Preliminary Results

RNS Number : 7299Y
Oxford Biomedica PLC
06 March 2012
 



EMBARGOED UNTIL 7.00AM 6 MARCH 2012

 

OXFORD BIOMEDICA PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011

 

Oxford, UK - 6 March 2012: Oxford BioMedica plc ("Oxford BioMedica" or "the Company") (LSE: OXB), the leading gene-based biopharmaceutical company, today announces its preliminary results for the year ended 31 December 2011.

 

OPERATIONAL HIGHLIGHTS:

 

·      Ocular gene therapy programmes partnered with Sanofi progressing well

-      Two new Phase I/II trials underway: RetinoStat® (Phase I) and StarGen™ (Phase I/IIa)

-      Third successive IND approval from FDA received for UshStat® Phase I/IIa study

 

·      Encouraging data from ProSavin® Phase I/II study in Parkinson's disease

-      DMC confirmed that highest (5x) dose shows most promising efficacy to date

-      Further product optimisation could provide up to 10-fold increase in dopamine production

 

·      Successful acquisition of specialist manufacturing facility to support core programmes

-      Commissioning process complete and on budget

-      Preparation for MHRA license on track to enable GMP manufacturing for clinical supply

 

·      New industry collaborations

-      LentiVector® platform collaboration with Mayo Clinic, USA for chronic glaucoma

-      Partnership with Pfizer broadened to include in vitro diagnostic use of 5T4 antibodies

-      Collaboration with ImaginAb to engineer a 5T4-based in vivo diagnostic imaging agent

 

·      Further TroVax® Phase III analyses published in Cancer Immunology, Immunotherapy

-      Biomarker can potentially target a more responsive patient population

-      Enthusiasm from the oncology community for multiple Phase II sponsored studies

 

FINANCIAL HIGHLIGHTS1:

 

·       Fundraising of £20.0 million before expenses, completed on 10 January 2011

·       Revenue of £7.7 million (2010: £11.2 million)

·       Research & development costs of £17.8 million (2010: £19.9 million) including £3.1 million exceptional impairment loss (2010: £3.9 million impairment loss)

·       Net loss after exceptional items of £12.6 million (2010: £10.3 million)

·       Net cash burn2 of £16.5 million (2010: net cash burn2 £13.0 million)

·       Net cash3 of £14.3 million (2010: £12.3 million)

 

1.    Audited financial results

2.    Net cash used in/generated from operating activities plus sales and purchases of non-current assets and interest received

3.    Cash, cash equivalents and available for sale investments

 

John Dawson, Chief Executive Officer at Oxford BioMedica, said: "Our strong operational progress during 2011 has resulted in a diversified portfolio with five core clinical programmes and the successful commissioning of our proprietary manufacturing facility.  Securing three IND approvals from the FDA within 12 months for our novel ocular gene therapies partnered with Sanofi was an exceptional achievement, and we are also pleased to have secured new industry collaborations.  With tough economic conditions impacting companies and influencing sector dynamics, we have tight fiscal controls in place and remain committed to maximising the opportunities ahead."

 

-Ends-

 

 

An analyst briefing will be held at 09.30am GMT on Tuesday, 6 March 2012 at the offices of M:Communications, CityPoint, 1 Ropemaker Street, London, EC2Y 9AW.

 

Webcast: Simultaneously to the analyst briefing at 09.30am GMT, there will be a live audio webcast of the presentation.  To connect to the webcast facility, please visit the Company's website: www.oxfordbiomedica.co.uk approximately 10 minutes before the start of the briefing.  A replay will be made available shortly after the presentation.

 

For further information, please contact:

 

Oxford BioMedica plc:

John Dawson, Chief Executive Officer

Tim Watts, Chief Financial Officer

Lara Mott, Head of Corporate Communications

 

Tel: +44 (0)1865 783 000

 

Singer Capital Markets Limited:

Shaun Dobson/Claes Spång

 

Tel: +44 (0)20 3205 7500

 

Media/Financial Enquiries:

Mary Clark/Claire Dickinson

M:Communications

 

Tel: +44 (0)20 7920 2342

 

 

Disclaimer

This press release contains "forward-looking statements", including statements about the discovery, development and commercialisation of products.  Various risks may cause Oxford BioMedica's actual results to differ materially from those expressed or implied by the forward-looking statements, including adverse results in clinical development programmes; failure to obtain patent protection for inventions; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals and services resulting from development efforts; the requirement for substantial funding to conduct research and development and to expand commercialisation activities; and product initiatives by competitors.  As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statements.  Oxford BioMedica disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Notes to editors

 

1. Oxford BioMedica

Oxford BioMedica plc (LSE: OXB) is a biopharmaceutical company developing innovative gene-based medicines and therapeutic vaccines that aim to improve the lives of patients with high unmet medical needs.  The Company's technology platform includes a highly efficient LentiVector® gene delivery system, which has specific advantages for targeting diseases of the central nervous system and the eye; and a unique tumour antigen (5T4), which is an ideal target for anti-cancer therapy.  Through in-house and collaborative research, Oxford BioMedica has a broad pipeline with current partners and licensees including Sanofi, Pfizer, GlaxoSmithKline, MolMed, Sigma-Aldrich, Biogen Idec, VIRxSYS, Emergent BioSolutions and ImaginAb.  Further information is available at www.oxfordbiomedica.co.uk.

CHAIRMAN'S STATEMENT

 

"Operationally, 2011 was a successful year for Oxford BioMedica resulting in substantial growth across the Company's clinical portfolio, the strategic investment in proprietary manufacturing, multiple regulatory approvals and new industry collaborations.  However, we are acutely aware that securing a commercial partner for ProSavin® has taken longer than anticipated.  We have clear strategic priorities ahead and, with multiple initiatives on-going, remain committed to securing a strong future for the Company."

 

Tough economic environment

The complexity of today's global economic environment has affected all industries, not just the pharmaceutical and biotechnology sector.  Cautious investors are steering clear of equity markets and non-profitable, "binary-risk" biotechnology companies no longer dominate the UK healthcare & life sciences sector.  However, the fundamentals of the pharmaceutical industry model are undergoing significant change which we believe represents an opportunity for innovators such as Oxford BioMedica. 

 

Successful pharma-biotech alliances are essential

The pharmaceutical companies best equipped to deal with the challenges ahead are those with robust pipelines capable of offsetting the impact from expiring patents and cuts in R&D.  Consolidation and alliances will continue to transform the market as companies adapt to changing conditions within the industry.  Oxford BioMedica has innovative technology platforms, a diverse product portfolio and world-class industry collaborations with partners such as Sanofi and Pfizer.  With one of the broadest patent estates in our chosen fields, we are well-positioned to leverage the value of our products and intellectual property through strategic partnerships.

 

Strong management team

Under the leadership of John Dawson, Chief Executive Officer, Oxford BioMedica has evolved from being a research-driven organisation into a more commercially-focused company.  The management team has the breadth and depth of expertise necessary to manage the Company in today's environment including R&D, clinical development, regulatory, intellectual property management, manufacturing, business development, due diligence and finance.  With development risk now spread across the broadest clinical portfolio to date, the management team has strategically focused on key therapeutic areas of interest such as neuroscience, ocular disease and oncology.

 

Board changes

In May 2011, Dr Alan Kingsman left the Board of Oxford BioMedica and I stepped up from Deputy Chairman to become Chairman.  I would like to express my sincere thanks to Alan for his invaluable contribution to the Company.  Dr Alex Lewis was also appointed Director of Corporate Activities and Strategy in May 2011 and, as a result, stepped down from the Board.  Andrew Wood stepped down as Chief Financial Officer in February 2012 having made a substantial contribution to the Company since its IPO in 1996.  We wish Andrew all the best for the future and welcome Tim Watts who has been appointed to the Board as Chief Financial Officer and Company Secretary.

 

Strategy commitment

Oxford BioMedica has clear strategic priorities ahead to secure corporate and commercial success.  The Company's growth and success will not only come from commercial partnerships but also future corporate activity.  The Board is continuously monitoring expenditure and, having recently reduced the Company's cost base, Oxford BioMedica has tight fiscal controls in place.  As with all biotechnology companies, we continue to review our options in terms of how best to finance the Company to allow us to achieve our strategic aims.

 

In conclusion

The operational achievements in 2011 are a result of the sheer hard work and dedication of our staff, so I would like to thank everyone for their commitment over the past year.  I would also like to thank our partners and shareholders for their long-term support, particularly given the volatile nature of the global biotechnology sector.  We have challenges ahead; however with increasingly valuable assets I remain confident that the management team will continue to make progress towards a strong future.

 

Nick Rodgers

Chairman

CHIEF EXECUTIVE'S STATEMENT

 

"Following the £20 million fundraising at the start of 2011, we set ourselves multiple R&D and commercial milestones for the year.  With three IND approvals from the US regulatory agencies within 12 months, our ocular portfolio is progressing extremely well and we have successfully commissioned our new manufacturing facility.  Whilst ProSavin® has produced the most encouraging results to date, we are taking an appropriately prudent approach towards the next key stage of development.  With further product optimisation, we will ensure the greatest chance of success in randomised studies.  With careful consideration towards our financial resources, we continue to evaluate the most effective strategies to further advance our products towards commercialisation."

