Preliminary Results

RNS Number : 7217Y
Oxford Biomedica PLC
27 February 2013
 



EMBARGOED UNTIL 7.00AM 27 FEBRUARY 2013

 

OXFORD BIOMEDICA PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012

 

Oxford, UK - 27 February 2013: Oxford BioMedica plc ("Oxford BioMedica" or "the Company") (LSE: OXB), the leading gene-based biopharmaceutical company, today announces its preliminary results for the year ended 31 December 2012.

 

OPERATIONAL HIGHLIGHTS:

 

·      Sanofi ocular partnership nearing successful conclusion: US$53 million committed to date

¾    Options exercised for StarGen™ and UshStat® for a total of US$3 million

¾    Ground-breaking RetinoStat® data show sustained, dose-related protein expression; treatment of final patient cohort ongoing

 

·      LentiVector® platform evolution supports next generation of ocular gene therapies

¾    Growing clinical data set underscores confidence in the technology platform

¾    Pre-clinical evaluation of Glaucoma-GT ongoing to maximise proof of concept

¾    Planning underway for pre-clinical evaluation of four new ocular products

 

·      Manufacturing capability complements commercial strategy

¾    GMP facility approved to manufacture supplies for clinical studies

¾    In-house manufacturing and analytical development activities underway to secure future alliances

¾    Launch of OXB Solutions microsite to showcase leading GMP manufacturing and analytical competences

 

·      Pioneering ProSavin® Phase I/II study successfully met primary endpoints

¾    ProSavin® is safe, well-tolerated and mediates long-term improvement of motor function

¾    Non-clinical programme for dose optimisation on track

 

·      Industry collaborations validate Oxford BioMedica's 5T4 tumour antigen technology

¾    ImaginAb option exercise for 5T4-targeted in vivo diagnostic for cancer imaging

¾    Multiple presentations of 5T4-ADC programme by Pfizer at key industry conferences

 

FINANCIAL HIGHLIGHTS1:

 

·       Fundraising of £11.6 million completed in July 2012; net proceeds £10.1 million

·       Revenue of £7.8 million (2011: £7.7 million)

·       Research and development costs of £14.0 million (2011: £17.8 million)

·       Net loss of £8.7 million (2011: £12.6 million)

·       Net cash burn2 of £10.5 million (2011: net cash burn2 £16.5 million)

·       Net cash3 of £14.1 million as at 31 December 2012 (2011: £14.3 million)

 

1.    Audited financial results

2.    Net cash used in operating activities plus sales and purchases of non-current assets and interest received

3.    Cash, cash equivalents and available for sale investments

 

John Dawson, Chief Executive Officer at Oxford BioMedica, said: "During 2012 we reported positive developments across our core clinical programmes, strengthened our LentiVector® technology platform and secured MHRA approval for our GMP manufacturing plant.  Macroeconomic conditions remain challenging, however sentiment towards the biopharmaceutical sector is improving and we are seeing more interest than ever in personalised medicines and niche disease indications, all of which positions Oxford BioMedica well for further developments in the year ahead."

 

-Ends-

 




 

An analyst briefing will be held at 09:30am GMT on Wednesday, 27 February 2013 at the offices of M:Communications, 11th Floor, CityPoint, 1 Ropemaker Street, London, EC2Y 9AW.  There will be a simultaneous live conference call and the presentation will be available on the Company's website at www.oxfordbiomedica.co.uk

 

Please visit the website approximately 10 minutes before the conference call, at 09:20am GMT, to download the presentation slides.  Conference call details:

 

Participant dial-in: +44 (0) 1452 555 566

Participant code: # 95172220

 

An audio replay file will be made available shortly afterwards via the Company's website: www.oxfordbiomedica.co.uk.   

 

For further information, please contact:

 

 

Oxford BioMedica plc:

John Dawson, Chief Executive Officer

Tim Watts, Chief Financial Officer

Lara Mott, Head of Corporate Communications

 

Tel: +44 (0)1865 783 000

 

N+1 Singer:

Shaun Dobson/Jenny Wyllie

 

Tel: +44 (0)20 7496 3000

 

Media/Financial Enquiries:

Mary Clark/Sarah Macleod/Claire Dickinson

M:Communications

 

Tel: +44 (0)20 7920 2342

 

 

Disclaimer

This press release contains "forward-looking statements", including statements about the discovery, development and commercialisation of products.  Various risks may cause Oxford BioMedica's actual results to differ materially from those expressed or implied by the forward-looking statements, including adverse results in clinical development programmes; failure to obtain patent protection for inventions; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals and services resulting from development efforts; the requirement for substantial funding to conduct research and development and to expand commercialisation activities; and product initiatives by competitors.  As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statements.  Oxford BioMedica disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Notes to editors

 

1. Oxford BioMedica

Oxford BioMedica plc (LSE: OXB) is a biopharmaceutical company developing innovative gene-based medicines and therapeutic vaccines that aim to improve the lives of patients with high unmet medical needs.  The Company's technology platform includes a highly efficient LentiVector® gene delivery system, which has specific advantages for targeting diseases of the central nervous system and the eye; and a unique tumour antigen (5T4), which is an ideal target for anti-cancer therapy. Through in-house and collaborative research, Oxford BioMedica has a broad pipeline with current partners and licensees including Sanofi, Pfizer, GlaxoSmithKline, MolMed, Sigma-Aldrich, Biogen Idec, Emergent BioSolutions, ImaginAb and Immune Design Corp.  Further information is available at www.oxfordbiomedica.co.uk and www.oxbsolutions.co.uk.

 




 

CHAIRMAN'S STATEMENT

 

"Oxford BioMedica delivered another year of strong operational progress during 2012.  Highlights included the MHRA approval of our manufacturing facility; Sanofi's US$3 million option exercise payment for StarGen™ and UshStat®; and the raising of a further £11.6 million.  These developments highlight our commitment to creating value in the business and we are grateful for the continued support from our shareholders."

 

Gene therapy is the future

In November 2012, the European Commission approved its first gene therapy product, Glybera®, to treat patients suffering from a rare disease.  This key regulatory and industry milestone supports the future for gene therapy in major markets, particularly the US where a gene therapy product is yet to be licensed.  We are seeing greater interest than ever in gene therapy and, with a leading gene therapy technology platform in terms of its design, manufacturing and clinical development status, I believe we are now very well-positioned to exploit the considerable effort that has been invested over a number of years.

 

Biotech is coming back…

The EU biotechnology sector as a whole gained 25.8% in 2012 (versus -33% in 2011) outperforming the larger pharmaceutical sector and the broader market indices.  Whilst this highlights the volatile nature of the sector, it also appears to underline increasingly positive investor sentiment.  In terms of UK biotechnology, performance was not as strong, largely due to investors' continued aversion to risk.  However, we are seeing signs of renewed interest in the sector and an opportunity for recognised technology leaders to prosper.

 

Finding tomorrow's treatments

The pressures on the healthcare industry continue, particularly given the resource constraints across payers, pharmaceutical companies and biotechnology innovators.  With ageing populations and growing societies in emerging markets, the industry needs to accelerate medicines for diseases which impose a significant social burden, such as chronic and neurodegenerative conditions.  It is exactly these sorts of indications which Oxford BioMedica can target with its LentiVector® platform product candidates.

 

Strategy commitment

Our strategy remains to build a financially self-sustaining company, based on our proprietary LentiVector® platform, targeting high value, fast growing markets such as ophthalmology.  There is potential for four revenue streams: i) through the exploitation of our existing product portfolio, ii) by developing new product opportunities iii) by securing specialist manufacturing alliances and iv) by leveraging our intellectual property.  In addition, the Board is continuing to seek out complementary acquisitions as a means to secure commercial success.

 

Board change

I am delighted that Martin Diggle joined the Board in October 2012 as a non-Executive Director.  He has a wealth of financial investment experience across many sectors and through Vulpes Investment Management, of which he is a founder, he has been a supporter of a number of life sciences businesses.  The Vulpes Life Sciences Fund is our largest shareholder and Martin brings a clear investor's perspective to the Board.

