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Ablynx

27.02.2013 ABLYNX ANNOUNCES 2012 FULL YEAR RESULTS

Year of strong operational and financial progress
GHENT, Belgium, 27 February 2013 - Ablynx [Euronext Brussels: ABLX] today announced its consolidated results for 2012, which have been prepared in accordance with IFRS as adopted by the European Union.
Operating highlights
First Nanobody®, ALX-0171 (anti-RSV), successfully delivered directly into the lungs using a nebuliser
Second clinical proof-of-concept for Nanobodies achieved with the anti-IL-6R product, ALX-0061, in RA patients
Three pre-clinical candidates selected as part of the Strategic Alliance with Boehringer Ingelheim and FTE payments under that Alliance extended by two years
Boehringer Ingelheim filed a Clinical Trials Application for a Nanobody as part of the Alzheimer’s collaboration
Progress in the Merck Serono collaboration with the selection of a second pre-clinical candidate, ALX-0751 in oncology
New partnership signed with Merck & Co for the discovery of Nanobodies targeting a voltage-gated ion channel and an option to a second undisclosed target
Entered into a feasibility study with Algeta to explore the use of Nanobodies in radio-immunotherapy for oncology
Strengthened the Board of Directors with the appointment of two key industry experts (ex-Amgen and ex-GSK)
Financial highlights
Revenue growth of 22% to €26.7M (2011: €21.9M)
Cash-in increased by 28% to €36.5M (2011: €28.5M)
Operating expenses decreased by 16% to €56.3M (2011: €66.7M)
Net loss for the year reduced by 35% to €28.5M (2011: €43.9M)
Net cash burn well controlled at just €21.1M
Strong year-end financial position of €62.8M in cash, cash equivalents, restricted cash and short-term investments
Post year end highlights
Promising 24 week Phase II efficacy and safety results with the anti-IL-6R Nanobody, ALX-0061, in patients with RA
Entered into a research collaboration with Spirogen to evaluate the potential of toxin-Nanobody drug conjugates in cancer
Commenting on the 2012 results, Dr Edwin Moses, Chairman and CEO of Ablynx, said:
“2012 was an excellent and rewarding year for Ablynx across all areas of our business. We were able to further demonstrate the power and broad applicability of the Nanobody platform, including the opportunity to deliver Nanobodies directly via the pulmonary route, the potential to design best-in-class molecules and the capability to address difficult disease targets in areas where conventional technologies have not yet been successful. The progression of our existing partnerships and the start of new collaborations are a further endorsement of our achievements to date. During the coming year, we expect important new partnering deals and advances in existing collaborations as some of our partnered programmes move into clinical development. We remain committed to building shareholder value.”
About Ablynx Ablynx is a biopharmaceutical company engaged in the discovery and development of Nanobodies®, a novel class of therapeutic proteins based on single-domain antibody fragments, for a range of serious human diseases, including inflammation, haematology, oncology and pulmonary disease. Today, the Company has approximately 25 programmes in the pipeline and five Nanobodies at clinical development stage. Ablynx has on-going research collaborations and significant partnerships with major pharmaceutical companies including Boehringer Ingelheim, Merck Serono, Novartis and Merck & Co. The Company is headquartered in Ghent, Belgium. More information can be found on

www.ablynx.com.
For more information, please contact Ablynx:
Dr Edwin Moses
Chairman and CEO
t: +32 (0)9 262 00 07
m: +44 (0)7771 954 193 / +32 (0)473 39 50 68
e: edwin.moses@ablynx.com
Marieke Vermeersch
Associate Director Investor Relations
t: +32 (0)9 262 00 82
m: +32 (0)479 49 06 03
e: marieke.vermeersch@ablynx.com
@AblynxABLX
M:Communications:
Mary-Jane Elliott, Amber Bielecka, Claire Dickinson
t: +44 207 920 2333
e: ablynx@mcomgroup.com
Certain statements, beliefs and opinions in this press release are forward-looking, which reflect the Company’s or, as appropriate, the Company’s directors’ current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Forward looking statements contained in this press release regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. As a result, the Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based. Neither the Company nor its advisers or representatives nor any of its or their parent or subsidiary undertakings or any such person’s officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this press release or the actual occurrence of the forecasted
developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release.
