STRASBOURG, France, March 11 /PRNewswire-FirstCall/ -- Transgene (Euronext Paris: FR0005175080) announces today its achievements in operations, financial performance for 2007 and outlook for 2008.
"2007 was a breakthrough year for Transgene, marked by two major accomplishments: the signing of a partnership agreement with Roche in the domain of therapeutic vaccines for the treatment of diseases caused by the HPV virus, and the successful completion of a EUR100.1m capital increase on European markets," declared Philippe Archinard, Managing Director of Transgene.
Key financial highlights include:
- Total revenues for the year were EUR28million compared to EUR5.5m in 2006.
- Transgene closed the year with a net loss of EUR5.5m compared to a net loss of EUR22m a year earlier.
- Basic loss per ordinary share was EUR0.28 versus EUR1.41 in 2006.
- Research and development expenditures were EUR28.8m compared to EUR24.2m in 2006.
- In 2007, net cash expenditure, excluding capital increase, was EUR5.5m compared to EUR20.7m in 2006.
- At the end of 2007, the company held cash and cash equivalents of EUR111.3m, which should enable it to finance some four years of operating costs.
Major Accomplishments of 2007:
Partnership Roche /Transgene: announced in April 2007, an exclusive world wide license agreement aimed at the development, registration and commercialisation of Transgene's therapeutic vaccines developed to fight diseases caused by the Human Papilloma Virus. Transgene received an upfront payment and a regulatory milestone of EUR23m in June 2007 and may receive further payments of up to EUR195m covering clinical development milestones and commercial milestones based on future sales of HPV products, stemming from Transgene's research. Under the terms of the agreement, Transgene is also entitled to receive progressive, double digit royalties on all future sales.
Strengthening of the Equity Bassolidated Balance Sheets
(Amounts in thousands of euros) December 31, December 31,
Fixed assets, net 6 182 6 214
Intangible assets, net 1 669 200
Financial assets, net 383 213
Other non-current assets 3 957 2 934
Total non-current assets 12 191 9 561
Cash and cash equivalents 111 312 20 323
Other current assets 4 811 2 721
Total current assets 116 123 23 044
Total assets 128 314 32 605
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity 110 936 18 979
Liabilities, non current 5 996 5 271
Liabilities, current 11 382 8 355
Total liabilities and
shareholder's equity 128 314 32 605
Condensed Consolidated Statements of Operations
(Amounts in thousands of Six months Twelve months
euros except share and ended december 31, ended december 31,
per share date) 2007 2006 2007 2006
(unaudited) (audited) (unaudited) (audited)
licensing agreements 2 159 1 827 25 834 3 720
Grants and tax credit
received for research 1 115 934 2 185 1 826
Total revenues 3 274 2 761 28 019 5 546
development (15 722) (12 435) (28 799) (24 155)
administrative (3 105) (2 125) (5 747) (3 928)
Other operating gains
and losses 7 12 (931) 23
expenses (18 820) (14 548) (35 477) (28 060)
Profit (loss) from
operations (15 546) (11 787) (7 458) (22 514)
Interest and other
income, net 1 563 391 1 937 483
Net profit (loss) (13 983) (11 396) (5 521) (22 031)
to equity holders of
the parent (13 983) (11 396) (5 521) (22 031)
Basic profit (loss)
per ordinary share (0.63) (0.69) (0.28) (1.41)
Diluted profit (loss)
per ordinary share (0.63) (0.69) (0.28) (1.41)
Average number of
outstanding shares 22 087 884 16 512 329 19 718 802 15 629 588
CONSOLIDATED CASH FLOW STATEMENT
(in thousands of Euros)
Cash flows from operating activities
Operating loss (7 458) (22 514)
Changes in provisions 1 161 183
Depreciation and amortization 1 257 1 215
Amortization of stock option costs 1 053 376
Change in operating working capital 5 760
Other (63) (74)
Net cash used in operations (4 045) (20 054)
Other operating cash flows
Interest received 2 043 601
Interest paid (71) (85)
Net cash used in operating activities (2 073) (19 538)
Cash flows from investing activities
Purchases of property, plant and equipment (992) (745)
Proceeds from sales of intangible assets (1 645) (42)
Proceeds from disposals (purchases) of
available-for-sale financial assets, net 0 9 890
Other (171) (6)
Net cash from (used in) investing activities (2 808) 9 097
Cash flows from financing activities
Proceeds from issues of share capital 100 940 14 487
Transaction costs to issue shares (4 524) (49)
Repayments of lease liabilities (546) (291)
Net cash provided by financing activities 95 870 14 147
Effect of changes in exchange rates on cash
and cash equivalents (1) (2)
