Bioniche in talks to boost cash reserves

Bioniche (ASX:BNC) reported a wider net loss of C$17.3 million ($16.94 million) for the first nine months of its financial year, despite a 4% increase in animal health revenue.

The company disclosed in its Q3 report that its accumulated deficit reached C$136.1 million by the end of March and that its cash obligations and expected expenditures over the next 12 months exceed its currently available funds.

Revenue from animal health grew 4% for the first nine months of the year to C$22.8 million, but third-quarter sales fell 12% to $7.4 million.

Cash on hand was $6.5 million, while non-cash working capital fell to $6.1 million. Monthly burn rate increased to $1.4 million for the year-to-date, up $1.2 million from a year earlier.

Bioniche CFO Brian Ford said the company “has been exploring a number of options to boost its cash reserves. Our lender... has been involved in these discussions and is investigating possible ways to assist.”

CEO Graeme McRae added that the company is encouraged by market interest in its new animal health products - including Immunocidin, the canine cancer treatment it launched last year - and interest among potential partners for Urocidin, the human bladder cancer treatment candidate.

Bioniche re-assumed control of Urocidin last month following a split with former partner Endo.

A group of disgruntled shareholders, led by two former Biovail executives, last month sent Bioniche an open letter, calling on the company to address its lagging share price.

The letter criticises the company for keeping the same CEO in charge despite Bioniche’s share price falling more than 90% since 1996.

According to Bioniche, these executives had previously used confidential company information to make two overtures to the company “which do not favourably compare to the opportunities under review.” 

The Biovail executives then formally requested a shareholder meeting to vote on replacing the board of directors. But Bioniche last week turned down the request, stating that consultations with legal council had determined that the shareholders in question are not legally entitled to make it.

“The actions by a group of dissident shareholders were unexpected and have presented a challenge that the company is dealing with in consultation with external advisers,” McRae said, adding that the company is taking action on multiple fronts to unlock shareholder value.

Bioniche shares were trading unchanged at $0.19 as of around 1.30 pm on Thursday.