CATCo Regulatory News (CAT)

6 Feb 2006 07:01

Cambridge Antibody Tech Group PLC06 February 2006 FOR IMMEDIATE RELEASE 07.00 GMT, 02.00 EST Monday 6 February 2006 For further information contact: Cambridge Antibody Technology Weber Shandwick Square Mile (Europe)Tel: +44 (0) 1223 471 471 Tel: +44 (0) 20 7067 0700Peter Chambre, Chief Executive Officer Kevin SmithJohn Aston, Chief Financial Officer Yvonne AlexanderRowena Gardner, Director of Corporate Communications Rachel Taylor BMC Communications/The Trout Group (USA) Tel: 001 212 477 9007 Brad Miles, ext 17 (media) Brandon Lewis, ext 15 (investors) CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC ANNOUNCES FIRST QUARTER FINANCIAL RESULTS Cambridge, UK... Cambridge Antibody Technology Group plc (LSE: CAT; NASDAQ:CATG) today announces financial results for the first quarter of its financialyear, from 1 October 2005 to 31 December 2005, and an update on business sincethe Preliminary Results announcement on 28 November 2005. Highlights:• HUMIRA(R) sales in 2005 of US$1.4 billion; forecast of more than US$1.9 billion sales for 2006 (Abbott) - the first product from the UK biotechnology industry to achieve blockbuster status • Approval for commencement of further clinical trial of CAT-354 • HGSI expects to initiate Phase III development of LymphoStat-B(TM) in 2006 • Net cash and liquid resources at 31 December 2005 of £152.2 million Paul Nicholson, CAT's Chairman, comments: "Clear progress has been made acrossour substantial pipeline in the first quarter: CAT's product candidates,CAT-354, CAT-3888 and CAT-8015 are progressing well. Our strategic alliance withAstraZeneca is meeting our highest expectations. Abbott continues to developHUMIRA as a potential treatment for new indications and has reported progresswith ABT-874. HGSI has reported progress with LymphoStat-B(TM) and HGS-ETR1." HUMIRA(R) (adalimumab) is a fully human anti-TNF alpha monoclonal antibody, isolated and optimised by CAT in collaboration with Abbott and now approved for marketing as a treatment for rheumatoid arthritis (RA), early RA and psoriatic arthritis. In January 2006, Abbott announced full year 2005 sales of HUMIRA of US$1.4 billion, making it the first product originating in the UK biotechnology industry to achieve "blockbuster" status (sales of over US$1 billion). Abbott also stated that it expects worldwide sales of HUMIRA in 2006 of more than US$1.9 billion. CAT receives royalty payments based on HUMIRA sales at the rate of 2.688%. In October 2005, Abbott submitted a regulatory application for HUMIRA as apotential treatment for ankylosing spondylitis and, in January 2006, stated thatit anticipates approval in the second half of 2006. In December 2005, Abbottsubmitted a new drug application for HUMIRA to treat RA in Japan. Abbott continues to develop HUMIRA as a potential treatment for a number ofadditional indications: Crohn's disease, ulcerative colitis, juvenile RA andpsoriasis. In January 2006, Abbott stated that these follow-on indicationsrepresent a US$1-2 billion incremental peak year "sales opportunity" beyond thebase RA business. CAT Product Candidates CAT-354 is a fully human anti-IL13 monoclonal antibody being developed by CAT,initially as a treatment for severe asthma. Following the completion in 2005 ofa Phase I clinical trial, CAT has recently received approval from the Medicinesand Healthcare products Regulatory Agency (MHRA) to commence a repeat-dosesafety study of CAT-354 in patients with mild/moderate asthma. The trial, whichwill take place in the UK, will commence in the first quarter of calendar year2006 and will study safety, tolerability and pharmacokinetics. The development of CAT-3888 and CAT-8015, immunotoxins which are potentialtreatments for a number of B-cell malignancies, continues as planned. GC-1008 is a pan-specific fully human anti-TGF monoclonal antibody beingdeveloped by CAT and Genzyme. The companies anticipate that an IND applicationfor a Phase I clinical trial in oncology indications will be filed in the firstquarter of calendar year 2006. The strategic alliance with AstraZeneca continues its excellent progress, withsix active discovery programmes. Other Licensed Product Candidates ABT-874 is a fully human anti-IL-12 monoclonal antibody, isolated and optimisedby