Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Xenova Group PLC (XEN)

  Print      Mail a friend

Thursday 06 November, 2003

Xenova Group PLC

3rd Quarter Results

Xenova Group PLC
06 November 2003

                               Xenova Group plc

                             Third Quarter Results


Slough, UK, 6th November, 2003

Quarterly Highlights

  • Acquisition of KS Biomedix Holdings plc

  • XR5944: start of Phase I clinical trial of novel DNA targeting agent

  • Cash, short-term deposits and investments £10.6m ($17.5m) at 30 September
    2003 (30 September 2002: £10.0m ($16.6m))

Subsequent Events

  • TA-NIC: start of second Phase I clinical trial for anti-smoking vaccine

  • TA-CD: start of Phase IIb clinical trial for anti-cocaine vaccine

  • Publication of novel findings relating to use of Xenova's OX-40 technology
    and its potential for the treatment of influenza



David Oxlade, Chief Executive Officer, said: 'We have now completed the
acquisition of KS Biomedix and made good progress with the integration of the
business.  The acquisition has strengthened our clinical portfolio and helped to
lay the foundations for Xenova to become a broader-based oncology business.  In
addition, it has created substantial opportunities for synergies and cost
savings across the enlarged Group which we have already started to exploit.'

'By focusing on our key clinical development programmes we believe we will be
able to deliver greater shareholder value and significantly improve the
long-term prospects of the Group.'

Contacts:
UK:                                               US:
Xenova Group plc                                  Trout Group/BMC Communications
Tel: +44 (0)1753 706600                           Tel: 001 212 477 9007
David A Oxlade, Chief Executive Officer           Press: Brad Miles (Ext 17) Daniel Budwick (Ext 14)
Daniel Abrams, Group Finance Director             Investors: Jonathan Fassberg (Ext 16) Lee Stern (Ext 22)
Jon Davies, Corporate Communications

Financial Dynamics
Tel: +44 (0)207 831 3113
David Yates/Ben Atwell


Notes to Editors

Xenova Group plc's product pipeline focuses principally on the therapeutic areas
of cancer and immune system disorders.  Xenova has a broad pipeline of
programmes in clinical development.  The Group has a well-established track
record in the identification, development and partnering of innovative products
and technologies and has partnerships with significant pharmaceutical and
biopharmaceutical companies including Celltech, Genentech, Lilly, Millennium
Pharmaceuticals, Nycomed, Pfizer and QLT.

For further information about Xenova and its products please visit the Xenova
website at www.xenova.co.uk

For Xenova: Disclaimer to take advantage of the 'Safe Harbor' provisions of the
US Private Securities Litigation Reform Act of 1995. This press release contains
'forward-looking statements,' including statements about our ability to
integrate acquired businesses and realize cost savings from integration, and
the discovery, development and commercialization of products. Various risks may
cause Xenova's actual results to differ materially from those expressed or
implied by the forward looking statements, including: unexpected costs and
delays in integrating acquired businesses into our group, adverse results in our
drug discovery and clinical development programs; failure to obtain patent
protection for our discoveries; commercial limitations imposed by patents owned
or controlled by third parties; our dependence upon strategic alliance partners
to develop and commercialize products and services; difficulties or delays in
obtaining regulatory approvals to market products and services resulting from
our development efforts; the requirement for substantial funding to conduct
research and development and to expand commercialization activities; and product
initiatives by competitors.  For a further list and description of the risks and
uncertainties we face, see the reports we have filed with the Securities and
Exchange Commission.  We disclaim any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.


Acquisition of KS Biomedix Holdings plc

On 14 August 2003 Xenova announced a recommended offer to acquire 100% of the
share capital of KS Biomedix Holdings plc, a UK listed drug research and
development group. This transaction became unconditional in all respects on 12
September 2003. The planned integration and rationalisation across the two
businesses is well advanced.  The Directors estimate that annualised
cost-savings of approximately £10m will be achieved across both businesses,
based on reductions in headcount, facilities and R&D costs (including Xenova's
restructuring activities commencing in May 2003).  The one-off reorganisation
and post acquisition integration cost of achieving these savings is expected to
be approximately £3.3m.

