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 CeNeS announces preliminary results for the year ended 31 December 2005
Cambridge, UK 10th April
2006 – CeNeS Pharmaceuticals plc (“CeNeS” or “the Company”) today
announced its preliminary results for the year ended 31 December 2005.
Highlights from 2005 and year to date Operational M6G - Post-operative pain · Pivotal European Phase III trial for post-operative pain commenced in September 2005 · Recruitment is ongoing and results are expected in H2 2006 · USA Phase III M6G - FDA meeting scheduled for mid 2006 with aim of obtaining IND later in 2006 · Discussions being held with EU and US Regulators on additional studies required to expand product claims to include respiratory depression · M6G IP position strengthened in March 2006 by the acquisition of an additional patented synthetic method CNS 5161 - Neuropathic pain · Successfully completed a Phase II study in neuropathic pain in June 2005 · Phase II trials protocols being developed for - Diabetic neuropathic pain - Post-traumatic neuropathic pain - Post-operative pain - Opioid refractory cancer pain CNS 7056X - Sedation and Anaesthesia · Filing of USA IND planned for 2006 · Very encouraging pre-clinical studies reveal rapid onset and offset of sedative action and rapid metabolism · Pre-clinical studies support the potential to expand indications for CNS 7056X into anaesthesia. Further studies in anaesthesia have been initiated at The University of Strasbourg, the University of Adelaide and under a Material Transfer Agreement with a major pharmaceutical company COMT - Parkinson’s disease and Schizophrenia · Pre-clinical development candidate for Parkinson’s on plan to be selected from lead series in 2006 · New academic publications point to the use of COMT inhibitors to improve the profound cognitive deficits of schizophrenia – an additional multi billion dollar market Financial · Cash resources at period end of £8.5 million (2004: £14.3 million) · Loss for 2005 of £6.6 million (2004: £4.9 million) in line with expectations. The increase is due to planned expenditure on M6G’s clinical development and our other development and discovery projects. Corporate · New Scientific Advisory Board established in April 2005 · CeNeS wins “Breakthrough of the Year Award” at the London Stock Exchange techMARK Mediscience awards · Canaccord Adams appointed Nominated Advisor (NOMAD) and stockbroker in February 2006. Commenting on the results, Alan Goodman, Chairman of CeNeS Pharmaceuticals said: “CeNeS has made excellent progress in all its programmes. This year we look forward to M6G delivering pivotal Phase III trial results and filing a Phase III IND in the USA, finalising the four Phase II trial designs for CNS 5161, securing an IND for CNS 7056X and moving our COMT programme into pre-clinical development. Given positive results in our Phase III trial we anticipate commencing negotiations for a European partnering deal. Significant commercial interest is being shown in our other programmes. 2006 will be a very exciting year for the Company and has the potential to transform CeNeS prospects. An audio webcast presentation will be available on www.cenes.com on 10th April 2006 from 10:30am (UK time). For more information please contact: CeNeS Pharmaceuticals plc Neil Clark Tel: + 44 (0)1223 266466 Northbank Communications Rowan Minnion Douglas Pretsell Emma Palmer Tel: + 44 (0)20 7886 8150 Chairman and Chief Executive’s Statement Business review We are pleased to report on another year of excellent progress for CeNeS. The Company’s focused development and discovery pipeline has the potential to deliver much needed new drugs to the commercially attractive Central Nervous System (“CNS”) market. Over the next two years our four main programmes are planned to reach significant clinical or pre-clinical milestones and the progression made to date in all four of our programmes is reflected by the significant interest potential partners are expressing in them. M6G – for the treatment of post-operative pain Clinical studies show that morphine-6-glucuronide “M6G” in addition to having at least an equivalent analgesic effect and a longer duration of action than morphine (the current “gold standard” treatment of choice for the control of moderate to severe pain), may have a reduced tendency to cause side effects such as respiratory depression, nausea and vomiting. M6G started a pivotal Phase III clinical trial in Europe in 2005. Recruitment is ongoing and results from this study are expected in the second half of 2006. If this trial is successful CeNeS plans to complete negotiations for a European partnering deal. Our European partner would then be expected to complete the registration process to enable a European launch thereafter. A positive Phase III result from this trial will also significantly increase the value CeNeS will be able to obtain from a North American licensing deal. Independent marketing studies have confirmed that the potential peak market sales for M6G in post-operative pain could be approximately £200 million in the main European territories and the U.S. If M6G is successful in treating post-operative pain using the current i.v. formulation there is potential for further use in other pain indications such as chronic pain and also the epidural delivery of M6G. Such