Medgenics(Regs) (LSE:MEDG)
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Medgenics (AIM:MEDG) announces its half-yearly report for the six-month
period ended 30 June 2008.
Highlights for the period
Appointment of Lord Steinberg as Non-Executive Director in February
2008.
Appointment of Dr. Ehud Shoshani, former CEO of Quintiles, Israel, as
Vice President of Clinical Affairs and addition of key scientific and
engineering personnel in accordance with its plan and preparation for
the Phase I/II clinical trial for EPODURE sustained-action protein
therapy to treat anaemia.
Successful manufacture of the key 'gutless' adenoviral vector in a GMP
(Good Manufacturing Practice) vector production facility. This vector
will be used to prepare EPODURE Biopumps capable of producing
sufficient daily amounts of erythropoietin (EPO) to meet the Company's
requirements for use in its Phase I/II clinical trials in anaemic
patients with chronic kidney disease.
Completion of the design, fabrication and evaluation of the key
proprietary patient contact devices that will be used both to enable
Medgenics to conduct its current Phase I/II clinical trial and to
assist in future clinical trials.
Successful move to a new larger facility, allowing the corporate and
R&D operations to be housed in one location.
Significant Post-period Highlights
Commencement of Phase I/II safety and efficacy clinical trial with
EPODURE following receipt of approval from Israel’s
Ministry of Health.
Financial Summary (in US $; unaudited)
Net loss after tax of $2.97 million for the period (2007: $1.04
million) as a result primarily of preparations for and initiation of
the Phase I/II clinical trial of EPODURE, including the set up costs
associated with the new laboratories and the recruitment of additional
R&D staff.
R&D costs for the six-month period of $1.63 million (2007: $0.44
million) and general and administrative costs of $1.39 million (2007:
$0.64 million).
Cash, cash equivalents and short-term investments at 30 June 2008 of
$1.74 million (at 31 December 2007: $4.68 million).
Dr. Andrew Pearlman, Chief Executive Officer of Medgenics, said:
“2008 continues to be an exciting year for
Medgenics and we have been focused on preparing for the start of our
landmark Phase I/II safety and efficacy trial of our EPODURE Biopump for
providing sustained treatment of anaemia in patients with chronic kidney
disease. We were pleased to receive approval to start this trial at the
end of July, and have been fully engaged in the process of recruiting
patients since early August. We have now begun the final screening
process of the first patients for this trial who were referred from
several cooperating nephrology centers in Israel and we continue on
track towards publishing our initial data and findings before the end of
the year.”
NOTES TO EDITORS:
Medgenics, Inc. is a clinical-stage biopharmaceutical company developing
its unique tissue-based Biopump platform technology to provide
sustained-action protein therapy for the treatment of a range of chronic
diseases.
Medgenics currently has two products in development based on this
technology:
EPODURE – producing erythropoietin (EPO) to
treat anaemia
INFRADURE – producing interferon-alpha (IFN-?)
to treat hepatitis C
The Company has demonstrated proof of principle of the Biopump treatment
procedure in a clinical trial using a short-acting version of EPODURE in
anaemic patients. A long-acting version of EPODURE, designed to produce
and deliver a therapeutic dose of EPO steadily for six months or more,
entered a Phase I/II trial in mid-2008. The Company plans to follow with
a clinical trial of INFRADURE in 2009.
Medgenics intends to develop its innovative products and bring them to
market via multiple strategic partnerships with major pharmaceutical
and/or medical device companies, starting with EPODURE and INFRADURE.
Beyond these, Medgenics plans to develop and/or out-license a pipeline
of future Biopump products targeting the large and rapidly growing
global protein therapy market, which is forecast to reach US $87 billion
by 2010. Other potential areas include multiple sclerosis (interferon-?),
haemophilia (Factor XIII), paediatric growth hormone deficiency (human
growth hormone) and diabetes (insulin).
