CATCo Regulatory News (CAT)

16 May 2005 07:01

Cambridge Antibody Tech Group PLC16 May 2005 07.00 BST, 02.00 EST Monday 16 May 2005 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 Rachel TaylorJohn Aston, Chief Financial Officer Kevin SmithRowena Gardner, Director of Corporate Yvonne AlexanderCommunications BMC Communications/The Trout Group (USA) Tel: 001 212 477 9007 Brad Miles, ext 17 (media) Brandon Lewis, ext 15 (investors) A live webcast of today's analyst meeting can be viewed at 14.00 BST today at www.cambridgeantibody.com in the investor relations section. High resolution images are available for the media to view and download free of charge from www.vismedia.co.uk. CAMBRIDGE ANTIBODY TECHNOLOGY ANNOUNCES INTERIM RESULTS FOR THE SIX MONTHS ENDED31 MARCH 2005 Cambridge, UK Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) todayannounces financial results for the six months ended 31 March 2005 and abusiness update. Summary of News• On target to commence initial five discovery programmes with AstraZeneca• GC-1008 to enter Phase I clinical trials in idiopathic pulmonary fibrosis in second quarter of 2005 (Genzyme)• No further development of CAT-192 in scleroderma (Genzyme)• LymphoStat-B(TM)Phase II clinical trial met primary endpoint (HGSI)• Decision to seek partner for CAT-354• Net cash and liquid resources of £178.2 million at 31 March 2005 (£93.7 million at 30 September 2004)• Net cash inflow before management of liquid resources and financing: £8.8 million for the six months ended 31 March 2005 compared with £14.2 million outflow for the six months ended 31 March 2004• Updated guidance for the future AstraZeneca Strategic AllianceIn November 2004, CAT announced a major strategic alliance with AstraZeneca forthe joint discovery and development of human monoclonal antibody therapeutics,principally in the field of inflammatory disorders. Since that time, the jointinfrastructure to manage the alliance has been established, AstraZeneca hasalready adopted one pre-existing CAT Discovery Programme into the Alliance andwork is on track to start the anticipated initial five 2005 Discovery projects. Abbott Litigation UpdateIn November 2003, CAT commenced legal proceedings against Abbott BiotechnologyLimited and Abbott GmbH in the High Court in London concerning the level ofHUMIRA(R) royalties due to CAT. On 20 December 2004, the judge, Mr Justice Laddie, ruled in CAT's favour stating that "Abbott was in error when it made itsfirst royalty payment to CAT calculated on the basis that only two per cent ofNet Sales was due. It should have calculated on the basis of the full royalty ofjust over five per cent and should have paid and continue to pay CAT accordingly." In January 2005, Mr Justice Laddie announced his decision on various proceduralmatters arising from this Judgment and ruled in CAT's favour on all counts. TheJudge denied Abbott's request for permission to appeal and further ordered thatAbbott pay CAT's costs of the case (to be assessed in due course) and that thesecosts should be assessed on a higher basis than the norm to reflect the Judge'sview of the merits of that part of the case. Following Mr Justice Laddie's refusal to give permission to appeal, in February2005, Abbott made a written application directly to the Court of Appeal. InMarch 2005, the Rt Hon Lord Justice Jacob, in the Court of Appeal, CivilDivision, decided to grant Abbott permission to appeal. In the Order from theCourt of Appeal, the reasons for the decision were stated as follows: "Thepoints raised in (Abbott's) notice of appeal appear, just, to raise a realprospect of success and the commercial importance of the agreements issufficient in the circumstances to provide a compelling reason for an appeal."CAT continues to believe in the strength of its position. In January 2005, Abbott paid to CAT US$23.73 million, representing royaltyarrears due to CAT arising from the original Judgment, and an additional sum ofUS$1.29 million, representing interest and compensation for currency loss onthis amount. Abbott also paid CAT £2.85 million representing an interim paymentof legal costs due. Were Abbott to be successful on its appeal CAT would have toreimburse Abbott in respect of these payments. Product Development CAT Product Candidates CAT-354 is a fully human anti-IL13 monoclonal antibody being developed by CAT,initially as a potential treatment for severe asthma. CAT commenced a Phase Iclinical trial in the UK in September 2004 to assess the safety and tolerabilityof CAT-354, and preliminary results are expected to be available at the end ofthe second quarter of 2005. If this initial trial meets its primary objectives,CAT intends to progress CAT-354 in a further, Phase II, clinical trial later in2005. It is currently expected that this trial will be a clinical pharmacologystudy involving allergen challenge in approximately 80 patients with mildasthma, and that it will be designed to evaluate the effects of different dosesof CAT-354 on their response to allergen challenge, compared