Final Results
Oxford Biomedica PLC
04 March 2003
Embargoed until 0700 Tuesday 4 March 2003
OXFORD BIOMEDICA PLC (LSE:OXB) PRELIMINARY RESULTS FOR
THE YEAR ENDED 31 DECEMBER 2002
HIGHLIGHTS
£21 million cash life extended to Q4 2004
TroVax(R) and MetXia(R) Phase I/II clinical trial results met all expectations
TroVax advancing into a Phase II trial in colorectal cancer, ready for Phase III
trials within 12 months
TroVax VET collaboration with top ten veterinary company
MetXia to enter Phase I/II trial in pancreatic cancer
ProSavin(R) for Parkinson's disease demonstrated efficacy in rodent preclinical
model, expected to enter clinical development by the end of 2003.
Continued progress with anti-5T4 antibody collaboration with Wyeth, valued at
$24 million in upfront and milestone payments
Senior appointments in Commercial Development, Corporate Strategy and Business
Development
£1.0 million grant funding obtained between December 2002 and February 2003
Commenting on the preliminary results Chairman Dr Peter Johnson said
'During 2002 Oxford BioMedica graduated from being a research oriented company
to a mid-stage product development company with successful trials being
completed for the lead cancer products, TroVax and MetXia. TroVax is advancing
into a Phase II trial in colorectal cancer and is expected to be ready for Phase
III trials within 12 months. During 2003, subject to regulatory approval, TroVax
will enter additional Phase II studies in breast cancer and renal cancer. MetXia
is also expected to enter efficacy studies initially in pancreatic cancer. In
addition, the Company's lead neurobiological product for Parkinson's disease,
ProSavin, will enter clinical development by the end of 2003.
In 2002 the biotechnology industry continued to suffer from the general market
downturn, with many share prices dropping below cash levels and many companies
running short of working capital. Oxford BioMedica has suffered a share price
reduction along with others in the sector, but by prudent management of our
programmes we have been able to extend our cash life by almost a year and bring
our products closer to market. Despite the depressed public markets, the
fundamentals of the Company are stronger than ever in 2003 with the lead
programmes ready for partnership with the pharmaceutical industry. The Company's
year-end cash position of £21 million provides flexibility in our development
and partnering strategy, and eliminates our immediate dependency on the capital
markets.
Oxford BioMedica has weathered the storms of 2002 and is prepared for the
challenges of 2003. The cash position is good and the product pipeline goes from
strength to strength. Despite the state of the markets, the Company will strive
to enhance shareholder value from commercial deals and clinical and preclinical
data. We thank our hard-working staff for their unfailing energy and dedication
to the Company and we thank our loyal shareholders for their support.'
-Ends-
For further information, please contact:
Oxford BioMedica plc
Professor Alan Kingsman, Chief Executive Tel: +44 (0)1865 783 000
City/Financial Enquiries:
Mike Wort, James Chandler: Beattie Financial Tel: +44 (0)20 7398 3300
Scientific/Trade Press Enquiries:
Sue Charles, Katja Stout: Northbank Communications Tel: +44 (0)20 7321 3870
Notes to Editors
Oxford BioMedica
Established in 1995 as a spin out from Oxford University, Oxford BioMedica plc
specialises in the development of novel gene-based therapeutics for the
treatment of cancer, neuro-degenerative disease and other disorders with major
unmet clinical needs. The development pipeline includes two novel anti-cancer
products in clinical trials and a gene therapy treatment for Parkinson's
disease, which is in late preclinical studies. This is underpinned by a broad
research pipeline and over 70 patent families, about quarter of which are
issued.
Oxford BioMedica's products use genes as the mediators of a therapeutic effect
and/or immune response. The Company's gene therapy products deliver therapeutic
molecules in vivo whilst its gene-based immunotherapy products deliver genes
that recruit the patient's immune system to mediate a therapeutic effect. The
genes are delivered by the Company's highly engineered viruses or cells.
BioMedica's lead product TroVax(R) is an anti-cancer therapeutic vaccine
expected to be useful against a broad range of tumour types. It is entering
Phase II trials in a number of indications including colorectal and renal
cancer, and is expected to be ready for Phase III trials at the end of 2003. The
Company's second cancer product, MetXia(R), is completing Phase I/II studies in
breast cancer.
Oxford BioMedica is headquartered in Oxford, UK and has a wholly-owned
subsidiary in San Diego, USA. BioMedica has corporate collaborations with Wyeth,
IDM, Intervet, Aliga Pharmaceuticals, Amersham and Arius Research.
