RNS No 6451k
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
15th December 1997
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1997
HIGHLIGHTS
Strong clinical development
* Two clinical programmes under way
* IND approval for one further programme
Functional genomics discovery platforms established
* ProAb(tm) functional genomics platform
* ProxiMol(tm) discovery platform
* Enhanced CAT(tm) library
Strong financial position
* Successful flotation raising #41m
* Cash at the year end #45m
Significant growth
* Staff numbers increased to 108 currently (93 in research and development)
New corporate partners
* Eli Lilly
* ObeSys
Professor Peter Garland, CAT's Chairman said:
"We are extremely pleased with the progress CAT has made during this important
year. Our successful listing on the London Stock Exchange provides the
resources to take CAT through the next stage of its development. We are
confident that CAT is progressing towards its goal of a profitable self
financing group with a significant portfolio of drug candidates based upon a
world class technology platform."
For Further information please contact:
Cambridge Antibody Technology 0171 253 2252 (15 December)
01763 263 233 (thereafter)
David Chiswell
John Aston
Ludgate Communications 0171 253 2252
Andrew Nicolls
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1997
SUMMARY
The year to 30 September 1997 was one marked by important milestones and
significant progress for CAT. During the year clinical trials have been
initiated on the first two of CAT's human antibodies and there have been
significant extensions of the group's technology platform. CAT signed a major
deal with the pharmaceutical company Eli Lilly bringing CAT both cash and
targets to feed its antibody pipeline. CAT listed on the London Stock
Exchange in March and has grown to 108 employees (currently) of which 93 are
in research and development.
BASF commenced trials of the human anti-TNFa antibody, developed in
conjunction with CAT, in April this year in patients with rheumatoid
arthritis. Since the year end CAT has commenced trials of its human
anti-TGFb2 antibody in patients at risk of developing fibrosis in the eye.
Furthermore, CAT's collaborative partner Techniclone has recently received FDA
approval to commence joint clinical trials with a radiolabelled chimaeric TNT
antibody for the treatment of malignant glioma. CAT/Techniclone's programme
incorporates both a chimaeric and a human antibody. These are all major
milestones in CAT's progress towards a group with a diverse portfolio of human
antibody-based therapeutic products.
In the early part of 1997, prior to listing, we signed agreements with Eli
Lilly and ObeSys. The Lilly agreement is a further important validation of
CAT's technology platform and also significant in providing potential targets
to CAT for the development of our own drug pipeline.
A key component of the business strategy is continually to enhance our world
leading technology base. We have developed significant new technologies for
the rapid screening and identification of new drug targets (ProAb(tm) and
ProxiMol(tm)) which are particularly significant in the context of feeding
CAT's product pipeline.
In March the Company successfully listed on The London Stock Exchange raising
over #41 million before expenses. CAT now has the resources to carry through
the next stage of its development.
Kevin Johnson and David Glover joined the Board in the summer as Research
Director and Medical Director respectively. Both have contributed enormously
to CAT's growth and success and we are delighted to have their continuing
contribution as board members. Since the year end Roger Aston has announced
his intention to resign from the board on 31 December 1997. We are grateful
to Roger for his contribution to CAT's development.
The expansion of the group has continued through the year. The recruitment of
high calibre personnel in a variety of disciplines is critical to CAT's future
success. It is a measure of the standing of the group that so many talented
individuals have chosen to join.
The current year should mark further progress by CAT on a number of fronts. We
expect to commence further clinical trials and to see results from the ongoing
clinical trials of the anti-TNFa and anti-TGFb2 antibodies towards the end of
1998. We will continue to develop the technology platform, particularly
applied to functional genomics. We envisage the continuing expansion of our
staff and resources.
We are confident that CAT is progressing towards its goal of a profitable self
financing group with a significant portfolio of drug candidates based upon a
world class technology platform.
OBJECTIVES FOR 1997/98
* Expand the clinical programme particularly in fibrosis and cancer.
* Take a significant number of antibody product candidates into pre-clinical
development to fuel the pipeline in 1999 and beyond.
* Use our new technologies, ProAb(tm) and ProxiMol(tm), to identify drug targets
with clinical potential for CAT's own pipeline and;
* Complement this by securing partnerships which ensure that the
opportunity to expand our pipeline is not limited by target availability.
