ra 2013 bioalliancepharma report

INNOVATION& PERFORMANCE

2013 ANNUAL REPORT

CO

NT

EN

TS OVERVIEW OF BIOALLIANCE PHARMA

MESSAGE FROM CHAIRMAN OF THE BOARD OF DIRECTOR

MESSAGE FROM CHIEF EXECUTIVE OFFICER

KEY FIGURES

2013 HIGHLIGHTS

MAJOR ADVANCES WITH ORPHAN PRODUCTS IN ONCOLOGY

LIVATAG®

VALIDIVE®

ACTIVITIES AND ACHIEVEMENTS OF THE DEPARTMENTS

R&D

STRATEGY AND MEDICAL AFFAIRS

BUSINESS DEVELOPMENT

QUALITY

PRODUCTION

FINANCE AND HUMAN RESOURCES

GOVERNANCE

STOCK MARKET AND SHAREHOLDERS

SIMPLIFIED FINANCIAL REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF CONSOLIDATED CASH FLOW

P.3

P.4

P.6

P.8

P.9

P.10

P.10

P.12

P.14

P.14

P.15

P.16

P.18

P.18

P.19

P.20

P.22

P.23

P.23

P.24

P.25

3BIOALLIANCE PHARMA | 2013 ANNUAL REPORT

CANCER AND ASSOCIATED PATHOLOGIES

BioAlliance Pharma conceives and develops innovative drugs used in the treatment of cancer with a particular approach based on rare and orphan diseases.

THERAPEUTIC APPROACHES DESIGNED TO TACKLE FUTURE CHALLENGES

Targeting (mucosal, cellular and molecular) and the control of resistance - for which targeting can be a key efficacy factor - are at the core of BioAlliance Pharma’s therapeutic approaches.

The Company develops breakthrough technologies, whether for nanoparticulate formulation, mucosal deli-very or targeted therapies, that make it possible to act precisely on a therapeutic target and to reduce drug resistance and/or intolerance.

A STRATEGY FOR GROWTH

The Company’s growth strategy is driven by the deve-lopment of its advanced products for orphan diseases in oncology. These are products with very high sales potential which benefit from more favorable price and reimbursement policies, and meet an established and unaddressed therapeutic need for a relatively limited segment of patients.

In the medium and long term, the Company could mar-ket these high added value products in Europe directly, in order to benefit from the full margin generated, and enter into partnership agreements for other regions in the world.

In addition to this strategic portfolio, BioAlliance Pharma has successfully developed and registered two initial drugs in Europe and the United States, thereby demons-trating the ability of its teams, and already enabling it to register income through international partnerships.

STRENGTHSUNDERPINNING GROWTH

Advanced strategic programs in severe orphan

diseases in oncology, the basis of its growth

strategy;

Two technological platforms targeting and figh-

ting drug resistance:

The Lauriad® mucoadhesive platform with two

products developed and registered and one pro-

duct currently undergoing its Phase II clinical

trial;

The nanoparticulate platform Transdrug™, with

one product undergoing Phase III clinical deve-

lopment;

Drug development and registration expertise in

Europe and the United States;

Scientific expertise in Oncology, Hepatology and

the field of Nanomedicines;

Strong Business Development skills with esta-

blished international commercial partnerships,

which have already earned the Company more

than fifty-five million euros since 2007;

A strong portfolio of patent and trademark sub-

missions and registrations, offering long-term

protection for all the products developed by the

Company.

OVERVIEW OF BIOALLIANCE PHARMA


“BIOALLIANCE, A FRENCH SME IN THE BIOTECH WORLD”


The main challenge for an SME in the field of new

drug research is to reconcile conflicting influences.

While defining a long-term strategy in order to

actually finish up with a drug for the patient, an

SME must constantly adapt to the risks of the pro-

ducts and to developments in the world of science,

developing a position of expertise and leadership in

its selected therapeutic fields, and finally securing

the necessary financial resources. It is important to

understand our own strengths and limitations, but

we must also be bold.

BioAlliance faces up to these challenges through

the commitment of its teams and the support of its

Board of Directors. I would like to stress the quality

of our Board of Directors of international renown,

which boasts the highest level of expertise in a

variety of fields, and to congratulate each member

for the energy and commitment they bring to

their role. The entire Board of Directors is actively

involved alongside the company employees, conti-

nuously providing them with the benefit of our

expertise and experience.

BioAlliance Pharma is driven forward by motivated,

competent and ambitious teams facing up to the

daily challenges with enthusiasm, and I salute their

commitment.

2013 and early 2014 were marked by decisive

advances in terms of the growth of BioAlliance

Pharma and the value of its assets. These events

reinforced the confidence and support of the

shareholders who have been fully behind the Com-

pany’s strategic decisions.

This dynamic will continue in 2014 with the advan-

cement, deployment and conclusion of key stages

in the research program cycle. In order to tackle

these challenges and to reinforce its financial flexi-

bility, BioAlliance Pharma is pursuing its efforts to

diversify its sources of funding and to widen its

shareholder base.

We are confident in the future of BioAlliance

Pharma and in its ability to pursue and exceed its

objectives of creating value and new perspectives.

PATRICK LANGLOISCHAIRMAN OF THE BOARD OF DIRECTORS

MESSAGE FROM CHAIRMANOF THE BOARD OF DIRECTORS


JUDITH GRECIETCHIEF EXECUTIVE OFFICER

COMMENTS ON THE 2013 PERFORMANCE AND SETS OUT THE STRATEGY FOR 2014

“

”

2013 for BioAlliance Pharma was a year full of progress and events in the development of its orphan drugs in oncology. It was also marked by the deployment of Sita-vig® with its marketing authorization in the United States for the prevention of labial herpes in early 2014, along-side the licensing agreement for marketing the drug in the USA. What are your main highlights from 2013?

