Dublin, Ireland--(Marketwire - April 3, 2008) -
AGI Therapeutics, plc
Financial results for the twelve months ended 31 December 2007
Dublin, Ireland, 3rd April 2007 - AGI Therapeutics plc ("AGI" or
the "Company"), a speciality pharmaceutical company focused on
gastrointestinal drug products, today reports audited financial
results for the twelve months ended 31 December 2007.
Financial highlights
- Revenue of EUR392,000 (2006: EUR196,000)
- Cash and short term deposits at 31 December 2007 of EUR30.9 million,
(2006: EUR40.0 million)
- R & D spend of EUR13.2 million (2006: EUR3.5 million)
- Net loss of EUR14.1 million (2006: EUR4.3 million)
- Loss per ordinary share of 20.9 cent (2006: 6.9 cent)
Operational highlights
- Positive meeting with the US Food and Drug Administration (FDA) in
relation to Rezular(TM) (arverapamil, AGI-003) resulting in guidance
on the investigational new drug application (IND) requirements for
further clinical and pre-clinical development, Phase III study design
and NDA 505b2 submission requirements
- IND filed and ARDIS programme initiated for Rezular(TM) in the
treatment of diarrhoea-predominant irritable bowel syndrome (IBS-D)
- Characterised mechanism of action of Rezular(TM), a triple action
intestinal modulator, which the Company believes to be a first-
in-class compound offering a safe and effective treatment for
IBS-D patients
- Identified target indications and developed Phase II programmes for
arbaclofen (AGI-006), 4-ASA (AGI-022) and mecamylamine CR (AGI-004)
in gastroparesis, ulcerative colitis and chemotherapy-induced
diarrhoea, respectively
- Further strengthened the management team with the addition of two
experienced senior executives to the US group:
- Sian Bigora, Pharm D. - Vice President, Clinical Research &
Regulatory Affairs
- Amir Shojaei, Pharm D., Ph.D. - Vice President, Pharmaceutical
Development.
- Exclusive option agreement signed with US-based Williamsburg Holdings;
an important first step in expanding AGI's early-stage development
pipeline
Post year-end highlights:
- First patient dosed in a Phase II study of AGI-004 in the
treatment of chemotherapy-induced diarrhoea (CID)
- Completed optimisation phase of development of AGI-010, a
modified release formulation of the proton pump inhibitor drug
("PPI") omeprazole which utilizes AGI's CHRONAB technology and
which is being co-developed with Axcan Pharma Inc. ("Axcan")
for the treatment of night-time acid breakthrough, (NAB),
in gastro esophegeal reflux disease (GERD)
- Positive pharmacokinetic data on Rezular(TM) which support its
safety profile and development strategy for Rezular(TM) in the
treatment of IBS-D
- Characterised the pharmacokinetic profile of arbaclofen
(AGI-006) in healthy volunteers
Commenting on the results, Dr. John Devane, CEO of AGI, said:
"The successful filing of an IND application and the commencement of
the ARDIS clinical programmme for RezularTM was our most significant
achievement this year and we believe the continued development of
this exciting IBS-D product will benefit patients in the future in
this underserved marketplace. In addition, we substantially increased
our investment in R&D in 2007 and have achieved strong progress across
our development pipeline. We were particularly pleased to report
the start of a new Phase II clinical study for mecamylamine
(AGI-004), for the treatment of CID, in February 2008.
Overall, 2007 was a busy year for AGI and we look forward to
continued progress in 2008. Our focus this year will be to
further advance our clinical programmes which will allow us
achieve our commercial goals."
Contact Information:
AGI Therapeutics plc. Tel: +353 1 449 3254
David Kelly, Chief Financial
Officer
Financial Dynamics - UK Tel: +44 (0) 20 7269 7182
Deborah Scott/Lara Mott
Financial Dynamics - Ireland Tel: +353 1 663 3607
Aisling Garvey
Piper Jaffray Limited Tel: +44 (0) 20 3142 8700
Neil Mackison
Will Carnwath
Davy Tel: +353 (1) 614 8761
John Frain
For further information:
www.agitherapeutics.com
About AGI Therapeutics plc
AGI is a speciality pharmaceutical company which is focused on the development
and commercialisation of differentiated drug products for gastro-intestinal (GI)
diseases and disorders. AGI's common shares are listed on the Alternative
Investment Market of the London Stock Exchange (AIM) and on the Irish Enterprise
Exchange of the Irish Stock Market (IEX) as AGI.
The Company has a portfolio of product candidates derived from its Known
Molecular Entity (KME) approach to drug re-profiling and development. The
Company's lead product candidate, Rezular™, is an orally administered
triple-action intestinal regulator, a first-in-class mechanism for the treatment
of diarrhoea predominant Irritable Bowel Syndrome (IBS-D).
