Information  X 
Enter a valid email address

Xtl Biopharmaceuticals Ltd (XTL)

  Print      Mail a friend

Thursday 15 March, 2007

Xtl Biopharmaceuticals Ltd

XTL Announces Results for the Year Ended 12/31/06


              XTL Biopharmaceuticals Announces Financial Results               
                     for the Year Ended December 31, 2006                      

New York, New York, March 15, 2007 - XTL Biopharmaceuticals Ltd. (NASDAQ: XTLB;
LSE: XTL; TASE: XTL), a biopharmaceutical company engaged in the acquisition,
development and commercialization of therapeutics for the treatment of unmet
medical needs, particularly neuropathic pain and hepatitis C, today announced
its financial results for the year ended December 31, 2006.

At December 31, 2006, the Company had cash, cash equivalents and short-term
bank deposits of $25.2 million, compared to cash and cash equivalents of $13.4
million at December 31, 2005. The year-over-year increase of $11.8 million is
attributable primarily to the Company's completion in May of a private
placement of ordinary shares yielding $24.4 million in net proceeds, partially
offset by operating expenditures associated with the development and support of
our hepatitis C clinical product candidates, XTL-2125 and XTL-6865, as well as
to the development of the DOS hepatitis C pre-clinical program.

The loss for the year ended December 31, 2006 was $15.1 million, or $0.08 per
ordinary share, compared to the loss of $14.0 million, or $0.08 per ordinary
share, for the year ended December 31, 2005, representing an increase in net
loss of $1.1 million. The increased loss was primarily attributable to an
increase of $2.9 million in research and development costs, primarily
associated with expenditures related to the DOS program acquired from VivoQuest
in September 2005, and a $0.4 million increase in business development costs
related to the recent in-licensing of our lead clinical compound Bicifadine in
January 2007. The increase in loss was partially offset by the absence of $1.8
million in in-process research and development costs related to the DOS
program, and also due to a $0.7 million increase in financial and other income,
due to the completion of the private placement that closed in May 2006, as well
as due to the general increase in short-term market interest rates when
compared to the comparable period last year. For the years ended December 31,
2006 and 2005, the Company's loss of $15.1 million and $14.0 million
respectively, included $2.2 million and $2.8 million, respectively, of non-cash
stock option compensation expense.

Ron Bentsur, Chief Executive Officer of XTL, commented, "During the year we
were successful in allocating our resources towards the transformation of XTL
into a company focused on clinical development with a more robust
clinical-stage pipeline. The recent in-licensing of Bicifadine, our lead drug
candidate, for the treatment of neuropathic pain, has immediately repositioned
us as a late-stage development company and we look forward to starting a
clinical trial with Bicifadine in 2007. In addition, we are nearing completion
of the Phase I XTL-2125 clinical trial and we expect to report clinical data
from the study during the second quarter of 2007. Moreover, we have completed
the XTL-6865 Phase I clinical trial and we expect to report clinical data from
this study shortly."

Mr. Bentsur added, "We enter 2007 with a very well-defined business plan. I
believe that the Company now has a clear pathway to success and that the
execution of the three main prongs of our business strategy, the development of
our lead product, Bicifadine, the development of our HCV product portfolio and
the continued opportunistic build-out of our product portfolio through
in-licensing and acquisitions, will determine the level of our success."

ABOUT XTL BIOPHARMACEUTICALS LTD.
XTL Biopharmaceuticals Ltd. ("XTL") is engaged in the acquisition, development
and commercialization of therapeutics for the treatment of neuropathic pain and
hepatitis C. XTL is developing Bicifadine, a serotonin and norepinephrine
reuptake inhibitor, for the treatment of neuropathic pain. In addition, XTL is
developing XTL-2125 - a small molecule, non-nucleoside inhibitor of the
hepatitis C virus polymerase. XTL-2125 is currently in a Phase 1 clinical trial
in patients with chronic hepatitis C. XTL is also developing XTL-6865 - a
combination of two monoclonal antibodies against the hepatitis C virus -
presently in Phase 1 clinical trials in patients with chronic hepatitis C.
XTL's hepatitis C pipeline also includes several families of pre-clinical
hepatitis C small molecule inhibitors.  XTL also has an active in-licensing and
acquisition program designed to identify and acquire additional drug
candidates. XTL is publicly traded on the NASDAQ, London, and Tel-Aviv Stock
Exchanges (NASDAQ: XTLB; LSE: XTL; TASE: XTL).

