TopoTarget A/S
Symbion
Fruebjergvej 3
DK 2100 Copenhagen
Denmark
Tel: +45 39 17 83 92
Fax: +45 39 17 94 92
CVR-nr: 25695771
www.topotarget.com
To OMX Nordic Exchange Copenhagen
Announcement No. 15-08 / Copenhagen, 14 May 2008
Interim report for the three months ended 31 March 2008
As announced on 22 April, TopoTarget has acquired global rights for belinostat,
the novel HDAC inhibitor for cancer treatment
• Expects to commence a registration trial in Peripheral T-Cell Lymphoma (PTCL)
in the second half of 2008
• Initiated partnering discussions
Highlights and key figures from Q1 2008
• Solid sales increase for Savene®/Totect®, with 102 kits sold. First-quarter
sales rose to DKK 7.0 million (EUR 0.9 million) from DKK 3.7 million (EUR 0.5
million) in Q1 2007. This is a satisfactory increase of 88%. The first quarter
of 2008 included sales of Totect®, which had not been launched in Q1 2007.
TopoTarget expects to be able to double its sales of Savene®/Totect® in 2008.
• TopoTarget has strengthened its Business Development team and pro-cesses. The
key objective is to enter into a value creating partnership for belinostat with
a strong partner with an effective sales organisation. Addi-tionally, a focused
process is underway to pursue partnership agreements for a number of the
pipeline products that have had value added during TopoTarget's development
programmes.
• Operating loss amounted to DKK 50.4 million (EUR 6.8 million) against a loss
of DKK 40.6 million (EUR 5.4 million) in the same period last year.
• Loss before tax of DKK 56.7 million (EUR 7.6 million), compared to a loss of
DKK 38.6 million (EUR 5.2 million) in the same period of 2007.
• Loss after tax of DKK 54.8 million (EUR 7.3 million), compared to a loss of
DKK 38.6 million (EUR 5.2 million) in the same period of 2007. This
corre-sponds to DKK (0.89) per share compared to DKK (3.02) last year.
• TopoTarget retains its pre-tax loss guidance of DKK 235-255 million which was
announced on 22 April 2008 in connection with the acquisition of global rights
to belinostat. The guidance also reflects the adjustment to our or-ganisation,
resulting in a reduced number of employees. In addition, we foresee additional
positive cost efficiencies between TopoTarget and its sub-sidiaries.
Conference call
TopoTarget will host a conference call this afternoon, May 14, at 14.00 (CET),
at which management will present and discuss the results for the first three
months of 2008.
A presentation will be available on TopoTarget's website, www.topotarget.com
before the start of the conference call.
To participate in the conference call please dial:
From Denmark: 70 26 50 40
Outside Denmark: +45 70 26 50 40 or +44 208 817 9301
The conference call will be held in English.
A replay of the conference call will be available two hours after the
conference call and until May 21, 2008 at 5.00 pm (CET) at the following
number: +353 1 436 4267 pincode 1259501#.
Interim report for the three months ended 31 March 2008
Copenhagen, Denmark - 14 May 2008 - The Board of Directors of Topo-Target A/S
(OMX: TOPO) today adopted the company's interim report for the three months
ended 31 March 2008.
During the three months ended 31 March 2008, operating expenses amounted to DKK
60.2 million against DKK 51.0 million in the year-earlier period, primar-ily
due to in-house paid clinical studies of belinostat, the acquisition of
TopoTar-get Switzerland S.A. and expanded sales forces in Europe as well as the
US. The operating loss for the period was DKK 50.4 million, compared with DKK
40.6 million in the same period of last year. The company posted a loss before
tax for the first three months of 2008 of DKK 56.7 million against a pre-tax
loss of DKK 38.6 million in the same period of 2007. Cash, cash equivalents and
mar-ketable securities amounted to DKK 348.0 million at 31 March 2008.
