British Biotech plc -- Results for the third quarter and nine months ended January 31, 1999.OXFORD, U.K.--(BUSINESS WIRE)--Feb. 15, 1999-- Introduction The Company continues to build on the strategies established by the new management team. The foundations of the Company's strategy, designed to create long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. shareholder value, are: -- focusing its discovery research mainly on metalloenzyme metalloenzyme /me·tal·lo·en·zyme/ (me-tal?o-en´zim) any enzyme containing tightly bound metal atoms, e.g., the cytochromes. me·tal·lo·en·zyme n. inhibitor inhibitor /in·hib·i·tor/ (in-hib´i-tor) 1. any substance that interferes with a chemical reaction, growth, or other biologic activity. 2. programs; -- enhancing the quality of its development programs through working more closely with independent experts, regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. and commercial partners; and -- seeking partnerships for the development, marketing and sales of its products worldwide. Against this strategic framework, an organisational review is progressing to ensure an appropriate operating structure is in place. The following sections of this announcement provide a summary of developments, including details of British Biotech's financial performance, since the second quarter results announcement. Financial review Key points -- Cumulative loss of BP24.9 million (US$41.1 million), down BP6.0 million (US$9.9 million) compared with 1997/98. -- Cash utilized for nine months of BP27.3 million (US$45.0 million), down BP12.7 million (US$21.0 million) compared with 1997/98. -- Expenditure, excluding one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. charges, 19 per cent below 1997/98. -- Cash balances at January January: see month. 31, 1999, were BP105.3 million (US$173.7 million). The loss for the third quarter of the 1998/99 financial year was BP8.3 million (US$13.7 million) (1997/98 : BP11.0 million) and BP24.9 million (US$41.1 million) (1997/98 : BP30.9 million) for the nine month period. The reduced loss for this quarter results from lower expenditure levels. Excluding one-off charges, overall expenditure for the nine month period is 19 per cent below last year's level. The loss for the third quarter includes a one-off charge of BP0.6 million (US$1.0 million) to cover the cash costs of closure of the biologicals Biologicals Biological products used to induce immunity to various infectious diseases or noxious substances of biological origin. The term is usually limited to immune serums, antitoxins, vaccines, and toxoids that have the effect of providing protective scale-up facility and rationalisation Noun 1. rationalisation - (psychiatry) a defense mechanism by which your true motivation is concealed by explaining your actions and feelings in a way that is not threatening rationalization of the Company's commercial activities announced in November November: see month. 1998. In addition, a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of up to BP2.9 million (US$4.8 million) against the book value of assets employed in the biologicals scale-up facility will be required in the fourth quarter following evaluation of the possible alternative strategies for the use of the facility. Research and development expenditure in the third quarter was BP8.0 million (US$13.2 million) (1997/98 : BP11.4 million) and in the nine month period was BP26.6 million (US$43.9 million) (1997/98 : BP32.0 million). Administrative expenditure, excluding one-off charges, was BP1.6 million (US$2.6 million) (1997/98 : BP3.2 million) in the third quarter and BP5.6 million (US$9.2 million) (1997/98 : BP8.1 million) in the nine month period. The lower levels of expenditure reflect the impact of the reduction in employment levels and overheads announced by the Company in May and November 1998. Net interest receivable in the third quarter was BP1.8 million (US$3.0 million) (1997/98 : BP2.7 million) and in the nine month period was BP6.3 million (US$10.4 million) (1997/98 : BP8.2 million), both reflecting the lower average cash balance held. The cash utilized by operations in the third quarter was BP9.9 million (US$ 16.3 million) (1997/98 : BP13.0 million) and in the nine month period was BP27.3 million (US$45.0 million) (1997/98 : BP40.0 million). The reduction in outflow reflects lower levels of operating and capital expenditure and increased income, offset by reduced interest receivable and the payment of one-off charges. Cash balances at January 31, 1999, were BP105.3 million (US$173.7 million). Product review Late stage development compounds Marimastat marimastat Oncology An angiogenesis inhibitor and matrix metalloproteinase inhibitor in clinical