Founded in 2000, Medgenics is a US-incorporated company with major
operations in Misgav, Israel. Medgenics was admitted to AIM in December
2007 (AIM:MEDG).
www.medgenics.com
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements, which include all
statements other than statements of historical fact, including (without
limitation) those regarding the Company’s
financial position, business strategy, plans and objectives of
management for future operations. These statements relate to future
events, prospects, developments and strategies. Forward-looking
statements are sometimes identified by their use of the terms and
phrases such as “estimate,”
“project,” “intend,”
“forecast,” “anticipate,”
“plan,” “planning,"
“expect,” “believe,”
“will,” “will
likely,” “should,”
“could,” “would,”
“may” or the
negative of such terms and other comparable terminology. All such
forward-looking statements are based on current expectations and are
subject to risks and uncertainties. Should any of these risks or
uncertainties materialize, or should any of the Company’s
assumptions prove incorrect, actual results may differ materially from
those included within these forward-looking statements. Accordingly, no
undue reliance should be placed on these forward-looking statements,
which speak only as of the date made. The Company expressly disclaims
any obligation or undertaking to disseminate any updates or revisions to
any forward-looking statements contained herein to reflect any change in
the Company’s expectations with regard
thereto or any change in events, conditions or circumstances on which
any such statements are based. As a result of these factors, the events
described in the forward-looking statements contained in this release
may not occur.
Chairman’s Review
Medgenics has made important progress during 2008, preparing for and
successfully launching its landmark Phase I/II safety and efficacy trial
of EPODURE, its lead protein therapy to treat anemia. We were pleased to
receive approval from Israel’s Ministry of
Health in late July and have begun the trial at the Hadassah University
Medical Center in Jerusalem, Israel, where it is being led by Principal
Investigator, Dr. Eithan Galun, a veteran of numerous clinical trials.
Patient recruitment is ongoing and we remain on track to announce
initial data from the trial by the end of the year.
This study will involve up to 30 patients with anaemia as a consequence
of chronic kidney disease. The primary aim is to assess the safety and
efficacy of EPODURE in three controlled dose ranges, in providing
sustained, elevated levels of the deficient protein erythropoietin (EPO)
and, thereby, in elevating the red blood cell count and haemoglobin
levels for up to 4–6 months in those patients
receiving appropriate doses. The first patients are scheduled to receive
the lowest dose range of up to 20 Units of EPO per kilogram per day.
Once an interim review has confirmed initial safety in at least six
patients, higher doses of 40 and 60 Units are planned.
EPODURE is based on Medgenics’ revolutionary
proprietary platform technology for treating certain chronic diseases,
whereby a biological “Biopump”
is created from patients’ own tissue,
enabling them to produce their own natural human protein therapy for
what we hope will be up to six months or more from a single procedure.
We believe this technology has the potential to improve significantly
the treatment of such diseases by improving efficacy, reducing
side-effects, eliminating frequent injections, improving patient
compliance and quality of life and reducing overall healthcare costs
associated with existing treatments.
We have been able to advance our clinical development activities for
EPODURE as a result of the £3.28 million
($6.72 million) fundraising we concluded successfully in December 2007
in conjunction with the Company’s admission
to AIM.
During the first half of 2008, the Company has incurred a large number
of one-off costs including the set-up of new facilities and the design
and manufacture of several key elements that were necessary to enable us
to commence the Phase I/II clinical trial. We are therefore confident
that the funds raised at Admission, together with ongoing Israeli
government funding from the Office of the Chief Scientist, as well as
the existing letter of credit, are sufficient to enable the Company to
continue its current programme of ongoing development and testing of our
Biopump platform technology and associated products, focusing on EPODURE
with the first set of data expected towards the end of 2008.
Our strategy for commercialization is to develop alliances with major
partners and to proceed with further clinical trials leading to eventual
FDA, EMEA and/or other regulatory approvals and eventual clinical
adoption of EPODURE. Furthermore, in the longer-term, we also plan to
pursue similar steps towards commercialization of other potential
applications of the Biopump platform technology. Pending the success of
the Phase I/II trial of EPODURE, our next product is likely to be
INFRADURE, which we are developing to produce and deliver
interferon-alpha for the treatment of hepatitis C. In preclinical in
vitro studies with this product we have already demonstrated that it
can produce therapeutically relevant amounts for more than six months.