Like Xenova, KS Biomedix was focused on the development of products for the
treatment of cancer, particularly clinical indications where survival prognosis
is poor and there are few, if any, approved products.  As a result of this
acquisition, the enlarged Xenova Group now has a broader clinical pipeline with
a total of 12 products in clinical stage development including eight products in
oncology (three in Phase II or Phase III) and four in addiction and immunology.
The table below summarises the Xenova's drug candidates and early development
programmes. Programmes highlighted in bold text have been prioritised for
development.

The Xenova Directors believe that greater shareholder value will be achieved by
focusing on six key clinical development programmes.  Of these six, four
(TransMIDTM, tariquidar, TA-CD, XR11576/XR5944) benefit from external funding or
support, substantially reducing the costs of clinical development to Xenova.
Xenova has deprioritised the majority of its preclinical programmes except where
externally funded, as is the case for the Genentech collaboration on OX-40.


Drug Candidates/Programmes      Therapeutic area                    Stage of          Partner
                                                                    Development
Clinical programmes

TransMIDTM (XR311)              Glioma                              Phase III         Sosei, Nycomed,
                                                                                      Medison, Ranbaxy

Tariquidar (XR9576)             Cancer                              Phase II          QLT (North America
                                                                                      only)
TA-HPV / TA-CIN                 Cervical cancer                     Phase II
TA-CD                           Cocaine addiction                   Phase II          NIDA*
XR303                           Cancer                              Phase I
HumaRAD                         Cancer                              Phase I
XR11576/XR5944                  Solid tumours                       Phase I           Millennium (North
                                                                                      America only)
DISC-PRO                        Genital and oro-labial herpes       Phase I
                                prophylaxis

TA-NIC                          Nicotine addiction                  Phase I
DISC-GMCSF                      Cancer                              Phase I
DISC-VET                        Bovine Herpes Virus                 Phase I           Pfizer
                                                                    equivalent


Preclinical  programmes

Triomics                        Solid tumours                       Preclinical       Option to acquire
XR11612                         Solid tumours                       Preclinical       As XR11576
OX-40                           Autoimmune disorders                Preclinical       Celltech, Genentech

OX-40L                          Infectious diseases, anti-cancer    Preclinical

PAI-1                           Cardiovascular                      Preclinical       Lilly
PAI-1                           Cancer                              Preclinical       Lilly (Option)**
MRP                             Cancer and asthma                   Preclinical
VP22 (Phogen joint venture)     Intra-cellular delivery system      Preclinical       Genencor
HIF-1 alpha                     Cancer                              Preclinical
MEN-B                           Meningitis                          Preclinical
XR304                           Ulcerative colitis                  Preclinical
XR113                           Cancer                              Preclinical
Ribosome display (Discerna)     Cancer targets                      Preclinical       Babraham


*  NIDA provides funding to independent investigators to conduct certain trials of TA-CD, but has
   no rights for its commercialisation, nor is funding required to be repaid by Xenova.

** Lilly has an option to acquire development and commercialisation rights relating to PAI-1
   inhibitors in the cancer field.



Product Pipeline Year to Date Update

Clinical Trials

Cancer - TransMIDTM treatment for high-grade glioma

Following the acquisition of KS Biomedix, TransMIDTM is now the most advanced
product in Xenova's pipeline, having already commenced Phase III development and
shortly to enter Phase III clinical trials.

TransMIDTM  is a treatment for high-grade glioma (brain cancer) a disease for
which no efficacious alternatives are currently available and which has a very
poor prognosis.  TransMIDTM is a modified diphtheria toxin conjugated to
transferrin.  The diphtheria toxin gains entry to the tumour cell when the
transferrin to which it is attached binds to transferrin receptors on the
surface of the cells.  Transferrin receptors are particularly prevalent on
rapidly dividing cells, and the high level of transferrin receptor expression on
glioma cells makes transferrin an ideal targeting mechanism for the diseased
cells.  Once inside a cell the diphtheria toxin interferes with protein
synthesis and ultimately kills the cell.

TransMIDTM  is pumped directly into the brain tumour via two catheters using CED
(Convection Enhanced Delivery - licensed from the National Institute of Health,
US).  CED greatly enhances the distribution of drug through the tumour mass and
produces high local concentrations of drug.  Since TransMIDTM is directly
infused into the tumour, it circumvents the usual obstacles presented to drug
delivery to the brain by the blood-brain barrier and reduces systemic side
effects.

Plans to progress TransMIDTM into Phase III trials in adults with recurrent and/
or progressive non resectable glioblastoma have already been submitted by KS
Biomedix and have been agreed with the FDA.  However, following its acquisition
of KS Biomedix Xenova intends to seek FDA approval to change the current Phase
III programme design from one large Phase III trial to two smaller Phase III
trials.

Cancer - tariquidar multi-drug resistance (MDR) programme

In June 2002, tariquidar entered two pivotal Phase III clinical trials as an
adjunctive treatment in combination with first-line chemotherapy for non-small
cell lung cancer (NSCLC) patients.  On 12 May 2003, QLT announced that the Phase
III trials would be stopped following a recommendation from the independent Data
and Safety Monitoring Committee (DSMC) which had just completed the unblinded
interim review of the data for the two ongoing trials.  A detailed review of the
unblinded clinical data on the patients in the Phase III trials is continuing.

On 23 July 2003, QLT announced that enrolment in the Phase IIb trial for
patients with chemo-refractory breast cancer, which is being carried out at the
MD Anderson Centre, Texas, had been sufficiently completed at 17 patients. QLT
will not be enrolling new patients in this trial.

Cancer - Therapeutic Vaccines

On 14 April 2003, the Company announced the results of an open label,
physician-sponsored Phase II 'prime-boost' study, targeting the treatment of
human papillomavirus (HPV) associated ano-genital intraepithelial neoplasia
(AGIN) using a combination of Xenova's TA-CIN and TA-HPV candidate therapeutic
vaccines.

The results of this study indicated that a prime boost strategy, using a
combination of Xenova's TA-CIN and TA-HPV candidate therapeutic vaccines, was
both safe and well tolerated and demonstrated clear clinical responses, even in
women with long-standing disease.  Of the 26 patients meeting the entry
requirements of the study, 15 (58%) showed evidence of symptomatic improvement,
one (4%) had a complete response (confirmed by histological examination and
viral clearance) and in addition, five (19%) showed a partial response (defined
as a lesion area reduction of 50% or greater), for an overall response rate in
this study of 23%.  Five patients (19%) were HPV16 negative at the end of the
study.

Cancer - Novel DNA Targeting Agents

On 3 July 2003, Xenova announced the start of a Phase I clinical trial of
XR5944, the second of three novel DNA targeting agents that are the subject of a
licence agreement with Millennium Pharmaceuticals Inc.  The first of these
compounds XR11576, entered Phase I clinical trials in February 2002.  The third,
XR11612 is in preclinical development.

The XR5944 Phase I clinical trial is being conducted at three centres in the
United Kingdom and will include approximately 40 patients.  In preclinical
studies, XR5944 has demonstrated a high level of anti-tumour activity against a
number of human tumour models, causing both partial and complete regression of
large established tumours.  Recent data published in the Proceedings for the
2003 Annual Meeting of the American Association for Cancer Research, suggest
that XR5944 acts through a novel mechanism of action distinct from other current
cytotoxic agents. Further exploration into the mechanism of action of XR5944 is
ongoing.

Vaccines of Addiction

On 15 January 2003, Xenova announced that it had reached an agreement with
ImmuLogic Pharmaceutical Corporation Liquidating Trust ('ImmuLogic') to buy out
all ImmuLogic's remaining rights to future milestone and royalty payments
relating to two of Xenova's therapeutic vaccines;  TA-CD for the treatment of
cocaine addiction and TA-NIC for nicotine addiction.

TA-CD

The start of a Phase IIa cocaine administration trial was announced on 14 April
2003. The ten-patient open label trial is being conducted in the United States
and is designed to evaluate the effect of TA-CD on behavioural changes
associated with cocaine administration.

The results of a second Phase IIa dose escalation trial were reported on 17 June
2003. This study, which started in April 2002, was designed to evaluate the
safety and immunogenicity of TA-CD using 4 or 5 dose vaccination schedules. The
trial involved the enrolment of 13 subjects, all of whom were cocaine abusers
seeking help with their addiction at the start of the trial.  Patients were
treated with up to five injections of the vaccine over a twelve week period
using doses up to 360 (micro)g each. Of the thirteen enrolled, twelve subjects
completed the 12 month evaluation period to assess safety, immune response and
cocaine usage.