Results overview
Revenues were €26.7 million (2011: €21.9 million) comprising up-fronts, milestone payments, payments for full-time equivalents and grants. Cash-in for the period of €36.5 million (2011: €28.5 million) showed a 28% growth compared with 2011. Total research and development costs were €46.9 million (2011: €56.3 million). General and administrative expenses remained well under control at €9.4 million (2011: €10.4 million). The loss from continuing operations (before tax and net finance income) decreased by 35% to €29.8 million (2011: €45.5 million). The net loss for the period was €28.5 million (2011: €43.9 million). The Company ended the year with €62.8 million in cash, cash equivalents, restricted cash and short-term investments.
Operational review
Pipeline update
At the end of 2012, Ablynx had five wholly-owned Nanobodies in the clinic, three in Phase II and two in Phase I clinical development.
The anti-IL-6R Nanobody, ALX-0061, was the Company’s second Nanobody to achieve clinical proof-of-concept in patients with rheumatoid arthritis (RA). It is believed that ALX-0061 could become a best-in-class RA therapeutic due to its improved efficacy, safety, potential for less frequent dosing and the faster onset of remission.
The anti-TNFα Nanobody, ozoralizumab (ATN-103), reported good 48 week open-label extension data from a worldwide Phase II study in RA patients, which demonstrated that it could have the potential for individualised treatment - a possible new approach in TNFα-targeted therapy.
Patient recruitment in the Phase II TITAN trial with caplacizumab, the anti-vWF Nanobody (ALX-0081/ALX-0681) to treat acquired thrombocytopenic purpura (TTP), progressed further and the goal is to complete recruitment of 110 patients by the end of 2013.
The first inhaled Nanobody (anti-RSV, ALX-0171) was successfully administered directly into the lungs of humans using a nebuliser, which is potentially a major breakthrough in the alternative administration of biological drugs and opens up the possibility of new ways to treat pulmonary diseases. ALX-0171 could become a first-in-class therapy to treat respiratory syncytial virus (RSV) infections, an area with high unmet medical need in infants as well as the elderly population.
Partnerships update
During the year, Ablynx’s existing partnering activities continued to make very encouraging progress.
Boehringer Ingelheim extended their FTE payments by a further two years, as part of the Strategic Alliance, during which time the primary focus will be to advance the existing Nanobody programmes towards the clinic. A second pre-clinical candidate in oncology was also selected as part of this on-going collaboration, with now a total of three pre-clinical candidates being in development. Boehringer Ingelheim filed a Clinical Trials Application, as part of the Alzheimer’s disease collaboration, with the current expectation being that a Phase I trial of this Nanobody programme will start in 2013.
Ablynx’s partnership with Merck Serono also advanced further with the selection of a second pre-clinical candidate, ALX-0751, in the field of oncology.
Ablynx added another flagship pharmaceutical company to its list of partners with a deal with Merck & Co., the world’s third largest pharmaceutical company. The partnership will focus on the discovery and development of Nanobodies against a voltage-gated ion channel, with the option to develop Nanobodies against a second non-disclosed target.
The first partnered programme with Novartis, TAS266 (anti-DR5), entered Phase I clinical development in cancer patients in 2012 but was terminated later the same year.
Ablynx remains committed to working with external partners to evaluate the potential of its Nanobody platform in a number of different ways. A further example of this strategy is the recently announced research collaboration with Algeta to discover and develop novel radioisotope based cancer therapeutics using target specific Nanobodies.
Corporate developments
Ablynx has strengthened its Board of Directors with the appointment of key industry experts as non-executive Directors of the Company: Dr. Roger Perlmutter, who spent more than a decade as Executive Vice President, Research and Development, at Amgen Inc, the world’s largest biotechnology company; and Dr. Russell Greig, who has held a number of executive positions at GSK, including President of Pharmaceuticals International and Senior Vice President Worldwide Business Development. The ability of Ablynx to attract such high-level Board members is a testament to the strength of the Company’s technology and product pipeline. Jim Van heusden and Mats Pettersson resigned from the Board, and Geert Cauwenbergh will resign at the General Assembly.
Dr Edwin Moses, Chairman and CEO of Ablynx commented: "Jim, Mats and Geert have served very successfully as Ablynx Board members and we would like to thank them for their contribution over the past five years. We welcome Dr Roger Perlmutter and Dr Russell Greig to the Board and look forward to benefiting from the wealth of their experience in our industry.”
Financial review
Key figures
(€ million)
2012
2011
% change
Revenues
26.7
21.9
22%
R&D income
25.6
19.9
29%
Grants
1.1
2.0
(45%)
Operating expenses
(56.3)
(66.7)
(16%)
R&D
(46.9)
(56.3)
(17%)
G&A
(9.4)
(10.4)
(10%)
Other operating income/(expense)
(0.2)
(0.7)
(71%)
Operating result
(29.8)
(45.5)
35%
Finance income (net)
1.3
1.6
(23%)
Net result
(28.5)
(43.9)
35%
Cash burn
(21.1)
(32.0)
(34%)
Cash at year end(1)
62.8
83.8
(25%)
(1) including €2.7 million restricted cash
Income statement
In 2012, revenues increased by 22% to €26.7 million (2011: €21.9 million), primarily driven by milestone payments from Boehringer Ingelheim, recognised income from the third deal signed with Merck Serono at the end of 2011 and the new deal signed with Merck & Co.
Total research and development costs decreased to €46.9 million (2011: €56.3 million), in line with lower external development costs which are largely related to the timing in spending in clinical trials. General and administrative expenses remained well under control at €9.4 million (2011: €10.4 million).
As a result of the foregoing, the loss from continuing operations, before tax and net finance income, decreased substantially to €29.8 million in 2012 (2011: €45.5 million).
Net finance income, primarily comprising interest from deposits and floating and fixed rate notes, decreased by 23% to €1.3 million in 2012 (2011: €1.6 million). This decrease was attributable to lower interest rates and a lower cash position.
As a result of the foregoing, the net loss before taxes decreased to €28.5 million in 2012 (2011: €43.9 million).
As the Company incurred losses in all of the relevant periods, the Company had no taxable income, and therefore paid no taxes.
Balance sheet
The Company’s intangible assets include a portfolio of patents which are being amortised over approximately 12 years, and technology licenses that are being amortised over 5 and 18 years. The Company has not capitalised any other patents and it expenses all its research and development activities in the IFRS consolidated financial statements. The intangible assets also include software licenses.
The Company’s non-current tangible assets include the Company’s laboratory and office equipment, the investments in its facilities and €2.7 million restricted cash, which is related to a cash pledge that the Company has provided. The Company does not own any real estate but continues to invest in equipment for its research activities.
The Company’s current assets consist mainly of trade receivables, other short term investments, and cash and cash equivalents.
The Company’s equity decreased from €58.6 million to €31.7 million mainly as a result of the incorporation of the loss for the year (€28.5 million).
The Company’s non-current liabilities relate to the financing of improvements in the building it occupies.
The Company’s current liabilities primarily relate to deferred income from collaborative agreements and trade payables.
Cash flow statement
Cash flow from operating activities represented a net outflow of €21.2 million in 2012, as compared to a net outflow of €30.6 million in 2011. The decrease is mainly related to higher revenues and lower operating expenses in 2012.
Cash inflow from investing activities of €22.9 million comprises primarily expenditure of €0.9 million on property, plant and equipment, and €22 million movements in short-term investments.
Cash flow from financing activities represented a net outflow of €0.7 million mainly attributable to reimbursed borrowings (e.g. leasing of lab equipment).
Material events after December 31st 2012
In February 2013, Ablynx announced efficacy and safety data for its anti-IL-6R Nanobody, ALX-0061, at the 24 week final analysis of the Phase II part of a combined Phase I/II study in patients with moderately to severely active rheumatoid arthritis (RA) on a stable background of methotrexate.
