REINACH and BASEL, Switzerland, August 28 /PRNewswire-FirstCall/ -- Arpida Ltd (SWX: ARPN) announced today its financial results for the six months ending 30 June 2007.
Highlights 2007 to date
Major pipeline progress:
Iclaprims second pivotal Phase III trial in complicated skin and skin structure infections (cSSSI) also achieves its pre-specified primary endpoint
Results from a Phase I study in special populations confirm iclaprims safety profile
Novel antibiotic AR-2474 achieves preclinical proof of concept
Promising results of first-in-man studies with AR-709
FDA authorises a Phase II trial with iclaprim in hospital pneumonia
Raised CHF 51.9 million
Late-stage antifungal therapy added to pipeline via acquisition of TLT Medical Ltd.
Harry Welten, MBA, Senior Vice President and CFO, said: In terms of spending, the first half of 2007 developed in line with our expectations. A major financial highlight of the first half was the share offering of last March. In a matter of a few hours, we successfully raised CHF 51.9 million, significantly boosting our cash position. Going forward, spending on the now completed Phase III programme with intravenous iclaprim in cSSSI will fall substantially. On the other hand, additional costs will be incurred for the NDA filing, pre-launch activities and the recently announced development programmes. On balance, we expect cash used in operating activities in the second half of the year to remain around the level of the first half.
Dr Khalid Islam, President and CEO of Arpida, said: Progress in the year 2007 to date has been tremendous. Our lead compound, intravenous iclaprim, has achieved the pre-specified primary endpoint in its second pivotal Phase III trial in cSSSI, confirming the result of the first. We have subsequently initiated discussions with the FDA in order to prepare for the next step: the filing of a New Drug Application for intravenous iclaprim in cSently used drugs. Promising results of first-in-man studies with AR-709 were published in March 2007.
An additional compound, AR-2474, has achieved in vivo proof of concept. AR-2474 has been shown to be highly effective in eradicating pathogens in preclinical models of skin infection and nasal carriage.
Apart from the antibiotic programmes, Arpida has an innovative antifungal therapy (TLT) which is about to enter Phase III clinical trials in Europe, targeting onychomycosis.
Moreover, the company has several other leads in optimisation and additional discovery programmes derived from its own discovery platform at various research stages.
This press release contains specific forward-looking statements, e.g. statements including terms like believe, assume, expect or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not place undue reliance on forward-looking statements. The company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments.
Dr Khalid Islam, President and CEO, Tel: +41-61-417-96-60
Harry Welten, MBA, CFO and Senior Vice President, Tel: +41-61-417-96-65
Paul Verbraeken, Head of Corporate Communications, Tel: +41-61-417-96-83SSI.
With a view to a potential launch of intravenous iclaprim in 2008, we are significantly expanding our medical and scientific communications. A total of 24 abstracts on iclaprim have been accepted at the upcoming ICAAC and IDSA conferences in the USA. We are eager to share our preclinical and clinical data with the medical and scientific community.
Dr Islam added: Progress was not limited to our most advanced programme, but was seen across the board. It included the authorisation from the US FDA to initiate Phase II trials with intravenous iclaprim in hospital-acquired pneumonia, as well as steady progress in other programmes such as oral iclaprim, AR-709 and AR-2474. Looking at the disturbing increase and the broadening of bacterial resistance against many of the current drugs, I feel these antibiotic programmes are aimed at significant existing or emerging medical needs.
Very recently, we succeeded in broadening our clinical pipeline further by acquiring the late-stage anti-fungal TLT therapy. TLT is about to enter Phase III clinical trials in Europe targeting onychomycosis an important indication, affecting dozens of millions of people worldwide.
Dr Islam concluded: Overall I can say that Arpida remains on a steady, successful course, strengthening the foundations for a profitable future.
