STRASBOURG, France, March 6 /PRNewswire/ -- Transgene S.A. announces today its achievements in operations, financial performance for 2006 and outlook for 2007.
"In 2006, we maintained a stable net cash expenditure by increasing our revenues in order to offset increased investments in research and development linked to the maturing of our portfolio of product candidates," said Philippe Archinard, Chief Executive Officer of Transgene. "In 2006, we achieved significant positive clinical results with our therapeutic vaccine candidate TG 4001 for which we are actively seeking to establish a partnership. The year 2007 should be key to Transgene with planned clinical results for three of our product candidates (TG 4010, TG 1042 and TG 4040). On this basis, we expect to further accelerate our development and take a step forward in achieving our strategic objective of becoming one of the world leaders in the field of cancer and infectious diseases immunotherapy."
2006 Highlights: TG 4001 established proof of concept for therapeutic vaccination clinical efficacy.
* Clinical pipeline advances : -- TG 4001 (MVA-HPV-IL2) for the treatment of precancerous cervical lesions caused by the Human Papilloma Virus (HPV) infection: the final Phase II trial results published in April 2006 have shown efficacy of the vaccine at month 6 after administration. Sustainability of the results at month 12 after administration was confirmed in November 2006. -- TG 4010 (MVA-MUC1-IL2) in first line therapy for Non Small Cell Lung Cancer (NSCLC) in combination with chemotherapy: the inclusion of 140 patients in the Phase IIb controlled trial, initiated at the beginning of 2006, should be completed by April 2007 (100 patients recruited to date). -- TG 1042 (Ad-IFNg) for the treatment of relapsing cutaneous lymphoma: the regulatory approvals have been obtained in the U.S. and Europe for a Phase II trial with 41 cutaneous B-cell lymphoma (CBCL) patients. The first clinical centers have been opened at the end of 2006 to commence recruitment in the first quarter of 2007. -- TG 4040 (MVA-HCV) in patients chronically infected by the hepatitis C virus: preclinical development was completed in 2006 and enabled the launch of a 15-patient Phase I trial in France at the beginning of 2007. * euro 14.3 million raised through the exercise of 76% of the warrants issued as part of the capital increase in July 2005. * euro 25 million multi-year grant from the French Agency for Industrial Innovation (Agence Francaise de l'Innovation Industrielle -- AII) for funding Transgene's participation in the ADNA ("Advanced Diagnostics and New therapeutic Approaches") project, subject to the approval of the European Commission. The majority of this funding will be dedicated to pharmacogenomics research and new product development in the field of chronic HPV carriers. * Biomanufacturing agreement reached with the French AIDS Research Agency (Agence Nationale de Recherches contre le SIDA et les hepatites virales / ANRS) and the French Institut for Health and Medical Research (Institut National de la Sante et de la Recherche Medicale / Inserm) to construct and manufacture a clinical batch of an AIDS vaccine candidate (800 thousand euros). 2007 Outlook: A year rich in clinical results. * TG 4001 (MVA-HPV-IL2): in parallel with discussions to establish a product development partnership, Transgene is preparing for the launch of Phase III trials in Europe and the U.S., with regulatory approvals expected during the second quarter of 2007. * TG 4010 (MVA-MUC1-IL2): interim results of the controlled Phase IIb trial are expected in the fourth quarter of 2007. * TG 1042 (Ad-IFNg): Phase II results from a first group of 13 patients should be available by the end of 2007. Transgene plans to discuss with the health authorities the acceptability of this Phase II trial to support an accelerated marketing authorization application for the treatment of relapsing CBCL, an orphan disease for which optimal medical treatment has yet to be established. * TG 4040 (MVA-HCV): preliminary Phase I results should be available by year end 2007. * Decision of the European Commission on the ADNA grant is expected by the second quarter of 2007 and, if approved, would be immediately followed by a first payment. * Due to TG 4010 Phase IIb trial disbursements and the launch of clinical trials with TG 1042 and TG 4040, the Company's net cash expenditures should amount to approximately euro 25 million in 2007 (without taking into account potential partnership revenues or the possible grant from ADNA). 2006 Financial Results Revenues: (figures in millions euros) 2006 2005 Trend Manufacturing contracts 1.4 1.5 - 7 % Contract with the French Muscular Dystrophy Association 1.7 1.3 + 30 % Licensing revenues 0.6 0.7 - 15 % Research and development grants 0.3 - - Research and development tax credit 1.5 0.7 + 115 % Total 5.5 4.2 + 31 %
For the 12 months ended December 31, 2006, revenues increased 31% to euro 5.5 million from euro 4.2 million in 2005.
Revenues from manufacturing services in 2006 were comparable to 2005, at euro 1.4 million. However, cash received from manufacturing contracts increased from euro 1 million in 2005 to euro 2.7 million in 2006. The cash received in 2006 will be recorded as revenue following delivery and acceptance by clients expected in 2007 (deferred revenues thus amounted to euro 2.1 million at December 31, 2006).
Billings to the French Muscular Dystrophy Association for the Myodys programme increased by 30% to euro 1.7 million due to higher external costs for the project. These costs included new plasmid manufacturing and animal muscle functionality studies.
Licensing revenues slightly decreased in 2006 to euro 600 thousand.
