Abzena Release: Trading And Business Update
Cambridge, UK, 21 February 2017 - Abzena plc (AIM: ABZA, ‘Abzena’ or the ‘Group’), a life sciences group providing services and technologies enabling the development and manufacture of biopharmaceutical products, provides the following business update for the period to 20 February 2017.
Highlights
• Group revenue for the full year expected to be in line with the Board’s expectations; UK business operated strongly, offsetting the lower than expected growth in the US operations.
• Costs from enhancing the US businesses to support long-term growth, including the investment capex, are above the Board’s prior expectations when translated into Sterling, but position the business favourably for selling the Group’s integrated biopharmaceutical development services.
• Expanded capacity in San Diego with two new biomanufacturing cleanroom suites operational and an additional 9,000sq.ft. facility to enable expansion of biomanufacturing process development group.
• GMP capability for manufacture of ADC linker-payloads now operational at Bristol, PA facility.
• New ‘Abzena inside’ product entered Phase I clinical development with an undisclosed, private US biotech company - now 12 clinical stage products in ‘Abzena inside’ portfolio.
• Two ‘Abzena inside’ products progressed into Phase II clinical development: Roche’s RG6125 for rheumatoid arthritis, and an undisclosed major US pharma programme for neurodegenerative conditions.
• Significant licence agreement for ThioBridge™ antibody drug conjugate (ADC) linker technology with San Diego-based biopharmaceutical company announced on 20 January 2017.
• Licence agreement for Composite Human Antibody™ technology signed with US biotech, Trieza Therapeutics announced on 22 December 2016.
• Manufacturing process development agreement with UCL for magacizumab, a candidate for neovascular age-related macular degeneration, following prior antibody engineering and cell line development projects for this product (see separate RNS Reach announcement today).
Dr John Burt, CEO of Abzena said:
“We are seeing good progress both within our services business and across our ‘Abzena inside’ portfolio. This strong momentum in top line growth from the first half has continued, driven by demand for our integrated services across the breadth of the biopharmaceutical development process.
“Our strategy of investing in future capacity will ensure our ability to provide quality service for this high level of customer need as our partners’ programmes progress. We continue to explore funding options to enable us to maintain this level of growth and to continue to expand our biomanufacturing capacity and capabilities."
Current trading
For the year to 31 March 2017, the Board expects to report overall Group revenues in line with its expectations as the momentum from the first half and strong demand for services has continued.
The revenues generated by the UK businesses have remained strong, offsetting the lower than expected growth of the revenue from the US businesses. The Group has worked on repositioning and enhancing these US businesses for further growth, which in turn has led to increased costs ahead of further growth in revenues.
Due to the strong US dollar, when translated into Sterling, these US costs and therefore Group costs overall, are ahead of the Board’s original expectations.
The aim of the US investment is to create a stronger, long-term offering from Abzena overall for its customers. Customer reaction to the enhanced offering through the improvements and investments made to date has been positive.
Cash at the end of the financial year is expected to be in line with the Board’s expectations.
The Group expects to report its full year results in June 2017.
Business overview
The period was dominated by restructuring and expansion to increase capacity in the US business, good progress within the UK services business and 'Abzena inside' portfolio.
• Capacity expansion
Demand for Abzena’s expanded range of integrated services continues to result in good customer engagement across the business. Contract bookings are strong from both new and existing customers as they benefit from using the full breadth of the Group’s offering. The high levels of utilisation seen in the first half of the year have been sustained.
In response to the increased demand for its services, during the second half of the year, Abzena has accelerated its investment in growing both its manufacturing capacity and its biology R&D to provide new and enhanced solutions for partners.
Further capacity expansion has been completed in San Diego, with two new biomanufacturing cleanroom suites now fully operational. Additional ancillary office space has been secured for Abzena’s growing biomanufacturing operations.
In addition, to fulfil the demand for the Group’s process development capabilities, Abzena has leased a further 9,000 sq.ft. office and laboratory facility as part of its capacity-enhancing investment programme.
In Bristol, PA, GMP capability for the manufacture of ADC linker-payloads is now operational and the Group is now able to manufacture linker-payload reagents for the its current and prospective ThioBridgeTM partners.
As disclosed at the half year results in November 2016, the Group continues to explore options to fund the growth of the manufacturing business through a significant expansion programme. This includes upgrading the GMP manufacturing platform and increasing capacity for process development and manufacturing. Subject to funding, Abzena also plans to establish a GMP conjugation facility in Bristol, PA, as part of the next phase of its investment and growth plans.
• "Abzena inside" portfolio
The portfolio of 'Abzena inside' products has seen good progress with a further Composite Human Antibody™ product being taken into clinical development by a US biotech company. This takes the number of “Abzena inside” products at a clinical stage to 12.
Within the portfolio, ‘Abzena inside’ products are also advancing through the clinic. Roche’s RG6125 has progressed into Phase II as a potential treatment for rheumatoid arthritis. A second programme, on which Abzena has the potential to receive a milestone payment based on future successful clinical development, has been advanced by a major US pharma company into two Phase II studies in patients with neurodegenerative conditions.
• Licence agreements
In January 2017, Abzena signed a significant licence agreement for its novel, site-specific ThioBridge™ ADC linker technology with an undisclosed San Diego-based biopharmaceutical company. The agreement covers the use of ThioBridge™ in up to 10 ADCs across a wide range of indications. The value of the agreement has the potential to reach over $300 million in licence fees and milestone payments over the medium term.