with placebo. Given the size of the market and complexity of the potential disease indicationsfor CAT-354, CAT has decided that the programme will benefit from having apartner experienced in developing drugs for major respiratory indications priorto commencing Phase III clinical trials. Accordingly, CAT has started to assessinterest in the product candidate from a limited number of potential licensees. Genzyme Alliance CAT and Genzyme believe that the neutralisation of TGFbeta offers important andvaluable opportunities for addressing unmet medical needs in a number of diseaseconditions. GC-1008 is a pan-specific fully human anti-TGFbeta monoclonal antibody being developed by CAT and Genzyme. The companies have received approval from the US Food and Drug Administration (FDA) to begin a Phase I clinical trial of GC-1008 in idiopathic pulmonary fibrosis (IPF). Preparations for this trial are now underway, which is expected to commence during the second quarter of 2005. The companies also intend to commence a clinical trial of GC-1008 in various cancers and it is currently anticipated that an Investigational New Drug (IND) application will be filed for this trial by the end of 2005. CAT-192 (metelimumab), a fully human anti-TGFbeta1 monoclonal antibody, has been jointly developed by CAT and Genzyme as a potential treatment for scarring and fibrotic conditions, including scleroderma. Following a study in 45 scleroderma patients that demonstrated that CAT-192 was safe and well- tolerated, an analysis of all existing scleroderma study results was undertaken to facilitate understanding of the disease and its progression. Following subsequent discussion with a panel of experts, suitable endpoints for a further trial in scleroderma cannot be identified, and Genzyme and CAT have concluded that no further development of CAT-192 in scleroderma will take place. There are no plans to pursue study of CAT-192 in other indications, as the companies focus their resources on the clinical development of GC-1008. Trabio(R) (lerdelimumab) is a fully human anti-TGFbeta2 monoclonal antibody developed by CAT as a potential treatment for improving the outcome of glaucoma surgery.In March 2005, CAT announced the failure of Trabio to meet the primary endpoint in its second pivotal ('International' Phase III) clinical trial - a result consistent with the result of the first pivotal ('European' Phase III) clinical trial, announced in November 2004. Since November 2004, CAT has been minimising all costs in connection with Trabiodevelopment, and has now terminated all further development of Trabio, subjectonly to continuing with its minimum obligations in completing the ongoing USclinical trial. Licensed Products and Product Candidates HUMIRA (adalimumab) is a fully human anti-TNFalpha monoclonal antibody, isolated and optimised by CAT in collaboration with Abbott and now approved for marketing as a treatment for rheumatoid arthritis (RA) in 58 countries. Abbott reported worldwide sales of HUMIRA of $852 million in 2004 and of $282million for the first quarter of 2005. Abbott has forecast revenues from HUMIRAof more than $1.3 billion in 2005 and has recently indicated that HUMIRA has"multibillion dollar potential". Abbott continues to develop HUMIRA as a potential treatment for a number ofadditional indications and reported in January that supplemental biologicslicense applications (sBLAs) had been made for two HUMIRA indications, early RAand psoriatic arthritis. Abbott also indicated that it expects to fileapplications in 2005 for ankylosing spondylitis, for RA in Japan and, possibly,for Juvenile RA. It has further indicated that a regulatory submission forCrohn's disease is expected in 2006. In psoriasis, Phase III clinical trialsbegan at the end of 2004 and Abbott expects to submit a regulatory applicationfor psoriasis in 2006 or early 2007. ABT-874 is a fully human anti-IL12 monoclonal antibody, isolated and optimisedby CAT in collaboration with Abbott, and licensed to Abbott. Abbott is committedto develop ABT-874 as a potential treatment for Crohn's disease, psoriasis andmultiple sclerosis and continues to enrol patients in a Phase II clinical trialin multiple sclerosis. Abbott plans to begin a Phase II clinical trial inpsoriasis by the end of 2005, as well as another clinical trial in Crohn'sdisease. LymphoStat-B (belimumab) is a fully human anti-BLyS monoclonal antibody licensedby CAT to Human Genome Sciences, Inc (HGSI). HGSI is developing LymphoStat-B asa potential treatment for systemic lupus erythematosus (SLE), for which HGSI hasFast Track designation from the US Food and Drug Administration, and RA. InApril 2005, HGSI announced that LymphoStat-B met the primary efficacy and safetyendpoints in its Phase II clinical trial in 283 patients with RA: LymphoStat-Bwas shown to be safe and well-tolerated, biologically active and to reduce thesigns and symptoms of RA at a level of statistical significance. Results of thePhase II clinical trial of LymphoStat-B in 449 patients with SLE are expected