SOURCE: Antisoma plc

September 18, 2008 02:22 ET

Antisoma's preliminary results for the year ended 30 June 2008

LONDON--(Marketwire - September 18, 2008) -


London, UK, and Cambridge, MA: 18 September 2008 Cancer drug developer Antisoma plc (LSE: ASM; USOTC: ATSMY) today announced its preliminary results for the year ended 30 June 2008. These results have been prepared under International Financial Reporting Standards ('IFRS') as adopted for use by the European Union.

Following the acquisition of Xanthus Pharmaceuticals, Inc. and advances in its existing pipeline, Antisoma now has seven oncology products in clinical development, including two in phase III and one in registration with the FDA.

Highlights of 2007/2008

ASA404 enters substantial phase III programme in lung cancer

  * First pivotal phase III trial in front-line lung cancer initiated
  * Plans announced for second pivotal trial in second-line lung
    cancer

Acquisition of Xanthus expands and advances pipeline

  * Xanthus Pharmaceuticals, Inc. acquired for GBP 23.7 million
  * Adds key phase III blood cancer product AS1413 (formerly
    Xanafide)
  * Adds US rights to niche oncology product oral fludarabine, in
    registration with FDA
  * Adds promising preclinical programme in autoimmune diseases
  * Expands and enhances US operation

New data and progress across pipeline

  * Supportive phase II data on ASA404 in lung and prostate cancers
  * Positive long-term data from AS1413 phase II trial in secondary
    AML
  * AS1411 enters phase II trials in renal cancer and AML
  * Encouraging preliminary data from AS1411 phase II trial in AML
  * AS1409 enters phase I trial

Financial summary

  * Cash and liquid resources of GBP 66.9 million at 30 June 2008
    (2007: GBP 61.4 million)
  * GBP 20.9 million (gross) raised in oversubscribed fundraising
    linked to acquisition of Xanthus
  * Milestone payment of GBP 12.6 million (USD 25 million) received
    from Novartis
  * Full-year post-tax profit of GBP 12.3 million (2007: GBP 9.8
    million loss)

Commenting on the results, Glyn Edwards, CEO of Antisoma, said: "This has been a remarkable year. The progress of ASA404 in lung cancer and the acquisition of Xanthus have given our pipeline a new scale and maturity, with two drugs in phase III and one in registration with the FDA. We are now well placed to make the transition from a drug development company into a company that both develops and commercialises novel cancer drugs."

A webcast and conference call will be held today at 8:30 am BST. A further conference call will be held today at 2:00 pm BST / 9:00 am EST. The webcast can be accessed via Antisoma's website at www.antisoma.com and the calls by dialling +44 (0)20 8609 1435 (UK toll-free 0808 109 1498; US toll-free 1866 793 4279) and using the participant PIN code 965983#. A recording of the webcast will also be available afterwards on the Antisoma website.

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                      +44 (0)20 7466 5000
(All media enquiries)
Mark Court, Lisa Baderoon, Rebecca Skye Dietrich
The Trout Group                              +1 646 378 2923
(US investor enquiries)
Brian Korb

Except for the historical information presented, certain matters discussed in this statement 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 such statements. These risks and uncertainties may be associated with product discovery and development, including statements regarding the Group'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

Overview

This has been a year of notable achievements for Antisoma. Novartis has advanced our potential blockbuster drug ASA404 into a substantial phase III programme in lung cancer. Our acquisition of Xanthus Pharmaceuticals, Inc. in June was a transforming deal, leaving us with a considerably more mature and diverse pipeline. This now includes two phase III drugs and one in registration among seven cancer drugs in the clinic. We are beginning the transition from a company that develops cancer drugs into a company that both develops and commercialises its own products.

ASA404 enters substantial phase III programme in lung cancer

Our Tumour-Vascular Disrupting Agent ASA404 has made excellent progress over the past year. In April, our licensing partner Novartis started 'ATTRACT-1', a 1200-patient, pivotal phase III trial of ASA404 as a first-line treatment for non-small cell lung cancer. This trial is designed to support applications for marketing authorisations; these applications are expected to take place in 2011 if the results of the trial are positive.

More recently, we announced that Novartis also plans to conduct a second phase III pivotal trial, called 'ATTRACT-2', in patients receiving second-line treatment for non-small cell lung cancer. This 900-patient trial is expected to start before the end of 2008 and is designed to support marketing applications in this additional market segment.

