20th Jun 2005 07:01
GW Pharmaceuticals PLC20 June 2005 Embargoed until 0700 20 June 2005 GW Pharmaceuticals plc ("GW" or "the Group") Interim Results For The Six Months Ended 31 March 2005 GW Pharmaceuticals plc, the company which develops and manufactures a range ofnew medicines based on cannabis and other controlled drugs, announces itsinterim results for the six months ended 31 March 2005. HIGHLIGHTS •Sativex (R) launched in Canada, the first launch of a cannabis-derived medicine anywhere in the world (announced separately today) •Medicines Commission confirms further efficacy data required prior to UK approval. No quality or safety issues to prevent grant of a product licence •Clear and well defined programme of new Phase III trials in place to meet European regulatory requirements •Preparations for discussions with US regulator at an advanced stage •Two further Phase III trials fully recruited and due to report results in coming months •Advanced Dispensing System undergoing regulatory device approval testing prior to start of methadone clinical trial •Amendment signed to Bayer marketing agreement, yielding an extra £1m cash payment in period since half-year end •Founder US investors increase equity position through £2.5m investment •Net loss for the six months to 31 March 2005 of £5.1m (2004: £6.9m), in line with budget •Cash and short term deposits at 31 March 2005 of £14.0m. Inflows since the period end have increased cash and short term deposits to £16.2m at 31 May 2005 Dr Geoffrey Guy, Executive Chairman of GW, said: "Today marks the Canadianlaunch of Sativex, GW's first ever product launch. GW was responsible forobtaining Canadian regulatory approval for this product in less than one yearfrom the time of its submission. This approval was also granted just over sixyears from the start of GW's development programme, a significant achievement.Although the recent UK regulatory setback is disappointing, GW can from thispoint onwards look forward to generating product sales revenues from Canada.Sativex is an important new medicine which has been widely anticipated bypatients and the medical community. Whilst delighted at the Canadian launch, werecognise and share the profound frustration of Multiple Sclerosis (MS) patients in the UK who will need to wait longer before Sativex may be licensed for prescription in the UK. "GW's prospects remain strong. GW has now satisfied both the UK and Canadianregulators with respect to its quality and safety data relating to Sativex. Inrespect of efficacy, we have, over recent years, produced a wealth of positiveclinical trials data, which include seven Phase III trials. In parallel with theUK Medicines Commission appeal, we had already put in place a clear and welldefined programme of additional clinical trials to address any outstandingefficacy questions and which have been the subject of formal guidance to meetEuropean regulatory requirements. We believe that this is a highly attractiveprogramme for pharmaceutical companies and over the coming months we will bepursuing product licensing discussions with a view to establishing marketingarrangements for Sativex in various countries." A presentation for analysts is taking place today at 09.30 at Weber ShandwickSquare Mile, Fox Court, 14 Gray's Inn Road, London WC1. An audio webcast of thepresentation will be available on GW's website at www.gwpharm.com from 15.00today. Enquiries: GW Pharmaceuticals plc (20/06/05) + 44 20 7067 0700Dr Geoffrey Guy, Executive Chairman (Thereafter) + 44 1980 557000Justin Gover, Managing Director Weber Shandwick Square Mile + 44 20 7067 0700Kevin Smith/Rachel Taylor/Yvonne Alexander Embargoed until 0700 20 June 2005 GW Pharmaceuticals plc ("GW" or "the Group") Interim Results For The Six Months Ended 31 March 2005 This has been a period of both regulatory success, with Sativex (r) beingapproved in Canada, and by contrast, disappointment as UK regulatory approvalwas subject to a further delay. Sativex has today been launched in Canada forthe treatment of Neuropathic Pain in Multiple Sclerosis (MS), becoming theworld's first approved cannabis derived medicine. This success in Canada onlyserves to reinforce our determination to work towards bringing Sativex to theEuropean market as quickly as possible. Sativex Launched In CanadaSativex contains delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD) as itsprincipal cannabinoid components. The medicine is administered by means of aspray into the mouth and is a pharmaceutical product standardised incomposition, formulation and dose. GW was responsible for the regulatory process in Canada. An application was madeto Health Canada, the Canadian regulator, in May 2004 and approval for Sativexwas granted in April 2005. Sativex has today been launched and is now availableby prescription through Canadian pharmacies as an adjunctive treatment forsymptomatic relief of Neuropathic Pain in adults with MS. Canada is the firstcountry in the world to approve Sativex. The product was approved under HealthCanada's Notice of Compliance with Conditions (NOC/c) policy. Sativex is manufactured in the UK by GW