Cambridge Antibody Technology Group plc Announces First Quarter Financial Results
CAMBRIDGE, England, Feb. 9 /PRNewswire-FirstCall/ -- Cambridge Antibody Technology Group plc (LSE: CAT - News; Nasdaq: CATG - News) today announces financial results for the first quarter of its financial year, from 1 October 2003 to 31 December 2003, and an update on business since the Preliminary Results Announcement on 17 November 2003.
Summary
* Continued progress in CAT core development programmes:
-- preliminary results show primary objective of CAT-192 Phase I/II
clinical trial met: CAT-192 found to be generally safe and well-
tolerated
-- enrolment complete in Phase III pivotal International clinical
trial of Trabio(TM)
* Further steps taken in strategy to focus investment on core
programmes:
-- co-development agreement with Amgen restructured on attractive
terms
-- co-development agreement with Elan in the fields of neurology and
pain terminated by CAT
* Extension of manufacturing agreement with Lonza to secure supply of
clinical grade antibody drugs to the end of 2006
* Second tranche of equity investment by Genzyme
* Reduced net cash outflow before management of liquid resources and
financing: 6.6 million pounds sterling for the three months ended
31 December 2003 compared with 7.2 million pounds for the three months
ended 31 December 2002
* Net cash and liquid resources increased to 115.1 million pounds at
31 December 2003 from 107.8 million pounds at 30 September 2003
CAT Product Candidates
Enrolment is complete in the Phase III pivotal International clinical trial of Trabio, a human anti-TGF-Beta2 monoclonal antibody, in patients undergoing first time surgery for glaucoma (trabeculectomy). A total of 393 patients in six European countries and South Africa were randomised in the double-blind trial which compares Trabio with placebo. Data from this trial are expected in early 2005 when all patients will have completed at least one year of follow-up post surgery.
CAT and Genzyme Corp today announce preliminary results from a Phase I/II clinical trial of CAT-192, a human anti-TGF-Beta1 monoclonal antibody. The primary objective of the trial was to assess the safety, tolerability and pharmacokinetics of CAT-192 in patients suffering from diffuse systemic sclerosis. The secondary objective was to evaluate the potential clinical outcomes for any future trial in systemic sclerosis.
The double-blind, placebo-controlled trial enrolled 45 patients at 12 medical centres in the US and Europe. Patients were randomised to receive one of three dose levels of CAT-192 (0.5 mg/kg, 5 mg/kg or 10 mg/kg) or matching placebo, given as an intravenous infusion every six weeks for four doses. Preliminary results show that the primary objective of the trial was met; CAT- 192 was generally safe and well-tolerated at each dose level. Elimination half-life was consistently around three weeks. There were no treatment-related serious adverse events observed. Four patient deaths occurred during the trial (one at 0.5 mg/kg and three at 5 mg/kg) and were determined by independent medical reviewers to be attributable to patients' underlying disease, and unrelated to treatment. For the secondary objective of the trial a number of clinical endpoints and biological markers, potentially indicative of disease progression, were evaluated. Preliminary review of these markers indicated that disease duration and gender played important roles in the results seen, and that the placebo group's skin score did not deteriorate during the trial as anticipated. Given these factors and the small sample size, no definitive conclusions regarding the efficacy of CAT-192 can be drawn at this time. Additional analyses and alternative trial designs are being evaluated.
An Investigational New Drug application for a Phase I trial in the US in idiopathic pulmonary fibrosis (IPF) of GC-1008, a pan-specific human anti-TGF- Beta monoclonal antibody being developed by CAT and Genzyme, has been filed with the US Food and Drug Administration (FDA). Discussions with the FDA are ongoing.
HUMIRA(TM)
In January, Abbott Laboratories announced increased worldwide 2004 sales forecasts for HUMIRA(TM) (adalimumab), a human anti-TNF-alpha monoclonal antibody and the first CAT-derived antibody to receive approval for marketing. Abbott reported that HUMIRA is now approved for sale in 37 countries and achieved full year sales in 2003 of $280 million. Based on this performance, Abbott has raised its sales expectations for 2004 to more than $700 million.