 

In conclusion

I believe that Oxford BioMedica has a unique contribution to make to healthcare and there is a great sense of pride in what we do within the Company.  Our employees have once again made a considerable effort during 2012 and we are grateful for their contribution.  We have some exciting prospects ahead and, with a highly-experienced team leading the evolution of the Company, I am confident that our science and our strategy will deliver.

 

Nick Rodgers

Chairman


CHIEF EXECUTIVE'S STATEMENT

 

"I am pleased to report that we achieved many operational successes during 2012 - our clinical ophthalmology programmes continued to deliver positive results, we completed the ProSavin® Phase I/II study in Parkinson's disease and we received MHRA approval for our manufacturing plant.  In addition, we received option exercise payments from Sanofi and ImaginAb, signed a new master services agreement with Immune Design Corp. and received a funding award for UshStat® from Foundation Fighting Blindness.  Our progress to date reflects the importance of strong relationships and industry alliances in delivering success."

 

Portfolio progress

We continue to build a leading position within the field of ophthalmology.  Our landmark ocular partnership with Sanofi is starting to generate milestone revenues following the option exercise payment received for StarGen™ and UshStat®.  Treatment of the final RetinoStat® patient cohort is underway; we are extremely encouraged by the results to date and, should Sanofi choose to exercise its option for RetinoStat® during 2013, we are eligible to receive a substantial milestone payment.  We are also privileged to be working with Mayo Clinic, a global leader in medical research, to develop Glaucoma-GT; a novel gene therapy for chronic glaucoma.  As a recognised technology pioneer, we are well-placed to leverage our expertise to exploit new opportunities and planning is underway for the pre-clinical evaluation of a tranche of new ocular product candidates.  The ProSavin® Phase I/II study successfully met its primary endpoint and we are currently evaluating a more potent product construct to ensure the greatest chance of success in Phase II studies.

 

Proprietary manufacturing

We successfully attained GMP certification for our state-of-the-art facilities in June 2012, just 16 months after the acquisition.  The MHRA conducted inspections in March and May 2012 to evaluate whether our processes, facilities and quality management systems were in accordance with EU GMP standards.  This is an impressive achievement for a company of our size and I express my sincere thanks to everyone involved.  Our specialist manufacturing capabilities provide a robust commercial arm to our business - not only to deliver significant operational and cost efficiencies for our internal programmes but also to generate revenue from new alliances.

 

Partnering initiatives

Since we cannot fund the development of all our portfolio product opportunities, we continuously seek ways to improve the value of our assets so as to increase the value of future partnerships.  Examples include the ongoing dose optimisation for ProSavin® and, for TroVax®, the UK investigator-led Phase II studies which will further validate use of the biomarker to predict those patients who are likely to benefit.  We also continue to move Glaucoma-GT towards a future first-in-man clinical study.

 

Financial management

Cash, cash equivalents and available for sale investments were £14.1 million at 31 December 2012 and we have sufficient financial resources to fund the business until Q1 2014.  This does not take into account the significant potential milestone payment should Sanofi elect to exercise its option for RetinoStat® during 2013, nor does it factor in potential revenue from manufacturing or product partnerships.

 

Outlook

The continued success of the ocular products partnered with Sanofi, our confidence in the LentiVector® platform, and our manufacturing capability underline our belief that our strategy should be founded on the development of ophthalmology products and the exploitation of our manufacturing and technical expertise.  We are resolutely focused on turning Oxford BioMedica into a company that is financially self-sustaining.  To this end, in 2013 our goals are to complete the RetinoStat® Phase I study, generate income from our manufacturing facility and initiate pre-clinical development of the next generation of ocular product opportunities.

 

John Dawson

Chief Executive Officer


OPERATIONAL REVIEW

 

LENTIVECTOR® PLATFORM DEVELOPMENT

Oxford BioMedica's proprietary LentiVector® technology platform is a highly efficient system for the delivery of therapeutic genes to a wide range of tissues, and it has specific advantages for targeting diseases of the eye and the central nervous system.  It is anticipated that a single application of a LentiVector® platform product could provide long-term or potentially permanent efficacy.  The Company's product candidates benefit from a common manufacturing platform, which can facilitate accelerated development and regulatory strategies.  With strong industry alliances, a growing clinical data set and a favourable safety profile, the LentiVector® platform is increasingly recognised as a leading platform to fight chronic disease.

 

OCULAR PORTFOLIO

 

Revenue-generating ocular collaboration: US$53 million committed by Sanofi to date

In April 2009, Oxford BioMedica became the first company to establish a lentiviral vector multi-product alliance with a large pharmaceutical company.  The Sanofi partnership comprises four LentiVector® platform product candidates for four ocular indications: RetinoStat® for "wet" age-related macular degeneration (AMD); StarGen™ for Stargardt disease; UshStat® for Usher syndrome type 1B; and EncorStat® for corneal graft rejection.  The agreement included an upfront receipt of US$26 million and up to US$24 million in development funding over the initial phase of development.

 

· Options exercised for StarGen™ and UshStat® for a total of US$3 million

In June 2012, Sanofi elected to exercise its options under the 2009 agreement to acquire exclusive worldwide licences for further development, manufacture and commercialisation of StarGen™ and UshStat®.  Oxford BioMedica received the aggregate option exercise payments of US$3 million in July 2012 and is eligible for further development and commercialisation milestone payments and royalties on any future sales of the products.  Oxford BioMedica is currently conducting the ongoing Phase I/IIa trials for StarGen™ and UshStat®.  The companies continue to work together to plan the next stages of development and finalise the terms of the worldwide licence agreements.

 

· Ground-breaking RetinoStat® data show sustained, dose-related protein expression

Oxford BioMedica delivered data from its Phase I study in "wet" age-related macular degeneration (AMD) throughout 2012.  The first results were announced at the 2012 Annual Meeting of the Association for Research in Vision and Ophthalmology (ARVO), the largest and most respected eye and vision research organisation in the world.  The ongoing study is led by Professor Peter Campochiaro at the Wilmer Eye Institute at Johns Hopkins, Baltimore (USA) and Oxford BioMedica opened a second clinical site in August 2012 at the Oregon Health & Science University, Portland (USA) with Dr Andy Lauer as Principal Investigator.  The latest highlights from the trial include:

 

¾    favourable, long-term safety profile now up to 19 months post-treatment (dose level 1);

¾    successful retinal transduction, as shown by substantial increase in expression and secretion of endostatin and angiostatin proteins measured in the anterior chamber of the eye following a single administration of RetinoStat®;

¾    long-term protein expression1: now sustained for at least one year post-treatment at dose levels 1 and 2, and at least two months at dose level 3; and

¾    further preliminary data continue to show a dose response, with the escalation to dose levels 2 and 3 yielding an increase in average protein expression.

 

1. as at latest available time points

 

The RetinoStat® Phase I study was the first US clinical study to directly administer a lentiviral vector-based treatment to patients.  Furthermore, Oxford BioMedica believes this is the first time that protein expression has been directly demonstrated in the eye following the administration of a gene therapy. 

 

· Favourable RetinoStat® safety profile supports treatment of less severe "wet" AMD patients

Oxford BioMedica has completed the first three patient cohorts (n=9, ascending dose levels 1, 2 and 3) and treatment of the final patient cohort is ongoing (confirmatory dose level).  Given the encouraging preliminary data, in December 2012 Oxford BioMedica and Sanofi submitted an amendment to the existing Phase I study protocol to broaden the patient population to include up to 12 patients with a less severe level of the disease in the confirmatory dose cohort.   

 

As a regulatory requirement, RetinoStat® must first be tested for safety in patients with a severe level of disease.  As such, patients can often be elderly and may find the commitment of surgery plus frequent follow up appointments challenging.  Whilst recruitment of the final patient cohort was slower than anticipated during Q4 2012, the protocol amendment has considerably widened the pool of eligible patients which is expected to positively influence recruitment onto the study.

