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UPDATE 2-Oxford Biomedica sees progress in its eye drugs

Published 08/24/2010, 06:54 AM
Updated 08/24/2010, 07:00 AM

* Sees all four eye drugs in clinic by end-2011

* H1 net loss 2.9 mln stg vs 0.5 mln stg loss

* Net cash 16.3 mln stg, enough to last until Q1 2012

* Looking for partner for ProSavin for Parkinson's

* Shares down 0.1 percent, outperforming FTSE

(Adds CEO, FD comments, analyst reaction, updates shares)

By Paul Sandle

LONDON, Aug 24 (Reuters) - British gene therapy specialist Oxford BioMedica said on Tuesday it would have all four of its eye disease drugs in clinics by the end of next year, and its cash burn would slow in the second half of 2010. The company also posted a net loss of 2.9 million pounds ($4.5 million) for the six months to end-June, against a 0.5 million loss for the same period a year ago, on revenue of 5.3 million pounds.

Nearly all of Oxford's revenue came from French partner Sanofi-Aventis, which reimburses research and development costs for its four eye product candidates.

"Our ocular collaboration is proving to be very good for us," said Chief Executive John Dawson in an interview.

"We will have all four drugs in the clinic by the end of 2011, and the first one (RetinoStat for age-related macular degeneration) by the end of 2010."

Oxford BioMedica's two other main drugs, Parkinson's Disease medicine ProSavin and cancer vaccine Trovax, are not partnered at the moment.

The company had net cash of 16.3 million pounds at June 30, which it said was enough to meet its needs into the first quarter of 2012.

Its cash was lower than some analysts had predicted, however, and its shares fell as much as 10 percent before recovering to stand just 0.1 percent lower at 9.99 pence by 0958 GMT in a weaker London market.

Finance Director Andrew Wood said a 1.7 million pound payment from Sanofi came a few days later than expected -- in July -- and would have boosted its cash balance to nearer 18 million pounds.

The cash burn would be lower in the second half, Wood said. "I'm looking at an average monthly cash burn going forwards of a shade under 1 million pounds a month."

Panmure Gordon analyst Savvas Neophytou said once the late payment was taken into consideration, cash was in line with expectations.

"We remain buyers of the stock and find the current share price an excellent entry level into the stock," he said.

Paul Cuddon at KBC Peel Hunt, who reduced his price target to 11 pence from 14 pence, said the alliance with Sanofi Aventis was the most valuable asset in the business, though it would take time for clinical data to emerge.

"In the meantime, we await deals for Trovax and/or ProSavin, on which there is limited visibility," he said.

Oxford is still talking to potential partners for ProSavin, with the objective of advancing into a larger study at the earliest opportunity.

It said in June that ProSavin showed continued benefits in an ongoing trial after two years, with two out of three patients showing 30 percent better motor function.

It is also still keen to resurrect the Trovax cancer vaccine, which failed in a clinical study in 2009, and said it expected a new phase II trial in prostrate cancer to begin during the third quarter. (Editing by James Davey and Will Waterman) ($1=.6484 Pound)

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