Milestones met during Q1 2008
• Improved sales of Savene® and Totect®
• New international diagnosis code used by doctors for accidents involving
anthracycline extravasation and the use of Savene®/Totect®
• European Oncology Nurses Society (EONS) recommended Savene®/Totect® for the
treatment of anthracycline extravasation in their guidelines
• APO010 patent allowed in the USA.
Highlights for the period after 31 March 2008
TopoTarget successfully bought back full control of belinostat, consolidating
global rights for the product. The deal consisted of a payment of USD 26
mil-lion (DKK 122.8 million), a total of 5 million TopoTarget shares and a
commer-cial milestone payment of a total of USD 6 million (DKK 28.3 million),
which is defined as 10% of the first USD 60 million (DKK 283.5 million) of
belinostat sales or partnership revenues
• A Valproic Acid patent in Europe covering Savicol™ allowed
• The Oncology Nursing Society in the United Kingdom, UKONS, adopted the EON
guidelines for using Savene® for anthracycline extravasation.
Expected milestones for the remainder of 2008
• Belinostat
• More results from clinical studies to be presented at ASCO (American Society
of Clinical Oncology) in May 2008, including pivotal Phase II results in
ovarian cancer (belinostat monotherapy and BelCaP:
belinostat+carboplatin+paclitaxel) and study in AML (acute myeloid leukaemia)
(BelAza: belinostat+azacytidine)
• Cutaneous T Cell Lymphoma (CTCL) & Peripheral T Cell Lymphoma (PTCL) data to
be presented at the International Conference on Malignant Lymphoma 3-7 June in
Lugano
• Special Protocol Assessment (SPA) agreement with the FDA for PTCL
registration trial
• Initiation of pivotal trial of PTCL
• Announcement of strategy and design of study in ovarian cancer with BelCaP
• Belinostat partnership process
• Additional pipeline data:
• Savicol™ first Phase II results in FAP (Familial Adenomatous Polyposis)
• Avugane Phase II data (acne)
• APO866 Phase II data
• APO010 Phase I data (advanced solid tumours)
• Savene®/Totect®
• Quarterly sales figures, 2008
• Savene® partnerships
• Building 2008 sales of Totect®
• Partnership activities that may lead to an agreement include VPA, APO010,
Zemab, mTOR and HSP90.
Belinostat status
Belinostat (PXD101) - is an intravenous (i.v.) and oral class I and II HDAC
inhibitor for the treatment of solid tumours and haematological malignancies.
Belinostat is TopoTarget's lead clinical candidate, for which TopoTarget has
global rights, and the company will focus its re-sources on developing
belinostat to exploit the product's potential.
I.v. and orally administered belinostat is currently evaluated in 18 clinical
stud-ies run by TopoTarget and the NCI (National Cancer Institute, USA).
T-cell lymphoma: PTCL and CTCL
• Agreement with the FDA (the Food and Drug Administration, the US health
authorities) on a Special Protocol Assessment (SPA), which was submitted at the
end of April 2008.
• Initiation of regulatory trial in the second half of 2008.
• Positive data has previously been reported on clinical response with proof of
concept for belinostat monotherapy of cutaneous T-cell lym-phoma (CTCL) and
peripheral T-cell lymphoma (PTCL). At the upcoming annual meeting of the
International Conference on Malignant Lymphoma on 3-7 June in Lugano,
Schwitzerland TopoTarget will present updated clinical data from an ongoing
Phase II trial.
Ovarian cancer
• Pivotal Phase II BelCaP data (full dosage belino-stat+carboplatin+paclitaxel)
will be presented at the ASCO annual meeting in May/June 2008 in Chicago, US.
• Positive results from a Phase II multicenter trial of BelCaP in women with
relapsed ovarian cancer were presented at the AACR-NCI-EORTC meeting in San
Francisco, the US, 22-26 October 2007. The data showed that BelCaP was well
tolerated, and 15 out of 16 evaluable pa-tients showed reduction in tumour size
as measured by radiologic as-sessment.
