide initial funding in the amount of up to EUR 4.8 million over
the next 12 months to start off the new business, but it is anticipated that
biocrea will attract and mainly rely on independent funding sources in the
future. While Biotie will retain its German subsidiary Biotie Therapies GmbH,
there will be no business operations or employees in its German site going
forward.
Workforce reduction measures would also impact Biotie's activities in its
headquarters in Turku, Finland. The company would maintain all competencies
necessary to support clinical development and business operations in order to
progress its current clinical pipeline and continue licensing and business
development activities. Effective today, Biotie will start a company-wide
regulated co-determination process with employees in Finland regarding a
potential reduction of headcount by up to 15 employees. Following the spin-off
in Germany and execution of planned restructuring measures in Finland, Biotie
expects its total number of employees going forward would be approximately 22,
all based at its headquarters in Turku, Finland.
Biotie's collaboration with Lundbeck for the development and commercialization
of nalmefene for alcohol dependence is unaffected by the restructuring.
Furthermore, the company will focus its development activities around
ronomilast, its oral, once daily PDE4 inhibitor and BTT-1023, its fully human
monoclonal antibody targeting VAP-1. Both products have successfully completed
multiple phase I trials and preparatory activities towards phase II trials are
underway for these two programs.
Timo Veromaa, President and CEO of Biotie stated: "We are confident that the
steps we would be taking today would allow us to focus on our core competencies
and to efficiently advance our existing clinical pipeline. The resulting
streamlined organization and corporate structure would enable us to build a
stronger clinical pipeline and additionally consider other strategic options to
deliver longer-term sustainable growth going forward. We look forward to the
upcoming results from the ongoing phase III trials of nalmefene in alcohol
dependence and remain enthusiastic about the differentiated profile of our oral
PDE-4 inhibitor, ronomilast, and by the broad potential of our VAP-1 antibody
for the treatment of inflammatory disorders".
The restructuring measures, including the intended spin-off of the German site
will be initiated immediately but completion of these measures and timing of
one-off charges related to these is subject to local regulations. Biotie will
record one-off costs of EUR 2.9 million in Q3 2010 in relation to the
discontinued operations in Germany, mainly due to write-offs of certain
intangible assets and goodwill. The restructuring plan, including the equity
investment into biocrea GmbH will lead to additional cash outflows of
approximately EUR 2.5-3 million in Q4 2010. Further cash outflows of approx EUR
2-2.5 million will take place in future periods in connection with the
restructuring plan.
Cost savings that will result from the restructuring are expected to be at least
EUR 4 million annually from 2011 onwards. The measures in connection to the
restructuring plan will accelerate cash outflows in 2010 and the company expects
to end the year with EUR 3.5-4.5 million in liquid assets, net of any additional
cash inflows. Biotie will need to secure its working capital in the near term
future in order to execute its intended product development activities. Income
generated from commercial agreements relating to Biotie's clinical programs may
significantly improve the company's financial position, but no reliable forecast
on any potential income from such commercial agreements can be provided. Biotie
may therefore need to secure additional financing through the issue of shares,
either by exercising its existing standby equity distribution agreement with
Yorkville or through share issues to other parties.
Thomas Taapken, CFO of Biotie commented: "Realigning our business to focus
exclusively on clinical development should give us greater strategic and
financial flexibility going forward and we believe that we would be better
positioned to secure additional funding in the future. By narrowing our focus we
could fully concentrate our resources on our clinical pipeline and would in
addition seek additional strategic options to deliver longer-term sustainable
growth going forward"
Conference call and webcast: Biotie's management will discuss the restructuring
on its third quarter 2010 financial results conference call today, 29 October
2010 at 3 p.m. Finnish, 2 p.m. CET, 8 a.m. New York.
Callers may access the conference directly at the following telephone numbers:
US: +1 212 444 0894, UK: +44 (0)20 7138 0825 and Finland: +358 (0)9 2319 4344
access code 4085851. Lines are to be reserved ten minutes before the start of
conference call. The event can also be viewed as a live webcast at
www.biotie.com. An on demand version of the conference will be published on
Biotie´s website later during the day. In case you need additional information
or assistance, please contact: Virve Nurmi, IR Manager Biotie Therapies,
Tel.+358 2 2748 911
Turku, 29 October 2010
Biotie Therapies Corp.
Timo Veromaa
President and CEO
For further information, please contact:
Virve Nurmi, Investor Relations Manager
tel. +358 2 274 8911, e-mail: virve.nurmi@biotie.com
www.biotie.com
ABOUT BIOTIE THERAPIES
Biotie is a specialized drug development company focused on central nervous
system and inflammatory diseases. It has several innovative small molecule and
biological drug candidates at different stages of clinical development. Biotie's
products address diseases with high unmet medical need and significant market
potential, including addiction and a broad range of inflammatory conditions such
as rheumatoid arthritis and chronic obstructive pulmonary disease (COPD). The
most advanced product, nalmefene for alcohol dependence, is currently in phase
III clinical development by licensing partner H. Lundbeck A/S.
Biotie is based in Turku, Finland and its shares are listed on NASDAQ OMX
Helsinki Ltd.
For more information, please refer to www.biotie.com
[HUG#1456959]
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Source: Biotie Therapies Oyj via Thomson Reuters ONE