CAT in collaboration with Abbott and licensed to Abbott. Abbott continues todevelop ABT-874 as a potential treatment for autoimmune diseases and in January2006, Abbott stated that it is "encouraged by the early data for the class ofmolecule in both psoriasis and Crohn's disease." Also in January 2006, Abbottstated that it "anticipates publishing data from a Phase II study in multiplesclerosis later in the year." LymphoStat-BTM(TM) (belimumab) is a fully human anti-BLyS monoclonal antibody,licensed by CAT to Human Genome Sciences, Inc (HGSI). HGSI is developingLymphoStat-B as a potential treatment for systemic lupus erythematosus (SLE) forwhich HGSI has a Fast Track designation from the US Food and Drug Administration(FDA) and RA. In January 2006, HGSI stated that, with its collaboratorGlaxoSmithKline, it expects to initiate Phase III development of LymphoStat-B inSLE in 2006. HGS-ETR1 (mapatumumab) is a fully human anti-TRAIL Receptor-1 monoclonalantibody licensed by CAT to HGSI. HGSI is developing HGS-ETR1 as a potentialtreatment for multiple cancer indications. In January 2006, HGSI reported thatit plans to initiate Phase II development of HGS-ETR1 in combination withchemotherapy in hematopoietic cancers. HGS-ETR2 is a fully human anti-TRAIL Receptor-2 monoclonal antibody licensed byCAT to HGSI. In January 2006, HGSI stated that the results of recently completedPhase I clinical trials warrant additional Phase II trials. It also stated thatit plans to reach "go/no go decisions" in 2006 regarding Phase II development ofHGS-ETR2 as a single agent and/or in combination with chemotherapy. ABthrax(TM) is a fully human monoclonal antibody licensed by CAT to HGSI. ABthrax was isolated and developed by HGSI from antibody libraries licensed from CAT and HGSI is developing it as a potential treatment for anthrax disease. In January 2006, HGSI stated that it is working to achieve an order from the US Government to supply ABthrax for the US Strategic National Stockpile. Financial Reporting A review of the financial results for the three months ended 31 December 2005 isset out below. For financial periods commencing on or after 1 October 2005, CATis producing its financial results in accordance with International FinancialReporting Standards (IFRS) and, accordingly, has restated the comparativefigures for the three months ended 31 December 2004, previously produced inaccordance with UK GAAP. The comparative figures in brackets are the restatedfigures for the corresponding period in the prior financial year (see note 2 tothe financial information for further details). Results for the year ended 30September 2005 have also been prepared in accordance with IFRS and are includedin this statement. These are as previously presented in the 2005 Annual Reportexcept for a subsequent amendment to revenue and direct costs (no impact on cashor operating loss) as detailed in note 3 to the financial information. Financial Results Net cash used in operating activities plus capital expenditure for the periodwas £8.7 million (2004: £9.7 million), excluding certain one off cash outflows.These were the acquisition cost of CAT-3888 and CAT-8015 from Genencor of US$14million (£7.9 million) and a net cash outflow of £15.3 million arising from thesettlement with Abbott (2004: nil). Net cash and liquid resources at 31 December2005 amounted to £152.2 million (30 September 2005: £175.6 million). CAT made aprofit before taxation for the three months ended 31 December 2005 of £3.0million (2004: loss of £11.3 million). Revenue in the period was £14.0 million (2004: £2.7 million) plus the US$255million (£144.7 million) received from Abbott in October 2005 and paid outimmediately to CAT's licensors as a part of the litigation settlement withAbbott in respect of HUMIRA (see note 3 for further details). The remainingroyalty balance consists of accrued royalties on sales of HUMIRA for the threemonths to 31 December 2005 and an accrual for the first of five annual paymentsof US$9.375 million due from Abbott in January 2006 as part of the terms of thesettlement agreement, full details of which are contained in note 4. No suchsums were recorded in the three months ended 31 December 2004. Licence fees of£1.3 million were recognised as revenue in the period having been