Additionally, data from an NCI-sponsored Phase II trial evaluating the activity
of intravenous belinostat monotherapy in two ovarian tumor populations
(pre-treated with up to three prior chemotherapies) was also presented at the
AACR-NCI-EORTC meeting. Out of 12 patients with micropapillary/borderline (LMP)
ovarian tumours, one patient achieved a partial response and one showed a CA125
response. Fur-thermore, nine patients achieved stabilisation of disease. In 18
patients with epithelial ovarian cancers (all patients had relapsed and were
resis-tant to platinum treatment), nine patients achieved stabilisation, five
had progression-free disease, and four were non-evaluable. Intrave-nously
administered belinostat was considered safe and generally well-tolerated in
these two ovarian tumour populations.
Savene®/Totect® status
TopoTarget's first marketed product Savene®/Totect® is used for the prevention
of serious tissue damage caused by anthracycline extravasation. Savene® was
launched in October 2006 in selected European countries and Totect® was
launched on the US market in October 2007.
The launch and commercial activities relating to Savene® in Europe and Totect®
in the US are progressing well. Following the launch of Totect® in Q4 2007 on
the US market, we are continuing to build awareness of Totect®, and sales in
the combined European and US markets are expected to double from 2007 to 2008.
TopoTarget has negotiated partnership agreements and distribution agreements
for certain European countries with the following European businesses who are
responsible for the marketing, sale and distribution in their respective
territo-ries: VIPharma (Greece), Grupo Ferrer (Spain and Portugal) and Adienne
Pharma (Italy). The following non-European businesses are responsible for
ob-taining registration and for the marketing, sale and distribution of Savene®
in their respective territories: BioPro (Far East) and 4G (Middle East and
Turkey).
Sales in the Nordic region and Benelux countries have been good, and
experi-ence gained in these markets is now being used as a role model for our
sales structure and strategy in Europe. As part of TopoTarget's ongoing plan to
im-prove efficiency in the company's sales and marketing structures,
TopoTarget has made its most successful sales person in Europe responsible for
the Euro-pean market in order to ensure in-house knowledge-sharing in the sales
organi-sation.
TopoTarget recorded a solid sales increase for Savene®/Totect®, with sales of
102 kits. First-quarter sales rose to DKK 7.0 million (approximately EUR 0.9
million) from DKK 3.7 million (EUR 0.5 million) in Q1 2007. This is a
satisfactory improvement of 88% on the first quarter of 2007. The first quarter
of 2008 in-cluded sales of Totect®, which had not been launched in Q1 2007.
TopoTarget expects to be able to double its sales of Savene®/Totect® in 2008.
In 2007 sales were DKK 21.6 million (EUR 2.9 million).
The figure below illustrates sales of Savene® and Totect® Q1 2007 and Q1 2008.
In March, TopoTarget announced that a new international ICD-9-CM diagnosis code
had been established. Previously, no diagnosis code existed that described
vesicant chemotherapy extravasation (including anthracycline extravasations),
which occurs when vesicant chemotherapy agents leak from a vein or are
inad-vertently administered into the tissue. Vesicants (”tissue-damaging"
agents) have the potential to cause tissue damage due to the local toxicity,
often requir-ing surgical intervention. Although vesicant extravasations are
thought to occur infrequently, reliable incidence data do not exist. It will
now be possible to more accurately determine how often vesicant extravasations
occur. In addition, re-imbursement for extravasation treatment is contingent
upon having a corre-sponding diagnosis. The new diagnosis code will facilitate
the coding and reim-bursement process.
Savene® has been recommended as the standard treatment of anthracycline
extravasation in the new guidelines from the European Oncology Nursing Soci-ety
(EONS). The guidelines offer a practical guide to extravasation management from
prevention and recognition through to management strategies and advice on
implementation of guidelines into clinical practice. Subsequently, the United
Kingdom Oncology Nursing Society, UKONS, published their guidelines which
included Savene® in April (adopted from the EONS guidelines).
