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  1. 1. 28 March 2007 3 TroVax Global development and commercialisation deal with sanofi-aventis PATRICE MAUREIN MAUREIN / CIANFAGLIONE & GRAVEREAUx ARCHITECTES BuSINESS REVIEw STRATEGy 13 Key Performance Indicators 16 Markets 19 Principal Risks and Uncertainties Business Review: Strategy 12 Oxford BioMedica Annual Report & Accounts 2007
  2. 2. Key Performance Indicators Our goal is to create a profitable biopharmaceutical company through the commercialisation of novel safe and effective gene-based medicines to treat unmet medical needs. To mitigate the inherent risks of drug development, we have adopted a hybrid business model that combines in-house and collaborative research and development, enabling us to establish a portfolio of product candidates that address multiple therapeutic areas. We also actively out-license our proprietary technologies for use in research or drug development to generate near-term revenue streams and, in some cases, royalties on product sales. In 2007, we undertook a review of our pipeline to prioritise our development efforts and maximise the potential return from our in-house investment. With rigorous financial management, we aim to deliver sustained growth and value for our shareholders and other stakeholders. Our corporate strategy is defined by six core strategic themes. These themes are FOCUS ON Targets: Our development priorities in 2008 are unchanged. We will continue to manage consistent with our near and long-term ADVANCING KEY the Phase III TRIST study of TroVax, while objectives for the business, and we have adopted them as Key Performance Indicators DEVELOPMENT sanofi-aventis takes responsibility for Phase III development in colorectal cancer. For to measure our progress. Our six themes are PROGRAMMES ProSavin, in addition to the ongoing Phase as follows: I/II trial, we are preparing for the next stage Link to Strategy: In 2007 , we conducted a of the product’s development, which could review of our pipeline to assess the return 1. Focus on advancing key development be a Phase III trial. We are continuing our on investment for each product candidate, programmes, which offer the greatest preparations for clinical trials of RetinoStat. by considering the commercial opportunity commercial value based on the anticipated competitive 2. Broaden the technology platform and profile, together with timelines and costs of development. We are now focusing BROADEN out-license technologies for near-term revenue our internal resources on those product TECHNOLOGY 3. Expand the clinical pipeline by at least candidates that offer the greatest potential value. PLATFORM one new product per year Link to Strategy: Intellectual property (IP) Performance: Our focus in 2007 has been is essential to our success. It provides us 4. Partner certain products with companies on progressing TroVax through Phase III with freedom to operate and protects our for late-stage development development in renal cancer, advancing products from competition, enhancing ProSavin into a Phase I/II trial in Parkinson’s their commercial value. We aim to be the 5. Retain commercial rights for certain disease, and preparing for the clinical leading company in our fields of gene-based products to maximise value development of RetinoStat in wet age- medicines and immunotherapy with a toolbox related macular degeneration. We also of technologies, such that we can apply 6. Maintain effective management of initiated a new anti-cancer programme, the most appropriate gene delivery system financial and human resources EndoAngio-GT, which is designed to block for any therapeutic gene, mechanism of In this section, we describe the relevance blood vessel growth (angiogenesis) in action or target tissue. By out-licensing our of these themes to our corporate strategy, tumours. This mechanism of action has technologies, we also generate near-term assess our performance in 2007 , and set out been proven in various preclinical models revenue and build commercial relationships our targets for 2008. of solid tumours and confirmed in clinical that may become more valuable in the future. studies with monoclonal antibodies targeting tumour vessel growth. The development of EndoAngio-GT is expected to benefit from synergies with RetinoStat. Business Review: Strategy Key Performance Indicators Oxford BioMedica Annual Report & Accounts 2007 13
  3. 3. Performance: In January 2008, we secured exclusive rights to use our LentiVector to enter clinical development that uses our LentiVector technology. RETAIN RIGHTS FOR technology in the field of RNA interference Targets: We are preparing for a submission CERTAIN PRODUCTS (gene silencing), which is a targeted Link to Strategy: The most successful therapeutic approach that has many to start clinical trials of RetinoStat for the biotech companies are fully integrated, applications and is attracting substantial treatment of wet age-related macular which means that they develop and market investment. In March 2007 , we acquired degeneration. We expect this to happen in their own products. By following this model Oxxon Therapeutics, which has strengthened 2009. We have several further preclinical in niche markets that require small but our proprietary position in immunotherapy. candidates that could enter the clinic in the specialised sales forces, we can capture Sigma-Aldrich is our strategic partner for next two years, including EndoAngio-GT for more value from the commercialisation of our the commercialisation of LentiVector-based cancer and StarGen for Stargardt’s disease. innovative products with limited investment. reagents for use in research. We receive royalties on sales of these reagents. During 2007 Sigma-Aldrich expanded its product PARTNER CERTAIN Performance: In 2007 , we conducted a risk-reward assessment of the ProSavin range. In 2007 , Oxford BioMedica and PRODUCTS programme and concluded that there was a Sigma-Aldrich also licensed the LentiVector Link to Strategy: Our product candidates strong rationale to retain commercialisation technology to another major US-based are principally designed for use in hospital rights in certain territories and establish a biotechnology company for use in its settings and specialist centres. Some specialised neurological sales and marketing in-house research activities. hospital products require competitive infrastructure. Furthermore, in our alliance marketing and substantial investment in with sanofi-aventis, we have retained an Targets: We are evaluating various option to participate in the promotion of commercial infrastructure. Based on our opportunities to in-license or