released fromdeferred income brought forward at 30 September 2005. Clinical milestonepayments of £0.3 million were received during the quarter. Direct costs comprise the US$255 million payment referred to above and a US$2million accrual for the payment due to CAT's licensors out of the US$9.375million due from Abbott. Research and development expenses for the period were £8.9 million for the threemonths ended 31 December 2005 (2004: £8.9 million). External development costsfor the three month period were £2.9 million (2004: £3.6 million), decreasingdue to lower spend on the Trabio(R) programme (terminated in March 2005) and anincrease in the reimbursement of costs received from AstraZeneca in line withthe increased activities in the alliance. Staff costs increased quarter onquarter in line with increased staff numbers, principally due to the hiring offormer Genencor staff. General and administration expenses decreased to £2.7 million for the threemonths ended 31 December 2005 (2004: £6.3 million). Litigation expensesdecreased from £1.9 million in the three months ended 31 December 2004 to £0.1million in the three months ended 31 December 2005, with the settlement of thelitigation with Abbott in October 2005. Included in general and administrationexpenses for the three months ended 31 December 2005 is a foreign exchangecredit of £0.8 million arising from the retranslation of US dollar depositsheld; a charge of £1.1 million arose in the comparative period. On 1 November 2005, CAT announced the acquisition of product candidates GCR-3888and GCR-8015 from Genencor. CAT paid US$14 million on closing, 4 November 2005.Simultaneously, Genencor subscribed US$14 million for 1,170,277 new CAT ordinaryshares. The assets acquired comprise primarily an intangible asset of US$13.9million, reflecting the intellectual property acquired. The increase in debtors during the three month period is due to an increase inaccrued royalty income: this increase comprises accrued royalties on sales ofHUMIRA for the three months to 31 December 2005 and the accrual for the US$9.375million due from Abbott in January 2006 as part of the terms of the settlementagreement. One off payments of £15.3 million, arising from the settlement withAbbott (see note 4) were made during the quarter giving rise to the significantdecrease in current liabilities. CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC RESULTS FOR THE THREE MONTHS ENDED 31 DECEMBER 2005 This financial information has been prepared in accordance with IFRS.Preliminary results for the year ended 30 September 2005 were prepared andpresented in accordance with IFRS in the 2005 Annual Report. Results for thethree months ended 31 December 2004 have been restated for the first time inaccordance with IFRS, having previously been presented under UK GAAP. See notes2 and 3 for further details. CONSOLIDATED INCOME STATEMENT(unaudited) Three Three Three months months Months Year ended 31 ended 31 ended 31 ended 30 December December December September 2005 2005 2004 2005 Convenience translation US$'000 £'000 £'000 £'000 Revenue 24,101 14,006 2,715 49,242Royalty buy out, settlement with Abbott (note 3) 249,037 144,722 - - ------------------------------------------------Total revenue 273,138 158,728 2,715 49,242 ------------------------------------------------Direct costs (2,000) (1,162) - (10,503)Royalty buy out, settlement with Abbott (note 3) (249,036) (144,722) - - ------------------------------------------------Total direct costs (251,036) (145,884) - (10,503) ================================================Gross profit 22,102 12,844 2,715 38,739 Research and development expenses (15,377) (8,936) (8,898) (37,017)General and administration expenses (4,641) (2,697) (6,258) (12,375) ================================================Operating profit/(loss) 2,084 1,211 (12,441) (10,653) Profit on sale of available for sale investments - - - 1,461Investment income 3,228 1,876 1,186 7,507Finance costs (12) (7) (14) (233) ------------------------------------------------Profit/(loss) before tax 5,300 3,080 (11,269) (1,918)Taxation - - - (1,047) ------------------------------------------------Profit/(loss) for the period attributable to equity holders of the parent 5,300 3,080 (11,269) (2,965) ================================================ Profit/(loss) per share - basic (pence) 5.9p (26.3)p (6.0)pProfit per share - diluted (pence) 5.8p The profit/losses for all periods arise from continuing operations.The dollar translations are solely for the convenience of the reader. CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC RESULTS FOR THE THREE MONTHS ENDED 31 DECEMBER 2005 This financial information has been prepared in accordance with IFRS.Preliminary results for the year ended 30 September 2005 were prepared andpresented in accordance with IFRS in the 2005 Annual Report. Results for thethree months ended 31 December 2004 have been restated for the first time inaccordance with IFRS, having previously been presented under UK GAAP. See notes2 and 3 for further details. Consolidated Balance Sheet(unaudited) As at 31 As at 31 As at 31 As at 30 December December December September 2005 2005 2004 2005 Convenience translation US$'000 £'000 £'000 £'000Fixed assetsIntangible assets 17,955 10,434 5,570 2,581Property, plant and equipment 20,964 12,183 11,783 11,706Available for sale investments 18,295 10,632 13,175 9,729 -------------------------------------------------- 57,214 33,249 30,528 24,016Current assetsTrade and other receivables 45,07 26,192 5,094 14,566Available for sale investments 174,936 101,660 64,983 100,037Cash and cash equivalents 87,174 50,659 94,482 76,378 -------------------------------------------------- 307,181 178,511 164,559 190,981 --------------------------------------------------Total assets 364,395 211,760 195,087 214,997 LiabilitiesCurrent liabilitiesObligations under finance leases (595) (346) (383) (405)Overdraft (122) (71) (164) (803)Trade and other payables (11,727) (6,815) (8,719) (22,335)Current taxation (1,802) (1,047) - (1,047)Deferred income (8,909) (5,177) (5,401) (4,977) -------------------------------------------------- (23,155) (13,456) (14,667) (29,567) Non-current liabilitiesObligations under finance leases - - (346) (40)Deferred income (32,210) (18,718) (19,726) (18,575)Deferred taxation (4,214) (2,449) (3,019) (2,178) -------------------------------------------------- (36,424) (21,167) (23,091) (20,793) --------------------------------------------------Total liabilities (59,579) (34,623) (37,758) (50,360) --------------------------------------------------Net assets 304,816 177,137 157,329 164,637 ================================================== EquityCalled-up share capital 9,117 5,298 5,145 5,164Share premium account 534,011 310,329 301,177 301,804Other reserves 38,723 22,503 23,384 21,742Retained losses (277,035) (160,993) (172,377) (164,073) --------------------------------------------------Total equity shareholders' funds 304,816 177,137 157,329 164,637 ================================================== The dollar translations are solely for the convenience of the reader. CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC RESULTS FOR THE THREE MONTHS ENDED 31 DECEMBER 2005 This financial information has been prepared in accordance with IFRS.Preliminary results for the year ended 30 September 2005 were prepared andpresented in accordance with IFRS in the 2005 Annual Report. Results for thethree months ended 31 December 2004 have been restated for the first time inaccordance with IFRS, having previously been presented under UK GAAP. See notes2 and 3 for further details. CONSOLIDATED CASH FLOW STATEMENT(unaudited) Three Three Three months months Months Year ended 31 ended 31 ended 31 ended 30 December December December September 2005 2005 2004 2005 Convenience translation US$'000 £'000 £'000 £'000 Net cash (used in)/provided by operating activities (39,953) (23,218) (9,415) 6,062 Net cash (from)/used in investing activities (17,788) (10,337) 2,735 (31,892) ------------------------------------------------ (57,742) (33,555) (6,680) (25,830) Net cash from financing activities 14,730 8,560 75,291 75,653 ------------------------------------------------(Decrease)/increase in cash and cash equivalents (43,012) (24,995) 68,611 49,823 ================================================ Cash and cash equivalents at beginning of year 130,049 75,575 25,737 25,737 Effect of foreign exchange rate changes 21 12 (32) 10 Effects of fair value movements (7) (4) 2 5 ------------------------------------------------Cash