1 January – 30 September 2007

§         Clinical Phase I studies of the drug candidate TB-402 for the prevention of blood clots have been successfully completed. Decision taken to advance into Phase II clinical development. 

§         The toxicology studies of the drug candidate TB-403 for the treatment of cancer have been completed. The results show that the drug candidate meets the safety requirements. An application for clinical trials in Denmark has been submitted in early October. 

§         The toxicology studies of the drug candidate BI-204 for the treatment of atherosclerosis have been completed. The results show that the drug candidate meets the safety requirements. An application for clinical trials is expected to be submitted during the fourth quarter. 

§         A directed new share issue was successfully carried out in July, raising SEK 120.0 million for BioInvent after issue expenses while broadening ownership with four new institutional owners.  

§         Collaboration with Genentech, Inc., to co-develop and commercialize the product candidate BI-204 was initiated in January. A first instalment of SEK 105.5 million was received and reported as revenue in  January. 

§         Net revenues for January - September 2007: SEK 140.0 millon (33.4).  

§         Cash flow from current operations and investment activities for January - September 2007: SEK 22.2 million (-83.7). 

§         Current investments together with cash and bank as of 30 September 2007: SEK 230.3 million (111.6). 

§         Profit after tax for January - September 2007 amounted to SEK 21.9 million (-83.7) and the profit after tax per share was SEK 0.44 (-1.78). 

BioInvent is a research-based pharmaceutical company that focuses on developing antibody drugs. The Company is currently running innovative drug projects within the areas of thrombosis, cancer, atherosclerosis and ophthalmic diseases. 

Comments by the CEO

It is with great satisfaction that I can report that we continue to deliver results according to the business plan as adopted and communicated. In September we and our partner ThromboGenics were pleased to announce that our drug candidate TB-402 for the prevention of blood clots had achieved all of the objectives of the study. It was particularly gratifying that the Phase I study also confirmed our earlier results about partial inhibition of Factor VIII even when applied in excess dosage, which is considered to reduce the risk of uncontrolled hemorrhage during treatment with TB-402.

It is also highly significant that the study showed that TB-402's prolonged half-life will allow for single-dose treatment in orthopaedic surgery patients and/or once a month administration for long-term stroke prevention in atrial fibrillation (AF). Treatment with existing medications requires daily dosage, which increases the risk of significant bleeds. TB-402 therefore has the potential to fill an important medical need for large patient groups. 

Based on these favorable study results we and our partner ThromboGenics, in consultation with the program's Scientific Advisory Board, have decided to move TB-402 into Phase II clinical development. In addition, the prestigious American Society of Hematology has approved an oral presentation of the complete data from the Phase I study at its annual meeting in Atlanta, Georgia, USA, on December 10, 2007. 

Treatment of tumours by attacking the blood supply is a method that has achieved great commercial success over the past year. The development of our drug candidate TB-403, which represents a unique way to starve tumours, is therefore completely in keeping with the times. We are extremely pleased that we and our partner ThromboGenics have successfully completed toxicological studies and that we have just submitted an application to begin Phase I clinical trials in Denmark.  As previously announced, we expect to initiate the Phase I program before the year-end.  

Our collaboration with Genentech in the BI-204 program for the treatment of atherosclerosis is also making good progress. We already note that many of the criteria that served as the basis for choice of partner have been fully met. Toxicological studies have been completed and preparations for clinical trials are well underway. We expect to submit an application to begin clinical trials during the fourth quarter this year.  

In summary, these encouraging results in our development projects and the advances noted in our research portfolio enable us to view the future with great optimism. We expect to pursue three clinical drug projects in the beginning of 2008.  

Development projects 

BioInvent is currently running three projects in the development phase. In the development phase the safety profile of the product candidate is tested in animal models, before testing safety and efficacy in clinical trials.