Oxford BioMedica plc was floated on the Alternative Investment Market of the
London Stock Exchange in December 1996, and was promoted to the United Kingdom
Listing Authority Official List in April 2001 following a successful £35.5
million fund-raising.
Further information is available on the World Wide Web at http://
www.oxfordbiomedica.co.uk
CHAIRMAN'S AND CHIEF EXECUTIVE'S REPORT
Lead Products
TroVax(R)
TroVax is Oxford BioMedica's leading cancer immunotherapy product. It is
designed specifically to stimulate an anti-cancer immune response and has
potential application in most solid tumour types. TroVax targets the tumour
antigen 5T4, which is broadly distributed throughout a wide range of solid
tumours. The presence of 5T4 is correlated with poor prognosis. The product
consists of a pox virus (MVA) gene transfer system, which delivers the gene for
5T4. MVA is known to induce the breaking of immune tolerance to self-antigens
that are expressed from the gene delivery system.
The major highlight of the year has been the results from the Phase I/II trial
of TroVax. Data from the study have been reported at national and international
cancer conferences during the year. The trial was a complete success in that
there were no safety issues, the product was exceptionally effective at inducing
an anti-tumour immune response and, even though the number of patients in a
Phase I/II trial is small, some interesting clinical improvements and disease
stabilisation were observed.
Our conclusions from the initial TroVax trials are that TroVax has the potential
to become a major cancer product and that its further clinical development
should aim to achieve two goals. The first is to bring TroVax to the market in
the shortest possible time and the second is to broaden the cancer indications
for which TroVax will be used. Following extensive consultation with leading
cancer clinicians in the UK, Europe and the USA, the Company released its
clinical development plans for TroVax at an analyst meeting in November 2002.
We believe that the fastest route to the market is to use TroVax alongside
current chemotherapy in late stage colorectal cancer patients. The main reason
to choose this route is that the clinical end-points of a pivotal trial can be
achieved relatively quickly, with product registration being targeted for 2007/8
if survival endpoints are required. If the regulatory authorities accept time to
progression of disease as an appropriate endpoint, registration could be
earlier. As a pre-requisite for a full Phase III study with chemotherapy, TroVax
will enter a Phase II study this year where the immunological properties of the
product will be evaluated in patients receiving the current 'standard of care'
chemotherapy, i.e. either 5FU and irinotecan or 5FU and oxaliplatin. This study
should be complete by the end of the year making TroVax ready for Phase III
efficacy studies in 2004.
TroVax will also enter clinical trials this year in earlier stage colorectal
cancer patients who have not received chemotherapy. This will begin to prepare
the ground for extending the use of TroVax to patients with less advanced
disease, thereby expanding substantially the market potential of the product.
The planned broadening of the clinical indications, and therefore the market,
for TroVax is possible because 5T4, the tumour antigen used in the product, is
present on a broad range of tumour types. With this in mind, TroVax will also
enter clinical trials in patients with breast cancer and renal cancer in the
coming year. Both of these trials will be conducted in the USA under FDA
regulations.
These plans for TroVax place it amongst the leading cancer immunotherapy
products worldwide and will enhance the Company's efforts to seek partners for
TroVax's co-development and marketing.
MetXia(R)
MetXia is Oxford BioMedica's leading gene-based cancer therapeutic. The product
is based on a highly engineered retrovirus gene delivery system expressing a
specific human cytochrome P450 gene. MetXia converts the tumour into a 'drug
factory', enabling increased local production of the anti-tumour, cytotoxic
derivative of the pro-drug cyclophosphamide. MetXia is potentially useful in the
treatment of all solid tumours and their metastases, particularly those where
cyclophosphamide is commonly used.
At a cancer conference in February 2002 the Company released results from the
Phase I/II trial of MetXia in patients with readily accessible solid tumours.
These patients were very late stage breast cancer and melanoma patients. The aim
of the trial was to assess the safety of MetXia and determine the effectiveness
of the gene delivery technology used in the product. In order to achieve these
goals it was important to access localised tumours for direct injection of
MetXia and then be able to take biopsy samples to measure the delivery
efficiency, without causing undue trauma. It was these considerations that led
to the selection of this particular patient group. MetXia is designed to be
effective in a broad range of tumour types and this first trial was designed to
provide a body of data that would justify further trials in various cancers.