The legal proceedings CAT commenced against Abbott Biotechnology Limited and Abbott GmbH in November 2003 in the High Court in London are continuing.
Other Licensed Product Candidates
LymphoStat-B(TM), a human monoclonal antibody which modulates the activities of B-lymphocytes, was isolated at CAT in collaboration with Human Genome Sciences, Inc. (HGSI) and licensed to HGSI in 2001. In January 2004, HGSI announced that it has begun dosing patients in a Phase II clinical trial of LymphoStat-B for the treatment of rheumatoid arthritis. The double-blind, placebo-controlled multi-centre Phase II trial will evaluate safety, optimal dosing and efficacy of LymphoStat-B in approximately 230 patients with active rheumatoid arthritis who have failed prior therapy. Also, HGSI continues to enrol and dose patients in its double-blind, placebo-controlled, multi-centre Phase II clinical trial of LymphoStat-B in patients with active systemic lupus erythematosus. HGSI plans to complete enrolment of both Phase II clinical trials in 2004.
HGSI has completed enrolment in its Phase I placebo-controlled, dose- escalation clinical trial to evaluate the safety, tolerability and pharmacokinetics of ABthrax(TM), a human anti-protective antigen monoclonal antibody isolated and developed by HGSI from antibody libraries licensed from CAT. HGSI has announced that it intends to submit an abstract from the trial for presentation at the American Society of Microbiology's Biodefense Meeting, scheduled for March 2004. HGSI has stated that further development of ABthrax will depend on US government funding.
HGSI continues with the Phase I clinical trials to evaluate the safety and pharmacology of HGS-ETR1 (previously known as TRAIL-R1 mAb) in patients with advanced solid tumours and has submitted an abstract from the Phase I clinical trials for presentation at the Annual Society of Clinical Oncology meeting, scheduled for June. HGSI plans to initiate Phase II clinical trials in 2004.
In the Phase I open-label, dose-escalating clinical trial of HGS-ETR2 (previously known as TRAIL-R2 mAb), HGSI continues to enrol patients with advanced tumours. Additionally, HGSI has recently received clearance from the FDA to commence a Phase I clinical trial in the US. HGSI plans to complete enrolment of both Phase I trials in 2004.
There are four product candidates at pre-clinical development stage at CAT's collaborators.
Discovery Stage Programmes
There are ongoing research programmes to 14 distinct molecular targets at CAT. Half are funded or co-funded by CAT and half are funded by CAT's licensees.
In December CAT restructured its agreement with Amgen, with Amgen taking over responsibility for the further development and marketing of the therapeutic antibody candidates isolated by CAT against two targets identified by Amgen and covered by an earlier collaboration agreement between CAT and Immunex. In return, CAT receives from Amgen an initial fee and potential milestone payments and royalties on future sales. This agreement allows CAT to focus its investment on a smaller number of core programmes, while retaining significant interest in the success of these two antibody candidates.
After three years, CAT has exercised its right to terminate its agreement with Elan, effective from 21 February 2004. The collaboration involved research on a number of targets. Terminating this exclusive agreement will allow CAT to collaborate with third parties in the fields of neurology and pain. The termination of the existing agreement does not preclude future collaboration with Elan.
In December, the research collaboration with Pfizer was extended for a further six months to 30 May 2004.
Operations
In January CAT and Lonza announced the extension of their November 2001 agreement, confirming that Lonza Biologics will manufacture and supply clinical grade antibody drugs to CAT through to the end of 2006. This will enable CAT to plan further ahead with confidence and will guarantee that CAT and its collaborators have access to Lonza's world-class manufacturing capability at production scale (up to 2,000L), for both ongoing programmes and future projects, in a cost-effective way.
Financial Results
A review of the financial results for the three months ended 31 December 2003 is set out below. The comparative figures in brackets are for the corresponding period in the prior financial year unless otherwise stated.
