Announcement no. 11/2007
To OMX Nordic Exchange
Copenhagen, May 29, 2007
Interim report for the period January1 to March 31, 2007 (unaudited)
Curalogic's pipeline progressing as planned
The development of Curalogic's three products for the treatment of allergy to
ragweed (ambrosia), grass and house dust mites is progressing as planned. In
March, Curalogic initiated the treatment of patients in the EU Phase III
clinical trial (RPE 04) with its ragweed product. The screening of patients for
the RPE 04 trial will continue until the end of May, and Curalogic will enrol
the last screened patients until June 4. In the period from January until March,
Curalogic successfully treated patients in a Phase II clinical trial (GPE 02)
with its grass product. The results from these trials showed that the grass
product is well-tolerated both with and without prior up-dosing. In our house
dust mite project, we continue our efforts to mature the manufacturing processes
for extracts and microbeads in preparation for the first clinical trial to be
initiated in third quarter 2007.
Financial performance during the period January 1, 2007 to March 31, 2007
Curalogic recorded an operating loss (EBIT) of DKK 37.4 million in first quarter
2007 compared to an operating loss of DKK 3.0 million in first quarter 2006. The
company's cash and cash equivalents amounted to DKK 136.8 million at March 31,
2007. Curalogic retains its expectations for the full year.
Events during the period until March 31, 2007
Treatment of patients in Phase II clinical trial with the grass product
Early in January, Curalogic initiated the treatment of patients in a phase II
clinical trial with its grass product. All patients completed the scheduled
treatment, and the last patients ended the treatment in March. In continuation
of the GPE 02 trial, Curalogic treated a new group of patients with its grass
product without prior up-dosing (GPE 02 cohort B).
Start of treatment of patients in EU Phase III clinical trial with the ragweed
product
On March 11, Curalogic initiated the treatment of the first patients in the EU
Phase III clinical trial with its ragweed product. The trial is conducted in the
United States, Italy, Hungary and Serbia.
Strengthening of the organisation
Our organisation was strengthened through the recruitment of new employees, who
took up their position on January 1, 2007. The organisation thus had a total of
11 employees as of March 31, 2007.
Investor relations
Gudme Raaschou Bank and Piper Jaffray have initiated analyst coverage of
Curalogic and the Curalogic share is now covered by Carnegie, Danske Equities,
Gudme Raaschou Bank and Piper Jaffray.
Material events after March 31, 2007
Results from GPE 02
Early in May, Curalogic announced results from the first part of the GPE 02
trial. The results showed that the grass product is well tolerated and that the
side effects observed at very high doses are comparable to those observed for
the ragweed product.
Results cohort B
In mid-May, Curalogic announced results from cohort B of the GPE 02 trial. The
results showed that the grass product is well tolerated without prior up-dosing.
This is an important result because it is easier for the patients to take the
same dose throughout the full treatment period.
Statement by Management and Board of Directors on the interim report
We have today considered and adopted the interim report of Curalogic A/S for the
period January 1 to March 31, 2007.
The condensed interim report has been prepared in accordance with IAS 34, the
company's accounting policies used for the accounting year 2006 and additional
Danish disclosure requirements for interim reports for listed companies. The
condensed financial statement is unaudited.
We consider the accounting policies used to be appropriate. Accordingly, the
interim report gives a fair presentation of the company's financial position as
of March 31, 2007 and of the results of its operations and cash flows for the
period January 1 to March 31, 2007.
Copenhagen, May 29, 2007
Curalogic A/S
Board of Directors
Jakob Schmidt Christian Karsten Hansen
Pamela J. Kirby Alf A. Lindberg
Carl Spana
Management Board
Peter Moldt
For additional information, please contact:
Peter Moldt, President and CEO, Phone +45 33 11 41 01, mobile +45 26 25 04 22
Helle Busck Fensvig, EVP and CFO, Phone +45 33 11 41 01, mobile +45 20 70 55 37
This announcement contains forward-looking statements regarding the company's
future financial development and performance and other statements which are not
historical facts. Such statements are made on the basis of assumptions and
expectations which, to the best of the company's knowledge, are reasonable at
this time, but may prove to be erroneous in the future.
Status of Curalogic's activities
Development activities
Curalogic has four products in clinical development for the treatment of allergy
to ragweed pollen, grass pollen, house dust mites and cat hair.
Ragweed (ambrosia)
Curalogic's product for the treatment of ragweed allergy is in Phase III
clinical trials. The ragweed product has been thoroughly tested in seven
clinical trials involving 1,066 patients. The results of the clinical trials
have demonstrated an excellent reduction in allergy symptoms comparable to that
of injection immunotherapy, and the product is safe and has very few side
effects.