It has been a very busy year, just as in 2012, a year of major advances and key progress with our development pro-grams.

Advances were first of all made with the portfolio driving the growth of the Company, namely orphan drugs in onco-logy, with Livatag® in primary liver cancer and Validive® in severe oral mucositis induced by radiotherapy and chemo-therapy in patients suffering from head and neck cancer. It is important to remember that these drugs are now in a very strong position and that we are approaching the years of fruition for all the efforts made and the key deve-lopment stages successfully completed.

The Livatag® trial is in its final phase of development, Phase III. The study is being extended geographically in both Europe and the United States following FDA authorization obtained in late 2013 to carry out the trial in the USA.

It should also be noted at this stage that the good tole-rance profile of the product has been confirmed by the independent expert committee assigned the task of ensu-ring patient safety, a decisive factor in the trial. As set out in the study protocol, the committee meets every 6 months to review the Livatag® tolerance data and on three occasions to date has issued a recommendation for the trial to continue without modification.

The Validive® Phase II trial for its part is about to complete the patient recruitment phase, and initial results are expec-ted during the fourth quarter of this year. Furthermore, the fast-track status granted by the FDA in early 2014 confirms the severity of the pathology being treated, severe oral mucositis, and the medical need which currently remains unaddressed. This status will provide closer contacts with the American agency, an accelerated review process and optimized development times. All these elements precede and prepare for the subsequent development phases: pro-duct phase III followed by registration.

Activities over recent months have also been focused on Sitavig®, our treatment for the prevention of labial herpes. For the second time in its history, BioAlliance Pharma has successfully undergone the product development phases to achieve registration in both Europe and the United States. We are the only French biotechnology company to have successfully completed this journey through the American agency, an achievement that is the result of not only our know-how and expertise but also the com-mitment and determination of our teams, of which I am particularly proud. And we are presently at the product’s commercialization stage with the signing in early March of a partnership agreement with a US company, Innocu-tis, which plans to launch the product in the United States during the third quarter of this year.


The strategy of BioAlliance Pharma appears to be turning towards the development of drugs for the treatment of orphan diseases in oncology: is this your main strategic focus?

BioAlliance Pharma aims to become a major player in the field of orphan drugs in oncology. It is in this area that we wish to develop the position of the laboratory and from which we will enjoy growth in the future. Our portfolio is already very rich and highly advanced with Livatag® and Validive®. It currently demonstrates our clear priorities in terms of human and financial investment. The field of orphan drugs in oncology represents a strategic area of significant value creation, both for patients by providing innovative therapeutic solutions and for the company and its shareholders.

In this strategic sector we are targeting pathologies with a significant degree of unaddressed medical need which represent massive market potential. The two drugs developed, Livatag® and Validive®, are innovative drugs designed to provide a strong therapeutic response in diseases for which there currently exists no or very few effective treatments. Furthermore, for these orphan diseases the development programs can be optimized in terms of time and cost and are therefore of major strategic interest to companies such as BioAlliance Pharma.

You currently have two drugs on the market emanating from your own research, where are they positioned in your product «landscape»?

The drugs we have brought to the market, Loramyc® and Sitavig®, are indeed the result of our own research and are proof of our expertise. Twice now we have been able to bring a development right through to registration, with authorities in both Europe and the United States. These drugs are planned to be marketed via partnership agree-ments and to generate recurrent income for the Company. However, the field of so-called «specialty» drugs, bringing an improvement to the drugs already being marketed through galenic formulation, is not the thrust of our strate-gic development. These drugs have provided and will continue to provide the Company with income, as has been the case with Loramyc® since 2007 (over €55m through licensing agreements) but will not drive the future growth of the Company.

Do you also plan to establish partnerships to develop sales of Livatag® and Validive® in certain countries?

A strategy of partnerships with these products is clearly an option we are already considering. It is possible to ima-gine that we will retain the product in-house for direct marketing activities in certain areas such as Europe, and entrust it to partners under license in other regions of the world.

With the roll-out and culmination of your research pro-grams, which should also be accompanied by a change of financial scale, what is your financing strategy to support the growth?

Our financing strategy is clearly one of the current ques-tions under review in light of the anticipated revenues, their timing and the needs of the Company.

Beyond the development expertise and right up to pro-duct registration, our products on the market are certainly important due to the substantial income they bring in, but they are in no way intended to provide the full amount of investment required for the development of our orphan drugs in oncology. Apart from certain agreements due to be concluded over the coming months, the Company is analyzing the most appropriate financing solutions in order to actively pursue the deployment of its programs.

You have confidence in the future of BioAlliance Pharma?

Yes, absolute confidence! We have major challenges ahead of us, but also the means, expertise and courage to meet them with success. We are duty-bound to complete our mission of understanding and meeting patient needs with innovative products.

And finally, I would like to thank all BioAlliance employees for their unfailing commitment, day in and day out, and also the Board of Directors under the leadership of Patrick Langlois, for its effectiveness and constant support. And our shareholders, for the faith they have placed in us, now more than ever.

MESSAGE FROM CHIEF EXECUTIVE OFFICER


€55malready receivedfrom partnerships

Over

€1,5min consolidated salesin 2013

€11,3mcash positionas of 31 December 2013

€10min R&D investment

251 patentsand published patent applicationsat 31 December 2013

1in Europe and the United States

drug registered and marketed

21 Phase III started in 20121 Phase II with recruitment undergoing completion (inclusion of last patient anticipated in H1 2014)

internationalclinical trials

SUBSTANTIAL ASSETS

52all experts in their field

employees 81 international and balancedBoard of Directors

directors

KEY FIGURES

9including United States and 8 countries in Europe for Livatag®United States and 5 countries in Europe for Validive®

countriesIn

70including 40 centers in Europe for Livatag®33 centers in the United States and Europe for Validive®

active clinical centers

Over

1in Europe and the United States

drug registered


JANUARYThe FDA authorizes the start of the Phase II clinical trial for Validive® (clonidine Lauriad®) in the United States for the prevention of severe oral mucositis induced by radiotherapy or chemotherapy in the treatment of head and neck cancer.