inAutumn 2005. HGS-ETR1 is a fully human anti-TRAIL Receptor-1 monoclonal antibody licensed byCAT to HSGI and being developed by HGSI as a potential treatment for a number ofcancers. In November 2004, HGSI announced that it had completed the enrolment and initialdosing of patients in a US Phase II clinical trial of HSG-ETR1 in patients withadvanced non-small cell lung cancer. The primary objective of the study is toevaluate tumour response. The secondary objectives are to evaluate the safetyand tolerability of HGS-ETR1, and to determine plasma concentrations of HGS-ETR1for use in a population pharmacokinetic analysis. Additional Phase II clinical trials of HGS-ETR1 in patients with advancedcolorectal cancer and in patients with relapsed or refractory non-Hodgkin'slymphoma continue, and HGSI has announced the completion of enrolment andinitial dosing of patients in both trials. Both trials are to evaluate theefficacy, safety and tolerability of HGS-ETR1. HGSI expects to announce the results of all three of the Phase II studies ofHGS-ETR1 in 2005. Two Phase Ib clinical trials of HGS-ETR1 to evaluate safety and tolerability incombination with chemotherapy also continue in patients with advanced solidmalignancies. HGSI plans to complete these trials in 2005. HGSI is presenting data from a "companion Phase I study" of HGS-ETR1 at the American Society of Clinical Oncology (ASCO) meeting in Orlando, 13 - 17 May 2005. HGS-ETR2 is a fully human anti-TRAIL Receptor-2 monoclonal antibody licensed byCAT to HGSI, and being developed by HGSI as a potential treatment for cancer. APhase I clinical trial of HGS-ETR2 in patients with advanced solid tumourscontinues. In January 2005, HGSI reported plans to initiate Phase II clinicaltrials of HGS-ETR2 as a single agent, and to initiate Phase Ib clinical trialsof HGS-ETR2 in combination with chemotherapeutic agents in 2005. HGSI is presenting data from a "companion Phase I study" of HGS-ETR2 at the ASCO meeting in Orlando, 13 - 17 May 2005. MYO-029 is a fully human monoclonal antibody which neutralises the effects ofGDF-8 (a protein which is associated with reduced skeletal muscle mass). Theantibody was discovered by CAT in collaboration with Wyeth and is licensed toWyeth, which is studying it as a potential therapy for muscle-wasting diseases,including muscular dystrophy and age-related sarcopenia. In February 2005, Wyethannounced a Phase I/II clinical trial in adult patients with muscular dystrophy(MD). The trial, which will take place in 12 clinical sites, is a prospective,randomised, placebo-controlled study in 108 patients, including equal numbers ofpatients with facioscapulohumeral MD (FSHD), Becker MD (BMD) and limb-girdle MD(LGMD). Results of the study are expected to be available in late 2006. Pre-clinical Product Candidates There are six antibody drug candidates licensed to partners which are at thepre-clinical stage of development. In addition, there are currently seven activeCAT Discovery candidates and 28 with CAT licensees (excluding the candidatesbeing progressed at licensees of CAT's patents). Patent Licensing Agreements In January 2003, CAT and Dyax announced the expansion of their 1997 licensingagreement. Under the terms of this expanded agreement, CAT receives milestoneand royalty payments on antibody products developed by Dyax and Dyax'slicensees. In January 2005, Dyax announced that two fully human monoclonalantibodies from Dyax's proprietary phage display libraries, IMC-11F8 andIMC-1121B, entered Phase I clinical development at ImClone Systems. Accordingly,CAT received a milestone payment from Dyax in January 2005. In September 2003, CAT granted Micromet a patent licence for the development andcommercialisation of Micromet's human therapeutic antibody candidate MT201(adecatumumab), specific for the epithelial tumour target Ep-CAM. In December2004, Micromet and Serono signed an exclusive collaboration and licenceagreement for the development and commercialisation of MT201 which is currentlybeing tested in two multi-centre Phase II clinical trials. CAT receivesmilestone and royalty payments on human antibody-based products developedagainst the Ep-CAM target by Micromet and its partners. The first milestonepayment would be due on filing for product approval. Senior Management Changes Diane Mellett, General Counsel, was appointed a Director following the Company'sAnnual General Meeting (AGM) on 4 February 2005. Also after the AGM, Dr DavidGlover, Chief Medical Officer at CAT, took early retirement from the Company andthe Board. Dr Patrick Round, VP Development at CAT, has assumed responsibilityfor all of CAT's development activities and has joined the Executive Group(responsible for the operational management of the Company). On 31 March 2005, Justin Hoskins was appointed as Company Secretary, succeedingDiane Mellett. The Future Following the achievements of the last few months, CAT is a company with strongfoundations, good medium term prospects and significant opportunities for growthin the longer term. These