OXFORD, UK, March 21 /PRNewswire-FirstCall/ -- Oxford GlycoSciences Plc (LSE: OGS, Nasdaq: OGSI) today announces its preliminary audited results for the year ended 31 December 2001.
Highlights
Vevesca (OGT 918):
-- Completion of submission to US and EU regulatory authorities for
Vevesca (OGT 918) for the treatment of type 1 Gaucher disease;
-- Exclusive agreement signed with Teva for the marketing of Vevesca
(OGT 918) in Israel;
-- Presented clinical results at the European Study Group on Lysosomal
Diseases meeting in September 2001 -- 24 month follow up data
(study 001 ext) and dose comparison study (003) -- 12 month dataset on
dose comparison study subsequently published in the journal Blood
Cells, Molecules and Diseases in March 2002;
-- Following the year end, announcement of intention to expand OGT 918
clinical trials to Niemann-Pick Type C disease, Neuronopathic (Type 3)
Gaucher disease and Late Onset GM2 Gangliosidosis.
Drug Discovery:
-- High-throughput target to drug lead collaboration signed with
NeoGenesis;
-- Therapeutic antibody alliance signed with BioInvent in March 2002 to
access their antibody phage display technology and their manufacturing
capabilities;
-- Comprehensive development effort initiated with Medarex in the field
of breast cancer treatment and acceptance of several targets into
joint venture;
-- Following the year end, announced commencement of a development
programme based on a novel molecule, OGT 923, for lysosomal storage
diseases.
Proteomics:
-- Grant of second US patent for automated proteomics methods and
apparatus: first licence granted to GeneProt in multi-million dollar
agreement;
-- Achievement of proteomics discovery milestone: filings made on over
4,000 disease-associated proteins;
-- Extension of research proteomics agreement with Pfizer;
-- Formation of a joint venture, Confirmant Ltd, to market certain
proteomics databases.
Commercial and financial:
-- Opening of a new office in Bridgewater, New Jersey, USA;
-- Commenced building a new laboratory facility next to existing
headquarters at Milton Park, Abingdon, UK;
-- Appointment of Mr John Rennocks and Mr Don DeGolyer to the Board;
Financial results:
-- revenues of GBP 13.4 million (2000: GBP 8.9 million)
-- loss for the year of GBP 25.3 million (2000: GBP 15.6 million)
-- year end cash balance of GBP 176.6 million
(2000: GBP 203.9 million)
Michael Kranda, Chief Executive Officer, commented: ``2001 has been a very important year in the progress of OGS. We achieved many of our objectives and continued our evolution as a drug discovery and development company. The Company enters 2002 with a growing glycolipid storage disease clinical programme led by Vevesca (OGT 918), a robust pipeline emerging from our disease-associated protein portfolio generated through our advanced proteomics platform and a 'performance driven' proteomics business.''
A presentation and conference call for analysts will take place today at 9.30 am GMT at the offices of Financial Dynamics, Holborn Gate, 26 Southampton Buildings, WC2, followed by a conference call and webcast at 4.00 pm GMT. Please call Claire Rowell on 020 7831 3113 for further details.
Review of Operations
Glycolipid Storage Disease Programmes
Vevesca (OGT 918)
-- In February 2001, we obtained and reported initial results from a
switch and combination six-month study showing that patients could be
maintained on oral therapy alone during the study period.
-- In July and August, we reached a significant milestone with the
submission of our dossier for Vevesca (OGT 918) for the treatment of
type 1 Gaucher disease to both European and US regulatory authorities.
-- In September, at the European Study Group on Lysosomal Diseases
meeting, data were presented on the extension of the OGT 918-001
clinical study at 24 months showing progressive improvement of the
results compared to those previously described in The Lancet after
12 months of treatment. In addition, data were presented at the same
meeting on the low dose study (OGT 918-003). Subsequent to the year
end the data from the OGT 918-003 study were published in the journal,
Blood Cells, Molecules and Diseases.
-- In November, we signed an exclusive agreement with Teva Pharmaceutical
Industries Ltd for the marketing and distribution of Vevesca (OGT 918)
in Israel.
