RNS Number:8987D
Cambridge Antibody Tech Group PLC
21 May 2001
01/CAT/08
FOR IMMEDIATE RELEASE
07.00 BST, 02.00 EST Monday 21 May 2001
For Further Information Contact:
Cambridge Antibody Technology Square Mile Communications (Europe)
Tel: +44 (0) 1763 263 233 Tel: +44 (0) 20 7601 1000
David Chiswell, CEO Kevin Smith
John Aston, Finance Director Graham Herring
Rowena Gardner, Head of Corporate
Communications
BMC Communications/The Trout Group
(USA)
Tel: 001 212 477 9007
Brad Miles, ext 17 (media)
Brandon Lewis, ext.15 (investors)
CAMBRIDGE ANTIBODY TECHNOLOGY
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2001
Highlights
* Major profit-sharing strategic alliances with Elan and Immunex.
* European Orphan Drug status awarded to CAT-152, the human monoclonal
antibody against TGFb 2, as a potential treatment to prevent scarring
after glaucoma surgical procedures.
* Encouraging two-year follow-up results for Phase I/IIa trial of CAT-152
announced.
* First phase of relocation to new facilities at Granta Park underway.
* Loss for the six months ended 31 March 2001 of #0.9 million.
* Cash and liquid resources at 31 March 2001: #168.0 million.
Professor Peter Garland, CAT's Chairman, said "During the six months to the
end of March 2001 there has been progress in CAT's partnered and in-house
clinical development programmes. CAT signed six new alliances, with Elan,
Immunex (two), Weston Medical, Zyomyx and Randox. The collaboration with Elan,
and the second collaboration with Immunex, are both cost and profit sharing,
and reflect CAT's objective to invest in building its antibody-based
therapeutic pipeline."
CAMBRIDGE ANTIBODY TECHNOLOGY
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2001
Strategic alliances
In January 2001, CAT announced a four-year strategic partnership with Elan for
the discovery and development of novel antibody-based therapeutics targeting
human neurological diseases. CAT shares research and development costs with
Elan, as well as commercialisation profits.
Today, CAT announced a new broad product development collaboration with
Immunex, committed to the joint discovery, development, marketing and sale of
human antibody-based therapeutics for certain autoimmune and inflammatory
disorders. The two companies will share costs and any profits equally. Prior
to this, in December 2000, CAT signed an agreement with Immunex to licence
CAT's antibody libraries for the discovery, development and potential
commercialisation of human monoclonal antibodies. The Company received a
licence fee from Immunex that allows Immunex the use of CAT's libraries and
provides Immunex with eight exclusive therapeutic antibody product options
from which CAT could potentially receive clinical milestone and royalty
payments on subsequent product sales.
Also in December 2000, CAT signed an agreement with Zyomyx to jointly develop
high-density protein biochips based on parallel antibody arrays and in April
2001 CAT signed an agreement with Randox to evaluate the use of CAT antibodies
in developing diagnostic biochip products.
In March 2001, an agreement was signed with Weston Medical that will allow CAT
to assess its in-house and partnered antibodies for drug delivery through
Weston Medical's Intraject(R) needle-free injection system.
CAT's collaboration with Genzyme progressed, with CTX approval for phase I/II
clinical trials of CAT-192, as a possible therapy for diffuse scleroderma,
being received. CAT's antibody research and development programme with
Wyeth-Ayerst continues. Activity in the strategic alliance with Pharmacia has
continued to build, but at a lower rate than originally envisaged. In our
collaboration with Human Genome Sciences (HGS), a number of antibody leads are
under development.
Product pipeline
D2E7, the human monoclonal antibody that neutralises TNFa , continues in phase
III trials as a potential treatment for rheumatoid arthritis. CAT's partner,
Abbott (formerly BASF Pharma), is responsible for these trials and is working
towards a launch of the product in 2003. Data from phase II trials is due to
be announced at the June 2001 meeting of the European League Against
Rheumatism (EULAR).
CAT-152 is CAT's human monoclonal antibody that neutralises TGFb 2.