strong foundations arise from CAT's balance sheet strength, (at 31 March2005 CAT had net cash and liquid resources of £178.2 million) and thesignificant and growing revenue stream from HUMIRA royalties; especially if theJudgment of the High Court is upheld on appeal. The diversified pipeline oflicensed antibody product candidates offers good prospects for growth in themedium term with no financial cost to CAT as these programmes progress throughthe clinic; notably ABT-874, LymphoStat-B and HGS-ETR1. Significantopportunities for the longer term are provided by CAT's proprietary programmeswhich, though at an early stage of development, are progressing with CAT-354 ina Phase I clinical trial and GC-1008 expected to enter Phase I trials this year,together with potential products resulting from the major Strategic Alliancewith AstraZeneca. The Strategic Alliance with AstraZeneca provides CAT with the opportunity bothto build a significant pipeline of antibody therapeutics in important diseasesin collaboration with a leading pharmaceutical company and to receive financialreturns commensurate with its level of investment. As part of the AstraZenecaAlliance, CAT is committed to supporting and funding half of a minimum of 25discovery programmes, jointly initiated, over the initial five-year discoveryphase. This investment is fully funded by the £75 million equity injection fromAstraZeneca made in December 2004. CAT has the opportunity to invest in theclinical development of selected candidates that result from the joint discoveryprogrammes and to thereby increase potential returns. CAT believes that it is in shareholders' interests to run its business such thatall its activities, excluding later stage product development, will either bepre-funded (as with the AstraZeneca discovery activities) or funded fromrevenues. This will ensure that the business is effectively self -financing upuntil the demonstration of efficacy in clinical trials. This strategy shouldenable CAT to continue to pursue its own carefully targeted proprietarydiscovery programmes. Decisions with regard to the funding of later stageclinical development activity will be taken on a case-by-case basis, in thelight of circumstances at the time, but the chief criterion for furtherinvestment at this stage will be the scale of returns available to CAT'sshareholders. CAT does not expect any significant increase in its currentheadcount. CAT believes that it can reach this sustainable position in the near term(within three years), based on the continuing success of HUMIRA and assuming asatisfactory outcome to the appeal by Abbott against the High Court ruling inCAT's favour. Acquisition or product in-licensing is not considered necessaryto achieve these goals, however CAT will continue to seek acquisition or productin-licensing opportunities where it is believed they can accelerate thedevelopment of the company without increasing its risk profile. CAT expects this financial strategy to govern the operations of the Company forthe initial five-year discovery phase of the AstraZeneca Alliance. As a consequence of these changes, CAT does not now believe that its previouslyarticulated goal of achieving profitability by 2008 remains in shareholders'interests, as it would severely limit the Company's capacity to invest in theopportunities available to it over the next five years. This strategy offers asustainable business model with, as the existing pipeline of product candidatesmatures, good growth prospects for the future. Financial Results CAT made a loss after taxation for the six months ended 31 March 2005 of £16.3million (six months ended 31 March 2004 (H1) £18.0 million; six months ended 30September 2004 (H2) £20.1 million). Net cash inflow before management of liquidresources and financing for the period was £8.8 million (H1 - £14.2 millionoutflow; H2 - £13.7 million outflow). Net cash and liquid resources at 31 March2005 of £178.2 million, were £84.5 million higher than at 30 September 2004 as aresult of the receipt of the subscription monies from AstraZeneca and backdatedroyalty payments and costs from Abbott (net cash and liquid resources at 31March 2004 - £107.6 million; 30 September 2004 - £93.7 million). Turnover in the period was £9.8 million (H1- £8.5 million; H2 - £7.4 million).Royalty income of £5.2 million was recognised as revenue in the periodrepresenting the two per cent royalty rate argued by Abbott on sales of HUMIRAfor the six months ended 31 December 2004, received in March 2005. Furtherdetails are provided in the notes to the financial information. The payment by Abbott of royalty arrears and other related payments pursuant tothe High Court Judgment are not reflected in these results. Pending resolutionof Abbott's appeal, the royalty arrears payment and royalty receipts in excessof the two per cent rate argued by Abbott will not be recognised as revenue.Similarly, amounts received in respect of CAT's costs will not be recogniseduntil the resolution of Abbott's appeal. The table below details