SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Date of Report: November 3, 1999
BIORA AB
SE-205 12 Malmo, Sweden
Telephone: (011) 46-40-32-13-33
Indicate by a check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
|X| Form 20-F |_| Form 40-F
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
|_| Yes |X| No
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b):
Not applicable.
This Form 6-K consists of the third quarter interim report of
Biora AB for the period ended September 30, 1999, which was issued on
November 3, 1999.
INTERIM REPORT
FOR THE FIRST NINE MONTHS 1999
BIORA AB (PUBL)
NOVEMBER 3, 1999
INCLUDING
NONRECURRING
REVENUE
THE FIRST NINE MONTHS 1999 1998 1998
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NET SALES, SEK MILLION 52.2 35.4 -
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OPERATING LOSS, SEK MILLIONS - 64.8 - 80.9 - 41.5(1)
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NET LOSS, SEK MILLIONS - 60.7 - 71.6 - 32.2(1)
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1) FIRST QUARTER OF 1998 INCLUDES NONRECURRING REVENUE FROM
SEIKAGAKU CORPORATION, BIORA'S JAPANESE PARTNER.
0 SALES DURING THE FIRST NINE MONTHS 1999 INCREASED BY 48
PERCENT TO SEK 52.2 MILLION (COMPARED TO SEK 35.4 MILLION
FOR THE SAME PERIOD IN 1998) AND DURING THE THIRD QUARTER
WITH 18 PERCENT TO SEK 14.7 MILLION (COMPARED TO SEK 12.5
MILLION IN 1998). THE INCREASE WAS MAINLY IN THE U.S.
MARKET.
O EMDOGAIN WAS APPROVED IN THE UNITED STATES FOR a NEW
APPLICATION, MULTIPLYING THE MARKET POTENTIAL SEVERAL
TIMES.
O A NEW SUBSIDIARY, BIORA BIOEX AB, WAS FORMED To FOCUS ON
R&D ON PRODUCTS FOR TREATMENT OF WOUNDS AND INFECTIONS
OUTSIDE THE ORAL CAVITY.
O DOCUMENTATION FOR LICENSING PRE-MIXED PRODUCT,
EMDOGAIN(R) GEL, WaS SUBMITTED IN EUROPE.
O BIORA, INC. RECEIVED "1999 SWEDISH TRADE COUNCIl NORTH
AMERICA ANNUAL ACHIEVEMENT AWARD"
Biora develops, manufactures and sells products for the treatment of
periodontal disease and for use in oral surgery. Using its proprietary
technology and expertise, Biora aims to become a world leader in
biology-based products for specialized dental therapy. Biora's American
Depository Shares are listed on the Nasdaq National Market in the USA and
Biora's ordinary shares are listed on the "O-list" of the Stockholm Stock
Exchange in Sweden.
THE FIRST NINE MONTHS OF 1999
Biora's sales during January 1- September 30, 1999, increased to SEK 52.2
million compared to SEK 35.4 million during the first nine months of 1998.
During the third quarter 1999 sales increased to SEK 14.7 million as
compared to SEK 12.5 million during the same period in 1998. The sales
increase was mainly in the U.S. market.
[GRAPHIC OMITTED]
SALES DURING 1998 AND 1999 PER QUARTER, SEK MILLIONS.
DEVELOPMENT OF SALES BASED ON ROLLING TWELVE MONTHS FIGURES, SEK MILLIONS
[GRAPHIC OMITTED]
PROGRESS IN THE U.S. MARKET
North America is the most important and fastest growing market for Biora.
There are estimated to be approximately 4,000 periodontists (specialists in
periodontitis) in the United States. Of those 2,400 had bought Emdogain at
the end of the period. More than half of them had bought Emdogain more than
once.
Biora believes that the acceptance of Emdogain is growing in the United
States. During this year's AAP conference (American Academy of
Periodontology, the leading organization for periodontology) at the end of
September, more than half a dozen periodontal opinion-leaders presented
positive results from their clinical experiences with the product. The
conference was attended by approximately 6,000 periodontists and dentists
from all over the world.
EMDOGAIN APPROVED IN THE USA FOR NEW INDICATION During the period the
United States Food and Drug Administration (FDA) approved Emdogain for use
as an adjunct to minimally invasive surgical technique. This indicates that
Emdogain can be utilized in conjunction with scaling and root planing
procedures for the treatment of periodontal intrabony defects in aesthetic
zones to optimize tissue height. Aesthetic zones include the teeth and gums
which appear when a person smiles.
Biora estimates that the target group in the United States for the new area
of application is about 60,000 dentists. Approximately 17 million scaling
and root planing procedures are performed annually in the USA and Biora
estimates that half of those are in the aesthetic zone.
