BioInvent Interim Report 1 January - 31 March 2006
[2006-04-12 8:40]
Recruitment and treatment of patients for the phase I/IIa study within the HIV project is now complete according to the protocol. The results are expected to be available in the second half of the second quarter 2006.
A new project for the treatment of age-related macular degeneration (AMD) has been initiated in cooperation with Immusol Inc., USA.
Net revenues for January-March 2006: SEK 7.1 million (9.6).
Cash flow from current operations and investment activities for January - March 2006: SEK -30.7 million (-19.0). Current investments together with cash and bank at the end of the period: SEK 164.6 million (156.0).
Loss after tax for January - March 2006 amounted to SEK -30.2 million (-26.0) and the loss after tax per share was SEK -0.64 (-0.88).
BioInvent is a research-based pharmaceutical company that focuses on developing antibody drugs. The Company is currently running innovative drug projects within the areas of HIV infection, thrombosis, cancer and atherosclerosis.
Comments by the CEO
In our ongoing endeavours to develop BioInvent we have emphasised creating a broad and innovative product platform. Our priority is to constantly add new, promising projects to our development portfolio as well as to move ongoing projects further forward in the value chain. It is therefore gratifying that the recently announced cooperation with Immusol has enabled us to add yet another project to our portfolio of drug projects. The purpose of the new project is to find a treatment for an eye disease that is a serious problem affecting a large group of people every year. Immusol has a focus and a good expertise in the area of eye diseases. This partnership is another example of our strategy and ability to gain access to innovative projects and target proteins through collaborations with reputable external research groups and companies.
All of the individuals who will take part in the I/IIa study of BI-201 for the treatment of HIV infection have been recruited and treated. The results from the study are expected to be available in the second half of the second quarter 2006. Our other three product candidates are advancing according to plan towards the clinical phase.
Development projects
BioInvent is currently running four projects in the development phase, one of which has reached the clinical phase. The development phase commences when a product candidate has been selected based on in vitro tests and tests on animals. In the development phase the safety profile of the product candidate is tested in animal models, before testing safety and efficacy of the product candidate in several clinical phases.
HIV-infection/AIDS (BI-201)
Clinical phase I/IIa studies of the product candidate BI-201 were started in June 2006. All patients are included and have received the drug according to the protocol. BioInvent expects to present the results in the second half of the second quarter 2006. The primary objective is to study the safety of the drug candidate BI-201, how well it is tolerated and its pharmacokinetic properties. Another important objective of these tests is to study the effects of BI-201 on the level of the virus in the patients´ blood and thereby get an initial indication of how effective BI-201 may be.
BI-201 is aimed at the Tat protein, which is vital for HIV´s ability to replicate itself and spread to new cells. BI-201 has in several preclinical tests carried out at the Karolinska Institute and the Swedish Institute for Infectious Disease Control (Smittskyddsinstitutet, SMI) proved to effectively prevent the spread of the virus between human cells in vitro. Extended and finalized resistance tests carried out at the same institutions have shown that BI-201 retained its efficacy and no development of resistance was identified after 50 weeks. Another recently launched drug against HIV was tested under the same conditions. Resistance to this drug developed after six weeks, which is in line with previous experience with this and similar drugs.
Thrombosis (TB-402)
A drug candidate (TB-402) has been chosen for toxicology studies to form the basis for the application to initiate clinical studies. The drug candidate is a human antibody aimed at Factor VIII, which plays a crucial role in the coagulation of the blood. The antibody has shown a beneficial partial inhibition of Factor VIII, even when applied in excess dosage. Extensive testing in several animal models has shown that TB-402 strongly reduces the risk of thrombosis without increasing the risk of bleeding. Toxicology studies and the manufacture of materials for the clinical program are under way. Clinical phase I studies on healthy volunteers are planned and these will be followed by a phase IIa program with patients who have undergone hip surgery. Blood clot formation in connection with certain types of heart arrhythmia, such as atrial fibrillation, represents also a growing problem. The project is being developed within the framework of the alliance with ThromboGenics.
