SLOUGH, U.K., Feb. 24, 2004 (PRIMEZONE) -- Xenova Group plc (Nasdaq:XNVA) (LSE:XEN) today announced its results for the year ended 31 December 2003.
Highlights:
-- Acquisition of KS Biomedix Holdings plc ("KS Biomedix")
including Phase III product candidate TransMIDTM
-- XR5944: start of Phase I clinical trial of novel DNA
targeting agent
-- TA-CD: patient dosing begins in Phase IIa cocaine
administration trial and Phase IIb efficacy trial. Results
of second Phase IIa study reported
-- Tariquidar (XR9576): review of Phase III data concluded.
US National Cancer Institute (NCI) conducting new
exploratory clinical trials
-- Initiation of further Phase I clinical trial for TA-NIC
-- Vaccines of addiction (TA-NIC & TA-CD): buyout of
residual interests from ImmuLogic
-- Signing of a two-year Manufacturing, Development and
Clinical Supply Agreement with Pharmexa A/S
-- Clinical Trials Manufacturing Facility received EU GMP
accreditation from the Medicines and Healthcare products
Regulatory Agency
-- Sale of Farnham research facility to Bioventix raising
0.8m ($1.4m)
Financial Highlights
-- Fully underwritten UK placing, US private placement and open
offer that raised approximately 21.1m ($37.8m) gross,
19.4m ($34.7m) net of expenses
-- Cash, short-term deposits and investments 27.5m ($49.2m) at 31
December 2003 (31 December 2002: 19.2m ($34.4m))
-- Implementation of both a headcount reduction and programme
prioritisation review expected to realise annualised cost
savings of approximately 10m ($17.9m)
-- Revenue recognised in the full year of 7.7m ($13.8m) (2002:
12.2m ($21.8m))
-- Loss on ordinary activities after taxation 15.0m ($26.9m)
(2002: 13.2m ($23.6m))
-- Loss per share 7.1p (12.6c) (2002: 9.0p (16.1c)) David
Oxlade, Chief Executive Officer, said: "We have completed
the integration of KS Biomedix and the resulting broader
portfolio has allowed us to prioritise and focus on the
highest potential clinical stage programmes. The
21 million fundraising enables us to fund the first Phase
III trial for TransMIDTM and to advance the development of
the company's later stage programmes. We have also announced
today that the NCI has commenced new exploratory Phase II
clinical trials with tariquidar."
Xenova Group plc's product pipeline focuses principally on the therapeutic areas of cancer, vaccines for addiction and immune system disorders. Xenova has a broad pipeline of programmes in clinical development. The Group has a well-established track record in the identification, development and partnering of innovative products and technologies and has partnerships with significant pharmaceutical and biopharmaceutical companies including Celltech, Genentech, Lilly, Millennium Pharmaceuticals, Nycomed, Pfizer and QLT.
For further information about Xenova and its products please visit the Xenova website at www.xenova.co.uk
Disclaimer to take advantage of the "Safe Harbor" provisions of the US Private Securities Litigation Reform Act of 1995. This press release contains "forward-looking statements," including statements about our ability to integrate acquired businesses and realize cost savings from integration, and the discovery, development and commercialization of products. Various risks may cause Xenova's actual results to differ materially from those expressed or implied by the forward looking statements, including: unexpected costs and delays in integrating acquired businesses into our group, adverse results in our drug discovery and clinical development programs; failure to obtain patent protection for our discoveries; commercial limitations imposed by patents owned or controlled by third parties; our dependence upon strategic alliance partners to develop and commercialize products and services; difficulties or delays in obtaining regulatory approvals to market products and services resulting from our development efforts; the requirement for substantial funding to conduct research and development and to expand commercialization activities; and product initiatives by competitors. For a further list and description of the risks and uncertainties we face, see the reports we have filed with the Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Chairman's Statement and Chief Executive's Review
This last financial year has seen a number of key events take place to shape the future of Xenova. Despite the setback relating to tariquidar in the early part of the year, Xenova has continued to focus its resources on advancing the development of both small molecules and biologics programmes.
On September 12 Xenova announced that the acquisition of KS Biomedix had become unconditional (save for admission) and the integration of the business followed shortly afterwards. As announced at the time of the acquisition, the estimated cost saving of 10m per annum across both businesses is expected to be achieved, based on reductions in headcount, facilities and R&D costs.
Xenova raised additional funds in 2003 through a UK placing, US private placement and open offer, raising approximately 21.1m gross ($37.8m), 19.4m ($34.7m) net of expenses. As a result, Xenova had 27.5m ($49.2m) in cash, short term deposits and investments at the year end.
