Interim Results
Oxford Biomedica PLC
05 September 2006
FOR IMMEDIATE RELEASE 5 SEPTEMBER 2006
OXFORD BIOMEDICA PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
Oxford, UK: 5 September 2006 - Oxford BioMedica (LSE: OXB), a leading gene
therapy company, announced today its interim financial results for the six
months ended 30 June 2006. Year to date highlights:
Operational highlights:
TroVax(R) (multiple cancers)
• Encouraging results from five Phase II trials in colorectal and renal
cancer presented at ASCO meeting
• Phase II trial in prostate cancer fully recruited, and preliminary
analysis shows high frequency of anti-tumour immune responses
• US Southwest Oncology Group secures regulatory clearance for a Phase II
trial in breast cancer
• Special Protocol Assessment secured from the US FDA for Phase III TRIST
study in renal cancer
• QUASAR committed to conduct a Phase III trial in early-stage colorectal
cancer
• Licensing discussions at advanced stages of due diligence
MetXia(R) (pancreatic cancer)
• Two dose levels of cyclophosphamide successfully evaluated in second
stage of the Phase II trial
ProSavin(R) (Parkinson's disease)
• Meeting request submitted to European agency as part of regulatory
process to start clinical trials
RetinoStat(R) (retinopathy)
• Preclinical preparation underway to support submission to regulatory
authorities to start clinical trials
Technology licensing
• Technology licence provided to VIRxSYS for AIDS/HIV product in Phase II
trials
• Strategic alliance partner, Sigma-Aldrich, launched second series of
LentiVector(R)-RNAi reagents
Financial highlights:
• Revenue of £0.2 million (first half of 2005: £0.2 million)
• Research and development costs of £9.5 million (first half of 2005: £4.8
million)
• Loss after tax of £8.7 million (first half of 2005: £5.0 million)
• Cash burn1 of £5.4 million (first half of 2005: £4.4 million)
• Cash, cash equivalents and current financial assets at 30 June of £38.7
million (30 June 2005: £18.6 million)
1. Net cash used in operating activities plus purchase of non-current assets
Commenting on the interim results, Oxford BioMedica's Chief Executive, Professor
Alan Kingsman, said: 'Our lead anti-cancer product, TroVax, continues to
generate promising clinical results in multiple cancer settings. Its progression
into Phase III trials and a commercial collaboration should ensure that TroVax
is developed and commercialised to its full potential. Progress across the
development pipeline could result in three further products entering clinical
development in 2006-07. With the Company in a strong financial position, we look
forward to pursuing our key development and commercial goals.'
Analyst meeting:
An analyst briefing will be held at 10:00 am today at the offices of Buchanan
Communications, 45 Moorfields, London EC2Y 9AE.
Web cast:
Simultaneously to the analyst briefing at 10.00 am, there will be a live audio
web cast of the results presentation. To connect to the web cast facility,
please go to the Company's website: http://www.oxfordbiomedica.co.uk/
approximately 10 minutes (09:50 am) before the start of the briefing. This will
also be available for replay shortly after the presentation.
-Ends-
For further information, please contact:
Oxford BioMedica plc:
Professor Alan Kingsman, Chief Executive Tel: +44 (0)1865 783 000
City/Financial Enquiries:
Lisa Baderoon/ Mark Court/ Mary-Jane Johnson Tel: +44 (0)20 7466 5000
Buchanan Communications
Scientific/Trade Press Enquiries:
Katja Stout/ Susan Yu/ Gemma Bradley Tel: +44 (0)20 7886 8150
Northbank Communications
Notes to editors
1. Oxford BioMedica
Oxford BioMedica (LSE: OXB) is a biopharmaceutical company specialising in the
development of novel gene-based therapeutics with a focus on oncology and
neurotherapy. The Company was established in 1995 as a spin out from Oxford
University, and is listed on the London Stock Exchange.
Oxford BioMedica has core expertise in gene delivery, as well as in-house
clinical, regulatory and manufacturing know-how. In oncology, the pipeline
includes two candidates in multiple Phase II trials, and a preclinical targeted
antibody therapy in collaboration with Wyeth. A Phase III trial in renal cancer
with TroVax, the lead cancer immunotherapy candidate, is expected to start in
the second half of 2006. In neurotherapy, the Company's lead product is a gene
therapy for Parkinson's disease, which is expected to enter clinical development
in 2006, and four further preclinical candidates. The Company is underpinned by
over 80 patent families, which represent one of the broadest patent estates in
the field.
The Company has a staff of approximately 70 split between its main facilities in
Oxford and its wholly owned subsidiary, BioMedica Inc, in San Diego, California.
Oxford BioMedica has corporate collaborations with Wyeth, Intervet,
Sigma-Aldrich, Viragen, MolMed, VIRxSYS and Kiadis; and has licensed technology
to a number of companies including Merck & Co, Biogen Idec and Pfizer.
Further information is available at www.oxfordbiomedica.co.uk
Chairman's and chief executive's report
The first half of 2006 has seen the Company achieve several of its goals for the
year. Major events included the presentation of new Phase II data with TroVax in
renal and colorectal cancer; a Special Protocol Assessment agreement from the US
Food and Drug Administration on the design and conduct of the Phase III trial of
TroVax in renal cancer; approval by the UK-based clinical trials network,
QUASAR, of a proposed Phase III trial of TroVax in colorectal cancer; and
regulatory progress towards the start of Phase I/II trials of ProSavin in
Parkinson's disease. Business development efforts have focused on the
commercialisation of TroVax, with several major pharmaceutical and biotechnology
companies currently evaluating the programme. The leading prospective partners
are in advanced stages of due diligence and are assessing the commercial
opportunity of TroVax in multiple cancer types. Discussions with these companies
on development strategies and deal structures are ongoing.
Oncology
The Company and its partners have key expertise in tumour biology, immunology
and product development. Oxford BioMedica's oncology pipeline comprises three
major product candidates as well as a product for treating cancer in companion
animals. These novel cancer therapies are designed to deliver a combination of
improved efficacy and safety over existing treatments.
The Company's in-house cancer pipeline is focussed on TroVax and MetXia.