and its contract manufacturing partners.The product is being marketed in Canada by Bayer HealthCare, PharmaceuticalsDivision, GW's marketing partner. Bayer is employing both a dedicated specialistsales team as well as their national primary care sales force in the marketinglaunch. It is estimated that 50 per cent of people with MS suffer from chronicneuropathic pain(i),(ii),(iii). Approximately 50,000 Canadian men and women have the disease(iv). GW is currently exploring opportunities to expand the regulatory approval inCanada to other indications. UK Medicines CommissionIn December 2004, GW announced that the Committee on Safety of Medicines (CSM),an advisory body to the UK regulatory authority, the Medicines and Healthcareproducts Regulatory Agency (MHRA), had advised that a further clinical study inMS Spasticity would be required prior to the grant of a UK product licence forSativex. At that time, the CSM confirmed that there were no quality or safetyissues that would prevent the grant of a product licence. GW elected to appeal against the CSM's decision to request a further study tothe Medicines Commission, the senior advisory body to the MHRA. The MedicinesCommission met in mid-May and subsequently declined GW's appeal. The Commissiondetermined that the evidence of efficacy of Sativex in MS Spasticity ispromising but not yet sufficiently compelling to permit the grant of a licence. Regulatory StrategyThe regulatory strategy for Sativex remains to secure approval across a range oftherapeutic indications in a number of countries across the world, including inEurope and North America. The recent Medicines Commission hearing related solely to the indication of MSSpasticity and represented a potential means to secure an early approval forSativex in the UK. However, GW has in parallel put in place a well definedclinical programme which is the subject of formal regulatory advice and which isdesigned to secure European regulatory approvals for Sativex in a range ofindications. In accordance with conventional regulatory requirements, GW'sprogramme provides for two pivotal Phase III clinical trials in support of eachindication. Each new trial is being implemented to support positive results seenfrom earlier studies in these indications. There has been no need for anychanges to this programme as a result of the recent Medicines Commissiondecision. •Peripheral Neuropathic PainIn recent weeks, GW has received formal guidance from European regulatoryauthorities that its current clinical programme would be sufficient to support aregulatory filing in the indication of peripheral neuropathic pain. GW has to date reported positive data in four separate neuropathic pain trials,each of which provide strong supportive evidence in this indication. Inaddition, GW is now commencing two further trials which conform to newlypublished European regulatory guidelines (which detail requirements for approvalin this indication). The first study, a 218 patient study in neuropathic pain inpatients with diabetic neuropathy, has commenced. A second study, a 218 patientstudy in neuropathic pain in patients with allodynia, is about to get underway.These studies are expected to complete in the second half of 2006. • MS SpasticityIn the indication of MS spasticity, GW has one completed positive pivotal trial.In order to meet regulatory requirements, a second pivotal study has commenced,which is due to report results in Spring 2006. This 280 patient study has beendesigned in consultation with leading experts in the treatment of spasticity soas to ensure that it includes all the most appropriate endpoints. Importantly,the UK Medicines Commission has accepted that a patient-reported outcome isappropriate for the assessment of symptomatic relief of spasticity in MS. Afurther meeting with the MHRA has been agreed in order that leading MS expertscan provide guidance to the regulator as to what they should expect from thisstudy. GW believes that this study, together with the existing data, will besufficient to obtain European regulatory approvals in this indication. •Neuropathic Pain in MSAs discussed above, GW has obtained approval for Sativex in Canada in theindication of neuropathic pain in MS. As part of this approval, under the NOC/cpolicy, a further study was formally agreed with the regulator. This study willcommence at the end of this year and, together with our existing positive data,will be sufficient to support a future European regulatory filing in thisindication. •General Neuropathic PainThe MS pain study described above will provide data in a recognised model ofcentral neuropathic pain. GW has received regulatory advice that the twoperipheral neuropathic pain studies described above together with the MS painstudy will support an application to broaden a future peripheral neuropathicpain indication to a general neuropathic pain claim. •Cancer PainHaving reported a positive Phase III Cancer Pain trial earlier this year, theCompany is now planning an additional pivotal trial in this indication. GW willbe seeking formal guidance from the US regulator as well as European regulatorsfor