1st Quarter Results
May 08 2003 - 2:01AM
UK Regulatory
RNS Number:8320K
Acambis PLC
08 May 2003
Results for the first quarter ended 31 March 2003
Cambridge, UK and Cambridge, Massachusetts - 8 May 2003 - Acambis plc
("Acambis") (LSE: ACM, NASDAQ: ACAM) announces its results for the first quarter
ended 31 March 2003.
Key points
> US Government consolidates activities of Acambis' two smallpox vaccine
(ACAM1000 and ACAM2000) contracts into the ACAM2000 contract
> Total of 10 other governments around the world have now ordered
ACAM2000 smallpox vaccine
> Increase in overall gross margin going forward
> Cash balance of over #50m at 31 March 2003, expected to increase to
over #125m by the end of 2003
First quarter ended 31 March 2003 2002
Revenue #41.8m #5.2m
Profit/(loss) before tax #9.5m #(2.8)m
Earnings/(loss) per share 8.7p (3.0)p
Earnings/(loss) per ADR $1.38 $(0.43)
-ends-
A conference call for analysts will be held at 9.30 am BST today. For details,
contact Zia Dottridge at Financial Dynamics on telephone number +44 (0) 20 7269
7270. An instant replay of the call will be available until midnight on
Thursday, 15 May on telephone number: UK +44 (0) 20 8288 4459 and US +1 334 323
6222. The passcode is 281172. An audio webcast of the call will also be
available via Acambis' website at www.acambis.com.
Enquiries:
Acambis plc
Dr John Brown, Chief Executive Officer Today: +44 (0) 20 7831 3113
Lyndsay Wright, Director of Communications Thereafter: +44 (0) 1223 275 300
Gordon Cameron, Chief Financial Officer Today: +44 (0) 20 7831 3113
Thereafter: +1 (617) 761 4200
Financial Dynamics
David Yates/Jonathan Birt Tel: +44 (0) 20 7831 3113
MacDougall BioCommunications
Doug MacDougall/Kari Lampka Tel: +1 (508) 647 0209
Chairman's statement
Overview
During the first quarter of 2003, there were a number of positive developments
relating to our smallpox vaccine franchise.
We are announcing today further information on our contracts with the US
Government and providing an update on contracts with other governments around
the world. These are described in further detail below.
In February, we were awarded a $9.2m contract by the US National Institutes of
Allergy and Infectious Diseases ("NIAID") relating to development of a new
Modified Vaccinia Ankara ("MVA") vaccine, which is a weakened form of the
current generation of smallpox vaccines and, as such, should allow the safe
inoculation of "at risk" people with weakened immune systems, who would
otherwise be unable to be vaccinated against smallpox.
In March, we announced results from a Phase I trial of our ACAM2000 smallpox
vaccine in which 99% of subjects achieved the primary immunogenicity endpoint,
which is development of a pock-mark on the skin, known as a "take". We also
announced details of an agreement with Cangene Corporation ("Cangene") (TSE:
CNJ) to market Cangene's Vaccinia Immune Globulin ("VIG") product in markets
outside North America and Israel. VIG is used in treating severe reactions that
may be brought on by the administration of smallpox vaccine.
Also in March, the fourth and final instalment of the #27.8m subscription by
Baxter for new Acambis ordinary shares took place. The instalment of
approximately #7.0 million increased Baxter's shareholding to 20.6%.
Revenue, pre-tax profit and earnings per share during the period were in line
with our expectations. Our cash position strengthened to give us a cash balance
in excess of #50.0m at 31 March 2003.
Smallpox vaccine update
US Government contracts
The US Government has recently decided to consolidate all the future research
and development ("R&D") and manufacturing activities associated with Acambis'
two existing smallpox vaccine contracts under a single contract.
Acambis previously had two contracts with the US Centers for Disease Control and
Prevention ("CDC") for a total of 209 million doses of smallpox vaccine. The
first, dating from September 2000 and amended in October 2001, was for the
delivery of 54 million doses of ACAM1000 vaccine to the US Government stockpile.
The second contract, awarded to Acambis in November 2001, relates to the
production of 155 million doses of ACAM2000 vaccine, in conjunction with our
partner Baxter Healthcare Corporation. Under both contracts, we have been
conducting extensive, separate clinical trial programmes that would have
involved Phase III trials of both vaccines this year.
The CDC has indicated that it no longer requires Acambis to deliver 54 million
doses of ACAM1000 vaccine and instead intends to place orders for 54 million
doses of ACAM2000 vaccine over the next 12 months. The CDC will, therefore, be
procuring a total of 209 million doses from the ACAM2000 contract. The CDC has
also specified that the ACAM2000 contract will be used to supply the long-term,
annual "warm-base" production capability previously provided for under the
ACAM1000 contract.
