UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE
ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 12, 2013
BIOSPECIFICS TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)
Delaware | 001-34236 | 11-3054851 |
(State or Other Jurisdiction | (Commission File Number) | (I.R.S. Employer |
Of Incorporation) | Identification No.) |
35 Wilbur Street
Lynbrook, NY 11563
(Address of Principal Executive Office) (Zip Code)
516.593.7000
(Registrants telephone number,
including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
INTRODUCTORY COMMENT
Throughout this Current Report on Form 8-K, the terms we, us, our and Company refer to BioSpecifics Technologies Corp.
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 12, 2013, the Company announced its financial and operating results for the fiscal quarter and full year ended December 31, 2013. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) | Exhibits | |
99.1 | Press release dated March 12, 2013 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 12, 2013 | BIOSPECIFICS TECHNOLOGIES CORP. |
| |
(Registrant) | |
/s/ Thomas L. Wegman | |
| |
Thomas L. Wegman | |
President |
EXHIBIT INDEX
Exhibit No. | Description |
99.1 | Press release dated March 12, 2013 |
Exhibit 99.1
BioSpecifics Technologies Corp. Reports Fourth
Quarter and Full Year
2012 Financial Results
LYNBROOK, NY March 12, 2013 BioSpecifics Technologies Corp. (NASDAQ: BSTC), a biopharmaceutical company developing first in class collagenase-based products marketed as XIAFLEX® in the U.S., today announced its financial results for the fourth quarter and full year ended December 31, 2012 and provided a corporate update.
We are looking forward to the potential FDA approval of XIAFLEX for the treatment of Peyronie's disease followed by the anticipated commercial launch in the fourth quarter of this year, and believe in the strong commercial opportunity for XIAFLEX for this devastating disease, reflected Thomas L. Wegman, President of BioSpecifics. We are also very pleased to announce today that we have completed enrollment in our Phase II clinical trial for XIAFLEX for human lipoma ahead of schedule, and that we remain on track to complete enrollment in our canine lipoma Phase II trial in the first half of 2013. We plan to report top-line data for both trials in the second half of 2013. We are also encouraged by the clinical progress Auxilium is making for XIAFLEX in Dupuytrens contracture patients with multiple palpable cords, cellulite and frozen shoulder. We anticipate reporting development progress for all of these indications beginning later this year.
Fourth Quarter & Full Year 2012 Financial Results
BioSpecifics reported net income of $1.1 million for the fourth quarter ended December 31, 2012, or $0.17 per basic share and $0.16 per share on a fully diluted basis, compared to net income of $71,326, or $0.01 per basic and diluted common share for the same period in 2011. For the full year ended December 31, 2012, the Company reported net income of $3.0 million, or $0.47 per share on a basic and $0.43 per share on a fully diluted basis, compared to net income of $6.6 million, or $1.04 per share on a basic and $0.95 on a fully diluted basis in the same period in 2011.
Total revenue for the fourth quarter of 2012 was $3.5 million, compared to $2.6 million for the same period in 2011. For the full year ended December 31, 2012, total revenue was $11.1 million, compared to $11.4 million in the same period in 2011.
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Royalty, mark-up on cost of goods sold, and earn-out revenues for the fourth quarter of 2012 were $2.5 million, compared to $1.9 million for the same period in 2011. Royalty and mark-up on cost of goods sold revenues recognized under BioSpecifics’ agreement with Auxilium Pharmaceuticals, Inc. (Auxilium) for the fourth quarter of 2012 were $1.6 million, compared to $1.1 million for the same period in 2011. Royalty revenues recognized from DFB Biotech, Inc. for the fourth quarter of 2012 were $0.8 million compared to $0.7 million for the same period in 2011. Total royalty, mark-up on cost of goods sold and earn-out revenues for the year ended December 31, 2012 increased to $9.2 million as compared to $6.3 million in the same period in 2011.
Total licensing fees consisting of licensing and sublicensing fees and milestones for the year ended December 31, 2012 were $2.0 million, compared to $5.0 million in the same period in 2011. Licensing fees recognized from Auxilium for the full year 2012 and 2011 were $0.4 million in each period. These licensing fees related to cash payments received in prior years and amortized over the expected development period. Sublicensing fees recognized for the full year ended December 31, 2012 were $570,000 compared to $750,000 in the same period in 2011. 2012 sublicensing fees were related to the $10.0 million paid to Auxilium by Actelion Pharmaceuticals Ltd. (Actelion) for the rights to develop and commercialize XIAFLEX for the treatment of Dupuytren's contracture and Peyronie's disease in Canada, Australia, Brazil and Mexico. 2011 sublicensing fees were related to the $15.0 million paid to Auxilium by Asahi Kasei Pharma Corporation for the rights to commercialize XIAFLEX for the treatment of Dupuytren's contracture and Peyronie's disease in Japan.