 

Portfolio progress

The initiation and development of three pioneering Phase I/II ocular gene therapy studies is not only a historic milestone for Oxford BioMedica, but is also of great significance to the field of ophthalmology - particularly in orphan indications such as Stargardt disease and Usher syndrome.  ProSavin® continues to generate positive data in the current Phase I/II study in Parkinson's disease and further product optimisation provides significant potential to increase benefit for patients and reduce the development risk, thus enhancing the commercial opportunity.  Whilst recruitment for our TroVax® Phase II study in prostate cancer is challenging given the new treatment landscape in the US, the support and enthusiasm from the oncology community is encouraging and we are pleased to be working with multiple academic groups on the future development of this important asset.  Alongside our core programmes, the new collaborations with Mayo Clinic, ImaginAb and our strengthened alliance with Pfizer further validate our innovative technology platforms.

 

Proprietary manufacturing

The new manufacturing facility is expected to deliver long-term operational and financial efficiencies and will support our products through Phase II, Phase III and to market.  It also provides the opportunity for us to become the LentiVector® platform supplier of choice for our current and future partners which could provide additional revenues.  The successful commissioning of the manufacturing facility is a significant achievement for Oxford BioMedica and the hard work continues in preparation to secure our MHRA license to support clinical manufacturing and supply.

 

Partnering initiative

Building the value of novel products takes time.  As a biopharmaceutical company we continuously aim to enhance our assets to reinforce patent protection, optimise cost of goods and increase the commercial opportunity at all levels of development.  Whilst we cannot influence data, during 2011 we improved elements within our control for ProSavin® and TroVax® such as clinical analyses, regulatory pathways, future trial design and manufacturing.  We are actively pursuing multiple initiatives to secure further funding for our core programmes and continue to evaluate development strategies in light of our financial resources.

 

Financial management

Our cash position at 31 December 2011 was £14.3 million and we have sufficient financial resources to fund the business until Q1 2013.  This does not take into account potential milestone payments should Sanofi elect to exercise its options for the ocular products during 2012, nor does it factor in potential revenue from partnering deals.  However, until we reach sustainable profitability we continue to strike a balance between growing the Company whilst also being careful with costs.  During 2011 we reviewed the Company's business operations to implement a stronger emphasis on clinical development and commercialisation.  Our aim is to ensure that Oxford BioMedica is an efficient, focused and resilient organisation.  As a result, management has reduced the Company's cost base, implemented a reduction in headcount of 16 staff and closed the US office in San Diego, California. 

 

Outlook

As I have said before, I believe Oxford BioMedica has strong fundamentals, an exciting development pipeline and a commercially-focused management team.  Whilst securing further funding for ProSavin® has taken longer than expected, our achievements during 2011 demonstrate our ability to deliver operational progress.  With multiple opportunities ahead, we remain confident in our ability to bring in future revenue and continue to run the business in order to deliver on our strategy.

 

John Dawson

Chief Executive Officer

OPERATIONAL REVIEW

 

LENTIVECTOR® PLATFORM

Oxford BioMedica's proprietary LentiVector® technology platform is a highly efficient system for the delivery of therapeutic genes to a wide range of tissues, and it has specific advantages for targeting diseases of the central nervous system and the eye.  The Company's most advanced LentiVector® platform candidate is ProSavin® for Parkinson's disease.  In partnership with Sanofi, Oxford BioMedica is also developing four products for the treatment of ocular diseases.  These five core LentiVector® platform candidates benefit from a common manufacturing platform and regulatory procedures.  The Company is also working with leading scientific teams to address other unmet needs, such as the treatment of glaucoma and motor neuron disease.

 

PROSAVIN®: gene-based therapy for Parkinson's disease (PD)

ProSavin® is being evaluated in a Phase I/II trial to assess the safety, efficacy and dose evaluation in patients with mid-stage Parkinson's disease who are experiencing reduced benefit on L-DOPA "equivalent" therapy.  Three ascending dose levels (1x, 2x and 5x) have been evaluated in 15 patients to date.  Six patients received the 2x dose, three of which were treated using an enhanced administration procedure which facilitates higher dosing and reduces surgical delivery time of the 2x dose by approximately 50%.  The highest (5x) dose level of ProSavin®, which is the scaled equivalent to the optimal dose in pre-clinical studies, is being assessed in the most recent six-patient cohort.  Patients have been treated at two centres of excellence for neurosurgery; the Henri Mondor Hospital in Paris, France with Professor Stéphane Palfi as Principal Investigator and Coordinating Investigator, and at Addenbrookes Hospital in Cambridge, UK with Dr Roger Barker as Principal Investigator.

 

Positive data presented at largest scientific conference for genetic & cellular therapeutics

In May 2011, data from the Phase I/II study were presented at the American Society of Gene & Cell Therapy (ASGCT) 14th Annual Meeting held in Seattle, USA by Professor Stéphane Palfi.  A six-month assessment of the third patient cohort, treated with a 2x dose of ProSavin® using an enhanced administration method, revealed the highest efficacy results observed to date with 43% average motor function improvement and a maximum of 61% in one patient.  In addition, patient diary measures such as increased functional "ON" time (when PD symptoms are not present), reduced "OFF" time (after withdrawal of PD medication) and improved quality of life also support the positive impact on patients' lives; further underlining the potential for ProSavin® to address the motor symptoms of PD.

 

Encouraging signs of clinical benefit for Parkinson's patients

In August 2011, Oxford BioMedica reported a positive interim review of the fourth patient cohort, treated with the highest (5x) dose of ProSavin®, by the study's independent Data Monitoring Committee (DMC).  At the three-month time point, the highest average motor function improvement of 29% was observed, with a maximum of 49% improvement in one patient.  Patients also reduced their average daily dose of L-DOPA "equivalent" therapy, whereas typically they would require an increase in dose given the nature of this inexorably degenerative disease.  Importantly, the DMC acknowledged that the improvements in motor function with decreased oral dopaminergic therapy observed to date are encouraging and clinically relevant.  If replicated in randomised studies, such levels of improvement would make a substantial difference to a patient's life.

 

Significant long-term improvements vs. progressively degenerating disease

As part of an interim review in December 2011, Oxford BioMedica and its clinical experts performed an efficacy analysis across all 15 patients treated at the latest available assessment time points and concluded:

 

·      Interim data show that ProSavin® mediates improvement in motor function in all cohorts at six-month primary efficacy endpoint

·      Population analysis of first three cohorts (12 month data for n=9) shows ProSavin® significantly improves motor function relative to baseline in progressively degenerating disease:

-      Improvement remains statistically significant up to 12 months

-      Improvement over baseline maintained up to 24 months (first two cohorts, n=6)

·      ProSavin® demonstrates efficacy across range of disease severity

-      Important in a disease such as PD where patient population is heterogeneous

·      Average reduction in L-DOPA "equivalent" therapy in all cohorts

In addition to the improvements observed across multiple endpoints, functional imaging data using Positron Emission Tomography (PET) scans to produce a detailed, three-dimensional picture inside the body also suggest dopamine (DA) provision attributable to ProSavin® at the highest (5x) dose.

 

Independent experts confirm 5x dose shows most promising efficacy to date

In December 2011, Oxford BioMedica also announced a positive review of all four patient cohorts by the study's independent DMC; a multidisciplinary panel with expertise in Parkinson's disease and virology.  In addition to ProSavin's long-term safety profile, now up to 36 months post-treatment (1x dose), the DMC confirmed that the fourth patient cohort (5x dose) shows most promising signs of efficacy to date:

 

Cohort

1

(1x dose)

2

(2x dose)

3

(2x dose)

4

(5x dose)

Improvement in UPDRS Part III "OFF" score1

x

x

x

x

Average reduction in L-DOPA "equivalent" therapy

 

x

x

x

Improvement in UPDRS Part III "ON" score2

 

 

x

x

Reduction in PET3 signal (i.e. increase in DA4 provision)

 

 

 

x

 

1.     Unified Parkinson's Disease Rating Scale (UPDRS) in patients' "OFF" state (i.e. after withdrawal of PD medication)

2.     Unified Parkinson's Disease Rating Scale (UPDRS) in patients' "ON" state (i.e. with medication and when PD symptoms are not present)

3.     Positron Emission Tomography scan used to produce a detailed, three-dimensional picture inside the body

4.     DA = dopamine

 

Support from DMC to investigate enhanced construct in Phase II programme

Oxford BioMedica and its clinical experts believe that the interim ProSavin® data set continues to support planning for a sham-controlled Phase II study.  During 2011, the Company identified and developed an enhanced product construct based on ProSavin®'s dopaminergic enzymes.  The new construct can potentially provide up to a 10-fold increase in dopamine production capacity, allowing further dose escalation without impacting volume or rate of administration.  In addition, the new construct offers extended patent protection and a relative reduction in cost of goods, thus increasing the commercial opportunity for ProSavin®.  With the support of the study's independent DMC, Oxford BioMedica is evaluating a strategy to move the new construct into development as part of a Phase II programme.

 

Partnering initiative

As previously announced, partnering discussions for ProSavin® have been influenced by: a potential partner's view of the risk associated with the early stage of the product; the ability to control future manufacturing; and the regulatory path to registration given that ProSavin® is an entirely novel product.  Following the European Medicines Agency's validation of the planned route to registration and the acquisition of a UK manufacturing facility, Oxford BioMedica has successfully addressed two of these key issues.

 

In terms of the risk associated with ProSavin® as an early stage gene therapy for PD, moving into a randomised Phase II study will add significant value and further de-risk the product.  Given the encouraging clinical results and positive analyses to date, Oxford BioMedica had anticipated that data from the highest (5x) dose cohort could crystallise a partnering deal in late 2011 or early 2012.  However, whilst independent experts have confirmed that the 5x dose of ProSavin® has indeed shown the most promising signs of efficacy to date, interested parties are keen for Oxford BioMedica to investigate the enhanced product construct as part of a Phase II programme to ensure the greatest chance of success in randomised studies.  As a result, securing further funding via a development partnership for this core programme has taken longer than expected.  With further product optimisation ongoing, a randomised Phase II study is unlikely to be initiated in 2012.  Oxford BioMedica is focused on non-clinical bridging studies and preparing the regulatory pathway for future US and EU regulatory applications. 

