Bionomics deal could push cashflow into black

The initial payment received by Bionomics (ASX:BNO) from its lucrative new deal with Ironwood Pharmaceuticals could be enough to push the company into positive cash flow territory this quarter.

Adelaide-based Bionomics signed the deal worth up to US$345 million ($325 million) with Ironwood last month to commercialise its anti-anxiety compound BNC210.

The company has received an initial US$3 million payment from Ironwood , and may receive up to $10 million more over the next 24 months.

Bionomics will also be entitled to royalty and other payments, depending on the outcome of the collaboration.

Judging by Bionomics' recent cash flow statements, the initial payment could accelerate a recent improvement in operating cash flow during the current quarter.

The latest statement, published on Tuesday, shows that net operating cash outflow improved to $1.04 million for the December quarter. This compares to nearly $2 million a year earlier. In the March quarter last year, the outflow was $2.6 million.

The latest filing also shows that R&D costs fell by 31% for the December quarter to $1.8 million, and by 34.6% for the half-year to $3.2 million.

Bionomics is also in the clinical trial stage for BNC105, a cancer treatment candidate being developed as a Vascular Disrupting Agent.

Bionomics (ASX:BNO) shares fell 4.26% in Wednesday's trading to $0.450. The shares have been trending down for most of 2012.