 

· Funding award for UshStat® Phase I/IIa study from Foundation Fighting Blindness

In July 2012, the US non-profit organisation, the Foundation Fighting Blindness, granted Oxford BioMedica an award of US$125,000.  The award will support the opening of a second clinical site for the ongoing UshStat® Phase I/IIa study, currently led by Professor Richard Weleber in the US at the Oregon Health & Science University's Casey Eye Institute.  The second clinical site will be at Centre Hospitalier National d'Ophtalmologie des Quinze-Vingts in Paris, France with Professor José-Alain Sahel as Principal Investigator.  The Company submitted a dossier to the Haut Conseil des Biotechnologies (HCB) in Q4 2012.  Subject to receiving regulatory approval, the second clinical site is expected to open in H2 2013.

 

· Continued support from expert Data Safety Monitoring Board (DSMB)

As expected, Oxford BioMedica reported early StarGen™ data in August 2012 following a positive review of the ongoing RetinoStat® and StarGen™ studies by the DSMB, an independent panel of experts in the field of ophthalmology, virology and vectorology.  In addition, the Company announced a further update across its clinical ocular programmes in November 2012 following a positive DSMB review of first patient cohort in UshStat® Phase I/IIa study.

 

Next objectives

Treatment of the final RetinoStat® patient cohort (n=up to 12) is ongoing and six-month data are expected to be reported by the end of the year.  At any time prior to or within a defined period after completion of the RetinoStat® Phase I study, Sanofi can exercise its option to license RetinoStat® which would trigger a significant milestone payment to Oxford BioMedica.  As funding resources have been focused on the clinical development of the first three products, the companies continue to evaluate the optimal development strategy for EncorStat®.

 

Market opportunity

AMD is a major cause of blindness affecting an estimated 25 million to 30 million people worldwide and the incidence of AMD is steadily increasing.  Neovascular "wet" AMD accounts for 90% of all severe vision loss from the disease with up to 4.5 million patients worldwide (source: AMD Alliance International).  The industry standard treatment for "wet" AMD and other related ocular conditions had global sales in excess of US$4.8 billion in 2012 (source: Novartis/Roche/Regeneron).  On the basis of non-clinical data, it is anticipated that RetinoStat® may require only a single administration.  If so, this would give the product a significant advantage over currently available treatments in the market that require frequent, repeated administration.  With no approved treatments for Stargardt disease (StarGen™), Usher syndrome type 1B (UshStat®) or corneal graft rejection (EncorStat®), these indications have an estimated market of $780 million (source: Oxford BioMedica).

 

Glaucoma-GT: targeting chronic glaucoma with Mayo Clinic

In collaboration with Mayo Clinic, Rochester (USA), Oxford BioMedica is developing a novel gene therapy for the treatment of chronic glaucoma.  Under the terms of the agreement, Mayo Clinic and Oxford BioMedica will undertake pre-clinical studies to establish the feasibility of treating glaucoma using Oxford BioMedica's proprietary LentiVector® gene delivery technology expressing a COX-2 gene and a PGF-2α receptor gene to reduce intraocular pressure.

 

Oxford BioMedica has successfully completed initial pre-clinical studies which have demonstrated that the LentiVector® platform is both well-tolerated at high vector dose and transduces suitable target cells following transcorneal injection into the front of the eye.  In preparation for the pre-clinical efficacy study to assess the lowering of intraocular pressure, the Company has decided to evaluate a more translational glaucoma model in order to maximise proof of concept.  This pre-clinical evaluation is ongoing, results from which are expected by the end of H1 2013.

 

Next objectives

The collaboration includes an option for exclusive US rights to license Mayo Clinic's glaucoma technology which Oxford BioMedica can choose to exercise under confidential terms agreed by both parties.  In the longer term it is likely that Oxford BioMedica will require a future partner for Glaucoma-GT but in the meantime the Company will continue to move the product towards clinical development in order to add value to the asset.

 

Market opportunity

Glaucoma is a group of eye diseases characterised by vision loss due to damage of the optic nerve affecting over 60 million people worldwide (source: Mayo Clinic).  Glaucoma represents the largest ophthalmic market with global sales of over US$5 billion in 2008.  The most common form of glaucoma is classed as primary open-angle glaucoma (also known as chronic glaucoma or chronic open-angle glaucoma) which accounts for 75-95% of all glaucoma cases (source: Datamonitor 2010).  Current treatment options for glaucoma aim to reduce intraocular pressure either through topical methods (e.g. eye drops) or eye surgery, however these approaches are not effective in all cases.  It is anticipated that the use of a novel gene therapy to provide long-term control of intraocular pressure could minimise the risk of disease progression and obviate the requirement for surgery.

 

Platform evolution: the next generation of ocular gene therapies

Ophthalmology is a high growth market estimated to be worth €13.4 billion in 2011, increasing to €16 billion worldwide by 2016 (source: Visiongain).  There is strong demand for innovative products and the LentiVector® platform is well suited to creating novel, long-acting products which could command attractive pricing.  Moreover, a common manufacturing platform can facilitate predictable or accelerated development and regulatory strategies for new ocular products.  By cross-referring data generated across the LentiVector® platform portfolio, Oxford BioMedica is in an increasingly strong position to develop a new wave of high value products and improve its leading intellectual property position.

 

Oxford BioMedica is currently evaluating product candidates for four new ocular indications, including uveitis and three undisclosed genetic retinal diseases, where there is a clear unmet medical need.  The Company plans to seek funding from translational grant opportunities and charities, in addition to leveraging its relationships with key opinion leaders, in order to initiate pre-clinical programmes to demonstrate proof of concept.  The first two pre-clinical programmes are expected to start in H2 2013.

 

Market opportunity

The three undisclosed genetic retinal diseases have a conservatively estimated market of over $400 million (source: Oxford BioMedica) and niche indications such as these can build significant business value.  Uveitis has an estimated global market of over $300 million (source: GlobalData). 

 

LENTIVECTOR® PLATFORM MANUFACTURING

Oxford BioMedica is a world leader in the development of lentiviral vector-based products and, in February 2011, the Company acquired a manufacturing site situated at Cowley, close to its headquarters in Oxford.  The rationale for the acquisition was to deliver long-term operational and financial efficiencies for the Company by manufacturing its own clinical study material as opposed to outsourcing to a contract manufacturing organisation.  The cost of the acquisition, refurbishment and equipment was £3.6 million.

 

· Certification attained to perform GMP manufacturing activities for clinical supply

In June 2012, Oxford BioMedica announced that it had received approval from the UK Medicines and Healthcare products Regulatory Agency (MHRA) to manufacture bulk drug material for Investigational Medicinal Products (IMPs) at its specialist manufacturing facility.  This represents an extension of Oxford BioMedica's existing Good Manufacturing Practice (GMP) certification which covers the established in-house activities for testing and subsequent release of IMPs for clinical development.  Having attained GMP certification, the plant has since been fully-operational and authorised to perform GMP manufacturing activities in support of clinical supply.

 

· In-house manufacturing activities underway with potential to secure future alliances

The manufacturing plant totals approximately 16,000 square feet, which includes c. 4,400 square feet in cleanrooms.  With two primary clean room suites on the first floor, there is also capacity for a third suite in addition to fill and finish capabilities on the ground floor.  Oxford BioMedica therefore has flexibility to run up to three specialist manufacturing suites in parallel.  Since June 2012, Oxford BioMedica has been working on the StarGen™ and UshStat® technology transfer to Sanofi which has required some manufacturing activity.  The Company has also produced test batches of the enhanced ProSavin® product construct, to support the ongoing pre-clinical bridging studies, and test batches of RetinoStat® for MHRA comparability testing requirements.  Not only does Oxford BioMedica have the capacity to support its existing programmes, but there is also ample opportunity for the Company to become the supplier of choice for its current and future partners.

