SOURCE: Antisoma plc

September 12, 2007 02:09 ET

Antisoma's Preliminary Results for the Year Ended 30 June 2007

LONDON--(Marketwire - September 12, 2007) -



12 September 2007, London, UK: Cancer drug developer Antisoma plc (LSE: ASM, USOTC: ATSMY) today announces its preliminary results for the year ended 30 June 2007. These results have been prepared under International Financial Reporting Standards ('IFRS') as adopted for use by the European Union.

Highlights of 2006/2007

Major licensing deal with Novartis for ASA404 (formerly AS1404)

  * Total potential milestones of USD $890 million
  * Near-term payments of USD $100 million ($75 million received to
    date)
  * Option to co-commercialise product in US
  * Phase III lung cancer trial expected to begin enrolment in early
    2008

Positive clinical trial data for ASA404

  * Five-month survival gain in randomised lung cancer trial
  * Supportive data from second lung cancer trial
  * Positive PSA response findings in prostate cancer

Positive data and progress on AS1411

  * Cases of tumour shrinkage in renal cancer patients
  * Lack of serious side-effects in phase I trial
  * Randomised phase II trial started in acute myeloid leukaemia
    (August 2007)


Financial summary

  * Upfront payment of £38.2 million (USD $75 million) received from
    Novartis
  * £26.3 million raised in oversubscribed fundraising
  * Cash and liquid resources of £61.4 million at 30 June 2007 (2006:
    £14.9 million)
  * Full-year net loss of £9.8 million (2006: £16.9 million)

Commenting on the results, Glyn Edwards, CEO of Antisoma, said: "This has been a breakthrough year, with positive phase II data on ASA404 and a major licensing deal with Novartis. Their investment in ASA404 has the potential to generate significant returns for Antisoma's shareholders. We are now applying the same rigorous approach we used in developing ASA404 to our promising aptamer drug AS1411, giving us another opportunity to create substantial value. With phase II data anticipated for AS1411 and plans to add further promising assets to our pipeline, we look forward to another exciting year."

Enquiries:
Antisoma plc                        +44 (0)7909 915 068
Glyn Edwards, Chief Executive Officer
Raymond Spencer, Chief Financial Officer
Daniel Elger, Director of Communications

Buchanan Communications (UK enquiries)   +44 (0)20 7466
5000
Mark Court/Lisa Baderoon/Rebecca Skye Dietrich

The Trout Group (US enquiries)   +1 646 378 2900
Brian Korb/Seth Lewis

Except for the historical information presented, certain matters discussed in this preliminary announcement are forward looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from results, performance or achievements expressed or implied by this preliminary announcement. These risks and uncertainties may be associated with product discovery and development, including statements regarding the Company's clinical development programmes, the expected timing of clinical trials and regulatory filings. Such statements are based on management's current expectations, but actual results may differ materially.

Joint Chief Executive and Chairman's Statement

This was a breakthrough year in which we reported a host of positive data from our clinical trials. Most notable was the five-month survival benefit with ASA404 (formerly AS1404) in lung cancer. In April we licensed ASA404 and a follow-on compound to Novartis in a deal worth up to $890 million in potential milestone payments. Our share price increased nearly three-fold during fiscal 2007 and we received the 2007 Techmark MediScience award for the best performing life sciences stock on the main market of the London Stock Exchange.

Going forward, the true value of ASA404 lies in its potential to become a widely used cancer drug. The Novartis deal provides a clear route to achieve that potential and realise the benefits for Antisoma's shareholders. It also puts us in a stronger position to unlock the value in other exciting drug candidates such as AS1411 and to continue to build our business with new opportunities.

ASA404 partnered and progressing to phase III

We announced our worldwide deal with Novartis in April 2007. They licensed worldwide rights to ASA404 and a follow-on vascular disrupting agent. We gained near-term payments of USD $100 million (of which $75 million has been received). We could receive up to $355 million in further development milestones and $325 million in sales-related milestones for ASA404 and up to $110 million for the follow-on compound. In addition, we will receive undisclosed royalties on any future sales of these drugs. We have an option under the deal to sell ASA404 alongside Novartis in the United States. If the product succeeds and we exercise this option, Novartis will support us in setting up a US sales infrastructure. This could also be used to sell other Antisoma products. We see this as an important strategic benefit as it provides a potential low-cost and low-risk route into commercialising our own drugs.