Clinical results from the Phase II programme with TroVax were reported at the
American Society of Clinical Oncology meeting in June 2006. The new data
included further indications of TroVax's efficacy in colorectal cancer and, for
the first time, preliminary indications of efficacy in renal cancer. During the
first half of 2006, Oxford BioMedica expanded its clinical programme with new
Phase II studies in renal cancer alongside standard therapies, and initiated a
trial in prostate cancer. Preparations for the start of Phase III trials with
TroVax progressed. In May 2006, the Company received a Special Protocol
Assessment agreement from the US Food and Drug Administration for the Phase III
TRIST (TroVax Renal Immunotherapy Survival Trial) study in renal cancer, and the
clinical trials network, QUASAR, approved the design of a Phase III trial in
early-stage colorectal cancer.
Patient recruitment continues in the second stage of the Phase II trial of
MetXia in pancreatic cancer. Data from this efficacy stage of the trial are
expected during the second half of 2006. The Company's partners, Wyeth and
Intervet, are completing preparations for clinical/field trials with their
respective cancer programmes and both product candidates continue to show
excellent results.
TroVax(R)
TroVax is Oxford BioMedica's lead cancer immunotherapy product candidate. It is
designed to stimulate a specific anti-cancer immune response and has potential
application in many tumour types. The product induces an immune response against
the tumour antigen 5T4, which is broadly distributed throughout a wide range of
solid tumours. 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, such as 5T4, that are expressed from this
gene-delivery system. Once activated by TroVax, the components of the immune
system, including antibodies and killer T-cells, migrate around the body seeking
out and destroying cancer cells bearing 5T4.
Approximately 150 patients have now been treated with TroVax in ten clinical
trials in colorectal, renal and prostate cancer (collectively approximately 500
doses). TroVax has attracted support from Cancer Research UK, the US National
Cancer Institute, and the clinical trials network, QUASAR. These organisations
are conducting or plan to conduct clinical trials with TroVax.
The Annual Meeting of the American Society of Clinical Oncology in June 2006 was
an important forum for TroVax. Oxford BioMedica's scientists and external
clinical investigators from cancer centres in the USA and from Cancer Research
UK presented data from five Phase II studies of TroVax.
New data were presented from the Company's two completed Phase II trials in 36
patients receiving TroVax as a first-line treatment for metastatic colorectal
cancer alongside two standard-of-care chemotherapy regimens. An updated analysis
of unaudited tumour response data showed that 95% of patients who received both
TroVax and at least six cycles of chemotherapy experienced disease control.
Encouragingly, 60% showed complete or partial tumour responses (tumour
shrinkage). In the analysis of patients that received at least two TroVax
immunisations and were therefore able to raise an anti-tumour immune response,
TroVax extended median survival to 80 weeks from 72 weeks based on historical
controls for chemotherapy alone. Similarly, TroVax improved survival at twelve
months from 70% to 90%. Importantly, as at 21 August 2006, nine patients (25%)
remained alive with an average follow-up time of almost two and a half years.
This level of survival is higher than expected and may indicate that TroVax is
providing a long-term therapeutic effect after treatment has halted. The Company
regards these data as encouraging and believes that, if these observations were
reproduced in a large randomised study, they would be sufficient to support
product registration. As reported previously in 2005, the primary endpoints of
safety and anti-tumour immunological responses were achieved in both trials and
the results confirmed the excellent safety profile of TroVax with no serious
adverse events being attributed to the product.
Data from Cancer Research UK's Phase II trial of TroVax as an adjuvant therapy
in colorectal cancer patients undergoing surgery for liver metastases showed
that 95% of patients produced an anti-tumour immune response. Hence, the primary
endpoint of immunological response was achieved. Again, TroVax was well
tolerated in all patients with no serious adverse events associated with the
product. Of the 20 patients recruited, 16 had successful surgical resection of
their colorectal cancer liver metastases. All evaluable resected tumours were
positive for the 5T4 antigen, the target for TroVax, confirming previously
reported data on the broad distribution of 5T4 on solid tumours.
The first presentation of data from two studies of TroVax plus interleukin-2
(IL-2) in renal cell carcinoma showed that two of the first six evaluable
patients (33%), who received at least three TroVax immunisations, had partial
responses based on industry-standard criteria known as Response Evaluation
Criteria in Solid Tumours (RECIST). If reproduced in a larger study, this
response rate would compare favourably with the historic rate of 10% for
patients receiving IL-2 alone. To date, 34 of 50 patients have been recruited
into the two trials, which are being conducted at two US clinical centres.
TroVax treatment has been well tolerated, with no serious adverse events
associated with the product, which is consistent with its excellent safety
profile in all trials. Across both Phase II trials of TroVax and IL-2 in renal
cancer, 88% of evaluable patients have shown anti-tumour antibody responses to
5T4. The antibody levels have been at the top end of the range previously seen
in the Company's Phase II trials of TroVax in patients with colorectal cancer
undergoing chemotherapy. These data endorse the Company's strategy to initiate
the Phase III TRIST (TroVax Renal Immunotherapy Survival Trial) study in this
cancer setting.
The Company announced in June 2006 that it was expanding its Phase II programme
in renal cancer with three additional studies to assess TroVax in combination
with other standard therapies: interferon-alpha (IFN - (a)) and sunitinib (Sutent
(R)). These small open-label trials are designed to broaden clinical experience
with TroVax and provide further support for the upcoming Phase III TRIST trial.
Recruitment into the additional Phase II studies is ongoing in centres in the UK
and the USA. To date, combining all five trials in renal cancer, 47 patients
have been enrolled.
The Company's Phase III trial, TRIST, is on-track to commence recruitment in the
second half of 2006. The manufacture of the trial material has been completed
and both the drug and placebo materials are being prepared for shipment to
clinical sites. Oxford BioMedica secured an agreement with the US Food and Drug
Administration (FDA) on a Special Protocol Assessment (SPA) in May 2006. The
written agreement from the FDA specifies the design, conduct, analysis and
endpoints of the trial, which, if successful, will support an efficacy claim in
a regulatory submission for product registration. The SPA was received at the
end of the FDA's first review period following Oxford BioMedica's application in
March 2006. In Europe, regulatory authorities in the countries chosen to
participate in the study are reviewing the respective Clinical Trial
Applications and the first approval has been obtained.
The TRIST study will evaluate whether TroVax immunotherapy, in combination with
first-line standard-of-care therapies, prolongs the survival of patients with
locally advanced or metastatic clear cell renal adenocarcinoma. The
multi-centre, randomised, double-blind, placebo-controlled trial will evaluate
TroVax in combination with standard-of-care therapy, versus placebo with
standard of care. Standard-of-care therapies will be IL-2, IFN-(a) or Sutent(R).
