SLOUGH, UK, Aug. 11, 2004 (PRIMEZONE) -- Xenova Group plc (LSE:XEN) (Nasdaq:XNVA) announced today its results for the six months ended 30 June 2004.
Year to Date Highlights
Development
-- TransMID(tm): agreement with the FDA under the Special Protocol
Assessment procedure for the revised Phase III clinical trial
programme
-- TransMID(tm): first patient treated in pivotal Phase III trial
-- TA-CD: positive results of two dose escalation Phase II studies
presented at College on Problems of Drug Dependence (CPDD)
66th Annual Meeting
-- TA-NIC: successful results from a second clinical trial
-- Tariquidar: Phase I paediatric study data presented at American
Society of Clinical Oncology (ASCO)
-- XR5944: Abstract relating to the on-going Phase I trial published
at ASCO
Commercial
-- Sale of Farnham facility to Bioventix raising 0.8m ($1.4m)
completed
-- Extension of manufacturing contract with Pharmexa
-- 10 year lease agreement signed with Genzyme for Cambridge
Science Park site
Financial
-- Revenue recognised in half year 3.2m ($5.8m); (2003: 4.2m ($7.5m))
-- Cash and short-term deposits and investments at the half year
19.5m ($35.3m); (2003: 10.1m ($18.3m))
David Oxlade, Chief Executive Officer said: "We are pleased with the progress made and the entry into Phase III trials of TransMID(tm) for the treatment of brain cancer. Positive results of trials with both addiction vaccines (cocaine and nicotine) have also been encouraging."
Xenova Group plc is a UK-based biopharmaceutical company focused on the development of novel drugs to treat cancer and addiction with a secondary focus in immunotherapy. The Company has a broad pipeline of products in clinical development, including three cancer programmes: its lead product TransMID(tm), for the treatment of high-grade glioma, is in Phase III trials, and its novel DNA targeting agents and XR303 are both in Phase I for cancer indications. Xenova is also developing two therapeutic vaccines for cocaine and nicotine addiction, which are in Phase II and Phase I trials respectively. Quoted on the London Stock Exchange (XEN) and on NASDAQ (XNVA), Xenova employs approximately 105 people throughout its sites in the UK and North America. (Reuters XEN.L; Bloomberg XEN LN) For further information about Xenova and its products please visit the Xenova website at www.xenova.co.uk.
A conference call for UK and Europe will take place today at 09:30 am UK time (10:30 European time), please contact Mo Noonan at Financial Dynamics on +44 (0)20 7269 7116 for details.
A conference call for the US will take place today at 14.00 UK time (09:00 EST), please contact Mo Noonan at Financial Dynamics on +44 20 7269 7116 for details.
A recording of the UK conference call will be available following the US conference call, please visit our website on www.xenova.co.uk for details on the day. Slides for the conference calls will also be made available through our website prior to the UK conference call.
Disclaimer to take advantage of the "Safe Harbor" provisions of the US Private Securities Litigation Reform Act of 1995. This press release contains "forward-looking statements," including statements about our ability to integrate acquired businesses and realize cost savings from integration, and the discovery, development and commercialization of products. Various risks may cause Xenova's actual results to differ materially from those expressed or implied by the forward looking statements, including: unexpected costs and delays in integrating acquired businesses into our group, adverse results in our drug discovery and clinical development programs; failure to obtain patent protection for our discoveries; commercial limitations imposed by patents owned or controlled by third parties; our dependence upon strategic alliance partners to develop and commercialize products and services; difficulties or delays in obtaining regulatory approvals to market products and services resulting from our development efforts; the requirement for substantial funding to conduct research and development and to expand commercialization activities; and product initiatives by competitors. For a further list and description of the risks and uncertainties we face, see the reports we have filed with the Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Chairman's Statement
The decision last year to concentrate on key prioritised programmes has been successful. Our lead programme, TransMID(tm), received Special Protocol Assessment (SPA) approval from the US Food and Drug Administration (FDA) and the first patient was dosed shortly afterwards. The addiction vaccines have also been progressing well, with positive initial results for both TA-CD and TA-NIC announced in the first half of the year generating interest with investors and media across both sides of the Atlantic. Our other programmes, including the Novel DNA Targeting Agents and XR303 are advancing steadily.