FEBRUARYCollaboration agreement with one of the world’s leading vaccine companies for the development of vaccinal application of the patented Lauriad® mucoadhesive technology.

MARCHContinuation of the Loramyc® development plan in Japan by its partner Sosei with the initiation of the pivotal Phase III registration phase.

APRILMarketing Authorization from the U.S. Food and Drug Administration (FDA) for Sitavig® in the treatment of recurrent labial herpes.

MAYFollowing the review of tolerance data, second positive recommendation from the independent European expert committee (Data Safety and Monitoring Board) to continue with the ReLive trial without modification (Phase III Livatag® trial in primary liver cancer).

JUNEInitiation in the United States of the Phase II clinical trial for Validive® (clonidine Lauriad®) for the prevention of severe oral mucositis induced by radiotherapy or chemotherapy in the treatment of head and neck cancer.

BioAlliance Pharma Combined General Meeting: Appointment of Russell Greig and Danièle Guyot-Caparros, Independent Directors.

JULYBioAlliance Pharma obtains funding of €4.3m from bpifrance (formerly OSEO)to accelerate the industrial development of Livatag® - Creation of the NICE consortium: first nanomedicine sector in France, BioAlliance Pharma lead member of the consortium.

Issue of two patents by the American and Japanese authorities for its drugs Oravig® (miconazole in the treatment of oropharyngeal candidiasis) and Sitavig® (acyclovir in the treatment of labial herpes).

Successful raising of capital: Gross amount raised: 8.7 million euros; Operation oversubscribed at 155%; Exercise of extension clause.

SEPTEMBERFirst meeting of the international expert committee into oral mucositis and its associated clinical development program conducted with Validive® (clonidine Lauriad®).

OCTOBERThird positive recommendation from the independent European expert committee (Data Safety and Monitoring Board) to continue with the ReLive trial without modification (Phase III Livatag® trial in primary liver cancer).

NOVEMBERCommercial exclusivity of Sitavig® strengthened by the issue of 2 new patents: industrial protection extended in the United States until 2029.

DECEMBERAuthorization received for the Phase III ReLive (Livatag®) trial in primary liver cancer in the United States and Germany.

2013 HIGHLIGHTS


MAJOR ADVANCES WITH ORPHAN PRODUCTSIN ONCOLOGY

LIVATAG®(DOXORUBICIN TRANSDRUG™), MAJOR PROGRESS WITH THE PHASE III CLINICAL TRIAL INTO PRIMARY LIVER CANCER

LIVATAG®, IN BRIEF

Primary liver cancer, also called hepatocellular car-

cinoma (HCC), is an aggressive cancer which is resistant

to treatment by chemotherapy and is the second highest

cause of death through cancer worldwide. It is commonly

diagnosed at an advanced stage at which time few thera-

peutic alternatives exist, presenting a strong therapeutic

need. Hepatocellular carcinoma (HCC) develops from

liver cells (hepatocytes) and represents 85% of primary

liver cancers. In the great majority of cases (>90%), it

occurs when the liver is already abnormal (cirrhosis). The

risk factors are well known: infection by hepatitis viruses

(B and C), overconsumption of alcohol (another major

cause of cirrhosis) and metabolic disease, especially obe-

sity, are growing causes of cirrhosis and HCC.

Livatag® is an innovative treatment designed to over-

come the mechanisms of resistance by using nanoparticles

to deliver doxorubicin into chemotherapy-resistant cells.

Livatag® enjoys orphan drug status in Europe and the

United States, enabling optimization of the product’s

development plan in terms of cost and duration, as well

as strengthening its protection (market exclusivity). The

product’s sales potential is estimated at 800 million euros

worldwide.

Livatag® is protected by two families of patents

protecting its composition (doxorubicin contained in

nanoparticles) and its specific administration regimen

until 2031, until which time no generic product may be

marketed.

LIVATAG®, THE ACHIEVEMENTS

The international randomized Phase III trial, started in

June 2012, aims at demonstrating the efficacy of Livatag®

on survival in nearly 400 patients with hepatocellular

carcinoma after failure or intolerance to Sorafenib. Some

twenty centers have been opened in France. During

2013, the trial was rolled out across Europe to 7 other

countries (Germany, Spain, Italy, Russia, Hungary, Austria

and Belgium). After reviewing the development plan for

Livatag®, in December 2013 the FDA (Food and Drug

Administration) gave its authorization for the trial to be

conducted in the United States.

As of the date of this report, over 100 patients have been

recruited. The extension of the trial to the United States

and in Europe should enable recruitment to be accelerated

from 2014. Recruitment is due to be completed in 2015

with preliminary results anticipated in 2016.

A committee of independent European experts (Data

Safety and Monitoring Board, DSMB) chaired by Professor

Michel Beaugrand continuously monitors the trial. This

type of committee is usually set up in pivotal Phase III

clinical trials to ensure patient safety and the integrity

of the study’s process, and to recommend possible

amendments to the protocol. Since the start of the trial,

the independent expert committee has met three times

and unanimously recommended continuing the study

without modification.