Recruitment of patients to a Phase II study to test CAT-152 as a treatment to
prevent post-operative scarring after glaucoma surgery was completed in
February. It is expected that the three month results of this trial will be
announced at a major international conference of ophthalmology in November
2001 and a preliminary communication of these results should be available in
late summer.
In April 2001, CAT-152 was recommended for Orphan Drug status (a drug that
treats a condition that affects not more than 5 in 10,000 people) in Europe as
a treatment to prevent post-operative scarring in patients undergoing surgery
for glaucoma, providing benefits which include grants, market exclusivity and
protocol assistance.
In May 2001 two-year follow-up results of the ongoing Phase I/IIa clinical
trial were presented at the annual meeting of the Association for Research in
Vision and Ophthalmology (ARVO). These suggested that patients treated with
CAT-152 after surgery for glaucoma continued to experience lower intraocular
pressure, with less use of post-operative injections and topical medication.
Using CAT-152 at the time of surgery appears to lead to a more successful
outcome of the operation, albeit based on low patient numbers. CAT is planning
to confirm these encouraging findings in further Phase II/III trials of
CAT-152 to be initiated later this year.
Also at ARVO encouraging results from laboratory studies were presented that
showed a possible role for CAT-152 in suppressing secondary cataract - a '
clouding' of the posterior capsule of the lens that occurs in up to 40 per
cent of patients following cataract surgery. CAT is evaluating whether to
initiate clinical trials with CAT-152 for this indication.
J695, the human monoclonal antibody that neutralises Interleukin 12, a
pro-inflammatory molecule associated with a range of autoimmune diseases
including rheumatoid arthritis, is in two Phase II clinical trials, conducted
by Abbott and Genetics Institute.
CAT-192 is a human anti-TGFb 1 monoclonal antibody developed as a potential
treatment for a variety of scarring and fibrotic conditions. CAT-192 has
completed Phase I clinical trials and results presented at the British
Pharmacological Society in December 2000 showed that CAT-192 was well
tolerated, with a prolonged half-life of around 40 days in healthy volunteers.
Following recent regulatory approval it is anticipated that patient enrolment
for UK Phase I/II multi-centre clinical trials, managed by Genzyme, CAT's
partner, to evaluate CAT-192 as a potential treatment for diffuse scleroderma
will begin shortly.
During the period, CAT-213, a human anti-eotaxin1 monoclonal antibody with the
potential to treat severe allergic disorders, progressed satisfactorily
through toxicology and pre-clinical testing. CAT intends to progress CAT-213 to
Phase I clinical trials shortly.
CAT completed its discovery programme with Human Genome Sciences to develop
anti-BLyS antibodies raised against B-Lymphocyte Stimulator, a protein
implicated in several autoimmune and neoplastic disorders. HGS has now
completed pre-clinical studies on a selected clinical candidate monoclonal
antibody and is working towards Phase I clinical trials later this year.
It is unlikely that there will be any further candidates moving into clinical
trials in this calendar year. There are currently 10 active antibody discovery
programmes underway.
Intellectual property
In April 1999, MorphoSys commenced an action against CAT in the US District
Court of Washington DC concerning CAT's US 'Griffiths' patent, which covers
the isolation of antibodies from phage display libraries which specifically
recognise human 'self' antigens. MorphoSys asked the court to revoke CAT''s
patent and/or declare that MorphoSys does not infringe the patent; CAT filed a
counter patent infringement action against MorphoSys. Following a hearing in
March 2001, the US District Court of Washington was unable to reach a decision
on all but one issue. The jury agreed on this one issue in favour of CAT, that
the Company was entitled to the priority dates of its British patent
applications. Several post trial motions have been filed with the court and
the parties are awaiting the court's decision. If the court does not issue a
dispositive ruling on the question of validity then the case will be retried
at a later date to be arranged.
There has been no change in the status of the legal action brought by
MorphoSys in respect of CAT's US McCafferty patent since the 2000 Annual
Report. With regard to the McCafferty patent litigation with MorphoSys in
Europe, CAT is awaiting the written decision from the Opposition Division
following the hearing last July. Receipt of the written decision triggers the
four-month deadline for filing of any appeal.
