LONDON and CAMBRIDGE, MA--(Marketwire - February 16, 2009) -
Antisoma plc (LSE: ASM; USOTC: ATSMY) announces its interim financial information for the period ended 31 December 2008.
Highlights
* First product approval from FDA * Oral fludarabine approved for chronic lymphocytic leukaemia * Pivotal phase III programmes advanced * Phase III trial of ASA404 in first-line lung cancer ongoing * Phase III trial of ASA404 in second-line lung cancer initiated * Phase III trial of AS1413 in leukaemia expanded * Strong partnership with Novartis on ASA404 * Lung cancer programme extended to second-line setting * Clinical development to expand into breast cancer * Supportive phase II data on key programmes * Long-term follow-up data from ASA404 and AS1413 trials * Positive interim data on AS1411 in acute myeloid leukaemia * New phase II trials initiated * AS1411 in renal cancer, AS1402 in breast cancer
Financial highlights
* Six month revenues of GBP 5.5 million (H1 2007: GBP 16.5 million) * Loss after tax of GBP 5.0 million (H1 2007: profit after tax of GBP 6.2 million) * Cash resources at 31 December 2008 of GBP 52.7 million (31 December 2007: GBP 50.4 million)
Glyn Edwards, CEO of Antisoma, said: “We have made substantial progress during this period, with our first product approval from the FDA and gathering momentum on our two key phase III development programmes, as well as very interesting initial findings from our phase II trial of AS1411 in leukaemia. We look forward to further developments in the first half of this year, notably a commercialisation deal for our approved product oral fludarabine and the final data from the AS1411 trial.”
Eric Dodd, Antisoma’s CFO, added: “Our financial results show that we are well placed to continue investment in our drug pipeline, with current cash resources sufficient to take our key programmes through mid-2010. With the divestment or partnering of oral fludarabine, we expect to extend this to mid-2011.”
A webcast and conference call will be held today at 9.30 am GMT. The webcast can be accessed via Antisoma’s website at www.antisoma.com and the call by dialling +44 (0)20 8609 1435 (UK toll-free 0808 109 1498; US toll-free 1866 793 4279) and using the participant PIN code [965983#]. A recording of the webcast will also be available afterwards on Antisoma’s website.
Enquiries: Glyn Edwards Chief Executive Officer Eric Dodd Chief Financial Officer Daniel Elger VP, Marketing and Communications, Antisoma plc +44 (0)7909 915 068 Mark Court, Lisa Baderoon, Rebecca Skye Dietrich Buchanan Communications +44 (0)20 7466 5000 Brian Korb The Trout Group +1 212 477 9007
Except for the historical information presented, certain matters discussed in this statement are forward looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from results, performance or achievements expressed or implied by such statements. These risks and uncertainties may be associated with product discovery and development, including statements regarding the Group’s clinical development programmes, the expected timing of clinical trials and regulatory filings. Such statements are based on management’s current expectations, but actual results may differ materially.
Chairman’s report
Overview
During the past six months we have received our first product approval from the US Food and Drug Administration (FDA), seen significant advances in our two phase III programmes and reported new supportive data from several phase II trials. With cash resources of around GBP 53 million available as of 31 December 2008, we are well placed to realise the potential of our pipeline.
Antisoma’s first product approval - oral fludarabine
Antisoma owns the US rights to oral fludarabine, the tablet formulation of a drug widely used to treat chronic lymphocytic leukaemia (CLL). In December the FDA approved oral fludarabine for marketing in the US, providing Antisoma with its first product approval.
We see oral fludarabine as an attractive sales opportunity because it avoids the need for intravenous infusions, which until now have been the only way in which US patients could receive fludarabine. In European countries where oral fludarabine has been introduced, it has captured a significant fraction of the total fludarabine market.
We have decided that the best way to realise the value of oral fludarabine is through a commercialisation deal with a partner that has established marketing infrastructure in the US. FDA approval of the drug has put us in a very good negotiating position. We have been in talks with a number of companies, and expect to conclude a divestment or partnering deal by the end of June.
A deal on oral fludarabine could extend our cash resources significantly. We expect that this will enable the Company to be funded through to mid-2011, comfortably beyond the expected timing of key phase III data on ASA404 and AS1413.
Two phase III drugs now in three pivotal studies
ASA404 programme advances, widens
Our Tumour-Vascular Disrupting Agent, ASA404, is making good progress in the capable hands of our partner, Novartis. A 1200-patient phase III trial (ATTRACT-1) is testing the drug as a first-line treatment for non-small cell lung cancer. This is the setting in which we observed a five-month improvement in median survival in a randomised phase II trial. Should the phase III trial produce positive data, we expect applications for marketing licences to be submitted in 2011.