In 2006, Transgene recorded euro 0.3 million in grants relating mainly to the hepatitis C programme. Research and development tax credits doubled to euro 1.5 million in 2006, in line with the doubling of the rate applicable to eligible research expenses from 5% in 2005 to 10% in 2006. The research tax credit will be reimbursable to the Company in 2010, less any amounts applied to offset taxes due.
Research and Development Expenses:
Research and development expenses amounted to euro 24.2 million in 2006 compared to euro 20.9 million in 2005. The increase was mainly due to:
-- increased expenses of euro 0.6 million for the Myodys programme (which are billed to the French Muscular Dystrophy Association); -- higher manufacturing costs linked to third party contracts and clinical batches eligible for Phase III trials (+ euro 0.5 million); -- higher expenses for clinical trials (+ euro 0.3 million); -- a full-year of expenses for the infectious disease research team (hepatitis C programme) taken over by Transgene in the third quarter of 2005 (+ euro 0.6 million); and -- increase in personnel costs (+ euro 0.5 million). General and Administrative Expenses :
General and administrative expenses were euro 3.9 million in 2006 compared to euro 4.6 million in 2005. The decrease was mainly due to:
-- a decrease in personnel costs (- euro 0.3 million); and -- external costs savings linked to the delisting from the Nasdaq in 2005. Interest and Other Income: Interest income was euro 0.5 million in 2006, compared to euro 0.4 in 2005. Net Loss:
Transgene reported a net loss of euro 22 million in 2006 compared to euro 21 million in 2005. Basic loss per ordinary share amounted to euro 1.41 in 2006 compared to euro 1.72 in 2005, due to the increase in outstanding shares following the exercise of warrants in July 2006.
Liquidity and Capital Resources
In 2006 cash expenditures, excluding the exercise of warrants and stock- options, amounted to euro 20.6 million compared to euro 20.7 million in 2005.
As of December 31, 2006, cash, cash equivalents and short-term investments totalled euro 20.3 million.
About Transgene:
Transgene is a France-based biopharmaceutical company dedicated to the development of therapeutic vaccines and immunotherapeutic products in oncology and infectious diseases. The company has three compounds in Phase II trials and one compound in Phase I studies. Transgene has bio-manufacturing production capacities for viral-based vectors and technologies available for out-licensing. For further information about Transgene, please visit http://www.transgene.fr
Cautionary note regarding forward-looking statements
This press release contains forward-looking statements referring to the planned development and clinical testing of Transgene's therapeutic vaccine candidates, the possibility of a partnership agreement for product development and anticipated government grants. However, product development and clinical testing depend on a variety of factors, including the timing and success of patient enrollment and the risk of unanticipated adverse patient reactions. Results from future studies with more data may show less favorable outcomes than prior studies, and there is no certainty that product candidates will ever demonstrate adequate therapeutic efficacy or achieve regulatory approval or commercial use. In addition, discussions with potential partners for product development does not ensure that a partnership agreement will be reached, as final agreement depends on a broad range of economic, technical and competitive factors, many of which are not under Transgene's control, as well as the successful conclusion of negotiations. Finally, funding from government grants cannot be certain and depends on factors such as final government approvals (as noted above), competing grant requests, government research priorities and availability of research dedicated resources. For a more detailed description of the risks and uncertainties involved in the development and testing of Transgene's product candidates, see Transgene's Document de reference on file with the French Autorite des marches financiers (AMF).
Condensed Consolidated Statements of Operations (IAS/IFRS) 12 months ended (Amounts in thousands of euros except December share and per share data) 31, 2006 2005 (unaudited) (audited) Revenues Revenues from collaborative and licensing agreements 3 720 3 425 Grants and tax credit received for research 1 826 727 Total revenues 5 546 4 152 Operating expenses Research and development (24 155) (20 913) General and administrative (3 928) (4 636) Other operating gains and losses 23 10 Total operating expenses (28 060) (25 539) Loss from operations (22 514) (21 387) Interest and other income, net 483 404 Income tax 0 (4) Net loss (22 031) (20 987) Loss per ordinary share (1.41) (1.72) Weighted average number of shares outstanding 15 629 588 12 190 448 Condensed Consolidated Balance Sheets (IAS/IFRS) (Amounts in thousands of euros) December 31, December 31, 2006 2005 (unaudited) (audited) ASSETS Fixed assets, net 6 214 6 608 Intangible assets, net 200 226 Financial assets, net 213 206 Other non-current assets 2 934 1 390 Total non-current assets 9 561 8 430 Cash and cash equivalents 20 323 16 619 Short term investments 0 9 890 Other current assets 2 721 2 776 Total current assets 23 044 29 285 Total assets 32 605 37 715 LIABILITIES AND SHAREHOLDERS' EQUITY Shareholders' equity 18 979 26 198 Liabilities, non-current 5 271 5 512 Liabilities, current 8 355 6 005 Total liabilities and shareholders' equity 32 605 37 715
Transgene S.A.CONTACT: Philippe Poncet of Transgene, + 33 3 88 27 91 21; or Mary Clark,or Halina Kukula, of Capital MS&L, +44 (0)20 7307 5330; or Estelle Guillot-Tantay or Tiphaine Hecketsweiler, of Image 7, + 33 1 53 70 74 93
Web site: http://www.transgene.fr//