Thrombosis (TB-402)

TB-402 is a human antibody binding to Factor VIII. The antibody has shown a beneficial partial inhibition of Factor VIII, even when applied in excess dosage. This reduces the risk of an overdose resulting in undesirable bleedings. Extensive testing in several animal models has shown that TB-402 strongly reduces the risk of thrombosis without increasing the risk of bleeding. The project is carried out within the alliance with ThromboGenics NV.

The clinical Phase I studies of the anticoagulant TB-402 have been successfully completed. The trial, performed in Denmark, was a randomized, single-dose, placebo-controlled, doseescalation trial in healthy male volunteers. 56 volunteers were enrolled into the trial, including both younger age volunteers (18-45) and older age volunteers (55-76). Preliminary results of the trial announced in September showed that TB-402 met both the primary (safety and tolerability) and secondary (pharmacokinetic and pharmacodynamic) endpoints. The drug was well tolerated and the study showed that TB-402’s prolonged half-life will allow for single-dose treatment in orthopaedic surgery patients and/or once a month administration for long-term stroke prevention in atrial fibrillation (AF) as opposed to daily treatment with current anticoagulants. Importantly, the findings confirm that TB-402 achieves only partial inhibition of FVIII activity without the undesired effect of total factor VIII inactivation. Final data analysis of the Phase I trial will be presented in an oral presentation at the American Society of Hematology Annual Meeting on December 10, 2007 in Atlanta, Georgia, USA.  

Based on these results, and after review of preliminary results with the Scientific Advisory Board for this program, the Joint Steering Committee of BioInvent and ThromboGenics has decided to move TB-402 into Phase II clinical development. As part of the development programme, drug interaction studies are performed in parallel with the preparation for Phase II, which is expected to start in H1 2008. The initial Phase II trial will be a dose-ranging clinical trial evaluating safety and efficacy (ability to prevent deep vein thrombosis - DVT) in an orthopaedic surgery setting. 

Atherosclerosis (BI-204)

The product candidate BI-204 targets oxidized forms of the LDL cholesterol (oxLDL). Strong links have been shown between oxidized forms of certain lipoproteins and the inflammatory processes that lead to plaque formation in the vessel walls. BI-204 has, in several tests, reduced inflammatory processes and, in animal models, it has been able to reduce plaque formation very significantly. The results also show a considerable reduction in the size of existing plaques in animals treated with BI-204. Results supports that the mechanism behind BI-204 is a modulation of the inflammatory process resulting in a reduction of pro-inflammatory cells in treated plaques, which in turn leads to a reduction in new plaque formation and the regression of existing plaques.   

The toxicology studies preceding the clinical Phase I studies have been successfully completed. An application for permission to initiate clinical trials is expected to be submitted during the fourth quarter. The project aims to develop a drug for secondary prevention of cardiac events in high-risk patients.    

In January 2007 BioInvent signed a co-operation agreement with Genentech, Inc. to co-develop and commercialize BI-204. Under the terms of the agreement, Genentech and BioInvent will be jointly responsible for clinical development. Genentech will solely control, any commercialization of the drug in North America, whilst BioInvent retains all commercial rights in the rest of the world. In January 2007 Genentech paid an upfront payment of SEK 105.5 million to BioInvent and, in addition, BioInvent could receive further milestone payments of up to about SEK 1.2 billion as well as royalties on Genentech’s sales in North America.

Cancer (TB-403) 

The product candidate TB-403 has in preclinical studies demonstrated good specificity for the target protein PlGF and inhibition of PlGF-associated angiogenesis and tumour growth in animal models. The toxicology studies preceding the clinical Phase I studies have been successfully completed. An application for clinical trials in Denmark has been submitted to the authorities in early October. The clinical Phase I studies are expected to be initiated during the fourth quarter. 

