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 the Copenhagen Stock Exchange
Announcement No. 16-07 / Copenhagen, 9 May 2007
Interim report for the three months ended 31 March 2007
• Continued successful rollout of Savene™ in Europe
• The Company's clinical projects are moving forward according to plans
• Sales of Savene™ for the first three months of 2007 amounted to DKK 3.7
million. Savene™ was launched in October 2006
• Operating loss amounted to DKK 44.5 million against a loss of DKK 38.5
million in the year-earlier period
• Loss before tax of DKK 42.6 million, as compared to a loss of DKK 37.1
million in the same period of last year
• Loss after tax of DKK 42.6 million, as compared to a loss of DKK 35.6 million
in the same period of last year. This corresponds to DKK -0.93 per share
compared to DKK -0.88 last year
• TopoTarget expects to announce its updated financial expectations for 2007
when more information will be made available in connection with the coming
offer of new shares in TopoTarget. In the absence of a completion of the
planned acquisition of Apoxis SA, TopoTarget would maintain its most recent
financial expectations for 2007
• On 11 April 2007 TopoTarget announced the conditional purchase agreement in
relation to the Swiss biotechnology company, Apoxis SA, a specialist in cancer
research and development.
A conference call on the results for the three months of 2007 will be hosted
today, Wednesday 9 May 2007 at 14.00 (CET). Further information is contained in
this announcement.
Interim report for the three months ended 31 March 2007
Copenhagen, Denmark - 9 May 2007 - The Board of Directors of TopoTarget A/S
(Copenhagen Stock Exchange: TOPO) today adopted the company's interim report
for the three months ended 31 March 2007.
During the three months period ended 31 March 2007, operating expenses amounted
to DKK 55.0 million against DKK 45.5 million in the year-earlier period,
primarily due to the establishment of Savene™ sales forces in Europe and the
USA. The operating loss for the period was DKK 44.5 million, compared with DKK
38.5 million in the same period of last year. The company posted a loss before
tax of DKK 42.6 million in the first three months of 2007 against a pre-tax
loss of DKK 37.1 million in the same period of 2006. Cash, cash equivalents and
marketable securities amounted to DKK 211.9 million at 31 March 2007.
The key events for the first three months of 2007 mainly comprised of the
continued roll-out of Savene™. Savene™ was launched in the first European
country in October 2006 and was launched in the following European countries
per 31 March: Denmark, Sweden, Norway, Netherlands, Luxembourg, England,
Ireland, Germany and Austria. Sales continue to develop well.
Expected key milestones for the remainder of 2007
Set out below are a number of expected key events for TopoTarget and its
business.
• The roll out of Savene™ in additional countries across Europe will continue
• FDA approval of Totect™ for marketing in the US by the end of May 2007.
Totect™ is expected to be launched in the second half of 2007
• Results from the following studies of belinostat (PXD101), forming the basis
of the regulatory strategy, are expected:
- Phase II results of intravenous belinostat in combination with carboplatin
and paclitaxel for advanced ovarian cancer
- Phase II results of intravenous belinostat in combination with 5-fluorouracil
for advanced colorectal cancer
- Phase II results of intravenous belinostat for T-cell lymphoma
- Phase I results of oral belinostat in advanced solid tumours
• Phase II (earlier referred to as Phase Ib) results of intravenous belinostat
in combination with Velcade® (bortezomib) for injection for advanced multiple
myeloma
• Results from two Phase II placebo-controlled studies of Baceca® in
combination with two different vitamin A analogues. Recruitment has been
completed in one of the trials
• Results from a pivotal Phase II study of Savicol™ for the treatment of
colorectal polyps in patients with FAP (Familial Adenomatous Polyposis -
genetic predisposition to develop colorectal cancer)
• Results from ongoing Phase I studies of Topotect aimed to help define the
optimum dose level and the risk involved in a combination of Topotect and
etoposide
The acquisition of Apoxis SA
On 11 April TopoTarget entered into an agreement with the shareholders in
Apoxis to purchase the entire issued share capital, participation certificates
and convertible loan notes of Apoxis. The acquisition is conditional upon,
inter alia, the nonoccurrence of material adverse change in Apoxis prior to
completion of the acquisition as well as upon the completion of the offer of
new TopoTarget shares (please refer to TopoTarget's stock exchange announcement
of 11 April 2007 for further details).
