BioInvent reports net revenues of SEK 63.1M for January - June 2010 period

Jul 14 2010

• Phase II data presented in May shows that the antithrombotic effect of TB-402 is better than enoxaparin, the current standard treatment.
• In May BioInvent and ThromboGenics achieved a milestone corresponding to EUR 10 million when development partner Roche launched a new clinical study with the product candidate TB-403.
• Reorganisation will give greater focus on the company's proprietary drug development. Adapted manufacturing capacity to in house needs, reduces fixed costs by around SEK 15 million on an annual basis.
• In March BioInvent entered into a partnership with Human Genome Sciences to develop and commercialise therapeutic antibodies.
• A directed new share issue that raised SEK 150 million for the company before transaction costs was implemented in February.
• Net revenues for January - June 2010: SEK 63.1 million (47.1).
• Loss after tax for January - June 2010 amounted to SEK -60.7 million (-88.2) and the loss after tax per share was SEK -1.01 (-1.59).
• Current investments together with cash and bank as of 30 June 2010: SEK 138.7 million, excluding share of milestone payments for TB-403 received in July, (150.5).
• Cash flow from current operations and investment activities for January - June 2010: SEK -89.7 million (-61.9).

BioInvent is a research-based pharmaceutical company that focuses on developing antibody drugs. The Company is currently running innovative drug projects mainly within the areas of thrombosis, cancer and atherosclerosis.

Comments by the CEO

BioInvent reached an important milestone when the results of a phase II trial of TB-402 following orthopaedic surgery, were reported in May. The data showed that TB-402 is statistically better at preventing thrombosis than enoxaparin, the current standard treatment. Supported by these good results, BioInvent and the company's partner, ThromboGenics, will now prioritise securing a development partner for the programme to ensure that the necessary resources is in place to take the product candidate to the market. Current treatment options with anticoagulants require daily dosing. The data we have presented reinforces our position that a product dosed once post surgery with a significant reduction in the incidence of blood clots, will provide significant advantages for both patients and healthcare providers.

In the recent quarter our product candidate for the treatment of cancer, TB-403, also took an important step forward as our partner, Roche launched a new clinical study in patients with metastatic, treatment-refractory, colorectal and ovarian cancer. The start of this study resulted in that BioInvent and ThromboGenics together received EUR 10 million as a first milestone payment in the early clinical development phase. The drug candidate has potential to be developed into a treatment alternative for several cancers. We anticipate that Roche will launch additional studies in the early clinical development phase to explore these opportunities.

Within our collaboration project, BI-204, with Genentech to treat atherosclerosis, the parties have now approved the design of the phase II trial. We expect the first patient to be included by the end of the year, or early first quarter next year.

In addition to the successes within our clinical product portfolio, during the first half of the year we clearly demonstrated our ambition to invest in developing our own product portfolio. In March we signed an agreement with Human Genome Sciences with the objective to develop new drug candidates to treat inflammatory diseases. We also decided to tailor our process development and manufacturing resources to meet the needs of our proprietary drug projects. After this move the company will withdraw from the contract manufacturing market and focus our manufacturing capacity on our in house needs. We have proved that we can generate considerable value through our own projects and we are convinced that focusing even more on our drug portfolio will result in additional shareholder value.

Lund, Svein Mathisen

Development projects

BioInvent is currently running four projects in the development phase. In the development phase the safety profile of the product candidate is tested in animal models, before testing safety and efficacy in clinical trials.

Thrombosis (TB-402)

TB-402 is a human antibody binding to Factor VIII. The antibody has shown a beneficial partial inhibition of Factor VIII, even when applied in excess dosage. This reduces the risk of undesirable bleedings. The objective is to initially develop a drug that prevents Deep Vein Thrombosis (DVT) following orthopaedic surgery. DVT is caused when a blood clot forms in a deep vein, most commonly in the deep veins of the lower leg. DVT is a major public health issue and it is estimated that in the US alone, more than 600,000 individuals are affected by DVT or pulmonary embolism (PE) each year. The number of patients undergoing total hip or knee replacement is estimated at around 2.4 million in 2009 and is expected to grow to approximately 3.1 million 2015 in the seven major pharmaceutical markets. Patients undergoing hip replacement or knee surgery are particularly at risk of developing DVT and all patients are therefore treated with anticoagulants prophylactically in order to reduce the risks of blood clots. TB-402 is a long-acting agent, which means it could be given as a single dose to prevent the development of DVT in patients undergoing surgery. This simple approach to prophylaxis would be an attractive option, as all current anticoagulant treatment options require daily treatment for up to several weeks. The project is carried out within the alliance with ThromboGenics.

