RNS Number:7286U
Cambridge Antibody Tech Group PLC
27 November 2000
For further information contact:
Cambridge Antibody Technology
Tel: +44 (0) 1763 263233
David Chiswell, CEO
John Aston, Finance Director
Rowena Gardner, Head of Corporate Communications
HCC De Facto (Europe)
Tel: +44 (0) 20 7496 3300
Nikul Odedra (trade)
Sue Charles (city/financial)
BMC Communications/The Trout Group (USA)
Tel: 001 212 477 9007
Brad Miles, ext 17 (media)
Brandon Lewis, ext.15 (investors)
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP plc
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2000
Highlights
Successful follow on equity financing, raising #93 million before expenses and
providing future financial security and flexibility.
Wide ranging strategic alliance signed with Pharmacia.
Major alliance with HGS including co-development rights to develop human
antibody therapeutics against genomics targets.
Exclusive product license granted to Wyeth-Ayerst to develop human monoclonal
antibody products specific for the amyloid b peptide - widely implicated in
Alzheimer's disease.
Wide ranging strategic partnership with Genzyme for the co-development of
anti-TGFb monoclonal antibodies for non-ophthalmic uses.
Option exercised by HGS to an exclusive development partnership on antibodies
against BLyS, the B-Lymphocyte Stimulator implicated in several autoimmune
diseases and certain cancers.
Phase III clinical trials initiated by BASF Pharma for D2E7, the human
anti-TNFa monoclonal antibody for rheumatoid arthritis isolated and optimised
by CAT in collaboration with BASF Pharma.
J695, a human monoclonal antibody against IL-12, isolated and optimised in a
collaboration between CAT, BASF Pharma and Genetics Institute, entered Phase
II clinical trials with BASF Pharma and Genetics Institute for the treatment
of autoimmune diseases including rheumatoid arthritis.
Good Phase I/IIa one-year results for CAT-152, a human monoclonal antibody
against TGFb2 as a potential treatment to prevent post-operative scarring in
patients undergoing surgery for glaucoma. A multicentre Phase II trial for CAT
is ongoing.
CAT-192, a human anti-TGFb1 monoclonal antibody being developed by CAT as a
potential treatment in a range of scarring and fibrotic conditions, completed
Phase I clinical trials.
A new programme, CAT-213, an anti-eotaxin1 human monoclonal antibody, which is
a potential treatment for allergic disorders, has entered pre-clinical
development.
Professor Peter Garland, CAT's Chairman, said " I am pleased to be able to
report that CAT has made excellent progress during the past year and has
reinforced its position as a world leader in the field of human monoclonal
antibody therapeutics. The clinical programmes of CAT-derived products are
making progress and we have secured further significant collaborations with
major pharmaceutical and genomics companies."
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP plc
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2000
Statement by the Chairman
During the past year CAT has made excellent progress and reinforced its
position as a world leader in the field of human monoclonal antibody
therapeutics. CAT's technologies are now well established and are being been
used by both the Company and its partners to develop a pipeline of novel
medicines. The Company's business is driven from a proprietary platform of
phage display technologies, which includes powerful functional genomics
applications underpinned by strong informatics and efficient process
industrialisation. As understanding of the human genome unfolds, we expect
that CAT's technologies will play a vital role in new drug target discovery,
validation and the development of antibody drugs.
To maximise the commercial opportunities offered by our platform technologies,
CAT has secured a number of high value strategic collaborations with leading
pharmaceutical and biotechnology companies worldwide. During the year we
signed new alliances with Pharmacia, Human Genome Sciences (HGS) and Genzyme.
We are now able to negotiate deals with our partners that allow us to retain
more potential value and, as an indication of partner confidence, all three of
the collaborations signed during the year included an element of equity
investment in CAT. Our alliance with Genzyme is particularly significant since
it is the first of CAT's alliances to include product candidates that CAT has
itself discovered and taken through the pre-clinical stage into clinical
trials.