Contact:
Ron Bentsur, Chief Executive Officer
Tel: +1-(212)-531-5960

Cautionary Statement
Some of the statements included in this press release, particularly those
anticipating future financial performance, clinical and business prospectsfor
our clinical compound for neuropathic pain, Bicifadine,and for our clinical
compounds for hepatitis C, XTL-2125 and XTL-6865, growth and operating
strategies and similar matters, may be forward-looking statements that involve
a number of risks and uncertainties. For those statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. Among the factors that could
cause our actual results to differ materially are the following: our ability to
start a clinical trial with Bicifadine in 2007; our ability to meet the
forecast reporting deadlines for XTL-2125 and XTL-6865 clinical trials that we
mentioned above; our ability to successfully complete cost-effective clinical
trials for the drug candidates in our pipeline which would affect our ability
to continue to fund our operations with our available cash reserves, our
ability to meet anticipated development timelines for the drug candidates in
our pipeline due to recruitment, clinical trial results, manufacturing
capabilities or other factors; and other risk factors identified from time to
time in our reports filed with the Securities and Exchange Commission and the
London Stock Exchange, including our annual report on Form 20-F filed with the
Securities and Exchange Commission on May 25, 2006. Any forward-looking
statements set forth in this press release speak only as of the date of this
press release. We do not intend to update any of these forward-looking
statements to reflect events or circumstances that occur after the date hereof.
This press release and prior releases are available at http://www.xtlbio.com.
The information in our website is not incorporated by reference into this press
release and is included as an inactive textual reference only.

                          XTL BIOPHARMACEUTICALS LTD.                          
                         (A Development Stage Company)                         
                          CONSOLIDATED BALANCE SHEETS                          
              (in thousands of US dollars, except share amounts)               

                                                       December 31       
                                                     2006        2005    
                                                  ---------   ---------  
                   A s s e t s                                           
                                                                         
CURRENT ASSETS:                                                          
Cash and cash equivalents                             4,400       13,360 
Short-term bank deposits                             20,845           -- 
Trading securities                                      102           -- 
Property and equipment (held for sale) -- net            18           -- 
Deferred tax asset                                       29           -- 
Other receivables and prepaid expenses                  702          431 
                                                   ---------    ---------
T o t a l current assets                             26,096       13,791 
                                                   ---------    ---------
                                                                         
EMPLOYEE SEVERANCE PAY FUNDS                             98          449 
RESTRICTED LONG-TERM DEPOSITS                           172          110 
PROPERTY AND EQUIPMENT -- net                           490          762 
INTANGIBLE ASSETS -- net                                 25           39 
DEFERRED TAX ASSET                                       19           -- 
                                                   ---------    ---------
T o t a l assets                                     26,900       15,151 
                                                   =========    =========
                                                                         
      Liabilities and shareholders' equity                               
                                                                         
CURRENT LIABILITIES:                                                     
Accounts payable and accrued expenses                 3,003        2,007 
Deferred gain                                           399          399 
                                                   ---------    ---------
T o t a l current liabilities                         3,402        2,406 
                                                   ---------    ---------
LIABILITY IN RESPECT OF EMPLOYEE                                         
  SEVERANCE OBLIGATIONS                                 340          695 
DEFERRED GAIN                                           398          798 
COMMITMENTS AND CONTINGENCIES                      ---------    ---------
T o t a l liabilities                                 4,140        3,899 
                                                   ---------    ---------
                                                                         
SHAREHOLDERS' EQUITY:                                                    
Ordinary shares of NIS 0.02 par value                 1,072          864 
  (authorized: 300,000,000 as of                                           
  December 31, 2006 and 2005; issued and                                   
  outstanding: 220,124,349 as of                                           
  December 31, 2006 and 173,180,441 as 
  of December 31, 2005)                                                                
Additional paid in capital                          136,611      110,179 
Deficit accumulated during the development stage   (114,923)     (99,791)
                                                     -------    ---------
T o t a l shareholders' equity                        22,760      11,252 
                                                   ---------    ---------
T o t a l liabilities and shareholders' equity        26,900      15,151 
                                                   =========    =========

                          XTL BIOPHARMACEUTICALS LTD.                          
                         (A Development Stage Company)                         
                     CONSOLIDATED STATEMENTS OF OPERATIONS                     
       (in thousands of US dollars, except share and per share amounts)        