KME is a re-profiling methodology used by the Company to identify existing
therapeutic drugs which typically have been marketed for a number of years, have
established safety profiles and can be developed for new clinical indications or
with improved profiles in their existing clinical indications. In this way, the
Company seeks to reduce the risk, time and cost of new product development as
compared to the development of new chemical entities.
AGI is developing a range of product candidates to treat a variety of prevalent
GI diseases and disorders, including irritable bowel syndrome (IBS), dyspeptic
symptoms, gastroparesis, ulcerative colitis, gastro-esophageal reflux disease
(GERD) and diarrhoea-related conditions such as chemotherapy-induced diarrhoea
(CID). The Company is targeting areas of the GI therapeutic drug products market
for its product candidates where there are currently unmet medical needs or
where the effectiveness of existing drug therapies can be further improved.
The Company has five active clinical stage product candidates which are either
isomers or new drug delivery formulations of existing approved drugs and which
have established safety and tolerability profiles in their currently approved
clinical indications.
For further information please see
www.agitherapeutics.com
Statements contained within this press release may contain forward-looking
comments which involve risks and uncertainties that may cause actual results to
vary from those contained in the forward-looking statements. In some cases, you
can identify such forward-looking statements by terminology such as 'may',
'will', 'could', 'forecasts', 'expects', 'plans', 'anticipates', 'believes',
'estimates', 'predicts', 'potential', or 'continue'. Predictions and
forward-looking references in this press release are subject to the satisfactory
progress of research which is, by nature, unpredictable. Forward projections
reflect management's best estimates based on information available at the time
of issue.
Chairman's and Chief Executive's review:
Overview
2007 was an important year of progress for AGI. Following a successful IPO in
2006, and the subsequent reporting of clinical data across the development
pipeline, 2007 was the year in which the Company refined the scope and direction
of future clinical development of its products. The year was dominated by the
progress of Rezular™, a product designed to treat the multiple symptoms of
IBS-D, a debilitating disease believed to affect between 10% and 20% of the
population in developed markets.
The Company also defined the clinical development programmes for its other
pipeline products. The clinical results generated from the proof-of-concept
studies in 2006 and early 2007 provided sufficient data to chart the best route
for further development. In 2007, AGI identified gastroparesis, ulcerative
colitis and chemotherapy-induced diarrhoea as the most promising clinical
indications for which to further develop its arbaclofen, 4-ASA and mecamylamine
products, respectively.
In anticipation of the steps required to move Rezular™ into Phase III
studies, the Company has expanded its US operations and raised its profile
amongst the international scientific, medical and investment communities in
2007. AGI attended Digestive Disease Week (DDW) in May and presented the Phase
II Rezular™ study results at the 2007 Scientific Meeting of the American
College of Gastroenterology in October. The Company also attended and presented
at a number of the major pharmaceutical investor conferences.
Strategy
AGI remains dedicated to its founding strategy, focusing on the development of
new products for GI diseases which are based on Known Molecular Entities (KMEs).
KME is a re-profiling methodology used by the Company to identify existing
therapeutic drugs which typically have been marketed for a number of years, have
established safety profiles and can be developed for new clinical indications or
with improved profiles in their existing clinical indications.
In addition to the Company's continued focus on the pharmaceutical and clinical
development of its product portfolio, AGI maintains its aim to develop into a
fully integrated specialty pharmaceutical business with the ability to oversee
the sales, marketing and distribution of its own products in the market by
targeting medical specialists within its therapeutic areas of expertise. In
order to maximise the commercial success of the Company's products, AGI aims to
out-license or partner those products that would benefit from being marketed or
co-promoted by larger companies, whilst retaining co-ownership rights to AGI's
products where possible.
Operations:
Rezular™ (arverapamil, AGI-003) in IBS-D
IBS is a functional disorder that comprises a cluster of gastrointestinal
symptoms which are likely to be life long and which affect between 10% and 20%
of the population in developed markets. Rezular™ is being developed in an
oral dosage form for the treatment of IBS-D in both men and women. The IBS-D
segment of the IBS market is estimated to account for at least one-third of all
IBS patients and there is currently an estimated 6 million diagnosed IBS-D
patients who could benefit from safe and effective drug therapy.
Rezular™ is an orally administered triple-action intestinal regulator, a
first-in-class mechanism for the treatment of IBS-D. It contains arverapamil, a
single enantiomer moiety of the racemic drug verapamil. Unlike the currently
available commercial forms of racemic verapamil (a mixture of two enantiomers),
Rezular™ shows a dominant activity in treating the symptoms of IBS-D without
the traditional cardiovascular actions of the racemic drug.
