4basebio AG: 4basebio AG reports first quarter 2020 financial results

DGAP-News: 4basebio AG / Key word(s): Quarterly / Interim Statement
14.05.2020 / 07:30
The issuer is solely responsible for the content of this announcement.

4basebio AG reports first quarter 2020 financial results

4basebio reports strong Q1 net profit following Abcam transaction

– Significant cash position enables focus on further strategy

– Successful completion of 10% share buyback

– Continued development of DNA manufacturing technology

Heidelberg, Germany and Cambridge, UK, 14 May 2020 – 4basebio AG (Frankfurt: 4BSB; ISIN: DE000A2YN801; Prime Standard) today reported a very strong positive net profit for the quarter ended 31 March 2020, following the sale of its proteomics and immunology businesses to Abcam on 1 January 2020.

“We are pleased to report a strong overall performance for Q1 2020, demonstrating the success of the Company’s buy and build strategy over the past three years,” commented Dr Heikki Lanckriet, CEO. “With the transaction now completed, we have significantly strengthened our cash position and we are now extremely well placed to focus on the continued development of our proprietary synthetic DNA manufacturing technology. Alongside this, we will continue to focus on our buy and build strategy.”

David Roth, CFO of 4basebio, added: “During Q1 we also successfully concluded a 10% share buyback, with the shares held in treasury at the end of the period. We have now announced our intention to cancel those shares and will be seeking approval from shareholders for a further share buyback authority at our AGM on 17 June. We closed the quarter with a total of EUR 101.3 million in cash equivalents including cash balances of EUR 86.9 million, with a further EUR 14.4 million in escrow following the Abcam transaction.”

First quarter of 2020 Financial Results:
Following the sale of the proteomics and immunology businesses to Abcam, the shape of the ongoing operations, as highlighted in the market guidance for 2020, has changed significantly. Consistent with the annual report for 2019, the consolidated statement of financial position and the consolidated statement of comprehensive income which follow show the results for the period from continuing and discontinued operations separately.

Revenues in the first quarter of 2020 amounted to EUR 296 thousand (2019: EUR 295 thousand from continuing operations) in line with our guidance for the year. Total net operating expenses (including cost of goods sold) were EUR 925 thousand in 2020 (2019: EUR 1.2 million from continuing operations).

Finance costs were EUR 173 thousand for the period and relate to non-cash charges on equity instruments. Taxation for the period represents an estimate of the taxes due on the profit arising from the Abcam transaction.

The result for the period includes a profit of EUR 66.9 million from discontinued operations (2019: EUR 378 thousand). The current year result represents the profit from the sale of the proteomics and immunology businesses to Abcam on 1 January 2020.

As previously reported, the terms of the transaction provided for proceeds of EUR 120 million adjusted for debt and cash balances. The following table presents an analysis of the profit on the transaction:

2020 Profit on disposal    
[in €’000]    
     
Proceeds from sale of businesses   120,000
Cash balances received from discontinued operations 2,707
Debt and interest repaid in discontinued operations   (6,044)
Tax liabilities of discontinued operations   (230)
Transaction related expenses 2020   (3,555)
    112,878
Net assets of discontinued operations   (46,015)
Profit on disposal of businesses   66,863

 

In addition, EUR 360 thousand of transaction expenses were recognised in 2019.

As a result, the net profit for the first quarter of 2020 was EUR 65.7 million (2019: loss of EUR 464 thousand).

The balance sheet has significantly changed since 31 December 2019 as a result of the Abcam transaction. Total assets at 31 March 2020 were EUR 106.6 million (31 December 2019: EUR 62.3 million), including cash balances of EUR 86.9 million (31 December 2019: EUR 990 thousand in continuing operations and EUR 2.7 million in discontinued operations) and amounts held in escrow of EUR 14.4 million (31 December 2019: EUR nil).

Non-current assets were significantly higher at EUR 18.1 million (31 December 2019: EUR 3.6 million from continuing operations) due to the classification of the escrow balance as long term (the escrow balance is released 2 January 2022).