There is growing awareness of Savene® and Totect® which have gathered
in-creasing support from healthcare professionals. This is reflected in an
increas-ing amount of coverage of Savene® and Totect® in medical and nursing
jour-nals.
Other clinical activities
TopoTarget's clinical pipeline consists of nine product candidates including
belinostat as discussed above, covering a broad range of cancer and other
indi-cations. Having consolidated the belinostat rights, TopoTarget is now
seeking partnerships for several of the following development programmes.
Baceca®- an HDAC inhibitor for the treatment of basal cell carcinoma (BCC)
TopoTarget has completed two randomised and blinded Phase II proof-of-concept
trials to investigate Baceca® monotherapy and in combination with two different
vitamin A like compounds for the treatment of basal cell carcinoma (BCC). The
results of a Danish, double-blind, randomised and placebo-controlled study to
evaluate the efficacy and tolerability of Baceca® in combina-tion with the
retinoid tazarotene showed a 69% clinical and pathological com-plete remission
obtained at three months after the end of the 16 weeks treat-ment period with
the combination treatment. This response rate confirmed the positive results of
an earlier Italian pilot study with this combination, which was conducted in
collaboration with G2M, now TopoTarget Germany AG. In a second Phase II trial
performed in Russia using an eight week treatment course with Baceca® in
combination with another retinoid (Isotrex®), Baceca® showed clear anti-cancer
efficacy.
Savicol™ - an HDAC inhibitor for the treatment of Familial Adenoma-tous
Polyposis (FAP)
TopoTarget is currently conducting a Phase II trial, evaluating the effect of
Savi-col™ in the treatment of FAP. This randomised, placebo-controlled Phase II
study takes place in Europe.
APO866 - an NAD+ inhibitor for the treatment of cancer
APO866 is a specific inhibitor of a key enzyme involved in the synthesis of
NAD+ and is being developed in three cancer trials. Treatment of patients is
ongoing in two Phase II clinical trials in advanced melanoma and cutaneous
T-Cell lymphoma (CTCL), and in a phase I/II clinical trial in B-Cell lymphatic
leu-kaemia (B-CLL).
In October 2007, APO866 was selected by Windhover Information as one of the 10
most interesting oncology products globally that is available for partnering.
APO010 - a human FasLigand protein for the treatment of cancer
A Phase I dose-escalation study in patients with solid tumours is ongoing using
APO010 to determine an appropriate dose for use in Phase II clinical studies.
APO010 is a recombinant fusion protein product that targets Fas receptors on
the surface of cancer cells, and was generated using Apoxis' proprietary
MegaLigand technology.
Zemab® - an antibody-toxin for the treatment of HER2 positive cancers (i.e.
head & neck and breast cancer)
One Phase I trial has been completed and new production of Zemab® is ongo-ing.
Topotect - a Topoisomerase II inhibitor - a protectant to enable che-motherapy
treatment of brain metastasis
The potential of the combination of Topotect and etoposide is explored.
Recruitment of patients has been slow in this rare subset of metastasis
patients.
Avugane™ - an HDAC inhibitor for the treatment of acne vulgaris
Based on Phase II proof-of-concept results showing comparable efficacy and
advantageous tolerability compared with a standard, marketed retinoid therapy,
TopoTarget is now running a double-blind, randomised, placebo-controlled Phase
II clinical trial in mild to moderate acne vulgaris. Data is expected from this
trial in the second half of 2008.
TopoTarget A/S
The financial ratios have been calculated in accordance with “Recommendations &
Ratios 2005”, issued by the Danish Society of Financial Analysts.
The interim financial statements are unaudited.
The comparative figures have been restated to reflect the changed structure for
recognition and measurement of acquired research and development projects
implemented in connection with the publication of the annual report for 2007.