As part of the disposal of non-core assets associated with the acquisition of KS Biomedix, Xenova has completed the sale of certain premises at its Farnham research facility together with related assets to Bioventix Limited for 0.8m. The sale included certain rights to intellectual property relating to super high-affinity antibodies that are not being developed by Xenova, and provides for the continuation of work by Bioventix on novel three-part proteins (trimers) being developed under an option agreement with Isis Innovations Ltd. Xenova has retained an option to develop certain therapeutic candidates arising from this work.
Xenova employed 112 people at 31 December 2003.
Operating Review
Following the acquisition of KS Biomedix and the integration of the two businesses, Xenova undertook a review of the product pipeline with the aim of prioritising key candidates/programmes for further development in the core business areas of cancer, addiction and immunotherapy. Described below are the prioritised programmes that currently make up the active pipeline of Xenova.
TransMIDTM treatment for high-grade glioma Following the acquisition of KS Biomedix, TransMIDTM is now the most advanced product in Xenova's pipeline, having already commenced Phase III development. Plans to progress TransMIDTM into Phase III trials in adults with recurrent and/or progressive non resectable glioblastoma multiforme had already been submitted by KS Biomedix and have been agreed with the FDA. However, following its acquisition of KS Biomedix, Xenova is seeking FDA approval to change the current Phase III programme design from one large Phase III trial to two smaller Phase III trials. Xenova is ready to start these trials as soon as FDA approval is obtained.
TransMIDTM is a treatment for high-grade glioma (brain cancer), a disease for which improved treatment would be welcomed, as there remains a poor prognosis for patients. TransMIDTM is a modified diphtheria toxin conjugated to transferrin. When TransMIDTM binds to transferrin receptors on the surface of the cell, the diphtheria toxin gains entry to the cell. Once inside the cell, the diphtheria toxin interferes with protein synthesis and ultimately kills the cell. Transferrin receptors are particularly prevalent on rapidly dividing cells, and the high level of transferrin receptor expression on glioma cells makes transferrin an appropriate targeting mechanism for the diseased cells.
TransMIDTM is pumped directly into the brain tumour using CED (Convection Enhanced Delivery - licensed from the National Institute of Health, US). CED enhances the distribution of TransMIDTM through the tumour mass and produces high local concentrations of drug. Since TransMIDTM is directly infused into the tumour, it circumvents the usual obstacles present in drug delivery to the brain caused by the blood-brain barrier and also reduces systemic side effects.
As stated at the time of the November 26th 2003 Prospectus issued to shareholders, Xenova has been in discussion with Amersham Health A.S., Nycomed Danmark A/S and the National Institute of Health (NIH) regarding the licensed rights pertaining to the development, manufacture and commercialisation of TransMIDTM in various territories. Following these discussions, Xenova has now reached a revised agreement with Amersham concerning the intellectual property licensed by Amersham to Xenova.
Revised arrangements for the development and commercialisation of TransMIDTM in the European territories covered by the License Agreement between Nycomed and Xenova have been agreed in principle, and an agreement between Nycomed and Xenova is expected to be signed shortly. Discussions with the NIH regarding amendments to the terms under which Xenova has licensed certain other intellectual property rights concerning TransMIDTM are at an advanced stage.
Under the terms of these new arrangements, Xenova's future financial obligations on successful commercialisation of TransMIDTM in North America have been significantly reduced.
Tariquidar Multi-Drug Resistance (MDR) Programme
In June 2002, tariquidar entered two pivotal Phase III clinical trials as an adjunctive treatment in combination with first-line chemotherapy for non-small cell lung cancer (NSCLC) patients. On 12 May 2003, QLT announced that the Phase III trials would be stopped following a recommendation from the independent Data and Safety Monitoring Committee (DSMC) which had just completed the un-blinded interim review of the data for the two ongoing trials. On 23 July 2003, QLT announced that enrolment in the Phase IIb trial for patients with chemo-refractory breast cancer, which is being carried out at the MD Anderson Centre, Texas, had been sufficiently completed at 17 patients.
The review of the data arising from the Phase III NSCLC trials has been completed. This review has confirmed that the levels of toxicities associated with the cytotoxic drugs administered to patients in the trial were increased in those patients receiving tariquidar compared with those receiving placebo. Following this review, we have announced today that the National Cancer Institute in the USA (NCI) has commenced further exploratory Phase I/II and Phase II studies with tariquidar in combination with various cytotoxic drugs. Discussions are also ongoing between Xenova and QLT concerning the possibility of further Phase II studies being undertaken.
Novel DNA Targeting Agents -- XR11576 & XR5944
On 3 July 2003, Xenova announced the initiation of a Phase I clinical trial of XR5944, the second of three novel DNA targeting agents that are the subject of a licence agreement with Millennium Pharmaceuticals Inc. The first of these compounds, XR11576, entered Phase I clinical trials in February 2002. The third, XR11612, is in pre-clinical development as a back-up.
The XR5944 Phase I clinical trial is being conducted at three centres in the United Kingdom and will include approximately 40 patients with advanced solid tumours. In pre-clinical studies, XR5944 has demonstrated a high level of anti-tumour activity against a number of human tumour models, causing both partial and complete regression of large established tumours. Recent data published in the Proceedings for the 2003 Annual Meeting of the American Association for Cancer Research, suggest that XR5944 acts through a novel mechanism of action distinct from other current cytotoxic agents by binding tightly to DNA and inhibiting RNA synthesis. Further exploration into the mechanism of action of XR5944 is ongoing.
XR303
XR303 is the first radioimmunotherapy product utilising a super high affinity chimaeric (human-sheep) monoclonal antibody to be evaluated in man. It was developed using Xenova's proprietary sheep monoclonal antibody technology, and binds to CEA (Carcinoembryonic antigen), which is widely expressed in solid tumours. The antibody is used to deliver a radionuclide, Iodine-131, to the tumour. The intention is to deliver a dose of radiation to the tumour that is sufficient to kill tumour cells whilst causing minimal damage to normal tissues.
XR303 has completed a Phase I imaging study in patients with metastatic colorectal cancer. This study, conducted in 10 patients, provided favourable results, with tumour images still clearly visible after eight days as a result of the radiolabelled antibody remaining bound to the tumour surface. There were no drug-related severe adverse events.
In view of these encouraging results, development of XR303 was also initiated as a therapeutic product for the treatment of pancreatic cancer, where the majority of tumours examined have been shown to express CEA. A Phase I/II dose escalation study in patients with non-resectable pancreatic cancer was commenced in October 2002 and is expected to complete in 2005.
In May 2003 both the European Commission and the FDA granted orphan drug designation to XR303 for pancreatic cancer.
Vaccines of Addiction
On 15 January 2003, Xenova announced that it had reached an agreement with ImmuLogic Pharmaceutical Corporation Liquidating Trust ("ImmuLogic") to buy out all ImmuLogic's remaining rights to future milestone and royalty payments relating to two of Xenova's therapeutic vaccines, TA-CD for the treatment of cocaine addiction and TA-NIC for nicotine addiction.
TA-CD
The start of a Phase IIa cocaine administration trial was announced on 14 April 2003. The ten-patient open label trial is being conducted in the United States and is designed to evaluate the effect of TA-CD on behavioural changes associated with cocaine administration under laboratory controlled conditions.
The results of a second Phase IIa dose escalation trial were reported on 17 June 2003. This study, which started in April 2002, was designed to evaluate the safety and immunogenicity of TA-CD using 4 or 5 dose vaccination schedules. The trial involved the enrolment of 13 subjects, all of whom were cocaine abusers seeking help with their addiction at the start of the trial. Patients were treated with up to five injections of the vaccine over a twelve week period using doses up to 360 ug each. Of the 13 enrolled, 12 subjects completed the 12 month evaluation period to assess safety, immune response and cocaine usage.
As for the previous study, the results showed the vaccine to be safe and well tolerated with a dose-related immune response. Of those 16 patients in the two Phase IIa studies who used cocaine at any time following vaccination, 14 reported a reduction of the usual euphoric effect normally associated with cocaine use, providing further anecdotal evidence of the vaccine's proposed mode of action.
On 24 October 2003, Xenova announced the initiation of the first randomised, placebo controlled Phase IIb clinical trial for TA-CD. The primary objective of this new study is to determine the efficacy of TA-CD in addicts seeking treatment for cocaine abuse, and to determine appropriate end-points for a Phase III study.
Up to 132 subjects, all of whom are methadone-dependent cocaine addicts being treated for drug dependency, will be recruited into this clinical study. Half the subjects will be treated with active TA-CD and half will be given a placebo. Subjects will be monitored three times a week to assess cocaine usage, including testing for cocaine metabolites in urine, for a period of 20 weeks. Patients will also undergo medical examinations and blood tests for anti-cocaine antibodies to assess the immunogenicity of the dosing schedule. The trial is expected to last up to two years (depending upon the rate of recruitment) and will allow an objective assessment of the efficacy of the TA-CD vaccine against placebo.
