RNS No 9628h
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
23rd November 1998
PRELIMINARY RESULTS 98
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP plc
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1998
HIGHLIGHTS
- Impressive Phase I/IIa clinical data with D2E7, CAT/BASF human anti-TNFalpha
antibody in rheumatoid arthritis
- Human anti-TGFbeta2 Phase I/IIa clinical trials in glaucoma surgery
initiated and on schedule but PVR clinical trial programme delayed
- Two drug candidates entered pre-clinical development with clinical trials in
fibrosis (anti-TGFbeta1) and autoimmunity/inflammation (anti-IL-12) due to
commence in 1999
- Powerful extension to platform technology and intellectual property through
the purchase of Aptein Inc.
- CAT libraries now contain 100 billion human antibodies
- Increased breadth of potential drug target base through significant
collaborations with ICOS and Progenitor
Professor Peter Garland, CAT's Chairman, said:
"I am pleased to report a year of solid progress and am confident that CAT
will continue to mature and develop a strong and broad product portfolio,
thereby successfully realising, over time, the true value inherent in the
Company."
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CAMBRIDGE ANTIBODY TECHNOLOGY GROUP plc
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1998
STATEMENT BY THE CHAIRMAN
CAT's progress in its first full year, since becoming a public company in
March 1997, can be assessed against the plans given at that time. I am
pleased to report a year of solid progress towards the delivery of those
plans.
CAT's strategy continues to centre on a balance of collaboration, in-house
development, and technological advance. As part of the pharmaceutical/life
sciences industry, we are well aware of the opportunities and challenges
arising from massive sequencing of the human genome. This in turn is expected
to generate a proliferation of proteins that are targets for pharmaceutical
intervention. Rights to those new targets will clearly be of major commercial
significance and competition for them will be intense.
Identification of such targets would be greatly assisted by the development of
high throughput screening methods for selecting those genes whose predicted
products are most likely to be pharmacological targets. CAT's ProAb(TM) and
ProxiMol(R) technologies, do exactly that. Both require combinatorial
antibody libraries. CAT can therefore make major contributions,
industry-wide, to unlocking the value of genomic databases. That is our
intent: we aim to enter major collaborations, and to secure rights to novel
targets for antibody therapy. In the last year we signed two such
collaborations with ICOS and Progenitor.
Our technology platforms were further strengthened during the year by the
acquisition of the US company Aptein Inc. bringing sole rights to the
controlling patents for polysome display. Together with phage display this
new technology has the potential to enhance significantly CAT's antibody
libraries.
Of particular note during the year has been the progress achieved in the drug
development pipeline with the initiation of clinical trials with 6B1 in
glaucoma drainage surgery, the recently reported clinical studies with D2E7 in
rheumatoid arthritis and the pre-clinical development of the human antibodies
SL15 (anti-TGFbeta1) and J695 (anti-IL-12) ahead of clinical trials during the
next year in fibrosis and autoimmunity/inflammation respectively. The
demonstration of clinically significant benefit in the early studies of D2E7,
the first product developed by CAT to enter clinical trials, is particularly
encouraging and a demonstration of the power of our platform technology to
derive drug candidates.
In a challenging business environment I continually take comfort from the high
level of professional expertise of CAT's Board. In March 1998 the Board was
strengthened by the addition of Alistair Cumming. He brings valuable
commercial UK plc experience and the ever insistent demand of a distinguished
engineer that technology should both work and be turned to profit. Stuart
Weisbrod resigned at the end of the financial year, due to pressure of other
commitments. His contributions have been much appreciated. We are currently
seeking further non-executive directors of similar calibre.
The Board of CAT would like to thank all Group employees. The last year has
been one of hard work and without exception our staff have shown a high degree
of commitment and enthusiasm in their work and in the future of CAT. We are
grateful too for the contribution of CAT's Scientific Advisory Board.
I am confident that CAT will continue to mature and develop a strong and broad
product portfolio, thereby successfully realising, over time, the true value
inherent in the Company.
