15 November 2013

BioAmber Reports Third Quarter 2013 Financial Results

Increased sales of bio-succinic acid by 83% to Q2

BioAmber Inc. (NYSE and EURONEXT Paris: BIOA), an industrial biotechnology company producing renewable chemicals, today announced its financial results for the three months ended September 30, 2013.

Highlights included:

  • Progressed well on its planned 30,000 MT bio-succinic acid plant in Sarnia, Ontario, which remains on track for mechanical completion in the fourth quarter of 2014
  • Achieved the final development milestone for the yeast licensed exclusively from Cargill
  • Sold $866,000 of bio-succinic acid in Q3 2013, a 83% increase over Q3 2012
  • Generated a gross margin of 24% on bio-succinic acid product sales in Q3 2013
  • Reduced monthly operating cash burn to $1.68M in Q3 2013, 17% lower than Q2 2013

“We have assembled a strong in-house team in Sarnia that is supported by quality engineering firms. Together we made good progress in the third quarter and Sarnia construction is on track,” said Jean- Francois Huc, President and Chief Executive Officer of BioAmber. “We also met the final milestone for the yeast we developed with Cargill, signaling that its performance meets our commercial targets. We continue to progress in our commercial development, with product sales growth, the addition of several new customers and a positive gross margin in the third quarter. We also lowered operating expenses, with a 17% reduction relative to Q2 2013 and a 28% reduction relative to Q1 2013. We plan to continue managing our costs diligently so that we can become a profitable company as soon as possible after Sarnia begins to ramp up,” Mr. Huc added.

Business Highlights

  • The Company has engaged AMEC Americas Ltd., which is providing detailed engineering and procurement services, and Alberici Constructors, Ltd., which is providing construction management services
  • The Company has started foundation work on the Sarnia construction site
  • The Company has ordered over 70% of the total dollar value of equipment needed for the plant, including 100% of the long-lead time equipment
  • The regulatory review by Canadian authorities is complete and the Company can use its yeast technology in the Sarnia plant for the commercial manufacture of succinic acid
  • The Company signed on 7 new customers in Q3 2013, for a total of 16 new customers in 2013
  • The Company exercised its option to extend its access to the large-scale demonstration facility in Pomacle, France from July to December 2014

Financial Highlights

Cash
The Company had cash and cash equivalents on hand of $95.6 million as of September 30, 2013.

Revenue
Revenue increased to $866,000 in the three months ended September 30, 2013 from $473,000 for the same period in 2012, an increase of 83%. The increase in revenue resulted from an increase in the volume of bio-succinic acid sold to existing and new customers.

Gross Profit
Gross profit increased to $211,000 in the three months ended September 30, 2013 from a loss of $111,000 in the same period in 2012.

Operating Expenses
Research and development expense decreased to $2.8 million in the three months ended September 30, 2013 from $4.8 million for the same period in 2012, due primarily to the completion of the initial development program for the yeast.

Selling and marketing expense decreased to $1.1 million in the three months ended September 30, 2013 from $1.2 million for the same period in 2012.

General and administrative expense decreased to $2.3 million in the three months ended September 30, 2013 from $4.7 million for the same period in 2012, primarily due to the $3.1 million of financing costs associated with the write off of 2012 deferred IPO costs. The decrease was partially offset by an increase in professional and insurance fees related to operating as a public company.

Other Financial Items
The Company recorded a net loss of $9.0 million, or $0.48 per share, for the three months ended September 30, 2013, compared to $11.6 million, or $1.12 per share, for the three months ended September 30, 2012.

In addition, during the three months ended September 30, 2013, the Company incurred a $2.0 million non-cash loss related to changes in the fair market value of the warrants issued in the initial public offering. The warrants will be revalued in each reporting period resulting in a non-cash amount being recorded in the statement of operations while the warrants remain outstanding.

The Operating Expenses Adjusted for Non-Cash Items for the three months ended September 30, 2013 was $5.0 million, compared to an Operating Expenses Adjusted for Non-Cash Items of $6.1 million and $7.0 million, for three months ended June 30, 2013 and March 31, 2013, respectively. The decrease was primarily driven by the completion of yeast development and scale up work, a shift from outsourced research and consulting expenses to in-house research activities, and a reduction in general and administrative payroll expenses, partially offset by higher professional and insurance fees associated with being a public company. The Operating Expenses Adjusted for Non-Cash Items is a non-GAAP financial metric that excludes the non-cash items from the operating expenses presented in our Consolidated Statements of Operations. Please refer to Annex A: “Non-GAAP Financial Information—Operating Expenses Adjusted for Non-Cash Items” for more information regarding this non-GAAP financial metric.

The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for the three months ended September 30, 2013 was $6.8 million, or $0.37 per share, compared to an Adjusted Net Loss Attributable to BioAmber Inc. Shareholders of $8.5 million, or $0.82 per share, for the three months ended September 30, 2012. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non- GAAP financial metric that excludes, for the three months ended September 30, 2013, the impact of the change in fair value of the warrants issued in connection with the IPO and excludes, for the three months ended September 30, 2012, the impact of the financing costs associated with writing-off 2012 deferred IPO costs. Please refer to Annex A: “Non-GAAP Financial Information—Adjusted Net Loss Attributable to BioAmber Inc. Shareholders” for more information regarding this non-GAAP financial metric.

Source: BioAmber, press release, 2012-11-07.

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