The CDC's decision enables Acambis to focus both manufacturing and clinical
trial resources on a single production and development programme. The decision
followed the convening of a Joint Down-Select Working Group of the National
Vaccine Advisory Committee (NVAC) and the Defense Science Board. It reflected
data from Phase I clinical trials of both vaccines that demonstrated similar
safety and immunogenicity profiles, and from genome sequencing that confirmed
ACAM1000 and ACAM2000 are genetically identical, despite slightly different
manufacturing methods. In addition, significantly greater quantities of ACAM2000
have been produced to date.
Acambis' activities in this area are now, therefore, being focused on ACAM2000,
with production and clinical trials of ACAM1000 being wound down. We continue to
be on course to complete the delivery of 155 million doses of ACAM2000 smallpox
vaccine to the CDC in the first half of 2003. Orders for, and delivery of, the
next 54 million doses are expected to be made over the next 12 months under
similar terms to the existing 155 million-dose order. We will be accounting for
all of the costs and revenue from these new orders as the doses are delivered
and currently anticipate that this will be split approximately one-third in 2003
and two-thirds in 2004.
Results from a Phase I trial of ACAM2000 were reported in March 2003. Under the
accelerated trial programme, Phase II trials are well underway and a Phase III
trial will begin later this year.
Other government contracts
We are continuing to market our ACAM2000 vaccine to governments around the world
in conjunction with Baxter. We now have contracts in place with 10 governments,
in addition to the US Government contract. Of these, six are with European
governments. We remain in discussions with several other governments and
organisations.
R&D update
We have completed the 1,050-subject paediatric trial in Peru of Arilvax(R), a
yellow fever vaccine. Results are currently being analysed and will be released
shortly. These data represent the final piece required for submission to the US
Food and Drug Administration of the biologics license application, which is
planned for around the middle of this year.
Also on track for the summer is the commencement of the first human clinical
trials of our ChimeriVax-West Nile vaccine. This represents a significant
milestone for our vaccine, which is aimed at preventing a disease that many
experts fear will be even more widespread this year in the US.
We have initiated a further Phase II trial of our ChimeriVax-JE vaccine against
Japanese encephalitis. The trial, which is being conducted in Australia, will
provide additional safety and efficacy data and investigate the duration of
immunity of the vaccine. Over the coming months, we also expect to commence
trials for our tetravalent ChimeriVax-Dengue vaccine and our MVA vaccine, a
bridging trial for our oral typhoid vaccine and further trials of our E. coli
vaccine.
Financial review
The financial results for the three months ended 31 March 2003 ("Q1") are
presented below. Unless otherwise stated, the comparative figures in parentheses
relate to the equivalent three-month period in 2002.
Trading results
Revenue for Q1 increased significantly to #41.8m (2001 - #5.2m) and arose
primarily from the ACAM2000 ($428m) smallpox vaccine contract with the CDC.
Activity on this contract increased sharply in 2003 as we continued to
manufacture vaccine for the US Government stockpile. During the period, we also
continued to receive revenues from the CDC on the ACAM1000 smallpox vaccine
contract (see above the statement regarding the decision to consolidate this
contract into the ACAM2000 vaccine contract), Aventis Pasteur for our
ChimeriVax-Dengue vaccine programme, the NIAID in respect of our MVA contract
and sales of ACAM2000 smallpox vaccine to other foreign governments.
Cost of sales in Q1, representing costs incurred on the CDC contracts and the
MVA contract, amounted to #24.9m (2002 - #3.3m), the sharp increase being
directly attributable to the increase in activity.
Expenditure on R&D in Q1 increased to #6.2m (2002 - #3.3m). In addition to the
increase in the number of R&D projects, reduced activity on the ACAM1000
smallpox vaccine programme in Q1 has meant that those resources previously
included in cost of sales have now been deployed on internally funded
programmes, which are covered under R&D.
Administrative costs, including amortisation of goodwill, increased marginally
to #1.1m (2002 - #1.0m). Interest receivable increased to #0.3m (2002 - #0.1m)
as a result of higher average levels of cash held throughout the period.
Interest payable decreased marginally to #0.2m (2002 - #0.3m) as a result of a
lower, fixed interest rate secured on the lease-financing facility from the
start of 2003. During the period, an exchange loss of #0.1m (2002 - #0.1m) was
recorded as a result of the revaluation of the amounts outstanding under our US
dollar-denominated overdraft facility for our Arilvax(R) programme.
