PARIS, March 5 /PRNewswire-FirstCall/ -- ExonHit Therapeutics S.A., a French drug and diagnostic discovery company, today announces its consolidated financial results for the year ending December 31, 2007.
2007 Key Events
- Milestone reached in the therapeutic research collaboration with Allergan Inc., in view of the initiation of Phase 1 trials with the first compound resulting from the collaboration;
- Approval by the AFSSAPS (Agence Francaise de Securite Sanitaire des Produits de Sante) and by ethics committees to initiate a clinical trial on 135 patients suffering from Alzheimer’s disease, as a result of Phase 1 clinical trials of EHT0202 which were successfully realized during the year;
- Prototype of the first blood test of Alzheimer’s Disease which the Company wishes to sell, as a first commercial step and as early as 2009, in its service laboratories which are GLPS (Good Laboratory Practices Standards) compliant, to the pharmaceutical industry;
- Signature of an amendment to the strategic partnership with bioMerieux in the field of cancer diagnostics. Pursuant to this amendment, ExonHit obtained certain commercial rights to diagnostic tools resulting from the collaboration and bioMerieux will have more flexibility to initiate new R&D programs in this field;
- New genomic map for the analysis of the murine genome;
- Increased financial resources, substantial improvement of stock liquidity and higher free float.
- Cash burn from operations remained limited at EUR 4.9 million (EUR 3.9 million in 2006);
- Consolidated cash and cash equivalents position increased to EUR 31.3 million at December 31, 2007 by issuance of new shares against EUR 24.0 million at December 31, 2006.
- Strategic progress in therapeutics
- New financial commitments from Allergan on the collaboration with the nomination in regulatory pre-development of a second compound resulting from the collaboration.
- Strengthened position in diagnostics
- Initiation of a new program in the field of blood diagnostic of prostate cancers in the framework of the collaboration signed with bioMerieux. To this end, ExonHit has initiated to the financing of clinical trials in Austria to speed the collection of blood samples.
- Development of the SpliceArray(TM) business
- Implementation and certification of an Affymetrix platform to equip a second service laboratory in Paris.
- Strengthened patent portfolio
- 10 new patents were filed in 2007, bringing the total of active patents filed since the Company’s creation in 1997 to 177. 26 patents have been granted to ExonHit Therapeutics since its inception.
Bruno Tocque, President of the Management Board of ExonHit, commented: “We have reached our main objectives in 2007. We are very proud of the work accomplished by our collaborators in a context of market agitation which has been very disturbing for companies like ExonHit which invest in innovation with 65% of its operating expenses devoted to R&D.
We have kept our cash burn from operations below EUR 5 million while still investing more in R&D than in 2006. At December 31, 2007, we have an enviable cash and cash equivalent position of EUR 31.3 million. We will thereby have the capacity to continue our investment efforts, and notably in Alzheimer’s disease to market our first blood diagnostic for the detection of AD and to continue our clinical research program with our compound EHT0202.
I am very confident in the efforts of our teams to obtain GBEA accreditation of our two GLPS service laboratories in molecular biology, both in Paris and in Gaithersburg, to serve biomedical research and our own medical diagnostics in neurodegenerative diseases and cancers. This is a crucial step for our revenues to grow as early as 2009. In addition, in 2008, we will have the results of over 5 years of ongoing efforts with our partners, Allergan and bioMerieux, and the new management will endeavour to translate these results in realistic operational and marketing ambitions.”
Overview of ExonHit’s business activities
In order to better organise its operations and to increase its chances of building its revenues, the Company has implemented two commercial departments: “Molecular Diagnostic/Genomic Services” and “Therapeutics”.
Each department shall have the necessary resources to reach its objectives, as well as large autonomy to determine those objectives. The R&D, for each department, will conduct the research and reach the objectives that will have been set.
Of course, there will be the two departments will be connected and information shared. To this end, a Strategy department has been created, which aims at ensuring the coherence and the long term objectives of the Company. This department will include Operations and Project organisation.