 

Next milestones

The primary efficacy end-point of the current Phase I/II study is the six-month UPDRS assessment, allowing time for improvements in patients' condition to stabilise including appropriate adjustments in background oral dopaminergic therapy.  Results from all six patients in the fourth (5x dose) cohort are expected in H1 2012.  In the meantime, the Company holds regular updates with interested parties and is evaluating the most effective strategy to advance ProSavin® into its next stage of development.

 

Market opportunity

Parkinson's disease affects approximately 1.5 million patients in the seven major markets (US, Japan, UK, France, Germany, Italy and Spain) which is projected to rise to 1.7 million by 2019.  None of the current treatments provide long-term relief from symptoms, yet, by 2019, sales of these treatments could exceed US$2.8 billion in the seven major markets (source: Datamonitor, Dec-2010).  ProSavin® has the potential to address a major unmet medical need in Parkinson's disease, offering long-lasting benefit from a single administration with an excellent safety profile.  The product could therefore also significantly reduce the social care burden that is associated with the mid to late-stage of disease.

 

OCULAR PORTFOLIO: gene-based therapies

In collaboration with Sanofi, Oxford BioMedica is developing four LentiVector® platform product candidates for the treatment of ocular diseases: RetinoStat® for "wet" age-related macular degeneration (AMD); StarGen™ for Stargardt disease; UshStat® for Usher syndrome type 1B; and EncorStat® for corneal graft rejection.  This partnership is an endorsement of the Company's LentiVector® platform and, furthermore, Sanofi's investment in the platform technology benefits Oxford BioMedica's development programmes in other therapeutic areas.  Oxford BioMedica is also privileged to be working with Mayo Clinic, Rochester (USA) to develop a novel gene therapy for the treatment of chronic glaucoma.

 

Landmark partnership with Sanofi

The ocular collaboration with Sanofi, signed in April 2009, included an upfront receipt of US$26 million and up to US$24 million in development funding over the initial phase of development.  Following successful Phase I/II completion, Oxford BioMedica may receive further undisclosed license fees, milestone payments and royalties on product sales, the terms of which are consistent with other deals of this scope and size.  Furthermore, there is considerable opportunity to expand the collaboration with the addition of other indications and related product candidates.  For example, RetinoStat® could be evaluated as a treatment for diabetic macular oedema.

 

Three ocular IND applications approved by FDA within 12 months

Oxford BioMedica works very closely with the regulatory agencies in order to define the development pathways for its novel gene therapies.  In November 2010, the US Food and Drug Administration (FDA) approved Oxford BioMedica's Investigational New Drug (IND) application for RetinoStat®, resulting in the initiation of the first US clinical study using the Company's LentiVector® platform technology in January 2011.  This was a major event for Oxford BioMedica and would also support subsequent LentiVector® platform regulatory submissions.  Accordingly, the FDA approved the StarGen™ and UshStat® IND applications in March and October 2011, respectively. 

 

Receiving three IND approvals from the US regulatory agencies within 12 months represents an exceptional achievement for the Company's R&D and regulatory teams.  Oxford BioMedica also held a pre-IND meeting with the FDA in September 2011 for EncorStat® to discuss the proposed development strategy in preparation for a Phase I/II trial.  Together with Sanofi, the Company continues to evaluate the optimal route for commercial development of this novel product.

 

Lead RetinoStat® Phase I trial in "wet" AMD on track

Six patients have been treated with RetinoStat® in the on-going US Phase I study in neovascular "wet" age-related macular degeneration (AMD).  Three patients received the first dose level, three received the second dose level and the third patient cohort (dose level 3) is underway.  The open label, dose escalation Phase I study will enrol 18 patients with "wet" AMD at the Wilmer Eye Institute at Johns Hopkins, Baltimore (USA).  Led by Professor Peter Campochiaro, the study will evaluate three dose levels and assess safety and aspects of ocular physiology.  Oxford BioMedica is on track to announce first results in H1 2012.

 

First gene therapy clinical trials in Stargardt disease and Usher syndrome underway

There are currently no approved treatments for Stargardt disease and Usher syndrome type 1B and other potential strategies do not target the root cause of the disease.  As such, StarGen™ and UshStat® have received both European and US Orphan Drug Designation which brings development, regulatory and commercial benefits. 

 

In June 2011, the first patient in the StarGen™ Phase I/IIa study in Stargardt disease was treated in the US.  In July 2011, the French regulatory agency (AFSSAPS) approved the opening of a second clinical site in France.  In the US, the study is led by Professor David Wilson at the Oregon Health and Science University, Portland, Oregon.  In France, Professor Jose-Alain Sahel leads the study at the Centre Hospitalier National D'Opthalmologie des Quinze-Vingts, Paris.  Four patients have been treated to date at the first dose level and the second cohort using dose level 1 in earlier-stage patients is underway.  The open label, dose escalation Phase I/IIa study will enrol up to 28 patients and will evaluate three dose levels for safety, tolerability and aspects of biological activity.  First results are expected in H2 2012. 

 

In February 2012, the UshStat® Phase I/IIa study in Usher syndrome type 1B commenced in the US at the Oregon Health & Science University's Casey Eye Institute.  Led by Professor Richard Weleber as Principal Investigator, the open label, dose escalation Phase I/IIa study will enrol up to 18 patients and will evaluate three dose levels for safety, tolerability and aspects of biological activity.  Initial results are expected in H2 2012.

 

Positive reviews from independent Data Safety Monitoring Board

In June 2011, Oxford BioMedica reported a positive interim review of the first RetinoStat® patient cohort by the study's independent Data Safety Monitoring Board (DSMB); an independent panel of specialists in the fields of ophthalmology, virology and vectorology.  RetinoStat® was safe and well-tolerated at one month following treatment with no signs of inflammation in the eye. 

 

In January 2012, the Company received its second positive DSMB review of the RetinoStat® and StarGen™ programmes.  Both products demonstrated a favourable safety profile with no serious adverse events related to RetinoStat®, StarGen™ or the methods of administration.  Importantly, RetinoStat® and StarGen™ demonstrate continued safety six months and one month post-treatment, respectively.  The DSMB gave its support to proceed to the final ascending dose patient cohort for RetinoStat® (dose level 3) and the second StarGen™ patient cohort, both of which are underway.

 

Market opportunity

AMD is a major cause of blindness affecting an estimated 25 million to 30 million people worldwide and the incidence of AMD is expected to triple by the year 2025.  Neovascular "wet" AMD accounts for 90% of all severe vision loss from the disease with up to 4.5 million patients worldwide (source: AMD Alliance International).  The industry standard treatment for "wet" AMD and other related ocular conditions had global sales in excess of US$3.7 billion in 2011 (source: Novartis/Roche).  On the basis of pre-clinical data, it is anticipated that RetinoStat® may require only a single administration.  If so, this would give the product a significant advantage in the market over currently available treatments that require frequent, repeated administration.  There are currently no approved treatments for Stargardt disease, Usher syndrome type 1B and corneal graft rejection.  StarGen™, UshStat® and EncorStat® have a common technology platform, manufacturing technique and safety in toxicology studies and it is these sorts of niche indications that can build significant business value.  Again, it is anticipated that a single application of Oxford BioMedica's gene-based products could provide long-term or potentially permanent benefits for patients suffering from these debilitating diseases.

 

Glaucoma-GT: new collaboration with Mayo Clinic for chronic glaucoma

In October 2011, Oxford BioMedica entered into a research and development collaboration with Mayo Clinic, Rochester (USA) to develop a novel gene therapy for the treatment of chronic glaucoma.  Under the terms of the agreement, Mayo Clinic and Oxford BioMedica will undertake pre-clinical studies to establish the feasibility of treating glaucoma using Oxford BioMedica's proprietary LentiVector® gene delivery technology expressing a COX-2 gene and a PGF-2α receptor gene to reduce intraocular pressure.

 

Since the start of the collaboration, the teams have successfully initiated the first pre-clinical study which aims to demonstrate gene transfer using Oxford BioMedica's LentiVector® platform technology to target ocular tissues following transcorneal administration.  Preliminary results from this study are encouraging and indicate effective and robust gene transfer into the target ocular tissues.  A second pre-clinical study is expected to begin in Q2 2012 to evaluate the lowering of intraocular pressure following administration of the collaboration's Glaucoma-GT.

 

Market opportunity

Glaucoma is a group of eye diseases characterised by vision loss due to damage of the optic nerve affecting over 60 million people worldwide (source: Mayo Clinic).  Glaucoma is the biggest ophthalmic market with global sales of over US$5 billion in 2008 treating seven million cases in the seven major markets.  The most common form of glaucoma is classed as primary open-angle glaucoma (also known as chronic glaucoma or chronic open-angle glaucoma) which accounts for 75-95% of all glaucoma patients (source: Datamonitor 2010).

 

MONUDIN®: motor neuron disease

The pre-clinical development of MoNuDin® is supported by the UK Motor Neurone Disease Association (MNDA).  MoNuDin® has shown promising results in early pre-clinical studies and Oxford BioMedica is optimising the product for clinical trials.  The Company's LentiVector® platform technology has the ability to deliver genes safely and efficiently to the neuronal cells affected by motor neuron disease.  Oxford BioMedica is working with non-profit research groups and organisations to explore novel therapeutic approaches to treat Amyotrophic Lateral Sclerosis (ALS), the most prevalent type of motor neuron disease.

