2014 Annual Report and Accounts & AGM Notification

RNS Number : 3706J

Oxford Biomedica PLC

02 April 2015

 

Oxford BioMedica

2014 Annual Report and Accounts & AGM Notification

London, UK - 2 April 2015: Oxford BioMedica plc ("Oxford BioMedica" or "the Group") (LSE:OXB), a leading gene and cell therapy group, gives notice that copies of the 2014 Annual Report and Accounts and the Notice of Annual General Meeting ("AGM") have been sent to shareholders. These documents are available on the "Investors" section of the Group's website at www.oxfordbiomedica.co.uk. Oxford BioMedica plc announced preliminary results for the year ended 31 December 2014 on 13 March 2015.

Copies of these documents have been submitted to the UK Listing Authority for publication through the National Storage Mechanism and will shortly be available for inspection at http://www.hemscott.com/nsm.do.

Further copies of the 2014 Annual Report and Accounts are available from the Group Secretary, Oxford BioMedica plc, Windrush Court, Transport Way, Oxford, OX4 6LT, United Kingdom (telephone number: [phone]).

Oxford BioMedica plc also announces that its AGM will be held on Thursday 7 May 2015. The meeting will be held at the offices of Covington & Burling LLP, 265 Strand, London WC2R 1BH, commencing at 10.00 a.m.

In accordance with the requirements of Rule 6.3.5 of the Disclosure Rules and Transparency Rules of the UK Financial Conduct Authority, the appendix to this announcement contains descriptions of the principal risks and uncertainties affecting the Group and material related party transactions, and a responsibility statement which has been extracted from the 2014 Annual Report and Accounts.  This announcement should be read in conjunction with, and not as a substitute for, reading the full 2014 Annual Report and Accounts.

- Ends -

For further information, please contact:
Oxford BioMedica plc: John Dawson, Chief Executive Officer Tim Watts, Chief Financial Officer	Tel: [phone]
Consilium Strategic Communications Mary-Jane Elliott/Matthew Neal/Chris Welsh/Laura Thornton	Tel: [phone]

Notes for editors

About Oxford BioMedica^®

Oxford BioMedica plc (LSE: OXB) is a leading gene and cell therapy group with an unrivalled portfolio of gene therapy products in development and a platform of exclusive and pioneering technologies with which it designs, develops and manufactures unique gene-based medicines for some of world's largest pharmaceutical companies. Leveraging its proprietary LentiVector^® IP and gene delivery system technology platform and unique tumour antigen (5T4), Oxford BioMedica is advancing its pipeline of seven gene therapy products addressing diseases for which there are currently no treatments or that are inadequately treated today, including ocular and central nervous system disorders. OXB Solutions, the Group's industry-leading manufacturing and development business, provides services to collaborators and partners working in gene and cell therapy, including Novartis and Immune Design Corp.  In addition, the Group has licenced products and IP to Sanofi, Pfizer, GlaxoSmithKline, MolMed, Sigma-Aldrich, Biogen Idec, Emergent BioSolutions and ImaginAb. Further information is available at www.oxfordbiomedica.co.uk  and www.oxbsolutions.co.uk .

Appendix

Principal risks and uncertainties

Risk assessment and evaluation is an integral part of Oxford BioMedica's management processes. Many of the Group's risks and uncertainties are common to all development-stage biopharmaceutical companies. Where possible, the Group's strategy and processes are designed to manage and mitigate these risks. The Board has overall responsibility for the Group's systems of risk management and internal control. The management structure of the Group allows the Executive Directors to be closely involved in all material aspects of risk assessment, management and mitigation. The Senior Executive Team meets formally twice-monthly and there are three key sub-committees covering product development, technical development and manufacturing operations which meet monthly. These sub-committees each regularly review the risks in their relevant areas.

Some risks are difficult to mitigate, in particular those related to gene therapy and its efficacy. For other risks, management's experience, planning and vigilance can mitigate the risks to a greater extent, for example those associated with intellectual property and financial risk. The Board members have relevant qualifications and experience, and they have access to external resources where required. The Board meets regularly and frequently enough to ensure that it is fully informed to oversee this activity in a timely manner. The following are the principal risks and uncertainties facing the business.