The TA-CD investigations are being supported by the National Institute on Drug Abuse (NIDA) which recognises cocaine abuse to be a major problem in the U.S. NIDA has also supported earlier clinical work as part of this programme.
TA-NIC Xenova announced the initiation of a second Phase I clinical trial for TA-NIC on 8 October 2003. This second Phase I study builds upon the findings of a previous Phase I trial which were announced in June 2002. The results of the first study, which was the first evaluation of an anti-nicotine vaccine in man, showed that the vaccine generated a specific anti-nicotine response and that it was safe and well tolerated both systemically and locally.
In the new dose ranging Phase I study approximately 60 smokers have been recruited into a double-blind, randomised, placebo-controlled trial which is being run at a European clinical centre experienced in testing smoking related therapies. The objective of the trial is to further establish safety and tolerability, and to determine the optimum vaccination dose and schedule required to induce the optimal anti-nicotine antibody response. Three different doses of the vaccine are being evaluated. The impact of vaccination on nicotine-induced changes in heart rate and skin temperature will also be monitored.
OX-40
On 20 October 2003 novel findings relating to a research collaboration, involving Xenova's OX40 technology and its potential for the treatment of influenza, were published by Imperial College, London.
Pre-clinical studies conducted by Imperial College demonstrated that down-regulation of the immune response, through blocking the OX40-OX40 ligand interaction, could alleviate the symptoms of influenza, without affecting the ability to clear the virus. This new research suggests that the down-regulation of OX40 signalling may play an important role in the fight against the symptoms of influenza and perhaps other diseases similarly characterised by excessive immune response.
OX40 is a platform technology capable of producing multiple drug candidates targeting cancer, autoimmune and other diseases where the immune system is involved. Xenova has retained rights to the OX40 technology relating to the up-regulation of the immune system which may be used for the development of novel treatments for cancer and infectious disease. Xenova's rights to down-regulate the immune system have been the subject of development and licence agreements entered into with Celltech and Genentech.
Clinical Trials Manufacturing
Xenova's Clinical Trial Manufacturing Facility (CTMF) has been manufacturing the Company's own internal clinical trial supplies since 1995 and this remains the primary purpose of the facility. Xenova recently announced that it is offering surplus capacity in the facility and its supporting development organisation for contract manufacturing.
On 5 June 2003, Xenova announced the signing of a two-year Manufacturing, Development and Clinical Supply Agreement with Pharmexa A/S (CSE: PHARMX) for the contract manufacture of clinical supplies of a vaccine targeting the human HER-2 protein. Manufacture is taking place at Xenova's CTMF in Cambridge.
On 8 September 2003 Xenova received notification that its CTMF had been successfully inspected by the Medicines and Healthcare products Regulatory Agency (MHRA). The inspection took place under the Voluntary Scheme for Inspection of Manufacturers. Xenova has received a letter from the MHRA confirming that its operations are in compliance with EU Good Manufacturing Practices (GMP). Accreditation by the MHRA will enable Xenova to continue to manufacture in full compliance with the forthcoming Clinical Trials Directive into 2004.
As well as its own CTMF facility in Cambridge, Xenova acquired additional manufacturing facilities in Edmonton, Canada though the acquisition of KS Avicenna, a wholly-owned subsidiary of KS Biomedix. KS Avicenna manufactures TransMIDTM for clinical trials.
Changes to the Xenova Group plc Board
On 13 August 2003, Research Director and Chief Scientific Officer Michael Moore, and Medical Director John St Clair Roberts resigned from the Company and the Xenova Board. Further changes to the Xenova Board were announced, as planned, following the acquisition of KS Biomedix: on 12 October 2003 John Rennocks and Dr Michael Young, non-executive directors of KS Biomedix, joined the Board of Xenova as non-executive directors. Howard Wachtler and Gerard Fairtlough resigned their positions as non-executive directors of Xenova on 17 October 2003.
Financial Summary
Operating Performance
In the year to 31 December 2003, the Group's revenues from licensing agreements, strategic partnerships and manufacturing outsourcing were 7.7m ($13.8m) (2002: 12.2m ($21.8m)).
