4SC Announces Financial Results for the First Quarter 2011
News May 12, 2011
4SC has announced its financial results in accordance with International Financial Reporting Standards (IFRS) for the quarter ended 31 March 2011.
Highlights of the first quarter 2011:
• 4SC-203 - Publication of the results from the Phase I clinical study with the multikinase inhibitor
• Resminostat - Commencement of the Phase I/II SHORE study in the third target indication of colorectal cancer in patients with K-ras-mutated tumours
• Vidofludimus - Presentation of the final results from the Phase IIa ENTRANCE study on the treatment of patients suffering from inflammatory bowel disease
• Capital increase - Successful placement of 3,452,647 new shares with new European and US institutional investors at a price of €3.40 per share. The gross issue proceeds amounted to approximately €11.74 million.
Dr Ulrich Dauer, CEO of 4SC, commented: "We have made a very successful start to 2011 so far. Investor confidence and our first development partnership with Yakult Honsha have validated both our business strategy and our development pipeline. With the successful conclusion of our capital increase and our pharma partnership, we now have a stronger starting point from which to negotiate further potential licensing deals for one or more of our programmes. We are looking confidently into the future, especially as regards the forthcoming results from the Phase IIb COMPONENT study for vidofludimus in treating rheumatoid arthritis, as well as the two Phase II resminostat studies in the indications of hepatocellular carcinoma and Hodgkin's lymphoma."
Overview of the financial results in the first quarter of 2011
No revenue was generated in the reporting period. As a result of the systematic scaling back of research collaborations, 4SC continued to focus on internal development programmes.
The operating loss posted for the first three months of 2011 amounted to €4,787 thousand, down from €5,274 thousand in the first quarter of 2010. The improvement resulted primarily from a decrease in research and development expenses and higher income from research grants.
The loss for the period declined accordingly by 11%, from €5,267 thousand in QI / 2010 to €4,697 thousand. On account of the lower loss for the period and as a consequence of the capital increase in February 2011 and the related increase in the average number of shares, both the basic and the diluted loss per share decreased by €0.02 to €-0.12 compared with the first three months of 2010 (€-0.14).
Cash and cash equivalents amounted to €5,521 thousand at the end of the reporting period. Taking into account all liquid funds and the available-for-sale securities, 4SC hat funds totaling €24,592 thousand as at 31 March 2011, compared with €17,607 thousand at the close of 2010.
Results from the clinical pipeline
4SC enjoyed a very successful start to the 2011 financial year, as the Company systematically pursued its strategy of establishing itself as the leading developer of targeted, small-molecule therapies in the areas of autoimmune diseases and cancer.
In the first quarter of 2011, 4SC not only announced the results from a Phase I study with the 4SC-203 compound from its oncology portfolio but also commenced a further clinical Phase I/II study (SHORE study) with its lead compound resminostat for the treatment of patients with Kras-mutated colorectal cancer (CRC). With the SHORE study, the Company has successfully implemented its three-pillar strategy for resminostat.
Shortly after the end of the reporting period, 4SC was also able to announce its first licensing deal for this compound on 14 April 2011. 4SC has granted the Japanese pharma company Yakult Honsha an exclusive license for the further development and marketing of resminostat in Japan in the indications of hepatocellular carcinoma (HCC) and colorectal cancer (CRC).
During the reporting period, 4SC also published final data from the Phase IIa ENTRANCE study of vidofludimus in patients with inflammatory bowel disease (IBD), which once again confirmed the top-line result announced at the end of 2010. The primary endpoint was met with a response rate of 88.5%.
Successful capital increase
In February 2011, 4SC successfully completed a capital increase. The Company placed 3,452,647 new shares with new institutional investors at a price of €3.40 per share, thus generating gross issue proceeds of around €11.74 million. The number of no-par value bearer shares rose accordingly from 38,502,739 to 41,955,386. Given its current capital resources,
the Company believes it is well positioned to achieve its development goals in the coming months and to conclude further licensing deals for one or more of its programmes.
For 4SC, the 2011 financial year is of particular importance. The Company is expecting final Phase II data from three clinical studies and, with this, the potential proof-of-concept for vidofludimus in rheumatoid arthritis (RA) and for resminostat in the two indications of HCC and HL. Alongside data evaluation, 4SC is continuing efforts to intensify discussions with potential
licensing partners for all current clinical programmes.
In the second quarter of 2011, 4SC plans to present top-line data from the Phase IIb COMPONENT study with vidofludimus in RA. Positive results for the Phase IIa study in IBD were already reported in November 2010 and towards the end of February 2011. Should the data from the COMPONENT study provide further confirmation of the highly promising potential of vidofludimus in the treatment of autoimmune diseases, this will once again considerably increase the value of the product as regards potential licensing deals.
In its oncology portfolio, 4SC in the 2011 financial year expects final results from two Phase II studies for resminostat in the indications HCC and HL. Encouraging data from these two studies have already been published. Here, too, further confirmation of the current positive dataset would lead to a considerable increase in product value for both 4SC and for potential licensing partners. The license agreement signed with Yakult Honsha concerning the development and commercialization of the compound in Japan already recognizes the potential of resminostat at an early stage.
Two more Phase I programmes will strengthen the clinical oncology pipeline in 2011. Positive Phase I data were reported for 4SC-203 in January 2011. Phase I results for 4SC-205 are also expected during the course of 2011.
A further Phase I study with 4SC-202, the second HDAC inhibitor owned by 4SC, was commenced in April 2011, shortly after the end of the reporting period. Initial data from this study are likely to be published in 2012.
4SC has a solid financial basis. Accordingly, and not least on account of the successful execution of its capital increase in February 2011, the Company believes it has a strong position from which to achieve its set development goals for the coming months as well as to negotiate additional possible licensing partnerships for one or several of its programmes. This strong
position was enhanced further with the recent signing of the licensing agreement with Yakult Honsha.