Results from the phase I trial show that TB-402 is both safe and well-tolerated. No serious adverse events related to TB-402 were reported. The pharmacokinetic analysis undertaken as part of the phase I trial confirm a prolonged half-life of approximately three weeks. Additional studies have shown that the effect of TB-402 can be reversed by giving the target protein (Factor VIII) that blocks TB-402 and also that TB-402 is safe and well tolerated in patients that are given standard treatment (enoxaparin and warfarin) for deep vein thrombosis.

Results from a phase II trial for the prevention of venous thromboembolism (VTE) following orthopaedic surgery, were reported in May. The phase II results showed the superior antithrombotic activity of TB-402, when compared to enoxaparin (Lovenox^®: sanofi-aventis). The study showed that the two drugs had comparable safety. Enoxaparin is currently the standard treatment to prevent VTE in this setting. VTE encompasses both deep venous thrombosis and pulmonary embolism.

The phase II trial was a multicenter, dose-escalating, randomised, open-label trial, evaluating TB-402 against enoxaparin for the prophylaxis of VTE after knee surgery. All patients received enoxaparin 40mg pre-operatively. Post operatively, patients were randomized in a sequential cohort design to one of three doses of TB-402 (0.3mg/kg, 0.6mg/kg or 1.2mg/kg) or enoxaparin 40mg (3:1;>

TB-402 was administered as a single intravenous bolus injection 18-24 hours after orthopaedic surgery, whereas enoxaparin was given as a 40mg subcutaneous injection every day for a period of at least 10 days. The primary efficacy endpoint was based on measuring all occurrences of VTE in patients by Day 7-11, whether they were symptomatic or asymptomatic. The primary safety endpoint was the number of patients with major or clinically relevant non-major bleeding from randomisation until the end of the study at 3 months. The study enrolled a total of 316 patients across 30 centers in Europe.

A pooled analysis of all groups treated with TB-402 and the group treated with enoxaparin showed a statistically significant reduction (22% and 39%) of the incidence of total VTE. The study also showed that TB-402 and enoxaparin had a similar safety profile. The results were presented on 8 July at the 21st International Congress on Thrombosis in Milano.

Atherosclerosis (BI-204)

The product candidate BI-204 targets oxidized forms of the LDL cholesterol (oxLDL). Links have been shown between oxidized forms of certain lipoproteins and the inflammatory processes that lead to plaque formation in the vessel walls. BI-204 has in preclinical studies reduced inflammatory processes and reduced plaque formation significantly. The results also show a considerable reduction in the size of existing plaques in animals treated with BI-204. Results supports that the mechanism behind BI-204 is a modulation of the inflammatory process resulting in a reduction of pro-inflammatory cells in treated plaques, which in turn leads to a reduction in new plaque formation and the regression of existing plaques. It is being developed as a drug for the prevention of secondary events in patients with cardiovascular disease. In a population-based, prospective, observational study of the risk of development of metabolic syndrome (JAMA. 2008; 299 (19) 2287-2293) higher concentration of oxidized LDL was associated with increased incidence of metabolic syndrome overall, as well as its components of insulin resistance and hyperglycemia. These observations support the picture that oxidized LDL can be an important target structure for developing new medications to treat patients with type 2 diabetes and metabolic syndrome. BI-204 is developed in collaboration with Genentech, a wholly-owned member of the Roche Group.

The phase I programme was completed in 2009. The study was a double-blind, within-group randomised dose-escalation trial testing both single and multiple doses of BI-204 administered either intravenously or subcutaneously. In total, 80 healthy male or female subjects with elevated levels of LDL cholesterol were included in the trial. BI-204 was well tolerated and pharmacokinetic results showed the halflife was in the expected range for fully human antibodies. Genentech and BioInvent have now approved the design of the Phase II trial.

Cancer (TB-403)

The product candidate TB-403, is a monoclonal antibody directed against placental growth factor, PlGF. TB-403 binds PlGF with high affinity and specificity and has been shown to inhibit tumour growth in animal models. TB-403 blocks tumour angiogenesis, the development of new blood vessels, which is required for tumour nutrient and oxygen supply supporting tumour growth. Angiogenesis is also required for disease progression and metastasis, the dissemination of the tumour to distal sites of the body.

The PlGF growth factor is secreted by tumours and is specifically over expressed in cancer and chronic inflammatory conditions. It affects the formation of new vessels in tissue that is under stress. PlGF is not required for survival of normal resting vasculature and blocking PlGF is expected to be relatively safe, because mice lacking PlGF are healthy and reproduce normally. Preclinical research has also shown that inhibition of PlGF does not induce resistance mechanisms because it does not induce "angiogenic rescue" mechanisms, whereby tumour expression of proangiogenic growth factors is upregulated, which may enable escape from therapy. This angiogenic rescue phenomenon has been demonstrated with some angiogenesis inhibitors.

