RNS No 5741j
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
18th May 1998
INTERIM RESULTS FOR THE SIX MONTHS 31 MARCH 1998
HIGHLIGHTS
- Anti-TNFalpha clinical programme conducted by BASF Pharma:
- Planned patient enrolment complete in European phase I/IIa study
- Over 1,000 doses have been given to patients
- New phase II studies starting shortly in both US and Europe
- Anti-TGFbeta2 clinical programme for treatment of ophthalmic fibrosis:
- Phase I/II study in proliferative vitreo retinopathy completed first
dose level according to plan
- Phase I/II study in glaucoma filtration surgery expected to commence
shortly
- Two drug candidates enter pre-clinical development:
- Anti-IL-12 for autoimmune and inflammatory diseases
- Anti-TGFbeta1 for systemic fibrosis and dermal scarring
- European patent issued covering the use of all antagonists against the
TGFbeta cytokine family for the prevention of fibrosis, to which CAT has an
exclusive licence
- Collaborations signed with ICOS and Progenitor widening CAT's potential
drug target base
- Participation in TNT programme (with Techniclone) curtailed
- Agreement with Dyax clarifies patent position with regard to the US market
- Staff numbers currently over 130 (a 30% increase during the last six
months)
- Operating cash outflow in six months (excluding revenue) of #4.8 million
(1997: #4.0 million)
- Current gross rate of cash spend (excluding revenue and interest income)
approximately #1.2 million per month
Professor Peter Garland, Chairman of CAT, commented:
"Significant progress has been made in all areas of activity needed to deliver
CAT's business strategy - to build one of the broadest clinical pipelines in
the sector, managing risk by both the breadth of this portfolio and by
partnership. Notably, our current clinical programmes in rheumatoid arthritis
(where over 1,000 doses have now been given to patients) and fibrosis continue
to proceed to plan, the deals with ICOS and Progenitor and the advancement of
additional programmes into pre-clinical development will all contribute to
CAT's product pipeline."
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DELIVERING CAT'S BUSINESS STRATEGY
CAT believes the major long term value to shareholders will come from the
fulfilment of its strategy to capitalise on the power and breadth of its
technology platforms to build a diverse portfolio of human monoclonal
antibody-based therapeutic products. From the year 2000 onwards it is our
stated objective to initiate 3 to 4 new clinical programmes each year.
Achievement of this challenging objective would result in one of the broadest
product portfolios in the sector. In effect this business model converts
CAT's broadly applicable technology platform into a broad portfolio of product
candidates in clinical trials and, with time, on the market. As well as
building a significant realisable asset base, this strategy manages risk by
both portfolio and partnership approaches.
To realise this plan fully CAT has been focusing on building and demonstrating
its capabilities in the following key areas:
- Maintaining and developing technology strength
- Sufficient targets against which to develop drugs
- The ability to develop potent drug candidates
- The ability to conduct pre-clinical and clinical development
- Building partnerships
- Resources and management
Since listing in 1997, CAT has made significant progress in all the key areas
required to realise this plan. Notable in the last six months has been the
progress of the two clinical programmes and the deals with ICOS and Progenitor
which, along with CAT's development of its ProAb(TM) and ProxiMol(TM)
functional genomics platforms, have significantly enhanced the number of
proprietary potential drug targets available to CAT. The continued movement
of commercially attractive product candidates into the manufacturing and
pre-clinical development phase underlines the effectiveness of CAT's product
development capabilities.
PRODUCT PIPELINE
CAT continues to build its portfolio of clinical development programmes, two
of which are already underway in the fields of inflammation and fibrosis. Two
further programmes have progressed to the pre-clinical phase, extending CAT's
position in fibrosis and inflammation/autoimmune diseases.
Summary of clinical and pre-clinical programmes
Development Phase Monoclonal antibody Disease target Status
----------------- ------------------- ------------------- --------------------
Clinical Human anti-TNFalpha Rheumatoid More than 1,000
arthritis doses administered
in Phase I/IIa
trials. Further
Phase II trials
beginning.
