CAMBRIDGE, United Kingdom, Sept. 30, 2003 (PRIMEZONE) -- CeNeS Pharmaceuticals plc (LSE:CEN) (Other OTC:CPHAF) today announced its unaudited interim financial results for the six months ended 30 June 2003.
Operational highlights
* Sale of pharmaceutical products in a deal worth over 9m in May
2003.
* M6G for post-operative pain enters first of two Phase III
trials -- first trial expected to complete in mid 2004.
* CNS5161 for neuropathic pain ready to enter Phase II trial
-- trial expected to complete in late 2004.
* Termination of M6G joint venture with Elan Corporation plc
("Elan").
Financial review
* Net profit for the first half of 2003 of 0.9m (H1 2002: loss 2.1m), including 3.2m profit on disposal of the pharmaceutical products in May 2003. * CeNeS now has at least two year's cash resources - cash resources at period end of 8.2m.
Corporate review
* Admission of the Company's shares to be traded on AIM ("The
Alternative Investment Market") from 8 August 2003.
* In August 2003, CeNeS removed all long-term convertible
debt from its balance sheet after agreeing with Elan to the
early conversion of its convertible debt of approximately
13.5m into 20m CeNeS ordinary shares at 68 pence per share
and the subsequent placing of these shares with institutional
investors at 3.875 pence per share.
* At same time in August, Elan's 9.9% shareholding in CeNeS
was placed with institutional investors at 3.875 pence per
share. As a result Elan has no interest in CeNeS shares.
* Also in August, CeNeS completed a placing of 17.4m shares
at 3.875 pence per share, raising 0.7m before expenses.
Commenting on the results, Alan Goodman, Chairman of CeNeS Pharmaceuticals plc said:
"CeNeS is now well placed to move forward and deliver increased value to shareholders. The company has strong management, a strong cash position and a late stage clinical pipeline focused on the treatment of pain. The CeNeS Board is reviewing several options to build from this strong base. The Board believes the next 18 months will be an exciting time for the Company as our two lead products progress through their clinical trials."
Review of the six months ended 30 June 2003
Introduction
The year to date has seen CeNeS deliver on several key objectives including the successful completion of its major restructuring program. This has significantly strengthened the position of the Company. CeNeS is now a well funded biotechnology company with a clear therapeutic focus on the treatment of pain. The improved cash position has been achieved principally by the sale of its pharmaceutical products Diconal, Cyclimorph and Valoid for a consideration of over 9m in May 2003.
In the first half of 2003 CeNeS has also completely terminated its collaboration with Elan. As part of this process CeNeS successfully negotiated the termination of its joint venture with Elan and also, in the second half of 2003, the conversion into shares, and subsequent placing with institutional investors, of Elan's convertible loan stock. CeNeS has also placed Elan's 9.9% shareholding with institutional investors.
CeNeS has subsequently announced the commencement of Phase III trials for M6G and phase II trials for CNS 5161 and enters the second half of 2003 with a clear and well funded clinical development programme.
Outlook
CeNeS has successfully undertaken a major restructuring against a background of extremely tough market conditions. The termination of the CeNeS /Elan relationship, our pain-focused late stage pipeline and our strong cash position mean we are well positioned to move forward.
Clinical development update
M6G -- for the treatment of post-operative pain M6G has commenced an initial Phase III trial, which we anticipate will complete in mid-2004. The trial will seek to recruit 168 patients in hospitals in three European countries. The patients will be suffering post-operative pain following knee surgery carried out under spinal anesthesia. The prime objective of the study is to compare the analgesic efficacy and duration of action of a range of doses of M6G given intravenously, compared with placebo. Subsequently, a second Phase III trial is then planned and it is expected that an initial European product filing could be made in late 2005.
Phase II clinical trials have already shown that M6G produces equivalent analgesia to morphine to combat post-operative pain. Additional Phase II clinical studies in post-operative nausea and vomiting have also shown that M6G reduced the incidence of nausea and vomiting by more than 50% when compared directly with morphine. These data have demonstrated that M6G induces equivalent analgesia to morphine combined with an improved side effect profile. In particular M6G appears to cause a significantly lower frequency and severity of nausea and vomiting than morphine. If CeNeS is able to confirm in larger phase III clinical trials that M6G causes fewer side effects than morphine, but has equal analgesic efficacy, then it should represent an attractive alternative for patients and healthcare providers.