REVIEW OF OPERATIONS
During the year CAT focused on four key objectives.
Initiation of the clinical pipeline
During the year the first two clinical programmes have been initiated in
rheumatoid arthritis and fibrosis in the eye. Since the year end CAT's
partner Techniclone received FDA approval to begin our joint clinical
programme in cancer.
Development of CAT's platform technology as a drug target discovery tool
CAT has made significant advances, particularly in the development of its
ProAb(tm) and ProxiMol(tm) technologies.
ProAb(tm)
ProAb(tm) is CAT's approach to functional genomics which focuses on the
analysis of proteins, the likely target for eventual drug development.
ProAb(tm) uses antibodies isolated from CAT's library as tools to build a
database of information on where and when each protein is made where it ends
up and whether it has any connection with important diseases. ProAb(tm) has
been developed to a level where CAT can collect and analyse data on
approximately one thousand potential drug targets every month.
ProxiMol(tm)
CAT has developed ProxiMol(tm) to identify molecules that are in close
proximity to each other. This is important because critical events in disease
initiation and/or progression are often linked with alterations in how
molecules interact physically and, by implication, functionally.
Ensuring that the Company is sufficiently well capitalised
Listing on the London Stock Exchange in March raising over #41 million before
expenses has strengthened CAT financially and has both underpinned the
business strategy and enabled the acceleration of the development of the
group.
Partnering
During the year agreements have been signed with both Eli Lilly and ObeSys
which have brought CAT rights to develop therapeutic antibodies against
attractive drug targets thus enabling CAT to augment its antibody pipeline.
R&D PIPELINE
The portfolio approach
Drug development is inherently risky with a significant proportion of drug
candidates failing during the development process. CAT believes that by using
its powerful platform technology to develop a portfolio of products the risk
is spread.
CAT is developing a portfolio of clinical development programmes with the
objective of initiating three to four clinical programmes per year from the
year 2000.
Programmes in the areas of inflammation, fibrosis, cancers and obesity, are
ongoing to generate therapeutic antibody candidates for clinical development.
Two clinical programmes have been initiated and IND approval has been given
for a third programme. Two pre-clinical programmes are ongoing and seven
antibody engines are operating.
By planning to conduct studies to the end of Phase II clinical trials and
partnering for the larger and more expensive Phase III clinical trial
programmes, CAT believes that it will maximise the product potential from its
technology base.
Programme details
The following table summarises product programme status:
Antibody Disease target Marketing rights Status
Human anti-TNFa Rheumatoid arthritis BASF Clinical trials
Phase I/IIa
Human anti-TGFb2 Fibrosis in the eye CAT Clinical trials
Phase I/IIa
Chimaeric TNT-1 I131 Glioma CAT / Techniclone IND approved
Human anti-TGFb2 Glaucoma surgery CAT Pre-clinical
Human TNT-1 Solid tumours CAT / Techniclone Pre-clinical
(radio labelled)
Leading anti-inflammatory programme
Human anti-TNFa antibody
In collaboration with Knoll(BASF), CAT isolated and optimised a potent fully
human monoclonal antibody that binds with and neutralises TNFa. TNFa is a
pro-inflammatory cytokine which increases tissue damage in inflammatory
diseases such as rheumatoid arthritis and Crohn's disease.
Knoll (BASF) commenced Phase I/IIa clinical studies in patients in rheumatoid
arthritis in Europe in April 1997. The programme is expected to expand in
1998 with the initiation of further studies in the USA and Europe.
Anti-Fibrosis Programmes
Fibrosis in the eye
Fibrosis in the eye causes loss of vision and blindness. Proliferative vitreo
retinopathy (PVR) occurs after retinal detachment. Fibrosis occurring at the
operated site causes failure of glaucoma drainage surgery (GDS).
Phase I/II clinical studies in patients with early PVR commenced on schedule
in the fourth quarter of 1997 at 3 major UK eye hospitals. Results are
expected in the fourth quarter of 1998. Phase I/II clinical studies in
patients undergoing GDS are scheduled to commence in mid 1998.
