RNS Number:9429K
Cambridge Antibody Tech Group PLC
22 May 2000
For Further Information Contact:
Cambridge Antibody Technology
Tel: +44 (0) 1763 263233
Dr David Chiswell, Chief Executive Officer
John Aston, Finance Director
Rowena Gardner, Communications Manager
HCC De Facto (Europe)
Tel: +44 (0) 20 7496 3300
Nikul Odedra (trade)
Sue Charles (city/financial)
BMC Communications/The Trout Group (USA)
Tel: +1 212 477 9007
Brad Miles, ext 17 (media)
Jonathan Fassberg, ext.16 (investors)
CAMBRIDGE ANTIBODY TECHNOLOGY
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2000
Highlights
Wide ranging strategic alliance signed with Searle in December 1999
Broadening of the partnership with Human Genome Sciences - a major alliance,
including co-development rights, signed in February 2000, just six months
after the initial collaboration
Phase III clinical trials initiated by BASF Pharma for D2E7, a human anti-TNFa
monoclonal antibody for rheumatoid arthritis, isolated and optimised by CAT in
collaboration with BASF Pharma
Good phase I/IIa one-year results for CAT-152, a human monoclonal antibody
against TGFb2, now in phase II clinical trials as a potential treatment to
prevent post-operative scarring in patients undergoing surgery for glaucoma
A new programme - CAT-213, an anti-eotaxin human monoclonal antibody, has
entered pre-clinical development as a potential treatment for allergic
disorders
Loss for the six months ended 31 March 2000 of #2.1 million
Successful equity financing completed in April, raising #93m before expenses
Pro-forma cash and liquid resources at 31 March 2000 (adjusted for proceeds of
equity financing and HGS subscription): #160.7 million
Professor Peter Garland, Chairman of Cambridge Antibody Technology, commented:
"In the first six months of the year CAT has achieved significant commercial
and clinical milestones, and substantially strengthened its financial
position, providing a strong platform on which to achieve future growth."
CAMBRIDGE ANTIBODY TECHNOLOGY
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2000
OVERVIEW
The six months to the end of March 2000 has been one of the most rewarding and
exciting for the company. During the period CAT completed two significant
strategic alliances - with Searle and Human Genome Sciences (HGS), both of
which demonstrated the value relationship between platform technologies and
the clinical potential of monoclonal antibodies as therapeutic products.
Importantly, the HGS alliance gives CAT the opportunity to develop
antibody-based drugs against genomics-derived drug targets from HGS.
Clinical product development programmes continued to make good progress. The
lead programme, D2E7, isolated and optimised by CAT in collaboration with BASF
Pharma and now being developed by BASF Pharma, entered phase III clinical
trials for rheumatoid arthritis. During the period CAT-192 completed phase I
patient recruitment and, immediately post year-end, good phase I/IIa one-year
results for CAT-152, a potential treatment to prevent post-operative scarring
in the eye, were announced. Looking to the future, CAT has begun a new
programme with potential for use in allergic disorders with CAT-213, an
anti-eotaxin antibody, entering pre-clinical development.
During the period, the company has substantially strengthened its financial
base, including raising #93m before expenses from an equity fundraising.
The company is now well positioned, in terms of its financial base, its
technology platform and its clinical programmes, to achieve significant growth
in the future.
STRATEGIC ALLIANCES
In December 1999 CAT announced a multidisciplinary strategic alliance with
Searle, the pharmaceutical business of Monsanto Company, for the development
of fully human monoclonal antibody-based therapeutic drugs across multiple
disease areas, focusing particularly on the field of cancer. This was CATs
largest alliance to date with a headline potential deal size in excess of
US$212 million: Searle invested US$12.5 million in new CAT ordinary shares;
US$14.5 million was committed over three years in research funding; CAT could
receive up to a further US$35 million in license fees, research funding and
technical performance milestones over the potential five-year term of the
research collaboration. There is potential to receive an additional US$150
million in clinical development and regulatory approval milestones as well as
further future revenue from product royalties.
