April 02, 2009
BTG plc: Close Period Update
London, UK, 02 April 2009
- On track to achieve planned cost savings from integration of Protherics
- Portfolio review completed
- Board and Management changes announced
BTG plc (LSE: BGC), the specialty pharmaceuticals company, today provides the following update for the year ended 31 March 2009 ahead of the planned publication of its Preliminary Results on 14 May 2009.
Recurring royalty revenues from licensed products and annualised sales revenues from CroFab™ and DigiFab™ are anticipated to be higher than in the previous year. Operating expenses and research and development expenses are anticipated to be in line with expectations. The Group anticipates that the majority of the estimated £10m of restructuring provisions associated with the acquisition of Protherics PLC will be taken in the year ended 31 March 2009. Cash at year end is anticipated to be over £70m.
Good momentum in BTG’s internal development pipeline, as described below, has been supplemented by strong progress in licensed programmes, including:
- Genzyme Corporation has completed enrolment of patients in the first of two Phase III trials of Campath® in multiple sclerosis, with a potential approval in 2012.
- Cougar Biotechnology has achieved rapid recruitment in the first Phase III trial of CB7630 (abiraterone) in prostate cancer patients and has secured agreement with the US Food and Drug Administration under a Special Protocol Assessment for a planned second Phase III clinical trial.
- AstraZeneca is making good progress with the current Phase II study of CytoFab™ in severe sepsis, which is expected to finish in mid-2009.
Integration of the Protherics business following completion of the acquisition on 4 December 2008 is progressing rapidly and efficiently. Significant progress has been made in achieving the planned cost savings and synergies, and the following decisions and actions have been taken.
- The former Protherics and BTG offices in London were vacated in mid-March and employees relocated to a significantly smaller London office. The former Protherics site in Runcorn will close around mid-2009.
- US operations will be based in BTG’s existing office near Philadelphia. The former Protherics manufacturing facility in Salt Lake City will close in Q3 2009. The former Protherics offices in Salt Lake City and Nashville will be retained.
- The manufacturing facilities in Australia and Wales have been reorganised to improve operational efficiencies.
As a result of these decisions, total headcount will fall by 20% from a peak of 365 in 2008 to 290 employees. The site and headcount reductions already made mean that the Group is on track to achieve savings of £10m per annum by no later than the 2010/2011 financial year.
Strong progress has been made in merging operations. Cross functional teams have developed unified processes including development, quality systems, regulatory affairs, manufacturing, financial systems/controls and risk management.
A detailed review of the Group’s enlarged portfolio following its acquisition of Protherics has now been completed. Each programme was assessed in relation to the development pathway and associated investment, technical risks, time to market, competitive landscape, potential return on investment and fit with BTG’s strategy to market its own products in the US.
Voraxaze™, an investigational new drug that is not approved in any indication but is currently available in the US under a Treatment Protocol and cost recovery programme for patients receiving high dose methotrexate (≥1g/m2) who are experiencing, or at risk of, methotrexate toxicity, will continue to be progressed through a rolling Biologics Licence Application in the US. The current leucovorin pharmacokinetics study and CMC activities intended to address questions raised by the US and EU regulators will also continue. BTG plans to market Voraxaze™ directly in the US if the product is approved, which could be around the end of 2010.
Following successful completion of the US Phase II safety study of Varisolve®, the investigational endovenous microfoam therapy for varicose veins, the FDA has now reviewed the study data and has now confirmed that screening patients for right-to-left cardiac shunts is no longer required under the current study protocol. Preparatory Phase III studies focusing on patient reported outcomes and photographic endpoints will continue in the US ahead of the pivotal Phase III trials, which could start in H2 2009. Discussions are progressing with potential commercial partners, and BTG anticipates reaching a decision on the future development and commercial strategy for Varisolve® during H2 2009.