acquire TroVax in the USA and EU, which would current resources, our strategy is to seek technology that complements our existing enable us to establish an oncology franchise. partners for these types of products to IP and can generate both near and long- access additional capabilities for product term value. During 2008, we plan to exploit Targets: We are evaluating various strategies development and commercialisation. In our rights in RNA interference through for the development of ProSavin, which addition, following the strategic review of our partnerships and also new in-house would provide additional finance and pipeline, we are seeking suitable partners for programmes. resource, thus reducing the financial risk our non-priority product candidates to ensure for Oxford BioMedica, while allowing us that they are developed and commercialised ExPAND CLINICAL to their full potential. to retain commercialisation rights. For ProSavin and some of our preclinical product PIPELINE Performance: In 2007 , our licensing deal candidates, we aim to progress discussions with sanofi-aventis for TroVax was a major with potential partners in territories that are Link to Strategy: Our success will ultimately achievement. The development of TroVax will outside of our core focus, during 2008. come from commercialisation of novel, safe and effective therapies that utilise require substantial investment over the next our proprietary technologies, whether developed by Oxford BioMedica or our few years. Similarly, its commercialisation will benefit from an established sales and MAINTAIN partners. Broadening our clinical pipeline marketing infrastructure, particularly if the EFFECTIVE with additional product candidates increases our commercial potential and also reduces product has proven application in multiple settings and cancer types. Sanofi-aventis is MANAGEMENT an ideal partner for TroVax, given its global Link to Strategy: Our continued growth development risk through diversification. capabilities and existing oncology franchise. requires ongoing investment in our pipeline Performance: In 2007 , we added two and technologies. We also need to recruit programmes to our clinical pipeline. Firstly, Targets: In our strategic review, we identified and retain key people with relevant skills through Oxxon Therapeutics, we acquired certain non-priority product candidates, which and training for our in-house activities. We a therapeutic vaccine for melanoma, Hi-8 we intend to partner for further development. aim to keep our fixed costs to a minimum by MEL, which is in Phase II development. These include MetXia, which is a localised using outsourced service providers where Secondly, in December 2007 , we received therapy for accessible tumours, that could appropriate. To ensure that our business is clearance from the regulatory authorities be developed to treat pancreatic, breast sustainable during our pre-commercialisation to start the Phase I/II trial of ProSavin in and prostate cancer and also glioma Parkinson’s disease. This is the first product (brain cancer). Business Review: Strategy Key Performance Indicators 14 Oxford BioMedica Annual Report & Accounts 2007
  4. 4. 07 May 2007 RetinoStat & StarGen Preclinical data presented at ARVO meeting phase, we maintain a principle of having financial resources for a minimum operational period of 12 months. Performance: We have established a solid track record of meeting or beating our financial targets in recent years. In 2007, we have strengthened our cash position and have sufficient resources for our ongoing operations. During the year we conducted a strategic review of our development pipeline to enable us to focus investment on opportunities that could generate the greatest value. Targets: We will continue to monitor the investment requirements for each of our programmes and will expand our internal operations as required to meet our objectives. Our financial goal is to be profitable within 12 months of registration of our first product, which could be in 2009 following a successful outcome from the Phase III TRIST study of TroVax in renal cancer. Business Review: Strategy Key Performance Indicators Oxford BioMedica Annual Report & Accounts 2007 15
  5. 5. Markets Average deal values for small molecule and biologic deals. (PharmaDeals, 2008) 300 Small Molecule Biological 250 Total potential deal value (US$ million) 2007 could be described as the year that to lose another US$12 billion in 2007, the pharmaceutical industry reinforced its according to IMS Health. Biotechnology 200 long-term commitment to the development drugs face less competition from generic and commercialisation of novel biological versions because their complexity raises therapies and technologies. The acquisition of the clinical and regulatory requirements the US biotechnology company MedImmune for approval of “biogenerics” and their 150 by AstraZeneca was one of the largest ever manufacturing requires substantial biotech deals, and followed AstraZeneca’s investment and infrastructure. previous buyout and integration of Cambridge 100 Antibody Technology in the UK. Pfizer, Within the multiple sub-sectors of Novartis and Roche are investing in new or biotechnology, Oxford BioMedica is focused enhanced biotechnology units with increased on gene therapy and cancer immunotherapy. budgets for the discovery and development 50 of novel biologics. Potentially more relevant to Oxford BioMedica, was an announcement GENE THERAPY by our partner for TroVax, sanofi-aventis, of AND CANCER 0 2005 2006 2007 its goal to boost sales from biologics to up to 30% of total sales in five years from about IMMUNOTHERAPY Year 10% today. Gene therapy is ‘the treatment or prevention of disease by gene transfer’ and involves Biotechnology drugs, which can be defined the genetic modification of human cells by Proportion of biologics sales by big pharma in simply as drugs derived from living cell introducing one or more genes. This approach 2006 (Pharma Deals; Evaluate Pharma, 2008) cultures instead of traditional chemistry, is most obviously associated with replacing 50 are an attractive investment for two basic missing or defective genes, through the reasons: the industry is fast-growing and introduction of a normal working version 45 generic competition is limited. of the gene. However, the field has its Biologics sales (% of total sales) 40 greatest potential in providing endogenous 35 • The biotechnology industry is expanding factories of pharmacologically active much more rapidly than traditional molecules that cannot be administered by 30 pharmaceuticals. Biotech sales in the USA conventional means. This is our