Overall cash flows for the quarter were a positive EUR 83.2 million (2019: outflow of EUR 775 thousand). This included net cash flows from the Abcam transaction of EUR 116.1 million, as follows:

2020 Cash flows    
[in €’000]    
     
Proceeds from sale of businesses – in investing cashflows   120,000
Transaction related expenses – in operating cashflows   (3,914)
    116,086

 

Excluding the impact of the transaction, underlying cash outflows from operating activities before interest and taxes were EUR 693 thousand (2019: outflow of EUR 184 thousand). Cash outflows on interest and taxes relate primarily to obligations under discontinued operations.

Net cash inflows from investing activities amounted to EUR 105.4 million, compared to a EUR 175 thousand outflow in the previous year. Cash outflows from financing activities included EUR 6.5 million debt repayments relating primarily to discontinued operations, settlement of an option and EUR 9.7 million in relation to the share buyback which occurred in February 2020. Outflows for the prior year were EUR 260 thousand. The company closed the period with cash balances of EUR 86.9 million.

Outlook 2020:
For the fiscal year 2020, 4basebio reaffirms its guidance of 24 April 2020: The operational cash burn for 2020, excluding expenses relating to the Abcam transaction, is expected to be between EUR 2.5 million to EUR 3.5 million with revenues between EUR 0.5 million and EUR 1.0 million.

 

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4basebio AG, Heidelberg, Germany

Interim results for the three months ending 31 March 2020

Consolidated statement of financial position

    31.03.2020   31.12.2019
[in €’000]        
         
Assets        
         
Other intangible assets   2,070   1,845
Escrow facility (Abcam transaction)   14,400   0
Property, plant and equipment   1,346   1,547
Deferred tax assets   254   254
Non-current assets   18,069   3,646
         
Inventory   421   442
Trade receivables   612   581
Other current assets   577   488
Cash and cash equivalents   86,911   990
Assets held for sale   0   56,104
Current assets   88,523   58,605
         
Total assets 106,592   62,251
         
         
Equity and liabilities        
         
Issued capital   52,310   52,310
Capital reserves   21,754   21,947
Accumulated loss   39,404   (26,324)
Treasury shares   (9,751)   0
Other reserves   (20)   163
Equity   103,696   48,096
         
Financial liabilities   1,465   1,532
Deferred tax liabilities   0   0
Non-current liabilities   1,465   1,532
         
Financial liabilities   208   1,264
Trade payables   458   336
Other current liabilities   765   934
Liabilities associated with assets held for sale 0   10,088
Current liabilities   1,431   12,623
         
Total equity and liabilities   106,592   62,251

 

 

Consolidated statement of comprehensive income

 

  01.01 – 31.03
  2020   2019
[in €’000]      
Continuing operations      
       
Revenues 296   295
Cost of goods sold (230)   (228)
Gross profit 66   67
       
Sales and distribution costs (63)   (34)
Administration expenses (533)   (838)
Research and non-capitalised development costs (183)   (105)
Other operating expenses 0   0
Other operating income 84   32
Operating result (629)   (877)
       
Finance income 0   26
Finance costs (173)   (1)
Financial result (173)   26
       
Earnings before taxes from continuing operations (802)   (851)
Income tax (333)   10
       
Result from continuing operations (1,135)   (841)
       
Discontinued operations      
Earnings after taxes from discontinued operations 66,863   378
       
Result for the period 65,728   (464)
Earnings per share      
– Undiluted (in EUR/share) 1.25   (0.01)
– Diluted (in EUR/share) 1.13   (0.01)
Earnings per share from continuing operations      
– Undiluted (in EUR/share) (0.02)   (0.02)
– Diluted (in EUR/share) (0.02)   (0.01)
       
Items that may be reclassified to the income statement in subsequent periods Other comprehensive income (after taxes)      
Exchange rate adjustments (182)   1,099
Total comprehensive income 65,546   635

 

Consolidated statement of cash flows

 

    01.01 – 31.03
    2020   2019
[in €’000]        
         
Result for the period   65,728   (464)
Profit arising on disposal of businesses to Abcam   (66,863)   0
Income taxes   333   0
Financial result   173   0
Depreciation of property, plant and equipment   109   77
Amortisation and impairment of intangible assets   9   599
Movement in deferred tax   0   (86)
Share option charges   48   66
Other non-cash items   0   45
Transaction related expenses   (3,914)   0
Change in operating assets and liabilities:        
Trade receivables and other current assets   (133)   210
Trade payables   (118)   (416)
Inventories   21   (215)
Cash flows from operating activities (before interest and tax)   (4,607)   (184)
Interest paid   (840)   (155)
Tax paid   (230)   0
Cash flows from operating activities   (5,678)   (339)
         