Beyond that, we believe our Biopump technology has the potential to be
developed to produce and deliver protein therapies to treat other
chronic diseases such as multiple sclerosis (interferon-beta),
hemophilia (Factor VIII) and growth failure/muscular atrophy (human
growth hormone).
Key events during the period
The start of the EPODURE Phase I/II trial and initiation of patient
recruitment parallels the Company's achievement of several important
milestones in recent months, which have been crucial to facilitating the
commencement of the trial:
We have significantly enhanced the clinical and technical teams that
will be driving the trial forward. In particular, we are pleased that
Dr. Ehud Shoshani, former CEO of Quintiles, Israel, has joined the
Company as Vice President of Clinical Affairs. Dr. Shoshani has 13
years’ experience in managing clinical
trials. Not only will his experience be highly valuable to Medgenics
in completing the preparations for and the launch and the management
of our imminent Phase I/II clinical trial for EPODURE, but also, in
the development of our future clinical programmes for this and our
other pipeline products.
We have successfully manufactured the key 'gutless' adenoviral vector
in a GMP vector production facility which was a significant
achievement for the Company from a technological standpoint. We have
tested this vector and are confident that it can be used to prepare
EPODURE Biopumps capable of producing sufficient daily amounts of EPO
to meet the Company's requirements for use in the trial.
The Company has completed the design, fabrication and evaluation of
the key proprietary devices required for harvesting patient
micro-organs and implanting Biopumps, including EPODURE, back into
patients.
The Group’s operations were relocated to a
new facility in March 2008 in the Teradion Business Park in Misgav,
thereby bringing all operations under one roof and representing an
important step for enhancing communication among the various
departments.
Board Appointment
Medgenics appointed Lord Leonard Steinberg as Non-Executive Director in
February 2008. Lord Steinberg is a Life Peer and a Conservative Party
member of the UK House of Lords and is the founder, former Chairman and
Life President of Genting Stanley plc (formerly Stanley Leisure plc). He
is one of the UK’s most successful and
respected businessmen, with substantial experience of the London stock
market. We are pleased that he joined the Board of Directors and we look
forward to the valuable contribution he will make to the Company.
Financial Review of the six-month period to 30 June 2008 (unaudited)
Net research and development expenses were $1.63 million (2007: $0.44
million)
Group general and administrative expenses were $1.39 million (2007:
$0.64 million)
Operating loss was $3.02 million (2007: $1.08 million)
Loss on ordinary activities before taxation for the period was $2.97
million (2007: $1.04 million)
Loss per share was $0.03 (2007: $0.02)
Cash, cash equivalents and short-term investments at the end of the
period was $1.74 million (at 31 December 2007: $4.68 million)
Consolidated balance sheet has net assets of $0.61 million (at 31
December 2007: $3.33 million)
Outlook
The start of our Phase I/II clinical trial with EPODURE was a major
milestone for the Company and is progressing. Positive results of the
trial will be crucial to confirm both the safety and efficacy of EPODURE
in anaemia patients, and will more broadly provide proof-of-concept of
our innovative Biopump technology for the long-term treatment of chronic
diseases. If the results are as we hope and expect, they will support
our ambitions of raising significant funds to advance EPODURE into
further clinical studies, to enhance our strategic partnering activities
and to progress the development of additional Biopump-based therapeutic
procedures in other disease areas.
All the evidence we have seen on the effectiveness of the Biopump
technology in various preclinical studies and our previous clinical
study give us confidence that the Phase I/II trial will be successful.
We are looking forward to reporting the first preliminary data over the
coming months.
Eugene A. Bauer, MD
Chairman of the Board of Directors
24 September 2008