British Biotech plc Preliminary results for the year ended April 30, 1999.OXFORD, England--(BUSINESS WIRE)-- June 30, 1999 Key points - 1999 loss after tax of(pound)39.8 million (US$64.1 million) (1998:(pound)44.9 million), after one-off charges of (pound)8.5 million (US$ 13.7 million) (1998:(pound)2.1 million). - Cash burn reduced to (pound)34.7 million (US$55.9 million) (1998: (pound)51.0 million). - (pound)97.8 million (US$157.5 million) cash at year end. - Cost savings, as a result of the measures introduced, expected to reach(pound)10 million (US$16.1 million) on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis by 2001. - Strategy includes broadening the product portfolio both through increased level of internally discovered compounds and addition of compounds from a range of external sources. - 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. combination and gastric cancer gastric cancer Stomach cancer, see there studies expected to report in 1999. - An independent Safety Committee has been established and a Scientific Advisory Board is being set up. Commenting, Dr Elliot Goldstein, Chief Executive, 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] plc, said, "The new management team has established a strategy which builds on the Company's existing strengths, experience and resources. This includes its world leadership in metalloenzyme inhibition and involves creating a sufficiently broad product portfolio, based on both internal and external opportunities to optimize the probability of compounds completing development and entering the market. Our resources, operating structure and policies are supporting this strategy through leveraging our development capability and financial strength. We believe the measures introduced best position the Company to meet the Board's objective of building a sustainable business A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. and thus long-term shareholder value." British Biotech plc Preliminary results for the year ended April 30, 1999 The past year has been one of significant change for British Biotech, in terms of management, business strategy and operating structure. The Board believes these changes best place the Company to achieve the Board's overriding (programming) overriding - Redefining in a child class a method or function member defined in a parent class. Not to be confused with "overloading". objective of creating and sustaining optimum value for shareholders. Strategy During the year, a detailed review of the Company's strategy and operating structure was undertaken. This focused initially on looking within the business and has resulted in the Company concentrating its resources on the core areas of research and development identified. More recently, the Board, in refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar the strategy, has endorsed the objective of broadening the Company's product portfolio to create sufficient drug development opportunities to minimize the risk inherent within the drug development process. The strategy is to: - focus discovery research on metalloenzyme inhibition programs; - take one British Biotech research compound, on average, into development annually; - broaden the product portfolio through adding externally-generated programs; - focus the development capability to establish clinical 'proof of principle' data; and - create appropriate partnerships to support the development and marketing of compounds worldwide. It is intended that further compounds, from a range of sources, will be added to the development program, currently comprising marimastat, BB-3644 and BB-10153. Innovative development candidates will come from the Company's own drug discovery, which is focused on metalloenzyme inhibition, a technology in which British Biotech is a world leader. The objective is to select one British Biotech compound, on average, to enter development annually. The Company's most advanced metalloenzyme 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. projects are in the anti-cancer, anti-inflammatory and anti-bacterial fields, all areas of unmet un·met adj. Not satisfied or fulfilled: unmet demands. medical need. Through leveraging the Company's development capability and financial strengths, externally-generated programs will also be added. The Company will assess both internal and external opportunities against rigorous standards and, after obtaining the advice of independent experts, will ensure that sound investment decisions are made in selecting compounds to move through the development cycle. The management team is committed to creating an open culture throughout the Company, encouraging the sharing of information and the discussion and resolution of issues that may arise. This includes working with independent experts in the fields in which the Company operates. An independent Safety Committee has been established and a Scientific Advisory Board is being set up to provide input into decision-making in research and development. Financial review The loss for the year ended April 30, 1999 decreased to (pound)39.8 million (US$64.1 million) (1998: (pound)44.9 million). The decrease reflects both an increase in income and reduced levels of expenditure. Turnover in 1999 amounted to (pound)4.2 million (US$6.8 million) (1998: (pound)0.5 million) and resulted principally from milestone payments received from Tanabe Seiyaku Co., Ltd., in respect of marimastat, and Japan Tobacco Inc., in respect of BB-10153. Income in the fourth quarter amounted to (pound)0.5 million (US$0.8 million) from Japan Tobacco following completion of the Phase I study with BB-10153. The cash utilized by operations reduced to (pound)34.7 million (US$55.9 million) (1998: (pound)51.0 million). The decrease reflects the lower loss for the year and the reduced levels of capital expenditure. The cash balance at April 30, 1999 amounted to (pound)97.8 million (US$157.5 million) (1998: (pound)132.6 million). In line with the Company's strategy, additional investment has been made in the medicinal chemistry Medicinal or pharmaceutical chemistry is a scientific discipline at the intersection of chemistry and pharmacology involved with designing, synthesizing and developing pharmaceutical drugs. and business development resources. At the same time, the Company has reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. or closed operations which were inconsistent with its revised strategy. The Company's commercial operations, including those in Europe and the biologicals scale-up facility in Oxford, were closed while its development and support operations in Oxford and Annapolis, USA, were rationalized with resulting job losses. Overall, the Company's work force has reduced by 32 per cent during the year to 311 staff and is planned to fall further to 280 as current marimastat clinical trials are completed. While job losses are always regrettable, these actions are a consequence of the revised strategy and will generate substantial cash savings. Total expenditure, excluding one-off charges, decreased to (pound)43.6 million (US$70.1 million) (1998: (pound)54.5 million) as a result of the initiatives described above and the restructuring completed in May 1998 which was described in last year's Annual Report. Research and development expenditure decreased to (pound)35.4 million ($57.0 million) (1998: (pound)42.2 million) due to the lower headcount levels and lower levels of expenditure on the preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. and clinical development of Zacutex and marimastat. Corporate and commercial expenditure decreased to (pound)8.2 million (US$13.2 million) (1998: (pound)12.3 million) due to the closure of the commercial operations and reduction to administrative departments. One-off charges in the year were (pound)8.5 million (US$13.7 million) (1998: (pound)2.1 million). These comprised the write down of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of (pound)4.4 million (US$7.1 million) and dilapidations of (pound)0.2 million (US$0.3 million) principally due to the decision to close the biologicals scale-up facility, the costs of (pound)1.5 million (US$2.4 million) associated with the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and regulatory inquiries, the payments to departing directors of (pound)1.4 million (US$2.2 million) and restructuring costs of (pound)1.0 million (US$1.6 million). Net interest reduced to(pound)8.4 million (US$13.5 million) (1998:(pound)10.7 million) due to reduced average cash balances and lower interest rates. Taxation amounted to (pound)0.4 million (US$0.6 million) (1998: (pound)0.1 million) and arises wholly overseas. It mainly relates to overseas withholding tax The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. on the income from Tanabe Seiyaku Co., Ltd. In addition, a small tax charge arose on the activities of British Biotech Inc., the Group's US subsidiary. Capital expenditure decreased to (pound)1.7 million (US$2.7 million) (1998: (pound)13.5 million). No major facilities projects were undertaken during the year and expenditure related to the enhancement and replacement of laboratory and computing computing - computer equipment. In the previous year, the principal element of expenditure related to the construction of new chemistry and office facilities. The Company continues to maintain a policy of conservative cash management with funds held on deposit in Sterling at a range of major international banks and building societies. The objective is to achieve returns in line with prevailing market rates while protecting the capital value. Product review Marimastat Marimastat is an investigational new drug and British Biotech's most advanced development compound. It is the first of a new class of potential oral anti-cancer agents, known as matrix metalloproteinase (MMP MMP Matrix Metalloproteinase (enzymes related to tissue healing/remodeling and cancer cell metastasis) MMP Mixed Member Proportional (New Zealand electoral system) MMP Multi-man Publishing ) inhibitors, being investigated to assess their ability to slow the progression of a range of solid tumors. The Company intends to license its MMP inhibitors in cancer, including marimastat and BB-3644 (see below), and discussions are continuing with potential partners. In February 1999, the first results from the ongoing marimastat pivotal trial program were announced. This was a 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 conducted in patients with advanced pancreatic cancer, an aggressive tumor tumor: see neoplasm. setting, and did not meet its primary end point. In a secondary analysis, using a technique to analyze clinical trial survival data adjusting for baseline variables, the 25mg marimastat group and the gemcitabine group showed no statistically significant difference with respect to survival. The Company believes that the results from 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. Nine randomized ran·dom·ize tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es To make random in arrangement, especially in order to control the variables in an experiment. marimastat pivotal trials are ongoing of which four studies, gastric cancer, glioblastoma glioblastoma /glio·blas·to·ma/ (gli?o-blas-to´mah) any malignant astrocytoma. glioblastoma multifor´me (brain cancer), pancreatic cancer combination and 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. , have completed their recruitment phase. It is difficult to be precise about when each study will report. However, the Company currently believes that study results will be available as follows: - second half of calendar 1999 - two studies, gastric cancer and pancreatic cancer combination (ie marimastat and gemcitabine); - calendar 2000 - four studies, glioblastoma, 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 combination (ie marimastat and carboplatin) and two studies in small cell lung cancer (one being conducted by the Company and a second study being run by the National Cancer Institute of Canada); and - calendar 2001 and 2002 - three studies, adjuvant adjuvant /ad·ju·vant/ (aj?dbobr-vant) (a-joo´vant) 1. assisting or aiding. 