The trial was completely successful in that the product was safe and gene
delivery was readily detected in the treated tumours. In addition there was
clinical benefit in some patients, including tumour size reduction. Most
remarkable, however, was the observation, in one patient, of a dramatic
improvement in a cancerous lesion that was not treated, following treatment of
skin tumours elsewhere on her body. In February 2002 expert opinion was that
this might be due to a systemic anti-tumour immune response induced in the
patient by the action of MetXia on the skin tumour. Since then the existence of
that immune response has been confirmed and the nature of the response
characterised. It is now clear that the patient had indeed mounted a broad
immune response against known markers that exist only on cancer cells. This
means that although MetXia must be administered directly to a tumour, the tumour
cell death that it causes may induce an immune response that will destroy other
tumours in the same patient. MetXia becomes, therefore, an even more exciting
potential product.
Currently the Company is pursuing two clinical development routes for MetXia. A
second Phase I/II trial, similar to the first, is being conducted with a higher
potency version of the product. This trial is monitoring immune responses more
closely than the first trial and is expected to add more data to support the
notion that the product may be used for disseminated metastatic disease.
Although patient recruitment has been slower than we had hoped, the trial will
deliver results within the next few months. In parallel the Company is seeking
regulatory approval for a Phase I/II study in pancreatic cancer, a disease where
there is a clear unmet medical need and rapid product approval is a possibility.
This trial should start during 2003.
Phase II studies in disseminated but accessible cancers are currently being
planned, with a view to MetXia being ready for pivotal Phase III trials during
2005. The Company believes that MetXia will be ready for marketing to the
industry after the current Phase I/II study is completed in 2003.
ProSavin(R)
The Company's lead neurobiology product, ProSavin, is an innovative approach to
the treatment of Parkinson's disease. Parkinson's disease affects 1% of the over
50 population, and approximately 10% of the over 60s(1). A patient with
Parkinson's disease progressively loses the ability to make the neurotransmitter
dopamine, the mediator of the control of movement. ProSavin is designed to
convert a small area of the brain into a replacement dopamine factory by
supplying the genes for dopamine synthesis to the target cells. It is the first
of a series of products based on Oxford BioMedica's proprietary LentiVector(R)
system, arguably the most powerful technology currently available for gene
delivery to the central and peripheral nervous system. The development of novel
neurobiological products is the fastest growing sector of R&D in the
pharmaceutical industry, a reflection of new opportunities and demographic
change.
During 2002, having demonstrated the efficacy of ProSavin in an industry
standard preclinical model for Parkinson's disease, the Company moved the
development of ProSavin to its San Diego team to take advantage of their
manufacturing skills and close working relationship with the FDA. A
manufacturing process, quality control procedures and potency testing have now
been put in place for the planned Phase I/II trials. Clinical centres in the USA
have been identified for the trials, and initial regulatory discussions with the
FDA have taken place. Although ProSavin is the first LentiVector product that
has been presented to the FDA, the discussions were positive and there are no
obvious barriers to achieving approval for the first trials.
During 2003 the ProSavin programme will complete the requirements for filing an
Investigational New Drug (IND) application in order to start a clinical trial in
late stage Parkinson's patients early in 2004. Once the IND is in place, the
Company believes that the product can be marketed aggressively to potential
pharmaceutical partners.
RetinoStatTM
In May 2002, the Company announced an important new research collaboration with
the Institute of Ophthalmology in London in order to develop RetinoStat, a new
product programme in the field of vision loss. RetinoStat utilises the Company's
LentiVector gene delivery technology to treat age-related macular degeneration
(AMD) and diabetic retinopathy (DR).
These two diseases are the major causes of blindness in the developed world and
create a market opportunity for effective treatments estimated to be in excess
of $1 billion per annum. AMD and DR affect 12 million people in the US. AMD is
the most common cause of visual loss in the elderly: one in six people aged
between 55 and 64 and one in four between the ages of 64 and 74 will develop a
form of AMD. Each year 200,000 people lose all central vision due to AMD. DR is
the most common cause of visual loss in the working population with 40,000 new
patients per year(2).
Both AMD and DR are caused by aberrant growth of leaky and disruptive blood
vessels in the retina. This is caused by a hyper-response to localised regions
of low oxygen arising from compromised blood supply within the retina. The
Company has shown that its LentiVector technology can target this region of the
eye with great accuracy and deliver anti-angiogenic proteins to treat these
diseases.
RetinoStat is currently in preclinical evaluation and could enter clinical
development early in 2004. The preclinical models for these diseases are
sufficiently predictive of efficacy in man that the Company believes that a
partner could be secured following completion of the preclinical studies.