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PARTNERING STRATEGY
CAT's strategy is to exploit our technology platforms in partnership. One of
the key needs for CAT is to have access to a large number of potential
targets. CAT's ProAb(TM) and ProxiMol(R) technologies have the ability to
identify potential new drug targets. In addition to exploiting these
functional genomics platforms for its own activities CAT is also using them as
an asset to attract partners who can provide both short term and long term
revenues and access to further targets for drug development, thus contributing
to a broad development pipeline. This has been evidenced during the year with
new collaborations with ICOS and with Progenitor, both of which have given CAT
access to key targets in areas such as inflammation, cancer, asthma,
hematopoiesis (blood cell formation), and angiogenesis (blood vessel
formation). In return, CAT provides access to its technologies and will
develop target-specific antibodies which the companies will jointly use to
evaluate and validate the therapeutic significance of the respective targets.
CAT continues to seek further such collaborations which can contribute to
short term revenues. Long term revenue generation will come from the
commercialisation with partners of CAT's therapeutic antibody products.
DRUG DEVELOPMENT PIPELINE
CAT's objective is to build a diverse development pipeline of human antibody
based drugs to maximise the value realised from our world leading technology
platforms whilst minimising the effects of the inevitable failures and the
risk of concentrating on a single lead product.
CAT's development activity focuses resources on the "value adding" stages from
target identification through to clinical demonstration of efficacy for an
antibody based drug. In general CAT will take programmes no further than
Phase II clinical trials before seeking partners for further clinical trials
and to gain marketing approval. CAT currently has two antibodies in three
ongoing clinical programmes with a further two scheduled to start in 1999,
building towards our objective to initiate three to four clinical programmes
per year from the year 2000.
Drug
candidate Target Disease Stage
----------- ----------- ------------------------------- ----------------
D2E7 TNFalpha Rheumatoid arthritis Phase II
6B1 TGFbeta2 Proliferative vitreoretinopathy Phase I/IIa
6B1 TGFbeta2 Glaucoma surgery Phase I/IIa
SL15 TGFbeta1 Local fibrosis Pre-clinical
SL15 TGFbeta1 Systemic fibrosis Pre-clinical
J695 IL-12 Autoimmunity/ inflammation Pre-clinical
Receptor Allergy Antibody Engine(TM)
Receptor Inflammation Antibody Engine(TM)
Cell marker Cancer Antibody Engine(TM)
Cell marker Morbid obesity Antibody Engine(TM)
Chemokine Asthma Antibody Engine(TM)
Receptor Inflammation Antibody Engine(TM)
As reported with the interim results, CAT took the decision during the year
not to co-fund any of the TNT clinical programmes arising from its joint
venture with Techniclone
In October 1998 CAT's cellular pathology laboratory was awarded GLP (Good
Laboratory Practice) status following inspection by the Medicines Control
Agency. This enables CAT to carry out certain pre-clinical projects in-house
to quality standards required for Regulatory submissions, thus saving on
external costs and giving more control over time and quality of data.
(Antibody Engine(TM) describes the activities which generate therapeutic
antibody candidates against identified disease targets. The most promising
candidates from each Antibody Engine(TM) will then progress to pre-clinical
and subsequently to clinical development.)
D2E7 (anti-TNFalpha human monoclonal antibody)
TNFalpha is a major pro-inflammatory cytokine which perpetuates inflammation
and eventual joint destruction in rheumatoid arthritis (RA).
Results from Phase I/IIa clinical trials presented at the American College of
Rheumatology meeting, in November 1998, reflect the substantial clinical
experience already gained with D2E7 for the treatment of RA. BASF Pharma
initiated these trials in April 1997. Over 140 patients participated in these
studies (a random, double-blind, placebo controlled single dose intravenous
study, followed by an open-label chronic intravenous dosing study and a
double-blind, placebo controlled, weekly subcutaneous dosing study.)
Data obtained from these trials show that D2E7 appears to be safe and well
tolerated and demonstrated a clinically significant effect in up to 80% of the
patients treated. A clear dose response was observed. The results are an
important validation of CAT's ability to develop human antibody drugs. BASF
Pharma has further Phase I and II studies ongoing in the USA and Europe.
6B1 (anti-TGFbeta2 human monoclonal antibody)
TGFbeta is a family of related cytokines, excessive activity of which is
associated with organ fibrosis and post-surgical scarring. TGFbeta2 is the
isoform believed to be responsible for scarring in and around the eye.
In June 1998, CAT received regulatory approval to begin trials with 6B1 as a
treatment to prevent scarring of the eye at the operation site following
glaucoma surgery. Scarring is the main cause of failure of such surgery.