----------------- ------------------- ------------------- --------------------
Human anti- Fibrosis after First dose level
TGFbeta2 retinal detachment completed in Phase
I/IIa trials
----------------- ------------------- ------------------- --------------------
Pre-clinical Human anti- Glaucoma filtration Phase I/IIa trials
TGFbeta2 surgery on target to start
mid-98
Human anti- Systemic fibrosis Entered pre-
TGFbeta1 and dermal scarring clinical phase.
Clinical starts
planned for 1999
Human anti-IL-12 Inflammation/ Entered pre-
Autoimmune diseases clinical phase.
Clinical starts
planned for 1999.
TNT (Techniclone) Cancer CAT ceased funding
----------------- ------------------- ------------------- --------------------
Antibody Engines 7 active antibody Including New engines started
engines inflammation, (including for ICOS
allergy, cancer target)
and obesity
----------------- ------------------- ------------------- --------------------
INFLAMATION
Anti-TNFalpha
Phase I/IIa clinical studies were initiated by BASF in 1997 for the human
monoclonal anti-TNFalpha antibody developed in conjunction with CAT. TNFalpha
is a pro-inflammatory cytokine which increases tissue damage in inflammatory
diseases such as rheumatoid arthritis and Crohn's disease. Rheumatoid
arthritis affects an estimated 2% of the population of North America and
Western Europe. CAT estimates that up to one million of these patients could
benefit from treatment with this product.
Enrolment of the planned patients into the first European phase I clinical
trial in rheumatoid arthritis has been completed. Over 1,000 doses of the
anti-TNFalpha antibody have now been administered and the summary results of
the study are expected to be released at the American College of Rheumatology
meeting in November 1998. BASF Pharma has received approval from the FDA to
commence clinical studies in the US. These trials are expected to begin
shortly. BASF Pharma is committed to initiate phase II trials in rheumatoid
arthritis in Europe shortly.
Anti-IL-12
Our partners Genetics Institute and BASF Pharma have decided to begin the
pre-clinical development of the anti-IL-12 human antibody (J695) developed in
collaboration with CAT. Further development and marketing of J695 is the
responsibility of GI and BASF Pharma. CAT will receive clinical milestone
payments, and royalties should the product candidate be marketed. Initial
clinical trials are expected to begin in 1999. Anti-IL-12 antibodies could
have application in a number of severe autoimmune and inflammatory diseases.
Dr Bob Kamen, President of BASF Bioresearch, commented:
"We have initiated two programmes with CAT designed to isolate high affinity
anti-cytokine drug candidate human antibodies. With the formal approval to
move J695 into the pre-clinical development stage both programmes have
resulted in potent drug candidates that are either in clinical trials or that
we intend to take into clinical trials"
FIBROSIS
The TGFbeta family of cytokines is a major factor in the initiation of
fibrosis. CAT has an exclusive licence to a European patent issued in 1997
which covers the use of antagonists (including, but importantly not restricted
to, antibodies) against the TGFbeta family of cytokines for the prevention of
fibrosis. CAT has developed two human monoclonal antibodies with application
in the prevention of fibrosis.
Anti-TGFbeta2
CAT's antibody directed against TGFbeta2, aimed at preventing fibrosis in the
eye, began Phase I/IIa clinical studies for the prevention of proliferative
vitreo retinopathy (PVR) in November 1997. The first dose level has been
completed with no safety concerns. PVR is characterised by the formation of
fibrous tissue in, and in front of the retina, following trauma or retinal
detachment or in the late stages of diabetic retinopathy. PVR causes the
retina to be pulled from its attachment with resulting loss of vision or
blindness. Results with this antibody demonstrating efficacy in an in vitro
model of PVR were presented at the Association for Research into Vision and
Ophthalmology (ARVO) meeting in the US earlier this month.
