The Board of Directors of MolMed S.p.A. (MILAN:MLM), chaired by Professor
Claudio Bordignon, today reviewed and approved the draft financial statements at
31 December 2011.
Claudio Bordignon, Chairman and CEO of MolMed, commented: "In 2011 we achieved a
number of important milestones. In particular we presented new data which
confirm the promising clinical activity of our two investigational therapeutics
and further demonstrate the quality and depth of our clinical programme.
We presented new Phase II data in three indications - ovarian cancer, small-cell
lung cancer and non-small cell lung cancer - of our vascular targeting agent
NGR-hTNF; altogether, the clinical data obtained provide additional evidence on
the antitumour activity of this molecule. NGR-hTNF is currently being
investigated in a pivotal Phase III trial in mesothelioma involving 24 centres
in Europe, North America and Egypt, the latter belonging to a region where
mesothelioma incidence is dramatically increasing.
For TK we presented additional data showing restoration of a fully functional
immune system in high-risk leukaemia patients treated with our cell-based
therapy, including first patients in a Phase III trial. This pivotal trial is
currently ongoing in Italy, Spain and Greece and is ready to be expanded to
Belgium, France, Germany, Israel, the Netherlands and the US, following IND
clearance from the FDA.
In addition to the progress in the clinical development of our two main
therapeutics, I would like to focus on 2011 as a year of substantial growth in
the field of cell and gene therapeutics. In this field, we won an important
recognition of our know-how in gene therapy with two strategic agreements signed
with Telethon Foundation and GlaxoSmithKline, leading to a positive impact on
our revenues at the end of 2011, which is expected to continue throughout this
year. 2012 will also be an important year; we will pursue long lasting pivotal
clinical trials involving additional clinical centres in several countries. The
primary data analysis of these trials is expected to be available in 2013."
FINANCIAL HIGHLIGHTS
Key income statement data
----------------------------------------------------------------------------
(amounts in Euro Fiscal Year Fiscal Year
thousands) 2011 2010 Change
absolute %
----------------------------------------------------------------------------
Operating revenues 3,418 2,676 742 27.7
----------------------------------------------------------------------------
Operating costs (26,098) (20,424) (5,674) 27.8
----------------------------------------------------------------------------
Operating result (22,680) (17,748) (4,932) 27.8
----------------------------------------------------------------------------
Net financial income
(charges) 1,111 166 945 569.3
----------------------------------------------------------------------------
Result for the year (21,569) (17,582) (3,987) 22.7
----------------------------------------------------------------------------
Net financial position
--------------------------------------------------------------------------
31 31
(amount in Euro December December
thousands) 2011 2010 Change
absolute %
--------------------------------------------------------------------------
Net financial
position 38,667 60,040 (21,373) (35.6)
--------------------------------------------------------------------------
KEY ACHIEVEMENTS IN YEAR 2011
Research & Development activities
In 2011, MolMed's activities were mainly focused on pursuing the clinical and
industrial development of its investigational anticancer products, NGR-hTNF for
the treatment of different types of solid tumours, and TK for the treatment of
high-risk leukaemia.
For NGR-hTNF, major progress included:
-- international expansion of pivotal Phase III trial (NGR015) for the
treatment of malignant pleural mesothelioma, with 24 centres
participating in Europe (Italy, the UK, Ireland and Poland), the US,
Canada and Egypt. 124 patients were enrolled at 31 December 2011. The
trial is expected to include more than 40 centres worldwide, with
primary data analysis expected in 2013;
-- promising interim data of a randomised Phase II trial in non-small cell
lung cancer, in particular in the squamous cell variant, and recruitment
of a larger patient population, in order to ensure the inclusion of an
adequate number of patients with this histology;
-- start of two new randomised Phase II trials: in ovarian cancer
refractory/resistant to prior platinum-based treatment regimens and in
mesothelioma as first line maintenance treatment. As regards ovarian
cancer, the study was initiated following promising results obtained in
a non-randomised Phase II trial completed in 2011. Progress of
recruitment in a randomised Phase II trial in soft tissue sarcomas.