We have achieved our objectives with the on-going disposal of surplus facilities in the UK. In January we announced the sale of part of the Farnham facility to Bioventix Limited for 0.8m ($1.4m) in cash, which was recognised in our 2003 accounts. In April we signed a 10 year agreement with Genzyme Limited for vacant space in the 310 Cambridge Science Park site. We continue to occupy part of the site together with the adjacent Clinical Trials Manufacturing Facility.
This year we also held the first trans-Atlantic R&D event for Xenova to provide investors and interested parties with an in-depth review of our prioritised development programmes. In late June we hosted an R&D meeting for US analysts and investors in New York shortly followed by an R&D meeting in London for UK analysts and investors with both meetings being well received.
As at 30 June 2004 we employed 105 people across our sites in the UK and North America.
Programme Update
TransMID(tm)
On 11 May 2004 we reached an agreement with the FDA under the SPA procedure for the revised Phase III clinical trial programme proposed for TransMID(tm).
Prior to its acquisition by Xenova, KS Biomedix Holdings plc (KS Biomedix) had obtained FDA agreement for a single Phase III clinical trial for TransMID(tm) under the SPA process. Following the acquisition of KS Biomedix, Xenova submitted a revised programme involving two smaller sequential Phase III clinical trials rather than one larger study, which has now been agreed with the FDA. The adoption of a two study approach reduces the level of risk associated with a large single study.
The initial Phase III clinical trial is designed to enrol 323 patients with non-resectable, progressive or recurrent Glioblastoma Multiforme (GBM) who have failed conventional therapy. The study is a randomised, open-labelled, multi-centre trial and will compare TransMID(tm) against a number of presently used chemotherapeutic agents regarded as "best standard of care" (BSC). The 323 patients will be randomised in a 2:1 ratio of TransMID(TM):BSC across approximately 50 sites in the EU, Israel and North America. The primary end-point is overall survival time with a planned interim analysis to be conducted after 50% of the required events have been observed.
In an earlier, open label, Phase II study, patients receiving TransMID(tm) achieved a significant increase in overall survival compared with historical survival figures. In this study, median survival for patients receiving TransMID(tm) was approximately 37 weeks. This compares to the historical average life expectancy for these patients which is approximately 26 weeks.
Subsequent to the SPA approval, on 7 June 2004 we announced that the dosing of the first patient in the TransMID(tm) trial had taken place at the University of Utah, Huntsman Cancer Institute.
TransMID(tm) is currently licensed to Nycomed Danmark ApS in Europe, Sosei Co Ltd in Japan, Medison Pharma Ltd in Israel and Ranbaxy Laboratories Limited in India. Xenova retains all rights to countries outside these territories including North America.
Novel DNA Targeting Agents
This programme involves three compounds being developed for the treatment of solid tumours. XR11576 and XR5944 have been shown to be highly potent as cytotoxic agents in both tumour cell lines and human xenograft models and are currently in Phase I clinical trials for the treatment of a range of solid tumours. The results of these two Phase I clinical trials are expected before the end of 2004. The third compound, XR11612, is in pre-clinical development.
Millennium Pharmaceuticals Inc. (Millennium) and Xenova had an abstract published at ASCO in June 2004 on the on-going Phase I study of XR5944.
Millennium holds the rights to these compounds in North America and Xenova retains the rights to the rest of the world.
XR303
XR303 is a radioimmunotherapy product targeted at late stage pancreatic cancer. XR303 has completed a Phase I imaging study in patients with metastatic colorectal cancer, the results of which showed the tumours still clearly visible at eight days as a result of the radiolabelled antibody remaining bound to the tumour surface.