The rationale for the acquisition is to further increase TopoTarget's strength
in the cancer field. The acquisition will add two first-in-class oncology
products in Phase I and II clinical development, and the MegaLigand™ protein
research technology platform, to TopoTarget's R&D pipeline.
TopoTarget will seek additional capital to fund the consolidated operations of
TopoTarget and Apoxis through an offer of new TopoTarget shares.
Both the completion of the acquisition of Apoxis and the completion of the
contemplated offer of new TopoTarget shares are expected to be finalised before
30 June 2007.
Highlights for the first three months of 2007
In the period from 1 January to 31 March 2007, TopoTarget achieved the
following:
• On 12 March TopoTarget announced that it had executed its in-licensing option
from Novartis Pharma AG of Switzerland, for the development and marketing of
Zemab®, an antibody based anti-cancer drug. According to the option and
licensing agreement originating from 2003, TopoTarget now holds the world-wide
and exclusive rights for the development of this product candidate
• On 27 March the company announced the initiation of patient dosing in a Phase
II open-label, multi-center clinical trial evaluating the efficacy and safety
of intravenous belinostat (PXD101), a small molecule histone deacetylase (HDAC)
inhibitor, in combination with Velcade® (bortezomib) for injection in multiple
myeloma patients refractory to or who have rapidly relapsed from at least one
previous bortezomib-containing regimen
Key events after 31 March 2007
Key events taken place after 31 March 2007 include:
• On 11 April TopoTarget entered into an agreement with the shareholders in
Apoxis to acquire Apoxis
• On 14-18 April TopoTarget presented preclinical data on belinostat (PXD101)
at the American Association for Cancer Research (AACR) 2007 Annual Meeting in
Los Angeles
• TopoTarget and CuraGen announced on 19 April that they expect to present an
up-date of earlier announced interim clinical data on belinostat (PXD101) at
two upcoming major medical meetings: The 2007 American Society of Clinical
Oncology (ASCO) Annual Meeting, which is being hosted in Chicago, IL, 2-5 June
2007, and at the 2007 Pan Pacific Lymphoma Conference, which is being hosted on
the Island of Maui, Hawaii, 11-15 June 2007
• On 24 April TopoTarget announced that a Phase II clinical trial had been
initiated, testing Avugane™, a topical valproic acid - an HDAC inhibitor drug -
in the treatment of acne vulgaris
• On 30 April TopoTarget held an extraordinary general meeting where a proposal
of a capital increase of up to nominal DKK 21 million shares was adopted
• TopoTarget and CuraGen announced on 2 May the initiation of a Phase I/II
open-label, multi-center clinical trial evaluating the efficacy and safety of
intravenous belinostat (PXD101) in combination with doxorubicin for the
treatment of Soft Tissue Sarcomas
Savene™/Totect™ status
TopoTarget's first product, Savene™, is a DNA topoisomerase II inhibitor for
the prevention of severe tissue damage caused by anthracycline extravasation
(i.e. the accidental leaking of chemotherapeutics into healthy tissue). Savene™
was launched in October 2006.
Savene™ is launched in the individual European countries as the product
receives approval in terms of pricing and is recommended for reimbursement from
the public reimbursement schemes. Savene™ has been launched in the following
European countries: Denmark, Sweden, Norway, Netherlands, Luxembourg, England,
Ireland, Germany and Austria. Furthermore, Savene™ is launched in Greece by our
partner, a VIPharma International A.E.
Treatment guidelines differ from country to country and from hospital to
hospital. TopoTarget's task is, through scientific publications and meetings,
international treatment guidelines and education, to assure that Savene™ is
known as the only evidence-based medical treatment and thus as ”good medical
practice”.
In 2006, a total of 30 Savene™ kits (nine prior to launch) were sold in nine
countries. By the end of March 2007, a further 52 kits have been sold. The
price and reimbursement process is ongoing. Sales of Savene™ amounted to DKK
3.7 million for the first three months of 2007. TopoTarget continues to expect
a significant growth in the sales of Savene™ during 2007.
Please refer to the attached pdf, page 5, for a figure illustrating the
quarterly sales development in Savene™ since its launch in October 2006.
On 2 August 2006 TopoTarget received an approvable letter for Totect™ from the
FDA. On 22 November 2006, an amendment to the NDA (New Drug Application) was
filed with the FDA to address the manufacturing issues for Totect™ outlined in
the approvable letter. TopoTarget believes that the final approval will be
received by the end of May 2007. Totect™ is expected to be launched in the US
market in the second half of 2007.