 




 

· OXB Solutions: www.oxbsolutions.co.uk

Oxford BioMedica has launched a microsite, called OXB Solutions, designed to support the Company's alliances in GMP manufacturing and leverage its leading position in intellectual property, translational research and clinical development.  This online communications tool provides a strong platform from which Oxford BioMedica can inform and update its existing partners and key stakeholders.  It will also help to build new relationships and industry alliances across all stages of viral vector product development and GMP manufacturing from clinical to commercial scale.

 

· New master services agreement with Immune Design Corp.

In September 2012, Oxford BioMedica signed a master services agreement with Immune Design.  The collaboration aims to leverage Oxford BioMedica's expertise in lentiviral vector clinical development by focusing on the design and validation of custom analytical methods, in order to facilitate the future clinical development path for Immune Design's pre-clinical therapeutic vaccine candidate for the treatment of cancer.

 

Next objectives

Oxford BioMedica regularly manufactures test batches of viral vector for third parties; this could lead to new alliances or research collaborations in 2013.

 

OTHER ASSETS

 

PROSAVIN®: gene-based therapy for Parkinson's disease (PD)

Parkinson's disease is a progressive movement disorder caused by the degeneration of dopamine producing nerve cells in the brain.  ProSavin® uses the Company's LentiVector® gene delivery technology to deliver the genes for three enzymes that are required for dopamine synthesis.  The product is administered locally to the region of the brain called the striatum, converting cells into a replacement dopamine factory within the brain, thus replacing the patient's own lost source of the neurotransmitter in a tonic level analogous to natural dopamine supply in the absence of PD.

 

· Pioneering Phase I/II study successfully met primary endpoints

In April 2012, Oxford BioMedica announced that a Phase I/II study to assess the safety, efficacy and dose evaluation of ProSavin® in patients with mid- to late-stage PD successfully met its primary endpoints.  The study evaluated three ascending dose levels of ProSavin® (1x, 2x and 5x) in a total of 15 patients.  The primary endpoints were safety and efficacy as measured by improvements in motor function at six months.  ProSavin® has demonstrated a long-term safety profile and all 15 patients showed improvements in motor function at the six-month efficacy endpoint relative to baseline.

 

· ProSavin® mediates long-term improvement of motor function

Oxford BioMedica will monitor all patients treated for at least 10 years post-treatment.  Motor function assessments at the latest available time points indicate:

 

¾    Cohort 1 (1x dose): improvement vs. baseline after four years (n=2 of 3)

¾    Cohort 2 (2x dose): improvement vs. baseline after three years (n=3 of 3)

¾    Cohort 3 (2x dose, enhanced technique): improvement vs. baseline after two years (n=2 of 3)

¾    Cohort 4 (5x dose, enhanced technique): improvement vs. baseline after 12 months (n=6 of 6)

 

Results can vary considerably when treating small patient numbers, particularly in a heterogeneous disease such as PD; for example, a patient in cohort 1 (at four years) and another in cohort 3 (at two years) did not show an improvement over baseline at their latest assessments.  However, given the nature of this inexorably degenerative disease, the overall results are very encouraging as the expected disease progression without ProSavin® may be significantly worse. 

 

· Non-clinical programme for product optimisation on track

Oxford BioMedica is currently evaluating a more potent product construct to ensure the greatest chance of success in future randomised Phase II studies, by increasing the benefit for patients, and to increase the commercial opportunity by offering extended patent protection and a relative reduction in cost of goods.  The Company initiated a non-clinical programme in H1 2012 to evaluate the efficacious dose range of the enhanced product construct using the gold standard MPTP model of Parkinson's disease.  The non-clinical programme will evaluate improvements in motor function, in addition to Positron Emission Tomography (PET) data to assess dopaminergic activity.  Progress is on track and the full non-clinical programme is expected to complete in Q3 2013.

 




 

Next objectives

Oxford BioMedica is seeking further funding, via a development partnership or grant opportunities, to support a small Phase IIa trial which would generate valuable data.  The Company holds regular updates with interested parties and is evaluating the most effective strategy to advance the enhanced ProSavin® construct into its next stage of development.

 

Market opportunity

Parkinson's disease affected approximately 2.3 million patients in 2011 in the seven major markets (US, Japan, UK, France, Germany, Italy and Spain), projected to rise to 2.8 million by 2021 (source: Datamonitor).  None of the current treatments provide long-term relief from symptoms, yet, by 2019, sales of these treatments could exceed US$2.8 billion in the seven major markets (source: Datamonitor).  ProSavin® has the potential to address a major unmet medical need in Parkinson's disease, offering long-lasting benefit from a single administration with an excellent safety profile.  The product could therefore also significantly reduce the social care burden that is associated with the mid to late-stage of disease.

 

MONUDIN®: motor neuron disease

The pre-clinical development of MoNuDin® is supported by the UK Motor Neurone Disease Association (MNDA).  The LentiVector® platform technology has the ability to deliver genes safely and efficiently to the neuronal cells affected by motor neuron disease.  In collaboration with VIB/University of Leuven, funded by a grant from the MNDA, Oxford BioMedica is exploring novel therapeutic approaches to treat Amyotrophic Lateral Sclerosis (ALS), the most prevalent type of motor neuron disease.  A route of administration directly into the cerebrospinal fluid bathing the spinal cord has been established.  Two forms of vascular endothelial growth factor (VEGF) have since been evaluated using this method.  Further pre-clinical work to evaluate the efficacy of these VEGF forms in a model of ALS is ongoing.  One of the major hurdles to treating motor neurone disease is ensuring that therapeutic agents are delivered to the relevant site of action in the brain and spinal cord; therefore this collaboration continues to support the future clinical development of MoNuDin®.

 

Market opportunity

Despite being one of the most common neurodegenerative diseases of adult onset, motor neuron disease has a high unmet need.  Amyotrophic lateral sclerosis (ALS), often referred to as Lou Gehrig's disease, is the most prevalent type of motor neuron disease.  In the US, there are an estimated 30,000 patients with ALS and nearly 6,000 new cases are diagnosed annually (source: ALS Association).  If MoNuDin® proves to be an effective neuroprotective treatment that can slow or arrest injury to patients' motor neurons, it would have compelling competitive advantages.

 

5T4 TUMOUR ANTIGEN PLATFORM

Oxford BioMedica's proprietary 5T4 antigen is an ideal target for anti-cancer treatment given its restricted expression on normal tissues and its high prevalence on the surface of cancerous cells across a wide range of solid tumours.

 

TroVax®(MVA-5T4): therapeutic cancer vaccine with a biomarker

TroVax® is a late-stage clinical asset that has completed 10 clinical trials in colorectal, renal and prostate cancer.  Few immunotherapy treatments have demonstrated a direct link between the predicted mode of action and clinical benefit.  TroVax® stands apart as a cancer vaccine that elicits a strong and readily definable immune response.  Oxford BioMedica has identified a biomarker, using a simple blood test, which predicts both the magnitude of the induced 5T4 antibody response and treatment benefit.  This enables us to identify those patients who are most likely to benefit from treatment with TroVax®

 

· Encouraging preliminary biomarker data

In October 2012, Oxford BioMedica made a strategic decision to close its US Phase II study in hormone refractory prostate cancer (HRPC) to focus on investigator-led Phase II studies.  As the HRPC study closed prior to completion of patient recruitment the efficacy results should be interpreted with caution, however data indicate:

 

¾    a trend towards increased time to disease progression in patients who received TroVax® plus chemotherapy drug docetaxel versus those who received docetaxel alone; and

¾    prospective validation that Oxford BioMedica's pre-treatment biomarker can identify patients most likely to benefit from treatment with TroVax®.