2. a substance that aids another, such as an auxiliary remedy. 3. 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. cancer, advanced breast cancer (being run in the USA by the Eastern Co-operative Oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. Group) and non-small cell lung cancer. The Company will continue to reassess reassess Verb to reconsider the value or importance of reassessment n Verb 1. reassess - revise or renew one's assessment reevaluate the program as each trial reports and further information on marimastat's safety and efficacy becomes available. BB-3644 BB-3644 is British Biotech's second generation oral MMP inhibitor being developed as a potential anti-cancer agent. Preclinical models have suggested that BB-3644 has a lower propensity to induce musculoskeletal musculoskeletal /mus·cu·lo·skel·e·tal/ (-skel´e-t'l) pertaining to or comprising the skeleton and muscles. mus·cu·lo·skel·e·tal adj. Relating to or involving the muscles and the skeleton. side effects Side effects Effects of a proposed project on other parts of the firm. than other broad spectrum MMP inhibitors, such as marimastat, while retaining good anti-cancer efficacy. Lower musculoskeletal side effects may allow longer term or higher dosing than is possible with marimastat. In Phase Ia testing in healthy volunteers, BB-3644 has been shown to be well tolerated and orally absorbed. A Phase Ib trial is being initiated in cancer patients to investigate the maximum tolerated dose for future efficacy studies. BB-10153 BB-10153 is a genetically engineered genetically engineered adjective Recombinant, see there protein which has shown 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. (clot-dissolving) and anti-thrombotic (clot-prevention) properties in preclinical models. It therefore has potential use in the treatment of cardiovascular diseases Cardiovascular disease Disease that affects the heart and blood vessels. Mentioned in: Lipoproteins Test cardiovascular disease including heart attack and stroke. BB-10153 has completed a Phase I trial which showed that it is well tolerated in healthy volunteers. Discussions are continuing with potential development and marketing partners. To support these discussions, the design of a Phase II program is under consideration and the Company is identifying an external contractor to produce the material needed to undertake this program. Zacutex In March 1999, the Company announced that a 1,500 patient trial of Zacutex in 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; had not met its primary end point and development of Zacutex had therefore been discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: . External events The inquiries by the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. (the Exchange) and the US Securities and Exchange Commission (SEC) into matters involving the Company continued during the year. In June 1999, the Company agreed a settlement with the SEC. The London Stock Exchange inquiry was also completed in June 1999 and concluded that the Company, between June 1997 and February 1998, had infringed certain of the Exchange's Listing Rules. No other regulatory inquiries are, to the Company's knowledge, under way or contemplated. Also in June 1999, settlement was reached in the legal dispute between the Company and a former employee. Annual General Meeting British Biotech's 1999 Annual General Meeting (AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f ) will be held on Thursday, September 23, 1999 at the Plasterers' Hall, No. 1 London Wall London Wall was the defensive wall built by the Romans around Londinium, their strategically important port town on the River Thames in England. The name London Wall, as explained below, may also be used to refer to a road related to this wall. , London EC2Y 5JU. Two non-executive directors A non-executive director (NED, also NXD) or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way. of the Company, Mr Marius Gray and Sir David John, retire by rotation and will not seek re-election. Mr Gray, aged 65, is retiring, having served as a non-executive director since the Company's formation in 1986 and Sir David John, aged 61, following the conclusion of his three-year term of office. Outlook The new management team has established a strategy which builds on the Company's existing strengths, experience and resources. This includes its world leadership in metalloenzyme inhibition and involves creating a sufficiently broad product portfolio, based on both internal and external opportunities, to optimize the probability of compounds completing development and entering the market. The Company's resources, operating structure and policies are supporting this strategy through leveraging its development capability and financial strength. The Company believes the measures introduced best position it to meet the Board's objective of building a sustainable business and thus long-term shareholder value. 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.