To ensure a successful launch of the product, TopoTarget has established an
American subsidiary named TopoTarget USA, Inc.
Status of clinical activities
TopoTarget's clinical pipeline consists of six product candidates covering a
broad range of cancer and other indications:
• Belinostat (PXD101) - two dose finding Phase I studies have been completed,
and belinostat is now being evaluated in 14 studies of nine different cancer
indications, funded partly by CuraGen, partly by the NCI (National Cancer
Institute, US)
Clinical studies of belinostat (PXD101) from TopoTarget/CuraGen
In Q4 2006 TopoTarget and CuraGen announced interim clinical results which
showed proof-of-concept for belinostat as a single-drug as well as in
combination with certain other drugs. An updated presentation of earlier
announced results from the combination study with paclitaxel and carboplatin,
and from the combination study with 5-fluorouracil, will be given at the coming
ASCO meeting on 2-5 June 2007.
In addition, TopoTarget and CuraGen are currently conducting three active
studies of belinostat: A Phase II clinical trial evaluating intravenous
belinostat for the treatment of peripheral T-cell non-Hodgkin's lymphomas (NHL)
including cutaneous T-cell lymphoma (CTCL). Results from this trial are
anticipated by the end of 2007. An update of earlier announced interim results
will be presented at the 2007 Pan Pacific Lymphoma Conference on 11-15 June
2007. A Phase II clinical trial evaluating intravenous belinostat in
combination with Velcade® for injection for the treatment of advanced multiple
myeloma and a phase I clinical trial evaluating the safety and tolerability of
oral belinostat for the treatment of advanced solid tumours. Furthermore, a
multi-centre study examining the combination of belinostat and doxorubicin in
patients with soft tissue sarcoma has been initiated on 2 May.
NCI-sponsored clinical studies of belinostat
A total of nine clinical trials have been initiated by the National Cancer
Institute (NCI) under a Clinical Trials Agreement signed with CuraGen. These
trials include: 1) A Phase II clinical trial evaluating belinostat for the
treatment of Acute Myelogenous Leukemia (AML); 2) A Phase II clinical trial
evaluating belinostat for the treatment of B-cell lymphomas; 3) A Phase II
clinical trial evaluating belinostat for the treatment of mesothelioma; 4) A
Phase I clinical trial evaluating belinostat for the treatment of inoperable
hepatocellular cancer; 5) A Phase I clinical trial evaluating belinostat in
combination with cis-retinoic acid for the treatment of patients with advanced
solid tumours, 6) A Phase I clinical trial evaluating belinostat in combination
with Velcade® (bortezomib) for injection for the treatment of advanced
malignancies, including solid tumours and lymphomas; and 7) A Phase I clinical
trial evaluating belinostat in combination with azacitidine for the treatment
of advanced haematological malignancies 8) A phase II clinical trial evaluating
belinostat as monotherapy in MDS and 9) A Phase II trial evaluating belinostat
as monotherapy as treatment for ovarian cancer patients.
• Baceca® - two Phase II trials to treat BCC (Basal Cell Carcinoma)
Baceca® is a moderate strength HDAC inhibitor and a new formulation of valproic
acid (VPA), investigated as a potential topical drug to treat
hyperproliferative (with rapid cell division) skin diseases such as basal cell
carcinoma (BCC), which is the most common cancer in humans.
TopoTarget has earlier initiated two randomised and blinded Phase II
proof-of-concept trials to investigate Baceca® alone, and in combination with
two different retinoids (vitamin A like compounds) for the treatment of BCC.
These trials will enrol a total of approx. 100 patients. TopoTarget expects to
have final results in Q3 2007.
• Avugane™ - Proof-of-concept in small Phase II study in acne patients
Avugane™, an HDAC-inhibitor and a new formulation of valproic acid (VPA), has
demonstrated positive effects in the treatment of acne vulgaris, and may also
be suitable to treat other inflammatory skin diseases such as psoriasis and
atopic dermatitis.
In a Phase II proof-of-concept trial, Avugane™ has been tested in patients
suffering from acne vulgaris. In this double-blind, randomised Phase II study
including 34 patients, Avugane™ showed comparable efficacy and advantageous
tolerability compared with a standard, marketed retinoid therapy. Avugane™ also
showed indications of an acceleration of the clinical response.