this additional trial. It is intended that this proposed programme willprovide a European registration package for this indication also. In summary, GW has a focused ongoing clinical programme targeted at well definedregulatory indications and which has been, and continues to be, the subject ofwidespread formal regulatory consultation. Assuming the results of these trialsare consistent with previous positive results seen in similar trials alreadycompleted, this programme will provide robust registration packages for Sativexin Europe, North America and elsewhere in the world across a range ofindications. Safety ProfileIn total, over 1000 patient-years of safety data have been accumulated to date.GW's trials continue to demonstrate that Sativex is well tolerated. Adverseevents are generally mild or moderate in intensity and are often diminishedthrough reduction of dose. United StatesOver the last few years, GW has been working to build a support base in the USin order to prepare for the establishment of clinical trials activities with aview to submitting a regulatory application in the future. Earlier this year, GWannounced that it was accelerating its strategy to enter the US market byretaining a range of experts in pharmaceutical development and regulatoryaffairs. The Company considers that the breadth of pre-clinical and clinical data nowavailable will enable the initiation of discussions with the Food & DrugAdministration (FDA) for an Investigational New Drug application in the US.During the first half of the year, GW has been actively working towards theseregulatory discussions. It is expected that meetings will take place with theFDA during the second half of 2005. In response to these US strategic developments, in February, GW's US founderinvestors and their associates ("the Investors") increased their equity positionin the Company. The Investors invested a further $4.8m (£2.5m) to increase theirshareholding from 7.79% to 9.62%. This was achieved through the issue for cashof 2,034,894 new ordinary shares at a price of £1.235 per share. Publications / PresentationsGW's clinical data has to date been the subject of six peer-reviewedpublications. This programme to publish data continues with a further papercurrently in press and others undergoing review. Since 2000, GW has been presenting its data at international scientificmeetings. In the last few months, presentations of GW data have been made by keyopinion leaders at meetings of the American Academy of Neurology, the AmericanPain Society, the British Pain Society and the Association of BritishNeurologists. Further presentations have been accepted for the forthcomingECTRIMS/ACTRIMS Multiple Sclerosis meeting and the International Association forthe Study of Pain. MHRA AuditDuring the half year, the MHRA inspectorate conducted a Good Clinical Practice(GCP) audit of GW's clinical research activities. There were no criticalfindings in the audit, and our processes were deemed to meet internationalregulatory requirements. This outcome, taken together with the successful GoodManufacturing Practice (GMP) audit of our clinical manufacturing facilities lastyear, is a testimony to the integrity of GW's quality systems. Advanced Dispensing SystemGW's second generation Advanced Dispensing System (ADS) is currently undergoingregulatory device approval testing prior to commencing a clinical trial. Thissystem has been specifically developed to allow for methadone to be dispensedsafely and reliably in the treatment of drug addiction. The clinical trial willbe carried out at the UK National Addiction Centre. Upon completion, GW willlook to expand the adoption of the ADS system at drug treatment centres aroundthe UK. GW is now actively pursuing the possibility of licensing the ADS technology foruse with other medicinal products. The potential of the ADS technology toaddress concerns about diversion and abuse of prescription drugs should providea number of commercial opportunities for ADS. Board AppointmentWe were pleased to announce the promotion of Dr Stephen Wright to GW's Board ofDirectors in March 2005. Dr Wright joined GW's senior management team in January2004 as Research & Development Director and retains this title in his newcapacity as a main Board Director. Financial ReviewIn the six months to 31 March 2005, GW made a net loss after tax of £5.1mcompared to £6.9m in the same period last year. Research and Development expenditure decreased to £5.0m (2004: H1 £7.1m; H2£6.8m). This expenditure was in line with budget and with the planned reductionin our research activities as outlined in the 2004 Annual Report. Following the approval of Sativex in Canada, stock has for the first time beenrecognised on the balance sheet. The stock represents the value of raw materialsand work in progress as at 31 March 2005, ready to satisfy the anticipatedinitial demand for Sativex from the Canadian market. The inclusion of £0.53m ofstock in the balance sheet has resulted in a corresponding credit to the profitand loss account in the current period. Management and administrative expenses (including amortisation of goodwill)reduced