MELBOURN, England, May 20 /PRNewswire-FirstCall/ -- Professor Peter Garland, CAT's Chairman, said, "In the first six months of the year CAT has made further progress in a number of areas. The CAT-derived human monoclonal antibodies in clinical development, both proprietary and collaborator-funded, continue to progress. This, together with the signing of a product co-development collaboration with Amrad and a licensing agreement with Incyte, reflects the Company's commitment to building significant long-term value in its world-leading pipeline of therapeutic antibodies."
CAMBRIDGE ANTIBODY TECHNOLOGY INTERIM RESULTS FOR THE SIX MONTHS ENDED
31 MARCH 2002
The last six months has been another period of progress for the Company with the first CAT-derived human monoclonal therapeutic antibody having been submitted for regulatory review by Abbott Laboratories. The product pipeline has continued to grow, with a further six CAT-derived products undergoing clinical trials, giving the Company a leading position in the discovery and development of human therapeutic antibodies. We have also recently received encouraging data from clinical trials of CAT-152.
In April, Peter Chambre joined CAT as CEO. His previous experience in senior management roles at Celera Genomics and Bespak will enable him to lead the transition of CAT to a product focused bio-pharmaceutical company.
* Clinical development pipeline -- CAT-funded/Co-funded
* There is continuing progress with CAT's own product pipeline.
* Enrolment continues in the European Phase II/III clinical trials of
CAT-152 (lerdelimumab) a human anti-TGFB(2) monoclonal antibody being
developed as a treatment to prevent post-operative scarring in patients
undergoing surgery for glaucoma (primary trabeculectomy). Further trials in
Europe and South Africa are being planned, and it is anticipated that
recruitment in these trials will start in the fourth quarter of this financial
year. In addition, we have initiated discussions with the US Food & Drug
Administration (FDA) regarding US clinical trials.
In May 2002, encouraging twelve month follow-up results of a 56 patient Phase II clinical trial of CAT-152 used in conjunction with phakotrabeculectomy (combined surgery to treat glaucoma and cataract), were presented at the Association for Research in Vision and Ophthalmology (ARVO) annual meeting. The results support findings from the earlier clinical trial of CAT-152 in trabeculectomy, and demonstrate that the benefits of CAT-152 treatment have become apparent with longer term follow-up: patients treated with CAT-152 achieved lower intraocular pressure (IOP) and fewer needed to return to topical medication.
CAT has also announced that, following receipt of a number of expressions of initial interest from potential partners, it has commenced a process of assessment and investigation of marketing strategies for CAT-152.
CAT-192, a human anti-TGFB(1) monoclonal antibody developed as a potential treatment for a variety of scarring and fibrotic conditions, continues to progress in trials. Genzyme, CAT's collaborator for CAT-192, is enrolling patients into Phase I/II studies to evaluate CAT-192 as a potential therapy for diffuse scleroderma. The product has been granted Orphan Drug Status in both the US and Europe for scleroderma.
CAT-213, a human anti-eotaxin1 antibody with the potential to treat allergic disorders, demonstrated a good safety profile in Phase I trials presented at the British Pharmacological Society (BPS) meeting in December 2001. During the period, CAT completed patient recruitment and treatment in a Phase I/II trial to test CAT-213 as a treatment for allergic rhinitis. CAT anticipates announcing preliminary results during the fourth quarter of this financial year.
Clinical development pipeline -- collaborator funded
There are a number of programmes in which CAT's collaborator is responsible for pre-clinical and clinical development and for which CAT receives milestones and royalties on product sales.
D2E7 (adalimumab), the human monoclonal antibody that neutralises TNFF(a) being developed and marketed by Abbott for rheumatoid arthritis, has completed its Phase III studies. In April 2002, Abbott simultaneously submitted a Biologics Licence Application (BLA) to the US FDA and a Marketing Authorisation Application (MAA) to the European Agency for the Evaluation of Medicinal Products (EMEA). Some of the Phase III results (on which the regulatory submissions are based) and further Phase II data will be presented at the European League Against Rheumatology (EULAR) meeting in June 2002.
Abbott is also planning to develop and market D2E7 in Crohn's disease, psoriatic arthritis and psoriasis. Trials in Crohn's disease are scheduled to begin by the third quarter of this calendar year and psoriatic arthritis/psoriasis programmes are also planned.