Up to June 2008 the project was carried out within the alliance with ThromboGenics. In June 2008 BioInvent and partner ThromboGenics entered into a strategic license agreement with Roche for development and commercialisation of TB-403. Roche received a worldwide, exclusive license to develop and commercialise TB-403. BioInvent and ThromboGenics retained co-promotion rights for the product in the Nordic, Baltic and Benelux regions.

The first phase l study in 16 healthy male subjects was successfully completed in June 2008 and showed that TB-403 is safe and well tolerated, with pharmacokinetic properties enabling it to be developed as a novel anti-cancer agent. A follow-up study in patients with advanced cancer was presented in November 2009 at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston, U.S.. This dose escalation study examined tolerability, pharmacokinetics and pharmacodynamics of TB-403 in 23 patients. TB-403 was shown to be well tolerated and no dose limiting toxicity was observed with doses up to 10 mg/kg weekly and 30 mg/kg every three weeks. In this patient population with advanced solid tumours, stable disease was observed in six of 23 patients whereof two patients had stable disease in 12 months.

Roche launched in May a new clinical study of TB-403 in patients with metastatic, treatment-refractory, colorectal and ovarian cancer. This resulted in a milestone payment of EUR 10 million from Roche. ThromboGenics, the company that initiated TB-403, received 60 percent and BioInvent 40 percent of this amount.

This trial is a multi-centre, open-label (monotherapy), dose-finding study with intravenous TB-403. The primary objective of the study will be to establish the TB-403 concentration-pharmacodynamic (PD) effect relationship using DCE-MRI (dynamic contrast-enhanced magnetic resonance imaging) and to identify the minimally PD effective dose. The trial will recruit up to 50 patients across three European sites.

Cancer (BI-505)

The drug candidate BI-505 is a human antibody that targets the adhesion protein ICAM-1 (also called CD54). In tumour cells the expression of ICAM-1 is elevated and it is therefore a candidate for being a suitable target protein for a therapeutic antibody. In addition to inducing apoptosis the antibody also provides important immuno-effector functions that help to kill tumour cells. BI-505 has in different animal models proved to be very effective at killing tumours and more effective than existing drugs.

BioInvent's intention is, in an initial stage, to treat patients with multiple myeloma. Other forms of hematologic cancer may also become relevant as indications. The possibility of treating ICAM-1 expressing solid tumours will also be examined further in additional preclinical trials. The number of newly diagnosed patients with multiple myeloma is more than 40,000 per year and the number of newly diagnosed patients with blood cancer is more than 200,000 per year.

BI-505 has been granted orphan drug designation in the United States and Europe for the indication of multiple myeloma. This status gives BI-505 possibility for market exclusivity for treatment of multiple myeloma with an antibody against ICAM-1 for up to 10 years after marketing approval is obtained.

A phase I study for the treatment of multiple myeloma was launched in the US at the beginning of the year. The study will investigate safety, pharmacokinetics and pharmacodynamics and will aim to define the optimal dose of the antibody for upcoming clinical phase II development. The study will involve 30 - 40 patients. The patients will be treated with intravenous doses of BI-505 every other week for a 28-day period with the possibility of extending the treatment until the condition deteriorates again.

Research projects

BioInvent is running a number of projects in the research phase i.e. the stage prior to selection of a Candidate Drug. The company's research portfolio currently includes projects mainly within the areas of cancer and inflammation. The research in the cancer field is aimed at additional product candidates that will impede undesirable vessel growth and thus the blood supply to tumours, as well as at programmed cell death inducing antibodies that kill tumour cells. BioInvent has together with a leading academic group launched a project focusing on new drug concepts based on the role of cancer-associated fibroblasts in tumour development.

The company's inflammation research is being enhanced by a partnership entered into in March with the US company Human Genome Sciences. Under this partnership the companies will work together to develop and commercialise antibody-based drugs based on target proteins from Human Genome Sciences' research and BioInvent's antibody technology.

BioInvent has initiated a new project in cooperation with a leading academic group for the treatment of type I diabetes.

The company is also conducting research and development on antibody-based drugs on behalf of other external partners. Such partners includes Bayer HealthCare, Daiichi Sankyo and Mitsubishi Tanabe. All in all BioInvent has entered into agreements of this kind with the possible development of up to 30 antibody-based products. As well as undisclosed license fees and research funding, BioInvent will receive milestone payments and royalties on sales of any products commercialized.

