PRELIMINARY RESULTS For The Year Ended 30 June 2005
Norwood Immunology Limited (‘Norwood Immunology’ or 'the Company') (AIM:NIM), the company focused on the rejuvenation of the immune system, today announces its preliminary results for the year ended 30 June 2005.
Operational Highlights
• Continued progress with US partner TAP Pharmaceutical Products, Inc. (TAP) and our principal investigators to progress our US human trials into the clinic. • IND application filed and accepted by the U.S. Food and Drug Administration (FDA) for the first US trial of the Company’s technology to rebuild the immune system for cancer patients receiving autologous (selfderived) bone marrow transplantation. The Company and its partners have been working to finalise the legal paperwork and complete the Institutional Review Board (IRB) approvals for this trial. These approvals have been completed and the Company now expects the first patient to be injected before the end of the calendar year. • Collaboration agreed with the University of Texas, M D Anderson Cancer Center, in Houston, for a FDA accepted clinical trial to determine whether an enhanced vaccine response can be achieved by using the Company’s therapy as an adjunctive immunology therapy with a melanoma vaccine used by M D Anderson. • Collaboration agreed with the Massachusetts General Hospital (MGH), in Boston USA, for a pre-clinical trial to examine whether the reactivated thymus, can create an immune system tolerant to donor tissue enabling a transplanted kidney to be accepted and survive without the need for long-term immunosuppressive drugs. • 11 patents were granted during the period. Financial Highlights
• The loss after tax for the year ended 30 June 2005 was A$5,514,022 (2004: A$8,115,418), approximately £2.3 million (2004: £3.1 million). • Research and development expenditure of A$2,022,701 (2004: A$3,255,029), approximately £0.9 million (2004: £1.2 million). • 2,500,000 shares issued on 27 April 2005 relating to the exercise of options; the total cash proceeds amounted to A$2,319,336, approximately £1.0 million. • Cash at 30 June 2005 was A$6,769,585 (2004: A$11,086,439), approximately £2.8 million (2004: £4.2 million). 1
· Basic loss per share of –A$0.045 (2004: –A$ 0.079), approximately –£0.019 (2004: –£0.030). All amounts expressed in pounds sterling have been converted, on a proforma basis at the 30 June 2005 rate of A$1:£0.442 (2004 A$1:£0.382).
Richard Williams, CEO of Norwood Immunology commented: ‘The last 12 months have been an important period following the admission of the Company to AIM and the raising of independent capital for the business at that time. During the year we have been focussed on our US clinical studies in cancer and vaccination enhancement and we were delighted to report that two IND applications relating to the use of the Company’s technology have been accepted by the FDA. We are now working towards enrolling our first patients on these trials. We have also recently announced a US preclinical transplantation tolerance trial. 2005/06 promises to be a busy year for Norwood Immunology as we continue to progress our US clinical trial programme’.
Lisa Baderoon, Mark Court, Mary-Jane Johnson, Buchanan Communications +44 (0)207 466 5000
CHAIRMAN'S STATEMENT
It is with great pleasure that we present Norwood Immunology’s preliminary results for the year ended 30 June 2005, following our admission to AIM on 30 June 2004.
Background
Norwood Immunology is focused on building immunity to improve people’s lives. It is developing and commercialising its technologies, which aim to rejuvenate and enhance the immune system through the re-growth of the thymus, improvements in bone marrow function and enhancement of T cell functionality. The thymus, a gland situated just above the heart, can be considered the core of the immune system, as it is responsible for the production of the majority of T cells. However, adults progressively suffer reduced T cell output as a result of the thymus atrophying after puberty, predominantly as a result of the effect of sex steroids on thymic and bone marrow function. The activity of existing T cells and quantity of naïve T cells being produced is central to the body’s ability to fight infections and damaged or abnormal cells, such as cancers. Paradoxically, many of the therapies for cancer in use today suppress the immune system thus reducing the body’s ability to recover from therapy and fight residual cancers.