Study treatment will be stratified between the standard of care options to
ensure that the allocation of TroVax and placebo is rigorously balanced.
Approximately 700 patients will be recruited at approximately 120 centres in the
USA, European Union, Eastern Europe and Israel. The primary endpoint is
improvement of survival and secondary endpoints include progression-free
survival, tumour response rates and quality of life scores. The protocol
includes the appointment of an independent Safety and Efficacy Monitoring Board
(SEMB) to assess the safety and potential efficacy of the drug combinations at
various time points during the trial. Median survival for this patient group is
approximately 11 months. The duration of the trial will be determined by the
number of survival events (deaths) in the study group. The trial is expected to
reach a conclusion in 2008-09, which would support the Company's objective of
reaching product registration in 2009.
The Company plans to seek 'orphan drug' designation for TroVax for treatment of
renal cell carcinoma in both the USA and Europe. The granting of orphan drug
status would provide Oxford BioMedica and its prospective commercial partner
with various benefits in terms of regulatory exclusivity, assistance with
clinical development and a waiver of filing fees.
In the first half of 2006, Oxford BioMedica advanced its discussions with the
QUASAR group, following their initial expression of interest in conducting a
Phase III trial of TroVax in early-stage (Stage II/III) colorectal cancer
patients. QUASAR is a UK-based clinical trials network that is funded from a
variety of sources including the UK Medical Research Council and the Department
of Health. QUASAR completed its evaluation of TroVax and the proposed trial in
May 2006. QUASAR has confirmed its commitment to conduct the Phase III trial and
is currently seeking funding through the appropriate agencies.
The proposed QUASAR trial will be randomised and placebo-controlled and is
expected to enrol approximately 3,000 patients. TroVax or placebo will be
administered following surgery and adjuvant chemotherapy with the primary
endpoint of disease-free survival at three years. The study is expected to be
configured to support product registration in Europe and the USA. The QUASAR
group has successfully conducted other large studies of adjuvant therapy in
colorectal cancer, enrolling about 7,000 patients over the last seven years.
Independently, the Company is planning a randomised trial in first-line
treatment of metastatic (Stage IV) colorectal cancer. The preliminary design of
the trial is to evaluate TroVax alongside standard-of-care treatment, and the
trial could be configured as either a Phase IIb or a Phase III trial. The final
design of this trial will be dependent upon the outcome of licensing discussions
with prospective commercial partners.
Oxford BioMedica started a Phase II trial of TroVax in patients with prostate
cancer in May 2006 in the USA and completed its target enrolment of 24 patients
in July 2006. Enrolment criteria required patients to have hormone-refractory
prostate cancer with progressive disease, and to have previously received
chemotherapy or to have refused chemotherapy. The open-label trial has two arms
(12 patients each) to assess the efficacy of TroVax alone versus TroVax in
combination with an approved treatment for prostate cancer, granulocyte
macrophage-colony stimulating factor (GM-CSF). Initial safety data from the
prostate cancer trial suggest that TroVax, alone or in combination with GM-CSF,
is well tolerated in this patient group. To date, preliminary immunological
analysis has shown that 11 of 13 evaluable patients (85%), who have received at
least two TroVax immunisations, have mounted anti-tumour antibody responses and/
or cellular responses to 5T4. Efficacy endpoints include objective response
rate, progression-free survival, overall survival and changes in
prostate-specific antigen (PSA) level, which is a recognised marker of disease
status.
The Company will present further Phase II results from both the renal cancer
trials and also the prostate cancer trial at the EORTC-NCI-AACR symposium in
Prague, Czech Republic, in November 2006. Two abstracts have been accepted for
presentation at the meeting and the Company expects to report further data on
tumour responses in renal cancer and preliminary efficacy data in prostate
cancer.
In addition to the trials described above, a US clinical trials co-operative
group, Southwest Oncology Group (SWOG), has made progress towards the start of a
Phase II trial with TroVax in breast cancer, which will be sponsored by the US
National Cancer Institute. In the first half of 2006, the proposed trial was
submitted to the FDA and no issues were raised. In August 2006, the study was
submitted to the US Recombinant DNA Advisory Committee and was similarly
accepted, which means that the trial can now commence.
The targeted population for this study will be late-stage breast cancer patients
who have received standard therapy and have either minimal residual disease or
no evidence of disease. These patients are at high risk of relapse. The current
published literature indicates a median progression-free survival of 18 to 22
months for this patient group. Approximately 120 patients will be enrolled in
this open-label trial. Key endpoints will include immunological response rates
and progression-free survival versus historical controls. SWOG, who is
responsible for all aspects of the trial, could commence patient enrolment
before the end of 2006 in centres in the USA. Should this trial prove
successful, SWOG may conduct a Phase III trial in the same setting.
The clinical data that have been generated to date place TroVax amongst the
leading cancer immunotherapy candidates in development worldwide. The field of
cancer immunotherapy is growing, with several major pharmaceutical and
biotechnology companies committing significant research and development
resources to this novel treatment approach. Oxford BioMedica is committed to
securing suitable development and commercialisation partners for TroVax and
several major pharmaceutical and biotechnology companies are evaluating the
programme. The leading prospective partners are in advanced stages of due
diligence and are assessing the commercial opportunity of TroVax in multiple
cancer types. Discussions with these companies on development strategies and
deal structures are ongoing.
MetXia(R)
MetXia is Oxford BioMedica's gene-based cancer therapeutic candidate. The
product is based on a highly-engineered retrovirus gene delivery system, which
expresses a specific human cytochrome P450 gene. Delivered in this way,
cytochrome P450 activates the chemotherapeutic pro-drug cyclophosphamide at the
tumour site, thereby increasing the effective concentration of the anti-tumour,
cytotoxic derivative in the tumour mass. In principle, this localised activation
should enhance the efficacy of cyclophosphamide and reduce the need for systemic
administration. This in turn should reduce the dose-limiting toxicity of the
drug and expand the therapeutic window.
MetXia is potentially useful in the treatment of a number of solid tumours and
their metastases, particularly those where cyclophosphamide is currently used as
a treatment. The Company is targeting its development efforts for MetXia on the
treatment of pancreatic cancer through direct administration of both MetXia and
cyclophosphamide to the tumour. A two-stage Phase II trial is ongoing in
patients with non-resectable pancreatic tumours.