trials as an ancillary therapy for advanced malignancy–ovary, pancreas, small cell of lung, stomach, glioblastoma. See Angiogenesis inhibitors. Marimastat is an investigational new drug and the first of a new class of potential oral anti-cancer agents targeted at the treatment of a range of solid tumors. Trials are being conducted in Europe and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and are intended to provide information on the efficacy and safety of marimastat in a range of tumor tumor: see neoplasm. types, with data accumulating progressively, as individual studies report. The Company today announces that the first marimastat pivotal trial to complete, Study 128, a pancreatic cancer pancreatic cancer Malignant tumour of the pancreas. Risk factors include smoking, a diet high in fat, exposure to certain industrial products, and diseases such as diabetes and chronic pancreatitis. Pancreatic cancer is more common in men. monotherapy monotherapy /mono·ther·a·py/ (-ther´ah-pe) treatment of a condition by means of a single drug. mon·o·ther·a·py n. Treatment of a disorder with a single drug. trial, has not achieved its primary end point. The primary trial objective was to compare the effect of marimastat and gemcitabine gemcitabine /gem·cit·a·bine/ (jem-sit´ah-ben) an antineoplastic agent used as the hydrochloride salt in the treatment of pancreatic adenocarcinoma and non. on patient survival, with a 16 per cent reduction in mortality required in either the 10mg or 25mg marimastat groups over a gemcitabine group to achieve its primary end point. No statistically significant difference was found between gemcitabine and either the 10mg or 25mg marimastat group. In a secondary analysis of the data using the Cox Proportional proportional values expressed as a proportion of the total number of values in a series. proportional dwarf the patient is a miniature without disproportionate reductions or enlargements of body parts. Hazards model, a technique which is used to analyse an·a·lyse v. Chiefly British Variant of analyze. analyse or US -lyze Verb [-lysing, -lysed] or -lyzing, clinical trial survival data adjusting for baseline The horizontal line to which the bottoms of lowercase characters (without descenders) are aligned. See typeface. baseline - released version variables, the 25mg marimastat group and the gemcitabine group were not significantly different from each other with respect to survival. Both 25mg and gemcitabine appeared to be better than either the 10mg or the 5mg group. British Biotech British Biotech was a British based biotech company. British Biotechnology Limited was founded in 1986 by former G D Searle managers Keith McCullagh and Brian Richards, [1] is currently assessing the implications of the results of Study 128 for the overall marimastat development program. The Company believes that the results of further studies of marimastat will be needed before a complete assessment of the efficacy, tolerability tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol and dose regimen regimen /reg·i·men/ (rej´i-men) a strictly regulated scheme of diet, exercise, or other activity designed to achieve certain ends. reg·i·men n. 1. can be made. Discussions will be held with external experts, including regulatory agencies. The Company will then consider whether or not a further clinical trial of marimastat should be undertaken in light of the results of Study 128 and the conclusions of the recent review of the marimastat pivotal trial program. The decision to undertake such a study would be prioritized against the overall ongoing development programs in order to focus resources where chances of success can be maximized. Subsequent to the second quarter's report, the Company announced, in December 1998, that it was discontinuing the ovarian cancer ovarian cancer Malignant tumour of the ovaries. Risk factors include early age of first menstruation (before age 12), late onset of menopause (after age 52), absence of pregnancy, presence of specific genetic mutations, use of fertility drugs, and personal history of breast monotherapy trial as its design was insufficient for registration in ovarian cancer in either the USA or Europe. This was because of its use of a composite measure to assess disease progression, as its primary end point. The decision was taken following discussions with external experts and was unrelated to the potential safety or effectiveness of marimastat in treating ovarian cancer. Additionally, the National Cancer Institute of Canada has agreed to the Company's previously announced proposal to increase the size of the small cell lung cancer Lung Cancer, Small Cell Definition Small cell lung cancer is a disease in which the cells of