PARIS, July 31 /PRNewswire-FirstCall/ -- ExonHit Therapeutics S.A. (Alternext: ALEHT), a drug and diagnostic discovery company, today presents its achievements for first half 2007.
First half 2007 - Key Events
- Completion of Phase 1 program for EHT0202;
- Filing of an Investigational Medicinal Product Dossier (IMPD) with the European Medicines Agency by Allergan Pharmaceuticals, on June 12, 2007, for EHT/AGN001, the first compound resulting from our collaborative therapeutic research;
- Additional step towards the certification of a blood diagnostic for Alzheimer’s disease;
- Launch of Genome Wide SpliceArray(TM) and opening of a second service platform in Paris;
- Filing of 6 new patents;
- Increase of financial resources, and reinforcement of shareholders’ equity.
Other important events for first half 2007
- Key financial figures
- Total revenues amounted to EUR 2.3 million, and revenues derived from the SpliceArray(TM) business increased by 66% compared to first half 2006, at constant exchange rate;
- Research and development expenses increased by 26% to EUR 4.2 million as a result of important clinical research efforts;
- Cash burn from operations remained limited at EUR 2.8 million;
- Consolidated cash and cash equivalent position increased to EUR 32.4 million on June 30, 2007.
- Strategic progress in therapeutics
- Demonstration of the efficacy of EHT0202 in animal models to revert the scopolamine deleterious effect on memory. Preparation for filing clinical studies with the objective to complete a scopolamine study in human before initiation of Phase II at the end of 2007;
- Strengthened position in diagnostics
- Validation of the first blood-based diagnostics for Alzheimer’s disease;
- Publication by bioMerieux of further data on the blood-based diagnostics for breast cancer they develop and announcement of the initiation of a third program on prostate cancer.
- Development of the SpliceArray(TM) business
- Volumes on the SpliceArray(TM) business for first half 2007 equivalent to those realized over the entire year of 2006;
- Signature of a research license on the ExonHit Therapeutics IP in this field with the University of North Carolina, and renewal of that signed with Merck Inc.
- Strengthened patent portfolio
- Six (6) new patents were filed during first half 2007, bringing the total of active patents filed since the Company’s creation in 1997 to 173. 27 patents have been granted to ExonHit Therapeutics since its inception.
- A complaint for infringement of US patent ndegrees 6,881,571 has been filed by ExonHit Therapeutics SA and ExonHit Therapeutics, Inc. (the “Company”) against Jivan Biologics, Inc. with the United States District Court, Northern District of California, on March 12, 2007.
Bruno Tocque, President of the Management Board of ExonHit Therapeutics, commented: “We have registered continued progress in our business, especially in the therapeutics field, and have strengthened our financial position by raising EUR 11.7 million. There has been the completion of the phase 1 study program with the EHT0202 and our partner Allergan Pharmaceuticals has filed an Investigational Medicinal Product Dossier (IMPD) to start clinical trials on the new chemical entity resulting discovered through our collaboration.
In addition, we now have a date for certification of our blood-based diagnostics for Alzheimer’s disease. In 2009, we will have completed an unprecedented clinical program and will proceed with the certification in Europe, and the registration in the United States, of a multi-gene expression test for detection of Alzheimer’s disease from blood. In parallel, bioMerieux continues to recruit patients for the prospective study they initiated at the end of the last summer to position the blood test for the detection of breast cancer. However, due to the delays experienced in the recruitment of blood samples for the third program initiated by bioMerieux, we have not yet recognized a milestone payment related to this program. The second half will be paced by our achievements and those of our partner in neurodegenerative diseases and Alzheimer’s disease, for which we have a critical mass of researchers and clinicians to enable us to make a difference in such a competitive field.”
Overview of ExonHit Therapeutics’ activities
ExonHit has made significant progress in its marketing activities and its clinical trials both in the diagnostics and therapeutics fields. ExonHit will be present in 2007 in its three fields of expertise, i.e. drugs, diagnostics and research tools, and will continue its balanced investment strategy, with resources allocated both on internal programs and programs with partners. These three fields have distinct risks and returns on investment.