The pre-tax profit for Q1 was #9.5m (2002 - loss of #2.8m). The improvement was
achieved primarily as a result of increased revenues under our ACAM2000 smallpox
vaccine programme.
During Q1 the Group recorded a tax charge of #0.9m (2002 - #nil). We anticipate
that the tax losses available to be used within the Group will be fully utilised
during 2003 and that the effective tax rate on our forecast 2003 profits will be
between 10% and 15%. In the US, where the majority of the tax liability arises,
we are required to make payments on account each quarter in respect of our
potential US tax liability for the year. The first payment was made on account
in April 2003.
Capital expenditure
Capital expenditure for Q1 decreased to #1.2m (2002 - #4.5m). In 2002, the
majority of the expenditure related to the investment being made to reactivate
our manufacturing plant. This process was substantially complete by the end of
2002. As a result, from 2003 onwards we anticipate capital expenditure levels to
be lower.
Balance sheet highlights
i) Cash/debtors
The cash balance of the Group at 31 March 2003 amounted to #50.2m (31 December
2002 - #11.8m). The large increase in cash in Q1 resulted primarily from the net
cash receipts arising from further deliveries of ACAM2000 vaccine to the CDC.
Debtors (receivable within one year) reduced to #30.2m at 31 March 2003 (31
December 2002 - #54.0m). Also during Q1, Baxter International, Inc. made its
fourth and final equity subscription of #7.0m, increasing its shareholding to
20.6%. We expect to have over #125.0m in cash by the end of the year.
ii) Stock/Creditors: amounts falling due within one year
Stock held at 31 March 2003 amounted to #50.5m (31 December 2002 - #48.4m). This
balance principally represents work-in-progress and finished goods in relation
to work being carried out under the ACAM2000 contract. Since payments for
certain stock items do not take place until after delivery of the vaccine stocks
to the US Government, this results in a high level of trade creditors, of #36.7m
(31 December 2002 - #54.8m). The levels of both stock and trade creditors will
reduce during the second quarter of 2003 as we complete deliveries under the
ACAM2000 contract to the CDC.
Our adopted method for recognising revenue under the 155 million-dose ACAM2000
contract with the CDC, the percentage of cost-to-completion method, continues to
give rise to a significant difference between invoices submitted and amounts
recognised as revenue. At 31 March 2003, the amount recorded as deferred income
relating to this contract was around #26.4m (31 December 2002 - #21.1m).
iii) Lease financing and overdraft facilities
During Q1, and in accordance with the terms of the facility, we started to repay
the interest accruing on the US dollar-denominated lease-financing facility
secured via Baxter in December 2001 for the reactivation of our manufacturing
plant. The balance on the facility at 31 March 2003 was #14.3m (31 December 2002
- #14.0m). The increase seen in the period was principally a function of the US
dollar exchange rate being lower at the end of the period than at the start. The
balance on the Arilvax(R) overdraft facility at 31 March 2003 was #4.4m (31
December 2002 - #4.3m).
Outlook
The additional vaccine sales with other governments, together with the
anticipated changes in the structure and timing of the US Government contracts,
are expected to result in a modest reduction in turnover in 2003 and a
significant increase in 2004. The resulting change in the mix of product revenue
will also lead to an increase in the overall gross margin going forward.
Alan Smith
Chairman
This results statement was agreed by the Board of Directors on 7 May 2003.
Notes to editors:
Acambis is a leading developer of vaccines to prevent and treat infectious
diseases. Recognised internationally as the leading producer of smallpox
vaccines, Acambis provides governments around the world with the full portfolio
of related smallpox vaccine products required to protect their citizens against
the threat of smallpox virus being used as a bioterrorist weapon. Acambis is
establishing a travel vaccines franchise, including vaccines against yellow
fever, Japanese encephalitis, dengue fever and typhoid. Acambis also has the
most advanced vaccine in development targeting the West Nile virus, which has
spread to over 40 US States in the last three years.
Acambis is based in Cambridge, UK and Cambridge, Massachusetts, US. Its primary
listing is on the London Stock Exchange (ACM) and its shares are listed in the
form of American Depositary Receipts on Nasdaq (ACAM). More information is
available at www.acambis.com.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995:
The statements in this news release that are not historical facts are
forward-looking statements that involve risks and uncertainties, including the
timing and results of clinical trials, product development, manufacturing and
commercialisation risks, the risks of satisfying the regulatory approval process
in a timely manner, the need for and the availability of additional capital. For
a discussion of these and other risks and uncertainties see "Risk factors" in
the Company's Annual Report and Form 20-F for the most recently ended fiscal
year, in addition to those detailed in the Company's filings made with the
Securities and Exchange Commission from time to time. These forward-looking
statements are based on estimates and assumptions made by the management of
Acambis and are believed to be reasonable, though are inherently uncertain and
difficult to predict. Actual results or experience could differ materially from
the forward-looking statements.