In respect of the litigation with Crucell, in response to motions filed by
CAT's lawyers, the court declined jurisdiction for Crucell's non-infringement
claim on Winter II and will assume jurisdiction only on the invalidity claim
and limited to the Netherlands only. A similar ruling on jurisdiction is
expected in the McCafferty case. CAT intends to defend both of these
proceedings vigorously and does not believe that there is merit in these
claims.
Whatever the outcome of current litigation, CAT believes that its ability to
operate its own technology will not be materially and adversely affected.
In the six months CAT has increased its patent estate in the US with the
granting of a new patent in the McCafferty family which provides protection
for libraries of phage displaying functional protein binding domains derived
from natural repertoires of nucleic acids, wherein each phage particle
contains a phagemid genome.
CAT still expects the first US patent from the Winter/Huse/Lerner family (part
of the settlement with Scripps) covering antibody gene libraries to be granted
in 2001.
Operations
CAT has made further progress towards its proposed listing of ADRs on the
NASDAQ market. CAT made a public filing of its registration statement with the
SEC in April 2001 and is currently in discussion with the SEC on the remaining
issues that must be addressed before effectiveness can be granted and the
listing take place.
In May 2001 the first phase of CAT's relocation plan was completed when CAT
commenced occupation of the Franklin Building, comprising 20,500 sq.ft. of new
laboratories and offices, at Granta Park, ten miles from the Company's main
location. This will be occupied by the Company's Pre-Clinical and Medical
departments. Work is progressing on the next stage of the development, with
occupation of a new 66,000 sq. ft. building, also on Granta Park, scheduled
for late 2002.
CAT employed 221 staff at 31 March 2001 (189 at 30 September 2000). Further
recruitment is underway, with staff numbers expected to increase to
approximately 250 by the end of the financial year.
Financial results
CAT made a loss for the six months ended 31 March 2001 of #0.9 million (six
months ended 31 March 2000 (H1) #2.1 million; six months ended 30 September
2000 (H2) #3.1 million.) Net cash outflow before financing for the period was
#3.3 million (H1 - #4.9 million inflow; H2 - #4.6 million outflow). Cash and
liquid resources at 31 March 2001 amounted to #168.0 million (31 March 2000 #
36.5 million; 30 September 2000 #156.5 million).
Revenues in the period were #6.6 million (H1- #6.4 million; H2 - #3.7
million). The profile of revenues over time continues to be irregular due to
the nature of CAT's business although some collaborations are continuing to
provide a more regular source of income. During the period a library license
fee was received from Immunex and income was also generated from fees
receivable under ongoing collaborations with HGS, Wyeth-Ayerst and Pharmacia.
The Group will be reviewing its accounting policy for revenue recognition in
the next six months. Part of this review will be giving consideration to the
adoption of a revenue recognition policy which is more consistent with US GAAP
(particularly SAB101) and thus ensure its results are more readily comparable
with those of US Biotech companies. Before any final decision is reached the
Group will await the publication of the
Accounting Standards Board discussion paper on Revenue Recognition, which is
anticipated to be released in the near future. Due consideration will be given
to proposals contained within that paper.
Operating costs for the period amounted to #12.3 million (H1 - #9.0 million;
H2 - #11.6 million). External development costs have increased in line with
increased activity on the Group's own and partnered programs. Staff costs have
increased as staff numbers have built. Spend in the period on patent-related
matters, including patent filings, oppositions and litigations was #1.2
million compared to #1.7 million for the whole of the 2000 financial year.
During the period the Group earned interest on its cash deposits of #4.9
million ( H1 - #0.7 million; H2 - #4.9 million) reflecting the level of cash
and liquid resources held in interest bearing securities.
Capital expenditure for the period was #1.6 million (H1 - #0.3 million; H2 - #
0.7 million). Of this, approximately half was on the fitting out of the
Franklin Building and preparations for further premises at Granta Park and the
remainder was largely laboratory equipment.
Funds raised from the issue of equity during the period included #13.5 million
(net of expenses) from Genzyme in October 2000 in connection with a
collaboration agreement, the remainder being raised from the exercise of share
options.