LIVATAG®REPRESENTSA NEW THERAPEUTIC OPTION COMPARED TO EXISTING TREATMENTS

“

”


«Liver cancer is a particularly severe and common

form of cancer. Today it is the second most

frequent cause of death from cancer and its

incidence is set to triple by 2020/2025. There

is a major need for effective treatments for

the most advanced forms in order to improve

patient survival rates. Livatag® represents a

new therapeutic option compared to existing

treatments due to its nanoparticulate formulation

which enables tumor resistance mechanisms to

be overcome and should provide it with very

interesting active properties. We hope that the

ReLive trial will enable us to confirm the patient

benefit, a decisive criterion for the registration of

the product and its accessibility by patients and

doctors.»

FOCUS LIVATAG®AN EXPERT’S POINT OF VIEW

PROFESSOR PHILIPPE MERLEHEPATOLOGY DEPARTMENT, CROIX ROUSSE HOSPITAL IN LYON,AND CENTRE DE RECHERCHE EN CANCÉROLOGIE (ONCOLOGY RESEARCH CENTRE) IN LYON, INSERM U871, INTERNATIONAL COORDINATOR OF THE RELIVE TRIAL


VALIDIVE® (CLONIDINE LAURIAD®), ACTIVE PURSUIT OF THE INTERNATIONAL PHASE II TRIAL WITH RECRUITMENT SCHEDULED TO BE CONCLUDED IN EARLY 2014 AND INITIAL RESULTS DURING THE SECOND HALF OF 2014

VALIDIVE®, IN BRIEF

Oral mucositis consists of erythematous and ulcerative

lesions of the oral mucous membrane. It is one of the

most common complications of radiotherapy and

chemotherapy.

This severe pathology affects nearly 80% of patients

suffering from a head and neck cancer treated by

radiotherapy or chemotherapy (120,000 new patients

per year estimated in Europe and the United States). Oral

mucositis currently has no proven cure. The consequences

of mucositis are significant pain, difficulty ingesting solid

and even liquid food which may require parenteral or

enteral feeding, hospitalization in 30% of cases, degraded

general condition and sometimes the cessation for a

longer or shorter period of the cancer treatment protocol

which may reduce its efficacy.

BioAlliance is developing Validive® (clonidine Lauriad®)

for the treatment or oral mucositis induced by radiotherapy

or chemotherapy in patients suffering from a head and

neck cancer. It consists of a novel therapeutic application

of clonidine (an agonist of the alpha-2 adrenergic

receptors traditionally used to counter hypertension)

based on Lauriad® mucoadhesive technology. Clonidine

acts as an agonist of the alpha-2 adrenergic receptors

on leucocytes and macrophages, thereby decreasing the

expression of the pro-inflammatory genes and the release

of cytokines IL6, IL1β and TNFα. The liberation of these

pro-inflammatory cytokines causes mucositis and the

effect of clonidine is to suppress the pro-inflammatory

mechanisms. Validive® also acts on the anti-inflammatory

mechanisms by increasing the release of TGF β. Clonidine

therefore has painkilling and anti-inflammatory properties.

Validive® enjoys orphan drug status in Europe and

the United States, enabling optimization of the product’s

development plan in terms of cost and duration, as well

as strengthening its protection (market exclusivity). The

product’s sales potential is estimated at between 200 and

400 million euros worldwide.

Validive® is protected by a family of patents covering

the treatment and prevention of inflammation, and

especially mucositis, through clonidine. Protection is

provided until 2029.

VALIDIVE®, THE ACHIEVEMENTS

The international double-blind, placebo-controlled Phase

II trial is underway in Europe and the United States. As of

the date of this report, 95% of the patients planned for

the trial have been recruited. Recruitment is due to be

concluded during the first half of 2014 with initial results

anticipated during the second half of the year.

In January 2014, Validive® received fast-track status from

the Food and Drug Administration (FDA), providing it

with accelerated and continuous review by the American

agency in recognition of the severity of the pathology

being treated and the urgent need for suitable treatment.

A new step in the industrialization of Validive® was taken

with the signing of an agreement with Penn Pharma for

the pharmaceutical development of Validive®, including

the production of Phase III clinical batches and commer-

cial production.

In September 2013, a European and American expert

committee of international renown in the fields of oral

mucositis, oral medicine, oncology and radiotherapy was

created around oral mucositis and Validive® and its asso-

ciated clinical development program. Its role is to bring

its expertise and recommendations to bear on the deve-

lopment strategy for Validive® and its medical positioning

within oral mucositis.



«We are permanently confronted with the

sequelae of radiation’s side effects: Patients

that are irradiated in the head and neck area are

particularly suffering from inflammation of the

oral mucosa. Pain and hindered ingestion of food

and liquids are the consequences and finally

may lead to a general deterioration requiring

hospitalization and intensive medical attention.

Although modern techniques may help to

protect normal tissue from radiation exposure,

pharmacological methods to prevent or

treat radiation-induced mucositis are so far

- unfortunately - limited. Extensive research,

therefore, is underway to better understand the

pathophysiology of mucositis and to design new

treatment options. Recently the inflammatory

component of the process moved into focus and

very promising first signs of anti-inflammation

directed interventions seem to be ready to hand.

Given that we are lucky to participate in first

line in the Clonidine-Lauriad-Trial, a study using

a „topical“ formulation of an anti-inflammatory

agent with virtually no side effects on the general

condition of these heavily stressed patients.

We are looking forward to see first results of this

trial in 2014 and hopefully will dispose thereafter

of means to better control devasting oral

mucositis in our patients being irradiated in the

head and neck area.».

FOCUS ON VALIDIVE®AN EXPERT’S POINT OF VIEW

...THE FIRST VERY PROMISING METHODS OF TACKLING THE INFLAMMATION...