The Company successfully completed the first stage of the trial in 2005. Patient
recruitment continues for the second stage of the trial using a fixed, optimal
dose of MetXia and increasing doses of cyclophosphamide in up to 25 patients, at
two centres in the UK. The objective of the second stage is to determine the
optimal dose of cyclophosphamide and to evaluate clinical benefit in addition to
safety. Recruitment of patients into this part of the trial is purposefully
staged since each patient must be carefully reviewed for their response to
therapy prior to treatment of subsequent patients. To date, two dose levels have
been evaluated and six patients have received treatment. These patients are at
an advanced stage of their disease, and most have previously failed to respond
to other therapies. To date, there have been no serious adverse events
associated with MetXia, and further patients are being identified for treatment
at higher dose levels of cyclophosphamide.
Oxford BioMedica expects to report further safety and preliminary outcome data
from this trial in the second half of 2006. In addition, the Company intends to
open discussions with the regulatory authorities to determine the most
expeditious route to obtain regulatory approval of MetXia for the treatment of
pancreatic cancer.
5T4 targeted antibody therapy (Wyeth)
Wyeth licensed rights to Oxford BioMedica's proprietary antibody against the 5T4
tumour antigen for the treatment of cancer in 2001. Wyeth is using the antibody
to develop an antibody-toxin conjugate based on its expertise with the
anti-cancer agent calicheamicin. Like TroVax, the product could, in principle,
be used to treat a range of cancers. The collaboration with Wyeth has the
potential to generate US$24 million in upfront and milestone payments, plus
royalties on product sales.
In the first half of 2006, Wyeth continued its preparations for clinical
development of the targeted antibody therapy and is expected to submit an
Investigational New Drug (IND) application for the start of clinical trials. The
start of clinical trials triggers a further milestone payment under the terms of
the collaboration.
TroVax-Vet(R) (Intervet)
TroVax-Vet is Oxford BioMedica's veterinary 5T4 tumour antigen-targeted
immunotherapy programme for the treatment of cancer in companion animals,
focusing on dogs and cats. The development and commercialisation collaboration
with Intervet, the animal health unit of Akzo Nobel, was signed in 2003.
Intervet is one of the world's top veterinary pharmaceutical companies. Under
the terms of the collaboration, Intervet is responsible for the programme and
Oxford BioMedica receives development milestones and royalties on product sales.
In the first half of 2006, Intervet completed its optimisation of the canine
version of TroVax-Vet and advanced to process development, which will define the
commercial manufacturing process. Intervet is planning clinical field trials of
canine TroVax-Vet that would support regulatory approval in Europe through the
veterinary unit of the European Agency for the Evaluation of Medicinal Products
(EMEA).
Neurotherapy
Oxford BioMedica's neurotherapy pipeline addresses Parkinson's disease,
vision-loss, nerve injury and acquired and inherited motor neuron disease. There
are five therapeutic candidates based on the Company's proprietary LentiVector
(R) technology. The neurotherapy programme continues to meet expectations in
ongoing preclinical development and advancement towards human trials.
In the first half of 2006, the Company started the regulatory process for the
start of clinical trials with the most advanced product, ProSavin for
Parkinson's disease. In July 2006, the Company submitted a formal request for a
regulatory meeting to discuss the ProSavin programme. The Company's vision-loss
product, RetinoStat, and its motor neuron disease product, MoNuDin, have
progressed into manufacturing development. In addition, the Company reported new
preclinical results with RetinoStat at an ophthalmology conference and presented
data on three of its other neurotherapy product candidates at major gene therapy
meetings.
Given the commonality of the LentiVector system to all the programmes, the
investment and infrastructure for ProSavin that relates to manufacturing
scale-up and safety testing can be applied to the entire neurotherapy portfolio.
Oxford BioMedica expects to initiate clinical trials with at least one
neurotherapy product per year, starting with ProSavin for Parkinson's disease.
The neurotherapy portfolio continues to attract support from charitable and
patient organisations, primarily because the products could provide safe and
effective treatment options for diseases with unmet medical need.
ProSavin(R)
Oxford BioMedica's lead neurotherapy product candidate, ProSavin, is a novel
approach to the treatment of Parkinson's disease, which directly targets the
cause of disease symptoms. ProSavin uses a LentiVector system to deliver the
genes for three enzymes that are required for the synthesis of dopamine. The
product is administered locally to the striatum, converting cells into a
replacement dopamine factory within the brain.
A confirmatory long-term preclinical efficacy study is ongoing in an
industry-standard model of Parkinson's disease. The study has previously
confirmed that a single treatment with ProSavin has a statistically significant
(p<0.05) therapeutic effect after two weeks, and restores almost normal movement
after five to eight weeks. Recent data show that the therapeutic benefit has
been maintained to the latest time point of twelve months. Furthermore,
long-term ProSavin treatment gave improved benefit in reducing symptoms without
any side-effects when compared with the conventional treatment of L-Dopa.
Results from this and other preclinical proof of principle studies will shortly
be submitted for publication in a medical journal. The new data are also
expected to be presented at the European Society of Gene Therapy Annual Meeting
in Athens, Greece, in November 2006.
In the first half of 2006, the manufacturing process was optimised for
production scale-up and transfer to a facility that is in compliance with Good
Manufacturing Practice (GMP). The manufacture of GMP clinical material is
expected to start in the second half of 2006. In July 2006, the Company
submitted a formal meeting request to a European agency as part of the
regulatory process leading to approval for clinical trials. The proposed Phase I
/II trial is to evaluate ProSavin in patients with moderate to late-stage
Parkinson's disease.
RetinoStat(R)
RetinoStat is the Company's novel gene-based treatment for wet age-related
macular degeneration (AMD) and diabetic retinopathy. The product uses the
LentiVector system to deliver two proprietary anti-angiogenic genes, angiostatin
and endostatin, to the retina to block the formation of aberrant blood vessels.
In May 2006, Oxford BioMedica and its collaborators at Johns Hopkins University
School of Medicine, Baltimore, Maryland, USA, presented encouraging preclinical
data with RetinoStat at the Association for Research in Vision and Ophthalmology
(ARVO) Annual Meeting. The data confirmed that RetinoStat provides statistically
significant efficacy in an industry-standard preclinical model of wet AMD. In
addition, by precisely engineering gene switches in the product, the Company
achieved highly specific gene expression in the target cells of the retina. This
substantially enhances the potential safety and efficacy of RetinoStat.
Oxford BioMedica and Johns Hopkins University, with support from the Foundation
Fighting Blindness and its subsidiary, the National Neurovision Research
Institute, are conducting further preclinical studies with RetinoStat, and
relevant models are currently being adapted to provide the pivotal preclinical
data. The Company expects to submit an Investigational New Drug (IND)
application to the US FDA to evaluate RetinoStat in wet AMD in 2007.
Other preclinical data presented at ARVO demonstrated that the Company's
LentiVector system can be used to deliver therapeutic genes safely and
effectively to human corneal endothelial cells. Hence, the LentiVector system
may have application in the development of gene-based therapies for the
treatment of other ocular diseases such as Fuchs' dystrophy, a condition that
leads to gradual loss of vision as the cornea degenerates and that can currently
only be treated by a cornea transplant.
MoNuDin(R)
MoNuDin is the Company's LentiVector-based product candidate for treating motor
neuron disease. The product carries the gene for vascular endothelial growth
factor, which is neuroprotective for motor neurons. It can be administered by
injection into skeletal muscle, where it is efficiently transported to spinal
motor neurons. The product is being developed initially for the treatment of
amyotrophic lateral sclerosis (ALS).
In the first half of 2006, Oxford BioMedica commenced process development for
manufacturing scale-up. Additional preclinical safety and efficacy studies are
ongoing. These studies are designed to support a regulatory submission to start
clinical trials. The UK Motor Neurone Disease Association continues to support
the programme.
Preclinical results were presented at the American Society of Gene Therapy
Annual Meeting in June 2006. The presentation highlighted previously reported
data, showing that MoNuDin increased life expectancy in an industry-standard
model of ALS by 30%, without causing toxic side-effects. This is one of the
largest therapeutic effects reported in the field to date in this disease model.
SMN-1G
In addition to the ALS programme, Oxford BioMedica is developing a gene-based
therapeutic to treat another motor neuron disease, spinal muscular atrophy
(SMA). SMN-1G is a specific treatment for SMA, which restores levels of the
protein, survival motor neuron-1, by delivering the corrected version of the
gene using the LentiVector system.
At the American Society of Gene Therapy Annual Meeting in June 2006, Oxford
BioMedica presented results from a previously reported preclinical study of
SMN-1G in a severe model of the disease. These results showed that a single
injection of SMN-1G into various muscles delayed onset of SMA, slowed
progression of the disease and increased life expectancy by approximately 40%.
The Company is planning further preclinical studies of SMN-1G that are designed
to support the start of clinical development.
Innurex(R)
Innurex is the Company's gene-based product for nerve regeneration for the
treatment of spinal cord and related injuries. Based on the LentiVector
technology, the product carries the gene for a subtype of the retinoic acid
receptor that induces nerve cells to re-grow. Oxford BioMedica collaborates with
King's College London, UK, on the Innurex programme.
Preclinical efficacy data were published in Nature Neuroscience in February 2006
and were presented at the British Society for Gene Therapy Annual Conference in
March 2006. The data were based on a preclinical study of Innurex in spinal cord
injury, which showed a statistically significant improvement in both sensory and
motor functional ability with Innurex compared to placebo for most measurements.
The Company is conducting further preclinical studies and is defining a clinical
plan for initial trials of Innurex.
Other programmes
Outside of its core therapeutic focus, the Company has advanced its preclinical
programme, for the blood clotting disorder, haemophilia A. This congenital
condition is caused by a deficiency of the blood clotting protein, Factor VIII.
The Company's product, ReQuinate(R), is deigned to restore levels of the
deficient protein by delivering the gene for Factor VIII using the LentiVector
system.
In the first half of 2006, the Company completed optimisation of the ReQuinate
product candidate and presented data at the British Society for Gene Therapy
Annual Conference in March 2006. The preclinical in vitro data showed that the
optimised product candidate produced potentially therapeutic levels of the
Factor VIII protein in liver cells. The Company is planning further preclinical
studies of ReQuinate in order to define the optimal route of delivery. The
ReQuinate programme is funded by a grant from the UK Department of Health.
The Company continues to evaluate opportunities for therapeutic product
development using the LentiVector technology as a delivery mechanism for
molecules that can silence genes via a process known as RNA interference (RNAi).
Current research efforts within Oxford BioMedica are focused on the evaluation
of the LentiVector system for the delivery of micro-RNA, which can be used to
regulate the expression of disease-related genes.
Technology licensing
Oxford BioMedica's licensing activities exploit the potential of its suite of
gene delivery technologies by providing third-party access either for research
or product development. The Company secured its ninth agreement in March 2006.
This agreement, with VIRxSYS Corporation, provides a licence to Oxford
BioMedica's patents for the VSV-G viral envelope system for the production of
VIRxSYS' HIV/AIDS product, VRX496. The product is currently in Phase II trials.
Under the agreement, Oxford BioMedica received an upfront licence fee and
receives annual maintenance payments, together with potential clinical and
regulatory milestone payments and royalties on future product sales.
In addition to its application in gene-based therapeutic products, the Company's
LentiVector technology is an effective tool for genomics-based target
validation, drug screening, production systems and the creation of transgenic
animals. Viragen Inc has a license to the LentiVector system for the development
of its avian transgenic biomanufacturing system, known as the OVATM System, for
efficient and economical manufacturing of therapeutic proteins in chicken eggs.
The Viragen agreement includes upfront and annual licence payments, in addition
to milestone payments on the achievement of technical goals and royalties on
commercialisation. In January 2006, Viragen announced that it had produced a
functional version of interferon-beta in the whites of eggs laid by transgenic
hens. Interferon-beta is the active ingredient in several leading multiple
sclerosis therapies.
In 2005, the Company announced a strategic alliance with Sigma-Aldrich,
providing Sigma-Aldrich with exclusive rights to commercialise reagents and
research tools incorporating the LentiVector technology. Sigma-Aldrich is
developing a range of high-value LentiVector-based research products for its
extensive customer base in the pharmaceutical, biotechnology and academic
sectors. In July 2006, Sigma-Aldrich announced that it had launched its second
series of LentiVector-RNAi research tools covering the human kinase gene family.