In accordance with the Group's revenue recognition policy, of the 6.9m ($11.1m) received from QLT Inc. in 2001 as part of the tariquidar licensing agreement, 2.3m ($4.1m) was recognised in the year, with the remaining 1.5m ($2.7m) being deferred to future periods. Following receipt of the balance of the first milestone of 0.7m ($1.2m) in the year in respect of the OX40 programme with Genentech, 1.4m ($2.5m) of the upfront licence fee and milestone of 3.5m ($6.2m) has been recognised in the year, with the remaining 1.2m ($2.2m) being deferred to future periods. Contract development revenue of 3.2m ($5.7m) (2002: nil) was also recognised in the year in respect of the ongoing Millennium collaboration on the novel DNA targeting agents. Other revenue included 0.8m ($1.4m) in respect of the Pharmexa contracts.
Total net operating expenses of 24.0m ($43.0m) were reduced from 26.5m ($47.5m) in 2002. Net operating expenses for continuing operations in the year were 20.3m ($36.3m) (2002 26.5m ($47.5)). Excluding exceptional reorganisation costs of 2.0m ($3.6m) net operating expenses of 18.3m ($32.7m) declined 20% compared to the prior year (22.7m ($40.6m)), as a result of the programme prioritisation and headcount reductions made in the year.
Overall research and development (R&D) expenditure of 15.1m ($27.0m) fell from 17.7m ($31.6m) in 2002. Continuing operations R&D expenditure of 13.7m ($24.5m) is lower than for the previous year (2002:17.7m, $31.6m) as a result of the reorganisations announced in December 2002 and May 2003. R&D expenditure includes 3.2m ($5.7m) for pre-clinical and clinical development of the programme of novel DNA targeting agents. These costs have been reimbursed by Millennium under the terms of the licence agreement. Other R&D expenditure was incurred in respect of the Vaccines of Addiction programme including the completion of a Phase II dose escalation study with TA-CD, the start of a Phase IIa cocaine administration study with TA-CD, and completion of a Phase I study in TA-NIC. R&D expenditure in the acquired KS Biomedix businesses amounted to 1.4m ($2.5m) in the period from 12 September 2003. The majority of this expenditure related to TransMIDTM Phase III development.
Administrative expenses of 9.4m ($16.8m) comprised 7.1m ($12.6m) in respect of continuing operations and 2.3m ($4.2m) from the acquired KS Biomedix business. Administrative expenses for continuing operations of 7.1m ($12.6m) have been reduced by 24% or 2.3m ($4.1m) from the prior year (2002: 9.3m ($16.7m)). These include 2.0m ($3.6m) exceptional reorganisation costs arising from the cost saving reorganisation announced in May 2003 (2002: 3.8m ($6.8m)) and 1.2m ($2.1m) of goodwill amortisation (2002: 1.2m ($2.1m)) relating to the goodwill arising on the acquisition of Cantab Pharmaceuticals Plc in 2001. Administrative expenses excluding both exceptional reorganisation costs and goodwill amortisation were 3.9m ($6.9), reduced by 11% from 4.3m ($7.8m) in 2002. Other operating income received from the subletting of excess facility space further reduced net expenses in the year by 0.4m ($0.8m) (2002: 0.5m ($0.8m)).
Following the announcement of the cessation of Phase III trials of tariquidar, the Group undertook a cost saving reorganisation, which included headcount reductions and project prioritisation. Included in continuing operations administrative expenses under exceptional reorganisation costs is 2.0m net ($3.6m) in respect of severance payments, a vacant leasehold provision and an impairment provision. Total exceptional reorganisation costs for the year were 3.2m ($5.7m) (2002: 3.8m ($6.8m)) and include 1.1m ($2.0m) in respect of the KS Biomedix business. As a result of the above reorganisation, surplus facilities have become available at the main Cambridge site. The Group is currently in confidential negotiations to sublet or surrender the remaining 20 year lease on this property. The charge made reflects a vacant leasehold provision which has been calculated based upon management's expectations of future subletting opportunities and estimated surrender payments.
Total net operating expenses for continuing operations for the second half of the year fell to 7.7m ($13.9m) from 12.6m ($22.5m) in the first half of the year principally as a result of the reduced research activity and lower exceptional reorganisation costs.
The reduced investment income reflects the lower average cash and liquid resources balance held throughout the year. R&D tax credits recoverable for the year have been reduced in line with the headcount reduction achieved during the year.