CNS 5161 -- for the treatment of neuropathic pain CeNeS has finalised plans for an extended Phase II trial of CNS 5161, a novel compound for the treatment of neuropathic pain. The Phase II trial will commence later in 2003 and results are expected in the second half of 2004. An initial phase II study has been completed in 10 patients with chronic intractable neuropathic pain. This study demonstrated that 0.25mg of CNS 5161 gave statistically significant pain relief. The drug was well tolerated by the patients.
Interim results
The profit for the period was 0.9m (H1 2002: loss of 2.1m) which includes a profit of 3.2m on the disposal of the pharmaceutical products in May 2003. Cash and short term deposits at 30 June 2003 was 8.2m (H1 2002: 0.1m). The net increase in cash and short term deposits for the period of 7.7m (H1 2002: decrease of 2.0m) includes proceeds from the sale of the pharmaceutical products Diconal, Cyclimorph and Valoid in May 2003.
Revenues for the period were 1.4m (H1 2002: 2.9m). The decrease was due to the disposal of the pharmaceutical products in May 2003 and one off revenues from other discontinued operations received in the period to 30 June 2002.
Research and development costs in total decreased to 0.5m from 1.6m. Costs incurred by discontinued operations decreased to 63,000 (H1 2002: 0.6m) and costs incurred by continuing operations decreased to 0.5m (H1 2002: 1.0m) following the divestment of non-core clinical development programmes and as a result of tight cost control. Administration expenses in total decreased to 2.9m (H1 2002: 3.3m). Administrative expenses of continuing operations decreased to 1.2m (H1 2002: 2.3m) due to cost savings made under the restructuring plan. The exceptional goodwill write down in discontinued operations arose following the acquisition of Elan's minority share holding in CeNeS Bermuda Limited.
Other operating income for the period of 0.4m (H1 2002: 1m) reflects the profit reported by CeNeS Bermuda Limited following the write off of loans with Elan on cessation of the joint venture arrangement. No development spend has been recharged by CeNeS or Elan to the joint venture during the period. The profit on disposal of discontinued operations of 3.2m (H1 2002: 0.5m) arose on the disposal of the pharmaceutical products. Other interest receivable and similar income of 0.2m (H1 2002: 0.4m) relates to the unrealised foreign currency translation made on the conversion of the dollar denominated long term convertible debt.
In August 2003 CeNeS and Elan agreed to convert the outstanding convertible loan notes of US$21.7m (approx 13.5m) into approximately 20m CeNeS ordinary shares at an average price of $1.10 (0.68) per ordinary share. CeNeS agreed that as part of the transaction the outstanding loan notes for the purposes of the conversion would include interest rolled up to the term for each of the loan notes. These shares were also placed with a group of institutional investors at 3.875 pence per share. As a result, since August 2003, CeNeS' balance sheet is free from any convertible debt. At the same time CeNeS raised 675,000 before expenses through a placing with investors of 17,441,296 ordinary shares of 1p each.
Portfolio of carried interests in divested non-core assets
Following the completion of the restructuring programme commenced in late 2001, CeNeS now has carried interests in certain divested non-core assets as set out below:
Asset disposed New owner/partner CeNeS carried interest *
Ion channel library Scion Stage payments and
Pharmaceuticals Inc milestones
GGF2 - potential Acorda Therapeutics, Milestones and royalties
treatment for Inc
multiple sclerosis
CEE 03 310 - Milestones and royalties
potential treatment Addex
for sleep disorders Pharmaceuticals SA
and substance abuse
Cognitive testing Cambridge Cognition Stage payments and a
division Limited milestone payment
AutoPatch technology Xention Discovery Minority shareholding,
and certain ion Limited loan note and certain
channel assets rights over potential
pain drug candidates
arising from
Xention's work
* The receipt of future milestones and/or royalties is dependent on the successful progression of the divested asset/technology and as such is not certain.
30 September 2003
The full 2003 Interim Results can be downloaded from the following link: