Transgene: Annual Results 2012 and Business Update

Solid operational performance in 2012, in preparation of key milestones in 2013 with the possible start of two phase 3 clinical trials for our most advanced products

Cash consumption in line with expectations and cash position of €92.9 million at end 2012


STRASBOURG, France--(BUSINESS WIRE)-- Regulatory News:

Transgene SA (Paris:TNG) (Euronext Paris: FR0005175080) today announced the company's financial results for 2012 and provided a business update.

The year 2012 was marked by the publication of a number of clinical results, by the start of important clinical trials, by the strategic partnership concluded with the EORTC, a leading cancer research cooperative group, and by the start of activities in China.

"2012 was a year in which we substantially invested in clinical trials, key for the immediate future of Transgene" stated Philippe Archinard, Chairman and Chief Executive Officer of Transgene. He added: "We now have excellent visibility on our next milestones and by the end of 2013 we should have the necessary clinical results to be able to decide the start of phase 3 studies, the last development phase before registration, for TG4010 in lung cancer and Pexa-Vec (JX594/TG6006) in liver cancer.We await the attainment of these milestones with a great deal of enthusiasm".

The consolidated financial results for 2012 consisted mainly in a stable net loss of €43.2 million (to be compared with €43.6 million in 2011) and a cash consumption of €46.6 million (compared to €40.8 million in 2011).

As of 31 December 2012, the company had €92.9 million in cash. Transgene expects a cash consumption of around €50 million in 2013.

"2012 financial numbers are in line with our expectations" stated Stéphane Boissel, Executive Vice President and Chief Financial Officer of Transgene. He added: "At the end of 2012, Transgene had a cash runway of close to two years".

The company will host a conference call and webcast in English tomorrow, Friday,
March 22 nd , at 02:30pm CET. The dial-in numbers are:

+44(0)20 7136 2050 (UK)

+33(0)1 70 99 43 01 (FR)


+1646 254 3364 (US)

 

Confirmation Code: 7934677

 

The weblink for the webcast is:

http://www.media-server.com/m/p/yp2gm6vc

 

Key 2012 numbers:

Annual consolidated financial statements for 2012 can be summarized as follows:

  • €13.1 million in revenue, compared with €14.4 million in 2011,
  • €48.7 million in R&D expenses, compared with €53.0 million in 2011,
  • €43.2 million in net loss, compared with €43.6 million in 2011, and
  • €46.6 million in cash consumption, compared with €40.8 million in 2011.

As of December 31, 2012, Transgene had €92.9 million in cash.

The following table presents the income statement for 2011 and 2012:

In thousands of euros   12/31/2012   12/31/2011
Revenue from collaborative and licensing agreements   3,928   5,646
Government financing for research expenditures   9,133   8,800
Revenue   13,061   14,446
Research and development expenses (48,679) (53,048)
General and administrative expenses (6,610) (6,226)
Other income and (expenses), net   93   -
Net operating expense   (55,196)   (59,274)
Operating income   (42,135)   (44,828)
Interest income and (expenses), net   (594)   1,426
Income/ (loss) before tax   (42,729)   (43,402)
Income tax expense   -   -
Income from equity affiliates   (474)   (224)
Net income/ loss   (43,203)   (43,626)
Net Income per share (€) (1.36) (1.38)
Diluted earnings per share (€) (1.36) (1.38)

The financial statements for 2012 as well as the management discussion on those statements are attached to this press release (Appendixes A and B).

Key 2012 events and short term news-flow:

In 2012, Transgene presented or published scientific and clinical data for 4 out of its 5 most advanced products:

  • Pexa-Vec (liver, colorectal and renal cancers) :
    Clinical data obtained in liver cancer were presented at ILCA1 (Berlin, September 2012). They illustrate the safety of the intravenous injection of Pexa-Vec followed by Sorefanib, the standard of care in the indication. This opens new perspectives for the clinical development of the product. Promising survival benefit data were also published in early 2013 in Nature Medicine. In a small group of patients (30), those data showed a doubling in average overall survival for patients having received high, therapeutic, dose of Pexa-Vec compared to patients having received low, placebo-like, dose of the product.
  • TG4040 (hepatitis C) :
    During the EASL2 congress of 2012 (Barcelona, April 2012), additional data from the phase 2b HCVac study were presented. They showed a prolongation of benefits of TG4040 under treatment. Primary endpoint of the trial was met. Final data will be orally presented by Transgene during the EASL congress of 2013 (Amsterdam, April 2013). An update on the TG4040 development strategy will then be made.
  • TG4001 (cancer of the oropharynx) :
    Phase 2b data showing significant superior efficacy of the therapeutic vaccine over placebo in HPV-related CIN 2/3 cervical neoplasia patients were communicated in May 2012. Detailed data were then presented by Roche3 in the context of the 28th international papillomavirus conference (Puerto Rico, December 2012). Those data are not sufficient to move the product in phase 3 in this indication. However, they represent a strong proof of concept for the product and enabled Transgene to enter into a strategic collaboration with EORTC, a leading cancer research cooperative group, for the conduct of a large phase 2b evaluating TG4001 in combination with radio-chemotherapy in HPV-related cancer of the oropharynx. This study will be initiated in 2013 and the first patient is expected to be randomized in early 2014.
  • TG1050 (hepatitis B) :
    During the EASL congress of 2012 (Barcelona, April 2012), first pre-clinical data with TG1050 were presented. They allowed us to move the product into IND enabling studies. Additional data will be presented during the EASL congress of 2013. TG1050 should enter clinical trials in 2014. Transgene intends to enter into a collaborative partnership with TG1050 before the start of clinical trials.

In 2012, Transgene started important clinical trials for its two lead products, TG4010 (lung cancer) and Pexa-Vec (liver cancer).

To date, around 70% of patients have been randomized in the phase 2b part of the phase 2b/3 trial with TG4010 in lung cancer. First data are expected in Q4 2013 and Novartis could exercise its option in late 2013 or early 2014.

To date, around 60% of patients in the TRAVERSE study (phase 2 b trial with Pexa-Vec in second line advanced liver cancer, or HCC) have been randomized. This study should give its first data by the end of 2013. With its partners, including Jennerex, Inc., Transgene has also started (i) a phase 2a clinical trial evaluating an intravenous injection-only protocol in liver cancer patients as well as (ii) a phase 1/2 evaluating Pexa-Vec in combination with chemotherapy in metastatic colorectal cancer. Data from the various ongoing clinical trials should enable the partners to decide on starting a phase 3 clinical trial by the end of 2013. A first patient in phase 3 could be randomized in early 2014.

1 ILCA = International Liver Cancer Association.
2 EASL = European Association for the Study of the Liver.
3 Roche had exclusive rights to TG4001 until February 2011 when rights were granted back to Transgene. Roche is sponsor of the still ongoing clinical data.

About Transgene:

Transgene (NYSE-Euronext: TNG), a member of the Institut Mérieux Group, is a biopharmaceutical company. It creates, develops and manufactures targeted immunotherapeutics for the treatment of cancers and infectious diseases. Transgene's products are major technological breakthroughs. They use well tolerated viruses to indirectly or directly kill infected or cancerous cells. Its four most advanced products have generated proof of concept data in randomized clinical studies: in lung cancer (TG4010), liver cancer (Pexa-Vec), hepatitis C (TG4040) and HPV-related cervical lesions (TG4001). Transgene has concluded strategic agreements for the development of three of these products: an option agreement with Novartis for the development of TG4010, an in-licensing agreement with US-based Jennerex, Inc. to develop and market Pexa-Vec and a strategic collaboration with EORTC to develop TG4001 in cancer of the oropharynx. With 280 employees, it is based in Strasbourg, France, and has operations in Lyon, China and the USA. Additional information about Transgene is available at www.transgene.fr.

Transgene can be followed on Twitter (@TransgeneSA) and LinkedIn.

Disclaimer:

This press release contains forward-looking statements notably referring to the anticipated cash consumption for 2013. The Company's anticipated cash consumption for 2013 is based on currently anticipated costs for on-going and planned product development and testing, but may increase in the event of unanticipated expenses. For further information on the risks and uncertainties involved in the testing and development of Transgene's product candidates, see Trangene's Document de Référence on file with the French Autorité des marchés financiers on its website at http://www.amffrance.org and on Transgene's website at www.transgene.fr .

APPENDIX: 2012 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated 2012 financial statements were approved by the Board of Directors on March 20, 2013, and will be submitted for approval by the shareholders of the Company during its next annual general meeting, on June 19, 2013. Audit procedures have been performed and the auditors' report is dated March 21, 2013.