Rezular™ activities dominated 2007. In March, the FDA determined that the
existing pre-clinical and clinical data would support submission of an IND
application and a Phase III programme for Rezular™. The design and scope of
the Phase III protocol was also agreed upon in the IND submission. In addition,
the FDA and AGI agreed on the overall manufacturing, pre-clinical, and clinical
development plans to support the submission of the New Drug Application (NDA) in
IBS-D under FDA's 505(b)(2) NDA regulations. The FDA concurred that the
remaining pre-clinical and supporting clinical studies required for the NDA
could be performed in parallel with the Phase III programme.
At the time of writing, the first ARDIS studies are underway with over 75 sites
currently randomising patients in the US, Europe and Latin America. Site
initiation and recruitment during Q4 was slower than expected and the Company
expects to be able to provide a more complete status update mid-2008. AGI is
pleased to note that greater than 80% of patients completing ARDIS I have
elected to roll over into the 12-month safety extension, ARDIS 3.
CHRONAB omeprazole (AGI-010) for NAB in GERD
As previously reported, AGI is developing a modified release formulation of the
proton pump inhibitor drug (PPI) omeprazole based on its CHRONAB technology
which the Company believes will be effective in treating NAB, a prevalent aspect
of current PPI therapy of GERD. GERD is the most prevalent of the major
gastrointestinal disorders and is most commonly treated with PPI drugs, which
achieve global annual sales in excess of US$20 billion. NAB is estimated to
occur in at least 50 per cent of GERD patients on PPI therapy.
AGI entered into a co-development and license agreement with Axcan in September
2006 to jointly develop for North American markets a modified release omeprazole
product based on AGI's CHRONAB formulation approach. AGI worked closely with
Axcan throughout 2007 to progress omeprazole through Phase II product
optimisation.
Following extensive work during 2007 to optimise its earlier prototype
formulations, AGI announced in March 2008 that it has identified a unique
formulation of omeprazole for once daily administration which, the Company
believes, could specifically address nocturnal acid breakthrough (NAB), a real
unmet medical need for GERD patients. With its partner Axcan, AGI will now focus
on defining the appropriate development approach for the remainder of the
AGI-010 program.
Arbaclofen (AGI-006) in gastroparesis
The results of a 64 patient exploratory Phase II trial of arbaclofen in
functional dyspepsia in early 2007 demonstrated statistically significant
improvements across a range of endpoints, including patient global severity,
bloating, nausea, condition specific Quality-of-Life (QOL) and rescue antacids.
AGI determined that the profile of activity of arbaclofen matches well with the
desired profile of a therapy for the dyspeptic symptoms of gastroparesis.
Diabetic gastroparesis is the most common manifestation of the dyspeptic
symptoms of gastroparesis, however effective and well-tolerated therapy options
are extremely limited for these patients.
During 2007, AGI carried out further work, including a study (reported in a
separate press release this week) on the pharmacokinetic exposure profile of
arbaclofen in healthy human subjects, under both fasted and fed conditions. In
addition, this study compared the fasted exposure of AGI-006 in terms of both R-
and S-isomers of baclofen with the fasted exposure following a single 10mg dose
of Lioresal® (a marketed form of racemic baclofen). The results of this work
support the Company's belief that the development of AGI-006 can follow a
similar clinical/ regulatory pathway to Rezular™.
4-ASA (AGI-022) in ulcerative colitis
AGI is developing a modified release oral formulation of 4-aminosalicylate
sodium (4-ASA) for the induction and maintenance of remission of mild to
moderate ulcerative colitis (UC). UC is a chronic, recurrent, relapsing and
remitting inflammatory disease of the colon and/or rectum. AGI believes that its
4-ASA product may offer certain advantages compared with current 5-ASA based
therapies which are commonly used to treat UC, including a superior tolerability
profile, and a more reliable delivery to the target sites of action in UC
leading to a higher efficiency of therapy with potential dosing advantages.
In March 2006, AGI reported on the outcome of a human pharmacokinetics trial in
16 human subjects designed to characterise the in vivo drug release profile and
pharmacokinetics of three delayed release/controlled release formulations
compared with a reference solution of 4-ASA. The study demonstrated delayed and
controlled in vivo release profiles consistent with targeted colonic delivery.
During 2007, having selected a lead formulation, AGI developed a high unit-dose,
once-daily, modified release tablet of this product and has designed a Phase II
clinical study to further investigate the efficacy of this product in UC
patients. AGI hopes to initiate this study later in 2008.