In addition to product collaborations, CAT has formed research collaborations.
In the year we entered into a partnership with the UK-based proteomics
company, Oxford GlycoSciences, for the development of antibody micro-arrays.
Such collaborations, together with the advancements we continue to make
in-house, will assist our efforts to remain at the forefront of technological
advancement.
During the year we raised #93 million in a follow-on equity financing. In a
volatile sector, we are now in a position to develop our future business
strategies from a base of financial security, giving us improved operational
flexibility.
The four CAT-derived products in clinical trials continue to make progress
and, at the year end, there were more human monoclonal antibody drugs in
clinical development derived by CAT than by any other company. The most
advanced of these is D2E7, a human antibody for rheumatoid arthritis initially
isolated and optimised by CAT in collaboration with BASF Pharma. D2E7 entered
Phase III clinical trials in February and is the first fully human monoclonal
antibody therapeutic product to enter Phase III trials. Phase II clinical
trials have progressed on CAT-152, a potential treatment to reduce scarring
following glaucoma surgery. J695, isolated and optimised in collaboration with
BASF Pharma and Genetics Institute, has now entered Phase II clinical trials
for certain autoimmune diseases, including rheumatoid arthritis. Finally,
CAT-192, a potential treatment for fibrosis and scarring, completed a Phase I
clinical trial during the year.
In addition, CAT-213, a potential treatment for allergic disorders, moved into
pre-clinical development, and is expected to progress to Phase I clinical
trials in 2001. CAT's initial collaboration with HGS has resulted in the
identification of clinical candidate antibodies against B-Lymphocyte
Stimulator (BLyS) (a protein implicated in several autoimmune and neoplastic
disorders) and it is expected that clinical trials will start in 2001.
We are pleased to report progress with two of our major strategic alliances.
Within the collaboration with Wyeth-Ayerst, initiated in 1999, CAT has granted
Wyeth-Ayerst an exclusive product licence to develop antibody therapeutics for
the amyloid b peptide that has been widely implicated in Alzheimer's disease.
Additionally, HGS exercised an option to enter an exclusive development
partnership on antibodies against BLyS.
CAT also continued to strengthen and defend its patent portfolio, covering
both technologies and product candidates, during the year.
As our business grows and matures, the Company must continue to invest in its
people and its facilities. With our staff numbers increasing from 146 to 189
in the last year, and a plan to expand further within the next 12 months, we
have reviewed our needs and have announced plans to move to larger
purpose-designed facilities at Granta Park, South Cambridgeshire, UK. This
move will be phased over two years, commencing in 2001, and will allow us to
consolidate our operations, invest in new systems, further industrialise our
processes and, most importantly, provide an environment in which the
innovation and productivity of our staff can flourish.
We are grateful to all who have contributed to our success this year - our
staff, our board, our scientific advisory board and other expert advisors, our
partners and our shareholders, and we look forward to further productive times
ahead.
Review of 2000
During the year, CAT's business strategy and phage display antibody
technologies have been further validated. The Company and its partners have
continued to make progress in clinical trials with human monoclonal antibody
therapeutic candidates. Investment in the technology base and continued
process industrialisation continue to deliver results in drug discovery, both
for in-house and partnered programmes. A number of significant alliances have
been entered into during the year.
Technology platforms
During the year, CAT has invested in process industrialisation with the
development and further automation of its systems that significantly increases
the capacity for rapid target identification using antibody phage display
technology.
Powerful, advanced integrated information systems are essential to maximise
the application of the wealth of information emerging from modern drug
discovery programmes. CONTINUITY, CAT's integrated internet-enabled
bioinformatics framework at the cutting edge of software engineering, has been
enhanced during the year in response to the new technical demands and
bottlenecks in genomics, proteomics and high throughput screening. This
integrated knowledge-based drug discovery project management system is used
both in-house and with our partners for the effective communication and
analysis of complex proprietary data.