“

”

PROFESSOR MICKAEL HENKERADIO-ONCOLOGIST, FREIBURG UNIVERSITY HOSPITAL,TRIAL COORDINATOR FOR GERMANY



ACTIVITIES AND ACHIEVEMENTSOF THE DEPARTMENTS

R&D

Nearly 70% of employees currently work in the R&D

Department, covering Preclinical, Clinical and Regulatory

activities.

These 3 activities are at the heart of the development of

a drug, which demands interaction and teamwork as each

activity relies heavily on the work of the other two.

BioAlliance Pharma employees, specializing in Preclinical

and Clinical, pharmacology, biochemistry and molecular

biology, exploit their expertise in support of preclinical

product development, notably by providing proof of

concepts and the toxicological and pharmacokinetic

prerequisites required for the product to enter the clinical

phase and by developing in vitro or animal models in

response to the requirements of product development

strategy. Our experts in galenic pharmacy carry out

pharmaceutical development, notably with innovative

forms such as nanoparticulate and mucoadhesive

formulations. The experience acquired through the

international registration of 2 products, Loramyc®

and Sitavig®, supports the optimization process of

developments with a view to gaining MAs for our future

drugs

The Preclinical and Clinical team actively contributes

to the dynamism of partnerships with academic

departments, as demonstrated once again with the teams

from Paris Sud University in the field of nanotechnology

with the creation of the NICE consortium, a reflection

of the success of BioAlliance in the management of its

academic alliances.

The BioAlliance Clinical team is responsible for carrying

out clinical trials from Phase I (which tests for tolerance

and detects the first signs of efficacy), Phase II (which

researches the optimum dose in terms of efficacy and

tolerance) and Phase III (which confirms the large-scale

efficacy of the drug on a defined patient population).

The application of clinical trial protocols and the

performance of a clinical trial must comply with extremely

strict regulations and requirements, designed to ensure

patient safety and respect and to guarantee the quality,

veracity and integrity of the results obtained.

The Clinical team, consisting of experienced Project

Managers and Clinical Coordinators, implements the

trials, monitors investigation centers and is in permanent

contact with the investigation centers, authorities and

experts, while coordinating activities with the CROs

(Clinical Research Organizations) which are responsible

for the day-to-day management of all the investigation

centers worldwide.

In 2013, the team obtained authorization from the FDA for two Phase II and Phase III clinical trials, of Validive® in the USA in early 2013 and of Relive (Livatag®) at year end. Thanks to its ability to set up numerous investigation centers in the United States and Europe, recruitment for the Validive® trial has been significantly accelerated and should be completed over the coming weeks, with preliminary results anticipated during the fourth quarter of 2014.

DA key support department for the Preclinical and Clinical teams, the Regulatory Affairs Department is largely responsible for development and registration strategy. It analyzes guidelines and requirements in order to give advice to the other teams regarding the choices to be made throughout the development of the drug, with the objective of creating maximum opportunity for success while ensuring compliance with regulatory requirements issued by the authorities.

Three regulatory affairs specialists are responsible at BioAlliance for providing day-to-day regulatory analysis of project activities, combining regulatory watch with critical evaluation in the light of the demands of the various health authorities.

This expertise was once again demonstrated in 2013, crowned by the successful FDA registration of Sitavig® in the USA. In Europe, Sitavig® had already been approved in 8 countries and the latest registrations, in France and Germany, were achieved in March 2014.


STRATEGY AND MEDICAL AFFAIRS

The Strategy and Medical Affairs team works on the

medical positioning and market access of products

under development and those already on the market.

This department’s work is based on a variety of activities,

notably scientific and medical watch and competitor

assessment. The monitoring of the good safety profile

of existing and development products is also one of the

team’s responsibilities.

In 2013, analysis of the possibility of extending the

development programs was carried out to accelerate

and widen the commercialization of our products to the

emerging BRIC markets of Brazil, Russia, India and China.

The creation of international expert committees for two

of our products undergoing clinical development was a

highlight of 2013. The objective of these committees is

to optimize the development plans, to smooth the way

for registration and enable market access under optimal

conditions, in order to ensure an appropriate response to

the needs of both patients and the medical profession.

The granting to Validive® of Fast Track Designation by

the FDA is one of the most significant outcomes of the

strategies that we have implemented.

Granting of Fast Track status to Validive® by the Food

and Drug Administration (FDA) in the prevention and

treatment of oral mucositis induced by radiotherapy and/

or chemotherapy in patients being treated for cancer. This

status recognizes that Validive® is a drug being developed

for a severe or life-threatening pathology with a significant

medical need. It will allow enhanced interaction with the

FDA and optimize the evaluation schedule of the product

during development and right up to registration.

PIERRE ATTALICHIEF OPERATING OFFICER,STRATEGY & MEDICAL AFFAIRS




BUSINESS DEVELOPMENT

Business Development is a key and strategic activity

for BioAlliance Pharma. Partnership agreements for

registered products are a significant source of income for

the Company and also a means of accelerating product

development, notably by opening up potential markets

which BioAlliance does not have the resources to develop

directly. In the early stages of such projects, business

development also consists of seeking grants and putting

together consortia with academic and industrial partners

around shared themes in order to obtain non-dilutive

financing for conducting the projects.

The main objectives of Business Development in 2014 and

the years ahead are to actively pursue agreements in key

territories for Sitavig®, notably in Europe, and to identify

partners for Validive® and Livatag®. To this end, BioAlliance

is actively seeking partners and is notably taking part

in BioPartnering, a unique opportunity to participate in

numerous events and to present our products to potential

partners.

Granting of a European patent strengthening and

extending the protection of Livatag® by an additional 12

years until 2031, representing a very significant level of

additional earnings for the drug.

