As a consequence of the termination of the Myodys research and development contract with the AFM in 2008, no revenues were received in 2009. Transgene’s rights have been transferred to the AFM which is now responsible for the programme.
Research grants decreased from €3.9m in 2008 to €1.4m in 2009. The related mainly to the ADNA programme (« Advanced Diagnostics for New Therapeutic Approaches ») financed by OSEO, the French Innovation Agency. Transgene may receive additional grants of up to €4.5m over the remaining life of the programme.
Research tax credits slightly decreased to €4.8m in 2009 compared to €5.6m in the previous year due to higher cash receipts from R&D grants and advances repayable that are deducted from eligible expenses. Transgene will claim the payment of the 2009 tax credit in the second quarter of 2010.
Operating Expenses
Research and Development expenses amounted to €33m in 2009 compared to €32.3m in 2008, mainly due to an increase in personnel costs in the area of biomanufacturing activities. 70% of R&D expenses relate to products in clinical development, 30% to products in preclinical development.
Administrative and general expenses were €6.2m in 2009 against €5.2m in 2008. This increase was mainly due to business development activities.
Other Gains and Losses
Other gains totalled €0.1m in 2009 against €1.6m in 2008. In 2008, other gains mainly reflected:
- The non-cash profit relating to the cancellation of the long-term debt due the AFM following the termination of the research contract (+ €3m);
- The exceptional amortisation charge for certain proprietary real-estate fixed assets located in the Strasbourg premises (- €1.2m).
Interest Income
Net interest income (earnings from interest less financial charges) was nil in 2009 compared to €4.0m in 2008 as a result of a substantial decline of interest rates over the year and higher financial charges linked to the capital lease of Transgene’s new facilities.
Net Loss
Transgene reported a net loss of €27.3m in 2009 compared to a net loss of €18.0m in 2008. Basic loss per ordinary share amounted to €1.24 in 2009 compared to €0.81 in 2008.
Liquidity and Capital Resources
In 2009, cash equivalents were invested in short-term treasury bonds funds or placed at market rates in a treasury pool organized by Transgene’s majority shareholder Institut Mérieux. As of 31 December 2009, Transgene held €64.7m in cash and cash equivalents compared to €86.7m a year earlier.
In 2009, net cash expenditures were €22m compared to €24.6m in 2008. Transgene currently anticipates a cash burn for 2010 on the order of €33m.
In 2009 and 2008, investments in tangible and intangible assets amounted to €4.2m and €16.9m, respectively. The 2008 investments related mainly to a new building of some 6,800 m² for mixed usage (laboratories and offices) which was commissioned late 2008. The building is fully financed by a €15.5m finance lease over 15 years. In 2009, investments related mainly to equipment and fittings of the new building, and customary laboratory and production equipment.
In 2009, Transgene received €1.9m in repayable advances relating to the publicly-funded ADNA programme compared to €0.8m in 2008. The company could receive further repayable advances of up to €7.1m over the remaining life of the program.
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 four compounds in clinical development: TG4010 having completed phase II trials, TG4001/RG3484 in Phase IIb trial, TG4040 having completed phase I studies and TG4023 in Phase I trial. Transgene has concluded strategic agreements for the development of two of its immunotherapy products with:
• Roche for the development of TG4001/RG3484 to treat HPV-mediated diseases, and
• Novartis for the development of TG4010 to treat various cancers.
Transgene has bio-manufacturing capacities for viral-based products. Additional information about Transgene is available on the Internet at www.transgene.fr.
Cautionary note regarding forward-looking statements
This press release contains forward-looking statements referring to the anticipated cash consumption for 2010. The Company’s anticipated cash consumption for 2010 is based on currently anticipated costs for on-going and planned product development and testing, but may increase in the event of unanticipated expenses. For further information on the risks and uncertainties involved in the testing and development of Transgene’s product candidates, see Trangene’s Document de Référence on file with the French Autorité des marchés financiers on its website at http://www.amf-france.org and on Transgene’s website at www.transgene.fr .