INCREASED USAGE IN EUROPE AND JAPAN
The number of periodontists and general practitioners who purchased the
product continued to increase during the first nine months of 1999. In
Germany approximately 6,500 had purchased Emdogain, and almost half of
those had made more than one purchase. Approximately 600 customers
[GRAPHIC OMITTED]
in Sweden had purchased Emdogain and of those 430 had made more than
one purchase.
In Japan Biora's products are marketed through the Japanese biotech company
Seikagaku Corporation. According to Seikagaku, the number of customers was
slightly more than 1,000 at the end of the period. Almost half of those had
bought Emdogain more than once. During the third quarter of 1999 Seikagaku
had broadened the target group from 1,500 to 4,000 specialists and general
practitioners.
THE GOAL IS TO MAKE EMDOGAIN A PREFERRED TREATMENT Emdogain has now been
approved and launched in all initial key markets. The long-term goal is to
make Emdogain a preferred treatment of severe periodontitis.
DOCUMENTATION FOR LICENSING PRE-MIXED PRODUCT, EMDOGAIN(R) GEL, SUBMITTED
Today Emdogain is delivered as two components, which the dentist mixes. To
simplify the use Biora is developing a pre-mixed product, Emdogain(R) Gel.
Documentation for licensing the product in Europe has been submitted, and
it is expected that documentation for licensing the product in the United
States will be submitted during the fourth quarter of 1999. Biora is now
preparing for a launch of the product in Europe during first half of year
2000.
INTENSIFIED FOCUS ON RESEARCH AND DEVELOPMENT
Development is conducted on two fronts: documenting new indications for
Emdogain, primarily in clinical studies, and developing new products based
on biological principles.
Important areas for new indications are: broadened use for treatment of
periodontitis, recession type defects, evulsed teeth, periodontitis in
connection with impacted wisdom teeth and wound healing.
NEW KNOWLEDGE ABOUT EMDOGAIN AND ITS MECHANISM OF ACTION At a
research-congress Biora presented new findings on Emdogain's mechanism of
action. According to these findings PDL-cells from the area between the
root and the jawbone (cells that are important for a successful treatment)
are favored by growing in the presence of Emdogain, while the growth of
cells from the gingival margin (cells that can jeopardize the treatment) is
inhibited. This data is important for the understanding of the product's
function and for continued market penetration.
STUDIES SHOW THAT EMDOGAIN CAN HAVE AN INFLUENCE ON WOUND HEALING Biora has
shown in its own cell culture studies that Emdogain-covered surfaces
inhibit the growth of certain bacteria, especially some of the pathogens
behind periodontal disease (e.g. Actinobacillus actinomycetemcomitans).
Another bacteria which is believed to be inhibited is Staphylococcus
aureus, which is connected with e.g. "hospital disease".
These studies show that Emdogain improves wound healing without the need
for local or general antibiotics. This type of modulating effect on
bacteria in combination with the positive influence on growth factors may
open the possibility to use Emdogain for the treatment of wounds and
infections in and outside the oral cavity.
NEW SUBSIDIARY ESTABLISHED
To emphasize Biora AB's focus on the diseases in the oral cavity but at the
same time develop the potential for other indications a new subsidiary,
Biora BioEx AB, has been formed. Biora BioEx, possibly together with other
partners, will continue Biora's development in areas that can generate
products for indications outside the oral cavity. During the first six
months of 1999 Biora BioEx has submitted documentation for three new
patents.
BIORA'S AMERICAN SUBSIDIARY WON "1999 SWEDISH TRADE COUNCIL NORTH AMERICA
ANNUAL ACHIEVEMENT AWARD" Biora, Inc. the North American subsidiary of
Biora AB was chosen as the Swedish subsidiary of the year in the North
American market. The Nominating Committee made the following statement:
"The company's successful strategy has been to focus on clinical
trials, education and the opinion leaders of the periodontal
profession. Already today, Biora has secured a 50% penetration in its
target U.S. market segment and is now on its way to success in Canada
and Mexico as well."
THE YEAR 2000 PROBLEM
The computer systems at the head office in Malmo have been reviewed and
certified by Biora's computer supplier. Year 2000 reviews of Biora's
production equipment and the computer systems of Biora's subsidiaries and
principal suppliers have also been done. Biora does not expect that the
year 2000 issue will have a material effect on either sales or supplies of
raw material.
NET SALES
The Group's net sales during the period increased to SEK 52.2 million
(1998: SEK 35.4 million). The increase is primarily attributable to
increased sales in the U.S. market. Sales growth in the German market has
been unsatisfactory and steps are now being taken to increase the rate of
growth.
PROFIT/LOSS
Gross profit amounted to SEK 40.6 million (1998: SEK 27.6 million). The
improvement can be explained mainly by the increase in sales.
