Preliminary Results





RNS Number : 7194O
Oxford Biomedica PLC
12 March 2009
 



For Immediate Release

12 MARCH 2009

Please note that there will be a webcast running simultaneously to the Analyst briefing at 09:30am to connect to the webcast please follow the link  http://mediaserve.buchanan.uk.com/webcasts/room7audio/lrframes.htm

OXFORD BIOMEDICA PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008

OxfordUK - 12 March 2009Oxford BioMedica (LSE: OXB), leading gene therapy company, today announces its preliminary results for the year ended 31 December 2008

 

Operational highlights:

Strategic realignment

  • Focused development on lead programmes 

  • Reduced cost base to extend cash for operations

  • Broadened partnering discussions

  • Strengthened Board and management

TroVax® (cancer)

  • TRIST study in renal cancer will not meet primary endpoint

  • Interim TRIST analysis suggests potential benefit in renal cancer subset

  • FDA reviewing TRIST data prior to further development

  • Encouraging results from Phase I/II and II cross-trial analysis 

ProSavin® (Parkinson's disease)

  • Phase I/II results at first dose level showed 30% improvement 

  • Second dose level was safe and well tolerated

  • Developed enhanced administration technology

  • Progressed Phase II/III preparation

Financial highlights1:

  • Revenue of £18.4 million (2007: £7.2 million)

  • Research & development costs of £22.5 million (2007: £22.1 million)

  • Net loss2 of £5.5 million (2007: £15.0 million)

  • Net loss after exceptional items of £10.0 million (2007: £15.3 million)

  • Net cash burn3 of £16.9 million (2007: net cash generated3 of £5.9 million)

  • Net cash4 of £21.9 million (2007: £38.1 million) 

  • Audited financial results

  • Net loss before exceptional items

  • Net cash used in/generated by operating activities plus sales and purchases of non-current assets

  • Cash, cash equivalents and current financial assets

Commenting on the annual results, Oxford BioMedica's Chief Executive, John Dawson said: "Following the challenges of 2008, our analysis of the Phase III TRIST data has underlined our confidence in the potential of TroVax as a therapeutic cancer vaccine, although the development path depends on comments from the FDA and sanofi-aventis's portfolio reviewWe are increasingly encouraged by the emerging data from the ProSavin trial in Parkinson's disease, and we aim to accelerate the product's development. Both TroVax and ProSavin have substantial potential for value creation. By concentrating our resources on these programmes, maintaining our financial flexibility and pursuing our commercial activities, I believe that we are well-positioned for the future."

-Ends-

Analyst meeting: An analyst briefing will be held at 09:30 am at the offices of Buchanan Communications, 45 Moorfields, London EC2Y 9AE. 

Web cast: Simultaneously to the analyst briefing at 09:30 am, there will be a live audio web cast of the presentation. To connect to the web cast facility, please go to the Company's website: http://www.oxfordbiomedica.co.uk/ approximately 10 minutes (09:20 am) before the start of the briefing. A recording of the web cast will also be available afterwards on Oxford BioMedica's website.

For further information, please contact:

Oxford BioMedica plc: 

John Dawson, Chief Executive Officer

Tel: +44 (0)1865 783 000

JPMorgan Cazenove Limited:

James Mitford/ Gina Gibson

Tel: +44 (0)20 7588 2828

City/Financial Enquiries:

Lisa BaderoonMark Court/ Mary-Jane Johnson Buchanan Communications

Tel: +44 (0)20 7466 5000

Scientific/Trade Press Enquiries:

Sue Charles/ Holly Griffiths/ John McIntyre

College Hill Life Sciences

Tel: +44 (0)20 7457 2020

US Enquiries:

Thomas Fechtner

The Trout Group LLC

Tel: (646) 378 2900

Notes to editors

1. Oxford BioMedica

Oxford BioMedica (LSE: OXB) is a biopharmaceutical company specialising in cancer immunotherapy and gene-based therapies. The Company was established in 1995, as a spin-out from Oxford University, and is listed on the London Stock Exchange. 

The Company has a platform of gene delivery technologies, which are based on highly engineered viral systems, and a broad development pipeline. Oxford BioMedica's lead product candidates are TroVax®, a therapeutic vaccine for multiple solid cancers, in Phase III development in collaboration with sanofi-aventis; and ProSavin®, a novel gene-based treatment for Parkinson's disease, in Phase I/II development. The Company is underpinned by over 80 patent families, which represent one of the broadest patent estates in the field. Oxford BioMedica has collaborations with sanofi-aventis, Wyeth, Sigma-Aldrich, MolMed and Virxsys. Technology licensees include Biogen Idec, Merck & Co, GlaxoSmithKline and Pfizer. 

Further information is available at www.oxfordbiomedica.co.uk

CHAIRMAN'S STATEMENT

 "During 2008, we implemented a number of Board and management changes and strengthened the team with the appointment of a new Chief Executive Officer, who has experience in building successful and profitable biopharmaceutical companies." 

2008 was a year of challenge and change for Oxford BioMedica. The unexpected news that the TRIST study of TroVax would not meet its primary endpoint was disappointing. Our analysis of the interim data has restored our confidence that, subject to regulatory approvals, TroVax is a potentially safe and effective anti-cancer treatment. The next stage of development for TroVax depends on comments from the FDA and the outcome of sanofi-aventis's ongoing portfolio review. However, the Company remains fundamentally strong with valuable technologies and funding into the second half of 2010. We have a first-rate management team and I am confident that we can deliver on our strategy and meet our objectives. 

Innovative drug development 

We are proud to be pioneers of gene therapy and immunotherapy, but the development path for truly innovative treatments is rarely smooth. For example, the first antibody therapies had several development setbacks in the 1990s, but today these products benefit thousands of patients. The development of therapeutic cancer vaccines has faced similar challenges, and TroVax is no exception, as we experienced in 2008. 

Strong fundamentals

Our unique technologies provide an excellent platform to create near and long-term value. We are fortunate to have a broad pipeline of development candidates, collaborations with major pharmaceutical and biotechnology companies, as well as support from charitable organisations. Furthermore, our LentiVector technology has become a valuable tool in research and drug discovery that is used by scientists across the world. 

Key value drivers

TroVax and ProSavin remain key value drivers for Oxford BioMedica. Both programmes have the potential to change current medical practice and to generate significant value. Our analysis of the interim TRIST data suggests that TroVax is providing a survival benefit in a substantial subset of patients with renal cancer. If confirmed, the product has broad potential as a treatment for cancer. Similarly, ProSavin is a highly innovative product candidate that has the potential to revolutionise the treatment of Parkinson's disease. 