For TK, major progress included:
-- expansion of pivotal Phase III trial (TK008) in Europe, with the
inclusion of centres in Spain and Greece, and the FDA clearance to
include US centres in the trial. 7 centres were involved as of 31
December 2011. Due to additional and higher than expected regulatory
requirements in some EU countries, which have delayed patient enrolment,
MolMed plans to include additional centres besides the 15 centres
originally planned in an effort to compensate this delay. Primary data
analysis is expected in 2013;
-- new long-term data on the clinical benefit following treatment with TK:
patients treated (including the first patients enrolled in the Phase III
trial) show rapid post-transplant restoration of a fully functional
immune system by effect of TK cells;
-- grant of a key European patent on a proprietary modified form of the TK
gene (EP1781789) providing IP protection in 29 countries belonging to
the European Patent Convention until 2025, with the possibility of a
further 5-year extension of market exclusivity.
Development and GMP production for third parties
Over the years, MolMed has developed specific expertise in the field of gene and
cell therapy, including the use of stem cells for the treatment of different
pathologies, positioning the Company among the leading players at international
level. In 2011, MolMed concluded two new agreements for the development and GMP
production of gene therapy treatments for third parties:
-- with GlaxoSmithKline (GSK), to develop a production process, based on a
retroviral vector, for the investigational gene therapy of a severe form
of immunodeficiency (ADA-SCID, the so-called "bubble boy disease"),
worth up to EUR 5.5 million in revenues over a 2-year period;
-- with Telethon Foundation, to develop and manufacture novel
investigational gene therapy treatments for six rare genetic diseases
(metachromatic leukodystrophy, Wiskott-Aldrich syndrome, beta-
thalassemia, mucopolysaccharidosis type I, globoid leukodystrophy and
chronic granulomatous disorder), worth up to EUR 8.3 million in revenues
over a 4-year period.
Company organisation
In January 2011, MolMed significantly strengthened its top management and
company organisation with Germano Carganico joining as General Manager
responsible for Research & Development and Operations, in order to provide the
Company with the expertise necessary for the final development stages and
registration of MolMed's investigational therapeutics.
Outlook for 2012
In 2012, MolMed will maintain its focus on advancing the development of its
investigational therapies NGR-hTNF and TK, while also providing strategic
services for gene therapy treatments. MolMed expects in particular to:
-- further advance the clinical development of NGR-hTNF, with the
presentation of new clinical data on ongoing Phase II trials relevant
for the selection of the indication for the next Phase III trial;
-- expand the Phase III trial of TK in the United States and in other
European countries;
-- further increase revenues from development and GMP production activities
of gene therapy treatments, by building on the important recognition of
our know-how in gene therapy with the agreements signed in 2011 with
Telethon and GSK;
-- maintain a strict control of expenses in order to keep its expected burn
rate in line with the 2011 level.
SUMMARY ON FINANCIAL RESULTS
MolMed's financials are peculiar to the business model of biotech companies
developing new therapeutic products and having no products on the market. At
this stage high costs must be sustained for the clinical and pharmaceutical
development of investigational therapeutics, and return is expected in
forthcoming years. In addition, given the Company's operating activities and the
characteristics of trials conducted, research and development costs are fully
recorded in the period they are incurred.
Operating revenues
Operating revenues in FY 2011 increased by 27.7%, from EUR 2.7 million to EUR
3.4 million. In particular, revenues generated from the intensification of
development and GMP production activities on behalf of third parties increased
by 69.4%, from EUR 1.6 million in 2010 to EUR 2.7 million in 2011, as a result
of the agreements with Telethon Foundation and GSK. Other development and
production activities carried out in collaboration with external institutions
are covered by co-funding grants, and generated in 2011 "other income" for EUR
651 thousand, an increase compared to 2010.
Operating costs
In 2011, operating costs totalled EUR 26.1 million. The expected increase (up
27.8%) compared to 2010 is linked to a particular concentration of costs related
to the progress of clinical trials of NGR-hTNF and its industrial manufacturing
process, and to the above mentioned intensification of development and GMP
production activities on behalf of third parties.
In particular, the rise in costs for raw materials and consumable materials,
which largely consist of materials and reagents used in R&D activities, was
primarily linked to the development of NGR-hTNF. In 2011 such costs totalled EUR
2.9 million, up 113.8% compared to 2010.