The phase III trial programme builds on two positive phase II trials in lung cancer. These suggested that a range of outcomes including survival were improved when ASA404 was added to standard chemotherapy treatment. Our most recent analysis of data from these trials, presented at the American Society of Clinical Oncology (ASCO) meeting in June, showed that patients with both major types of lung cancer (squamous and non-squamous) had improved outcomes and acceptable safety with ASA404.

Lung cancer is an area of high unmet medical need and is amongst the most prevalent cancers worldwide. We are very pleased with the breadth of Novartis' programme in lung cancer, which as well as the two pivotal studies includes supporting studies such as a phase I trial in Japan.

ASA404 also has potential against a variety of other solid tumours. We have announced encouraging findings from a randomised phase II trial in prostate cancer. Novartis is now considering what the next steps should be in prostate cancer as part of a wider review of additional indications in which ASA404 could be developed.

Acquisition of Xanthus broadens and advances pipeline

In June we completed the acquisition of Cambridge, Massachusetts-based Xanthus Pharmaceuticals, Inc. in an all-share deal valued at GBP 23.7 million. This added three major assets to our pipeline: AS1413 (formerly Xanafide), a drug in phase III development for secondary acute myeloid leukaemia (secondary AML); oral fludarabine, a niche product in registration with the FDA (US Food and Drug Administration) for the treatment of chronic lymphocytic leukaemia (CLL); and a promising preclinical programme of Flt-3 inhibitors for autoimmune conditions. The acquisition has also greatly enhanced our US operations, with our Princeton office now absorbed into the larger Xanthus facility in Cambridge.

AS1413 has first-entrant potential in secondary AML

AS1413 (formerly Xanafide) is the most important asset added to our pipeline by the acquisition of Xanthus. It is a novel chemotherapy drug with the attractive property of evading the multi-drug resistance mechanisms that often limit the effectiveness of chemotherapy treatments.

AS1413 is in a pivotal phase III trial in secondary AML, which is being conducted under a Special Protocol Assessment (SPA) from the FDA. The drug could be the first to gain a specific marketing authorisation for this under-served indication, as well as having potential for wider application in other blood cancer settings.

Data from an 88-patient phase II study of AS1413 in secondary AML have been presented at major meetings. These show a complete remission rate of around 40% with an AS1413-based regimen in secondary AML, compared with rates around 25% seen with current standard care in two previous studies. The latest data from the phase II trial, presented at the ASCO and European Haematology Association (EHA) meetings in the summer, provide evidence that a good number of the responses seen in secondary AML patients are of sustained duration relative to the poor prognostic expectations in this disease.

Since the acquisition of Xanthus, we have undertaken a review of the size and statistics of the phase III trial, and are currently in discussion with the FDA about these aspects. We expect that the trial will ultimately include around 450 patients, and that it will report in a broadly similar time frame to the phase III trials on ASA404.

Should the phase III trial of AS1413 prove successful, we plan to sell the drug ourselves in the US while seeking partners for marketing in other countries. This plan fits well with our option to co-sell ASA404 with Novartis in the US. Sales infrastructure provided under the Novartis deal could be leveraged to sell AS1413.

Oral fludarabine FDA decision expected

Another important asset from the Xanthus portfolio is oral fludarabine. This is a tablet formulation of a widely used chemotherapy drug for CLL, which is currently only available in the US as an intravenous formulation. A marketing application for oral fludarabine is being considered by the FDA. Based on the latest communications we have had with the FDA, we expect a decision on approval any time between now and June 2009.

We have US rights to oral fludarabine. Outside the US, oral fludarabine is marketed by Bayer-Schering Pharma AG. In European countries, the oral formulation has assumed a substantial share of the fludarabine market since its launch, and we believe that the drug represents an attractive niche sales opportunity in the US.

We have decided that the best way to realise the value of oral fludarabine is through a commercialisation deal with a partner that has established marketing infrastructure in the US. We believe that FDA approval of the product would put us in a strong position to conclude such a deal.

AS1411 now in two phase II trials

In August 2007, we announced the start of phase II trials of our aptamer drug, AS1411, with the initiation of a 70-patient randomised trial in acute myeloid leukaemia (AML). This trial compares patients receiving the standard current therapy, cytarabine, with patients receiving cytarabine plus AS1411. Two different doses of AS1411 are being tested, and preliminary findings based on comparison of the lower-dose AS1411 group with the control group are encouraging. We look forward to seeing additional data from this trial during the coming year.