A Phase I/II dose escalation study is now underway in patients with non-resectable pancreatic cancer. This study is expected to complete in 2005. Xenova retains all rights to XR303.
Tariquidar
In June 2004 the National Cancer Institute (NCI) in the US presented a poster at the ASCO conference in New Orleans on a Phase I clinical trial of tariquidar in children with solid tumours.
The results of this study showed that tariquidar was well tolerated in children. Of the 18 subjects enrolled, one had a complete response, one had a partial response and five had stable disease for one to eight cycles of therapy.
In early 2004 it was also announced that the NCI had commenced exploratory Phase I/II studies with tariquidar in combination with various cytotoxic drugs.
TA-CD
On 14 June 2004 we announced results of two dose escalation Phase II studies of TA-CD, our therapeutic vaccine being developed for the treatment of cocaine addiction, at the CPDD 66th Annual Scientific Meeting in Puerto Rico between 12-17 June.
Results from both studies showed that the maximum mean antibody response occurred between 70 and 90 days post vaccination, with cocaine-specific antibodies persisting for at least six months. The authors also reported that the likelihood of using cocaine decreased in those subjects who received a more intense vaccination schedule and as a result were observed to produce higher levels of anti-cocaine antibodies. 88% of subjects from one study and 63% from the other, who did relapse within six months, reported a reduction in the euphoric effects of cocaine.
A randomised, placebo-controlled Phase IIb study of TA-CD in 132 patients is underway with recruitment in progress. The primary objective of this study is to determine the efficacy of TA-CD in methadone-dependent cocaine addicts seeking treatment for cocaine abuse, and to determine the appropriate end points for a Phase III trial. The National Institute on Drug Abuse (NIDA) is supporting these studies but Xenova retains all commercial rights to TA-CD.
TA-NIC
Initial results of the second clinical trial of TA-NIC, our therapeutic vaccine being developed for the treatment of nicotine addiction, were announced on 14 July 2004. These results showed that there were no drug-related serious adverse events in any of the three cohorts with minimal injection-site effects seen at the dose selected for Phase II/III studies.
The anti-nicotine antibody responses were dose dependent and at the selected dose, an improved anti-nicotine antibody response profile was observed compared to the lowest dose tested. The data showed that the level of anti-nicotine antibodies obtained with the chosen dose was approximately double that seen at the low dose. There was also a faster rise and more rapid onset of anti-nicotine antibody response.
Although not designed to test the effect of TA-NIC on smokers' quit rates, there was a clear reduction across all groups receiving the vaccine in terms of those smokers who voluntarily quit during the 12-week period or self-reported a reduction in smoking pleasure compared to those receiving the placebo.
Final results of this study are expected by the end of 2004. Xenova retains all commercial rights to TA-NIC.
OX40
OX40 is a platform technology capable of producing multiple drug candidates targeting cancer, autoimmune and other diseases where the immune system is involved. In 2003 Imperial College demonstrated that by blocking the OX40-OX40 ligand (OX40L) interaction (down-regulation), symptoms of influenza could be alleviated without affecting the ability to clear the virus. In contrast, the use of agents such as OX40L-IgG that bind to OX40 and up-regulate the immune response, has been shown to be effective at promoting anti-tumour responses in a number of cancer models. Xenova retains all rights for the use of OX40 in up-regulation whilst Genentech Inc and Celltech Group plc have the rights for down-regulation.
Corporate Events
In June 2004, our Clinical Trials Manufacturing Facility in Cambridge, UK, (CTMF), received a Manufacturer's Authorisation -- Investigational Medicinal Products from the Medicines and Healthcare products Regulatory Agency (MHRA). This authorisation allows Xenova to manufacture and release investigational products in compliance with the new Clinical Trials Directive that came into force in May of this year.
In July 2004 we signed an agreement with Pharmexa A/S (Pharmexa) to continue the current manufacturing campaign of their AutoVac HER-2 vaccine. Manufacture will take place at our CTMF. This extension enables us to manufacture additional batches of the vaccine for Pharmexa's Phase II trials in breast cancer.
