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- A clinical development plan already well underway:
- New clinical immune checkpoint inhibitors (ICIs) combination collaborations signed with Bristol-Myers Squibb for TG4010 (lung cancer) and with Merck KGaA/Pfizer for TG4001 (head and neck cancer)
- First patients dosed in trials combining ICIs with TG4010 (lung cancer) and with Pexa-Vec (solid tumors)
- Very favorable change in finance:
- Net loss significantly reduced: 25.2 million in 2016 compared to 46.4 million in 2015
- Cash and cash equivalents increased: 56.2 million as of December 31, 2016, increasing financial visibility until the end of 2018
- Acceleration of the clinical development plan will generate a rich news flow over the next 12 months
Conference call scheduled today at 6:00 PM CET (in English)
STRASBOURG, France--(BUSINESS WIRE)--#HBV--Regulatory News:
Transgene (Paris:TNG) (Euronext Paris: TNG), a biotechnology company focused on designing and developing viral-based immune-targeted therapies for the treatment of cancers and infectious diseases, today announced its financial results for the fiscal year ended December 31, 2016, and provided its outlook for 2017.
In 2016, Transgene has focused its efforts on implementing its strategy, which looks to combine Transgenes immunotherapies (therapeutic vaccines and oncolytic viruses, which boost the immune system), with immune checkpoint inhibitors (ICIs). Over the last twelve months, additional data from clinical studies combining active immunotherapies with ICIs have confirmed the strong rationale behind this strategy.
During the second half of 2016, Transgene signed two clinical collaboration agreements that allow clinical studies with:
- TG4010 in combination with Bristol Myers-Squibbs ICI nivolumab in lung cancer patients receiving a 2nd line of treatment and;
- TG4001 with Merck KGaAs and Pfizers ICI avelumab in patients with HPV-positive head and neck cancer.
Several clinical trials have recently started or are being initiated to confirm the potential of Transgenes immunotherapeutics in combination with ICIs. The first results from these studies are expected around the end of 2017.
During the 2016 fiscal year, the Company strengthened its financial structure which will provide it with the funding to execute its clinical development plan through the end of 2018. This improved financial situation was the result of:
- a loan of 20 million from the European Investment Bank (EIB), 10 million of which was drawn down in June 2016 ;
- a 46.4 million rights issue that was completed in November 2016;
- as well as the significant reduction of our net loss 25.2 million compared to 46.4 million in 2015.
In parallel with strengthening its financial position, Transgene completed its reorganization with the result it is now focused on research and clinical development (R&D). As part of the restructuring, Transgene sold its production facility to ABL Europe, a Mérieux Group Company, for 3.5 million.
Philippe Archinard, Chairman and Chief Executive Officer of Transgene said: ?Our achievements in 2016 have reinforced our position as a major player in immunotherapy. Our portfolio of immunotherapies, our clinical collaborations and our much-improved financial position have put us in a strong position to execute our clinical plan which is designed to deliver a rich news flow over the coming months. Positive results from these studies would allow us to conclude partnership agreements with pharmaceutical companies. We are looking forward to demonstrating the important clinical benefits that our immunotherapies in combination with ICIs can offer to patients with severe diseases.
Product pipeline review
1. Therapeutic Vaccines
TG4010 in advanced non-squamous non-small cell lung cancer
TG4010 is a therapeutic vaccine that induces an immune response against MUC1 expressing cells. TG4010 is being developed in non-squamous non-small cell lung cancer (NSCLC). TG4010s mechanism of action and excellent safety profile make it a very suitable candidate for combinations with other therapies.
TG4010s development plan is focused on Phase 2 studies that can generate a comprehensive data package for TG4010 in 1st- and 2nd-line treatment of advanced NSCLC over the next 9 to 18 months.
The clinical trials aim to confirm the synergies that are expected to result from the combination of a therapeutic vaccine and an ICI. The expected clinical benefits are an increase in the response rate, in the quality and in the duration of the response to current and future standards of care.
Non-small cell lung cancer (NSCLC) 2nd-line
Non-small cell lung cancer (NSCLC) 1st-line
TG4001: trial in combination with avelumab following collaboration agreement with Merck KGaA and Pfizer
TG4001 is a therapeutic vaccine that has already been administered to more than 300 patients with high grade cervical intra-epithelial neoplasia (CIN 2/3). This clinical experience has demonstrated good tolerability, a significant HPV clearance rate and promising efficacy results for TG4001. Its mechanism of action and good safety profile make TG4001 an appropriate candidate for combinations with other therapies, such as the anti-PD-L1 ICI avelumab.