 

Working together with leading academic organisations

Oxford BioMedica's on-going collaboration with VIB/University of Leuven, funded by a grant from the MNDA, is focused on the pre-clinical development of MoNuDin® for the treatment of ALS.  The collaboration builds on previous work funded by MNDA and will utilise Oxford BioMedica's LentiVector® platform technology to compare the therapeutic potential of two forms of vascular endothelial growth factor (VEGF).  Following successful gene expression studies in 2011 to evaluate the optimal delivery route for this approach, Oxford BioMedica has demonstrated VEGF expression using its LentiVector® platform technology in cells and also in vivo using two different forms of the VEGF therapeutic gene.  Further pre-clinical work to evaluate the efficacy of these VEGF forms is expected to start in Q2 2012.

 

During 2011, in collaboration with the University of Bristol, Oxford BioMedica also investigated the effects of MoNuDin® in a pre-clinical model of ALS using a new route of delivery for administration directly into the cerebrospinal fluid bathing the spinal cord.  The results of this study have demonstrated proof-of-concept for this intracerebroventricular delivery route.

 

One of the major hurdles to treating motor neurone disease is ensuring that therapeutic agents are delivered to the relevant site of action in the brain and spinal cord; therefore both collaborations continue to support Oxford BioMedica's planning for the future clinical development of MoNuDin®.

 

Market opportunity

Despite being one of the most common neurodegenerative diseases of adult onset, motor neuron disease has a high unmet need.  Amyotrophic lateral sclerosis (ALS), often referred to as Lou Gehrig's disease, is the most prevalent type of motor neuron disease. In the US, there are an estimated 30,000 patients with ALS and nearly 6,000 new cases are diagnosed annually (source: ALS Association).  Only one drug has been approved for the treatment of ALS and its benefit is a modest increase in survival time.  If MoNuDin® proves to be an effective neuroprotective treatment that can slow or arrest injury to patients' motor neurons, it would have compelling competitive advantages.

 

LENTIVECTOR® PLATFORM MANUFACTURING

Historically, all of Oxford BioMedica's manufacturing to Good Manufacturing Practice (GMP) standards has been outsourced to a contract manufacturing organisation.  However, given the pivotal role of manufacturing in biological drug development and the planned growth of the Company's clinical LentiVector® platform portfolio during 2011, Oxford BioMedica conducted a strategic review in 2010 to maximise control and minimise risks associated with manufacturing.

 

Successful acquisition of UK manufacturing facility in Cowley, Oxford

In February 2011, Oxford BioMedica acquired a UK manufacturing facility for £1.9 million which represents a fraction of the cost of a new build.  The facility totals approximately 16,000 square feet, which includes c. 4,400 square feet in cleanrooms, and is situated less than three miles from the Company's head office.  This investment in the Company's specialist manufacturing processes will address one of the main hurdles associated with the rapid progression of products through Phase II, Phase III and to market and, importantly, also provides the opportunity for Oxford BioMedica to become the LentiVector® platform supplier of choice for its current and future partners.

 

Commissioning process complete

Oxford BioMedica appointed James Christie, a senior biopharmaceutical executive with over 30 years of experience in the industry, as Head of Manufacturing in February 2011.  Led by James, an integrated team comprising manufacturing, development, quality control, quality assurance, engineering and logistics expertise have been engaged in commissioning the facility throughout 2011.  In line with expectations and on budget, the manufacturing facility is now fully-commissioned and produced its first pilot run at the end of 2011.

 

New MSAT team in operation

The Company's Manufacturing Sciences and Technology (MSAT) team is now in place.  The MSAT team covers all aspects of biological and fill/finish manufacturing by bringing together core expertise in process development, process improvement and optimisation, technology transfer and process monitoring and troubleshooting.  With MSAT, Manufacturing & Supply, Quality Assurance and Quality Control, Oxford BioMedica has the necessary capabilities and core competencies to develop and support current and future production activities.

 

Next steps

Oxford BioMedica is currently manufacturing product batches in preparation for obtaining a license from the UK Medicines and Healthcare products Regulatory Agency (MHRA) to enable GMP manufacturing for clinical supply. Subject to receiving MHRA approval, progress remains on track for the manufacturing facility to be fully-operational in H1 2012.  Oxford BioMedica also plans to work towards a recognised environmental programme.

 

5T4 TUMOUR ANTIGEN PLATFORM

Oxford BioMedica's proprietary 5T4 antigen is an ideal target for anti-cancer treatment given its restricted expression on normal tissues and its high prevalence on the surface of cancerous cells across a wide range of solid tumours.  TroVax® is Oxford BioMedica's 5T4-specific therapeutic vaccine candidate which is in Phase II development.  In partnership with Pfizer, pre-clinical evaluation of Oxford BioMedica's 5T4-targeted antibody is on-going to optimise the product for clinical development.  Pfizer also has non-exclusive rights for the in vitro diagnostic use of 5T4 antibodies.  The Company is also collaborating with ImaginAb to engineer an in vivo diagnostic imaging agent using an antibody targeting 5T4 for positron emission tomography (PET) cancer imaging.

 

TROVAX® (MVA-5T4): therapeutic cancer vaccine

TroVax® is a late-stage clinical asset that has completed 10 clinical trials in colorectal, renal and prostate cancer.  It is currently being evaluated in a randomised, open-label Phase II study in patients with metastatic hormone refractory prostate cancer (HRPC).  Oxford BioMedica also continues to receive interest from oncologists and clinicians regarding the future development of TroVax® in several cancer indications which have a clear unmet medical need and a lack of effective treatments.  A number of sponsored Phase II clinical studies are expected to commence during 2012.

 

Biomarker potentially targets a more responsive patient population

In March 2011, analyses of the TroVax® Renal Immunotherapy Survival Trial ("TRIST") Phase III study were published in Cancer Immunology, Immunotherapy; the official journal of the Association for Cancer Immunotherapy.  Oxford BioMedica has identified an algorithm biomarker (the "Immune Response Surrogate") for predicting the quantitative 5T4 antibody response induced by TroVax® in order to identify those patients who are most likely to mount a strong 5T4 antibody response subsequent to TroVax® administration.  Importantly, the biomarker was also relevant when applied to an independent dataset derived from the nine historic Phase I and II studies in patients with renal, colorectal and prostate cancer, which suggests that the biomarker could potentially be applied to multiple cancer types.  The biomarker will be used in all future TroVax® clinical trials in order to target a more responsive patient population, including the on-going HRPC Phase II trial.

 

Phase II study in hormone refractory prostate cancer (HRPC)

The on-going randomised, open-label Phase II study in patients with metastatic HRPC is designed to evaluate the activity of TroVax® plus chemotherapy drug docetaxel, versus docetaxel alone.  The study is being led by Dr Anna Ferrari, New York University Cancer Institute (USA) and has been carefully designed to give early proof-of-concept by monitoring changes in prostate specific antigen kinetics, one of the most widely used oncological biomarkers in clinical research. 

 

The first centre started recruiting patients in September 2010 and the number of recruiting clinical sites expanded to eight during 2011.  However, with new prostate cancer treatments on the US market, in addition to other clinical trials targeting the same indication, competition for suitable patients is high.  As a result, recruitment rates during H2 2011 were slower than anticipated and two of the centres have ceased recruitment.  As previously communicated, initial results from patients treated to date are still expected in H2 2012 and Oxford BioMedica is closely monitoring the progress of this study.

 

Multiple sponsored Phase II studies to be initiated by collaborators

In April 2011, the team of cancer immunologists at Cardiff University and Velindre Cancer Centre, Wales (UK) received a favourable opinion from the Gene Therapy Advisory Committee (GTAC) and CTA approval from the Medicines and Healthcare products Regulatory Agency (MHRA) to undertake a Phase II study for TroVax® in patients with malignant pleural mesothelioma.  The study will be funded by the June Hancock Mesothelioma Research Fund and the Velindre Cancer Centre Stepping Stones Appeal and Oxford BioMedica will provide TroVax®.  Recruitment is expected to commence during H1 2012.

 

Oxford BioMedica's collaborators at Cardiff University received MHRA approval in July 2011 and a favourable GTAC opinion in August 2011 to evaluate TroVax® in patients with inoperable metastatic colorectal cancer.  The Phase II study will be sponsored by Cardiff University and Oxford BioMedica will provide TroVax®.  Recruitment is expected to begin during H1 2012.

 

The Company continues to work with its partners at the UK National Cancer Research Network (NCRN) in order to develop a Phase II metastatic ovarian cancer protocol.  The protocol received a positive review by the Clinical Trials Awards and Advisory Committee (CTAAC) in November 2011.  Following amendments to reflect the CTAAC opinion, the study protocol will be submitted to the GTAC.  Subject to GTAC approval, the study is estimated to start in Q3 2012.

 

Partnering initiative

Expenditure on TroVax® is closely monitored and, given the interest within the oncology field, management continues to explore collaborations through clinical networks in order to generate further data and leverage the value of the product.  Securing a development or financial partner for TroVax®'s future late-stage development remains a key strategic priority for the Company and discussions with interested parties are on-going.

 

Market opportunity

At $47.7 billion, cancer is one of the largest, fastest growing markets in the pharmaceutical industry, according to MarketResearch.com.  In prostate cancer alone, the global vaccine market is expected to reach US$2.3 billion in 2017; growing at a compound annual rate of 66% (source: GlobalData).  TroVax® is not prostate cancer specific and is administered in the same way as most infectious disease vaccines are given; a simple injection in the arm.  If TroVax® is shown to be efficacious in a pivotal registration trial for even just one of the major cancers where it is known that 5T4 is present on the tumours, it has significant potential.

 

TARGETED ANTIBODY THERAPY FOR CANCER: partnered with Pfizer

Oxford BioMedica licensed global rights to develop antibodies targeting the 5T4 tumour antigen for the treatment of cancer to Wyeth (acquired by Pfizer in 2009) in 2001.  The original agreement is potentially worth US$24 million which comprises upfront payments, license option fees and milestone payments that are subject to the achievement of certain project objectives.  Additionally, under the agreement, Oxford BioMedica will receive royalties on sales of products targeting the proprietary 5T4 antigen that are developed and commercialized by Pfizer.

 

Diagnostic rights secured in preparation for Investigational New Drug (IND) application

In May 2011, Oxford BioMedica broadened its licensing agreement with Pfizer granting non-exclusive rights for the in vitro diagnostic use of 5T4 antibodies, including an option for commercialisation of a 5T4-based diagnostic.  The potential value of this collaboration is now up to US$28 million, which comprises upfront payments, license option fees and milestone payments that are subject to the achievement of certain project objectives.  The next milestone payment to Oxford BioMedica would be due if Pfizer initiates clinical trials for the development of a 5T4-targeted antibody therapy.

 

Data presented by Pfizer at ISREC Symposium 2011 in Switzerland

In September 2011, Pfizer presented new data at the ISREC Symposium which confirmed that 5T4 is the single oncology target for the antibody-drug conjugate (ADC) technology licensed from Seattle Genetics earlier this year. The Oncology Research Unit has synthesised an anti-5T4 antibody-drug conjugate (ADC), called A1-mcMMAF, and has shown that A1-mcMMAF can eradicate tumour cells that have heterogeneous expression of 5T4.

 

Market opportunity

The concept of an anti-cancer therapy, which has antibody-like specificity as well as chemotherapy-like potency, is clearly attractive.  The 5T4-targeted antibody therapy has the potential to benefit patients with any solid cancer that expresses the 5T4 tumour antigen, which represents a multi-billion US dollar market.  Based on the product's profile, it could have application as a single agent or could be used in combination with other treatments, including therapeutic vaccines, such as TroVax®.

 

DIAGNOSTIC CANCER IMAGING: new research collaboration with ImaginAb

In June 2011, Oxford BioMedica announced its collaboration with ImaginAb to engineer an in vivo diagnostic imaging agent using an antibody fragment targeting the 5T4 tumour antigen.  Following proof-of-concept, the agreement includes an option for ImaginAb to negotiate an exclusive license for commercialisation of an in vivo 5T4-based imaging diagnostic.  On that basis, Oxford BioMedica could receive proceeds of up to US$4 million in initiation and development milestone payments, in addition to royalties on product sales, subject to the achievement of certain programme objectives.  Since the start of the collaboration, progress is on track and the teams are preparing for pre-clinical studies to begin in H1 2012.

 

OTHER PRODUCTS

Oxford BioMedica has some non-core assets where, although development is no longer funded by the Company, there remains potential to realise value from previously completed clinical and pre-clinical studies.  These products include EndoAngio-GT, a gene-based anti-angiogenic therapy for cancer, Hi-8® MEL, a therapeutic vaccine for metastatic melanoma and MetXia®, a gene-directed enzyme prodrug therapy (GDEPT) strategy for pancreatic cancer.  Oxford BioMedica seeks to realise the value of these assets through partnerships.  A divestment process for out-licensing Hi-8® MEL concluded in June 2011 without securing a partner on this occasion.  Consequently, an impairment charge of £3.1 million was recognised in June 2011 to write the Hi-8® MEL asset down to zero.

 

BOARD CHANGES

At the Annual General Meeting on 5 May 2011, Nick Rodgers, previously Non-Executive Director, Senior Independent Director and Deputy Chairman of Oxford BioMedica, was appointed Chairman of the Company following Dr Alan Kingsman leaving the Board.  As a result, Dr Andrew Heath, Non-Executive Director, was appointed the Senior Independent Director and Deputy Chairman.  Oxford BioMedica expresses its deep gratitude to Dr Kingsman for his invaluable contribution to the Company over the last 15 years.  Dr Kingsman will continue to be a consultant to Oxford BioMedica.

 

On 24 May 2011, Dr Alex Lewis was appointed Director of Corporate Activities and Strategy and a member of the senior management team and, as a result, stepped down from the Board.  In place of Dr Lewis, Dr Paul Blake became Chairman of Oxford BioMedica's remuneration committee and Dr Heath joined the Company's remuneration committee.

 

Tim Watts was appointed to the Board as Chief Financial Officer and Company Secretary of the Company in February 2012 as Andrew Wood stepped down from the Board of Oxford BioMedica.  Andrew will continue as an employee of the Company for the time being to ensure the smooth transition of the role.  Oxford BioMedica thanks Andrew for his substantial contribution to the Company since its IPO in 1996 and wishes him well for the future.

 

 

FINANCIAL REVIEW

 

"2011 was a year of significant operational progress for Oxford BioMedica, and included the raising of £20 million before expenses in a placing and open offer which closed on 10 January 2011 and the purchase and commissioning of the manufacturing facility in Oxford."

 

Financial overview

Cash burn in 2011 was £16.5 million , compared to £13.0 million in 2010 and the total of cash, cash equivalents and current financial assets at 31 December 2011 amounted to £14.3 million (2010:£12.3 million).

 

Revenue in 2011 of £7.7 million was £3.4 million lower than in 2010 primarily because R&D funding from Sanofi for the ocular programme was reduced as the external programme costs were lower in 2011 by £2.7 million.  Revenue was further reduced in 2011 compared with 2010 because 2010 included £0.6 million one-off license income.  Cost of sales in 2011 was £0.6 million compared with £0.6 million credit in 2010 which was due to the release of a provision.  Non-exceptional operating expenses of £18.5 million were £1.3 million lower than in 2010.  The lower ocular programme costs were offset by £1.0 million start-up and commissioning costs at the manufacturing facility that was acquired in February 2011. There was a further £3.1 million exceptional impairment of intangible assets in 2011 (2010 £3.9 million) as the divestment of Hi-8® MEL did not secure a purchaser.  The net loss after exceptional items in 2011 was £12.6 million, compared with £10.3 million in 2010.

 

Revenue £7,718,000 (2010: £11,153,000)

The bulk of the Group's revenue in 2011 is generated by the ocular collaboration with Sanofi which was initiated in April 2009.  The collaboration has two elements: a non-refundable upfront payment of US$26 million (£16.6 million) which was received in 2009, and R&D funding of up to US$24 million which is receivable over the current phase of the collaboration.  Revenue recognised in 2011 for this collaboration comprised £4.7 million in respect of the upfront payment (2010: £4.7 million) and £2.7 million of R&D funding (2010: £5.6 million).  Deferred income of £4.6 million is expected to be recognised in 2012 and 2013.  The R&D funding component was lower in 2011 because external programme costs were lower than in 2010.  Revenue was further reduced in 2011 because there was a one-off £0.6 million receipt in 2010 in respect of the prime-boost technology license with Emergent BioSolutions.

 

Cost of sales £555,000 (2010: credit of £593,000)

Cost of sales is the royalty payable to third party licensors attributable to upfront and milestone payments that are recognised as revenue.  In 2010 a provision of £1.1 million was released following re-negotiation of the licence with Cancer Research Technology (CRT) covering the 5T4 cancer antigen. 

 

Operating expenses before exceptional items £18,521,000 (2010: £19,850,000)

Non-exceptional operating expenses were £1.3 million lower than 2010 at £18.5 million, principally due to lower R&D costs.

 

Research & development costs (pre-exceptional) £14,710,000 (2010: £15,931,000)

R&D costs comprise external costs (pre-clinical studies, GMP manufacturing, regulatory costs, and clinical trials), in-house expenditure (staff, R&D consumables, intellectual property, facilities and, depreciation of R&D assets), and amortisation of intangibles.  External pre-clinical and clinical costs in 2011 were lower than 2010 by £2.3 million primarily due to lower ocular programme costs in 2011 but this was offset by £1.4 million higher in-house UK R&D due to the start-up and commissioning costs of the manufacturing facility which was acquired in February 2011.

 

Administrative expenses (pre-exceptional) £3,811,000 (2010: £3,919,000)

Non-exceptional administrative expenses of £3,811,000 in 2011 were slightly lower than 2010 due mainly to lower employment costs including the charge for share options.

 

Exceptional operating expenses £3,136,000 (2010: £3,949,000)

Exceptional items are described fully in note 3 to the preliminary financial information.  In 2010, following a review of the carrying value of intangible assets, the Directors made a provision for impairment of £3,949,000 covering the product Hi-8® MEL.  In 2011, at the conclusion of a divestment process which did not secure a partner for Hi-8® MEL, the residual carrying value of £3,136,000 was written off.

 

Finance income £136,000 (2010: £207,000)

The Group places its cash in bank deposits for periods of up to 12 months and generates interest on those deposits.  The maturity profile of deposits is intended to match planned expenditure.  Lower net interest receivable in 2011 reflects lower average balances on deposit and lower interest rates. The Group has no debt, but is recognising as a finance expense the discount on a lease provision and a dilapidation provision. 