The anti-TGFbeta2 antibody also has significant potential in preventing
fibrosis following glaucoma filtration surgery. Glaucoma is characterised by
raised intra-ocular pressure which jeopardises eyesight. It is estimated to
affect six million people in North America and Europe. A conservative
estimate is that at least 250,000 glaucoma filtration operations per year in
the US and Western Europe could benefit from this antibody since fibrosis is
the main cause of failure of surgery. CAT's anti-TGFbeta2 antibody thus has
potential to increase the number of operations performed each year by
improving the success rate. Phase I/IIa trials for this indication are
expected to begin shortly.
Anti-TGFbeta1
TGFbeta1 has been associated with both scarring in the skin and fibrosis
within internal organs. This can give rise to conditions such as pulmonary
fibrosis and cirrhosis of the liver. CAT has engineered a human anti-TGFbeta1
antibody with the potential to prevent scarring and tissue fibrosis, thereby
reducing the risk of organ failure. A conservative estimate is that three
million patients in North America and Western Europe alone could benefit from
such anti-fibrotic/anti-scarring treatment. This programme has progressed into
pre-clinical development, placing it in line to enter the clinic in late 1999.
CANCER
Techniclone (CAT's joint venture partner in Tumour Necrosis Therapy - TNT)
recently announced the start of Phase I/IIa trials for the chimaeric TNT
antibody for the treatment of malignant brain tumours. Techniclone desires
rapidly to expand the clinical programmes for TNT to include other trials for
additional cancer disease indications. Taking into account other
opportunities available to it, CAT has decided not to co-fund any of the TNT
clinical programmes (including both the chimaeric and human antibodies.)
However, CAT retains an economic interest in the programme with royalty income
potential should products be marketed in the future.
CORPORATE COLLABORATIONS
In addition to CAT's ongoing corporate collaborations with Pfizer, Eli Lilly,
BASF, GI and Mitsubishi, CAT entered into new agreements in the last six
months with ICOS and Progenitor.
CAT's technology platforms have the capacity to validate large numbers of
candidate targets in order to maintain a healthy antibody pipeline. The total
pool of targets available to CAT has been considerably strengthened through
the deals with ICOS and Progenitor.
The collaborative agreement with ICOS will lead to joint development of
antibody-based therapeutics to treat conditions such as inflammation, cancer
and allergy. Intellectual property rights to six initial targets are provided
by ICOS whilst CAT will contribute its antibody engineering expertise to
validate these targets and to develop therapeutic candidates for specific
diseases. The collaboration will also be used to discover novel associated
drug targets, principally using CAT's ProxiMol(TM) platform.
The broad-based collaboration with Progenitor will allow both companies to
accelerate their respective product development programmes by sharing each
other's technology strengths. Under the deal, CAT will have access to a
diverse and extensive portfolio of molecular targets from Progenitor's gene
discovery programmes in asthma, inflammation, hematopoiesis (blood cell
formation), and angiogenesis (blood vessel formation) and will have the first
right to develop antibody-based products.
The deal includes rights to the leptin receptor, with possible application in
obesity and other metabolic and haematological disorders and Del-1, a blood
vessel growth factor and a target for cancer therapy and vascular disorders.
In return, CAT will use its ProAb(TM) and ProxiMol(TM) technologies to
develop target-specific antibodies for Progenitor and for functional genomics
applications.
PEOPLE AND FACILITIES
In March 1998, Alistair Cumming joined the Board of CAT as a non-executive
director. Until last year Mr Cumming was Chief Operating Officer for British
Airways.
During the six months ended 31 March 1998 the Group has continued to recruit
high-calibre personnel. Staff numbers currently stand at 133. It is
anticipated that this figure will have reached 150 by the end of the current
financial year.
In response to increased R&D activity, we have recently taken out a lease on
23,000 sq. ft of additional space in Melbourn. This is currently being
commissioned for office and laboratory use, in particular to accommodate a
significant investment in automation and development processes.