Norwood Immunology has identified a number of clinical contexts in which rejuvenating the thymus and the immune system could confer significant clinical benefits on patients, using a class of drugs already in wide clinical use today (GnRH analogues -principally used in the treatment of prostate cancer and endometriosis). The new use of this drug for the rejuvenation of the immune system could potentially provide significant incremental sales opportunities. The main areas where development efforts are currently being focused include oncology, therapeutic vaccines and viral diseases, with longer-term plans for enhancing the treatment of autoimmune diseases, HIV/AIDS and tolerance of transplanted stem cells or organs.
Commercial Development
The financial year to 30 June 2005 has been an important period for Norwood Immunology following the admission of the Company to AIM in June 2004 and the raising of independent capital for the business.
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During the year the Company has been focusing on its US clinical and pre-clinical trial programs to develop the Company towards our key milestones. We have been working closely with our US partner TAP Pharmaceutical Products, Inc. (“TAP”) and our principal investigators to progress our US human trials into the clinic. These clinical trials are intended to obtain publications and then potential regulatory approval for the new indications for our licence partner’s drug, Lupron Depot®. In addition, since 30 June 2004, eleven additional patents have been granted across the Company’s six patent families. Currently the Company’s patent portfolio consists of seventy- eight pending applications and thirteen granted applications.
We are pleased to report that since the admission of the Company to AIM, significant progress has been made in developing our US clinical trials.
We announced in December 2004, that TAP filed an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) in connection with the Company’s first autologous (self-derived) bone marrow transplantation (BMT) trial in the USA. This cancer trial is looking at how to rebuild the immune system for cancer patients requiring BMT following chemotherapy/radiotherapy. In February 2005 this IND was accepted by the FDA. This trial, which will have as its principal investigator Dr. Richard Champlin, at M.D. Anderson Cancer Center in Houston, Texas, USA, is being conducted by a consortium of leading clinicians and pre-eminent institutions in the field of cancer including the Dana-Farber Cancer Institute and the University of Minnesota. This consortium is led by Dr. Lee Nadler, of the Dana-Farber Cancer Institute Harvard Medical School and is co-funded by the National Cancer Institute and the National Institute of Allergy and Infectious Diseases. Our second US BMT trial in allogeneic (donor-derived) BMT patients has a similar protocol and is planned to follow the autologous trial.
Subsequent to the year end, in August 2005, the Company signed a collaboration with the Massachusetts General Hospital (MGH), in Boston USA, for a pre-clinical trial to examine whether a transplanted donor kidney will be accepted as “self” and survive without the need for long-term immuno-suppressive drugs. This trial will test whether the thymus, having been reactivated by the Company’s technology can create a new immune system that is tolerant to that donor, particularly in the presence of donor haemopoietic stem cells (the stem cells that form blood and immune cells).
In October 2005 the Company signed a collaboration with the University of Texas, MD Anderson Cancer Center, in Houston, for a clinical trial to determine whether an enhanced vaccine response can be achieved by using the Company’s therapy to increase thymic activity and the output and function of T-cells via sex steroid suppression using Lupron Depot®. The trial, which will have as its principal investigator, Dr Patrick Hwu, of the Department of Melanoma Medical Oncology at the M D Anderson Cancer Center, will involve Lupron Depot® being administered as an adjunctive immunology therapy with an experimental melanoma vaccine used by Dr Hwu so as to enhance the immune responsiveness to that vaccine.
The Company’s first trial, on BMT patients in two cancer centres in Melbourne is now fully recruited and final results are expected in the six months to June 2006. Encouraging interim results have already been published as an Abstract at the American Society of Haematology meeting in the USA in late 2004.
In addition to the progress reported on the above cancer and transplantation trials, Norwood Immunology is also continuing to discuss additional studies of the immune system looking at the output of new T-cells and vaccine response to antigens, as well as in HIV/AIDS, although these additional trials are subject to designing detailed protocols and securing additional or third party funding.