Board changes

I was honoured to assume the role of Chairman in 2008, having been Chief Executive Officer since 1995. John Dawson, an experienced industry leader, was appointed as Chief Executive Officer and Nick Rodgers, our Senior Independent Director, assumed the role of Deputy Chairman. The Board was further strengthened by the appointment of Dr Alex Lewis, an experienced industry consultant, as Non-Executive Director. I also wish to express my sincere appreciation to Dr Peter Johnson, Dr Sue Kingsman and Dr Mike McDonald, who left the Company during the year.

Looking to the future

As a fellow shareholder, I am acutely aware that our share price is disappointingly low and does not reflect the underlying strength of our business. Despite the difficult economic climate and the events of 2008, I believe that we are well-positioned for the future and that Oxford BioMedica will emerge as one of the UK's leading biopharmaceutical companies. In conclusion, I would like to thank our employees, partners and shareholders for their support and I look forward to the challenges and opportunities ahead.  

Professor Alan Kingsman

Chairman

  CHIEF EXECUTIVE'S STATEMENT

"Our novel gene-based medicines have the potential to transform treatment prospects, thus improving the quality and duration of life for patients with debilitating and life threatening diseases."

In 2008, we refocused our resources and streamlined our operations in response to continuing uncertainty in financial markets and the setback of our TroVax programme. Importantly, our other development programmes made good progress during 2008, particularly ProSavin. We have advanced a number of commercial discussions and instigated new initiatives to maximise value and reduce risk. These actions aim to maintain our financial flexibility, whilst we pursue opportunities to drive growth and achieve sustainable profitability.

Development progress

Our development activities in 2008 were dominated by events relating to the TRIST study of TroVax. Over the last few months, we have collected and analysed a complete dataset from the study. Our analysis provides valuable insight into the potential clinical utility of TroVax. In 2008, we reported encouraging results from the first dose level in the Phase I/II trial of ProSavin. We also advanced the preclinical development of RetinoStat, StarGen and EndoAngio-GT.

Partnership progress

In addition to in-house and collaborative development, we have a financial interest in several external development programmes that utilise our technology. The most valuable of these is Wyeth's 5T4-targeted antibody therapy. The product is expected to enter clinical trials in 2009, which triggers a milestone payment under our collaboration. In addition, MolMed, which is utilising our ex vivo retroviral gene delivery technology, paid us a milestone in 2008 linked to development progress.

Focused resources and efforts

We have taken decisive steps to reduce our cost base and have focused our resources on TroVax and ProSavin. Our immediate objective for TroVax is to work with our partner, sanofi-aventis, to secure regulatory support for further trials. Our priority for ProSavin is the successful and timely completion of the Phase I/II trial in Parkinson's disease. We are considering amendments to the ongoing trial, including the use of an enhanced administration technology that could accelerate the development plan for ProSavin. 

Value creation and risk management

To maximise the value of our assets and to manage our risk, we have expanded our collaboration activities. Our commercial strategy for ProSavin was to market the product on our own in the USA and Europe. Given the economic climate, we have revised our strategy as we seek to reduce our costs and development risk, and we broadened partnering discussions to all territories. We are also exploring options to partner or monetise other assets, including MetXia, Hi-8 MEL and the ocular applications of our LentiVector technology. 

Outlook

We are pursuing multiple objectives to build and strengthen the Company. We are also exploring opportunities to accelerate profitability through strategic, well-conceived corporate activity. We continue to manage our financial resources rigorously and are reviewing further cost reduction measures to extend our cash life. The FDA's feedback on the TRIST data is expected in May 2008, following which, we aim to report the results. Another important event is sanofi-aventis's portfolio review, which is due to conclude at the end of April 2009. For ProSavin, further efficacy data from the Phase I/II trial are anticipated in June 2009. The outcomes of these events together with our commercial activities are integral to our path forward.

John Dawson
Chief Executive Officer

OPERATIONAL REVIEW

5T4 TUMOUR ANTIGEN

The 5T4 antigen is an ideal target for anti-cancer treatment given its restricted expression on normal tissues and high prevalence on the surface of cancerous cells. Through our collaborations with sanofi-aventis and Wyeth, we are pursuing two 5T4-targeted strategies: a therapeutic vaccine (TroVax) and a monoclonal antibody therapy. Another therapeutic approach, using bi-specific antibodies, is the subject of collaboration discussions.

TROVAX® (cancer)

Development of our lead product candidate, TroVax, faced challenges in 2008 following the unexpected recommendation from the DSMB that the Phase III TRIST study would not meet its endpoint. Despite this event, we continue to work closely with our partner, sanofi-aventis. Based on our exploratory analysis of the data, we are confident that a subset of renal cancer patients may be identified that benefit from TroVax. 

Phase III TRIST study 

In March 2008, we completed recruitment of 733 patients with locally advanced or metastatic clear cell renal carcinoma in more than 100 sites in the USA, European Union and Eastern Europe. In July 2008, the DSMB advised that TRIST would not meet the predefined primary efficacy endpoint of survival improvement. The DSMB recommended that we continue to monitor patients but discontinue further vaccinations.

At a meeting with the FDA in October 2008, we agreed a series of amendments to the study. With these amendments, a key aspect of the ongoing study is to explore the potential benefit of TroVax in subsets of patients. Although the TRIST study alone is unlikely to support registration of TroVax in renal cancer, the results may form part of a regulatory submission alongside an additional confirmatory trial.  

Ongoing FDA review

At the meeting in October 2008, the FDA assessed the data reviewed by the DSMB in July 2008. The FDA agreed with the conclusions of the DSMB, Oxford BioMedica and sanofi-aventis that there was no evidence to support or refute a TroVax-related safety signal. 

The FDA requested an analysis based on a complete data set from the study as of 30 days after the last vaccination (August 2008). This has been a resource-intensive task for Oxford BioMedica and sanofi-aventis. A meeting has been scheduled with the FDA to discuss the data in April 2009. The response from the FDA is an important step for regulatory clearance to initiate further clinical trials.

Cross-trial analysis 

The clinical activity of the anti-tumour immune response induced by TroVax was confirmed by a cross-trial analysis in patients with colorectal, renal and prostate cancer. The results were presented at an EORTC-NCI-AACR Symposium in October 2008. 