INTELLECTUAL PROPERTY
In addition to the issue of the anti-TGFbeta2 antagonist patent mentioned
above, CAT recently signed an agreement with Dyax which serves to clarify its
intellectual property position in phage display with respect to research,
development and commercialisation of products on a worldwide basis.
FINANCIAL
CAT made a loss for the six months ended 31 March 1998 of #2.97 million (1997:
#6.41 million). Operating cash outflow for the period was #3.85 million
(1997: #3.69 million) and at 31 March 1998 the Group held cash and liquid
resources of #40.91 million (1997: #48.16 million).
The major source of income during the period was the second instalment of a
licence fee from Eli Lilly under the agreement signed in December 1996. The
profile of revenues received by CAT continues to be irregular as most derive
from licence, option and milestone payments - the timing of which tends to be
uncertain.
Operating costs for the period amounted to #5.44 million compared to #3.99
million for the six months to 31 March 1997 (excluding the #2.97 million cost
of intellectual property acquired from the Medical Research Council in return
for the issue of shares in January 1997) and #4.28 million for the six months
to 30 September 1997.
Six months Six months Six months
ended 31 ended 30 ended 31
March 98 Sept. 97 March 97
# million # million # million
Research & development 4.51 3.49 3.21
General & administration 0.93 0.79 0.78
----- ----- -----
Total 5.44 4.28 3.99
The increase in the cost base for the six months reflects the on-going
investment in staff as well as the increasing levels of pre-clinical and
clinical activity being carried out by CAT.
Interest receivable during the six months ended 31 March 1998 was #1.57
million compared to #1.50 million for the six months ended 30 September 1997.
This reflects an increase in returns due to higher interest rates, offset by
the decline in cash balances.
Capital expenditure during the period was #0.96 million, principally on
laboratory equipment. This figure is anticipated to rise significantly over
the next six months with the addition of further capabilities and the fitting
out of additional premises.
Operating cash outflow, excluding revenues, for the six months ended 31 March
1998 was #4.80 million compared to #3.96 million for the six months ended 31
March 1997 and #4.47 million for the six months ended 31 September 1997.
CAT's current monthly rate of gross cash spend (excluding revenues and
interest income), is approximately #1.2 million, It is anticipated that the
annual cash spend for the full year to September 1998 (excluding revenues)
will be within the #18 million estimated in December 1997.
------------------------------------------------------------------------------
CONSOLIDATED PROFIT AND LOSS
(Unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept.
1998 1997 1997
#'000 #'000 #'000
Turnover 945 265 1,134
Direct costs (42) (13) (51)
------ ------ ------
Gross profit 903 252 1,083
Research and development expenses (4,507) (3,209) (6,693)
MRC intellectual property acquisition - (2,967) (2,967)
General and administration expenses (931) (783) (1,576)
------ ------ ------
Operating loss (4,535) (6,707) (10,153)
Amounts written off investments - (1) (1)
Interest receivable (net) 1,567 301 1,799
------ ------ ------
Loss on ordinary activities
before taxation (2,968) (6,407) (8,355)
Taxation on loss on ordinary activities (4) - -
------ ------ ------
Loss for the financial period (2,972) (6,407) (8,355)
====== ====== ======
Loss per share - basic (pence) 13.4 50.5 47.9
Loss per share -fully diluted (pence) 11.9 41.1 41.3
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept.
1998 1997 1997
#'000 #'000 #'000
Loss for the financial period (2,972 (6,407) (8,355)
(Loss) / gain on foreign
exchange translation (2) 22 (2)
------ ------ ------
Total recognised loss (2,974 (6,385) (8,357)