J695, a human anti-IL-12 monoclonal antibody being developed by Abbott and Genetics Institute, also continues to progress in Phase II clinical trials. J695 is being studied as a treatment for various autoimmune diseases including rheumatoid arthritis and Crohn's disease.
Human Genome Sciences Inc. (HGSI) continues Phase I clinical trials of LymphoStat-B(, an antibody raised against B-Lymphocyte Stimulator (BLyS) and developed initially in collaboration with CAT. This trial is studying the safety of LymphoStat-B( in patients with systemic lupus erythematosus.
In January 2002 HGSI exercised an option for an exclusive licence on a human monoclonal antibody to TRAIL-R1, a receptor that is expressed on a number of solid tumours and tumours of hematopoietic origin, developed in collaboration with HGSI. Pre-clinical data presented at the American Association for Cancer Research (AACR) annual meeting in April 2002 show the anti-TRAIL-R1 antibody has anti-tumour activity. Since period end, HGSI has been granted regulatory clearance to commence Phase I clinical trials in the US in patients with advanced cancer.
Research pipeline
There are currently four CAT-derived products in pre-clinical development, either at CAT, or with collaborators. In addition there are ten projects in the Company's discovery and development programme, both proprietary and collaborator funded.
It was announced today that HGSI has exercised an option for an exclusive licence to a human monoclonal antibody to TRAIL-R2, a receptor protein in the tumour necrosis family and expressed on a number of solid tumours. The anti-TRAIL-R2 antibody, developed in collaboration with HGSI has entered pre-clinical development at HGSI and early pre-clinical data were presented at the AACR in April 2002.
In January 2002, Immunex exercised one of its exclusive licence options granted under an agreement signed in December 2000. This allows Immunex the right to develop and commercialize human monoclonal antibodies specific for an undisclosed disease target. CAT received a licence fee and will obtain milestone and royalty payments on any antibody-based therapeutics commercialized by Immunex.
In December 2001, CAT entered a product development collaboration with Amrad to discover and develop jointly therapeutic antibodies that neutralize the receptor for gametocyte-macrophage colony stimulating factor (GM-CIF Receptor), a potential drug target in the development of rheumatoid arthritis. CAT and Amrad are co-funding all development through to completion of Phase II studies, at which point CAT will have primary responsibility for development and commercialization. Amrad has the option either to receive milestone and royalty payments from CAT or to participate jointly with CAT in further development and commercialization.
In October 2001, CAT signed an agreement with Merck & Co., Inc. for the research and development of products specific for a key target involved in disease mediated by HIV. Merck is providing proprietary technology and experience in HIV biology and CAT is providing its proprietary human phage antibody libraries. Merck receives exclusive rights to prophylactic and therapeutic products developed in collaboration with CAT against the specified viral target. CAT has received an upfront technology access fee from Merck, and is entitled to receive clinical development milestones and royalties on the sale of products that result from the alliance.
In December 2001 CAT entered a licensing agreement with Incyte, providing CAT with access to Inciter's LifeSeq® Gold database and to high quality, sequence-verified human cDNA clones and rights to use this information for therapeutic antibody product development including a number of exclusive therapeutic antibody license options. This agreement, together with that signed with HGSI in March 2000, provides CAT with a source of potential drug targets.
Intellectual property
CAT has major patents granted in the key territories of the world. During the period this estate has been extended with a divisional of the Company's McCafferty patent granted by the European Patent Office in January 2002.
In March 2002, the District Court in Washington DC issued its formal ruling that MorphoSys does not infringe CAT's Griffiths patent (US 5,885,793). The decision was based on the method by which the MorphoSys' library is derived: CAT has filed a notice of appeal to the Federal Circuit on this decision. It is anticipated that the hearing will take place in the first half of 2003.
May 2003 has been proposed as the date for the legal actions in which CAT claims that MorphoSys infringes its Winter II patent and two of the Winter/Lerner/Huse patents. In the legal action brought by MorphoSys in respect of CAT's US McCafferty patent, a date for the preliminary 'Markman Hearing' has been set for July 2002. The date for the Trial has been set for February 2003.
Drug Royalty Corporation
On May 2, 2002, CAT bought out its royalty obligations to Drug Royalty Corporation of Canada (DRC) for C$14 million (6.2 million pounds), satisfied by the issue to DRC of 463,818 CAT shares (representing approximately 1.3% of CAT's issued share capital). This means that CAT will no longer pay DRC royalties on revenues. The buy-back right was negotiated at the time of CAT's offer to acquire the whole of DRC.
