CATCo Regulatory News (CAT)

3 Feb 2006 13:00

Cambridge Antibody Tech Group PLC03 February 2006 FOR IMMEDIATE RELEASE 13.00 GMT, 08.00 EST Friday 3 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: STATEMENT RE: Q1 2006 FINANCIAL STATEMENT Cambridge, UK: Cambridge Antibody Technology Group plc (LSE: CAT, NASDAQ:CATG) today issues this explanatory statement in relation to the first quarter2006 figures which will be released on Monday 6 February 2006. CAT's Annual Report for the financial year ended 30 September 2005 was completedand signed on 28 November 2005 and the auditors, Deloitte & Touche LLP,(Deloitte) reported on the financial statements contained in the Annual Reportas of that date. In addition to CAT's UK GAAP financial statements, the 2005Annual Report also contained preliminary reconciliations to InternationalFinancial Reporting Standards (IFRS), which were also reported on by Deloitte. Since that date, 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 debate,Deloitte have informed CAT that they have altered their view on theinterpretation and application of IFRS as it relates to the treatment of theUS$255 million payment received from Abbott in October 2005 and paid outimmediately to CAT's licensors as a part of the litigation settlement with Abbott in respect of HUMIRA(R). Previously this receipt and subsequent payment were accounted for in the same manner as the remainder of the litigation settlement with Abbott, as an adjusting post balance sheet event, and therefore included in revenue and direct costs in both the 2005 UK GAAP financial statements and the preliminary IFRS reconciliations. Deloitte's revised interpretation and application of IFRS to these payments is that they should be treated as a non-adjusting post balance sheet event. Under this revised interpretation and application of IFRS, the US$255m (£144.7m)received from Abbott and paid out to CAT's licensors in October 2005 would notbe included in 2005 revenues and 2005 direct costs. Accordingly, CATs financialstatements for its 2006 financial year (which will be prepared under IFRS) willinclude recognition of revenue and a direct cost in respect of these payments. It should be emphasised that this is simply a technical accounting adjustmentand there are no implications for cash flow or operating loss. Consequential on this revised interpretation and application of IFRS, CAT'sAnnual Report on Form 20F which will be filed with the Securities and ExchangeCommission in the United States in respect of financial year ended 30 September2005 will contain adjustments to UK GAAP numbers in respect of the matterreferred to above so as to show consistency of treatment between US GAAP, UKGAAP and IFRS. - ENDS - 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, ABthrax(TM) (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, with a new site in Palo Alto, USA. CAT currently employs around 290 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