Intellectual property and patent protection risk

The Group's success depends, amongst other things, on maintaining proprietary rights to its products and technologies and the Board gives high priority to the strategic management of the Group's intellectual property portfolio. However, there can be no guarantee that the Group's products and technologies are adequately protected by intellectual property. Furthermore, if the Group's patents are challenged, the defence of such rights could involve substantial costs and an uncertain outcome. 

Third-party patents may emerge containing claims that impact the Group's freedom to operate. There can be no assurance that the Group will be able to obtain licences to these patents at reasonable cost, if at all, or be able to develop or obtain alternative technology. Where copyright, design right and/or "know how" protect the Group's products or technology, there can be no assurance that a competitor or potential competitor will not independently develop the same or similar products or technology. 

Rights of ownership over, and rights to license and use, intellectual property depend on a number of factors, including the circumstances under which the intellectual property was created and the provisions of any agreements covering such intellectual property. 

There can be no assurance that changes to the terms within licence agreements will not affect the entitlement of the Group to the relevant intellectual property or to license the relevant intellectual property from others.

Gene therapy risk

The commercial success of the Group's gene therapy products will depend, in part, on their acceptance by the medical community and the public for the prevention and/or treatment of diseases. To date only one gene therapy product has been approved in Europe, and none in the USA. Furthermore, specific regulatory requirements, over and above those imposed on other products, apply to gene therapy and there can be no assurance that additional requirements will not be imposed in the future. This may increase the cost and time required for successful development of the Group's products.

Development risks

To develop a pharmaceutical product it is necessary to conduct pre-clinical studies and human clinical trials for product candidates to demonstrate safety and efficacy. The number of pre-clinical studies and clinical trials that will be required varies depending on the product candidate, the indication being evaluated, the trial results and the regulations applicable to the particular product candidate. In addition, the Group or its partners will need to obtain regulatory approvals to conduct clinical trials and manufacture drugs before they can be marketed. 

This development process takes many years. The Group may fail to develop successfully a product candidate for many reasons, including:

-         Failure to demonstrate long-term safety;

-         Failure to demonstrate efficacy;

-         Failure to develop technical solutions to achieve necessary dosing levels or acceptable delivery mechanisms;

-         Failure to establish robust manufacturing processes;

-         Failure to find a development partner or alternative funding;

-         Failure to obtain regulatory approvals to conduct clinical studies or, ultimately, to market the product; and 

-         Failure to recruit sufficient patients into clinical studies.

The failure of the Group to develop successfully a product candidate could adversely affect the future profitability of the Group. There is a risk that the failure of any one product candidate could have a significant and sustained adverse impact on the Group's share price. There is also the risk that the failure of one product candidate in clinical development could have an adverse effect on the development of other product candidates, or on the Group's ability to enter into collaborations in respect of product candidates. 

(i) Safety risks

Safety issues may arise at any stage of the drug development process. An independent drug safety monitoring board (DSMB), the relevant regulatory authorities or the Group itself may suspend or terminate clinical trials at any time. There can be no assurances that any of the Group's product candidates will ultimately prove to be safe for human use. Adverse or inconclusive results from pre-clinical testing or clinical trials may substantially delay, or halt, the development of product candidates, consequently affecting the Group's timeline for profitability. The continuation of a particular study after review by an independent data safety monitoring board or review body does not necessarily indicate that all clinical trials will ultimately be successfully completed.

(ii) Efficacy risks

Human clinical studies are required to demonstrate efficacy in humans when compared against placebo and/or existing alternative therapies. The results of pre-clinical studies and initial clinical trials of the Group's product candidates do not necessarily predict the results of later stage clinical trials. Unapproved product candidates in later stages of clinical trials may fail to show the desired efficacy despite having progressed through initial clinical trials. There can be no assurance that the efficacy data collected from the pre-clinical studies and clinical trials of the Group's product candidates will be sufficient to satisfy the relevant regulatory authorities that the product should be given a marketing authorisation.

(iii) Technical risks

During the course of a product's development, further technical development may be required to improve the product's characteristics such as the delivery mechanism or the manufacturing process. There is no certainty that such technical improvements or solutions can be identified.

