Interim Results
Cambridge Antibody Tech Group PLC
16 May 2005
07.00 BST, 02.00 EST Monday 16 May 2005
For further information contact:
Cambridge Antibody Technology Weber Shandwick Square Mile (Europe)
Tel: +44 (0) 1223 471 471 Tel: +44 (0) 20 7067 0700
Peter Chambre, Chief Executive Officer Rachel Taylor
John Aston, Chief Financial Officer Kevin Smith
Rowena Gardner, Director of Corporate Yvonne Alexander
Communications
BMC Communications/The Trout Group
(USA)
Tel: 001 212 477 9007
Brad Miles, ext 17 (media)
Brandon Lewis, ext 15 (investors)
A live webcast of today's analyst meeting can be viewed at 14.00 BST today at
www.cambridgeantibody.com in the investor relations section.
High resolution images are available for the media to view and download free of
charge from www.vismedia.co.uk.
CAMBRIDGE ANTIBODY TECHNOLOGY ANNOUNCES INTERIM RESULTS FOR THE SIX MONTHS ENDED
31 MARCH 2005
Cambridge, UK Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) today
announces financial results for the six months ended 31 March 2005 and a
business update.
Summary of News
• On target to commence initial five discovery programmes with AstraZeneca
• GC-1008 to enter Phase I clinical trials in idiopathic pulmonary fibrosis in
second quarter of 2005 (Genzyme)
• No further development of CAT-192 in scleroderma (Genzyme)
• LymphoStat-B(TM)Phase II clinical trial met primary endpoint (HGSI)
• Decision to seek partner for CAT-354
• Net cash and liquid resources of £178.2 million at 31 March 2005 (£93.7
million at 30 September 2004)
• Net cash inflow before management of liquid resources and financing: £8.8
million for the six months ended 31 March 2005 compared with £14.2 million
outflow for the six months ended 31 March 2004
• Updated guidance for the future
AstraZeneca Strategic Alliance
In November 2004, CAT announced a major strategic alliance with AstraZeneca for
the joint discovery and development of human monoclonal antibody therapeutics,
principally in the field of inflammatory disorders. Since that time, the joint
infrastructure to manage the alliance has been established, AstraZeneca has
already adopted one pre-existing CAT Discovery Programme into the Alliance and
work is on track to start the anticipated initial five 2005 Discovery projects.
Abbott Litigation Update
In November 2003, CAT commenced legal proceedings against Abbott Biotechnology
Limited and Abbott GmbH in the High Court in London concerning the level of
HUMIRA(R) royalties due to CAT. On 20 December 2004, the judge, Mr Justice
Laddie, ruled in CAT's favour stating that "Abbott was in error when it made its
first royalty payment to CAT calculated on the basis that only two per cent of
Net Sales was due. It should have calculated on the basis of the full royalty of
just over five per cent and should have paid and continue to pay CAT
accordingly."
In January 2005, Mr Justice Laddie announced his decision on various procedural
matters arising from this Judgment and ruled in CAT's favour on all counts. The
Judge denied Abbott's request for permission to appeal and further ordered that
Abbott pay CAT's costs of the case (to be assessed in due course) and that these
costs should be assessed on a higher basis than the norm to reflect the Judge's
view of the merits of that part of the case.
Following Mr Justice Laddie's refusal to give permission to appeal, in February
2005, Abbott made a written application directly to the Court of Appeal. In
March 2005, the Rt Hon Lord Justice Jacob, in the Court of Appeal, Civil
Division, decided to grant Abbott permission to appeal. In the Order from the
Court of Appeal, the reasons for the decision were stated as follows: "The
points raised in (Abbott's) notice of appeal appear, just, to raise a real
prospect of success and the commercial importance of the agreements is
sufficient in the circumstances to provide a compelling reason for an appeal."
CAT continues to believe in the strength of its position.
In January 2005, Abbott paid to CAT US$23.73 million, representing royalty
arrears due to CAT arising from the original Judgment, and an additional sum of
US$1.29 million, representing interest and compensation for currency loss on
this amount. Abbott also paid CAT £2.85 million representing an interim payment
of legal costs due. Were Abbott to be successful on its appeal CAT would have to
reimburse Abbott in respect of these payments.
Product Development
CAT Product Candidates
CAT-354 is a fully human anti-IL13 monoclonal antibody being developed by CAT,
initially as a potential treatment for severe asthma. CAT commenced a Phase I
clinical trial in the UK in September 2004 to assess the safety and tolerability
of CAT-354, and preliminary results are expected to be available at the end of
the second quarter of 2005. If this initial trial meets its primary objectives,
CAT intends to progress CAT-354 in a further, Phase II, clinical trial later in
2005. It is currently expected that this trial will be a clinical pharmacology
study involving allergen challenge in approximately 80 patients with mild
asthma, and that it will be designed to evaluate the effects of different doses
of CAT-354 on their response to allergen challenge, compared with placebo.