In December 2016, Abzena also signed a license agreement for its Composite Human Antibody™ technology with US biotech, Trieza Therapeutics for use in oncology. This agreement could result in up to $35 million in development and commercial milestone payments as well as royalties on the sale of licensed products containing the Abzena sequence.
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
• Group revenue for the full year expected to be in line with the Board’s expectations; UK business operated strongly, offsetting the lower than expected growth in the US operations.
• Costs from enhancing the US businesses to support long-term growth, including the investment capex, are above the Board’s prior expectations when translated into Sterling, but position the business favourably for selling the Group’s integrated biopharmaceutical development services.
• Expanded capacity in San Diego with two new biomanufacturing cleanroom suites operational and an additional 9,000sq.ft. facility to enable expansion of biomanufacturing process development group.
• GMP capability for manufacture of ADC linker-payloads now operational at Bristol, PA facility.
• New ‘Abzena inside’ product entered Phase I clinical development with an undisclosed, private US biotech company - now 12 clinical stage products in ‘Abzena inside’ portfolio.
• Two ‘Abzena inside’ products progressed into Phase II clinical development: Roche’s RG6125 for rheumatoid arthritis, and an undisclosed major US pharma programme for neurodegenerative conditions.
• Significant licence agreement for ThioBridge™ antibody drug conjugate (ADC) linker technology with San Diego-based biopharmaceutical company announced on 20 January 2017.
• Licence agreement for Composite Human Antibody™ technology signed with US biotech, Trieza Therapeutics announced on 22 December 2016.
• Manufacturing process development agreement with UCL for magacizumab, a candidate for neovascular age-related macular degeneration, following prior antibody engineering and cell line development projects for this product (see separate RNS Reach announcement today).
Dr John Burt, CEO of Abzena said:
“We are seeing good progress both within our services business and across our ‘Abzena inside’ portfolio. This strong momentum in top line growth from the first half has continued, driven by demand for our integrated services across the breadth of the biopharmaceutical development process.
“Our strategy of investing in future capacity will ensure our ability to provide quality service for this high level of customer need as our partners’ programmes progress. We continue to explore funding options to enable us to maintain this level of growth and to continue to expand our biomanufacturing capacity and capabilities."
Current trading
For the year to 31 March 2017, the Board expects to report overall Group revenues in line with its expectations as the momentum from the first half and strong demand for services has continued.
The revenues generated by the UK businesses have remained strong, offsetting the lower than expected growth of the revenue from the US businesses. The Group has worked on repositioning and enhancing these US businesses for further growth, which in turn has led to increased costs ahead of further growth in revenues.
Due to the strong US dollar, when translated into Sterling, these US costs and therefore Group costs overall, are ahead of the Board’s original expectations.
The aim of the US investment is to create a stronger, long-term offering from Abzena overall for its customers. Customer reaction to the enhanced offering through the improvements and investments made to date has been positive.
Cash at the end of the financial year is expected to be in line with the Board’s expectations.
The Group expects to report its full year results in June 2017.
Business overview
The period was dominated by restructuring and expansion to increase capacity in the US business, good progress within the UK services business and 'Abzena inside' portfolio.
• Capacity expansion
Demand for Abzena’s expanded range of integrated services continues to result in good customer engagement across the business. Contract bookings are strong from both new and existing customers as they benefit from using the full breadth of the Group’s offering. The high levels of utilisation seen in the first half of the year have been sustained.
In response to the increased demand for its services, during the second half of the year, Abzena has accelerated its investment in growing both its manufacturing capacity and its biology R&D to provide new and enhanced solutions for partners.
Further capacity expansion has been completed in San Diego, with two new biomanufacturing cleanroom suites now fully operational. Additional ancillary office space has been secured for Abzena’s growing biomanufacturing operations.
In addition, to fulfil the demand for the Group’s process development capabilities, Abzena has leased a further 9,000 sq.ft. office and laboratory facility as part of its capacity-enhancing investment programme.
In Bristol, PA, GMP capability for the manufacture of ADC linker-payloads is now operational and the Group is now able to manufacture linker-payload reagents for the its current and prospective ThioBridgeTM partners.
As disclosed at the half year results in November 2016, the Group continues to explore options to fund the growth of the manufacturing business through a significant expansion programme. This includes upgrading the GMP manufacturing platform and increasing capacity for process development and manufacturing. Subject to funding, Abzena also plans to establish a GMP conjugation facility in Bristol, PA, as part of the next phase of its investment and growth plans.
• "Abzena inside" portfolio
The portfolio of 'Abzena inside' products has seen good progress with a further Composite Human Antibody™ product being taken into clinical development by a US biotech company. This takes the number of “Abzena inside” products at a clinical stage to 12.
Within the portfolio, ‘Abzena inside’ products are also advancing through the clinic. Roche’s RG6125 has progressed into Phase II as a potential treatment for rheumatoid arthritis. A second programme, on which Abzena has the potential to receive a milestone payment based on future successful clinical development, has been advanced by a major US pharma company into two Phase II studies in patients with neurodegenerative conditions.
• Licence agreements
In January 2017, Abzena signed a significant licence agreement for its novel, site-specific ThioBridge™ ADC linker technology with an undisclosed San Diego-based biopharmaceutical company. The agreement covers the use of ThioBridge™ in up to 10 ADCs across a wide range of indications. The value of the agreement has the potential to reach over $300 million in licence fees and milestone payments over the medium term.
In December 2016, Abzena also signed a license agreement for its Composite Human Antibody™ technology with US biotech, Trieza Therapeutics for use in oncology. This agreement could result in up to $35 million in development and commercial milestone payments as well as royalties on the sale of licensed products containing the Abzena sequence.
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.