Cancer (TB-403)
A product candidate (TB-403) has been selected and has undergone extensive preclinical studies. Several in vitro and in vivo studies have demonstrated good specificity for the relevant target protein PlGF and inhibition of PlGF-associated angiogenesis. Production of material for the toxicology program is in progress.
The PlGF growth factor is secreted by tumours and is specifically expressed in cancer and chronic inflammatory conditions. It affects the formation of new vessels in tissue that is under stress. Unlike VEGF, which is targeted by the drug Avastin, PlGF does not seem to affect normal, physiological angiogenesis. This characteristic is important because it means that the inhibition of PlGF is not expected to cause any significant side effects, but will still have the desired effect on various diseases. The project is being developed within the framework of the alliance with ThromboGenics.
Atherosclerosis (BI-204)
A product candidate (BI-204) was selected in the third quarter 2005 for toxicology and clinical studies. BI-204 is aimed at oxidized forms of the bad LDL cholesterol. Strong links have been shown between oxidized forms of certain lipoproteins and the inflammatory processes that lead to plaque formation in the vessel walls. In several animal tests, BI-204 has been shown to reduce inflammatory processes and, in a number of animal models, it has been able to reduce plaque formation very significantly. The results also show a considerable reduction in the size of existing plaques in animals treated with BI-204.
Development of the cell line to be used in the production of BI-204 is in progress. The next stage is the production of material for the toxicology program.
Research projects
To ensure sustainable development of the portfolio of development projects, BioInvent is running a number of projects in the research phase i.e. the stage prior to selection of a product candidate for safety tests in animal models with the intention to initiate clinical trials. Eight of these have the treatment of cancer as the primary indication. Five of these are collaboration projects with the Belgian company UCB as the commercialising partner. BioInvent´s proprietary projects include a second angiogenesis project (anti-angiomotin) and two projects in which the selected antibodies have been shown in vitro to kill tumour cells effectively through a process called apoptosis or programmed cell death.
In the beginning of April BioInvent initiated a collaboration with Immusol, Inc. for the development of a fully human n-CoDeR antibody for the treatment of age related macular degeneration (AMD) and other ophthalmic disorders. Macular degeneration is the most common cause of vision loss in people over 60, affecting 20 - 25 million people worldwide. It is characterised by abnormal and uncontrolled vessel growth in the eye.
Within the framework of the partnership, Immusol is providing expertise in ophthalmology and intellectual property rights covering the use of antagonists against a biological target identified to play an important role in the underlying pathological process of AMD. BioInvent will contribute its knowledge and experience in angiogenesis, immunology and therapeutic antibody discovery and development. Under the terms of the collaboration, the parties will share costs and revenues in further development and commercialization.
Harmful angiogenesis in the eye is also a potential indication for the TB-403 product candidate, aimed at the target protein PlGF, and the anti-angiomotin research project, both of which act in different ways to prevent the undesired vessel formation. Animal data for both of the projects is available to support the possibility within ophthalmology.
In February 2006 the Company decided to change the collaboration with Cartela within osteoarthritis. BioInvent has returned the rights to the target proteins to Cartela. The parties have initiated negotiations concerning a license agreement to replace the previous agreement. The negotiations may result in Cartela acquiring the right to further develop the antibodies that BioInvent has developed during the course of the cooperation.
Patents and licensing
In January 2006 the US Patent Office granted a patent covering BioInvent´s antibody library n-CoDeR. The issued patent covers methods for preparation of n-CoDeR as well as methods for preparing the separate antibody components included in the library. BioInvent has already obtained corresponding patents in Europe, Japan and Australia. In August 2004 Maxygen Inc. and Novozymes A/S filed oppositions against the granted European patent with the European Patent Office in Munich. European patents may be challenged up to nine months after they have been granted by a notice of opposition being filed in writing by an opponent. The European Patent Office´s Opposition Division, in initial oral proceedings in March, has agreed with the oppositions. BioInvent will appeal the decision as soon as it is available in writing. The Company believes it has a good chance of winning the appeal process. The patent is still valid until a final decision is made in the appeal. The appeal process is expected to take around two years. The Company´s freedom and ability to develop and commercialise current and future product candidates from n-CoDeR is not affected, nor will it be affected even if the Patent Office´s decision is upheld.