and cash equivalents at end of period 87,051 50,588 94,318 75,575 ================================================ The dollar translations are solely for the convenience of the reader. Notes to the financial information 1. Accounting policiesFor financial periods commencing on or after 1 October 2005, CAT is producingits financial results in accordance with IFRS and, accordingly, has restated thecomparative figures for the three months ended 31 December 2004, previouslyproduced in accordance with UK GAAP. Preliminary results were prepared inaccordance with IFRS for the year ended 30 September 2005 and presented in the2005 Annual Report. Except for the subsequent adjustment, detailed in note 3below, the results for the 2005 financial year have been presented in thisfinancial statement on the same basis. See note 2 below for further details ofthe impact of the restatement of the comparative figures. This financial information has been prepared in accordance with the IFRSpolicies expected to be in place in 2006 set out in the Annual Report for theyear ended 30 September 2005. During the year ending 30 September 2006, CATadopted IAS 32 (International Accounting Standard) and IAS 39 and there were nomaterial adjustments as a result of that adoption. The Annual Report for theyear ended 30 September 2005 sets out the UK GAAP accounting policies togetherwith the relevant IRFS differences. 2. Restatement of the comparative figuresPreliminary results prepared in accordance with IFRS for the year ended 30September 2005, were presented in the 2005 Annual Report with details of the keyreconciling items. The results contained in this statement for the year ended 30September 2005 are the same as those previously presented except for theadjustment detailed below in note 3. The net effect of presenting the comparative figures for the three months ended31 December 2004 under IFRS rather than UK GAAP is to decrease the loss aftertax reported from £11.7 million to £11.3 million principally due to a foreignexchange credit regarding the translation of overseas operations, partiallyoffset by an IFRS 2 share option charge for the period. Net assets increasedfrom £150.1 million to £157.3 million principally due to the recognition of anunrealised holding gain arising from recording available for sale investments atfair value as opposed to cost, as previously recorded under UK GAAP, anddecreased retained losses. Further details of the revised accounting policies adopted in accordance withIFRS and of the key reconciling items for the year ended 30 September 2005 arecontained within the 2005 Annual Report. 3. Results for year ended 30 September 2005The results for the three months ended 31 December 2005 have been prepared underIFRS. These results include as revenue and as a direct cost the US$255m receivedfrom Abbott in October 2005 and paid out immediately to CAT's licensors as apart of the litigation settlement with Abbott in respect of HUMIRA. Previouslythis receipt and subsequent payment were accounted for in the same manner as theremainder of the litigation settlement with Abbott, as an adjusting post balancesheet event, and therefore included in revenue and direct costs in both the 2005UK GAAP financial statements and the preliminary IFRS reconciliations. The 2005Annual Report was finalised on 28 November 2005 and reported on by CAT'sauditors, Deloitte & Touche LLP (Deloitte). The 2005 Annual Report also containsthe preliminary reconciliations to IFRS, which were also reported on byDeloitte. Since that time, there has been continuing debate within the accountingprofession as to the interpretation of IFRS and in particular its relationshipwith US GAAP and, to a lesser extent, UK GAAP. As a consequence of this debateand after reporting on the preliminary IFRS reconciliation contained in the 2005Annual Report, Deloitte have subsequently altered their view on theinterpretation and application of IFRS to the payments of US$255 millionreceived and made by CAT in October 2005 as a part of the litigation settlementwith Abbott. Deloitte's revised interpretation and application of IFRS to thesepayments, contrary to the treatment endorsed in the preliminary IFRSreconciliation contained in the 2005 Annual Report, is that they should betreated as a