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York Pharma: Interim Results for the Six Months Ended 31st March 2006 Hitchin, UK, 3 May 2006 - York Pharma plc, the AIM-listed (AIM:YRK) strategic acquirer, developer and marketer of pharmaceutical products in the field of dermatology, is pleased to announce its interim results for the Six Months Ended 31st March 2006. Highlights
Chief Executive’s Summary: We have made strong progress in all areas of the business in the first half of the current financial year. We await receipt of the first regulatory approval for our lead product Abasol™ and are preparing actively for its commercialisation later this year. Sabarep™ and Vampex™ have entered Phase II clinical development and all other programmes are on track as set out in detail in the Chairman’s and Chief Executive’s statement. During the period, the business delivered on its targets and ended with a positive cash position. We are confident that we will meet our major value creating milestones in the second half of the current financial year. Chairman’s and Chief Executive's statement Corporate Objectives York Pharma is a speciality pharmaceutical company. Our stated objective is the discovery, acquisition, development and commercialisation of novel prescription dermatological products. We are committed to bringing to both patients and healthcare professionals, effective and safe medicines of the highest quality for the superior treatment of diseases of the skin. Financial Information The interim results for the six months ended 31 March 2006 are in line with management expectations and show a pre and post tax loss of £2,027,856 (2005 £778,387) for the period. This reflects the Company’s investment in the development of its product portfolio, in implementing its regulatory strategy and in planning for the first commercialisation of Abasol™ in the United Kingdom. Product Selection, Development and Regulatory Strategy In light of the headlines in recent weeks surrounding the conduct of clinical trials and the development of new pharmaceutical products, we felt that shareholders would appreciate a reiteration of our corporate strategy, in what is essentially the engine room of the business. The Company’s focus is on the development and commercialisation of medicinal products for the treatment of skin diseases. The expertise and experience of its management and employees garnered over some decades lie in this therapy area. Dermatology provides an identifiable, specialist market with a well-recognised range of unmet therapeutic needs. Drug treatment of skin conditions, especially in the commonest mild or moderate forms of the diseases, is usually possible by local application to the affected area. The Company’s attention to developing topical, rather than systemic, medicines reduces the risk of development failure from unexpected toxicity or side-effects remote from the site of application. York Pharma’s low-risk development strategy is also characterised by the mix of introducing new active drugs, such as abafungin (Abasol™), and repositioning established agents, like carbenoxolone (Vampex™), in a different therapeutic setting. Both approaches are novel and offer high potential commercial value. Each project benefits from careful selection to lessen development risk. New molecules are essential to the progress of successful antimicrobial therapy as resistance blunts the effectiveness of the old ones. To compete in this high value market, the Company’s selection of abafungin was influenced not only by its spectrum of activity but also by the substantial foundation of safety data generated with the drug. The safety profile of carbenoxolone, the active component of Vampex™, has also been established from several decades of registered clinical usage as a cytoprotectant. Nevertheless, given the increasing and varying demands of regulatory authorities around the world, York Pharma’s attitude to its product dossiers is dynamic and constantly guided by independent expert regulatory consultants in the major territories. The Company recognises the higher risks inherent in the development of cancer projects such as YP004, which is directed at the treatment of malignant melanoma and other susceptible tumours. We intend to proceed with early stage development within our Vitamin A Metabolic Pathway (VAMP) research programme and then out license YP004 to a third party to complete the development using its own resources. This will both avoid the exposure of York Pharma to the major costs of development and generate early cash for the Company in licensing fees and milestone payments. In summary, York Pharma’s development strategy is designed to extract high commercial value from its R&D effort while minimising the risks of development or technical failure: · by focusing on unmet clinical needs in dermatology · by concentrating on developing topical, rather than systemic, formulations · by adopting a mix of new active substances and established drugs, for which there is a large body of safety data
This strategy is underpinned by a portfolio of patents protecting the projects. At the same time, York Pharma is operating in a therapeutic field which is unlikely to bring the Company into head-to-head competition with “Big Pharma”. Business Review Our pipeline comprises currently seven products/projects. Products span pre-registration to pre-clinical status, and cover many of the key therapeutic areas within prescription dermatology:
Our lead product, Abasol™, will operate in the antifungal market. In addition, the Company has innovative dermatology products/projects for the treatment of atopic eczema/irritant dermatitis, psoriasis, acne and malignant melanoma, a skin cancer associated with a high rate of mortality. Excluding malignant melanoma, these combined therapeutic markets make up over 75% of the total dermatology market, valued at approximately US$10.4 billion. In addition, malignant melanoma is valued at US$437m currently and is expected to grow to approximately US$1.1 billion by 2013. We have a robust and strategically focused dermatology portfolio of innovative products that is well advanced, carries relatively low-risk and addresses significant unmet market needs. Whilst still subject to rigorous development hurdles, the development of medicines applied to the skin generally poses fewer risks than the development of systemic medicines to which most of the body’s major organs become exposed via the circulatory system. Intellectual Property The Company owns and controls a family of twelve patents that protect York Pharma’s current R&D projects. They include additional IP created since September 2005 that has both enhanced the Company’s exclusive position and provided further protection to our ongoing investment in York Pharma’s products and technologies. We have also invested in trade marks. The Abasol™ mark is being registered in all territories where commercialisation is anticipated. YP001 has now entered Phase II development en-route to commercialisation and the Sabarep™ mark has been applied for internationally to protect that product. In addition, the first product to emerge from the YP003 project, a vitamin A metabolic pathway (VAMP) inhibition programme, has recently completed its initial Phase II clinical study and will be known as Vampex™. Current Operations York Pharma plc currently has four operational subsidiaries; York Pharma (R&D) Limited, York Pharma (UK) Limited, York Pharma GmbH and York Pharma KK. Products/Projects Abasol™ Our lead product Abasol™ (abafungin), is a totally new therapeutic molecule with a novel mode of action. It offers features and benefits that York Pharma believes will give it a significant competitive advantage in the important topical antifungal market. The antifungal market in which Abasol™ will compete is valued at approximately US$2.4 billion, about 23% of the overall dermatology market. Though the initial indication for Abasol™ is for the treatment of dermatomycoses (fungal infections of the skin), we hope to expand the indications to include fungal infections of the nails (onychomycoses). The broad antimicrobial spectrum of abafungin suggests potential for further indications. These may include vaginal candidiasis, vulvovaginitis (especially where certain bacteria are also implicated), dermatitis associated with various skin bacteria and possibly some forms of acne. We have completed manufacturing scale up for commercialisation of the product and are now proceeding towards securing marketing authorisations in Europe, USA and Japan. Our first regulatory approval and commercialisation in Europe remains on target for calendar 2006. Sabarep™ (YP001) The first therapeutic product from York Pharma’s Skin Barrier Repair Technology platform is Sabarep™, known previously as YP001. This is a product for the prevention of “flares” in atopic dermatitis/eczema, a disease characterised by intense itching, scratching, redness and dryness of the skin. Atopic eczema affects 15 to 25% of children and 2% of adults and causes an enormous amount of suffering at a crucial time in a child’s development. A published medical review has revealed recently that approximately two-thirds of children first seen with clinically defined atopic dermatitis are not immunologically atopic or allergic - traditionally believed to be a cause of the symptoms. This supports strongly York Pharma’s earlier discoveries surrounding skin barrier dysfunction and its role in the development of atopic eczema. Changes in genes that regulate the thickness and function of the skin barrier have been identified. The physical sites predisposed to atopic eczema are also those that have a relatively thin skin barrier such as the face, inside flexor of the arm, behind the knees and eyelids. This underlines the relevance of the skin barrier in the disease. To date, in vitro and in vivo data have confirmed that Sabarep™ (YP001) has substantial anti-protease activity and exerts a significant beneficial effect in restoring skin barrier function. Sabarep™ will be marketed as a topical cream and entered Phase II clinical testing in December 2005. Initial results are expected in mid-2006. YP002 YP002 will be marketed as a point of care (POC) diagnostic test for identifying individuals having a dysfunctional skin barrier that would benefit from using a skin protease inhibitor (SPI)-based barrier repair product such as Sabarep™. The YP002 product arises from important discoveries made by York Pharma scientists into the genetics of eczema and the resulting abnormal composition of proteins that are associated with the impaired skin barrier. The test will enable those having an impaired skin