House of Commons - Science and Technology

Select Committee on Science and Technology Minutes of Evidence

Annex M

British Biotech plc

Results for the three months ended 31 October 1994

HIGHLIGHTS

— Loss of 6.6 million, well within budget.

— Cash and short-term investments £58.2 million at the end of the quarter.

— Encouraging results from Phase I trial of BB-10010, a new bone marrow protecting drug, and start of Phase I/Phase II trials in cancer patients announced on 31 October.

— Following the end of the quarter, two drugs, batimastat and lexipafant commenced Phase III clinical trials.

— BB-2516, a potential oral cancer treatment, started Phase I clinical trials in November.

— Clinical plans for 1995 announced.

Commenting, Dr Brian Richards, Chairman said "Consistent progress has been made in 1994, with both batimastat and lexipafant moving into Phase III trials and BB-10010 and BB-2516 starting clinical trials. The Board looks forward with confidence to 1995, during which important results are expected from all five of British Biotech's clinical programmes".

British Biotech plc

Results for the three months ended 31 October 1994

CHAIRMAN'S STATEMENT33

The second quarter maintained British Biotech's rapid progress in new product development. All three of the company's new cancer treatments advanced further along their respective development paths. In particular, the company's breakthrough oral anti-tumour drug, BB-2516, completed preclinical studies, successfully following the end of the quarter, and commenced initial human trials. The injectable drug, batimastat, which is more advanced in development, remains on track for a European Marketing Approval Application early in 1996. Thirdly, encouraging early clinical data was obtained with the new bone marrow protection agent, BB-10010. Meanwhile, successful Phase II results were announced with the anti-inflammatory drug, lexipafant, in the treatment of pancreatitis and this drug is not in Phase III trials.

FINANCIAL

The loss, before and after tax, for the second quarter of the 1994-95 financial year was £6.6 million (1993-94 : £4.6 million), well within the company's internal budget for the period. The increase this year is attributable to the planned rise in operating expenditure related to the progress across the company's development programmes.

Turnover increased from £693,000 to £858,000. Turnover mainly represents the continuing EUREKA grant funding, further income under the biological research agreement with R&D Systems Europe and income from Glaxo under the collaborative agreement to develop lexipafant for asthma. Operating expenditure both for the quarter and the half-year remains within budget. Net interest increased by £268,000 in the quarter, reflecting the increased cash balances following the recent Rights Issue.

Cash resources (including cash equivalents and short-term investments) decreased by £9.6 million in the period (1993-94 : £6.1 million). The increase over last year is a result of the increased loss and higher levels of capital expenditure, principally relating to the construction of new chemical development facilities in Cowley, Oxford. Cash resources were £58.2 million at the end of the quarter, slightly ahead of budget.

RESEARCH AND DEVELOPMENT

The quarter saw excellent progress for British Biotech across the company's programmes. Of particular note were the positive Phase II results for lexipafant in pancreatitis and encouraging Phase I results for BB-10010, both announced during the quarter. Clinical progress is described in detail below.

Metalloproteinase inhibitors

Batimastat injectable, the anti-tumour matrix metalloproteinase inhibitor (MMPI), continued to make good progress through clinical development in malignant ascites, a distension of the abdomen with tumour fluid which is a feature of some late-stage cancers, and pleural effusion, a complication of lung cancer involving fluid accumulation in the chest cavity. In October, recruitment was completed in the UK Phase II trial of batimastat in 40 patients with malignant ascites. The full results of the trial are expected to be announced at a medical symposium during 1995, but results to date indicate that safety and efficacy were similar to those in the Phase I/II study reported earlier this year. As a result, the company has been able to progress to a Phase III trial which started after the end of the quarter.

By the end of October, 16 patients with pleural effusion had been recruited into a Phase I/II study out of a projected total of 21. Preliminary results look encouraging in that batimastat has been well tolerated and appeared to prevent reaccumulation of tumour fluid in the chest in many of the patients assessed in the study. The company plans to start pivotal trials in 1995.