This product range can be used to study the role of kinases in immune response,
metabolism and cell differentiation, thus supporting the discovery and
development of new therapeutics. Under the agreement with Sigma-Aldrich, Oxford
BioMedica receives annual minimum payments and royalties on sales.
The Company's technology licensing activities are generating a modest revenue
stream through annual maintenance payments and minimum royalties. They have the
potential for significant additional income in some cases. Oxford BioMedica
anticipates further technology licensing deals in the second half of 2006.
Intellectual property
The Company's broad intellectual property estate is fundamental to its corporate
strategy to generate income from licensing and commercialising its products and
technologies. The Company's patent portfolio comprises 39 US and 11 European
granted patents plus 66 patents that have issued in other jurisdictions. In
total, 161 patent applications are currently pending. Another 15 patent
families, covering key technologies, have been licensed from third parties. In
the first half of 2006, eight new patents were granted.
Intellectual property news during the first half of 2006 included a Notice of
Allowance from the US Patent Office for a key patent application for ProSavin in
June. The patent significantly extends the protection of the Company's lead
product candidate for Parkinson's disease. It is expected that the patent will
be issued before the end of 2006. This patent describes the genetic composition
of ProSavin and, as such, is an important addition to the portfolio of patents
that protect the product. The patent also provides protection for new product
candidates that the Company may develop for the treatment of other
neurodegenerative conditions such as Alzheimer's disease.
Also in June 2006, Sigma-Aldrich and Oxford BioMedica filed a lawsuit against
Open Biosystems Inc for infringement of two US patents relating to the use of
the LentiVector technology for RNAi research tools. The Company licensed these
patents exclusively to Sigma-Aldrich for research use in 2005.
Board changes
In the first half of 2006, there were two changes to the Board. Dr Mike McDonald
, who joined Oxford BioMedica in 2005 as Chief Medical Officer, was appointed to
the Board as an Executive Director in February 2006. Mike has considerable
experience in clinical development and regulatory affairs from 20 years in the
pharmaceutical and biotechnology industry. Raj Uppal, a Non-Executive Director,
resigned from the Board in March 2006 to pursue other interests. Raj has made a
valuable contribution to the Board and has been an excellent source of advice
over the years, having joined the Board in February 2001. A replacement
Non-Executive Director is being sought.
Finance
The Company has increased the level of investment in research and development,
as indicated when new funds were raised in December 2005. In the first half of
2006, investment in the clinical development of TroVax was £4.8 million (£4.1
million more than the year before) as the Company prepared for the start of the
TRIST Phase III study. Overall, the net loss for the first half of 2006 was £8.7
million. Due to the timing of payments to contract research organisations, the
cash flow in the first half of 2006 did not fully reflect the higher level of
activity, and cash used in operations was only £0.6 million (12%) higher than
last year at £5.8 million. Offsetting this, trade payables and accruals
increased by £3.8 million in the first half of 2006. Overall, cash, cash
equivalents and short-term deposits decreased by £5.2 million over the period,
leaving a total balance of £38.7 million at 30 June 2006.
Revenue in the first half of 2006 was derived from licences to the Company's
intellectual property, and was £208,000 (H1 2005: £232,000). Initial fees on
signing new licences were lower in the first half of 2006 than the comparative
period last year.
Operating costs were up 70% at £10.8 million (H1 2005: £6.3 million).
Administrative expenses were £0.2 million lower due to one-off legal and
professional fees in 2005, plus reduced US administration costs, but research
and development costs were £4.6 million higher due to the expanded clinical
activity this year. Clinical and preclinical expenditure with external
contractors increased from £1.0 million in the first half of 2005 to £5.3
million in the 2006 period. Expenditure on the TroVax Phase III programme in the
first half of 2006 accounted for £5.2 million, with a further £0.3 million for
TroVax Phase II studies and £0.5 million for other clinical and preclinical
programmes. Grant income of £0.2 million in the period came principally from the
UK Motor Neurone Disease Association grant for MoNuDin and the UK Department of
Health grant for ReQuinate, for the treatment of haemophilia A.
Net interest receivable was £0.5 million higher in the first half of 2006 due to
the increased funds on deposit following the share issue in December 2005. While
it continues making losses, the Company claims research and development tax
credits in the UK. Despite higher spending on research and development, the net
tax credit for the first six months of 2006 was only £0.1 million more than the
same period in 2005, because the amount of available tax credit was restricted
to the total of UK payroll taxes.
Largely as a result of higher investment in research and development, the net
loss for the first half of 2006 increased to £8.7 million (H1 2005: £5.0
million). The loss per ordinary share was 1.7p (H1 2005: 1.3p).
Net cash used in operations increased by just £0.6 million to £5.8 million,
despite an increase of £4.3 million in the operating loss for the period. The
cash outflow was lower than might have been expected because of an increase of
over £3.5 million in payables and a reduction of £0.4 million in receivables.
The payables increase is attributable to the timing of suppliers billing for
services, and the reduction in receivables is mainly due to the receipt of £0.4
million in the first half of 2006 from three long-standing grant claims.
Interest received in the first half of 2006 was £0.5 million (H1 2005: £0.3
million). These amounts are less than the corresponding figures for interest
receivable in the income statement because of accrued income on fixed-term
deposits that is paid on maturity of the deposits. No tax credit was received in
the 2006 period (H1 2005: £0.7 million), but a claim for £1.2 million for the
year ended 31 December 2005 has been submitted and is expected to be settled in
the second half of the year.
Cash used for purchases of tangible and intangible fixed assets was £0.1 million
(H1 2005: £0.1 million). Additions to property, plant and equipment, detailed in
note 5, are higher than this figure due to the recognition of an asset of £0.3
million. This relates to establishment of a dilapidation provision in respect of
leasehold property at the Company's premises in Oxford. The issue of shares in
the first six months of 2006 raised £0.2 million (H1 2005: £0.6 million). There
were 1.2 million new shares issued (H1 2005: 3.7 million) on the exercise of
share options.
In summary, the Company is on track with its increased investment in the
development of TroVax, and has a strong cash position, enabling investment in
clinical development to continue while the Company is in discussions with
potential commercial partners.