Given the size of the market and complexity of the potential disease indications
for CAT-354, CAT has decided that the programme will benefit from having a
partner experienced in developing drugs for major respiratory indications prior
to commencing Phase III clinical trials. Accordingly, CAT has started to assess
interest in the product candidate from a limited number of potential licensees.
Genzyme Alliance
CAT and Genzyme believe that the neutralisation of TGFbeta offers important and
valuable opportunities for addressing unmet medical needs in a number of disease
conditions.
GC-1008 is a pan-specific fully human anti-TGFbeta monoclonal antibody being
developed by CAT and Genzyme. The companies have received approval from the
US Food and Drug Administration (FDA) to begin a Phase I clinical trial of
GC-1008 in idiopathic pulmonary fibrosis (IPF). Preparations for this trial
are now underway, which is expected to commence during the second quarter of
2005. The companies also intend to commence a clinical trial of GC-1008 in
various cancers and it is currently anticipated that an Investigational New
Drug (IND) application will be filed for this trial by the end of 2005.
CAT-192 (metelimumab), a fully human anti-TGFbeta1 monoclonal antibody, has
been jointly developed by CAT and Genzyme as a potential treatment for
scarring and fibrotic conditions, including scleroderma. Following a study
in 45 scleroderma patients that demonstrated that CAT-192 was safe and well-
tolerated, an analysis of all existing scleroderma study results was
undertaken to facilitate understanding of the disease and its progression.
Following subsequent discussion with a panel of experts, suitable endpoints
for a further trial in scleroderma cannot be identified, and Genzyme and CAT
have concluded that no further development of CAT-192 in scleroderma will
take place. There are no plans to pursue study of CAT-192 in other
indications, as the companies focus their resources on the clinical
development of GC-1008.
Trabio(R) (lerdelimumab) is a fully human anti-TGFbeta2 monoclonal antibody
developed by CAT as a potential treatment for improving the outcome of glaucoma
surgery.In March 2005, CAT announced the failure of Trabio to meet the primary
endpoint in its second pivotal ('International' Phase III) clinical trial - a
result consistent with the result of the first pivotal ('European' Phase III)
clinical trial, announced in November 2004.
Since November 2004, CAT has been minimising all costs in connection with Trabio
development, and has now terminated all further development of Trabio, subject
only to continuing with its minimum obligations in completing the ongoing US
clinical trial.
Licensed Products and Product Candidates
HUMIRA (adalimumab) is a fully human anti-TNFalpha monoclonal antibody, isolated
and optimised by CAT in collaboration with Abbott and now approved for marketing
as a treatment for rheumatoid arthritis (RA) in 58 countries.
Abbott reported worldwide sales of HUMIRA of $852 million in 2004 and of $282
million for the first quarter of 2005. Abbott has forecast revenues from HUMIRA
of more than $1.3 billion in 2005 and has recently indicated that HUMIRA has
"multibillion dollar potential".
Abbott continues to develop HUMIRA as a potential treatment for a number of
additional indications and reported in January that supplemental biologics
license applications (sBLAs) had been made for two HUMIRA indications, early RA
and psoriatic arthritis. Abbott also indicated that it expects to file
applications in 2005 for ankylosing spondylitis, for RA in Japan and, possibly,
for Juvenile RA. It has further indicated that a regulatory submission for
Crohn's disease is expected in 2006. In psoriasis, Phase III clinical trials
began at the end of 2004 and Abbott expects to submit a regulatory application
for psoriasis in 2006 or early 2007.
ABT-874 is a fully human anti-IL12 monoclonal antibody, isolated and optimised
by CAT in collaboration with Abbott, and licensed to Abbott. Abbott is committed
to develop ABT-874 as a potential treatment for Crohn's disease, psoriasis and
multiple sclerosis and continues to enrol patients in a Phase II clinical trial
in multiple sclerosis. Abbott plans to begin a Phase II clinical trial in
psoriasis by the end of 2005, as well as another clinical trial in Crohn's
disease.
LymphoStat-B (belimumab) is a fully human anti-BLyS monoclonal antibody licensed
by CAT to Human Genome Sciences, Inc (HGSI). HGSI is developing LymphoStat-B as
a potential treatment for systemic lupus erythematosus (SLE), for which HGSI has
Fast Track designation from the US Food and Drug Administration, and RA. In
April 2005, HGSI announced that LymphoStat-B met the primary efficacy and safety
endpoints in its Phase II clinical trial in 283 patients with RA: LymphoStat-B
was shown to be safe and well-tolerated, biologically active and to reduce the
signs and symptoms of RA at a level of statistical significance. Results of the
Phase II clinical trial of LymphoStat-B in 449 patients with SLE are expected in
Autumn 2005.