CAT continues to innovate, maintaining its technology leadership in the
antibody field. CAT has made significant progress in the initial process
development of its ribosome display system and has introduced this technology
into its antibody discovery programmes. In the future, ribosome display will
be used alongside phage display to provide a complementary route to lead
antibody identification, with the potential to increase the speed and
efficiency of the process.
In September 2000, CAT announced the formation of a strategic research
collaboration with the UK-based proteomics company, Oxford GlycoSciences
(OGS), for the development of protein chip technology. CAT and OGS will
combine their respective world-leading technologies to develop new protein
detection and screening technology based on antibody microarrays. The goal is
to create a new generation of protein detection technology with the speed,
throughput and sensitivity to serve the development of research tools,
diagnostics and other applications. This is CAT's first collaboration
designed to help solve the technological and commercial challenges in
developing protein chips and unlock the potential value in this new market.
At the other end of the drug development process, CAT published the results of
a pre-clinical collaboration with Weston Medical, to evaluate a novel delivery
system that could offer advantages in both product differentiation and patient
compliance. Initial research results demonstrated that CAT-192, as a
prototype human monoclonal antibody therapeutic, could be successfully
delivered through the skin using Weston Medical's Intraject needle-free drug
delivery system without compromising molecular integrity and biological
activity. This collaboration opens new opportunities and potential
applications for monoclonal antibody therapeutics where delivery using
conventional needle injection would be inappropriate or inconvenient for
patients.
Intellectual property
CAT protects its technology and product candidates through timely patent
filings and appropriate defence. CAT has a strong patent estate, giving it
the commercial freedom to operate within its chosen field. Where necessary,
CAT has sought to defend its position and protect its interests.
CAT's position as a world leader in phage display technology is reflected in
the breadth of the Company's patent portfolio. CAT's key patents fall into
three main families: Winter II covers the production of large expression
libraries of human antibody genes; McCafferty covers the method (phage
display) developed by CAT to obtain the desired antibodies from these
libraries; and the Griffiths patent covers the isolation of antibodies from
these libraries which specifically recognise human 'self' antigens.
Last year CAT and Scripps settled a US infringement action between Winter II
and the Scripps' Huse Lerner patent family from which CAT gained worldwide
commercial rights to the Huse Lerner patent. In Europe the first patents from
the Huse Lerner family have been granted, the main patents are pending and
CAT expects the first US patent to be granted in 2001.
Patents from both the Winter II and McCafferty families have been granted in
Europe and upheld after opposition proceedings in the European Patent Office.
Both CAT and MorphoSys have appealed against a modification of part of the
Winter II patent that was requested by the Opposition Division at the European
Patent Office. CAT has been advised that Morphosys' HuCAL Library is covered
by the Winter II patent as modified by the Opposition Division. The
independent claims of the McCafferty patent were upheld without amendment by
the Opposition Division. This decision is appealable.
CAT is pursuing a patent infringement action against MorphoSys under the
Winter II and McCafferty patents in the Munich District Court. This action was
commenced in 1998 and was stayed by the German Court pending proceedings by
the Opposition Division.
In April 1999, MorphoSys commenced an action against CAT in the US District
Court of Washington DC concerning the Griffiths patent. The MorphoSys action
asked the court to revoke CAT's Griffiths patent and/or declare that MorphoSys
does not infringe the patent. Following preliminary 'Markman' hearings in the
second half of the year, a trial date has now been set for March 2001. In
September 1999, MorphoSys commenced a similar action in respect of CAT's US
McCafferty patent. A trial date has been set for April 2002. CAT is vigorously
defending both lawsuits and does not believe there is merit in the claims.
In July 2000, Crucell issued a writ against the Medical Research Council
(MRC), in a Dutch national court, seeking a declaration that the Winter II
patent was invalid or that Crucell did not infringe the claims of the patent.
Subsequently, in September 2000, Crucell issued a second writ seeking an
identical declaration in respect of the McCafferty patent. Pursuant to the
terms of its agreement with the MRC, CAT is responsible for the defence of
these proceedings. CAT intends to defend both these proceedings vigorously and
does not believe that there is merit in these claims.