non-adjusting post balance sheet event. Under this revised interpretation and application of IFRS the payments receivedfrom Abbott and made by CAT to its licensors should not be included as 2005revenues and direct costs but should be treated as revenue and direct costs inthe 2006 financial year. Accordingly, these amounts will be included and treatedas revenue and as a direct cost in CAT's 2006 financial statements preparedunder IFRS. It should be emphasised that this is simply a technical accounting adjustment,reflecting one element of the Abbott settlement as a non-adjusting rather thanan adjusting post balance sheet event, and there are no implications for cashflow or operating loss. 4. Settlement with AbbottIn November 2003, CAT announced that it had commenced legal proceedings againstAbbott in the High Court in London regarding the royalty rate payable on salesof HUMIRA under a licence agreement between the parties. In October 2005, CATannounced it had reached an agreement with Abbott regarding royalties payable toCAT under this licence agreement. • Abbott would pay CAT royalties at 2.688% on sales of HUMIRA from 1 January 2005. CAT would retain all of these royalties. • CAT would retain all royalties received from Abbott in respect of sales of HUMIRA up to 31 December 2004, net of approximately £7.6 million which was paid to its licensors, Medical Research Council, Scripps Institute and Stratagene. • Abbott paid CAT the sum of US$255 million, which CAT paid to its licensors in lieu of their entitlement to royalties arising on sales of HUMIRA from 1 January 2005 onwards. This was both received from Abbott and paid to CAT's licensors in October 2005. • CAT refunded to Abbott approximately £9.2 million for royalties paid in respect of sales of HUMIRA from 1 January 2005 through to 30 June 2005. • Abbott would pay CAT five annual payments of US$9.375 million commencing January 2006, contingent on the continued sale of HUMIRA. From each of these payments, CAT would pay US$2 million to its licensors. 5. Convenience translationThe consolidated financial statements are presented in Sterling. Theconsolidated financial statements as of and for the period ended 31 December2005 are also presented in US Dollars as a convenience translation. The Dollaramounts are presented solely for the convenience of the reader and have beencalculated using an exchange rate of £1:US$1.72079, the closing rate as of 31December 2005. No representation is made that the amounts could have been orcould be converted into US Dollars at this or any other rates. 6. Profit/(loss) per shareThe loss per ordinary share and diluted loss per share are equal because shareoptions are only included in the calculation of diluted earnings per share iftheir issue would decrease the net profit per share or increase the net loss pershare. The calculation is based on information in the table shown below. Three Three months months Year ended 31 ended 31 ended 30 December December September 2005 2004 2005 Profit/(losses) (£'000) 3,080 (11,269) (2,965)Weighted average number of shares 52,427,334 42,811,23 49,381,476 The Company had ordinary shares in issue of 52,976,075 and a total of 2,395,672ordinary shares under option as of 31 December 2005. 7. Statement of changes in equity Share Share Other Profit and capital premium reserves loss reserve £'000 £'000 £'000 £'000Balance at 1 October 2005 5,164 301,804 21,742 (164,073)New shares issued 134 8,525 - -Available for sale investments (unrealised gain) - - 632 -Share option charge - - 471 -Foreign exchange - - (342) -Retained profit for the period - - - 3,080 ---------------------------------------------------Balance at 31 December 2005 5,298 310,329 22,503 (160,993) =================================================== 8. Revenue Three Three Three months months Months Year ended 31 ended 31 ended 31 ended 30 December December December September 2005 2005 2004 2005 Convenience translation US$'000 £'000 £'000 £'000Royalties (excluding buy out) 21,229 12,337 - 40,521Licence fees 2,203 1,280 1,212 5,168Technical milestones - - 1,099 1,099Clinical milestones 487 283 - 1,118Contract research fees 33 19 223 356Other 149 87 181 980 ---------------------------------------------- 24,101 14,006 2,715 49,242 ----------------------------------------------Royalty