HGS-ETR1 is a fully human anti-TRAIL Receptor-1 monoclonal antibody licensed by
CAT to HSGI and being developed by HGSI as a potential treatment for a number of
cancers.
In November 2004, HGSI announced that it had completed the enrolment and initial
dosing of patients in a US Phase II clinical trial of HSG-ETR1 in patients with
advanced non-small cell lung cancer. The primary objective of the study is to
evaluate tumour response. The secondary objectives are to evaluate the safety
and tolerability of HGS-ETR1, and to determine plasma concentrations of HGS-ETR1
for use in a population pharmacokinetic analysis.
Additional Phase II clinical trials of HGS-ETR1 in patients with advanced
colorectal cancer and in patients with relapsed or refractory non-Hodgkin's
lymphoma continue, and HGSI has announced the completion of enrolment and
initial dosing of patients in both trials. Both trials are to evaluate the
efficacy, safety and tolerability of HGS-ETR1.
HGSI expects to announce the results of all three of the Phase II studies of
HGS-ETR1 in 2005.
Two Phase Ib clinical trials of HGS-ETR1 to evaluate safety and tolerability in
combination with chemotherapy also continue in patients with advanced solid
malignancies. HGSI plans to complete these trials in 2005.
HGSI is presenting data from a "companion Phase I study" of HGS-ETR1 at the
American Society of Clinical Oncology (ASCO) meeting in Orlando, 13 - 17 May
2005.
HGS-ETR2 is a fully human anti-TRAIL Receptor-2 monoclonal antibody licensed by
CAT to HGSI, and being developed by HGSI as a potential treatment for cancer. A
Phase I clinical trial of HGS-ETR2 in patients with advanced solid tumours
continues. In January 2005, HGSI reported plans to initiate Phase II clinical
trials of HGS-ETR2 as a single agent, and to initiate Phase Ib clinical trials
of HGS-ETR2 in combination with chemotherapeutic agents in 2005.
HGSI is presenting data from a "companion Phase I study" of HGS-ETR2 at the ASCO
meeting in Orlando, 13 - 17 May 2005.
MYO-029 is a fully human monoclonal antibody which neutralises the effects of
GDF-8 (a protein which is associated with reduced skeletal muscle mass). The
antibody was discovered by CAT in collaboration with Wyeth and is licensed to
Wyeth, which is studying it as a potential therapy for muscle-wasting diseases,
including muscular dystrophy and age-related sarcopenia. In February 2005, Wyeth
announced a Phase I/II clinical trial in adult patients with muscular dystrophy
(MD). The trial, which will take place in 12 clinical sites, is a prospective,
randomised, placebo-controlled study in 108 patients, including equal numbers of
patients with facioscapulohumeral MD (FSHD), Becker MD (BMD) and limb-girdle MD
(LGMD). Results of the study are expected to be available in late 2006.
Pre-clinical Product Candidates
There are six antibody drug candidates licensed to partners which are at the
pre-clinical stage of development. In addition, there are currently seven active
CAT Discovery candidates and 28 with CAT licensees (excluding the candidates
being progressed at licensees of CAT's patents).
Patent Licensing Agreements
In January 2003, CAT and Dyax announced the expansion of their 1997 licensing
agreement. Under the terms of this expanded agreement, CAT receives milestone
and royalty payments on antibody products developed by Dyax and Dyax's
licensees. In January 2005, Dyax announced that two fully human monoclonal
antibodies from Dyax's proprietary phage display libraries, IMC-11F8 and
IMC-1121B, entered Phase I clinical development at ImClone Systems. Accordingly,
CAT received a milestone payment from Dyax in January 2005.
In September 2003, CAT granted Micromet a patent licence for the development and
commercialisation of Micromet's human therapeutic antibody candidate MT201
(adecatumumab), specific for the epithelial tumour target Ep-CAM. In December
2004, Micromet and Serono signed an exclusive collaboration and licence
agreement for the development and commercialisation of MT201 which is currently
being tested in two multi-centre Phase II clinical trials. CAT receives
milestone and royalty payments on human antibody-based products developed
against the Ep-CAM target by Micromet and its partners. The first milestone
payment would be due on filing for product approval.
Senior Management Changes
Diane Mellett, General Counsel, was appointed a Director following the Company's
Annual General Meeting (AGM) on 4 February 2005. Also after the AGM, Dr David
Glover, Chief Medical Officer at CAT, took early retirement from the Company and
the Board. Dr Patrick Round, VP Development at CAT, has assumed responsibility
for all of CAT's development activities and has joined the Executive Group
(responsible for the operational management of the Company).
On 31 March 2005, Justin Hoskins was appointed as Company Secretary, succeeding
Diane Mellett.
The Future
Following the achievements of the last few months, CAT is a company with strong
foundations, good medium term prospects and significant opportunities for growth
in the longer term.
These strong foundations arise from CAT's balance sheet strength, (at 31 March
2005 CAT had net cash and liquid resources of £178.2 million) and the
significant and growing revenue stream from HUMIRA royalties; especially if the
Judgment of the High Court is upheld on appeal. The diversified pipeline of
licensed antibody product candidates offers good prospects for growth in the
medium term with no financial cost to CAT as these programmes progress through
the clinic; notably ABT-874, LymphoStat-B and HGS-ETR1. Significant
opportunities for the longer term are provided by CAT's proprietary programmes
which, though at an early stage of development, are progressing with CAT-354 in
a Phase I clinical trial and GC-1008 expected to enter Phase I trials this year,
together with potential products resulting from the major Strategic Alliance
with AstraZeneca.
The Strategic Alliance with AstraZeneca provides CAT with the opportunity both
to build a significant pipeline of antibody therapeutics in important diseases
in collaboration with a leading pharmaceutical company and to receive financial
returns commensurate with its level of investment. As part of the AstraZeneca
Alliance, CAT is committed to supporting and funding half of a minimum of 25
discovery programmes, jointly initiated, over the initial five-year discovery
phase. This investment is fully funded by the £75 million equity injection from
AstraZeneca made in December 2004. CAT has the opportunity to invest in the
clinical development of selected candidates that result from the joint discovery
programmes and to thereby increase potential returns.
CAT believes that it is in shareholders' interests to run its business such that
all its activities, excluding later stage product development, will either be
pre-funded (as with the AstraZeneca discovery activities) or funded from
revenues. This will ensure that the business is effectively self -financing up
until the demonstration of efficacy in clinical trials. This strategy should
enable CAT to continue to pursue its own carefully targeted proprietary
discovery programmes. Decisions with regard to the funding of later stage
clinical development activity will be taken on a case-by-case basis, in the
light of circumstances at the time, but the chief criterion for further
investment at this stage will be the scale of returns available to CAT's
shareholders. CAT does not expect any significant increase in its current
headcount.
CAT believes that it can reach this sustainable position in the near term
(within three years), based on the continuing success of HUMIRA and assuming a
satisfactory outcome to the appeal by Abbott against the High Court ruling in
CAT's favour. Acquisition or product in-licensing is not considered necessary
to achieve these goals, however CAT will continue to seek acquisition or product
in-licensing opportunities where it is believed they can accelerate the
development of the company without increasing its risk profile.
CAT expects this financial strategy to govern the operations of the Company for
the initial five-year discovery phase of the AstraZeneca Alliance.
As a consequence of these changes, CAT does not now believe that its previously
articulated goal of achieving profitability by 2008 remains in shareholders'
interests, as it would severely limit the Company's capacity to invest in the
opportunities available to it over the next five years. This strategy offers a
sustainable business model with, as the existing pipeline of product candidates
matures, good growth prospects for the future.
Financial Results
CAT made a loss after taxation for the six months ended 31 March 2005 of £16.3
million (six months ended 31 March 2004 (H1) £18.0 million; six months ended 30
September 2004 (H2) £20.1 million). Net cash inflow before management of liquid
resources and financing for the period was £8.8 million (H1 - £14.2 million
outflow; H2 - £13.7 million outflow). Net cash and liquid resources at 31 March
2005 of £178.2 million, were £84.5 million higher than at 30 September 2004 as a
result of the receipt of the subscription monies from AstraZeneca and backdated
royalty payments and costs from Abbott (net cash and liquid resources at 31
March 2004 - £107.6 million; 30 September 2004 - £93.7 million).
Turnover in the period was £9.8 million (H1- £8.5 million; H2 - £7.4 million).
Royalty income of £5.2 million was recognised as revenue in the period
representing the two per cent royalty rate argued by Abbott on sales of HUMIRA
for the six months ended 31 December 2004, received in March 2005. Further
details are provided in the notes to the financial information.
The payment by Abbott of royalty arrears and other related payments pursuant to
the High Court Judgment are not reflected in these results. Pending resolution
of Abbott's appeal, the royalty arrears payment and royalty receipts in excess
of the two per cent rate argued by Abbott will not be recognised as revenue.