expansion would significantly increase the potential peak market sales of M6G. The Phase III study is being carried out at 30 centres in seven European countries in 428 patients suffering moderate to severe post-operative pain following surgical procedures such as hysterectomy or major gastrointestinal, bowel and urological surgery. Supportive clinical studies, such as Phase I drug distribution studies, are also being undertaken in parallel with this pivotal Phase III study. The Company’s clinical development team is continuing discussions with regulatory authorities in Europe to discuss the overall clinical development plan for M6G in relation to label claims. These discussions are investigating whether additional clinical studies would allow an extension of the planned M6G profile to also show that its use results in less respiratory depression than morphine at equi-analgesic doses. CeNeS market analysis suggests that this additional safety label claim would substantially increase the peak sales opportunity for M6G as a safer novel analgesic in both the European and the North American pain markets. 2005 also saw the successful completion of the additional pre-clinical work that was required by the Food and Drug Administration (“FDA”) for the U.S. market with a view to submitting an Investigational New Drug (“IND”) application in 2006. A detailed review has been undertaken of the likely clinical trials requirements in the USA for M6G development. CeNeS is scheduled to meet with the FDA in mid-2006 to seek consultation on a suitable Clinical Development Plan and to achieve an Investigational New Drug (IND) application in the USA later that year. Subject to these discussions with the FDA, it is now anticipated that M6G could enter into pivotal Phase III studies in the USA at an earlier date than previously planned. CeNeS is continuing to evaluate the strategy for the US development of M6G, but is encouraged by the potential of accelerating the US development time lines. Clarity of the USA clinical trial requirements is an important component of the M6G data package that will be considered by potential US partners in their evaluation of the M6G opportunity. In March 2006 agreement was reached with Innovata plc to acquire certain patent rights covering a proprietary synthetic method for the manufacture of its lead product M6G. Terms of the deal were not disclosed. CeNeS already has good patent protection around the synthetic route for M6G and also expects to receive ten years of data and market exclusivity in Europe from the date of first market approval. This agreement further strengthened M6G’s intellectual property position. CNS 5161 – for the treatment of neuropathic pain CNS 5161 is a blocker of the N-methyl-D-asparate (“NMDA”) ion channel and is a novel compound for the treatment of neuropathic pain. In June 2005 successful results were announced from a Phase IIa study of CNS 5161, a potent and selective NMDA antagonist, in neuropathic pain. In the study, which was designed to establish the therapeutic window of CNS 5161, the product was associated with a clear trend to improvement in pain levels and was well tolerated with no instances of the psychotomimetic side effects associated with some NMDA antagonists. This latter finding confirms CeNeS understanding that CNS 5161 occupies a unique position in its class. The Phase IIa study was a 48-patient, European multi-centre, double blind, cross-over, dose escalating, preliminary safety and efficacy study, comparing a single dose of CNS 5161 to placebo in order to establish a maximum tolerated dose of CNS 5161. Intractable chronic neuropathic pain patients of varied aetiology (such as diabetic neuropathy and post-traumatic neuropathy) were investigated in the study. In terms of pain relief, the study showed that 500ug of CNS 5161 was associated with a clear trend to improvements in pain levels (measured using a Visual Analogue Scale (VAS)) at two, six and twelve hours after the start of the intravenous infusion, when compared to placebo. The results were not statistically significant as was expected with small group sizes (12 patients per dose group) in a proof of concept study. The analgesic effects of CNS 5161, however, appeared to be demonstrated predominantly in the group of patients with diabetic neuropathy. Compared to placebo, the lowest dose of 125ug showed no effect on pain scores whilst the 250ug dose showed an improvement in pain scores that was most evident at 24 hours. This latter observation supports previous clinical findings with this compound. At all dose levels, CNS 5161 was well tolerated and demonstrated a safety profile similar to that observed in earlier clinical studies. To plan the next stage of CNS 5161’s development CeNeS has entered into a collaboration with Ergomed Clinical Research Limited to finalise the design and planning of Phase II trials of this novel NMDA. The trials will be designed to test the compound’s potential as a new treatment for diabetic and post-trauma neuropathic pain, opioid-refractory cancer pain and post-operative pain. The Company has also contracted the manufacture of supplies of CNS 5161 material sufficient for the next set of clinical trials. It is not currently planned to commence the next Phase II trials with CNS 5161 until the results of the ongoing pivotal Phase