Excerpts from the 1998 Annual report. 1999 not issued yet. Sorry about the formatting. Can't seem to get it lined up cleanly. (The occaisonal ? is an artifact fomr my word processor.)
Cambridge Antibody Technology Annual Report 1998 Highlights
? Impressive Phase I/IIa clinical data with D2E7, CAT/BASF
human anti-TNFa antibody in rheumatoid arthritis.
? Human anti-TGFb2 Phase I/IIa clinical trials in glaucoma
surgery initiated and on schedule but PVR clinical trial
programme delayed.
? Two drug candidates entered pre-clinical development
with clinical trials in fibrosis (anti-TGFb1 ) and autoimmunity
/inflammation (anti-IL-12) due to commence in 1999.
? Powerful extension to platform technology and
intellectual property through the purchase of Aptein Inc.
? CAT libraries now contain 100 billion human antibodies.
? Increased breadth of potential drug target base through
significant collaborations with ICOS and Progenitor.
Using its world-leading platform technologies,
CAT is exploiting the unique characteristics
of antibodies both to discover new disease
targets through functional genomics and to
engineer fully human antibodies as treatments
for human diseases. CAT?s aim is to secure
short term and long term revenues through
technology access and product development
respectively, working in partnership with
others at all stages of the discovery and
development process.
Statement by the Chairman
CAT?s progress in its first full year, since
becoming a listed company in March 1997, can be assessed against the plans given at that time. I am pleased to report a year of solid progress towards the delivery of those plans.CAT?s strategy continues to centre on a balance of collaboration, in-house development, and technological advance. As part of the pharmaceutical/life
sciences industry, we are well aware of the opportunities and challenges arising from massive sequencing of the human genome. This in turn is expected to generate a proliferation of proteins that are targets for pharmaceutical intervention. Rights to those new targets will clearly be of
major commercial significance and competition for them will be intense. Identification of such targets would be greatly assisted by the development of high throughput screening methods for selecting those genes whose predicted products are most likely to be pharmacological targets. CAT?s
ProAb TM and ProxiMol © technologies do exactly that. Both require combinatorial antibody libraries. CAT can therefore make major contributions, industry-wide, to unlocking the value of genomic databases.
That is our intent: we aim to enter major collaborations and to secure rights to novel targets for antibody therapy. In the last year we signed two such collaborations with ICOS and Progenitor. Our technology platforms were further strengthened during the year by the acquisition of the US company Aptein Inc. bringing sole rights to the controlling patents for polysome display. Together with phage display
this new technology has the potential to enhance significantly CAT?s antibody libraries. Of particular note during the year has been the progress achieved in
the drug development pipeline with the initiation of clinical trials with 6B1 in glaucoma drainage surgery, the recently reported clinical studies with D2E7 in rheumatoid arthritis and the pre-clinical development of the
human antibodies SL15 (anti-TGFb1) and J695 (anti-IL-12) ahead of clinical trials during the next year in fibrosis and autoimmunity/inflammation respectively. The demonstration of clinically significant benefit in the early
studies of D2E7, the first product developed by CAT to enter clinical trials, is particularly encouraging and a demonstration of the power of our platform technology to derive drug candidates.
Financial review Net cash outflow for the financial year ended 30 September
1998 was œ10.0 million (1997: œ7.2 million) a 39% increase on 1997 levels.
Cash at the year end was œ34.8 million (1997: œ44.6 million). CAT made a
loss for the financial year of œ7.0 million (1997: œ8.4 million, after intellectual
property acquisition costs).
Revenues in the year totalled œ1.4 million (1997: œ1.1 million).The profile
of revenues is irregular due to the nature of CAT?s business with the exact
timing of milestone payments and licence fees being uncertain.The major
source of income during the financial year has been the second instalment
of a licence fee from Eli Lilly.
Operating costs were œ11.2 million (1997: œ8.3 million, excluding intellectual
property acquisition).The rise over the previous financial year largely
reflects the increased scale of our activities, staff numbers having risen over
the year from 98 to 139. Over the next financial year it is anticipated that
staff costs will show a more modest increase as staff numbers level out at
around 160.
Capital expenditure during the year was œ3.9 million (1997: œ1.4 million).
A significant part of this expenditure represents the cost of refurbishment
and fitting out of 23,000 sq.ft. of additional specialist laboratory and office
space at Cambridge House in Melbourn. Cambridge House was occupied
earlier this month. CAT originally acquired a short leasehold interest but
since the year end has acquired the freehold for œ0.8 million.
