Company Announcement no. 2/2009
To: NASDAQ OMX Nordic Exchange Copenhagen Hørsholm, Denmark, March 3, 2009
LifeCycle Pharma Announces Annual Report 2008
LifeCycle Pharma A/S (OMX:LCP) (‘LCP') today announced the annual report of
LifeCycle Pharma A/S for the financial year 2008. The annual report has been
prepared in accordance with International Financial Reporting Standards as
adopted by the EU and additional Danish disclosure requirements for annual
reports of listed companies.
This company announcement should be read in conjunction with LCP's annual
report 2008 published separately today.
Full Year 2008 Highlights
• During 2008, LCP recognized DKK 170.1 million in revenue compared to DKK 64.7
million in 2007. Revenue mainly consisted of USD 29 million (equivalent to DKK
152 million at the exchange rate prevailing at the date of transaction) in
up-front payment received from Cowen Healthcare Royalty Partners, L.P. in
August 2008 in connection with LCP's sale of its the future royalty stream from
FenoglideTM in North America.
• Research and development costs increased by DKK 87.3 million, or 48%, from
DKK 183.6 million in 2007 to DKK 270.9 million in 2008. The higher research and
development costs reflect increased costs related to the further development of
LCP-Tacro™.
• Administrative expenses increased from DKK 54.0 million in 2007 to DKK 73.3
million in 2008. This increase is attributable to the continued strengthening
of administrative functions, including the build-up of administrative functions
in the US subsidiary established in 2007, along with an overall increase in
activity levels.
• During 2008, LCP recognized DKK 174.1 million in operating loss compared to
DKK 172.9 million in 2007, and DKK 149.8 million in net loss compared to DKK
160.2 million in 2007.
• At the time of LCP's interim report for the first nine months of 2008, the
Company expected an operating loss of DKK 220 - 250 million and a net loss of
DKK 210 - 240 million for 2008. Operating loss was realized at DKK 174.1
million, and net loss at DKK 149.8 million. The improved results are due to
timing of Phase 3 clinical cost related to LCP-TacroTM, now scheduled for 2009,
along with the implementation of a cost containment program aimed at reducing
LCP´s costs.
• As per 31 December 2008, the balance sheet reflects cash and cash equivalents
of DKK 600.1 million compared to DKK 331.7 million as per 31 December 2007. The
net increase mainly relates to the Company's rights issue in April 2008 as well
as the up-front payment from the sale of the future royalty stream from
FenoglideTM to Cowen Healthcare Royalty Partners, L.P. The cash position was in
connection with the Q3 2008 report announced on 27 November 2008 estimated to
be in the range of DKK 500 - 540 million; the main reason for the net increase
compared to previous guidance relates to timing of R&D expenses for
LCP-TacroTM, which now are expected to incur in the first half of 2009.
• For 2009, LCP projects an operating loss of DKK 450 - 480 million and a net
loss in the range of DKK 430 - 460 million. At the end of 2009, the Company's
cash position is expected to be in the range of DKK 150 - 200 million.
Fourth Quarter 2008 Highlights
• Revenue amounted to DKK 4.8 million compared to DKK 4.0 million for the same
period in 2007
• Research and development cost were realized at DKK 78.7 million compared to
DKK 69.7 million in the third quarter of 2008. The increase in cost is
attributable to preparations for Phase 3 clinical studies for LCP-Tacro™
• Administrative expenses were realized at DKK 18.3 million, which is in line
with previous quarters of 2008
• Operating loss amounted to DKK 92.1 million, while net loss was realized at
DKK 80.7 million
• Dr. Jim New was appointed President and Chief Executive Officer
• LCP-Tacro™ entered clinical Phase 3 development
Outlook for 2009
LCP is projecting an operating loss of DKK 450 - 480 million compared to the
realized operating loss of DKK 174.1 million for 2008. The net loss is expected
to be in the range of DKK 430 - 460 million compared to the net loss of DKK
149.8 million for 2008. As of 31 December 2008, the Company's cash position
equaled DKK 600.1 million and the Company's 31 December 2009 cash position is
expected to be in the range of DKK 150 - 200 million.
The above estimates do not include any significant revenue, and are subject to
possible changes primarily due to the timing and variation of clinical
activities, related costs, royalty and other partner income, and fluctuating
exchange rates.
Important Events following the Balance Sheet Date
On 27 January 2009, LCP announced the receipt of a notification from the Danish
pharmaceutical company, H. Lundbeck A/S, informing of a decrease in its
shareholdings in LCP from 15,313,816 shares, corresponding to 27.21% of LCP's
share capital, to 0 shares. At the same time, LCP announced the receipt of a
notification informing that LFI A/S (100 % owned by the Lundbeck Foundation,
which in turn controls H. Lundbeck A/S) now owns 15,878,066 shares,
corresponding to 28.21% of LCP's share capital.
Research and Development Update
LCP-Tacro™ Transplant
Phase 2 pharmakinetic clinical studies in de novo kidney and liver transplant
patients are presently ongoing and are expected to be completed in H1 2009.
Both studies will have a one year extension phase.