| HPV positive head and neck cancer 2nd-line |
TG1050: ongoing recruitment in the Phase 1/1b trial, results expected in 2H 2017
TG1050 is a therapeutic vaccine for the treatment of chronic hepatitis B. In 2015, Transgene started a study (NCT02428400) evaluating the safety and tolerability of TG1050 in patients who are currently being treated for chronic HBV infection with standard-of-care antiviral therapy. The technology of TG1050 is also being developed in China, where Transgene operates a joint-venture with Tasly Biopharmaceutical Technology.
| Chronic hepatitis B |
2. Oncolytic viruses
Pexa-Vec: ongoing Phase 3 trial, initiation of the Phase 2 clinical trials in combination with ICIs
Pexa-Vec is an oncolytic virus designed to selectively destroy cancer cells through intracellular viral replication (oncolysis), and by stimulating the bodys immune response against cancer cells. Its mechanism of action and its tolerability profile make it an appropriate candidate for combinations with immune checkpoint inhibitors (ICIs).
| Advanced liver cancer (hepatocellular carcinoma - HCC) 1st-line |
| Advanced liver cancer (hepatocellular carcinoma - HCC) 1st-line |
TG6002: preparation of first-in-human trial
TG6002 is a next generation oncolytic immunotherapy. It has been designed to induce the breakdown of cancer cells (oncolysis) and express the FCU1 gene in cancer cells it has infected leading to the local production of 5-FU, a widely used chemotherapy. TG6002 could potentially be used both in combination or as monotherapy.
| Glioblastoma |
3. Research and preclinical portfolio
Transgene has delivered multiple important research and preclinical milestones in 2016. Transgene is exploring a new generation of armed oncolytic viruses. These oncolytic viruses can be armed with ICIs and/or therapeutic moieties that modulate the tumor micro-environment. These novel therapeutic payloads are designed to modify cell interactions within the tumor and enhance the efficacy of oncolytic viruses.
Transgene has filed a patent for an oncolytic Vaccinia Virus expressing an anti-PD1 antibody. Transgene presented a poster at the AACR (American Association for Cancer Research) meeting in April 2016, demonstrating our capacity to engineer advanced multifunctional viruses.
- Restructuring plan and sale of the production facility to ABL Europe for 3.5 million finalized. Annualized recurring savings are estimated to be approximately 15 million.
- Management team strengthened: Maud Brandely, MD, PhD appointed Chief Medical Officer, and John Felitti, JD, LLM appointed General Counsel & Corporate Secretary.
Key financials for 2016
- Net cash burn for 2016 was 30.6 million (including 5 million linked to the restructuring), versus 34.8 million in 2015. This was lower than expected due to a delay in an $4 million milestone payment to SillaJen. This payment is to be made in early 2017.
- Cash available at year-end 2016: 56.2 million, compared to 31.7 million at the end of 2015. This higher cash balance includes the 10 million draw-down of the EIB loan and the net proceeds of 45.2 million from the rights issue which was concluded in November 2016.
- Net operating expenses of 33.0 million in 2016, compared to 45.8 million in 2015.
- Significantly reduced net loss of 25.2 million in 2016, compared to a loss of 46.4 million in 2015.
?Transgenes 2016 financials reflect the completion of the reorganization that started in 2015. This has led to a significant reduction of our operating costs and as a result a 46% reduction in our net loss when compared to 2015. This reduction in fixed costs has enabled us to devote a greater proportion of our increased financial resources to our key strategic clinical and pre-clinical programs, said Jean-Philippe Del, Vice President, Finance.
The financial statements for 2016 as well as managements discussion and analysis are attached to this press release (Appendices A and B).
Financial Outlook 2017
Transgene expects its cash burn to be around 30 million in 2017. This figure takes into account the increase in costs related to the launch of clinical trials in 2017, as well as a confirmed significant reduction of our fixed costs following the restructuring that has taken place since 2015.
The Company still has access to further funding of up to 10 million from the second tranche of the EIB loan.
Transgene will host a ?R&D Day, on June 22, 2017. The event which will be conducted in English will feature presentations from several leading international scientists and clinicians.
The Board of Directors of Transgene met on March 17, 2017, under the chairmanship of Philippe Archinard and closed the 2016 financial statements. Audit procedures have been performed by the statutory auditors and the delivery of the auditors report is ongoing. The registration document, which includes the financial report, will be available in April 2017 on Transgenes website, www.transgene.com.
A conference call in English is scheduled on March 20th at 6 PM CET.
Webcast link to English language conference call:
Participant telephone numbers:
France: +33 (0)1 76 77 22 26
A replay of the call will be available on the Transgene website (www.transgene.fr) following the live event.