In February 2013, Ablynx announced a research collaboration with Spirogen to evaluate the potential of a novel anti-cancer drug conjugate combining Spirogen's proprietary cytotoxic drugs, pyrrolobenzodiazepines (PBD), and associated linker technology, with Nanobodies generated using Ablynx’s proprietary technology platform.
Outlook 2013
Ablynx is well positioned to generate further shareholder value during the course of 2013.
Ablynx will investigate various possibilities through which it can progress the development of the anti-IL-6R Nanobody, ALX-0061, including discussions with potential licensing partners and other paths which will allow the Company to maximise the value of the asset.
The Phase II trial with caplacizumab is expected to progress further with the goal to complete the recruitment of 110 patients by the end of 2013. It is intended that the trial is accepted as a pivotal study for conditional Marketing Authorisation (MA) in Europe, Ablynx will have a post-Phase II meeting with the FDA to agree on the next steps. Caplacizumab could be the first drug on the market that is specifically approved to treat acquired TTP.
During the course of 2013, additional clinical and pre-clinical studies will be performed with the anti-RSV Nanobody (ALX-0171). The clinical studies include a safety study in adults with hyper-active airways, to extend the current safety package beyond “healthy” airways, and a pulmonary and systemic PK study in healthy volunteers. Additionally, a pre-clinical package consisting of a study in juvenile animals to extend juvenile PK knowledge of ALX-0171 plus two additional efficacy studies will be performed. This package has been designed to meet regulatory requirements for a first-in-infant study for ALX-0171 in the EU which is expected to start in 2014.
Ablynx also expects important new partnering deals and advances in existing collaborations as some of its partnered programmes move into the clinical development stage. Technology developments, to exploit the Nanobody platform even more broadly, will continue both in-house and in collaboration with partners.
Finally, good cash management will remain a key priority for the Company, with a strong focus on net cash burn and the generation of cash to support the on-going development of the business. Again in 2013, we expect to keep net cash burn in the range €20-25 million.
Financial Calendar 2013
31 March – Online publication annual report 2012
25 April – Annual general meeting
15 May – Q1 2013 results
21 August – Half year 2013 results
14 November – Q3 2013 results
Shareholder Clubs @ Ablynx (Dutch only)
6 March at 5.45pm 22 May at 5.45pm 18 September at 5.45pm 11 December at 5.45pm
To attend an event, please register via email: investors@ablynx.com, mentioning your name and preferred day. The events are on a “first come, first serve” basis.
Glossary
FTE full-time equivalent employee
IL-6R receptor of interleukin-6 - a cytokine involved in a wide range of biological activities
PK pharmacokinetics - the study of the absorption, distribution, metabolism, and excretion of drugs in the body
RSV respiratory syncytial virus
TNFα tumor necrosis factor alpha - a cytokine involved in systemic inflammation
TTP thrombotic thrombocytopenic purpura - a rare blood disorder
vWF von-Willebrand factor - a blood glycoprotein involved in hemastasis
FINANCIAL INFORMATION
The consolidated financial statements have been prepared in accordance with IFRS, as adopted by the EU. The financial information included in this press release is an extract from the full IFRS consolidated financial statements which will be published on 31 March 2013.