The clinical Phase 3 for kidney transplant patients was initiated in December
2008. This program consists of a conversion (switch) study in which
approximately 300 patients are randomized to either stay on treatment with
Prograf® (Astellas Pharma Inc.) or to switch to LCP-TacroTM. Subsequent studies
in de novo kidney and liver transplant patients are planned to commence in 2009
and 2010, respectively. The initiation of the first Phase 3 study is a
significant achievement for LCP and forms the first steps of taking the Company
into a phase of global drug development. The first Phase 3 study will include
patients at more than 50 centers in North America and five European countries.
LCP expects to complete a Phase 3 study in stable kidney patient in the second
half of 2010. A subsequent Phase 3 study in de novo kidney patients is
scheduled to start by the end of 2009.
The initiation of Phase 3 clinical activities for liver transplant patients
awaits discussions with the FDA, planned for the second half of 2009.
LCP-Siro
In the light of the additional required investments in clinical development
necessary to potentially bring LCP-Siro to market, the commercial potential of
the product candidate has been reassessed. Based on this, the Board in LCP
today decided to terminate the current Phase 1 studies and further development
of LCP-Siro and hence concentrate the Company's financial resources on LCP's
current late stage clinical development programs. LCP will now evaluate
potential out-licensing opportunities.
LCP-3301
A Phase 1 study was initiated in 2008, formulation activities are ongoing.
LCP-Tacro™ Autoimmune Hepatitis
Phase 2 clinical studies for the treatment of autoimmune hepatitis was
initiated in January 2008. Due to slow recruitment difficulties, we have
decided to continue the study with the number of patients enrolled. Patients
already included in the trial will complete the treatment as originally planned
with top-line results expected in the second half of 2009.
LCP-Feno
LCP is currently preparing clinical bioequivalence studies for LCP-Feno.
Results of these studies are expected to be available in the second half of
2009.
LCP-AtorFen
Phase 2 clinical trial data were presented by LCP at the Annual Meeting of the
American Heart Association (AHA), New Orleans, 11 November 2008. Preparation of
clinical Phase 3 studies is ongoing.
An open-label extension study for one year of the Phase 2 program is ongoing.
Results from this study are expected in the first half of 2009.
Other preclinical projects
- Internal preclinical projects
LCP has initiated a number of initiatives to bring forward internal projects in
preclinical development by applying LCP's suite of technologies to these
compounds. LCP is currently working on such projects.
- Preclinical projects with external partners
LCP has a range of product formulation agreements with external partners in
regard to LCP's technology base, including the Meltdose® technology. One of
these agreements, with a top 10 pharmaceutical company, was announced on 21
December 2007 - LCP has now delivered the agreed services in accordance with
the earlier entered feasibility agreement. However, the parties have agreed not
to take the project into clinical development.
LCP has a policy of announcing details of preclinical projects once these enter
clinical development.
Grant of Warrants
At a Board meeting held on 3 March 2009, the Board of Directors decided to
issue 876,250 warrants to employees of the Company and the Company's
subsidiary. Of the 876,250 warrants granted, 100,000 was granted to the EVP
Peter G. Nielsen and 100,000 was granted to EVP Karin Jexner Hamberg.
Each warrant entitles the holder to subscribe one share of nominal DKK 1 in the
Company against cash contribution equal to the closing price of the Company's
shares at the NASDAQ OMX Copenhagen on 3 March 2009, thus ensuring that the
exercise price reflects the fair market price per share following the
disclosure of the annual report 2008.
By application of the Black-Scholes formula, the market value of the warrant
program can be calculated as DKK 3.36 per warrant assuming an exercise price of
DKK 10.20, equal to the closing price of the Company's share at the NASDAQ OMX
Copenhagen on 2 March 2009, based on an interest rate of 3.02% and a volatility
of the Company's shares set to 35%.
Conference Call
On 3 March 2009, at 5.00 PM (CET), LCP will be hosting a conference call. To
access the call, please dial one of the following numbers: +1 866 966 5335
(US), +44 2030 032 666 (UK), +45 8088 8649 (DK). Following the conference call,
a recording will be available on the company's website www.lcpharma.com. A
presentation will be available on the Company's website (under ‘Investors') one
hour prior to the scheduled time of the conference call.
For more information, please contact:
LifeCycle Pharma A/S
Dr. Jim New
President & Chief Executive Officer
Phone: +45 7033 3300
Email: JSN@lcpharma.com
or
Peter Schøtt Knudsen
Head of Investor Relations
Phone: + 45 2055 3817
Email: PSK@lcpharma.com
About LifeCycle Pharma A/S (LCP)
Based in Hørsholm, Denmark, with an office in New York, LCP is an emerging
specialty pharmaceutical company. Clinical development is the core of LCP's
effort to develop a product portfolio which includes products for
immunosuppression, specifically organ transplantation, and products to combat
certain cardiovascular diseases. As a fully integrated company, LCP adapts new
technologies on a fast commercial timetable. LCP's unique, patented delivery
technology, MeltDose®, can improve absorption and bioavailability - at
low-scale up costs - not only for a broad spectrum of drugs already on the
market but also for new chemical entities. LCP has a cholesterol-lowering
product, Fenoglide™, currently on the U.S. market and a diversified near- and
medium-term pipeline with four product candidates in clinical trials and a
number of projects one in preclinical development. LCP is listed on NASDAQ OMX
Copenhagen under the trading symbol (OMX: LCP). For further information, please
visit www.lcpharma.com.