barrier to take positive therapeutic steps prior to the cascade of events resulting in overt clinical skin disease. Importantly, it will also provide a valuable tool for clinicians and patients to monitor the response to Sabarep™ or other skin barrier therapy. Vampex™ (YP003) Psoriasis affects approximately 2% of the world’s population and the market for anti-psoriatic medicines is valued at around US$630 million. Independent analysts have projected it to grow to US$2.0 billion by 2008. Approximately 85% of patients have a mild to moderate form of the disease that is not appropriate for treatment with the newer biologics due to their safety profile, their associated high cost and their administration by injection. Under the YP003 programme, York Pharma scientists discovered a new therapeutic target and rationale for the treatment of psoriasis named vitamin A metabolic pathway (VAMP) inhibition. This research has led the Company to the discovery of a potent inhibitor of the therapeutic target. York Pharma’s anti-psoriatic product, Vampex™ (YP003), is a small molecule, carbenoxolone, that will be formulated as a gel suitable for the topical management of psoriasis. Carbenoxolone is a known medicinal product on which the Company has generated new patents. These cover its new use, providing the necessary exclusivity to commercialise in dermatology. Furthermore, in March 2006, the Company announced it had filed new patents further extending its exclusive position to include a novel class of VAMP Inhibitor drugs. Data generated by the Company through in vitro and in vivo tests has confirmed the ability of Vampex™ (YP003) to significantly alter the abnormal hyperproliferation of epidermal cells, characteristic of the disease. By inhibiting the vitamin A metabolic pathway (VAMP) that is over-active in psoriasis, Vampex™ (YP003) triggers cells that are abnormally proliferating to stop dividing and undergo final differentiation, a principal therapeutic objective in psoriasis. The present gold standard therapy for mild to moderate psoriasis consists of the vitamin D analogues, such as calcipotriol. Vampex™ (YP003) has recently completed a Phase IIa “proof of concept” clinical trial in psoriatic patients. The Phase IIa study was double-blind and randomised within patients. For each patient, three medications: the test medication, Vampex™ (2% carbenoxolone gel), placebo and 0.05% calcipotriol cream (reference product) were applied to selected psoriasis plaques daily for four weeks. Whilst the carbenoxolone formulation was not optimised, in terms either of dosage form or concentration, this product showed favourable signs of clinical effect. Its activity profile demonstrated clinical activity according to the guideline set by the European Medicines Agency (EMEA); showing an improvement of at least a 50% reduction in an index of redness, scaling and thickness of plaques. Histological examination further supported these positive results. There were no adverse reactions to carbenoxolone. The profile of Vampex™ and the results from this study give a provisional indication that Vampex™ will be an effective anti-psoriatic agent. It is well differentiated from its competitors by having a lower risk of skin irritancy, a more favourable safety profile and potentially improved efficacy that is not diminished with ongoing administration. YP004 Although YP004 is at the pre-clinical programme stage, it has a major potential in the treatment of melanoma. York Pharma scientists have identified a potentially selective drug target in melanoma skin cancer cells. YP004 aims to target a cell-surface receptor found by York Pharma to be over-expressed in melanoma cells and possibly in a variety of other cancers. Inhibition of the receptor causes an important and marked shift from a state of ongoing proliferation to a state of terminal differentiation in the cells targeted by the therapy. In February 2006, York Pharma reported new data which confirmed malignant melanoma as a focus for York Pharma’s YP004 skin cancer programme. In malignant melanoma, the cancer cells produce a significantly higher density of the receptor, which is involved in the cellular uptake of retinol (vitamin A), than in normal, non-cancerous melanocytes. This discovery supports the potential for YP004 to provide a treatment that preferentially targets the cancerous cells, a key objective for therapy. The same cell-surface receptor has also been identified in renal cell carcinoma. As a result of this observation, York Pharma’s scientific team believes that the eventual novel anti-proliferative agent may have a wider role in the treatment of cancers extending beyond those involving the skin. The findings present an exciting opportunity for the development of a novel therapeutic treatment of malignant melanoma and potentially other cancers. York Pharma has filed for patent protection internationally in relation to these scientific findings. Recent reports predicting a trebling in skin cancer over the next 30 years illustrate the growing problem which YP004 may address. The prevalence of malignant melanoma is rising faster than any other cancer. It is associated with 77% of all deaths from skin cancer, killing 1,700 and 7,800 people annually in the UK and USA respectively. There are 7,300 and 51,400 new cases of melanoma diagnosed each year in the UK