Development Candidates
The most exciting events of the year within the development candidate pipeline
have been from the RequinateTM and InnurexTM programmes.
Requinate is a new development candidate employing the proprietary LentiVector
technology for the treatment of haemophilia A. It delivers a highly engineered
version of the human Factor VIII gene to provide an endogenous factory for the
blood clotting factor for the haemophilia patient. The product will enter
preclinical development during 2003 and the Company will initiate discussions
with potential partners following those studies.
Innurex is the Company's nerve repair product for spinal injury and is the
subject of a research collaboration with King's College, London. There is no
product on the market for severe spinal injury, yet there is a substantial
medical need mainly from car, motorcycle and sports injuries. During 2002 the
Company demonstrated that its LentiVector technology was able to deliver the
gene encoding RARb2 to spinal tissue, in vitro, very efficiently. This had the
desired effect of triggering nerve outgrowth from the tissue samples. During
2003 the Company will assess the product in well-established preclinical models
in preparation for entering clinical development during 2004. The Company
intends to seek a pharmaceutical partner after the preclinical proof of
principle studies are complete.
Research collaborations
The two main research programmes in tumour antigen discovery and Focused Target
Identification (FTI) have both resulted in partnerships that create new product
opportunities. In addition the Company has obtained grant funding for the motor
neuron disease programme.
Arius Research
In July 2002, the Company announced a collaboration with Arius Research Inc.
Under this agreement Arius is supplying a number of anti-tumour antibodies and
Oxford BioMedica is using technology developed within the TroVax programme to
identify the cognate antigens. Arius and Oxford BioMedica share the resulting
intellectual property and commercialisation rights. In October 2002, the Company
announced that this collaboration had already attracted its first development
partner, Protein Design Labs Inc (PDL), a leading player in the development of
humanised monoclonal antibodies. PDL was granted an option to develop the first
two antibodies in the Oxford BioMedica/Arius collaboration.
Aliga Pharmaceuticals
During 2002 Oxford BioMedica started to see the first tangible results emerging
from its target discovery programme, particularly in the field of blood vessel
growth in response to low oxygen concentration. This is a condition seen in
cancer, arthritis and ischaemic diseases such as peripheral arterial disease and
coronary disease. An enzyme target was identified from the FTI programme, which
is ideal for a small molecule discovery project. The initial goal is a product
for the highly lucrative wound-healing field. The recent announcement of the
collaboration with the European company Aliga Pharmaceuticals (formerly called
Kiadis) provides the necessary chemistry expertise and puts in place Oxford
BioMedica's first small molecule programme. Wound healing has been selected as
the first target because of the speed with which products can be taken into the
clinic in this field. However, products arising from this collaboration may be
effective in various cardiovascular conditions in addition to wound healing.
ALS Association and Andrew's Buddies
During 2002, the Company was invited to talk at several neurobiology
conferences. The presentations included descriptions of Oxford BioMedica's
unique ability to target motor neurons with its LentiVector technology. This
attracted the attention of two USA charities, the American Amyotrophic Lateral
Sclerosis (ALS) Association, which is devoted to finding treatments for the
major form of motor neuron disease, and Andrew's Buddies, an organisation
committed to developing treatments for the inherited neuromuscular disease
Spinal Muscular Atrophy (SMA). Together these two charities have awarded grants
of over US$600,000 to the Company to pursue products for motor neuron disease
(MoNuDinTM) and SMA. The Company retains all intellectual property and
commercial rights and a commercial partner will be sought following proof of
principle studies which should be completed by 2004.
Commercial Collaborations
In addition to its lead products, development candidates and research
collaborations, Oxford BioMedica has a number of commercial collaborations where
the commercial partners are wholly responsible for funding and managing the
programmes.
Wyeth
The antibody-toxin collaboration with Wyeth, valued at $24 million in upfront
and milestone payments, is progressing well. In February 2002, Wyeth extended
the collaboration and the option to develop the product. The Company anticipates
that Wyeth will exercise the option during 2003 following the completion of
preclinical studies.
Amersham
The exploratory research programme to develop a cancer diagnostic with Amersham
is continuing and the Company anticipates that the scope of the collaboration
could broaden during 2003.
Intervet
Recently, the Company announced that it had changed its partner, from Virbac SA
to Intervet SA, for the development of TroVax-VET, a version of TroVax for the
treatment of cancer in companion animals. Intervet is one of the world's top ten
veterinary companies and is committed to the rapid development of the product.
This new collaboration also triggered the award of a €0.9 million EUREKA(3)
grant to Oxford BioMedica for R&D related to the TroVax programme.