 




 

· First of multiple Phase II investigator-led studies underway

In July 2012, Oxford BioMedica's partners at Cardiff University, Wales (UK) initiated a Phase II trial to assess the safety and immunological activity of TroVax® in patients with inoperable metastatic colorectal cancer.  The Company expects two further sponsored Phase II studies in mesothelioma and ovarian cancer to be initiated in the UK by academic collaborators in 2013.  All of these studies will use the biomarker to select patients for the studies.

 

Next objectives

Securing a partner to fund TroVax®'s future late-stage development remains a priority.  Expenditure on TroVax® to support the investigator-led Phase II studies will be modest. 

 

5T4-targeted antibody therapy for cancer: partnered with Pfizer

Pfizer's continued commitment to the 5T4-ADC programme, as demonstrated by presentations at key industry conferences during 2012, is encouraging.  The potential value of Oxford BioMedica's collaboration with Pfizer is up to US$28 million, which comprises upfront payments, license option fees and milestone payments that are subject to the achievement of certain project objectives.  The next milestone payment to Oxford BioMedica would be due if Pfizer initiates clinical trials for the development of a 5T4-targeted antibody therapy.

 

Diagnostic cancer imaging: research collaboration with ImaginAb

In November 2012 ImaginAb exercised its option to acquire an exclusive worldwide licence for commercialisation of an in vivo 5T4-based imaging diagnostic.  ImaginAb is preparing to initiate clinical development of the 5T4 in vivo diagnostic in 2013.  Under the terms of the agreement, Oxford BioMedica received an upfront option exercise payment and could receive proceeds up to a total of US$4 million in future initiation and development milestone payments, in addition to royalties on product sales, subject to the achievement of certain programme objectives.

 

Market opportunity

The oncology market was estimated to be $72 billion in 2010, forecast to grow to $93 billion in 2015 (source: Datamonitor, 2011).  In particular, the cancer targeted therapies and immunotherapy market was $19.5 billion in 2009, forecast to increase to $36.8 billion in 2019 (source: Datamonitor, 2010).  TroVax® is administered in the same way as most infectious disease vaccines are given; a simple injection in the arm.  If shown to be efficacious in a pivotal trial for even just one of the major cancers where it is known that 5T4 is present on the tumours, TroVax® has significant potential.  The concept of an anti-cancer therapy, which has antibody-like specificity as well as chemotherapy-like potency, is clearly attractive.  The 5T4-targeted antibody therapy has the potential to benefit patients with any solid cancer that expresses the 5T4 tumour antigen, which represents a multi-billion US dollar market.  Targeted molecular imaging for the diagnosis and staging of cancer also holds significant promise in the era of personalised medicine.

 

INTELLECTUAL PROPERTY AND TECHNOLOGY LICENSING

The LentiVector® platform technology is protected by a comprehensive patent portfolio of around 60 patent families including over 500 issued patents.  In November 2012, Oxford BioMedica announced that the Carnegie Institution for Science and the University of Massachusetts Medical School were granted a key US patent for the use of RNA interference (RNAi) to inhibit expression of a target gene in animal cells, including mammalian cells.  The patent covers vector-based delivery of RNAi and, as a result, triggered a modest milestone payment by Oxford BioMedica for its exclusive rights to this technology.  This patent further strengthened the Company's leading intellectual property position.

 

The Company also has the potential to enjoy future milestone payments and royalties from a number of licensing agreements with partners who are developing mid- to late-stage products including:

 

MolMed:

2004: Licensed Oxford BioMedica's retroviral ex vivo gene delivery technology (TK008 in Phase III for transplant rejection in patients with acute leukaemia)

 

Bavarian Nordic:

2010: Licensed  Oxford BioMedica's heterologous PrimeBoost technology patents and poxvirus patents (PROSTVACTM is in Phase III for advanced prostate cancer)

 

Emergent BioSolutions:

2010: Licensed Oxford BioMedica's heterologous PrimeBoost technology patents and poxvirus patents (Tuberculosis vaccine is in Phase II)

 




 

FINANCIAL REVIEW

 

"2012 has been an important developmental year for Oxford BioMedica from a financial perspective.  In February 2012, steps were taken to reduce costs and 16 staff were made redundant.  This included the closure of the small US office.  In June 2012 our manufacturing facility in Oxford was approved by the MHRA (Medicines and Healthcare products Regulatory Agency) to manufacture bulk drug material for Investigational Medicinal Products. This approval gives us the opportunity in the future of generating revenues which would reduce our cash burn, as well as making substantial savings on our internal R&D programmes.  We also benefited in June 2012 from Sanofi exercising its options over StarGen™ and UshStat® which brought in $3.0 million (£1.9 million) and opens up the prospect of future development milestones.  In July 2012 we completed a Firm Placing and Open Offer raising £10.1 million net of expenses.  At the end of 2012, we had £14.1 million of cash, cash equivalents and available for sale investments."

 

Financial overview

At the start of 2012 the cash balance was £14.3 million.  During the year the cash burn was £10.5 million compared with £16.5 million during 2011.  Following the £10.1 million net proceeds from the fundraising in July 2012 and a further £0.2 million invested by the Carnegie Institution for Science and the University of Massachusetts Medical School, the cash balance was £14.1 million at 31 December 2012.

 

Revenue £7.8 million (2011: £7.7 million)

Revenues were virtually unchanged in 2012 compared with 2011 although the composition was slightly different. 

 

The bulk of the Group's revenue in 2012 and 2011 was generated from the collaboration with Sanofi which began in April 2009.  There are three elements in 2012.  First, in 2009 the Group received a non-refundable upfront payment of US$26 million (£16.6 million) which is being spread over the term of the agreement.  Revenue to date of £15.9 million has been recognised under this collaboration, of which £3.4 million was recognised in 2012 (£4.7 million in 2011). The remaining £0.7 million is classified as deferred income and is expected to be recognised as income in the next 12 months.  Secondly, Sanofi is funding R&D expenditure on the four products covered by the collaboration agreement up to a maximum of $24 million.  To date, £13.3 million (US$21.1 million) has been recognised as revenue, of which £1.9 million was recognised in 2012 (£2.7 million in 2011). £0.6m has been classified as current deferred income.  Finally, under the 2009 agreement, Sanofi has the option to acquire exclusive worldwide licences for further development, manufacture and commercialisation of any one or all of the products covered by the agreement.  In June 2012, Sanofi exercised its options in relation to StarGen™ and UshStat®, triggering option fees of $2.0 million and $1.0 million respectively (in aggregate £1.9 million) which were recognised as revenue in full in 2012.

 

Cost of sales £0.7 million (2011: £0.6 million)

Costs of sales are the royalties payable to third party licensors attributable to upfront and option fees from the Sanofi agreement that are recognised as revenue.  The increase in cost of sales in 2012 is caused by the royalty payments due to licensors triggered by the receipt of the option fees for StarGen™ and UshStat®

 

Research & development costs £14.0 million (2011: £14.7 million (pre-exceptional items))

R&D costs comprise external costs paid for clinical trial materials and outsourced activities; in-house expenditure including staff costs, R&D consumables, intellectual property, facilities and depreciation of R&D assets; and amortisation of intangibles.  External costs in 2012 were lower than in 2011 mainly because the costs of the Sanofi collaboration activities, £1.9 million, were lower than in 2011 (£2.7 million).  Other external costs were mainly in respect of the enhanced ProSavin® construct non-clinical studies and the Trovax® prostate cancer study, the latter of which was terminated in October 2012.

 

Administrative expenses £3.6m (2011: £3.8m)

Administrative expenses of £3.6 million in 2012 were £0.2 million lower than in 2011 despite the inclusion in 2012 of redundancy costs and the closure of the US office, and also £0.4 million professional fees incurred on a confidential corporate project.

 

Operating loss (pre-exceptional) £10.5 million (2011: £11.3 million pre-exceptional)

The operating loss in 2012 of £10.5 million was £0.8 million lower than in 2011 because of the lower R&D and administrative expenses. 

 

 

Net finance income £0.1 million (2011: £0.1 million)

Finance income in 2012 was virtually unchanged from 2011, as interest rates remain low and average cash balances in the two years were similar.