Signing of two licensing agreements: the first with

the American company Innocutis for the marketing of

Sitavig® in the United States, and the second with the

Korean company Daewoong Pharmaceutical Co. Ltd for

marketing in South Korea.

Signing of a contract between Japanese partner

Sosei and Fujifilm Pharma, with a view to the future

marketing of Loramyc® in Japan after receipt of marketing

authorization for the country.

Advances in clinical development programs carried

out by its partners with a view to registering Loramyc® in

Japan (Sosei) and in Chine (SciClone Pharmaceuticals).

Retrieval of commercialization and Marketing

Authorization rights for Oravig® in the United States

and advanced discussions with potential partners for

marketing acquisition or license.

Receipt of funding from bpifrance of nearly €9m, of

which €4.3m awarded directly to BioAlliance Pharma via

a Strategic Industrial Innovation (ISI) program enabling

acceleration of the industrial development of Livatag®

and supporting the establishment of the NICE (Nano

Innovation for Cancer) consortium.


AUDE MICHELHEAD OF CORPORATE BUSINESS DEVELOPMENT




QUALITY

The Quality Policy within BioAlliance Pharma is mainly

designed to ensure that all of our activities, from Clini-

cal and Pharmaceutical Development and Production to

Pharmacovigilance, are carried out in accordance with

regulations and international Good Practices.

Through regular inspections by the health authorities,

the ultimate representatives of patients, the day-to-day

implementation of the Quality Policy is verified. It is

also an essential prerequisite for approval of our Marke-

ting Authorization applications, such as in 2013 with the

various inspections carried out by the Food and Drug

Administration prior to the granting of the NDA for Sita-

vig® in the United States (production unit and several

clinical centers that took part in the clinical trials for Sita-

vig®).

In 2014, quality activities will mainly be associated with

the deployment of Quality Plans for Livatag® and Vali-

dive®.

PRODUCTION

Providing our partners with the products they market in

the various territories, and complying with quality, quan-

tity and cost criteria, are the day-to-day responsibilities

of the team.

They must also prepare for the future, in particular by

selecting the right industrial partner at the right time

for the production of batches intended for the market.

The selection process, carried out during product deve-

lopment upstream of commercialization, is based on a

number of criteria such as expertise, production capacity,

quality level and international recognition.

In 2013 this work, carried out in collaboration with various

departments throughout BioAlliance, led to the selection

of Penn Pharma for the development, industrialization

and future production of Validive®.

Optimization of the development and commerciali-

zation program: commencement of industrialization via

an agreement with Penn Pharma for the pharmaceutical

development of Validive®, including the production of

Phase III clinical batches and commercial production.

MICHEL FORESTCHIEF PHARMACIST & QUALITY ASSURANCE DIRECTOR


NICOLAS FELLMANNCHIEF FINANCIALAND HUMAN RESOURCES OFFICER


FINANCEAND HUMAN RESOURCES

The Finance and Human Resources Department covers all

financial, human resources management, corporate legal

and other support services.

It supports the Company’s strategy by managing the

budget, finance & cash flow and relationships with the

financial community, also performing financial risk control

and financial & fiscal optimization activities. Finance

Department teams (accounts and management control)

stay close to operational employees on a day-to-day basis,

thereby ensuring constant and rigorous management

of expenditure and investment commitments within a

culture deliberately focused on cash flow optimization.

The management of obligations in terms of company

and stock market law, including compliance with the

disclosure obligations of listed companies and executive

management, in support of Director and Shareholder

meetings, is another important dimension of the team’s

work.

Finally, the department provides the men and women

who give BioAlliance Pharma its distinctive value all the

support they may require in the field of human resources.

The culture of the Company is based on strong values

of innovation and excellence, but also of teamwork and

solidarity, values which are continually reiterated through

a very high level of interaction between the Human

Resources Department, management and employees.

In 2013, successful capital increase of 8.7 million euros,

155% subscribed, notably intended for the acceleration

and completion of the Validive® Phase II trial.


GOVERNANCE

Rémi Drol ler, Russel l Greig, Thomas Hofstaetter, David Solomon, Judith Grec iet , Nicolas Trebouta, Patr ick Langlois , Danièle Guyot-Caparros

«We became a shareholder of BioAlliance five years ago with a long-term vision. We are today very happy with our decision on account of this independent company having two products registered in the USA, two others with very strong potential which have commenced their final clinical trial phases, a Board of Directors composed of pragmatic professionals and a management team led by Judith Greciet with all the expertise and determination required to successfully see its development through. These are just some of the reasons behind our continued faith and support over the years ahead»NICOLAS TREBOUTAREPRESENTING FINANCIÈRE DE LA MONTAGNE

«For me it is a privilege to sit on the Board of Directors of BioAlliance Pharma, a French biotechnology company engaged in the development of innovative drugs to treat rare cancers, and which has already been able to successfully develop and register two drugs exploiting leading-edge technology. It is with conviction and enthusiasm that I commit myself to my role as Board member - a rewarding and gratifying experience »THOMAS HOFSTAETTER


The Board of Directors determines the Company’s business policies, approves the strategy and oversees its implementation.

The composition of the Board of Directors of BioAlliance Pharma changed during 2013. Following the expiry and non-renewal of the terms of office of Catherine Dunand and Michel Arié following the General Shareholders’ Meeting of 26 June 2013, the same meeting approved the appointment of Danièle Guyot-Caparros, Independent Director, and Russell Greig, previously and since 17 July 2012 a permanent guest member of the Board and also an Independent Director.

The Board of Directors consists of eight high-level professionals in the pharmaceutical and finance industries, including five independent directors and two representatives of the Company’s main shareholders:

Chairman: Patrick Langlois, PhD in Economics and Finance, General Partner of PJL Conseil and member of the boards and non-executive director of biotech organizations in Europe and the U.S.