Leading anti-cancer programme
Tumour Necrosis Therapy ("TNT")
The commonest types of cancer are all solid tumours. At their centre solid
tumours have a necrotic core where most of the cells are dead or dying.
Antibodies recognising this tissue, linked/conjugated with radio isotopes,
such as Iodine131 , can be used to irradiate the living cells of the tumour
'from the inside'. This approach is known as Tumour Necrosis Therapy (TNT).
CAT has a joint venture with Techniclone, a US biotech company, to develop
chimaeric and fully human radiolabelled TNT products to treat various cancers.
The initial indication for chimaeric TNT-1 product is glioma, the most
prevalent form of brain cancer. The antibody will be delivered locally via a
reservoir which is inserted at the time of surgery.
In November 1997 Techniclone was granted an IND for a phase I/IIa study with
Chimaeric TNT-1 I131 in patients with glioma. Studies are expected to
commence in early 1988.
Phase I/IIa clinical studies, with a human TNT antibody, for systemic
intravenous administration are planned for late 1998.
PEOPLE
CAT's employees have increased in number over the year from 48 on 1 October
1996 to 98 on 30 September 1997. Growth has been in all areas of CAT's
activity. Of the numbers employed at the year-end 68 were in research, 16 in
pre-clinical and clinical development, 3 in business development and 11 in
managerial and administrative functions. CAT continues to attract
high-calibre personnel.
Since the year end CAT has recruited two additional members to its senior
management team; Nigel Burns has joined as Vice-President Pre-Clinical
Development from British Biotech and Diane Mellett has joined as
Vice-President Legal Affairs and Company Secretary from Sonnenscheins. Overall
numbers have continued to grow and CAT currently has 108 staff. Employee
numbers are projected to reach approximately 150 by the end of the current
year.
The quality of its staff are fundamental to CAT's future success. All
employees participate in CAT's share option scheme and all are eligible to
participate in the Staff Share Scheme after an initial period of service.
FINANCIAL REVIEW
CAT reported a #8.36 million loss for the year ended 30 September 1997.
Operating cash outflow during the year was #7.30 million. #42.25 million was
raised from financings and CAT finished the year with cash and liquid
resources of #44.59 million.
The profile of revenues is irregular as most derive from licence, option and
milestone payments the timing of which is uncertain. Major sources of revenue
in the year were a clinical milestone from BASF on the anti-TNFa antibody
entering the clinic and an initial instalment of a licence fee from Eli Lilly.
Operating costs in the year were #11.24 million (1996 #5.42 million). This
included #2.97 million attributable to the write-off of intellectual property
associated with the issue to the Medical Research Council of 750,000 shares
under the terms of CAT's licence agreement with the MRC. This write-off has no
effect on cash and is in accordance with CAT's established accounting policy
of writing-off all intellectual property costs.
The remaining #8.27 million can be analysed as #6.69 million research and
development costs and #1.58 million administration and management expenses.
Over the coming year costs will increase as staff numbers are built up and
also as CAT commits to a greater level of pre-clinical and clinical activity.
Capital expenditure during the year was #1.45 million (1996 - #0.36 million).
This was chiefly on laboratory equipment. Higher levels of expenditure are
expected in the current year as CAT develops the automation of its operations
and as further space is fitted out to accommodate the expansion in staff
numbers.
Cash and liquid resources at the year end were #44.59 million (1996 #9.57
million). This showed a decline from #48.16 million at the half-year. In the
second half year operating cash outflow (excluding revenues) was #4.47 million
as compared with #3.96 million in the first half year. The monthly rate of
cash spend at the year end was approaching #1 million. Cash expenditure in
the current year is estimated at approximately #18 million.
CAT's liquid reserves are managed on a discretionary basis by a third party.
Funds are placed on deposit and in money market instruments. Parameters have
been set by the board governing the maturity of deposits and the amount
placed with any single institution.
Based on current cash levels and anticipated levels of expenditure CAT would
expect to have sufficient funds to finance operations for approximately 2-3
years, and expects to require additional financing for the future development
of its business.