 

Tax credit £1.6 million (2011: £1.7 million)

The tax credit of £1.6 million (2011:£1.7 million) represents the amount expected to be received under current legislation on research and development tax credits for small and medium-sized companies plus any prior year adjustments.

 

Loss for the year before exceptional items £8.7 million (2011: £9.5 million)

Before exceptional items, the lower net loss in 2012 is attributable to the lower costs and operating loss. 

 

Balance sheet

Non-current assets decreased from £7.3 million at the start of the year to £6.8 million at 31 December 2012.  There were additions of £0.2 million intangible assets and £0.3 million property, plant and equipment which were offset by £0.4 million amortisation of intangible assets and £0.6 million depreciation of fixed assets.

 

Current assets declined from £18.8 million at the start of the year to £17.6 million due mainly to lower trade and other receivables.  The 2011 trade and other receivables balance had a significant VAT receivable and also larger clinical trial prepayments than at 31 December 2012.

 

Current liabilities have decreased from £7.7 million at 31 December 2011 to £4.3 million at 31 December 2012.  Trade and other payables are £0.5 million lower, mainly due to lower trade payables, and current deferred revenue is £2.8 million lower because most of the Sanofi collaboration agreement upfront payment has now been recognised.

 

Cash resources

Cash used in operations in 2012 was £11.5 million, £2.8 million less than in 2011, and the R&D tax credit received was a similar amount at £1.5 million (2011 £1.4 million).  Fixed asset purchases of £0.5 million in 2012 were much lower than in 2011 when £3.6 million was spent, largely on the purchase and refurbishment of the manufacturing facility.

 

In 2012, £10.3 million net proceeds were received from the issue of ordinary shares, compared with £18.6 million in 2011.

 

At the end of 2012, the Group had £14.1 million of cash, cash equivalents and current financial investments (2011 £14.3 million).

 

Financial outlook

With £14.1 million cash resources at the end of 2012 the Group has sufficient financial resources to fund the business into Q1 2014.  However this does not take into account the potential revenue generating possibilities from the manufacturing facility, nor the significant option fee should Sanofi choose to exercise its option over RetinoStat® during 2013.  We are also continuing to explore ways of generating cash from ProSavin® and TroVax®.

 

Our objective is to develop Oxford BioMedica's business model in a balanced way such that net cash burn is reduced to the point where we reach sustainable profitability.  We also continue to seek to leverage the value of our intellectual property through strategic partnerships and other growth opportunities may also come from corporate activity.

 

Tim Watts

Chief Financial Officer


Consolidated statement of comprehensive income

for the year ended 31 December 2012

 



2012


2011



Notes

Total

£'000

Pre-exceptional items

£'000

Exceptional items

(note 6)

£'000

Total

£'000

Revenue


7,756

7,718

-

7,718

Cost of sales


(667)

(555)

-

(555)

Gross profit


7,089

7,163

-

7,163

 

Research and development costs

 

 

(14,015)

(14,710)

(3,136)

(17,846)

Administrative expenses


(3,619)

(3,811)

-

(3,811)

Other operating income: grants receivable


58

56

-

56

Operating loss


(10,487)

(11,302)

(3,136)

(14,438)







Finance income


141

144

-

144

Finance costs


(3)

(8)

-

(8)

Loss before tax


(10,349)

(11,166)

(3,136)

(14,302)

Taxation

4

1,619

1,671

-

1,671

Loss for the year


(8,730)

(9,495)

(3,136)

(12,631)







Other comprehensive income

Exchange adjustments


-

(2)

-

(2)

Total recognised comprehensive expense for the year attributable to owners of the parent


(8,730)

(9,497)

(3,136)

(12,633)

 

Basic loss and diluted loss per ordinary share

5

(0.76p)



(1.35p)

 

The notes on pages 17 to 23 form part of this preliminary information.




Balance sheet

as at 31 December 2012

 

 

Notes

2012

£'000

2011

£'000

Assets

 

 

 

Non-current assets

 

 

 

Intangible assets

6

2,931

3,106

Property, plant and equipment

7

3,902

4,213

Financial assets: Investments in subsidiaries

 

-

-

 

 

6,833

7,319

Current assets

 

 

 

Trade and other receivables

8

1,705

2,800

Current tax assets

 

1,824

1,641

Financial assets: Available for sale investments

 

5,105

7,500

Cash and cash equivalents

 

8,956

6,835

 

 

17,590

18,776

Current liabilities

 

 

 

Trade and other payables

9

2,702

3,226

Deferred income

10

1,568

4,386

Provisions

11

-

41

 

 

4,270

7,653

Net current assets/(liabilities)

 

13,320

11,123

Non-current liabilities

 

 

 

Deferred income

10

-

170

Provisions

11

510

501

 

 

510

671

Net assets

 

19,643

17,771

 

 

 

 

Equity attributable to owners of the parent

 

 

 

Ordinary shares

 

14,162

9,449

Share premium

 

130,304

124,755

Merger reserve

 

14,310

14,310

Other reserves

 

(682)

(682)

Accumulated losses

 

(138,451)

(130,061)

Total equity

 

19,643

17,771

 

The notes on pages 17 to 23 form part of this preliminary information.




Statement of cash flows

for the year ended 31 December 2012

 

 

 

2012

2011

 

Notes

£'000

£'000

Cash flows from operating activities

 

 

 

Cash used in operations

12

(11,470)

(14,323)

Interest paid

 

(3)

-

Tax credit received

 

1,500

1,418

Overseas tax paid

 

(64)

(78)

Net cash used in operating activities

 

(10,037)

(12,983)

 

 

 

 

Cash flows from investing activities

 

 

 

Purchases of property, plant and equipment

 

(476)

(3,640)

Purchases of intangible assets

 

(195)

(9)

Net maturity/(purchase) of available for sale investments

 

2,395

(1,897)

Interest received

 

172

144

Net cash generated from/(used in) investing activities

 

 

1,896

 

(5,402)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from issue of ordinary share capital

 

11,779

20,000

Costs of share issues

 

(1,517)

(1,430)

Net cash generated from financing activities

 

 

10,262

 

18,570

 

 

 

 

Net increase in cash and cash equivalents

 

 

2,121

 

185

Cash and cash equivalents at 1 January

 

6,835

6,653

Effects of exchange rate changes

 

-

(3)

Cash and cash equivalents at 31 December

 

8,956

6,835

 

The notes on pages 17 to 23 form part of this preliminary information.

 




Statement of changes in equity attributable to owners of the parent company

for the year ended 31 December 2012

 



Share capital

Share premium

Merger reserve

Other reserves

Accumulated losses

Total

Group


£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2011


5,449

110,387

14,310

(680)

(117,861)

11,605

Year ended 31 December 2011:








Exchange adjustments


-

-

-

(2)

-

(2)

Loss for the year


-

-

-

-

(12,631)

(12,631)

Total comprehensive expense for the year


-

-

-

(2)

(12,631)

(12,633)

Transactions with owners:

Share options








  Value of employee services


-

-

-

-

431

431

Issue of shares excluding options


4,000

16,000

-

-

-

20,000

Costs of share issues


-

(1,632)

-

-

-

(1,632)

At 31 December 2011


9,449

124,755

14,310

(682)

(130,061)

17,771

Year ended 31 December 2012:








Exchange adjustments


-

-

-

-

-

-

Loss for the year


-

-

-

-

(8,730)

(8,730)

Total comprehensive expense for the year


-

-

-


(8,730)

(8,730)

Transactions with owners:

Share options








  Value of employee services


-

-

-

-

340

340

Issue of shares excluding options


4,713

7,066

-

-

-

11,779

Costs of share issues


-

(1,517)

-

-

-

(1,517)


14,162

130,304

14,310

(682)

(138,451)

19,643

 

The notes on pages 17 to 23 form part of this preliminary information.




