Proactiveinvestors recommends

Additional Information

Market:	LSE
Sector:	Pharma & Biotech
EPIC:	BII

1 year chart

1 day chart

Biocompatibles

Biocompatibles International (LON: BII) is a leading company in the field of drug-device combination products. The Oncology Products Division conducts the marketing of Biocompatibles’ approved oncology products. These include products that are used for the treatment of primary liver cancer (HCC), liver metastases from colorectal cancer and prostate cancer.

The company's R&D Facilities are engaged in licensing and in new product development for oncology, stroke, diabetes and obesity. Biocompatibles has collaborative agreements with AstraZeneca, Bayer Healthcare Pharmaceuticals Inc. and Medtronic Inc.

The drugs work: Biocompatibles sees further good sales growth ahead

Thursday, March 18, 2010

In its preliminary full-year results statement, Biocompatibles International (LSE: BII) said it has continued to make very good progress in 2009 in terms of its financial performance and progress with its strategic goals. In the twelve months ended 31 December 2009, the group demonstrated a substantial improvement in its sales performance, delivering revenue growth of 50%, ahead of the company’s expectations.

The Surrey-based medical technology company develops drug delivery products, mainly in the field of oncology. Biocompatibles’ Oncology Products Division supplies drug-eluting bead products via distribution partners such as AngioDynamics, Terumo and Eisai. The beads allow the delivery of chemotherapy drugs directly to the tumour, which reduces side effects on healthy parts of the body.

The Licensing Division, which includes Germany-based CellMed, is developing products across broader indications, including the treatment of strokes, diabetes and obesity - in partnership with AstraZeneca (LSE: AZN) - and cosmetic treatments.

Biocompatibles' strategic goals are to deliver consistently strong overall sales growth, the progression of drug-eluting bead clinical trials in new indications, and delivering the GLP-1 peptide programme in partnership with AstraZeneca.

Revenues were ahead of the company’s expectations, increasing by 50% to £26.6m, compared with £17.7m in the previous financial year. The sales of bead products grew by 100% to £12.0m and the CellMed division also showed notable revenue growth, up 239% to £3.9m, primarily due to the company’s co-development agreement with AstraZeneca.

Looking ahead, Biocompatibles expects to achieve consolidated revenues between £28m and £32m for 2010, which would represent a 13% year-on-year increase at the mid point. The company expects this growth to be generated by the Oncology Products Division.

Gross profit increased by 48% to £20.8m, compared with £14m for 2008. The company invested substantially in sales and marketing with a 215% increase in spending to £9.4m in 2009, compared with £3m in the previous financial year.

Similarly the company invested in Research and Development (R&D) in support of the CellMed-AstraZeneca co-development and its other clinical activities. R&D costs increased 22% to £14.5m in the full year.

Throughout the year, Biocompatibles saw a good amount of clinical activity in its Oncology division. in February 2009 the company undertook a UK-based clinical trial relating to liver metastases from colorectal cancer and presented drug-eluting bead data to the American Society of Clinical Oncology - Gastrointestinal. In April, it reported a positive update on US drug-eluting bead cancer trials, and later in November it released positive data from a combination therapy trial in primary liver cancer.

Biocompatibles' clinical trial programme for the Drug-Eluting Beads, is focused on three key trials, PARAGON II, PARAGON and SPACE.

In total, operating expenses increased by 63%, to £28.6m compared with £17.6m in the previous financial year. Overall Biocompatibles reported an operating loss of £7.6m for FY09, compared with £3.2m during FY08, the net loss for the year was £5.8m.

The company also noted that the full-year comparatives were affected by an asset impairment charge of £2.5m in 2009, and a significant one-off income item in 2008. As at 31 December 2009, Biocompatibles had a healthy amount of net funds, £30.5m.

Biocompatibles plans further investments in its business in 2010, with an anticipated cash outflow of £8m, based on expected operating utilisation of £5.5m and the proposed £2.5m dividend. The company’s expenditures will, among other things, support the Novabel manufacturing facility at CellMed, although Biocompatibles noted that the majority of this expenditure is funded by its marketing partner, Merz Pharmaceuticals GmbH.

No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.