Novartis has now also started a second, 900-patient phase III trial (ATTRACT-2), testing ASA404 in patients who have already received one round of treatment for non-small cell lung cancer. This trial is designed to support applications to market ASA404 as a second-line treatment. We are very pleased that Novartis has decided to evaluate ASA404 in both the first-line and second-line settings, as this will ensure that a broad spectrum of lung cancer patients could be eligible for treatment with the drug.
During the period, the results of the key phase II trial supporting phase III development in lung cancer were published in the British Journal of Cancer. We also announced further encouraging findings from a phase II trial in prostate cancer.
In February, we announced that Novartis had decided on priorities for the further development of ASA404. After lung cancer, the next priority will be HER2-negative metastatic breast cancer. The decision to expand the development programme to include breast as well as lung cancer underlines the broad potential of ASA404.
In addition to the USD 100 million that we have already received from Novartis, we can earn substantial further milestone payments based on progress of ASA404 in development and achievement of sales targets. We will also earn royalties on all sales of the drug worldwide, and have a strategically important option to co-commercialise ASA404 in the US.
AS1413 pivotal study expanded
AS1413 is being tested in a pivotal phase III trial (ACCEDE) under a Special Protocol Assessment (SPA) agreed with the US Food and Drug Administration (FDA). The trial is being conducted in patients with secondary acute myeloid leukaemia (secondary AML). This form of leukaemia follows previous bone marrow disease or treatment for other cancers, and has a poor prognosis and poor responsiveness to currently available treatments.
During the period, we agreed with the FDA an enlargement of the phase III trial, such that it will now enrol around 450 patients. Numbers of hospitals included in the study and its geographical reach are also being increased. The study is expected to report data in late 2010 or early 2011.
At the American Society for Haematology (ASH) meeting in December, we reported positive long-term follow-up data from a phase II trial of secondary AML patients treated with AS1413 plus cytarabine. Some 40% of patients who achieved complete remissions were still in remission 18 months after treatment. The ACCEDE trial is evaluating the same regimen of AS1413 plus cytarabine, comparing it with standard treatment of daunroubicin plus cytarabine.
We retain all rights to AS1413, and intend to take it to market ourselves in the US while seeking partnerships for other territories. If ASA404 is successful, we will have sales infrastructure provided by Novartis that could be used to sell AS1413 in the US.
Promise in pipeline
AS1411 phase II data cascade begins
A second presentation at the ASH meeting covered positive interim findings from a 60-patient randomised phase II trial of our aptamer drug AS1411. This was conducted in patients with relapsed and refractory AML, another group of AML patients with a poor prognosis and few treatment options. The study has two stages, evaluating two different doses of AS1411 in combination with standard chemotherapy and comparing each of these regimes with chemotherapy alone. Initial data showed that adding the lower dose of AS1411 to chemotherapy produced some complete responses, whereas there were no such responses with chemotherapy alone.
We now await data from the second part of the phase II study, which compares patients receiving a higher dose of AS1411 plus chemotherapy with additional control patients on chemotherapy alone. Final data are expected during the first half of 2009. If these are positive, the drug could progress into phase III trials.
AS1411 has also entered a 30-patient single-arm phase II trial in kidney cancer (renal cell carcinoma). This trial tests AS1411 as a monotherapy treatment in patients who have progressed after initial therapy for their cancer. The first findings are expected in the second half of 2009.
AS1402 enters phase II
Our antibody drug AS1402 has entered a 110-patient phase II trial in women receiving first-line treatment for advanced breast cancer. Patients are being randomised to receive either AS1402 plus the hormone therapy letrozole or letrozole alone. Results are expected during 2010.
Operation preparing for commercialization
In line with our plan to become a company that markets as well as developing cancer drugs, we have made two appointments of individuals with significant commercial experience. Eric Dodd joined in November as Chief Financial Officer, following a career in technology businesses, and Michael Lewis, a senior commercial executive at the medical device company Gambro, has joined our Board as a Non-Executive Director. The Board wishes to thank Raymond Spencer, former Chief Financial Officer who left Antisoma in December 2008, for his contribution to the development of the Company.
Financial review
Overview
We have a solid financial position that reflects the careful use of the substantial cash resources we have built up, notably from milestone payments made by Novartis, our development and commercialisation partner for ASA404. Novartis is funding all development work on ASA404 while we are investing in our other pipeline products, particularly AS1413, which is in a pivotal phase III trial, and AS1411 and AS1402, which are both in phase II development.