The PlGF growth factor is secreted by tumours and is specifically over expressed in cancer and chronic inflammatory conditions. It affects the formation of new vessels in tissue that is under stress. Unlike VEGF, which is targeted by the drug Avastin, PlGF does not seem to affect normal, physiological angiogenesis. This characteristic is important because it means that the inhibition of PlGF is expected to have fewer side effects, but will still have the desired effect on various diseases. The project is being developed within the framework of the alliance with ThromboGenics NV.

Research projects

BioInvent is running a number of projects in the research phase i.e. the stage prior to selection of a Candidate Drug. The Company’s research portfolio focuses on cancer and ophthalmic diseases. The research in the cancer field is aimed at additional product candidates that will impede undesirable vessel growth and thus the blood supply to tumours, as well as at apoptotic antibodies that kill tumour cells. Progress has been made during the period with a view to identifying product candidates with these properties. 

Within the area of ophthalmic diseases, projects are under way aiming to develop therapeutic antibodies for the treatment of age related macular degeneration (AMD) and diabetic retinopathy. Macular degeneration is the most common cause of vision loss in people over 60. It is characterised by abnormal and uncontrolled vessel growth in the eye. Two of the projects are being carried out in cooperation with Immusol, Inc. and ThromboGenics respectively, while a third is a proprietary only to BioInvent.   

Revenues and result

Net revenues for the January – September period amounted to SEK 140.0 million (33.4). The first instalment from the collaboration with Genentech of SEK 105.5 million is included in its entirety in the reported net revenues. The remaining revenues for the period refer to remuneration from external development projects and comprise SEK 34.5 million (33.4) during the period January to September and SEK 9.8 million (16.2) during the period July to September. The assignments include mainly process development and manufacturing of products for customer’s clinical trials. 

The Company’s total costs for the January – September period amounted to SEK 124.4 million (119.3). Operating costs are divided between external costs of SEK 61.4 million (54.4), personnel costs of SEK 53.7 million (53.5) and depreciation of SEK 9.3 million (11.4). External costs relate mainly to toxicology studies, clinical studies, commissioned research and milestone payments. 

Research and development costs for January – September amounted to SEK 103.0 million (99.4). Depreciation according to plan reduced the operating result for the period by SEK 9.3 million (11.4), of which depreciation of intangible fixed assets amounts to SEK 4.9 million (5.7).  

BioInvent’s portion of the subsidy from the EU’s Sixth Framework Programme for the TB-403 project amounted to SEK 2.2 million during the period January to September and has been reported in the income statement under ”Other operating revenues and costs.” 

The profit after tax for January – September amounted to SEK 21.9 million (-83.7). The improved result is principally related to cash payments received relating to BI-204. The loss after tax for July - September amounted to SEK -18.6 million (-21.5). The net financial items, January – September, amounted to SEK 4.5 million (2.2). The profit per share after tax, January – September, amounted to SEK 0.44 (-1.78). 

Financial position and cash flow

As of 30 September 2007, the Group’s current investments together with cash and bank amounted to SEK 230.3 million (111.6). The cash flow from current operations and investment activities for January – September amounted to SEK 22.2 million (-83.7). Cash payments received relating to BI-204 had a positive impact to the cash flow. The cash flow from current operations and investment activities for July - September amounted to SEK -33.2 million (-26.4). Negative developments in working capital during the last quarter are mainly related to settlement with partners. 

After the directed issue of 8,500,000 shares, which was concluded in early July, share capital increased by SEK 4.2 million to SEK 27.8 million. The issue raised SEK 120.0 million after issue expenses, which amounted to SEK 5.4 million. The number of shares following the directed issue is 55,660,889.  

The shareholders’ equity amounted to SEK 252.2 million at the end of the period. The equity/assets ratio at the end of the period was 85.8 (80.2) per cent. Shareholders’ equity per share amounted to SEK 4.53 SEK (2.87). The Group had no interest-bearing liabilities. 

Investments

Investments in tangible fixed assets amounted to SEK 1.5 million (8.2).  