Business disposals   120,000   0
Investments in property, plant and equipment and intangible assets   (110)   (89)
Abcam escrow facility   (14,400)   0
Investments in capitalised development   (119)   (86)
Cash flows from investing activities   105,372   (175)
         
Cash in(out)flow due to changes in current financial liabilities   (6,487)   (260)
Capital increase by way of cash contribution (less costs of issuing equity)   (268)   0
Share buyback   (9,725)   0
Cash flows from financing activities   (16,480)   (260)
         
Net change in cash and cash equivalents   83,215   (775)
Exchange differences   0   181
         
Cash and cash equivalents at the beginning of the period   3,696   6,238
Cash and cash equivalents at the end of the period   86,911   5,644

 

Consolidated statement of changes in equity

                  Other comprehensive income    
                  Accumulated Exchange effect      
  Issued capital   Capital   Accumulated Treasury   exchange on long term     Total
€ thousand (except Number) Number Amount   reserves   loss Shares   differences assets Total   equity
                           
1 January 2020 52,309,785 52,309   21,946   (26,325) 0   71 92 163   48,091
                           
Share buyback             (9,751)           (9,751)
Option redemption       (267)                 (267)
Result recorded directly in equity representing exchange rate adjustments                 (71) (111) (182)   (182)
Interest on mandatory convertible bond charged to income       26                 26
Share option expense charged to income       48                 48
Net profit for the period           65,728             65,718
Total comprehensive income       74   65,728     (71) (111) (182)   65,610
                           
31 March 2020 52,309,785 52,309   21,754   39,404 (9,751)   (0) (19) (20)   103,696
                           
                           
1 January 2019 51,411,323 51,411   19,753   (23,603) 0   64 (1,121) (1,057)   46,504
Other capital increase costs       (33)                 (33)
Result recorded directly in equity representing exchange rate adjustments           15     108 974 1,082   1,097
Share option expense charged to income       66                 66
Net loss for the period           (464)             (464)
Total comprehensive income       33   (449)     108 974 1,082   666
                           
31 March 2019 51,411,323 51,411   19,786   (24,052) 0   172 (147) 25   47,170

 

 

For further information, please contact:

4basebio AG
Dr. Heikki Lanckriet, CEO/CSO
Phone: +44 1223 873 364
Email: heikki.lanckriet@4basebio.com

Dr. Robert Mayer, Manager IR
Phone: +49 171 3876540
Email: robert.mayer@4basebio.com

MC Services AG
Julia Hofmann
Phone: +49 89 210228 0
Email: 4basebio@mc-services.eu

About 4basebio AG:

4basebio AG, formerly operating under the name of Expedeon AG, is an enabler of exciting advances in medical science and patient care. After divestment of its immunology and proteomics products portfolio on 1 January 2020, the Company changed its name to 4basebio AG reflecting the enhanced focus on technologies and products centered around DNA. The Company is focusing on DNA manufacturing to supply DNA products for therapeutic and other uses requiring large amounts of high-purity DNA, such as the fast-growing market of novel gene therapies and gene vaccines. Besides DNA manufacturing, 4basebio aims at providing research and diagnostic products based on its RNA reverse transcriptase, DNA polymerase and DNA primase enzymes, addressing the research tools and diagnostic products markets.

4basebio AG has offices in Germany, Spain, UK, and the US. The Company is listed on the Prime Standard segment of the Frankfurt Stock Exchange (Ticker: 4BSB; ISIN: DE000A2YN801).

More information: www.investors.4basebio.com

# # # This publication is intended for information only and constitutes neither an offer to sell nor an invitation to buy securities. Some statements included in this press release, relating neither to proven financial results nor other historical data, should be viewed as forward-looking, i.e. not definite. Such statements are mainly predictions of future results, trends, plans or goals. These statements should not be considered to be total guarantees since given their very nature they are subject to known and unknown risks and imponderability and can be affected by other factors as a consequence of which the actual results, plans and goals of 4basebio AG may deviate greatly from the established conclusions or implied predictions contained in such statements. 4basebio does not undertake to publicly update or revise these statements in the light of new information or future results or for any other reason. # # #

 


14.05.2020 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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