This deal was followed in March 2000 by the announcement of a major alliance
with HGS, dedicated to developing human antibody therapeutics against
genomics-derived disease targets. This represented a significant broadening of
CAT's relationship with HGS, coming just six months after the initial
collaboration. It included the equivalent of US$67 million in up front
funding for CAT - US$55 million being invested in equity, and US$12 million
being committed in licensing and research support fees.
This alliance provides the potential for CAT and HGS to generate a substantial
pipeline of human antibody drugs and gives CAT greater opportunity to
aggressively develop and commercialise its own antibody-based pipeline of
drugs.
PRODUCT PIPELINE
During the six months there has also been significant progress in CAT's
clinical pipeline.
D2E7 (a fully human monoclonal antibody that neutralises TNFa) made positive
progress in the period as a treatment for rheumatoid arthritis. In February
BASF Pharma announced that it had initiated phase III trials of D2E7 and
further phase II clinical data are to be presented at the European League of
Rheumatology meeting (EULAR) in June 2000.
D2E7 is the first fully human monoclonal antibody to enter phase III clinical
trials. Taken together with the three other human monoclonal antibodies
developed with CATs technology also in clinical trials, this development
underlines CATs technology as the leading technology platform in the
development of fully human monoclonal antibodies as drugs.
CAT-152 (a fully human monoclonal antibody against TGFb2) is being developed
by CAT as a treatment to prevent post-operative scarring in patients
undergoing surgery for glaucoma. In May 2000 the one year results from the
Phase I/IIa clinical trial of CAT-152 were announced at the Annual Meeting of
the Association for Research in Vision and Opthalmology (ARVO). Treatment with
CAT-152 was associated with encouraging trends for a reduced need for
intervention and topical treatment and also with a lower intraocular pressure
which could represent evidence of clinically relevant anti-scarring activity,
albeit based on low patient numbers. The patients in this trial are being
followed for a further year. Recruitment to the phase II study, which
commenced in October 1999, is underway and should be complete by the end of
2000. Further trials are expected to commence in early 2001.
J695 is a fully human monoclonal antibody that neutralises Interleukin 12 (a
pro-inflammatory molecule associated with many severe autoimmune disorders)
and continues to progress in clinical development, having entered Phase I
clinical trials, conducted by BASF Pharma and Genetics Institute
(Wyeth-Ayerst), in June 1999.
CAT-192 is a fully human anti-TGFb1 monoclonal antibody that is being
developed by CAT as a potential treatment in a range of scarring and fibrotic
conditions. CAT-192 entered phase I clinical trials in November 1999.
Recruitment and dosing in this phase I study have been completed. Results show
that CAT-192 appears well tolerated, with a prolonged half-life of around 40
days in healthy volunteers. Following these phase I results, the immediate
focus is on systemic injection/disorders. The development programme is on
schedule for patient studies later this year.
CAT-213, a fully human anti-eotaxin monoclonal antibody with potential in the
treatment of allergic disorders, has moved into pre-clinical development.
INTELLECTUAL PROPERTY
During the period CAT has further extended its patent estate in the US with
the granting of a key patent covering its ProxiMol technology.
FINANCING AND OPERATIONS
CAT announced an equity fundraising in March aimed at raising #100 million.
The purpose of the fundraising was to finance CATs continuing operations and
to allow an expansion and acceleration of CATs own development activities. The
offering was structured to allow the marketing of shares to international
investors in the United States and continental Europe. In difficult market
conditions the offering was successfully concluded, albeit that the amount
raised was reduced from the original target of #100 million to #93 million
(before expenses). The Company thanks existing shareholders for their
continued support and commitment and welcomes its new shareholders.
These additional funds will enable the Company to capitalise on its market
leading position, in particular to allow CAT to capture more value by
expanding activities, increasing the breadth of its product pipeline and
gaining greater flexibility in the partnering of programmes.
Following the success of this financing, CAT intends to seek a secondary
listing on the US NASDAQ at the appropriate time.
The Company employed 153 staff as at 31 March 2000. Further recruitment is
underway. The intention is to build staff numbers to approximately 250, with
the greater part of the increase in the next 18 months.
