MolMed S.p.A.
MILAN : MLM

MolMed S.p.A.

March 12, 2012 13:10 ET

MolMed Board of Directors Approves the Draft Financial Statements for Fiscal Year 2011

- Phase II Data of NGR-hTNF in Six Indications Showing Promising Clinical Activity and International Expansion of Pivotal Phase III Trial

- Further Evidence of Clinical Benefit of TK from Long-Term Follow Up of Treated Patients and International Expansion of Pivotal Phase III Trial

- Agreements With Telethon Foundation and GlaxoSmithKline for the Development of New Gene Therapy Treatments, Leading to Significant Growth in Revenues from Activities for Third Parties

- Positive Net Financial Position of EUR 38.7 Million, Consisting of Cash and Current Financial Assets

MILAN, ITALY--(Marketwire - March 12, 2012) - The Board of Directors of MolMed S.p.A. (MILAN:MLM), chaired by Professor Claudio Bordignon, today reviewed and approved the draft financial statements at 31 December 2011.

Claudio Bordignon, Chairman and CEO of MolMed, commented: "In 2011 we achieved a number of important milestones. In particular we presented new data which confirm the promising clinical activity of our two investigational therapeutics and further demonstrate the quality and depth of our clinical programme.

We presented new Phase II data in three indications - ovarian cancer, small-cell lung cancer and non-small cell lung cancer - of our vascular targeting agent NGR-hTNF; altogether, the clinical data obtained provide additional evidence on the antitumour activity of this molecule. NGR-hTNF is currently being investigated in a pivotal Phase III trial in mesothelioma involving 24 centres in Europe, North America and Egypt, the latter belonging to a region where mesothelioma incidence is dramatically increasing.

For TK we presented additional data showing restoration of a fully functional immune system in high-risk leukaemia patients treated with our cell-based therapy, including first patients in a Phase III trial. This pivotal trial is currently ongoing in Italy, Spain and Greece and is ready to be expanded to Belgium, France, Germany, Israel, the Netherlands and the US, following IND clearance from the FDA.

In addition to the progress in the clinical development of our two main therapeutics, I would like to focus on 2011 as a year of substantial growth in the field of cell and gene therapeutics. In this field, we won an important recognition of our know-how in gene therapy with two strategic agreements signed with Telethon Foundation and GlaxoSmithKline, leading to a positive impact on our revenues at the end of 2011, which is expected to continue throughout this year. 2012 will also be an important year; we will pursue long lasting pivotal clinical trials involving additional clinical centres in several countries. The primary data analysis of these trials is expected to be available in 2013."

FINANCIAL HIGHLIGHTS

Key income statement data
(amounts in Euro thousands) Fiscal Year 2011 Fiscal Year 2010 Change
absolute %
Operating revenues 3,418 2,676 742 27.7
Operating costs (26,098 ) (20,424 ) (5,674 ) 27.8
Operating result (22,680 ) (17,748 ) (4,932 ) 27.8
Net financial income (charges) 1,111 166 945 569.3
Result for the year (21,569 ) (17,582 ) (3,987 ) 22.7
Net financial position
(amount in Euro thousands) 31 December 2011 31 December 2010 Change
absolute %
Net financial position 38,667 60,040 (21,373 ) (35.6 )

KEY ACHIEVEMENTS IN YEAR 2011

Research & Development activities

In 2011, MolMed's activities were mainly focused on pursuing the clinical and industrial development of its investigational anticancer products, NGR-hTNF for the treatment of different types of solid tumours, and TK for the treatment of high-risk leukaemia.

For NGR-hTNF, major progress included:

  • international expansion of pivotal Phase III trial (NGR015) for the treatment of malignant pleural mesothelioma, with 24 centres participating in Europe (Italy, the UK, Ireland and Poland), the US, Canada and Egypt. 124 patients were enrolled at 31 December 2011. The trial is expected to include more than 40 centres worldwide, with primary data analysis expected in 2013;
  • promising interim data of a randomised Phase II trial in non-small cell lung cancer, in particular in the squamous cell variant, and recruitment of a larger patient population, in order to ensure the inclusion of an adequate number of patients with this histology;
  • start of two new randomised Phase II trials: in ovarian cancer refractory/resistant to prior platinum-based treatment regimens and in mesothelioma as first line maintenance treatment. As regards ovarian cancer, the study was initiated following promising results obtained in a non-randomised Phase II trial completed in 2011. Progress of recruitment in a randomised Phase II trial in soft tissue sarcomas.
For TK, major progress included:
  • expansion of pivotal Phase III trial (TK008) in Europe, with the inclusion of centres in Spain and Greece, and the FDA clearance to include US centres in the trial. 7 centres were involved as of 31 December 2011. Due to additional and higher than expected regulatory requirements in some EU countries, which have delayed patient enrolment, MolMed plans to include additional centres besides the 15 centres originally planned in an effort to compensate this delay. Primary data analysis is expected in 2013;
  • new long-term data on the clinical benefit following treatment with TK: patients treated (including the first patients enrolled in the Phase III trial) show rapid post-transplant restoration of a fully functional immune system by effect of TK cells;
  • grant of a key European patent on a proprietary modified form of the TK gene (EP1781789) providing IP protection in 29 countries belonging to the European Patent Convention until 2025, with the possibility of a further 5-year extension of market exclusivity.

Development and GMP production for third parties

Over the years, MolMed has developed specific expertise in the field of gene and cell therapy, including the use of stem cells for the treatment of different pathologies, positioning the Company among the leading players at international level. In 2011, MolMed concluded two new agreements for the development and GMP production of gene therapy treatments for third parties:

  • with GlaxoSmithKline (GSK), to develop a production process, based on a retroviral vector, for the investigational gene therapy of a severe form of immunodeficiency (ADA-SCID, the so-called "bubble boy disease"), worth up to € 5.5 million in revenues over a 2-year period;
  • with Telethon Foundation, to develop and manufacture novel investigational gene therapy treatments for six rare genetic diseases (metachromatic leukodystrophy, Wiskott-Aldrich syndrome, beta-thalassemia, mucopolysaccharidosis type I, globoid leukodystrophy and chronic granulomatous disorder), worth up to € 8.3 million in revenues over a 4-year period.

Company organisation

In January 2011, MolMed significantly strengthened its top management and company organisation with Germano Carganico joining as General Manager responsible for Research & Development and Operations, in order to provide the Company with the expertise necessary for the final development stages and registration of MolMed's investigational therapeutics.

Outlook for 2012

In 2012, MolMed will maintain its focus on advancing the development of its investigational therapies NGR-hTNF and TK, while also providing strategic services for gene therapy treatments. MolMed expects in particular to:

  • further advance the clinical development of NGR-hTNF, with the presentation of new clinical data on ongoing Phase II trials relevant for the selection of the indication for the next Phase III trial;
  • expand the Phase III trial of TK in the United States and in other European countries;
  • further increase revenues from development and GMP production activities of gene therapy treatments, by building on the important recognition of our know-how in gene therapy with the agreements signed in 2011 with Telethon and GSK;
  • maintain a strict control of expenses in order to keep its expected burn rate in line with the 2011 level.

SUMMARY ON FINANCIAL RESULTS

MolMed's financials are peculiar to the business model of biotech companies developing new therapeutic products and having no products on the market. At this stage high costs must be sustained for the clinical and pharmaceutical development of investigational therapeutics, and return is expected in forthcoming years. In addition, given the Company's operating activities and the characteristics of trials conducted, research and development costs are fully recorded in the period they are incurred.

Operating revenues

Operating revenues in FY 2011 increased by 27.7%, from € 2.7 million to € 3.4 million. In particular, revenues generated from the intensification of development and GMP production activities on behalf of third parties increased by 69.4%, from € 1.6 million in 2010 to € 2.7 million in 2011, as a result of the agreements with Telethon Foundation and GSK. Other development and production activities carried out in collaboration with external institutions are covered by co-funding grants, and generated in 2011 "other income" for € 651 thousand, an increase compared to 2010.

Operating costs

In 2011, operating costs totalled € 26.1 million. The expected increase (up 27.8%) compared to 2010 is linked to a particular concentration of costs related to the progress of clinical trials of NGR-hTNF and its industrial manufacturing process, and to the above mentioned intensification of development and GMP production activities on behalf of third parties.

In particular, the rise in costs for raw materials and consumable materials, which largely consist of materials and reagents used in R&D activities, was primarily linked to the development of NGR-hTNF. In 2011 such costs totalled € 2.9 million, up 113.8% compared to 2010.