Conclusion and outlook
The Company is pleased with the progress of its portfolio of product candidates
in oncology and neurotherapy. In the first half of 2006, internal efforts have
focused on TroVax in terms of both late-stage clinical development and also
commercial activities. Recruitment into the first Phase III trial of TroVax for
renal cancer is expected to commence in the second half of 2006 and further data
are anticipated from the ongoing Phase II trials in various cancer settings.
Given the breadth of application of the product across many cancer types, the
Directors believe that TroVax represents a substantial asset. The Company
remains committed to securing a suitable commercial partner for the ongoing
development and commercialisation of TroVax.
Beyond TroVax, a number of pipeline products are approaching key milestones in
their development. In the coming period, further data are anticipated from the
Phase II trial of MetXia in pancreatic cancer. Also, ProSavin is expected to
gain regulatory approval for the start of trials in Parkinson's disease. The
latter event is significant for the Company's entire neurotherapy pipeline,
which is based on the LentiVector gene delivery technology. The Company is
expanding the therapeutic application of the LentiVector technology into new
disease areas, and expects to announce further details in the second half of
2006.
The Company's collaboration with Wyeth on the 5T4 targeted antibody therapy for
the treatment of cancer is moving forward. Wyeth is completing preparations for
clinical trials, the start of which will trigger a milestone payment to Oxford
BioMedica under the agreement. The partnership with Intervet on TroVax-Vet is
similarly nearing clinical field trials for the treatment of cancer in dogs.
Technology licensing continues to generate revenue, and there is the opportunity
for further agreements and increasing payments, particularly through the
strategic alliance with Sigma-Aldrich.
On behalf of the Board, we take this opportunity to recognise the considerable
contribution and support shown to Oxford BioMedica by our partners and other
stakeholders. In particular, we would like to thank the staff at Oxford
BioMedica for their continuing commitment and dedication during the period.
Consolidated income statement
for the six months ended 30 June 2006
Notes Six months Six months Year
ended ended ended
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Revenue 2 208 232 824
Research and development costs (9,456) (4,838) (9,327)
Administrative expenses (1,352) (1,505) (2,865)
Other operating income: grants 249 13 135
receivable
Operating loss (10,351) (6,098) (11,233)
Interest payable and similar (13) (17) (31)
charges
Interest receivable 952 504 969
Loss before tax (9,412) (5,611) (10,295)
Taxation 744 639 1,210
Loss for the period (8,668) (4,972) (9,085)
Basic loss and diluted loss per 3 (1.7p) (1.3p) (2.4p)
ordinary share
The notes on pages 16 to 20 form part of this financial information
Consolidated balance sheet
at 30 June 2006
Notes 30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Assets
Non-current assets
Intangible assets 4 1,641 1,641 1,641
Property, plant and equipment 5 944 996 831
2,585 2,637 2,472
Current assets
Trade and other receivables 6 1,772 1,815 1,777
Current tax assets 1,943 1,700 1,175
Financial assets: Available for 31,000 13,174 23,500
sale investments
Cash and cash equivalents 7 7,651 5,450 20,317
42,366 22,139 46,769
Liabilities
Current liabilities
Trade and other payables 8 5,854 2,171 2,180
Current tax liabilities - 1 1
Provisions 9 61 76 67
5,915 2,248 2,248
Net current assets 36,451 19,891 44,521
Non-current liabilities
Provisions 9 671 396 393
Net assets 38,365 22,132 46,600
Shareholders' equity
Ordinary shares 4,996 3,758 4,984
Share premium 106,311 78,886 106,097
Other reserves 78 86 84
Retained losses (73,020) (60,598) 64,565)
Total equity 38,365 22,132 46,600
The notes on pages 16 to 20 form part of this financial information
Consolidated cash flow statement
for the six months ended 30 June 2006
Notes Six months Six months Year
ended ended ended
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash used in operating activities
Cash used in operations 10 (5,752) (5,149) (10,074)
Interest received 482 262 1,040
Interest paid - (17) (11)
Tax credit received - 650 1,786
Overseas tax paid (25) (26) (65)
Net cash used in operating
activities (5,295) (4,280) (7,324)
Cash flows from investing
activities
Purchases of property, plant and
equipment (82) (118) (327)
Purchases of intangible assets - (14) (14)
Net (purchase)/maturity of
available for sale investments (7,500) 4,326 (6,000)
Net cash (used in)/generated by
investing activities (7,582) 4,194 (6,341)
Cash flows from financing
activities
Net proceeds from issue of ordinary
share capital 234 614 29,043
Effects of exchange rate changes (23) 5 22
Net (decrease)/increase in cash and
cash equivalents (12,666) 533 15,400
Cash and cash equivalents at 1
January 20,317 4,917 4,917
Cash and cash equivalents at period
end 7 7,651 5,450 20,317
The notes on pages 16 to 20 form part of this financial information
Statement of changes in shareholders' equity
Group Share Share Translation Merger Retained
capital premium reserve reserve losses Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2005 3,721 78,309 (623) 711 (55,739) 26,379
Exchange adjustments - - (2) - - (2)
Loss for the six months
ended 30 June 2005 - - - - (4,972) (4,972)
Share options
Proceeds from shares issued 37 577 - - - 614
Value of employee services - - - - 113 113
At 30 June 2005 3,758 78,886 (625) 711 (60,598) 22,132
Exchange adjustments - - (2) - - (2)
Loss for the six months
ended 31 December 2005 - - - - (4,113) (4,113)
Share options 23 401 - - - 424
Proceeds from shares issued
Value of employee services - - - - 146 146
Issue of shares excluding
share options 1,203 28,879 - - - 30,082
Costs of share issues - (2,069) - - - (2,069)
At 31 December 2005 4,984 106,097 (627) 711 (64,565) 46,600
Exchange adjustments - - (6) - - (6)
Loss for the six months
ended 30 June 2006 - - - - (8,668) (8,668)
Share options 12 214 - - - 226
Proceeds from shares issued
Value of employee services - - - - 213 213
At 30 June 2006 4,996 106,311 (633) 711 (73,020) 38,365
The notes on pages 16 to 20 form part of this financial information
Notes to the financial information
1 Basis of preparation
This financial information comprises the consolidated interim balance sheets as
at 30 June 2006 and 30 June 2005 and related consolidated interim statements of
income and cash flows for the six months then ended of Oxford BioMedica plc
(hereinafter referred to as 'financial information').