approach 25 grew 20% to US$40.3 billion in 2006, with ProSavin, which delivers genes for 20 while pharmaceutical sales grew 8% to synthesising dopamine for treatment of 15 US$275 billion, according to IMS Health. Parkinson’s disease. Furthermore, gene- 10 based approaches can be used to activate • Biotechnology drugs are less vulnerable the immune system to kill disease cells. Our 5 to generic competition upon patent lead product, TroVax, delivers a gene that 0 expirations, which is the main concern produces a protein found on cancer cells in a of the pharmaceutical industry. The e on is e . r s ca Co ze rti ch in fashion that enables this to be recognised as nt ne ns Pfi Kl a Ro ve & pharmaceutical industry lost US$14 billion ov ze h ith -A ck Jo N foreign by the patient’s immune system. The ra Sm er ofi st & worth of annual drug sales to patent M n A xo on Sa patient’s immune system then attacks and la ns expirations in 2006 and was expected G h Jo kills cancer cells that express the protein. Business Review: Strategy Markets 16 Oxford BioMedica Annual Report & Accounts 2007
  6. 6. Biotech and big pharma R&D expenditures vs approvals (Ernst & Young, 2007) 70 35 Number of new molecular entities (NME) R&D expenditures (US $billion) 60 30 approved by the FDA 50 25 40 20 30 15 20 10 10 5 0 0 2000 2001 2002 2003 2004 2005 2006 Biotech R&D Pharma R&D Biotech NME Pharma NME DELIVERY SYSTEM IS KEY was used widely some years ago as a More recently, in 2007 , a patient died vaccine for the eradication of smallpox and following treatment in a trial of an There is no perfect delivery system that can more recently for biodefence stockpiling. adeno-associated virus-based product for be used to treat every disorder. Like any inflammatory arthritis in the USA. The type of medical treatment, a delivery system FDA suspended the trial but then lifted its must be customised to address the unique SAFETY CONCERNS hold after its safety review indicated features of the disorder and choosing the Regulatory authorities in the USA and EU that the product did not contribute to the most suitable vector is part of the challenge have yet to approve a human gene therapy patient’s death. Very few pharmaceuticals in gene therapy. Factors that influence the for sale. There have been some notable or biopharmaceuticals have zero risk and selection of the delivery system include the clinical successes with gene therapy in gene therapy is no exception. target cell type and whether these have been various disease settings. However, the critics removed from the body (ex vivo) or are still of gene therapy have always focused on the It is worth stressing that Oxford BioMedica’s in the body (in vivo), the duration of gene handful of adverse events that have occurred LentiVector technology and the MVA system expression required for therapeutic effect, in some of these trials, although none of in our cancer immunotherapies have not and the size of the piece of DNA to be used these have been with Oxford BioMedica’s been associated with any serious safety in the gene therapy. products or vector systems. issues. However, these previous incidents reinforce the need for rigorous safety testing Viral vectors are widely used for gene In 1999, gene therapy suffered its first major of our gene-based products. delivery since they have a natural ability to setback with the death of 18-year-old Jesse enter a cell and deliver genetic material both Gelsinger. Mr Gelsinger was participating in efficiently and in a defined manner. Oxford a gene therapy trial and his death is believed REGULATORY PROGRESS BioMedica’s proprietary LentiVector system to have been triggered by a severe immune A new regulatory process for the approval of is based on highly engineered lentiviruses. response to the adenoviral vector being advanced products, including gene therapies, Unlike some other commonly used viral evaluated. in the EU came in to force on 30 December vectors, the LentiVector technology has the 2007 . The regulation on advanced therapy ability to integrate genes into the genome Another issue arose in 2003 when the FDA medicinal products offers a framework to of non-dividing cells as well as dividing placed a temporary halt on all gene therapy support the advancement of these products cells. The breadth of our LentiVector-based trials using retroviral vectors in blood stem with access to scientific advice and a pipeline reflects the utility of the technology. cells. The FDA took this action after two centralised European approval process. It has potential application in the treatment children treated in a French gene therapy For Oxford BioMedica, the new regulation of neurological disorders (e.g. ProSavin for trial developed a leukaemia-like condition. On provides greater clarity on the route to Parkinson’s disease), eye diseases (e.g. analysis, it was concluded that these events market in Europe for our product candidates, RetinoStat for wet age-related macular were primarily driven by the trial design and and potentially reduces clinical timelines and degeneration), genetic diseases, chronic nature of the therapeutic gene and not a regulatory uncertainty. infections and also cancer. broader issue related to gene therapy per se. Less media coverage was given to In 2007, for the first time, an advisory panel Our cancer immunotherapy programmes the fact that most patients were successfully of the US FDA assessed a therapeutic utilise a Modified Vaccinia Ankara (MVA) virus, treated by this potentially life-saving gene cancer vaccine. The product in question which is an attenuated form of vaccinia. MVA therapy for X-linked severe combined was Dendreon’s prostate cancer vaccine, is an effective vector system for delivering immunodeficiency disease (X-SCID), also Provenge. The panel was unanimous that a and inducing an immune response against known as ‘bubble boy syndrome’ where safety claim could be supported and voted recombinant tumour antigens. The vector no alternative treatments exist. 13-4 that there was substantial evidence of itself has an excellent safety profile and efficacy based on a secondary endpoint of median survival. Business Review: Strategy Markets Oxford BioMedica Annual Report & Accounts 2007 17