BB-2516, the company's second generation MMPI which can be taken by mouth, completed toxicology testing and other pre-clinical studies successfully and, as a result, a Phase I clinical trial in healthy volunteers was able to start after the end of the quarter. The commencement of human clinical trials with this new drug is a major milestone for British Biotech's research and development team. The initial volunteer studies are expected to lead to trials in cancer patients during 1995.

BB-10010

In October, British Biotech announced the initial results of its Phase I clinical trial with its new bone marrow protecting drug, BB-10010, and the start of an initial patient safety trial. The Phase I study was conducted in 36 healthy volunteers and showed that BB-10010 was well tolerated at all doses. A clinical trial in patients with various cancers has now begun.

The Phase I study also confirmed findings of pre-clinical studies conducted earlier this year, which showed that BB-10010 mobilises white blood cells into the bloodstream. This finding importantly confirmed the bio-activity of the molecule in man and is particularly significant in relation to peripheral bone marrow transplantation (described below).

Potential utility of BB-10010

BB-10010 has two potential clinical uses:

Stem Cell Protection:

Stem Cell Mobilisation:

The initial patient study which has now commenced is designed to test the safety of BB-10010 in cancer patients. More extensive studies, designed to test efficacy, are scheduled to commence over the next three to six months at both UK and US hospital cancer transplant centres.

Lexipafant

Lexipafant, the company's PAF antagonist, is being investigated clinically in a number of different diseases.

Pancreatitis

In September, British Biotech announced results of a Phase II clinical trial of lexipafant in patients with acute pancreatitis, at a meeting of The European Pancreatic Club in Bologna, Italy. The Phase II efficacy trial was conducted in 83 patients with pancreatitis, by five participating UK hospitals co-ordinated by the Royal Liverpool University Hospital. Pancreatitis is a serious inflammatory disease of the pancreas resulting in severe abdominal pain which usually requires hospitalisation for treatment.

Patients treated with lexipafant, when compared to those receiving placebo, showed a consistent trent towards a more rapid:

— improvement in clinical severity; and

— reduction in systemic and pancreatic inflammation, as measured by the levels in blood of three different surrogate markers of inflammation, interleukin-8, interleukin-6 and E-selectin.

Changes in the blood concentrations of inflammatory markers are known to correlate with disease severity in pancreatitis and, in particular, interleukin-6 has been shown to be predictive of clinical outcome. It is therefore noteworthy that, in this trial, lexipafant reversed the characteristic rise in interleukin-6 in the early stage of the disease. By 24 hours after commencement of therapy, significant differences between lexipafant and placebo groups were apparent in blood concentrations of both interleukin-6 and interleukin-8.

As a consequence of these encouraging Phase II results, lexipafant commenced a Phase III pivotal trial in pancreatitis after the end of the quarter, intended to confirm clinical benefit in the treatment of this serious acute disease. If successful, this Phase III trial in 300 patients may form the basis of a European Marketing Approval Application.

Sepsis

Lexipafant is also being evaluated in a number of other acute care conditions, including sepsis and coronary artery bypass grafting. Preliminary information is now available from a double-blind, 150-patient Phase II trial of lexipafant in severe sepsis, which indicates that lexipafant is unlikely to be of clinical benefit in the treatment of sepsis. Although the drug was well tolerated and organ function appeared to be improved partially by treatment, mortality was not significantly different in treatment and placebo groups. As a consequence of these results, the company has decided not to pursue further trials of lexipafant in this indication.

p24-VLP

p24-VLP is being studied in two different formulations, adjuvanted and unadjuvanted.

Adjuvanted p24-VLP, the AIDS immunotherapeutic, continued to recruit well in the Phase II studies, with almost 500 patients enrolled into four separate studies. Patient recruitment is complete in three studies and one study is still recruiting, a combination study with AZT in Australia. The first results should be known in the second half of 1995.