the lung tissues grow uncontrollably and form tumors. Description Lung cancer is divided into two main types: small cell and non-small cell. trial. As none of the ongoing nine studies have reached their predefined end point, it is difficult to be precise about when further clinical results will be available. However, the Company believes that the results of the pancreatic pancreatic /pan·cre·at·ic/ (pan?kre-at´ik) pertaining to the pancreas. pancreatic pertaining to the pancreas. See also pancreatitis, diabetes mellitus, cystic pancreatic duct. combination study will be available in the second half of 1999 and that the results of one or more other marimastat studies may be available this calendar year. Discussions are continuing with potential marimastat licensing partners. Zacutex(R) Zacutex is an investigational new drug and an injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. treatment which British Biotech is studying as a potential prophylactic prophylactic /pro·phy·lac·tic/ (pro?-fi-lak´tik) 1. tending to ward off disease; pertaining to prophylaxis. 2. an agent that tends to ward off disease. pro·phy·lac·tic n. and treatment for acute pancreatitis acute pancreatitis Inflammation of the pancreas of abrupt onset, often with gallstones and alcohol ingestion Epidemiology 109,000 hospitalizations, 2251 deaths–US; 10-fold ↑ from 1960s to 1980s–reason unclear; . As previously stated, the results of Study 215, an international Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA trial of Zacutex as a potential treatment for acute pancreatitis, are expected to be available by the end of March 1999 and will be announced as soon as they are available. Recruitment is continuing in the 1,800 patient Phase III trial designed to investigate whether Zacutex, when used prophylactically, protects patients from developing pancreatitis pancreatitis Inflammation of the pancreas, associated with alcohol, trauma, or pancreatic-duct obstruction. Activated enzymes escaping into pancreatic tissues cause irritation and inflammation. when undergoing a diagnostic procedure known as ERCP ERCP abbr. endoscopic retrograde cholangiopancreatography Endoscopic retrograde cholangiopancreatography (ERCP) Diagnostic technique used to obtain a biopsy. (endoscopic en·do·scope n. An instrument for examining visually the interior of a bodily canal or a hollow organ such as the colon, bladder, or stomach. en retrograde retrograde /ret·ro·grade/ (ret´ro-grad) going backward; retracing a former course; catabolic. ret·ro·grade adj. 1. Moving or tending backward. 2. cholangio-pancreatography). Early stage development compounds BB-3644 The Company expects to be able to announce, by the end of March 1999, its decision on how it intends to progress BB-3644 once the long term toxicology toxicology, study of poisons, or toxins, from the standpoint of detection, isolation, identification, and determination of their effects on the human body. Toxicology may be considered the branch of pharmacology devoted to the study of the poisonous effects of drugs. reports have been fully assessed. Potential indications for BB-3644 are chronic inflammatory diseases Noun 1. inflammatory disease - a disease characterized by inflammation disease - an impairment of health or a condition of abnormal functioning NEC, necrotizing enterocolitis - an acute inflammatory disease occurring in the intestines of premature infants; and cancer. BB-10153 Discussions are ongoing with potential licensing partners for BB-10153, a potential thrombolytic thrombolytic /throm·bo·lyt·ic/ (throm?bo-lit´ik) dissolving or splitting up a thrombus, or an agent that so acts. thrombolytic 1. dissolving or splitting up a thrombus. 2. an agent that dissolves or splits up a thrombus. and anti-thrombotic. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which reflect the Company's current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company's research strategy, the applicability of the discoveries made therein, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process. -0-
Unaudited consolidated profit and loss account
for the quarter and nine months ended January 31, 1999
Quarter Quarter Nine months Nine months
ended ended ended ended
January 31, January 31, January 31, January 31,
1999 1998 1999 1998
BP000 BP000 BP000 BP000
Turnover 52 102 3,708 368
Research and development
expenditure (7,961) (11,355) (26,604) (31,984)
Administrative expenses:
corporate and
commercial (1,631) (3,173) (5,609) (8,124)
Administrative expenses:
one-off charges
(note 2) (600) - (2,330) -
Operating loss (10,140) (14,426) (30,835) (39,740)
Profit on sale of
investments - 660 - 660
Interest receivable 1,925 2,848 6,577 8,545
Interest payable (88) (94) (268) (295)