This financial information has been prepared in accordance with the Listing
Rules of the Financial Services Authority. In preparing this financial
information management has used the principal accounting policies as set out in
the Group's annual financial statements for the year ended 31 December 2005 on
pages 52 to 54.
The Group has chosen not to adopt IAS 34 'Interim Financial Statements' in
preparing its 2006 interim statements and, therefore, this financial information
is not in compliance with IFRS.
The interim financial information for the six months ended 30 June 2006 and for
the six months ended 30 June 2005 is unaudited. This financial information has
not been reviewed by the independent auditors. The financial information
relating to the year ended 31 December 2005 has been extracted from the annual
financial statements for that year. The report of the independent auditors on
the 2005 annual financial statements was unqualified. The financial information
in this report does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985.
Copies of the interim results for the six months ended 30 June 2006 are being
sent to all shareholders. Details can also be found on the Company's website at
www.oxfordbiomedica.co.uk. Further copies of the interim results and copies of
the full report and accounts for the year ended 31 December 2005 can be obtained
by writing to the Company Secretary, Oxford BioMedica plc, Medawar Centre,
Oxford Science Park, Oxford, OX4 4GA, UK.
This announcement was approved by the Board of Oxford BioMedica plc on 4
September 2006.
2 Segmental analysis
The Group has one single business, based upon its proprietary technology,
operated out of two geographical locations - Oxford (UK), which is the principal
operating site, generating all the revenue, and San Diego (USA), which provides
intellectual property management and business development services to the UK
subsidiary. 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 tax are derived entirely from the principal activity,
biotechnology research and development. The business segments comprise the
Group's UK and US operations. The majority of the Group's activities take place
in the UK. Since the reorganisation of US activities in 2004, expenditure in the
USA accounts for less than 10% of Group costs. Purchases and sales between
subsidiaries are eliminated on consolidation.
The Group's revenue derives wholly from assets located in the UK. By
destination, revenue derives from the European Union and the USA.
Six months Six months Year
ended ended ended
30 June 30 June 31
2006 2005 December
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Revenue by destination
European Union 28 72 53
United States of America 180 160 771
Total turnover 208 232 824
3 Basic loss and diluted loss per ordinary share
The basic loss per share has been calculated by dividing the loss for the period
by the weighted average number of shares of 499,147,326 in issue during the six
months ended 30 June 2006 (six months ended 30 June 2005: 373,949,311; year
ended 31 December 2005: 380,914,250).
The Company had no dilutive potential ordinary shares in either period 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.
4 Intangible assets
Intellectual property rights 30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cost
At 1 January 1,920 1,991 1,991
Additions - 14 14
Disposals (17) (23) (85)
At period end 1,903 1,982 1,920
Impairment
At 1 January 279 364 364
Disposals (17) (23) (85)
At period end 262 341 279
Net book amount at period end 1,641 1,641 1,641
5 Property, plant and equipment
Short Office Computer Laboratory Total
leasehold equipment, equipment equipment
improvements fixtures
and
fittings
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2006 2,270 86 270 2,650 5,276
Exchange adjustments (27) - (1) - (28)
Additions at cost 374 1 14 62 451
Disposals - (1) (10) (40) (51)
At 30 June 2006 2,617 86 273 2,672 5,648
Depreciation
At 1 January 2006 2,093 74 212 2,066 4,445
Exchange adjustments (27) - (1) - (28)
Charge for the period 158 6 16 157 337
Disposals - (1) (10) (39) (50)
At 30 June 2006 2,224 79 217 2,184 4,704
Net book amount at 30 June
2006 393 7 56 488 944
Net book amount at 30 June
2005 310 20 86 580 996
Net book amount at 31
December 2005 177 12 58 584 831
6 Trade and other receivables
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Amounts falling due after more than one year
Other receivables - rent deposit 190 229 205
Amounts falling due within one year
Trade receivables 158 45 119
Other receivables 881 845 676
Other tax receivable 173 318 242
Prepayments 349 376 442
Accrued income 21 2 93
1,582 1,586 1,572
Total trade and other receivables 1,772 1,815 1,777
7 Cash and cash equivalents
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash at bank and in hand 252 236 185
Short-term bank deposits 7,399 5,214 20,132
Total cash and cash equivalents 7,651 5,450 20,317
In addition to the cash and cash equivalents described above, the Group held
bank deposits of £31,000,000 (30 June 2005: £13,174,000; 31 December 2005:
£23,500,000) with an initial term to maturity between five and twelve months
classified as available for sale investments.
8 Trade and other payables - current
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Trade payables 851 465 397
Other taxation and social security 122 150 263
Accruals 4,798 1,470 1,415
Deferred income 83 86 105
Total trade and other payables 5,854 2,171 2,180
9 Provisions
Onerous Onerous Onerous
Dilapidation lease Total lease lease
30 June 30 June 30 June 30 June 31 December
2006 2006 2006 2005 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000 £'000 £'000
At 1 January - 460 460 464 464
Exchange adjustments - (31) (31) 31 50
(Credited)/charged to
the income statement - (7) (7) 7 -
Tangible fixed asset
recognised in the
period 338 - 338 - -
Utilised in the
period - (41) (41) (40) (74)
Amortisation of
discount 4 9 13 10 20
Total provisions 342 390 732 472 460
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current 61 76 67
Non-current 671 396 393
Total provisions 732 472 460
The dilapidation provision relates to anticipated costs of restoring the
leasehold property in Oxford, UK to its original condition at the end of the
present leases in 2011, discounted at 4.74% per annum. 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 Diego, USA which has been sub-let for the
remainder of the lease term until June 2012, discounted at 4.72% per annum (June
2005: 4.10%; December 2005: 4.09%). The provision will be utilised over the
remaining term of the lease.
10 Cash flow from operating activities
Reconciliation of net loss to net cash used in operating activities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Continuing operations
Net loss (8,668) (4,972) (9,085)
Adjustment for:
Tax (744) (639) (1,210)
Depreciation 337 334 674
Loss on disposal of property, plant and
equipment 1 - 33
Interest income (952) (504) (969)
Interest expense 13 17 31
Charge in relation to employee share
schemes 213 113 259
Changes in working capital:
Decrease/(increase) in trade and other
receivables 447 65 (190)
Increase in payables 3,649 450 457
Decrease in provisions (48) (23) (74)
Effects of exchange rate changes - 10 -
Net cash used in operations (5,752) (5,149) (10,074)
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