  7. 7. Testimony from patients and patient advocacy For example, Merck & Co acquired the groups also appeared to influence the FDA US RNAi company Sirna for US$1.1 billion, panel in light of the toxicity associated with closing the transaction in early 2007, and other existing treatments. There was a very there have been several large pharma-biotech strong appeal for the approval of a product collaborations in the field. that could provide a better quality of life with a good safety profile, even if it conferred only ADDRESSING LONG-TERM a slight extension on life. DELIVERY The supportive sentiment of the advisory Traditionally, gene therapy has focused on panel is a landmark event for the field supplying a normal copy of a faulty or absent of cancer vaccines, although the FDA gene, whereas RNAi turns off a problematic subsequently issued an “approvable letter” gene. In fact, these contrasting approaches requesting additional clinical data. It indicates share some of the same challenges, that the FDA’s advisory committee has principally the delivery of the therapeutic adopted a pragmatic and flexible approach gene or siRNA into cells. For many diseases, to this new treatment paradigm and is an particularly genetic and chronic disorders, encouraging sign for the field of cancer the success of RNAi therapies will depend vaccines including TroVax. upon efficient long-term delivery of the intermediates of RNAi, particularly short China is the first country to have a interfering RNA (siRNA). Oxford BioMedica’s commercial gene therapy. The Chinese LentiVector technology provides an ideal biotechnology company, Shenzhen SiBiono solution for long-term delivery of siRNA. GenTech, received approval from the State Several pharmaceutical companies, such Food and Drug Administration of China for as GlaxoSmithKline, Merck & Co and Pfizer, its anti-cancer product, Gendicine, for the are already using our system for targeted treatment of head and neck cancer in 2003. delivery of siRNA in their research activities, Gendicine uses an adenoviral vector to deliver under technology licensing agreements. With the gene for p53. The success of Gendicine rights for therapeutic RNAi applications, we can only help Oxford BioMedica and the field are evaluating in-house and collaborative of gene therapy gain global acceptance. opportunities. RNA INTERFERENCE In January 2008, Oxford BioMedica entered the field of RNA interference (RNAi) based therapeutics through a licensing agreement that provides rights to key Nobel Prize- winning RNAi patents. There has been substantial investment in the therapeutic application of RNAi in the last few years. Business Review: Strategy Markets 18 Oxford BioMedica Annual Report & Accounts 2007
  8. 8. Principal Risks and uncertainties Risk assessment and evaluation is an integral part of our planning. Most of the risks and DEVELOPMENT RISK COLLABORATION uncertainties that we face are common to Safety or efficacy issues may arise at any stage of the drug development process. AND THIRD-PARTY all development-stage biopharmaceutical companies. Where possible, our strategy Adverse or inconclusive results from RISK is designed to manage and mitigate preclinical testing or clinical trials may Our current and future revenue is dependent these issues. Our principal risks and the substantially delay, or halt, the development on the successful outcome of a number of uncertainties, particularly as they relate to of our product candidates, consequently collaborations. Our most important alliances the next few years, are described below. affecting our timelines for profitability. Results are with sanofi-aventis, Wyeth and Sigma- of the TRIST study and the other planned Aldrich. In addition, we have collaborations Phase III trials may differ from those obtained with other companies relating to products INTELLECTUAL in previous clinical trials and additional data and technologies, as well as agreements PROPERTY may be required for regulatory approval. Similarly, the results of our preclinical studies with contract organisations for preclinical and clinical testing and manufacturing. AND PATENT with ProSavin and RetinoStat may not be There can be no assurance that these PROTECTION RISK reproduced in human clinical trials. relationships will be successful and they may be terminated or require re-negotiation. Our commercial success will depend, amongst other things, on maintaining REGULATORY Circumstances may also arise where the failure by collaborators and third parties proprietary rights to our products and technologies. There can be no assurance that REVIEW RISK to perform their obligations in accordance with our agreements could delay, or halt our products and technologies are adequately Our products will be subject to the regulatory entirely, the evaluation, development, protected by intellectual property. If review and approval process by agencies production or commercialisation of our proceedings are initiated against our patents, across the world to assess their safety, products and technologies. Such events the defence of such rights could involve efficacy and manufacture, amongst other could adversely affect our existing and substantial costs and an uncertain outcome. aspects. There can be no assurance that anticipated revenue streams. Third-party patents may emerge containing our products will successfully gain the claims that impact our freedom to operate. necessary regulatory approvals for launch. There can be no assurance that we will be The time taken to obtain regulatory approval varies between territories and while some PHARMACEUTICAL able to obtain licences to these patents at reasonable cost, if at all, or be able to develop agencies, like the US FDA, have pre-defined PRICING RISK or obtain alternative technology. The Board review periods, others are less predictable. The ability of Oxford BioMedica and our of Oxford BioMedica gives high priority to Furthermore, each regulatory authority may partners to commercialise our products the strategic management of the Company’s impose its own restrictions on the product may depend on the extent to which intellectual property portfolio and we actively label, or may require additional data before reimbursement will be available from monitor the competitive environment. granting an approval. In the case of TroVax, government health administration authorities, As well as protection of our products sanofi-aventis has global responsibility for private health coverage insurers and other and technologies, we use our intellectual the regulatory process and the programme organisations. There is no assurance that property estate to generate value through remains on-track for the first regulatory adequate health administration or third-party out-licensing activities. submission and review in 2009. re-imbursement will be available or that Business Review: Strategy Principal Risks and Uncertanties Oxford BioMedica Annual Report & Accounts 2007 19
