Kuros Biosciences AG

EQS-Adhoc: Kuros Biosciences Reports Financial Results for 2015


EQS Group-Ad-hoc: Kuros Biosciences AG / Key word(s): Final Results
Kuros Biosciences Reports Financial Results for 2015

26.04.2016 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.

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Kuros Biosciences Reports Financial Results for 2015

-Three extraordinary one-time factors lead to positive result for 2015

-Debt-free balance sheet after mandatory conversion of bonds and settlement with
convertible loan note holders

-Two partnering agreements signed for CYT003 and the VLP technology with
Checkmate for the treatment of cancer and with Arbutus for the treatment of
hepatitis B infections

-Business combination with Kuros Biosurgery closed in January 2016 creating
future leader in tissue repair and regeneration

Schlieren (Zurich), Switzerland, April 26, 2016 - Kuros Biosciences Ltd.
("Kuros") today announced its financial results for 2015. The Company reported a
net income of CHF 6.23 million, largely as a result of three extraordinary,
non-operative and one-time effects: (i) markedly higher income from partnering,
mainly driven by Novartis' buy-out of CAD106; (ii) significantly reduced
operating costs due to the discontinuation of research and development
activities; and (iii) higher financial income as a result of the elimination of
all outstanding debt, namely the mandatory conversion of all convertible bonds
into equity and the repayment and partial waiver of claims by the convertible
loan note holders. These transactions completed the restructuring of the balance
sheet of the Company, paving the way for the business combination of Cytos
Biotechnology Ltd and Kuros Biosurgery Holding Ltd. The combination was
structured by way of an exchange of Kuros Biosurgery Holding Ltd shares for
newly issued Cytos Biotechnology Ltd shares. The acquisition closed on January
18, 2016 and created the basis for a future leader in the field of tissue repair
and regeneration.

"Last year's result reflects the effects of three extraordinary items, some of
which were non-operational and had a one-time effect. Most importantly, we
completed the restructuring of our balance sheet by eliminating all debt,
thereby regaining full flexibility in our search for a strategic partner in
2015," commented Harry Welten, Chief Financial Officer and member of the Board
of Directors of Kuros Biosciences. "In January 2016, we acquired Kuros
Biosurgery Holding AG, a private-held spin-off from the ETH Zurich, to
rejuvenate our asset base. Together, we endeavor to make Kuros Biosciences a
leader in the field of tissue repair and regeneration."

Late-stage pipeline is focused on sealant and orthobiologic product candidates
Kuros focuses on the development of innovative products for tissue repair and
regeneration. The Company's most advanced product candidates have met the
respective primary endpoint in all the clinical trials in which they were
tested:

- KUR-023 is a novel biomaterial designed to seal the dura (membrane covering
the brain and spinal cord) after brain and spinal surgery.

- KUR-111 and KUR-113 are two novel orthobiologic product candidates for the
regeneration of bone during fracture healing or spinal fusion. Both candidates
share the same biologically active agent.

In addition, Kuros continues its collaborations for CYT003 (an immune modulator)
and the virus-like particle (VLP) technology with Checkmate Pharmaceuticals for
the treatment of cancer and with Arbutus Biopharma (formerly OnCore Biopharma)
for the treatment of hepatitis B infections. Both partnering agreements were
signed in 2015. The CYT003 program and VLP technology will be moving forward
with investment from the collaboration partners and, if successful, Kuros will
be eligible for significant development milestone payments and royalties on
future sales. The Company, however, will no longer invest own funds into these
collaborations.

Outlook and newsflow
KUR-023 has successfully completed a European clinical trial and is being
prepared to be CE marked ahead of commercial launch in the European Union, which
is currently expected in 2017. The Company is planning a second clinical study
to support approval of the product in the United States of America. KUR-111 and
KUR-113 have been successfully tested in large, controlled Phase IIb clinical
trials and are now progressing towards Phase III clinical development.

Kuros is well financed following a CHF 20 million fund-raising in November 2015.
The Company expects the current cash position to provide adequate financing to
bring KUR-023 to market in both Europe and the US. Moreover, funds available
will allow Kuros to prepare for a Phase III study with KUR-111.
 

Consolidated financial performance and results of operations

Balance sheet restructuring
In 2015, Kuros Biosciences Ltd ("Kuros"; formerly Cytos Biotechnology Ltd)
achieved success in two major steps towards elimination of its debt burden.
First, the bondholders meeting held on January 26, 2015 approved the mandatory
conversion of their bonds into shares, which took place on May 5, 2015. Second,
the convertible loan note claims were eliminated by: (i) repayment of the
non-subordinated part of the loan notes of CHF 14.2 million at maturity, i.e. on
February 10, 2015; (ii) a loan note to convertible bond swap whereby CHF 2
million of the claims of the loan note holders were eliminated by converting the
same amount into 1,600 convertible bonds out of treasury; (iii) loan note
holders accepting a "haircut" of 8% on their overall claims; and (iv) repayment
of all remaining claims, i.e. CHF 4.36 million, on July 28, 2015.