Financial review for six months to 30 June 2007
Key financial indicators
(CHF million) 2007 H1 2006 H2 2006 H1
Research and development expenses (27.7) (40.8) (23.9)
Management and general expenses (6.0) (4.6) (4.6)
Total operating expenses (33.7) (45.4) (28.5)
Net result (33.8) (44.6) (27.9)
Cash and financial investments end of 94.7 72.8 98.6
Equity end of period 87.7 65.5 104.9
In the first half of 2007, revenues of CHF 0.1 million were generated, related to contract research carried out for third parties.
Total operating expenses increased to CHF 33.7 million for the first six months of 2007.Of these expenses CHF 2.7 million relate to IFRS 2 non-cash charges for options accounting whereas this charge was CHF 1.0 million in the first half of 2006.
In the first half of 2007, 82% of the total operating expenses or CHF 27.7 million (first half of 2006: CHF 23.9 million) was spent on research & development, a substantial part of which was related to the phase III clinical trial programme with intravenous iclaprim.
Management and general expenses were CHF 6.0 million in the first half of 2007 (first half of 2006: CHF 4.6 million), thus remaining at a low level relative to the total operating expenses.
Financial income rose from CHF 0.6 million to CHF 0.8 million. This increase is mainly due to higher levels of cash invested and higher interest rates in Swiss Francs money market accounts. Financial expenses increased to CHF 0.8 million due to unrealised currency translation differences on inter-company relationships and CHF 0.3 million of realised exchange losses. On balance, the net financial result amounts to zero.
Balance sheet / cash flow
Cash and financial investments stood at CHF 94.7 million as per 30 June 2007, an increase of CHF 21.9 million relative to the situation at year-end 2006. The funds are held in current and money market accounts with leading banks.
Cash used in operating activities amounted to CHF 29.8 million (first half of 2006: CHF 24.0 million), while investing activities required CHF 0.9 million, compared with CHF 2.8 million in the first half of 2006. Financing activities amounted to CHF 52.2 million, mainly reflecting the proceeds of the share issue of March 2007.
In the share placing of March 2007, 1.7 million registered common shares from authorised capital were placed with institutional investors via an accelerated bookbuilding transaction. The shares were placed at CHF 30.50 per share, resulting in gross proceeds of CHF 51.9 million. Net proceeds (after expenses and taxes) were CHF 49.8 million.
The annual general meeting of shareholders of 8 May 2007 approved the appropriation of the accumulated loss in the Statutory accounts. The accumulated Statutory loss of CHF 31.1 million was compensated with an equal amount of share premium in the general reserves. This concerns a movement within equity and has no impact on the total amount.
Based on current expectations and including pre-launch activities, NDA preparation and the recently announced development plans, cash used in operating activities in the second half of the year is forecast to remain around the level of the first half.
During the first half of 2007, the total number of common shares outstanding rose by 12.1% to 19.3 million. The increase was due to the placing of March, involving 1.7 million new shares from the authorised capital. In addition, 0.4 million shares were issued from conditional capital due to the exercise of staff options. Early August 2007, the number of outstanding shares increased by an additional 0.3% in connection with the payment related to the closing of the TLT transaction.
As per 28 August 2007, Arpida has four shareholders with stakes above 5%: Fidelity (10.7%), Deutsche Bank (10.1%), Schroders (7.8%) and Capital Group (5.0%). In accordance with SWX Swiss Exchange these stakes are considered free-float, which consequently is 100%.
Intravenous iclaprim in cSSSI Phase III programme completed
In February 2007, Arpida reported positive results of a Phase I trial with intravenous iclaprim in volunteers with varying degrees of renal and hepatic impairment and obesity. The predictable pharmacokinetics observed in these populations would suggest that monitoring may not be required. This could be an important competitive advantage in the clinical setting.
In March, patient enrolment in ASSIST-2, the second pivotal Phase III trial with iclaprim in complicated skin and skin structure (cSSSI) was completed. Top-line results were published on 15 July 2007. These showed that the pre-specified primary endpoint of the second trial was achieved, as it was in the first.