  9. 9. 19 May 2007 Hi-8 MEL Encouraging results from Phase II trials of Hi-8 MEL presented at American Association of Immunologists Meeting satisfactory price levels will be reached. payments from sanofi-aventis. Our capital for development of our products. However, In addition, there is increasing pressure in requirements after that date, if any, depend there have been some recent developments many territories to contain healthcare costs on the achievement of TroVax-related relating to cancer vaccines and gene-based by limiting both coverage and the level of milestones and securing new collaborations. medicines that suggest the regulatory reimbursement. Increasingly, new therapeutic The first regulatory submission of the product authorities in the USA and EU are supportive products are being assessed on the basis in renal cancer, which is anticipated in 2009 of these novel treatment approaches. These of their cost effectiveness. TroVax is being in the USA, triggers a significant milestone are described in the Markets section of the evaluated in Phase III trials in combination payment. However, there is the risk that Business Review on pages 16 to 18. with standard therapy. As an add-on to we may have to increase the follow-up existing treatment, we will need to justify duration of the Phase III TRIST study, which its cost effectiveness in order to secure would delay the timing of this payment. suitable pricing and reimbursement. Similarly, the achievement of these regulatory milestone events depends on various factors, some of which are outside our control, COMPETITION RISK the most important determinant being the Our competitors, and potential competitors, outcome of the Phase III TRIST study. include some of the major pharmaceutical and biotechnology companies, many of whom have substantially greater resources STAFF RISK than us. Our products are potentially While we have employment contracts with “best in class” candidates and, in the all of our personnel, the retention of their case of TroVax, we are collaborating with a services cannot be guaranteed. Recruiting major company in oncology and vaccines. and retaining key management and scientific However, there can be no assurance that personnel as we build the business will be competitors will not succeed in developing critical to our success. products and technologies that are more effective or economic than ours, which, in the worst case, could render our products GENE THERAPY RISK and technologies obsolete or otherwise There are no gene therapies approved for uncompetitive. sale in the USA or EU. The commercial success of gene-based medicines such as ours will depend, in part, on acceptance FINANCIAL RISK by the medical community and the We expect to record a net cash outflow from public. Furthermore, specific regulatory operations in 2008 as we continue to invest requirements, over and above those in our research and development efforts, imposed on pharmaceutical products taking into account milestone payments generally, apply to gene therapy and there from sanofi-aventis and our other licensing can be no assurance that further additional income. We have sufficient working capital requirements will not be imposed in the for our current operating activities until the future as a result of new concerns. This end of 2009, excluding future milestone may increase the cost and time necessary Business Review: Strategy Principal Risks and Uncertanties 20 Oxford BioMedica Annual Report & Accounts 2007
  10. 10. Business Review: Strategy Principal Risks and Uncertanties Oxford BioMedica Annual Report & Accounts 2007 21
  11. 11. 03 June 2007 4 TroVax Encouraging Phase II results in renal cancer presented at ASCO BuSINESS REVIEw OPERATIONAL REVIEw 23 Performance 26 Advanced Candidates 35 Early-stage Candidates 36 Technology Licensing 37 Intellectual Property 38 Financial Review 44 Outlook Business Review: Operational Review 22 Oxford BioMedica Annual Report & Accounts 2007
  12. 12. Performance In our 2006 Annual Report, we set out key operational objectives for our drug development and licensing activities in 2007. There were 20 key objectives for the year. In total, we achieved 14 of these during the period, and we expect to deliver on another four within the next 12 months, which equates to success rate of 90%. The two remaining objectives are no longer relevant to our modified strategy in 2008. We have listed our 2007 objectives and our performance in relation to these targets in the table below: FINALISE GLOBAL LICENSING DEAL WITH A MAJOR PHARMACEUTICAL COMPANY TROVAx In March 2007 , we signed a global licensing agreement with sanofi-aventis. It is one of the largest alliances in the field of cancer immunotherapy in terms of potential payments. REPORT FURTHER RESULTS FROM PHASE II TRIALS IN RENAL CANCER At ASCO in June 2007 , we reported new positive data from two Phase II trials. 68% of evaluable patients with clear cell renal carcinoma showed disease control when treated with TroVax and there was a relationship between reduction in tumour burden and patients’ anti-5T4 responses. REPORT RESULTS FROM PHASE II TRIAL IN PROSTATE CANCER At AACR in April 2007 , we reported preliminary data from the Phase II trial of TroVax with or without standard therapy of GM-CSF in hormone-refractory prostate cancer. TroVax was well tolerated and all patients developed anti-5T4 responses. FIRST REVIEW BY DSMB OF PHASE III TRIST TRIAL IN RENAL CANCER The independent Data Safety Monitoring Board (DSMB) has completed three analyses, the most recent one being in February 2008. Following each review, the DSMB concluded that the trial should continue as planned without modification. US NATIONAL CANCER INSTITUTE TO INITIATE PHASE II TRIAL IN BREAST CANCER Since TroVax is in a broad Phase III programme, Oxford BioMedica and sanofi-aventis concluded that it was no longer appropriate to carry out a study of this design. We are coordinating with the US clinical trials network to design a larger study of TroVax in breast cancer. QUASAR TO INITIATE PHASE III TRIAL IN EARLY-STAGE COLORECTAL CANCER Following our collaboration, sanofi-aventis became a party to the QUASAR preparations and is acting as US regulatory agent for the trial, which has been submitted to the US and UK regulatory authorities for review prior to patient recruitment. Business Review: Operational Review Performance Oxford BioMedica Annual Report & Accounts 2007 23
