SOURCE: OctoPlus

February 22, 2008 02:10 ET

OctoPlus announces 2007 annual results

LEIDEN, NETHERLANDS--(Marketwire - February 22, 2008) -


OctoPlus N.V. ("OctoPlus" or "the Company") (Euronext: OCTO), the drug delivery and development company, announces today its annual results for the year ended 31 December 2007.

Highlights 2007

- SELECT-1 Phase IIa study with Locteron® started and successfully completed: positive results show a strong anti-viral response, and patients receiving Locteron experienced side effects that were less frequent and less severe than those previously reported in clinical trials for other interferon products.

- Approval gained from FDA to start PLUS study with Locteron in the United States.

- OP-286 CR in-licensed in September: commenced pre-clinical development of a controlled-release GLP-1 analogue product, named OP-286 CR, for the treatment of diabetes type II.

- Full rights to the PolyActiveTM technology acquired from IsoTis.

- Gross service revenues from Contract Development increased by 6% to EUR 9.0m of which 51% comprised of inter-segment revenues.

- Significant progress made on the construction of the new office, laboratory and production facilities. The expanded facilities will become fully operational later in 2008 and will significantly expand development and production capacity for both the development of own products as well as for third party clients.

During the year, OctoPlus' lead product Locteron progressed into a Phase IIa clinical study. The study was completed in November and the promising results were presented at the Annual Meeting of the American Association for the Study of Liver Diseases (AASLD). Results from the ongoing Phase II study with OctoPlus' other clinical-stage product, OP-145 CSOM, are expected in the first half of 2008.

"We are very proud of the progress we have made with Locteron in 2007," comments Joost Holthuis, CEO. "A successful Phase IIa study was completed in November, approval was gained to start a study in the US and we are now preparing for a subsequent Phase IIb study which is scheduled to start at the end of 2008. We are also preparing for the further upscaling of Locteron and the further growth of our Contract Development division via the new laboratory and production facilities, which become fully operational later this year. Achieving these milestones required a total cash outflow of EUR 17 million in 2007. The progress we have made with Locteron allows us to confidently pursue the additional financing we require to achieve our 2008 objectives."

Financials 2007

The table below outlines the key financial figures of the Company for the six-month period ended 31 December 2007 and 2006 and the full year 2007 and 2006. These financial figures are as yet unaudited. A distinction has been made in this table between gross revenues, inter-segment revenues and total (net) revenues. Gross revenues include inter-segment revenues for Contract Development supporting the Products & Drug Delivery division in the development of the product pipeline, mainly for Locteron. Contract Development generates most of the Company's revenues, with additional revenues from license fees and subsidies generated by the Products & Drug Delivery division. Contract Development worked at full capacity in order to facilitate as much as possible requests from third parties as well as demands for OctoPlus' products under development.

Key figures last six months and full year
2007 and 2006
(unaudited, in Euro x 1,000; except per
share data)

                                         %                            %
                H2 2007     H2 2006 change     Yr 2007   Yr 2006 change

Gross
revenues          4,783       4,762     0%       9,741     8,996     8%
Inter-segment
revenues        (2,463)     (1,990)    24%     (4,547)   (2,945)    54%
Total
revenues          2,320       2,772   -16%       5,194     6,051   -14%

Result for
the period      (9,054)     (4,564)    98%    (15,175)   (8,665)    75%

Earnings per
share
(basic and       (0.56)      (0.33)    70%      (0.94)    (0.68)    38%
diluted)

Cash, cash equivalents,
deposits net of bank                             2,515    19,553   -87%
overdrafts

Full year ended 31 December 2007

For the full year 2007, total gross revenues increased by 8% to EUR 9.7m (2006: EUR 9.0m), with service revenues from Contract Development increasing by 6% to EUR 9.0m (2006: EUR 8.5m) and revenues from the Products & Drug Delivery division increasing by 54% to EUR 0.8m (2006: EUR 0.5m), as a result of higher service revenues and higher income from subsidies in 2007. Contract Development supported the Products & Drug Delivery division in the preparation of Locteron Phase II clinical trials throughout 2007 (including formulation development and manufacturing of clinical trial material), resulting in an increase of inter-segment revenues from EUR 2.9m in 2006 to EUR 4.5m in 2007. As a result, consolidated (net) revenues decreased by 14% to EUR 5.2m (2006: EUR 6.1m).

Total operating costs increased by 40% to EUR 20.3m (2006: EUR 14.6m) as a result of the growth of the Company from 139 employees at year-end 2006 to 170 employees at year-end 2007, increased expenditures for pre-clinical and clinical studies and the expenses related to the follow-on financing, which was withdrawn in November. The headcount in the Products & Drug Delivery division and the supporting functions increased significantly, as large efforts were invested in the upscaling process of the lead product Locteron, as well as the further development of the other products. The headcount in the Contract Development division remained almost stable.

Net loss for 2007 was EUR 15.2m, an increase of 75% compared to the net loss of EUR 8.7m for the year 2006.

Last six months ended 31 December 2007

Over the last six months of 2007, gross revenues remained flat at EUR 4.8m (H2 2006: EUR 4.8m), with the Contract Development division working at full capacity. Contract Development provided services to the Products & Drug Delivery division for a total of EUR 2.5m, an increase of 24% compared to last year (H2 2006: EUR 2.0m). The increase is explained by the fact that more clinical material for the Locteron studies had to be produced in 2007. As a result, consolidated (net) revenues decreased with 16% to EUR 2.3m (H2 2006: EUR 2.8m).

Total operating costs increased by 54% to EUR 11.3m (H2 2006: EUR 7.3m), as explained in more detail in the section discussing the full year results.