Appendix A: 2012 Financial Statements

Consolidated balance sheet (IFRS)
(in thousands of euros)

ASSETS       12/31/2012   12/31/2011
             

Current assets

       
Cash and cash equivalents 6,137 1,733
Other current financial assets 86,778 137,774
Cash, cash equivalents and other financial assets 92,915 139,507
Receivables 2,012 624
Inventories 1,107 1,093
Other current assets       2,340   2,560
Total current assets       98,374   143,784
             

Non-current assets

Property, plant and equipment 24,805 25,507
Intangible assets 1,497 1,581
Financial assets 7,382 6,175
Equity consolidated affiliates 3,932 544
Other non-current assets       24,474   15,993
Total non-current assets       62,090   49,800
             
Total assets       160,464   193,584
EQUITY AND LIABILITIES       12/31/2012   12/31/2011
             

Current liabilities

       
Payables 9,587 10,840
Financial liabilities 961 955
Provisions for risk 2 3
Other current liabilities       8,853   9,319
Total current liabilities       19,402   21,117

 

           

Non-current liabilities

Financial liabilities 38,006 27,374
Defined benefit obligations 3,226 2,794
Other non-current liabilities       252   883
Total non-current liabilities       41,484   31,051
             
Total liabilities       60,886   52,168
             

Equity

Share capital 72,886 72,523
Share premiums 427,258 426,041
Retained earnings (356,655) (313,030)
Net loss for the year (43,203) (43,626)
Other comprehensive income       (709)   (492)
Total equity and reserves attributable to equity holders of the Company      

99,578

  141,416
             
Total equity and liabilities       160,464   193,584

Consolidated income statement (IFRS)
(In thousands of euros, except per share data)

        12/31/2012   12/31/2011
Revenue from collaborative and licensing agreements       3,928   5,646
Government financing for research expenditures       9,133   8,800
Revenue       13,061   14,446
Research and development expenses (48,679) (53,048)
General and administrative expenses (6,610) (6,226)
Other income and (expenses), net       93   -
Net operating expense       (55,196)   (59,274)
Operating income       (42,135)   (44,828)
Interest income and (expenses), net       (594)   1,426
Income/ (loss) before tax       (42,729)   (43,402)
Income tax expense       -   -
Income from equity affiliates       (474)   (224)
Net income/ loss       (43,203)   (43,626)
Net income per share (€) (1.36) (1.38)
Diluted earnings per share (€) (1.36) (1.38)

Consolidated statement of comprehensive income (IFRS)
(In thousands of euros)

    12/31/2012   12/31/2011
Net income/(loss)   (43,203)   (43,626)
Foreign exchange gains / (losses) 11 (1)
Reevaluation of hedging instruments   (227)   (270)
Other comprehensive income   (216)   (271)
Comprehensive income   (43,419)   (43,897)
Of which, Equity holders of the parent company (43,419) (43,897)
Of which, minority interests - -

Statement of cash flows (IFRS)
(In thousands of euros)

    12/31/2012   12/31/2011
Cash flows from operating activities    
Net Income (43,203) (43,626)
Elimination of financial result 594 (1,426)
Elimination of non-cash elements
Income from equity affiliates 474 224
Changes in provisions 282 260
Depreciation and amortization of tangible and intangible assets 2,763 2,740
Payments in shares 856 1,441
Others   (1,233)   5
Net cash generated from/(used in) operating activities before change in working capital and other operating cash flow   (39,467)   (40,382)
Change in operating working capital
Receivables (1,620) 685
Inventories (14) (121)
Research tax credit (8,418) (7,786)
Other current assets 606 219
Payables (1,283) 2,292
Prepaid income (1,080) (1,678)
Accrued Employee benefits expenses 459 39
Other current liabilities   (477)   714
Net cash generated from/( used in) operating activities   (51,294)   (46,018)
Cash flows from investing activities
(Purchase) /disposal of property, plant and equipment (1,379) (3,302)
(Purchase)/ disposal of intangible assets (566) (548)
Other (purchases) /disposals   (2,631)   (1,668)
Net cash used in investing activities   (4,576)   (5,518)
Cash flows from financing activities
Collected net financial result 194 1,856
Gross proceeds from issuance of share capital 725 254
Fees paid in relation to capital increase - -
Conditional subsidies 3,116 3,103
(Acquisition)/ disposal of current financial assets 50,582 41,143
Research tax credit financing 6,601 6,465
Repayment of finance lease liabilities   (955)   (930)
Net cash generated from /(used in) financing activities   60,263   51,891
Effect of change in exchange rates on cash and cash equivalents   11   (1)
Net increase (decrease) in cash and cash equivalents   4,404   35

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