The parent company

Net revenues for January – September amounted to SEK 140.0 million (33.4). The profit after tax amounted to SEK 21.9 million (-83.7). The cash flow from current operations and investment activities amounted to SEK 22.2 million (-83.7).

Organisation

As of 30 September 2007, BioInvent had 96 (97) employees. 81 (82) of these work in research and development.

Risk factors

The Company’s operations are associated with risks related to factors such as drug development, competition, technology development, patents, capital requirements, currency and interest rates. The aforementioned risks summarize the factors of significance for BioInvent and thus an investment in the BioInvent share. For more extensive information, please see the 2006 annual report.

Accounting principles

This consolidated interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, which is in accordance with the stipulations in the Swedish Financial Accounting Standards Council’s recommendation RR 31 Consolidated Interim Reports. Otherwise the same definitions are applied with respect to key ratios and calculation methods as those used in the most recent annual report. 

Parent Company’s accounts have been prepared with application of the Swedish Accounting

Standards Council’s recommendation RR 32, Reporting for Legal Entities.

Nominating committee

Each year, a nominating committee shall be established consisting of the chairman of the board of directors and a representative of each one of the Company´s three largest shareholders as of 31 August each year. The three largest shareholders as of 31 August 2007 were Stiftelsen Industrifonden, Nordea Fonder and Tredje AP-fonden. The representatives of the shareholders will be announced on the web site.

Upcoming financial reports

BioInvent will present the following financial reports:

Financial statement for 2007                          14 February 2008

Interim reports                                        10 April, 16 July, 16 October 2007 

Contact

Any questions regarding this report will be answered by:  

BioInvent International AB (publ.)

Svein Mathisen, President & CEO, tel.+46 (0)46 286 85 67, mobile +46 (0)708 97 82 13

Cristina Glad, Executive Vice President, tel. +46 (0)46 286 85 51 

Northbank Communications

Katja Stout, tel. +44 (0)20 7268 3002

The report is also available at www.bioinvent.com 

Consolidated income statement in brief (SEK thousands)

	3 MONTHS 2007 July-Sep.	3 MONTHS 2006 July-Sep.	9 MONTHS 2007 Jan.-Sep.	9 MONTHS 2006 Jan.-Sep.	12 MONTHS 2006 Jan.-Dec.
Net revenues	9,759	16,224	140,022	33,356	50,829
Operating costs
Research and development costs	-24,120	-32,948	-103,004	-99,382	-135,361
Sales and administrative costs	-6,381	-5,447	-21,352	-19,933	-29,804
Other operating revenues and costs	118	-41	1,757	52	2,606
	-30,383	-38,436	-122,599	-119,263	-162,559
Operating profit/loss	-20,624	-22,212	17,423	-85,907	-111,730
Profit/loss from financial investments	2,070	699	4,460	2,170	2,897
Profit/loss after financial items	-18,554	-21,513	21,883	-83,737	-108,833
Tax	-	-	-	-	-
Profit/loss	-18,554	-21,513	21,883	-83,737	-108,833
Profit/loss pertaining to the parent company’s shareholders	-18,554	-21,513	21,883	-83,737	-108,833
Earnings per share, average no. of shares, SEK
Before dilution	-0.34	-0.46	0.44	-1.78	-2.31
After full dilution	**	*	**	*	*
Average no. of shares
Before dilution (thousands)	54,716	47,161	49,679	47,161	47,161
After full dilution (thousands)	**	47,161	**	47,161	47,161

*The outstanding warrants lead to no dilution of earnings per share as a redemption

  to shares would lead to an improvement of earnings per share.

**At the end of the period there were no outstanding warrants.

 

Consolidated balance sheet in brief (SEK thousands)

	2007 30 Sep.	2006 30 Sep.	2006 31 Dec.
Assets
Fixed assets
Intangible fixed assets	13,964	20,771	18,877
Tangible fixed assets