 

Tax credit £1,671,000 (2010: £1,514,000)

Oxford BioMedica's UK operating subsidiary is entitled to claim a R&D tax credit which is payable in cash to the Company.  The credit is based on certain eligible expenses, to which a mark-up of 100% (75% before 1 April 2011) and a tax rate of 12.5% (14% before 1 April 2011)  are applied, restricted where appropriate to the lower of UK payroll tax (Income Tax and National Insurance) and Corporation Tax losses.  The reimbursement of R&D costs by Sanofi reduces the net eligible expenses for R&D credit.  As part of its policy to support Small- and Medium-sized Enterprises (SMEs) the Government has increased the mark up from 75% to 100% from 1 April 2011 and has stated that it intends to increase it further to 125% from 1 April 2012. The increase in the mark up from 1 April 2011 has resulted in an increased tax credit in 2011 compared with 2010.   The Group's US subsidiary supplies services to the UK subsidiary subject to a fixed mark-up.  Interest is charged by the subsidiary at statutory rates for an inter-company loan.  This generates a low level of taxable income in the USA.

 

Loss for the financial year before exceptional items £9,495,000 (2010: £6,341,000)

Loss for the financial year including exceptional items £12,631,000 (2010: £10,290,000)

Before exceptional items, the higher net loss in 2011 is attributable principally to the £1.1 million credit in cost of sales in 2010 and the £0.6 million license income in 2010 from Emergent BioSolutions, neither of which were repeated in 2011, and the £1.0 million start-up and commissioning costs of the new manufacturing facility. 

 

Intangible assets £3,106,000 (2010: £6,683,000)

Intangible assets at 31 December 2011 were £3.6 million lower than 2009 due to the recognition of an impairment charge (classified as an exceptional research and development cost) of £3.1 million and amortisation (classified as a non-exceptional research and development cost) of £0.5 million

 

Property, plant and equipment £4,213,000 (2010: £580,000)

Property, plant and equipment is £3.6 million greater in 2011 than 2010 because of the purchase and re-furbishment of the new manufacturing facility.

 

Trade and other receivables £2,800,000 (2010: £4,795,000)

Trade and other receivables at 31 December 2011 were significantly lower than at 31 December 2010 because the 2010 balance included £0.7 million prepaid costs of the January 2011 share issue, as well as £1.4 million (2011: Nil) accrued income in respect of R&D funding recoverable from Sanofi.

 

Trade and other payables £3,226,000 (2010: £3,923,000)

Trade and other payables reduced in 2011 because the 2010 balance included accrued share issue costs which had been incurred in 2010 ahead of the January 2011 share issue.

 

Deferred income £4,556,000 (2010: £9,402,000)

Deferred income reflects payments received under licensing agreements that exceed the amount of recognised revenue. The initial receipt in 2009 from the ocular collaboration with Sanofi is being recognised as revenue over a period of 42 to 51 months.

 

Share issues

At the start of 2011, the Company had 544,875,557 shares in issue.  On 10 January 2011 the Company issued 400,000,000 new ordinary shares in a placing and open offer, raising £20.0 million before expenses.  Expenses of £0.8 million were incurred during 2010 in respect of this share issue, included in prepayments at 31 December 2010 and charged to the share premium account in 2011.  Further costs of £0.8 million were incurred in closing the share issue in 2011.  At 31 December 2011 the Company had 944,875,557 shares in issue.

 

Cash, cash equivalents and available for sale investments £14,335,000 (2010: £12,256,000).

Cash burn £16,488,000 (2010: £13,038,000)

The total of cash, cash equivalents and available for sale investments at the end of 2011 was £14.3 million.  Cash burn is the aggregate of cash from operating activities, proceeds of sale of property, plant and equipment and fixed asset investments, purchases of property, plant and equipment and intangible assets, and interest received. It was £16.5 million in 2011, compared to £13.0 million in 2010.  Cash used in operations in 2011 was £14.3 million, £1.0 million less than in 2010 but the 2011 tax credit received was £1.1 million lower than in 2010 and 2011 also included the £3.1 million purchase and refurbishment of the manufacturing site.

 

Financial outlook

There has been good operational progress for Oxford BioMedica throughout 2011 and in particular the ocular programmes in collaboration with Sanofi are progressing well.  We have successfully commissioned the proprietary manufacturing facility to support our core programmes.  Subject to receiving MHRA approval, this facility should generate significant cost savings by increasing operational and financial efficiencies and provides the opportunity for the Company to become the LentiVector® platform supplier of choice for its current and future partners.

 

We have sufficient financial resources to fund the business until Q1 2013. However this does not take into account potential milestone payments should Sanofi choose to exercise its options for the ocular products during 2012, nor does it factor in potential revenue from partnering deals for ProSavin® and TroVax®.  Our aim is to ensure that Oxford BioMedica is an efficient, focused and resilient organisation and until we reach sustainable profitability we will continue to strike a balance between growing the Company whilst also being careful with costs.  Having recently reduced the Company's cost base, Oxford BioMedica has tight fiscal controls in place.  We continue to seek to leverage the value of our intellectual property through strategic partnerships and our growth and success will also come from future corporate activity.  We also continue to review our options in terms of how best to finance the Company to allow us to achieve our strategic aims.

 

Tim Watts

Chief Financial Officer

Consolidated statement of comprehensive income

for the year ended 31 December 2011

 



2011



2010



Notes

Pre-exceptional items

£'000

Exceptional items

(note 3)

£'000

Total

£'000

Pre-exceptional items

£'000

Exceptional items

(note 3)

£'000

Total

£'000

Revenue


7,718

-

7,718

11,153

-

11,153

Cost of sales (charge)/credit


(555)

-

(555)

593

-

593

Gross profit


7,163

-

7,163

11,746

-

11,746

 

Research and development costs

 

 

(14,710)

(3,136)

(17,846)

(15,931)

(3,949)

(19,880)

Administrative expenses


(3,811)

-

(3,811)

(3,919)

-

(3,919)

Other operating income: grants receivable


56

-

56

42

-

42

Operating loss


(11,302)

(3,136)

(14,438)

(8,062)

(3,949)

(12,011)









Finance income


144

-

144

222

-

222

Finance costs


(8)

-

(8)

(15)

-

(15)

Loss before tax


(11,166)

(3,136)

(14,302)

(7,855)

(3,949)

(11,804)

Taxation

4

1,671

-

1,671

1,514

-

1,514

Loss for the year


(9,495)

(3,136)

(12,631)

(6,341)

(3,949)

(10,290)









Other comprehensive income

Exchange adjustments


(2)

-

(2)

(4)

-

(4)

Total recognised comprehensive expense for the year attributable to owners of the parent


(9,497)

(3,136)

(12,633)

(6,345)

(3,949)

(10,294)

 

Basic loss and diluted loss per ordinary share

5



(1.35p)



(1.89p)

 

The notes on pages 20 to 27 form part of this preliminary financial information.

Balance sheet

as at 31 December 2011

 

 

 

 

            Group

 

 

 

2011

2010

 

 

Notes

 

£'000

£'000

 

Assets

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible assets

6

 

3,106

6,683

 

Property, plant and equipment

7

 

4,213

580

 

Financial assets: Investments in subsidiaries

 

 

-

-

 

 

 

 

7,319

7,263

 

Current assets

 

 

 

 

 

Trade and other receivables

8

 

2,800

4,795

 

Current tax assets

 

 

1,641

1,331

 

Financial assets: Available for sale investments

 

 

7,500

5,603

 

Cash and cash equivalents

 

 

6,835

6,653

 

 

 

 

18,776

18,382

 

Current liabilities

 

 

 

 

 

Trade and other payables

9

 

3,226

3,923

 

Deferred income

10

 

4,386

5,201

 

Current tax liabilities

 

 

-

11

 

Provisions

11

 

41

83

 

 

 

 

7,653

9,218

 

Net current assets

 

 

11,123

9,164

 

Non-current liabilities

 

 

 

 

 

Other non-current liabilities

 

 

-

123

 

Deferred income

10

 

170

4,201

 

Provisions

11

 

501

498

 

 

 

 

671

4,822

 

Net assets

 

 

17,771

11,605

 

 

 

 

 

 

 

Equity attributable to owners of the parent

 

 

 

 

 

Ordinary shares

 

 

9,449

5,449

 

Share premium

 

 

124,755

110,387

 

Merger reserve

 

 

14,310

14,310

 

Other reserves

 

 

(682)

(680)

 

Retained losses

 

 

(130,061)

(117,861)

 

Total equity

 

 

17,771

11,605

 

 

The notes on pages 20 to 27 form part of this preliminary financial information.

Statement of cash flows

for the year ended 31 December 2011

 

 

 

         Group

 

 

2011

2010

 

Notes

£'000

£'000

Cash flows from operating activities

 

 

 

Cash used in operations

12

(14,323)

(15,289)

Interest paid

 

-

(1)

Tax credit received

 

1,418

2,508

Overseas tax paid

 

(78)

(46)

Net cash used in operating activities

 

(12,983)

(12,828)

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Proceeds from sale of property, plant and equipment

 

-

2

Proceeds from sale of fixed asset investments

 

-

36

Purchases of property, plant and equipment

 

(3,640)

(291)

Purchases of intangible assets

 

(9)

(266)

Net (purchase)/maturity of available for sale investments

 

(1,897)

12,897

Net cash (used in)/generated from investing activities

 

(5,546)

12,378

 

 

 

 

Cash flows from financing activities

 

 

 

Interest received

 

144

309

Proceeds from issue of ordinary share capital

 

20,000

210

Costs of share issues

 

(1,430)

(216)

Net cash generated from financing activities

 

18,714

303

 

 

 

 

Net increase /(decrease) in cash and cash equivalents

 

185

(147)

Cash and cash equivalents at 1 January

 

6,653

6,802

Effects of exchange rate changes

 

(3)

(2)

Cash and cash equivalents at 31 December

 

6,835

6,653

 

The notes on pages 20 to 27 form part of this preliminary financial information.