Recruitment of patients for the double blind, placebo controlled Phase I/IIa
study is on plan and expected to be complete during early 1999. The three
month double-blind follow up phase of the trial will be completed early in the
second quarter of 1999, allowing the presentation of unblinded results in the
middle of the year.
6B1 is also being used in a Phase I/IIa study in the treatment of
Proliferative Vitreoretinopathy (PVR), a condition which can occur following
retinal detachment and is the factor most responsible for failure in surgery
undertaken to reattach the retina. The study commenced in September 1997 at
three major UK opthalmology centres. A total of 16 patients have been treated
(11 active, 5 placebo control). An unusual observation has been made
post-operatively on the retina of 3 of the 11 actively treated patients. This
observation, which is apparently without clinical consequence for the
patients, requires further study over time in order to evaluate its
significance. CAT has, with the agreement of the investigators, suspended
patient recruitment into this study. The patients enrolled to date will be
followed up, as planned in the protocol, for a year following treatment, at
which time a decision will be taken whether further clinical trials are
warranted. This observation has not affected the glaucoma surgery study
mentioned above.
SL15 (anti-TGFbeta1 human monoclonal antibody)
TGFbeta1 is the isoform of TGFbeta family associated with fibrosis or scarring
in the skin and most internal organs and tissues.
CAT has engineered a potent anti-TGFb1 human monoclonal antibody with the
potential to prevent scarring and tissue fibrosis, thereby reducing the risk
of organ failure. A conservative estimate is that at least three million
patients in North America and Western Europe alone could benefit from such
anti-fibrotic/anti-scarring treatment.
CAT's anti-TGFb1 monoclonal antibody progressed into the pre-clinical phase of
development during the first part of 1998. Pre-clinical studies are
progressing as planned, placing it in line for regulatory approval to enter
its initial clinical trial in late 1999.
J695 (anti-IL-12 human monoclonal antibody)
IL-12 is a potent pro-inflammatory molecule associated with many severe
autoimmune and inflammatory disorders.
In collaboration with BASF Pharma and Genetics Institute CAT has developed a
high potency anti-IL-12 human antibody (J695) which is currently in
pre-clinical development. BASF Pharma and Genetics Institute are responsible
for the development and commercialisation of the antibody and for clinical
trials. 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.
Potential drug candidates
Plans are well advanced to bring more drug candidates into pre-clinical
development to build the pipeline in the year 2000 and beyond.
The total pool of targets available to CAT has been strengthened during the
year through collaborative deals with ICOS and Progenitor. Targets arising
from these collaborations, such as del-1 and the leptin receptor from
Progenitor, offer the potential for CAT to develop therapeutic candidates in
the broad fields of cancer, haematopoiesis and angiogenesis. Validation of a
number of these targets is advancing and one of the targets provided by ICOS
has already been progressed through CAT's Antibody Engine(TM).
FINANCIAL REVIEW
Net cash outflow for the financial year ended 30 September 1998 was #10.0
million (1997: #7.2 million) a 39% increase on 1997 levels. Cash at the year
end was #34.8 million (1997: #44.6 million). CAT made a loss for the
financial year of #7.0 million (1997: #8.4 million, after intellectual
property acquisition costs).
Revenues in the year totalled #1.4 million (1997: #1.1 million.) The profile
of revenues is irregular due to the nature of CAT's business with the exact
timing of milestone payments and licence fees being uncertain. The major
source of income during the financial year has been the second instalment of a
licence fee from Eli Lilly.
Operating costs were #11.2 million, (1997: #8.3 million, excluding
intellectual property acquisition.) The rise over the previous financial year
largely reflects the increased scale of our activities, staff numbers having
risen over the year from 98 to 139. Over the next financial year it is
anticipated that staff costs will show a more modest increase as staff numbers
level out at around 160.
Capital expenditure during the year was #3.9 million (1997: #1.4 million.) A
significant part of this expenditure represents the cost of refurbishment and
fitting out of 23,000 sq. ft. of additional specialist laboratory and office
space at Cambridge House in Melbourn. Cambridge House was occupied earlier
this month. CAT originally acquired a short leasehold interest but since the
year end has acquired the freehold for #0.8 million.
