Cambridge Antibody Technology Interim Results for the Six Months Ended 31 March 2003
Monday May 19, 2:02 am ET
CAMBRIDGE, England, May 19 /PRNewswire-FirstCall/ --
* First CAT-derived human monoclonal antibody, Humira(TM), launched in US
(Abbott)
* Clinical trials of Trabio(TM) commenced in US
* Enrolment complete in CAT-192 Phase I/II clinical trial
* Good Phase I results for LymphoStat-B(TM); awarded "fast track" status
(HGSI)
* IND for ABthrax(TM) to be filed in near future (HGSI)
* Principal patent litigation resolved
* Proposed merger with Oxford GlycoSciences not completed
* Level of Humira royalty disputed by Abbott
* Loss for the six months ended 31 March 2003 of 18.8 million pounds
* Cash and liquid resources at 31 March 2003: 118.2 million pounds
* Cash burn for year ended 30 September 2003 to be less than
40 million pounds
Professor Peter Garland, CAT's Chairman, said: "The core value of the Company is in the pipeline of products derived from our exceptional technology. The last six months have been a period of good progress for CAT's product development: Humira has been launched in the US by Abbott, Trabio has commenced clinical trials in the US and there has been advancement in other CAT-derived products under development. Also, important agreements have been reached in respect of CAT's patents and licensing.
"Despite the disappointments of the Oxford GlycoSciences outcome and the disagreement over Humira royalties with Abbott, our five-year objectives of profitability and strengthening our pipeline to deliver rapid growth thereafter, remain unchanged. We are focussed on developing our pipeline and our core technologies, in particular Ribosome Display, while licensing our technology and capabilities in areas outside our primary focus. The fundamentals on which CAT is based remain strong and we will continue to enhance and demonstrate the value of our pipeline. We will plan prudently for the future of the business, including ensuring the adequacy of our cash position. We remain committed to building a strong, product-based, profitable biopharmaceutical company."
Product development
Humira(TM)
On 31 December 2002, Abbott Laboratories announced that it had received US Food and Drug Administration (FDA) approval to market Humira (adalimumab, previously known as D2E7), a human anti-TNFalpha monoclonal antibody, in the US, earlier than anticipated, as a treatment for rheumatoid arthritis (RA). Humira was isolated and optimised by CAT and Abbott as part of a collaboration and is the first CAT-derived antibody to receive approval for marketing. Abbott launched Humira in the US in January 2003 and has reported sales of $26 million in Q1 2003. Approval for marketing in Europe from the European Agency for the Evaluation of Medicinal Products (EMEA) is expected by the end of the first half of 2003. In March 2003, Abbott announced that it has expanded its Humira programme by starting a randomised, multi-centre Phase II clinical trial in patients with chronic plaque psoriasis and a Phase III clinical trial in patients with psoriatic arthritis. Phase III clinical trials in juvenile RA and Crohn's disease continue.
CAT's entitlement to royalties in relation to sales of Humira is governed by an agreement dated 1 April 1995 between Cambridge Antibody Technology Limited and Knoll Aktiengesellschaft (now a subsidiary of Abbott Laboratories). The agreement allows for offset, in certain circumstances, of royalties due to third parties against royalties due to CAT, subject to a minimum royalty level. Abbott indicated to CAT in March 2003 its wish to initiate discussions regarding the applicability of these royalty offset provisions for Humira. CAT believes strongly that the offset provisions do not apply and will seek an outcome consistent with that position.
CAT Products
Following regulatory clearance from the FDA, a clinical trial of Trabio (lerdelimumab, CAT-152), a human anti-TGFbeta2 monoclonal antibody, being developed for improving outcomes in glaucoma filtration surgery, have started in the US. The trial is a head-to-head comparison of Trabio with 5-Flurouracil (5-FU) in patients undergoing first time glaucoma surgery. In the Phase III European clinical trial, recruitment is on schedule to be complete by the end of the first half 2003 and in the Phase III International clinical trial recruitment is expected to be complete by the end of 2003.
In May 2003 three-year follow-up results of the Phase I/IIa clinical trial of Trabio in patients undergoing first time glaucoma filtration surgery were presented at the annual meeting of the Association for Research in Vision and Ophthalmology (ARVO). The results show a clinically significant benefit in the outcome of surgery in patients treated with Trabio after surgery for glaucoma. Additionally, there were no significant long-term safety issues observed.
Discussions continue with a number of potential partners with a view to the marketing and selling of Trabio.
Patient recruitment in the Phase I/II clinical trial of CAT-192 (metelimumab), a human anti-TGFbeta1 monoclonal antibody, as a potential treatment for diffuse systemic sclerosis being conducted by CAT's partner, Genzyme, is complete, with patients recruited in four countries. Data are expected to be available in the fourth quarter of 2003.
In the Phase I/II allergen challenge study of CAT-213, a human anti-Eotaxin(1) monoclonal antibody, in allergic conjunctivitis, patient recruitment is complete. Data are expected to be available in the third quarter of 2003.