As for the previous study, the results showed the vaccine to be safe and well
tolerated with a dose-related immune response.  Of those 16 patients in the two
Phase IIa studies who used cocaine at any time following vaccination, 14
reported a reduction of the usual euphoric effect normally associated with
cocaine use, providing further anecdotal evidence of the vaccine's proposed mode
of action.

On 24 October 2003, Xenova announced the start of the first randomised, placebo
controlled Phase IIb clinical trial for TA-CD. The primary objective of this new
study is to determine the efficacy of TA-CD in addicts seeking treatment for
cocaine abuse, and to determine appropriate end-points for a Phase III study.

Up to 132 subjects, all of whom are methadone-dependent cocaine addicts being
treated for drug dependency are being recruited into this clinical study. Half
the subjects will be treated with active TA-CD and half will be given a placebo.
Subjects will be monitored three times a week to assess cocaine usage,
including testing for cocaine metabolites in urine, for a period of 20 weeks.
Patients will also undergo medical examinations and blood tests for anti-cocaine
antibodies to assess the immunogenicity of the dosing schedule.  The trial is
expected to last up to two years (depending upon the rate of recruitment) and
will allow an objective assessment of the efficacy of the TA-CD vaccine against
placebo.

The TA-CD investigations are being supported by the National Institute on Drug
Abuse (NIDA) which recognises cocaine abuse to be a major problem in the U.S.
NIDA has also supported earlier clinical work as part of this programme.

TA-NIC

Xenova announced the start of a second clinical trial for TA-NIC on 8 October
2003.  This second Phase I study builds upon the findings of a previous Phase I
trial which were announced in June 2002.  The results of this first study, which
was the first evaluation of an anti-nicotine vaccine in man, showed that the
vaccine generated a specific anti-nicotine response and that it was safe and
well tolerated both systemically and locally.

In the new Phase I study approximately 60 smokers are being recruited into a
double-blind, randomised, placebo-controlled trial which is being run at a
European clinical centre experienced in testing smoking related therapies.  The
objective of the trial is to further establish safety and tolerability, and to
determine the vaccination dose and schedule required to induce the optimal
anti-nicotine antibody response.  Three different doses of the vaccine will be
evaluated.  The impact of vaccination on nicotine-induced changes in heart rate
and skin temperature will also be monitored.

Preclinical Programmes

OX-40

On 20 October 2003 novel findings relating to a research collaboration,
involving Xenova's OX40 technology and its potential for the treatment of
influenza, were published by Imperial College, London.

Pre-clinical studies conducted by Imperial College demonstrated that
down-regulation of the immune response, through blocking the OX40-OX40 ligand
interaction, could alleviate the symptoms of influenza, without affecting the
ability to clear the virus. This new research suggests that the down-regulation
of OX40 signaling may play an important role in the fight against the symptoms
of influenza and perhaps other diseases similarly characterised by excessive
immune response.

OX40 is a platform technology capable of producing multiple drug candidates
targeting cancer, autoimmune and other diseases where the immune system is
involved.  Xenova's rights to the OX40 technology include rights relating to the
up-regulation of the immune system which may be used for the development of
novel treatments for cancer and infectious disease.  Xenova's rights to
down-regulate the immune system have been the subject of development and licence
agreements entered into with Celltech and Genentech.

Contract Manufacture

On 5 June 2003, Xenova announced the signing of a two-year Manufacturing,
Development and Clinical Supply Agreement with Pharmexa A/S (CSE: PHARMX) for
the contract manufacture of clinical supplies of a vaccine targeting the human
HER-2 protein. Manufacture will take place at Xenova's Clinical Trial
Manufacturing Facility in Cambridge.

On 8 September 2003 Xenova received notification that its Clinical Trials
Manufacturing Facility (CTMF) in Cambridge has been successfully inspected by
the Medicines and Healthcare products Regulatory Agency (MHRA).  The inspection
took place under the Voluntary Scheme for Inspection of Manufacturers.  Xenova
has received a letter from the MHRA confirming that its operations are in
compliance with EU Good Manufacturing Practices.

Xenova's CTMF has been manufacturing clinical trial supplies since 1995 and
recently announced that it is offering the facility and its supporting
Development organisation for contract manufacturing.  Accreditation by the MHRA
will enable Xenova to continue to provide contract manufacturing services in
full compliance with the forthcoming Clinical Trials Directive into 2004 and
beyond.