III study of M6G have been announced. In January 2005 our clinical development team successfully applied for and gained a Manufacturing Authorisation for Investigational Medicinal Products from the UK Medicines and Healthcare Products Regulatory Agency. CeNeS is now authorised to manufacture and release clinical trial products for use in the studies that it is conducting, in compliance with European directive 2001/20/EC. This EU legislation, also known as the Clinical Trials Directive, came into force in 2004 and governs the conduct of clinical trials across Europe. This is an important step in the development of CeNeS and demonstrates its commitment to the highest standards of Good Manufacturing Practice and Good Clinical Practice. Pre-clinical development update CeNeS continues to make good progress in the development of its earlier stage programmes and is greatly encouraged by corroborating external evidence that supports the potential to expand these programmes into significant new markets. CNS 7056X – short acting sedative CNS 7056X, a short acting sedative, is the lead compound of a series that was assigned to CeNeS from GlaxoSmithKline in November 2003. The pre-clinical development work is ongoing with the intention of filing an IND in the U.S. in 2006. CeNeS is planning to conduct the first proof of concept Phase I study in the U.S., a major potential market for short acting sedatives. The intellectual property position around CNS 7056X was recently strengthened when the European Patent Office granted the patent for a series of sedative compounds, including CNS 7056X. On the basis of very encouraging pre-clinical data, revealing a rapid onset and offset of sedative action and rapid metabolism by human liver samples, CeNeS is now evaluating the potential of CNS 7056X for the additional indications of the induction and maintenance of anaesthesia. Pre-clinical studies to evaluate the potential of CNS 7056X in these additional indications are being undertaken at The University of Strasbourg, the University of Adelaide and at a major pharmaceutical company. The evaluation will complete in the second half of 2006. Encouraging interest from anaesthetists in extending the development of CNS 7056X as an anaesthetic supports the additional use of CNS 7056X as an agent for the induction and maintenance of anaesthesia. This could double the potential market opportunity to over £400m. Propofol is used widely for the induction and maintenance of anaesthesia in the USA, Europe and Japan, and its sales during 2004 exceeded US$750 million (source: IMS Health). Whilst propofol is an extremely successful compound, its limitations include pain on injection and cardiovascular depression (lowering of heart rate and blood pressure). The pre-clinical profile of CNS 7056X suggests that it may overcome some of these limitations, and could offer a new paradigm for intravenous anaesthesia. The leading anaesthetist, Professor Pierre Diemunsch (Strasbourg, France) who has conducted pre-clinical studies on CNS 7056X, commented “CNS 7056X is a very interesting molecule with the desirable pre-clinical profile of a rapid onset and offset of sedative action and minimal cardiovascular depression. The control that this profile provides means that CNS 7056X has great potential for use not only as a short-acting sedative but also as an agent for the induction and maintenance of anaesthesia using the established regime of intravenous infusion in combination with an opiate.” COMT inhibitors for Parkinson’s disease Parkinson’s disease is the second most common neurodegenerative disease after Alzheimer’s disease. It affects approximately 1.5 per cent. of the global population over the age of 65, representing 4 million patients. L-DOPA (the precursor of dopamine) is the gold standard treatment for Parkinson’s disease. Catechol-O-methyltransferase (“COMT”) is an important enzyme that metabolises L-DOPA and dopamine and causes a significant depletion of L-DOPA thereby limiting its therapeutic efficacy. COMT inhibitors enhance the effectiveness of L-DOPA, which leads to significantly longer functional time each day for patients. However, existing COMT inhibitors have significant problems including causing liver toxicity, poor brain penetration and poor oral bioavailability which are thought to be due to the nitrocatechol chemical class to which they belong. CeNeS has identified novel series of COMT inhibitors using our leading edge understanding of the chemistry of Parkinson’s disease. The CeNeS COMT inhibitors are not nitrocatechols and have the potential to provide a significantly superior profile compared with current agents. Accordingly, their design profile includes the ability to act both centrally and peripherally as COMT inhibitors. This is an important feature as the current leading COMT inhibitor drug, a nitrocatechol, does not act centrally. A number of compounds are now being evaluated in the lead optimisation process with the target of identifying a pre-clinical development candidate in 2006. In addition to Parkinson’s disease, a number of new academic publications point to the potential use of a COMT inhibitor that acts in the brain to improve the profound cognitive deficits of schizophrenia. Schizophrenia is a debilitating mental illness characterised by disturbances such as hallucinations and