CAT made a loss after taxation for the three months ended 31 December 2003 of 9.1 million pounds (2002: 10.5 million pounds). Net cash outflow before management of liquid resources and financing for the period was 6.6 million pounds (2002: 7.2 million pounds).
Revenue in the period was 3.8 million pounds (2002: 1.4 million pounds). Royalty income of 0.7 million pounds was recognised as revenue in the quarter representing the amount received from Abbott in respect of HUMIRA for sales through to 30 June 2003. Licence fees of 1.1 million pounds and milestone payments of 1.3 million pounds were recognised in the period. Four technical milestone payments were received from Pfizer in December 2003. A proportion of a clinical milestone received from Abbott in the last financial year was released to revenue, having been offset against the first royalty payment made by Abbott. Revenues of 0.6 million pounds were generated from contract research fees under collaborations with Pfizer, Wyeth Research and Merck & Co., Inc. The research services being performed for Wyeth Research were completed during the period.
Direct costs for the three months ended 31 December 2003 were 0.2 million pounds, reflecting royalties due to the Medical Research Council and other licensors in respect of the royalties CAT receives on product sales.
Operating costs for the period amounted to 13.6 million pounds (2002: 13.2 million pounds). Research and development expenses decreased from 11.2 million pounds for the three months ended 31 December 2002 to 10.4 million pounds for the three months ended 31 December 2003. Research and development costs for the three months ended 31 December 2002 included the one-off cost of a cross- licensing arrangement with Xoma for antibody-related technologies. External development costs have risen significantly from 2.5 million pounds in the three months ended 31 December 2002 to 4.7 million pounds in the three months ended 31 December 2003, reflecting activity on clinical trials, particularly Trabio.
General and administration expenses increased from 2.0 million pounds for the three months ended 31 December 2002 to 3.2 million pounds for the three months ended 31 December 2003. The main reason for this increase is a non-cash charge arising from the retranslation of CAT's trading balances with its US subsidiary, Aptein Inc., as over the relevant period there has been a material depreciation in the value of the US Dollar compared to Sterling.
During the period the Group accrued interest receivable on its cash deposits of 1.0 million pounds (2002: 1.3 million pounds) reflecting the reduced level of cash and liquid resources held in interest bearing securities and the lower interest rates available.
Genzyme has increased its equity stake in CAT through a subscription of 22.9 million pounds for 4.3 million shares. The subscription for shares occurred in two tranches, the first of which occurred during the previous financial year. The second tranche was for 2.5 million shares with a value of 13.3 million pounds, issued following shareholder approval at the EGM held in October 2003.
As a result of the Genzyme subscription, net cash and liquid resources at 31 December 2003 increased to 115.1 million pounds from 107.8 million pounds at 30 September 2003.
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
Preliminary Statement of Results for
the Three Months Ended 31 December 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(unaudited)
Three months Three months Three months Year
ended ended ended ended
31 December 31 December 31 December 30 September
2003 2003 2002 2003
Convenience
translation
US$'000 '000 pounds '000 pounds '000 pounds
Turnover 6,812 3,818 1,405 8,743
Direct costs (442) (248) (9) (690)
Gross profit 6,370 3,570 1,396 8,053
Research and
development
expenses (18,591) (10,420) (11,234) (44,981)
General and
administration
expenses (5,704) (3,197) (2,008) (9,196)
Operating loss (17,925) (10,047) (11,846) (46,124)
Interest
receivable (net) 1,754 983 1,306 4,360
Loss on ordinary
activities before
taxation (16,171) (9,064) (10,540) (41,764)
Taxation on loss on
ordinary activities -- -- -- 2,573
Loss for the
financial period (16,171) (9,064) (10,540) (39,191)
Loss per share -
basic and diluted
(pence) 22.5p 29.1p 107.5p
Consolidated Statement of Total Recognised Gains and Losses
Three months Three months Three months Year
ended ended ended ended
31 December 31 December 31 December 30 September
2003 2003 2002 2003
Convenience
translation
US$'000 '000 pounds '000 pounds '000 pounds
Loss for the
financial period (16,171) (9,064) (10,540) (39,191)
Gain on foreign
exchange translation 1,675 939 256 606
Total recognised
losses relating
to the period (14,496) (8,125) (10,284) (38,585)
The losses for all periods arise from continuing operations.