Whatever the outcome of current litigation activity, CAT believes that its
ability to operate its own technology will not be materially and adversely
affected.
In the US, patents were granted on chemisynthetic libraries, use of
self-splicing introns with the loxP dual combinatorial system, and on CAT's
ProxiMol technology.
During the year, CAT significantly strengthened its patent portfolio relating
to TGFb antagonists. A European patent covering CAT-152 was granted, whilst
notice of allowance was received for a patent on TGFb1-specific antibodies.
In June, CAT purchased a US patent, covering use of TGFb antagonists in the
central nervous system, from the Whittier Institute for Diabetes and
Endocrinology. CAT's recent deal with Genzyme includes rights to the 'Dasch'
patents covering monoclonal antibodies which bind to TGFb1 and TGFb2. In
addition, CAT has expanded the scope of its licence from the Burnham Institute
to cover use of TGFb antagonists in dermal applications.
Partnerships and Alliances
During the year, CAT has been successful in securing further major strategic
alliances. The commercial potential of human monoclonal antibody drugs is
being increasingly recognised by the pharmaceutical industry. Through its
strategic alliances, CAT is in a position to access novel drug targets,
thereby helping it to build a pipeline of human monoclonal antibody drugs.
In December 1999, CAT announced a multidisciplinary strategic alliance with
Pharmacia (previously 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 CAT's largest alliance at the time with a headline
potential deal size in excess of $200 million. Pharmacia made an equity
investment of $12.5 million in CAT; $14.5 million was committed over three
years in research funding; and CAT can receive up to a further $35 million in
licence fees, research funding and technical performance milestones over the
potential five-year term of the research collaboration. If the expected
number of human monoclonal antibody-based drugs are successfully developed and
receive regulatory approval, the scale of the collaboration offers CAT the
potential to receive an additional $150 million in clinical development and
regulatory approval milestones. CAT will also receive royalties on sales of
both antibody-based drugs and small molecule drugs developed by Pharmacia
where CAT's technology is used to validate a target.
This was followed in March 2000 by the announcement of a major alliance with
Human Genome Sciences (HGS), dedicated to developing human antibody
therapeutics against genomics-derived disease targets. This represented a
significant broadening of CAT's existing relationship with HGS, coming just
six months after the initial collaboration. It included the equivalent of $67
million in up-front funding for CAT - $55 million in equity, and $12 million
in licensing and research support fees.
HGS and CAT are combining their resources with the aim of developing a
significant number of therapeutic antibody products. The agreement provides
HGS with rights to develop and sell fully human antibodies for therapeutic and
diagnostic purposes. Also under the agreement, CAT will have access to
selected HGS-derived sequence and biological information, and has the right to
select up to 24 proprietary HGS antigens for pre-clinical development. CAT
has rights to develop six such products on its own. HGS is entitled to
clinical development milestones and royalty payments on these products. In
addition, HGS has the option to share clinical development costs and to share
the profits equally with CAT on up to 18 other products. Already progress is
being made with this second CAT/HGS alliance and antibody drug candidates have
already been identified for HGS against several therapeutic targets.
The rapid progress being made under the first CAT/HGS alliance was
demonstrated immediately post year end, when HGS exercised an option to enter
into an exclusive development partnership on human antibodies against the
target BLyS. BLyS, a B-Lymphocyte Stimulator discovered by HGS, is a protein
made by the human immune system, which stimulates the production of
antibodies; its overproduction is anticipated to be a central component of
several autoimmune and certain neoplastic (cancerous) disorders. The companies
have worked in close collaboration to isolate over 10,000 antibody clones
specific to BLyS and to characterise over 1,000 distinct human antibodies in
detail. By focusing on high throughput functional screening of these antibody
leads, clinical candidate antibodies have been demonstrated in record time.