The operating loss amounted to loss of SEK 64.8 million (1998: loss SEK
41.5 million). Operating loss during the same period 1998 includes
nonrecurring revenue from Biora's Japanese partner in an amount of SEK 39.4
million. (Operating loss for the first half of 1998 excluding the
nonrecurring revenue was SEK 80.9 million).
Net financial items were SEK 4.2 million (1998: SEK 8.7 million). The
decrease is explained by decreased interest bearing assets and lower market
interest rates.
Net loss after tax during the period amounted to SEK 60.7 million (1998:
loss SEK 32.2 million), corresponding to a loss per share of SEK 2.86
(1998: loss SEK 1.52) based on the average of number of shares. (Net loss
after tax during the first nine months of 1999 excluding nonrecurring
revenue was SEK 71.6 million).
Concentration on increased efficiency has led to lower costs of
administration and maintained sales costs, while sales increased by 48 %.
INVESTMENTS
Capital expenditures during the period totaled SEK 2.7 million (1998: SEK
4.5 million).
FINANCIAL POSITION
Net change in cash and cash equivalents during the period were negative, in
an amount of SEK 59.5 million (1998: negative SEK 73.4 million). At the end
of the report period (figures for December 31, 1998, for comparison, are
given below in parentheses), the Group's liquid funds amounted to SEK 127.6
million (SEK 187.0 million), the equity/assets ratio was 84.2 percent
(86.6) and Group equity amounted to SEK 153.7 million (SEK 214.0 million).
EMPLOYEES
As of September 30, 1999, Biora had 88 employees as compared to 85
employees as of December 31, 1998.
COMING FINANCIAL INFORMATION
During 1999, Biora will publish financial information on the following
dates:
Year end report on 1998 operations February 16
Annual Report End of March
Interim report January - March May 4
Shareholder's meeting May 4
Interim report January - June August 18
Interim report January - September November 2
Capital Markets Day March 23
Malmo, November 3, 1999
Tomas Hammargren
President and CEO
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Biora's auditors have not audited this interim report.
This report may contain certain forward-looking statements that relate to
future events or future business and financial performance. Such statements
can only be predictions and the actual events or results may differ from
those discussed. The Company cautions that these statements are subject to
important factors that could cause actual results to differ materially from
those expressed or implied in such forward-looking statements and are more
fully discussed in periodic reports filed with Securities and Exchange
Commission.
CONSOLIDATED STATEMENTS OF OPERATIONS
1999 1999 1998 1999 1998 1998
(Swedish GAAP, Jan - JUL - Jul - Jan - Jan - Jan -
unaudited) Sep SEP Sep Sep Sep Dec
(TUSD)1) (TSEK) (TSEK) (TSEK) (TSEK) (TSEK)
Net sales 6,331 14,738 12,493 52,230 35,442 50,119
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Costs of goods sold -1,413 -3,074 -2,912 -11,659 -7,835 -10,864
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GROSS PROFIT 4,918 11,664 9,581 40,571 27,587 39,255
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Selling expenses -7,818 -20,241 -20,632 -64,494 -63,194 -89,622
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Administrative expenses -1,507 -3,748 -4,095 -12,430 -16,453 -22,133
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Research and
development costs -3,579 -9,245 -9,473 -29,523 -30,206 -39,980
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Other operating income
and expenses 2) 125 2,154 1,884 1,029 40,727 40,952
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LOSS FROM OPERATIONS -7,861 -19,416 -22,735 -64,847 -41,539 -71,528
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Financial net 512 988 2,309 4,221 8,698 11,572
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LOSS AFTER FINANCIAL
ITEMS -7,349 -18,428 -20,426 -60,626 -32,841 -59,956
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Income tax -4 - 592 -32 594 -42
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LOSS FOR THE PERIOD -7,353 -18,428 -19,834 -60,658 -32,247 -59,998
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CONSOLIDATED BALANCE SHEETS
Sep 30, SEP 30, Sep 30, Dec 31,
(Swedish GAAP, unaudited) 1999 1999 1998 1998
(TUSD)1) (TSEK) (TSEK) (TSEK)
Intangible long term assets 2,414 19,911 25,876 25,337
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Tangible long term assets 1,305 10,768 12,411 12,269
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Financial long term assets 306 2,524 2,511 2,571
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TOTAL LONG TERM ASSETS 4,025 33,203 40,798 40,177
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Inventories 529 4,368 3,140 4,174
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Current receivables 2,097 17,300 20,625 15,787
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Bank deposits 10,910 90,000 196,587 148,050
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Cash and bank 4,554 37,572 16,317 38,998
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TOTAL CURRENT ASSETS 18,091 149,240 236,669 207,009
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TOTAL ASSETS 22,116 182,443 277,467 247,186
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Shareholders's equity 18,631 153,698 244,128 213,970
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Provisions 59 484 254 397
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Long term liabilities 3) 19 155 - 155
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Current liabilities 3) 3,407 28,106 33,085 32,664
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TOTAL SHAREHOLDERS' EQUITY AND 22,116 182,443 277,467 247,186
LIABILITIES
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1) Average exchange rate Jan-Sep, 1999, USD 1= 8,2495
2) In the first quarter 1998 a nonrecurring revenue from Seikagaku
Corporation of 39.4 MSEK is included in other operating income and
royalty expense to Astra of 1,0 MSEK on this revenue is included in
other operating expenses.