The analysis was based on survival and immunological response data from nine Phase I or Phase II trials in 189 evaluable patients TroVax was well tolerated in all cancer types and in combination with other therapies. Of 180 patients tested, 88% showed positive 5T4-specific responses following treatment. 

The analysis of all evaluable patients showed a statistically significant association between immune responses to 5T4 and overall survival. There were no correlations between the immune response to MVA and patient survival, suggesting that the benefit associated with the 5T4 response is not related to patients' general health status. Across all nine trials, a doubling in the 5T4-specific antibody response between the first and third vaccinations was associated with a reduction in the relative risk of death of 16% (p

 

Further development

Preparations for further trials of TroVax continued in 2008, although the timelines for initiation were extended following the DSMB's review of the TRIST study. Sanofi-aventis's FLAMENCO trial in metastatic colorectal cancer has an initial Phase II component, which rolls into a Phase III trial. The trial has a primary endpoint of overall survival and an interim endpoint of progression free survival. The study may be initiated in 2009, pending discussion and agreement with the FDA. 

The proposed Phase III QUASAR V trial in patients following adjuvant therapy for colon cancer is being coordinated by a team at the Clinical Pharmacology Department of Oxford University. The trial is expected to recruit approximately 3,000 patients with a primary endpoint of three-year disease free survival.

Commercial strategy

We signed a global licensing agreement with sanofi-aventis in March 2007 to develop and commercialise TroVax for the treatment of cancer. Payments from sanofi-aventis have enabled us to fund the ongoing Phase III TRIST study and, under the terms of the agreement, sanofi-aventis funds all future research, development, regulatory and commercialisation activities.

We triggered a milestone payment of €10 million linked to the successful interim review of the TRIST study in February 2008. In total, we have received payments of €48 million from a total that could exceed €518 million for the achievement of development and regulatory milestones. The Company is entitled to additional commercial milestone payments and tiered royalties on global sales. We have also retained an option to participate in the promotion of TroVax in the USA and the EU.

Next milestones

The FDA's feedback on the TRIST database is anticipated in May 2009. Following the FDA's review, we aim to report interim results from the TRIST study. Pending FDA agreement, further trials of TroVax may be initiated. 

Market opportunity 

The global cancer market is expected to generate sales in excess of US$60 billion by 2010. The market for therapeutic cancer vaccines, although minimal at present, has the potential to mirror the growth seen in the monoclonal antibody market, and reach sales in excess of US$5 billion by 2012 (source: Research and Markets). Many leading companies recognise this opportunity and are investing in the field. With the potential to benefit patients with some of the most common types of cancer, TroVax could capture a significant share of the market.

TARGETED ANTIBODY THERAPY (cancer)

In 2008, our partner, Wyeth, who has full responsibility for the 5T4-targeted antibody therapy, advanced the programme toward the clinic. In preclinical testing, the compound has met Wyeth's criteria for clinical development. Wyeth is preparing an Investigational New Drug (IND) application for the programme. An IND approval is required by the FDA before initiating clinical trials. It includes manufacturing details, preclinical pharmacology and toxicology data, and the proposed plan for the Phase I trial. 

Commercial strategy

We licensed the rights to develop and commercialise antibodies targeting the 5T4 tumour antigen for use in the treatment of cancer to Wyeth in January 2001. Under the terms of the agreement, Wyeth funds all research, development, regulatory, manufacturing and commercialisation activities.

The agreement is potentially worth US$24 million, comprising an upfront payment, license option fees and payments linked to the achievement of development and regulatory milestones. Additionally, we are entitled to royalties on global sales of antibody-based products targeting the 5T4 tumour antigen.

Next milestones

Wyeth may submit an IND application for the 5T4-targeted antibody therapy during 2009. The start of clinical trials triggers a milestone payment to Oxford BioMedica. 

Market opportunity

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 linked to calicheamicin has the potential to benefit patients with any solid cancer that expresses the 5T4 tumour antigen, which represents a multi-billion US dollar market. Based on the product's profile, it could have application as a single agent or could be used in combination with other treatments, including therapeutic vaccines, such as TroVax. 

LENTIVECTOR®

The LentiVector technology is a highly efficient system for delivery of therapeutic genes and RNA interference agents, but it has specific advantages for targeting diseases of the central nervous system or the eye. Our most advanced LentiVector product candidate is ProSavin for the treatment of Parkinson's disease. We are also developing therapies for ocular diseases (RetinoStat and StarGen) and motor neuron disease (MoNuDin).

PROSAVIN® (Parkinson's disease)

The promising initial patient data from the Phase I/II trial in Parkinson's disease signified an important milestone for our LentiVector technology. The patients have experienced meaningful benefits in their day-to-day quality of life. Although anecdotal, patients have engaged in sporting, social and travel activities, which they had not been able to do prior to treatment. 

The cautious development of such an innovative 'first in man' therapeutic strategy has required the use of a single expert site for the initial stage of the study. However this has impacted our previous guidance on timelines. We are considering steps to amend the trial and potentially accelerate the development of ProSavin. 

Phase I/II trial 

The principal investigator for the trial, Professor Stéphane Palfi from the Henri Mondor Hospital in Paris, presented data from the first dose level in the Phase I/II trial at two medical meetings in November 2008: the Annual Congress of the European Society of Gene and Cell Therapy and the Annual Meeting of the Society for Neuroscience.

Treatment has been well tolerated with no evidence of adverse events or immunologic reactions. The three patients in the cohort demonstrated average improvements in their motor function, based on the Unified Parkinson's Disease Rating Scale (UPDRS), of 30% after six months. One patient showed an improvement of more than 50% at six months. In addition, all of the patients have experienced improvements in their quality of life.

The second cohort of patients has been treated, although the exclusion and subsequent replacement of one patient due to an unrelated condition extended the treatment intervals. Importantly, the second dose level was safe and well tolerated in all patients.

 

Enhanced administration technology

At present, the administration of ProSavin requires several hours of surgery. In parallel with the Phase I/II trial, we have developed an enhanced infusion technology that could reduce the surgery time by up to 50% and, thus, expand the market opportunity. The technology is capable of delivering higher doses of ProSavin and is also less invasive, since fewer injections are required. 

Phase II/III preparation 

Our objective is to move directly to an adaptively designed Phase II/III trial that could support registration, if the safety and efficacy of ProSavin is clearly demonstrated in the Phase I/II trial. We are refining our clinical and regulatory strategy and seeking further regulatory guidance from the FDA and EMEA. 