delusions as well as a range of negative symptoms, including cognitive disturbances. Cognitive disturbances often prevent schizophrenia patients from readjusting to society and require patients to be under medical care for their entire lives. Despite the availability of a variety of current antipsychotic drugs with worldwide sales exceeding USD $12 billion, cognitive disturbances are poorly addressed by existing therapies and represent a large unmet medical need in schizophrenia therapy. CeNeS novel COMT inhibitors have the potential to address this unmet need. In a recent review of the area, the world-renowned psychiatrist, Professor Daniel Weinberger (NIMH, Bethesda, USA) made the following concluding comment “on theoretical and practical grounds, COMT is a prime candidate for ameliorating the cognitive deficits of patients with schizophrenia, and empirical data to support this are beginning to emerge.” Tunbridge EM, Harrison PJ, Weinberger DR. Catechol-o-Methyltransferase, Cognition, and Psychosis: Val(158)Met and Beyond. Biol Psychiatry. 2006 (Epub ahead of print). Strategy CeNeS has an experienced management team that is continuing to deliver on its stated goals and has a clear vision and strategy for the future. The Company has a strong discovery and development pipeline with the capacity to deliver significant shareholder value. The CNS market is one of the largest and fastest growing segments of the pharmaceutical market. By focusing on CNS opportunities with well-understood mechanisms of action, CeNeS is well positioned to deliver new products to neurologists, anaesthetists and pain specialists in order to improve the treatment of patients and to deliver significant returns to our investors. We shall continue to evaluate other opportunities which we believe will complement this strategy and further enhance shareholder. In the short term the successful development of M6G will enable us to drive the growth of the Company with the goal of becoming a focused specialty pharmaceutical business. The Board and management of CeNeS are committed to the development of the Company and are excited about the prospects for further significant success. Our flexible business model means we are well placed to take advantage of opportunities arising that will enhance shareholder value. Alan Goodman Neil Clark Chairman Chief Executive Financial Review Results of operations The loss for the year ended 31 December 2005 was £6.6 million (2004: £4.9 million). The increased loss is due to a planned increase in expenditure associated with the increased clinical development and discovery activities. Net cash and short-term investments as at 31 December 2005 was £8.5 million (2004: £14.3 million). Turnover from out-licensing activities was less than £0.1 million in the year ended 31 December 2005 (2004: less than £0.1 million). Research and development costs rose to £4.9 million (2004: £3.5 million) as a result of clinical trial costs associated with the M6G Phase III and CNS 5161 Phase II clinical trials. Administrative expenses for the year to 31 December 2005 increased to £3.1 million (2004: £2.4 million) including amortisation of goodwill of £1.0 million in the year to 31 December 2005 (2004: £1.0 million). Other operating income for the year ended 31 December 2005 of £0.2 million (2004: £0.1 million) includes rents receivable on property sublet in Irvine, Scotland. Net interest receivable for the year ended 31 December 2005 was £0.5 million (2004: £0.3 million). CeNeS has estimated that the research and development tax credit claim for 2005 will be £0.6 million. This amount has yet to be agreed with the HMRC. The amount receivable for 2004, which has yet to be agreed by the HMRC, is £0.5 million. The Company has received a payment on account of £0.2 million against the 2004 claim. HMRC enquiries into the amounts claimed for 2002 and 2003 have been concluded and final payments for those years have been received since the year end. Fixed assets The decrease in intangible assets to £6.5 million (2004: £7.5 million) is a result of goodwill amortisation of £1.0 million. Tangible fixed assets have increased to £36,000 (2004: £18,000). Debtors and Creditors Total debtors as at 31 December 2005 were £1.5 million (2004: £1.4 million). Creditors due within one year were £2.0 million (2004: £2.0 million). Creditors due after more than one year were £0.5 million (2004: £0.6 million). The Company has reviewed and recalculated the onerous lease provision of £1.0 million (31 December 2004: £0.9 million) which reflects the expected liability relating to the leases of premises in Scotland that are no longer required by the group. Of this provision, £0.5 million (2004: £0.6 million) is included in creditors due after more than one year and £0.5 million (2004: £0.3 million) is included in creditors due within one year. Cash resources Net cash and short-term investments as at 31 December 2005 were £8.5 million (2004: £14.3 million), comprising cash at bank and in hand of £8.5 million (2004: £4.3million) and short-term deposits of £nil (2004: £10.0 million). Net funds decreased by £5.8 million in 2005 (2004: increased by £6.5 million). The increase in 2004 included proceeds of £10.6 million raised under a placing and open offer in November 2004. |
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