  13. 13. PUBLISH PRECLINICAL RESULTS IN SCIENTIFIC JOURNAL PROSAVIN In 2007, we submitted a manuscript for publication. We have subsequently updated the reported data and responded to comments from the medical journal. We anticipate publication in 2008. GAIN REGULATORY APPROVAL FOR START OF CLINICAL TRIALS In December 2007 , we received regulatory clearance from the French Health Products Safety Agency for our Clinical Trial Application (CTA). The CTA was submitted in July 2007. START PHASE I/II TRIAL IN MODERATE TO LATE-STAGE PARKINSON’S DISEASE Patient recruitment is underway and we plan to report preliminary results once the first cohort of patients is assessable, which is expected in mid-2008. The trial is being conducted at the Henri Mondor Hospital in Créteil, France. REPORT RESULTS FROM STAGE TWO OF PHASE II TRIAL IN PANCREATIC CANCER METxIA Preliminary results have shown disease stabilisation in 50% of evaluable patients. Patient survival is difficult to interpret for this heterogeneous patient group but has ranged from four to almost 110 weeks. Median survival for the evaluable patients is 26 weeks. DEFINE OPTIMAL DOSE OF CYCLOPHOSPHAMIDE FROM STAGE TWO OF PHASE II TRIAL Five dose levels of cyclophosphamide have been evaluated and additional patients are being recruited at the maximum tolerated (optimal) dose to establish more efficacy data in this patient group. START DISCUSSIONS WITH PRINCIPAL INVESTIGATORS AND REGULATORY AUTHORITIES TO DETERMINE ROUTE TO REGISTRATION IN PANCREATIC CANCER We have discussed the next development steps internally and with our clinical advisors. However, we have decided to collaborate with an industry partner for further development and commercialisation of MetXia. PROGRESS COMMERCIAL DISCUSSIONS We have initiated some discussions with prospective partners but we intend to broaden our business development efforts following successful completion of the Phase II trial. Business Review: Operational Review Performance 24 Oxford BioMedica Annual Report & Accounts 2007
  14. 14. COMMENCE MANUFACTURING SCALE-UP OF CLINICAL MATERIAL RETINOSTAT In 2007, we initiated the process for clinical scale-up. We have commissioned GMP production of a key component of RetinoStat and we aim to have final clinical material by the end of 2008. SUBMIT INVESTIGATIONAL NEW DRUG (IND) APPLICATION TO THE FDA FOR START OF CLINICAL TRIALS IN USA During 2007 , our internal resources for LentiVector-based programmes were prioritised to ProSavin, which has extended our timetable for clinical development of RetinoStat. We expect to submit the IND in early 2009. WYETH TO CONTINUE ITS EVALUATION OF 5T4-TARGETED 5T4-TARGETED ANTIBODY THERAPY IN PRECLINICAL MODELS ANTIBODY Wyeth’s evaluation is ongoing. It aims to start clinical trials of its 5T4-targeted antibody therapy in THERAPY solid cancers if warranted by the data. LEADING ANIMAL HEALTH PARTNER TO START FIELD TRIALS IN DOGS TROVAx-VET Following the sanofi-aventis collaboration for TroVax in human cancers, Oxford BioMedica has decided on commercial grounds not to renew the collaboration for TroVax-Vet. SIGN ADDITIONAL TECHNOLOGY LICENSING DEALS WITH BLUE-CHIP COMPANIES TECHNOLOGY LICENSING In July 2007, a major US-based biotechnology company licensed our LentiVector technology for research activities. ExPAND ExISTING RELATIONSHIPS TO ESTABLISH MORE SIGNIFICANT COLLABORATIONS In January 2008, we gained exclusive rights to therapeutic RNAi technology using our LentiVector system. Many of our existing technology licensees use LentiVector-RNAi in research. These licences could be broadened to therapeutic RNAi applications. Business Review: Operational Review Performance Oxford BioMedica Annual Report & Accounts 2007 25
  15. 15. Advanced Candidates KEY HIGHLIGHTS • Global development and commercialisation deal with sanofi-aventis • Achieved two development milestones under sanofi-aventis agreement • Three successful DSMB reviews of Phase III TRIST study in renal cancer • Further Phase II results in renal cancer confirm therapeutic potential KEY OBJECTIVES • Complete recruitment and continue to manage the Phase III TRIST study • Sanofi-aventis to initiate Phase III trial in metastatic colorectal cancer • QuASAR to initiate Phase III trial in early-stage colorectal cancer • Support sanofi-aventis in preparation for licensure and pre-marketing TROVAx® milestone payments for other cancer types, commercial milestone payments when sales trial, which reflects TroVax’s excellent safety profile and potential to improve patients’ Development of our lead product candidate, reach certain targets and tiered escalating survival and quality of life. TroVax, is progressing in multiple cancer royalty income on global sales. types. The product is one of the most The trial has been recruiting at a rate of about advanced therapeutic cancer vaccines in The Phase III TRIST study of TroVax 50 patients per month. This is comparable to development. Therapeutic vaccines have the in renal cancer is being managed by the recruitment rate for the Phase III trial of potential to play a significant role in cancer Oxford BioMedica and co-funded with Pfizer’s Sutent® (sunitinib), which was one therapy as additive treatment options for sanofi-aventis. All other TroVax activities, of the recently launched targeted agents patients. We believe that TroVax could be one including development, registration and for renal cancer that has had rapid uptake in of the first registered products in this field. commercialisation, will be funded by terms of commercial sales. In January 2007 , sanofi-aventis. As part of the agreement, the UK National Cancer Research Network sanofi-aventis is committed to the rapid (NCRN), which provides the UK National SANOFI-AVENTIS initiation of a Phase III trial in colorectal Health Service (NHS) with the infrastructure COLLABORATION cancer. In terms of commercialisation, Oxford to support cancer clinical trials, agreed to In March 2007 , we secured a licensing BioMedica retains an option to participate in adopt the trial. The NCRN’s adoption of agreement with sanofi-aventis for the the promotion of TroVax in the USA and the TRIST means that multiple NHS centres global development and commercialisation European Union. are participating in the study. In reaching of TroVax. The agreement is one of the its decision to adopt the TRIST trial, the largest alliances in the field of cancer Renal Cancer Clinical Studies Group of immunotherapy. PHASE III TRIST STUDY the NCRN evaluated TroVax and the trial PROGRESS design and concluded that the product Oxford BioMedica received payments from The Phase III TRIST (TroVax Renal offers potential improvement in care for sanofi-aventis totalling €38 million in 2007, Immunotherapy Survival Trial) study, is patients within the NHS. comprising an initial payment of €29 million progressing well. We are approaching full and an early development milestone payment recruitement of 700 patients. The rate of The study is being conducted in patients of €9 million. A further milestone payment of recruitment