Net increase (decrease) in cash and cash
equivalents 90 988 3 704
Cash and cash equivalents at 1 January 20 323 16 619
Cash and cash equivalents at 31 December 111 312 20 323
Outlook for 2008:
"With EUR111.3m of cash as of year-end 2007, and strengthened by a major validating partnership agreement, Transgene has a solid platform to accelerate the development of its pipeline and growth of the company. We should report strong newsflow throughout 2008 including clinical trial results on three of our vaccine candidates in the pipeline: (i) TG4010, for non-small cell lung cancer, in phase IIb - an independent central radiological reading has recently confirmed the observed difference in favour of the combination of our vaccine with chemotherapy; (ii) TG1042, for relapsed cutaneous B-cell Lymphoma, where we expect phase II interim results at the end of the 2nd quarter due to slower than anticipated patient recruitment and (iii) TG4040, for chronic hepatitis C, in phase I where initial tolerance and efficacy data are expected shortly," Philippe Archinard added.
"Further to our clinical results newsflow, Roche expects to enter TG4001/R3484 into Phase III clinical trials by the end of 2008. Moving forward, thanks to its continuous internal research efforts, Transgene is broadening its technological base and intends to expand its clinical portfolio. Our objective is to move one new product candidate into clinical development each year. We believe that Transgene is ideally positioned to become a leader in the field of cancer and infectious diseases immunotherapy," concluded Philippe Archinard.
Main Developments in the Product Portfolio:
- TG4001/R3484 (MVA-HPV-IL2) for the treatment of precancerous cervical lesions caused by the HPV virus. According to the terms of our partnership agreement signed in April 2007, Roche will be responsible for the development and commercialisation of the vaccine worldwide. Phase II trials have been completed and Roche expects TG4001/R3484 to enter into phase III clinical trials by the end of 2008. A further development milestone payment will be triggered upon the treatment of the first patient in the phase III clinical study.
- TG4010 (MVA-MUC1-IL2) for the treatment of non small cell lung cancer in combination with chemotherapy. The recruitment of 148 patients in the controlled study of phase IIb initiated at the beginning of 2006 was completed in May 2007. Local radiological evaluations realised in the clinical centres showed a difference in favour of the combination of our vaccine with chemotherapy compared to chemotherapy alone. This difference was confirmed by a recently completed independent central radiological reading. Full interim results of the trial data (response rate, progression-free survival and overall survival) should be released on the occasion of a major scientific conference organised for the end of the 2nd quarter. We will be announcing final results by the end of 2008.
- TG1042 (Ad-IFNÎ³) for the treatment of relapsed cutaneous B-cell lymphoma (CBCL). A phase II trial was launched end 2006 in France, Switzerland and the United States. The objective was the recruitment of 41 patients suffering from relapsed cutaneous B-cell lymphoma after treatment with radiotherapy. CBCL, a malignant disease of the skin is a rare illness which affects between 10,000 and 15,000 patients in Europe and the United States. Recruitment of patients has proven to be slower than anticipated for the phase II trial of this orphan indication. As a consequence we expect a delay in the interim results data which is now anticipated for the end of the 2nd quarter 2008.
- TG4040 (MVA-HCV) for the treatment of hepatitis C: a phase I trial began in France in the 1st quarter 2007. Fifteen patients were recruited who had not received any previous treatment for their infection. Patients received one subcutaneous injection per week for 3 weeks of TG4040 at doses of 106 pfu (3 patients), 107 pfu (3 patients) and 108 pfu (9 patients). The patients treated with the higher dose receive a complementary injection ('boost') at six months. The tolerance and efficacy data after the first injections are expected shortly. The complete efficacy results of the clinical study (after the full treatment schedule including boost) are expected in the 4th quarter 2008. We have extended the ongoing clinical trial to include patients with more advanced stages of liver disease, in order to potentially enlarge the target patient population, and also to assess shortened administration schedules of the vaccine (2 and 4 month intervals between prime and boost injections).