Chief Executive Officer: Judith Greciet, PhD in Pharmacy, joined BioAlliance in March 2011 after a successful managerial career with increasing operational and strategic responsibilities at Laboratoire EISAI France, Wyeth Pharmaceuticals France (now Pfizer), LFB (Laboratoire Français du fractionnement et des Biotechnologies), Zeneca and Pharmacia.

Russell Greig has over thirty years of experience in the pharmaceutical industry, with expertise in research & development and business development. Russell Greig spent a significant part of his career at GlaxoSmithKline (USA/UK) where he was Senior Vice President of Worldwide Business Development R&D.

Danièle Guyot-Caparros is a chartered accountant and a finance and accountancy graduate of the Ecole Supérieure de Commerce in Nancy. After experience with an audit firm carrying out international assignments she joined Rhône-Poulenc, later to become Aventis and then Sanofi, occupying several important posts, notably with responsibilities carried out in France at European level and then in business planning and performance monitoring on a worldwide level. Over the past 5 years, Danièle Guyot-Caparros has been a consultant specializing in the field of life sciences and health.

Thomas Hofstaetter has over thirty years of experience in the development and acquisition of biotechnology companies and technological cooperation agreements, including at Wyeth, Inc. and Aventis, VaxInnate Corporation and Geron Corporation.

David Solomon, Physician Pharmacologist, CEO of Zealand Pharma (Denmark), holding various positions with executive responsibilities in biotech companies since 2006.

Financière de la Montagne, represented by Nicolas Trebouta. Financière de la Montagne has been a director of BioAlliance Pharma since June 2011. Nicolas Trebouta has managed investments in biotechnology companies directly through his Company, Financière de la Montagne, or through funds.

Kurma Life Sciences Partners, represented by Rémi Droller. Kurma Life Sciences Partners has been a director of BioAlliance Pharma since 16 December 2010. Rémi Droller joined Kurma as Partner in September 2010 after more than 10 years of experience in the field of healthcare investment.

The board sat on 7 occasions during 2013. It is assisted in the preparation of its decisions by two specialized committees, the Audit Committee and the Appointments and Remuneration Committee.

OPERATIONALDECISION-MAKING BODIES

STRATEGY COMMITTEEThe Strategy Committee sets the strategy, major policies and growth scenarios of the Company and oversees their implementation. It ensures that the company is managed collectively and cross-functionally.

Its members are as follows:• Judith GRECIET, Chief Executive Officer• Pierre ATTALI, Chief Operating Officer, Strategy & Medical Affairs• Nicolas FELLMANN, Chief Financial and Human Resources Officer• Michel FOREST, Chief Pharmacist & Quality Assurance Manager• Aude MICHEL, Head of Corporate Business Development

OPERATIONS COMMITTEEComposed of the Executive Management, department heads

and R&D operational departments, the Operations Committee sets the operating strategy, systematically reviews and validates progress of projects, and coordinates the teams.

RISK MANAGEMENT COMMITTEEThis committee updates the Company’s risk mapping and monitors action plans with the departments concerned.

AN INTERNATIONAL BOARD OF DIRECTORSTO GUIDE THE COMPANY’S GROWTH


STOCK MARKETAND SHAREHOLDERS

FINANCIAL CALENDAR27/02/2014 Publication of the consolidated financial statements for 2013

28/02/2014 2013 accounts presentation meeting

08/04/2014 Combined Shareholders’ Meeting

15/04/2014 Publication of the revenue statement for Q1 2014

22/09/2014 Publication of the half-year financial report

23/09/2014 2014 half-year accounts presentation meeting

07/10/2014 Publication of the revenue statement for Q3 2014

ISIN DETAILS

Code ISIN/Euronext - FR0010095596

Code Mnémonique : BIO

Euronext Paris - Compartiment C

Shares outstanding at 31/12/2013 : 20 682 992

Share capital : € 5 170 748

Simple voting rights only

Liquidity contract: CM-CIC Securities

50,0%Retail

13,6%Financière

de la Montagne

5,2%IDInvest Partners

31,2%Other

institutional

SHAREHOLDINGAT 31 DECEMBER 2013

3,0

3,5

4,0

4,5

5,0

5,5

01 02 111009080706050403 12

6,0 Price at 02 January 2013:

Price at 31 December 2013:

Highest share price: at 25/01/2013

Lowest share price: 02/07/2013 :

Market capitalisation at 31/12/2013:

4,83 €

4,28 €

5,80 €

3,42 €

88,50 M€

SHARE PERFORMANCE 2013


SIMPLIFIEDFINANCIAL REPORT

CONSOLIDATED BALANCE SHEET

ASSETS (IN EURO)

NON-CURRENT ASSETS

Intangible assets

Tangible assets

Financial assets

Other non-current assets

Total non-current assets

CURRENT ASSETS

Inventories and work in-progress

Trade receivables

Other receivables

Marketable securities

Cash

Total current assets

TOTAL ASSETS

31/12/2012

32 519

1 085 533

421 565

0

1 539 616

2 739

2 088 957

3 985 696

7 892 826

6 610 308

20 580 526

22 120 142

31/12/2013

22 785

908 313

368 998

0

1 300 096

3 145

338 113

4 772 870

7 357 014

3 972 013

16 443 156

17 743 252

LIABILITIES (IN EURO)

SHAREHOLDERS’ EQUITY

Share capital

Less: treasury shares

Additional paid-in capital

Reserves

Minority interests

Net income/(loss) for the year

Total shareholders’ equity

NON-CURRENT LIABILITIES

Provisions

Other liabilities

Total non-current liabilities

CURRENT LIABILITIES

Short-term debt

Trade payables

Other liabilities

Total current liabilities

TOTAL LIABILITIES AND EQUITY

31/12/2012

4 414 929

(25 147)