The statutory auditor, Deloitte Bedrijfsrevisoren/Reviseursd’Entreprises, represented by Gert Vanhees, has substantially completed the audit procedures on the IFRS consolidated statements as of and for the year ended 31 December 2012, and has confirmed that the consolidated balance sheet, the consolidated statements of comprehensive income, cash flow and changes in shareholders’ equity, included in this press release, are consistent in all material aspects with the consolidated accounts from which they have been derived.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December (€ '000) 2012 2011
Revenue:
Research & development
25,645
19,861 Grants
1,082
2,008 Total revenue 26,727 21,869
Research & development expense
(46,868)
(56,307) General & administrative expense
(9,409)
(10,423) Total operating expenses (56,277) (66,730)
Other operating income
204
38 Other operating expenses
(426)
(706) Operating result (29,772) (45,529)
Finance income (net)
1,264
1,634 Finance income
1,452
1,737 Finance cost
(188)
(103) Loss before taxes (28,508) (43,895)
Income tax expense
0
0 Loss for the year (28,508) (43,895)
Other comprehensive loss :
Fair value gains/losses on available-for-sale financial assets, net of tax
0
0 Total comprehensive income for the period (28,508) (43,895)
Loss attributable to equity holders
(28,508)
(43,895) Total comprehensive loss attributable to equity holders
(28,508)
(43,895) Basic and diluted loss per share
(0.65)
(1.01)
CONSOLIDATED BALANCE SHEET
As at 31 December (€'000) 2012 2011 Non-current assets 12,304 11,979
Intangible fixed assets
600
1,018 Property, plant & equipment
3,450
4,984 Restricted cash
2,660
3,000 Tax receivables
5,594
2,977 Current assets 62,691 86,550
Trade receivables
591
2,233 Other current assets
729
1,301 Tax receivables
608
489 Accrued income and deferred charges
656
1,705 Other short-term financial investments
55,810
77,500 Cash and cash equivalents
4,297
3,322 Total assets 74,995 98,529 Equity attributable to equity holders 31,722 58,630
Share capital
73,465
73,304 Share premium account
126,466
126,457 Share-based payment reserve
8,078
6,648 Retained earnings
(176,287)
(147,779) Non-current liabilities 927 1,752
Borrowings
927
1,752 Current liabilities 42,346 38,147
Borrowings
825
805 Trade payables
8,070
9,867 Other current liabilities
3,214
3,868 Deferred income
30,237
23,607 Total liabilities 43,273 39,899 Total equity and liabilities 74,995 98,529
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December (€'000) 2012 2011 Cash flows from operating activities
Loss before income tax
(28,508)
(43,895) Adjustments for:
Amortisation
727
609 Depreciation
326
2,169 (Profit)/loss on disposal of property, plant and equipment
Share-based payment expense
1,542
1,569 Finance income – net
(1,337)
(1,689) Net movement in trade and other receivables
527
734 Net movement in trade and other payables
4,179
8,201 Cash used in operations (22,544) (32,302)
Interest paid
(74)
(23) Interest received
1,411
1,712 Income tax paid
0
0 Net cash used in operating activities (21,207) (30,613) Cash flows from investing activities
Purchases of property, plant and equipment
(700)
(3,682) Proceeds from sale of property, plant and equipment
1,908
1,221 Purchases of intangible assets
(309)
(211) Purchases of available-for-sale financial assets
Purchases of short-term financial investments
Sale of available-for-sale financial assets
Sale of short-term financial investments
22,030
8,000 Transfer to non-current asset
0
0 Net cash used in investing activities 22,929 5,328 Cash flows from financing activities
Proceeds from issuance of ordinary shares
Proceeds from exercise of warrants
58
164 Proceed of borrowings
1,477 Repayments of borrowings
(805)
(376) Net cash generated from financing activities (747) 1,265 Net (decrease)/increase in cash and cash equivalents 975 (24,020)
Cash and cash equivalents at beginning of the period
3,322
27,342 Cash and cash equivalents at end of the period 4,297 3,322
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER EQUITY
(€'000) Share capital Share premium Share- based payments Retained loss Fair Value Reserve Total Equity Balance at 31 December 2010 73,076 126,421 5,177 (103,885) 0 100,789 Loss of the period (43,894) Other comprehensive income
Available-for-sale financial assets
Total comprehensive income Warrant plans Share-based payments
1,570
Transactions with owners Capital increase
Issuance costs
Exercise of warrants
228
36
(99)
Balance at 31 December 2011 73,304 126,457 6,648 (147,779) 0 58,630 Loss of the period (28,508) Other comprehensive income
Available-for-sale financial assets
Total comprehensive income Warrant plans Share-based payments 1,542
Transactions with owners Capital increase
Issuance costs
Exercise of warrants 161 9 (112)
Balance at 31 December 2012 73,465 126,466 8,078 (176,287) 0 31,722

 

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