Similarly, amounts received in respect of CAT's costs will not be recognised
until the resolution of Abbott's appeal. The table below details payments
received from Abbott in the period and the accounting treatment adopted.
Recognised as
Date received Description Amount Revenue Creditors
$ million $ million $ million
January 2005 Back dated royalties 23.7 - 23.7
January 2005 Costs and interest 6.7 - 6.7
March 2005 Royalty to 31 Dec 04 25.0 9.7 15.3
_______________________________
Total 55.4 9.7 45.7
_______________________________
Total as recognised in £m £29.4 £5.2 £24.2
Direct costs for the six months ended 31 March 2005 were £2.0 million (H1 - £1.5
million; H2 - £1.5 million), reflecting royalties due to the Medical Research
Council (MRC) and other licensors on the royalties CAT receives on product sales
under its various licences and collaborations. In respect of product sales of
HUMIRA, the amounts payable to the MRC and other licensors included in direct
costs are consistent with the basis adopted for revenue recognition. CAT has
made an additional payment on account to the MRC, out of the back dated royalty
payment received from Abbott. This is reflected in prepayments.
Research and development costs for the six months ended 31 March 2005 were £18.1
million (H1 - £21.5 million; H2 - £22.6 million). External development costs
were £6.0 million in the six months ended 31 March 2005 (H1 - £9.5 million; H2 -
£9.1 million), reflecting cost savings made on the Trabio programme. The spend
on Trabio for the six month period was £2.9 million (H1 - £6.0 million; H2 -
£5.1 million). Research and development staff costs and consumables were £7.4
million in the period (H1 - £6.8 million; H2 - £8.3 million).
General and administration expenses for the period were £9.1 million (H1 - £5.5
million; H2 - £5.5 million). Litigation expenses for the six months ended 31
March 2005 were £3.1 million (H1 - £0.7 million; H2 - £1.8 million) due to the
cost of the trial against Abbott in November 2004. CAT has received a payment on
account of costs from Abbott (£2.85 million) which has not been credited against
this cost, pending the outcome of Abbott's appeal. General and administration
staff costs were £2.3 million in the period (H1 £1.7 million; H2 £2.1 million).
The non-cash foreign currency translation charge arising from the retranslation
of CAT's trading balances with its US subsidiary, Aptein Inc and the
retranslation of US dollar deposits held was £1.2 million (H1 £1.4 million; H2 £
(0.3) million).
During the period the Group accrued interest receivable on its cash deposits of
£3.0 million (H1 - £2.1 million; H2 - £2.0 million) reflecting the increased
level of cash and liquid resources held in interest bearing securities.
The significant increase in creditors reflects the amounts received from Abbott,
as detailed in the table above, not yet recognised in the profit and loss
account pending the outcome of the legal proceedings with Abbott.
In the event that CAT prevails on appeal, up to approximately £10 million of the
£29.4 million received from Abbott referred to in the table above will be
payable to the MRC and other licensors.
If the payments received from Abbott not yet recognised in the profit and loss
account (and the related payment on account to the MRC) are excluded from the
cashflow statement for the six months ended 31 March 2005, the net cash outflow
before management of liquid resources and financing for the period is £14.3
million (H1 - £14.2 million; H2 - £13.7 million).
Outlook
Net cash outflow, before management of liquid resources and financing, for the
full year (excluding the Abbott payments not yet recognised in the profit and
loss account and related payments on account to the MRC), is expected to be of
the order of £32 million. This is consistent with guidance given in November
2004. Taking account of the Abbott and related payments, aggregate cash inflow
for the year before financing is expected to be of the order of £2 million
(based on current exchange rates).
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
INTERIM STATEMENT OF RESULTS FOR
THE SIX MONTHS ENDED 31 MARCH 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(unaudited)
Six months Six months Six months Year
ended ended ended ended
31 March 31 March 31 March 30 September
2005 2005 2004 2004
Convenience
translation
US$'000 £'000 £'000 £'000
Turnover 18,595 9,845 8,468 15,925
Direct costs (3,844) (2,035) (1,523) (3,023)
___________________________________________________________
Gross profit 14,751 7,810 6,945 12,902
Research and
development
expenses (34,155) (18,083) (21,486) (44,125)
General and
administration
expenses (17,141) (9,075) (5,480) (10,969)
___________________________________________________________
Operating loss (36,545) (19,348) (20,021) (42,192)
Interest
receivable (net) 5,680 3,007 2,053 4,130
___________________________________________________________
Loss on ordinary
activities before
taxation (30,865) (16,341) (17,968) (38,062)
Tax on loss on
ordinary activities - - - (64)
___________________________________________________________
Loss for the
financial period (30,865) (16,341) (17,968) (38,126)
___________________________________________________________
Loss per share
- basic and
diluted (pence) 34.7p 44.2p 93.3p
Consolidated Statement of Total Recognised Gains and Losses
Six months Six months Six months Year
ended ended ended ended
31 March 31 March 31 March 30 September
2005 2005 2004 2004
Convenience
translation
US$'000 £'000 £'000 £'000
Loss for the
financial period (30,865) (16,341) (17,968) (38,126)
Gain on foreign
exchange translation 1,581 837 1,306 1,099
___________________________________________________________
Total recognised
losses relating to
the period (29,284) (15,504) (16,662) (37,027)
___________________________________________________________
The losses for all periods arise from continuing operations.