In September 2008, we initiated a second phase II trial. This is a 30-patient single arm study evaluating AS1411 as monotherapy in renal (kidney) cancer. It seeks to build on the promising findings seen in our phase I trial in patients with this disease.

Earlier-stage pipeline provides future growth potential

Behind the programmes described above, we have a number of earlier-stage assets. These are an important element of our business, since they have the potential to become future late-stage products that could add further value for shareholders.

Our antibody drug AS1402 will shortly begin a randomised phase II study in breast cancer; our antibody-cytokine fusion product AS1409 has entered a phase I study in melanoma and renal cancer; and P2045 is under review following initial clinical investigation in lung cancer. We also have several preclinical programmes in oncology, including the AMPK programme licensed from Betagenon in April, and one very exciting non-oncology programme evaluating the targeting of Flt-3 in autoimmune diseases. Though the Flt-3 programme falls outside our focus on cancer, it has shown such potential that we have decided to continue our investment in its development with the aim of producing a strong package of data to support a partnering deal.

Financial position bolstered by partner revenues and investor support

We finished the year with cash and short-term investments of GBP 66.9 million, up from GBP 61.4 million last year. This increase reflects the receipt of a milestone payment of GBP 12.6 million (USD 25 million) from Novartis when they initiated the first phase III trial of ASA404 and our raising of GBP 20.0 million net of costs from shareholders at the time we acquired Xanthus, offset by our operating expenditure. The support for our fundraising from public market investors and the owners of Xanthus was important in ensuring that we continued to have a strong balance sheet following the acquisition.

Total revenues for the year ended 2008 were GBP 39.5 million, compared with GBP 8.0 million last year. The difference mainly results from the increase in revenues relating to recognition of the upfront and milestone payments received from Novartis.

Total operating expenses have increased from GBP 21.8 million last year to GBP 28.7 million this year, reflecting an increase in research and development costs from GBP 14.5 million to GBP 18.4 million and an increase in general and administrative costs from GBP 7.3 million to GBP 10.3 million.

The increase in revenues from Novartis has led to our recording a full-year profit of GBP 12.3 million, compared with a loss of GBP 9.8 million last year.

Board developments

In line with our move towards becoming a company that commercialises as well as develops cancer drugs, we have appointed Michael Lewis as a Non-Executive Director. Mr Lewis's most recent role was as President for Europe, Middle East and Africa and also Head of Global Marketing for the medical device company Gambro. He has also held senior executive and commercial positions in other medical technology businesses. During the year, Ann Hacker resigned as a Director, and we would like to thank her for her substantial contribution to the Board and in particular her dedicated work as Chairman of the Remuneration Committee.

Outlook

With seven drugs in the clinic, we look forward to a number of major product milestones in the year ahead. Novartis will shortly be initiating a second pivotal phase III study of ASA404, complementing their ongoing trial in first-line patients with a trial in the second-line setting. With the phase III study of AS1413 in secondary AML also gathering momentum, there will soon be three pivotal trials of Antisoma products in progress. While ASA404 and AS1413 are the key value drivers for the Company over the medium term, we have a very promising shorter-term niche opportunity in oral fludarabine, which is currently being considered for approval by the FDA. If the drug gains approval, this will provide a very good basis for a commercialisation deal. There are also important developments expected in the earlier-stage pipeline, particularly the emergence of further phase II data on AS1411, which could provide clinical proof of concept for this highly novel therapeutic. The Board believes that the increased scale and diversity of our pipeline following the acquisition of Xanthus, together with the funds that we have to support ongoing development work, put our business in a very strong position, and so we look forward to the future with confidence.

Glyn Edwards
Chief Executive Officer

Barry Price
Chairman
Unaudited consolidated income statement
for the year ended 30 June 2008


                                               2008     2007
                                     Notes    £'000    £'000

Revenue                                2     39,527    7,956

Research and development expenditure       (18,432) (14,511)
Administrative expenses                    (10,297)  (7,324)
Total operating expenses                   (28,729) (21,835)

Operating profit/(loss)                      10,798 (13,879)

Finance income                                2,578    1,176

Profit/(loss) before taxation                13,376 (12,703)

Taxation                                    (1,047)    2,953

Profit/(loss) for the year                   12,329  (9,750)

Earnings/(loss) per ordinary share
Basic                                          2.7p   (2.4)p
Diluted                                        2.6p   (2.4)p

All amounts arise from continuing operations.

Unaudited consolidated statement of recognised income and expense
 for the year ended 30 June 2008


                                                   2008     2007
                                                  £'000    £'000

Profit/(loss) for the year                       12,329  (9,750)

Exchange translation difference on consolidation  (235)  (1,638)

Total recognised gain/(expense) for the year     12,094 (11,388)


Unaudited consolidated balance sheet
as at 30 June 2008

                                                 2008     2007
                                       Notes    £'000    £'000
ASSETS
Non-current assets
Goodwill                                        5,559    5,523
Intangible assets                              47,149   19,065
Property, plant and equipment                   2,358      485
Deferred tax asset                                  -      750
                                               55,066   25,823
Current assets
Trade and other receivables                     2,113    2,460
Current tax receivable                              -    2,011
Short-term deposits                            33,000   10,000
Cash and cash equivalents                      33,861   51,414
                                               68,974   65,885
LIABILITIES
Current liabilities
Trade and other payables                      (9,866)  (7,492)
Current tax payable                             (297)        -
Deferred income                               (5,401) (31,905)
Provisions                                      (629)    (341)

Net current assets                             52,781   26,147
Total assets less current liabilities         107,847   51,970
Non-current liabilities
Deferred tax liabilities                      (5,559)  (5,523)
Provisions                                       (81)    (168)
                                              (5,640)  (5,691)

Net assets                                    102,207   46,279

Shareholders' equity                    4
Share capital                                  10,467    8,795
Share premium                                 119,629  100,451
Shares to be issued                             2,273        -
Other reserves                                 37,996   18,571
Profit and loss account                      (68,158) (81,538)
Total shareholders' equity                    102,207   46,279


Unaudited consolidated cash flow statement
for the year ended 30 June 2008

                                                        2008     2007
                                                       £'000    £'000

Cash flows from operating activities
Profit/(loss) for the year                            12,329  (9,750)
Adjustments for:
Interest receivable                                  (2,578)  (1,176)
Tax charge/(credit)                                    1,047  (2,953)
Impairment of acquired intellectual property rights        -      144
Depreciation of property plant and equipment             213      321
Share-based payments                                   1,051      893
Operating cash flows before movement in working
capital                                               12,062 (12,521)
Decrease/(increase) in trade and other
receivables                                              961  (1,500)
(Decrease)/increase in trade and other payables     (28,506)   34,323
Cash generated from/(used in) operations            (15,483)   20,302
Interest received                                      2,753    1,144
Research and development tax credit received           2,011    2,092
Net cash (used in)/generated from operating
activities                                          (10,719)   23,538

Cash flows from investing activities
Purchase of property, plant and equipment            (1,969)    (188)
Purchase of intangible assets                        (1,605)  (1,839)
(Purchase)/sale of short-term deposits              (23,000)  (4,494)
Net cash outflow in respect of acquisitions            (237)        -
Net cash (used in)/generated from investing
activities                                          (26,811)  (6,521)

Cash flows from financing activities
Proceeds from issue of ordinary share capital         20,966   26,503
Expenses paid in connection with issue of ordinary
share capital                                          (980)  (1,518)
Net cash generated from financing activities          19,986   24,985

Net (decrease)/increase in cash and cash
equivalents                                         (17,544)   42,002
Exchange gains/(losses) on cash and bank overdrafts      (9)        -
Cash and cash equivalents at beginning of year        51,414    9,412
Cash and cash equivalents at end of year              33,861   51,414

Notes to the financial information for the year ended 30 June 2008

1. Basis of preparation

The financial information in this preliminary announcement has not been audited and does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The information has been extracted from the consolidated financial statements for the year ended 30 June 2008. The financial statements will be delivered to the Registrar of Companies after the Annual General Meeting. The consolidated financial statements for the year ended 30 June 2007 have been delivered to the Registrar of Companies and were given an unqualified audit opinion by the Company's auditors.