HGS plans to start clinical trials in 2001. Under the terms of this exclusive
agreement, CAT will receive a product license fee with the upside potential
for future clinical milestones and royalties on product sales.
In September 2000 CAT announced that it has granted Wyeth-Ayerst an exclusive
product licence to develop human monoclonal antibody products specific for the
amyloid b peptide that has been widely implicated in Alzheimer's disease. CAT
received a licensing fee, with upside potential for future clinical milestone
payments and royalties on product sales. CAT started its collaboration with
Wyeth-Ayerst in March 1999 to apply CAT's functional genomics and antibody
engineering expertise to the discovery of new therapeutics based on targets
identified by Wyeth-Ayerst.
Wyeth-Ayerst had previously announced an alliance with Elan Corporation to
develop immunotherapeutic agents that may be used for the treatment of mild to
moderate Alzheimer's disease and possibly prevent the onset of the disease.
Elan researchers have recently shown for the first time that certain
monoclonal antibodies can cross the blood-brain barrier. Previously this had
limited the prospect of using antibody-based therapy for neurodegenerative
disorders. The agreement between CAT and Wyeth-Ayerst allows Wyeth-Ayerst and
Elan to use CAT's technology to explore further both preventative and
potential therapeutic treatments for Alzheimer's disease.
Also in September 2000, CAT announced a broad strategic alliance with Genzyme
to develop and commercialise human monoclonal antibodies directed against TGFb
for the treatment of scarring-related and other serious medical disorders.
Both Genzyme and CAT had separately invested in anti-TGFb programmes - CAT in
isoform-specific and Genzyme in pan-specific antibodies - and the
collaboration offers the potential to strengthen and accelerate these
anti-TGFb programmes. This agreement is of particular note as it is the first
agreement that CAT has signed for product candidates it has developed through
pre-clinical and into clinical trials and, as such, is a strong endorsement of
CAT's drug development capabilities. As part of the deal, Genzyme has received
an exclusive worldwide licence to CAT's human antibodies directed against TGFb
for all uses except ophthalmology. Additionally, Genzyme has received a
non-exclusive worldwide licence from CAT for non-antibody antagonists of TGBb
in exchange for milestones and royalties. In connection with the agreement,
Genzyme made a $20 million equity investment in CAT.
The agreement is based on sharing costs and profits. CAT and Genzyme will
focus initially on developing a human monoclonal antibody-based treatment for
diffuse scleroderma, a chronic and life-threatening disorder in which the
production of excess collagen leads to scarring of the skin and vital internal
organs. Other potential clinical indications of anti-TGFb treatment include
post-surgical scarring, fibrosis of all major organs such as the lungs, liver
and kidneys, and certain forms of cancer. CAT has retained full rights for
ophthalmology indications of its anti-TGFb monoclonal antibodies CAT-152 and
CAT-192 and will continue the clinical development of CAT-152, currently in
Phase II clinical trials.
Progress in Clinical Trials
Human monoclonal antibodies are now emerging as the preferred format for
monoclonal antibody therapeutics - and in this CAT has been pioneer. The
Company can demonstrate solid progress in clinical development during the
year, both in partnered and in-house programmes.
D2E7, the human monoclonal antibody that neutralises TNFa, made positive
progress in the period as a potential treatment for rheumatoid arthritis. In
November 1999, data presented at the American College of Rheumatology
Conference (ACR) showed that, in a randomised, double-blind placebo-controlled
study with 283 patients, D2E7 was significantly superior to placebo when given
by self-injection at a dose of 20mg to 80mg once weekly over a three month
period. In February 2000, CAT's partner, BASF Pharma, announced that it had
initiated Phase III trials of D2E7. These trials are expected to progress
through 2001.
Further Phase I and Phase II clinical data were presented at the European
League Against Rheumatology meeting (EULAR) in June 2000 and at the ACR
conference in October 2000. It is anticipated that additional Phase II
clinical data will be presented during 2001.