paymentsreceived from Abbott in the period and the accounting treatment adopted. Recognised asDate received Description Amount Revenue Creditors $ million $ million $ millionJanuary 2005 Back dated royalties 23.7 - 23.7January 2005 Costs and interest 6.7 - 6.7March 2005 Royalty to 31 Dec 04 25.0 9.7 15.3 _______________________________ Total 55.4 9.7 45.7 _______________________________ Total as recognised in £m £29.4 £5.2 £24.2 Direct costs for the six months ended 31 March 2005 were £2.0 million (H1 - £1.5million; H2 - £1.5 million), reflecting royalties due to the Medical ResearchCouncil (MRC) and other licensors on the royalties CAT receives on product salesunder its various licences and collaborations. In respect of product sales ofHUMIRA, the amounts payable to the MRC and other licensors included in directcosts are consistent with the basis adopted for revenue recognition. CAT hasmade an additional payment on account to the MRC, out of the back dated royaltypayment received from Abbott. This is reflected in prepayments. Research and development costs for the six months ended 31 March 2005 were £18.1million (H1 - £21.5 million; H2 - £22.6 million). External development costswere £6.0 million in the six months ended 31 March 2005 (H1 - £9.5 million; H2 -£9.1 million), reflecting cost savings made on the Trabio programme. The spendon Trabio for the six month period was £2.9 million (H1 - £6.0 million; H2 -£5.1 million). Research and development staff costs and consumables were £7.4million in the period (H1 - £6.8 million; H2 - £8.3 million). General and administration expenses for the period were £9.1 million (H1 - £5.5million; H2 - £5.5 million). Litigation expenses for the six months ended 31March 2005 were £3.1 million (H1 - £0.7 million; H2 - £1.8 million) due to thecost of the trial against Abbott in November 2004. CAT has received a payment onaccount of costs from Abbott (£2.85 million) which has not been credited againstthis cost, pending the outcome of Abbott's appeal. General and administrationstaff costs were £2.3 million in the period (H1 £1.7 million; H2 £2.1 million).The non-cash foreign currency translation charge arising from the retranslationof CAT's trading balances with its US subsidiary, Aptein Inc and theretranslation of US dollar deposits held was £1.2 million (H1 £1.4 million; H2 £(0.3) million). During the period the Group accrued interest receivable on its cash deposits of£3.0 million (H1 - £2.1 million; H2 - £2.0 million) reflecting the increasedlevel of cash and liquid resources held in interest bearing securities. The significant increase in creditors reflects the amounts received from Abbott,as detailed in the table above, not yet recognised in the profit and lossaccount pending the outcome of the legal proceedings with Abbott. In the event that CAT prevails on appeal, up to approximately £10 million of the£29.4 million received from Abbott referred to in the table above will bepayable to the MRC and other licensors. If the payments received from Abbott not yet recognised in the profit and lossaccount (and the related payment on account to the MRC) are excluded from thecashflow statement for the six months ended 31 March 2005, the net cash outflowbefore management of liquid resources and financing for the period is £14.3million (H1 - £14.2 million; H2 - £13.7 million). Outlook Net cash outflow, before management of liquid resources and financing, for thefull year (excluding the Abbott payments not yet recognised in the profit andloss account and related payments on account to the MRC), is expected to be ofthe order of £32 million. This is consistent with guidance given in November2004. Taking account of the Abbott and related payments, aggregate cash inflowfor the year before financing is expected to be of the order of £2 million(based on current exchange rates). CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLCINTERIM STATEMENT OF RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT(unaudited) Six months Six months Six months Year ended ended ended ended 31 March 31 March 31 March 30 September 2005 2005 2004 2004 Convenience translation US$'000 £'000 £'000 £'000 Turnover 18,595 9,845 8,468 15,925Direct costs (3,844) (2,035) (1,523) (3,023) ___________________________________________________________ Gross profit 14,751 7,810 6,945 12,902 Research anddevelopmentexpenses (34,155) (18,083) (21,486) (44,125)General andadministrationexpenses (17,141) (9,075) (5,480) (10,969) ___________________________________________________________Operating loss (36,545) (19,348) (20,021) (42,192) Interestreceivable (net) 5,680 3,007 2,053 4,130 ___________________________________________________________Loss on ordinaryactivities beforetaxation (30,865) (16,341) (17,968) (38,062)Tax on loss onordinary activities - - - (64) ___________________________________________________________Loss for thefinancial period (30,865) (16,341) (17,968) (38,126) ___________________________________________________________ Loss per share- basic anddiluted (pence) 34.7p 