-- During the last quarter of the year, we hired key commercial
management and established a global sales and marketing operation
principally based in Bridgewater, New Jersey, USA.
-- In early 2002, we announced plans to investigate OGT 918 in
Niemann-Pick Type C disease, Neuronopathic (Type 3) Gaucher disease
and Late Onset GM2 Gangliosidosis.
OGT 923
-- In early 2002, we announced a small molecule development programme
based on OGT 923, a new chemical entity that has shown efficacy in
pre-clinical models of Sandhoff and Niemann Pick C disease. We plan
to enter OGT 923 into phase I human trials in the last quarter of
2002.
OGS Drug Research and Development Programmes
OGS Pipeline
-- In March 2002, we presented an update on our novel R&D strategy and
our development pipeline, showing our progress in developing both a
small molecule inhibitor, OGT 2492, and a fully human antibody,
OGS-MDX 067, against heparanase I, an enzyme involved in the growth
and spread of many cancers.
-- During the year, we began development of new laboratories next to our
headquarters at Milton Park, Abingdon, UK to gather chemistry, biology
and development teams in a centralized state-of-the-art facility,
which is planned for completion by the end of 2003.
Drug Discovery Partnerships
-- In December, we announced the achievement of our objective to identify
and file patent applications for over 4,000 disease-associated
proteins, which represent the basis for our proprietary research
programmes.
-- In May, we established an extensive 'target to drug lead'
collaboration with NeoGenesis, an innovative US chemogenomics company,
which has already started to deliver candidate compounds.
-- In July, we signed a collaboration agreement with Hybrigenics to
identify proteins interacting with OGS disease-associated proteins as
part of our target validation strategy.
-- In January 2002, the OGS/Medarex/Genmab alliance announced several
antigens had been accepted into the programme and that the
collaboration had been extended to include vaccines as part of a
comprehensive cancer campaign.
-- In March 2002, we signed a multi-target collaboration with BioInvent
to access their antibody phage display technology. This collaboration
will complement the therapeutic antibody discovery and development
technologies from our alliance with Medarex, and provide us with
access to additional manufacturing capacity to exploit more fully our
large and varied target portfolio.
Proteome Operations
-- In June, we announced a project to generate data to build the Protein
Atlas of the Human Genome, the first database to use sequence
information obtained directly from naturally-occurring human proteins
to identify unambiguously all protein-coding genes in the human
genome.
-- At the same time, we formed Confirmant, a 50/50 joint venture with
Marconi, to develop and market databases, initially those licensed to
Confirmant by OGS and based on proteomics data generated by OGS,
including the Protein Atlas of the Human Genome(TM). In total OGS
will receive up to GBP 29.0 million from Confirmant to complete the
Protein Atlas.
-- In December 2001, we extended our collaboration with Pfizer. Revenues
from proteomics collaborations, including revenue from the licensing
of marketing rights and provision of database services to Confirmant,
contributed to record revenues, up by more than 50 per cent over 2000.
-- In July, we announced the first integration of two cutting edge
proteomics technologies, Isotope Coded Affinity Tag reagents and MALDI
TOF/TOF tandem mass spectrometry in an industrialised platform.
-- In August, we were issued US Patent No. 6,278,794, covering essential
processes in high-throughput proteomics. This patent complements the
coverage offered by OGS' more general U.S. Patent No. 6,064,754, which
was issued in May 2000 and underscores OGS' leading position in
industrialised proteomics. In January 2002, GeneProt became the first
company to take a licence to those patents.
-- During the year, we put a technical development plan in place and
realised the benefits from automation, enabling us to cut more than
GBP 2.0 million per year in proteomics operational costs while
maintaining revenue growth.
2001 Financial Highlights
Revenues from the proteomics business increased in 2001 to GBP 13.4 million compared with the prior year of GBP 8.9 million. Included in the 2001 revenue was a contribution of GBP 5.3 million from Confirmant.
Year end cash balances stood at GBP 176.6 million (year end 2000: GBP 203.9 million).
