Financial Analysis Pierre Mouy March 2010

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Financial AnalysisPierre MouyMarch 2010

Company Overview Biota Holdings is a Pharmaceutical company engaged in

anti-infective drug R&D, and its commercialization to treat respiratory diseases, particulary Influenza.

Biota’s blockbuster product , Relenza, 1st in class NAI is marketed by GSK.

R&D activities focus on the development of drug candidates for the treatment of :

HCV infections RSV infections HRV infections

The company has several partnerships with Pharmaceuticals such as:

Company snapshot In 2010 Biota Holdings Ltd operates with 3 subsidiaries

Biota Holdings Limited

Biota Scientific Management Pty

Ltd

Biota Investments

Pty Ltd

Biota Respiratory

Research Pty Ltd

Prolysis Limited

UK ( 2009 )

NuMAX Pharmaceuticals Inc USA

(2001)

Maxthera Inc

USA ( 2009 )

Company snapshot

Biota’s Headquarters in Melbourne, Australia 34 Employees estimated

Mr Peter Cook

CEO Managing director

Since 2005Dr James Fox

Chairman since 2009

Dr Simon Tucker

Vice PresidentResearch

Since 1997Dr Leigh Farrell

Vice PresidentBusiness DSince 2006

Dr Jane RyanVice

PresidentProduct D

Since 1997

Dr John LambertExecutive director

Since 2002

Company snapshot Biota Holdings floated on the Australian Stock Exchange

( ASX ) 2006 Biota admitted to the S&P/ASX 300 index Biota datas:

174 m shares for a AUD $324 m Market Cap

20 Largest shareholders

for 42% equity

Financial performance The Company reported:

Financial year end June Revenues of $60.56m during the fiscal year ended

June 2009, increase of 54.11% over 2008 Net Profit of $38.18m in 2009, whereas Biota

reported a net loss of 6.49m during 2008

Financial report Biota Holdings Limited

Income StatementsFor the year ended 30 June 2009

Others incomes : $22.776 m ( suit GSK )Total Revenues : $83.334 m

Financial report Biota Holdings Limited

Expenses StatementsFor the year ended 30 June 2009

Financial report Biota Holdings Limited

Income/Expenses Statements

For the year ended 30 June 2009

R&D

Financial report Biota Holdings Limited

For the year ended 30 June 2009

Total Revenues : $83.334 m Total Expenses : $ 41.517 m

R&D : 42% Revenues Litigation : 12% Revenues Salaries : 7.10% Revenues Sub-royalty : 7% Revenues Finance cost : 0.2% Revenues

R&D

Biota Holdings Limited Balance sheets

Strong cash position ~ $86.7million ~ 1.43 x Incomes ~ 1 year ½ available

Total equity ~ $97 million

Financial reportFor the year ended 30 June 2009

Financial report Biota Holdings Limited

Balance sheets

Total Assets ~ $111,629 million

Total Liabilities Total equity ~ $ 97,032 + Liabilities ~ $ 12,454 = ~ $111,629 million

Assets = Liabilities

Financial position Analysis Biota Holdings Limited vs Pharmaceuticals &

Healthcare sector (Oz) during the period 2005-2009 100.61 % Annual growth rate , 11.8% above the average sector

3 kinds of ratios for the fiscal year year 2009: Profitability ratios:

69.05 % operating margin OM , 18.5 % above the average sector 39.4 % return on equity ROE , 16.1 % above the average sector

Operating costs ratios: 31 % operating costs (% sales) OP over 5 years

Liquidity ratios: 7,6 % current ratio CR over 5 years

Profitability ratios To assess the Biota’s ability to generate earnings

based on Revenues

69.05 % operating margin , 18.5 % above the average sector OP used to mesure the Biota’s

Pricing strategy &

Operating efficiencyOM =

(Operating Income/ revenues) * 100

Profitability ratios To assess the Biota’s ability to generate earnings based

on Ressources used

39.4 % return on equity , 16.1 % above the average sector OP used to mesure the rate

Of Return on the

Shareholder’s equity

ROE = (Net Income/Shareholders

Equity) * 100

Operating cost ratio Operating costs :

To understand the costs the company is incurring as % of sales 31 % operating costs (% sales) OP in 2009

Operating cost = (operating expenses/Revenues)

* 100

2005 2006 2007 2008 2009Op costs(% sales)

502,86 181,50 68,08 123,69 30,95

Liquidity ratios Current ratio ( absolute ratio )

Current ratio 2009 = 7,61 Used to determine the Biota ability to pay off its

short-terms debts obligations ( the highter the value ratio is, the larger the margin

of safety biota would possese to cover short term debts)

( if ratio = 1 near Bankruptcy !! )Current ratio=

(Current assets/Current liabilities)

2005 2006 2007 2008 2009Currentratio

6,29 4,93 5,27 3,33 7,61

Stocks Analysis S&P/ASX 300 , in the Intersuisse Biotechnologies Index Market capitalisation ~ $324m Shareholders ~ 13,300 Total shares ~ 174m

Stocks Analysis

2.24

Bird Flu

Rumour

11 Aug 2005

Inside Traders wave

+ 30,6%

Mediatization+ 312,65%10/10/2005

Nov 2005French order9m courses

April 2006US defense

order5,5m courses

Jul 2006US order

16m courses

First Profitabilit

yannounce

d

Swine Flu

Rumour

24 April 2009

Inside Traders wave

+ 31,34%

Mediatization+ 296,32%27/04/2009

Open gap

24/10/2009

Mars 2009

Nasdaq biotech

PER Capital market ratio: Mesure of the price paid for a share relative to the

annual income earned per share. PER (Price earning ratio) = 9,66 ; vs 11,4 Aussie sector

average

Capital management : $20m return to shareholders in Dec 2009 ! 1st time

since 1985 ~0,12 cents per share dividend ~ significant

Stocks Analysis

SWOT AnalysisStrengths Weaknesses

Strong In-house Research capabilities

Flagship Product: RelenzaStrong Financial Position

Business Concentration: Aussie

Limited InvestorConfidence

Opportunities Threats

Significant CollaborationsMarket Potential: HCV

Emerging Markets

Competitive PressuresGovernment RegulationsUncertain R&D Outcomes

THE ENDReferences:

- Annual report 2009

- Global market directs

- Business week- Intersuisse- Euronext- Google fiinance- biota website