Results of operations
Revenues in the period were GBP 5.5 million, of which GBP 5.4 million represents recognition of the final parts of two payments from Novartis for ASA404: the upfront payment of USD 75 million and a milestone payment of USD 25 million paid on the start of the first phase III trial in lung cancer. Recognition of these revenues was completed in July 2008. The remaining GBP 0.1 million represents reimbursement by Novartis of costs incurred on ASA404.
Total operating expenses for the six months ended 31 December 2008 were GBP 20.0 million (2007: GBP 13.9 million). The increase in expenses reflects the expansion of the business through the acquisition of Xanthus Pharmaceuticals, Inc. in June 2008 and the resulting increase in expenditure associated with a broader and more mature drug pipeline.
During the period we have made exchange gains of GBP 6.7 million on translation of our US dollar and Euro balances into sterling. We also made a gain of GBP 1.1 million on our working capital. We recognised a further GBP 13.7 million exchange gain on our dollar-denominated intangible assets.
Our loss of GBP 5.0 million reflects the difference between our revenues, finance income and tax credit and our operating expenses, as we continue to invest in our cancer drug pipeline.
Liquidity and capital resources
Cash, cash equivalents and short-term deposits amounted to GBP 52.7 million as at 31 December 2008 (30 June 2008: GBP 66.9 million; 31 December 2007: GBP 50.4 million). Net cash used in operating activities for the six months ended 31 December 2008 was GBP 19.2 million (six months ended 31 December 2007: GBP 10.7 million).
In managing our cash resources, we have taken account of the changing environment with respect to deposit risks, and have maintained a conservative treasury policy with short deposit terms and diversified counterparty risk.
Taxation
We have recognised a credit of GBP 1.5 million in respect of an R&D tax credit receivable for the first six months of the financial year.
(Loss)/profit per share
The basic loss per share for the half-year ended 31 December 2008 was (0.8)p. The profit per share for the half-year ended 31 December 2007 was 1.4p.
Outlook
After a very productive 2008, we look forward to further important developments during 2009. During the first half of the year, we expect to conclude a divestment or partnering deal for oral fludarabine, further enhancing our already significant cash resources. We also expect the final data from our phase II study of AS1411 in leukaemia, an important milestone that could lead to progress of this drug into phase III testing. Looking further ahead, we have two ongoing phase III programmes that provide us with a clear opportunity to transition into a company that not only develops novel cancer drugs but also participates in their commercialisation.
Barry Price Chairman 13 February 2009 Interim Report for the six months ended 31 December 2008 Consolidated Income Statement for the six months ended 31 December 2008 6 months 6 months Year ended 31 ended 31 ended 30 December December June 2008 2007* 2008* unaudited unaudited audited Notes £'000 £'000 £'000 Revenue 5,514 16,526 39,527 Research and development expenditure (16,775) (10,444) (22,249) Administrative expenses (3,208) (3,464) (6,480) Total operating expenses (19,983) (13,908) (28,729) Operating (loss)/profit (14,469) 2,618 10,798 Finance income 3 8,011 1,502 2,578 (Loss)/profit before taxation (6,458) 4,120 13,376 Taxation 1,493 2,050 (1,047) (Loss)/profit for the period 6 (4,965) 6,170 12,329 (Loss)/profit per ordinary share Basic 4 (0.8)p 1.4p 2.7p Diluted 4 (0.8)p 1.3p 2.6p Consolidated statement of recognised income and expense for the six months ended 31 December 2008 6 months 6 months Year ended 31 ended 31 ended 30 December December June 2008 2007 2008 unaudited unaudited audited £'000 £'000 £'000 (Loss)/profit for the period (4,965) 6,170 12,329 Exchange translation difference on consolidation 12,484 71 (235) Total recognised gain for the period 7,519 6,241 12,094 * Certain costs have been reclassified between Research and Development and Administrative Expenses as disclosed in note 5. Consolidated Balance Sheet as at 31 December 2008 As at 31 As at 31 As at 30 December December June 2008 2007* 2008* unaudited unaudited audited Notes £'000 £'000 £'000 A ASSETS Non-current assets Goodwill 7,642 5,548 5,559 Intangible assets 62,653 19,136 47,149 Property, plant and equipment 2,282 531 2,358 Deferred tax asset - 3,158 - 72,577 28,373 55,066 Current assets Trade and other receivables 1,904 1,751 2,113 Current tax receivable 1,493 - - Short-term deposits 10,000 