Consolidated profit and loss account
For the year ended 30 September 1997
1997 1996
#'000 #'000
Turnover 1,134 2,112
Direct costs (51) (121)
Gross profit _______ _______
1,083 1,991
Research and development expenses (6,693) (4,054)
MRC intellectual property acquisition (non-cash) (2,967) -
General and administration expenses (1,576) (1,364)
_______ _______
Operating loss (10,153) (3,427)
Amounts written off investments (1) (1)
Interest receivable (net) 1,799 173
_______ _______
Loss on ordinary activities before taxation (8,355) (3,255)
Taxation on loss on ordinary activities - 36
_______ _______
Loss for the financial year (8,355) (3,219)
======= =======
Loss Per Share Basic (pence) 47.9p 43.1p
Fully Diluted (pence) 41.3p 32.3p
The losses for both years arise from continuing operations
Consolidated statement of total recognised gains and losses
1997 1996
#'000 #'000
Loss for the financial year (8,355) (3,219)
(Loss) / Gain on foreign exchange translation (2) 5
_______ _______
Total recognised gains and losses
relating to the year (8,357) (3,214)
======= =======
Consolidated balance sheet
30 September 1997
1997 1996
#'000 #'000
Fixed assets
Tangible fixed assets 1,763 804
Investments - 1
_______ _______
1,763 805
Current assets
Debtors 1,111 501
Investment in liquid resources 44,182 8,500
Cash at bank and in hand 411 1,073
_______ _______
45,704 10,074
Creditors
Amounts falling due within one year (1,817) (2,112)
_______ _______
Net current assets 43,887 7,962
_______ _______
Total assets less current liabilities 45,650 8,767
Creditors
Amounts falling due after more than one year (13) (210)
_______ _______
Net assets 45,637 8,557
======= =======
Capital and reserves
Called-up share capital 2,215 1,132
Share premium account 42,785 -
Other reserve 13,383 11,991
Profit and loss account (12,746) (4,566)
_______ _______
Shareholders' funds - all equity 45,637 8,557
======= =======
Consolidated cash flow statement
For the year ended 30 September 1997
1997 1996
#'000 #'000
Operating loss (10,153) (3,427)
Depreciation charge 466 421
(Profit) loss on disposal of fixed assets (8) 3
Non-cash considerations 3,007 -
Decrease in work in progress - 26
(Increase) / decrease in debtors (307) 1,489
(Decrease) / increase in creditors (299) 995
_______ _______
Net cash outflow from operating activities (7,294) (493)
Returns on investments and servicing of finance
Interest received 1,464 179
Interest paid (6) (6)
Taxation
UK corporation tax recovered 36 -
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,449) (356)
Sale of tangible fixed assets 32 12
Acquisitions
(net of cash and cash equivalents acquired)
Purchase of subsidiary undertaking - (71)
_______ _______
Net cash outflow before management of
liquid resources and financing (7,217) (735)
Management of liquid resources
Decrease/(increase) in term deposits 4,909 (7,500)
Net purchase of securities (40,591) -
Financing
Issue of ordinary share capital 42,253 8,248
New loans - 175
Repayment of loans - (371)
Inception of finance leases - 27
Capital elements of finance lease rental payments (13) (26)
_______ _______
Decrease in cash and cash equivalents (659) (182)
======= =======
Notes to the financial information
Basis of consolidation
The group financial statements consolidate the financial statements of
Cambridge Antibody Technology Group plc and its subsidiary undertakings, drawn
up to 30 September each year. The acquisition of Cambridge Antibody
Technology Limited , by way of share for share exchange, has been accounted
for as a group reconstruction in accordance with Financial Reporting Standard
Number 6. Consequently, consolidated financial information is presented as if
Cambridge Antibody Technology Limited had been owned by the company throughout
the current and comparative financial periods.
Loss per share
Loss per ordinary share is based on a loss for the financial year of
#8,355,000 (1996 - #3,219,000) and a weighted average number of ordinary
shares of 17,427,833 (1996 - 7,471,291). Fully diluted loss per share is
based on a weighted average number of ordinary shares of 20,221,636 (1996 -
9,968,441).