Costs for external activities increased by 42.8% compared to 2010. This increase is due to a rise of external costs for development and consultancy services linked to the industrial manufacturing process of NGR-hTNF, as well as to the expansion of clinical trials of NGR-hTNF and TK.

Costs for the use of third-party assets totalled € 1.0 million in 2011, with no significant variation compared to 2010. These costs essentially include the rental costs of premises housing MolMed's headquarters in Milan and its secondary offices in Segrate.

Personnel costs in 2011 grew by 4.7% compared to 2010, from € 7.6 million to € 8.0 million. This rise is due to an increase in the number of employees in R&D and Operations, needed to meet the escalation of development and production activities.

Other operating costs totalled € 139 thousand in 2011, with no significant variation compared to 2010.

Amortisation and depreciation for FY 2011 totalled € 1.1 million, down by € 102 thousand compared to FY 2010, due to the completion in 2010 of the amortisation of some assets.

Investments made during FY 2011 totalled € 314 thousand, and were largely due to routine renewal of laboratory equipment and purchase of new devices for use in production processes.

Operating result

The operating result for 2011 was negative for € 22.7 million. The expected increase in operating loss, up 27.8% compared to 2010, is due to the expected increase in operating costs resulting from the intensification of development activities for MolMed's investigational therapeutics.

Net financial income (charges)

The financial income derives from the management of financial resources through temporary, low-risk investments. The increase recorded in 2011 was linked to the investment of the financial resources obtained through the share capital increase completed in August 2010. The trend in financial charges reflects the transfer to the Income Statement of € 106 thousand from the fair value reserve recorded at 31 December 2010, following the maturity and sale of some securities.

Profit (loss) for the year

The bottom-line result for 2011 shows a loss of € 21.6 million, compared to a loss of € 17.6 million in 2010.

Net financial position

The net financial position at 31 December 2011 totalled € 38.7 million, and included cash on hand for € 12 thousand, other cash for € 3.3 million and cash equivalents (time deposit) for € 17.9 million. The net financial position also included investment in current assets for € 17.7 million, net of € 236 thousand for lease payables connected with lease contracts for laboratory equipment.

The official Corporate Financial Reporting Manager of MolMed S.p.A., Enrico Cappelli, herewith attests, pursuant to Article 154-bis, paragraph 2 of the Italian Consolidated Law on Finance (Legislative Decree 58/1998), that the accounting disclosure contained in this press release matches documentary evidence, corporate books and accounting records.

The report on Corporate Governance, the report on remuneration, the 2011 draft financial statements and the reports of the Board of Statutory Auditors and of the independent Auditing firm will be made available to the public at the Company's headquarters and at Borsa Italiana S.p.A., and in the section "Investors/Corporate Governance/Shareholders' Meetings" of MolMed's website (www.molmed.com), in accordance with legal provisions.

The following statements related to the 2011 draft financial statements are provided in attachment to this press release:

  • Statement of financial position
  • Income statement
  • Statement of comprehensive income
  • Cash flow statement
  • Statement of changes in shareholders' equity
In this press release, use is made of "alternative performance indicators" which are not provided for under European IFRS, and whose significance and content - in line with Recommendation CESR/05-178b published on November 3, 2005 - are illustrated below:
  • Operating Revenues: defined as the difference between sales revenues and other income and costs for materials, costs of services received, costs for use of third-party assets, personnel costs and amortisation, depreciation & write downs. It represents the profit before financial flows and taxes;
  • Net Financial Position: is the algebraic sum of cash, cash equivalents, financial receivables and other financial assets, and current and non-current financial debt.

The audit is still underway, and the report of the independent Auditing firm on the Financial Statements at 31 December 2011 will be issued on a subsequent date with respect to the publication date of this press release.

