CAT shares down after mixed trial results
By David Firn, Pharmaceuticals and Chemicals Correspondent FT.com, 15:15 GMT Feb 9, 2004
Cambridge Antibody Technology revealed mixed results from a trial of its new scleroderma treatment on Monday, but said losses were narrowing as it reported the first revenues from Humira, the arthritis treatment it developed with Abbott, the US healthcare giant.
CAT shares fell 4.7 per cent to 462p after the UK biotechnology company said the scleroderma treatment was safe and well tolerated, but proved no better at controlling the chronic, life-threatening scarring disorder than an inactive placebo treatment.
The drug, known as CAT-192, is one of the most important products in the UK biotechnology company's pipeline, and is being developed in a collaboration with Genzyme, one of the biggest biotechnology companies in the US.
Peter Chambré, CAT chief executive, said the trial had given the company enough data to design a larger proof of concept study with which to seek marketing approval of the drug. He said: "We never expected that we were going to see statistically significant evidence of efficacy. What we really wanted to see was safety, tolerability and pharmacokinetics [drug metabolism data] and we got big ticks there."
CAT also revealed it had terminated an agreement to collaborate exclusively with with Elan, the Irish biotechnology company, on pain and central nervous system treatments. Mr Chambré said the break was part of an effort to focus spending on CAT's core projects, but it also freed the company to license its technology more widely in the areas that had been covered by the Elan agreement.
Pre-tax losses for the three months to December 31 fell from £10.3m ($19m) to £8.13m as turnover rose 171 per cent to £3.8m.
Revenues from Humira were £700,000 on sales of $83m during the three months to June 30 last year - the period covered by the royalty payment. Mr Chambré said Humira royalties would rise significantly during 2004, despite the fact that the two companies remain locked in a legal dispute over the level of payments Abbott, which markets the drug, should make to CAT. "We are starting to see the benefit of Humira flowing to the bottom line, albeit not at the level we expected," he said.
Sales of Humira are forecast to rise from $200m in the second half of 2003 to $700m for the whole of 2004.
Comment
CAT is not going to turn a profit any time soon, but Mr Chambré has been doing a good job of rebalancing the risk/reward profile since he took over as chief executive two years ago. The cash balance is up at £115.1m - or 282p a share - following the sale of a stake to Genzyme. That should give CAT enough cash for three years more research and development.
Spending is being more tightly focused on key projects: Trabio, a glaucoma treatment which is doing well in clinical trials; CAT-192, which is doing fairly well; and an asthma treatment due to begin human testing later this year. Cannacord, the Canadian bank, says the minimum level of Humira royalties is worth 169p a share, so investors are buying the upside potential of a portfolio of experimental drugs for about 10p-a-share.... |
