SOPHIA ANTIPOLIS, France, July 30 /PRNewswire-FirstCall/ -- NicOx S.A. (Eurolist: COX) today reported its financial results for the six months ended June 30, 2007.
Key highlights for the first six months of 2007: -- Initiation of the 302 and 303 pivotal phase 3 studies for naproxcinod, the final phase 3 trials in NicOx' plan for regulatory filing -- Initiation of a phase 2 efficacy study for PF-03187207 in NicOx' glaucoma collaboration with Pfizer -- Selection of the first drug candidate in NicOx' antihypertensive collaboration with Merck and subsequent submission of an IND for this candidate -- Appointment of three key officers to the Company's management: Pascal Pfister, MD, as Chief Scientific Officer, Jacques Djian, MD, as Cardiometabolic Area Leader and Sanjiv Sharma as Vice President Commercial Affairs -- Successful completion of a capital increase with net proceeds of euro 120.7 million
Michele Garufi, Chairman and CEO of NicOx, declared: "We have been focusing the majority of NicOx' internal efforts on completing the development of naproxcinod and were successful in initiating the two remaining pivotal phase 3 studies in our regulatory plan during the first half of the year. Due to the successful financing in February, we are confident we will meet our goal of submitting the naproxcinod NDA in the first quarter of 2009, while at the same time preparing the Company for its progressive transformation from a pure R&D company into an integrated pharmaceutical business. At the same time, we are very pleased with the rapid advancement of our important collaborations with Merck and Pfizer in the major indications of hypertension and glaucoma. We look toward the remainder of 2007 with confidence in our product portfolio and the world class team we have assembled."
Financial summary for the first half 2007
Revenues for the first half of 2007 increased 203% to euro 11.2 million, compared to euro 3.7 million during the same period in 2006. This increase is due to payments received from NicOx' partnered programs, primarily the Company's collaborations with Merck & Co., Inc. in the antihypertensive field and Pfizer Inc in ophthalmology.
For the first six months of 2007, operating expenses were euro 21.0 million, compared to euro 19.0 million for the same period in 2006. The majority of these expenses relate to the development of naproxcinod, NicOx' lead drug candidate, which is a unique, first in class, COX-Inhibiting Nitric Oxide Donating (CINOD) product for the treatment of the signs and symptoms of osteoarthritis.
The Company recorded a net loss of euro 6.6 million for the first six months of 2007, compared to a net loss of euro 14.7 million for the same period in 2006. Net loss is expected to increase significantly in the second half of 2007, due to costs relating to naproxcinod.
On June 30, 2007, NicOx had cash, cash equivalents and current financial instruments of euro 195.2 million, compared to euro 81.7 million on December 31, 2006. The significant strengthening of NicOx' balance sheet was mainly due to the successful completion of a rights issue in February 2007, with net proceeds of euro 120.7 million, which will be used to finance the phase 3 clinical studies for naproxcinod, as well as the initial pre-marketing activities to support the launch of the compound.
* Review of the first six months of 2007:
Initiation of the two remaining phase 3 pivotal studies for naproxcinod
Naproxcinod is NicOx' lead product and the first compound in the COX- Inhibiting Nitric Oxide Donating (CINOD) class, which the Company aims to develop for treating the signs and symptoms of osteoarthritis. NicOx believes naproxcinod has the potential to become the drug-of-choice in this indication, with no detrimental effect on blood pressure and a good gastro-intestinal tolerability.
NicOx' plan for the regulatory filing of naproxcinod consists of three pivotal phase 3 trials (the 301, 302 and 303 studies). Each of these studies has been designed to compare the efficacy of naproxcinod to placebo on three standard co-primary endpoints after 13 weeks. In October 2006, NicOx reported the top-line results from the 301 study in 918 patients with knee osteoarthritis, which revealed that naproxcinod was superior to placebo on all three co-primary efficacy endpoints (see press release of October 27, 2006). Blood pressure data for naproxcinod showed a sustained reduction compared to baseline and the existing anti-inflammatory agent naproxen, at week 2, 6 and 13, confirming earlier published data from phase 2 clinical studies. During the first six months of 2007, NicOx initiated the two remaining pivotal trials for naproxcinod (the 302 and 303 studies):
-- The 302 study is expected to enroll approximately 1020 patients with osteoarthritis of the knee at around 120 clinical centers in the United States, with efficacy results expected in mid-2008 (see press release of April 3, 2007). In addition to the primary efficacy endpoints at 13 weeks, a secondary endpoint will compare the efficacy of naproxcinod and naproxen at 26 weeks. -- The 303 study is expected to enroll approximately 800 patients with osteoarthritis of the hip at around 100 clinical centers in the United States, Canada and Europe, with efficacy results also expected mid-2008 (see press release of June 29, 2007).
