Pharmexa: Interim Report for the First 9 Months of the Financial Year 2002

HORSHOLM, DENMARK


HOERSHOLM, Denmark, Nov. 21, 2002 (PRIMEZONE) -- Summary: Pharmexa (Other OTC:PMXAY) made important progress in Q3. Based on positive results from the clinical phase I/II trial soon to be completed, Pharmexa has decided to proceed to clinical phase II with the HER-2 AutoVac(TM)DNA pharmaccine against breast cancer. In the HER-2 AutoVac(TM) Protein programme, the company expects to file an IND application in Q1 2003 to start a clinical phase I/II trial in the United States. Research and development costs were DKK 121.2 million, which was in line with expectations, and the company maintains its financial forecast for the full year.

Pharmexa has experienced very positive developments in the third quarter. The headlines are:


-- Preliminary results fully support that Pharmexa's HER-2 AutoVac(TM)
   DNA product continues in clinical phase II trials and the preparation 
   for such trials are now ongoing.

-- Pharmexa is currently finishing the preclinical studies on the HER-2 
   AutoVac(TM) Protein product and expects to initiate a clinical phase 
   I/II trial in the United States early next year.

-- Pharmexa has made important progress in the TNF-alpha AutoVac(TM) 
   programme.

Status of Pharmexa's Activities

HER-2 AutoVac(TM) DNA soon ready for phase II

Pharmexa's research and development projects continue to develop satisfactorily. Pharmexas most advanced project is the HER-2 AutoVac(TM) DNA product against breast cancer. On June 6, 2002, the company announced that preliminary data from the first two dosage levels showed that Pharmexa's pharmaccine was safe and well tolerated by the patients and that immune responses were induced in some patients already at the lowest dosage level.

All 27 patients in the trial have now been recruited and treated, providing Pharmexa with additional data for final analysis. However, it is already clear at this stage that the results fully validate the progression of the product to clinical phase II, and against this background, Pharmexa has initiated the work of filing an application to start such clinical phase II trial. The Application is expected to be filed in the beginning of 2003. The overall results of the current phase I/II trial will be released on December 12, 2002 at the 25th Annual San Antonio Breast Cancer Symposium in San Antonio, Texas. Positive development in the HER-2 AutoVac(TM) Protein programme Important progress has also been made in Pharmexa's other breast cancer programme, HER-2 AutoVac(TM) Protein. The final toxicological trials are ongoing and have confirmed Pharmexa's high expectations for this product. Over the past few months, Pharmexa has prepared the scheduled phase I/II trial and expect to file the IND application in Q1 2003 to startup clinical phase I/II trials in the USA. Pharmexa hopes to publish the results of this trial before the end of 2003 as previously announced.

Improved TNF-alpha AutoVac(TM) molecules under development

Significant progress has been made in the TNF-alpha AutoVac(TM) programme, which Pharmexa recently bought back. Pharmexa has already developed a number of new TNF-alpha AutoVac(TM) molecules, which initially confirm Pharmexa's belief that significant improvement can be made compared to the two molecules developed by Ferring, Pharmexa's former partner. Over the coming months, Pharmexa expects to announce further details about its clinical development plans in the highly attractive area of anti-TNF-alpha therapy.

Prioritisation in Pharmexa's portfolio

In the years ahead, Pharmexa's three leading product candidates, HER-2 AutoVac(TM) DNA, HER-2 AutoVac(TM) Protein and TNF-alpha AutoVac(TM), will be given top priority. Those three product candidates are expected to create the most value to the company and its shareholders in the short and medium term, partly through the validation of both the DNA and the Protein versions of the AutoVac(TM) technology in patients, partly through the generation of an important news flow. These three products in its portfolio alone make Pharmexa a broadly based company. Furthermore, Pharmexa's collaborate partners H. Lundbeck, Schering-Plough and Lexigen are all working with AutoVac(TM) products, and these collaborations are set to provide Pharmexa with substantial milestone and royalty income, if the products are developed successfully.