                                                                      Period from* 
                                                                      March 9, 1993
                                                                       to December 
                                        Year ended December 31           31, 2006                                
                                      2006       2005         2004      (unaudited) 
                                   --------    --------    --------      --------   
REVENUES:                                                                         
Reimbursed out-of-pockets
  expenses                              --        2,743        3,269        6,012 
License                                454          454          185        1,093 
                                  ---------    ---------    ---------    ---------
                                       454        3,197        3,454        7,105 
                                                                                  
COST OF REVENUES:                                                                 
Reimbursed out-of-pockets
  expenses                              --        2,743        3,269        6,012 
License (with respect to
  royalties)                            54           54           32          140 
                                  ---------    ---------    ---------    ---------
                                        54        2,797        3,301        6,152 
                                                                                  
GROSS MARGIN                           400          400          153          953 
                                                                                  
RESEARCH AND DEVELOPMENT COSTS      10,229        7,313       11,985       93,119 
(includes non-cash stock                                                          
option compensation of                                                            
$173, $112 and $30, in 2006,                                                      
2005 and 2004, respectively)                                                                     
                                                                                  
L E S S - PARTICIPATIONS                --           --           --       10,950 
                                  ---------    ---------    ---------    ---------
                                    10,229        7,313       11,985       82,169 
                                                                                  
IN - PROCESS RESEARCH AND               --        1,783           --        1,783 
DEVELOPMENT COSTS                                                                 
                                                                                  
GENERAL AND ADMINISTRATIVE           5,576        5,457        4,134       34,588 
EXPENSES (includes non-cash                                                       
stock option compensation of
$1,992, $2,641 and $2, in 2006,                                                                  
2005 and 2004, respectively)                                                      
                                                                                  
BUSINESS DEVELOPMENT COSTS             641          227          810        5,154 
(includes non-cash stock                                                              
option compensation of $15,                                                          
$10 and $0, in 2006, 2005 and                                                         
2004, respectively)                                                               
                                                                                  
                                  ---------    ---------    ---------    ---------
                                                                                  
OPERATING LOSS                      16,046       14,380       16,776      122,741 
                                                                                  
FINANCIAL AND OTHER INCOME-net       1,141          443          352        8,284 
                                  ---------    ---------    ---------    ---------
LOSS BEFORE INCOME TAXES            14,905       13,937       16,424      114,457 
INCOME TAXES                           227           78           49          466 
                                  ---------    ---------    ---------    ---------
LOSS FOR THE PERIOD                 15,132       14,015       16,473      114,923 
                                  =========    =========    =========    =========
BASIC AND DILUTED LOSS PER
ORDINARY SHARE                      $0.08       $ 0.08       $ 0.12              
                                  =========    =========    =========             

WEIGHTED AVERAGE NUMBER OF     201,737,295  170,123,003  134,731,766              
SHARES USED IN COMPUTING BASIC                                                    
AND DILUTED LOSS PER ORDINARY                                                         
SHARE                                                                             

* Incorporation date, see note 1

                          XTL BIOPHARMACEUTICALS LTD.                          
                         (A Development Stage Company)                         
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY           
              (in thousands of US dollars, except share amounts)               

                                           Ordinary shares                 
                                         -------------------               
                                       Number of      Amount    Additional 
                                         shares                   paid in  
                                                                  capital  
                                        ---------    ---------   -----------
BALANCE AT DECEMBER 31, 2005           173,180,441         864      110,179 
                                                                           
CHANGES DURING 2006:                                                       
Comprehensive loss - loss for the  
  period                                        --          --           --                    
Non-employee stock option    
  compensation expenses                         --          --            7       
Employee stock option compensation  
  expenses                                      --          --        2,173           
Exercise of stock options                  277,238           1           96
Issuance of share warrants, net of              --          --        4,565
  $681 share issuance expenses                                                    
Issuance of shares, net of $2,956       46,666,670         207       19,591
  share issuance expenses                                                    
                                         ---------    ---------   ---------
BALANCE AT DECEMBER 31, 2006           220,124,349       1,072      136,611
                                         =========    =========   =========

                                         Deficit         
                                       Accumulated             
                                        during the              
                                       development             
                                          stage        Total        
                                        -----------   --------- 
BALANCE AT DECEMBER 31, 2005               (99,791)     11,252 
                                                              