buy out 249,037 144,722 - - ----------------------------------------------Total 273,138 158,728 2,715 49,242 ============================================== 9. Reconciliation of profit/(loss) from operations to net cash from operatingactivities Three Three Three months months Months Year ended 31 ended 31 ended 31 ended 30 December December December September 2005 2005 2004 2005 Convenience translation US$'000 £'000 £'000 £'000Operating profit/(loss) 2,084 1,211 (12,441) (10,653)Depreciation charge 1,127 655 673 2,693Amortisation of intangible fixed assets 160 93 262 3,251Profit on disposal of fixed assets - - - (2)Fair value movements on cash and cash equivalents and held to maturity investments 52 30 (19) (75)Foreign exchange movements 449 261 (679) 24Share based payments 810 471 415 1,742 ----------------------------------------------Operating cashflow before movements in working capital 4,682 2,721 (11,789) (3,020) ----------------------------------------------(Increase) in debtors (20,613) (11,979) (275) (8,871)Increase/(decrease) in deferred income 590 343 (683) (2,258)(Decrease)/increase in creditors (excluding deferred income) (28,130) (16,347) 2,520 13,988 ----------------------------------------------Cash used in operations (43,471) (25,262) (10,227) (161) ----------------------------------------------Interest paid (333) (194) (15) (49)Interest received 3,852 2,238 827 6,272 ----------------------------------------------Net cash (used in)/provided by operating activities (39,952) (23,218) (9,415) 6,062 ============================================== 10. Analysis of cash flows Three Three Three months months Months Year ended 31 ended 31 ended 31 ended 30 December December December September 2005 2005 2004 2005 Convenience translation US$'000 £'000 £'000 £'000Net investment in available for sale investments (2,838) (1,649) 3,001 (32,000)Purchases of property, plant and equipment (1,311) (762) (266) (1,998)Purchases of intangible assets (13,673) (7,946) - -Proceeds on disposal of property, plant and equipment 34 20 - 2Proceeds from the sale of fixed asset investments - - - 2,104 ----------------------------------------------Net cash (from)/used in investing activities (17,788) (10,337) 2,735 (31,892) ---------------------------------------------- Issue of ordinary share capital 14,900 8,659 75,382 76,028Capital lements of finance lease rental payments (170) (99) (91) (375) ----------------------------------------------Net cash from financing activities 14,730 8,560 75,291 75,653 ---------------------------------------------- 11. Analysis and reconciliation of net funds 1 October Fair value Exchange 31 December 2005 Cash flow movements movement 2005 £'000 £'000 £'000 £'000 £'000 Cash and cash equivalents 76,378 (25,727) (4) 12 50,659Overdrafts (803) 732 - - (71) ----------------------------------------------------------------------- 75,575 (24,995) (4) 12 50,588Available for sale investments 100,037 1,649 (26) - 101,660 -----------------------------------------------------------------------Net cash and liquid resources 175,612 (23,346) (30) 12 152,248Finance leases (445) 99 - - (346) -----------------------------------------------------------------------Net funds 175,167 (23,247) (30) 12 151,902 ======================================================================= Financial Statements The preceding information, comprising the Consolidated Income Statement,Consolidated Balance Sheet, Consolidated Cash Flow Statement and associatednotes, does not constitute the Company's statutory financial statements for theyear ended 30 September 2005 within the meaning of section 240 of the CompaniesAct 1985. Results for the quarterly periods ending 31 December 2005 and 31December 2004 have not been audited. The results for the year ended 30 September2005 as set out above have been prepared in accordance with IFRS. They are basedon the statutory financial statements for the year ended 30 September 2005prepared under UK GAAP amended by adjustments arising from the implementation ofIFRS. The statutory financial statements, upon which the auditors reportedwithout qualification, will be filed with the Registrar of Companies after theCompany's Annual General Meeting. The Annual Report, containing financial statements, for