For 2008, Operations will concentrate their efforts on obtaining an accreditation to realise clinical diagnostics in Paris and Gaithersburg. It will also realise the services which ExonHit offers its customers in biomedical research, and continue the promotion of its tools both in the US and in Europe.
In 2008, the Company will continue to invest in its two fields of activity, both in partnership and in-house, in line with the projects initiated since several years by the group.
- Molecular Diagnostic/Genomic Services
In 2006, the Company transferred to bioMerieux a diagnostic panel for the screening of breast cancers in blood. The Company will now continue the projects which have been initiated in common in 2006 and 2007, i.e., blood diagnostic of colon cancer and blood diagnostic of prostate cancer.
In house diagnostic research will also continue for Alzheimer’s disease in order to identify, at an early stage, individuals who can develop Alzheimer’s disease, and in order to service the existing test to assist the pharmaceutical industry in recruiting homogeneous cohort of patients for clinical trials for new drugs.
In genomic services, the Company, in collaboration with renowned scientists, intends to continue researches on different pathologies to increase the penetration of its new generation of tools, the SpliceArray(TM), in the scientific and medical communities. New biochips, particularly on the Agilent platform, will contribute to fuel the growth of this activity.
- Therapeutics
The strategic collaboration with Allergan will continue with the ambition to validate new pharmacologic programs for clinical trials in man.
In house, Phase 2 study will be realized with EHT0202, in several clinical sites, on 135 patients suffering from Alzheimer’s disease, randomized in double-blind. The main objective is to determine the tolerability and safety of the product in an oral administration over a 3 month period, in association with inhibitors of acetylcholinesterase, which is the usual treatment for this disease. The study will also allow the collection of preliminary data on the clinical efficacy of the product, notably on a cognitive and behavioural standpoint.
2007 Consolidated financials results
- Income Statement
Consolidated R&D revenues were EUR 5.3 million in 2007, down 5% compared to EUR 5.6 million in 2006. Total revenues amount to EUR 5.4 million, a decrease of 5% compared to the EUR 5.6 million achieved in 2006. At constant exchange rate, total revenues would have increased 4% between 2006 and 2007. 89% of ExonHit’s 2007 revenues come from the Allergan collaboration; this compares with 76% in 2006. While revenues generated by the Therapeutics and SpliceArray(TM) activities posted double-digit growth in 2007, revenues form the bioMerieux collaboration decreased due to, on the one hand, the delays experienced in the recruitment of samples in prostate cancer and, on the other hand, the milestone achieved in 2006 in this collaboration.
R&D revenues from grants increased from EUR 0.01 million in 2006 to EUR 0.05 million in 2007.
R&D expenses have increased by 27% to EUR 8.6 million in 2007 when compared to EUR 6.8 million in 2006, mainly as a result of increased expenses in clinical trials. In 2007, R&D revenues covered 62% of the company’s R&D expenses, as opposed to 83% in 2006.
Marketing and selling expenses have increased by 31% to EUR 1.0 million in 2007, compared to EUR 0.8 million in 2006. This increase mainly comes from the recruitment of new employees in this department and the increase in the selling and marketing effort for SpliceArray(TM).
General and administrative costs increased by 16% to EUR 3.5 million in 2007, compared to EUR 3.0 million in 2006. This increase mainly comes from the substantial increase of study and consultancy fees between the two years as a result of increased expenses to value our IP.
Operating expenses have been increased by 24% to EUR 13.2 million in 2007 compared to EUR 10.6 million in 2006. In 2007, 65% of these expenses are allocated to R&D compared to 64% in 2006.
Consequently, the company posted an operating loss of EUR 7.8 million in 2007, compared to EUR 5.0 million in 2006.
The presence of convertible bonds throughout fiscal year 2007, as well as the leasing of some pieces of equipment, explains the increase in interest expenses between 2006 and 2007 at EUR 0.8 million. Meanwhile, a more active management of our cash as well as an increased cash balance over 2007 leads to higher financial gains in 2007 at EUR 1.3 million. Nonetheless, the unfavourable evolution of the euro/dollars exchange rate between the two year years has led to a currency rate loss of EUR 0.7 million during 2007, compared to a loss of EUR 0.3 million in 2006. As a consequence, the financial result amounts to a loss of EUR 0.22 million in 2007 as compared to a gain of EUR 0.4 million in 2006.