In parallel a phase I study is in progress in Canada, co-financed by the University of Montreal, involving patients who have relapsed after having received standard of care treatment (Ribavirine and Interferon Alpha). Results of this study should be available in the first half of 2009.
Expanding the Pipeline:
In 2005, we took the decision to focus resources on fewer clinical developments to accelerate the establishment of proof of concept and the subsequent signing of strategic partnership agreements. At the same time, with the goal of bringing one new product into clinical development each year, we carried out a major reorganisation of our research group with three objectives:
- To broaden our technological base in the field of immunotherapeutics;
- To develop a superior "biomarker" platform in order to maximise probability of success and efficiency of our clinical developments; and
- To reinforce the medical and market-oriented drive of our research activities.
The company has achieved these goals and is now in a position to
reactivate the clinical development of products that were put on hold, and
to initiate the development of new therapeutic vaccines and passive
immunotherapeutics, either specific or non specific. The company intends to
disclose details of its preclinical and clinical programmes at an R&D
presentation, which we plan to schedule for mid-year 2008.
2007 Financial Results
Summary Statement of Operations
(Amounts in thousands of
euros except share and Twelve months ended december 31,
per share date) 2007 2006
Total revenues 28 019 5 546
Research and development (28 799) (24 155)
General and administrative (5 747) (3 928)
Other operating gains and losses (931) 23
Total operating expenses (35 477) (28 060)
Profit (loss) from operations (7 458) (22 514)
Interest and other income, net 1 937 483
Profit (loss) attributable to
equity holders of the parent (5 521) (22 031)
Basic profit (loss) per ordinary
share (0.28) (1.41)
Comments on 2007 Financial Results
EUR million 2007 2006 Trend
Third Party Manufacturing Contracts 1.4 1.4 0 %
AFM Contract 0.7 1.7 - 59 %
Revenues from Roche partnership 23.0 - N/A
Revenues from Licenses 0.7 0.6 + 17 %
Grants 0.5 0.3 + 66 %
Research Tax Credits 1.7 1.5 + 13 %
Total 28.0 5.5 x 5.1
In 2007 total revenues were EUR28m compared to EUR5.5m in 2006. The substantial increase in revenues is a consequence of the payment of EUR23m received from Roche as part of the licensing agreement.
Revenues from third party manufacturing services remained stable at EUR1.4m. Deferred revenues from manufacturing contracts amounted to EUR3m at end 2007 and will be recorded as revenues in 2008 following delivery and acceptance of the manufactured products by clients. Cash receipts tied to these contracts have declined from EUR2.7m in 2006 to EUR1.8m in 2007. Third party manufacturing contracts and their corresponding revenues will progressively be replaced by the manufacture of the vaccine TG4001/R3484 which will be invoiced to Roche.
Billings to the French Muscular Dystrophy Association (AFM) have declined by some 60% and reflect the decline in the workload on the preclinical Myodys programme.
Excluding revenues stemming from our partnership agreement with Roche (EUR23m), license revenues slightly increased to EUR0.7m in 2007 against EUR0.6m in 2006.
Research grants progressed from EUR0.3m in 2006 to EUR0.5m in 2007. They essentially relate to the hepatitis C programme.
Research and development tax credits increased by 13% to EUR1.7m in 2007 as a result of an increase in eligible research expenses. The research tax credit will be reimbursable to the company in 2011, less any amounts applied to offset income taxes due. The French reform on research tax credits will have a favourable impact on our research tax credit for 2008.
In 2007, Transgene made significant investments in new personnel. This was consistent with having reached certain milestones: our partnership agreement with Roche and late stage clinical development of our product portfolio.
Research and Development expenses amounted to EUR28.8m in 2007 compared to EUR24.2m in 2006. The increase was mainly due to:
- Increase in personnel costs of EUR1.7m;
- The cost of clinical trials increased by EUR1.3m, largely due to the ongoing phase IIb clinical studies on TG4010;
- Higher bio-manufacturing activities (+ EUR0.7m);
- Acquisition and amortization of technological licences (+ EUR 0.5m); and
- An increase in non cash expenses of EUR0.5m (amortization of stock options)
Administrative and general expenses reached EUR5.7m in 2007 against EUR3.9m in 2006. The major reasons were:
- Increase in personnel costs of EUR0.3m;
- Expenses and taxes related to the licensing contract with Roche (+ EUR0.7m); and
- An increase in non cash expenses of EUR0.2m (amortization of stock options).