This financial information has been prepared in accordance with UK GAAP. The
dollar translations are solely for the convenience of the reader.
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
INTERIM STATEMENT OF RESULTS FOR
THE SIX MONTHS ENDED 31 MARCH 2005
CONSOLIDATED BALANCE SHEET
(unaudited) As at As at As at As at
31 March 31 March 31 March 30 September
2005 2005 2004 2004
Convenience
translation £'000 £'000 £'000
US$'000
Fixed assets
Intangible assets 10,024 5,307 6,357 5,832
Tangible assets 22,979 12,166 13,357 12,362
Investments 5,557 2,942 3,157 2,942
____________________________________________________
38,560 20,415 22,871 21,136
____________________________________________________
Current assets
Debtors 14,572 7,715 7,140 4,460
Short term investments 309,136 163,668 108,007 93,061
Cash at bank and in hand 29,378 15,554 644 2,678
____________________________________________________
353,086 186,937 115,791 100,199
Creditors
Amounts falling due within
one year (78,391) (41,503) (12,841) (15,603)
____________________________________________________
Net current assets 274,695 145,434 102,950 84,596
____________________________________________________
Total assets less
current liabilities 313,255 165,849 125,821 105,732
Creditors
Amounts falling due
after more than one year (38,158) (20,202) (20,626) (20,650)
____________________________________________________
Net assets 275,097 145,647 105,195 85,082
____________________________________________________
Capital and reserves
Called-up share capital 9,748 5,161 4,107 4,111
Share premium account 569,881 301,716 226,725 226,829
Other reserve 25,416 13,456 13,456 13,456
Profit and loss account (329,948) (174,686) (139,093) (159,314)
____________________________________________________
Shareholders' funds -
all equity 275,097 145,647 105,195 85,082
____________________________________________________
This financial information has been prepared in accordance with UK GAAP. The
dollar translations are solely for the convenience of the reader.
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC
INTERIM STATEMENT OF RESULTS FOR
THE SIX MONTHS ENDED 31 March 2005
CONSOLIDATED CASH FLOW STATEMENT
(unaudited) Six months Six months Six months Year
ended ended ended ended
31 March 31 March 31 March 30 September
2005 2005 2004 2004
Convenience
translation
US$'000 £'000 £'000 £'000
Net cash inflow/(outflow) from
operations 13,500 7,147 (15,764) (31,067)
_________________________________________________
Returns on investments and
servicing of finance
Interest received 4,720 2,499 2,237 4,295
Interest element of finance
leases (55) (29) (43) (78)
_________________________________________________
4,665 2,470 2,194 4,217
_________________________________________________
Taxation - - - (64)
_________________________________________________
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (1,630) (863) (599) (1,032)
Sale of tangible fixed assets - - - 6
_________________________________________________
(1,630) (863) (599) (1,026)
_________________________________________________
Net cash inflow/(outflow)
before management of liquid
resources and financing 16,535 8,754 (14,169) (27,940)
_________________________________________________
Management of liquid
resources (133,497) (70,678) 555 15,357
_________________________________________________
Financing
Issue of ordinary share capital 143,430 75,937 14,115 14,223
Capital elements of finance lease
rental payments (348) (184) (170) (348)
_________________________________________________
143,082 75,753 13,945 13,875
_________________________________________________
Increase in cash 26,120 13,829 331 1,292
_________________________________________________
This financial information has been prepared in accordance with UK GAAP. The
dollar translations are solely for the convenience of the reader.
Notes to the financial information
Accounting policies
This financial information has been prepared in accordance with the policies set
out in the statutory financial statements for the year ended 30 September 2004.
Convenience translation
The consolidated financial statements are presented in Sterling. The
consolidated financial statements as of and for the period ended 31 March 2005
are also presented in US Dollars as a convenience translation. The Dollar
amounts are presented solely for the convenience of the reader and have been
calculated using an exchange rate of £1:US$1.8888, the noon buying rate as of 31
March 2005. No representation is made that the amounts could have been or could
be converted into US Dollars at this or any other rates.