Loss on ordinary activities
before taxation (8,303) (11,012) (24,526) (30,830)
Taxation (17) (21) (361) (56)
Loss for the
period (8,320) (11,033) (24,887) (30,886)
Loss per share
(note 3) (1.3)p (1.7)p (3.8)p (4.7)p
-0-
Statement of total recognized gains and losses
for the quarter and nine months ended January 31, 1999
Quarter Quarter Nine months Nine months
ended ended ended ended
January 31, January 31, January 31, January 31,
1999 1998 1999 1998
BP000 BP000 BP000 BP000
Consolidated
loss for the
period (8,320) (11,033) (24,887) (30,886)
Translation of overseas
subsidiary financial
statements - - (21) 6
Total losses recognized
for the period (8,320) (11,033) (24,908) (30,880)
-0-
Unaudited consolidated balance sheet
At At
January 31, April 30,
1999 1998
BP000 BP000
Tangible fixed assets 35,799 37,361
Current assets
Stocks 72 75
Debtors 2,612 2,768
Cash at bank and in hand 105,292 132,762
107,976 135,605
Current liabilities
Creditors:
amounts falling due
within one year (8,665) (13,097)
Net current assets 99,311 122,508
Total assets less current liabilities 135,110 159,869
Creditors: amounts falling due after
more than one year (2,498) (2,700)
Net assets 132,612 157,169
Capital and reserves
Share capital 33,047 33,013
Share premium 296,238 296,096
Other reserve 10,008 10,008
Profit and loss account (206,681) (181,948)
Total shareholders' funds 132,612 157,169
-0-
Unaudited consolidated cash flow statement
for the quarter and nine months ended January 31, 1999
Quarter Quarter Nine months Nine months
ended ended ended ended
January 31, January 31, January 31, January 31,
1999 1998 1999 1998
BP000 BP000 BP000 BP000
Cash outflow from
operating
activities (10,680) (13,183) (31,475) (35,697)
Return on investments
and
servicing of
finance 1,239 1,999 5,667 7,728
Taxation (12) (11) (360) (60)
Capital expenditure and
financial
investment (422) (2,415) (1,086) (12,642)
Aquisitions and
disposals - 660 - 660
Cash utilized by
operations (9,875) (12,950) (27,254) (40,011)
Management of
liquid resources 9,425 12,000 26,225 39,100
Financing 52 (57) (76) 316
Decrease in
cash in the period (398) (1,007) (1,105) (595)
Reconciliation of net
cash flow to movement
in net funds
Decrease in cash
in the period (398) (1,007) (1,105) (595)
Cash used to decrease debt
and lease financing 68 89 252 265
Net movement in
liquid resources (9,425) (12,000) (26,225) (39,100)
Exchange adjustment (1) - (21) -
Movement in net funds
in the period (9,756) (12,918) (27,099) (39,430)
Net funds at start of the
period 112,259 153,384 129,602 179,896
Net funds at end of the
period 102,503 140,466 102,503 140,466
Notes
1. The interim financial information on the Group set out above has
been prepared on the basis of the accounting policies set out in the
Group's statutory accounts for the year ended April 30, 1998. The
adoption of new accounting standards applicable to the current
financial year has not had a material impact on the results for the
period or prior periods. This interim financial information does not
constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985. The Group's statutory accounts for the year
ended April 30, 1998, have been delivered to the Registrar of
Companies; the report of the auditors on these accounts was
unqualified and did not contain a statement under Section 237 (2) or
(3) of the Act.
2. Administrative expenses : one-off charges for the current
quarter covers the cash costs associated with the rationalisation of
the Company's commercial activites and the closure of its biologicals
scale-up facility.
In addition, a write-down of up to BP2.9 million (US$4.8 million)
against a book value of assets employed in the biologicals scale-up
facility will be required in the fourth quarter following evaluation
of the possible alternative strategies for the use of the facility.
3. Losses per share
a. Quarter ended January 31, 1999 Losses per share are based on the
loss attributable to shareholders of BP8.3 million (US$13.7 million)
(1997/98 : BP11.0 million) and on 661 million (1997/98 : 660 million)
shares, being the weighted average number of shares in issue for the
quarter.
b. Nine months ended January 31, 1999 Losses per share are based on
the loss attributable to shareholders of BP24.9 million (US$41.1
million) (1997/98 : BP30.9 million) and on 661 million (1997/98 : 659
million) shares, being the weighted average number of shares in issue
for the nine months.
4. The directors do not propose a dividend for the period.
5. Zacutex is a registered trade mark of British Biotech
Pharmaceuticals Limited.
6. Where they appear, U.S. dollar figures have been
translated at the rate of BP1 = US$1.65.
NOTE: BP = British Pounds
-0-
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