Circadian Technologies (ASX: CIR) is an Australian biotechnology company developing innovative, biologics-based therapies for the treatment of cancer and other serious human illnesses.
Circadian owns an extensive portfolio of products and intellectual property related to Vascular Endothelial Growth Factors (VEGFs), a class of proteins that play a critical role in regulating tumour blood supply.
Despite a significant development program in advancing its cancer treatments, Circadian Technologies (ASX: CIR) maintained significant cash reserves and listed investments of $33.8 million at 30 June 2010. This translates into Net Tangible Asset backing of $0.77 per share, relative to Circadian's share price of $0.50 at the June fiscal year end.
During the financial year, Circadian focused on the advancing its cancer treatment programs, VGX-100, VGX-200 and VGX-300. The company is developing biological drugs (including antibodies) based on intellectual property rights to three targets for the treatment of cancer, Vascular Endothelial GrowthFactors (VEGF) C, D and the VEGFR-3 receptor.
All in-house cancer product development programs, VGX-100, VGX-200 and VGX-300 are being evaluated in ongoing studies in a range of rodent cancer models. The most advanced of these programs is VGX-100 and a key manufacturing milestone was achieved during the period for VGX-300.
Key fiscal results for the year to 30 June 2010
- Total cash reserves plus listed investments (at market value) amounting to $33.8 million
- A consolidated net loss of $6,948,240 after an income tax expense of $109,502 (2009: loss of $9,921,670 after an income tax expense of $45,867)
- Cash reserves amounted to $31.9M (2009: $38.8M)
- Net tangible asset backing per share of $0.77 (2009: $0.86) whereas Circadian’s share price was $0.52 (2009: $0.73). The net tangible asset backing using the market value of the investment in Antisense Therapeutics rather than its equity accounted value was $0.75 (2009: $0.93)
- Direct R&D expenditure (excluding personnel costs) amounted to $4,295,334 (2009: $4,483,438)
- Net royalty income of $621,712 (2009: $721,618)
- Patent costs of $1,044,370 (2009: $1,729,030)
- The Group retains interests in two listed investments. These are in Antisense Therapeutics Limited and a small investment in Optiscan Imaging Limited. The combined market value of these investments (including indirect interests) as at 30 June 2010 was $1,922,324. During the year the Group disposed of its interest in CancerProbe Pty Ltd and sold 5 million shares in Antisense Therapeutics Limited. A net gain on sale of $157,547 was recognised in profit or loss from these transactions.
Advancement of VGX-100 program
The Group has made good progress in its VGX-100 antibody program targeting the VEGF-C protein. In April 2010, we presented data at the American Association for Cancer Research Annual meeting in respect of VGX-100’s effects in mouse models of cancer demonstrating that significantly inhibited tumour growth in a variety of different animal models (tumour xenografts) of human cancer. This data indicates that, if clinically validated, VGX-100 has the potential to be a useful new treatment for some types of cancer.
Ciradian has successfully developed a commercially acceptable yielding production manufacturing process for VGX-100 and successfully completed the production of pilot batches of drug compound for use in animal pharmacokinetic and toxicology studies.
Initial pharmacokinetic and toxicology studies have commenced. As part of the planning for our clinical trials program, we have also commenced large scale cGMP production of VGX-100 with material sufficient for Phase 1 and Phase 2 clinical studies expected to be available early in 2011.
Significantly in terms of investor milestones, Ciradian is on track to file an IND with the FDA in respect of VGX-100 in first half of 2011.
Achievement of key manufacturing milestone for VGX-300 cancer drug candidate
Circadian advised in its 2009 annual report that it expected to demonstrate manufacturability of VGX-300 in commercial quantities. In October 2009, Circadian announced the achievement of this milestone. Circadian has achieved the production of the VGX-300 protein in cell culture to enable production at gram quantities, which are sufficient to advance the anti-cancer product in pre-clinical studies.
Extending and strengthening intellectual property position
Successful prosecution of a key strategic patent
In August 2009, Vegenics was granted a patent in Japan claiming the VEGF-C protein, VEGF-C gene and antibodies to VEGF-C as well as the use of these molecules in a broad spectrum of therapeutic indications, including the treatment of cancer. This Japanese patent, together with the large number of VEGF-C patents granted in the United States and Europe, provides the Group with a major commercial advantage and access to the world’s major pharmaceutical markets. Japan is the world’s second largest market for pharmaceuticals after the USA comprising around 11%.