• Strategic expansion of the value chain
• Significant progress of all clinical projects
• Financials in line with guidance
Munich, Germany, 22 February 2011. WILEX AG (ISIN DE0006614720 / Frankfurt Stock Exchange / Prime Standard) today published its financial results and annual report for the financial year 2010 (1 December 2009 – 30 November 2010).
Peter Llewellyn-Davies, Chief Financial Officer of WILEX AG, commented: “The 2010 financial year was outstanding from an operational perspective. We made good progress in all clinical projects. The registration trial of REDECTANE ® was completed successfully. At the same time, we complemented our business model through strategic acquisitions. The Company’s costs are at the lower end of our guidance.”
Developments in financial year 2010
REDECTANE®: Positive final data from the REDECTANE® trial were announced in May 2010 showing superior diagnosis with PET/CT and REDECTANE® compared with CT alone in renal cell cancer. WILEX has finalised preparations for the pre-BLA meeting with the US Food and Drug Administration (FDA). The documentation will be submitted as soon as the product manufacturing sections have been received from our partner IBA. WILEX’s first drug candidate could be approved by 2011/12.
RENCAREX®: The Company announced in January 2011 that a major milestone in the Phase III ARISER trial of the therapeutic antibody RENCAREX® in the indication clear cell renal cell cancer had been reached. The process for the interim analysis for efficacy of RENCAREX® has started and the 343rd relapse was reported to WILEX. The results of the interim analysis are expected to be available from mid-year.
MESUPRON®: Impressive final data for the small molecule MESUPRON® were presented in June 2010. In a Phase II combination trial with the chemotherapeutic agent Gemcitabine in the indication pancreatic cancer, MESUPRON® showed an improvement in the tumour response rate, median survival and one-year survival.
WX-554: The MEK inhibitor WX-554 acquired from UCB Pharma completed a Phase I dose escalation study in healthy volunteers with positive results in June 2010. The substance was safe and well tolerated.
Strategic expansion: WILEX acquired Oncogene Science, a former business unit of Siemens Healthcare Diagnostics Inc. based in Cambridge, MA, USA, in November 2010. WILEX Inc., a wholly-owned newly founded US subsidiary of WILEX AG acquired the business and a team of ten employees. With Oncogene Science, WILEX has expanded its business model to include the innovative biomarker business. Furthermore, the planned acquisition of Heidelberg Pharma AG, which was approved by the Extraordinary General Meeting in December 2010, is set to give WILEX access to an attractive and highly promising antibody technology and ideally complements the WILEX’s business model.
Company funding: Our shareholders confirmed their trust in WILEX by participating in two capital measures carried out in the 2010 financial year. This provided WILEX with approximately EUR 18 million in fresh capital. In addition, we concluded an equity distribution agreement of up to EUR 20 million in March 2010 and secured new funds of up to EUR 10 million through a shareholder loan in December 2010.
Key financial figures for financial year 2010
As expected, WILEX did not recognise any sales revenue from product sales or licence agreements in the 2010 financial year. In the previous year, the Company had posted EUR 10.00 million in sales revenue from UCB’s two milestone payments. At EUR 1.31 million, other income, as planned, was below the previous year’s figure (2009: EUR 3.01 million; -56.4%). This income comprises advance prepayments from our cooperation partners deferred and recognised at the time the relevant services are rendered. These deferred amounts decrease over time as the projects progress.
Operating expenses including depreciation and amortisation fell by 5.6% to EUR 24.43 million (previous year: EUR 25.88 million). This was mainly due to the decrease in research and development costs to EUR 19.70 million (previous year: EUR 21.82 million) as a result of the trials’ expected progress. Research and development costs accounted for 80.7% of all costs, with administrative costs making up the remaining 19.3% of operating expenses amounting to EUR 4.72 million (previous year: EUR 4.05 million). The increase in costs was caused mainly by the revaluation of stock options and by consultancy costs for the mandatory offer and the negotiated transactions.
Given that WILEX had recognised sales revenue from UCB in the previous year, the Company’s earnings before tax in financial year 2010 fell by EUR 10.4 million year on year to EUR -23.09 million (2009: EUR -12.71 million). The net loss for the year increased accordingly to EUR 23.10 million (2009: EUR 12.73 million, +81.5 %). This corresponds to earnings per share of EUR -1.38 (2009: EUR -0.95). Equity as of 30 November 2010 was EUR -1.30 million (previous year: EUR 3.04 million).
The Company had cash and cash equivalents of EUR 1.94 million (previous year: EUR 3.41 million) at the end of the reporting period. In December 2010, WILEX signed a loan agreement for EUR 10 million with its two main shareholders, dievini and UCB, subject to subordination and payable in two instalments. As a result, WILEX expects its funding to be secured into the second quarter of 2011.
Operating outlook for the 2011 financial year
WILEX expects to achieve pivotal milestones in 2011. The clinical focus will be on the filing of the marketing application for REDECTANE® with the FDA and on the Independent Data Monitoring Committee’s results of the interim analysis for efficacy of RENCAREX®. This analysis will provide critical information on the trial endpoint – “disease-free survival” – and could be the basis for the European application for marketing approval. Other projects include the continuation of the Phase II trial of MESUPRON® in the breast cancer indication and the Phase I programme involving WX-554. The commercialisation of the product candidates, the integration of WILEX Inc. and the completion of the takeover of Heidelberg Pharma AG will be important challenges on the commercial side.
Revenue from the product sales of WILEX Inc. and the preclinical contract research of Heidelberg Pharma AG are intended to generate net cash flow. The earnings of WILEX are contingent on the conclusion of a commercialisation agreement for one of the product candidates as well as income from the first out-licensing of the ADC technology. Whilst promising discussions and negotiations are ongoing, no potential sales revenue from a partnership is included in the planning.
Financial outlook on 2011 of the WILEX Group
WILEX expects to generate between EUR 3.0 million and EUR 4.5 million in sales revenue and other income in the 2011 financial year if its projects proceed as planned. Operating expenses will be in the range of EUR 28 million to EUR 33 million. Research and development costs are expected to be between EUR 22 million and EUR 27 million. We anticipate a net loss of between EUR 24 million to EUR 29 million. This figure includes the impact of EUR 2 million to EUR 3 million from the acquisitions of Oncogene Science and Heidelberg Pharma based on the sales revenue and cost planning of both business units.