The principal driver for the ASA404 deal was the mature data from our randomised phase II study of the drug in non-small cell lung cancer. Headline findings were announced in September 2006 and detailed at a medical conference in November. The addition of ASA404 to chemotherapy in this trial extended median survival by over 5 months (14.0 months versus 8.8 months with chemotherapy alone). This is one of the largest survival benefits ever observed in a trial in advanced lung cancer. Other measures of the drug's effect also demonstrated an additional benefit with ASA404, and the combination of ASA404 and chemotherapy was generally well tolerated. More recently, we have reported positive data from a second phase II trial of ASA404 in lung cancer. This trial was a single-arm study in which patients received a higher dose of ASA404 combined with chemotherapy. Median survival was 14.9 months, corroborating the extended survival seen when ASA404 was added to chemotherapy in the randomised trial.

We have conducted phase II trials of ASA404 in two other cancers. A study in recurrent ovarian cancer produced mixed data when one year's follow-up was completed in July 2007. As a result, this indication will not be a priority for further development. In June 2007 we reported the latest data from a randomised study of ASA404 in hormone-refractory prostate cancer at the American Society of Clinical Oncology ('ASCO') meeting. Addition of ASA404 to chemotherapy improved various measures based on the prostate cancer biomarker PSA (Prostate Specific Antigen). Further data from the prostate cancer trial, including one-year survival findings, are expected by the end of October.

We expect Novartis to begin enrolment of patients into a phase III trial of ASA404 in lung cancer early in 2008. Lung cancer is among the most prevalent cancers. Given this and the potential for application in a number of other cancers, we see ASA404 as a potential blockbuster.

AS1411 phase II programme underway

In August 2007 we announced that we had started a phase II trial of our aptamer drug AS1411 in the blood cancer AML (acute myeloid leukaemia). This trial builds on data reported during the year from a phase I trial in solid tumours as well as AML-specific data presented at recent scientific meetings. Cancer cells from patients with AML are highly sensitive to AS1411 and the drug has been shown to act synergistically in vitro with an established current treatment for AML, cytarabine. The phase II trial tests AS1411 in combination with cytarabine. It is a randomised trial designed to compare this combination with cytarabine alone, and will provide the first systematic evaluation of the efficacy of AS1411. Initial results will be available during 2008.

Final data from the phase I study of AS1411 in solid tumours were presented in October 2006. These showed that the drug was remarkably well tolerated, with no serious adverse events related to treatment among the thirty trial patients. The trial included 12 patients with advanced renal cancer, many of whom had received several previous treatments. In this group there were two cases of profound tumour shrinkage, while a number of other patients showed disease stabilisation. We considered these results very encouraging given the nature of the patients included in the trial. Renal cancer will therefore be the second indication to progress to phase II, and we expect to start this trial in early 2008. As with AML, we plan to carry out a randomised trial to gain a clear sense of the therapeutic potential of AS1411 in renal cancer.

Like ASA404, AS1411 could have potential across a variety of cancers, in this case including both blood cancers and solid tumours.

AS1402 to be tested in full phase II trial

Our phase II plans for our antibody drug AS1402 have evolved. We had originally planned a phase IIa study in which markers would be used to make an initial assessment of the drug's effect. This would then have led to a larger phase II study. Working with external advisors, we have now drawn up plans for a more comprehensive assessment of efficacy through a full phase II study. This has meant some delay to the programme, but will mean that we gain more valuable data from the next trial. We expect this to start during 2008. It will be a randomised controlled study in patients with metastatic breast cancer.

AS1409 to enter clinic

AS1409 combines the anti-cancer cytokine IL-12 with a tumour targeting antibody in a single drug molecule. In August 2006 we announced plans to start testing AS1409 in renal cancer and melanoma patients during 2007. We expect to start a phase I trial in these cancers by December.

Under the alliance agreement we signed with Roche in 2002, they had an option to license any product entering the clinic at Antisoma until November 2007. Antisoma's business has evolved since the Roche deal. We are now more focused on taking drugs through trials ourselves. We have therefore agreed with Roche that they will not use this option to license AS1409. At the same time, we have agreed on an early termination of the option agreement so that it will not apply if we acquire any new clinical products before November. We would like to take this opportunity to thank Roche for being an excellent and supportive partner over the five years of our agreement.

We have a number of other drug candidates under preclinical evaluation. In prioritising these, we have decided not to pursue further development of our targeted RNase drug, AS1406. We are continuing work on our programme of telomere targeting agents. We intend to bring in additional drug candidates to boost our pipeline.