has been encouraging. Over 100 with locally advanced or metastatic clear cell €10 million was triggered in February 2008 centres are participating in the USA, Western renal carcinoma. It is a randomised, placebo- following the third successful interim analysis Europe and Eastern Europe. It is rare for such controlled, two-arm study comparing TroVax of the TRIST study by the Data Safety a large trial to recruit to plan. One factor that in combination with standard of care to Monitoring Board. Further development and affects the rate of recruitment, but is difficult placebo with standard of care. The standard regulatory milestone payments could yield to predict at the outset of a multi-centre trial, of care therapy can be sunitinib, interferon- up to €470 million if TroVax is approved for is clinicians’ enthusiasm for the product. alpha or interleukin-2. The protocol stratifies a small number of defined cancer types. Clinicians have been highly supportive of the treatment between the three standards Oxford BioMedica is entitled to additional Business Review: Operational Review Advanced Candidates 26 Oxford BioMedica Annual Report & Accounts 2007
  16. 16. Sanofi-aventis Collaboration Sanofi Pasteur, is a world leader in the industry, offering an extensive range of vaccines. In 2007, sanofi-aventis signed an exclusive global license agreement with Oxford BioMedica to develop and commercialise TroVax, for the treatment and prevention of cancer. Marc Cluzel, Senior Vice President Research and Development, sanofi- aventis, said: “We are very excited Marc Cluzel, Senior Vice President Research and Development, about the opportunity to be associated sanofi-aventis. with this innovative therapeutic vaccine. Sanofi-aventis is one of the world’s Sanofi-aventis is committed to the leading pharmaceutical companies and development of novel anti-cancer agents number one in Europe. It is active in that provide safer and more effective many therapeutic areas and has a broad therapeutic options for cancer patients. franchise in the field of cancer with two We consider that therapeutic vaccines of the world’s top five selling cancer have an important role to play in the treatments. Sanofi-aventis is present treatment of cancer, and the initial in 100 countries throughout the five clinical data for TroVax suggest that it is continents. Its vaccines division, one of the most promising candidates in the field. Our collaboration combines Oxford of care to ensure that the allocation of Review from the FDA, the regulatory review BioMedica’s expertise in cancer TroVax and placebo is rigorously balanced. period could be six months from submission. immunotherapy with the experience The primary endpoint for the trial is overall of sanofi-aventis in clinical development survival; secondary endpoints include the COLORECTAL CANCER PHASE and commercialisation of oncology percent of patients with progression-free III TRIALS STARTING products. The collaboration is working survival at week 26, tumour response well. The Phase III TRIST study of rates and quality-of-life scores. The trial is Sanofi-aventis is starting an international, TroVax in renal cancer is on-track and we being conducted under a Special Protocol randomised, placebo-controlled Phase III trial will shortly be starting Phase III trials Assessment (SPA) agreement from the of TroVax in colorectal cancer. The Phase III in colorectal cancer. Given the broad FDA. The SPA specifies the design, conduct, trial, which has been named FLAMENCO, distribution of the targeted tumour analysis and endpoints of the trial. With this is designed to assess TroVax as a first antigen, 5T4, TroVax could be evaluated in place, this single comparative trial may line treatment of patients with Stage IV in various solid tumours and stages be used to support an efficacy claim in a metastatic colorectal cancer. It is expected to of disease. regulatory submission to the FDA. enrol approximately 1,300 patients. The trial design is similar to the TRIST study, in that it We look forward to our continuing The independent DSMB for the TRIST study will evaluate TroVax in combination with first partnership with Oxford BioMedica has completed three scheduled interim line standard of care versus placebo plus first to advance the development and analyses, the most recent one being in line standard of care. commercialisation of TroVax and, February 2008. Following each review, importantly, to provide cancer patients the DSMB concluded that the trial should with new treatment options.” continue as planned without modification. The role of the DSMB is to evaluate unblinded data from the ongoing trial to determine whether there are safety or efficacy issues TRIST trial design that would warrant modification of the protocol or early termination of the study. The TroVax DSMB is independent of Oxford BioMedica Stratified and sanofi-aventis. To preserve the study Randomisation blinding, the DSMB provides no additional Placebo information other than its recommendation. 1 3 6 9 13 17 21 25 33 41 49 57 65 Vaccination Time Points (weeks) Based on the current progress, we expect the trial to reach its primary endpoint in the BASELINE 26 65 first half of 2009, which is aligned with our expectations at the outset of the study. If the Selected Standard of Care primary endpoint is achieved, sanofi-aventis could file its first regulatory submission for registration of TroVax in renal cancer within a CT Scan CT Scan few months of the trial results. With Priority Business Review: Operational Review Advanced Candidates Oxford BioMedica Annual Report & Accounts 2007 27
  17. 17. Award Award TECHMARK TECHMARK AWARD MEDISCIENCE AWARD FOR ‘ACHIEVEMENT FOR ‘BREAKTHROUGH OF THE YEAR’ – OF THE YEAR’ – JUNE NOVEMBER 2007 2007 The techMARK awards recognise the The techMARK Mediscience awards achievements and reward the successes recognise and reward excellence of of technology companies listed on AIM within the quoted life-sciences sector. and the London Stock Exchange. This As winners of this award we were award was extremely wide ranging, recognised as the company which recognising exceptional achievement by made the most significant breakthrough an individual or company, for example a between 1 April 2006 and 31 March 2007. major contract or joint venture. sources, including the UK Medical Research Council and the Department of Health as well as Oxford BioMedica and sanofi-aventis. Patient recruitment is expected to commence in mid-2008. UPDATE ON US-SPONSORED BREAST CANCER TRIAL Over the last two years, we have been liaising with the SouthWest Oncology Group (SWOG), which is one of the largest cancer clinical trials