Quarterly results for the three months ended 31 March 2003
Group profit and loss account
Three months Three months Year
ended ended ended
31 Mar 2003 31 Mar 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#m #m #m
______ ______ ______
Turnover 41.8 5.2 79.7
Cost of sales (24.9) (3.3) (49.2)
______ ______ ______
Gross profit 16.9 1.9 30.5
Research and development costs (6.2) (3.3) (16.3)
Administrative costs (including
amortisation of goodwill) (1.1) (1.0) (4.3)
______ ______ ______
Group operating profit/(loss) 9.6 (2.4) 9.9
Share of loss of joint venture (0.1) (0.1) (0.2)
______ ______ ______
Total operating profit/(loss)
before exceptional items
(Group and joint venture) 9.5 (2.5) 9.7
Exceptional items:
Amounts written off fixed asset
investment - - (0.1)
______ ______ ______
Profit/(loss) on ordinary
activities before finance
charges 9.5 (2.5) 9.6
______ ______ ______
Interest receivable 0.3 0.1 0.7
Interest payable and similar
charges (0.2) (0.3) (1.2)
Exchange gain/(loss) on foreign
currency borrowings (0.1) (0.1) 0.5
______ ______ ______
Profit/(loss) on ordinary
activities before taxation 9.5 (2.8) 9.6
______ ______ ______
Taxation (0.9) - -
______ ______ ______
Profit/(loss) on ordinary
activities after taxation
being retained loss for the
period) 8.6 (2.8) 9.6
______ ______ ______
Earnings/(loss) per ordinary
share (basic, note 2) 8.7p (3.0)p 10.0p
______ ______ ______
Earnings/(loss) per ordinary
share (diluted, notes 2 and 3) 8.5p (3.0)p 9.7p
______ ______ ______
Group statement of total recognised gains and losses
Three months Three months Year
ended ended ended
31 Mar 2003 31 Mar 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#m #m #m
______ ______ ______
Profit/(loss) for the period 8.6 (2.8) 9.6
Gain/(loss) on foreign currency
translation 1.8 (0.6) 1.3
______ ______ ______
Total recognised gains and losses
for the period 10.4 (3.4) 10.9
______ ______ ______
Quarterly results for the three months ended 31 March 2003
Group balance sheet
As at As at
31 Mar 2003 31 Dec 2002
(unaudited) (audited)
#'000 #'000
______ ______
Fixed assets
Goodwill 13.3 13.6
Tangible assets 21.2 20.0
Other investments 1.1 1.1
______ ______
35.6 34.7
______ ______
Current assets
Stock 50.5 48.4
Debtors: amounts receivable within one year 30.2 54.0
Debtors: amounts receivable after one year 5.6 4.9
Short-term investments 0.2 0.1
Cash at bank and in hand 50.0 11.7
______ ______
136.5 119.1
______ ______
Creditors: amounts falling due within one year (89.6) (88.4)
______ ______
Net current assets 46.9 30.7
______ ______
Total assets less current liabilities 82.5 65.4
______ ______
Creditors: amounts falling due after one year (18.5) (18.9)
______ ______
Provisions for liabilities and charges
Investment in joint ventures:
- share of assets 0.9 0.9
- share of liabilities (1.2) (1.1)
______ ______
(0.3) (0.2)
______ ______
Net assets 63.7 46.3
______ ______
Capital and reserves
Called-up share capital 10.4 9.9
Share premium account 94.3 87.8
Profit and loss account (41.0) (51.4)
______ ______
Shareholders' funds - all equity 63.7 46.3
______ ______
Reconciliation of movements in Group shareholders' funds
As at As at
31 Mar 2003 31 Dec 2002
(unaudited) (audited)
#'000 #'000
______ ______
Retained profit for the period 8.6 9.6
Gain on foreign currency exchange 1.8 1.3
New share capital subscribed 7.0 7.7
______ ______
Net increase in shareholders' funds 17.4 18.6
Opening shareholders' funds 46.3 27.7
______ ______
Closing shareholders' funds 63.7 46.3
______ ______
Quarterly results for the three months ended 31 March 2003
Group cash flow statement
Three months Three months Year
ended ended ended
31 Mar 2003 31 Mar 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#m #m #m
______ ______ ______
Net cash in/(out) flow from 32.6 0.2 (6.2)
operating activities
______ ______ ______
Returns on investments and
servicing of finance
Interest received 0.2 0.1 0.7
Interest paid (0.2) - (0.1)
______ ______ ______
Net cash inflow from returns on
investments and servicing of
finance - 0.1 0.6
______ ______ ______
Taxation - - 0.1
______ ______ ______
Capital expenditure and
financial investment
Purchase of tangible fixed (1.2) (4.5) (11.5)