Based on these promising results, TopoTarget initiated a double-blind,
randomised Phase II four-arm clinical trial in mild to moderate acne vulgaris
in April 2007, testing further the efficacy and safety of three different dose
strengths of Avugane™ compared to a placebo control group. The clinical end
points include the evaluation of the therapeutic efficacy based on counts of
facial acne lesions as well as safety and tolerability measurements.
• Savicol™ - Phase II pivotal trial in FAP
Savicol™ is an HDAC inhibitory anti-cancer drug candidate, and a new
formulation of valproic acid (VPA), developed in a mini-tablet format.
TopoTarget is currently conducting a Phase II pivotal trial, evaluating the
effect of Savicol™ in the treatment of hereditary polyps of the colon (Familial
Adenomatous Polyposis - FAP). Savicol™ has Orphan Drug status in both Europe
and the US. This randomised, placebo-controlled Phase II study takes place in
Europe and is expected to enrol a total of 60 FAP patients. The trial will
primarily investigate the drug's therapeutic influence on the growth and the
polyp burden in the colon of these patients. The first results from the study
are expected in Q4 2007.
• Topotect - Phase I/II for brain metastases
Three Phase I/II trials with different designs and treatment schedules are
ongoing, exploring the potential of the combination of Topotect and etoposide.
Results from these studies are expected to be announced during 2007.
• Zemab® - Phase I trial completed
Zemab® is a recombinant protein targeting the HER2 receptor, which plays a
central role in the development of e.g. breast cancer and head and neck cancer.
Initial clinical studies have demonstrated a reduction in tumour size in six
out of ten patients after injection of Zemab® directly into the tumour. Under
the agreement with Novartis AG from 2003, TopoTarget has exercised its option
to exclusively in-license Zemab® for further development. Following a new
production of Zemab®, new clinical studies are expected to be initiated in H1
2008.
• Status of the mTOR programme
In May 2006, TopoTarget acquired the rights to an mTOR programme from BioImage.
The programme covers a novel class of small molecules which act via the mTOR
(mammalian Target Of Rapamycin) signalling pathway. The compounds have
demonstrated marked anti-tumour efficacy in TopoTarget's tumour models.
TopoTarget continues the preclinical development of TOP216 and some of its
analogues.
Extraordinary general meeting
At an extraordinary general meeting held on 30 April 2007 the Board of
Directors of TopoTarget was authorized to increase the company's share capital
by up to a total of DKK 21,000,000 represented by shares with a nominal value
of DKK 1. Such increase can be issued at one or more times, at any time up to 1
May 2009 and is to be utilized (by way of contribution-in-kind of shares etc.)
in TopoTarget's acquisition of Apoxis SA and (by way of cash contribution
through an offering of shares to obtain capital) to finance the consolidated
operations of Apoxis SA and TopoTarget (please refer to TopoTarget's stock
exchange announcements of 11 April and 1 May 2007 for further details).
Conference call
TopoTarget hosts a conference call this afternoon,
9 May at 14.00 (CET),
where management will present and discuss the results for the first three
months of 2007.
A PowerPoint presentation will be available at TopoTarget's website,
www.topotarget.com (under Investor and Media > Presentations and Events), one
hour from 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 will be available two hours after the conference call and until 16 May
2007 at the following number: +353 1 436 4267, security code 915764#.
Please refer to the attached pdf, page 9, for finacial highlights and key
figures.
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.
More detailed accounting information is provided in the appendices.
Comments on the interim financial statements for the three months ended 31
March 2007
The company generated revenues of DKK 10.4 million during the three months
ending 31 March 2007 compared to DKK 7.0 million generated during the three
months period ended 31 March 2006. Included in the revenues are invoicing to
CuraGen and sale of Savene™. The higher revenue in 2007 is mainly due to sales
of Savene™ on various European markets.
During the three months period ended 31 March 2007, the production costs
totalled DKK 4.0 million compared to DKK 3.6 million in the same period of
2006. The increased costs are mainly due to the sales of Savene™ commenced in
2007.
During the three months period ended 31 March 2007, the research and
development costs totalled DKK 27.9 million compared to DKK 28.1 million
during the period ended 31 March 2006. The company has now in-housed research
activities which were outsourced in the period ended 31 March 2006. This has
resulted in savings thus enabling more research work to be produced at the same
cost in the period ended 31 March 2007 compared to the period ended 31 March
2006.