cooperative groups in the USA, funded by research grants from the US National Cancer Institute, part of the National Institutes of Health. SWOG was planning to conduct a Phase II trial of TroVax in The standard treatment will be chemotherapy patients with advanced breast cancer. Since with or without Avastin® (bevacizumab), TroVax is being evaluated in a major Phase which will be stratified between the two III programme, SWOG, Oxford BioMedica arms of the study. The primary endpoint will and sanofi-aventis have now concluded be overall survival and the trial will include an that an open-label Phase II study of TroVax interim analysis to evaluate time to disease to evaluate safety and immunology in this progression. The trial will be conducted under patient group is no longer necessary. SWOG a SPA with the FDA and patient recruitment remains committed to the TroVax programme, is expected to start in mid-2008. Results from and we are working with the organisation the interim analysis are anticipated in 2010. to design a larger study of TroVax in breast In addition to the Phase III trial in metastatic cancer. colorectal cancer, the UK clinical trials network QUASAR is starting a trial of TroVax ENCOURAGING RESULTS in early-stage colorectal cancer. This trial is FROM PHASE II TRIALS IN supported by both sanofi-aventis and Oxford BioMedica. Sanofi-aventis will act as the RENAL CANCER three had partial responses (i.e. tumour US regulatory agent for the trial, which has At the Annual Meeting of the American shrinkage) and 19 had stable disease for been submitted to the US and UK regulatory Society of Clinical Oncology (ASCO) in periods exceeding three months, including authorities. The trial will assess TroVax in June 2007 , new data were reported from three patients that were stable for more than patients with Stage II/III colorectal cancer two Phase II trials of TroVax in renal cancer. 17 months. Preliminary analysis of clinical who have had surgical resection of their TroVax was well tolerated with no serious benefit showed a statistically significant primary tumours and been treated with adverse events attributable to the treatment relationship between reduction in tumour adjuvant chemotherapy. It is expected to and the product induced anti-5T4 antibody burden in patients with clear cell renal enrol approximately 3,000 patients and has responses in 91% of patients. Twenty-four carcinoma and patients’ anti-5T4 antibody been designed with a primary endpoint of of 35 evaluable patients with clear cell renal responses (p=0.028). These encouraging new three-year disease-free survival. The funding carcinoma (68%) showed disease control. data support the hypothesis that the 5T4- of the QUASAR trial derives from a variety of Two patients had complete responses (i.e. specific immune response induced by TroVax their tumours were completely eradicated), has therapeutic benefit. Business Review: Operational Review Advanced Candidates 28 Oxford BioMedica Annual Report & Accounts 2007
  18. 18. Deal Wins Awards Award The monetary and strategic value of our global licensing SCRIP AWARD FOR deal for TroVax with sanofi-aventis has been widely ‘LICENSING DEAL OF recognised by the industry and the financial community, THE YEAR’ – with Oxford BioMedica receiving three prestigious awards DECEMBER 2007 during 2007. This was particularly gratifying, given the number of significant achievements in the sector as a The Scrip awards recognise the whole over the year. Andrew Umbers, Chief Executive pharmaceutical industry’s achievements of Evolution Securities, which sponsored the techMARK and contributions to science and the mediscience awards summed this up by saying: “An advancement of healthcare, and are obvious highlight [of 2007], which is reflected by this testament to the hard work that goes on behind the scenes of drug development. year’s award nominees, has been the announcement In choosing the winner of this award, the of major product licensing deals by UK biotechnology judges considered not just the monetary firms. John Davis, Editor of Scrip commented on the ” value of each deal but also its strategic awards: “The number and more importantly the quality value to both the licensor and the licensee, the geographic spread and how of this year’s entries was outstanding, and we feel this is it complemented the licensees’ existing a testament to the exciting and innovative work that the product pipeline. pharmaceutical and biotech industries continue to deliver. ” PRESENTATION OF FINAL PHASE II RESULTS Together with sanofi-aventis, we aim to present final data from all four open-label Phase II trials of TroVax in renal cancer at ASCO in May/June 2008. The trials evaluated TroVax as a single agent and in combination with high-dose interleukin-2, low-dose interleukin-2 or interferon-alpha. Separately, we plan to report results from the completed Phase II trial of TroVax in prostate cancer at the Targeted Anticancer Therapies meeting, 20-22 March 2008, in the USA. The trial, in 27 patients with hormone-refractory prostate cancer, evaluated TroVax as a single agent and in combination with the standard The companies have secured manufacturing therapy, granulocyte-macrophage colony- for commercial launch, together with material stimulating factor (GM-CSF). Preliminary for the Phase III trials in colorectal cancer. data from this trial were previously reported Discussions are ongoing with sanofi-aventis in April 2007 at the Annual Meeting of the and our contract manufacturer regarding American Association for Cancer Research, longer-term supply. Sanofi-aventis is showing that TroVax was well tolerated and evaluating its manufacturing strategy, which all patients developed anti-5T4 antibody may include an in-house manufacturing responses. facility for TroVax. PRE-COMMERCIALISATION SUMMARY PLAN We are delighted by the progress of the The presentation of clinical data at TroVax programme and by the commitment upcoming conferences is part of the pre- of our partner, sanofi-aventis. By combining commercialisation plan for TroVax ahead Oxford BioMedica’s expertise in cancer of the Phase III TRIST study results and immunotherapy and the experience of potential registration in 2009. Sanofi- sanofi-aventis in clinical development and aventis is implementing a communications commercialisation of oncology products, we initiative to inform and educate the oncology hope to be able to bring this innovative and community regarding TroVax ahead of its potentially valuable medicine to patients as potential launch. soon as possible. Business Review: Operational Review Advanced Candidates Oxford BioMedica Annual Report & Accounts 2007 29