Plethora Solutions Holdings Plc Regulatory News (PLE)

30 May 2007 07:01

Plethora Solutions Holdings PLC30 May 2007 PLETHORA SOLUTIONS HOLDINGS PLC (AIM: PLE) PRELIMINARY RESULTS FOR THE YEAR TO 31 DECEMBER 2006 Plethora Solutions Holdings PLC ('Plethora'), the developer of products for thetreatment of urological disorders, announces preliminary results for the yearended 31 December 2006. Highlights • Acquisition of Timm Medical Technologies brings product revenues and a dedicated US sales & marketing operation • Out-licensing of PSD502 in the USA for premature ejaculation with Sciele Pharma Inc - $7m equity investment - Regulatory and sales milestones - Royalties on sales - Co-promotion rights retained Results for the year to 31 December 2006 • Revenues of £5.2m (2005: £0) • Loss after tax of £5.9m (2005: £5.7m) • Cash and short term investments at 31 December 2006 of £3.4m (2005: £6.2m) Dr Steven Powell, CEO of Plethora, said:"2006 began with the acquisition of Timm Medical Technologies Inc., whichbrought product revenues and a urology focussed sales and marketing operation inthe USA. In addition, we have advanced our clinical development programmes andstrengthened our team to manage Plehtora's broad development pipeline andaccelerate business development activities. "I'm particularly pleased that we have concluded our first PSD502 licensingagreement with Sciele Pharma for the premature ejaculation indication in the USA. This will deliver value to Plethora through a combination of a $7 millionupfront payment made as an equity investment, future milestones and royalties onsales. Significantly, we have retained co-promotion rights to the US urologistmarket which we will address through our Timm Medical operation. 2007 will be animportant year for Plethora. The signing of the agreement with Sciele will befollowed, in due course, with licensing agreements for territories outside theUSA for premature ejaculation and also possibly for wound pain indications. Witha developing pipeline of urology products and a growing product revenue stream,we are well placed to make further progress towards our goal of building asustainable urology business." For further information contact: Plethora Solutions Tel: 020 7269 8630Steven Powell City/Financial Enquiries Tel: 020 7379 5151MaitlandBrian Hudspith/Liz Morley About Plethora: Plethora is focused on the development and marketing of products for thetreatment of urological disorders. The Company has products in clinicaldevelopment for the treatment of overactive bladder, stress urinaryincontinence, interstitial cystitis, gynaecological pain, erectile dysfunctionand premature ejaculation. In January 2006, Plethora acquired Minneapolis (Mn)based Timm Medical Technologies Inc., which markets products for the treatmentof erectile dysfunction (ED) to urology clinics through a US-based specialtysales team. The Company is headquartered in the UK and is listed on the LondonStock Exchange (AIM:PLE) Further information is available at www.plethorasolutions.co.uk CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT INTRODUCTION In the last year we have made progress towards our goal of building asustainable urology business. We continue to implement our dual strategy ofmarketing products directly for the treatment of urological disorders throughour urology sales and marketing operation in the USA and generation of revenuesby developing and licensing out therapeutic products at the end of Phase IIclinical trials. Towards this goal, we can report an upward trend in sales ofproducts for the treatment of erectile dysfunction through our Timm Medicalsubsidiary. Post the reporting period, we have also announced the firsttherapeutic licensing agreement for PSD502, our premature ejaculation product.During 2006 we expanded our clinical development pipeline, which now comprisestwo products progressing towards Phase III and four projects in Phase II. All ofthese development projects made progress in 2006 and this is a testament to boththe commitment and hard work of our small team and to our capital efficientbusiness model. At the beginning of the year, we acquired Timm Medical Technologies, Inc. ofMinneapolis, USA. This brought us a focussed US sales and marketinginfrastructure together with product revenues. In Timm we have a business thathas the potential to grow significantly both organically, as we have shownthrough a year-on-year sales increase, and through acquisition of new productsto be marketed by the existing specialist sales force. In anticipation of this increased activity in both clinical development andlicensing activity, our senior management team was strengthened with theappointment in August of Sandrine Cailleteau as Chief Business Officer