Debt-free balance sheet and significantly lower cash burn
Funds available for financing the operations amount to CHF 2.83 million as per
December 31, 2015 and include cash and cash equivalents, financial assets and
trade and other receivables. This is CHF 14.22 million lower than on December
31, 2014 (CHF 17.06 million) and is primarily driven by the repayment of the
non-subordinated part of the loan notes of CHF 14.2 million on February 10, 2015
as well as the settlement of all remaining claims of the loan note holders in
the amount of CHF 4.36 million on July 28, 2015. As a result of these
transactions, Kuros' balance sheet became debt-free. The gross cash burn from
operating activities was a monthly average of CHF 0.21 million and significantly
lower compared to CHF 2.06 million in 2014.

Higher revenues consist of license fees and buy-out of CAD106
In 2015, revenue comprising deferred income from license fees paid by Novartis
of CHF 0.64 million has been recognized for the period from January 1, to August
20, 2015. In March 2015, Novartis has bought out the collaboration and license
contract for CAD106 for a lump-sum payment of CHF 4 million (plus VAT) and is
therefore not required to make any further payments under the collaboration and
license agreement. Kuros had pre-assigned the amount to the holders of the loan
notes as part of the final settlement of all outstanding loan notes. In
addition, Kuros received revenues from Checkmate (license fee of CHF 0.98
million) and from Arbutus (CHF 0.73 million for material relating to the VLP
particle).

Significant reduction in net operating costs due to discontinuation of
development
Net operating costs amounted to CHF 5.70 million, compared to CHF 19.94 million
in the previous year. In 2015, research and development costs decreased by CHF
16.39 million to CHF 1.09 million as a result of the discontinuation of the
Phase IIb clinical study in asthma in the first half-year of 2014 and a
substantial reduction in work force, primarily staff in the development and
regulatory department. General and administrative and sales and marketing
expenditures combined amounted to CHF 7.37 million (2014: CHF 5.28 million). The
increase reflects higher administrative work as a result of the discontinuation
of the research and development department. Other income consisted of proceeds
from sub-lease agreements reaching CHF 2.75 million, a reduction of CHF 0.26
million compared to 2014 (CHF 3.01 million), which included also the final
release of accruals for Asklia (CHF 0.49 million).

Mandatory conversion lead to positive net financial income
With CHF 11.23 million, the financial income was significantly higher compared
to 2014 (TCHF 88) as a result of the mandatory conversion of all convertible
bonds into equity and the partial waiver of claims by the loan note holders with
effects of CHF 9.61 million and CHF 1.62 million, respectively. These are
one-time effects and will not occur in the future as all debt has been
eliminated as of December 31, 2015. Financial expenses amounted to CHF 5.66
million and were significantly lower than in 2014 (CHF 15.19 million) due to the
conversion of the convertible bonds and the repayment of the non-subordinated
part of the convertible loans in February 2015 as well as the repayment of the
remainder of claims by loan note holders on July 2015. The net financial result
amounted to CHF 5.57 million in 2015 compared to CHF -15.10 million in 2014.

Positive result for 2015 thanks to three extraordinary effects
Three extraordinary line items shaped Kuros' income statement - significantly
lower operating costs and higher financial income as well as markedly higher
revenues - resulting in a net income of CHF 6.23 million for 2015 compared to a
net loss of CHF 34.03 million in the previous year.

in TCHF                                                                     2015
2014

Revenue
6,355   1,000

Net operating costs
(5,701) (19,937)

Operating income/(loss)                                                     654
(18,937)

Net financial income/(loss)
5,573   (15,097)

Net income/(loss)
6,227   (34,026)

Net income/(loss) per share (in CHF)                                        0.08
(1.20)

                                                                             
 

Cash and cash equivalents, financial assets and trade and other receivables
2,834   17,055

Fulltime equivalents                                                        4
23
 
The Annual Report 2015 can be downloaded
at:http://www.kuros.ch/investors/reports-presentations.html


For further information, please contact:
Kuros Biosciences Ltd
Harry Welten, MBA
Chief Financial Officer
Tel: +41 44 733 46 46
harry.welten@kuros.ch


About Kuros Biosciences Ltd

Kuros Biosciences Ltd is focused on the development of innovative products for
tissue repair and regeneration and is located in Schlieren (Zurich),
Switzerland. The Company is listed according to the Main Standard on the SIX
Swiss Exchange Ltd under the symbol KURN. Information regarding Kuros is
available atwww.kuros.ch.

Forward Looking Statements
This media release contains certain forward-looking statements that involve
risks and uncertainties that could cause actual results to be materially
different from historical results or from any future results expressed or
implied by such forward-looking statements. You are urged to consider statements
that include the words "will" or "expect" or the negative of those words or
other similar words to be uncertain and forward-looking. Factors that may cause
actual results to differ materially from any future results expressed or implied
by any forward-looking statements include scientific, business, economic and
financial factors, Against the background of these uncertainties, readers should
not rely on forward-looking statements. The Company assumes no responsibility
for updating forward-looking statements or adapting them to future events or
developments.

 

End of ad hoc announcement

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Additional features:

Document:http://n.eqs.com/c/fncls.ssp?u=PIQAYTIOAD
Document title: Kuros_FY15_160426

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26.04.2016 News transmitted by EQS Schweiz AG. www.eqs.com - news archive:
http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.
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Language: English

Company:  Kuros Biosciences AG

          Wagistrasse 25

          8952  Schlieren

          Switzerland

Phone:    +41 44 733 4747

Fax:      +41 44 733 4740

E-mail:info@kuros.ch

Internet: www.kuros.ch

ISIN:     CH0011025217

Valor:    -

Listed:   Foreign Exchange(s) SIX


End of News EQS Group News Service
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