Intellectual Property
Intellectual property is the basis of the Company's fundamental value. As in
previous years, Oxford BioMedica expanded its patent portfolio in 2002. A total
of 100 individual patent applications have been granted in various territories.
Ten new filings were made from Oxford and three from San Diego. The Company has
the largest lentiviral vector patent estate in the world.
Commercial Strategy
All of the commercial collaborations that Oxford BioMedica has established to
date have been technology or product component deals where new commercial
opportunities have been created outside the Company's core focus. This has
provided a route to additional revenues beyond those that will derive from
marketing our major products. However, as the lead products mature, the
rationale for out-licensing them to pharmaceutical and big biotech companies
becomes stronger. TroVax and MetXia are now at the point where potential
partners should be attracted by the exciting clinical data, and both ProSavin
and RetinoStat should provide compelling preclinical proof of principle data
during 2003. This means that substantial commercial activity is anticipated
during the next two years.
Financial
We have managed our finances prudently in 2002, and by focusing on our key
programmes we have extended the projected life of our cash reserves. If we were
to discount the generation of all cash from our research and development
programmes over the next two years, the present funds would be sufficient to
fund operations until the fourth quarter of 2004. Given the status of our
programmes, we anticipate that this period will be extended both by cash from
commercial activities and from grants.
In 2001 we set in train an expansion of our operations including a strategic
investment in a US operating centre. In 2002 we continued to build our US
presence, but as a result of increased focus on key programmes, we reduced
capital expenditure and some UK activities. The Group's net cash outflow before
management of liquid resources and financing (often referred to as the cash
burn) was £11.6 million in 2002 compared to £11.9 million in 2001. In part this
reduction was due to the timing of tax and interest receipts. The bank balance
at 31 December 2002 was £21.0 million.
The Group's loss for the year after tax was £11.7 million (2001: £8.4 million).
US activities account for the increased loss: as we have continued the
investment in our subsidiary in San Diego, the loss attributable to the US
operation has increased from £0.8 million in 2001 to £3.4 million in 2002.
Changes to the Board and Senior Management
During the year the Company made a number of key senior appointments. In May
2002, Peter Nolan was appointed to the Board as Senior Vice President for
Commercial Development. Peter has been a senior member of the Company since its
foundation, and is a director of the UK BioIndustry Association. Prior to
joining Oxford BioMedica, he was head of the Biotechnology Unit at the UK
Department of Trade & Industry. At Oxford BioMedica, he has overall
responsibility for the Company's patent portfolio and strategic in-licensing and
technology acquisition activities.
In September 2002, the Company appointed Nick Woolf as Senior Vice President of
Corporate Strategy. With more than eight years experience as a biotechnology and
pharmaceutical analyst, Nick has been involved in all aspects of company
financing, ranging from IPOs to major corporate deals. Most recently he served
as Director and Head of European Biotechnology Research at ABN AMRO, where he
was responsible for developing its industry coverage. Prior to that, Nick was
Vice President and Senior Analyst at Robertson Stephens International, and he
was previously at both Nomura and SBC Warburg. Nick holds an MA in chemistry
from Oxford University.
In November 2002, the Company appointed Dr David Higgins as Vice President for
Business Development. He has been appointed to the San Diego subsidiary to
spearhead business development primarily in the USA. David has extensive
experience in the biotech industry having worked in project management and
business development for Invitrogen Corporation, Chiron Corporation and Idun
Pharmaceuticals over the past 10 years.
The Board accepted the resignations of Dr. Paul Durrands and Dr. Neill Mackenzie
in April and November respectively. We thank Paul and Neill for their
contributions to the Company and wish them well in their new careers.
Dr Peter Johnson
CHAIRMAN
Prof. Alan Kingsman
CHIEF EXECUTIVE OFFICER
Financial Review
Financial overview
In 2002 Oxford BioMedica increased the focus of its resources on its most
advanced programmes. As a result of these resource adjustments, we have extended
the projected life of our cash reserves. The balance of the Group's expenditures
has also changed, with a greater emphasis on the USA and reduced expenditure in
the UK.
In 2001 the Company began a significant expansion of its operations. The scale
of UK activities increased, and a new operating subsidiary in the USA was
established. This followed the raising of £35.5 million in a placing and open
offer in April 2001, and has allowed us to improve the Company's risk profile by
developing a broadened portfolio of product programmes based on our core
technology. We expected that the full-year impact of the expansion that began in
2001 would result in higher levels of expenditure in 2002.