Unadjuvanted p24-VLP. The Phase I trial results were presented at a symposium in the USA after the end of the quarter. The trial, which was designed to test whether this form of p24-VLP could induce cytotoxicT lymphocyte (CTL) responses in humans, showed that p24-VLP without adjuvant can induce a CTL response, but only at a low level and for a short period. The company has therefore decided that it will not pursue further trials with unadjuvanted p24-VLP.

BRITISH BIOTECH INC

During the quarter, the company announced two key management appointments in the USA.

Dr Gregory M Hockel PhD joined as Vice President, Regulatory Affairs. Dr Hockel will oversee British Biotech's regulatory submissions in the United States including all Investigational New Drug (INDs) submissions and New Drug Applications (NDAs).

Dr Henrick S Rasmussen MD PhD has joined as Vice President of Clinical Research and will be responsible for British Biotech's clinical research programme in the United States. Dr Rasmussen has had responsibility in other companies for directing clinical studies in Europe, USA, Japan and Australia/New Zealand, regularly meeting US investigators and experts as well as the FDA.

PLANS FOR 1995

1995 promises to be a pivotal year for British Biotech. All five of the company's leading products will complete significant clinical trials. While it is difficult to be precise about timing and results, outline plans are as follows:

Metalloproteinase inhibitors

Batimastat—malignant ascites

The European Phase III study programme currently comprises two separate multi-centre clinical trials in patients with malignant ascites. Each trial will enrol 150 patients and will take approximately one year to complete. The first trial has now started and is being conducted at approximately 20 hospitals in the UK. The second trial will commence in early 1995 and will be conducted at approximately 20 hospitals in Germany, France, Italy, the Netherlands, Belgium and Switzerland. In addition, Phase II studies are planned to commence in the first half of 1995 in the USA.

Batimastat—pleural effusion

Full results of the current Phase I/II studies are expected to be released in the second quarter of 1995 at a major US oncology conference. Pivotal trials in Europe are expected to start in the first half of 1995. A parallel clinical programme is being planned in the USA.

BB-2516

If the current Phase I trials show BB-2516 to be well tolerated and absorbed, Phase II studies should commence around the middle of 1995. Initially, the company is planning to test BB-2516 in four different solid tumour types, with parallel programmes in the UK and the USA.

BB-10010

Following the successful Phase I trial described above, a further volunteer study will shortly commence in which the ability of the drug to mobilise bone marrow cells will be measured. A series of clinical trials in cancer patients is the next step in developing this compound. Patients will be studied during receipt of cancer chemotherapy in order to demonstrate protection of bone marrow cells by BB-10010. One of these studies is planned for the USA and an IND application has been submitted to FDA to obtain authorisation for this clinical trial.

Lexipafant

(i) Pancreatitis

Recruitment is due to complete in the Phase III lexipafant study in patients with severe acute pancreatitis in the first half of 1996.

(ii) CABG

Results from the Phase II study of lexipafant in patients undergoing coronary artery bypass graft surgery (CABG) should be available in late 1995.

(iii) Asthma

The oral version of lexipafant, which is being evaluated by Glaxo as a treatment for chronic asthma, is scheduled to enter a large scale Phase II trial in the first half of 1995.

p24-VLP

Results from the clinical trials currently under way with adjuvanted p24-VLP will be released in the second half of 1995.

OUTLOOK

1994 has been an active and productive period for British Biotech. Over 700 subjects were recruited into 26 clinical trials at 65 centres in nine countries. Both batimastat and lexipafant moved quickly into Phase III trials, while BB-10010 and BB-2516 entered clinical trials for the first time.

1995 will be an even more eventful period for the company, with all five of the clinical programmes reporting important data. I look forward with confidence to further progress being made in 1995.