Board Changes
During the year, Mr James Noble retired from the Board. He was replaced in August by Mr John Rennocks. John brings a wealth of corporate and financial experience from British Steel, Powergen and Smith & Nephew, and acts as Chairman of our Audit Committee. In March 2002, Mr Don DeGolyer, President of Global Therapeutics, was appointed to the Board and CEO Michael Kranda announced his decision to step down by year-end for personal reasons.
Financial Review
During 2001, OGS established a joint venture, Confirmant, with Marconi to build and market the Protein Atlas. Each party holds 50 per cent of Confirmant's issued share capital which was issued for cash for a consideration of GBP 30 million. Over the life of the contract with Confirmant, OGS expects to earn up to GBP 29 million.
Sales by OGS to Confirmant during the period ended 31 December 2001 amounted to GBP 5.3 million, including GBP 3.8 million recognised as consideration for the grant of marketing rights and data analysis software, and GBP 1.5 million in respect of database services.
During the period, OGS' share of Confirmant's losses of GBP 2.0 million was offset against the carrying value of the investment.
Profit and loss account
The Group loss for the year ended 31 December 2001 was GBP 25.3 million (2000: GBP 15.6 million). Total revenues for the full year were GBP 13.4 million in 2001 (2000: GBP 8.9 million), and include revenue from collaborations with Bayer, GlaxoSmithKline, Incyte, Pfizer and Pioneer Hi-Bred, and database services provided to Confirmant to populate the Protein Atlas and licence payment for the grant of database marketing rights and to data analysis software.
Total operating expenses for the year ended 31 December 2001 were GBP 49.4 million (2000: GBP 28.9 million). Operating expenses consist of direct and indirect research and development costs, sales and marketing costs and administrative expenses. Revenue in the first half of the year was higher than the second half principally due to the recognition in the first half of the licensing of marketing rights and data analysis software to Confirmant. Net operating expenses increased in the second half principally due to drug discovery collaboration costs with NeoGenesis.
Direct and indirect research and development expenses were GBP 41.6 million in 2001 (2000: GBP 25.4 million), reflecting the Group's major investment in the following areas: drug discovery programmes; Vevesca (OGT 918) clinical trials; intellectual property; alliance payments and enhancements to our technology platform.
Sales and marketing expenses were GBP 4.2 million in 2001 (2000: GBP 0.2 million) reflecting the Group's investment in future commercialisation activities. Administrative expenses totalled GBP 3.6 million in 2001 (2000: GBP 3.2 million). The Group's total number of employees increased from 186 to 231 at the year end. Interest receivable for the year ended 31 December 2001 increased to GBP 9.7 million (2000: GBP 3.2 million), at an average return of 5.1 per cent during the period (2000: 6.1 per cent). OGS has taken the benefit of the Research and Development Tax Credit and recognised GBP 2.9 million for the year in these accounts.
Balance sheet and cash flow
Tangible fixed assets increased from GBP 12.7 million at the end of 2000 to GBP 14.2 million at the end of 2001, reflecting further investment in IT and mass spectrometry equipment and further development of the Milton Park facility. In addition, at 31 December 2001 the Group had capital commitments of GBP 2.0 million (2000: GBP 1.2 million).
Fixed asset investments totalled GBP 14.5 million at 31 December 2001 and included investments in Confirmant and NeoGenesis. The Confirmant investment is stated net of OGS' share of Confirmant's losses of GBP 2.0 million and a provision for unrealised profit on the grant of marketing rights and data analysis software of GBP 2.7 million.
The NeoGenesis investment represents an investment of GBP 4.3 million in NeoGenesis series E convertible preferred stock.
Debtor balances increased to GBP 9.6 million (2000: GBP 6.1 million), principally reflecting the increased Research and Development Tax Credit accrual.
Creditors due within one year have increased to GBP 18.2 million (2000: GBP 10.7 million) reflecting the expansion of the Group's activities during 2001 and an increase in deferred income of GBP 4.0 million.
Operational net cash outflow for the year was GBP 22.2 million (2000: GBP 14.4 million). The net cash outflow, before use of liquid resources and financing, was GBP 37.6 million (2000: GBP 21.1 million), including fixed asset investments of GBP 19.3 million (2000:Nil).