Recruitment is progressing well in the ongoing Phase IIb oesophageal cancer study of OncoGel™, a sustained release formulation of the chemotherapy agent paclitaxel. BTG will complete this study, for which preliminary data are anticipated in H2 2010 and survival data are anticipated by H1 2011, and will thereafter seek a partner to progress the programme into Phase III and beyond. A partner will also be sought for all further development of OncoGel™ as a potential treatment for primary brain cancer, in which four patients have been dosed in a Phase I/II study.
The current Phase IIa 20-patient study of Prolarix™, the prodrug tretazicar co-administered with the co-substrate caricotamide, in patients with inoperable liver cancer will be completed and is due to report in H1 2010. A partner will then be sought for further development.
BTG plans to progress the current Phase I/II study of Acadra™ (acadesine) in patients with B-cell chronic lymphocytic leukaemia and thereafter will seek a partner to continue development. Additional sites have been opened to increase recruitment rates, and results are anticipated in H1 2011.
In part B of the Phase IIa study of ATV, the angiotensin therapeutic vaccine, several injection site reactions and ‘flu-like symptoms' have occurred which were inconsistent with the adverse event profile seen in part A of the study. As a precaution, dosing has been suspended and all safety data generated to date and materials used in the study are being reviewed. The review is expected to take two to three months.
Phase IIa studies are planned to commence in H2 2009 for BGC20-1531, an EP4 receptor antagonist targeting the treatment of migraine headaches, and BGC20-0134, a novel structured lipid which is under development as an oral treatment for relapsing-remitting multiple sclerosis. If clinical proof of principle is demonstrated in these studies, anticipated in H2 2010 and 2011 respectively, development partners will be sought to conduct Phase IIb and subsequent studies.
BTG is continuing to explore opportunities with potential partners to progress development of the Digoxin Immune Fabs as a treatment for severe pre-eclampsia.
BTG plans to complete an ongoing Phase I study investigating a proprietary formulation of BGC20-0166, a combination of two serotonin-modulating drugs targeting obstructive sleep apnoea, while seeking a partner to progress future clinical development. An Investigational New Drug application was recently opened in the US for BGC20-0166.
A partner will also be sought to continue development of BGC20-0582, a botanically derived product targeting the treatment of head lice infestation.
No further development will be conducted on BGC20-1259, a potential treatment for Alzheimer’s disease. Although the product has completed Phase I clinical studies in healthy volunteers, BTG has reviewed recently generated non-clinical data and has concluded that significant additional investment would be required to progress to a Phase IIa study in patients.
The majority of programmes in the current pipeline are anticipated to reach datapoints and suitability form licensing during the next two years. Consquently, BTG is on track to meet its commitment to reduce investment in development by around £10m per annum to approximately £20m per annum, but the 2010/2011 financial year. It is anticipated that from 2010/2011 an increasing proportion of investment in development will be directed towards later-stage products that BTG intends to acquire and to market to US hospital specialists.
Christine Soden, who joined BTG in July 2005 as Chief Financial Officer and became Chief Operating Officer following the acquisition of Protherics PLC, retired from the Board on 31 March 2009 and will leave BTG in June 2009. As CFO, Christine led the transformation of BTG’s financial position from reporting a loss of £35m in 2005 to recording a profit in the seven consecutive half-year reporting periods thereafter. She played a major role in developing BTG’s M&A strategy, working with the Board to effect the acquisition of Protherics. Following the acquisition, Christine had led the integration of the enlarged company’s business development, legal and IP functions.
William James O’Shea has been appointed as a Non-Executive Director of BTG effective from 2 April 2009. From 2007 to 2008, Jim O’Shea was Vice Chairman of Sepracor, Inc where he was also President and Chief Operating Officer from 1999 to 2007. Previously Jim was Senior Vice President of Sales and Marketing and Medical Affairs for Zeneca Pharmaceuticals (US), a business unit of Zeneca Inc. While at Zeneca, Jim also held several management positions of increasing responsibility in international sales and marketing in the US and UK.