Milestone revenue recognized for the years ended December 31, 2012 and 2011 were $1.0 million and $3.8 million, respectively. In 2012, BioSpecifics recognized a $1.0 million milestone related to the U.S. Food and Drug Administration’s (FDA) December 2012 acceptance of Auxilium’s supplemental Biologics License Application (sBLA) for XIAFLEX for the potential treatment of Peyronie's disease. BioSpecifics also recognized a milestone of $28,500 related to the Notice of Compliance (approval) granted by Health Canada for XIAFLEX for the treatment of Dupuytren's contracture for adult patients with a palpable cord in Canada to Auxilium. In 2011, BioSpecifics recognized a $2.6 million milestone related to the first sale of XIAFLEX in Europe, a $637,500 milestone related to the first sale of XIAFLEX in Germany, and a $637,500 milestone related to the first sale of XIAFLEX in Spain.
Research and development expenses for the fourth quarters of 2012 and 2011 were $0.3 million in each period. For the year ended December 31, 2012, research and development expenses were $1.2 million, compared to $1.0 million in the same period in 2011. This increase in research and development expenses was primarily due to expenses related to BioSpecifics’ internally-managed human and canine lipoma XIAFLEX clinical development programs.
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General and administrative expenses for the fourth quarter of 2012 were $1.2 million, compared to $1.1 million for the same period in 2011. For the year ended December 31, 2012, general and administrative expenses were $4.8 million, compared to $5.2 million in the same period in 2011. The decrease in general and administrative expenses was due to lower stock based compensation and general legal fees partially offset by third party royalty fees and consulting fees.
Income tax expenses for the fourth quarter of 2012 were $1.0 million as compared to $1.2 million for the same period in 2011. For the year ended December 31, 2012, income tax expense was $2.2 million as compared to an income tax benefit of $1.3 million in the same period of 2011. In the 2011 period, the $1.3 million in income tax benefit consisted of an income tax expense of $2.3 million which was offset by a one-time $3.6 million tax benefit related to the Company’s deferred tax asset valuation allowance and the recording of the Company’s deferred tax assets as BioSpecifics believes that its tax assets are more likely than not to be realized as it achieved sustained profitability on an on-going annual basis. In making such determination, the Company considered all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.
As of December 31, 2012, BioSpecifics had cash and cash equivalents and investments of $8.5 million, compared to $9.0 million on September 30, 2012.
Recent Corporate Highlights:
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Upcoming Anticipated Events:
BioSpecifics plans to complete enrollment in its Phase II trial, Chien-804, evaluating 32 canines with benign subcutaneous lipomas randomized 1:1 XIAFLEX to placebo in the first half of 2013.
The Company expects to report top-line data from both its Phase II clinical trial for the treatment of human lipoma and Chien-804 in the second half of 2013.
Auxilium anticipates that U.S. full year 2013 XIAFLEX net revenues will be in the range of $65 to $75 million and ex-U.S. and deferred revenues for XIAFLEX will be in the range of $10 to $15 million.
Auxilium is currently conducting an open-label clinical trial evaluating XIAFLEX for the concurrent treatment of multiple palpable cords in approximately 600 adult patients with Dupuytren’s contracture in the U.S, Australia, New Zealand and the EU. This study began enrollment in the third quarter of 2012 and top-line data are expected in the first quarter of 2014. If successful, this study may allow Auxilium to seek a XIAFLEX label expansion from the FDA for the concurrent treatment of multiple palpable cords in adult Dupuytren's contracture patients.
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In the third quarter of 2012, Auxilium completed enrollment in its Phase IV Dupuytren's contracture retreatment clinical trial. Top-line data from this study are expected in the fourth quarter of 2013.
Actelion, Auxilium’s partner in Canada, plans to launch XIAFLEX in Canada in the first half of 2013.
Under the Prescription Drug User Fee Act, the FDA is expected to take action by September 6, 2013 on Auxilium’s application for the U.S. approval of XIAFLEX for the treatment of Peyronie’s disease. If approved, Auxilium plans to execute the commercial launch in the fourth quarter of 2013 and submit a Marketing Authorisation Application to the European Medicines Agency.