More detailed accounting information is provided in the appendices.
Comments on the interim financial statements for the three months ended 31
March 2008
The company generated revenue of DKK 9.9 million during the period compared
with DKK 10.4 million in the same period last year. Included in revenues are
invoicing to CuraGen and Savene® sales in Europe and Totect® sales in the US.
Despite higher sales of Savene® in Europe and Totect® in the US in Q1 2008
compared to Q1 2007 revenue in Q1 2008 is lower than the corresponding quarter
in 2007 primarily due to lower re-invoicing of research and development costs
to CuraGen
In the first three months of 2008, production costs amounted to DKK 4.3 million
as compared with DKK 4.4 million in the same period of 2007. The higher costs
relative to revenue were mainly due to increasing Savene® sales in Europe.
In the period 1 January to 31 March 2008, research and development costs
amounted to DKK 29.6 million as compared with DKK 23.5 million in the
year-earlier period. The company recorded higher research and development costs
primarily because TopoTarget is conducting clinical studies of belinostat for
its own account (CLN14 and CLN15) and because TopoTarget Switzerland S.A.,
which was acquired in June 2007, is included in full in Q1 2008.
First-quarter sales and distribution costs amounted to DKK 13.1 million, up
from DKK 11.4 million in the same period of 2007. The higher costs were mainly
due to a higher number of sales staff in Europe because Savene® is being
launched in more countries, and also because the company has extended its sales
force in TopoTarget USA Inc. in connection with the launch of Totect® in
October 2007.
In the period 1 January to 31 March 2008, administrative expenses amounted to
DKK 13.3 million as compared with DKK 11.6 million in the year-earlier pe-riod.
The increase was due to factors such as higher costs due to the acquisition of
our Swiss subsidiary in June 2007 and an increase in Business Development
activities.
Net financial expenses amounted to DKK 6.3 million in the first three months,
as compared with net financial income of DKK 1.9 million in the year-earlier
period. The difference was primarily due to large currency translation
differences on consolidation of group enterprises and interest expenses on the
loan provision for payment of the expected milestone to the former owners of
TopoTarget Switzerland S.A. concerning APO866.
In the first three months of 2008, tax amounted to an income of DKK 1.9
mil-lion as compared with DKK 0.0 million in the same period of 2007. The tax
in-come was due to a reduction in the deferred tax liability concerning
TopoTarget Switzerland S.A.
In the period 1 January to 31 March 2008, the company recorded a loss after tax
of DKK 54.8 million as compared with a loss after tax of DKK 38.6 million in
the same period of 2007.
At 31 March 2008, total assets amounted to DKK 777.0 million. Of this amount,
cash bank deposits and short-term securities amounted to DKK 348.0 million.
At 31 March 2008, equity amounted to DKK 611.0 million compared with DKK 392.3
million at the same time in 2007. The change consists of a loss of DKK 231.4
million during the period from 1 April 2007 to 31 March 2008, the capital
increase in June 2007 totalling DKK 441.8 million, additions during the period
of share-based payment totalling DKK 7.8 million and fair value adjustment of
the bond portfolio totalling DKK 1.3 million.
Outlook for 2008
On 22 April 2008, TopoTarget acquired the rights to belinostat giving the
com-pany the full ownership of belinostat. This will increase the Group's
combined costs for clinical trials and other activities.
The company maintains its full-year 2008 guidance, announced in connection to
the consolidation of belinostat rights, for a pre-tax loss in the range of DKK
235 million to DKK 255 million.
Statement by the Board of Directors and Senior Management
The Board of Directors and the Senior Management today discussed and adopted
the interim report for the nine months ended 30 September 2007.
The interim report, which is unaudited, is presented in accordance with IAS 34
and additional Danish disclosure requirements on the presentation of interim
reports by listed companies.