In the 2007 ragweed pollen season, Curalogic is conducting an EU Phase III trial
(RPE 04) with patients in the United States, Italy, Hungary and Serbia. The
first patient was treated on March 11, 2007, and the screening of patients for
the RPE 04 trial will continue until the end of May. Until June 4, Curalogic
will enrol the last patients screened, allowing us to report on the final number
of enrolled patients in the trial early in June. Patients will be treated until
November 2007, after which Curalogic expects to announce the results of the
trial in first quarter 2008.
The primary objective of the RPE 04 trial is to evaluate the efficacy and safety
of one daily dose of orally administered ragweed extract or placebo in patients
suffering from ragweed allergy when treatment is initiated at least eight weeks
prior to, and continuing throughout, the ragweed pollen season. Based on data
from the trial, Curalogic plans to file a registration application in Europe in
second half 2008.
About 4 million people in Europe and 29 million people in the United States
suffer from ragweed allergy. Ragweed allergy is by the patients experienced as
one of the worst allergies, and the reason is that ragweed pollen is highly
potent and the pollen season is very long (6-8 weeks).
Grass
Curalogic's product for the treatment of grass allergy is in Phase II clinical
trials. The grass product has been characterised in two clinical trials. The
trials included a total of 93 patients with moderate to severe grass allergy who
were dosed on a daily basis for 1 to 10 weeks. The highest dose tested is 64,000
BAU, which is approximately 30 times higher than the maintenance dose with
injection immunotherapy recommended in the US. No treatment related serious
adverse events or anaphylactic reactions were reported during the trials. The
grass product was well-tolerated and the adverse events were similar in nature
to those observed for the ragweed product. The next step in development is an EU
Phase III trial and Curalogic is discussing the planning of this study with the
company's clinical advisors.
About 51 million people in Europe and 30 million people in the United States
suffer from grass allergy. The active ingredient in the micro-encapsulated grass
product candidate is an extract of Timothy grass pollen (Phleum Pratense L.).
House dust mites
Curalogic's product for treating allergy to house dust mites is currently in the
preclinical phase. The programme targets registration both in the United States
and in Europe. The two most predominant house dust mite species in the US and
Europe are D. pteronyssinus and D. farinae, which are typically found in carpets
and bedclothes. The active substances in the product for treating allergy to
house dust mites will therefore comprise a mixture of extracts of these two
species of house dust mites.
In the first quarter 2007, Curalogic has endeavoured to further mature the house
dust mite product. Curalogic is still planning to initiate the first Phase II
clinical trial (DME 01) with this product in third quarter 2007.
About 30 million people in Europe and 52 million people in the United States are
allergic to house dust mites. Patients who are allergic to house dust mites
suffer from allergy symptoms all year round.
Cat
Curalogic's product candidate for the treatment of allergy to cat hair is in
Phase II. The active substance in the clinically tested cat product is an
extract from cat hair. A successful oral product for treatment of allergy to
cats would require cat hairs in quantities exceeding the currently available
supply. Curalogic has explored several options for sourcing the cat allergen,
and the company has concluded that, commercially, the establishment of
recombinant manufacturing is the best solution. Curalogic is investigating the
practical possibilities of how to establish such manufacturing capabilities.
Other activities
Investor relations
In first quarter 2007, Curalogic again presented the company at various venues
for institutional as well as private investors. During the reporting period,
Gudme Raaschou Bank and Piper Jaffray started analyst coverage of Curalogic and
the Curalogic share is now covered by Carnegie, Danske Equities, Gudme Raaschou
Bank and Piper Jaffray.
Strengthening of the organisation
Our organisation was strengthened through the recruitment of new employees, who
took up their position on January 1, 2007. The company has hired a senior
employee responsible for the day-to-day clinical development activities, another
senior employee responsible for regulatory activities and an additional
administrative employee. The organisation thus had a total of 11 employees as of
March 31, 2007.
Strengthening of the Clinical Advisory Board
Curalogic has enlarged its panel of clinical advisors with Dr. Kleine-Tebbe,
Allergy & Asthma Center Westend, Berlin in Germany, who has extensive experience
in the development of immunotherapy products. A curriculum vitae for Dr.
Kleine-Tebbe is available on Curalogic's website (www.curalogic.com).
Financial highlights and key ratios
Comments on the interim report
The development of Curalogic's activities has proceeded as planned during the
first three months of 2007.
Revenue
Curalogic had no revenue in the first three months of 2007.