Auxilium is also currently managing the clinical development of XIAFLEX for the treatment of cellulite and frozen shoulder syndrome (adhesive capsulitis). In the third quarter of 2012, Auxilium completed enrollment in its cellulite Phase Ib and frozen shoulder Phase IIa studies. Following positive top-line 30-day data from the Phase Ib single site, open-label dose escalation study of XIAFLEX for the potential treatment of cellulite that was reported in December 2012, Auxilium announced that it planned to initiate a Phase II clinical trial in the second half of 2013. Top-line data from the Phase IIa study of XIAFLEX for frozen shoulder are expected in the first quarter of 2013, and Auxilium plans to initiate a Phase II study in the second half of 2013.
Upcoming Annual Meeting:
Webcast and Conference Call
BioSpecifics will host a conference call today at 4:30 p.m. EDT to discuss these fourth quarter and full year 2012 results.
In order to participate in the conference call, please dial 1-800-860-2442 (domestic) or 1-412-858-4600 (international). The live webcast can be accessed under “Calendar of Events” in the Investor Relations section of the Company’s website at www.biospecifics.com or you may use the link: http://www.videonewswire.com/event.asp?id=92436.
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A replay of the call will be available one hour after the end of the conference on March 12, 2013 until 9:00 a.m. EDT on March 27, 2013. To access the replay, please dial 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and reference the access code 10025434. The archived webcast will be available for 90 days in the Investor Relations section of BioSpecifics’ website at www.biospecifics.com.
About BioSpecifics Technologies Corp.
BioSpecifics Technologies Corp. is a biopharmaceutical company that has developed injectable collagenase for twelve clinical indications. Injectable collagenase is currently marketed as XIAFLEX® in the U.S. for the treatment of adult Dupuytren's contracture patients with a palpable cord by Auxilium Pharmaceuticals, Inc. (Auxilium) and is approved for Dupuytren’s contracture in the European Union, Switzerland and Canada. XIAFLEX is also in clinical development for the treatment of several additional promising indications. A supplemental Biologics License Application is currently under standard review at the U.S. Food and Drug Administration for XIAFLEX for the treatment of Peyronie’s disease. Auxilium is also testing XIAFLEX for frozen shoulder syndrome (adhesive capsulitis) and cellulite in Phase IIa and Phase Ib clinical trials, respectively. BioSpecifics is currently managing the development of XIAFLEX for two indications, human lipoma and canine lipoma (Chien-804), both of which are in Phase Il clinical trials. Auxilium is currently partnered with Asahi Kasei Pharma Corporation for the development and commercialization of injectable collagenase for Dupuytren’s contracture and Peyronie’s disease in Japan and with Actelion Pharmaceuticals Ltd. for the same indications in Canada, Australia, Brazil and Mexico. Pfizer Inc. has marketing rights to XIAPEX® (the EU trade name for XIAFLEX) for Dupuytren’s contracture in 46 countries in Eurasia through April 24, 2013. For more information, please visit www.biospecifics.com.
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Forward-Looking Statements
This release includes “forward-looking statements” within the meaning of, and made pursuant to the safe harbor provisions of, the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements.” The forward-looking statements include statements concerning, among other things, the timing of the review and potential approval by the FDA of XIAFLEX as a treatment for Peyronie’s disease; the timing of the potential US commercial launch and submission of the MAA to the EMA with respect to the use of XIAFLEX for the treatment of Peyronie’s disease and its commercial potential; the development progress of various indications and the extent to which these indications are promising; the expectation of XIAFLEX to be the first and only biologic therapy indicated for the treatment of Peyronie’s disease; the timing of completing enrollment in BioSpecifics’ Phase II trial of XIAFLEX for the treatment of canine lipoma; the timing of reporting top-line data from BioSpecifics’ Phase II trials of XIAFLEX for the treatment of human and canine lipoma; the anticipated net revenues of XIAFLEX in respect of Dupuytren’s contracture-related sales; the timing of making XIAFLEX available in Canada as a treatment for Dupuytren’s contracture; the timing of results from Auxilium’s clinical trials for Dupuytren’s contracture (release of top-line data for contracture retreatment clinical trial and multi-cord trial) and frozen shoulder; the potential for Auxilium to seek from the FDA a XIAFLEX label expansion for the concurrent treatment of multiple palpable cords in adult Dupuytren’s contracture patients; the timing for Auxilium to initiate a phase II trial of XIAFLEX as a treatment for cellulite; the timing for Auxilium to initiate a Phase II trial of XIAFLEX as a treatment for frozen shoulder; and the potential market for XIAFLEX as a treatment for various indications. In some cases, these statements can be identified by forward-looking words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “likely,” “may,” “will,” “could,” “continue,” “project,” “predict,” “goal,” the negative or plural of these words, and other similar expressions. These forward-looking statements are predictions based on BioSpecifics’ current expectations and its projections about future events. There are a number of important factors that could cause BioSpecifics’ actual results to differ materially from those indicated by such forward-looking statements, including the timing of regulatory filings and action; the ability of BioSpecifics’ partner, Auxilium, and its partners, Asahi Kasei Pharma Corporation and Actelion Pharmaceuticals Ltd., to achieve their objectives for XIAFLEX in their applicable territories; the market for XIAFLEX in, and initiation and outcome of clinical trials for, additional indications including frozen shoulder, cellulite, human lipoma and canine lipoma, all of which will determine the amount of milestone, royalty and sublicense income BioSpecifics may receive; the potential of XIAFLEX to be used in additional indications; the timing of results of any clinical trials; the receipt of any applicable milestone payments from Auxilium; whether royalty payments BioSpecifics is entitled to receive will exceed set-offs; and other risk factors identified in BioSpecifics’ Annual Report on Form 10-K for the year ended December 31, 2011, its Quarterly Reports on Form 10-Q for the first, second and third quarters of 2012 and its Current Reports on Form 8-K filed with the Securities and Exchange Commission. All forward-looking statements included in this release are made as of the date hereof, and BioSpecifics assumes no obligation to update these forward-looking statements.