assets
Funds advanced to joint
venture - - -
______ ______ ______
Net cash outflow from capital
expenditure and financial
investment (1.2) (4.5) (11.5)
______ ______ ______
Net cash in/(out)flow before
management of liquid resources
and financing 31.4 (4.2) (17.0)
______ ______ ______
Management of liquid resources (0.1) - -
______ ______ ______
Financing
Net proceeds from issue of new
shares:
- Baxter subscription 7.0 - 7.0
- Other - - 0.8
______ ______ ______
Net cash inflow from financing 7.0 - 7.8
______ ______ ______
Increase/(decrease) in cash for
the period 38.3 (4.2) (9.2)
______ ______ ______
Analysis of net funds/(debt)
Non-cash
movements Exchange
1 Jan 2003 Cash flow (note 4) movement 31 Mar 2003
#m #m #m #m #m
______ ______ ______ ______ ______
Cash 11.7 38.3 - - 50.0
Liquid
resources 0.1 0.1 - - 0.2
Overdraft
facility (4.3) - - (0.1) (4.4)
______
38.4
Finance
leases (14.0) 0.2 (0.2) (0.3) (14.3)
______ ______ ______ ______ ______
Net funds/
(debt) (6.5) 38.6 (0.2) (0.4) 31.5
______ ______ ______ ______ ______
Quarterly results for the three months ended 31 March 2003
Reconciliation of operating profit/(loss) to net cash in/(out) flow from
operating activities
Three months Three months Year
ended ended Ended
31 Mar 2003 31 Mar 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#m #m #m
______ ______ ______
Operating profit/(loss) 9.6 (2.4) 9.9
Depreciation and amortisation 0.8 0.6 2.6
Increase in stock (1.3) (4.4) (52.6)
Increase in debtors 21.5 (7.5) (50.6)
Increase in creditors 1.6 11.9 81.8
Exchange differences on
inter-company balances (1.2) 0.5 1.3
Other 1.6 1.5 1.4
______ ______ ______
Net cash in/(out)flow from
operating activities 32.6 0.2 (6.2)
______ ______ ______
Notes
1. Basis of preparation
The financial information for the three months ended 31 March 2003 is unaudited,
and has been prepared in accordance with the accounting policies set out in the
Annual Report for the year ended 31 December 2002. The financial information for
the three months ended 31 March 2002 is also unaudited. The financial
information relating to the year ended 31 December 2002 does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
This has been extracted from the full report for that year which has been filed
with the Registrar of Companies. The report of the auditors on these accounts
was unqualified. The Board approved the financial statements for the year ended
31 December 2002 on 27 March 2003. The statutory accounts for the year ended 31
December 2002 along with the Notice of Annual General Meeting was sent to
shareholders on 8 April 2003. The 2003 Annual General Meeting at which the
statutory accounts for the year ended 31 December 2002 will be laid, is due to
be held on 13 May 2003.
2. Earnings/(loss) per ordinary share (basic)
The basic earnings per ordinary share for the three months ended 31 March 2003
is based on a Group profit of #8.6 million (2002 - loss of #2.8 million,
December 2002 - profit of #9.6 million). This has been calculated on the
weighted average ordinary shares in issue and ranking for dividend during the
period of 99,264,123 for the three months ended 31 March 2003 (2002 -
93,081,919, December 2002 - 96,101,507).
3. Earnings/(loss) per ordinary share (diluted)
Diluted earnings per ordinary share for the three months ended 31 March 2003 is
based on the weighted average number of ordinary shares outstanding of
101,502,602 (December 2002 - 98,976,882) after adjusting for the effect of all
dilutive potential ordinary shares. Basic and diluted earnings per ordinary
share were the same for the three months ended 31 March 2002 as the Company was
loss-making during this period.
4. Non-cash movements
In December 2001 the Group entered into a lease-financing arrangement with
Baxter in respect of our manufacturing facility. During the three-month period
to 31 March 2003 interest payable on the finance lease was charged to the Group
profit and loss account. This amount is shown as a non-cash movement on the
analysis of net funds/(debt). A similar amount of interest was repaid from cash
in the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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