to £1.3m (2004: H1 £1.4m; H2 £1.4m). Operating losses of £6.3m were offset by interest income of £0.35m (2004: H1£0.51m; H2 £0.45m) and an R&D tax credit of £0.83m (2004: H1 £1.07m; H2 £0.98m). Net cash outflow, before management of liquid resources and financing, was £6.4mcompared to £7.9m in the comparable period last year. As at 31 March 2005 GW hadcash and short-term deposits totalling £14.0m. Capital expenditure incurred in the period was £0.08m (2004:H1 £0.62m; H2£0.15m). No major capital expenditure projects were undertaken in the period. The headcount as at 31 March 2005 was 104. Since 31 March 2005, £2.8m in milestone payments has been received from Bayer, a£1.9m R&D tax credit has been received from the Inland Revenue and the firstcommercial orders for Sativex in Canada have been placed. Correspondingly, GWhad cash and short-term deposits totalling £16.2m as at 31 May 2005. In view of the additional recent UK regulatory delay, GW's commercial licensingmodel has shifted from appointing distribution partners at the end of thedevelopment process to a more conventional licensing model, providing for stagedmilestone payments. GW currently owns its entire product pipeline and has todate licensed distribution rights for Sativex to Bayer HealthCare in the UK andCanada only. A prime focus over coming months will be to enter into anadditional licence agreement (or agreements) for other territories to maintainthe Company's financial strength. Prospects Today's launch of Sativex in Canada is a transforming event for the Company, interms of the success of our scientific efforts and also in terms of thefinancial picture moving forward. We remain committed to securing approval ofSativex across Europe and elsewhere and have put in place a clear clinicalprogramme based on formal regulatory advice, which is designed to ensure thatthis objective is met as rapidly as possible. We have seen excellent clinicaldata from our trials to date and have good reason to expect similar results fromour future trials. GW remains well funded at the present time and will be seeking to maintain thisposition through the negotiation of new product licensing arrangements whichwill yield a range of financial payments. GW maintains a world leading positionin its field and has absolute confidence in its future prospects. - Ends - Enquiries: GW Pharmaceuticals plc (20/06/05) + 44 20 7067 0700Dr Geoffrey Guy, Executive Chairman (Thereafter) + 44 1980 557000Justin Gover, Managing Director Weber Shandwick Square Mile + 44 20 7067 0700Kevin Smith/Rachel Taylor/Yvonne Alexander This news release may contain forward-looking statements that reflect theGroup's current expectations regarding future events, including the clinicaldevelopment and regulatory clearance of the Group's products. Forward-lookingstatements involve risks and uncertainties. Actual events could differmaterially from those projected herein and depend on a number of factors,including (inter alia), the success of the Group's research strategies, theapplicability of the discoveries made therein, the successful and timelycompletion of clinical studies, including with respect to Sativex and theGroup's other products, the uncertainties related to the regulatory process, andthe acceptance of Sativex and other products by consumers and medicalprofessionals. --------------------------(i) Archibald CJ, et al. Pain 1994; 58:89-93.(ii) Sketris IS, et al. Clinical Therapeutics 1996; 18(2):303-318.(iii) Moulin DE, et al. Neurology 1988;38:1830-1834.(iv) www.mssociety.ca GW Pharmaceuticals plcConsolidated profit and loss accountfor the six months ended 31 March 2005 Six months ended Six months ended Year ended 31 March 31 March 30 September Notes 2005 2004 2004 Unaudited Unaudited Audited £000's £000's £000'sTurnover - - -Research and development costs (5,011) (7,077) (13,937)Management and administrative expenses (1,308) (1,383) (2,752) __________ __________ __________Operating loss (6,319) (8,460) (16,689)Interest receivable 350 508 961Interest payable - (2) (3) __________ __________ __________Loss on ordinary activities before taxation (5,969) (7,954) (15,731)Tax credit on loss on ordinary activities 3 828 1,073 2,051 __________ __________ __________Loss on ordinary activities after taxation being retained loss for the period (5,141) (6,881) (13,680) ========== ========== ========== Loss per share - basic and diluted 2 (4.6p) (6.2p) (12.4p) All activities relate to continuing operations. The Group has no recognised gains and losses other than the losses above andtherefore no separate statement of total recognised gains and losses has beenpresented. GW Pharmaceuticals plcConsolidated balance sheetas at 31 March 2005 31 March 31 March 30 September Notes 2005 2004 2004 Unaudited Unaudited Audited £000's £000's £000'sFixed assetsIntangible assets - goodwill 5,745 6,101 5,922Tangible assets 903 1,149 1,026 __________ __________ __________ 6,648 7,250 6,948 __________ __________ __________ Current assets Stock 533 - -Debtors: amounts falling due within one year 2,418 2,338 2,381Debtors: amounts due after more than one year 3 828 903 -Cash held