Acquisition of KS Biomedix On 12 September Xenova Group plc announced that the offer to acquire KS Biomedix had become unconditional (save for admission). Under the terms of the offer made to KS Biomedix shareholders, 1.0714 shares in Xenova Group plc were issued in exchange for one share held in KS Biomedix. An additional contingent deferred consideration of 10p per KS Biomedix share held will be paid in Xenova Group plc shares upon the commercial sale of TransMIDTM in either the US or European markets before 14 August 2011. Based upon a Xenova Group plc closing share price of 15.25 pence on 11 September this valued KS Biomedix at 17.1m ($30.5m) including the contingent deferred consideration payable in respect of TransMIDTM of 6.5m ($11.6m). In calculating the provisional fair values of the assets and liabilities acquired, two adjustments have been made to the book values stated at 12 September in order to reflect Xenova's accounting policies. The book value of tangible fixed assets acquired has been reduced by 0.1m ($0.1m) in adopting Xenova's depreciation policy, and adopting Xenova's revenue recognition policy to the licence fees received by KS Biomedix from Nycomed and Sosei in 2002 has resulted in 0.2m ($0.4m) of revenue previously recognised by KS Biomedix to be deferred as at 12 September 2003. The fair value of the assets and liabilities acquired is 6.9m ($12.3m). The consideration totalling 17.7m ($31.6m) (including 0.6m ($1.1 m) of acquisition expenses) generated goodwill upon acquisition of 10.8m ($19.3m). The goodwill arising has been capitalised and is being amortised over the 10 year estimated useful life of the acquired business. In addition to the 0.6m ($1.1m) of acquisition expenses, share issue costs of 0.5m ($1.0m) were incurred and offset against the share premium account.
With the acquisition of 100% of KS Biomedix, Xenova has acquired KS Biomedix' wholly-owned subsidiary KS Avicenna Inc, as well as its 50% share in Discerna Ltd, a joint venture with Babraham Bioscience Technologies Limited.
As part of the restructuring activities completed as part of the acquisition, 18 positions have been lost across both the head office and research and development functions. Included within administration expenses is an exceptional charge of 1.1m ($2.0m) in respect of severance payments and a vacant leasehold provision in respect of the acquired business. The net operating loss included in the financial statements in respect of KS Biomedix for the period from acquisition to 31 December 2003 was 3.7m ($6.6m).
On 6 January 2004, Xenova announced the sale of certain premises at KS Biomedix's Farnham research facility together with related assets to Bioventix Limited for 0.8m ($1.4m). This disposal resulted in a disposal of part of the goodwill arising on the acquisition of KS Biomedix, amounting to 0.2m ($0.4m). The disposal also resulted in a further seven former KS Biomedix employees transferring from Xenova to Bioventix.
UK Placing, US Private Placement and Open Offer
On 26 November 2003, Xenova Group plc announced a UK placing (fully underwritten), US private placement and open offer of 187,601,690 Offer Shares and 56,280,507 Warrants to raise approximately 21.1m ($37.8m) gross or 19.4m ($34.7m) net of expenses. The total number of ordinary shares in issue following the UK placing, US private placement and open offer was approximately 431.5 million.
Cash, short-term deposits and investments
Cash, short-term deposits and investments at 31 December 2003 totalled 27.5m ($49.2m) (2002: 19.2m ($34.4m)). The Group had cash of 12.1m ($21.6m) and liquid resources of 15.4m ($27.6m) at 31 December 2003 (2002: cash 2.6m ($4.7m), liquid resources 16.6m ($29.7m)).
Included in liquid resources is an investment in Cubist Pharmaceuticals Inc of 0.4m ($0.8m), (2002: 0.4m ($0.8m)).
Share capital reorganisation
Prior to the UK placing, US private placement and open offer Xenova Group plc received approval from shareholders at an EGM on 22 December 2003 to reorganise its share capital such that each issued existing 10p ordinary share was sub-divided into ten new ordinary shares of 1p each, of which nine such new ordinary shares were converted and redesignated as nine deferred shares of 1p each, and each unissued, but authorised, 10p ordinary share was subdivided into ten new ordinary shares of 1p each. Shareholders also approved a capital reduction which will result in the deferred shares being cancelled if approval is obtained from the High Court. Xenova Group plc is in the process of making an application to the court and anticipates that the capital reduction will become effective in the first half of 2004. Following the capital reduction the number of ordinary shares in issue will remain the same.
The number of shares in issue rose to approximately 431.5 million as at 31 December 2003 from 172.8 million at 31 December 2002, due principally to the 69.4 million shares issued to acquire KS Biomedix and the 187.6 million shares issued as a result of the UK placing, US private placement and open offer.
The Directors do not propose a dividend for 2003 (2002: nil).
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