After a weak start to 2011 ProMetic predicted business would improve in the second half of the year. Total revenues jumped by 50 per cent year-on-year, driven by sales of affinity absorbents to ‘major pharmaceutical companies’, and ProMetic predicts business will continue to improve.
“We anticipate this trend to continue in the coming quarters with the scaling up of clients’ products and manufacturing processes”, Pierre Laurin, CEO of ProMetic, said. ProMetic thinks these trends make the business ‘extremely attractive for the coming quarters’ but near-term difficulties remain.
As of September 30 ProMetic had CA$112,000 (€81,000) in cash, half of its reserves at the start of the year, and liabilities of CA$23.2m. ProMetic is projecting that by the end of the year it will cut total liabilities by one-third.
Liabilities have accumulated as ProMetic has posted losses. Since the end of 2008 ProMetic has lost CA$27.2m but in a conference call following third quarter results Laurin told investors it “could have been much worse”.
“Despite a poor liquidity situation at quarter end, we expect in the coming months to significantly improve the gearing of our balance sheet”, Bruce Pritchard, chief financial officer at ProMetic, said. Pritchard told investors ProMetic is very confident it can trade its way out of the situation.
Plotting a recovery
Laurin presented a slide showing the gap in revenues in late 2010, early 2011 and ProMetic is trying to stop this happening again. Business from OctaPharma and two unnamed pharma companies is expected to provide sales throughout much of next year and make performance more predictable.
ProMetic said a bioseparation deal with a biopharm will generate ‘significant service revenue’ early next year and possibly lead to a long-term supply agreement worth up to CA$5m. Celgene is also due to pay the unit US$6m of deferred revenues linked to a 2008 deal between ProMetic and Abraxis.
The 2008 deal was worth up to US$295m but stalled after Celgene bought Abraxis in 2010. A project that continued is worth US$10m, US$6m of which ProMetic expects to receive soon, and some of the other work could restart.
Laurin said: “With regard to certain projects that were non-core to Celgene they are currently being rerouted through another organisation that is owned by the previous majority owner of Abraxis.
“We’re very confident that…spin-off activities pursued by Dr Soon-Shiong, the owner of Abraxis, in a new corporate identity will continue driving value for us.” How much work this drives to ProMetic “remains to be realised”, Laurin said, but he is “quite confident of the likely outcome”.