FINANCIAL RESULTS
Net cash inflow before financing for the six months ended 31 March 2000 was
#4.9 million (six months ended 31 March 1999 (H1) outflow #7.7 million; six
months ended 30 September 1999 (H2) #4.1 million outflow). CAT made a loss for
the period of #2.1 million (1999: H1 #6.5 million; H2 #6.2 million). Cash and
liquid resources at 31 March 2000 amounted to #36.5 million (31 March 1999
#27.4 million; 30 September 1999 #23.6 million).
Subsequent to the period end, on 1 April 2000, the Company issued 1,670,000
shares to HGS for #34.7 million in cash, in connection with a collaboration
agreement. In early April, on completion of the equity fund raising referred
to above, 5,010,532 shares were issued to raise #89.5 million net of expenses.
Revenues in the period were #6.4 million (1999: H1 none, H2 #1.8 million).
The profile of revenues is irregular due to the nature of CAT's business
although latterly some collaborations are providing a more regular source of
income. During the period a milestone was received from BASF in relation to
commencement of Phase III trials for D2E7 and significant income generated
from ongoing collaborations with HGS, Wyeth-Ayerst and Searle. Of monies
received during the period from Searle and HGS, a considerable proportion
relates to services to be provided in future periods. Such income has been
deferred and will be recognised as the services are provided.
Operating costs for the period amounted to #8.1 million (1999: H1 #7.6
million; H2 #8.7 million). Operating costs have fluctuated with the incidence
of external development expenditure and staff costs have shown modest
increases in line with staff numbers.
In addition there was an exceptional charge in the period of #0.9 million
(comparative periods: nil) which is a provision for employers National
Insurance on certain options granted in December 1999.
In December 1999 56,000 shares were placed to fund the payment of a liability
otherwise payable by the issue of shares. In January 2000 the Company issued
1,870,837 shares to Monsanto Europe SA for cash of #7.8 million, in connection
with a collaboration agreement. Further shares have been issued during the
period on exercise of share options.
Whilst operating expenses and capital expenditure over the six months were
broadly in line with expectations, the incidence of significant cash receipts,
particularly from Searle and HGS resulted in a net cash inflow for the period.
Over the second half of the year operating expenditure is expected to rise
as the scale of activity is increased. Investment income will be
significantly higher, reflecting the increased level of cash and liquid
resources.
CAMBRIDGE ANTIBODY TECHNOLOGY
Consolidated profit and loss account
(Unaudited)
6mths end 6mths end Yr end
31 March 31 March 30 Sept
2000 1999 1999
#'000 #'000 #'000
Turnover 6,388 - 1,799
Direct costs (249) - (81)
Gross profit 6,139 - 1,718
Research and development expenses (6,642) 6,331) (13,574)
General and administration expenses (1,462) (1,242) (2,684)
National Insurance on share options (885) - -
Operating loss (2,850) (7,573) (14,540)
Interest receivable (net) 749 1,109 1,810
Loss on ordinary activities before taxation (2,101) 6,464) (12,730)
Taxation on loss on ordinary activities - - (1)
Loss for the financial period (2,101) (6,464) (12,731)
Loss per share - basic and fully diluted (pence) 8.0 27.1 52.4
Consolidated statement of total recognised gains and losses
6mths end 6mths end Yr end
31 March 31 March 30 Sept
2000 1999 1999
#'000 #'000 #'000
Loss for the financial period (2,101) (6,464) (12,731)
Loss on foreign exchange translation - (1) (1)
Total recognised loss (2,101) (6,465) (12,732)
CAMBRIDGE ANTIBODY TECHNOLOGY
Consolidated balance sheet
(Unaudited)
As at 31 As at 31 As at 30
Mar Mar Sept
2000 1999 1999
#000 #000 #000
Fixed Assets
Intangible assets 4,635 5,358 4,822
Tangible fixed assets 5,194 5,987 5,837
9,829 11,345 10,659
Current Assets
Debtors 1,555 1,525 894
Investment in liquid resources 36,286 26,858 22,773
Cash at bank and in hand 206 512 849
38,047 28,895 24,516
Creditors
Amounts falling due within one year (6,687) (2,065) (3,275)
Net current assets 31,360 26,830 21,241
Total assets less current liabilities 41,189 38,175 31,900