Recurring contract reseach revenues in the second half of the year will arise
from Pharmacia, Wyeth-Ayerst and HGS and are expected to be of the order of #2
million. Additional revenues may arise from technical and clinical milestone
payments.
Operating costs are expected to increase significantly in the second half.
Particular areas of anticipated increase are external product development
costs, staff costs and premises costs, reflecting increased scale of activity;
in addition there are certain costs which fall only in the second half of the
year such as performance related remuneration and staff share scheme
allocation.
Capital expenditure in the second half is expected to approach #4 million.
Whilst the average monthly cash burn for the first half of the financial year
has been significantly less than the #1.8 million predicted in the 2000 Annual
Report, the average monthly cash burn is expected to be around the predicted
rate for the remainder of the year.
CONSOLIDATED PROFIT AND LOSS
(Unaudited)
Six months ended Six months ended Year ended 30
31 March 2001 31 March 2000 September 2000
#'000 #'000 #'000
Turnover 6,628 6,388 10,146
Direct costs (233) (249) (381)
Gross profit 6,395 6,139 9,765
Research and development (9,216) (7,151) (15,728)
expenses
General and administration (3,034) (1,838) (4,842)
expenses
Operating loss (5,855) (2,850) (10,805)
Interest receivable (net) 4,931 749 5,644
Loss on ordinary activities (924) (2,101) (5,161)
before taxation
Taxation on loss on - - -
ordinary activities
Loss for the financial (924) (2,101) (5,161)
period
Loss per share - basic and 2.6p 8.0p 17.1p
fully diluted (pence)
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Six months ended Six months ended Year ended 30
31 March 2001 31 March 2000 September 2000
#'000 #'000 #'000
Loss for the financial (924) (2,101) (5,161)
period
Loss on foreign exchange (3) - (7)
translation
Total recognised loss (927) (2,101) (5,168)
CONSOLIDATED BALANCE SHEET
(Unaudited)
As at 31 March As at 31 March As at 30
2001 2000 September 2000
Fixed Assets
Intangible assets 4,261 4,635 4,448
Tangible fixed assets 5,651 5,194 5,008
9,912 9,829 9,456
Current Assets
Debtors 4,128 1,555 3,452
Investment in liquid resources 167,246 36,286 156,502
Cash at bank and in hand 779 206 26
172,153 38,047 159,980
Creditors
Amounts falling due within one (7,636) (6,687) (8,427)
year
Net current assets 164,517 31,360 151,553
Total assets less current 174,429 41,189 161,009
liabilities
Creditors
Amounts falling due after more (1,278) (3,441) (1,975)
than one year
Net Assets 173,151 37,748 159,034
Capital and Reserves
Called-up share capital 3,538 2,759 3,477
Share premium account 194,689 56,071 179,706
Other reserve 13,451 13,451 13,451
Profit and loss account (38,527) (34,533) (37,600)
Shareholders' funds - all equity 173,151 37,748 159,034
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited)
Six months Six months Year ended 30
ended 31 ended 31 September
March 2001 March 2000 2000
#'000 #'000 #'000
Operating loss (5,855) (2,850) (10,805)
Depreciation in the period 1,001 907 1,808
Amortisation of patents 187 187 374
Profit on disposal of fixed assets 1 (6) (5)
(Increase) / decrease in debtors (27) (558) (1,159)
(Decrease) / increase in creditors (1,244) 6,858 6,178
Net cash (outflow) / inflow from (5,937) 4,538 (3,609)
operations
Returns on investments and servicing of finance
Interest received 4,282 646 4,245
Taxation - - -
Capital expenditure and financial investment
Purchase of fixed assets (1,647) (289) (1,018)
Sale of fixed assets 2 31 44
(1,645) (258) (974)
Net cash (outflow) / inflow before (3,300) 4,926 (338)
management of liquid resources and
financing
Management of liquid resources (10,744) (13,513) (133,729)
Financing
Issue of ordinary shares 15,044 7,949 132,302
Capital element of finance lease - (9) (9)
payments
15,044 7,940 132,293
Increase/ (decrease) in cash and 1,000 (647) (1,774)
cash equivalents
Basis of preparation
These interim financial statements have been prepared in accordance with the
policies set out in statutory financial statements for the year ended 30
September 2000.