As well as its own CTMF facility in Cambridge, Xenova acquired additional
manufacturing facilities in Edmonton, Canada though the acquisition of KS
Avicenna a wholly-owned subsidiary of KS Biomedix.  KS Avicenna manufactures KS
Biomedix products for clinical trials.

Changes to the Xenova Board

On 13 August 2003, Research Director and Chief Scientific Officer Michael Moore,
and Medical Director, John St Clair Roberts resigned from the Company and the
Xenova Board.  Further changes to the Xenova Board were announced, as planned,
following the acquisition of KS Biomedix:  on 12 October 2003 John Rennocks and
Dr Michael Young, non executive directors of KS Biomedix, joined the Board of
Xenova as non executive directors. Howard Wachtler and Gerard Fairtlough
resigned their positions as non executive directors of Xenova on 17 October
2003.

Financial Summary

Operating Performance

In the nine months to 30 September 2003, Xenova's continuing revenues from
licensing agreements, strategic partnerships and manufacturing outsourcing were
£6.9m ($11.4m) (2002: £10.7m ($17.7m)).

In accordance with Xenova's revenue recognition policy, of the £6.9m ($11.5m)
received from QLT in 2001 as part of the tariquidar licensing agreement, £2.1m
($3.5m) was included in the nine months to 30 September 2003, with a further
£1.7m ($2.9m) being deferred to future periods. Following the payment of the
first milestone of £0.7m ($1.2m) in the period, in respect of the OX40 programme
with Genentech, £1.3m ($2.2m) (2002: £0.6m ($1.0m)) of the total upfront licence
fee and milestone of £3.5m ($5.8m) have been recognised in the first nine
months, with a further £1.3m ($2.1m) being deferred to future periods. Contract
development revenue of £2.6m ($4.3m) (2002: £nil) was recognised in the first
nine months in respect of the ongoing Millennium collaboration on the novel DNA
targeting agents. Other revenue included £0.8m ($1.4m) (2002: £0.4m ($0.7m)) in
respect of ongoing contract manufacturing.

Net operating expenses from continuing operations in the period to 30 September
2003 were £17.2m ($28.6m). Excluding the exceptional reorganisation costs of
£2.3m ($3.9m), the net operating expenses in the period to 30 September 2003 of
£14.9m ($24.7m) declined 13.4% compared to the same period in 2002 (£17.2m
($28.5m)). This was as a result of the initial cost savings from the
reorganisations implemented in the first half of 2003.

Continuing operations research and development expenditure for the nine months
to 30 September 2003 was £11.5m ($19.1m), lower than the same period in 2002
(£13.3m ($22.1m)).  The development costs under the Millennium licence agreement
of £2.6m ($4.3m) have been recovered.  Other expenditure was incurred in respect
of the Vaccines of Addiction programme; including the completion of a Phase II
dose escalation study with TA-CD, the start of a Phase IIa cocaine
administration trial with TA-CD, and completion of a Phase I study in TA-NIC.

Total continuing operations administrative expenditure for the nine months to 30
September 2003 of £6.1m ($10.1m) (2002: £4.2m ($7.0)) included £2.3m ($3.8m) in
respect of exceptional reorganisation costs and £0.9m ($1.5m) in respect of
goodwill amortisation arising on the acquisition of Cantab Pharmaceuticals plc
in 2001. Administrative expenses, excluding both exceptional reorganisation
expenses and the amortisation of goodwill, were £2.9m ($4.7m) which reflected
cost savings made since 2002 (2002: £3.4m ($5.6m)). The subletting of excess
facility space further reduced net expenses in the period by £0.3m ($0.4m)
(2002: £0.4m ($0.7m)).

Following the announcement of the cessation of Phase III trials of tariquidar,
the Group has undertaken a further cost saving reorganisation, which included a
headcount reduction and project prioritisation.

Included in administrative expenses, within exceptional reorganisation costs, is
£2.3m ($3.8m) (2002:  £nil) in respect of severance payments and a vacant
leasehold provision.  Total exceptional reorganisation costs are £3.3m ($5.5m),
including £1.0m ($1.7m) in respect of the acquired KS Biomedix business. As a
result of the above reorganisation, surplus facilities have become available at
the main Cambridge site. The Group is currently in negotiations to sublet or
surrender the remaining 20 year lease on this property. The charge made reflects
a vacant leasehold provision which has been calculated based upon management's
expectations of future subletting opportunities and surrender payments,
discounted at a rate of 4% per annum.