D2E7 is the first fully human monoclonal antibody to enter Phase III clinical
trials - over 1,900 patients have been treated worldwide with D2E7 and over
1,500 patient years of treatment experience have been documented by BASF
Pharma. Taken together with the three other human monoclonal antibodies
developed with CAT's technology that are also in clinical trials, this
positions CAT's technology as the leading technology platform in the
development of human monoclonal antibodies as drugs.
CAT-152, a 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, one-year results from the Phase I/IIa clinical trial of CAT-152
were presented at the annual meeting of the Association for Research in Vision
and Ophthalmology (ARVO). Treatment with CAT-152 was associated with
encouraging trends for a lower intraocular pressure together with a reduced
need for subsequent intervention and topical anti-glaucoma treatment. These
outcomes could represent evidence of clinically relevant anti-scarring
activity, albeit based on low patient numbers.
A multicentre Phase II study commenced in October 1999. Recruitment has been
slower than expected and the trial is now scheduled for conclusion in early
2001. Further trials are expected to commence in mid 2001. It is CAT's
intention to develop CAT-152 further, thus enhancing its value as a candidate
for partnering at a later stage.
Also in the ophthalmology area, encouraging pre-clinical studies of CAT-152 in
the possible prevention of secondary cataracts have recently been presented at
a major European ophthalmology research conference. CAT-152 also has the
potential to be developed for other indications outside of the ophthalmic
field, and these would form part of the collaboration with Genzyme.
J695 is a human monoclonal antibody that neutralises Interleukin 12, a
pro-inflammatory molecule associated with many severe autoimmune disorders.
J695 continues to progress in clinical development having recently entered
Phase II clinical trials, conducted by BASF Pharma and Genetics Institute, in
autoimmune diseases including rheumatoid arthritis.
CAT-192 is a human anti-TGFb1 monoclonal antibody that has been developed by
CAT as a potential treatment in a range of scarring and fibrotic conditions
and is currently under investigation. CAT-192 entered Phase I clinical trials
in November 1999. Results to be presented at the British Pharmacological
Society in December 2000 show that CAT-192 appears to be well tolerated, with
a prolonged half-life of around 40 days in healthy volunteers.
Under the agreement with Genzyme, the immediate focus is on systemic
sclerosis/ scleroderma. Phase II clinical trials, which are Genzyme's
responsibility, are anticipated to start in 2001. CAT-192 has the potential to
be developed for a number of indications other than scleroderma.
CAT-213, a human anti-eotaxin1 monoclonal antibody with potential in the
treatment of allergic disorders, moved into pre-clinical development during
the year. Satisfactory progress is being made with toxicology and other
pre-clinical studies and the programme is on target to enter Phase I trials
during 2001.
CAT is working with HGS on a programme to develop anti-BLyS antibodies (ie:
antibodies against B-Lymphocyte Stimulator, a protein which may play a crucial
role in several autoimmune and neoplastic disorders). Following the isolation
of over 10,000 antibody clones and the characterisation of over 1,000
antibodies in detail, clinical candidate antibodies have been demonstrated.
HGS plans to start clinical trials in 2001.
Financial Review
CAT made a loss for the financial year ended 30 September 2000 of #5.2 million
(1999: #12.7 million). Net cash outflow for the financial year was #0.3
million (1999: #11.8 million) and CAT raised #132.3 million (net of expenses)
from the issue of equity (1999: #0.5 million). Net cash and liquid resources
at the year end were #155.6 million (1999: #23.6 million).
Financing
CAT announced an equity fundraising in March 2000 aimed at raising #100
million. 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 in April,
albeit that the amount raised was reduced from the original target of #100
million to #93 million (before expenses).
During the financial year and immediately following its end, CAT has issued
equity to three corporate partners for cash in connection with collaboration
agreements. These were to Monsanto Europe SA in January 2000 for #7.8 million,
to Human Genome Sciences Inc. in April 2000 for #34.7 million and to Genzyme
Corporation in October 2000 for #13.7 million (all before expenses). The
Company also received #2.4 million in cash from the exercise of share options.