Unaudited consolidated profit and loss account
for the year ended April 30, 1999
1999 1998
(pound)000 (pound)000
Turnover 4,224 454
Research and development
expenditure (35,389) (42,244)
Administrative expenses:
Corporate and (8,206) (12,271)
Commercial
Administrative expenses:
One-off charges (8,529) (2,134)
(note 3)
Operating loss (47,900) (56,195)
Profit on sale of investment -- 660
Interest receivable 8,790 11,092
Interest payable (356) (396)
Loss on ordinary activities
before taxation (39,466) (44,839)
Taxation (377) (73)
Loss for the financial year (39,843) (44,912)
Loss per share (basic and
diluted) (note 4) (6.0)p (6.8)p
Statement of total recognized gains and losses
for the year ended April 30, 1999
1999 1998
(pound)000 (pound)000
Consolidated loss for
the financial year (39,843) (44,912)
Translation of overseas
subsidiary
financial statements 10 15
Total losses recognized
during the year (39,833) (44,897)
Unaudited consolidated balance sheet
at April 30, 1999
1999 1998
restated
(pound)000 (pound)000
Tangible fixed assets 30,498 37,361
Current assets
Stocks -- 75
Debtors 2,247 2,768
Cash at bank and in hand 98,560 132,762
100,807 135,605
Current liabilities
Creditors: amount
falling due within
one year (10,568) (11,852)
Net current assets 90,239 123,753
Total assets less
current liabilities 120,737 161,114
Creditors: amounts
falling due after more
than one year (2,430) (2,700)
Provisions for liabilities
and charges (616) (1,245)
Net assets 117,691 157,169
Capital and reserves
Share capital 33,049 33,013
Share premium 296,240 296,096
Other reserve 10,008 10,008
Profit and loss account (221,606) (181,948)
Total shareholders' funds 117,691 157,169
Unaudited consolidated cash flow statement
for the year ended April 30, 1999
1999 1998
(pound)000 (pound)000
Cash outflow from
operating activities (41,095) (49,099)
Returns on investments and
servicing of finance 8,448 10,925
Taxation (372) (68)
Capital expenditure and
financial investment (1,652) (13,466)
Acquisitions and disposals -- 660
Cash utilized by operations (34,671) (51,048)
Management of liquid resources 32,350 51,900
Financing (142) 380
(Decrease)/increase in cash
in the period (2,463) 1,232
Reconciliation of net cash flow to
movement in net funds
(Decrease)/increase in
cash in the period (2,463) 1,232
Cash used to decrease debt
and lease financing 322 355
Cash used to decrease
liquid resources (32,350) (51,900)
Exchange adjustment (1) 19
Movement in net funds in the period (34,492) (50,294)
Net funds at May 1, 129,602 179,896
Net funds at April 30, 95,110 129,602
Analysis of net funds
Cash at bank and in hand 98,560 132,762
Bank overdraft (747) (134)
Secured loan and finance leases (2,703) (3,026)
95,110 129,602
Notes 1. The financial information on the Group set out above does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The financial information for the year ended April 30, 1998 is an extract from the Group's statutory accounts which have been delivered to the Registrar of Companies The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. ; the report of the auditors on these accounts was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. 2. The unaudited results for the year ended April 30, 1999 have been prepared in accordance with UK generally accepted accounting principles. The accounting policies applied are those set out in the Annual Report and Accounts for the year ended April 30, 1998 except for changes arising from the adoption of Financial Reporting Standard No. 12 "Provisions, Contingent Liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. and Contingent Assets Contingent Asset An asset in which the possibility of ownership depends solely upon future events uncontrollable by the company. Notes: An example might be a settlement from a lawsuit. See also: Asset, Balance Sheet, Contingent Liability, Liability " (FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 12). The new standard, FRS 12, provides detailed conditions under which a provision may be recognized, including specific requirements for recording restructuring and environmental contingencies environmental contingencies (en·vīˑ·r  n·menˈ·t . The adoption of
the new standard has had no material impact on the prior year profit and
loss account and retained earnings Retained EarningsThe percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . However, a reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of certain accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. from creditors to provisions amounting to (pound)1.2 million (US$1.9 million) has been made in the April 30, 1998 balance sheet to conform with the definitions in FRS 12. 3. Administrative expenses: one-off charges. The costs for 1999 comprised the write down of fixed assets, dilapidations, the costs associated with the litigation and regulatory inquiries, payments to departing directors and restructuring costs. The costs for 1998 related to the production of the Circular and the consolidation of the Group's activities onto one site. Total administrative expenses for the year were (pound)16.7 million (US$26.9 million) (1998: (pound)14.4 million). 4. Basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. losses per share are based on the loss attributable to shareholders after taxation of (pound)39.8 million (US$64.1 million) (1998: loss of (pound)44.9 million) and on 660.6 million shares (1998: 659.4 million), being the weighted average number of shares in issue for the year. 5. The annual report is expected to be mailed to shareholders on August 3, 1999 and the Annual General Meeting will be held on September 23, 1999. 6. Zacutex is a registered trade mark of British Biotech Pharmaceuticals Limited. 7. Where they appear, U.S. dollar figures have been translated at the rate of (pound)1=US$1.61 |
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