Brian Richards

Chairman

British Biotech plc

Unaudited consolidated profit and loss account for the three months ended 31 October 1994

	Quarter ended 31 October 1994 £000	Quarter ended 31 October 1993 £000	Half-year ended 31 October 1994 £000	Half-year ended 31 October 1993 £000
Turnover
Continuing operations (note 1)	858	693	1,625	1,160
Discontinued operation (note 1)	¸	¸	¸	1,668

	858	693	1,625	2,828
Operating (loss)/profit
Continuing operations	(7,394)	(5,107)	(13,764)	(9,906)
Discontinued operation	¸	¸	¸	181
	(7,394)	(5,107)	(13,764)	(9,725)

Loss on disposal of discontinued operation	¸	¸	¸	(142)
Interest receivable	906	638	1,784	1,338
Interest payable	(138)	(138)	(281)	(279)

Loss before and after tax	(6,626)	(4,607)	(12,261)	(8,808)
Loss per share (note 2)	(13.7p)	(11.9p)	(25.6p)	(22.8p)

British Biotech plc

Unaudited consolidated profit and loss account for the three months ended 31 October 1994

	Quarter ended 31 October 1994 £000	Quarter ended 31 October 1993 £000	Half-year ended 31 October 1994 £000	Half-year ended 31 October 1993 £000
Net cash outflow from operations	(7,530)	(5,828)	(13,348)	(10,492)
Return on investments
Net interest	142	319	528	489
Investing activities
Purchase of fixed assets	(2,231)	(578)	(3,406)	(1,769)
Disposal of discontinued operation	-	¸	¸	879
Net sale of short-term investments	4,500	¸	6,500	¸

Cash outflow before financing	(5,119)	(6,087)	(9,726)	(10,893)
Financing
Issue of share capital	59	1	45,934	1
Repayment of loan	(67)	¸	(135)	¸

Cash (outflow)/inflow from financing	(8)	1	45,799	1
(Decrease)/increase in cash and cash equivalents	(5,127)	(6,086)	(36,073)	(10,892)
Cash and cash equivalents
At start of period	63,280	45,397	22,080	50,203
Increase/(decrease) in period	(5,127)	(6,086)	(36,073)	(10,892)

At end of period	(58,153)	(39,311)	(58,153)	(39,311)

British Biotech plc

Unaudited Consolidated Balance Sheet at 31 October 1994

	31 October 1994	30 April 1994
	£000	£000
Tangible fixed assets	21,065	18,671
Current assets
Stocks	73	63
Debtors	3,767	1,555
Short-term investments	—	6,500
Cash and cash equivalents	58,153	22,080
	61,993	30,198
Creditors due within one year	(6,087)	(5,442)
Net current assets	55,906	24,756
Total assets less current liabilities	76,971	43,427
Creditors due after more than one year	(3,897)	(4,028)
Net assets	73,074	39,399
Capital and reserves
Share capital	2,415	1,811
Share premium	141,239	95,907
Profit and loss account	(70,580)	(58,319)
Shareholders' funds	73,074	39,399

NOTES:

1. The discontinued operation in the half-year ended 31 October 1993 related to the reagents and diagnostics business British Bio-technology Products Limited, which was sold to Techne Corporation on 30 July 1993.

2. Losses per share

Quarter ended 31 October 1994

Losses per share are based on the loss attributable to shareholders before and after taxation of £6.6 million (1993: loss of £4.6 million) and on 48.3 million (1993: 38.6 million) shares, being the weighted average number of shares in issue for the quarter.

Half-year ended 31 October 1994

Losses per share are based on the loss attributable to shareholders before and after taxation of £12.3 million (1993: loss of £8.8 million) and on 47.8 million (1993: 38.6 million) shares, being the weighted average number of shares in issue for the half-year.

In calculating the weighted average number of shares, the number of shares in issue prior to the Rights Issue have been adjusted to reflect the bonus element of the Rights Issue.

3. The financial information on the group set out above does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The financial information for the year ended 30 April 1994 is an extract from the group's statutory accounts which have been delivered to the Registrar of Companies; the report of the auditors on these accounts was unqualified and did not contain a statement under Section 237(2) or (3) of the Act.



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