25,524 10,000 Cash and cash equivalents 42,700 24,854 56,861 56,097 52,129 68,974 LIABILITIES Current liabilities Trade and other payables (9,740) (5,484) (9,866) Current tax payable (297) (358) (297) Deferred income - (15,823) (5,401) Provisions (477) (150) (629) Net current assets 45,583 30,314 52,781 Total assets less current liabilities 118,160 58,687 107,847 Non-current liabilities Deferred tax liabilities (7,642) (5,548) (5,559) Provisions (145) (77) (81) (7,787) (5,625) (5,640) Net assets 110,373 53,062 102,207 Shareholders’ equity Share capital 6 10,468 8,797 10,467 Share premium 6 119,649 100,483 119,629 Shares to be issued 6 2,273 - 2,273 Other reserves 6 50,480 18,642 37,996 Profit and loss account 6 (72,497) (74,860) (68,158) Total shareholders’ equity 110,373 53,062 102,207 * Cash and cash equivalents and short-term deposits have been reclassified as disclosed in note 5. Consolidated Cash flow statement for the six months ended 31 December 2008 6 months 6 months Year ended ended ended 31 December 31 December 30 June 2008 2007* 2008* unaudited Unaudited audited £'000 £'000 £'000 Cash flows from operating activities (Loss)/profit for the period/year (4,965) 6,170 12,329 Add back: Foreign exchange (gain)/loss (1,076) 136 - Finance income (8,011) (1,502) (2,578) Tax (credit)/charge (1,493) (2,050) 1,047 Depreciation of property plant and equipment 318 162 213 Share-based payments 626 508 1,051 Operating cash flows before movement in working capital (14,601) 3,424 12,062 Decrease in debtors 1,237 1,239 961 Decrease in creditors (6,963) (18,372) (28,506) Cash generated used in operations (20,327) (13,709) (15,483) Interest received 1,136 972 2,753 Research and development tax credit received - 2,011 2,011 Net cash used in operating activities (19,191) (10,726) (10,719) Cash flows from investing activities Purchase of property, plant and equipment (200) (208) (1,969) Purchase of intangible assets (1,779) - (1,605) Purchase of short-term deposits - (20,524) (5,000) Net cash outflow in respect of acquisitions - - (237) Net cash used in investing activities (1,979) (20,732) (8,811) Cash flows from financing activities Proceeds from issue of ordinary share capital 21 34 20,966 Expenses paid in connection with issue of ordinary share capital - - (980) Net cash generated from financing activities 21 34 19,986 Net decrease in cash and cash equivalents (21,149) (31,424) 456 Exchange gains/(losses) on cash and bank overdrafts 6,988 (136) (9) Cash and cash equivalents at beginning of year 56,861 56,414 56,414 Cash and cash equivalents at end of year 42,700 24,854 56,861 * Cash and cash equivalents and short-term deposits have been reclassified as disclosed in note 5.
Notes to the interim accounts
1. Basis of Preparation and Accounting Policies
The interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2008 were approved by the Board of Directors on 26 September 2008 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006. This condensed consolidated interim financial information has been reviewed not audited.
This condensed consolidated half-yearly financial information for the six months ended 31 December 2008 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 - ‘Interim Financial Reporting’ as adopted by the European Union. This half-yearly condensed consolidated financial report should be read in conjunction with the annual financial statements for the year ended 30 June 2008, which have been prepared in accordance with IFRSs as adopted by the European Union. Except as described below, the accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2008, as described in those financial statements.
Taxes on income in interim periods are accrued using the tax rate that would be applicable to total expected annual earnings.
There are no new Standards likely to effect the financial statements for the year ending 30 June 2009.
2. Segmental information
Primary reporting segment - business segment
The Directors are of the opinion that under IAS 14 - ‘Segmental information’ the Group has only one business segment, being drug development.
Secondary reporting segment - geographical segment
The Group’s geographical segments are determined by location of operations.
All revenue is derived from customers whose operations are located in Europe.
The following table shows the carrying value of segment assets by location of assets:
6 months 6 months ended ended Year ended 31 Dec 2008 31 Dec 2007 30 June 2008 £'000 £'000 £'000 Total assets/(liabilities) UK 112,457 53,460 80,430 US (2,084) (398) 21,777 Total 110,373 53,062 102,207
Total assets are allocated based on where the assets are located.