Costs for external activities increased by 42.8% compared to 2010. This increase
is due to a rise of external costs for development and consultancy services
linked to the industrial manufacturing process of NGR-hTNF, as well as to the
expansion of clinical trials of NGR-hTNF and TK.
Costs for the use of third-party assets totalled EUR 1.0 million in 2011, with
no significant variation compared to 2010. These costs essentially include the
rental costs of premises housing MolMed's headquarters in Milan and its
secondary offices in Segrate.
Personnel costs in 2011 grew by 4.7% compared to 2010, from EUR 7.6 million to
EUR 8.0 million. This rise is due to an increase in the number of employees in
R&D and Operations, needed to meet the escalation of development and production
activities.
Other operating costs totalled EUR 139 thousand in 2011, with no significant
variation compared to 2010.
Amortisation and depreciation for FY 2011 totalled EUR 1.1 million, down by EUR
102 thousand compared to FY 2010, due to the completion in 2010 of the
amortisation of some assets.
Investments made during FY 2011 totalled EUR 314 thousand, and were largely due
to routine renewal of laboratory equipment and purchase of new devices for use
in production processes.
Operating result
The operating result for 2011 was negative for EUR 22.7 million. The expected
increase in operating loss, up 27.8% compared to 2010, is due to the expected
increase in operating costs resulting from the intensification of development
activities for MolMed's investigational therapeutics.
Net financial income (charges)
The financial income derives from the management of financial resources through
temporary, low-risk investments. The increase recorded in 2011 was linked to the
investment of the financial resources obtained through the share capital
increase completed in August 2010. The trend in financial charges reflects the
transfer to the Income Statement of EUR 106 thousand from the fair value reserve
recorded at 31 December 2010, following the maturity and sale of some
securities.
Profit (loss) for the year
The bottom-line result for 2011 shows a loss of EUR 21.6 million, compared to a
loss of EUR 17.6 million in 2010.
Net financial position
The net financial position at 31 December 2011 totalled EUR 38.7 million, and
included cash on hand for EUR 12 thousand, other cash for EUR 3.3 million and
cash equivalents (time deposit) for EUR 17.9 million. The net financial position
also included investment in current assets for EUR 17.7 million, net of EUR 236
thousand for lease payables connected with lease contracts for laboratory
equipment.
The official Corporate Financial Reporting Manager of MolMed S.p.A., Enrico
Cappelli, herewith attests, pursuant to Article 154-bis, paragraph 2 of the
Italian Consolidated Law on Finance (Legislative Decree 58/1998), that the
accounting disclosure contained in this press release matches documentary
evidence, corporate books and accounting records.
The report on Corporate Governance, the report on remuneration, the 2011 draft
financial statements and the reports of the Board of Statutory Auditors and of
the independent Auditing firm will be made available to the public at the
Company's headquarters and at Borsa Italiana S.p.A., and in the section
"Investors/Corporate Governance/Shareholders' Meetings" of MolMed's website
(www.molmed.com), in accordance with legal provisions.
The following statements related to the 2011 draft financial statements are
provided in attachment to this press release:
-- Statement of financial position
-- Income statement
-- Statement of comprehensive income
-- Cash flow statement
-- Statement of changes in shareholders' equity
In this press release, use is made of "alternative performance indicators"
which are not provided for under European IFRS, and whose significance and
content - in line with Recommendation CESR/05-178b published on November 3,
2005 - are illustrated below:
-- Operating Revenues: defined as the difference between sales revenues and
other income and costs for materials, costs of services received, costs
for use of third-party assets, personnel costs and amortisation,
depreciation & write downs. It represents the profit before financial
flows and taxes;
-- Net Financial Position: is the algebraic sum of cash, cash equivalents,
financial receivables and other financial assets, and current and non-
current financial debt.
The audit is still underway, and the report of the independent Auditing firm on
the Financial Statements at 31 December 2011 will be issued on a subsequent date
with respect to the publication date of this press release.
SHAREHOLDERS' GENERAL MEETING 2012
The Board of Directors gave mandate to the Chairman to convene the Annual
Shareholders' General Meeting on 23 April 2012 at 11.00 AM, at NH Hotel Milano
2, via Fratelli Cervi, 20090 Segrate (Milan), Italy, in order to resolve upon
the following agenda:
Ordinary business:
1. Approval of the financial statements for the fiscal year ended 31
December 2011;
2. Proposal of confirmation of Member of the Board of Directors, appointed
pursuant to art. 2386 of the Italian civil code;
3. Deliberation on Section I of the Report on remuneration, pursuant to
art. 123-ter of the Italian consolidated law on finance;
4. Proposed approval of a stock option plan related to MolMed ordinary
shares, reserved to Executive members of the Board of Directors, General
Managers and Directors of the Company.