Manufacturing development is underway to optimise the production process of ProSavin for Phase II/III and commercial supply. We have designed suitable producer cell lines that could enable efficient scale-up.

Commercial strategy

We have revised our strategy, given the continuing uncertainty in capital markets. Our intention had been to develop, launch and market ProSavin ourselves in the USA and Europe, and restrict partnering discussions to Japan and Asia until the programme is more advanced. In 2008, we broadened our partnering efforts to include all territories. In pursuing a collaboration, our objective is to retain an option to commercialise ProSavin in certain countries.  

Next milestones

The final patient at the second dose level is due to have their three-month assessment in June 2009. In the same month, all of the patients in the first cohort will have reached 12 months. Based on these data, we plan to optimise the development plan with the possible introduction of the enhanced administration technology.  

Market opportunity

Parkinson's disease affects approximately 4.1 million people worldwide and the prevalence is rising owing to demographic changes. None of the current treatments provide long-term relief from symptoms, yet, by 2012, sales could exceed US$4.6 billion in the major developed countries (source: Lead Discovery). ProSavin has the potential to address an unmet medical need in Parkinson's disease, offering long-lasting benefit from a single administration with an excellent safety profile. The product could also reduce the social care burden that is associated with mid to late-stage disease. 

RETINOSTAT® (wet age-related macular degeneration)

In 2008, we set an objective of submitting an IND application and advancing RetinoStat into clinical trials before the end of 2009. As part of our ongoing strategic realignment to conserve capital resources, we have reduced our development activities for RetinoStat, which has impacted the timing of the IND application.  

Depending on the availability of resources, an IND application may still be submitted in 2010, facilitating the start of trials in wet age-related macular degeneration (AMD).

Clinical preparation

At a meeting with the FDA in October 2008, we received regulatory advice on the requirements for an IND application to start clinical trials of RetinoStat. Based on the FDA's feedback, we have designed a non-clinical development plan to support an IND application.

The US charity, Foundation Fighting Blindness (FFB), is supporting certain preclinical activities for RetinoStat. In 2008, we initiated further preclinical studies at the Johns Hopkins University School of Medicine in the USA.

Commercial strategy

Our preferred strategy is to partner RetinoStat having first demonstrated clinical proof of concept, which would substantially increase the product's value. With reduced in-house development activity on the programme, we are now working with the FFB to explore alternative sources of funding for RetinoStat. These discussions also aim to secure further finance for the development of StarGen in Stargardt disease and other applications of our LentiVector technology in ocular diseases. Partnering our ocular assets with a pharmaceutical company is also an option. 

Market opportunity

Age-related macular degeneration is a major cause of blindness, affecting an estimated 25 to 30 million people in the Western world. Neovascular "wet" AMD accounts for 90% of all severe vision loss from the disease. The current leading treatment, Lucentis® (Genentech), achieved sales in the USA of US$875 million in 2008 but requires repeated injections directly into the eye. RetinoStat could require only a single or infrequent administration, and could also provide a safer and more efficient means of inhibiting angiogenesis.

STARGEN™ (Stargardt disease)

We are collaborating with the FFB, through its translational research arm, the National Neurovision Research Institute, on the development of StarGen. Preclinical development is ongoing at multiple sites in the USA, including Columbia UniversityYerkes Research Center at Emory University and Oregon Health and Science University

Commercial strategy

The high unmet need in Stargardt disease and the access to patients through national patient organisations mean that StarGen could be commercialised effectively with a small specialist sales force. The disease also qualifies for orphan status, which would provide financial, marketing, and drug-approval benefits. The FFB and a consortium of investors have agreed, subject to achieving specific development milestones, to invest up to US$3.9 million in the StarGen programme, by subscribing to new Ordinary Shares in Oxford BioMedica. Under this agreement, we received US$250,000 in February 2009. 

Market opportunity

Stargardt disease is the most common juvenile degenerative retinal disease with a US and EU prevalence of approximately 50,000 patients and 600 new cases per year. Since there are no available treatments for this disease, StarGen could capture the entire market. Additional opportunities for StarGen also exist in cone-rod dystrophy and the dry form of AMD, where the same mutant gene plays a role. These indications would significantly expand the market opportunity for StarGen.

 

MONUDIN® (motor neuron disease)

The preclinical development of MoNuDin is supported by the UK Motor Neurone Disease Association. Motor neuron disease affects all of the major muscle groups. Preclinical studies are ongoing to address the challenge of achieving widespread delivery of MoNuDin and to optimise the product for clinical trials. 

Commercial strategy

Despite being one of the most common neurodegenerative diseases of adult onset, motor neuron disease has a high unmet need and has the advantage of orphan status. If successful, MoNuDin is potentially a programme that Oxford BioMedica could commercialise with a small specialist sales force. To support its preclinical development, we are exploring a partnership with another not-for-profit organisation.

Market opportunity

Amyotrophic lateral sclerosis (ALS), often referred to as Lou Gehrig's disease, is the most prevalent type of motor neuron disease. In the USA, there are an estimated 30,000 patients with ALS and nearly 6,000 new cases are diagnosed annually (source: ALS Association). Only one drug is approved for the treatment of ALS, and its only benefit is a modest increase in survival time. 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.

RNA INTERFERENCE

We have exclusive rights to intellectual property for LentiVector-based RNA interference (RNAi) therapeutic applications. The unravelling of the human genome and major advances in the understanding of disease have created new opportunities to develop therapies that use RNAi to turn off the expression of disease-associated genes. We aim to exploit the potential of our technology in this field through collaborative drug development.  

RESEARCH TOOL

As a research tool, the LentiVector technology has applications in transgenesis, stem cell manipulation, somatic disease models, target validation, and gene discovery. Our strategy is to offer non-exclusive licenses for research applications, in return for upfront and annual maintenance fees. In 2008, we added Open Biosystems as a licensee as part of a patent dispute settlement. Our other licensed users include Biogen Idec, GlaxoSmithKline, Merck & Co and Pfizer. We also have a strategic alliance with Sigma-Aldrich to develop and commercialise LentiVector-based reagents for the research market. 

 

OTHER DEVELOPMENT PROGRAMMES

To conserve cash resources, we have reduced development activities for our other development programmes. We are pursuing partnership and alternative strategies to maximise the value of our intellectual property and to monetise these assets. Our objective is to retain a financial interest in the successful development and commercialisation of any product candidate that derives from our technologies through milestone payments and royalties. 