on deposit as short term investment 10,000 22,000 13,152Cash at bank and in hand 4,049 2,216 4,655 __________ __________ __________ 17,828 27,457 20,188Creditors: Amounts falling due within one year (3,473) (4,339) (3,609) __________ __________ __________Net current assets 14,355 23,118 16,579 __________ __________ __________Total assets less current liabilities 21,003 30,368 23,527Provisions for liabilities and charges (74) (195) (69) __________ __________ __________Net assets 20,929 30,173 23,458 ========== ========== ========== Capital and reservesCalled-up share capital 113 111 111Share premium account 49,946 47,252 47,336Other reserves 19,262 19,262 19,262Profit and loss account (48,392) (36,452) (43,251) __________ __________ __________Equity shareholders' funds 20,929 30,173 23,458 ========== ========== ========== GW Pharmaceuticals plcConsolidated cash flow statementfor the six months ended 31 March 2005 Six months ended Six months ended Year ended 31 March 31 March 30 September 2005 2004 2004 Unaudited Unaudited Audited £000's £000's £000'sNet cash outflow from operating activities (6,555) (8,020) (16,403)Returns on investment and servicing of finance 271 567 1,097Taxation - 170 1,725Capital expenditure (82) (625) (764) __________ __________ __________Cash outflow before management of liquid resources and financing (6,366) (7,908) (14,345)Management of liquid resources 3,152 7,045 15,893Financing 2,608 80 108 __________ __________ __________(Decrease) / increase in cash during the period (606) (783) 1,656 ========== ========== ========== Reconciliation of operating loss to net cash outflow from operating activities Six months ended Six months ended Year ended 31 March 31 March 30 September 2005 2004 2004 Unaudited Unaudited Audited £000's £000's £000'sOperating loss (6,319) (8,460) (16,689)Depreciation charge 204 278 526Amortisation of goodwill 178 178 357Loss on sale of tangible fixed assets - - 14Increase in stock (533) - -Decrease / (increase) in debtors 41 (250) (47)(Decrease) / increase in creditors (126) 234 (564) __________ __________ __________Net cash outflow from operating activities (6,555) (8,020) (16,403) ========== ========== ========== GW Pharmaceuticals plcNotes to the Interim Report 1 Basis of preparationThese accounts are unaudited and do not constitute statutory accounts within themeaning of section 240 of the Companies Act 1985. The interim results have beenprepared on the basis of the accounting policies set out in the Report andAccounts for the year ended 30 September 2004. The financial informationrelating to the year ended 30 September 2004 has been extracted from the fullreport and accounts which have been delivered to the Registrar of Companies. Thereport of the auditors on those accounts was unqualified. 2 Loss per shareThe calculations of loss per share are based on the following losses and numbersof shares. Six months ended Six months ended Year ended 31 March 31 March 30 September 2005 2004 2004 £000's £000's £000's Loss for the financial period (5,141) (6,881) (13,680) ========== ========== ========== Number of Number of Number of shares shares sharesWeighted average number of shares 111,405,893 110,524,770 110,647,389 ========== ========== ========== Since the Group reported a net loss, diluted loss per share is equal to basicloss per share. 3 Tax credit on loss on ordinary activities Six months ended Six months ended Year ended 31 March 31 March 30 September 2005 2004 2004 £000's £000's £000'sUK Corporation tax - R&D tax credit:Current period (828) (903) (1,883)Prior periods - (170) (168) __________ __________ __________Total (828) (1,073) (2,051) ========== ========== ========== The UK Corporation tax credits relate to research and development expenditureclaimed under the Finance Act 2000. The £828,000 due under the current period is shown on the balance sheet as adebtor due after more than one year. The current period amounts are subject tothe agreement of the Inland Revenue. 4 Analysis of changes in net funds As at As at 30 September 2004 Cashflow 31 March 2005 Audited Unaudited Unaudited £000's £000's £000'sCash held on deposit as short term investment 13,152 (3,152) 10,000Cash at bank and in hand 4,655 (606) 4,049Finance leases (6) 4 (2) __________ __________ __________Total 17,801 (3,754) 14,047 ========== ========== ========== 5 Movement in Share Capital & Reserves Called-up Called-up Share Share share premium Other Profit and Capital capital Account reserves loss account TotalGroup No. of shares £000's £000's £000's £000's £000'sAt 1 October 2004 110,965,581 111 47,336 19,262 (43,251) 23,458Exercise of share options 259,011 - 99 - - 99Share placing* 2,034,894 2 2,511 - - 2,513Retained loss for the period - - - - (5,141) (5,141) __________ __________ __________ __________ __________ __________At 31 March 2005 113,259,486 113 49,946 19,262 (48,392) 20,929 =========== =========== ============ ============ ============ ============ * The 2,034,894 shares were placed at £1.235 per share on the 28 February 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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