However, recognising the tough economic and market conditions that developed in
2001 and continued through 2002, we have reduced the scope of our expansion in
the USA, and have made strategic cuts in the UK operation as we focus our
resources on the lead programmes. The increase in operating expenses in 2002 was
less than we had anticipated, and overall the net cash outflow before management
of liquid resources and financing (the 'cash burn') in 2002 was lower than in
2001.
At the start of 2001 the Group had 59 employees, all in Oxford, UK. By the end
of that year, the headcount had risen by over a third in the UK to 80, with a
further 9 employees in the USA. Throughout 2002 we continued the measured
expansion of our US operation, albeit more slowly than originally planned. At 31
December 2002 we had a staff of 26 in the USA. In Oxford, however, the headcount
of 55 at the end of 2002 was 35% less than its peak. This was the result of
curtailing some earlier-stage research and development activities, and
transferring certain programmes to the USA. This reduction involved a number of
redundancies.
The impact on our projected expenditure has been to extend the worst-case cash
window - the period covered by current cash reserves, assuming that no new funds
are received from revenues, grants or share issues - by 11 months to quarter
four of 2004. We already know that this view is unduly pessimistic, as we have
recently been awarded a Eureka grant of approximately €0.9 million, and we
expect existing and new collaborations to add to our funds, further extending
the cash window.
Financial results
The net cash outflow before management of liquid resources and financing in 2002
was lower than last year at £11.6 million (2001: £11.9 million). This was
because lower capital expenditure, the receipt of R&D tax credit and increased
receipts of bank interest had offset increased operating expenses. Because the
expenditure reductions, tax credits and most of the interest receipts were in
the UK, the UK cash outflow in 2002 was significantly less than 2001 at £7.0
million (2001: £10.6 million). The worst-case cash projections described above
indicate, in the absence of revenues or grants, that the total Group cash
outflow in 2003 and 2004 will be at a similar level to 2002.
The loss for the year after tax was £11.7 million (2001: £8.4 million).
Operations in the UK accounted for £8.3 million (2001: £7.6 million), with the
loss from US operations £3.4 million (2001: £0.8 million).
Net operating expenses for 2002 were £14.2 million (2001: £11.4 million). Nearly
all of the increase over 2001 (£2.6 million) was in the US operation. Research
and development costs were £10.8 million (2001: £8.6 million) and administration
expenses were £3.4 million (2001: £2.8 million). UK expenses include £0.3
million in respect of staff redundancies and writing down redundant fixed
assets.
Revenue of £0.2 million (2001: £0.4 million) consisted mainly of a receipt from
Wyeth under the immunotoxin collaboration. Grant income of £0.1 million in 2002
was from a European Community Framework V programme related to development of
novel cancer vaccines.
Interest receivable on bank deposits was £1.1 million (2001: £1.5 million). This
year's figure is lower because of the lower average balance held on deposit and
the reduction in interest rates in both the UK and the US.
The net tax credit for 2002 of £1.3 million (2001: £1.2 million) represents the
UK Research and Development Tax Credit, less tax payable in the USA. During 2002
R&D tax credits totalling £1.6 million relating to 2000 and 2001 were received.
It is expected that the 2002 R&D tax credit will be received in 2003.
Capital expenditure was £1.3 million (2001: £3.2 million). The majority of the
2002 capital expenditure (£1.0 million) was in the US, where we established new
laboratories and offices in San Diego.
Cash position and outlook
The bank balance at 31 December 2002 was £21.0 million (2001: £32.6 million),
slightly higher than we had anticipated at the beginning of 2002. We anticipate
that the balance of expenditure between the UK and the US will shift a little
further towards the US in 2003 and 2004, as the full year effects of the changes
we have made in 2002 are felt. We expect clinical development to take a larger
part of total expenditure in the next couple of years, particularly as the
TroVax, MetXia and ProSavin programmes progress. Overall, however, we expect to
hold expenditure close to current levels. This means that, in the absence of any
revenues from collaborations (present or future), new grants or other new
sources of funds, our cash resources are sufficient to fund operations until the
fourth quarter of 2004. We have already been awarded a new government grant, and
we are optimistic that our maturing clinical and development pipeline will
create opportunities for significant revenues over that period. We therefore
view our current position as an excellent platform for growth in value.