As in the 301 trial, patients in the ongoing 302 and 303 studies are undergoing controlled standardized Office Blood Pressure Measurements (OBPM) at each visit to the treatment center. Following the completion of the 302 and 303 trials, NicOx plans to perform a predefined statistical analysis on the pooled OBPM data from all three phase 3 studies. NicOx projects the submission of a New Drug Application (NDA) for naproxcinod to the United States Food and Drug Administration (FDA) during the first quarter of 2009.
Important achievements in the glaucoma collaboration with Pfizer Inc
In March, NicOx announced the initiation of a phase 2 clinical trial for PF-03187207, the selected development candidate from its August 2004 agreement with Pfizer, which is focused on the development of novel nitric oxide- donating prostaglandin F2-alpha analogs for the treatment of glaucoma. This phase 2 study is designed to compare the safety and efficacy of PF-03187207 to the prostaglandin F2-alpha analog latanoprost, a proprietary Pfizer product and the leader in worldwide glaucoma sales. The initiation of this trial followed the review of an Investigational New Drug (IND) submission for PF- 03187207 by the FDA, which resulted in a euro 1.0 million milestone payment from Pfizer to NicOx.
In February, promising preclinical results from a prototype compound, which is a nitric oxide-donating derivative of latanoprost, were presented at the Association for Ocular Pharmacology and Therapeutics 8th Scientific Meeting. The NicOx compound was shown to have an improved ability to lower Intraocular Pressure (IOP) in validated preclinical models when compared to latanoprost.
NicOx and Pfizer have also made good progress in the major collaborative agreement signed in March 2006, which granted Pfizer exclusive rights to apply NicOx' nitric oxide-donating technology across the entire field of ophthalmology. NicOx received euro 3.0 million from Pfizer which related to the research funding for the second year of this collaboration.
Significant progress in the antihypertensive collaboration with Merck & Co., Inc.
In January, NicOx announced that Merck and NicOx had selected the first drug candidate from the companies' major collaboration to develop novel antihypertensive agents using NicOx' nitric oxide-donating technology. IND- enabling toxicology studies were subsequently initiated on this candidate and the achievement of this milestone resulted in a euro 5.0 million payment from Merck to NicOx.
In May, Merck submitted an IND for the candidate and the first of a series of planned clinical trials was recently initiated following the review of this exploratory IND submission by the FDA (see press release of July 16, 2007).
Other research and development programs -- In May, NicOx and Axcan Pharma Inc. announced that the two companies had agreed not to pursue the development of NCX 1000 following a preliminary analysis of 11 patients from a phase 2a study in portal hypertension, which confirmed the safety profile of NCX 1000 but did not demonstrate required efficacy. -- In June, NicOx and the US National Cancer Institute (NCI) took the precautionary measure of ending an NCI-sponsored phase 1 trial, studying the potential of NCX 4016 as a preventative treatment for colon cancer, due to results observed in non-clinical, in vitro genotoxicity tests on NCX 4015, a potential, specific metabolite of NCX 4016. NicOx is in the process of evaluating a further program of testing in order to assess the relevance of these results.
Pascal Pfister MD appointed as Chief Scientific Officer
On July 2, NicOx announced the appointment of Pascal Pfister, MD, as Chief Scientific Officer (CSO) and member of NicOx' executive team, with overall responsibility for NicOx' Research and Development (R&D) activities and managing more than 75 people. Dr. Pfister brings extensive experience and leadership to NicOx from his 19 year career at Novartis & Sandoz. The Company also further strengthened its R&D team through the recruitment of Jacques Djian, MD, as Cardiometabolic Area Leader who is advising and managing NicOx' R&D in the cardiometabolic disease area.