Creditors
Amounts falling due after more than one year (3,441) - -
Net Assets 37,748 38,175 31,900
Capital and Reserves
Called-up share capital 2,759 2,398 2,528
Share premium account 56,071 45,969 48,465
Other reserve 13,451 13,339 13,339
Shares to be issued - 2,634 -
Profit and loss account (34,533) (26,165) (32,432)
Shareholders' funds - all equity 37,748 38,175 31,900
CAMBRIDGE ANTIBODY TECHNOLOGY
Consolidated cash flow statement
(Unaudited)
6mths end 6mths end Yr end
31 March 31 March 30 Sept
2000 1999 1999
#'000 #'000 #'000
Operating loss (2,850) (7,573) (14,540)
Depreciation in the period 907 727 1,627
Amortisation of patents 187 202 389
Profit on disposal of fixed assets (6) - -
(Increase) / decrease in debtors (558) 143 264
Increase / (decrease) in creditors 6,858 (144) 1,072
Net cash inflow / (outflow) from operations 4,538 6,645) (11,188)
Returns on investments and servicing of finance
Interest received 646 891 2,102
Interest paid - (1) (2)
646 890 2,100
Taxation
Overseas taxation paid - - (1)
Capital expenditure and financial investment
Purchase of fixed assets (289) (1,922) (2,672)
Sale of fixed assets 31 - -
(258) (1,922) (2,672)
Net cash inflow / (outflow) before
management of liquid resources
and financing 4,926 (7,677) (11,761)
Management of liquid resources (13,513) 7,966 12,051
Financing
Issue of ordinary shares 7,949 198 539
Capital element of finance lease payments (9) (2) (4)
7,940 196 535
(Decrease) / increase in cash and cash equivalents (647) 485 825
Notes
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 1999.
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 2000 and 31 March 1999 have
not been audited. The results for the year ended 30 September 1999 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
There was an exceptional charge in the period of #0.9 million (comparative
periods: nil) which is a provision for employers National Insurance on certain
options granted in December 1999. The provision is based on the share price
of the company at the period end and current National Insurance rates and its
size reflects the significant increase in the share price since the date of
grant. The liability will not crystallise until the options are exercised
(they are exercisable from December 2002) and the ultimate liability will be
determined by the market price on exercise.
As the share price at future period ends fluctuates so the liability will
fluctuate, giving rise to further charges or to credits to the profit and loss
account in those periods. A change of 10% in the share price (based on that
at the current period end) would cause the liability to fluctuate by
approximately #103,000.
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 2000, the six months ended 31 March 1999 and
the year ended 30 September 1999 respectively. Losses of #2,101,000,
#6,464,000, and #12,731,000. Weighted average number of shares in issue of
26,285,300, 23,828,470, and 24,314,191. The company currently has 34,275,039
ordinary shares in issue and a total of 2,295,033 ordinary shares under
option.
Creditors
The Groups creditors have increased sharply during the period. This reflects
the significant amounts of income deferred to future periods, the provision
for National Insurance on certain share options and provision for
non-contingent expenses of the Offers incurred up to 31 March 2000.
Notes
Cambridge Antibody Technology (LSE:CAT)
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 around
150 people.
CAT is listed on the London Stock Exchange, having raised #41m in its IPO in
March 1997. An Open Offer and International 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
display antibody library, currently incorporating around 100 billion distinct
antibodies. This library forms the basis for the companys strategy to develop
a portfolio of clinical development programmes and for discovering new drug
leads using functional genomics. Four fully human therapeutic antibodies
developed by CAT are at various stages of clinical trials.
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, Wyeth-Ayerst, Human
Genome Sciences, AstraZeneca and Searle.
END
IR SFEEFUSSSEII
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