Other charges totalled EUR0.9m in 2007 and mainly reflected a provision to cover the cost of leaving our rented office premises in Strasbourg. Transgene has decided to regroup all the company's personnel at Illkirch, a Strasbourg suburb where the current production site is located, and expects to move there by the end of 2008. A new leased building of some 6 800 msquared is currently under construction for mixed usage (laboratories and offices). The objective is to optimize our R&D resources through the provision of more suitable premises. Globally the cost of these premises will equal that of the current rental costs, after initial expenditure on new equipment and other service expenses.
Interest income was EUR1.9m in 2007 compared to EUR0.5m in 2006. Interest income consisted of investment income resulting from the proceeds of the capital increase and the partnership agreement.
Transgene reported a net loss of EUR5.5m in 2007 compared to EUR22.0m in 2006. Basic loss per ordinary share amounted to EUR0.28 in 2007 compared to EUR1.41 in 2006, due to the combined reduction in net losses and the increase in the average number of shares in issue after the rights issue of July 2007.
Liquidity and Capital Resources
As of 31 December 2007, Transgene held EUR111.3m in cash and cash equivalents compared to EUR20.3m a year earlier. Cash equivalents are invested in short-term money market funds. A capital increase of EUR100.1m (EUR96.4m net) was completed in June and July 2007 involving the issue of 5,484,977 shares at a price of EUR18.25 cents per share.
The financing by OSEO/AII of the ADNA programme (<< Advanced Diagnostics for New Therapeutic Approaches >>) is currently under review by the European Commission and we expect a decision during the second quarter of 2008. The specific aid sought, to be received over the life of the program, breaks down into EUR8.6m of grants and of EUR9.8m repayable advances. The amount of aid has been adjusted relative to the estimate of EUR25m announced on 24 November 2006. This is due to the exclusion of certain costs relative to the HPV programme which is now licensed to Roche.
In 2007, net cash expenditures, excluding the capital increase, were EUR5.5m compared to EUR20.7m in 2006. Transgene currently anticipates a cash burn for 2008 in the order of EUR20m to EUR25m depending on the outcome of the requested aid to OSEO/AII.
Telephone Conference Call
A telephone conference call is organised today, 11th March 2008, in
English at 7pm Paris time (6pm London time). To participate in the
conference please dial one of the following numbers 10 minutes before the
Transgene, based in Strasbourg, is a biopharmaceutical company dedicated to the development of therapeutic vaccines and immunotherapeutic products in oncology and infectious diseases. The company has one product which has completed Phase II trials (TG4001/R3484), two compounds in Phase II trials (TG4010 and TG1042) and one compound in Phase I studies (TG4040). Transgene has concluded a strategic partnership agreement with Roche for the development of its TG4001/R3484 therapeutic vaccine to treat HPV-mediated diseases. Transgene has bio-manufacturing capacities for viral-based vectors and technologies available for out-licensing. Additional information about Transgene is available on the Internet at http://www.transgene.fr.
Cautionary note regarding forward-looking statements
This press release contains forward-looking statements referring to the
planned development and clinical testing of Transgene's vaccine candidates.
However, successful product development and clinical testing depend on a
variety of factors, including the timing and success of future patient
enrolment and the risk of unanticipated adverse patient reactions. Results
from future studies with more data may show less favourable outcomes than
prior studies, and there is no certainty that product candidates will ever
demonstrate adequate therapeutic efficacy or achieve regulatory approval or
commercial use. This press release also contains forward-looking statements
referring to potential future milestone payments under Trangene's
partnership agreement with Roche. However, the payment of such amounts
requires satisfaction of the relevant contractual conditions, which depends
in part on factors outside the control of the Company. For further
information on the risks and uncertainties involved in the testing of
Transgene's product candidates, and in connection generally with the
development of its products, see Trangene's Document de reference on file
with the French Autorite des marches financiers on its website at
http://www.amf-france.org and Transgene's website at
|SOURCE Transgene S.A.|
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