At 31 December 2001, the Group had cash and cash equivalents of GBP 176.6 million (2000: GBP 203.9 million).
Annual General Meeting
Oxford GlycoSciences Plc's Annual General Meeting will be held at 10.30am on Thursday 9 May 2002 at the Randolph Hotel, Beaumont Street, Oxford OX1 2LN.
This release contains forward-looking statements, such as the commercial potential and success of OGS' collaborations and drug candidates. Factors that could cause actual results to vary significantly from those expressed or implied by these and other forward-looking statements include the success of OGS' research and development strategies, the validity of its technologies and intellectual property position and strategies, the medical conclusions on which Vevesca (OGT 918) is based and uncertainties related to the regulatory process.
Consolidated Profit and Loss Account
For the year ended 31 December 2001
2001 2000
Notes GBP'000 GBP'000
Turnover 3 13,376 8,934
Net operating costs (49,396) (28,904)
Operating loss (36,020) (19,970)
Share of joint venture loss (2,007) -
Profit on disposal 82 -
Loss on ordinary activities before interest and (37,945) (19,970)
taxation
Interest receivable 9,733 3,156
Loss on ordinary activities before taxation (28,212) (16,814)
Tax on loss on ordinary activities 4 2,864 1,205
Loss for the year (25,348) (15,609)
Loss per ordinary 5p share
- basic and diluted 5 (46.04p) (38.64p)
The Group has no recognised gains or losses other than those above,
therefore no separate statement of total recognised gains and losses has
been presented.
There is no difference between the losses on ordinary activities before
taxation and the losses for the periods stated above, and their historical
cost equivalents. The results for the periods above are derived entirely
from continuing activities.
Balance Sheet
At 31 December 2001
Group Company
2001 2000 2001 2000
Notes GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Tangible assets 14,221 12,738 - -
Investments
Investment in joint
venture - share of
gross assets
14,679 - - -
Investment in joint
venture - share of
gross liabilities (1,686) - - -
Investment in joint
venture - provision for
unrealised profit (2,708) - - -
3 10,285 - - -
Other investments 4,251 - 36,666 36,666
28,757 12,738 36,666 36,666
Current assets
Stock 346 226 - -
Debtors 9,626 6,109 103,171 44,510
Cash at bank and in
hand 176,618 203,892 155,489 195,539
186,590 210,227 258,660 240,049
Creditors: amounts
falling due within
one year (18,250) (10,725) - (516)
Net current assets 168,340 199,502 258,660 239,533
Total assets less
current liabilities 197,097 212,240 295,326 276,199
Creditors: amounts
falling due after
more than one year (2,399) (2,383) - -
Provisions for
liabilities and charges (87) (181) - -
Net assets 194,611 209,676 295,326 276,199
Capital and reserves
Share capital 2,778 2,727 2,778 2,727
Share premium account 275,950 265,718 275,950 265,718
Capital reserve 11,107 11,107 - -
Profit and loss account
(deficit) (95,224) (69,876) 16,598 7,754
Equity shareholders'
funds 6 194,611 209,676 295,326 276,199
Consolidated Cash Flow Statement
For the year ended 31 December 2001
2001 2001 2000 2000
Notes GBP'000 GBP'000 GBP'000 GBP'000
Net cashflow
from operating
activities A (22,164) (14,447)
Returns on
investments
and servicing
of finance
Interest received 9,042 2,575
Net cash flow
from returns on
investments and
servicing of finance 9,042 2,575
Capital expenditure
and financial
investment
Purchases of
tangible fixed assets (5,306) (9,266)
Purchases of fixed
asset investments (19,251) -
Net cash flow from
capital expenditure
and financial
investment
(24,557) (9,266)
Disposals
Cash consideration
from sale of
biochemicals product
line 115 -
Cash consideration
from sale of other
assets 7 -
Net cashflow before
management of liquid
resources and
financing (37,557) (21,138)
Management of
liquid
resources B 39,480 (176,738)
Financing
Issue of
ordinary share
capital 10,552 213,873
Expenses paid in
connection with
share issues (269) (14,812)
Net cash flow
from financing 10,283 199,061
Increase in
net cash C 12,206 1,185
Notes to the Consolidated Cash Flow Statement