The Company has progressed with preparations for a NASDAQ listing and hopes to
announce the conclusion to this process in the near future. CAT does not plan
the NASDAQ listing to be accompanied by an offering of its securities.
Results of operations
Revenues in the year totalled #10.1 million (1999: #1.8 million.) CAT's
historical profile of revenues has been irregular due to the nature of CAT's
business although latterly some collaborations are providing a more regular
source of income. During the year CAT received a milestone payment from BASF
following the entry of D2E7 into Phase III clinical trials and a licence
exclusivity fee from Wyeth-Ayerst related to antibodies to amyloid b.
Additionally, income was generated from fees receivable under ongoing
collaborations with Wyeth-Ayerst, Pharmacia and Human Genome Sciences. Of
monies received for such services, a 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 expenses of #20.6 million (1999: #16.3 million) were broadly in line
with expectations and reflect the increasing scale and complexity of CAT's
activities. Staff numbers have risen over the year from 146 to 189 at year end
(the average over the year was 161) with a resulting impact on staff and
associated costs. Further recruitment is ongoing and staff numbers are
anticipated to build to approximately 250, with the greater part of that
increase in the current year. There was a charge during the year of #0.5
million (1999: #nil) for employer's National Insurance payable on the exercise
of certain options granted in December 1999 and a provision for the cost of
shares to be allocated under the employee share scheme of #0.5 million (1999:
#0.2 million.) External development costs were lower than in the comparative
period due to the incidence of expenditure but significant increases are
anticipated in future periods as CAT's product pipeline matures. Expenditure
during the year included payments for access to intellectual property
totalling #1.1 million, principally to Burnham Institute and Integra
Lifesciences (for rights relating to TGF beta), Stratagene and The Whittier
Institute for Diabetes and Endocrinology. Such payments in the comparative
period amounted to #0.6 million of which the majority was to The Scripps
Research Institute and Stratagene. Operating costs were also impacted by fees
connected with current patent litigation, the total spend in the year on such
litigation and patent oppositions being #1.7 million (1999: #0.3 million).
This level of expenditure on litigation is expected to continue in the current
year.
The increase in investment income for the financial year reflects the increase
in cash balances over the year, particularly from April 2000 onwards.
The high level of deferred income, the provision for employer's National
Insurance on certain options and the provisions for legal costs and share
scheme allocations have all contributed to a substantial increase in creditors
during the year.
Capital expenditure during the year was #1.0 million (1999: #2.7 million),
chiefly on laboratory equipment. The comparative year included #1.1m for the
purchase of the freehold interest in Cambridge House and residual fitting out
costs. Capital expenditure is expected to increase significantly for the next
two years as CAT's new facilities at Granta Park are fitted out and equipped
and further investment is made in process automation. CAT's total expenditure
on the planned facilities at Granta Park is expected to be of the order of #7
million.
As CAT continues to expand its operations and incurs associated capital
expenditures, the Group anticipates a significant net cash outflow during the
current financial year.
It is anticipated that CAT's net cash burn rate for the current year, taking
account of expected revenues, will be approximately #1.8 million per month.
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP plc
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2000
Consolidated Profit and Loss Account
For the year ended 30 September 2000
2000 1999
#'000 #'000
Turnover 10,146 1,799
Direct costs (381) (81)
Gross profit 9,765 1,718
Research and development expenses (15,728) (13,574)
General and administration expenses (4,842) (2,684)
Operating loss (10,805) (14,540)
Interest receivable (net) 5,644 1,810
Loss on ordinary activities before taxation (5,161) (12,730)
Taxation on loss on ordinary activities - (1)
Loss for the financial year (5,161 (12,731)
Loss per share - basic and fully diluted (pence 17.1p 52.4p
Consolidated Statement of Total Recognised Gains and Losses
2000 1999
#'000 #'000
Loss for the financial year (5,161) (12,731)
Loss on foreign exchange translation (7) (1)
Total recognised gains and losses (5,168) (12,732)
relating to the year
The losses for both years arise from continuing operations.