Special business:
5. Share capital increase pursuant to art. 2439, comma 2 of the Italian
civil code, with exclusion of option right pursuant to art. 2441, commas
5 and 8 of the Italian civil code, to serve the stock option plan
reserved to Executive members of the Board of Directors, General
Managers and Directors of MolMed. Consequential amendment of the
Corporate bylaws;
6. Amendments of Articles 5, 18 and 29 of the Corporate bylaws in order to
adapt their contents to the new share capital and to legislation
updates.
With particular reference to item 4 of the agenda in ordinary business, the
Board of Directors, upon proposal of the Remuneration Committee, has resolved to
submit to the Shareholders the guidelines of an incentive plan under Article
114-bis of Legislative Decree 24 February 1998, n. 58 (the "Stock Option Plan
2012" or the "Plan") in favour of Executive members of the Board, General
Managers and Directors of MolMed (the "Beneficiaries"). In summary, the 2012
Stock Option Plan provides for the allocation of a maximum number of options
equal to 7,000,000 in favour of the Beneficiaries and each option granted under
it gives them the right to subscribe 1 (one) new share.
For details please refer to the Plan Disclosure document (in Italian), prepared
in accordance with Art. 114-bis, paragraph 1 of the Consolidated Law on Finance
("TUF") in compliance with Appendix 3, Schedule 7 of art. C 84 of the General
Rules for Issuers ("RE"), which will be filed together with the publication of
the Notice of General Meeting. The Notice will be made available to the public
on 13 March 2012 on MolMed's website (www.molmed.com) and at Borsa Italiana via
the NIS circuit. The Notice will be published on 14 March 2012 on the Italian
daily newspaper Milano Finanza.
Documents and materials relevant to the General Meeting will be made available
to the public from Wednesday 14 March 2012 at the Company's headquarters and at
Borsa Italiana via the NIS circuit, as well as on MolMed's website
(www.molmed.com). Shareholders may obtain hard copies of such documents at their
own expense.
This press release is written in compliance with public disclosure obligations
established by CONSOB (Italian securities & exchange commission) resolution no.
11971 of 14.5.1999 as subsequently amended.
About MolMed
MolMed S.p.A. is a biotechnology company focused on research, development and
clinical validation of novel antitumour therapies. MolMed's pipeline includes
two novel therapeutics in clinical development: TK, a cell-based therapy
enabling bone marrow transplants from partially compatible donors, in Phase III
in high-risk acute leukaemia; NGR-hTNF, a novel vascular targeting agent (VTA),
in Phase III in malignant pleural mesothelioma and in Phase II in six more
indications: colorectal, lung (small-cell and non-small-cell), liver and ovarian
cancer, and soft tissue sarcomas. MolMed also offers top-level expertise in cell
and gene therapy to third parties to develop, conduct and validate projects from
preclinical to Phase III trials, including scale-up and cGMP production of
clinical-grade viral vectors, and manufacturing of patient-specific genetically
engineered cells. MolMed is headquartered at the San Raffaele Biomedical Science
Park in Milan, Italy. The Company's shares are listed on the Milan Stock
Exchange, at the Standard segment (class I) of the MTA managed by Borsa
Italiana. (Ticker Reuters: MLMD.MI).
DISCLAIMER
This press release may contain certain forward-looking statements. Although the
Company believes its expectations are based on reasonable assumptions, these
forward-looking statements are subject to numerous risks and uncertainties,
including scientific, business, economic and financial factors, which could
cause actual results to differ materially from those anticipated in the
forward-looking statements. The Company assumes no responsibility to update
forward-looking statements or adapt them to future events or developments. This
document does not constitute an offer or invitation to subscribe or purchase any
securities of MolMed S.p.A.
FULL VERSION OF THIS PRESS RELEASE AVAILABLE ON MOLMED'S WEBSITE (www.molmed.com).
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