118 081 366

(99 180 837)

0

(11 547 921)

11 742 389

751 910

3 479 260

4 231 170

56 931

3 791 419

2 298 232

6 146 582

22 120 142

31/12/2013

5 170 748

(58 512)

128 044 120

(110 398 366)

0

(15 320 256)

7 437 734

456 878

3 030 220

3 487 098

91 182

4 557 185

2 170 054

6 818 420

17 743 252

All regulatory information on BioAlliance Pharma can be viewed at its websitewww.bioalliancepharma.com



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

€

Net sales

Other income

Purchases

Personnel costs

External expenses

Taxes other than on income

Depreciation and amortisation, net

Allowances to provisions, net

Other operating income

Other operating expenses

Operating expenses

Operating loss

Income from cash and cash equivalents

Other financial income

Financial expenses

Financial loss

Income/(loss) before taxation

Income tax expense

Net income/(loss)

Earnings per share

Diluted earnings per share

Income/(loss) for the period

Other elements of the comprehensive income for the period net of taxes

Total comprehensive income for the period

31/12/2012

4 028 124

546

(375 231)

(4 821 647)

(7 938 743)

(1 946 732)

(214 955)

(106 130)

15 364

(155 799)

(15 559 238)

(11 515 203)

249 520

21 640

(303 879)

(32 718)

(11 547 921)

0

(11 547 921)

(0,65)

(0,65)

(11 547 921)

332 490

(11 215 431)

31/12/2013

1 466 712

16

(264 271)

(5 346 986)

(10 706 716)

(297 740)

(232 994)

64 774

5 381

(125 028)

(16 908 960)

(15 436 850)

281 173

122 680

(287 260)

116 593

(15 320 256)

0

(15 320 256)

(0,74)

(0,74)

(15 320 256)

253 332

(15 066 923)


STATEMENT OF CONSOLIDATED CASH FLOW

31/12/2012

(11 547 921)

603 058

38 424

339 495

(99 730)

(75)

(10 666 749)

(5 706)

(10 672 454)

(3 409 121)

(14 081 575)

(53 813)

1 262

(10 622)

137

(63 036)

27 000

34 827

56 436

(122 606)

70 679

(71 527)

(5 191)

(12 723)

(14 162 525)

28 665 659

14 503 134

31/12/2013

(15 320 256)

3 419

(44 944)

300 075

(14 542)

(0)

(15 076 249)

(71 532)

(15 147 781)

1 055 915

(14 091 866)

(58 254)

12 540

2 973

(42 741)

10 718 574

(51 538)

83 148

75 456

71 532

14 838

10 912 010

48 490

(3 174 107)

14 503 134

11 329 027

€

CONSOLIDATED NET LOSS

+/- Depreciation, amortisation and provisions, net

(excluding provisions against working capital)

-/+ Unrealised gains and losses related to changes in fair value

+/- Non-cash income and expenses on stock options and similar items

-/+ Other non-cash income and expenses

-/+ Capital gains or losses on disposal

-/+ Capital gains or losses on dilution

+/- Share of earnings of associates

- Dividends (non-consolidated investments)

Gross operating cash flow after cost of net debt and taxes

+ Cost of net debt

+/- Tax expense (including deferred taxes)

Gross operating cash flow before cost of net debt and taxes

- Taxes paid

+/- variation of BFR linked to the activity

Change in working capital (including employee benefit liabilities)

NET CASH FLOW FROM OPERATING ACTIVITIES

- Expenditures on acquisition of tangible and intangible assets

+ Proceeds of disposal of tangible and intangible assets

- Expenditures on acquisition of financial assets (non-consolidated investments)

+ Proceeds of disposal of financial assets (non-consolidated investments)

+/- Effect of changes in scope of consolidation

+ Dividends received (equity accounted investments, non-consolidated investments)

+/- Change in loans and advances granted

+ Capital grants received

+/- Other flows relating to investment activities

NET CASH FLOWS FROM INVESTING ACTIVITIES

+ Net amounts received from shareholders on capital increases

Paid by shareholders of the parent company

Paid by minority interest in consolidated companies

Amounts received on exercise of stock options

-/+ Purchases and sales of treasury shares

- Dividends paid in the year

Dividends paid to shareholders of the parent company

Dividends paid to minority shareholders in consolidated companies

+ Amounts received on issuance of new loans

- Reimbursements of loans (including finance leases)

- Net interest received (including finance leases)

+/- Other flows related to financing activities

NET CASH FLOWS FROM FINANCING ACTIVITIES

+/- Effect of fluctuations in foreign exchange rates

CHANGE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents at start of year

CASH AND CASH EQUIVALENTS AT YEAR END



BIOALLIANCE PHARMA49, boulevard du Général Martial Valin,75015 Paris

Tél. : + 33 (0) 1 45 58 76 [email protected]. bioalliancepharma.com


Photo credits : Image BioAlliance Pharma,

Xavier Granet, Enguerran Ouvray, Tek Image

Publisher : BioAlliance Pharma

Design and production : Limbus Studio

BIOALLIANCE PHARMA49, boulevard du Général Martial Valin,75015 Paris

Tél. : + 33 (0) 1 45 58 76 [email protected]. bioalliancepharma.com

Contact : BioAlliance Pharma - Nicolas Fellmann49, boulevard du Général Martial Valin,75015 ParisTél. : + 33 (0) 1 45 58 76 [email protected]. bioalliancepharma.com

ra 2013 bioalliancepharma report

Documents

p pharma

orphan products

advanced products

severe orphan diseases

high added value products

therapeutic target

departments rd strategy

fighting drug resistance