Consolidated Balance Sheet
At 30 September 2000 2000 1999
#'000 #'000
Fixed assets
Intangible assets 4,448 4,822
Tangible fixed assets 5,008 5,837
9,456 10,659
Current assets
Debtors 3,452 894
Investment in liquid resources 156,502 22,773
Cash at bank and in hand 26 849
159,980 24,516
Creditors
Amounts falling due within one year (8,427) (3,275)
Net current assets 151,553 21,241
Total assets less current liabilities 161,009 31,900
Creditors
Amounts falling due after more than one year (1,975) -
Net assets 159,034 31,900
Capital and reserves
Called-up share capital 3,477 2,528
Share premium account 179,706 48,465
Other reserve 13,451 13,339
Profit and loss account (37,600) (32,432)
Shareholders' funds - all equity 159,034 31,900
Consolidated Cash Flow Statement
2000 1999
For the year ended 30 September 2000 #'000 #'000
Net cash outflow from operating activities (3,609) (11,188)
Returns on investments and servicing of finance 4,245 2,100
Taxation - (1)
Capital expenditure and financial investment (974) (2,672)
Net cash outflow before management of liquid
resources and financing (338) (11,761)
Management of liquid resources (133,729) 12,051
Financing 132,293 535
(Decrease)/increase in cash (1,774) 825
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 1999.
Loss per share
Potentially dilutive issueable shares are only included in the calculation of
fully diluted earnings per share if their issue would decrease net profit per
share or increase net loss per share. The Group's basic and fully diluted
earnings per share are therefore equal.
Loss per ordinary share (basic and fully diluted) is based on the loss for the
financial year of #5,161,000 (1999: #12,731,000) and a weighted average number
of ordinary shares of 30,179,818 (1999; 24,314,191).
Analysis and reconciliation of net funds
1 October Cash Exchange 30 September
1999 Flow movement 2000
#'000 #'000 #'000 #'000
Cash at bank 849 (825) 2 26
Overdrafts - (949) - (949)
Liquid resources 22,773 133,729 - 156,502
Finance leases (9) 9 - -
Net funds 23,613 131,964 2 155,579
1999
#'000 #'000
(Decrease)/increase in cash in the year (1,774) 825
Increase/(decrease) in liquid resources 133,729 (12,051)
Decrease in lease financing 9 4
Change in net funds resulting from cash flows 131,964 (11,222)
Exchange movement 2 4
Movement in net funds in year 131,966 (11,218)
Net funds at 1 October 1999 23,613 34,831
Net funds at 30 September 2000 155,579 23,613
Reconciliation of movements in group shareholders' funds
2000 1999
#'000 #'000
Loss for the financial year (5,161) (12,731)
Other recognised gains and losses relating to the year (7) (1)
(5,168) (12,732)
New shares issued 132,302 2,824
Shares to be issued - deferred consideration - (1,650)
Net reduction in shareholders' funds 127,134 (11,558)
Opening shareholders' funds 31,900 43,458
Closing shareholders' funds 159,034 31,900
Financial Statements
The preceding information does not constitute the company's statutory
financial statements for the year ended 30 September 2000 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 2000 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
2000 will be posted to shareholders by 22 December 2000 and will be available
shortly thereafter from:
The Company Secretary
Cambridge Antibody Technology Group plc
The Science Park
Melbourn
Cambridgeshire
SG8 6JJ, UK
Tel: +44 (0) 1763 263233
This preliminary announcement was approved by the Board on 24 November 2000.
Notes to Editors
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 nearly
200 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
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 programs 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: AstraZeneca, BASF
Pharma, Eli Lilly, Genentech, Genetics Institute, Genzyme, Human Genome
Sciences, ICOS Corporation, Oxford GlycoSciences, Pharmacia Corporation,
Pfizer, Wyeth-Ayerst.
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