Transgene S.A. (Euronext: TNG), part of Institut Mérieux, is a publicly traded French biotechnology company focused on designing and developing targeted immunotherapies for the treatment of cancers and infectious diseases. Transgenes programs utilize viral vector technology with the goal of indirectly or directly killing infected or cancerous cells. The Companys two lead clinical-stage programs are: TG4010, a therapeutic vaccine against non-small cell lung cancer and Pexa-Vec, an oncolytic virus against liver cancer. The Company has several other programs in clinical and preclinical development. Transgene is based in Strasbourg, France, and has additional operations in Lyon, as well as a joint venture in China. Additional information about Transgene is available at www.transgene.fr.
Follow us on Twitter: @TransgeneSA
This press release contains forward-looking statements, which are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those anticipated. The occurrence of any of these risks could have a significant negative outcome for the Companys activities, perspectives, financial situation, results, regulatory authorities agreement with development phases, and development. The Companys ability to commercialize its products depends on but is not limited to the following factors: positive pre-clinical data may not be predictive of human clinical results, the success of clinical studies, the ability to obtain financing and/or partnerships for product manufacturing, development and commercialization, and marketing approval by government regulatory authorities. For a discussion of risks and uncertainties which could cause the Companys actual results, financial condition, performance or achievements to differ from those contained in the forward-looking statements, please refer to the Risk Factors (?Facteurs de Risque) section of the Document de Référence, available on the AMF website (http://www.amf-france.org) or on Transgenes website (www.transgene.fr). Forward-looking statements speak only as of the date on which they are made and Transgene undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.
Opdivo® is a registered trademark of Bristol-Myers Squibb Company.
Appendix A: 2016 Financial Statements
CONSOLIDATED BALANCE SHEET, IFRS,
|ASSETS||December 31, 2016||December 31, 2015|
|Cash and cash equivalents||4,855||3,285|
|Other current financial assets||51,352||28,365|
|Cash, cash equivalents and other current financial assets||56,207||31,650|
|Other current assets||15,242||12,930|
|Assets available for sale||-||3,500|
|Total current assets||74,055||51,028|
|Property, plant and equipment||14,580||16,559|
|Financial fixed assets||5,023||4,050|
|Investments in associates||3,923||1,148|
|Other non-current assets||24,946||27,599|
|Total non-current assets||48,895||49,841|
|LIABILITIES AND EQUITY||December 31, 2016||December 31, 2015|
|Provisions for risks||1,456||7,038|
|Other current liabilities||3,761||3,770|
|Total current liabilities||19,919||26,725|
|Other non-current liabilities||-||-|
|Total non-current liabilities||56,528||47,597|
|Share premiums and reserves||504,258||476,788|
|Profit (loss) for the period||(25,207)||(46,374)|
|Other comprehensive income||(983)||(800)|
|Total equity attributable to Company shareholders||46,503||26,547|
|Total equity and liabilities||122,950||100,869|
CONSOLIDATED INCOME STATEMENT, IFRS
(In thousands, except for per-share data)
|Revenue from collaborative and licensing agreements||2,346||1,465|
|Government financing for research expenditure||6,382||8,100|
|Research and development expenses||(26,419)||(32,138)|
|General and administrative expenses||(6,236)||(5,798)|
|Net operating expenses||(32,975)||(45,755)|
|Operating income from continuing operations||(22,664)||(35,807)|
|Share of profit (loss) of associates||(917)||(1,172)|
|Income (loss) before tax||(24,183)||(37,909)|
|Income tax expense||-||-|
|Net income/(loss) from continuing operations||(24,183)||(37,909)|
|Net income/(loss) from discontinued operations||(1,024)||(8,465)|
|Basic loss per share ()||(0.45)||(1.20)|
|Diluted earnings per share ()||(0.45)||(1.20)|
CASH FLOW STATEMENT, IFRS
|Cash flow from operating activities:|
|Net income/(loss) from continuing operations||(24,183)||(37,909)|
|Net income/(loss) from discontinued operations||(1,024)||(8,465)|
|Cancellation of financial income||602||930|
|Elimination of non-cash items|
|Income of associates||917||1,172|
Net cash generated from/(used in) operating activities before change in
|Change in operating working capital requirements:|
|Current receivables and prepaid expenses|| |
|Inventories and work in progress||942||(14)|
|Research tax credit||(6,425)||(8,532)|
|Assets available for sale||2,000||-|
|Other current assets||(524)||(2,150)|
|Other current liabilities||(57)||2|
|Net cash used in operating activities:||(33,585)||(45,152)|
|Cash flows from investing activities:|
|(Acquisitions)/disposals of property, plant and equipment||(27)||(1,527)|
|(Acquisitions)/disposals of intangible assets||(20)||-|
|Net cash used in investing activities:||(2,067)||2,316|
|Cash flow from financing activities:|
|Net financial income proceeds||(283)||(165)|
|Gross proceeds from the issuance of shares||46,300||477|
|Share issue costs||(1,220)||-|
|(Acquisition)/disposal of other financial assets||(22,933)||34,176|
|Net tax credit financing||6,761||8,209|
|Net cash generated from/(used in) financing activities:||37,222||42,580|
|Effect of changes in exchange rates on cash and cash equivalents||-||28|
|Net increase/(decrease) in cash and cash equivalents:||1,570||(228)|
|Cash and cash equivalents at beginning of period||3,285||3,513|
|Cash and cash equivalents at end of period:||4,855||3,285|
|Investments in other current financial assets||51,351||28,365|
|Cash, cash equivalents and other current financial assets:||56,206||31,650|
Appendix B: Management Discussion of 2016 Financials
During the periods under review, revenues from collaborative and licensing agreements mainly included:
- research and development services for third parties amounting to 0.5 million in 2016 (0.8 million in 2015); and
- income related to commercial use of technologies or products provided under license by Transgene amounting to 1.8 million in 2016 (0.7 million in 2015). This mainly comprised a non-recurrent compensation of 1.3 million paid by Sanofi Chimie under the terms of the 1991 cooperation agreement between the two companies.