The next step will be to discuss the data with the regulatory authorities and define the path forward for the filing of a New Drug Application (NDA) which is expected to take place in the course of this year.
Intravenous iclaprim - Additional indications
In June 2007, the US FDA granted authorisation to initiate a Phase II trial with intravenous iclaprim in the treatment of patients with hospital-acquired pneumonia (HAP), ventilator-associated pneumonia (VAP) or healthcare-associated pneumonia (HCAP) suspected or confirmed to be due to Gram-positive pathogens. Results of this trial are expected in the course of 2008.
Additional Phase I trials are currently ongoing. After completion of these trials, efficacy trials could be undertaken.
In July 2007, Arpida announced the acquisition of TLT Medical Ltd., a Swiss privately-owned biopharmaceutical company with an innovative onychomycosis (OM) therapy. European regulatory authorities have granted authorisation to initiate a pivotal Phase III clinical trial that aims to demonstrate superiority of the TLT therapy compared to the standard of care topical treatment for mild to moderate OM. Enrolment is expected to start in the short term and filing for approval could be expected in late 2008 or early 2009.
AR-709 First-in-man successfully completed
AR-709 originates from Arpidas own drug discovery efforts. It is a bactericidal antibiotic that is being developed for the treatment of upper and lower respiratory tract infections contracted in the community setting.
In August 2006, the UK Medicines and Healthcare products Regulatory Authority granted authorisation to start first-in-man studies with AR-709. Results were published on 29 March 2007. These showed that AR-709 achieves high concentrations in the key compartments of the lungs where pathogens can reside and replicate. Moreover, the results of the studies showed that AR-709 exhibited a large volume of distribution and a long half life in man. Three possible routes of administration are under investigation: intravenous, oral and targeted delivery. The latter could have the added benefit of avoiding unnecessary systemic exposure.
Additional studies are ongoing in order to initiate Phase I studies in humans.
AR-2474 originates from Arpidas own drug discovery efforts. It is an antibiotic with a novel mechanism of action that has demonstrated, both in vitro and in vivo, to be highly effective in eradicating multi-drug resistant bacteria known to cause topical infections. AR-2474 is being developed as a topical therapy for different applications, including infections of the skin and eye as well as nasal carriage of MRSA.
In March, results from preclinical studies were published, showing AR-2474 to be at least as efficacious as the gold standard mupirocin (Batroban ) in two distinct preclinical models of MRSA infection of the skin and MRSA nasal carriage.
Additional preclinical studies are currently ongoing.
Early-stage research programmes
Arpida has a number of programmes at earlier research stages. Efforts are focussed on a number of selected targets. Crystallisation and co-crystallisation of these target proteins and inhibitory molecules could open up new avenues for rational drug design.
In February 2007 Arpida announced an important focusing of the research organisation, concentrating operations in the headquarters in Reinach, Switzerland. This strategic re-alignment has been completed on schedule during the first half.
In the annual general meeting of 8 May 2007, Arpidas shareholders approved the appointment of Michel Pettigrew MBA as a non-executive member of the Board of Directors of Arpida Ltd. Michel Pettigrew is currently Chief Operating Officer at Ferring Pharmaceuticals, a privately owned research-driven specialty biopharmaceutical company. In this position, he oversees all sales, marketing and manufacturing activities around the world. In earlier positions, he has worked for Procter & Gamble and Bristol-Myers Squibb in North-America, Europe and Asia.
In view of the new growth phase that Arpida is entering, the Board of Directors has decided to establish two new committees. The task of the newly established Research & Development Committee is to provide strategic guidance to Arpidas activities in this field. The committee consists of Prof Dr Axel Kleemann (chair) and Prof Dr Nam-Hai Chua. The task of the Commercialisation Committee is to define the strategic focus and framework for the (pre-) marketing efforts. The committee is chaired by Dr Jurgen Raths and has Michel Pettigrew, MBA and Dr Andre Lamotte as members.