In January, CAT announced a recommended offer for the whole of DRC at C$3.00 per DRC share, payable in CAT shares. In March, a competing all cash offer was made by Inwest Investments Ltd of Canada (Inwest), equating to C$3.05 per DRC share; the DRC board shifted its recommendation to this offer in preference to the CAT offer. In April the Inwest offer for DRC succeeded. This triggered CAT's right to buy back its royalty interest, as described above.
Operations
CAT's plans to consolidate its operations on one site are on schedule, with remaining employees due to relocate to a new building at Granta Park at the end of this year. The Company employed 269 staff on 31 March 2002 and CAT plans to increase staff numbers to approximately 300 by the end of the financial year.
Financial results
CAT made a loss after taxation for the six months ended 31 March 2002 of 9.1 million pounds (six months ended March 31, 2001 (H1) 4.2 million pounds (restated); six months ended September 30, 2001 (H2) 7.6 million pounds.) Net cash outflow before financing for the period was 10.7 million pounds (H1 - 3.3 million pounds outflow; H2 - 11.0 million pounds outflow). Cash and liquid resources at 31 March 2002 amounted to 147.3 million pounds (31 March 2001 168.0 million pounds; September 30, 2001 156.7 million pounds).
Turnover in the period was 4.9 million pounds (H1- 3.4m pounds (as restated); H2 - 3.7 million pounds). This included a milestone payment from HGSI with the initiation of LymphoStat-B Phase I clinical trials. Turnover included 0.9 million pounds of revenues (principally licence fees) released which have previously been deferred under the Group's policy for revenue recognition. Revenue was also generated under ongoing collaborations for research and development services with HGSI, Wyeth-Ayerst, Pharmacia and Merck.
Recurring revenues, representing contract research revenues and income from licensing arrangements entered into as at 30 September 2001, were 3.5 million pounds in the current period.
Operating costs for the period amounted to 18.3 million pounds (H1 - 12.3 million pounds; H2 - 15.5 million pounds). External development costs have increased in line with increased activity on CAT's own clinical trials, particularly CAT-152, and on partnered programmes. Staff and infrastructure costs have risen with the growth in staff numbers, from 247 at 30 September 2001 to 269 at the current period end, and the additional premises leased at Granta Park. Spend in the period on patent litigation, including patent oppositions, was 0.5 million pounds compared to 1.2 million pounds for the six months ended 31 March 2001. These costs are expected to rise significantly as CAT prepares for the MorphoSys trial set for early 2003. General and administration expenses include 1.2 million pounds of costs incurred in the six months ended 31 March 2002 relating to the offer for DRC (comparative periods - none).
During the period the Group accrued interest receivable on its cash deposits of 3.4 million pounds (H1 - 4.9 million pounds; H2 - 4.4 million pounds) reflecting the reduced level of cash and liquid resources held in interest bearing securities and the recent lower interest rates available.
During the period, the Group recognised a tax credit of 0.9 million pounds following submission of a claim based on research and development expenditure in a prior accounting period. Additions to tangible fixed assests for the period were 2.4 million pounds (H1 - 1.6 million pounds; H2 - 2.2 million pounds), principally due to the purchase of a significant amount of laboratory equipment. In addition, costs associated with the construction of CAT's new premises at Granta Park were incurred during the period. These costs will increase substantially as the majority of the fit out costs for the new premises will be incurred in the second half of the financial year.
The addition to intangible fixed assets represents the Incyte LifeSeq(r) licence which was capitalised as an intangible asset in the first quarter and for which the first payment has now been made.
Outlook
Operating costs are expected to increase in the second half of the year as the CAT-152 clinical trials develop further and staff numbers head towards 300, reflecting further increases in activity levels across all areas of the Company.
Capital expenditure for the year is expected to approach 10.0 million pounds excluding the purchase of the Incyte LifeSeq(r) licence.
A significant increase in cash outflow is expected in the second half of the year as external research and development expenditure and staff costs continue to build, and capital expenditure, particularly expenditure on the new facilities, increases. Taking into account additional expenditure incurred on the acquisition of the Incyte licence and the DRC bid the average monthly net cash burn for the year as a whole is expected to be at the upper end of the range of 2.5 million pounds to 3.0 million pounds per month previously indicated.