ENDOANGIO-GT (cancer)

We have identified a potentially optimal gene delivery system for our anti-cancer EndoAngio-GT programme. With further preclinical development, we believe that the product could be a potentially valuable clinical candidate.

Market opportunity

There is substantial interest within the industry for novel anti-angiogenic approaches for the treatment of cancer. The market leader in the field, Avastin® (Genentech), generated sales in excess of US$4 billion in 2008. EndoAngio-GT could have competitive advantages in terms of safety and potency.

HI-8® MEL (melanoma)

Following the encouraging results from two clinical trials of Hi-8 MEL in melanoma, which demonstrated safety and dose-dependent efficacy, we have established a plan to optimise the product configuration for further development. 

Market opportunity

More than 100,000 people are diagnosed with melanoma each year in the seven major pharmaceutical markets. Existing therapies for Stage III/IV metastatic melanoma offer limited efficacy and often have serious side-effects. Worldwide sales of treatments for melanoma are expected to exceed US$775 million in 2010 (source: Datamonitor). 

METXIA® (pancreatic cancer)

The Phase I/II trial of MetXia has been completed. A total of 35 patients with non-resectable pancreatic cancer were treated. Optimal doses of the product and the prodrug were identified and a number of patients showed disease stabilisation and associated stabilisation of tumour markers. 

Median survival for the 14 evaluable patients, who received at least one dose of MetXia and three doses of cyclophosphamide, was 27 weeks. Increased cycles of cyclophosphamide appeared to be associated with longer survival. These results support advancement of MetXia to randomised trials. We aim to report the results at a suitable medical meeting. 

Market opportunity

Pancreatic cancer is the fifth leading cause of cancer-related mortality in the USA with over 30,000 deaths attributable to this disease annually. It is one of the most aggressive forms of cancer with a five-year survival rate in the low single percentage digits. The US pancreatic cancer drug market is expected to reach US$1.1 billion by 2013 (source: EPiQ Market Intelligence). 

  FINANCIAL REVIEW

"In line with expectations, revenue in 2008 increased significantly, while pre-exceptional operating expenses were lower than last year. Having reduced our cost base in the second half of 2008, I believe that Oxford BioMedica is more resilient than most to the weakness of financial markets."

Oxford BioMedica is a development-stage biopharmaceutical company. We continue to invest in the advancement of our most promising gene-based product candidates, whilst pursuing collaborations to generate near-term income and offset our development costs. Sustainable profitability depends on the ability of Oxford BioMedica and our collaborators to develop and bring to market safe and effective medicines that benefit patients and achieve commercial success. Our strategy aims to accelerate profitability by focusing our development efforts and expanding our commercial activities.

Financial overview

Revenue growth of more than 150% and lower pre-exceptional expenses resulted in a significantly lower net loss before exceptional items of £5.5 million (2007: £15.0 million). The exceptional impairment charge of £4.6 million in 2008 was a non-cash item, mainly reflecting the deterioration in market conditions since the acquisition of Oxxon Therapeutics Limited in 2007. Unless otherwise indicated, the figures presented below are before exceptional items, in order to facilitate like-for-like comparison.  

Revenue in 2008 of £18.4 million (2007: £7.2 million) included a milestone payment of €10 million (£7.6 million) received from sanofi-aventis in March 2008 and £10.5 million of deferred revenue from 2007. Operating expenses (research and development costs and administrative expenses) were £0.1 million lower than in 2007. Operating expenses peaked in the first half of 2008 coinciding with the TRIST study reaching full recruitment, and were 28% lower in the second half. This is in part a consequence of decisive cost reduction measures and operational efficiencies implemented in the second half of 2008 to conserve financial resources. 

The year end bank, cash and short term investments were £21.9 million. In addition, at 31 December 2008, trade and other receivables included a further £3.9 million owing from sanofi-aventis for expenditure incurred in 2008 related to development of TroVax. 

Revenue £18,394,000 (2007: £7,219,000)

The TroVax collaboration with sanofi-aventis generated revenue of £18.1 million in 2008. £10.5 million was the recognition of deferred revenue from 2007, and £7.6 million was the milestone payment received in 2008. There remains deferred revenue of £8.3 million at the end of 2008. As a consequence of the setback to the TRIST study in July 2008, the period over which part of the deferred revenue is recognised was extended by 15 months.

Revenue from technology licensing in 2008 was £0.3 million (2007: £0.2 million). Although not significant at the moment, we believe that these licences, which in the main provide for access to our technology for research use, could facilitate more valuable collaborations for product development in the future. Several leading pharmaceutical and biotechnology companies continue to use our LentiVector technology for research. 

Cost of sales £1,295,000 (2007: £449,000)

We have licensed a number of third-party technologies to expand our activities and to ensure that we have freedom to operate. Most licences include royalties payable on sales, and some include royalties payable on licensing income, including up-front and milestone income. The increased cost in 2008 is attributable principally to the TroVax milestone income received.

Operating expenses before exceptional items £26,322,000 (2007: £26,424,000) 

Operating expenses were £0.1 million lower than 2007 at £26.3 million. The small increase in R&D costs was principally in TRIST Phase III study expenses, which peaked in the first half of 2008, coinciding with the study reaching full recruitment. Administration expenses in 2008 included a net credit of £0.7 million for foreign exchange gains.

Research & development costs £22,482,000 (2007: £22,142,000)

R&D costs comprise in-house expenditure (staff, R&D consumables, intellectual property, facilities and depreciation of R&D assets) and external costs (preclinical studies, GMP manufacturing, regulatory affairs, and clinical trials). Cost reductions implemented in 2007 and added to in 2008 resulted in in-house costs being £1.2 million lower in 2008. As expected, external clinical and preclinical costs rose slightly. External costs of the TRIST study accounted for £10.0 million in 2008 (2007: £8.3 million). External costs reached a peak in the first half of 2008 but fell back by 35% in the second half.

Administrative expenses £3,840,000 (2007: £4,282,000)

Administrative expenses were overall 10% lower than 2007, due mainly to foreign exchange gains. Excluding exchange gains and severance costs, core costs of £4.2 million were unchanged from 2007. Non-exceptional severance costs in 2008 related to the resignation of the former CEO Dr Mike McDonald. The volatility of foreign exchange markets resulted in much higher net foreign exchange differences in 2008. The high amount of receivables denominated in US Dollars at 31 December 2008 resulted in a net foreign exchange gain.  