Revenues and result

Net revenues for the January - June period amounted to SEK 63.1 million (47.1). Revenues for the January - June 2010 period include BioInvent's share, SEK 38.3 million, of the milestone payment received when its partner Roche launched a new clinical study involving TB-403 in May. BioInvent's share, SEK 21.7 million, of the first milestone payment for TB-403 is included in reported net revenues for 2009. Net revenues for the April - June period amounted to SEK 48.0 million (10.3).

The Company's total costs for the January - June period amounted to SEK 124.0 million (137.7). Operating costs are divided between external costs of SEK 68.2 million (86.9), personnel costs of SEK 50.6 million (45.2) and depreciation of SEK 5.2 million (5.6). Restructuring costs (personnel costs) in connection with changes in the manufacturing operation amounting to SEK 6.0 million were charged to the company's second quarter 2010 results.

Research and development costs for January - June amounted to SEK 106.1 million (120.6). Depreciation according to plan reduced the operating result for the period by SEK 5.2 million (5.6), of which depreciation of intangible fixed assets amounts to SEK 2.5 million (2.8).

The loss after tax for January - June amounted to SEK -60.7 million (-88.2). The loss after tax for April - June amounted to SEK -22.8 million (-53.5). The net financial items, January - June, amounted to SEK -0.4 million (2.4). Earnings per share after tax, January - June, amounted to SEK -1.01 (-1.59).

Financial position and cash flow

As of 30 June 2010, the Group's current investments together with cash and bank amounted to SEK 138.7 million, excluding the share of the milestone payment relating to TB-403 received in July, (150.5). The cash flow from current operations and investment activities for January - June amounted to SEK -89.7 million (-61.9). The milestone payment for TB-403 received in July will have a positive effect on cash flow in the third quarter.

In February BioInvent implemented a directed new share issue totalling 5,434,800 shares that raised SEK 150 million for the company before transactions costs. The subscription price was set at SEK 27.60 per share.

The shareholders' equity amounted to SEK 140.5 million (143.5) at the end of the period. The Company's share capital was SEK 30.5 million. The equity/assets ratio at the end of the period was 65.2 (69.5) per cent. Shareholders' equity per share amounted to SEK 2.30 (2.58). The Group had no interest-bearing liabilities.

Investments

Investments in tangible fixed assets amounted to SEK 1.8 million (0.6). No investments were made in intangible assets during the period (-).

Organisation

As of 30 June 2010, BioInvent had 90 (105) employees. 75 (90) of these work in research and development.

Employee incentive program

The annual general meeting on 14 April 2008 resolved to adopt an incentive program comprising a maximum of 1,450,000 employee options (Sw. personaloptioner) and to issue 1,920,090 warrants for the subsidiary BioInvent Finans AB, free of charge, to secure the company's commitment under the incentive program and to cover the company's associated social security contributions. BioInvent Finans AB has subscribed all the warrants. Each employee option entitles the holder to subscribe to a new share at a subscription price of SEK 26.84. A basic allocation of 513,750 employee options took place during 2008 and 2009. Extra allotment of 69,750 employee options took place in February 2009 and in January 2010 with 429,750 employee options.

The annual general meeting on 21 April 2009 resolved to adopt an amendment to the existing employee options program 2008/2012, resolved by the AGM 2008. The amendment program comprise a maximum of 240,250 employee options, directed to the employees of the Company, entitling the holder to subscribe for new shares. Each employee option entitles the holder to subscribe to a new share at a subscription price of SEK 26.84. A basic allocation of 33,750 employee options took place during 2009 and 2010. Extra allotment of 8,127 employee options took place in January 2010.

Risk factors

The Company's operations are associated with risks related to factors such as drug development, competition, collaboration with partners, technology development, patents, capital requirements, currency and interest rates. The aforementioned risks summarize the factors of significance for BioInvent and thus an investment in the BioInvent share.

Accounting principles

This interim report was prepared in accordance with IAS 34, Interim Financial Reporting, the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2.3, Accounting for Legal Entities. The accounting principles applied are consistent with those used in the preparation of the most recent Annual Report. The updates and changes adopted by the EU and applied from 1 January 2010 and that will affect the financial reporting are the following: IFRS 3R Business Combinations and IAS 27R Consolidated and Separate Financial Statements. Their effect on the financial reporting is described in the 2009 Annual Report. The following new standards and amendments have not at this time had any effect on BioInvent's financial reporting: IFRIC 12 Service Concession Arrangements, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 16 Hedges of a Net Investment in a Foreign Operation, IFRIC 17 Distribution of Non-Cash Assets to Owners and IFRIC 18 Transfers of Assets from Customers. These statements will be applied to the extent BioInvent International executes the transactions in question.

SOURCE BioInvent International AB (publ.)