This financial information has been prepared in accordance with UK GAAP.
The dollar translations are solely for the convenience of the reader.
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
Preliminary Statement of Results for
the THREE MONTHS ended 31 DECEMBER 2003
Consolidated Balance Sheet
(unaudited As at As at As at As at
31 December 31 December 31 December 30 September
2003 2003 2002 2003
Convenience
translation
US$'000 '000 pounds '000 pounds '000 pounds
Fixed assets
Intangible assets 11,811 6,620 7,671 6,883
Tangible fixed
assets 24,618 13,798 13,907 14,366
Investments 6,018 3,373 215 3,373
42,447 23,791 21,793 24,622
Current assets
Debtors 11,622 6,514 5,104 4,526
Short term
investments 201,673 113,033 116,449 108,347
Cash at bank
and in hand 6,473 3,628 7,645 1,056
219,768 123,175 129,198 113,929
Creditors
Amounts falling
due within one year (23,550) (13,199) (16,024) (12,657)
Net current assets 196,218 109,976 113,174 101,272
Total assets less
current liabilities 238,665 133,767 134,967 125,894
Creditors
Amounts falling
due after more
than one year (36,165) (20,270) (8,798) (18,152)
Net assets 202,500 113,497 126,169 107,742
Capital and reserves
Called-up
share capital 7,313 4,099 3,635 3,834
Share premium
account 404,118 226,498 203,208 212,883
Other reserve 24,008 13,456 13,456 13,456
Profit and
loss account (232,939) (130,556) (94,130) (122,431)
Shareholders'
funds - all equity 202,500 113,497 126,169 107,742
This financial information has been prepared in accordance with UK GAAP.
The dollar translations are solely for the convenience of the reader.
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
Preliminary Statement of Results for
the THREE MONTHS ended 31 DECEMBER 2003
Consolidated Cash Flow Statement
(unaudited)
Three months Three months Three months Year
ended ended ended ended
31 December 31 December 31 December 30 September
2003 2003 2002 2003
Convenience
translation
US$'000 '000 pounds '000 pounds '000 pounds
Net cash outflow
from operations (13,219) (7,409) (5,414) (35,819)
Returns on
investments and
servicing of finance
Interest received 2,150 1,205 1,048 5,095
Interest element
of finance leases (39) (22) -- (46)
2,111 1,183 1,048 5,049
Taxation -- -- 2,637 5,210
Capital expenditure
and financial
investment
Purchase of intangible
fixed assets -- -- (2,673) (2,673)
Purchase of tangible
fixed assets (666) (373) (2,826) (5,413)
Sale of tangible
fixed assets -- -- -- 4
(666) (373) (5,499) (8,082)
Net cash outflow
before management
of liquid resources
and financing (11,774) (6,599) (7,228) (33,642)
Management of
liquid resources (8,361) (4,686) 10,245 18,778
Financing
Issue of ordinary
share capital 24,765 13,880 688 10,562
Proceeds from new
finance lease
commitment -- -- 504 1,389
Capital elements of
finance lease
rental payments (150) (84) (36) (221)
24,615 13,796 1,156 11,730
Increase/(decrease)
in cash 4,480 2,511 4,173 (3,134)
This financial information has been prepared in accordance with UK GAAP.
The dollar translations are solely for the convenience of the reader.
Notes to the financial information
Accounting policies
This financial information has been prepared in accordance with the policies set out in the statutory financial statements for the year ended 30 September 2003.