and Dr.Eboo Versi as Senior Vice-President, Clinical Development. Since the year end wehave also announced the appointment of Bill Robinson as a non-executivedirector. Bill's exceptional global pharmaceutical sales and marketingexperience together with an extensive industry network will be of great benefitto the Board. As a result of these activities, we now have a platform for continued growth in2007 and beyond through the consummation of licensing agreements around ourdevelopment assets and continued growth and development of the Timm Medicalbusiness. LICENSING AGREEMENT FOR PSD502 FOR PREMATURE EJACULATION IN THE USA Underlining the potential that has been amassed within our developmentportfolio, earlier this month we announced an exclusive agreement with ScielePharma, Inc., for marketing of PSD502 for premature ejaculation in the USA.Under the terms of this agreement Sciele will make a $7m upfront payment for anequity stake in Plethora at £2.00 per share, followed by milestone paymentsbased on achievement of regulatory and sales milestones. Reflecting thedevelopment status of this product, Plethora will also receive royalty paymentson sales. Plethora has retained co-promotion rights to urology clinics that willbe addressed through our existing Timm Medical sales and marketinginfrastructure. By retaining co-promotion rights in the US and negotiatingnon-US rights separately, Plethora aims to extract further value from itsinvestment in the development of this asset. Sciele's equity investment inPlethora reflects the potential that exists in our product development pipelineparticularly in women's health, an area of focus for Sciele. OUTLOOK Through the establishment of a profitable US commercial business unit, thesuccessful conclusion of our first out-licensing deal and the expansion of thedevelopment pipeline, Plethora has established a platform for the next phase ofgrowth of the company. Following the successful integration of the Timm Medicaloperation, we look forward to continuing the commercial development of thebusiness and have added new products that can be detailed by the Timm salesforce. The twin tracks of licensing and product revenues are central to ourstrategy to build a sustainable urology business. The exciting prospect ofmoving therapeutic products closer to market approval brings these two strategicpaths together and provides us with a unique opportunity to capture a share ofproduct value via licensing partners whilst maintaining the option to retaincommercial rights for our existing US sales and marketing operations. In addition we will continue to seek opportunities for new product and businessacquisitions to strengthen our business and accelerate the Group's route toprofitability. PRODUCT AND PIPELINE REVIEW The Group's product pipeline includes two drugs which have completed Phase IIclinical development and are advancing into Phase III, four drugs in Phase IIdevelopment and three marketed medical devices. Plethora's marketed and development stage products are directed towards meetingpatient and prescriber needs in four major clinical areas: Erectile Dysfunction Erectile dysfunction (ED), the persistent inability to attain and maintain anerection sufficient to permit satisfactory sexual intercourse, afflicts almostone-fifth of men. It can be treated by either pharmacological ornon-pharmacological means or a combination of treatments. A number of oralphosphodiesterase type 5 (PDE5) inhibitors including sildenafil (Viagra(R)),vardenafil (Levitra(R)) and tadalafil (Cialis(R)) are approved as first-linetreatments for ED. These agents are widely prescribed and the two leadingproducts alone had combined global sales in excess of $2.6 billion in 2006. Theuse of PDE5 inhibitors is associated with a number of side effects and iscontra-indicated for a large number of individuals, such as the estimated 1.5million American men aged between 45 and 64 who receive nitrate medications forangina. The reported response rates to oral PDE5 inhibitors are alsosubstantially lower in diabetics than for all patients (51-56% response rate indiabetics versus 81-84% in all patients). Overall, while ED market expansion hasbeen driven by oral drugs, the current generation of PDE5 inhibitors is noteffective in around 30% of men. ED may also be treated with prostaglandin E1 (alprostadil) administered eitherby injection directly into the penis (intracavernosal therapy: Caverject(R)) oras a small drug pellet placed in the urethra (intraurethral therapy: MUSE(R)). Non-pharmacological treatments include vacuum erection devices (VEDs). VEDs arenon-invasive and fast-acting with a low incidence of side effects and aresuitable for a wide range of patients with either chronic or occasional