Copenhagen and Oslo, 17th November, 2011, 2011-11-17 09:15 CET (GLOBE NEWSWIRE) -- Affitech A/S (NASDAQ OMX: AFFI) the antibody medicines Company, today announced a restructuring of the Company that will result in a staff reduction of about 24 people at the Company’s subsidiary, Affitech Research AS in Oslo, where its main Research and Development operations take place. The reasons for this restructuring exercise are (i) to focus more of its spending on development of its lead antibody products and (ii) to extend the period available to the Company for raising fresh capital.
Focus on Product Development
The Company has completed preclinical research on its lead antibody AT001/r84, a new selective antibody to vascular endothelial growth factor (VEGF), a major target of anti-cancer medicines. The Company has also completed the research phase of its AT008/anti-CCR4 program and has selected a monoclonal antibody development candidate as its second potential anti-cancer drug. Affitech now intends to focus its resources on supporting the clinical development of AT001/r84 and the preclinical development of AT008/anti-CCR4.This second potential anti-cancer product is the first functional antagonist of CCR4, a G-protein coupled receptor (GPCR) found on the surface of many cancer cells. The antibody was discovered using the Company's proprietary CBASTM technology platform. Affitech will continue its discovery research on other novel anti-GPCR drug candidates and maintain its core technologies and expertise within the Company.
Financial Considerations
In April 2010, Affitech entered into a subscription agreement with Trans Nova Investments whereby Trans Nova Investments became the controlling shareholder of the Company with an equity position of approximately 53% of the Company. At the same time, Affitech signed a Research and Development collaboration and license agreement with NauchTekhStroy Plus (later transferred to IBC Generium) under which IBC Generium gained exclusive rights to license each of Affitech’s two lead products (AT001/r84 and AT008/anti-CCR4) for the Russia and CIS markets.
The pre-clinical package for AT001/r84 for Russia/CIS was completed in October 2011, and the Company announced on October 20th, 2011 that it had received a €2.5 million milestone fee as the second of a number of agreed license and milestone payments to be paid during the development of the product in Russia. AT008/anti-CCR4 has also progressed well, and Affitech expects to receive a €2.0 million license fee in the current month, as the first of a number of license and milestone payments following the exercise by IBC Generium of the license for the development of the product in Russia/CIS. These license and milestone fees are included within the Company’s budget for 2011. Affitech announced in its Q2 2011 report that the Company would require further equity financing by the end of Q1 2012 in order to pursue its present activities.
Trans Nova Investments has indicated to Affitech’s Board of Directors that they do not intend to solely fund Affitech’s further activities at the present rate of cash utilization. As a result, over the last few months the Company has investigated potential co-investor leads for financing, and this process will continue for the coming months. The Board of Affitech views the quality of the Company’s technology and new product opportunities as very strong and believes that the company has the basis and the competitive edge for further financing its Research and Development. However, due to the currently difficult financial market, a new financing process is likely to take time and cannot be guaranteed. The Board of Affitech has therefore decided to reduce expenses and cash flow in order to extend the period during which the Company can continue its operations while seeking new investment on an international basis. By implementing the staff reductions announced today and other cost cutting measures and focusing its activities as described, the Board of Directors expects the Company to have sufficient funds until end of Q2 2012.
Outlook
The financial outlook for 2011 is changed to an estimated loss of 45-55 million DKK compared to a loss of 50-60 million DKK as previously announced. This includes restructuring expenses of up to 5 million DKK offset by a general lower operating cost level than previously expected in Q4 and the initial impact of the cost saving measures taken. The cash position at year end 2011 is expected to be in the range of 25 million DKK. The annual cost saving effects of the announced restructuring is estimated to be 18 million DKK.
Affitech will provide more detail on the progress of its Research and Development programs and its financial status in the Company’s Q3 2011 Report, which will be issued on November 24th 2011.
About Affitech
Affitech A/S is a publicly traded (NASDAQ OMX Copenhagen) human therapeutic antibody company based in Copenhagen, Denmark with R&D facilities in Oslo, Norway. The Company utilizes a range of proprietary antibody technologies for the discovery of fully human antibodies for application in oncology, inflammation and other disease areas. CBAS™ (Cell Based Antibody Selection) is Affitech’s premier discovery engine for the isolation of lead antibodies to cell surface molecules. Affitech co-develops its two lead antibody drug programs AT001/r84 and AT008/CCR4 with Russian partner IBC Generium. The Company’s initial focus is on rapid and cost effective development by partnering clinical trials in emerging markets. Further information is available at www.affitech.com.
Disclaimer
This announcement may contain forward-looking statements including statements about Affitech’s expectations of the progression of its pipeline including the timing for commencement and completion of clinical trials and with respect to cash burn guidance. Such statements are based on Management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Affitech cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, the following: risks associated with technological development, the risk that research & development will not yield new products that achieve commercial success, the impact of competition, the ability to transact viable and profitable commercial deals, the risk of non-approval of patents not yet granted, and difficulties of obtaining relevant governmental approvals for new products. No expressed or implied representations or warranties are given concerning Affitech A/S or the accuracy or completeness of the information provided herein, and no claims shall be made by the recipient of this news release by virtue of the information contained herein.
Contact:
Randi Krogsgaard, Director IR & Corporate Communications
Tel # +45 2320 1001, e-Mail: ir@affitech.com