44.2p 93.3p Consolidated Statement of Total Recognised Gains and Losses Six months Six months Six months Year ended ended ended ended 31 March 31 March 31 March 30 September 2005 2005 2004 2004 Convenience translation US$'000 £'000 £'000 £'000Loss for the financial period (30,865) (16,341) (17,968) (38,126) Gain on foreignexchange translation 1,581 837 1,306 1,099 ___________________________________________________________Total recognisedlosses relating tothe period (29,284) (15,504) (16,662) (37,027) ___________________________________________________________ The losses for all periods arise from continuing operations.This financial information has been prepared in accordance with UK GAAP. Thedollar translations are solely for the convenience of the reader. CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLCINTERIM STATEMENT OF RESULTS FORTHE SIX MONTHS ENDED 31 MARCH 2005 CONSOLIDATED BALANCE SHEET(unaudited) As at As at As at As at 31 March 31 March 31 March 30 September 2005 2005 2004 2004 Convenience translation £'000 £'000 £'000 US$'000Fixed assetsIntangible assets 10,024 5,307 6,357 5,832Tangible assets 22,979 12,166 13,357 12,362Investments 5,557 2,942 3,157 2,942 ____________________________________________________ 38,560 20,415 22,871 21,136 ____________________________________________________Current assetsDebtors 14,572 7,715 7,140 4,460Short term investments 309,136 163,668 108,007 93,061Cash at bank and in hand 29,378 15,554 644 2,678 ____________________________________________________ 353,086 186,937 115,791 100,199CreditorsAmounts falling due within one year (78,391) (41,503) (12,841) (15,603) ____________________________________________________ Net current assets 274,695 145,434 102,950 84,596 ____________________________________________________Total assets less current liabilities 313,255 165,849 125,821 105,732CreditorsAmounts falling due after more than one year (38,158) (20,202) (20,626) (20,650) ____________________________________________________Net assets 275,097 145,647 105,195 85,082 ____________________________________________________ Capital and reservesCalled-up share capital 9,748 5,161 4,107 4,111Share premium account 569,881 301,716 226,725 226,829Other reserve 25,416 13,456 13,456 13,456Profit and loss account (329,948) (174,686) (139,093) (159,314) ____________________________________________________Shareholders' funds - all equity 275,097 145,647 105,195 85,082 ____________________________________________________ This financial information has been prepared in accordance with UK GAAP. Thedollar translations are solely for the convenience of the reader. CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLCINTERIM STATEMENT OF RESULTS FORTHE SIX MONTHS ENDED 31 March 2005 CONSOLIDATED CASH FLOW STATEMENT(unaudited) Six months Six months Six months Year ended ended ended ended 31 March 31 March 31 March 30 September 2005 2005 2004 2004 Convenience translation US$'000 £'000 £'000 £'000 Net cash inflow/(outflow) from operations 13,500 7,147 (15,764) (31,067) _________________________________________________ Returns on investments and servicing of financeInterest received 4,720 2,499 2,237 4,295Interest element of finance leases (55) (29) (43) (78) _________________________________________________ 4,665 2,470 2,194 4,217 _________________________________________________Taxation - - - (64) _________________________________________________ Capital expenditure and financial investmentPurchase of tangible fixed assets (1,630) (863) (599) (1,032)Sale of tangible fixed assets - - - 6 _________________________________________________ (1,630) (863) (599) (1,026) _________________________________________________ Net cash inflow/(outflow) before management of liquid resources and financing 16,535 8,754 (14,169) (27,940) _________________________________________________ Management of liquid resources (133,497) (70,678) 555 15,357 _________________________________________________ FinancingIssue of ordinary share capital 143,430 75,937 14,115 14,223Capital elements of finance lease rental payments (348) (184) (170) (348) _________________________________________________ 143,082 75,753 13,945 13,875 _________________________________________________ Increase in cash 26,120 13,829 331 1,292 _________________________________________________ This financial information has been prepared in accordance with UK GAAP. Thedollar translations are solely for the convenience of the reader. Notes to the financial information Accounting policies This financial information has been prepared in accordance with the policies setout in the statutory financial statements for the year ended 30 September 2004. Convenience translationThe consolidated financial statements are presented in Sterling. Theconsolidated financial statements as of and for the period ended 31 March 2005are 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$1.8888, the noon buying rate as of 31March 2005. No representation is made that the amounts could have been or couldbe converted