SHAREHOLDERS' GENERAL MEETING 2012

The Board of Directors gave mandate to the Chairman to convene the Annual Shareholders' General Meeting on 23 April 2012 at 11.00 AM, at NH Hotel Milano 2, via Fratelli Cervi, 20090 Segrate (Milan), Italy, in order to resolve upon the following agenda:

Ordinary business:

  1. Approval of the financial statements for the fiscal year ended 31 December 2011;
  2. Proposal of confirmation of Member of the Board of Directors, appointed pursuant to art. 2386 of the Italian civil code;
  3. Deliberation on Section I of the Report on remuneration, pursuant to art. 123-ter of the Italian consolidated law on finance;
  4. Proposed approval of a stock option plan related to MolMed ordinary shares, reserved to Executive members of the Board of Directors, General Managers and Directors of the Company.
Special business:
  1. Share capital increase pursuant to art. 2439, comma 2 of the Italian civil code, with exclusion of option right pursuant to art. 2441, commas 5 and 8 of the Italian civil code, to serve the stock option plan reserved to Executive members of the Board of Directors, General Managers and Directors of MolMed. Consequential amendment of the Corporate bylaws;
  2. Amendments of Articles 5, 18 and 29 of the Corporate bylaws in order to adapt their contents to the new share capital and to legislation updates.

With particular reference to item 4 of the agenda in ordinary business, the Board of Directors, upon proposal of the Remuneration Committee, has resolved to submit to the Shareholders the guidelines of an incentive plan under Article 114-bis of Legislative Decree 24 February 1998, n. 58 (the "Stock Option Plan 2012" or the "Plan") in favour of Executive members of the Board, General Managers and Directors of MolMed (the "Beneficiaries"). In summary, the 2012 Stock Option Plan provides for the allocation of a maximum number of options equal to 7,000,000 in favour of the Beneficiaries and each option granted under it gives them the right to subscribe 1 (one) new share.

For details please refer to the Plan Disclosure document (in Italian), prepared in accordance with Art. 114-bis, paragraph 1 of the Consolidated Law on Finance ("TUF") in compliance with Appendix 3, Schedule 7 of art. C 84 of the General Rules for Issuers ("RE"), which will be filed together with the publication of the Notice of General Meeting. The Notice will be made available to the public on 13 March 2012 on MolMed's website (www.molmed.com) and at Borsa Italiana via the NIS circuit. The Notice will be published on 14 March 2012 on the Italian daily newspaper Milano Finanza.

Documents and materials relevant to the General Meeting will be made available to the public from Wednesday 14 March 2012 at the Company's headquarters and at Borsa Italiana via the NIS circuit, as well as on MolMed's website (www.molmed.com). Shareholders may obtain hard copies of such documents at their own expense.

This press release is written in compliance with public disclosure obligations established by CONSOB (Italian securities & exchange commission) resolution no. 11971 of 14.5.1999 as subsequently amended.

About MolMed

MolMed S.p.A. is a biotechnology company focused on research, development and clinical validation of novel antitumour therapies. MolMed's pipeline includes two novel therapeutics in clinical development: TK, a cell-based therapy enabling bone marrow transplants from partially compatible donors, in Phase III in high-risk acute leukaemia; NGR-hTNF, a novel vascular targeting agent (VTA), in Phase III in malignant pleural mesothelioma and in Phase II in six more indications: colorectal, lung (small-cell and non-small-cell), liver and ovarian cancer, and soft tissue sarcomas. MolMed also offers top-level expertise in cell and gene therapy to third parties to develop, conduct and validate projects from preclinical to Phase III trials, including scale-up and cGMP production of clinical-grade viral vectors, and manufacturing of patient-specific genetically engineered cells. MolMed is headquartered at the San Raffaele Biomedical Science Park in Milan, Italy. The Company's shares are listed on the Milan Stock Exchange, at the Standard segment (class I) of the MTA managed by Borsa Italiana. (Ticker Reuters: MLMD.MI).

DISCLAIMER

This press release may contain certain forward-looking statements. Although the Company believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including scientific, business, economic and financial factors, which could cause actual results to differ materially from those anticipated in the forward-looking statements. The Company assumes no responsibility to update forward-looking statements or adapt them to future events or developments. This document does not constitute an offer or invitation to subscribe or purchase any securities of MolMed S.p.A.

FULL VERSION OF THIS PRESS RELEASE AVAILABLE ON MOLMED'S WEBSITE (www.molmed.com).

Contact Information

  • MolMed S.p.A.
    Holger Neecke
    Director Business Development & Investor Relations
    +39 02 21277.205
    +39 02 21277.325 (FAX)
    investor.relations@molmed.com

    MolMed S.p.A.
    Enrico Cappelli
    Chief Financial Officer
    +39 02 21277.302
    +39 02 21277.325 (FAX)
    afc@molmed.com