The company continues to explore licensing opportunities for its pipeline
products to maximise value for shareholders and reduce cash outflow.

The net loss per share from continuing operations in the nine months to 30
September 2003 was 5.2p (2002: 4.7p).


Treasury

Cash, short-term deposits and investments at 30 September 2003 totalled £10.6m
($17.5m) (31 December 2002: £19.2m ($31.9m)). Of this balance, cash was £3.9m
($6.5m) and short-term deposits and investments were £6.7m ($11.1m) at 30
September 2003 (31 December 2002: cash £2.6m ($4.4m), short-term deposits and
investments £16.6m ($27.6m)).

Included in short-term deposits and investments is an investment in Cubist
Pharmaceuticals Inc., which at 30 September 2003 is valued at £0.4m ($0.7m) (31
December 2002: £0.3m ($0.6m)).

On 16 September 2003, 23,500 of the 88,668 Cubist Pharmaceutical Inc. shares
were sold for £0.2m.  During the quarter £0.2m ($0.3m) of surplus fixed assets
were sold at net book value.


Share capital

The number of shares in issue stood at 243.7 million as at 30 September 2003 (31
December 2002: 139.1 million).

The Directors do not propose an interim dividend for 2003 (2002: nil).


Acquisition of KS Biomedix Holdings Plc

On 12 September the Group announced the successful acquisition of KS Biomedix
Holdings plc. Under the terms of the offer made to KS Biomedix shareholders,
1.0714 shares in Xenova Group plc have been issued in exchange for each share
held in KS Biomedix. An additional contingent deferred consideration of 10p per
KS Biomedix share held will be paid in Xenova Group plc shares upon the
commercial sale of the KS Biomedix TransMIDTM product in either the US or
European markets before 14 August 2011. Based upon a Xenova Group plc closing
share price of 15.25 pence on 11 September this values KS Biomedix at £17.0m
($28.3m) including the contingent deferred consideration payable in respect of
TransMIDTM of £6.5m ($10.7m).

In the provisional calculation of the fair values of the assets and liabilities
acquired, there have been no accounting policy adjustments made to the balance
sheet values stated at 11 September. Intangible fixed assets acquired of £5.6m
($9.3m) comprised goodwill in respect of the acquisition by KS Biomedix of KS
Avicenna Inc in 2001, which has not been capitalised separately from the
goodwill arising on the acquisition of KS Biomedix by Xenova. The provisional
fair value of the assets and liabilities acquired is £7.2m ($11.9m). The
consideration totalling £17.6m ($29.2m) (including £0.6m ($0.9m) of acquisition
expenses) generates goodwill upon acquisition of £10.4m ($17.2m).The goodwill
arising has been capitalised and amortised over the 10 year estimated useful
life of the acquired business. In addition to the £0.6m ($0.9m) of acquisition
expenses, share issue costs of £0.6m ($1.1m) were incurred.

In addition to acquiring 100% of KS Biomedix Holdings plc,  Xenova acquired 100%
of KS Canada Holdings Inc, KS Canada Inc and KS Avicenna Inc, as well as a 50%
share in Discerna Ltd, a joint venture with Babraham Biosciences Technology
Limited.

As part of the restructuring activities following completion of the acquisition
approximately 26 positions have been lost across both head office and the
research and development functions. Included within administration expenses for
the period to 30 September 2003 is £0.7m in respect of severance payments
regarding the acquired business. The net operating loss included in the
financial statement in respect of KS Biomedix for the period from acquisition to
the 30 September 2003 is £1.5m ($2.4m).