Licensed Products
In April 2003, Human Genome Sciences, Inc (HGSI) announced the results of a Phase I clinical trial of LymphoStat-B, a human anti-B-Lymphocyte Stimulator (BLyS) antibody, and reported that these results show that it is safe, well tolerated and biologically active in patients with systemic lupus erythematosus (SLE). In consideration of LymphoStat-B's potential to address this serious unmet medical need, the FDA has awarded LymphoStat-B "Fast Track Product" designation for the treatment of SLE, which will facilitate the development and review of the product. HGSI has reported that it is expecting to initiate Phase II trials in patients with SLE soon and in patients with RA in the second half of 2003.
The Phase I clinical trials of TRAIL-R1 mAb, a human anti-TRAIL-R1 monoclonal antibody, being carried out by HGSI in the US in patients with advanced cancers continue. HGSI expects to complete enrolment by the end of 2003 and to publish results in 2004. A Phase I clinical trial in patients with multiple myeloma has commenced.
Since exercising an option, in May 2002, for an exclusive licence to TRAIL-R2 mAb, a human anti-TRAIL-R2 monoclonal antibody, HGSI has stated that it expects to initiate Phase I clinical trials for cancer in mid-2003.
In March 2003, HGSI publicised its work in developing a human anti-protective antigen monoclonal antibody, ABthrax, and reported that it is effective in protecting against anthrax in multiple experimental models. This antibody was isolated and developed by HGSI from antibody libraries licensed from CAT, and an exclusive licence to the antibody was granted to HGSI by CAT in September 2002. HGSI is planning to submit an IND to seek clearance from the FDA to start a Phase I clinical trial to evaluate the safety, tolerability and pharmacology of ABthrax in healthy adults in the near future. HGSI expects to initiate the trial in mid-2003.
J695, a human anti-IL12 monoclonal antibody, continues in two Phase II clinical trials, conducted by Abbott.
Pre-clinical and discovery stage programmes
There are five CAT-derived human monoclonal antibodies in pre-clinical development, both at CAT and at CAT's collaborators. Pre-clinical studies of GC-1008, a human anti-panTGFbeta monoclonal antibody, being developed jointly by CAT and Genzyme, continue and it is expected that an IND will be filed in the fourth quarter of 2003 for clinical trials in idiopathic pulmonary fibrosis.
A further CAT human monoclonal antibody, derived from proprietary research programmes and being developed for the treatment of asthma and chronic obstructive pulmonary disease, has entered pre-clinical development. This antibody has been optimised using Ribosome Display, a technology increasingly used in CAT's drug discovery activities.
There are ongoing research programmes to 16 distinct molecular targets at CAT. Over half of these programmes are funded or co-funded by CAT, including programmes with Amgen, Amrad and Elan.
Activity in the last six months has reflected the weak market for research collaborations between biotechnology and major pharmaceutical companies. Against this background, in January 2003, CAT announced a short extension to the term of its research collaboration with Pfizer (previously Pharmacia). Further discussions on the future of this collaboration are underway. HGSI continues to utilise the libraries it licensed from CAT in 2000 to identify and optimise antibody candidates, however the research collaboration in which CAT carried out funded research for HGSI concluded in March 2003, when its planned three year term expired. Discussions are underway with Wyeth regarding the next phase of that collaboration.
Intellectual property
During December 2002 and January 2003 CAT successfully resolved all principal patent litigation. Patent disputes with MorphoSys and Crucell were settled with agreements that demonstrate the strength of CAT's patent portfolio. CAT entered into a cross-licensing arrangement with XOMA for antibody-related technologies and also reached agreement with Dyax Corporation to expand access and freedom to operate under each other's phage display patents, an agreement which also included the removal of CAT's obligation to pay royalties to Dyax on antibody products it develops, except in respect of Humira. CAT has options to buy out, under a predetermined schedule, any royalty obligation which CAT may have in respect of Humira. CAT has subsequently informed Dyax that it does not believe royalties are due to Dyax in respect of Humira; Dyax is disputing that view.
Operations
In December 2002, CAT completed its relocation to new laboratories and offices at Granta Park, Cambridge. One of the two vacated premises in Melbourn has been disposed of; the other is on the market. CAT employed 299 staff at 31 March 2003 (293 at 30 September 2002).
In response to the weak market for early stage research collaborations, and to achieve its long-term ambitions in proprietary product development, CAT is adapting its skill base. To reflect this changing environment a limited number of positions within the research team are being made redundant.
Oxford GlycoSciences
In January 2003, CAT and Oxford GlycoSciences Plc (OGS) announced that they had agreed the terms of a merger between the two companies by way of a share for share exchange. CAT shareholders subsequently approved the merger at an Extraordinary General Meeting held in February. However, a decline in CAT's share price, particularly after the announcement of the dispute with Abbott over the level of Humira royalties, depressed the value of CAT's offer. A competing cash offer made to OGS shareholders by Celltech subsequently became unconditional.