These interim financial statements do not constitute statutory financial
statements within the meaning of section 240 of the Companies Act 1985.
Results for the six-month periods ended 31 March 2001 and 31 March 2000 have
not been audited. The results for the year ended 30 September 2000 have been
extracted from the statutory financial statements, which have been filed with
the Registrar of Companies and upon which the auditors reported without
qualification.
National Insurance on share options
The Group is making a provision systematically over time for employer's
National Insurance payable on certain share options granted to employees.
There was a credit for the current period of #0.2 million principally
resulting from the decline in share price between the beginning and end of the
period. The charge for the whole of the year ended 30 September 2000 was #0.5
million. In the interim statement for the six months ended 31 March 2000 the
provision was calculated in accordance with draft accounting guidance which
indicated that a full provision for the total potential liability be made at
each period end, resulting in a charge for that period of #0.9 million. At the
time this was shown separately on the face of the profit and loss account but
it has now been subsumed into the relevant expense headings. If that charge
had been calculated in accordance with current guidance it would have been #
0.1 million.
Loss per share
The loss per ordinary share and fully diluted loss per share are equal because
the Group is sustaining losses. The calculation is based on the following, for
the six months ended 31 March 2001, the six months ended 31 March 2000 and the
year ended 30 September 2000 respectively. Losses of #924,000, #2,101,000, and
#5,161,000. Weighted average number of shares in issue of 35,209,153,
26,285,300 and 30,179,818. The company currently has 35,380,856 ordinary
shares in issue and a total of 1,588,478 ordinary shares under option.
-ENDS-
Notes to Editors:
Cambridge Antibody Technology (CAT)
CAT is a UK biotechnology company using its proprietary technologies in human
monoclonal antibodies for drug discovery and drug development. Based in
Melbourn, 10 miles south of Cambridge, England, CAT currently employs around
220 people.
CAT is listed on the London Stock Exchange, having raised #41m in its IPO in
March 1997. A secondary offering in March 2000 raised #93m.
CAT has a world-leading platform technology for rapidly isolating fully human
monoclonal antibodies using phage display systems. CAT has an extensive phage
antibody library, currently incorporating around 100 billion distinct
antibodies. This library forms the basis for the company's strategy to develop
a portfolio of clinical development programmes and for discovering new drug
leads using functional genomics. Four human therapeutic antibodies developed
by CAT are at various stages of clinical trials.
CAT has a number of licence and collaborative agreements in place with
pharmaceutical and biotechnology companies including: Eli Lilly, Pfizer, BASF
Pharma (Abbott), Genentech, ICOS, Genetics Institute, Wyeth-Ayerst, Human
Genome Sciences, AstraZeneca, Pharmacia, Oxford GlycoSciences, Genzyme, Zyomyx
and Elan.
Phagemids
A phagemid is a plasmid containing a bacterial origin of replication and a
phage origin of replication. Use of a phagemid containing a geneIII-antibody
fusion, together with a helper phage, allows a mixture of wild-type pIII and
fusion pIII to be displayed on the surface of the phage particle. If phagemids
are not used, several antibody molecules are displayed on each phage
(multivalent display). Phagemids allow display of a single antibody molecule
per phage (monovalent display) enabling selection for higher affinity
antibodies by avoidance of avidity effects. The phagemid system is widely used
by antibody phage display companies.
This press release contains statements about Cambridge Antibody Technology
Group plc (CAT) that are forward looking statements. All statements other than
statements of historical facts included in this press release may be forward
looking statements
These forward looking statements are based on numerous assumptions regarding
CAT's present and future business strategies and the environment in which CAT
will operate in the future. Certain factors that could cause CAT's actual
results, performance or achievements to differ materially from those in the
forward looking statements include: market conditions, CAT's ability to enter
into and maintain collaborative arrangements, success of product candidates in
clinical trials, regulatory developments and competition.
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