into US Dollars at this or any other rates. Loss per shareFRS 14 requires presentation of diluted EPS when a company could be called uponto issue shares that would decrease net profit or increase net loss per share.For a loss making company with outstanding share options, net loss per sharewould only be increased by the exercise of out-of-the-money options. Since itseems inappropriate to assume that option holders would act irrationally, noadjustment has been made to diluted EPS for out-of-the-money share options,diluted EPS equals basic EPS. The calculation is based on information in thetable below. Six months Six months Year ended ended ended 31 March 31 March 30 September 2005 2004 2004 Losses (£'000) 16,341 17,968 38,126Weighted average number of shares 47,128,201 40,638,511 40,866,684 The Company had ordinary shares in issue of 51,609,987 and a total of 2,155,040ordinary shares under option as of 31 March 2005. Turnover Six months Six months Six months Year ended ended ended ended 31 March 31 March 31 March 30 September 2005 2005 2004 2004 Convenience translation US $'000 £'000 £'000 £'000 Royalties 9,758 5,166 2,673 6,328Licence fees 4,731 2,505 2,188 4,601Technical milestones 2,076 1,099 1,592 1,610Clinical milestones 978 518 556 1,091Contract research fees 421 223 1,109 1,829Other 631 334 350 466 ____________________________________________________________Total 18,595 9,845 8,468 15,925 ____________________________________________________________ Deferred income £'000 Balance brought forward at 1 October 2004 25,810Cash receipts 2,684Released to revenue (2,836)Other (251) _________Deferred income at 31 March 2005 25,407 _________ Reconciliation of operating loss to operating cash inflow/(outflow) Six months Six months Six months Year ended ended ended ended 31 March 31 March 31 March 30 September 2005 2005 2004 2004 Convenience translation US$'000 £'000 £'000 £'000 Operating loss (36,545) (19,348) (20,021) (42,192) Depreciation charge 2,544 1,347 1,452 2,826Amortisation of intangible fixed assets 992 525 526 1,051Loss on disposal of fixed assets - - - (3)Write down of fixed asset investment - - - 215EIP charge 249 132 - 144Increase indebtors (5,137) (2,720) (2,757) (24)(Decrease)/increase in deferred income (761) (403) 3,267 4,086 Increase in creditors (excluding deferred income) 52,158 27,614 1,769 2,830 __________________________________________________________Operating cash inflow/(outflow) 13,500 7,147 (15,764) (31,067) __________________________________________________________ Analysis and reconciliation of net funds 1 October Cash flow Exchange 31 March 31 March 2004 movement 2005 2005 Convenience translation £'000 £'000 £'000 £'000 US $'000 Cash at bank and in hand 2,678 12,896 (20) 15,554 29,378Overdrafts (1,512) 933 - (579) (1,094) ________ 13,829Liquid resources 92,559 70,678 - 163,237 308,322 _____________________________________________________________Net cash and liquid resources 93,725 84,507 (20) 178,212 336,606Finance leases (820) 184 - (636) (1,201) _____________________________________________________________Net funds 92,905 84,691 (20) 177,576 335,405 _____________________________________________________________ Liquid resources shown above is included within short term investments on theBalance Sheet, which also includes a part of the investment in MorphoSys shares. Reconciliation of movements in group shareholders' funds Six months Year ended ended 31 March 30 September 2005 2004 £'000 £'000 Loss for the financial period (16,341) (38,126)Other recognised gains and losses relating to the period 837 1,099 ___________________________ (15,504) (37,027)New shares issued (net of expenses) 75,937 14,223Executive Incentive Plan 132 144 ___________________________Net increase/(decrease) in shareholders' funds 60,565 (22,660)Opening shareholders' funds 85,082 107,742 ___________________________Closing shareholders' funds 145,647 85,082 ___________________________ Financial Statements The preceding information, comprising the Consolidated Profit and Loss Account,Consolidated Statement of Total Recognised Gains and Losses, ConsolidatedBalance Sheet, Consolidated Cash Flow Statement and associated notes, does notconstitute the Company's statutory financial statements for the year ended 30September 2004 within the meaning of section 240 of the Companies Act 1985, butis derived from those financial statements. Results for the six month periodsended 31 March 2005 and 31 March 2004 have not been audited. The results for theyear ended 30 September 2004 have been extracted from the statutory financialstatements which have been filed with the Registrar of Companies and upon whichthe auditors reported without qualification. The annual report and financial statements for the year ended 30 September 2004are available from our registered office: Cambridge Antibody Technology Group plcMilstein BuildingGranta ParkCambridgeCB1 6GH, UKTel: +44 (0) 1223 471471 INDEPENDENT REVIEW REPORT TO CAMBRIDGE ANTIBODY TECHNOLOGY PLC IntroductionWe have been instructed by the