Financial position strengthened by Novartis deal

We now have more cash resources at our disposal than at any time in our history. This reflects the successful completion of the ASA404 deal, which triggered an upfront payment of £38.2 million (USD $75 million), and the raising of £26.3 million in a placing in December 2006. As a result we finished the financial year with £61.4 million in cash and short-term investments, compared with £14.9 million last year.

Total revenues for the year ended 30 June 2007 were £8.0 million, up from £1.6 million last year. This reflects the advent of revenues from Novartis, £6.6 million of which were recognised in the year ended 30 June 2007. Our operating losses decreased from £19.8 million last year to £13.9 million this year. Total operating expenses have increased by £0.4 million to £21.8 million, with research and development expenditure falling by £2.0 million and administrative expenses increasing by £2.4 million, inclusive of £0.9 million of foreign exchange losses. Net losses for the year were £9.8 million, compared with £16.9 million last year.

An important consequence of the ASA404 deal is that we will incur no further costs for the development of the drug. We are, however, now undertaking a significant programme of trials on other products, most notably AS1411, which we expect to be in at least two phase II studies by the end of our 2007-2008 financial year. With these studies and those planned for AS1409 and AS1402, we expect a measured rise in our spending on product development over the coming year.

Major developments expected on ASA404 and AS1411

Further development of ASA404 is now in the hands of Novartis. We expect them to start enrolling patients into a phase III trial in lung cancer in early 2008 and to explore the drug's potential in other solid tumours. Antisoma's resources can now be focused on other promising drugs, especially AS1411. With one phase II trial in acute myeloid leukaemia underway and a second in renal cancer starting soon, we look forward to a plethora of data over the next eighteen months. We also continue to seek further promising assets for our pipeline, and expect to bring in new drugs for development when suitable opportunities arise.


Glyn Edwards                                     Barry Price
Chief Executive Officer                     Chairman


Consolidated income statement
for the year ended 30 June 2007



                                       2007     2006
                                       £'000    £'000

Revenue                                7,956    1,630

Research and development expenditure   (14,511) (16,569)
Administrative expenses                (7,324)  (4,854)
Total operating expenses               (21,835) (21,423)

Operating loss                         (13,879) (19,793)

Interest receivable                    1,176    923

Loss before taxation                   (12,703) (18,870)

Taxation - UK                          2,953    1,998

Loss for the year                      (9,750)  (16,872)

Loss per ordinary share
Basic and diluted (restated)           2.36p    4.67p




Consolidated statement of total recognised income and expense
for the year ended 30 June 2007



                                                 2007     2006
                                                 £'000    £'000

Loss for the year                                (9,750)  (16,872)

Exchange translation difference on consolidation (1,638)  (110)

Total recognised expense for the year            (11,388) (16,982)




Consolidated balance sheet
as at 30 June 2007



                                        2007     2006
                                        £'000    £'000

ASSETS
Non-current assets
Goodwill                                5,523    6,133
Intangible assets                       19,065   19,008
Property, plant and equipment           485      618
Deferred tax assets                     750      -
                                        25,823   25,759
Current assets
Trade and other receivables             2,460    928
Current tax receivable                  2,011    1,900
Short-term deposits                     10,000   5,506
Cash and cash equivalents               51,414   9,412
                                        65,885   17,746
LIABILITIES
Current liabilities
Trade and other payables                (7,492)  (4,657)
Deferred income                         (31,905) (313)
Provisions                              (341)    (16)
Net current assets                      26,147   12,760
Total assets less current liabilities   51,970   38,519

Non-current liabilities
Deferred tax liabilities                (5,523)  (6,133)
Other non-current liabilities           -        (573)
Provisions                              (168)    (24)
                                        (5,691)  (6,730)

Net assets                              46,279   31,789

Shareholders' equity
Share capital                           8,795    8,040
Share premium                           100,451  76,221
Other reserves                          18,571   20,209
Profit and loss account                 (81,538) (72,681)
Total shareholders' equity              46,279   31,789



Consolidated cash flow statement
for the year ended 30 June 2007



                                                    2007     2006
                                                    £'000    £'000

Loss for the year                                   (9,750)  (16,872)
Add back:
Interest                                            (1,176)  (923)
Tax                                                 (2,953)  (1,998)
Adjustments for:
Impairment of acquired intellectual property rights 144      -
Depreciation of property plant and equipment        321      431
Loss on disposal of property plant and equipment    -        2
Share-based payments                                893      675
Operating cash flows before movement in working     (12,521) (18,685)
capital