Sanjiv Sharma appointed as Vice President of Commercial Affairs in the United States
In April, NicOx announced the recruitment of Sanjiv Sharma as Vice President of Commercial Affairs, who is responsible for implementing a global commercial strategy for NicOx' portfolio and defining the strategy for establishing sales and marketing operations in preparation for the launch of naproxcinod. Mr. Sharma is a member of NicOx' executive team and will head NicOx' planned US office, which will be established in Warren County, New Jersey. NicOx currently employs a team of 5 people in the New Jersey area.
Successful completion of a capital increase with net proceeds of euro 120.7 million
On February 16, NicOx successfully completed a capital increase with preferential subscription rights for existing shareholders which it announced on January 22. There was a demand for new ordinary shares totaling euro 227.0 million, with the offering therefore covered 1.75 times. The offering raised net proceeds of euro 120.7 million through the issuance of 9,131,526 new ordinary shares, representing 24.00% of NicOx' issued share capital prior to the capital increase and 19.35% post increase.
* Financial results for the first half of 2007:
Eric Castaldi, Chief Financial Officer of NicOx, commented: "The successful completion of the capital increase at the beginning of 2007 was a major achievement that has allowed NicOx to progress naproxcinod to the next value level through the initiation of the 302 and 303 phase 3 studies. Expenses are expected to increase sharply in the second half of the year due to the continuation of these two studies and other costs relating to the development and pre-marketing of naproxcinod."
Revenues
NicOx' revenues reached euro 11.2 million for the six months ended June 30, 2007, compared to euro 3.7 million for the six months ended June 30, 2006. This significant increase results from the following amounts that were entirely recognized as revenues during the first semester of 2007:
-- euro 5.0 million received from Merck in January 2007, following the initiation of toxicology studies on the first development candidate recently selected in the context of the agreement signed with Merck in March 2006. -- euro 1.0 million received from Pfizer in April 2007, following the review of an Investigational New Drug (IND) submission by the United States Food and Drug Administration (FDA) for a new experimental medicine for the treatment of glaucoma, developed under the collaboration agreement signed between Pfizer and NicOx in August 2004.
These amounts, received by the Company, result from a firm commitment by the other contracting party. They have been immediately recognized in revenues because the Company will not have continuing involvement in the future development of the compounds mentioned above.
During the first semester of 2007, NicOx also recognized the following sums, initially recorded as prepaid income, in revenues:
-- euro 1.25 million corresponding to the initial payment of euro 5.0 million from Pfizer, as a technology exclusivity fee, following the signature in March 2006 of an agreement that granted Pfizer rights to an exclusive worldwide license to develop and commercialize new drug candidates using NicOx' proprietary technology in the field of ophthalmology. -- euro 1.5 million corresponding to the funding of the research collaboration, pursuant to the above referenced agreement signed with Pfizer in March 2006. -- euro 2.1 million corresponding to the initial payment of euro 9.2 million received from Merck following the signature of a collaboration agreement for new antihypertensive drug candidates in March 2006. -- euro 0.3 million corresponding to the allocation of the remaining balance of the US $2 million license and option payments received from Axcan following the termination of the development of NCX 1000 in May 2007.
The initial payments above have been deferred from March 2006 for Pfizer and Merck over the estimated duration of the Company's involvement in the development and research programs provided for under the corresponding agreements, the duration of which are revised periodically, if necessary. The payments received from Pfizer for the funding of the research activities are deferred over a period of 12 months from the date of invoice.
Operating expenses
Consolidated operating expenses increased by euro 2.0 million during the first semester of 2007, to reach euro 21.0 million, compared to euro 19.0 million during the same period of 2006. During the first semester of 2007, consolidated operational expenses were split between 71% in research and development expenses and 29% in selling and administrative expenses.