During the three months period ended 31 March 2007, sales and distribution
costs totalled DKK 11.4 million compared to DKK 2.7 million in the period
ended 31 March 2006. The increased costs are due to an increased number of
sales representatives in Europe as Savene™ is being launched in more countries
and are also due to the sales force being formed in the USA for the launch of
Totect™ during 2007.
During the three months period ended 31 March 2007, administrative expenses
totalled DKK 11.6 million compared to DKK 11.1 million in the same period of
2006.
During the three months period ended 31 March 2007, financial income totalled
DKK 2.4 million compared to DKK 1.9 million in the three month period ended 31
March 2006. The increase is mainly due to higher interest on the securities in
which the company has invested its proceeds from the capital increases.
During the three months period ended 31 March 2007, the financial expenses
totalled DKK 0.4 million compared to DKK 0.6 million in the first quarter of
2006.
During the three months period ended 31 March 2007, tax totalled DKK nil (EUR
nil) compared to (income) DKK 1.5 million in the period ended 31 March 2006.
The income in the three months period ended 31 March 2006 was due to a
reduction of deferred tax liability relating to the subsidiary TopoTarget
Germany AG.
During the three months period ended 31 March 2007, loss after tax was thus DKK
42.6 million compared to a loss after tax of DKK 35.6 million in the
year-earlier period.
At 31 March 2007, total assets amounted to DKK 382.2 million. Of this amount,
cash bank deposits and short-term securities amounted to DKK 211.9 million.
At 31 March 2007, equity amounted to DKK 342.1 million compared with DKK 384.6
million at the same time in 2006. The change consists of a loss of DKK 181.7
million during the period from 1 April 2006 to 31 March 2007, the DKK 121.7
million capital increase in November, additions for share-based payments
totalling DKK 6.7 million, the exercise of warrants totalling DKK 10.6 million,
fair-value adjustment of the bond portfolio totalling DKK 2.0 million and also
costs of DKK 1.8 million related to the expected capital increase in connection
with the expected acquisition of Apoxis SA.
Outlook for 2007
On 30 April 2007 a resolution to increase the company's capital, partly with a
view to fund the expected acquisition of Apoxis, was passed at an extraordinary
general meeting in TopoTarget. The planned acquisition of Apoxis will increase
the expected pre-tax loss for the full year 2007. The acquisition of Apoxis is
subject to, inter alia, the completion of the expected upcoming offering of new
shares. Information on this transaction and its implications on the outlook for
2007 will be available in the prospectus.
If the expected capital increase and acquisition of Apoxis are not completed,
TopoTarget will maintain its earlier financial guidance for 2007. On 14 March
2007, in connection with the announcement of the company's results for 2006,
the company projected a pre-tax loss for 2007 of approximately DKK 200 million
to DKK 220 million and a cash burn that may be higher than the expected pre-tax
loss due to an increase in sales activities and the resulting change in working
capital.
Please refer to the attached pdf, page 14-22, for quarterly figures and notes.
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 three months ended 31 March 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 2007.
Copenhagen, 9 May 2007
Senior Management
Peter Buhl Jensen
CEO
Board of Directors
Håkan Åström Jesper Zeuthen Anders Gersel Pedersen
Chairman
Ingelise Saunders Jeffrey Buchalter 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
Tim Corcoran Telephone +44 1235 443 713
Chief Operating Officer Mobile +44 7876 561 027
Background information
About TopoTarget
TopoTarget (OMX - The Nordic Exchange: TOPO) is a biopharmaceutical company,
headquartered in Denmark and with subsidiaries in the UK, Germany and the USA,
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 predictive cancer
models and key cancer enzyme regulators (mainly HDAC, mTOR, and topoisomerase
II inhibitors) and a strong development foundation has been built. TopoTarget
has a broad portfolio of small molecule preclinical drug candidates and seven
drugs are in clinical development, including both novel anti-cancer
therapeutics and new cancer indications for existing drugs. Savene™ is
TopoTarget's first product on the market. In addition to organic growth,
TopoTarget consistently looks for opportunities to strengthen and expand its
activities through acquisitions and in-licensing. For more information, please
refer to www.topotarget.com.H
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
nonclinical or clinical studies or from other sources; the success of competing
products and technologies; technological uncertainty and product development
risks; uncertainty of additional funding; TopoTarget's history of incurring
losses and the uncertainty of achieving profitability; TopoTarget's stage of
development as a biopharmaceutical 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
exposure; 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.