Auditors
Following a competitive tendering process, the Board has appointed Deloitte & Touche as the Group's auditors following the resignation of Arthur Andersen. Shareholders will have the opportunity to vote on the appointment of Deloitte & Touche at the next Annual General Meeting. The Board of Directors is fully committed to ensuring that the Group's auditors maintain complete independence and objectivity.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(Unaudited)
US$ Six months Six months Year
ended
Proforma ended 31 ended 31 30 September
Six months March 2002 March 2001 2001
ended 31 restated
March 2002
$'000 pounds'000 pounds'000 pounds'000
Turnover 6,914 4,852 3,401 7,121
Direct costs (91) (64) (233) (351)
Gross profit 6,823 4,788 3,168 6,770
Research and development
expenses (19,611) (13,762) (9,216) (21,393)
General and administration
expenses (6,438) (4,518) (3,034) (6,443)
Operating loss (19,226) (13,492) (9,082) (21,066)
Interest receivable (net) 4,879 3,424 4,931 9,295
Loss on ordinary activities
before taxation (14,347) (10,068) (4,151) (11,771)
Taxation on loss on
ordinary activities 1,311 920 -- --
Loss for the financial period (13,036) (9,148) (4,151) (11,771)
Loss per share - basic
and diluted (pence) 25.7p 11.8p 33.3p
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
(Unaudited)
US$ Six months Six months Year ended
Proforma ended 31 ended 31 30 Sept.
six months March 2002 March 2001 2001
ended 31 restated
March 2002
$'000 pounds'000 pounds'000 pounds'000
Loss for the financial
period (13,036) (9,148) (4,151) (11,771)
(Loss) / profit on foreign
exchange translation (87) (61) (3) 1
Total recognised loss (13,123) (9,209) (4,154) (11,770)
Prior year adjustment (6,594)
Total recognised losses since
last annual report and
financial statements (18,364)
This financial information has been prepared in accordance with UK GAAP.
The dollar translations are solely for the convenience of the reader.
CONSOLIDATED BALANCE SHEET
(Unaudited)
US$ As at 31 As at 31 As at 30
Proforma March March September
as at 31 2002 2001 2001
March 2002 restated
$'000 pounds'000 pounds'000 pounds'000
Fixed Assets
Intangible assets 12,054 8,459 4,261 4,075
Tangible fixed assets 10,814 7,589 5,651 6,642
Investments 306 215 -- --
23,174 16,263 9,912 10,717
Current Assets
Debtors 8,479 5,950 4,128 4,940
Investment in liquid resources 205,516 144,222 167,246 156,228
Cash at bank and in hand 4,416 3,099 779 585
218,411 153,271 172,153 161,753
Creditors
Amounts falling due within
one year (18,965) (13,309) (9,247) (8,335)
Net current assets 199,446 139,962 162,906 153,418
Total assets less current
liabilities 222,620 156,225 172,818 164,135
Creditors
Amounts falling due after
more than one year (11,096) (7,787) (9,488) (8,085)
Net Assets 211,524 148,438 163,330 156,050
Capital and Reserves
Called-up share capital 5,090 3,572 3,538 3,546
Share premium account 279,812 196,359 194,689 195,017
Other reserve 19,168 13,451 13,451 13,451
Profit and loss account (92,546) (64,944) (48,348) (55,964)
Shareholders' funds - all equity 211,524 148,438 163,330 156,050
This financial information has been prepared in accordance with UK GAAP.
The dollar translations are solely for the convenience of the reader.
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited)
US$ Six Months Six Months Year
Six Months ended 31 ended 31 Ended
ended 31 March March 30 September
March 2002 2002 2001 2001
restated
$'000 pounds'000 pounds'000 pounds'000
Net cash outflow from
operations (15,484) (10,866) (5,937) (19,150)
Returns on investments and servicing
of finance
Interest received 5,815 4,081 4,282 8,322
Taxation -- -- -- --
Capital expenditure and financial
investment
Purchase of fixed assets (5,603) (3,932) (1,647) (3,485)
Sale of fixed assets -- -- 2 4
(5,603) (3,932) (1,645) (3,481)
Net cash outflow before
management of liquid
resources and financing (15,272) (10,717) (3,300) (14,309)
Management of liquid resources 17,109 12,006 (10,744) 274
Financing
Issue of ordinary shares 1,949 1,368 15,044 15,380
Increase in cash 3,786 2,657 1,000 1,345
This financial information has been prepared in accordance with UK GAAP.
The dollar translations are solely for the convenience of the reader... |