CHANGES DURING 2006:                                          
Comprehensive loss - loss for the period   
  loss for the period                      (15,132)    (15,132)                                               
Non-employee stock option                       --           7 
compensation expenses                                         
Employee stock option compensation   
  expenses                                      --       2,173         
Exercise of stock options                       --          97 
Issuance of share warrants, net of              --       4,565 
$681 share issuance expenses                                       
Issuance of shares, net of $2,956               --      19,798 
share issuance expenses                                       
                                           --------   --------                
BALANCE AT DECEMBER 31, 2006              (114,923)    22,760 
                                          =========  =========

                          XTL BIOPHARMACEUTICALS LTD.                          
                         (A Development Stage Company)                         
                     CONSOLIDATED STATEMENTS OF CASH FLOWS                     
                         (in thousands of US dollars)                          

                                                                    Period from 
                                                                      March 9,  
                                                                     1993 (a) to  
                                                                     December 31,     
                                           Year ended December 31      2006    
                                         2006      2005      2004    (unaudited) 
                                      --------- --------- ---------  ----------  

CASH FLOWS FROM OPERATING ACTIVITIES:                                           
Loss for the period                    (15,132)  (14,015)  (16,473)    (114,923)
Adjustments to reconcile loss to net                                            
cash used in operating activities:                                                           
Depreciation and amortization              243       242       319        3,072 
Linkage difference on restricted
  deposits                                 (10)        3        --           (7)
Acquisition of in process research           --    1,783        --        1,783 
  and development                             
Loss (gain) on disposal of property        (57)        6         1          (39)
  and equipment                                                                   
Increase (decrease) in liability in          8      (159)       30        1,236 
  respect of employee                                                             
  severance obligations                                                           
Impairment charges                          --        26        --          380 
Loss (gain) from sales of investment        --        --        13         (410)
  securities                                                                      
Other income related to exchange of       (100)       --        --         (100)
  shares                                                                          
Gain from trading securities                (2)       --        --           (2)
Stock option based compensation          2,180     2,763        32        5,458 
  expenses                                                                        
Gain on amounts funded in respect of        (1)      (6)       (4)          (92)
  employee severance pay funds                                                             
Deferred tax asset                         (48)       --        --          (48)
Changes in operating assets and                                                 
  liabilities:                                                                    
                                                                                
  Decrease (increase) in other            (178)       418     (143)        (609)
    receivables and                                                                                 
    prepaid expenses                                                                
  Increase (decrease) in accounts          910     (1,127)     133        2,917 
    payable and accrued expenses                                                                         
  Increase (decrease) in deferred gain    (400)     (400)    1,597          797 
                                      --------- --------- ---------    ---------
Net cash used in operating activities  (12,587)  (10,466)  (14,495)    (100,587)
                                      --------- --------- ---------    ---------
                                                                                
CASH FLOWS FROM INVESTING ACTIVITIES:                                           
Decrease (increase) in short-term      (20,845)   10,136     7,193      (20,845)
  bank deposits                                                                   
Restricted deposits                        (52)       --        46         (165)
Investment in investment securities          --       --        --       (3,363)
Proceeds from sales of investment            --       --       722        3,773 
  securities                                                                      
Employee severance pay funds               (18)      (50)     (136)        (909)
Purchase of property and equipment         (21)      (38)     (180)      (4,042)
Proceeds from disposals of property        103        27         5          252 
  and equipment                                                                   
Acquisition in respect of license and       --      (548)       --         (548)
  purchase of assets                                                              
                                      --------- --------- ---------    ---------
Net cash provided by (used in)         (20,833)    9,527     7,650      (25,847)
  investing activities                                                            

                          XTL BIOPHARMACEUTICALS LTD.                          
                         (A Development Stage Company)                         
               CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)               
                         (in thousands of U.S dollars)                         

                                                                    Period from 
                                                                      March 9,
                                                                     1993 (a) to
                                                                    December 31,
                                         Year ended December 31        2006     
                                        2006      2005      2004     (unaudited) 
                                     --------- --------- ---------   ---------  
                                                                             