During the year CAT entered into an agreement to purchase a US company, Aptein
Inc. The acquisition was completed in July and gives CAT a powerful
extension to its existing antibody display platform technology. Under the
terms of the agreement CAT purchased the issued share capital and outstanding
share options and warrants of Aptein for a total consideration of up to $11
million satisfied by the issue of up to 2.366 million CAT shares (an implied
CAT share price of 278p.) $6 million of the consideration was satisfied by
the issue of 1.290 million CAT shares on closing. The balance of the
consideration of up to $5 million will be satisfied by the issue of up to
1.076 million CAT shares after Aptein's European patents have been sustained
through opposition or appeal. In accordance with accounting standards the
cost of acquiring this new technology has been capitalised and will be written
off over the lives of the patents concerned.
The #10.0 million cash spend in the period was significantly less than that
estimated in December 1997. This was primarily because of lower spending than
anticipated on pre-clinical development and clinical programmes. It is
anticipated that CAT's cash burn rate will rise modestly over the coming year
- levels are expected to increase to an average of approximately #1.5 million
per month (excluding revenues). At this increased burn rate and excluding
cash from future collaborative deals, CAT has sufficient funds to finance
existing operations for approximately two further years. CAT expects to
require additional financing for the further development of its business.
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CAMBRIDGE ANTIBODY TECHNOLOGY GROUP plc
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1998
CONSOLIDATED PROFIT AND LOSS ACCOUNT
1997 1998
#'000 #'000
Turnover 1,354 1,134
Direct costs (61) (51)
------ ------
Gross profit 1,293 1,083
Research and development expenses (9,125) (6,693)
MRC intellectual property acquisition (non-cash) - (2,967)
General and administration expenses (2,078) (1,576)
------ ------
Operating loss (9,910) (10,153)
Amounts written off investments - (1)
Interest receivable (net) 2,959 1,799
------ ------
Loss on ordinary activities before taxation (6,951) (8,355)
Taxation on loss on ordinary activities (4) -
------ ------
Loss for the financial year (6,955) (8,355)
------ ------
Loss per share - basic and fully diluted (pence) 31.0p 47.9p
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
1997 1998
#'000 #'000
Loss for the financial year (6,955) (8,355)
Gain/(loss) on foreign exchange translation 1 (2)
------ ------
Total recognised gains and losses relating
to the year (6,954) (8,357)
------ ------
The losses for both years arise from continuing operations
CONSOLIDATED BALANCE SHEET AT 30 SEPTEMBER 1998
1997 1998
#'000 #'000
Fixed assets
Intangible assets 4,576 -
Tangible fixed assets 4,792 1,763
------ ------
9,368 1,763
Current assets
Debtors 1,449 1,111
Investment in liquid resources 34,824 44,182
Cash at bank and in hand 20 411
------ ------
36,293 45,704
Creditors
Amounts falling due within one year (2,194) (1,817)
------ ------
Net current assets 34,099 43,887
------ ------
Total assets less current liabilities 43,467 45,650
Creditors
Amounts falling due after more than one year (9) (13)
------ ------
Net assets 43,458 45,637
------ ------
Capital and reserves
Called-up share capital 2,349 2,215
Share premium account 45,820 42,785
Other reserve 13,339 13,383
Shares to be issued 1,650 -
Profit and loss account (19,700) (12,746)
------ ------
Shareholders' funds - all equity 43,458 45,637
------ ------
CONSOLIDATED CASH FLOW STATEMENT
1997 1998
#'000 #'000
Operating loss (9,910) (10,153)
Depreciation charge 832 466
Amortisation of patents 54 -
Profit on disposal of fixed assets (13) (8)
Non-cash considerations - 3,007
Increase in debtors (54) (307)
Increase/(decrease) in creditors 343 (299)
------ ------
Net cash outflow from operating activities (8,748) (7,294)
Returns on investments and servicing of finance
Interest received 2,694 1,464
Interest paid (3) (6)
Taxation
Overseas taxation paid (4) -
UK corporation tax recovered - 36
Capital expenditure and financial investment
Purchase of tangible fixed assets (3,874) (1,449)
Sale of tangible fixed assets 26 32
Acquisitions (net of cash and cash
equivalents acquired) (110) -
------ ------
Net cash outflow before management of liquid
resources and financing (10,019) (7,217)
Management of liquid resources
Decrease in term deposits 1,302 4,909
Net sale/(purchase) of securities 8,056 (40,591)
Financing
Issue of ordinary share capital 298 42,253
Capital elements of finance lease rental payments (22) (13)
------ ------
Decrease in cash (385) (659)
------ ------
NOTES TO THE FINANCIAL INFORMATION
Accounting policies
This financial information has been prepared on a basis consistent with the
accounting policies set out in the annual report for the year ended 30
September 1997, except as noted below.