ED,including patients in which oral ED drugs are contraindicated. The efficacy rateof VED treatment has been reported as being 80% or greater in clinical studies. The ErecAid(R) Vacuum Therapy Product Range Through our subsidiary, Timm Medical, Plethora markets a range of manual andelectrical VEDs to physicians active in the management of ED as well as directlyto patients. Timm products are marketed outside of the USA through an extensivedistributor network. Timm Medical reported revenues for the full twelve months ending 31 December2007 of $10.5m, primarily from sales of the ErecAid(R) VED. This equates to a12% year-on-year increase in revenues. Sales growth has been achieved bydemonstrating the effectiveness of the product in treating ED in those patientswho are either excluded from, or choose not to use, oral therapeutics for thetreatment of ED. During 2006, the importance of this product in these key ED patient groups wasunderlined when the FDA granted extended labelling for ErecAid(R), permittingits use as a means of improving arterial blood flow to the penis (" penilerehabilitation") following prostate cancer surgery. Over 200,000 American menwill be diagnosed with prostate cancer in 2007, of which around 80,000 will betreated by having their prostate surgically removed via a radical prostatectomy(RP) procedure. All will experience some degree of ED and this can persist longinto the recovery period. Nerve damage during surgery reduces the efficacy oforal ED drugs and so alternate treatments are required. Penile shrinkage is also common after RP procedures. A clinical assessment ofErecAid(R) in post-RP patients demonstrated that of 28 men who made daily use ofErecAid(R), only one experienced a reduction in penile length greater than 1cm.Of the four patients who did not make daily use of the vacuum system, threeexperienced a reduction in penile length of more than 1cm. The studyinvestigators concluded that early intervention with VED should be recommendedin all potent men undergoing nerve-sparing RP. We believe that the continued demonstration of the safety and clinical efficacyof ErecAid(R) in satisfying medical needs in these ED patient groups will leadto organic growth in Timm Medical revenues. PSD510 (Invicorp(R)) In February 2006, Plethora acquired exclusive North American commercial rightsto a non-oral ED drug treatment, Invicorp(R). Invicorp(R) is a combination oftwo pharmaceutical actives, phentolamine mesylate and aviptadil (vasoactiveintestinal peptide), which have a synergistic effect on smooth muscle andvasodilation resulting in an erection upon intracavernosal injection. Incontrast to current, marketed injectible therapeutics where pain is a commonadverse event experienced by more than 30% of users, the reported incidence ofpain associated with Invicorp(R) in clinical studies to date is in the range0-11%. Equally, Invicorp appears to illicit fewer other side effects comparedwith currently marketed injectible ED products which collectively generatedsales in the US in excess of $35 million in 2005. We believe that the superioradverse event profile and clinical efficacy of Invicorp(R) will allow thisproduct not only to compete for market share but also to attract and retain newusers. Invicorp(R) is a strong complement to the Timm Medical ED franchise and willleverage Timm's current access to a key prescriber group, namely urologistsactive in ED management in those men failing oral ED drugs. Invicorp(R) isalready approved in some European countries and other territories outside of theUS. Following discussions with the FDA, Plethora intends to initiate the finalstage of the clinical development programme for Invicorp(R), a Phase IIIprogramme, at up to 30 sites in the US later in 2007. The study is expected totake approximately 12 months to complete. Premature Ejaculation Premature ejaculation (PE) is a recognised medical condition defined as"persistent or recurrent ejaculation with minimal sexual stimulation before,upon, or shortly after penetration, and before the person wishes it".Epidemiological surveys indicate that PE is the most commonly reported form ofsexual dysfunction in men, with prevalence of 25 to 30%. Unlike ED, theprevalence of PE does not appear to correlate with increasing age and there areno approved pharmaceutical treatments. PSD502: A Topical Treatment for Premature Ejaculation PSD502 is a unique formulation of two established anaesthetic drugs, lidocaineand prilocaine, which is dispensed by metered dose aerosol. PSD502 has successfully completed a double-blind, placebo-controlled parallelgroup Phase II clinical study conducted in subjects with primary PE. Resultsobtained for 43 evaluable subjects showed a statistically-significant (p