(iv) Manufacturing process risk

There can be no assurance that the Group's product candidates will be capable of being produced in commercial quantities at acceptable cost. The Group's LentiVector® platform product candidates use specialised manufacturing processes for which there are only a few suitable manufacturers including the Group's own facility. There can be no assurance that the Group will be able to manufacture the Group's product candidates at economic cost or that contractors who are currently able to manufacture the Group's product candidates will continue to make capacity available at economic prices, or that suitable new contractors will enter the market. Manufacturing processes that are effective and practical at the small scale required by the early stages of clinical development may not be appropriate at the larger scale required for later stages of clinical development or for commercial supply. There can be no assurance that the Group will be able to adapt current processes or develop new processes suitable for the scale required by later stages of clinical development or commercial supply in a timely or cost-effective manner, nor that contract manufacturers will be able to provide sufficient manufacturing capacity when required.

(v) Collaboration and funding risk

Collaborations and licensing are an important component of the Group's strategy to realise value and manage risk. The Group is dependent on collaborative relationships with third parties to facilitate and fund the research, development, manufacture, commercialisation and marketing of products. There is no guarantee that such collaborations and funding will be found. There can also be no assurance that the Group's existing relationships will not be terminated or require re-negotiation for reasons that may be unrelated to the potential of the programme. Circumstances may also arise where the failure by collaborators and third parties, such as contract manufacturers, to perform their obligations in accordance with our agreements could delay, or halt entirely, development, production or commercialisation of our products, or adversely impact our cash flows. 

(vi) Regulatory risk

The clinical development and marketing approval of the Group's product candidates, and the Group's manufacturing facility, are regulated by healthcare regulatory agencies, such as the FDA (USA), EMA (Europe), and MHRA (UK). During the development stage, regulatory reviews of clinical trial pplications or amendments can prolong development timelines. Similarly, there can be no assurance of gaining the necessary marketing approvals to commercialise products in development. Regulatory authorities may impose restrictions on a product's use or may require additional data before granting approval. If regulatory approval is obtained, the product and manufacturer will be subject to continual review and there can be no assurance that such an approval will not be withdrawn or restricted. 

The Group's laboratories, manufacturing facility and conduct of clinical studies are also subject to regular audits by the MHRA to ensure that they comply with Good Laboratory Practice (GLP), Good Manufacturing Practice (GMP) and Good Clinical Practice (GCP) standards. Failure to meet such standards could result in the laboratories or the manufacturing site being closed or the clinical studies suspended until corrective actions have been implemented and accepted by the regulator.

(vii) Failure to recruit sufficient patients into clinical studies

Clinical trials are established under specific protocols which specify how the trials should be conducted. Protocols specify the number of patients to be recruited into the study and the characteristics of patients who can and cannot be accepted into the study. The risk exists that it proves difficult in practice to recruit the number of patients with the specified characteristics. This could be caused by a variety of reasons such as the specified characteristics being too tightly defined resulting in a very small population of suitable patients, or the emergence of a competing drug, either one that is approved or another drug in the clinical stage of development.

Longer-term commercialisation risks

In the longer term, the success of the Group's products will depend on the regulatory and commercial environment several years into the future. Future commercialisation risks include:

-      The emergence of new and/or unexpected competitor products or technologies. The biotechnology and pharmaceutical industries are subject to rapid technological change which could affect the success of the Group's product candidates or make them obsolete;

-      Regulatory authorities becoming increasingly demanding regarding efficacy standards or risk averse regarding safety;

-      Governments or other payers being unwilling to pay for/reimburse gene therapy products at a level which would justify the investment. Based on clinical studies to date, the Group's LentiVector® platform product candidates have the unique potential to provide permanent therapeutic benefit from a single administration. The pricing of these therapies will depend on assessments of their cost-benefit and cost effectiveness;

-      The willingness of physicians and/or healthcare systems to adopt new treatment regimes. Any or all of these risks could result in the Group's future profitability being adversely affected as future royalties and milestones from commercial partners could be reduced. 

Manufacturing operations risk

The Group manufactures clinical study material for its own product development and for third parties. 

