• Income more than doubled, liquidity and equity strengthened
• Commercialisation strategy on track
• Financial guidance improved
Munich, Germany, 14 July 2011. WILEX AG (ISIN DE0006614720 / WL6 / Frankfurt Stock Exchange) today published its financial report for the first six months of the 2011 financial year (1 December 2010 – 31 May 2011) and reported on the status of the Company’s projects.
Peter Llewellyn-Davies, Chief Financial Officer of WILEX AG, commented: “Strategic acquisitions have expanded our business model over the past half-year and we are on track with our commercialisation strategy. We have doubled income and strengthened liquidity and equity, therefore significantly improving our financial position and our guidance for the current financial year.”
Business performance, research and development activities in 2011
WILEX granted the exclusive US commercial rights for RENCAREX® to Prometheus Laboratories Inc., a US pharmaceutical company, in April 2011 and received payments totalling USD 19 million during the reporting period. Under this agreement, WILEX has the option of receiving either the European commercial rights to an already marketed Prometheus product or a compensation payment of USD 20 million 12 months after signing. Overall the alliance has a potential value of more than USD 145 million plus royalties on US sales.
The recruitment of breast cancer patients for the MESUPRON® Phase II trial was successfully completed in May 2011.
The Pre-BLA Meeting for the diagnostic candidate REDECTANE® took place in the second quarter. The FDA confirmed during the discussions at this meeting that the Phase III REDECT trial delivers reasonable evidence of the diagnostic efficacy and safety of REDECTANE®. Two issues remain to be resolved by WILEX and its partner Ion Beam Applications S.A., Louvain-la-Neuve, Belgium (IBA). The FDA suggested that WILEX and IBA might consider an outcomes based study to provide additional evidence of clinical benefit before BLA filing. WILEX and IBA agree with the FDA that a trial with a clinical benefit outcome could represent the next logical step in REDECTANE’s development. WILEX, IBA and external medical advisors however are of the opinion that such a trial should be conducted as a Phase IV trial after market approval. WILEX and IBA will first discuss the trial design and strategy with the Medical Advisory Board and subsequently with the FDA. The second set of issues discussed with the FDA concerns matters related to the manufacturing of REDECTANE®. WILEX and IBA will make the required data available to the FDA in the next months.
In connection with marketing Oncogene Science’s in vitro diagnostic tests, WILEX Inc. successfully acquired important customers and expanded its client base. ISO certification, a prerequisite for manufacturing and selling the diagnostic tests, as well as the changeover of the product range to WILEX Inc. is ongoing and are expected to be completed in the next weeks. Initial sales revenue has been generated.
The acquisition of Heidelberg Pharma AG was successfully completed in March and is now being integrated into the WILEX Group. Heidelberg Pharma has successfully expanded its preclinical service business and reports increasing sales revenue.
Financial results of the first half of 2011
In the first six months of the 2011 financial year, the WILEX Group generated higher income of € 2.0 million (previous year: € 912 k – plus 120%). In the first half of 2011, the WILEX Group posted sales revenue of € 1.4 million (previous year: € 0 k), of which € 898 k are attributable to the sales revenue from deferred income relating to the Prometheus transaction. Additional revenue will be generated from the marketing of WILEX Inc.’s diagnostic tests and Heidelberg Pharma’s customer specific preclinical contract research. Other income amounted to € 639 k (previous year: EUR 912 k) primarily based on income realisation from grants and milestone payments.
Operating expenses including depreciation and amortisation amounted to € 12.41 million at the level of the previous year (€ 12.48 million). Research and development costs at just under 71% account for the majority of operating expenses. They were € 8.75 million in the first half of 2011 and thus 14.1% lower than 2010 (€ 10.19 million). The ongoing clinical development of the monoclonal antibody Girentuximab (for RENCAREX® and REDECTANE®) accounted for 52.3% of research and development costs. As expected and reflecting the progress of the two Phase III trials, this figure was lower than 2010 in absolute terms but slightly higher in relative terms than the previous year’s 47.9%. The uPA programme involving the small-molecule drug candidate MESUPRON® – specifically, the Phase II breast cancer trial – accounted for 29.4% of the research and development costs (previous year 32.7%). Costs fell compared to the previous year as the Phase II trial involving patients with pancreatic cancer, which incurred expenditures the previous year, has been completed. The other projects, which mainly comprise the programmes acquired from UCB, account for 18.3% of research and development costs. Administrative costs rose by 17.1% to € 2.67 million (previous year: € 2.28 million) due mainly to the consolidation of our subsidiaries’ expenses as well as transaction costs in connection with the acquisition.
The consolidated net loss for the period was € 10.62 million. This represents an improvement of 8.1% compared with the previous year (€ 11.56 million) as a result of higher income and lower costs. Earnings per share improved to -0.54 (previous year: € -0.73).
The WILEX Group had cash and cash equivalents of € 13.52 million (30 November 2010: € 1.94 million, 31 May 2010: € 3.31 million) at the close of the first half of 2011. Equity at the end of the reporting period was € 7.37 million (30 November 2010: € -1.30 million). The equity ratio improved to 20.2%.
Outlook
The WILEX Group has adjusted its financial guidance for the current financial year and now expects sales revenue and other income to increase considerably to between € 9 million and € 11 million.
Operating expenses in 2011 will be lower than previously forecast at between € 26 million and € 30 million if business goes as planned.
Accordingly, the operating loss for the year will decrease to between € 16 million and € 20 million, compared to a loss of € 23.1 million in 2010. As previously forecast, the result includes the business activities of both WILEX Inc. and Heidelberg Pharma at between € -2 million and € -3 million based on both entities’ revenue and cost planning. Both companies are anticipated to achieve positive results by the end of 2012.
WILEX expects the following clinical milestones to be achieved in the coming months: The Company continues to prepare the approval application for REDECTANE® jointly with its partner IBA. WILEX and IBA will address the issues raised at the pre-BLA Meeting and prepare proposals ready for discussion with the FDA. The recommendation of the Independent Data Monitoring Committee in the Phase III ARISER trial of RENCAREX® is expected in the second half of 2011.
Under the agreement with Prometheus, WILEX will make a decision by May 2012 on whether to take over an approved and marketed product for Europe or receive the agreed payment of USD 20 million.
The Phase I programme for the MEK inhibitor WX-554 will be continued in the second half of 2011 with the orally administered version in healthy volunteers and patients studies. The final data of progression-free survival from the Phase II trial of MESUPRON® in HER2 receptor negative breast cancer are expected in 2012.
WILEX Inc. will continue expanding its customer base for marketing the in vitro diagnostic tests. The integration of Heidelberg Pharma AG and the expansion of contract-based business activities will be continued. The conclusion of licence agreements for the ADC platform technology is a key task for the next months.