BioWorld International Correspondent
LONDON - Cambridge Antibody Technology (CAT) Group plc dropped its target of becoming profitable by 2008, saying that sticking to the plan would severely limit its capacity to invest in products coming out if its collaboration with AstraZeneca plc over the next five years.
Instead it intends to divert revenues to pay for clinical development up to proof of principle. The discovery stage already is fully funded under the terms of the deal, in which AstraZeneca injected into CAT £75 million (US$137.8 million) in December.
"Within three years time all research to the end of Phase II will be prefunded or funded from revenues, so we will be self-sustaining with no need to raise money up to proof of concept," Peter Chambré, CEO, told BioWorld International.
Cambridge-based CAT has not set an alternative date when it expects to move into profit. "We will run the company on behalf of shareholders: We don't want to limit their ability to participate in the upside beyond proof of concept," Chambré said. "Whatever we invest in late-stage trials will depend on the quality of the candidates."
Shares in CAT fell by 11.5 pence to £5.68 when the change was announced May 16. The company had net cash of £178.2 million at March 31.
CAT's belief that it can fund multiple programs through to proof of concept within the next three years depends on partner Abbott Laboratories losing an appeal over the level of royalties it owes CAT for the rheumatoid arthritis treatment Humira. The case, due to be heard near the end of 2005, will determine whether CAT receives 2 percent or more than 5 percent royalties on Humira, which has forecast sales of $1.3 billion in 2005.
The research with AstraZeneca will start five discovery programs per year over the next five years. At the end of discovery each partner will have the option to invest further or to opt out. Chambré said the infrastructure to manage the alliance now is in place, and the first five programs are about to commence. A pool of targets has been created based on the joint expertise of the two companies, from which a short list is being drawn. The focus will be on inflammatory diseases, but Chambré said none of the programs will be disclosed until they enter preclinical development.
CAT also gave an update on its alliance with Genzyme Corp., of Cambridge, Mass., announcing that CAT-192, an anti-TGF beta-1 antibody for scarring and fibrotic conditions, was to be axed following a 45-patient study in scleroderma. The product was safe and well tolerated, but after discussions with experts it emerged no suitable endpoints for a further trial in scleroderma could be identified.
In its place, the companies will start a trial of GC-1008, an anti-TNF beta antibody, in idiopathic pulmonary fibrosis next month.
CAT announced also that it is looking for a partner for CAT-354, a fully human anti-IL13 antibody for severe asthma. The product commenced a Phase I trial in September, with preliminary results expected next month. Chambré said there is interest in the product, and there would be benefits in having a partner on board to help shape the Phase II trial in 80 patients that is expected to start later in the year.