Exceptional items £4,561,000 (2007: £335,000)

The Group reviews the carrying value of its intangible assets annually, and at 31 December 2008 recognised an impairment charge of £4.6 million. Intangible assets comprise purchased intellectual property rights (licences to third party patents) and in-process R&D from the acquisition of Oxxon Therapeutics Limited in 2007. The impairment charge reflects the Directors', assessment of overall deterioration in asset values in the market since 2007, and the refocusing of the Group's resources on lead programmes. The exceptional restructuring costs in 2007 relate to the integration of the Oxxon business in 2007 and the closure of its former offices and laboratories.

Finance income £1,638,000 (2007: £2,087,000)

The Group places its cash in bank deposits for periods of up to 12 months and generates interest on those deposits. The maturity profile of deposits is intended to match planned expenditure. Lower net interest in 2008 reflects the lower average balance on deposit, which was partly mitigated by a higher average rate of interest. The rapid reduction in interest rates since November 2008, combined with a lower cash balance, means that interest receivable in 2009 is expected to be significantly less than 2008.

 

The Group has no debt, but is recognising as a finance expense the discount on a lease provision and a dilapidation provision. The lower charge in 2008 reflects the lower prevailing interest rate at the year end.

Tax credit £1,992,000 (2007: £2,452,000)

Our UK operating subsidiary is entitled to claim R&D tax credit. The credit is based on certain eligible expenses, to which a mark-up of 75% and a tax rate of 14% are applied, restricted where appropriate to the lower of UK payroll tax (Income Tax and National Insurance) paid in the year and Corporation Tax losses for the year. The lower tax credit in 2008 results from restriction due to the amount of payroll taxes paid in the year.

The Group's US subsidiary supplies services to the UK subsidiary subject to a fixed mark-up. Also, interest is charged at statutory rates for an inter-company loan. This generates a low level of taxable income in the USA

Loss for the financial year before exceptional items £5,480,000 (2007: £14,954,000)

The Group's loss for the year before exceptional items was 63% lower than 2007, due principally to the higher level of recognised revenue. After exceptional items the net loss was £10.0 million (34% lower than 2007). 

Intangible assets £11,119,000 (2007: £14,910,000)

Intangible asset additions in 2008 of £0.8 million (2007: £0.2 million) were the purchase of intellectual property rights. As described above, the carrying value of certain intangibles, principally the in-process R&D acquired with Oxxon Therapeutics Limited in 2007 has been reduced by an impairment charge of £4.6 million.

Trade and other receivables £7,305,000 (2007: £4,672,000)

Trade and other receivables increased by £2.6 million in 2008 to £7.3 million. This includes £3.9 million (2008: £0.1 million) of costs related to the development of TroVax that are to be reimbursed by sanofi-aventis. The most significant of these is £3.7 million for TroVax clinical trial consumables manufactured in 2008 for sanofi-aventis' use. The reduction in other receivables is principally due to lower bank interest accrued on fixed-term deposits at the end of 2008. Prepaid clinical trial expenses are clinical materials not yet shipped to site, and advance payments to clinical sites.

Trade and other payables £10,558,000 (2007: £9,557,000)

Trade and other payables increased by £1.0 million in 2008 to £10.6 million. £0.8 million is attributable to royalties payable on the milestone received from sanofi-aventis in 2008, and the remainder of the increase is attributed to external clinical and preclinical costs. 

Deferred income £8,443,000 (2007: £18,913,000)

Deferred revenue reflects payments received under our licensing agreements that exceed the amount of recognised revenue. Receipts in 2007 from the TroVax collaboration with sanofi-aventis are being recognised as revenue over a period of 24 to 51 months. 

Share issues

At the end of 2008, the Company had 537,289,761 shares in issue. During the year, shares issued for cash raised £0.6 million. 

Cash and deposits £21,891,000 (2007: £38,147,000). 

Cash burn £16,889,000 (2007: Operational cash generated £5,883,000)

The total of cash, cash equivalents and current asset investments at the end of 2008 was £21.9 million, a reduction of £16.3 million compared to the previous year. The format of the cash flow statement under IFRS does not readily confer an assessment of cash burn. However, based on the aggregate of cash from operating activities, proceeds of sale of property, plant and equipment and purchases of property, plant and equipment and intangible assets, the cash burn was £16.9 million in 2008, in contrast to a cash inflow of £5.9 million in 2007. 

The Group's bank deposits at 31 December 2008 were held by Anglo Irish Bank in deposits with a maximum term to maturity of 12 months. In September 2008, the Irish government gave a two-year guarantee covering all funds deposited with a number of institutions, including Anglo Irish Bank. In January 2009, the Irish government nationalised Anglo Irish Bank. The Directors consider that Anglo Irish Bank continues to offer appropriate security for the Group's funds, but are keeping the matter under review.

Financial outlook

The anticipated delay to the potential launch of TroVax and the weakness of financial markets have caused the Group to assess very carefully current resources and spending plans in 2009-10. Following a strategic realignment of our cost base in the second half of 2008, involving 13 redundancies and the focusing of resources on key priorities, we estimate that our current cash is sufficient to support the Group's operations into the second half of 2010. We continue to explore ways to extend our cash for operations. 

Andrew Wood

Chief Financial Officer  CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2008

2008

2007

Notes

Pre-exceptional items

£'000

Exceptional items 

(note 3)

 £'000

Total

£'000

Pre-exceptional items

£'000

Exceptional items

(note 3)

£'000

Total

£'000

Revenue

2

18,394

-

18,394

7,219

-

7,219

Cost of sales

(1,295)

-

(1,295)

(449)

-

(449)

Research and development costs

(22,482)

(4,561)

(27,043)

(22,142)

-

(22,142)

Administrative expenses

(3,840)

-

(3,840)

(4,282)

(335)

(4,617)

Other operating income: grants receivable

113

-

113

161

-

161

Operating loss

(9,110)

(4,561)

(13,671)

(19,493)

(335)

(19,828)

Finance income

1,662

-

1,662

2,117

-

2,117

Finance costs

(24)

-

(24)

(30)

-

(30)

Loss before tax

(7,472)

(4,561)

(12,033)

(17,406)

(335)

(17,741)

Taxation

4

1,992

-

1,992

2,452

-

2,452

Loss for the financial year

(5,480)

(4,561)

(10,041)

(14,954)

(335)

(15,289)

Basic loss and diluted loss per ordinary share

5

(1.0p)

(0.9p)

(1.9p)

(2.8p)

(0.1p)

(2.9p)

The notes on pages 16 to 20 form part of this financial information.