CASH FLOWS FROM FINANCING                                                       
  ACTIVITIES:                                                                     
Issuance of share capital              24,363        --    15,430       128,734 
  and warrants - net of share
  issuance expenses                                                
Exercise of share warrants and stock       97     1,511        19         2,100 
  options                                                                         
Proceeds from long-term debt               --        --        --           399 
Proceeds from short-term debt              --        --        --            50 
Repayment of long-term debt                --        --        --          (399)
Repayment of short-term debt               --        --        --           (50)
                                     --------- --------- ---------     ---------
Net cash provided by financing         24,460     1,511    15,449       130,834 
activities                                                                      
                                     --------- --------- ---------     ---------
                                                                                
NET INCREASE (DECREASE) IN CASH AND                                             
  CASH EQUIVALENTS                     (8,960)      572     8,604         4,400 
                                                                                
BALANCE OF CASH AND CASH EQUIVALENTS                                            
AT BEGINNING OF PERIOD                 13,360    12,788     4,184            -- 
                                     --------- --------- ---------     ---------
BALANCE OF CASH AND CASH EQUIVALENTS                                            
AT END OF PERIOD                        4,400    13,360    12,788         4,400 
                                     =========  ========  ========     =========
                                                                                
Supplementary information on                                                    
investing and financing activities
not involving cash flows:                                                                     
                                                                                
Issuance of ordinary shares in                                                  
  respect of license and
  purchase of assets                       --     1,391        --         1,391 
Conversion of convertible                                                       
subordinated debenture                                                          
into shares                                --        --        --         1,700 
                                                                                
Supplemental disclosures of cash                                                
flow information:                                                               
Income taxes paid                         136        49       107           457 
                                     =========  ========  ========     =========
Interest paid                              --        --        --           350 
                                     =========  ========  ========     =========
                                                                                
(a) Incorporation date, see note 1                                              

                          XTL BIOPHARMACEUTICALS LTD.                          
                         (A Development Stage Company)                         
                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                 

1. GENERAL

XTL Biopharmaceuticals Ltd. ("the Company") was incorporated under the Israel
Companies Ordinance on March 9, 1993. The Company is a development stage
company in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 7 "Accounting and Reporting by Development Stage Enterprises."

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States ("US GAAP"). The
preparation of the financial statements, in conformity with US GAAP, requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities, at the date of the financial statements, and the reported expenses
during the reporting periods. Actual results may vary from these estimates.

Through December 31, 2006, the Company has incurred losses in an aggregate
amount of US $114.9 million. Such losses have resulted from the Company's
activities as a development stage company. It is expected that the Company will
be able to finance its operations from its current reserves through 2007.
Continuation of the Company's current operations after utilizing its current
cash reserves during 2008 is dependent upon the generation of additional
financial resources either through agreements for the commercialization of its
product portfolio or through external financing.

2. STOCK-BASED COMPENSATION

The Company adopted SFAS No. 123R "Share - Based Payment" ("SFAS 123R") as of
January 1, 2005, using the modified prospective application transition method.
Under such transition method, the Company's financial statements for periods
prior to the effective date of SFAS 123R (January 1, 2005) have not been
restated.

3. RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as they are incurred and consist
primarily of salaries and related personnel costs, fees paid to consultants and
other third-parties for clinical and laboratory development, license and
milestone fees, and facilities-related and other expenses relating to the
design, development, testing, and enhancement of product candidates.

In connection with the purchase of assets, amounts assigned to intangible
assets to be used in a particular research and development project that have
not reached technological feasibility and have no alternative future use are
charged to in-process research and development costs at the purchase date.

4. REVENUE RECOGNITION

The Company recognizes the revenue from its licensing agreement with Cubist
under the provisions of the EITF 00-21 "Revenue Arrangements with Multiple
Deliverables" and SAB 104 "Revenue Recognition." Under those pronouncements,
companies are required to allocate revenues from multiple-element arrangements
to the different elements based on sufficient objective and reliable evidence
of fair value. Since the Company does not have the ability to determine the
fair value of each unit of accounting, the agreement was accounted for as one
unit of accounting, after failing the separation criteria, and the Company
recognizes each payment on the abovementioned agreement ratably over the
expected life of the arrangement.

In addition, through 2005, Cubist had requested that the Company provide
development services to be reimbursed by Cubist. As required by EITF 01-14
"Income Statement Characterization of Reimbursements Received for
"Out-of-Pocket" Expenses Incurred," amounts paid by the Company, as a
principal, are included in the cost of revenues as reimbursable out-of-pocket
expenses, and the reimbursements the Company receives as a principal are
reported as reimbursed out-of-pocket revenues.

a d v e r t i s e m e n t