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AB Science today reports its revenues for the first half of 2018
Globe Newswire 1-Oct-2018 2:40 AM
Paris, October 1st 2018, 8.30am
Net loss of 11.1M€ in the first half of 2018
Cash position of 21.1M€ as of 30 June 2018, plus 6.6M€ of 2017 tax credit reimbursed by the Public Finance Department in August 2018
AB Science SA (NYSE Euronext - FR0010557264 - AB), a pharmaceutical company specializing in the research, development and commercialization of protein kinase inhibitors (PKIs), today reports its revenues for the first half of 2018 and provides an update on its activities.
Key events for the first half of 2018
Clinical studies
Amyotrophic Lateral Sclerosis (ALS)
In April 2018, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicine Agency (EMA) adopted a negative opinion for the marketing authorization of masitinib in the treatment of adult patients with amyotrophic lateral sclerosis (ALS).
The grounds for this negative opinion were:
The CHMP considered, based on a Good Clinical Practice inspection carried out on two of the main clinical investigation centers of the study, that the reliability of the data was not robust enough to support registration.
The CHMP did not recognize the clinical relevance of the distinction made by AB Science between patients with "normal" progression (accounting for 85% of patients in the study) and for whom an improvement on the primary endpoint - ALSFRS-R score - has been demonstrated, and those with "rapid" progression (accounting for 15% of patients in the study).
The CHMP considered that the primary analysis of the ALSFRS-R score for patients who stopped the study prematurely, based on the LOCF method (last observation carried forward), could introduce a bias in the analysis of the results.
The marketing authorization application was filed in September 2016 based on the interim results from study AB10015. The final safety data were generated in February 2018 and could not be inspected during the evaluation. New data cannot be presented as part of a reexamination procedure.
AB Science is therefore evaluating the possibility to resubmit the application based on the final results from study AB10015. As part of the resubmission, AB Science intends to submit:
Final safety data
New sensitivity analyses on the primary analysis of the ALSFRS-R score for patients who stopped the study prematurely, applying recommended methods as per EMA guidelines in order to corroborate the results based on the LOCF method (last observation carried forward)
New preclinical data reinforcing the mechanism of action of masitinib, which is an important consideration in the context of an application based on a single pivotal trial
Moreover, a second study is needed to confirm the results of this first pivotal study, even in case of positive opinion by the CHMP. AB Science will initiate this confirmatory study in the treatment of ALS once the scientific advice procedure regarding the design of the trial is completed and once the ANSM clinical hold is lifted.
Other clinical studies
The phase 3 study evaluating masitinib in the treatment of primary progressive or relapse-free secondary progressive multiple sclerosis is still ongoing. The Independent Data Safety Monitoring Committee (IDMC) did not report any safety concern with masitinib in the study population. The recruitment is completed and final results of the study are expected in 2019.
The phase 3 study (AB12003) evaluating masitinib in the treatment of metastatic castrate resistant prostate cancer (mCRPC) is still ongoing following the blinded interim analysis of study data. According to the study protocol, an interim analysis performed by the IDMC was pre-planned once 50% of the events had been reached. Based on results from this interim analysis, the IDMC has recommended the continuation of study AB12003 in a pre-specified sub-population of patients that were identified based on a specific biological biomarker, and which is estimated to account for about two-thirds of the eligible population. A total of 468 patients are to be enrolled in this sub-population, while enrolment of patients with an absence of this biomarker will be stopped. Based on the rules set for the interim analysis, this recommendation from the IDMC means that the probability of success of study AB12003 is above 80% in the selected sub-population, assuming that the patients remaining to be enrolled behave similarly to those analyzed at the interim analysis. AB Science expect study AB12003 to be completed in 2019.
Other events
Other transactions of securities
During the first half of 2018, as a result of the exercise of share subscription warrants, 39,314 shares of nominal value of 0.01 euros were issued in the first half of 2018, resulting in an increase in equity of 393.14 euros.
As of 30 of June 2018, the share capital of AB Science is composed of 41,064,310 shares, including 18,891,108 with a double voting right.
Other information
AB Science confirms its eligibility for the PEA-SMEs in accordance with decree n°2014-283 of 4 March 2014 for the implementation of Article 70 of 2014 Finance Law n°2013-1278 of 29 December 2013, setting the PEA-PME eligibility for companies: less than 5 000 employees on one hand, a turnover lower than 1,500 million euros or total assets of less than 2,000 million, on the other hand.