Loss per share
Financial Reporting Standard Number 14 - Earnings Per Share, provides that
potentially dilutive shares are only included in the calculation of fully
diluted earnings per share if their issue would increase net loss per share.
The Group's basic and fully diluted earnings per share are therefore equal.
The comparative figures have been adjusted accordingly.
Loss per ordinary share (basic and fully diluted) is based on the loss for the
financial year of #6,955,000 (1997: #8,355,000) and a weighted average number
of ordinary shares of 22,457,778 (1997: 17,427,833).
Analysis and reconciliation of net funds
1 October Cash Exchange 30 September
1997 flow movement 1998
#'000 #'000 #'000 #'000
Cash at bank 411 (385) (6) 20
Liquid resources 44,182 (9,358) - 34,824
Finance leases (35) 22 - (13)
------ ------ ------ ------
Net funds 44,558 (9,721) (6) 34,831
------ ------ ------ ------
1997 1998
#'000 #'000
Decrease in cash in the year (385) (659)
Cash (inflow)/outflow from movement in
liquid resources (9,358) 35,682
Cash outflow from decrease in lease financing 22 13
Change in net funds resulting from cash flows (9,721) 35,036
------ ------
Waiver of loan - 175
Exchange movement (6) (3)
------ ------
Movement in net funds in year (9,727) 35,208
Net funds at 1 October 1997 44,558 9,350
------ ------
Net funds at 30 September 1998 34,831 44,558
------ ------
Reconciliation of movements in group shareholders' funds
1997 1998
#'000 #'000
Loss for the financial year (6,955) (8,355)
Other recognised gains and losses relating
to the year 1 (2)
------ ------
(6,954) (8,357)
New shares issued 3,059 45,260
Adjustment to listing expenses 66 -
Shares to be issued - deferred consideration 1,650 -
Adjustment to goodwill - 177
------ ------
Net addition to shareholders' funds (2,179) 37,080
Opening shareholders' funds 45,637 8,557
------ ------
Closing shareholders' funds 43,458 45,637
------ ------
Financial Statements
The preceding information does not constitute the company's statutory
financial statements for the year ended 30 September 1998 within the meaning
of section 240 of the Companies Act 1985 but is derived from those financial
statements. The statutory financial statements for the company for the year
ended 30 September 1998 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.
The annual report and financial statements for the year ended 30 September
1998 will be posted to shareholders on 5 January 1999 and will be available
shortly thereafter from:
The Company Secretary FT Annual Reports Service
Cambridge Antibody Technology Group plc telephone 0181 770 0770
The Science Park www.icbinc.com/cgi-bin/ft.pl
Melbourn
Cambridgeshire
SG8 6JJ telephone 01763 263233
This preliminary announcement was approved by the Board on 20 November 1998.
Notes
CAT is a UK biotechnology company using its proprietary technologies in fully
human monoclonal antibodies for drug discovery and drug development. Based in
Melbourn, 10 miles south of Cambridge, England, CAT currently employs over 140
people. In March 1997, CAT completed its initial public offering and listing
on the London Stock Exchange, raising approximately #41 million.
CAT has a world-leading platform technology for rapidly isolating fully human
monoclonal antibodies using phage display systems. CAT has an extensive phage
display 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 to aid the discovery of new
drug leads using functional genomics. The first two antibody products it
developed started clinical trials in 1997, in inflammation and fibrosis.
CAT has a number of license and collaborative agreements in place with
pharmaceutical and biotechnology companies including: Eli Lilly, Pfizer, BASF
Pharma, Genentech, ICOS Corporation, Genetics Institute/BASF Pharma,
Mitsubishi Chemical, Progenitor and Obesys.
Web site: www.catplc.co.uk
For further information contact:
Cambridge Antibody Technology Tel: +44 (0) 1763 263233
David Chiswell, Chief Executive Officer
John Aston, Finance Director
HCC.De Facto Tel: +44 (0) 171 496 3300
City/Financial, Nicola How
Trade/Scientific, Andrew Worsfold
END
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