  CONSOLIDATED BALANCE SHEET 

as at 31 December 2008

Notes

2008

£'000

2007

£'000

Assets

Non-current assets

Intangible assets

6

11,119

14,910

Property, plant and equipment 

688

810

11,807

15,720

Current assets

Trade and other receivables

7

7,305

4,672

Current tax assets

2,119

2,623

Financial assets: Available for sale investments

13,750

27,185

Cash and cash equivalents

8,141

10,962

31,315

45,442

Current liabilities

Trade and other payables

8

10,558

9,557

Deferred income

9

4,486

11,530

Current tax liabilities

-

14

Provisions

10

88

60

15,132

21,161

Net current assets/(liabilities)

16,183

24,281

Non-current liabilities

Other non-current liabilities

131

96

Deferred income

9

3,957

7,383

Provisions

10

631

590

4,719

8,069

Net assets

23,271

31,932

Shareholders' equity

Ordinary shares

5,373

5,347

Share premium 

109,686

109,101

Merger reserve

14,310

14,310

Other reserves

(692)

(625)

Retained losses

(105,406)

(96,201)

Total equity

23,271

31,932

The notes on pages 16 to 20 form part of this financial information.

  CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2008

2008

2007

Notes

£'000

£'000

Cash flows from operating activities

Cash (used in)/generated by operations

11

(20,610)

2,307

Net interest received

2,162

1,567

Tax credit received

2,551

2,480

Overseas tax paid

(74)

(57)

Net cash (used in)/generated by operating activities

(15,971)

6,297

Cash flows from investing activities

Proceeds from sale of property, plant and equipment

10

7

Purchases of property, plant and equipment 

(162)

(259)

Purchases of intangible assets

(766)

(162)

Net maturity/(purchase) of available for sale investments

13,435

(6,685)

Cash and cash equivalents acquired with subsidiary

-

3,759

Acquisition costs

-

(382)

Net cash generated by/(used in) investing activities

12,517

(3,722)

Cash flows from financing activities

Net proceeds from issue of ordinary share capital

611

345

Net cash generated by financing activities

611

345

Net (decrease)/increase in cash and cash equivalents

(2,843)

2,920

Cash and cash equivalents at 1 January

10,962

8,043

Effects of exchange rate changes

22

(1)

Cash and cash equivalents at 31 December

8,141

10,962

The notes on pages 16 to 20 form part of this financial information.

  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

for the year ended 31 December 2008

Share capital

Share premium

Merger reserve

Translation reserve

Losses

Total

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2008

5,347

109,101

14,310

(625)

(96,021)

31,932

Exchange adjustments

-

-

-

(67)

-

(67)

Loss for the year

-

-

-

-

(10,041)

(10,041)

Total recognised expense for the year

-

-

-

(67)

(10,041)

(10,108)

Share options:

Proceeds from shares issued

2

50

-

-

-

52

Value of employee services

-

-

-

-

836

836

Issue of shares excluding options

24

545

-

-

-

569

Costs of share issues

-

(10)

-

-

-

(10)

At 31 December 2008

5,373

109,686

14,310

(692)

(105,406)

23,271

The notes on pages 16 to 20 form part of this financial information.

  NOTES TO THE FINANCIAL INFORMATION

for the year ended 31 December 2008

1    Basis of preparation

This financial information for the years ended 31 December 2008 and 31 December 2007 does not constitute the statutory financial statements for the respective years and is an extract from the financial statements. Financial statements for the year ended 31 December 2007 have been delivered to the Registrar of Companies and included the auditors' report. Financial statements for the year ended 31 December 2008 have not yet been delivered to the Registrar. The auditors' reports on the financial statements for the years ended 31 December 2008 and 31 December 2007 were unqualified and did not contain statements under either section 237(2) or section 237(3) of the Companies Act 1985. The financial information in this report does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.

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 1985 applicable to companies reporting under IFRS. The financial statements are prepared in accordance with the historical cost convention as modified by revaluation of available for sale investments. 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 2008 are available from the Company Secretary. The audited statutory financial statements for the year ended 31 December 2008 are expected to be distributed to shareholders by 31 March 2009 and will be available at the registered office of the Company, Medawar Centre, Oxford Science ParkOxford, 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 11 March 2009.

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

Where the Group makes estimates and assumptions concerning the future, the resulting accounting estimates will seldom exactly match actual results. Due to the amounts involved, the estimates and assumptions regarding revenue recognition, costs accrued for clinical trials and impairment of intangible assets have the greatest risk of causing a material adjustment to the carrying amounts of assets and liabilities. 

In 2008 the Group recognised revenue of £18,064,000 from the sanofi-aventis TroVax collaboration, comprising a milestone receipt of £7,566,000 along with £10,498,000 that had been received in 2007 and treated as deferred income. From July 2008 the period over which part of the 2007 receipt is being recognised was extended by 15 months, reflecting management's revised estimate of the timing of a future milestone event. This extension reduced the amount of revenue recognised in 2008 by £942,000. Deferred income of £8,325,000 remained at December 2008. Should the timing of the future milestone event differ from management's estimates, there could be a material effect on the income statement and on the amount of deferred revenue in the balance sheet. 

For clinical trial costs the Group uses a percentage-of-completion method to accrue for such costs. This method requires the Group to estimate the services performed by contractors to date as a proportion of total services to be performed.

The Group has significant intangible assets arising from purchases of intellectual property rights and from the acquisition of Oxxon Therapeutics Limited in 2007. Under IFRS, intangible assets that have an indefinite useful life or which are not yet available for use are tested annually for impairment. 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 highly sensitive 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 could materially affect the amount of impairment.

 

2    Segmental analysis

The Group's primary segment reporting is by geographical location of assets, with business sector as the secondary format. Revenue and loss on ordinary activities before taxation are derived entirely from the Group's one business segment, biotechnology research and development. All costs of acquisition of property, plant and equipment and intangible assets as well as depreciation expense borne by the Group relate to this one segment. In addition, all other non-cash expenses incurred by the Group relate to this one segment. The two geographic locations comprise the Group's UK and US operations. The majority of the Group's activities take place in the United Kingdom, with the United States subsidiary providing intellectual property management and business development support to the United Kingdom operation. Purchases and sales between subsidiaries are eliminated on consolidation.

The Group's revenue derives from assets located in the United Kingdom. By location of customer, revenue derives from the European Union and the United States of America.

