viewBiota Holdings Ltd

Biota Holding unveils "corker" net profit of $38 million, outlook is strong


Biota Holdings (ASX: BTA) has unveiled a "corker" set of earnings numbers for the year to 30 June 2009.

Try this on for size.  Net profit was $38.2 million, from a loss for the previous year of $6.5 million.  Even excluding the litigation settlement of $12.8 million from profits, it was a bumper year for Biota. 

As can be expected, revenues jumped to $83.3 million ($45 million previously), which included $45 million in royalties from Relenza sales.  Collaboration income from licensing agreements with AstraZeneca and Boehringer Ingelheim contributed $12.6 million. There was also grant income of $2.8 million from the US National Institutes of Health for the development of new drug programs.

Costs actually decreased to $41.5 million (2008: $54.3m), always a good test of management mettle - even with litigation costs of $7.2 million (2008: $21.8m).

Most importantly of all, cash at 30 June 2009 increased by $26.5 million to $86.7 million (2008: $60.2m).

The future looks so strong that $20 million in cash will be returned to shareholders in December 2009.  Improving return on shareholders funds even further, Biota completed an on-market share buyback in October 2008 when 6.6 million shares were purchased at a cost of $4.9 million (74 cents per share) and subsequently cancelled.

With GlaxoSmithKline (GSK) announcing it would triple production capacity of Relenza to further increase to 190 million courses by the end of 2009; further increases in royalty income are expected.

Additional upside is likely based on the success of the Phase III clinical trial in Asia for laninamivir.  Daiichi Sankyo has undertaken to lodge a New Drug Application in Japan by March 2010 and commence prophylaxis studies.

Phase III laninamivir results have also seen an increase in commercial interest for markets outside of Japan.  And the demonstrated proof-of-concept of BTA798 for the treatment of complications for HRV infection, has resulted in expressions of interest from a number of companies.

In all, this has been a year for Biota to crow about.  With Relenza now becoming a significant contributor to global influenza pandemic stockpiles, shareholders are benefitting mightily from higher return on equity and in capital appreciation and capital return.

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