PVG.L Regulatory News (PVG)

Ark Therapeutics Group plc

Interim Management Statement

8 November 2012 - Ark Therapeutics Group plc ("Ark" or the "Company") today publishes its interim management statement for the period from 1 July 2012 to date.

Highlights

Corporate

·; Dr David Venables appointed to the Board in April 2012 and as Chief Executive Officer on 1 August 2012 following Martyn Williams' resignation as a Director and Chief Executive Officer on 31 July 2012

Manufacturing

·; Notice of award of Australian patent for Ark's proprietary Baculo-Lenti manufacturing process received in July 2012

·; Manufacturing partnership entered into with a leading European gene therapy company in July 2012

·; Letter of Intent signed in August 2012 with EMD Millipore Corporation, USA ("EMD Millipore") to enter into a collaborative agreement to jointly develop bioprocessing capabilities

·; Continued success of manufacturing partnership with PsiOxus Therapeutics Ltd ("PsiOxus") announced in September 2012

·; Manufacturing agreement signed in October 2012 with Laurantis Pharma Oy ("Laurantis") for the production of Lymfactin™

Pre-clinical

·; Notice of allowance of US patent for arginine derivatives with NP-1 antagonist activity issued in August 2012

Business Update

Following the appointment of Dr David Venables as Chief Executive Officer on 1 August 2012, the organisation is fully focused upon becoming a profitable, revenue-generating contract viral development and manufacturing services business.

We are pleased to report real progress in the delivery of our vision to become a leading contract development and manufacturing partner for viral drug development. In July we announced that we had entered into a manufacturing partnership with a leading European gene therapy company to supply manufacturing and development services in respect of the partner's therapeutic vaccine product. As well as providing state-of-the art manufacturing capabilities at our GMP manufacturing facility in Kuopio, Finland we are able to bring our partner the benefit of our own experience in developing adenoviral-based medicines. This substantive partnership provides further validation of the strong scientific and technological capabilities available at Ark.

In August we announced that we had signed a non-binding letter of intent with EMD Millipore to enter into a collaborative agreement to jointly develop bioprocessing capabilities. Key elements of the collaboration focus on production optimisation of viral based bioengineered vaccines and other live viral products for pilot and production scale and the installation of these processes at our manufacturing facility in Kuopio. Additionally, the parties plan to establish a GMP BSL-2 suite in the Kuopio facility equipped with EMD Millipore's process technology to enable Ark's wider routine use of EMD Millipore process technology in its manufacturing services business. 

In September we were delighted to report that, under the partnership arrangement with PsiOxus announced in September 2011, we had successfully completed the cGMP manufacture and release of drug product to PsiOxus for use in a Phase I clinical trial of the oncolytic vaccine ColoAd1. The material was manufactured under stringent timelines using Ark's proprietary suspension based single use process ("ATOSUS") and, by using this proprietary production platform, manufacture of toxicology material followed by clinical material of the required product quality was achieved within less than twelve months, saving significant time from the typical CMC development and manufacturing timelines.

In October we announced that Ark had been selected to manufacture and supply LymfactinTM to Laurantis under a conditional agreement. The agreement is subject to Laurantis receiving regulatory approval to commence its Phase I clinical trial. LymfactinTM uses an adenoviral vector to deliver vascular endothelial growth factor (VEGF-C) during transplantation of lymph nodes in order to avoid lymphedema. Ark has worked in close partnership with Laurantis since 2009 in the development of this exciting research programme, commencing with the preparation and provision of the CMC dossier, and are delighted that Laurantis has chosen Ark as its preferred manufacturer of the first clinical batch of Lymfactin™. This is further validation of Ark's unique complete manufacturing service and clear demonstration of its full understanding of the regulatory process for bio-therapeutics development. 

In line with the implementation of our strategic plan we aim to secure further high quality development and manufacturing contracts and partnerships and have identified and generated an increasing number of leads to supplement our growing order book.

Development Programmes

We have implemented our objective of stopping all funding of in-house product development whilst continuing to seek external partners. We are actively engaging in discussions with other companies for potential partnership on our early and late-stage development programmes, including Cerepro®, NRP-1 and our VEGF-D programme in fetal growth retardation.

Board and Management

As reported in our interim results on 29 August 2012, Dr David Venables was appointed to the Board in April 2012 and as Chief Executive Officer on 1 August 2012 following Martyn Williams' resignation as a Director and Chief Executive Officer on 31 July 2012.

Cash

As we reported in our interim results, the Company had cash and cash equivalents of £4.9m at 30 June 2012. The Board continues to review detailed cash forecasts on a regular basis.

As a result of the cost saving initiatives reported in our interim results we have reduced staff numbers and closed down a number of non-core product initiatives. The Board expects that these initiatives will result in cost savings of approximately £2m on an annualised basis.

Dr David Venables, CEO of Ark, commented:

"I am deeply encouraged by the progress we have made since the Company transitioned to a services orientated revenue-generating business earlier this year and would like to thank management, staff and shareholders for their continued support of our new business model."

Enquiries

Ark Therapeutics Group plc

Ark Therapeutics Group plc is a leading viral product focused contract development and manufacturing services company with world-class viral research, development and GMP manufacturing operations in Finland and the UK. Ark's business model is to offer product development and GMP manufacturing contract services for viral products, including the areas of viral mediated gene therapy, oncolytic viral vaccines, live and attenuated viral vaccines, viral vectored vaccines and virus like particles. Ark's capabilities span from translational research through preclinical and clinical product development, in addition to process and analytical development, GMP manufacture and sterile filling from pre-clinical through to commercial product supply. These capabilities have been established through the development of Ark's own products through to Marketing Authorisation Application registered with the European Medicines Agency. Following a change in business strategy in 2011, Ark is now building its business through contract development and manufacturing services and is seeking external partners to advance those products it previously had under development.

Ark's shares were first listed on the London Stock Exchange in March 2004 (AKT.L).

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Group's products and services), and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in forward-looking statements include those relating to Ark's funding requirements, regulatory approvals, clinical trials, reliance on third parties, intellectual property, key personnel and other factors. These forward-looking statements speak only as at the date of this announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.