As a result, net loss for the period increased by 98% to EUR 9.1m (H2 2006: net loss of EUR 4.6m).

Cash flow

The Company began 2007 with a cash and cash equivalents balance (including deposits and net of bank overdrafts) of EUR 19.6m. A total of EUR 10.8m (2006: EUR 6.4m) was used during the year for OctoPlus' operating activities and a further EUR 6.3m was used for capital expenditures (2006: EUR 1.1m). Included in the EUR 6.3m of investing activities is EUR 4.3m related to the new laboratory and production facilities currently being built adjacent to the Company's headquarters, and EUR 1.3m was invested to acquire the full rights to the PolyActive technology and its intellectual property in certain strategic areas from IsoTis, Inc. The cash flow from financing activities was cash neutral in 2007 (2006: positive cash flow of EUR 17.8m).

As a result the Company's cash and cash equivalents (including deposits and net of bank overdrafts) decreased by 87% to EUR 2.5m at year-end 2007 (31 December 2006: EUR 19.6m).

Outlook 2008

In 2008, the Company plans to advance its two Phase II clinical products to the next stage and further grow the Contract Development business.

In the second quarter of 2008 the ongoing Phase II study with OP-145 CSOM is expected to be completed and the commencement of Phase III studies is scheduled for later this year. In February 2008, the Company commenced a clinical Phase IIa PLUS study with Locteron in the United States, for which results are expected in the fourth quarter of 2008. This study expands upon the favorable results of the recently completed SELECT-1 Phase IIa study in Europe and will provide US investigators first-hand experience with the product. Successful completion of this Phase IIa PLUS trial will prepare for dosing of Locteron for longer durations and in previously underserved patient populations. The SELECT-2 Phase IIb study with Locteron is scheduled to start in the fourth quarter of the year. The Company reiterates its goal to secure a commercial partner for Locteron before the start of Phase III studies in 2009. Pre-clinical development of the diabetes product OP-286 CR and the vaccines will continue, in preparation of clinical studies that are scheduled to start in 2009.

The Contract Development order book is once again better filled than at the same stage last year. Especially the third party contracts show a marked increase. The Company will be able to meet this increased demand using its expanded facilities in Leiden.

Due to adverse market conditions, the follow-on financing was withdrawn by the Company in November 2007. Additional funds are still required for the Company to meet its 2008 targets as described above. The Company has secured short-term financing and is actively pursuing additional financing opportunities in order to raise such funds. The Company is confident that it will accomplish this in the near future.

Annual report and Annual General Meeting of Shareholders

OctoPlus is currently finalising its Annual Report 2007 and will publish this report on 31 March 2008. The report will also be available on the Company's website www.octoplus.nl. The Annual General Meeting of Shareholders will take place at Naturalis in Leiden on 22 April 2008 at 14:00 Central European Time (CET).

The consolidated balance sheet of OctoPlus N.V. as of 31 December 07, the related consolidated statements of income and the consolidated statement of cash flows for the year ended 31 december 07, as presented in this press release, are unaudited.

Conference call and webcast presentation

On February 22, OctoPlus will hold a conference call at 10:00 CET. This event can also be followed during a live audio webcast via OctoPlus' website www.octoplus.nl. If you would like to participate in the conference call, please dial in on telephone number +31 (0) 45 631 6901. After the presentation of the results, Joost Holthuis, CEO of OctoPlus, Hans Pauli, CFO, and Gerben Moolhuizen, CBO, will be available to answer questions. After the event, the webcast will be available for replay on the Company's website.

For further information, please contact:
Rianne Roukema, Corporate Communications:
telephone number +31 (71) 524 1071
e-mail IR@octoplus.nl

About OctoPlus

OctoPlus N.V. is a product-oriented biopharmaceutical company committed to the creation of improved pharmaceutical products that are based on OctoPlus' proprietary drug delivery technologies and have fewer side effects, improved patient convenience and a better efficacy/safety balance than existing therapies. Rather than seeking to discover novel drug candidates through early stage research activities, OctoPlus focuses on the development of long-acting, controlled-release versions of known protein therapeutics, other drugs, and vaccines.

OctoPlus' pipeline consists of 5 products in pre-clinical and clinical development. The lead product is Locteron, a controlled-release formulation of interferon alfa for the treatment of chronic hepatitis C, which the Company is co-developing with Biolex Therapeutics. Locteron is currently in Phase II clinical studies. Furthermore, the pipeline comprises a product candidate for the treatment of chronic middle ear infection, which is in Phase II clinical development, a pre-clinical GLP-1 analogue product candidate for the treatment of diabetes and two pre-clinical-stage single-shot vaccines.

In addition, OctoPlus is a European leading provider of advanced drug formulation and clinical scale manufacturing services to the pharmaceutical and biotechnology industries, with a focus on difficult to formulate active pharmaceutical ingredients. The earnings and expertise that the Company derives from rendering formulation and manufacturing services help to support the Company's own drug development programs.

OctoPlus is listed on Euronext Amsterdam by NYSE Euronext under the symbol OCTO. For more information about OctoPlus, please visit the website on www.octoplus.nl.

This document may contain certain forward-looking statements relating to the business, financial performance and results of OctoPlus N.V. and the industry in which it operates. These statements are based on OctoPlus N.V.'s current plans, estimates and projections, as well as its expectations of external conditions and events. In particular the words "expect", "anticipate", "predict", "estimate", "project", "plan", "may", "should", "would", "will", "intend", "believe" and similar expressions are intended to identify forward-looking statements. We caution investors that a number of important factors, and the inherent risks and uncertainties that such statements involve, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. In the event of any inconsistency between an English version and a Dutch version of this document, the English version will prevail over the Dutch version.

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