Revenue by customer location

2008

£'000

2007

£'000

Europe

18,141

7,021

United States of America

253

198

Total revenue

18,394

7,219

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 income statement 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.

  

2008

2007

Group

£'000

£'000

Research and development costs: Impairment of intangible assets

4,561

-

Administration expenses: Restructuring costs

-

335

Total

4,561

335

Following the setback in the TRIST phase III TroVax study in 2008, the Directors undertook a strategic restructuring, focusing resources on the continuing development of TroVax, ProSavin and RetinoStat. These three programmes are of highest potential value in the near term. Impairment charges in 2008 reflect lower prospects for certain other products, particularly Hi8-MEL, MetXia and Innurex.  

Exceptional administrative expenses in 2007 of £335,000 were restructuring costs associated with the integration of Oxxon Therapeutics Limited ('Oxxon') and closure of the former Oxxon offices and laboratories following the acquisition of Oxxon in March 2007.

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 financial statements for the year ended 31 December 2008 represents the credit receivable by the Group for the year and adjustments to prior periods. These amounts have not yet been agreed with the relevant tax authorities. 

2008

2007

Continuing operations

£'000

£'000

Current tax

United Kingdom corporation tax research and development credit

(2,119)

(2,526)

Overseas taxation

59

60

(2,060)

(2,466)

Adjustments in respect of prior periods

United Kingdom corporation tax research and development credit

72

-

Overseas taxation

(4)

14

Taxation credit

(1,992)

(2,452)

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 of 537,176,196 in issue during the year ended 31 December 2008 (2007: 528,024,022). 

The Company had no dilutive potential ordinary shares in either year which would serve to increase the loss per ordinary share. There is therefore no difference between the loss per ordinary share and the diluted loss per ordinary share. 

6    Intangible assets

In-process R&D 

Intellectual property rights 

Total

£'000

£'000

£'000

Cost

At 1 January 2008

10,400

4,780

15,180

Additions 

-

761

761

Disposal

-

(36)

(36)

At 31 December 2008

10,400

5,505

15,905

Accumulated amortisation and impairment

At 1 January 2008

-

270

270

Impairment in the year

3,598

954

4,552

Disposal

-

(36)

(36)

At 31 December 2008

3,598

1,188

4,786

Net book amount at 31 December 2008

6,802

4,317

11,119

Net book amount at 31 December 2007

10,400

4,510

14,910

Impairment charges are included within research and development costs in the income statement. The impairment charge in 2008 follows a strategic restructuring, focusing resources on the continuing development of TroVax, ProSavin and RetinoStat. These three programmes are of highest potential value in the near term. The impairment charge reflects lower prospects for certain other products, particularly Hi8-MEL, Innurex and MetXia. 

Impairment losses are recognised for the amount by which each asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Value in use is calculated using estimated discounted future cash flows. Key assumptions in the discounted cash flow calculations are:

  • The product is developed by a collaborative partner who funds all future development costs and markets the product

  • The Group receives an initial licence fee, milestone payments and royalties on sales

  • The resulting cash receipts are discounted at 12% per annum  

The exceptional impairment losses recognised in 2008 comprise £3,703,000 in respect of Hi8-MEL and £858,000 in respect of Innurex, MetXia and MoNuDin.  

 

 7    Trade and other receivables

2008

2007

£'000

£'000

Non-current

Other receivables - rent deposit

160

118

Current

Trade receivables

106

91

Other receivables

4,394

1,129

Other tax receivable

333

414

Prepaid clinical trial expenses

790

969

Other prepayments

1,522

1,917

Accrued income

-

34

7,145

4,554

Total trade and other receivables

7,305

4,672

Other receivables include £3,913,000 expenditure related to TroVax to be reimbursed by sanofi-aventis. Prepaid clinical trial expenses comprise stocks of materials for use in clinical trials and advance payments to clinical trial sites.

8    Trade and other payables - current

2008

2007

£'000

£'000

Trade payables

3,298

2,948

Other taxation and social security

136

418

Accruals

7,124

6,191

Total trade and other payables

10,558

9,557

9    Deferred income

In 2007 non-refundable payments totalling €38,000,000 (£25,793,000) were received from sanofi-aventis under the TroVax licence agreement. These payments are being recognised as revenue over a period of 24 to 51 months. At 31 December 2008 £8,325,000 remained as deferred income. The milestone payment of €10,000,000 (£7,566,000) received in 2008 has been recognised as current period revenue. 

Including technology licence income, the Group had deferred income of £8,443,000 at 31 December 2008 (2007: £18,913,000). £4,486,000 (2007: £11,530,000) is expected to be recognised as revenue within 12 months of the balance sheet date, and is classified as current; the remaining £3,957,000 (2007: £7,383,000) is classified as non-current. 

10    Provisions

Dilapidations 

£'000

Onerous lease

£'000

Total 

£'000

At 1 January 2008

371

279

650

Exchange adjustments

-

82

82

Utilised in the year

-

(75)

(75)

Amortisation of discount

11

8

19

Change of discount rate - charged to income statement

-

14

14

Change of discount rate - adjustment to recognised fixed asset

29

-

29

At 31 December 2008

411

308

719

At 31 December 2007

371

279

650

2008

2007

£'000

£'000

Current

88

60

Non-current

631

590

Total provisions

719

650

The dilapidations provision relates to anticipated costs of restoring the leasehold property in OxfordUK to its original condition at the end of the present leases in 2011, discounted at 1.59% per annum (2007: 4.32%). The provision will be utilised at the end of the leases if they are not renewed.

The onerous lease provision relates to the estimated rental shortfall in respect of a redundant property in San DiegoUSA which has been sub-let for the remainder of the lease term until June 2012, discounted at 2.23% per annum (2007: 4.39% per annum).The provision will be utilised over the term of the lease.

11    Cash flow from operating activities

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

2008

2007

£'000

£'000

Continuing operations

Loss before tax

(12,033)

(17,741)

Adjustment for:

Depreciation

307

314

(Profit)/loss on disposal of property, plant and equipment

(10)

77

Impairment

4,552

8

Finance income

(1,662)

(2,117)

Finance expense

24

30

Charge in relation to employee share schemes

836

828

Changes in working capital:

Increase in trade and other receivables

(3,074)

(1,880)

Increase/(decrease) in payables

983

4,036

(Decrease)/increase in deferred income

(10,470)

18,821

Decrease in provisions

(63)

(69)

Net cash (used in)/generated by operations

(20,610)

2,307

-Ends-


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