(Increase)/decrease in debtors                      (1,500)  157
Increase/(decrease) in creditors                    34,323   (1,118)
Cash generated from/(used in) operations            20,302   (19,646)

Interest received                                   1,144    937
Research and development tax credit received        2,092    1,698
Net cash generated from/(used in) operating         23,538   (17,011)
activities

Cash flows from investing activities
Purchase of property, plant and equipment           (188)    (70)
Purchase of intangible assets                       (1,839)  -
(Purchase)/sale of short-term deposits              (4,494)  1,994
Net cash (used in)/generated from investing         (6,521)  1,924
activities

Cash flows from financing activities
Proceeds from issue of ordinary share capital       26,503   7,192
Expenses paid in connection with issue of ordinary  (1,518)  (237)
share capital
Net cash generated from financing activities        24,985   6,955

Net increase/(decrease) in cash and cash            42,002   (8,132)
equivalents
Cash and cash equivalents at beginning of year      9,412    17,544

Cash and cash equivalents at end of year            51,414   9,412



Notes to the financial statements for the year ended 30 June 2007

1. Basis of reporting

The preliminary announcement for the year ended 30 June 2007 has been prepared by Antisoma plc in accordance with International Financial Reporting Standards ('IFRS') and International Financial Reporting Interpretation Committee interpretations ('IFRIC') as adopted for use by the European Union and endorsed by June 30, 2007 and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. For Antisoma there are no differences between IFRSs as adopted for use in the European Union and full IFRS as published by the International Accounting Standards Board ('IASB').

The Group established IFRS accounting policies in 2006 and applied these policies and applicable IFRS 1 - 'First-time Adoption of International Financial Reporting Standards' transition provisions to determine the opening balance sheet at its date of transition, being July 1, 2004. Those exemptions provided by IFRS 1 which have continuing relevance are as follows:


  * Business combinations: a first-time adopter may elect not to
    apply IFRS 3 - 'Business combinations' retrospectively to
    business combinations that occurred before the date of transition
    to IFRS. The Group elected to take advantage of this exemption,
    not applying IFRS 3 to the business combinations that occurred
    before July 1, 2004, the Group's date of transition.
  * Share-based payments: the Group has applied the requirements of
    IFRS 2 - 'Share-based payments' in accordance with the
    transitional provisions. IFRS 2 has been applied to all grants of
    equity instruments after November 7, 2002 that had not vested at
    January 1, 2005.

2. Segmental information

Under IAS 14 - 'Segmental information' the Group has only one business segment, being drug development. In addition, as the Group's activities are virtually all UK based, there is only one geographical segment. The Group's geographical segments are determined by location of operations.

All revenue is derived from customers whose operations are located in Europe.

3. Shareholders' funds and statement of changes in shareholders' equity


                                                     Profit
                              Other         Other    and
              Share   Share   reserve:      reserve: loss
              capital premium Retranslation merger   account  Total
              £'000   £'000   £'000         £'000    £'000    £'000

At 1 July
2005          7,659   69,647  724           19,595   (56,484) 41,141
Loss for
the year      -       -       -             -        (16,872) (16,872)
New share
capital
issued        381     6,811   -             -        -        7,192
Expenses on
share issue
taken to
share premium -       (237)   -             -        -        (237)
Share
options:
value of
employee
services      -       -       -             -        675      675
Foreign
exchange
adjustments
on
consolidation -       -       (110)         -        -        (110)
At 30 June
2006          8,040   76,221  614           19,595   (72,681) 31,789

At 1 July
2006          8,040   76,221  614           19,595   (72,681) 31,789
Loss for
the year      -       -       -             -        (9,750)  (9,750)
New share
capital
issued        755     25,748  -             -        -        26,503
Expenses on
share issue
taken to
share premium -       (1,518) -             -        -        (1,518)
Share
options:
value of
employee
services      -       -       -             -        893      893
Foreign
exchange
adjustments
on
consolidation -       -       (1,638)       -        -        (1,638)
At 30 June
2007          8,795   100,451 (1,024)       19,595   (81,538) 46,279

The financial information contained in this preliminary announcement does not constitute the Group's statutory accounts for the years ended 30 June 2007 or 2006 within the meaning of section 240 of the Companies Act 1985. The financial information has been extracted from the financial statements for the year ended 30 June 2007, which have been approved by the Board of Directors and on which the auditors have reported without qualification. The financial statements will be delivered to the Registrar of Companies after the Annual General Meeting The financial statements for the year ended 30 June 2006, upon which the auditors reported without qualification, have been delivered to the Registrar of Companies.

ENDS

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