Analysis and reconciliation of net funds
1 October Cash flow Other non Exchange 30 September
1996 cash changes movement 1997
#'000 #'000 #'000 #'000 #'000
Cash at bank 1,073 (659) - (3) 411
Liquid resources 8,500 35,682 - - 4,418
Debt due after 1 year (175) - 175 - -
Finance leases (48) 13 - - (35)
_______ _______ _______ _______ _______
Net funds 9,350 35,036 175 (3) 44,558
======= ======= ======= ======= =======
1997 1996
#'000 #'000
Decrease in cash in the year (659) (182)
Cash outflow from increase in liquid resources 5,682 7,500
Cash outflow from decrease lease financing 13 26
_______ _______
Change in net funds resulting from cash flows 35,036 7,344
Loans acquired with subsidiary - (175)
Waiver of loan 175 -
Repayment of loan - 371
New finance leases - (27)
Exchange movement (3) -
_______ _______
Movement in net funds in year 35,208 7,513
Net funds at 1 October 1996 9,350 1,837
_______ _______
Net funds at 30 September 1997 44,558 9,350
======= =======
Reconciliation of movements in group shareholders' funds
1997 1996
#'000 #'000
Loss for the financial year (8,355) (3,219)
Other recognised gains and losses
relating to the year (2) 5
_______ _______
(8,357) (3,214)
New shares issued 45,260 8,248
Adjustment to goodwill / goodwill written off 177 (406)
_______ _______
Net addition to shareholders' funds 37,080 4,628
Opening shareholders' funds 8,557 3,929
_______ _______
Closing shareholders' funds 45,637 8,557
======= =======
The adjustment to goodwill reflects the waiver during the year of a loan from
a third party which was advanced to a subsidiary prior to its acquisition by
the group. The subsidiary retains a contractual obligation to make payments
to the third party based on a percentage of certain net sales and licence
income.
Financial Statements
The preceding information does not constitute the company's statutory
financial statements for the year ended 30 September 1997 within the meaning
of s227 of the Companies Act 1985 but is derived from those financial
statements. The comparative information for the year ended 30 September 1996
has been derived from the statutory financial statements of Cambridge Antibody
Technology Limited.
Financial Statements for the year ended 30 September 1997 will be posted to
shareholders on 9 January 1998 and will be available from the Company
Secretary, Cambridge Antibody Technology Group plc, The Science Park,
Melbourn, Cambridgeshire, SG8 6JJ (telephone 01763 263233) shortly
thereafter. They will also be available through the FT Annual Reports Service
(telephone 0181 770 0770).
The statutory financial statements for Cambridge Antibody Technology Limited
for the year ended 30 September 1996 received an unqualified audit report and
have been delivered to the Registrar of Companies. The statutory financial
statements for the company for the year ended 30 September 1997 will be
delivered to the Registrar of Companies after the Company's Annual General
Meeting. The auditors have reported on those financial statements and their
report was unqualified.
Notes for Editors
CAT
CAT's business is based on a world leading platform technology for the rapid
isolation of human monoclonal antibodies. This technology has applications
both in the development of antibody-based human therapeutic products and as a
drug discovery tool, particularly in the context of functional genomics.
CAT's strategy is to capitalise on the strength of its platform technology in
order to build a diverse portfolio of antibody-based human therapeutic
products. Clinical trials of two human monoclonal antibodies developed by CAT
have already started in 1997. Phase I/IIa Trials of CAT's anti-TGFb2
monoclonal antibody in patients with early proliferative vitreo retinopathy
have recently commenced, and earlier this year Phase I/IIa trials of the human
anti-TNFa monoclonal antibody isolated and developed by CAT in collaboration
with Knoll (BASF) were initiated by Knoll in patients with rheumatoid
arthritis.
CAT will also continue to use its platform technology as a drug discovery
tool, to seek to secure licenses and collaborative agreements with other
pharmaceutical companies, including genomics companies, thereby gaining
further access to antibody targets of potential therapeutic interest.
CAT has already entered into a number of licence and collaborative agreements
with pharmaceutical and biotechnology companies. These include: technology
licences with Genentech, Pfizer and Eli Lilly; therapeutic antibody licences
with Knoll (BASF), Knoll(BASF)/Genetics Institute and Mitsubishi Chemical;
joint ventures with Techniclone and ObeSys (with BTG); and a licence agreement
with Integra Life Sciences.
END
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