Recent events since half-year closing
The phase 3 study evaluating masitinib in the third and fourth-line treatment of metastatic colorectal cancer is still ongoing. The study design is an adaptive design. A trend analysis for OS was planned after a certain number of events are observed. Based on this trend analysis, the IDMC recommended the continuation of the study, with a total of 415 patients to be enrolled. A total of 190 patients have been enrolled in study AB12010. An interim analysis is planned after around 50% of the total number of required events. AB Science expects study AB12010 to be completed in 2019.
No other event that is likely to have an impact on the financial position of the Company has occurred since closing.
Consolidated financial statements for the first half of 2018
The Company's turnover, entirely generated by the commercialization of a drug in veterinary medicine, amounts to 872 K€ for the first half of 2018, as compared with 842 K€ one year earlier, which represents an increase of 3.6%.
The Company's operating charges amounted to 15,064 K€ on 30 June 2018 as compared with 14,550 K€ on 30 June 2017, corresponding to an increase of 3.5%.
The Company's marketing expenses are stable (530K€ on 30 June 2018 compared with 525K€ on 30 June 2017).
Administrative expenses decreased by 4.5% from 1,259 K€ on 30 June 2017 to 1,202 K€ on 30 June 2018.
Research and development expenses increased by 4.2%, from 12,756 K€ as of 30 June 2017 to 13,287 K€ as of
30 June 2018.
Operating profit/loss
The operating loss as at 30 June 2018 amounted to 14,192 K€ as compared with 13,709 K€ as at 30 June 2017,
which is an increase of the operating loss by 483 K€ (3.5%).
Financial profit/loss
The financial profit as of 30 June 2018 was 3,076 K€, as compared with a profit of 206 K€ a year earlier.
The 3,076 K€ profit is composed of:
Financial income: 3,121 K€. Financial income is mainly related to:
Cash remuneration: 4 K€
Exchange gains: 36 K€
Accounting at the fair value of the financial liabilities, explained in the 11.3 note of the
appendix to the consolidated financial statements of the present document: 3,077 K€. This variation generates a non-recurring and non-cash effect income.
Financial loss: 45 K€. Financial loss is mainly related to:
Currency effects: 33 K€
Other financial charges: 11 K€
Net profit/loss
The total net loss as at 30 June 2018 amounted to 11,121 K€, as compared to 13,511 K€ as of 30 June 2017, a decrease of 17.7% for the reasons provided above.
Consolidated balance sheet information
Assets
Given the stage of product development, development costs were expensed, marketing prospects being difficult to evaluate. Fixed assets correspond essentially to the cost of registration of the Company's patents. Registration costs of the Company's patents booked as net fixed assets are stable compared to 30 June 2017 and amounts to 1,659 K€ as at 30 June 2018.
Inventory amounted to 246 K€ as of 30 June 2018 as compared with 159 K€ as of 31 December 2017.
Trade receivable decreased from 449 K€ at the end of 2017 to 377 K€ as of 30 June 2018.
As of 30 June 2018, there is no current financial asset. These financial assets correspond to cash instruments, the
term of which is beyond 3 months. As of 30 June 2018, there is no cash with a term beyond 3 months.
Other current assets of the Company increased from 9,246 K€ as of 31 December 2017 to 12,040 K€ as of 30 June 2018, a 29.7% increase over the period (2,794 K€). This increase is explained by the accounting of the research tax credit for the first half of 2018 (3,006 K€).
Total cash and current financial assets amounted to 21,109 K€ as of 30 June 2018, against 38,789 K€ as of 31 December 2017. This amount excludes the reimbursement of the 6,557 K€ amount for the 2017 research tax credit paid by Finance Public Department in August 2018.
Liabilities
Funding used by the Company comes mainly from issue of bond loan agreements, issue of new shares with the equity line facilities (PACEO) set up with Société Générale and Crédit Agricole and various public aids (research tax credits, reimbursable advances and subsidies).
The table hereafter shows the change in the Company's equity between 31 December 2017 and 30 June 2018.
(in thousands of euros) - IFRS norms
Company Equity
Equity as of 31 December 2017
10 735
Capital increases and additional paid-in capital net of issuance costs
50
Total profit/loss over the period
(11 046)
Conversion options
0
Payments in shares
76
Equity as of 30 June 2018
(184)
As of 30 June 2018, shareholders' equity amounted to -184 K€.