and USA respectively, a condition for which new therapeutic treatments are needed urgently. This discovery marks an important step along the road to producing a therapeutic agent against a devastating cancer that regrettably is increasing in incidence. York Pharma has developed a unique understanding and patent exclusivity over the novel use of a receptor involved in cellular transport of vitamin A as a treatment for malignant melanoma. Our achievements make the Company ideally placed to both develop and partner our scientific and intellectual property in the field of skin and, potentially, other cancers. YP005 Sphingosine-1-phosphate (S1P) is a pre-clinical product which may have potential in hyperproliferative skin disorders, such as acne. S1P has a novel dual mechanism of action: preventing the overproduction of corneocytes at the entrance of sebaceous follicle ducts, believed to be a primary cause of acne, as well as having complementary anti-inflammatory properties. The profile of S1P has the potential to become a breakthrough treatment for this commonly occurring skin condition. York Pharma is collaborating with the Freie Universität Berlin (one of the world’s leading centres for dermatological research) on this programme. Research funding for the pre-clinical phase of development has been applied for under a German government bioscience programme. YP006 YP006 is aimed at the use of Abasol™ in onychomycoses – fungal infections of the nails and nailbed – a common and chronic condition. Current topically applied treatments produce only low cure rates and lengthy treatment regimens. Oral treatments that offer a higher degree of efficacy are associated with toxicity concerns that limit their use in what is not a life threatening condition. Abasol™ has the potential to offer a local treatment which is both safe and effective, with an important competitive advantage. Abasol™ not only kills fungus in the actively growing phase, it also kills the resting cells, a feature not associated with existing treatments. Incomplete clearance of resting cells by treatment can result in incomplete cures or result in them later becoming active, thereby restarting the cycle of recurrent infection. York is currently evaluating the most appropriate dosage form for delivering Abasol™ into and through the nail. Once the dosage form has been selected and validated, the product will proceed immediately into Phase II human studies. People An announcement on 30 March 2006 confirmed Ian Harvey as our full-time Finance Director effective 1 October 2006. Having worked with us on a part-time basis since our flotation, his knowledge and experience have been invaluable in our formative phase of development, and his planning for our future growth has been impressive. His commitment to York Pharma has always been unquestionable and greatly appreciated. Having his full time and committed focus will be a great boost for the business and the team, particularly during the final quarter of the year when we are planning to launch our lead product Abasol™ in its first market. We are also delighted with the further strengthening of the York Pharma plc board by the appointment of an additional Non-Executive Director, Dr Allan Salem. Dr Salem has an MA, DPhil in Biochemistry and Microbiology from Wadham College, Oxford. He also lectured in microbiology at the University of Sheffield, before embarking on a long and distinguished career in the pharmaceutical industry. Since 2002, Dr Salem has operated as a pharmaceutical industry consultant for a number of international companies. We are delighted that Allan Salem has joined the board of York Pharma plc; his R & D expertise coupled with his international business development skills will be invaluable in helping to guide the board’s planning and decision making processes. The Future The Company has made substantial progress over the last six months, having advanced all products/projects along the development path and closer to commercialisation. We are preparing for our first regulatory approval and commercialisation of Abasol™, and are awaiting the results of Phase II testing of Sabarep™ (YP001) in mid-2006. In addition, Vampex (YP003) shows great promise as a novel new treatment for psoriasis and YP004 could herald a major breakthrough in the treatment of one of the most aggressive skin cancers. The fair value of our business should be recognised and unlocked as we achieve further milestones to the benefit of all our shareholders and employees. It has taken great effort and dedication from the York Pharma team, our advisers and supporters to make major progress during the period. We thank them all for their past efforts and look forward with great anticipation to the remainder of the current financial year. Chairman Chief ExecutiveFor more information please contact:
Notes to editors:
About York Pharma plc York Pharma is an AIM-listed strategic acquirer, developer and marketer of pharmaceutical products in the field of dermatology. Its portfolio now embraces skin diseases that make up more than 70% of the global $10bn dermatology market, and its lead product, Abasol for the treatment of fungal infections of the skin, has been filed for European marketing approval. For further information, please go to www.yorkpharma.com
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