The Compensation and Nomination committees have been merged into one which consists of Prof Dr Nam-Hai Chua (chair), Dr Andre Lamotte and Dr Hans Funfschilling. The Finance & Audit Committee consists of Dr Hans Funfschilling (chair), Prof Dr Axel Kleemann and Michel Pettigrew, MBA.
Based on current expectations, intravenous iclaprim could be launched in its first indication (cSSSI) in the USA in the course of 2008. Arpida is convinced it can market the drug in the USA without the need for a partner. The potential profitability of this approach clearly exceeds that of an outlicensing scenario. In Europe, the approach is flexible: Arpida could handle the marketing itself, but does not exclude working with partners. For all other regions, Arpida will be looking for partners to handle marketing and logistics.
The preparations for the market launch are in full progress; they consist of two parts: the pre-launch activities and the actual build-up of a marketing organisation.
In the course of 2007, Arpida has significantly expanded its efforts aimed at raising the awareness of iclaprim in its target audiences. Activities focus on regular contacts with opinion leaders in the field of anti-infectives, on increasing the number of publications in key journals and on securing a substantial presence at major conferences. The two main conferences coming up in the short term are ICAAC in September and IDSA in October; both take place in the USA. A total of 37 abstracts containing preclinical and clinical information on Arpidas compounds have been accepted at these conferences. Of these 37, 24 concern iclaprim with the remainder related to AR-709 and AR-2474. Arpida is working with external partners in this area to further accelerate these operations.
Both in the executive management and the Boards of Directors of both Arpida Ltd. and Arpida Inc., a wealth of expertise is present to support these activities. Dr Raths heads the European hospital-focused marketing organisation of Eli Lilly and Mr Pettigrew, MBA is Chief Operating Officer at Ferring Pharmaceuticals. Prof Bartlett, MD, who is on the Board of Arpida Inc. in the USA, is one of the leading experts in the anti-infectives field. The expertise present within Arpida should be instrumental in the build-up of the commercial organisation.
In order to provide more background to the results announcement Arpida
will host a conference call on 28 August 2007, at 3.00pm CET.
The dial-in numbers are:
The conference call (Call ID 406, followed by the #) will be available
for play-back for 48 hours by dialling:
About Arpida Ltd.
Arpida (SWX: ARPN) is a biopharmaceutical company with research facilities near Basel, Switzerland and in the USA. It focuses on the discovery and development of novel drugs that seek to overcome the growing problem of microbial resistance.
Arpidas leading product candidate is intravenous iclaprim, a broad-spectrum antibiotic that targets severe infections requiring hospital treatment, including those caused by methicillin-resistant Staphylococcus aureus (MRSA). The US Food and Drug Administration has granted fast track status to intravenous iclaprim. In July 2007, Arpida reported the completion of the Phase III programme in complicated skin and skin structure infections. An NDA filing is expected to take place in the second half of 2007.
In June 2007, Arpida announced that it has received approval from the US FDA to initiate Phase II trials with intravenous iclaprim in the treatment of patients with hospital-acquired pneumonia (HAP), ventilator-associated pneumonia (VAP) or healthcare associated pneumonia (HCAP).
An oral formulation of iclaprim has successfully completed three Phase I trials: an ADME study (absorption, distribution, metabolism and excretion) with radiolabelled compound, a Phase I bioavailability trial with a solution and one with a capsule formulation. Iclaprim could be offered not only as an intravenous therapy for hospital use in acute situations, but also as an oral formulation, allowing early patient discharge followed by outpatient treatment. This switch should be a valuable instrument in reducing healthcare costs and enhancing patient comfort.
Arpidas fourth most advanced programme, AR-709, targets upper and lower
respiratory tract infections acquired in the community setting. AR-709
exhibited potent activity against a large panel of pneumococcal clinical
isolates including those resistant to curr
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