 

Statement of changes in equity attributable to owners of the parent

for the year ended 31 December 2011

 

Share capital

Share premium

Merger reserve

Other reserves

Retained losses

Total

Group

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2010

5,412

110,043

14,310

(676)

(108,113)

20,976

Year ended 31 December 2010:







Exchange adjustments

-

-

-

(4)

-

(4)

Loss for the year

-

-

-

-

(10,290)

(10,290)

Total comprehensive expense for the year

-

-

-

(4)

(10,290)

(10,294)

Transactions with owners:

Share options

  Proceeds from shares issued

2

11

-

-

-

13

  Value of employee services

-

-

-

-

542

542

Issue of shares excluding options

35

347

-

-

-

382

Costs of share issues

-

(14)

-

-

-

(14)

At 31 December 2010

5,449

110,387

14,310

(680)

(117,861)

11,605

Year ended 31 December 2011:







Exchange adjustments

-

-

-

(2)

-

(2)

Loss for the year

-

-

-

-

(12,631)

(12,631)

Total comprehensive expense for the year

-

-

-

(2)

(12,631)

(12,633)

Transactions with owners:

Share options







  Value of employee services

-

-

-

-

431

431

Issue of shares excluding options

4,000

16,000

-

-

-

20,000

Costs of share issues

-

(1,632)

-

-

-

(1,632)

At 31 December 2011

9,449

124,755

14,310

(682)

(130,061)

17,771

 

The notes on pages 20 to 27 form part of this preliminary financial information.

NOTES TO THE PRELIMINARY FINANCIAL INFORMATION

for the year ended 31 December 2011

 

1          Basis of preparation

 

This financial information for the years ended 31 December 2011 and 31 December 2010 does not constitute the statutory financial statements for the respective years and is an extract from the financial statements. It is based on, and is consistent with, that in the Group's statutory accounts for the year ended 31 December 2011 and those financial statements will be delivered to the Registrar of Companies following the Company's Annual General Meeting. Financial statements for the year ended 31 December 2010 have been delivered to the Registrar of Companies and included the auditors' report. The auditors' reports on the financial statements for the years ended 31 December 2011 and 31 December 2010 were unqualified and did not contain statements under section 498 of the Companies Act 2006. The financial information in this report does not constitute statutory financial statement within the meaning of sections 434-436 of the Companies Act 2006.

 

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations endorsed by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements are prepared in accordance with the historical cost convention. Whilst the financial information included in this preliminary announcement has been prepared in accordance with IFRSs adopted for use in the European Union, this announcement does not itself contain sufficient information to comply with IFRSs.

 

Copies of this announcement and the interim report for 2011 are available from the Company Secretary. The audited statutory financial statements for the year ended 31 December 2011 are expected to be distributed to shareholders by 30 April 2012 and will be available at the registered office of the Company, Medawar Centre, Oxford Science Park, Oxford, OX4 4GA. Details can also be found on the Company's website at www.oxfordbiomedica.co.uk.

 

This announcement was approved by the Board of Oxford BioMedica plc on 5 March 2012.

 

Use of estimates and assumptions

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and judgements are continually made and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable in the circumstances.

 

Critical accounting estimates and assumptions

Where the Group makes estimates and assumptions concerning the future, the resulting accounting estimates will seldom exactly match actual results. Due to the amounts involved, the estimates and assumptions regarding revenue recognition and impairment of intangible assets have the greatest risk of causing a material adjustment to the carrying amounts of assets and liabilities.

 

In 2009 the Group received an upfront non-refundable payment of US$26 million (£16.6 million) from Sanofi under the ocular product collaboration. This is being recognised as revenue on a straight line basis over 42 to 51 months (the expected duration of the initial stage of the collaboration for each of the four products). Up to 31 December 2011, revenue of £12.4 million has been recognised under this collaboration, with the remaining £4.2 million classified as deferred income.

 

Over the term of the ocular product collaboration with Sanofi, Oxford BioMedica may recover up to US$24 million in research and development funding. Project costs in excess of US$24 million will be borne by Oxford BioMedica. The amount of research and development funding that is recognised as revenue is based on an estimate of the amount of project costs expected to be borne by the Group by the end of the collaboration. Up to 31 December 2011 £11.4 million has been recognised as revenue and £0.2 million has been classified as current deferred income.

 

The Group has significant intangible assets arising from purchases of intellectual property rights and in-process R&D. When there is an indicator of a significant and permanent reduction in the value of intangible assets, an impairment review is carried out.  The impairment analysis is principally based on estimated discounted future cash flows.  Actual outcomes could vary significantly from such estimates of discounted future cash flows, due to the sensitivity of the assumptions used.  The determination of the assumptions is subjective and requires the exercise of considerable judgement.  Any changes in key assumptions about the Group's business and prospects or changes in market conditions could materially affect the amount of impairment.  At 31 December 2011 the book value of intangible assets was £3.1 million of which £2.2 million related to PrimeBoost technology.  In respect of intellectual property rights and in-process R&D relating to Hi-8® MEL, following a marketing initiative that did not result in securing a partner, an impairment charge of £3.1 million was recognised in 2011, writing the Hi-8® MEL  asset down to zero.

 

The Group acquired a new manufacturing facility in 2011 at a cost of £1.9 million and has incurred capitalisable refurbishment costs of £1.2 million giving a book value of £3.1 million.   Prior to purchasing the plant, the Company obtained an independent valuation and an indication of a 'fire-sale' price if the manufacturing plant was to be stripped out and the building sold as a shell which was substantially less than the year end carrying value.  However, the Directors consider that the book value is supported on a value-in-use basis as the costs of in-house manufacture of LentiVector® platform batches is very substantially lower than the cost of purchasing them from a third-party contract manufacturer.  The value in use calculation is based on an assumed output of 19 batches over the next four years. The number of batches is dependent on the progress of the Company and its collaborations and so is inherently uncertain.However the plant only needs to operate at approximately 50% of its capacity, for forecast savings to support the value in use and carrying value of the facility. 

 

Going concern

Oxford BioMedica plc is a research and development based business with no currently marketed products. The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's message (page 3), the Chief Executive Officer's statement (page 4), the operational review on pages 5-12, The financial position of the Group, including its cash flows, is described in the financial review on pages 13-15.

 

The Group is expected to incur significant further costs as it continues to develop its portfolio of candidate products and related technology. The Directors estimate that the cash held by the Group will be sufficient to support the current level of activities into the first quarter of 2013.  Based on anticipated progress in the business in 2012, the Directors also expect to secure additional financing sufficient for the future needs of the business beyond the first quarter of next year.  However, there is no certainty that adequate resources will be available on a timely basis, and in the event that further funding is not achieved, then the Group would have to curtail or suspend the existing programme development.


After making enquiries, the Directors consider that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing the financial statements.

 

 

 

2          Segmental analysis

 

The chief operating decision-maker has been identified as the Senior Management Group (SMG), comprising the Executive Directors and other key members of management. The SMG reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on internal management reports.

 

The SMG considers that the business comprises a single activity, which is biotechnology research and development. The SMG reviews the Group's profit or loss and its cash flows, assets and liabilities on a whole-company basis. In carrying out these reviews, the SMG considers all material items of income and expenditures that are directly attributable to individual development programmes. The internal management reports do not allocate assets and liabilities or shared overheads to individual products, as the Group does not consider it meaningful, in the present development phase, to attempt to attribute profits or losses to individual products.

 

Based on the above considerations, there is considered to be one reportable segment: biotechnology research and development.

 

Internal and external reporting is on a consolidated basis, with purchases and sales between subsidiaries eliminated on consolidation. Therefore the segment financial information is the same as that set out in the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of cash flows and the statement of changes in equity.

 

3          Exceptional items

 

Exceptional items represent significant items of income or expense which due to their nature or the expected infrequency of the events giving rise to them, are presented separately on the face of the statement of comprehensive income to give a better understanding to shareholders of the elements of financial performance in the year, so as to facilitate comparison with prior periods and to better assess trends in financial performance.

 

 



2011

£'000

2010

£'000

Exceptional research and development costs

3,949

 

In 2010, following a review of the carrying value of intangible assets, the Directors made a provision for impairment of £3,949,000 covering the product Hi-8® MEL. In 2011, at the conclusion of a divestment process which did not secure a partner for Hi-8® MEL, the residual carrying value of £3,136,000 was written off.

 

 

4          Taxation

 

The Group is entitled to claim tax credits in the United Kingdom for certain research and development expenditure. The amount included in the statement of comprehensive income for the year ended 31 December 2011 comprises the credit receivable by the Group for the year less overseas tax paid in the year. The United Kingdom corporation tax research and development credit is paid in arrears once tax returns have been filed and agreed. The tax credit recognised in the financial statements but not yet received is included in current tax assets in the balance sheet. The amounts for 2011 have not yet been agreed with the relevant tax authorities.

 

Group


2011

2010

Continuing operations

£'000

£'000

Current tax



United Kingdom corporation tax research and development credit

(1,641)

(1,331)

Overseas taxation

58

70


(1,583)

(1,261)

Adjustments in respect of prior periods



United Kingdom corporation tax research and development credit

(87)

(239)

Overseas taxation

(1)

(14)

Taxation credit

(1,671)

(1,514)

 

 

5          Basic loss and diluted loss per ordinary share

 

The basic loss per share has been calculated by dividing the loss for the year by the weighted average number of shares in issue during the year ended 31 December 2011 (935,012,543; 2010: 543,924,620).

 

As the Group is loss-making, there were no potentially dilutive options in either year. There is therefore no difference between the basic loss per ordinary share and the diluted loss per ordinary share.