Current liabilities amount to 17,795 K€ as of 30 June 2018 against 18,713 K€ in late 2017, which represents a decrease of 4.9%.
This decrease (918 K€) can be explained by the following effects:
The decrease in current liabilities (902 K€)
The decrease of the other current liabilities (78 K€)
The increase in current provisions (63 K€)
Non-current liabilities mainly amount to 18,048 as of 30 June 2018 against 21,152 K€ as of 31 December 2017, a decrease of 3,104 K€. They mainly include conditional cash advances (9,331 K€) and cash instruments (7,967 K€). The decrease is mainly due to the cash instruments fair value variation.
Risk factors and uncertainties
Additionally to the risks and uncertainties described in Chapter 5 of the Annual Financial Report to 31 December 2017, the Company is exposed to the following risks and uncertainties:
Lifting of the clinical hold in France
The Company is in regular contact with ANSM in order to restart patient recruitment in clinical studies in France, based on the corrective and preventive actions implemented by the Company.
Marketing authorization application in Amyotrophic Lateral Sclerosis
Following the CHMP negative opinion for the marketing authorization of masitinib in the treatment of adult patients with amyotrophic lateral sclerosis and since the marketing authorization application was filed in September 2016 based on the interim results from study AB10015, AB Science is evaluating the possibility to resubmit the application based on the final results from study AB10015.
Foreseeable evolution of the Group's situation and future prospects
In 2018, AB Science continued and reinforced the transformation plan in order to ensure that clinical studies are carried out in compliance with good clinical practices.
In 2018, AB Science continues to allocate most of its resources to the development of masitinib, the most advanced molecule of the Company.
The expected clinical milestones are:
Trend analysis for the phase 2/3 study in refractory ovarian cancer
Interim analysis for phase 3 study in pancreatic cancer
Interim analysis for phase 2/3 study in Alzheimer's disease
Final analysis for phase 3 study in severe asthma uncontrolled by oral corticosteroids
And also:
Launch of confirmatory studies in ALS and mastocytosis, subject to the lifting of the clinical hold in France
The Company also continued to invest in drug discovery activities in order to fuel its portfolio of molecules. AB Science intends to launch a phase 1/2 study in refractory acute myeloid leukemia with a new molecule developed by AB Science (AB8939).
About AB Science
Founded in 2001, AB Science is a pharmaceutical company specializing in the research, development and commercialization of protein kinase inhibitors (PKIs), a class of targeted proteins whose action are key in signaling pathways within cells. Our programs target only diseases with high unmet medical needs, often lethal with short term survival or rare or refractory to previous line of treatment.
AB Science has developed a proprietary portfolio of molecules and the Company's lead compound, masitinib, has already been registered for veterinary medicine and is developed in human medicine in oncology, neurological diseases, and inflammatory diseases. The company is headquartered in Paris, France, and listed on Euronext Paris (NYSE:AB).
Further information is available on AB Science's website: www.ab-science.com.
Forward-looking Statements - AB Science
This press release contains forward-looking statements. These statements are not historical facts. These statements include projections and estimates as well as the assumptions on which they are based, statements based on projects, objectives, intentions and expectations regarding financial results, events, operations, future services, product development and their potential or future performance.
These forward-looking statements can often be identified by the words "expect", "anticipate", "believe", "intend", "estimate" or "plan" as well as other similar terms. While AB Science believes these forward-looking statements are reasonable, investors are cautioned that these forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict and generally beyond the control of AB Science and which may imply that results and actual events significantly differ from those expressed, induced or anticipated in the forward-looking information and statements. These risks and uncertainties include the uncertainties related to product development of the Company which may not be successful or to the marketing authorizations granted by competent authorities or, more generally, any factors that may affect marketing capacity of the products developed by AB Science, as well as those developed or identified in the public documents filed by AB Science with the Autorité des Marchés Financiers (AMF), including those listed in the Chapter 4 "Risk Factors" of AB Science reference document filed with the AMF on November 22, 2016, under the number R. 16-078. AB Science disclaims any obligation or undertaking to update the forward-looking information and statements, subject to the applicable regulations, in particular articles 223-1 et seq. of the AMF General Regulations.
