Half Year Report January - June 1999
SMITHKLINE BEECHAM GIVES TOP PRIORITY TO ETEC
The partner SmithKline Beecham (SB), the world's largest vaccine company, gives top priority to the ETEC-vaccine and contributes resources in a new project organisation for completion of Phase III trials in Guatemala/Mexico. The estimated launch on the first selected market in SB's marketing plan is the year 2001. SmithKline Beecham is to submit registration applications for both Europe and the USA.
The present situation regarding the clinical trials is as follows:
· In Kenya 700 patients have participated in the study.
Patient recruitment has been completed. Laboratory analysis, validation and analysis of the results are currently being made.
· Guatemala/Mexico. In the present situation, 750 patients have been included. The trial continues with vaccine produced according to method used for commercial products.
· In Israel, 500 of the 1600 patients have been recruited to date. The aim of the study is to investigate the ETEC-vaccine's protective effect over a sustained period of time. The study is not intended for inclusion in the first application for registration.
More information regarding the studies will be provided when the effect data from the trials are reported, when SB submits an application for registration and upon approval of the ETEC-vaccine.
INCREASED PRODUCTION CAPACITY FOR ETEC
An investment in SBL Vaccin's production plants in order to ensure adequate volumes prior to the launch of the ETEC-vaccine will start in October. The investment amounts to approx. 30 MSEK. In the existing production plant the cholera vaccine, which, in Sweden, is marketed under the Dukoral trademark, is also manufactured.
Dukoral sales have increased by 125% compared with last year.
THE CHOLERA VACCINE - INTERNATIONAL BREAKTHROUGH FOLLOWING WHO RECOMMENDATION
The subsidiary, SBL Vaccin, has received its first major international order for its oral vaccine against cholera. The World Health Organisation, WHO, has recommended SBL's vaccine as being the only cholera vaccine with a documented high protective effect. The order has been issued by the Madagascan health care authorities. The value of the order amounts to 16 MSEK. It is the authorities' assessment that further orders of the same magnitude are to be expected in the autumn.
From and including this May, Active Biotech took back all the international marketing rights outside of the EU, USA and Australia in order to be able to sell the cholera vaccine under its own management in these markets. The vaccine has already been registered in six South American countries and registration applications are to be submitted in a further ten countries. Negotiations are currently being conducted with distributors in Switzerland, Latin America, Mexico, Africa, Turkey and Canada.
SAIK-MS IN PHASE I
Following approval by the Medical Products Agency in Sweden [Läkemedelsverket] in June, the first clinical trials with a SAIK- compound against multiple sclerosis (MS) have been successfully carried out. SAIK is Active Biotech's generic name for different substances designed to modulate the human immune defence system. During the autumn an increased number of patients are to be included in the study and the result is expected to be available during Q2 of year 2000, which means that the product can be able to enter phase II as early as Q4 of year 2000. The launch is expected to take place in the year 2005/2006. The timing will be determined by the authorities' weighted assessment of the disease's complexity factor and the time required for following up the patients during the Phase III trials.
A new market study shows that the products currently on the market sell for approx. SEK 5 billion, with a strong annual growth rate. The total market potential for MS is estimated as being approx. SEK 20 billion a year and the number of patients is increasing by some
50 000 annually. Only a small proportion of the patients is treated by means of the existing therapy. The need for new and more effective pharmaceuticals is considerable.
FOCUSING AND INTEGRATION PROVIDE SAVINGS OF APPROX.
SEK 75 MILLION A YEAR
The integration of Active Biotech from three companies into one operational unit, which was announced by the MD at the shareholders general meeting, has commenced. In this way synergy benefits will be produced at the rate by which the measures are executed.
The Group's pre-clinical research is being increasingly centred upon Lund. Through concentration and reordering priorities within research and development, resources are released for further investments within key projects.
The highest priority for SBL Vaccin, Solna, will be the build-up of increased production capacity for the ETEC and cholera vaccines as well as a strengthening of markets, registration and the pharmaceutical sector.
A total overview of all activities within research and development is under way, with a focusing upon the Group's leading edge expertise area - the human immune defence system. There will be a concentration upon vaccines and pharmaceuticals, which control the immune system, so-called immunomodulators.
By focusing on this area, resources will be freed for further, offensive efforts directed at the Group's three prioritised products: the cholera vaccine, the ETEC-vaccine and SAIK-MS.
Active Biotech will become one operational unit with a cost-efficient organisation. Above measures makes a cost reduction of approx. 75 MSEK possible, of which 20 MSEK external costs. One-off costs are expected to be covered within the forecast result for 1999.
STRONG FINANCIAL POSITION
The Group's available liquid funds amounted to 721 MSEK, or 64 SEK per share. The Group's equity/assets ratio was 75% and the Parent Company's 65%. Net investments for the period amounted to 84 MSEK.
RESULT AND FORECAST 99
The pre-tax result for January-June amounted to -74.9 MSEK. The forecast for the whole of 1999 remains at -115 MSEK, including estimated one-off costs. As with previous forecasts there is an estimated sales profit for the ongoing sale of SBL Vaccin's property in Solna. No comparative figures for the corresponding period for last year are shown due to change of operations.
Q3 report will be issued on 25-11-1999.
The final accounts announcement for 1999 will appear on 24-02-2000.
President & CEO
Active Biotech AB is a Swedish biotechnology group focused on the research and development of pharmaceuticals and vaccines. Our core competence is knowledge of the human immune defence system. We have a high qualitative project portfolio and considerable financial resources. Largest products are the Cholera-vaccine, vaccine against tourist diarrhoea (ETEC), and innovative drugs against MS (SAIK). The turnover of Active Biotech was SEK 259 million in 1998.
Lund, 27 August 1999
ACTIVE BIOTECH AB (publ)
The whole report including tables can be downloaded from the enclosed link
Half Year Report January - June 1999