Consolidated Profit and Loss Account (unaudited)
for the periods ended 30 September 2003

                                                      Three months ended               Nine months ended

                                                 30 Sept   30 Sept    30 Sept     30 Sept   30 Sept   30 Sept
                                                    2003      2003       2002        2003      2003      2002
                                     Notes          $000      £000       £000        $000      £000      £000
                                                   _____     _____      _____       _____     _____     _____

Turnover (including share of joint
venture)
     Continuing operations                         4,527     2,725      4,025      11,435     6,883    10,939
     Less: share of joint venture                    (5)       (3)      (123)        (13)       (8)     (274)
     revenue
     Acquisitions                                     17        10          -          17        10         -
                                                   _____     _____      _____       _____     _____     _____
Turnover                                           4,539     2,732      3,902      11,439     6,885    10,665

Operating expenses
Research and development costs
     Continuing operations                       (5,604)   (3,373)    (4,902)    (19,068)  (11,477)  (13,326)
     Acquisitions                                  (419)     (252)          -       (419)     (252)         -
                                                   _____     _____      _____       _____     _____     _____
                                                 (6,023)   (3,625)    (4,902)    (19,487)  (11,729)  (13,326)
                                                   _____     _____      _____       _____     _____     _____
Administrative expenses
    Continuing operations                        (1,359)     (818)    (1,096)     (4,738)   (2,852)   (3,351)
    Continuing operations:                         (482)     (290)          -     (3,865)   (2,326)         -
    exceptional
    reorganisation costs
    Continuing operations expenses:                (485)     (292)      (293)     (1,455)     (876)     (879)
    amortisation of goodwill
                                                   _____     _____      _____       _____     _____     _____
                                                 (2,326)   (1,400)    (1,389)    (10,058)   (6,054)   (4,230)
    Acquisitions                                   (415)     (250)          -       (415)     (250)         -
    Acquisitions: exceptional                    (1,710)   (1,029)          -     (1,710)   (1,029)         -
    reorganisation costs
    Acquisitions  amortisation of                   (71)      (43)          -        (71)      (43)         -
    goodwill
                                                   _____     _____      _____       _____     _____     _____
Total administrative expenses                    (4,522)   (2,722)    (1,389)    (12,254)   (7,376)   (4,230)

Other operating income
   Continuing operations                             219       132        107         548       330       380

Total net operating expenses                    (10,326)   (6,215)    (6,184)    (31,193)  (18,775)  (17,176)

Group operating loss
     Continuing operations                       (3,188)   (1,919)    (2,282)    (17,155)  (10,326)   (6,511)
     Acquisitions                                (2,599)   (1,564)          -     (2,599)   (1,564)         -
                                                   _____     _____      _____       _____     _____     _____
                                                 (5,787)   (3,483)    (2,282)    (19,754)  (11,890)   (6,511)

Continuing operations: share of                    (128)      (77)         28       (317)     (191)        63
operating (loss)/profit of joint
venture                                            _____     _____      _____       _____     _____     _____

Total operating loss: Group and                  (5,915)   (3,560)    (2,254)    (20,071)  (12,081)   (6,448)
share of joint venture

Interest (net)                                       110        66        130         545       328       464
Share of interest of joint venture                     -         -          2           5         3         5
Amounts written back on/(off)                         60        36      (256)         269       162   (1,893)
investments
                                                   _____     _____      _____       _____     _____     _____

Loss on ordinary activities before               (5,745)   (3,458)    (2,378)    (19,252)  (11,588)   (7,872)
taxation

Tax on loss on ordinary activities                   402       242        420         912       549     1,291
                                                   _____     _____      _____       _____     _____     _____

Loss on ordinary activities after                (5,343)   (3,216)    (1,958)    (18,340)  (11,039)   (6,581)
taxation
                                                   _____     _____      _____       _____     _____     _____


Loss per share continuing operations              (1.4c)    (0.9p)     (1.4p)      (8.7c)    (5.2p)    (4.7p)
(basic and diluted)
Loss per share (basic and diluted)                (2.7c)    (1.6p)     (1.4p)     (10.1c)    (6.1p)    (4.7p)
                                                   _____     _____      _____       _____     _____     _____

Shares used in computing net loss                197,596   197,596    139,057     182,221   182,221   139,057
per share (thousands)
                                                   _____     _____      _____       _____     _____     _____



US Dollar amounts have been translated at the closing rate on 30 September 2003
(£1.00: $1.6614) solely for information.