As of December 31, 2016, government financing for research expenditures consisted of a research tax credit, as well as grants received and receivable:
- the research tax credit (CIR - crédit impôt recherche) amounted to 6.3 million in 2016 (7.9 million in 2015). Related eligible expenses (net of grants received during the fiscal year) amounted to 21.3 million in 2016 and 25.8 million in 2015; and
- research grants amounted to 0.1 million in 2016 (0.2 million in 2015).
Research and development (R&D) expenses amounted to 26.4 million in 2016, compared to 32.1 million in 2015. This decrease of 18% was mainly due to the impact of the restructuring plan initiated in 2015, with a decrease in payroll costs and operating expenses.
The following table details R&D expenses by type:
In millions of euros
|Dec. 31, 2016||Dec. 31, 2015||Change|
|Intellectual property expenses and licensing costs||1.1||1.5||-27%|
|External expenses for clinical projects||5.0||4.2||+19%|
|External expenses for other projects||3.8||4.4||-14%|
|Depreciation and provisions||1.5||2.0||-25%|
|Research and development expenses||26.4||32.1||-18%|
Employee costs allocated to R&D (salaries, employer contributions and related expenses) amounted to 10.8 million in 2016, compared to 14.6 million in 2015. This decrease of 26% was explained by the reduction in the headcount as results of the restructuring plan decided in 2015, especially in preindustrial development activities.
Intellectual property and licensing expenses amounted to 1.1 million in 2016 versus 1.5 million in 2015.
External expenses for clinical trials amounted to 5.0 million in 2016 versus 4.2 million in 2015. This increase was due to the acceleration of clinical trials with TG4010 (1.6 million in 2016 vs. 1.0 million in 2015) and Pexa-Vec (2.4 million in 2016 vs. 2.3 million in 2015).
Other external expenses, including expenses for research, preclinical and manufacturing projects, amounted to 3.8 million in 2016 versus 4.4 million in 2015. As results to the sale of the manufacturing unit, the Company now subcontracts the clinical lots manufacturing, notably to ABL Europe, the new owner of the Illkirchs unit since February 2016. This manufacturing subcontracting amounted to 1.2 million in 2016. Furthermore, the expenses for the commercial production unit with Sanofi/Genzyme decreased at 0.5 million in 2016 versus 2.0 million in 2015, due to the end of the construction part of the project, which enters into validation step. No expense related to regulatory toxicology studies was booked in 2016 (0.4 million in 2015 for TG1050 and TG6002).
Operating expenses, including the cost of operating research laboratories, amounted to 4.1 million in 2016 versus 5.1 million in 2015 (-20%), as expected as results of the restructuring.
General and administrative (G&A) expenses amounted to 6.2 million in 2016 versus 5.8 million in 2015.
The following table details G&A expenses by type:
|In millions of euros||Dec. 31, 2016||Dec. 31, 2015||Change|
|Fees and administrative expenses||1.5||1.7||-12%|
|Other fixed costs||0.7||1.0||-30%|
|Depreciation and provisions||0.1||0.1||N/S|
|General and administrative expenses||6.2||5.8||+7%|
Employee costs allocated to G&A amounted to 3.8 million in 2016 versus 2.9 million in 2015. This increase was mainly due the transfer of the Chairman and Chief Executive Officers home entity.
Lucie Larguier, +33 (0)3 88 27 91 04
Director Corporate Communications & IR
Citigate Dewe Rogerson
David Dible / Marine Perrier, + 44 (0)20 7638 9571
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