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Biotech / Medical : Cambridge Antibody Technology Group -- Ignore unavailable to you. Want to Upgrade?

To: nigel bates who wrote (279)	8/28/2002 6:43:38 AM
From: nigel bates	Respond to of 625

By Mark Potter LONDON, Aug 28 (Reuters) - Britain's Cambridge Antibody Technology Group Plc (CAT) reported a third-quarter loss in line with expectations on Wednesday and said strengthening its pipeline of antibody-based drugs was a priority. "We're planning to substantially strengthen our proprietary clinical trial programme," Chief Executive Peter Chambre told Reuters, adding the firm was prepared to look at product and company acquisitions as well as organic growth. CAT is a world leader in developing drugs from antibodies -- proteins produced by the body's immune system to fight disease -- but it has come under some criticism for relying too heavily on its main product, rheumatoid arthritis drug D2E7, which is being developed by Abbott Laboratories (NYSE: ABT - news) . "There's a bit of a gap (before subsequent products come to market). But they've got the money to fill it," said Sam Fazeli, an analyst at Nomura who has a "buy" rating on CAT's shares. CAT posted a pre-tax loss of 12.3 million pounds ($18.8 million) in the three months to June 30. This was up sharply from a 6.1 million pound loss in the second quarter, but included a one-off payment of 6.7 million pounds to buy out a royalty-sharing deal with Canada's Drug Royalty Corp . At 0900 GMT the shares, which have underperformed the UK pharmaceutical sector by 41 percent so far this year, were unchanged at 748 pence, valuing the business at around 275 million pounds ($421 million). Monoclonal antibodies, which target one specific part of the body's immune system, were hailed as "magic bullets" in the 1980s and 1990s for their potential to attack disease without harming healthy cells. But they have failed to live up to their initial promise, due in part to complexity in manufacturing. New technologies have since emerged, and there are currently 11 products on the market, generating sales of about $3 billion. Some analysts think this could rise beyond $20 billion by 2010. BETTER DEALS CAT has proprietary technology to validate and engineer human monoclonal antibodies, which are likely to have fewer side-effects than existing versions which are either derived from mice or artificially made. The firm is involved with seven of the 20 human monoclonal antibodies currently in clinical trials, and D2E7 is set to be the first human-based treatment to reach the market next year. But CAT is only in line for a small percentage of royalties from peak sales OF D2E7, which could exceed $1 billion. Chief Executive Peter Chambre, who took over from founder David Chiswell in April, signalled the firm may try to hold onto some of its products longer than in the past, strengthening its hand when they are eventually licensed out. CAT currently owns the full rights to two of its drugs in the clinic, CAT-213 for allergies and CAT-152 for post-operative scarring in glaucoma patients. The firm said preliminary results from a Phase I/II clinical trial of CAT-213 were positive, and that while there were delays in recruiting a Phase II/III trial for CAT-152, this would not affect the overall timetable for the product. CASH RICH Net cash outflow in the period was 9.3 million pounds, taking the total for the year so far to 20.1 million and leaving the company with a total of 137.9 million at June 30. "With lead arthritis product D2E7 expected to reach the market next year, a new CEO at the helm and enough cash (380 pence-per-share) to drive the pipeline on, we believe CAT is well placed for long-term growth," analysts at ABN Amro said in a research note. CEO Chambre said CAT expected cash burn for the full-year of 30-36 million pounds, in line with previous guidance, and was comfortable with analysts' forecasts the firm would start making a profit in 2006 or 2007.