Mecamylamine (AGI-004) in CID
Based on preliminary proof-of-concept clinical work carried out in patients
suffering from functional diarrhoea, AGI believes that controlled release
mecamylamine has the potential to be an effective agent in diarrhoeal states
characterised by a high frequency of watery stools. Given the mechanism of
action of mecamylamine on the nicotinic acetylcholine receptors (nAChR) and the
pathophysiology of certain diarrhoeal states that are not satisfied by current
therapy, AGI identified chemotherapy-induced diarrhoea (CID) as an area of unmet
clinical need where controlled release mecamylamine may have therapeutic
benefit.
During 2007, AGI consulted with medical experts and designed a clinical protocol
to study mecamylamine in patients with CID. In February 2008, AGI announced that
the first patient has been dosed in this Phase II study.
The current standard of care for CID patients usually involves multiple oral
daily doses of an opioid agent such as loperamide. However, many patients who
receive loperamide continue to experience significant and debilitating diarrhoea
which may require reduction, delay or even withdrawal of chemotherapy. AGI's
mecamylamine product is a controlled release transdermal patch which AGI
believes offers a significant advantage to current CID therapy, including its
convenient, once-daily transdermal form.
New Products
In August 2007, AGI signed an exclusive option agreement to license certain
intellectual property and know-how surrounding a novel prodrug platform for the
prokinetic/antiemetic agent, levosulpiride, from Williamsburg Holdings, a US
private drug development company.
While this particular technology is still undergoing technical feasibility
assessment, AGI believes this demonstrates its continued commitment to broaden
the Company's early stage portfolio.
Outlook
The 2007 results announced today demonstrate the progress AGI is making in
moving forward its pipeline of exciting compounds in underserved markets. In
2008, a key objective will be to deliver further clinical data which will allow
the Company to bring industry partners on board to see the products through to
eventual market launch. In these difficult equity markets, AGI remains firmly
focused on ensuring that both its existing financial resources and management
effort is concentrated on maximising the value of the Company's existing
pipeline and optimising the route to regulatory submission and approval.
Dr Ronan Lambe Dr John Devane
Chairman Chief Executive Officer
Dublin, 3 April, 2008
Financial review
The financial information for the year ended 31 December 2007 presented below
has been prepared according to IFRS, as adopted by the European Union.
Operating performance
Revenue
AGI received an initial milestone payment of $1.5 million from Axcan Pharma Inc.
in 2006 related to a co-development agreement for Chronab omeprazole. This
upfront fee is being recognised on a straight line basis over three years, an
estimate of the likely term of the underlying development programme. For the
year to December 31, 2007 a total of EUR0.4 million was recognised as revenue
(2006: EUR0.2 million).
Research and Development expenses
Total Research and Development Expenses for the year to December 31, 2007 was
EUR13.2 million (2006: EUR3.5 million). The significant increase in R&D costs
reflects the increased number of clinical programmes associated with the
Company's products in development, particularly the initiation of the ARDIS
Phase III programme for Rezular™. Also included in this cost category is a
write down of approximately EUR0.7 million associated with intellectual property
relating to a discontinued development programme.
General and Administrative expenses
General and Administrative expenses in 2007 were EUR2.6 million (2006: EUR1.9
million). This increase is attributable to increased costs associated with the
expansion of the Company's office in the US and the fact that AGI incurred the
first full year of costs associated with being a public company.
Interest Income
The Company earned interest on its cash balances, primarily the proceeds of the
IPO during 2006. This amounted to EUR1.5 million in 2007 (2006: EUR1.0 million).
Taxation
While the Company has had a loss to date, not all of this is available for
offset against the interest income referred to above. Therefore AGI incurred a
tax charge of EUR0.2 million for the year (2006:EUR0.1 million).
Share based compensation expense
During 2006 and 2007, the Company issued share options to certain employees.
While the options were issued at a strike price equal to the market price of the
Company's shares on the date of grant, a calculation is required of the
potential expense to the company of issuing those options which is determined
using the Black-Scholes option-pricing formula. A total amount of EUR1.0 million
was expensed during 2007 (2006: EUR0.8 million) for these share based
compensation charges, divided between Research and Development and General and
Administration expenses.
Operating cash flow
Net cash outflow from operating activities in the period was EUR8.9 million
(2006:EUR2.0 million). At 31 December 2007, AGI had cash and short-term deposits
of EUR30.9 million, (2006 EUR40.0 million).