Loss per share
FRS 14 requires presentation of diluted EPS when a company could be called upon
to issue shares that would decrease net profit or increase net loss per share.
For a loss making company with outstanding share options, net loss per share
would only be increased by the exercise of out-of-the-money options. Since it
seems inappropriate to assume that option holders would act irrationally, no
adjustment has been made to diluted EPS for out-of-the-money share options,
diluted EPS equals basic EPS. The calculation is based on information in the
table below.
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2005 2004 2004
Losses (£'000) 16,341 17,968 38,126
Weighted average number of shares 47,128,201 40,638,511 40,866,684
The Company had ordinary shares in issue of 51,609,987 and a total of 2,155,040
ordinary shares under option as of 31 March 2005.
Turnover
Six months Six months Six months Year
ended ended ended ended
31 March 31 March 31 March 30 September
2005 2005 2004 2004
Convenience
translation
US $'000 £'000 £'000 £'000
Royalties 9,758 5,166 2,673 6,328
Licence fees 4,731 2,505 2,188 4,601
Technical milestones 2,076 1,099 1,592 1,610
Clinical milestones 978 518 556 1,091
Contract research fees 421 223 1,109 1,829
Other 631 334 350 466
____________________________________________________________
Total 18,595 9,845 8,468 15,925
____________________________________________________________
Deferred income
£'000
Balance brought forward at 1 October 2004 25,810
Cash receipts 2,684
Released to revenue (2,836)
Other (251)
_________
Deferred income at 31 March 2005 25,407
_________
Reconciliation of operating loss to operating cash inflow/(outflow)
Six months Six months Six months Year
ended ended ended ended
31 March 31 March 31 March 30 September
2005 2005 2004 2004
Convenience
translation
US$'000 £'000 £'000 £'000
Operating loss (36,545) (19,348) (20,021) (42,192)
Depreciation charge 2,544 1,347 1,452 2,826
Amortisation of
intangible fixed assets 992 525 526 1,051
Loss on disposal of
fixed assets - - - (3)
Write down of
fixed asset investment - - - 215
EIP charge 249 132 - 144
Increase indebtors (5,137) (2,720) (2,757) (24)
(Decrease)/increase
in deferred income (761) (403) 3,267 4,086
Increase in creditors
(excluding deferred
income) 52,158 27,614 1,769 2,830
__________________________________________________________
Operating cash
inflow/(outflow) 13,500 7,147 (15,764) (31,067)
__________________________________________________________
Analysis and reconciliation of net funds
1 October Cash flow Exchange 31 March 31 March
2004 movement 2005 2005
Convenience
translation
£'000 £'000 £'000 £'000 US $'000
Cash at bank
and in hand 2,678 12,896 (20) 15,554 29,378
Overdrafts (1,512) 933 - (579) (1,094)
________
13,829
Liquid resources 92,559 70,678 - 163,237 308,322
_____________________________________________________________
Net cash and
liquid resources 93,725 84,507 (20) 178,212 336,606
Finance leases (820) 184 - (636) (1,201)
_____________________________________________________________
Net funds 92,905 84,691 (20) 177,576 335,405
_____________________________________________________________
Liquid resources shown above is included within short term investments on the
Balance Sheet, which also includes a part of the investment in MorphoSys shares.
Reconciliation of movements in group shareholders' funds
Six months Year
ended ended
31 March 30 September
2005 2004
£'000 £'000
Loss for the financial period (16,341) (38,126)
Other recognised gains and losses relating to
the period 837 1,099
___________________________
(15,504) (37,027)
New shares issued (net of expenses) 75,937 14,223
Executive Incentive Plan 132 144
___________________________
Net increase/(decrease) in shareholders' funds 60,565 (22,660)
Opening shareholders' funds 85,082 107,742
___________________________
Closing shareholders' funds 145,647 85,082
___________________________
Financial Statements
The preceding information, comprising the Consolidated Profit and Loss Account,
Consolidated Statement of Total Recognised Gains and Losses, Consolidated
Balance Sheet, Consolidated Cash Flow Statement and associated notes, does not
constitute the Company's statutory financial statements for the year ended 30
September 2004 within the meaning of section 240 of the Companies Act 1985, but
is derived from those financial statements. Results for the six month periods
ended 31 March 2005 and 31 March 2004 have not been audited. The results for the
year ended 30 September 2004 have been extracted from the statutory financial
statements which have been filed with the Registrar of Companies and upon which
the auditors reported without qualification.