The manufacturing processes for gene and cell therapy products are still relatively immature. There is a risk of contamination or other process failure during the manufacturing process which results in material which has been produced having to be destroyed and re-manufactured at additional cost.

Attraction and retention of key employees

Whilst the Group has entered into employment arrangements with each of its key personnel with the aim of securing their services, the retention of their services cannot be guaranteed. The Group is significantly dependent on certain scientific and management personnel. Incentivisation of key employees to remain with the Group remains critical to the Group's success. The loss of those employees could weaken the Group's scientific and management capabilities, resulting in delays in the development of its drugs and impacting negatively on the Group's business. The biotechnology industry has a highly competitive market for qualified scientific and managerial employees. Competitors may try to recruit some of the Group's important employees. Recruiting and retaining management and scientific personnel as the Group develops will be critical to the Group's success.

Financial risks

(a) Product liability and insurance risk

In carrying out its activities the Group potentially faces contractual and statutory claims, or other types of claim from customers, suppliers and/or investors. In addition, the Group is exposed to potential product liability risks that are inherent in the research, pre-clinical and clinical evaluation, manufacturing, marketing and use of pharmaceutical products. While the Group is currently able to obtain insurance cover, there can be no assurance that any future necessary insurance cover will be available to the Group at an acceptable cost, if at all, or that, in the event of any claim, the level of insurance carried by the Group now or in the future will be adequate, or that a product liability or other claim would not have a material and adverse effect on the Group's future profitability and financial condition.

(b) Foreign currency exposure

The Group records its transactions and prepares its financial statements in pounds sterling, but some of the Group's income from collaborative agreements and patent licences is received in US dollars. The Group also incurs a proportion of its expenditure in US dollars and the Euro. The Group's cash balances are predominantly held in pounds sterling, although the Group's Treasury Policy permits cash balances to be held in other currencies in order to hedge foreseen foreign currency expenses. To the extent that the Group's foreign currency assets and liabilities in the longer term are not so well matched, fluctuations in exchange rates between pounds sterling, the US dollar and the Euro may result in realised and unrealised gains and losses on translation of the underlying currency into pounds sterling that may increase or decrease the Group's results of operations and may adversely affect the Group's financial condition, each stated in pounds sterling. 

In addition if the currencies in which the Group earns its revenues and/or holds its cash balances weaken against the currencies in which it incurs its expenses, this could adversely affect the Group's future profitability.

(c) Continuing cashflow

The Group continues to incur significant expenses and capital expenditure as it builds a revenue generating business and develops its portfolio of development products. The Directors have considered the cash position in the context of going concern and their conclusions are set out in the Chief Financial Officer's review, the Directors' report and in Note 1 to the consolidated financial statements in the 2014 Annual Report and Accounts.

Transactions with related parties

Vulpes Loan Facility

On 6 January 2014, shareholders approved a £5 million secured loan facility provided by Vulpes Life Sciences Fund to the Group. Martin Diggle, a non-Executive Director of the Company is a founder of Vulpes Investment Management which manages Vulpes Life Sciences Fund.

During the first 6 months of 2014, the Group drew down £1.5 million of this facility. This amount was repaid in full, together with accumulated interest and arrangement fee, on 17 June 2014 following the successful fundraise.

The loan agreement has now been cancelled.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report, the Directors' remuneration report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the Directors have prepared the group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

-         select suitable accounting policies and then apply them consistently;

-         make judgements and accounting estimates that are reasonable and prudent;

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

Each of the Directors, whose names and functions are listed below confirm that, to the best of their knowledge:

-         the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the Group; and

-         the Directors' report contained in this section includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

Name	Function
Nick Rodgers	Chairman
Dr Andrew Heath	Deputy Chairman and Senior Independent Director
Dr Paul Blake	Chief Development Officer
Martin Diggle John Dawson	Non-Executive Director Chief Executive Officer
Tim Watts	Chief Financial Officer
Peter Nolan	Chief Business Officer

In accordance with Section 418, Directors' reports shall include a statement, in the case of each Director in office at the date the Directors' report is approved, that:

(a)      so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

(b)      he has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information

 

END

 

 

ACSITMITMBJMBPA