Condensed Consolidated Balance Sheet (unaudited)
as at 30 September 2003


                                                                  Unaudited     Unaudited      Audited
                                                                      As at         As at        As at
                                                               30 September  30 September  31 December
                                                                       2003          2003         2002
                                                                       $000          £000         £000
                                                                      _____         _____        _____

Cash, short-term deposits and investments                            17,546        10,561       19,217

Other current assets                                                  8,566         5,156        3,164

Fixed assets (including goodwill)                                    46,335        27,889       15,249
                                                                      _____         _____        _____

Total assets                                                         72,447        43,606       37,630
                                                                      _____         _____        _____

Current liabilities (including provisions & deferred                 18,088        10,887       11,120
income)

Shareholders' equity                                                 54,359        32,719       26,510
                                                                      _____         _____        _____

Total liabilities and shareholders' equity                           72,447        43,606       37,630
                                                                      _____         _____        _____



US Dollar amounts have been translated at the closing rate on 30 September 2003
(£1.00: $1.6614) solely for information.


Notes to the Financial Statements

1   Basis of preparation

These unaudited statements, which do not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985, have been prepared using
the accounting policies set out in the Group's 2002 Annual Report and Accounts.
The 2002 Annual Report and Accounts received an unqualified auditor's report and
have been delivered to the Registrar of Companies.

There have been no changes to the Group's accounting policies in 2003.

The financial information has been prepared on a going concern basis.  This
assumes that additional funds are raised through either equity financing or
licencing of our development programmes.  In the event that additional funds are
not secured, the company would immediately seek to further reduce its overheads
and development expenditure on its drug candidates and would seek to licence
rights to some of its drug candidates and technologies at an earlier stage than
currently intended.

2   Acquisition of KS Biomedix Holdings Plc

On 12 September the Group announced the successful acquisition of KS Biomedix
Holding plc. Under the terms of the offer made to KS Biomedix shareholders,
1.0714 shares in Xenova Group plc have been issued in exchange for each share
held in KS Biomedix. An additional contingent deferred consideration of 10p per
KS Biomedix share held will be paid in Xenova Group plc shares upon the
commercial sale of the KS Biomedix TransMIDTM product in either the US or
European markets before 14 August 2011. Based upon a Xenova Group plc closing
share price of 15.25 pence on 11 September this values KS Biomedix at £17.0m
including the contingent deferred consideration payable in respect of TransMIDTM
of £6.5m.

Details of the book value and provisional fair value of the assets and
liabilities of KS Biomedix as at 11 September are set out below:
 
                                                                                    Provisional

                                                                     Book values     Adjustments  Fair values
                                                                            £000            £000         £000
                                                                           _____           _____        _____
Fixed assets
    Tangible                                                               3,296               -        3,296
    Intangible                                                             5,569         (5,569)            -
Investment in joint venture - net assets                                      99               -           99
Stock                                                                          9               -            9
Debtors                                                                    1,991               -        1,991
Cash and liquid investments                                                4,082               -        4,082
Creditors falling due within one year                                    (2,249)               -      (2,249)
Creditors falling due after more than one year                              (61)               -         (61)
                                                                           _____           _____        _____
Net assets acquired                                                       12,736         (5,569)        7,167

Satisfied by:
Shares issued and to be issued                                                                         10,551
Contingent deferred consideration to be settled by in shares                                            6,458
Expenses of acquisition                                                                                   553
                                                                                                        _____
Total consideration                                                                                    17,562
                                                                                                        _____

Goodwill arising on acquisition                                                                        10,395
                                                                                                        _____


In this provisional fair value table there have been no accounting policy
adjustments made to the balance sheet values stated at 11 September. Intangible
fixed assets acquired comprised goodwill in respect of the acquisition by KS
Biomedix of KS Avicenna Inc in 2001, which has not been capitalised separately
from the goodwill arising on the acquisition of KS Biomedix by Xenova. In
addition to the £553,000 of acquisition expenses, share issue costs of £633,000
were incurred.

The goodwill arising on the acquisition of the KS Biomedix business has been
capitalised and amortised over the 10 year estimated useful life of the acquired
business.

In addition to acquiring 100% of KS Biomedix Holdings plc,  Xenova acquired 100%
of KS Canada Holdings Inc, KS Canada Inc and KS Avicenna Inc, as well as a 50%
share in Discerna Ltd, a joint venture with Babraham Biosciences Technology
Limited.

As part of the restructuring activities following completion of the acquisition
approximately 26 positions have been lost across both head office and the
research and development functions. Included within administration expenses for
the period to 30 September 2003 is £0.7m in respect of severance payments
regarding the acquired business.


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