====== ====== ======
CONSOLIDATED BALANCE SHEET
(Unaudited) As at As at As at
31 March 31 March 30 Sept.
1998 1997 1997
#'000 #'000 #'000
Fixed Assets
Tangible fixed assets 2,347 838 1,763
------ ------ ------
Current Assets
Debtors 1,512 774 1,111
Investment in liquid resources 40,753 47,356 44,182
Cash at bank and in hand 155 801 411
------ ------ ------
42,420 48,931 45,704
Creditors
Amounts falling due within one year (2,013) (2,170) (1,817)
------ ------ ------
Net current assets 40,407 46,761 43,887
------ ------ ------
Total assets less current liabilities 42,754 47,599 45,650
Creditors
Amounts falling due after one year (11) (177) (13)
------ ------ ------
Net Assets 42,743 47,422 45,637
====== ====== ======
Capital and Reserves
Called-up share capital 2,220 2,214 2,215
Share premium account 42,840 42,791 42,785
Other reserve 13,403 13,368 13,383
Profit and loss account (15,720) (10,951) (12,746)
------ ------ ------
Shareholders' funds - all equity 42,743 47,422 45,637
====== ====== ======
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited) Six months Six months Year
ended ended ended
31 March 31 March 30 Sept.
1998 1997 1997
#'000 #'000 #'000
Operating loss (4,535) (6,707) (10,153)
Depreciation in the period 370 223 466
Profit on disposal of fixed assets (6) - (8)
Non cash considerations - 3,007 3,007
Decrease / (increase) in debtors 111 (275) (307)
Increase / (decrease) in creditors 206 58 (299)
------ ------ ------
Net cash outflow from operations (3,854) (3,694) (7,294)
====== ====== ======
Returns on investments
and servicing of finance
Interest received 1,055 303 1,464
Interest paid (2) (3) (6)
------ ------ ------
1,053 300 1,458
------ ------ ------
Taxation
UK corporation tax recovered - - 36
------ ------ ------
Capital expenditure
and financial investment
Purchase of fixed assets (960) (257) (1,449)
Sale of fixed assets 8 - 32
------ ------ ------
(952) (257) (1,417)
Net cash outflow before management
of liquid resources and financing (3,753) (3,651) (7,217)
====== ====== ======
Management of liquid resources 3,429 (38,856) (35,682)
------ ------ ------
Financing
Issue of ordinary shares 80 42,243 42,253
Capital element of finance lease payments (11) (6) (13)
------ ------ ------
69 42,237 42,240
------ ------ ------
Decrease in cash (255) (270) (659)
====== ====== ======
Basis of preparation
These interim financial statements have been prepared in accordance with the
policies set out in the statutory financial statements for the year ended 30
September 1997.
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 1998 and 31 March 1997 have
not been audited. The results for the year ended 30 September 1997 have been
extracted from the statutory financial statements, which have been filed with
the Registrar of Companies and on which the auditors reported without
qualification.
Major non-cash transaction
In January 1997 the group acquired certain intellectual property rights from
the Medical Research Council for #2,967,000. The consideration was paid by
the issue of shares. In accordance with the group's accounting policy on
research and development expenditure, the cost of acquisition was written off
in the profit and loss account.
Loss per share
The loss per ordinary share and fully diluted loss per share are based on the
following, for the six months ended 31 March 1998, the six months ended 31
March 1997 and the year ended 30 September 1997 respectively. Losses of
#2,967,000, #6,407,000 and #8,355,000. For the basic earnings per share,
weighted average numbers of shares in issue of 22,169,842, 12,688,707 and
17,427,833. For the fully diluted earnings per share, weighted average
numbers of shares of 24,973,896, 15,596,505 and 20,221,636.
The company currently has 22,199,633 ordinary shares in issue and a total of
2,875,515 under option.
Investment in liquid resources
Liquid resources comprise negotiable securities and term deposits.
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For further information contact:
Cambridge Antibody Technology
David Chiswell, Chief Executive Officer Tel: +44 (0) 1763 263233
John Aston, Finance Director
City/Financial Enquiries
Nicola How, HCC.De Facto Financial Tel: +44 (0) 171 957 4600
Scientific/Trade Enquiries
Andrew Worsfold, HCC.De Facto Cambridge Tel: +44 (0) 1223 518093
END
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