There are a total of 35 million HIV patients worldwide. Current treatments consist of a combination of antiretroviral therapies that are effective in reducing viral load, but don’t cure HIV and don’t destroy the virus-producing cells. Bionor Pharma (BIONOR.OL) is working on developing a functional cure for HIV.
Based in Norway, Bionor is listed on the Oslo Stock Exchange. It develops therapeutic peptide vaccine treatments that target rapidly mutating viruses such as HIV (human immunodeficiency virus), hepatitis C (HCV) and influenza.
During Alpha Deal Group’s initial due diligence call, CEO Dr. Anker Lundemose said Bionor is conducting the largest trial of its therapeutic vaccine, Vacc-4X. It is one of the furthest advanced therapeutic vaccines in development and has already demonstrated efficacy against HIV.
Bionor’s “kick, kill and boost” development strategy may have all the elements required to achieve a functional cure for HIV. These include releasing dormant HIV reservoirs (kick), encouraging HIV destruction via an immune response elicited by Vacc-4x (kill) and strengthening the immune system to maximize its attack on HIV (boost).
Bionor has also identified a potential biomarker that may predict how well patients respond to Vacc-4x– an important step.
In The Pipeline
The company’s product pipeline contains Vacc-4x, Vacc-C5, and Vacc-4x and Vacc-C5 combined, which are developed for the treatment of HIV; Vacc-Flu, for the treatment of Influenza, and Vacc-HCV for the treatment of HCV. Additionally, Bionor develops soy-based products.
Lundemose said that Bionor is committed to creating and increasing shareholder value through the development and out-licensing of products fighting viral diseases or diseases derived from viral infections. The company will continue its current clinical development program and develop the platform technology, further leveraging it to create new vaccine candidates and expanding the development pipeline.
Bionor is fully engaged with experts in the field of HIV and has a number of ongoing collaborative initiatives evaluating “state of the art” assay technologies, statistical methodologies and in-vitro models.
Chart 1: Bionor Pharma Stock Price
Source: Eikon / StarMine
Financial Results
Bionor reported a net loss of NOK 25.4million in Q4 (NOK 21.6 million) and a net loss of NOK 85.4 million (NOK 66.8 million) for the full year 2013.
Cash flow from operations in Q4 was negative NOK 17.2 million (negative NOK 17.7 million) and net cash at period end was NOK 107.5 million (NOK 106 million).
Revenue in Q4 2013 was NOK 0.1 million, down NOK 1.5 million compared to Q4 2012. Revenue for the full year 2013 was NOK 4.2 million in line with revenues for the full year 2012. There was no revenue related to the Nutraceutical business or services for the Phase II Vacc.4x + lenalidomide trial in the fourth quarter. For the full year 2013 these revenues amounted to NOK 2.4 million (NOK 2.7 million) and NOK 1.6 million (NOK 1.6 million) respectively.
Twelve month gross margin rose 59.37% compared to 24.50% for the Industry.
Table 1: Bionor Pharma Profitability Ratios
Source: Eikon / StarMine
The company also presents an interesting price to book value at 4.82 compared to 23.66 for the industry.
Table 2: Bionor Pharma Price to Book
Source: Refinitiv
Cash Flow And Liquidity
Cash flow from operations in fourth quarter 2013 was negative NOK 17.2 million (negative NOK 17.7 million). Cash flow from operations for the full year 2013 was negative NOK 68.6 million (negative NOK 52.6 million). Net working capital was negative NOK 9.3 million at end of fourth quarter, a decrease of NOK 3 million compared with the same period last year.
Financial Position
Total assets were NOK 196.8 million at year-end 2013 compared to NOK 208.5 million at year-end 2012. The main reason for the decrease is the decrease of the group’s intangible assets.
Goodwill and intangible assets reported at year-end 2013 were NOK 78.2 million compared to NOK 88.9 million at year-end 2012.
The group repaid its borrowings in full in the first half 2013 and has since year-end 2012 reduced its borrowings with NOK 2.9 million.
Table 3: Bionor Pharma Leverage
Source: Eikon / StarMine
Closing Comments
Lundemose highlighted Bionor Pharma’s value proposition. The company has a first mover position with Vacc-4x as the furthest advanced therapeutic T cell vaccine in the HIV space. The clinical strategy could lead to the development of improved treatments and combination therapies for the benefit of HIV patients and the execution of the planned combination of the REDUC trial (Vacc-4x + HDACi) could be a cornerstone in finding a functional cure for HIV patients.
The company also has sufficient funding to secure the execution of ongoing clinical development program, including the REDUC trial, until readout. The identification of a potential biomarker that identify patients more likely to respond to Vacc-4x may prove to be an important step. Finally, the continuing development of the three existing clinical trials in 2014 are major milestones for Bionor and catalysts for further development.
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