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Telesta Therapeutics www.telestatherapeutics.com/

Telesta Therapeutics Inc. (Formerly Bioniche Life Sciences Inc.) is focused on the development, manufacturing, and commercialization of proprietary and innovative therapeutics for the global human health market.
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Bioniche Life Sciences bolsters coffers by A$18.9m, reduces cash burn rate

Monday, March 19, 2012 by Angela Kean

Bioniche Life Sciences bolsters coffers by A$18.9m, reduces cash burn rate

Bioniche Life Sciences (ASX: BNC, TSX: BNC) has secured A$18.9 million (US$20 million) in financing after U.S.-based Capital Royalty made a strategic investment in the company.

Importantly, to avoid dilution of equity shareholders’ stakes in Bioniche, Capital Royalty has agreed to a five year loan to fund corporate growth and support capital requirements.

The terms of the agreement include a 15% interest rate, with a portion deferred and capitalised for the first three years.

An additional royalty interest of 2% will be paid to Capital Royalty on all product sales revenues for the term of the loan.

Bioniche is expected to begin principal repayments of eight equal installments in June 2015.


Review of capital expenditure and cash flow


In the last half of 2011, Bioniche undertook an internal review of its capital expenditure priorities and cash flow used in operations.

As a result the company successfully reduced its cash burn rate by $300,000 in the second quarter of the 2012 financial year, compared to the first quarter which witnessed a burn rate of A$1.3 million.

The reduction was driven by a 21.3% increase to $7.4 million in Animal Health product sales during the second quarter, as well as an increase in gross margins of the products to 52.4%.

Bioniche also lowered research and development expenditure by 4% to $9.5 million for the first half of the 2012 financial year, in line with its initiative to reduce overheads as some of the company’s late-stage research projects mature.

In February, the company’s cash position was $9.65 million after it received a $2.75 million outstanding payment from the Business Development Bank of Canada.

Bioniche is aiming to achieve a zero cash burn rate by the end of the 2013 financial year.

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