Antibody Microarrays
In November 2002, CAT announced its intention to seek independent financing for its development of the application of antibodies on microarrays for personalised medicine, as this fell outside CAT's focus on therapeutic antibodies. Discussions are currently ongoing with a potential purchaser of this business.
Board
Dr Kevin Johnson, CAT's Chief Technology Officer, whose focus since 2001 has been on leading CAT's development of antibodies on microarrays, will leave the Company upon conclusion of that project. Kevin has made an enormous contribution to CAT over the last thirteen years and we wish him every success in his future endeavors.
CAT is pleased to have welcomed two Non-Executive Directors, Dr Peter Ringrose and Ake Stavling, to its Board during the period. Peter Ringrose is an eminent scientist, having successfully led research and development organisations at the pinnacle of the pharmaceutical industry, and has recently been appointed as Chairman of the Biotechnology and Biological Sciences Research Council. Ake Stavling has extensive senior management experience covering finance and the pharmaceutical industry; succeeds Dr Jim Foght as chairman of the Audit Committee.
Financial results
CAT made a loss after taxation for the six months ended 31 March 2003 of 18.8 million pounds (six months ended 31 March 2002 (H1) 9.1 million pounds; six months ended 30 September 2002 (H2) 19.1 million pounds). Net cash outflow before management of liquid resources and financing for the period was 13.2 million pounds (H1 - 10.7 million pounds outflow; H2 - 17.6 million pounds outflow). Cash and short-term investments at 31 March 2003 amounted to 118.2 million pounds (31 March 2002 147.3 million pounds; 30 September 2002 129.8 million pounds).
Revenue in the period was 4.0 million pounds (H1- 4.9 million pounds; H2 - 4.6 million pounds). Licence fees of 0.9 million pounds were recognised in the period, principally licence fees released from deferred income brought forward at 30 September 2002. The library licence granted to Merck & Co., Inc. came into effect during the second quarter of the current financial year. Revenues of 2.5 million pounds were generated from contract research fees under ongoing collaborations with Pfizer, HGSI, Wyeth Research and Merck & Co., Inc. Technical milestone payments of 0.2 million pounds were received from Pfizer during the first quarter of the financial year. In December 2002, CAT settled all patent disputes with Crucell and MorphoSys. As part of these settlement agreements CAT has received, and will continue to receive for a number of years, annual payments giving rise to the majority of other revenue recognised in the period. A clinical milestone payment was received from Abbott following the US FDA approval of Humira; this has not been recognised as revenue in the period as it is creditable against future royalties receivable.
Operating costs for the period amounted to 25.3 million pounds (H1 - 18.3 million pounds in total, 17.1 million pounds excluding the Drug Royalty Corporation of Canada (DRC) transaction costs; H2 - 29.2 million pounds in total, 22.5 million pounds excluding the DRC transaction costs). External development costs have risen significantly from 2.8 million pounds in the six months ended 31 March 2002 to 5.8 million pounds in the six months ended 31 March 2003, with increased activity on clinical trials, particularly Trabio and the Genzyme collaboration. Staff and infrastructure costs were higher in the current period than for the six months ended 31 March 2002 primarily as a result of the increase in staff numbers (from an average of 266 during the six month period ended 31 March 2002 to an average of 300 during the first half of the current financial year), and the leasing of new premises at Granta Park.
Spend in the period on patent litigation and oppositions, was 0.2 million pounds compared to 0.5 million pounds for the six months ended 31 March 2002. This reduction results from the successful resolution of all principal outstanding patent litigation in the first quarter of the current financial year.
General and administration expenses include 1.6 million pounds of costs incurred in the six months ended 31 March 2003 relating to the offer made for OGS (comparative periods - none). A break fee of 1.1 million pounds receivable from OGS has been offset against these costs.
During the period the Group accrued interest receivable on its cash deposits of 2.5 million pounds (H1 - 3.4 million pounds; H2 - 3.0 million pounds) reflecting the reduced level of cash and liquid resources held in interest bearing securities and the lower interest rates available.
Purchases of tangible fixed assets for the period were 4.3 million pounds (H1 - 1.6 million pounds; H2 - 2.2 million pounds), principally due to the final costs associated with the construction and fit out of CAT's new premises at Granta Park.
Outlook
Recurring revenues, representing contract research revenues and income from licensing arrangements entered into as at 30 September 2002, were 2.6 million pounds in the current period. On the basis of contracts in place at 31 March 2003 recurring revenues are expected to be in the region of 4.5 million pounds to 5.5 million pounds for the full financial year.
Operating costs are expected to show only a modest increase in the second half of the financial year. Staff numbers are expected to reduce over the remainder of the financial year.
In November 2002 we gave guidance that net cash burn for the year was expected to be up to 40 million pounds. Cash outflow is expected to increase in the second half of the year but overall cash burn for the year is now expected to be less than 40.0 million pounds... |
