FIT Biotech Oy lowers its profit forecast for the 2016 financial period and has started raising additional finance to ensure the implementation of its business plan and continuity of its business – FIT Biotech

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FIT Biotech Oy lowers its profit forecast for the 2016 financial period and has started raising additional finance to ensure the implementation of its business plan and continuity of its business

FIT Biotech Oy

Company release 7 March 2016 at 12:00  EET   

FIT Biotech Oy lowers its profit forecast for the 2016 financial period and has started raising additional finance to ensure the implementation of its business plan and continuity of its business

In its offering circular dated 29 May 2015, the Company assessed that it would proceed to signing of a possible license agreement to be entered into at a later date related to gene-based treatments during 2016, in which case the fees based on the possible license agreement would begin in 2016. However, it is assessed that the possible license agreement will be delayed from the aim set forth in the offering circular, since collecting of material required for the clinical study permit in pre-clinical studies has taken longer than expected.

In March 2015, the Company signed a preliminary agreement with Chinese QYH Biotech Company Ltd concerning two poultry vaccines. In its offering circular dated 29 May 2015, the Company expected to enter into the actual license agreement at the end of 2015 or at the beginning of 2016, when the preliminary studies have been completed. However, the preliminary studies conducted in cooperation with QYH Biotech Company Ltd have taken longer than expected.

Due to this, the signing and milestone fees related to possible license agreements will be delayed.

Typically to pharmaceutical industry, the conclusion date of such agreements and amount of fees possibly received based on the agreements is difficult to anticipate accurately due to various uncertainties. Of the advance fees of cooperation agreements, particularly milestone fees and, subsequently, sales-linked royalties of license agreements depend on how risky product development advances and whether a sales permit for the pharmaceutical is obtained.

In its offering circular dated 29 May 2015, the Company assessed that its operating profit would turn positive by the end of 2016, provided that the assumptions made at that point, of which the most important was the accrual of assumed signing and milestone fees totalling EUR 3.6 million and entering them as revenue for 2016, would materialize. The Company expects that a significant share of these fees will be generated from possible license agreements to be entered into in the field of gene-based treatments.

Due to the delays in signing the license agreements related to the gene-based treatments and delays in preliminary studies into poultry vaccines, the Company lowers its profit forecast as follows:

The Company assesses that its operating profit for 2016 will be negative.

The Company has started raising additional finance to ensure the implementation of its business plan and continuity of its business.

The Company's other development projects have advanced as expected. One example is the HIV immunotherapy project. In January 2016, the Company announced that it had been invited to join a major research consortium European HIV Vaccine Alliance (EHVA), which develops new vaccines against HIV. The Company's share of the consortium's funding is approximately EUR 1 million, which will have a cash-flow impact predominantly in 2016 and 2017. The received funding covers the costs incurred by the Company due to the EHVA project.

FIT BIOTECH OY

Board of Directors

Further information:
Rabbe Slätis
CEO, FIT Biotech Oy
Email: rabbe.slatis@fitbiotech.com
Tel.: +358 40 840 6749

Certified Advisor: Translink Corporate Finance Oy, tel. +358 20 743 2790

FIT Biotech in brief
FIT Biotech Oy is a biotechnology company established in 1995 that develops and licenses its patented GTU® (Gene Transport Unit) vector technology for new-generation medical treatments. GTU® is a gene transport technology that meets an important medical challenge in the usability of gene therapy and DNA vaccines.

FIT Biotech applies GTU® technology in its drug development programmes. Application areas include cancer (gene therapy) and infectious diseases such as HIV and tuberculosis, as well as animal vaccines.

FIT Biotech shares are listed on the First North Finland market maintained by Nasdaq Helsinki Oy.


DISTRIBUTION:
NASDAQ OMX Helsinki
Principal media
www.fitbiotech.com

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