NOTES TO THE PRELIMINARY FINANCIAL INFORMATION

for the year ended 31 December 2012

 

1          Basis of preparation

 

This financial information for the years ended 31 December 2012 and 31 December 2011 does not constitute the statutory financial statements for the respective years and is an extract from the financial statements.  It is based on, and is consistent with, that in the Group's statutory accounts for the year ended 31 December 2012 and those financial statements will be delivered to the Registrar of Companies following the Company's Annual General Meeting.  Financial statements for the year ended 31 December 2011 have been delivered to the Registrar of Companies.  The auditors' reports on the financial statements for the years ended 31 December 2012 and 31 December 2011 were unqualified and did not contain statements under section 498 of the Companies Act 2006. The financial information in this report does not constitute statutory financial statement within the meaning of sections 434-436 of the Companies Act 2006.

 

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations endorsed by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements are prepared in accordance with the historical cost convention. Whilst the financial information included in this preliminary announcement has been prepared in accordance with IFRSs adopted for use in the European Union, this announcement does not itself contain sufficient information to comply with IFRSs.

 

Copies of this announcement and the interim report for 2012 are available from the Company Secretary and are on the Company's website. The audited statutory financial statements for the year ended 31 December 2012 are expected to be distributed to shareholders by 30 April 2013 and will be available at the registered office of the Company, Medawar Centre, Oxford Science Park, Oxford, OX4 4GA. Details can also be found on the Company's website at: www.oxfordbiomedica.co.uk.

 

This announcement was approved by the Board of Oxford BioMedica plc on 26 February 2013.

 

Going concern

Oxford BioMedica plc is a research and development based business with no currently marketed products.  The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's message (page 3), the Chief Executives' review (page 4) and the operational review on pages 5 to 10.  The financial position of the Group, including its cash flows, is described in the financial review on pages 11 to 12.

 

The Group expects to incur significant further costs as it continues to develop its portfolio of candidate products, manufacturing capability and related technology. The Directors estimate that the current cash and available for sale investments held by the Group will be sufficient to support the current level of activities into the first quarter of 2014, without any additional revenue streams.  Based on anticipated progress in the business in 2013, the Directors also expect to secure additional collaborative and/or commercial manufacturing income, or financing sufficient for the future needs of the business beyond the first quarter of next year.  However, there is no certainty that adequate resources will be available on a timely basis, and in the event that further funding is not achieved, then the Group would have to curtail or suspend the existing programme development in order to conserve cash and extend the cash runway.

 

After making enquiries, the Directors consider that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing the financial statements.

 

Use of estimates and assumptions

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and judgements are continually made and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable in the circumstances.

 

Critical accounting estimates and assumptions

In applying the Group's accounting policies, management is required to make judgements and assumptions concerning the future in a number of areas. Actual results may be different from those estimated using these judgements and assumptions. The key sources of estimation uncertainty and critical accounting judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

 

Revenue recognition

In 2009 the Group received an up-front non-refundable payment of US$26.0 million (£16.6 million) from Sanofi under the ocular product collaboration.  This is being recognised as revenue on a straight line basis over the expected duration of the initial stage of the collaboration for each of the four products.  During 2012, the recognition period has been varied to recognise that i) Sanofi has exercised its options over StarGen™ and UshStat®  and will take over these studies before June 2013, ii) the RetinoStat® study will complete during 2013, and iii) the utilisation of EncorStat® funding on the other three products.  As at December 2012 revenue of £15.9 million has been recognised under this collaboration, of which £3.4 million was recognised in 2012. The remaining £0.7 million is expected to be recognised as income in the next 12 months and is classified as current deferred income, with £nil classified as non-current.

 

If the revenue recognition periods had been three months longer, the amount of revenue recognised in 2012 would have been reduced by £0.6 million (2011: £0.6 million) and the amount of deferred income carried forward at 31 December 2012 increased by £0.6 million (2011: £0.6 million).

 

Over the term of the ocular product collaboration with Sanofi, Oxford BioMedica may recover up to US$24.0 million in research and development funding and recognise this as revenue.  Project costs in excess of US$24.0 million will be borne by Oxford BioMedica.  The amount of research and development funding that is recognised as revenue is based on an estimate of the amount of project costs expected to be borne by the Group by the end of the collaboration.  Up to 31 December 2012 £13.3 million (2011: £11.4 million) had been recognised as revenue and £0.6 million (2011: £0.4 million) had been classified as current deferred income. If the estimated total project expenditure had been 5% higher, the amount of revenue recognised to 31 December 2012 would have been £0.6 million (2011: £0.6 million) lower and the amount of deferred income higher by the same amounts.

 

Intangible asset impairment

The Group has significant intangible assets arising from purchases of intellectual property rights and in-process R&D.  Amortisation is charged over the assets' patent life on a straight line basis from the date that the asset becomes available for use.  When there is an indicator of a significant and permanent reduction in the value of intangible assets, an impairment review is carried out.  The impairment analysis is principally based on estimated discounted future cash flows.  Actual outcomes could vary significantly from such estimates of discounted future cash flows, due to the sensitivity of the assessment to the assumptions used.  The determination of the assumptions is subjective and requires the exercise of considerable judgement.  Any changes in key assumptions about the Group's business and prospects or changes in market conditions affecting the Group or its development partners could materially affect whether an impairment exists.  This risk is now concentrated on purchased patent rights which have been sublicensed to collaborative partners. At 31 December 2012 the book value of intangible assets was £2.9 million of which £1.9 million related to PrimeBoost technology.  In respect of intellectual property rights and in-process R&D relating to Hi8®-MEL, following a marketing initiative that did not result in securing a partner, an impairment charge of £3.1 million was recognised in 2011, writing the Hi8®-MEL asset down to zero.

 

2          Segmental analysis

 

The chief operating decision-maker has been identified as the Senior Management Group (SMG), comprising the executive Directors and other senior managers. The SMG considers that the business comprises a single activity, which is biotechnology research and development. The SMG reviews the Group's profit or loss and its cash flows, assets and liabilities on a whole-company, consolidated basis in order to assess performance and allocate resources.  Therefore the segment financial information is the same as that set out in the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of cash flows and the consolidated statement of changes in equity.


3          Exceptional items

 

Exceptional items represent significant items of income or expense which due to their nature or the expected infrequency of the events giving rise to them, are presented separately on the face of the statement of comprehensive income to give a better understanding to shareholders of the elements of financial performance in the year, so as to facilitate comparison with prior periods and to better assess trends in financial performance.  There were no exceptional items in 2012.

 

4          Taxation

 

The Group is entitled to claim tax credits in the United Kingdom for certain research and development expenditure. The amount included in the statement of comprehensive income for the year ended 31 December 2012 comprises the credit receivable by the Group for the year less overseas tax paid in the year. The United Kingdom corporation tax research and development credit is paid in arrears once tax returns have been filed and agreed. The tax credit recognised in the financial statements but not yet received is included in current tax assets in the balance sheet. The amounts for 2012 have not yet been agreed with the relevant tax authorities.

 

 

Group

 

2012

2011

 

£'000

£'000

Current tax

 

 

United Kingdom corporation tax research and development credit

(1,497)

(1,641)

Overseas taxation

1

58

 

(1,496)

(1,583)

Adjustments in respect of prior periods

 

 

United Kingdom corporation tax research and development credit

(120)

(87)

Overseas taxation

(3)

(1)

Taxation credit

(1,619)

(1,671)

 

5          Basic loss and diluted loss per ordinary share

 

The basic loss per share has been calculated by dividing the loss for the year by the weighted average number of shares in issue during the year ended 31 December 2012 (1,146,473,109; 2011: 935,012,543).

 

As the Group is loss-making, there were no potentially dilutive options in either year. There is therefore no difference between the basic loss per ordinary share and the diluted loss per ordinary share. 