the year ended 30September 2005 is available from our registered office: The Company SecretaryCambridge Antibody Technology Group plcMilstein BuildingGranta ParkCambridgeCB1 6GH, UKTel: +44 (0) 1223 471471 Notes to Editors Business:• CAT is a biopharmaceutical company aiming to bring improvements to seriously ill patients' lives and thereby create outstanding returns for shareholders. CAT seeks to develop products independently and in collaboration with partners, using its capabilities and technologies in the discovery and development of new and innovative antibody medicines in selected therapeutic areas. CAT also seeks to licence its technologies to enable others to develop new medicines. Products:• HUMIRA(R), licensed to Abbott, is the first CAT-derived antibody to be approved for marketing. It was isolated and optimised in collaboration with Abbott and has been approved for marketing as a treatment for rheumatoid arthritis (RA) in 57 countries, and for psoriatic arthritis and early RA in some European countries and the US. • There are six further CAT-derived antibodies licensed to partners at various stages of clinical development: ABT-874 (Abbott), LymphoStat-B(TM), HGS-ETR1, HGS-ETR2, ABthraxTM (all Human Genome Sciences (HGSI)) and MYO-029 (Wyeth). CAT has also licensed its proprietary technologies and patents to several companies. CAT's licensees include Amgen, Chugai, Dyax, Genzyme, HGSI, Merck & Co, Micromet, Pfizer and Wyeth, and three antibody drug candidates are in clinical development at patent licensees. • There are three further human therapeutic product candidates in clinical development: CAT-354 and CAT-3888, proprietary CAT products, and GC-1008, in collaboration with Genzyme. Collaborations:• CAT has a broad collaboration with Genzyme for the development and commercialisation of antibodies directed against TGF beta, a family of proteins associated with fibrosis and scarring, and with potential application in the treatment of some cancers. • CAT has a major strategic alliance with AstraZeneca to discover and develop human antibody therapeutics, principally in inflammatory disorders. This provides CAT with the opportunity to build a substantial pipeline of antibody therapeutics with a significant pharmaceutical partner. • CAT has a co-development collaboration with Zenyth against GM-CSF Receptor, a potential drug target in the development of RA. Science:• CAT has an advanced proprietary technology for rapidly isolating human monoclonal antibodies using Phage Display and Ribosome Display systems. CAT has extensive phage antibody libraries, currently incorporating more than 100 billion distinct antibodies, which form the basis for the Company's strategy to develop a portfolio of antibody-based drugs. Business Background:• CAT is based near Cambridge, UK and in Palo Alto, USA. CAT currently employs around 300 people. • CAT is listed on the London Stock Exchange (CAT) and on NASDAQ (CATG). • More information can be found at www.cambridgeantibody.com Application of the Safe Harbor of the Private Securities Litigation Reform Actof 1995: This press release contains statements about Cambridge AntibodyTechnology Group plc ("CAT") that are forward looking statements. All statementsother than statements of historical facts included in this press release may beforward looking statements within the meaning of Section 21E of the SecuritiesExchange Act of 1934. These forward looking statements are based on numerousassumptions regarding the company's present and future business strategies andthe environment in which the company will operate in the future. Certain factorsthat could cause the company's actual results, performance or achievements todiffer materially from those in the forward looking statements include: marketconditions, CAT's ability to enter into and maintain collaborative arrangements,success of product candidates in clinical trials, regulatory developments andcompetition. We caution investors not to place undue reliance on the forwardlooking statements contained in this press release. These statements speak onlyas of the date of this press release, and we undertake no obligation to updateor revise the statements. This information is provided by RNS The company news service from the London Stock Exchange