Contact:
BioSpecifics Technologies Corp.
Thomas L. Wegman, President
(516) 593-7000
thomas_wegman@biospecifics.com
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BioSpecifics Technologies Corp.
Consolidated
Statements of Operations
|
Three months ended | Twelve months ended | ||||||||||
|
December 31 | December 31 | ||||||||||
|
2012 | 2011 | 2012 |
2011 |
||||||||
(Unaudited) | (Audited) | |||||||||||
Revenues: |
||||||||||||
Net sales |
$ | 6,091 | $ | 8,541 | $ | 18,219 | $ | 21,998 | ||||
Royalties |
2,457,299 | 1,853,276 | 9,155,654 | 6,314,959 | ||||||||
Licensing revenue |
1,044,881 | 746,775 | 1,971,205 | 5,012,102 | ||||||||
Consulting fees |
- | - | - | 46,667 | ||||||||
Total Revenues |
3,508,271 | 2,608,592 | 11,145,078 | 11,395,726 | ||||||||
|
||||||||||||
Costs and expenses: |
||||||||||||
Research and development |
302,636 | 265,063 | 1,249,755 | 972,078 | ||||||||
General and administrative |
1,160,703 | 1,059,194 | 4,774,828 | 5,231,881 | ||||||||
Total costs and expenses |
1,463,339 | 1,324,257 | 6,024,583 | 6,203,959 | ||||||||
|
||||||||||||
Operating income |
2,044,932 | 1,284,335 | 5,120,495 | 5,191,767 | ||||||||
|
||||||||||||
Other income (expense): |
||||||||||||
Interest Income |
7,078 | 14,719 | 34,634 | 55,780 | ||||||||
Other, net |
- | 1,344 | - | 15,823 | ||||||||
|
7,078 | 16,063 | 34,634 | 71,603 | ||||||||
|
||||||||||||
Income before income tax |
2,052,010 | 1,300,398 | 5,155,129 | 5,263,370 | ||||||||
Income tax benefit (expense) |
(951,054 | ) | (1,229,072 | ) | (2,174,054 | ) | 1,338,256 | |||||
|
||||||||||||
Net income |
$ | 1,100,956 | $ | 71,326 | $ | 2,981,075 | $ | 6,601,626 | ||||
|
||||||||||||
Basic net income per share |
$ | 0.17 | $ | 0.01 | $ | 0.47 | $ | 1.04 | ||||
Diluted net income per share |
$ | 0.16 | $ | 0.01 | $ | 0.43 | $ | 0.95 | ||||
|
||||||||||||
Shares used in computation of basic net income per share |
6,381,665 | 6,350,770 | 6,351,245 | 6,340,648 | ||||||||
Shares used in computation of diluted net income per share |
6,971,453 | 6,857,966 | 6,981,527 | 6,952,386 |
BioSpecifics Technologies Corp.
Selected
Consolidated Balance Sheet Data
(Unaudited)
|
December 31 | |||||
|
2012 | 2011 | ||||
Cash and cash equivalents |
$ | 3,383,737 | $ | 3,196,831 | ||
Short term investments |
5,120,000 | 5,000,000 | ||||
Accounts and income tax receivable, net |
5,133,430 | 3,481,637 | ||||
Deferred tax assets |
1,573,051 | 3,047,955 | ||||
Working capital |
13,151,273 | 11,970,264 | ||||
Total assets |
18,390,264 | 16,265,073 | ||||
Long-term liabilities |
207,390 | 276,520 | ||||
Total stockholders' equity |
17,458,346 | 14,872,314 |
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