 




 

6          Intangible assets

 

 

In-process R&D

Intellectual property rights

Total

Group

£'000

£'000

£'000

Cost

 

 

 

At 1 January 2012

10,400

5,298

15,698

Additions

-

195

195

At 31 December 2012

10,400

5,493

15,893

Accumulated amortisation and impairment

 

 

 

At 1 January 2012

10,400

2,192

12,592

Amortisation charge for the year

-

370

370

At 31 December 2012

10,400

2,562

12,962

 

Net book amount at 31 December 2012

-

2,931

2,931

 

Cost

 

 

 

At 1 January 2011

10,400

5,289

15,689

Additions

-

9

9

At 31 December 2011

10,400

5,298

15,698

Accumulated amortisation and impairment

 

 

 

At 1 January 2011

7,238

1,768

9,006

Amortisation charge for the year

114

336

450

Impairment provided in the year

3,048

88

3,136

At 31 December 2011

10,400

2,192

12,592

 

Net book amount at 31 December 2011

-

3,106

3,106

 

For intangible assets regarded as having a finite useful life amortisation commences when products underpinned by the intellectual property rights become available for use. Amortisation is calculated on a straight line basis over the remaining patent life of the asset.

 

An intangible asset is regarded as having an indefinite useful life when, based on an analysis of all of the relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. There are currently no assets with indefinite useful lives.

 

In-process R&D relates to the product Hi8®-MEL acquired as part of the acquisition of Oxxon Therapeutics Limited in 2007. During 2011 a process to divest Hi8®-MEL was concluded without securing a partner. The asset was fully impaired in 2011 with a charge of £3,136,000.

 

The Company had no intangibles at 31 December 2012 or 31 December 2011.

 




 

7          Property, plant and equipment

 

 

Freehold property

Short

leasehold

improvements

Office

 equipment & computers

Laboratory

equipment

Total

 

£'000

£'000

£'000

£'000

£'000

Cost

 

 

 

 

 

At 1 January 2012

3,115

3,011

606

3,316

10,048

Additions at cost

15

17

30

254

316

Disposals

-

(424)

(45)

-

(469)

At 31 December 2012

3,130

2,604

591

3,570

9,895

Accumulated depreciation

 

 

 

 

 

At 1 January 2012

45

2,810

388

2,592

5,835

Charge for the year

213

63

98

227

601

Disposals

-

(424)

(19)

-

(443)

At 31 December 2012

258

2,449

467

2,819

5,993

Net book amount at 31 December 2012

2,872

155

124

751

3,902

 

 

 

 

Freehold property

Short

leasehold

improvements

Office

 equipment & computers

Laboratory

equipment

Total

 

 

£'000

£'000

£'000

£'000

£'000

Cost

 

 

 

 

 

 

At 1 January 2011

 

-

2,966

441

2,913

6,320

Exchange adjustments

 

-

1

-

-

1

Additions at cost

 

3,115

44

214

596

3,969

Disposals

 

-

-

(49)

(193)

(242)

At 31 December 2011

 

3,115

3,011

606

3,316

10,048

Accumulated depreciation

 

 

 

 

 

 

At 1 January 2011

 

-

2,716

351

2,673

5,740

Exchange adjustments

 

-

1

-

-

1

Charge for the year

 

45

93

86

112

336

Disposals

 

-

-

(49)

(193)

(242)

At 31 December 2011

 

45

2,810

388

2,592

5,835

Net book amount at 31 December 2011

 

3,070

201

218

724

4,213

 

The Company had no property, plant and equipment at 31 December 2012 or 31 December 2011.

 

 

 




 

8          Trade and other receivables

 

 

Group

Company

 

2012

2011

2012

2011

 

£'000

£'000

£'000

£'000

Current

 

 

 

 

Trade receivables

315

154

-

-

Accrued income

400

33

-

-

Other receivables

184

256

-

-

Other tax receivable

140

858

-

-

Prepayments

666

1,499

11

1

Total trade and other receivables

1,705

2,800

11

1

 

9          Trade and other payables - current

 

 

Group

Company

 

2012

2011

2012

2011

 

£'000

£'000

£'000

£'000

Trade payables

881

1,200

-

-

Other taxation and social security

157

161

-

-

Accruals

1,664

1,865

23

46

Total trade and other payables

2,702

3,226

23

46

 

10        Deferred income

 

Group

2012

£'000

2011

£'000

Current

1,568

4,386

Non-current

-

170

Total deferred income

1,568

4,556

 

On 28 April 2009 the company entered into a collaborative programme with Sanofi to develop gene therapy products to treat ocular diseases. An initial non-refundable payment of US$26 million (£16,641,000) was received. Prior to 2012 this was being recognised as revenue on a straight line basis over 42 to 51 months, being the expected duration of the initial stage of the collaboration for each of the four products. In 2012, the period has been varied to recognise that i) Sanofi has exercised its options over StarGen™ and UshStat® and will take over these studies before June 2013, ii) the RetinoStat® study will complete during 2013, and iii) at Sanofi's request EncorStat® has not proceeded as originally planned and its funding was allocated to the other three products.  Revenue to date of £15,854,000 has been recognised under this collaboration, of which £3,414,000 was recognised in 2012. The remaining £787,000 expected to be recognised as income in the next 12 months and is classified as current deferred income, with £nil classified as non-current.

 

Over the term of the ocular gene therapy collaboration, Oxford BioMedica may recover from Sanofi up to US$24 million in research and development funding. Project costs in excess of US$24 million will be borne by Oxford BioMedica. To date, £13,319,000 ($21,091,000) has been recognised as revenue, of which £1,932,000 was recognised in 2012. £621,000 (2011: £355,000) has been classified as current deferred income.

 




 

11        Provisions

 

Group

Dilapidations

£'000

Onerous lease

£'000

Total

£'000

At 1 January 2012

501

41

542

Exchange adjustments

-

-

-

Utilised in the year

-

(41)

(41)

Unwinding of discount

3

-

3

Change of discount rate - adjustment to recognised property, plant and equipment

 

6

 

-

 

6

At 31 December 2012

510

-

510

At 1 January 2011

457

124

581

Exchange adjustments

-

(2)

(2)

Utilised in the year

-

(82)

(82)

Unwinding of discount

7

1

8

Change of discount rate - adjustment to recognised property, plant and equipment

 

37

 

-

 

37

At 31 December 2011

501

41

542

 

 

 

2012

£'000

2011

£'000

Current

 

-

41

Non-current

 

510

501

Total provisions

 

510

542

 

The dilapidations provision relates to anticipated costs of restoring the leasehold property in Oxford, UK to its original condition at the end of the present leases in 2016, discounted using the rate per the Bank of England nominal yield curve. The equivalent rate was used in 2011. The provision will be utilised at the end of the leases if they are not renewed.

 

The onerous lease provision related to the estimated rental shortfall in respect of a redundant property in San Diego, USA which was sub-let for the remainder of the lease term until June 2012, discounted using the rate per the Bank of England nominal yield curve. The equivalent rate was used in 2011. The provision was fully utilised in 2012.

 

12        Cash flows from operating activities

            Reconciliation of loss before tax to net cash (used in)/generated from operations

 

 

Group

 

2012

2011

 

£'000

£'000

Continuing operations

 

 

Loss before tax

(10,349)

(14,302)

Adjustment for:

 

 

Depreciation

601

336

Amortisation of intangible assets

370

450

Loss on disposal of property, plant and equipment

26

-

Charge for impairment

-

3,136

Finance income

(141)

(144)

Finance expense

3

8

Charge in relation to employee share schemes

340

431

 

 

 

Changes in working capital:

 

 

Decrease in trade and other receivables

1,224

1,229

Decrease in trade and other payables

(524)

(539)

Decrease in deferred income

(2,988)

(4,846)

Decrease in provisions

(32)

(82)

Net cash used in operations

(11,470)

(14,323)

 

-Ends-


This information is provided by RNS
The company news service from the London Stock Exchange
 

END

 
 

FR EASAKADKDEFF