Jim is a Director of Surface Logix Inc. and of NASDAQ listed Penwest Pharmaceuticals Co. and CombinatoRx Inc. Jim is also a past Chairman of the US National Pharmaceuticals Council. There are no further details to be disclosed in relation to paragraph 9.6.13R of the Financial Services Authority Listing Rules.
In preparation for establishing commercial operations in the US to sell products to hospital specialists, acquiring later stage products and realising value from the current development pipeline, BTG has made a number of key appointments.
Matthew Gantz has been appointed General Manager US and will have overall responsibility for BTG’s commercial operations in the US. Prior to joining BTG, Matthew was Founder and CEO of Acureon Pharmaceuticals, a specialty pharmaceutical company focused in the hospital areas of infectious diseases, transplant and ICU. Before that he was the President and CEO of Hydrabiosciences Inc, a privately held biotechnology company developing novel, ion channel medicines in the pain and cardiovascular area. Previously, he was VP Europe for Chiron’s Biopharmaceutical Division where he was directly responsible for $100+ million Infectious Disease and Oncology business.
Dr Guenter R. Janhofer has been appointed Head of Development and will have overall responsibility for BTG’s development programmes and organisation. A medical doctor, Guenter has over 20 years’ experience in the pharmaceutical industry, initially as a Medical Director with Desitin Pharmaceuticals in Germany and then with Merck Sharp and Dohme (MSD) in Austria. Following a role in the US with MSD as a Senior Director of Clinical Research Operations, he returned to Germany and spent five years as MSD’s Executive Medical Director. In 2000 he returned to the US with Merck & Co first as Executive Director, Clinical Development Studies, and then as VP Global Medical & Scientific Affairs.
Dr Richard Mason has been appointed Head of Business Development, with responsibility for leading BTG’s in-and out-licensing activities. Richard joins BTG from venture capital firm Advent Venture Partners where, as Executive-in-Residence, he undertook CEO assignments at portfolio life sciences companies, both listed and private. Previously Richard was Senior Vice President Business Development at Cambridge Antibody Technology plc. Richard qualified in medicine from the Medical College of St. Bartholomew’s Hospital, University of London and subsequently worked for the NHS in internal and emergency medicine at several London teaching hospitals. He is a member of the Royal College of Physicians and also holds a BSc in Immunology from University College London and an MBA from the Judge Business School, University of Cambridge.
Louise Makin, BTG’s CEO, commented: “We are making good progress in our evolution into a specialty pharmaceutical business with the rapid integration of the Protherics business, the reshaping of our portfolio and the strengthening of our management team. The operations and portfolio reviews have been completed, and we are on track to achieve the planned annual savings of £10m and reduction in R&D spend of £10m by the 2010/2011 financial year.”
She added: “I am delighted with the calibre of people we have been able to recruit to head up our US commercial operations, our development activities and our licensing efforts as we prepare to sell our own products in the US hospital specialty sector and continue to invest in and realise value from our pipeline. I am pleased to welcome Jim O’Shea to the Board, and am confident that his experience in the pharmaceutical industry will be of great benefit to BTG, in particular as we build our US commercial operations. Finally, I would like to pay tribute to Christine Soden, who has been instrumental in transforming BTG’s business over the past four years. We can look forward to the future with confidence, as we embark on the next phase of our development as a sustainable specialty pharmaceuticals company.”
For further information, contact:
Andy Burrows, Director of Investor Relations
+44 (0) 20 7575 1741
mobile +44 (0) 7990 530605
Rolf Soderstrom, Chief Financial Officer
+44 (0) 20 7246 9950
+44 (0) 20 7831 3113
BTG is an international specialty pharmaceuticals company that is developing and commercialising products targeting critical care, cancer, neurological and other disorders. The company is also seeking to acquire new products to develop and market to hospital specialists, and is building a sustainable business financed by revenues from sales of its critical care products and from royalties and milestone payments on partnered products.