During the year CAT entered into an agreement to purchase a US
company, Aptein Inc. The acquisition was completed in July and gives
CAT a powerful extension to its existing antibody display platform
technology. Under the terms of the agreement CAT purchased the issued
share capital and outstanding share options and warrants of Aptein for a
total consideration of up to $11 million satisfied by the issue of up to
2.366 million CAT shares (an implied CAT share price of 278p.) $6 million
of the consideration was satisfied by the issue of 1.290 million CAT shares
on closing.The balance of the consideration of up to $5 million will be
satisfied by the issue of up to 1.076 million CAT shares after Aptein?s
European patents have been sustained through opposition or appeal.
In accordance with accounting standards the cost of acquiring this new
technology has been capitalised and will be written off over the lives of the
patents concerned.
The œ10 million cash spend in the period was significantly less than that
estimated in December 1997. This was primarily because of lower spending
than anticipated on pre-clinical development and clinical programmes. It is
anticipated that CAT?s cash burn rate will rise modestly over the coming
year ? levels are expected to increase to an average of approximately
œ1.5 million per month (excluding revenues). At this increased burn rate,
and excluding any cash from future collaborative deals, CAT has sufficient
funds to finance existing operations for approximately two further years.
CAT expects to require additional financing for the further development
of its business.
Substantial shareholdings
On 23 November 1998 the Company had been notified,
in accordance with section 198 to 208 of the Companies
Act 1985, of the following interests in the ordinary share
capital of the Company:
Number of issued share Percentage
Oracle Group 1,627,030 6.9%
Medical Research Council 1,120,000 4.8%
Vector Fund Management L.P. 1,072,960 4.6%
3i Group plc 1,000,865 4.3%
Peptech Limited 819,125 3.5%
Patents
CAT?s policy is to seek patent protection for technology
it develops in-house and in collaboration with its research
partners and to defend patents forcefully during the
formal opposition phase of the European patent process
and against any challenge to validity.
A number of patents arising from both families of patent
applications (McCafferty et al and Winter et al) covering
CAT?s basic antibody technology have been granted in
Europe and are currently in the opposition phase. In the
US CAT has filed broadly similar patent applications with
the United States Patent Office. The McCafferty patent
application is under examination in the US.The Winter
et al patent application is the senior applicant in an
interference action within the US Patent Office involving
other US patent applications. Since the year end CAT?s
bi-specific diabodies patent has been granted in the US.
The acquisition of Aptein Inc. has provided CAT with
the fundamental patents for polysome display which are
granted in both the US and Europe.
CAT has licensed certain rights to phage display patents
held by Dyax Corporation. CAT continues to oppose
Dyax?s patent in Europe.
In September 1998 CAT commenced a patent
infringement action in the Munich District Court against
MorphoSys of Germany who it believes is currently
infringing two of the Company?s key patents ? Winter et
al and McCafferty et al. The action does not impact on
CAT?s freedom to operate its technology.
Consolidated profit and loss account for the year ended 30 September 1998
1998 1997
œ?000 œ?000
Turnover 1,354 1,134
Direct costs (61) (51)
Gross profit 1,293 1,083
Research and development expenses (9,125) (6,693)
MRC intellectual property acquisition (non-cash) (2,967)
General and administration expenses (2,078) (1,576)
Operating loss (9,910) (10,153)
Amounts written off investments ? (1)
Interest receivable (net) 6 2,959 1,799
Loss on ordinary activities before taxation (6,951) (8,355)
Taxation on loss on ordinary activities (4) ?
Loss on ordinary activities before taxation (6,951) (8,355)
Taxation on loss on ordinary activities (4) ?
Loss per share ? basic and fully diluted (pence) 31.0p 47.9p
Consolidated balance sheet 30 September 1998
1998 1997
œ?000 œ?000
Fixed assets
Intangible assets 4,576 ?
Tangible fixed assets 4,792 1,763
9,368 1,763
Current assets
Debtors 1,449 1,111
Investment in liquid resources 34,824 44,182
Cash at bank and in hand
36,293 45,704
Creditors
Amounts falling due within one year (2,194) (1,817)
Net current assets 34,099 43,887
Total assets less current liabilities 43,467 45,650
Creditors
Amounts falling due after more than one year (9) (13)
Net assets 43,458 45,637
Capital and reserves
Called-up share capital 2,349 2,215
Share premium account 45,820 42,785
Other reserve 13,339 13,383
Shares to be issued 1,650 ?
Profit and loss account (19,700) (12,746)
Shareholders? funds ? all equity 43,458 45,637 |
