Divestments, settlements boost Acambis 3Q profit; market okays new growth strategy
Vaccine developer Acambis plc (ACM.L) turned a pre-tax loss of £10.2m in the third quarter of last year into a profit of £4.8m for the three months to end September 2006 as it pocketed a substantial settlement on its Arilvax vaccine and the proceeds from the sale of subsidiary Berna Products.
The company’s new chairman Peter Fellner (pictured) also reported the outcome of the Board’s strategic review, which has targeted its non-biodefence pipeline as the path to growth.
CEO Gordon Cameron said: "Following significant activity on all fronts, the past two months have been a very busy period of news flow. We have delivered both positive data from our key pipeline programmes and achieved a number of agreements that have raised significant cash.
“Acambis is now in a much stronger financial position and, with our clear strategic direction, the Board is confident that we are well-positioned to pursue the next stage of Acambis' growth and development."
The news pushed the company’s share price up 3.2% or 5p to 160p by the close of trading in London, valuing the Cambridge-based group at around £170m.
Pipeline
On 30 October, Acambis announced positive results from its pivotal Phase 3 trials of ChimeriVax-JE, which, it said, reinforced its confidence that it has a profile that is ideally suited to both the endemic and the travel vaccine markets. The announcement followed positive data from its ChimeriVax-West Nile and C. difficile vaccines, reported with 2Q results.
In September, it reported the US Government had placed an order for 10 million doses of ACAM2000, potentially contributing about £16m in revenues in 2006. It said yesterday it was working to deliver these doses before the end of the year, with the aim of meeting its overall 2006 revenue guidance of £30m.
In early October, Acambis sold Berna Products Corp, its travel vaccine sales and marketing unit, to Crucell NV for around £8.8m. With the end of the Arilvax licensing agreement, for which it got a £10.1m settlement payment from Novartis, it decided Berna was no longer a strategic asset.
All these deals strengthened the financial outlook and balance sheet. Its cash and near cash balance at 30 September was £46.1m.
Strategic review
Dr Fellner said Acambis had established a strong base to grow into a substantial biotech. Through the US Government smallpox vaccine contracts, it had developed in-house expertise and assets essential to the development of biological products, such as vaccines.
The Group was now capable of taking a product through all stages from concept to licensure. Its pipeline includes a mix of novel infectious disease vaccines that offer useful near-term revenue sources and higher value opportunities in the medium to longer term.
Its "biodefence" assets – smallpox vaccines – would likely provide significant revenues and cashflow to underpin the business while supporting the core non-biodefence pipeline.
“In the Board's view, the non-biodefence pipeline is the primary growth area and we will aim to build this into an increasingly valuable portfolio”, he said.
To achieve this, existing operations would drive key projects - ChimeriVax-JE, ChimeriVax-West Nile, C. difficile and universal influenza vaccines - through to licensure as quickly and effectively as possible, probably by working with partners.
“At the same time, we are ambitious to expand the portfolio through adding projects that address significant market opportunities, as we have accomplished with the C. difficile and influenza projects. Acquisitions – be they of products and/or companies - form a major part of that growth strategy, as will the output from Acambis' own innovative research programmes,” Dr Fellner said.
While the biodefence business underpins the new strategy, Acambis does plan to expand it beyond the current portfolio.
Biologicals on agenda
“Today, Acambis' principal expertise is in the area of vaccines against infectious diseases,” Dr Fellner said. “In assessing opportunities for acquisition-driven growth, we are also considering biologicals to treat infectious diseases and vaccines targeting disorders other than infectious diseases. In both areas, we believe Acambis' established capabilities will be particularly appropriate for such a business expansion”.
He said Acambis was recruiting a Senior VP R&D to succeed Dr Thomas Monath, who retired as Chief Scientific Officer and stood down from the Board in September.
7th November 2006