The following table shows the costs in the period to acquire property, plant, equipment and intangibles by location of assets:
6 months 6 months ended ended Year ended 31 Dec 2008 31 Dec 2007 30 June 2008 £'000 £'000 £'000 Capital expenditure UK 1,866 208 3,574 US 113 - 26,900 Total 1,979 208 30,474 3. Finance income 6 months ended 6 months 31 Dec ended Year ended 2008 31 Dec 2007 30 June 2008 £'000 £'000 £'000 Interest receivable: - On short-term deposits 289 980 480 - On cash and cash equivalents 1,027 522 2,098 Net foreign exchange gains on financing activities 6,695 - - Total 8,011 1,502 2,578 4. (Loss)/profit per ordinary share 6 months 6 months ended ended Year ended 31 Dec 31 Dec 30 June 2008 2007 2008 (Loss)/profit for the period (£'000) (4,965) 6,170 12,329 Weighted average number of shares (‘000) 613,529 446,405 455,649 Basic (loss)/earnings per ordinary share (0.8)p 1.4p 2.7p 6 months 6 months ended ended Year ended 31 Dec 31 Dec 30 June 2008 2007 2008 (Loss)/profit for the period (£'000) (4,965) 6,170 12,329 Weighted average number of shares (‘000) 613,529 446,405 455,649 Adjustments for: - share options (‘000) - 16,555 19,269 - deferred consideration shares (‘000) - - 523 Weighted average number of shares (‘000) 613,529 462,960 475,441 Diluted (loss)/earnings per ordinary share (0.8)p 1.3p 2.6p In the six months ended 31 December 2008, the Group had no dilutive potential ordinary shares in issue because it was loss making. In prior periods diluted earnings per share consider the effects of potential dilutive shares relating to employee share option schemes and deferred consideration shares.
5. Reclassification
The Directors have reviewed the classification of certain items within the Income Statement and Balance Sheet and believe, in order to aid comparison, it is more appropriate to classify the following differently than was reported in prior periods:
1) Reclassification of expenditure - certain costs were previously included within Administrative Expenses and have been reclassified in Research and Development in order to be consistent with industry sector accounting practices. The impact of the change is to increase Research and Development costs and reduce Administrative expenses by £3,360,000 (6 months to December 2007: an increase of £1,018,000; year ended 30 June 2008: an increase of £3,817,000). Reallocated costs include business development, facilities and a proportion of other overheads directly attributable to Research and Development activities.
2) Reclassification of cash and cash equivalents and short-term deposits - the Group’s definition of cash and cash equivalents has been restated to reflect more accurately the underlying substance of the deposits. Historically cash was classified as a deposit when its duration was over 90 days whereas it now includes all cash deposited for three months. The impact of the change is to increase cash and cash equivalents and reduce short-term deposits by £24,517,000 (6 months to 31 December 2007: £8,012,000; year ended 30 June 2008: £23,000,000). The relevant comparatives in the cash flow statement have been amended to reflect these adjustments.
6. Shareholders’ funds and statement of changes in shareholders’ equity
Profit Shares Other Other and Share Share to be reserve: reserve: loss Total capital premium issued retranslation merger account £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 July 2007 8,795 100,451 - (1,024) 19,595 (81,538) 46,279 Profit for the period - - - - - 6,170 6,170 New share capital issued 2 32 - - - - 34 Share options: value of employee services - - - - - 508 508 Foreign exchange adjustments on consolidation - - - 71 - - 71 At 31 December 2007 8,797 100,483 - (953) 19,595 (74,860) 53,062 At 1 July 2007 8,795 100,451 - (1,024) 19,595 (81,538) 46,279 Profit for the year - - - - - 12,329 12,329 New share capital issued 1,672 20,158 - - 19,660 - 41,490 Expenses on share issue taken to share premium - (980) - - - - (980) Share capital to be issued - - 2,273 - - - 2,273 Share options: value of employee services - - - - - 1,051 1,051 Foreign exchange adjustments on consolidation - - - (235) - - (235) At 30 June 2008 10,467 119,629 2,273 (1,259) 39,255 (68,158) 102,207 At 1 July 2008 10,467 119,629 2,273 (1,259) 39,255 (68,158) 102,207 Loss for the period - - - - - (4,965) (4,965) New share capital issued 1 20 - - - 21 Share options: value of employee services - - - - - 626 626 Foreign exchange adjustments on consolidation - - - 12,484 - - 12,484 At 31 December 2008 10,468 119,649 2,273 11,225 39,255 (72,497) 110,373
7. Principal risks and uncertainties 8. The principal risks and uncertainties