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Corporate Development
Norwood Immunology was admitted to London Stock Exchange’s AIM on 30 June 2004 at a placing price of 38 pence per share with 121,411,463 issued shares. On 27 April 2005, the Company issued 2,500,000 shares relating to the exercise of options for total cash proceeds of A$2,319,336.
The loss after tax for the year ended 30 June 2005 was A$5,514,022 (2004: A$8,115,418), approximately £2.3 million (2004: £3.1 million). All amounts expressed in pounds sterling have been converted, on a proforma basis, at the 30 June 2005 rate of A$1:£0.442 (2004 A$1:£0.382). We have maintained a careful control of our operational costs as we use the funds raised at the time of our admission to AIM, and from the subsequent issue of shares relating to the exercise of options, to advance the Company’s clinical development plans. These clinical plans are designed to enable the Company to obtain publications and then potential regulatory approval for the new indications for our licensing partner’s drug.
In addition to our US clinical development and commercialisation program, Norwood Immunology is pursuing commercial licences for the rest of the world markets in immunology and related therapeutic areas. Norwood Immunology is also open to consider partnering or mergers and acquisitions with projects or companies to secure development technologies, marketed products and/or marketing and development companies. These acquisitions would aim to enable a further broadening of the technology base and bring products in both immunology and related therapeutic fields.
The Board would like to express its appreciation to all our shareholders for their continued support throughout the year and to the employees of the Company for their dedication and the progress achieved. We look forward to continuing to build further value in the Company through the progression of our clinical trial program over the coming year and expect to report further progress with our interim results due in March 2006.
Rolf Stahel Chairman October 2005
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PROFIT AND LOSS ACCOUNT Year ended 30 June 2005 Note 2005 AUD 2004 AUD Other operating expenses (net) Share-based compensation charge (5,795,913) - (7,845,355) (290,000) Total operating expenses (net) (5,795,913) (8,135,355) OPERATING LOSS Finance income (net) (5,795,913) 281,891 (8,135,355) 19,937 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION Tax on loss on ordinary activities (5,514,022) - (8,115,418) - RETAINED LOSS FOR THE FINANCIAL YEAR (5,514,022) (8,115,418) Loss per share Basic 3 (0.045) (0.079) Diluted 3 (0.045) (0.079) All activities derive from continuing operations.
There no recognised gains and losses for the current financial year and preceding financial year other than as stated in the profit and loss account.
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BALANCE SHEET 30 June 2005
Note 2005 2004 AUD AUD
FIXED ASSETS
Tangible assets 8,858 4,581
CURRENT ASSETS
Debtors 195,615 124,084 Cash at bank and in hand 6,769,585 11,086,439
6,965,200 11,210,523
CREDITORS: amounts falling due within one year
(1,445,525) (2,423,945)
NET CURRENT ASSET 5,519,675 8,786,578
TOTAL ASSETS LESS CURRENT LIABILITIES
5,528,533 8,791,159
CAPITAL AND RESERVES
Called up share capital 27,330,261 25,078,865 Profit and loss account (21,801,728) (16,287,706)
TOTAL EQUITY SHAREHOLDERS' FUNDS
5,528,533 8,791,159
CASH FLOW STATEMENT Year ended 30 June 2005 Note 2005 2004 AUD AUD Net cash outflow from operating activities 4 (6,850,653) (5,790,383) Returns on investments and servicing of finance 5 299,074 19,937 Capital expenditure and financial investment 5 (7,014) (4,891) Cash outflow before financing (6,558,593) (5,775,337) Financing 5 2,241,739 15,861,396 (Decrease)/increase in cash in the year 6 (4,316,854) 10,086,059
NOTES TO THE FINANCIAL INFORMATION
1 Basis of preparation
The figures and financial information for the year ended 30 June 2005 do not constitute the statutory financial statements within the meaning of section 240 of the Companies Act 1985 but are derived from the audited financial statements.