- Development of new therapeutics
We intend to continue to develop our therapeutic pipeline by using our R&D engine based on the analysis of alternative splicing events and their role on the onset of disease, both in on our own resources and within our strategic alliance with Allergan.
- We have completed the complementary Phase 1 clinical trials to measure the non toxicity of the EHT0202 compound. These complementary trials included the food effect study as well as escalating doses on women and men over 60. At the same time, our clinicians and experts have designed the synopsis of the first efficacy studies in patients with Alzheimer’s disease. In parallel, additional long term toxicity studies have been initiated in view of a prolonged administration in further clinical trials.
- The Allergan collaboration continues to be very satisfactory. An important milestone has been reached with the filing of the IMPD for the first administration to human for this compound discovered within its common discovery effort, and synthesized by ExonHit Therapeutics. Work has been done on other chemical series active on validated targets in order to offer clinicians with new discoveries in each single field of this collaboration, i.e. pain, ophthalmology, and neurodegeneration
- Development of new diagnostics
- The scientific results we presented at the International Congress on Alzheilmer’s and Parkinson diseases in Salzburg, Austria, open the route to develop new tests to diagnose early-stage Alzheimer’s from blood. An ambitious program to further collect blood samples has been initiated. Such diagnostics should enable the recruitment of patients for clinical trials of current and future compounds aiming at treating Alzheimer’s disease and thus lead to a better treatment of patients.
- At the April 2007 AACR, bioMerieux and ExonHit jointly presented additional results to the study of the performance of the blood-based diagnostic for breast cancer and the two companies have initiated a third program to detect prostate cancers.
- SpliceArray(TM) (genomic analytical tools)
After producing a new map of the human genome expression and the tools for its study, our researchers have designed on the Affymetrix platform, the “Genome Wide SpliceArray(TM)”, a micro-array that gathers all elements for an optimal detection of all expressed human genes in the various healthy and diseased tissues. Our researchers continue to develop new products to even better serve the needs of the biomedical community.
Our US subsidiary, ExonHit Therapeutics Inc., has successfully diversified its service offering, especially in Europe, and has signed a licence agreement with the University of North Carolina, and renewed that signed with Merck, Inc. last year.
First half 2007 - Consolidated financial results
- Income statement
Consolidated revenues for first half 2007 amounted to 2.3 million euros, a 30% decrease compared to 3.2 million euros for the same period last year. This decrease is due to the lower level of Research and Development revenues resulting from (i) slightly lower revenues from the Therapeutics activities which suffered from the unfavourable exchange rate; (ii) a significant decrease in revenues from our diagnostic activities, whereas we received a milestone payment from bioMerieux during first half 2006, the delay in providing samples for the third program prevented us to recognize revenues on this program during first half 2007. These decreases have been only partly compensated by the strong growth of our SpliceArray(TM) business that increased by more than 50% as compared to last year, despite an unfavourable exchange rate. Balanced amounts on old projects explained the growth in other revenues.
Research and Development expenses for first half 2007 increased by 26% to 4.2 million euros as compared to EUR 3.3 million for the same period last year. This growth is mainly due to increased clinical trial expenses both in the therapeutics and diagnostics fields, as well as to the higher number of micro-arrays bought from Affymetrix and Agilent in order to serve external and internal clients.
Marketing and sales expenses increased by 50% to 0.5 million euros for first half 2007 as compared to 0.3 million euros for the same period last year. This increase mainly comes from the recruitment of new employees in this department and the increase in sales and marketing efforts in the SpliceArray(TM) business.
General and administrative expenses amounted to 1.4 million euros for first half 2007, a slight increase (4%) as compared to the 1.3 million euros posted for the same period last year.
In total, the Group’s operating expenses increased by 22% for the first six months of 2007 to 6.0 million euros, as compared to 5.0 million euros for the same period last year. During this period, the Group allocated 69% of its operating expenses to R&D versus 67% for the same period in 2006.
The Group posted an operating loss of 3.8 million euros for first half 2007, a 120% increase as compared to the 1.7 million euros posted for the same period last year.