Research and development costs
Curalogic's research and development costs amounted to DKK 35.6 million in the
first three months of 2007 compared to DKK 1.9 million in the first three months
of 2006. Staff costs included in research and development costs amounted to DKK
1.2 million in the first three months of 2007 compared to DKK 0.4 million in the
first three months of 2006. Curalogic incurred research and development costs
for clinical trials and maturing of production lines in the amount of DKK 34.4
million in the first three months of 2007 compared to DKK 1.5 million in the
first three months of 2006. The most significant development costs during the
period were costs to the EU phase III clinical trial of the ragweed allergy
product and costs in relation to the phase II clinical trial of the grass
allergy product.
Administrative expenses
Curalogic's administrative expenses amounted to DKK 1.8 million in the first
three months of 2007 compared to DKK 1.1 million in the first three months of
2006. Of the overall administrative expenses, staff costs including costs in
relation to the Board of Directors, amounted to DKK 1.1 million in the first
three months of 2007 compared to DKK 0.7 million in the first three months of
2006. Costs incurred in connection with the head office as well as fees for
legal advisors, auditors and other consultants amounted to DKK 0.7 million in
the first three months of 2007 compared to DKK 0.4 million in the first three
months of 2006.
Operating loss
Curalogic realised an operating loss of DKK 37.4 million in the first three
months of 2007 compared to an operating loss of DKK 3.0 million in the first
three months of 2006.
Net financials
Curalogic's financials amounted to a net income of DKK 1.4 million in the first
three months of 2007 compared to a net expense of DKK 0.3 million in the first
three months of 2006. The financial income can be ascribed to interest income on
the proceeds of the listing of the Company's shares on the Copenhagen Stock
Exchange in June 2006.
Loss before tax
Overall, Curalogic posted a loss before tax of DKK 36.0 million in the first
three months of 2007 compared to a loss before tax of DKK 3.3 million in the
first three months of 2006.
Tax on the loss on ordinary operations
Tax on the loss on ordinary operations amounted to DKK 0.0 million in the first
three months of 2007 as well as in the first three months of 2006. The Group has
not recognised the value of tax losses as an asset in the balance sheet, since
Management believes that the criteria for such recognition have not been met.
Liquidity and capital resources
The company's cash flows from primary operations was a net outflow of DKK 30.6
million in the first three months of 2007 compared to a net outflow of DKK 3.4
million in the first three months of 2006. Cash flows from net financials
represented an inflow of DKK 1.4 million in the first three months of 2007
compared to DKK 0.0 million in the first three months of 2006, which meant that
cash flows from the company's operating activity was a net outflow of DKK 29.2
million in the first three months of 2007 compared to a net outflow of DKK 3.4
million in the first three months of 2006.
Cash flows from investing activities totaled DKK 0.0 million in the first three
months of 2007 and 2006.
Curalogic had no cash flows from financing activities in the first three months
of 2007, while the company raised loans against issue of convertible debt
instruments to Nordic Biotech K/S in the amount of DKK 5.0 million during the
first three months of 2006. In connection with the listing of the company's
shares on the Copenhagen Stock Exchange in June 2006, these convertible loans
were converted into shares at the offer price.
The company's cash and cash equivalents amounted to DKK 136.8 million as of
March 31, 2007 compared to DKK 10.0 million as of March 31, 2006.
Curalogic's equity amounted to DKK 124.4 million as of March 31, 2007 compared
to DKK 2.4 million as of March 31, 2006.
Appendices - Interim report with notes
Notes
1. Accounting policies
The interim financial statements have been prepared in accordance with IAS 34,
Interim financial reporting, and additional Danish disclosure requirements for
listed companies.
The accounting policies applied in the interim financial statements is unchanged
relative to the accounting policies applied in the company's annual report for
2006, which 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 following new or amended standards and interpretations have entered into
force for the financial year ending December 31, 2007:
IAS 32, Financial instruments: Presentation
IFRS 7, Financial instruments: Disclosures
IFRIC 7, Applying the restatement approach in IAS 29, Financial reporting in
hyperinflationary economies
IFRIC 8, Scope of IFRS 2
IFRIC 9, Reassessment of embedded derivatives
IFRIC 10, Interim financial reporting and impairment
The application of these new or amended standards and interpretations has not
resulted in any changes to the accounting policies in terms of recognition and
measurement.
Relative to the annual report for 2006, the application of IFRS 7 in the annual
report for 2007 will result in changes and additions to the notes provided
concerning financial instruments. IFRS 7 is not relevant for the interim
financial statements.
Segment information
The company has only one business segment, consisting of the development of
pharmaceuticals for treatment of allergic conditions. As the company does not
generate income in the form of revenue to external customers, the interim report
for the first quarter does not include segment information on geographical
areas.
Notes