 

6          Intangible assets

 

In-process R&D

Intellectual property rights

Total

Group

£'000

£'000

£'000

Cost




At 1 January 2011

10,400

5,289

15,689

Additions

-

9

9





At 31 December 2011

10,400

5,298

15,698

Accumulated amortisation and impairment




At 1 January 2011

7,238

1,768

9,006

Amortisation charge for the year

114

336

450

Impairment provided in the year

3,048

88

3,136





At 31 December 2011

10,400

2,192

12,592

 

Net book amount at 31 December 2011

-

3,106

3,106

 

Cost




At 1 January 2010

10,400

5,505

15,905

Additions

-

229

229

Disposals

-

(445)

(445)

At 31 December 2010

10,400

5,289

15,689

Accumulated amortisation and impairment




At 1 January 2010

3,667

1,119

4,786

Amortisation charge for the year

409

290

699

Impairment provided in the year

3,162

787

3,949

Disposals

-

(428)

(428)

At 31 December 2010

7,238

1,768

9,006

 

Net book amount at 31 December 2010

3,162

3,521

6,683

 

For intangible assets regarded as having a finite useful life amortisation commences when products underpinned by the intellectual property rights become available for use. Amortisation is calculated on a straight line basis over the remaining patent life of the asset.

 

An intangible asset is regarded as having an indefinite useful life when, based on an analysis of all of the relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. Such assets are tested annually for impairment.

 

In-process R&D relates to the product Hi-8® MEL acquired as part of the acquisition of Oxxon Therapeutics Limited in 2007. During the year a process to divest Hi-8® MEL was concluded without securing a partner. The asset was fully impaired with a charge of £3,136,000 (2010: charge of £3,949,000).

 

Impairment losses are recognised for the amount by which each asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Where the asset is no longer being developed by the Company sales value less cost to sell is used as the recoverable amount. Value in use is calculated using estimated discounted future cash flows. Key assumptions in the discounted cash flow calculations are:

 

·      The product is developed by a collaborative partner who funds all future development costs and markets the product.

·      The Group receives an initial licence fee, milestone payments and royalties on sales.

·      The cash flow projections include estimates for selling price, royalty rates, population growth, disease incidence and market penetration.

·      The resulting cash receipts are discounted at 12% per annum.

·      The cash flow projections are a long-term view, based on the expected patent life. Due to the length of the development cycle for innovative medicines, this period is significantly longer than 5 years.

 

The key assumptions are management estimates, based where possible on available information for similar products. Due to the novelty and early stage of development of the Group's products, it is not possible to benchmark these assumptions against past experience. 

 

Impairment and amortisation charges are included within research and development costs in the statement of comprehensive income.

 

Intellectual property rights comprise third party patent rights that have been purchased by the Group. No in-house research and development or patent costs are included in intangible assets.

 

7          Property, plant and equipment

 

Freehold property

Short

leasehold

improvements

Office

 equipment and computers

Laboratory

equipment

Total


£'000

£'000

£'000

£'000

£'000

Cost






At 1 January 2011

-

2,966

441

2,913

6,320

Exchange adjustments

-

1

-

-

1

Additions at cost

3,115

44

214

596

3,969

Disposals

-

-

(49)

(193)

(242)

At 31 December 2011

3,115

3,011

606

3,316

10,048

Depreciation






At 1 January 2011

-

2,716

351

2,673

5,740

Exchange adjustments

-

1

-

-

1

Charge for the year

45

93

86

112

336

Disposals

-

-

(49)

(193)

(242)

At 31 December 2011

45

2,810

388

2,592

5,835

Net book amount at 31 December 2011

3,070

201

218

724

4,213

 

 


Short

leasehold

improvements

Office

 equipment and computers

Laboratory

equipment

Total



£'000

£'000

£'000

£'000

Cost






At 1 January 2010


2,864

395

2,859

6,118

Exchange adjustments


15

1

-

16

Additions at cost


137

61

99

297

Disposals


(50)

(16)

(45)

(111)

At 31 December 2010


2,966

441

2,913

6,320

Depreciation






At 1 January 2010


2,597

292

2,598

5,487

Exchange adjustments


15

1

-

16

Charge for the year


154

72

119

345

Disposals


(50)

(14)

(44)

(108)

At 31 December 2010


2,716

351

2,673

5,740

Net book amount at 31 December 2010


250

90

240

580

 

On 25 February 2011 the Group purchased a freehold property in Oxford, UK comprising a manufacturing facility and associated offices and laboratories for £1,896,000 including costs of acquisition. The facility was previously approved by the Medicines and Healthcare products Regulatory Agency (MHRA) to Good Manufacturing Practice (GMP) standards. Oxford BioMedica has invested a further £1,219,000 on the building and £477,000 on plant and equipment in order to commission the facility, a process which was substantially complete by 31 December 2011.

 

 

8          Trade and other receivables

 

Group


2011

2010


£'000

£'000

Non-current



Other receivables - rent deposit

-

150

Current



Trade receivables

154

394

Accrued income

33

1,366

Other receivables

256

108

Other tax receivable

858

109

Prepaid costs of share issues

-

777

Prepaid clinical trial expenses

493

368

Other prepayments

1,006

1,523


2,800

4,645

Total trade and other receivables

2,800

4,795

 

Accrued income of £33,000 (2010: £1,366,000) relates to R&D funding receivable from Sanofi.

 

In January 2011 the Company raised £20 million before costs in a placing and open offer. Costs related to the share issue of £777,000 classified as prepaid costs of share issues at 31 December 2010 were recognised as costs of share issues in 2011.

 

Prepaid clinical trial expenses mainly comprise advance payments to clinical trial sites.

 

9          Trade and other payables - current

Group


2011

2010


£'000

£'000

Trade payables

1,200

1,277

Other taxation and social security

161

139

Accrued share issue costs

-

525

Other accruals

1,865

1,982

Total trade and other payables

3,226

3,923

 

 

10        Deferred income

 

2011

2010

Group

£'000

£'000

Current

4,386

5,201

Non-current

170

4,201

Total deferred income

4,556

9,402

 

On 28 April 2009 the Group entered into a collaborative programme with Sanofi to develop gene therapy products to treat ocular diseases. An initial non-refundable payment of US$26 million (£16,641,000) was received. This is being recognised as revenue on a straight line basis over 42 to 51 months (the expected duration of the initial stage of the collaboration for each of the four products). Revenue to date of £12,440,000 has been recognised under this collaboration, of which £4,665,000 was recognised in 2011. The remaining £4,201,000 is classified as deferred income. £4,031,000 is expected to be recognised as income in the next 12 months and is classified as current: the remaining £170,000 is classified as non-current.

 

Over the term of the ocular gene therapy collaboration, Oxford BioMedica may recover from Sanofi up to US$24 million in research and development funding. Project costs in excess of US$24 million will be borne by Oxford BioMedica. To date, £11,387,000 has been recognised as revenue, of which £2,651,000 was recognised in 2011. £355,000 (2010: £457,000) has been classified as current deferred income.

 

11        Provisions

Group

Clinical trial

£'000

Dilapidations

£'000

Onerous lease

£'000

Total

£'000

At 1 January 2011

-

457

124

581

Exchange adjustments

-

-

(2)

(2)

Utilised in the year

-

-

(82)

(82)

Unwinding of discount

-

7

1

8

Change of discount rate - adjustment to recognised fixed asset

-

37

-

37

At 31 December 2011

-

501

41

542

 

At 1 January 2010

 

817

 

420

 

200

 

1,437

Exchange adjustments

-

-

8

8

Utilised in the year

(817)

-

(88)

(905)

Unwinding of discount

-

12

2

14

Change of discount rate - charged in the statement of comprehensive income

-

-

2

 

2

Change of discount rate - adjustment to recognised fixed asset

-

25

-

25

At 31 December 2010

-

457

124

581

 

 


2011

£'000

2010

£'000

Current


41

83

Non-current


501

498

Total provisions


542

581

 

The dilapidations provision relates to anticipated costs of restoring the leasehold property in Oxford, UK to its original condition at the end of the present leases in 2016, discounted using the rate per the Bank of England nominal yield curve. The equivalent rate was used in 2010. The provision will be utilised at the end of the leases if they are not renewed.

 

The onerous lease provision relates to the estimated rental shortfall in respect of a redundant property in San Diego, USA which has been sub-let for the remainder of the lease term until June 2012, discounted using the rate per the Bank of England nominal yield curve. The equivalent rate was used in 2010. The provision will be utilised over the term of the lease.

 

 

12        Cash flows from operating activities

            Reconciliation of loss before tax to net cash (used in)/generated from operations

 

 

Group

 

2011

2010

 

£'000

£'000

Continuing operations

 


Loss before tax

(14,302)

(11,804)

Adjustment for:

 


Depreciation

336

345

Amortisation of intangible assets

450

699

Loss on disposal of property, plant and equipment

-

2

Loss on disposal of intangible asset

-

17

Profit on disposal of fixed asset investment

-

(36)

Charge for impairment

3,136

3,949

Finance income

(144)

(222)

Finance expense

8

15

Charge in relation to employee share schemes

431

542

 

 


Changes in working capital:

 


Decrease/(increase) in trade and other receivables

1,229

529

Decrease in trade and other payables

(539)

(4,059)

Decrease in deferred income

(4,846)

(4,363)

Decrease in provisions

(82)

(903)

Net cash used in operations

(14,323)

(15,289)

 

 

13        Events after the balance sheet date

 

In January 2012 management decided to reduce costs by making 14 Oxford-based staff redundant with effect from the end of February 2012 (12 staff) and April 2012 (two staff).  It was also decided to close the US office which will lead a further two redundancies by June 2012.

 

-Ends-

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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