Andrew Wood
CHIEF FINANCIAL OFFICER
Consolidated profit and loss account
for the year ended 31 December 2002
Notes 2002 2001
£'000 £'000
Turnover 2 173 373
Research and development costs (10,833) (8,570)
Administrative expenses (3,420) (2,859)
Operating expenses (14,253) (11,429)
Other operating income: government grants receivable 63 29
Net operating expenses (14,190) (11,400)
Operating loss (14,017) (11,027)
Interest receivable 1,094 1,486
Loss on ordinary activities before taxation 2 (12,923) (9,541)
Tax credit on loss on ordinary activities 3 1,263 1,152
Loss for the year (11,660) (8,389)
Basic loss and diluted loss per ordinary share 4 (4.9p) (3.8p)
The results for the years above are derived entirely from continuing operations.
There is no difference between the loss on ordinary activities before taxation
and the loss for the years stated above, and their historical cost equivalents.
Statement of Group total recognised gains and losses
Note 2002 2001
£'000 £'000
Loss for the financial year (11,660) (8,389)
Currency translation differences on foreign currency net investments 8 (395) (2)
Total recognised losses for the year (12,055) (8,391)
Consolidated balance sheet
at 31 December 2002
Notes 2002 2001
£'000 £'000
Fixed assets
Intangible assets 185 234
Tangible assets 5 3,394 3,647
Investments 26 26
3,605 3,907
Current assets
Debtors 6 2,223 2,712
Cash at bank and in hand 20,964 32,645
23,187 35,357
Creditors: amounts falling due within one year 7 (1,254) (1,756)
Net current assets 21,933 33,601
Total assets less current liabilities 25,538 37,508
Provisions for liabilities and charges (6) -
Net assets 25,532 37,508
Capital and reserves
Called-up share capital 2,388 2,382
Share premium account 58,762 58,689
Other reserve 711 711
Profit and loss account (deficit) (36,329) (24,274)
Equity shareholders' funds 8 25,532 37,508
Consolidated cash flow statement
for the year ended 31 December 2002
2002 2001
Notes £'000 £'000
Operating activities
Net cash outflow from continuing operating activities a (13,390) (9,846)
Returns on investments and servicing of finance
Interest received 1,550 1,120
Taxation
UK R&D tax credit received 1,553 -
Overseas tax paid (9) (2)
1,544 (2)
Capital expenditure
Purchase of tangible fixed assets (1,349) (3,182)
Net cash outflow before management of liquid resources and financing (11,645) (11,910)
Management of liquid resources
Transfer to deposit accounts (6) (32,190)
Transfer to current accounts 11,741 10,886
11,735 (21,304)
Financing
Issue of ordinary shares 79 36,108
Expenses of share issue - (3,186)
Net cash inflow from financing 79 32,922
Increase/(decrease) in cash in the year b 169 (292)
Notes to the consolidated cash flow statement
(a) Reconciliation of operating loss to net cash outflow 2002 2001
from operating activities £'000 £'000
Continuing activities
Operating loss (14,017) (11,027)
Amortisation of intangible fixed assets 49 49
Depreciation of tangible fixed assets 1,166 840
Loss on disposal of fixed assets 138 1
(Increase)/decrease in debtors due after more than one year (329) 37
Decrease in other debtors and other tax receivable 90 16
Increase in prepayments and accrued income (11) (163)
(Decrease)/increase in trade creditors (230) 216
(Decrease)/increase in other taxation and social security (17) 58
(Decrease)/increase in accruals and deferred income (88) 127
Exchange rate differences (141) -
Net cash outflow from continuing operating activities (13,390) (9,846)
(b) Reconciliation of net cash flow to movement in net funds 2002 2001
£'000 £'000
Increase/(decrease) in cash in the year 169 (292)
Cash (inflow)/outflow from change in liquid resources (11,735) 21,304
Change in net funds resulting from cash flows (11,566) 21,012
Exchange movements (115) (2)
Net funds at beginning of the year 32,645 11,635
Net funds at end of the year 20,964 32,645
(c) Analysis of net funds At 1 January Cash flow Exchange At 31 December
2002 movements 2002
£'000 £'000 £'000 £'000
Cash 249 169 (115) 303
Liquid resources 32,396 (11,735) - 20,661
Net funds/cash at bank and in hand 32,645 (11,566) (115) 20,964
Liquid resources relate to bank deposits which are not immediately accessible
within 24 hours without financial penalty.
Notes to the accounts
for the year ended 31 December 2002
1 Basis of preparation
The figures and financial information for the years ended 31 December 2002 and
31 December 2001 do not constitute the statutory financial statements for the
respective years. Financial statements for the year ended 31 December 2001 have
been delivered to the Registrar of Companies and included the auditors' report.