The progression of our R&D expenses leads to an increase of the income tax benefit from EUR 0.5 million in 2006 to EUR 0.7 million in 2007. On December 31, 2007, the company had a Research Tax Credit receivable of EUR 1.8 million.
As a consequence, ExonHit recorded a consolidated net loss of EUR 7.3 million in 2007 compared to EUR 4.5 million in 2006.
- Balance sheet
On December 31, 2007, the cash position of the Company amounted to EUR 31.3 million, against EUR 24.0 million at the end of 2006. As a result of a number of share capital increases following the exercise of warrants and stock-options and the issuance of new shares using the equity line with Societe Generale convertible bonds, the Company strengthened its stockholders’ equity.
- Cash flow statements
In 2007, ExonHit’s net use of cash due to operating activities was EUR 4.9 million as compared to EUR 3.9 million for 2006. This difference is mainly due to the increase of the loss from operations that is partly balanced by a decrease in the “accounts receivables” line.
The capital expenditure to strengthen the SpliceArray(TM) business with the opening of a new service laboratory in Paris mainly explains the capital expenditure level of EUR 0.9 million in 2007, compared to EUR 0.3 million in 2006.
The financial operations generated EUR 13.3 million in 2007, this compares with a generation of EUR 14.7 million in 2006.
About ExonHit Therapeutics
ExonHit Therapeutics is the world’s leader in the analysis of alternative RNA splicing, a process which when deregulated plays a key role in the onset of various diseases.
ExonHit has a multi-component commercial strategy to capture the maximum value from its leadership in alternative splicing. The Company is already generating revenues from a new generation of microarrays, SpliceArrayTM family of products, that enable life science researchers to detect crucial disease-associated information. These products are marketed worldwide in conjunction with Agilent and Affymetrix. In the field of diagnostics, ExonHit has a major collaboration with bioMerieux to develop completely novel predictive blood-based cancer diagnostics, which could play a key role in improving the treatment of breast cancer and other major cancers and develops its own projects for the detection of other chronic diseases such as Alzheimer’disease or atherosclerosis.
In parallel, ExonHit is developing its own therapeutic pipeline in the field of neurodegenerative diseases and cancer. The Company has advanced drug candidates into clinical trials and is evaluating several promising pre-clinical compounds. ExonHit also has a strategic partnership with Allergan, to discover and develop new therapeutics in the areas of pain, neurological diseases and ophthalmology. This collaboration provides on-going research funding to ExonHit.
Founded in 1997, ExonHit is headquartered in Paris, France and has a U.S. facility in Gaithersburg, Maryland. The Company is listed on Alternext of Euronext Paris since November 17, 2005.
http://www.exonhit.com
This press release includes only summary information and does not purport to be comprehensive. The projections, forecast and estimates of ExonHit Therapeutics which may be contained herein are for illustrative purposes only and are based on management’s current views and assumptions. Such projections, forecast and estimates involve known and unknown risks and uncertainties, as described at Section 4.2 “Facteurs de risque” (Risk Factors) of the Document de Base available on ExonHit Therapeutics’ website (www.exonhit.com), that may cause actual results, performance or events to differ materially from those anticipated in the summary information.
In addition, ExonHit Therapeutics, its shareholders, and its affiliates, directors, officers, advisors and employees have not verified the accuracy of, and make no representations or warranties in relation to, statistical data or predictions contained in this press release that were taken or derived from third party sources or industry publications, and such statistical data and predictions are used in this press release for information purposes only.
philippe.rousseau@exonhit.com
CONTACT: Contacts: ExonHit Therapeutics, Bruno Tocque, Chairman of the
Management Board; Philippe Rousseau, Chief Financial Officer, Tel:
+33-1-58-05-47-00, philippe.rousseau@exonhit.com