Financial Summary
Operating Performance
In the six months to 30 June 2004, Xenova's revenues recognised from licensing agreements, strategic partnerships and manufacturing outsourcing were 3.2m ($5.8m) (2003: 4.2m ($7.5m)).
Revenues included 1.9m ($3.4m) recognised under the revenue recognition policy in respect of the tariquidar licensing agreement with QLT and the OX40 licensing agreement with Genentech. As at 30 June there is no deferred revenue from QLT for the tariquidar license. 0.3m ($0.5m) was also recognised in respect of the milestone due from Nycomed for the first patient treated in the TransMID(tm) trial. Contract development revenue of 0.4m ($0.7m) arose in respect of the Millennium collaboration on the DNA Targeting Agents and manufacturing revenue was 0.6m ($1.1m).
Net operating expenses in the period to 30 June 2004 were 11.3m ($20.5m) (2003: 12.6m ($22.7m)). Excluding the exceptional reorganisation costs to 30 June 2003 of 2.0m ($3.6m) and the impact of increased goodwill amortisation charges in 2004, net operating expenses in the period to 30 June 2004 increased 4% compared to the prior year.
Total research and development expenditure for the six months to 30 June 2004 was 7.7m ($14.0m), 5% less than the prior year (8.1m ($14.7m)). Expenditure was incurred primarily in respect of the TransMID(tm) programme, the Phase I/II dose escalation trial of XR303, and the Vaccines of Addiction programmes including the second Phase I study in TA-NIC. The development costs under the Millennium license agreement of 0.4m ($0.7m) have been recovered as in previous periods.
Total administrative expenditure for the six months to 30 June 2004 of 3.9m ($7.1m) (2003: 4.7m ($8.5m)) included 1.1m ($2.1m) in respect of goodwill amortisation related to the acquisitions of Cantab and KS Biomedix. Administrative expenses, excluding the amortisation of goodwill, were 2.8m ($5.1m) (2003: 2.0m ($3.6m)). The subletting of vacant space in Slough and Cambridge reduced net expenses in the period by 0.3m ($0.6m) (2003: 0.2m ($0.4m)).
The increase in investment income recorded for the six months compared with the prior year reflects the higher average cash and liquid resources balances held following the fundraising in December 2003. The R&D tax credits recoverable for the six months have increased to reflect the impact of the KS Biomedix acquisition and the revised impact of the reorganisation announced in June 2003.
Cash outflow before financing and movements in liquid resources in the six months to 30 June 2004 of 7.3m ($13.2m) has decreased 26% from the prior year (9.9m ($18.0m)) partly as a result of the cost savings made during 2003 both before and after the KS Biomedix acquisition and partly because the reorganisation costs of 1.0m ($1.8m) were incurred in 2003. Cash outflow also includes significant expenditure on the commencement of Phase III clinical trials of TransMID(tm).
The net loss per share in the six months to 30 June 2004 was 1.6p (2003: 4.5p).
Treasury Cash, short-term deposits and investments at 30 June 2004 totalled 19.5m ($35.3m) (2003: 10.1m ($18.3m)). Of this balance, cash was 3.1m ($5.6m) and short-term deposits and investments were 16.4m ($29.7m) at 30 June 2004 (2003: cash 0.4m ($0.7m), short-term deposits and investments 9.7m ($17.6m)).
Included in short-term deposits and investments is an investment in Cubist Pharmaceuticals Inc, which at 30 June 2004 was valued at 0.4m ($0.7m) (2003: 0.6m ($1.1m)).
Share capital
The number of shares in issue stood at 431.5 million as at 30 June 2004 (2003: 174.5 million).
During the half year 2,195 million deferred shares were cancelled and their value of 21.9m ($39.7m) credited to a special reserve.
The Directors do not propose an interim dividend for 2004 (2003: nil).
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