company to review the financial information forthe six months ended 31 March 2005 which comprises the profit and loss account,the balance sheet, the statement of total recognised gains and losses, the cashflow statement and related notes. We have read the other information containedin the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performedWe conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom auditing standards and thereforeprovides a lower level of assurance than an audit. Accordingly, we do notexpress an audit opinion on the financial information. Review conclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 March 2005. Deloitte & Touche LLPChartered Accountants16 May 2005 Quarterly financial information Three months Three months ended ended 31 March 31 December 2005 2004 £'000 £'000Consolidated profit and loss account (unaudited):Turnover 7,130 2,715Direct costs (2,035) - _______________________________Gross profit 5,095 2,715 Research and development expenses (8,907) (9,176)General and administration expenses (2,650) (6,425) _______________________________Operating loss (6,462) (12,886) Interest receivable (net) 1,835 1,172 _______________________________ Loss on ordinary activities before taxation (4,627) (11,714)Taxation on loss on ordinary activities - - _______________________________Loss for the financial period (4,627) (11,714) _______________________________ Consolidated cash flow statement (unaudited):Net cash inflow/(outflow) from operations 17,374 (10,227) _______________________________ Returns on investments and servicing of financeInterest received 1,672 827Interest paid (14) (15) _______________________________ 1,658 812 Taxation - - _______________________________ Capital expenditure and financial investmentPurchase of tangible fixed assets (597) (266)Sale of tangible fixed assets - - _______________________________ (597) (266) Net cash inflow/(outflow) before management of liquid resources and financing 18,435 (9,681) _______________________________ Management of liquid resources (8,372) (62,306) _______________________________ FinancingIssue of ordinary share capital 555 75,382Capital elements of finance lease rental payments (93) (91) _______________________________ 462 75,291 _______________________________Increase in cash 10,525 3,304 _______________________________ - ENDS - Notes to EditorsCambridge Antibody Technology (CAT):• CAT is a biopharmaceutical company using its proprietary technologies and capabilities in human monoclonal antibodies for drug discovery and drug development. Based near Cambridge, England, CAT currently employs around 290 people.• CAT is a leader in the discovery and development of human therapeutic antibodies and 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. These libraries form the basis for the Company's strategy to develop a portfolio of antibody-based drugs.• One CAT human therapeutic antibody product candidate is in clinical development, with one further product candidate in pre-clinical development.• HUMIRA, the leading CAT-derived antibody, isolated and optimised in collaboration with Abbott, has been approved for marketing as a treatment for rheumatoid arthritis in 58 countries.• Six further licensed CAT-derived human therapeutic antibodies are in clinical development by licensees, with six further licensed product candidates in pre- clinical development.• CAT has alliances with a number of pharmaceutical and biotechnology companies to discover, develop and commercialise human monoclonal antibody-based products.• On 22 November 2004, CAT announced a major strategic alliance with AstraZeneca to discover and develop human antibody therapeutics in inflammatory disorders.• CAT has a broad collaboration with Genzyme for the development and commercialisation of antibodies directed against TGFbeta, a family of proteins associated with fibrosis and scarring.• CAT has also licensed its proprietary technologies to several companies. CAT's licensees include: Abbott, Amgen, Chugai, Genzyme, Human Genome Sciences, Merck & Co, Pfizer and Wyeth Research.• CAT is listed on the London Stock Exchange and on NASDAQ. CAT raised £41m in its IPO in March 1997 and £93m in a secondary offering in March 2000. 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 and the environment in which the company will operate in the future. Certain factors that could cause the company's actual results, performance or achievements to differ materially from those in the forward looking statements include: market conditions, CAT's ability to enter into and maintain collaborative arrangements, success of product candidates in clinical trials, regulatory developments and competition. We caution investors not to place undue reliance on the forward looking statements contained in this press release. These statements speak only as of the date of this press release, and we undertake no obligation to update or revise the statements. This information is provided by RNS The company news service from the London Stock Exchange