The annual report and financial statements for the year ended 30 September 2004
are available from our registered office:
Cambridge Antibody Technology Group plc
Milstein Building
Granta Park
Cambridge
CB1 6GH, UK
Tel: +44 (0) 1223 471471
INDEPENDENT REVIEW REPORT TO CAMBRIDGE ANTIBODY TECHNOLOGY PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2005 which comprises the profit and loss account,
the balance sheet, the statement of total recognised gains and losses, the cash
flow statement and related notes. We have read the other information contained
in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2005.
Deloitte & Touche LLP
Chartered Accountants
16 May 2005
Quarterly financial information
Three months Three months
ended ended
31 March 31 December
2005 2004
£'000 £'000
Consolidated profit and loss account (unaudited):
Turnover 7,130 2,715
Direct costs (2,035) -
_______________________________
Gross profit 5,095 2,715
Research and development expenses (8,907) (9,176)
General and administration expenses (2,650) (6,425)
_______________________________
Operating loss (6,462) (12,886)
Interest receivable (net) 1,835 1,172
_______________________________
Loss on ordinary activities before taxation (4,627) (11,714)
Taxation on loss on ordinary activities - -
_______________________________
Loss for the financial period (4,627) (11,714)
_______________________________
Consolidated cash flow statement (unaudited):
Net cash inflow/(outflow) from operations 17,374 (10,227)
_______________________________
Returns on investments and servicing of finance
Interest received 1,672 827
Interest paid (14) (15)
_______________________________
1,658 812
Taxation - -
_______________________________
Capital expenditure and financial investment
Purchase of tangible fixed assets (597) (266)
Sale of tangible fixed assets - -
_______________________________
(597) (266)
Net cash inflow/(outflow) before management
of liquid resources and financing 18,435 (9,681)
_______________________________
Management of liquid resources (8,372) (62,306)
_______________________________
Financing
Issue of ordinary share capital 555 75,382
Capital elements of finance lease rental payments (93) (91)
_______________________________
462 75,291
_______________________________
Increase in cash 10,525 3,304
_______________________________
- ENDS -
Notes to Editors
Cambridge Antibody Technology (CAT):
• CAT is a biopharmaceutical company using its proprietary technologies and
capabilities in human monoclonal antibodies for drug discovery and drug
development. Based near Cambridge, England, CAT currently employs around 290
people.
• CAT is a leader in the discovery and development of human therapeutic
antibodies and has an advanced proprietary technology for rapidly isolating
human monoclonal antibodies using phage display and ribosome display systems.
CAT has extensive phage antibody libraries, currently incorporating more than
100 billion distinct antibodies. These libraries form the basis for the
Company's strategy to develop a portfolio of antibody-based drugs.
• One CAT human therapeutic antibody product candidate is in clinical
development, with one further product candidate in pre-clinical development.
• HUMIRA, the leading CAT-derived antibody, isolated and optimised in
collaboration with Abbott, has been approved for marketing as a treatment for
rheumatoid arthritis in 58 countries.
• Six further licensed CAT-derived human therapeutic antibodies are in clinical
development by licensees, with six further licensed product candidates in pre-
clinical development.
• CAT has alliances with a number of pharmaceutical and biotechnology companies
to discover, develop and commercialise human monoclonal antibody-based
products.
• On 22 November 2004, CAT announced a major strategic alliance with AstraZeneca
to discover and develop human antibody therapeutics in inflammatory disorders.
• CAT has a broad collaboration with Genzyme for the development and
commercialisation of antibodies directed against TGFbeta, a family of proteins
associated with fibrosis and scarring.
• CAT has also licensed its proprietary technologies to several companies.
CAT's licensees include: Abbott, Amgen, Chugai, Genzyme, Human Genome
Sciences, Merck & Co, Pfizer and Wyeth Research.
• CAT is listed on the London Stock Exchange and on NASDAQ. CAT raised £41m in
its IPO in March 1997 and £93m in a secondary offering in March 2000.
Application of the Safe Harbor of the Private Securities Litigation Reform Act
of 1995: This press release contains statements about Cambridge Antibody
Technology Group plc ("CAT") that are forward looking statements. All statements
other than statements of historical facts included in this press release may be
forward looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. These forward looking statements are based on numerous
assumptions regarding the company's present and future business strategies and
the environment in which the company will operate in the future. Certain factors
that could cause the company's actual results, performance or achievements to
differ materially from those in the forward looking statements include: market
conditions, CAT's ability to enter into and maintain collaborative arrangements,
success of product candidates in clinical trials, regulatory developments and
competition. We caution investors not to place undue reliance on the forward
looking statements contained in this press release. These statements speak only
as of the date of this press release, and we undertake no obligation to update
or revise the statements.
This information is provided by RNS
The company news service from the London Stock Exchange
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