Convenience translation
The consolidated financial statements are presented in Sterling. The consolidated financial statements as of and for the period ended 31 December 2003 are also presented in US Dollars as a convenience translation. The Dollar amounts are presented solely for the convenience of the reader and have been calculated using an exchange rate of 1 pound:US$1.7842, the noon buying rate as of 31 December 2003. No representation is made that the amounts could have been or could be converted into US Dollars at this or any other rates.
Loss per share
The loss per ordinary share and diluted loss per share are equal because share options are only included in the calculation of diluted earnings per share if their issue would decrease the net profit per share or increase the net loss per share. The calculation is based on the following for the three months ended 31 December 2003, the three months ended 31 December 2002 and the year ended 30 September 2003 respectively: losses of 9,064,000 pounds, 10,540,000 pounds, and 39,191,000 pounds; weighted average number of shares in issue of 40,270,246, 36,260,545 and 36,440,993. The Company had ordinary shares in issue of 40,991,338 and a total of 1,967,118 ordinary shares under option as of 31 December 2003.
Reconciliation of operating loss to operating cash outflow
Three months Three months Three months Year
ended ended ended ended
31 December 31 December 31 December 30 September
2003 2003 2002 2003
Convenience
translation
US$'000 '000 pounds '000 pounds '000 pounds
Operating loss (17,925) (10,047) (11,846) (46,124)
Depreciation charge 1,345 754 726 2,989
Amortisation of
intangible fixed
assets 469 263 262 1,050
Loss on disposal
of fixed assets -- -- 7 94
Shares received
from MorphoSys -- -- -- (3,589)
Increase in debtors (3,909) (2,191) (926) (1,285)
Increase in
deferred income 4,500 2,522 121 10,597
Increase in creditors
(excluding
deferred income) 2,301 1,290 6,242 449
(13,219) (7,409) (5,414) (35,819)
Analysis and reconciliation of net funds
1 October Cash flow Exchange 31 December
2003 movement 2003
'000 pounds '000 pounds '000 pounds '000 pounds
Cash at bank
and in hand 1,056 2,540 32 3,628
Overdrafts (1,144) (29) -- (1,173)
2,511 32
Liquid resources 107,916 4,686 -- 112,602
Net cash and
liquid resources 107,828 7,197 32 115,057
Finance leases (1,168) 84 -- (1,084)
Net funds 106,660 7,281 32 113,973
Three months Year
ended ended
31 December 30 September
2003 2003
'000 pounds '000 pounds
Increase/(decrease) in cash in the period 2,511 (3,134)
Increase/(decrease) in liquid resources 4,686 (18,778)
Decrease/(increase) in lease financing 84 (1,168)
Change in net funds resulting from cash flows 7,281 (23,080)
Exchange movement 32 (35)
Movement in net funds in period 7,313 (23,115)
Net funds at 1 October 2003 106,660 129,775
Net funds at 31 December 2003 113,973 106,660
Reconciliation of movements in group shareholders' funds
Three months Year
ended ended
31 December 30 September
2003 2003
'000 pounds '000 pounds
Loss for the financial period (9,064) (39,191)
Other recognised gains and
losses relating to the period 939 606
(8,125) (38,585)
New shares issued 13,880 10,562
Net increase/(decrease) in shareholders' funds 5,755 (28,023)
Opening shareholders' funds 107,742 135,765
Closing shareholders' funds 113,497 107,742
Financial Statements
The preceding information, comprising the Consolidated Profit and Loss Account, Consolidated Statement of Total Recognised Gains and Losses, Consolidated Balance Street, Consolidated Cash Flow Statement and associated notes, does not constitute the Company's statutory financial statements for the year ended 30 September 2003 within the meaning of section 240 of the Companies Act 1985, but is derived from those financial statements. Results for the three month periods ended 31 December 2003 and 31 December 2002 have not been audited. The results for the year ended 30 September 2003 have been extracted from the statutory financial statements which have been filed with Registrar of Companies and upon which the auditors reported without qualification.
The annual report and financial statements for the year ended 30 September 2003 are available from the Corporate Communications Department at the Company's registered office: |
