Clavis Pharma ASA. First Quarter Report 2008

Transcription

1 Clavis Pharma ASA First Quarter Report 2008 Clavis Pharma uses its proprietary Lipid Vector Technology (LVT) to develop new and superior pharmaceuticals by improving already established drugs. The Company s objective is to build an attractive pipeline of new drug candidates in oncology and subsequently license these out to strategic partners for further co-development and marketing. The company is currently in the development phase, and revenues will be generated at the time of partnering and onwards from up-front payments, milestone payments, royalties from licensees and direct product sales in selected territories. Highlights Clavis Pharma announced on 3 April the initiation of the ELACYT clinical Phase II in acute myelogenous leukaemia (AML). The initiation was based on the positive assessment of the Phase I data by an independent international clinical expert group. The Company announced on 13 March the initiation of a new clinical Phase II study with ELACYT in ovarian cancer. This study will explore a more prolonged treatment regimen compared to the other ongoing Phase II studies in solid tumours. The ELACYT clinical Phase II studies in malignant melanoma and colorectal cancer are progressing according to plan. The Intravenous CP-4126 clinical Phase I study in solid tumours is progressing towards maximum tolerated dose, with the tolerability proving better than expected. The Oral CP-4216 program is progressing towards clinical phase as planned. Geir Christian Melen assumed his new position as Chief Executive Officer (CEO) of Clavis Pharma on 1 April The Election Committee has proposed the previous CEO, Tom E. Pike, as new Board Member. The Company s R&D programs are progressing well resulting in planned R&D and other operating expenses of NOK 21 million for the quarter. The Company has cash and cash equivalents of NOK 146 million as at 31 March, Clavis Pharma ASA 1Q Report 2008 Page 1 of 11

2 First Quarter: Operational Review Significant progress has been made in Clavis Pharma s clinical program in the first quarter of 2008, most notably the initiation of two Phase II studies. The initiations further broadens the Company s development pipeline, which during the quarter constituted of four clinical Phase II studies, one Phase I study and pre-clinical development on all together three product candidates. ELACYT Background Clavis Pharma s lead product candidate ELACYT is a patented LVT version of the widely used leukaemia drug, cytarabine. ELACYT is being developed for both solid tumours and haematological malignancies, such as leukaemia. ELACYT has shown in preclinical models to be effective in treating solid tumours, where cytarabine has not shown clinical benefits. It has also shown potential advantages over cytarabine in haematological malignancies in preclinical models, for which the cytarabine treatment is the gold standard. The United States Food and Drug Administration (FDA) has approved the Investigational New Drug application (IND), allowing the Company to conduct clinical studies with ELACYT in the US. The European Commission has granted orphan drug designation to ELACYT for the treatment of Acute Myeloid Leukaemia (AML). This designation is an important milestone in the Company s strategy to achieve marketing approval for ELACYT as rapidly and economically as possible. Clavis Pharma has four ELACYT Phase II trials ongoing. Clinical Phase II in Acute Myelogenous Leukaemia (AML) initiated The Company announced on 3 April that it had started recruiting patients to the Phase II part of its clinical Phase I/II study with ELACYT in haematological cancers. The Phase II part will evaluate the efficacy and safety of ELACYT in patients with late stage AML, which is a patient group with limited treatment options and short expected survival. The Phase II part commenced after the successful completion of Phase I, which demonstrated a good safety profile, as well as clinical activity. In the study, 77 patients with haematological malignancies have been treated with ELACYT at doses up to 2500 mg/m²/day, administered both as a short-lasting infusion and as continuous infusion. An independent international clinical expert group made the recommendation on dose and schedule for the Phase II study. The coordinating investigator of the study is Prof. Frank Giles, Chief, Division of Hematology and Medical Oncology, UTHSC, San Antonio, USA. The Phase II part of the study involves 16 sites in the US, France, Germany, Italy, Norway and the UK. Clinical Phase II in Ovarian Cancer initiated The Company announced on 13 March that it has received approval to initiate a new clinical Phase II study with ELACYT in ovarian cancer. The study is designed to show activity of ELACYT in women who have relapsed after prior chemotherapy regimens. ELACYT will be given in a new and prolonged schedule compared to the treatment of solid tumours in previous studies. The patient will be treated for 10 days (five days per week for two weeks), followed by a two week drug- Clavis Pharma ASA 1Q Report 2008 Page 2 of 11

3 free period. Based upon preclinical and clinical observations, the Company believes that such repeated daily treatment may be more efficacious than current treatment options in this patient population. The study is a multicentre study coordinated by Prof. Sandro Pignata of the Medical Oncology B, National Cancer Institute, Naples, Italy, with two additional study centres in Italy, one in Belgium and one in the US. Ovarian cancer is the fifth leading cause of death in women and about 60,000 new cases are being diagnosed in the seven major industrialised countries each year. The disease is more common in industrialised nations, with the exception of Japan. The cause of the disease is usually unknown and there is no available screening test, thus it is often diagnosed too late for curative treatment. Although surgery remains central to the management of ovarian cancer, drug therapy plays a key role in treating the disease. It is only in recent times that second and third-generation cytotoxics have become integral to managing the disease, which has lead to a gradual increase in survival. Currently, a number of therapeutic approaches are used for an effective management of the disease. Clinical Phase II in Malignant Melanoma The Phase II combination study of ELACYT and Nexavar (sorafenib) in malignant melanoma patients is progressing according to plan at six centres in Europe and the US. Nexavar, developed by Bayer Healthcare and Onyx Pharmaceuticals, is a novel cancer drug which received marketing authorisation both in the US and Europe in 2005/2006 for the treatment of patients with advanced renal cell carcinoma (kidney cancer). It has recently been approved for unresectable hepatocellular carcinoma (liver cancer). There are currently several clinical studies ongoing with Nexavar in combination treatment for malignant melanoma. Clinical Phase II Study in Metastatic Colorectal Cancer The Phase II trial with ELACYT in metastatic colorectal cancer (CRC) is progressing according to plan. Four clinical centres in the UK are participating in the study. The study objective is to evaluate efficacy in patients progressing after an initial standard therapy (second line patients). CP-4126 Background CP-4126 is the LVT version of gemcitabine (Gemzar, Eli Lilly), a blockbuster cancer drug and one of the leading products on the world market. Clavis Pharma aims to develop CP-4126 with substantial benefits over gemcitabine, including opportunities for oral administration. Intravenous CP-4126 is currently in clinical Phase I for solid tumours and Oral CP-4126 in late preclinical phase. Intravenous (I.V.) CP-4126 The Phase I dose escalation trial is in its final stage, progressing towards Maximum Tolerated Dose (MTD). The objective is to define the MTD and the Recommended Dose (RD) for the Clavis Pharma ASA 1Q Report 2008 Page 3 of 11

4 following Phase II studies. The tolerability of CP-4126 is proving better than expected, in turn potentially suggesting a wide therapeutic window (the drug dosage which can treat disease effectively, while staying within the acceptable safety range). The Clinical Phase II program is currently being planned in detail. A principal investigator for the first Phase II study has been selected and participating centres are being recruited. The plan is to conduct randomised studies aimed at demonstrating superiority over current treatment options in selected patient populations. Oral CP-4126 The Company has completed the formal preclinical safety study on Oral CP-4126, which is necessary before initiating the clinical program. Formal data analysis and reporting is ongoing, and preliminary data are encouraging. The drug formulation work to develop an oral dosage form (the right mixture of active ingredient and other ingredients) suitable for clinical use is ongoing and good progress is being made. Discussions are ongoing with regulatory authorities as part of the preparations for an application to start clinical trials. Oral chemotherapy is expected to represent a substantial growth potential, as it increases the quality of life for patients and reduces national health care costs. CP-4200 Further progress has been made in the joint preclinical research and development program with Mt. Sinai School of Medicine in New York. Organisational changes Mr. Geir Christian Melen assumed his new position as Chief Executive Officer (CEO) of Clavis Pharma on 1 April On 27 March the Company published an update on the CEO transition, informing that Mr. Tom E. Pike, the former CEO, will continue to spend a significant part of his time as an advisor to the Company. Furthermore, it was announced that the Election Committee of the Company had decided to propose to the Annual General Meeting that Mr. Tom E. Pike be elected as a new member of the Board. Clavis Pharma ASA 1Q Report 2008 Page 4 of 11

5 First Quarter: Financial Review Income Statement Revenues Clavis Pharma recorded operating revenues of NOK 0.9 million in the first quarter 2008, which was in line with the same period last year. The company s operating revenues are primarily made up of government grants. Operating costs Total operating costs were NOK 21.4 million in the first quarter, compared to NOK 14.4 million in the same quarter last year. The increase reflects a higher R&D activity level compared to the same period last year. In general, R&D costs will vary from quarter to quarter depending on the timing of project start-ups and when patients enter clinical programs. Net financials Net financial income was NOK 1.8 million in the first quarter, compared to NOK 2.0 million for the same period last year. The positive net financial income mainly represents interest earned on liquid funds. Profit and loss Clavis Pharma incurred net loss of NOK 18.7 million for the first quarter 2008, compared to NOK 11.5 million in the first quarter Balance Sheet Clavis Pharma had a total balance of NOK million as at 31 March 2008, compared to a total balance of NOK million as at 31 March Cash and cash equivalents amounted to NOK million as at 31 March 2007, and the company had no interest bearing debt. Expected level of operating expenses The Company is strategically controlling costs and at the same time ensuring optimal progress in development and clinical activities, to ensure maximum return on investments in R&D. Total operating expenses for the full year is expected to be in the range NOK million. Oslo, The Board of Directors of Clavis Pharma ASA Head Office Parkveien 53B, NO-0256 Oslo, Norway Tel: Fax: mail@clavispharma.com Clavis Pharma ASA 1Q Report 2008 Page 5 of 11

6 Clavis Pharma ASA - First Quarter Accounts 2008 Profit and Loss Account Note (NOK 1000) Q1 Q1 Year Government grants Other revenue Total operating income Payroll and payroll related cost Depreciation 3 10 Other operating costs Operating profit/loss Financial income Financial expenses Loss before tax Income tax expense Loss for the period Earnings per share (NOK): Basic Diluted Clavis Pharma ASA 1Q Report 2008 Page 6 of 11

7 Clavis Pharma ASA - First Quarter Accounts 2008 Balance Sheet (NOK 1000) Note ASSETS Non-current assets Computer and office equipment Total non-current assets Current assets Trade accounts receivable 475 Other receivables Receivable issued capital, not paid-in Cash & cash equivalents Total current assets Total Assets EQUITY AND LIABILITIES Equity Share capital Share premium reserve Issued capital, not paid-in Other paid in capital Loss for the period Total equity Current liabilities Trade accounts payable Other current liabilities Total current liabilites Total liabilities Total Equity and Liabilities Clavis Pharma ASA 1Q Report 2008 Page 7 of 11

8 Clavis Pharma ASA - First Quarter Accounts 2008 Cash Flow Statement (NOK 1000) Q1 Q1 Year Cash flow from operating activities Loss before tax Employee share option program Depreciation 3 10 Changes in trade receivables and trade credito Changes in other accrued entries Net cash flow from operating activities Net cash flow from investing activities Purchase of tangible non-current assets Net cash flow from investing activities Cash flow from financing activities Share issue (net proceeds after cost of share issues) Net cash flow from financing activities Net change in cash and cash equivalents Cash and cash equivalents at IB Cash and cash equivalents at UB Clavis Pharma ASA 1Q Report 2008 Page 8 of 11

9 Clavis Pharma ASA - First Quarter Accounts 2008 Statement of changes in equity (NOK 1 000) Attributable to equity holders Share capital Share capital other shares Share premium reserve Other paid in capital Total equity Equity as at Loss for the period Total income and expense for the period Employee share option scheme - value of employee services Issue of share cpaital Conversion of existing shares Equity as at Equity as at Loss for the period Total income and expense for the period Employee share option scheme - value of employee services Equity as at Equity as at Loss for the period Total income and expense for the period Employee share option scheme - value of employee services Equity as at Clavis Pharma ASA 1Q Report 2008 Page 9 of 11

10 Notes Note 1: Basis of presentation The financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ( IAS 34 ). This financial information should be read together with the financial statements for the year ended 31 December 2007 prepared in accordance with International Financial Reporting Standards ( IFRS ). The accounting policies used are consistent with those used in the Annual Financial Statements. The presentation of the Interim Financial Statements is consistent with the Annual Financial Statements. Where necessary, the comparatives have been reclassified or extended to take into account any presentational changes made in these Interim Financial Statements. The preparation of the Interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities at the date of the Interim Financial Statements. If in the future such estimates and assumptions, which are based on management s best judgement at the date of the Interim Financial Statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. Note 2: Other Operating Costs (NOK 1000) Q1 Q1 Year R&D costs External services General & admin. expenses Other operating costs Other operating costs Note 3: Employee benefits a) Pension obligations The Company has a defined contribution plan. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available. b) Share-based compensation The Company operates an equity-settled, share-based compensation plan. The Company measures the cost of share based compensation by reference to the fair value of the option at the date at which they are granted and the cost is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair Clavis Pharma ASA 1Q Report 2008 Page 10 of 11

11 value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised Clavis Pharma and ELACYT are registered trademarks of Clavis Pharma ASA. Head Office Parkveien 53B, NO-0256 Oslo, Norway Tel: Fax: mail@clavispharma.com Clavis Pharma ASA 1Q Report 2008 Page 11 of 11