The financial information in this statement has been prepared in accordance with International Financial Reporting Standards ('IFRS') as endorsed by the European Union, International Financial Reporting Interpretation Committee ('IFRIC') interpretations and those parts of the Companies Act 1985 applicable to companies reporting under IFRS. There have been no new standards during the year that have significantly impacted the results of the Group.

2. Segmental information

Primary reporting segment - business segment

The Directors are of the opinion that under IAS 14 - 'Segmental information' the Group has only one business segment, being drug development.

Secondary reporting segment - geographical segment

The Group's geographical segments are determined by location of operations.

All revenue has been derived from external customers located in Europe. The principal sources of revenue for the Group in the two years ended 30 June 2008 were:

                                                           2008  2007
                                                          £'000 £'000
Recognition of upfront and milestone payments on a time
apportioned basis:
           Novartis                                      38,806 6,592
           Other                                            265   647
R&D services and materials
recharged:
           Novartis                                         456   717
Total revenues                                           39,527 7,956



The following table shows the carrying value of segment assets by
location of assets:

                                    2008   2007
                                   £'000  £'000
Total assets/(liabilities)
UK                                80,430 46,500
US                                21,777  (221)
Total                            102,207 46,279


Total assets are allocated based on where the assets are located.

The following table shows the costs in the period to acquire
property, plant, equipment and intangibles by location of assets:


                            2008  2007
                           £'000 £'000
Capital expenditure
UK                         3,574 2,027
US                        26,900     -
Total                     30,474 2,027

Capital expenditure is allocated based on where the assets are located.

3. Acquisitions

On 11 June 2008, the Group acquired the entire share capital of Xanthus Pharmaceuticals, Inc. by the issue of 86,416,353 shares of 1p each with a fair market value of 23.75p based on the closing share price on 10 June 2008, and 9,568,951 deferred consideration shares of 1p each with a fair market value of 23.75p based on the closing share price on 10 June 2008. The deferred consideration shares may be issued 18 months after the closing date of the transaction, subject to deductions based on claims for indemnity by Antisoma plc or as otherwise allowed under the terms of the acquisition agreement.

Details of the book and fair values of the assets and liabilities of Xanthus Pharmaceuticals, Inc., as at 11 June 2008 are set out below:

                                         Book             Provisional
                                        value Adjustments  fair value
                                        £'000       £'000       £'000
Fixed assets
  - Intangible assets                       -      26,781      26,781
  - Property, plant and equipment         142        (23)         119
Trade and other receivables               791           -         791
Cash and cash equivalents                 629           -         629
Trade and other payables              (4,657)           -     (4,657)

Net assets acquired                   (3,095)      26,758      23,663

Shares issued                                                  20,524
Shares to be issued                                             2,273
Expenses of acquisition                                           866
Total consideration                                            23,663

Analysis of the net cash outflow in
respect of
acquisitions
                                                                Total
                                                                £'000
Expenses on acquisition                                         (866)
Cash acquired                                                     629
Net cash outflow in respect of
acquisitions                                                    (237)

Xanthus Pharmaceuticals, Inc. is involved in the development and commercialisation of potential therapeutic products for the treatment of cancer.

The fair value adjustments contain provisional amounts, which are subject to finalisation within twelve months of the date of the acquisition.

The company contributed £nil to revenue and a loss of £767,000 for the period. If the acquisition had occurred at the start of the period, the additional revenue and loss for the year would have been £nil and £14,081,000, respectively.

4. Statement of changes in equity

Group

                              Shares         Other    Other   Profit
                Share   Share     to      reserve: reserve:      and Total
                                  be
              capital premium issued retranslation   merger     loss
                £'000   £'000  £'000         £'000    £'000    £'000 £'000

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


At 1 July
2007          8,795 100,451      -       (1,024)   19,595 (81,538)  46,279
Profit for
the year          -       -      -             -        -   12,329  12,329
New share
capital
issued        1,672  20,158      -             -   19,660        -  41,490
Expenses on
share issue
taken to
share premium     -   (980)      -             -        -        -    (980)
Share capital
to be issued      -       -  2,273                                   2,273
Share
options:
value of
employee
services          -       -      -             -        -    1,051   1,051
Foreign
exchange
adjustments
on
consolidation     -       -      -         (235)        -        -    (235)
At 30 June
2008         10,467 119,629  2,273       (1,259)   39,255 (68,158) 102,207

ENDS

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