Following the issuance of convertible bonds in November 2006, interest expenses increased to 0.2 million euros for first half 2007, as compared to 0.01 million euros for first half 2006. At the same time, interest rates increased and cash equivalents were at a higher level, which translated in increased interest incomes earned. These gains increased from 0.1 million euros for the first six months of 2006 to 0.5 million euros for the same period in 2007. As a consequence, we posted a net financial income of 0.3 million euros for first half 2007 against a net financial income of 0.1 million for the same period last year. The Group also posted an exchange loss of 0.1 million euros for first half 2007 as compared to a loss of EUR 0.2 million for first half 2006. These exchange loss or gain are mainly non realized as the Group keep both cash and cash equivalents in euros and US dollars and it is not the Company’s policy to convert from one currency to another.
As a consequence, ExonHit Therapeutics’ consolidated net loss amounted to 3.6 million euros for first half 2007, as compared to the loss of 1.8 million euros posted for first half 2006.
- Balance sheet
As of June 30, 2007, the consolidated cash balance amounted to EUR 32.4 million, against EUR 24.0 million at the end of 2006 and EUR 11.5 million at the end at June 30, 2006.
As a result of the opening of a new service laboratory in Paris, France, property and equipment increased 30% to 2.2 million euros on June 30, 2007. The majority of the new pieces of equipment have been financed through capital lease.
As a result of the various capital increases that took place during first half 2007 (exercise of warrants and stock-options, as well as issuance of new shares following the use of the PACEO line put in place with Societe Generale), additional paid in capital increased 11.1 million euros, while taking into account the net loss for first half 2007, total shareholders’ equity increased by 7.5 million euros to 20.7 million on June 30, 2007, against EUR 13.2 million on December 31, 2006.
- Cash flow statement
During first half 2007, ExonHit Therapeutics’ net use of cash due to operating activities was 2.8 million euros slightly lower than the 3.0 million euros used during first half 2006. This increase mainly reflects the increased net loss.
Capital expenditures are mainly related to the equipment of the new service laboratory in Paris for the SpliceArray(TM) activity.
The partial exercise of warrants issued in November 2005 and June 2006, as well as stock-options, combined with the issuance of new shares following the use of the PACEO line put in place with Societe Generale led to a strengthening of shareholder’s equity by 11.7 million euros for first half 2007.
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, “SpliceArrays,” 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.
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 the Alternext market of Euronext Paris since November 17, 2005.
------------------------------------------------------------------------- BALANCE SHEET (Montants en milliers d’euro) (amounts in thousands of euros) ------------------------------------------------------------------------- June 30, December 2006 31, 2005 ASSETS Note (unaudited) (audited) ------------------------------------------------------------------------- Intangible assets, net 121 577 Property and equipment, net 3 2,177 1,677 Other long-term assets 4 1,381 1,387 ------------------------------------------------------------------------- Total long-term assets 3,679 3,641 ------------------------------------------------------------------------- Inventory 97 42 Accounts and grants receivable 1,266 1,879 Other short-term assets 5 2,682 3,050 Cash and cash equivalents 6 32,388 23,972 ------------------------------------------------------------------------- Total short-term assets 36,433 28,943 ------------------------------------------------------------------------- TOTAL ASSETS 40,112 32,584 ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS’ EQUITY ------------------------------------------------------------------------- Share capital 416 382 Additional paid-in capital 69,114 58,003 Accumulated deficit (49,715) (46,086) Other 850 899 ------------------------------------------------------------------------- Shareholders’ equity 7 20,666 13,198 ------------------------------------------------------------------------- Convertible bonds 13,522 13,522 Provision 8 143 169 Capital lease obligations less current portion 9 324 0 Long-term portion of deferred income 9 546 732 ------------------------------------------------------------------------- Total long-term liabilities 870 732 ------------------------------------------------------------------------- Current portion of long-term debt 9 1,158 951 Current portion of capital lease obligations 103 0 Accounts payable 810 650 Other short-term liabilites 