The financial information for both the years ended 30 June 2005 and 30 June 2004 has been extracted from the audited financial statements for the year ended 30 June 2005. The auditor’s report on those accounts was unqualified.
The financial information in this announcement has been prepared on the basis of UK Generally Accepted Accounting Principles and the accounting policies as set out in the most recently published set of annual financial statements. The preliminary results have been prepared using accounting policies consistent with those adopted in the audited financial statements for the year to 30 June 2004.
The audited statutory financial statements for the year ended 30 June 2005 are being distributed to shareholders from today, 13 October 2005, and are available from the Company’s website www.norwoodimmunology.com.
This preliminary announcement was approved by the board of Norwood Immunology Limited on 13 October 2005.
2 Going concern
The Company is an emerging pharmaceutical business and as such expects to be cash absorbing until its technologies are commercialised.
The Company does not have sufficient cash resources to fund its current level of activities for at least the next 12 months, but the directors have reasonable expectation that the Company can raise additional cash resources during the next 12 months for this purpose, and have therefore prepared these financial statements on a going concern basis.
In the event that additional funds are not secured, the Company would seek to reduce its overheads and other costs and further delay, reduce or eliminate clinical trial developments which are not externally funded by partners.
Whilst the directors are currently uncertain as to the outcome of the fundraising process, the directors have formed a judgement at the time of preparing the financial statements that they believe that it is appropriate for the financial statements to be prepared on the going concern basis as the existing funds and the actions being undertaken should enable the Company to continue for at least twelve months after approval of the accounts.
For this reason the directors continue to adopt the going concern basis in preparing the financial statements. The financial information does not contain any adjustments that would arise if the financial information was not drawn up on a going concern basis.
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3 Basic and diluted loss per ordinary share
The calculations of earnings per share are based on the following losses and numbers of shares.
2005 2004 AUD AUD
Retained loss for the financial year: (5,514,022) (8,115,418)
No. No. Weighted average number of shares:
For basic earnings per share 121,979,956 103,635,651 Exercise of share options --
For diluted earnings per share 121,979,956 103,635,651
FRS 14 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. The loss and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share, as the exercise of share options would have the effect of reducing the loss per ordinary share and is therefore not dilutive.
4 Reconciliation of Operating Loss to Operating Cash Flows
2005 2004 AUD AUD
Operating loss (5,795,913) (8,135,355) Share based compensation charge -290,000 Depreciation 2,737 310 Increase in debtors (71,531) (117,164) (Decrease)/increase in creditors (985,946) 2,171,826
Net cash outflow from operating activities (6,850,653) (5,790,383)
5 Analysis of Cash Flows
2005 2004 AUD AUD
Returns on investments and servicing of finance
Interest received 307,286 20,886 Interest paid (8,212) (949)
Net cash inflow 299,074 19,937
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Capital expenditure and financial investment Purchase of tangible fixed assets (7,014) (4,891) Net cash outflow (7,014) (4,891) Financing Issue of ordinary share capital (net) (Decrease)/increase in short term borrowings 2,251,395 (9,656) 11,753,515 4,107,881 Net cash inflow 2,241,739 15,861,396 6 Analysis and Reconciliation of Net Funds 1 July 2004 AUD Cash flow AUD 30 June 2005 AUD Cash at bank and in hand Debt due within 1 year 11,086,439 (9,656) (4,316,854) 9,656 6,769,585 - Net funds 11,076,783 (4,307,198) 6,769,585 2005 AUD 2004 AUD Increase in cash in the year Cash (outflow)/inflow from decrease/(increase) in debt financing (4,316,854) 9,656 10,086,059 (4,107,881) Change in net funds resulting from cash flows Issue of equity for debt (4,307,198) - 5,978,178 10,621,850 Movement in net funds in year Net funds at beginning of year (4,307,198) 11,076,783 16,600,028 (5,523,245) Net funds at end of year 6,769,585 11,076,783 END
NAL Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