Research and development expenses amounted to euro 14.9 million during the first semester of 2007, compared to euro 14.4 million during the same period of 2006 (including euro 1.1 million allocated to cost of sales in 2007 and euro 0.8 million in 2006). These expenses come essentially from development expenses and are primarily explained by the costs of the phase 3 development of naproxcinod, such as expenses relating to external collaborations with contract research organizations and suppliers involved in the clinical development and the manufacturing activities regarding this compound. The costs of sales correspond for the moment principally to the expenses incurred by the Company in performing research activities under the contracts signed with Pfizer and Merck.
Operational subsidies from the research tax credit, which are deducted from research and development expenses, amounted to euro 2.7 million for the six months ended June 30, 2007, compared to euro 0.5 million for the six months ended June 30, 2006. This increase reflects principally the tax agreement obtained for 2007 by certain subcontractors, including NicOx Srl. The Company anticipates a strong increase in its research and development expenses in the second semester of 2007, notably in relation with the launch of two phase 3 clinical studies on naproxcinod in April and June 2007.
On June 30, 2007, the Company employed 77 people in research and development, compared to 61 people on June 30, 2006.
Administrative and selling expenses amounted to euro 6.1 million on June 30, 2007, compared to euro 4.6 million during the same period in 2006. General and administrative expenses represented euro 4.2 million for the six months ended June 30, 2007, compared to euro 3.4 million for the six months ended June 30, 2006, and correspond mainly to personnel expenses in administrative and financial functions and to the remuneration of corporate officers. These expenses also include structural costs such as leases, property service charges and maintenance costs (excluding structural costs related to research and development activities), legal and accounting fees, and other external administrative costs. The increase in general and administrative expenses for the six months ended June 30, 2007, is mainly due to the gratuitous share and warrant attributions made during the first semester of 2007, and to the increase in personnel and structural expenses inherent to the expansion of the Company.
Selling expenses, which reached euro 1.9 million during the first semester of 2007, compared to euro 1.2 million for the six months ended June 30, 2006, correspond to market development activities for naproxcinod and to business development and communication activities. The increase in selling expenses for the first semester of 2007 results principally from personnel, market analysis and market development expenses, following the creation, during the first semester of 2007, of a commercial department in order to prepare the commercial launch of naproxcinod. The Company anticipates a significant increase in its selling expenses during the second semester of 2007.
On June 30, 2007, the Company employed 32 people in selling, general and administrative departments, compared to 21 people on June 30, 2006.
Operating loss
The operating loss amounted to euro 9.8 million for the six months ended June 30, 2007, compared to euro 15.3 million for the six months ended June 30, 2006. This situation is explained primarily by the strong increase in revenues recognized during the period as explained above.
Other results
Net financial income amounted to euro 3.2 million for the six months ended June 30, 2007, compared to euro 0.7 million for the six months ended June 30, 2006. Net financial income has benefited from the increase in the Company's cash, cash equivalents and financial instruments following the capital increase completed in February 2007.
During the first semester of 2007, the Company recorded a non-significant tax credit, relating to a tax option subscribed by its Italian subsidiary, compared to an income tax expense of euro 0.1 million for the six months ended June 30, 2006.
Net loss
Net loss decreased euro 8.1 million during the first semester of 2007 to euro 6.6 million, compared to euro 14.7 million for the six months ended June 30, 2006. This situation is explained by the strong increase in the revenues recognized over the period, by the significant increase in the research tax credit over the period and its impact on the research and development expenses and the increase in the net financial income following the investment of the net proceeds of the rights offering completed in February 2007. This significant decrease in net loss cannot be considered as an indication of the future results of the Company expected for 2007.
Balance sheet items
On June 30, 2007, the Company's financial instruments, cash and cash equivalents amounted to euro 195.2 million, compared to euro 81.7 million on December 31, 2006. This significant increase in cash, cash equivalents and current financial instruments is primarily attributed to the increase of capital with preferential rights completed in February 2007, the net proceeds of which amounted to euro 120.7 million.
The indebtedness incurred by NicOx is mainly short-term operating debt. As of June 30, 2007, its current liabilities amounted to euro 15.6 million, including euro 6.9 million in accounts payable to suppliers and external collaborators, euro 5.9 million of deferred revenues through payment received under collaboration agreements, euro 2.0 million in accrued compensation for employees, and euro 0.6 million in taxes payable.
