MolMed S.p.A.

MolMed S.p.A.

August 04, 2011 13:24 ET

MolMed Board of Directors Approves the Financial Report for the First Half-Year 2011

- New Promising Results of Six Clinical Trials of Its Investigational Anticancer Drugs NGR-hTNF and TK, Including Data of a Randomised Phase II Trial of NGR-hTNF in Non-Small Cell Lung Cancer

- Positive Net Financial Position of EUR 50.9 Million, Consisting Mainly of Cash and Other Current Financial Assets

- 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 New Drugs, and Return is Expected in Forthcoming Years

MILAN, ITALY--(Marketwire - Aug. 4, 2011) - The Board of Directors of MolMed S.p.A. (MILAN:MLM), chaired by Professor Claudio Bordignon, today approved the half-year financial report at 30 June 2011.

Claudio Bordignon, Chairman of the Board and CEO of MolMed, comments: "The new clinical data presented in June at ASCO 2011 demonstrate the quality, solidity and depth of our clinical development programme. For NGR-hTNF, we had further confirmed evidence of its promising antitumour activity, now observed in six different types of solid tumours, including both orphan indications and severe widespread cancers like non-small cell lung cancer. For TK, we have strengthened evidence of its direct role in providing immune protection against infections and leukaemia relapse. Both investigational products are in pivotal Phase III trials, and we are progressing in the international expansion of these trials in Europe and in the United States."

Financial Highlights
Key Income Statement Data
(amounts in thousands of Euro) Change
1st half 2011 1st half 2010 absolute %
Operating revenues 1,316 1,178 138 11.7 %
Operating costs (11,784 ) (9,683 ) (2,101 ) 21.7 %
Operating result (10,468 ) (8,505 ) (1,963 ) 23.1 %
Net financial income (charges) 681 (137 ) 818 597.1 %
Profit (loss) for the period (9,787 ) (8,642 ) (1,145 ) 13.2 %
Net financial position
(amounts in thousands of Euro) Change
June 30, 2011 December 31, 2010 absolute %
Net financial position 50,891 60,040 (9,149 ) (15.2 %)

HIGHLIGHTS OF DEVELOPMENT ACTIVITIES

During the first half-year 2011, MolMed's activities were mainly focused on pursuing the clinical 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.

Substantial progress achieved in the development of NGR-hTNF included:

  • International expansion of Phase III trial for the treatment of malignant pleural mesothelioma, with the involvement of a clinical centre in Poland. The trial, already ongoing in 10 centres across Italy, will involve up to 45 centres in Europe, the United States and Canada.
  • New data of five clinical trials and start of two new randomised Phase II trials:
    • In a randomised Phase II trial in non-small cell lung cancer as first-line treatment in combination with cisplatin-based chemotherapy, first results confirm the good safety profile of NGR-hTNF and show promising clinical activity in terms of disease control and duration of progression-free survival.
    • In a Phase II trial in combination with doxorubicin in relapsed ovarian cancer, the primary end-point was already met after recruitment of less than half of the patients. On the basis of these results, MolMed has started a randomised Phase II trial of NGR-hTNF plus the standard doxorubicin-based regimen, versus the standard regimen alone.
    • In a Phase II trial in combination with doxorubicin in relapsed small-cell lung cancer, over half of the patients showed disease control, with similar antitumour activity in both chemo-sensitive and chemo-refractory patients.
    • In a completed Phase II trial in malignant pleural mesothelioma, the long-term follow up analysis confirms efficacy of a more frequent administration in prolonging disease control. On the basis of this evidence, along with the lack of cumulative toxicity, MolMed started a new randomised Phase II trial of NGR-hTNF as first-line maintenance therapy for mesothelioma patients who completed the pemetrexed-based chemotherapy.
    • In an ongoing Phase I trial at high doses, interim results show that NGR-hTNF can be safely administered up to doses of 300 μg/m2; the trial plans to explore further dose escalation.
Main developments concerning TK included:
  • Clearance by the U.S. FDA of the IND that will allow to include patients enrolled in U.S. clinical centres in the ongoing pivotal Phase III trial for the treatment of high-risk leukaemia. Following a recent meeting with the FDA, the new trial design has been confirmed with a wider primary end-point, i.e. disease-free survival - which includes also disease relapse in addition to transplant-related mortality - evaluated on a patient population increased to 170 patients.
  • Activation of two European clinical centres in Spain and in Greece, with recruitment of the first patients likely to occur within the next weeks. So far, recruitment in the trial has been slower than expected due to additional regulatory requirements of some EU Member States, which delayed the activation of clinical centres in Europe. Taking also into account the increased number of patients, the planned regulatory submissions will be postponed accordingly, as the primary analysis is expected not before 2013.
  • New data from the long-term follow-up of a completed Phase II trial, that further clarify the interleukin-7-dependent mechanism through which TK cells boost the function of thymus in adult patients and prompt the recovery of a fully functional immune system, effective against pathogens and leukaemia relapse.