IL5 AutoVac(TM) programme put on hold

Pharmexa has on this basis decided to give lower priority to the IL5 AutoVac(TM) programme against asthma. Specifically, this entails that Pharmexa will not take the IL5 AutoVac(TM) programme to the clinical stage at this time, even though this product has had a highly successful research and development course and is at an advanced pre-clinical stage. This decision is also based on recent clinical results from other companies that have raised doubts concerning the relevance of IL5 as a therapeutic target in asthma in humans.

As described in Pharmexa's release dated September 20, 2001, two other pharmaceutical companies have tested the effect of monoclonal antibodies targeting IL5 in clinical phase II trials in asthma in patients. So far, these trials have shown disappointing results, and on September 17, 2002, the American pharmaceutical company Schering-Plough announced its decision to stop further development of its IL5 antibody. The reason given in the announcement was that although down regulation of IL5 in a large phase II trial reduced the number of inflammatory cells in the lungs, this reduction did not appear to have a beneficial effect on the lung function of asthma patients.

The development of the IL5 AutoVac(TM) therapeutic vaccine has progressed according to plan, and Pharmexa has shown and published results demonstrating a highly beneficial effect on the lung function using the product in preclinical trials. However, the failure of other companies to reproduce these results in patients means that it is currently too risky to continue, particularly given the lack of an explanation of why the beneficial effect apparently fails to show in patients. The fact that Pharmexa is putting this project on hold is not ascribable to shortcomings in the AutoVac(TM) technology rather it illustrates the risk involved in working with less validated targets such as IL5. Also, the decision illustrates Pharmexa's strategy of keeping close track of the performance in other companies that work with the same targets, and react accordingly. Pharmexa is ready to resume the IL5 AutoVac(TM) programme on short notice if new clinical results should substantiate that IL5 is a relevant therapeutic target in asthma.

Pharmexa's RANKL AutoVac(TM) and IgE AutoVac(TM) programmes continue their satisfactory performance, and the company's early research projects are progressing according to plan. Concurrent with the prioritisation around IL5 AutoVac(TM) and the most advanced products, Pharmexa has since august implemented a temporary stop on new hires.

Inoxell

Inoxell has experienced rapid growth since its inception in last year. Inoxell has focused its research activities on immunology and metabolic diseases areas in which the company has significant expertise. A number of complementary technologies have been developed or introduced to enhance the business concept. Inoxell is working to identify and validate new drug targets on its own and in collaboration with other pharmaceutical and biotech companies. The first example hereof is the research collaboration with AstraZeneca, in which the second stage is close to being completed.

Inoxell aims to develop its own drug candidates, and the recent agreement with Rigel plays an important part of these efforts. This agreement gives Inoxell access to a number of complementary technologies, potentially allowing it to reduce the time to market.

Inoxell is outside Pharmexa's strong focus on active immunotherapy. The intention is therefore that Pharmexa's stake in Inoxell should be reduced and that Inoxell should develop independently of Pharmexa, possibly through a merger with another biotech company. Pharmexa continues to review different scenarios for Inoxell's further development and estimate that a satisfactory solution may be found despite the recent resignation of Inoxell's CEO and CSO. Pharmexa hopes to announce the results of these endeavours within the next few months.

Unchanged outlook for the 2002 financial year

Pharmexa reiterates the financial forecast as announced in the interim report dated August 21, 2002. Based on the company's current collaborative agreements, Pharmexa A/S expects research and developments costs of approximately DKK 130 million in the financial year 2002. The net result for 2002 is expected to be a loss of approximately DKK 115 million. Moreover, the Pharmexa Group projects negative results in the subsidiary Inoxell.

Soeren Mouritsen, Chief Executive Officer

Certain parts of this press release contain forward-looking information with respect to the plans, projections and future performance of the company, each of which involves significant uncertainties. The company's actual results may differ materially from the information set forth in these statements.

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