NicOx had no loans outstanding and long-term financial leasing commitments amounted to euro 0.03 million as of June 30, 2007.
CONSOLIDATED INCOME STATEMENT For the period ended June 30 2007 2006 (in thousands of euros except for per share data) Revenues 11,176 3,682 Cost of sales (1,115) (770) Research and development expenses (13,797) (13,612) Administrative and selling expenses (6,072) (4,573) Operating loss (9,808) (15,273) Net financial income 3,163 664 Loss before income tax (6,645) (14,609) Income tax expense 3 (132) Loss for the period (6,642) (14,741) Attributable to: - Equity holders of the Company (6,642) (14,741) - minority interests - - Earnings per share for profit attributable to equity holders of the Company (0.15) (0.43) CONSOLIDATED BALANCE SHEET As of As of June December 30, 2007 31, 2006 (in thousands of euros) ASSETS Non current assets Property, plant, & equipment 2,194 1,900 Intangible assets 294 214 Government subsidies receivable 4,185 1,521 Other financial assets 144 141 Deferred income tax assets 3 11 Total non-current assets 6,820 3,787 Current assets Trade receivables 2,225 2,142 Government subsidies receivable - 708 Other current assets 1,560 1,670 Prepaid expenses 2,373 1,362 Current financial instruments 78,156 27,602 Cash and cash equivalents 117,093 54,138 Total current assets 201,407 87,622 TOTAL ASSETS 208,227 91,409 LIABILITIES Capital and Reserves attributable to equity holders of the Company Ordinary shares 9,456 7,610 Other reserves 182,845 66,302 Minority interests in equity - - Total Equity 192,301 73,912 Non-current liabilities Provisions for other liabilities and charges 159 118 Deferred income tax liabilities 110 110 Finance lease 24 34 Total non-current liabilities 293 262 Current liabilities Provisions for other liabilities and charges - 17 Finance lease 16 17 Trade payables 6,889 6,188 Deferred revenue 5,926 8,102 Current income tax payable 5 209 Social security and other taxes 2,599 2,702 Other liabilities 198 - Total current liabilities 15,633 17,235 TOTAL LIABILITIES and SHAREHOLDERS' EQUITY 208,227 91,409
NicOx (Bloomberg: COX:FP, Reuters: NCOX.PA) is a product-driven biopharmaceutical company dedicated to the development of nitric oxide- donating drugs to meet unmet medical needs. NicOx is targeting the therapeutic areas of inflammation and cardio-metabolic disease. Resources are focused on two lead compounds, naproxcinod (formerly HCT 3012), in phase 3 development for the treatment of signs and symptoms of osteoarthritis, and NCX 4016, in phase 2 for type 2 diabetes.
NicOx has strategic partnerships with some of the world's leading pharmaceutical companies, including Pfizer Inc and Merck & Co., Inc.
NicOx S.A. is headquartered in Sophia-Antipolis, France, and is a public company listed on the Eurolist of Euronext(TM) Paris (segment: Next Economy).
The elements included in this communication may contain forward-looking statements subject to certain risks and uncertainties. Actual results of the company may differ materially from those indicated in the forward-looking statements because of different risks factors described in the company's document de reference.
NicOx S.A.CONTACT: Karl Hanks, Manager of Corporate Relations and Market Analysis ofNicOx, +33(0)4-97-24-53-42, hanks@nicox.com; or Investors in the UnitedStates, Lisa Burns, lburns@burnsmc.com, or Juliane Snowden,jsnowden@burnsmc.com, both of Burns McClellan, +1-212-213-0006; or Media inthe United States, Jonathan Birt of FD, +1-212-850-5634, jbirt@fd-us.com;or Media in Europe, Valerie Auffray, +44(0)207-282-2979,valerie.auffray@citigatedr.co.uk, or David Dible, +44(0)207-282-2949,david.dible@citigatedr.co.uk, both of Citigate Dewe Rogerson, all for NicOxS.A.
Web site: http://www.nicox.com/