3) Biora did not have any interest-bearing liabilities either on September
30, 1999, September 30, 1998, or December 31, 1998.
KEY RATIOS
CONSOLIDATED 1999 1998 1997 1996 1995
Swedish GAAP, unaudited) Jan - (2)
Sep (1)
Net sales (TSEK) 52,230 50,119 16,499 4,561 936
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R & D costs (TSEK) 3) 29,523 39,980 21,207 10,884 9,347
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Return on capital employed, -43.9 -40.0 -53.2 -266.2 -46.1
% 4)
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Return on equity, % 5) -43.9 -40.0 -58.1 neg -128.8
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Equity / assets ratio, % 6) 84.2 86.6 81.9 -34.2 28.8
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Net debt / equity ratio, % 7) -83.0 -87.4 -103.0 -84.3 163.3
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Total equity (TSEK) 153,698 213,970 277,935 -18,437 7,986
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Average number of shares 21,204 21,204 20,571 14,207 10,819
outstanding, (000s) 8)
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Equity per share, SEK 8) 7.25 10.09 13.51 -1.30 0.74
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Loss per share, SEK 8) -3.8 -2.83 -3.66 -2.61 -1.01
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1) Return on capital employed, return on equity and loss per share have
been calculated by multiplying the nine month operating loss and net loss
respectively by 1.33 to obtain comparability to the other presented twelve
months key ratios.
2) Return on capital employed and return on equity have been adjusted for
the effect of the nonrecurring revenue from Seikagaku.
3) R&D-costs are shown gross, including capitalized costs. During 1999, as
well as during 1998, no costs have been capitalized under the caption
Capitalized R&D costs, why the net and gross costs were equal, 29,523 (2.5%
royalty to Astra on sales of Emdogain has been reclassified to costs of
goods sold.)
4) Operating loss plus financial income dividend by average total assets
(total assets less non-interest-bearing operating liability including
deferred taxes.
5) Net loss divided by average equity.
6) Shareholders' equity divided by total assets.
7) Interest-bearing liabilities less cash and bank deposits divided by
shareholders' equity.
8) The number of ordinary shares outstanding used in determination of loss
and equity per ordinary share is calculated on a proforma basis by giving
effect to a 25:1 share split and the 3:1 stock dividend completed by the
Company during 1996. The dilution effects of outstanding convertible loans
and options have not been considered when calculating equity and loss per
share for the years 1995-1999 as this would reduce the loss per share.
STATEMENTS OF CASH FLOWS
CONSOLIDATED (TSEK) 1999 1998 1999 1998 1998
(Swedish GAAP, unaudited) Jul - Jul - Jan - Jan - Jan -
Sep Sep Sep Sep Dec
Loss for the period -18,428 -19,834 -60,658 -32,247 -59,998
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Depreciation and amortization 1,391 1,304 4,078 3,707 5,156
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Change in capitalized research
and development costs 1,776 731 5,328 2,193 2,924
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Prepaid nonrecurring revenue - - - 39,375 -39,375
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Other adjustments to reconcile
net loss to net cash
flows form operating activities 45 -582 122 -555 241
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Change in assets and
liabilities -2,052 -2,182 -5,357 -2,831 -2,821
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NET CASH USED IN OPERATING
ACTIVITIES -17,268 -20,563 -56,487 -69,108 -93,873
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Capital expenditures (tangible
assets and patents) -608 -555 -2,687 -4,472 -5,842
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Other investing activities 3 - 34 - -
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NET CASH USED IN INVESTING
ACTIVITIES -605 -555 -2,653 -4,472 -5,842
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NET CASH USED IN / FROM
FINANCING ACTIVITIES - -49 - 7 111
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Effect of exchange rate
changes on cash and cash
equivalents -54 183 -336 167 342
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NET CHANGE IN CASH AND CASH -17,927 -20,984 -59,476 -73,406 -99,262
EQUIVALENTS
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BIORA AB
Dated: November 3, 1999 By: /s/ Anders Agering
------------------------
Anders Agering
Chief Financial Officer