Financial statements for the year ended 31 December 2002 have not yet been
delivered to the Registrar. The auditors' reports on the financial statements
for the years ended 31 December 2001 and 31 December 2002 were unqualified and
did not contain statements under either section 237 (2) or section 237 (3) of
the Companies Act 1985.
The new accounting standard FRS 19 'Deferred Tax' has been adopted in the
current year. This change of accounting policy did not result in any change to
the prior year's financial position.
Copies of this announcement are available from the Company Secretary. The
audited statutory financial statements for the year ended 31 December 2002 are
expected to be distributed to shareholders by 15 March 2003 and will be
available at the registered office of the Company, Medawar Centre, Oxford
Science Park, Oxford, OX4 4GA.
This announcement was approved by the Board of Oxford BioMedica plc on 3 March
2002.
2 Turnover and loss on ordinary activities before taxation
The Group's turnover and loss on ordinary activities before taxation are derived
entirely from its principal activity. The Group has operations in the United
Kingdom and in the United States of America.
Turnover 2002 2001
Geographical analysis Turnover by Turnover by Turnover by Turnover by
destination origin destination origin
£'000 £'000 £'000 £'000
United Kingdom 1 173 67 373
Rest of Europe - - 35 -
North America 172 - 271 -
173 173 373 373
Loss on ordinary activities before taxation 2002 2001
Geographical analysis £'000 £'000
United Kingdom 9,541 8,770
North America 3,382 771
12,923 9,541
Net assets 2002 2001
Geographical analysis £'000 £'000
United Kingdom 3,020 4,352
North America 1,548 511
Net operating assets 4,568 4,863
Cash at bank and in hand 20,964 32,645
25,532 37,508
3 Tax credit on loss on ordinary activities
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 2002 represents the credit receivable
by the Group for the year, less income tax payable by the Group's subsidiary in
the United States of America. These amounts have not yet been agreed with the
relevant tax authorities.
Group 2002 2001
£'000 £'000
Current tax
United Kingdom corporation tax research and development credit (1,262) (1,167)
Overseas taxation - 15
(1,262) (1,152)
Prior years' tax adjustments
United Kingdom corporation tax research and development credit 7 -
Overseas taxation (14) -
Total current tax net credit (1,269) (1,152)
Deferred tax
Origination of timing differences: overseas tax 6 -
Total deferred tax (note15) 6 -
Tax credit on loss on ordinary activities (1,263) (1,152)
4 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 238,670,615 in issue during the year
ended 31 December 2002 (2001: 219,196,867).
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.
5 Tangible fixed assets
Short Office Computer Laboratory Total
leasehold equipment, equipment equipment
improve-ments fixtures
and fittings
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2002 1,874 211 921 2,459 5,465
Additions 466 39 75 670 1,250
Disposals - - (611) - (611)
Exchange differences (52) (7) (6) (70) (135)
At 31 December 2002 2,288 243 379 3,059 5,969
Depreciation
At 1 January 2002 541 97 288 892 1,818
Charge for the year 334 37 312 483 1,166
Eliminated on disposals - - (399) - (399)
Exchange differences - (1) (1) (8) (10)
At 31 December 2002 875 133 200 1,367 2,575
Net book amount at 31 December 2002 1,413 110 179 1,692 3,394
Net book amount at 31 December 2001 1,333 114 633 1,567 3,647
6 Debtors
2002 2001
£'000 £'000
Amounts falling due after more than one year
Other debtors - rent deposit 291 -
Amounts falling due within one year
Other debtors 123 531
Corporation tax receivable 1,262 1,560
Other tax receivable 115 193
Prepayments and accrued income 432 428
1,932 2,712
Total debtors 2,223 2,712
7 Creditors: amounts falling due within one year
2002 2001
£'000 £'000
Trade creditors 379 638
Overseas taxation - 13
Other taxation and social security 164 181
Accruals and deferred income 711 924
1,254 1,756
8 Reconciliation of movements in Group shareholders' funds
2002 2001
£'000 £'000
Loss for the year (11,660) (8,389)
New share capital issued 79 36,108
Expenses of share issue - (3,186)
Exchange differences (395) (2)
Net (reduction)/addition to shareholders' funds (11,976) 24,531
Opening shareholders' funds 37,508 12,977
Closing shareholders' funds 25,532 37,508
--------------------------
(1) Decision resources Inc
(2) the US National Institutes of Health
(3) EUREKA is a pan-European network for market-oriented, industrial R&D
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