In the area of development and GMP production, MolMed entered into an agreement with Fondazione Telethon to develop and manufacture novel investigational gene therapy treatments for six rare genetic diseases, worth up to € 8.3 million in revenues over a four-year period.

COMPANY ORGANISATION

In January 2011, MolMed significantly strengthened its top management and company organisation with the arrival of Germano Carganico as General Manager responsible for Research & Development and Operations, in charge of coordinating the final development stages and registration of MolMed's investigational therapeutics.

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 new drugs, 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

Overall, operating revenues totaled € 1.3 million in the first half 2011, with an increase of 11.7% compared with the same period of 2010.

At present, The Company's typical revenues are mainly generated from service activities related to development and production of investigational cell and gene therapy treatments, and in the first half of 2011 they were in line with those achieved in the same period of 2010. The positive effects of revenues stemming from the agreement recently signed with Fondazione Telethon are expected to materialise in the second half of 2011.

The increase of "Other income" was substantially due to R&D grants for projects co-funded by the European Union.

Operating costs

Operating costs totaled € 11.8 million, up 21.7% compared to the corresponding period of 2010, reflecting the intensification of development activities for MolMed's investigational therapies.

In particular, the increase in costs for raw materials and consumables, which largely consist of materials and reagents used in R&D activities, was linked to the NGR-hTNF industrial manufacturing process.

Costs for services recorded an increase consistent with the progress of development plans for the Company's investigational therapies. More specifically, the increase was largely due to the rise in external development and advisory costs relating to the NGR-hTNF industrial manufacturing process and to the progress of clinical trials of NGR-hTNF and TK.

Costs for use of third-party assets, mainly rental costs for the Company's headquarters in Milan and secondary premises in Segrate, amounted to € 0.5 million in the first half of 2011, with no significant change.

Personnel costs in the first half of 2011 were higher than those recorded in the same period of 2010 because of an increase in the number of employees, in order to strengthen the Company's operating functions in view of the intensification of production and development activities.

Other operating costs, which amounted to € 82 thousand, and amortisation, depreciation and write-downs, which totalled € 0.6 million, are in line with those of the same period of 2010.

Investments made during the period totaled € 0.1 million, and were mainly related to ordinary renewal of laboratory equipment and purchase of new equipment used in production processes.

Operating result

The planned increase in operating costs, due to the Company's product development plans, resulted in a negative operating result of € 10.5 million in the first half of 2011, with an increase of 23.1% compared to the same period last year.

Net financial income and charges

Financial income mainly resulted from the management of cash and cash equivalents through temporary, low-risk investments. The increase in the period was linked to the investment of the financial resources obtained through the share capital increase completed in August 2010.

Result for the period

The result for the first half-year of 2011 is negative for € 9.8 million, compared to a negative result for € 8.6 million in the first half of 2010.

Net financial position

The trend in the net financial position, from € 60.0 million at 31 December 2010 to € 50.9 million at 30 June 2011, is connected to the absorption of financial resources required to run the Company's ordinary business.

The net financial position as of 30 June 2011 included cash and cash equivalents for € 5.8 million and other current financial assets for € 45.4 million, net of € 0.3 million for lease payables connected with lease contracts for laboratory equipment.

Taking into account current financial receivables and other financial assets, cash absorbed in the period amounted to € 9.2 million (€ 1.5 million per month on average), and was entirely due to the Company's ordinary operations.

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.

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 & writedowns. 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.

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 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.

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 IS AVAILABLE ON MOLMED'S WEBSITE

Contact Information

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

    Administration, Finance & Control: MolMed S.p.A.
    Enrico Cappelli
    Chief Financial Officer
    +39 02 21277.302
    +39 02 21277.325 (FAX)
    enrico.cappelli@molmed.com