11 2,840 3,362 ------------------------------------------------------------------------- Total short-term liabilities 4,911 4,964 ------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 40,112 32,584 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED INCOME STATEMENT (in thousands of euros, except per share data) ------------------------------------------------------------------------- 6 months 6 months 12 months June 30, June 30, December 2007 2006 31, 2006 (unaudited) (unaudited) (audited) ------------------------------------------------------------------------- Research and development revenues 2,246 3,237 5,630 Research and development grants 23 - 9 ------------------------------------------------------------------------- Total revenues 2,269 3,237 5,639 ------------------------------------------------------------------------- Research and Development expenses (4,161) (3,301) (6,784) Marketing and selling expenses (517) (344) (800) General and Administrative expenses (1,361) (1,308) (3,035) ------------------------------------------------------------------------- Total operating expenses (6,039) (4,953) (10,619) ------------------------------------------------------------------------- Loss from operation (3,770) (1,716) (4,979) ------------------------------------------------------------------------- Interest expense (240) (10) (87) Interest income 505 106 329 Exchange gain (loss) (126) (158) (280) ------------------------------------------------------------------------- Loss before tax (3,630) (1,778) (5,018) ------------------------------------------------------------------------- Tax benefit 2 - 486 ------------------------------------------------------------------------- Net income (loss) (3,629) (1,778) (4,532) ------------------------------------------------------------------------- Weighted average number of shares outstanding 25,047,120 23,111,553 23,378,105 ------------------------------------------------------------------------- Net loss per share (0.14) (0.08) (0.19) ------------------------------------------------------------------------- Net loss per share (diluted) (0.14) (0.08) (0.19) ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENTS (in thousands of euros) ------------------------------------------------------------------------- 6 months Year ending ending June 30, December 2007 31, 2006 (unaudited) (audited) ------------------------------------------------------------------------- OPERATING ACTIVITIES ------------------------------------------------------------------------- Net result (3,629) (4,532) Depreciation and amortization of property and equipment 257 382 Depreciation intangible assets 33 28 Provision for pension liabilities (25) (119) Interest on convertible bonds 238 71 Gain (loss) on sale of equipment (27) - Increase (decrease) in cash from: Inventory (58) (42) Accounts receivable 595 (1,392) Grants receivable 16 112 Research tax credit receivable (2) 1,603 Other current assets 366 (403) Accounts payable and accrued expenses 163 (98) Accrued compensation (495) 235 Other current liabilities - - Current portion of deferred income (26) 1,076 Long-term portion of deferred income (185) (860) ------------------------------------------------------------------------- Net cash used in operating activities (2,779) (3,940) ------------------------------------------------------------------------- INVESTING ACTIVITIES ------------------------------------------------------------------------- Purchase of property and equipement (922) (757) Sale of property and equipment 56 416 ------------------------------------------------------------------------- Net cash used in operating activities (866) (340) ------------------------------------------------------------------------- FINANCING ACTIVITIES ------------------------------------------------------------------------- Capital increases (net of fees) 11,688 1,585 Issuance of convertible bonds - 13,522 Repayment of loans and capital lease Issuance (repayment) of loans and capital leases 396 (414) ------------------------------------------------------------------------- Net cash provided by (used in) financing activities 12,084 14,693 ------------------------------------------------------------------------- Net increase(decrease) in cash and cash equivalents 8,439 10,413 Effect of exchange rate on cash (23) (41) Cash and cash equivalents, beginning of period 23,972 13,601 ------------------------------------------------------------------------- Cash and cash equivalents, end of period 32,388 23,972 ------------------------------------------------------------------------- Contacts: ExonHit Therapeutics Bruno Tocque, C.E.O. Philippe Rousseau, C.F.O. Tel: +33-1-58-05-47-00 philippe.rousseau@exonhit.com
ExonHit Therapeutics SA
CONTACT: Contacts: ExonHit Therapeutics, Bruno Tocque, C.E.O., PhilippeRousseau, C.F.O., Tel: +33-1-58-05-47-00, philippe.rousseau@exonhit.com