The company´s drug projects are based on comprehensive claims relating to granted patents and submitted patent applications that protect the target proteins and their use. In March the European Patent Office granted one such patent for the use of antibodies against PIGF for the treatment of cancer etc. The patent covers the TB-403 product candidate, which is being developed in cooperation with ThromboGenics.
Organisation
As of 31 March 2006, BioInvent had 95 employees, which is the same as on the same date last year 78 (78) of these work in research and development.
Revenues and result
Net revenues for the January - March period amounted to SEK 7.1 million (9.6). Net revenues for the period referred to remuneration from development projects on behalf of customers.
The Company´s total costs for the January - March period amounted to SEK 38.0 million (36.5). Operating costs are divided between external costs of SEK 17.1 million (14.6), personnel costs of SEK 17.2 million (16.9) and depreciation of SEK 3.7 million (5.0).
Research and development costs for January - March amounted to SEK 31.1 million (30.4). Depreciation according to plan lowered the operating result for the period by SEK 3.7 million (5.0), of which depreciation of intangible fixed assets amounts to SEK 1.9 million (2.2).
The loss after tax for January - March amounted to SEK -30.2 million (-26.0). The net financial items, January - March, amounted to SEK 0.7 million (0.9). The loss per share after tax, January - March, amounted to SEK -0.64 (-0.88).
Financial position and cash flow
As of 31 March 2006, the Group´s current investments together with cash and bank amounted to SEK 164.6 million (156.0). The cash flow from current operations and investment activities for January - March amounted to SEK -30.7 million (-19.0). The decline in the cash flow is due to the increased losses and fluctuations in working capital.
The shareholders´ equity amounted to SEK 188.8 million at the end of the period. The Company´s share capital was SEK 23.6 million. The equity/assets ratio at the end of the period was 83.0 (88.0) per cent. Shareholders´ equity per share amounted to SEK 4.00 SEK (6.33). The Group had no interest-bearing liabilities.
Investments
Investments in tangible fixed assets amounted to SEK 0.5 million (0.0).
The parent company
Net revenues for January - March amounted to SEK 7.1 million (9.6). The loss after tax amounted to SEK -30.1 million (-26.0). The cash flow from current operations and investment activities amounted to SEK -30.6 million (-19.0).
Warrant programme
At the end of the period, there were outstanding warrants equivalent to a maximum of 312,000 shares after recalculation to take into account the implemented new share issue. The warrant program was issued in April 2003 and is aimed at senior executives and key individuals not in possession of large holdings of shares. So far, 219,440 warrants have been acquired by the employees at market terms. The remaining 92,560 warrants are reserved for future recruitments. The subscription period for the warrants is 1 January to 30 April, 2007 and the subscription price is SEK 22 after recalculation to take into account the implemented new share issue. The warrant program could provide a maximum dilution of 0.7%.
Accounting principles
This consolidated interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, which is in accordance with the stipulations in the Swedish Financial Accounting Standards Council´s recommendation RR 31 Consolidated Interim Reports. BioInvent International AB started applying the International Financial Reporting Standards (IFRS) from 1 January 2005 in accordance with an EU decree.
Parent Company´s accounts have been prepared with application of the Swedish Accounting
Standards Council´s recommendation RR 32, Reporting for Legal Entities.
Upcoming financial reports
BioInvent will present the following financial reports:
Interim reports 13 July, 12 October 2006
Financial statement for 2006 15 February 2007
Contact:
Any questions regarding this report will be answered by:
BioInvent International AB (publ.)
Svein Mathisen, President & CEO, tel.+46 (0)46 286 85 67, mobile +46 (0)708 97 82 13
Cristina Glad, Executive Vice President, tel. +46 (0)46 286 85 51, mobile +46 (0)708 16 85 70.
Northbank Communications
Katja Stout, tel. +44 (0)20 7886 8153
The report is also available at www.bioinvent.com
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