A Reconciliation of operating loss to net cash flow from operating
activities
2001 2001 2000 2000
GBP'000 GBP'000 GBP'000 GBP'000
Operating loss (36,020) (19,970)
Depreciation charges
(including profit/
loss on disposals) 4,418 2,867
Increase in stock (170) (4)
Decrease/(increase)
in debtors 34 (514)
Increase in
deferred income 6,815 706
Increase in creditors 2,759 2,468
13,856 5,523
Net cashflow from
operating activities (22,164) (14,447)
B Reconciliation of net cash flow to movement in net funds
2001 2001 2000 2000
GBP'000 GBP'000 GBP'000 GBP'000
Increase in cash
in the year 12,206 1,185
Cashflow from (decrease)
/increase in liquid
resources (39,480) 176,738
Change in net funds
resulting from
cash flows (39,480) 176,738
Movement in net
funds in the year (27,274) 177,923
Net funds at
1 January 203,892 25,969
Net funds at
31 December 176,618 203,892
C Analysis of net funds
At 1 At 31
January December
2001 Cash flow 2001
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 1,846 12,206 14,052
Bank deposits - liquid
resources 202,046 (39,480) 162,566
203,892 (27,274) 176,618
Liquid resources represent all deposits with an original maturity of
between 24 hours and one year. Cash includes cash in hand and deposits of
up to 24 hours which are payable on demand.
1 Preliminary results
The preliminary announcement was approved by the Board of Directors on Wednesday 20 March 2002.
The preliminary results for the year ended 31 December 2001 represent abridged financial statements and have not yet been delivered to the Registrar of Companies. The comparative figures for the year ended 31 December 2000 have been taken from, but do not constitute, the Group's financial statement for that year. Those financial statements were reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
2 Principal accounting policies
The accounts have been prepared in accordance with applicable Accounting Standards in the United Kingdom. The accounting policies applied are consistent with those set out in the Annual Report and Accounts for the year ended 31 December 2000.
3 Interest in joint venture
Oxford GlycoSciences (UK) Limited and Marconi Plc hold 50 per cent of the issued share capital of Confirmant Limited ('Confirmant'), which was issued for cash for aggregate consideration of GBP 30.0 million.
Revenue from Confirmant during the period ended 31 December 2001 amounted to GBP 5.3 million, including GBP 2.9 million relating to the grant of exclusive marketing rights, GBP 0.9 million in respect of the delivery of data analysis software, and GBP 1.5 million in respect of database services. In accordance with FRS9, only revenue relating to Marconi Plc's share of the joint venture's marketing rights and software was initially recognised. The balance of GBP 3.25 million is being recognised over the life of the related assets in the joint venture.
4 Tax on loss on ordinary activities
The Group has recognised Research and Development Tax Credits totalling GBP 2.9 million (2000: GBP 1.2 million) in the accounts, relating to the period from 1 January 2001 to 31 December 2001.
5 Loss per ordinary 5p share
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.
For diluted loss per share, the weighted average number of ordinary shares in issue is adjusted to assume exercise of all options, which would be potentially dilutive. Due to the loss making position of the Group the exercise of share options does not increase basic loss per share and therefore according to FRS14 the basic and diluted loss per share remain the same.
Basic and diluted loss
per share 2001 2000
GBP'000 '000 pence GBP'000 '000 Pence
Loss attributable
to ordinary
shareholders (25,348) 55,052 (46.04) (15,609) 40,397 (38.64)
6 Reconciliation of movements in shareholders' funds
Group 2001 2000
GBP'000 GBP'000
Loss for the year (25,348) (15,609)
New Capital Issued 10,552 213,873
Expenses of share issue (269) (15,328)
Net addition to/ (reduction in) shareholders' funds (15,065) 182,936
Opening shareholders' funds 209,676 26,740
Closing shareholders' funds 194,611 209,676
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