AGI Therapeutics, plc
Consolidated Income Statement
for the year ended 31 December 2007
2007 2006
EUR'000 EUR'000
Revenue 392 196
______ ______
Operating expenses
Research and development expenses
(share based payment charge of
EUR489,000 (2006: EUR287,000)) (13,159) (3,519)
General and administrative expenses
(share based payment charge of
EUR516,000 (2006: EUR484,000)) (2,640) (1,893)
Other operating income - 65
______ ______
Operating loss (15,407) (5,151)
______ ______
Interest income 1,518 1,064
Interest expense - (98)
______ ______
Net finance income 1,518 966
______ ______
Loss before income tax (13,889) (4,185)
Income tax expense (179) (137)
______ ______
Loss for the year (14,068) (4,322)
Attributable to equity holders (14,068) (4,322)
Basic loss per ordinary share
Basic loss per share (in cent) 20.9 6.9
Diluted loss per share (in cent) 20.9 6.9
Consolidated Balance Sheet
at 31 December 2007
2007 2006
EUR'000 EUR'000
Non-current assets
Property, plant and equipment 48 39
Intangible assets 1,165 1,810
______ ______
Total non-current assets 1,213 1,849
______ ______
Current assets
Other current assets 426 223
Cash and cash equivalents 30,911 40,007
______ ______
Total current assets 31,337 40,230
______ ______
Total assets 32,550 42,079
Shareholder equity
Share capital 674 674
Share premium 51,079 51,079
Other reserve 1,800 795
Retained deficit (26,712) (12,644)
______ ______
Total shareholders' equity 26,841 39,904
______ ______
Current liabilities
Trade and other payables 5,709 2,175
______ ______
Total current liabilities 5,709 2,175
______ ______
Total liabilities 5,709 2,175
______ ______
Total equity and liabilities 32,550 42,079
Consolidated Statement of Cash Flows
for the year ended 31 December 2007
2007 2006
EUR'000 EUR'000
(Loss) for the year (14,068) (4,322)
Adjustments to reconcile loss to net
cash used in operating activities:
Depreciation of property, plant &
equipment 19 10
Amortisation of intangible assets 61 41
Interest income (1,518) (1,064)
Interest expense - 98
Impairment of intangible assets 738 -
Corporation tax 179 137
Share based payment 1,005 771
______ ______
Operating cash outflow before changes
in working capital (13,584) (4,329)
(Increase)/decrease in other current
assets (95) (48)
Increase in trade and other payables 3,433 1,303
______ ______
Cash absorbed by operations (10,246) (3,074)
Interest received 1,410 1,005
Tax paid (78) -
______ ______
Net cash outflow from
operating activities (8,914) (2,069)
______ ______
Cash flows from investing activities
Acquisition of intangible assets (154) (330)
Purchases of property, plant and
equipment (28) (47)
______ ______
Net cash used in investing activities (182) (377)
______ ______
Cash flows from financing activities
Proceeds from issue of share capital - 42,517
Expenses in respect of the issue of
share capital - (2,979)
______ ______
Net cash from financing activities - 39,538
______ ______
Net (decrease)/increase in cash and
cash equivalents (9,096) 37,092
Cash and cash equivalents at the
beginning of the year 40,007 2,915
______ ______
Cash and cash equivalents at the
end of the year 30,911 40,007
Notes to the consolidated preliminary financial information
1 Basis of preparation
This consolidated preliminary financial information is presented in euro rounded
to the nearest thousand, being the functional currency of the company and its
subsidiaries. It has been prepared on the historical cost basis of accounting,
except for share based payments and financial instruments, which are stated at
fair value.
The accounting policies have been applied consistently by all group companies.
This preliminary consolidated financial information does not constitute full
statutory financial statements of the Group within the meaning of Regulation 40
of the European Communities (Companies: Group Accounts) Regulations, 1992, but
is derived from those Financial Statements. Statutory Financial Statements for
the year ended 31 December 2006 have been filed with Companies House. The
auditor's report on those financial statements was unqualified. The Statutory
Financial Statements for the year ended 31 December 2007 will be delivered to
the Companies House following the Company's annual general meeting.
Going concern
The Company's main activity is research and development which to date has been
funded through equity offerings. The Company is loss-making and will continue to
be so into the future as it continues to invest in the clinical development of
its products which will be managed and scheduled in line with available funds,
and possible future funding from out-licensing and/or further equity funding.
On this basis the Directors have a reasonable expectation that AGI will continue
in operational existence for the foreseeable future and have adopted the going
concern basis in preparing these financial statements.
2 Statement of compliance
This preliminary consolidated financial information has been prepared in
accordance with the International Financial Reporting Standards (IFRSs) as
issued by the International Accounting Standards Board (IASB) as adopted by the
European Union (herein 'EU IFRS').
This information is provided by RNS
The company news service from the London Stock Exchange