We consider the accounting policies to be appropriate, the accounting estimates
reasonable and the overall presentation of the interim report to be appropriate
to the effect that the interim report gives a true and fair view of the Group's
assets and liabilities, financial position, results of operations and cash
flows for the three months ended 31 March 2008.
Copenhagen, 14 May 2008
Senior Management
Peter Buhl Jensen
CEO
Board of Directors
Håkan Åström Jesper Zeuthen Jeffrey Buchalter
Chairman
Anders Gersel Pedersen Ingelise Saunders Torbjørn Bjerke
Peter Buhl Jensen
For further information, please contact:
Dr. Peter Buhl Jensen Telephone +45 39 17 83 41
Chief Executive Officer Mobile +45 21 60 89 22
Ulla Hald Buhl Telephone +45 39 17 83 92
Director IR & Communications Mobile +45 21 70 10 49
Background information
About TopoTarget
TopoTarget (OMX: TOPO) is a biotech company, headquartered in Denmark and with
subsidiaries in the US, Switzerland, Germany and the UK, dedicated to finding
''Answers for Cancer'' and developing improved cancer therapies. TopoTarget is
founded and run by clinical cancer specialists and combines years of hands-on
clinical experience with in-depth understanding of the molecular mechanisms of
cancer. Focus lies on highly predic-tive cancer models and key cancer targets
(including HDACi, NAD+, mTOR, FasLigand and topoisomerase II inhibitors) and a
strong development foundation has been built. Topo-Target has a broad portfolio
of small molecule pre-clinical drug candidates and nine drugs (both small
molecules and protein based) are in clinical development, including both novel
anti-cancer therapeutics and new cancer indications for existing drugs.
Savene®/Totect® was approved by EMEA in 2006 and the FDA in 2007 and is
TopoTarget's first product on the market. For more information, please refer to
www.topotarget.com.
TopoTarget Safe Harbour Statement
This announcement may contain forward-looking statements, including statements
about our expectations of the progression of our preclinical and clinical
pipeline including the timing for commencement and completion of clinical
trials and with respect to cash burn guidance. Such statements are based on
management's current expectations and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. TopoTarget cautions investors
that there can be no assurance that actual results or business conditions will
not differ materially from those projected or suggested in such forward-looking
statements as a result of various factors, including, but not limited to, the
following: The risk that any one or more of the drug development programs of
TopoTarget will not proceed as planned for technical, scientific or commercial
reasons or due to patient enrolment issues or based on new information from
non-clinical or clinical studies or from other sources; the success of
competing products and technologies; technological uncertainty and product
develop-ment risks; uncertainty of additional funding; TopoTarget's history of
incurring losses and the uncertainty of achieving profitability; TopoTarget's
stage of development as a bio-pharmaceutical company; government regulation;
patent infringement claims against TopoTarget's products, processes and
technologies; the ability to protect TopoTarget's patents and proprietary
rights; uncertainties relating to commercialization rights; and product
liability expo-sure; 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, unless required by law.
Notes to the consolidated interim financial statements
1. ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with IAS 34,
Interim financial reporting, and additional requirements for interim financial
statements of listed companies. No interim financial statements have been
pre-pared for the parent company.
The accounting policies applied in the interim report are unchanged relative to
the accounting policies applied in the company's annual report for 2007, and
are in accordance with the International Financial Reporting Standards (IFRS)
as adopted by the EU and additional Danish disclosure requirements for annual
reports of listed companies.
The interim report is presented in Danish kroner (DKK), which is the parent
company's functional currency.
The following new and revised standards and interpretations are effective from
the financial year 2008:
• IFRIC 11, IFRS 2 - Group and treasury share transactions.
• IFRIC 12, Service concession arrangements
• IFRIC 14, IAS 19 - The limit on a defined benefit asset, minimum fund-ing
requirements and their interaction.
2. REVENUES
3. SEGMENT INFORMATION
4. STAFF COSTS
5. INTANGIBLE ASSETS
6. SECURITIES
