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Ablynx Announces 2015 Full Year Results

Ablynx Announces 2015 Full Year Results

Key value drivers in pre-clinical and clinical development are progressing well

GHENT, Belgium, 25 February 2016 - Ablynx [Euronext Brussels: ABLX; OTC: ABYLY] today announced its financial results for 2015, which have been prepared in accordance with IFRS as adopted by the European Union.

  • Total revenues of €77.5 million (+57%); cash position of €236.2 million (+15%), strengthened by the successful placement of 5-year convertible bonds (raising €100 million; 3.25% coupon rate and 26.5% conversion rate)
  • Net cash burn of €67.2 million(1), an improvement over the previously guided range of €70-80 million
  • R&D highlights: initiated 1 Phase III study and 3 Phase II studies to include a total of over 900 patients; completed recruitment of 35 infants in the Phase I/IIa RSV study; completed recruitment of 345 patients in the Phase IIb combination study with ALX-0061 in RA patients; initiated 14 new discovery programmes both proprietary and as part of pharmaceutical collaborations; achieved the first pre-clinical proof-of-concept with a bi-specific Nanobody in the immuno-oncology collaboration with Merck & Co., Inc.
  • Signed 3 new pharmaceutical partnerships and extended 2 existing collaborations
  • Significant catalysts anticipated in 2016 with a number of potential pre-clinical/clinical milestones and several important clinical trial read-outs

“We are very pleased with our strong performance in 2015 with excellent progress reported in all areas,” said Dr Edwin Moses, CEO of Ablynx. “Our product pipeline is advancing well and now includes more than 40 proprietary and partnered programmes, with our first Nanobody product expected to be launched in 2018. We remain focused on delivering sustainable value to all our stakeholders and look forward to an exciting year with multiple pre-clinical, clinical and commercial catalysts across our extensive pipeline.”

Financial highlights

ablynx 1

(1)  excluding €97.2 million net proceeds from the convertible bonds (which raised €100 million, announced on 20 May 2015)
(2)  including €1.6 million in restricted cash  
(3)  excluding €39.9 million net proceeds from the private placement (which raised €41.7 million, announced 30 June 2014)
(4)  including €2.0 million in restricted cash
(5)  defined as liquidity position in the cash flow statement

Operational review
R&D update
In March 2015, we initiated a Phase IIb study of our anti-IL-6R Nanobody (ALX-0061), in combination with methotrexate, in patients with rheumatoid arthritis (RA). Recruitment of 345 patients was completed on schedule by year-end.

In April 2015, we initiated a Phase IIb monotherapy study of ALX-0061 in RA patients. In February 2016, recruitment of 251 patients was completed, also on schedule.

In July 2015, the first eligible patients from the Phase IIb RA studies with ALX-0061 rolled-over into the open-label extension study.
In August 2015, we initiated a Phase II study of ALX-0061 in patients with systemic lupus erythematosus (SLE). We are planning to recruit 300 patients in this study by 2017.

In September 2015, we initiated a confirmatory, international, Phase III study of our anti-vWF Nanobody, caplacizumab, in patients with acquired TTP (aTTP). We are planning to recruit 92 patients into this study by 2017. On 11 February 2016, the TITAN Phase II study of caplacizumab was published in The New England Journal of Medicine.

In October 2015, pre-clinical proof-of-concept was achieved with a bi-specific Nanobody programme as part of the extensive immuno-oncology collaboration with Merck & Co., Inc., which triggered a €3.5 million milestone payment to Ablynx.

In November 2015, Ablynx’s partner Boehringer Ingelheim presented compelling pre-clinical proof-of-mechanism data with the bi-specific anti-VEGF/Ang2 Nanobody in multiple in vivo cancer models. A Phase Ib study of this anti-VEGF/Ang2 Nanobody in patients with solid tumours was initiated by Boehringer Ingelheim in January 2016, triggering a €8 million milestone payment to Ablynx. Boehringer Ingelheim is expected to recruit 80 patients into this study, with top line efficacy data anticipated in 2018. In addition, a Phase II study with this Nanobody is expected to start in 2017 and this would trigger a substantial milestone payment to Ablynx.

In December 2015, the Phase I/IIa safety study of the inhaled anti-RSV Nanobody, ALX-0171, completed recruitment in 35 infants, aged 3-24 months, who were hospitalised with a respiratory syncytial virus (RSV) infection. Also in this month, an independent Data Monitoring Committee reviewed safety data available for the first 15 infants from the placebo-controlled part of this Phase I/IIa study and confirmed that the inclusion age for recruitment could be lowered to 1 month. The Company then decided to generate additional data during the current RSV season in the Northern Hemisphere by expanding the Phase I/IIa study to include up to 18 additional infants, aged 1-5 months. Recruitment of this expansion cohort was completed ahead of schedule in February 2016.

Partnerships update
In March 2015, Ablynx announced an extension of its initial two-year research collaboration with Merck & Co., Inc., to develop and commercialise Nanobodies directed towards an undisclosed voltage gated ion channel. Merck & Co., Inc. extended their funding to the end of September 2016. This ion channel collaboration was announced in October 2012 and included a €6.5 million upfront payment and €2 million in initial research funding.

In May 2015, a research and option agreement was signed with Genzyme to explore the potential of a Nanobody targeting an ion channel that may play a role in multiple sclerosis, triggering an undisclosed exclusivity payment to Ablynx.

In June 2015, Ablynx and Taisho Pharmaceuticals signed an exclusive license agreement to develop and commercialise the anti-TNFα Nanobody, ozoralizumab, in Japan. Ablynx received an upfront payment of $3 million and is entitled to receive development and commercial milestone payments plus royalties.

In July 2015, Ablynx significantly expanded its immuno-oncology partnership with Merck & Co., Inc., which was originally signed in February 2014, to include a total of up to 17 programmes with a focus on multi-specific Nanobodies. As part of both the original and expansion agreements, Ablynx received €33 million in upfront payments and is potentially entitled to receive up to €5.7 billion in future milestone payments, plus royalties.

In November 2015, Ablynx and Novo Nordisk entered into a drug discovery collaboration to investigate multi-specific Nanobodies in an undisclosed indication. Ablynx received an upfront payment of €5 million in early 2016, and is entitled to receive €4 million in research funding during the initial three year term of the collaboration and up to €182 million in potential milestones, plus royalties.

Corporate developments
In November 2015, Ablynx announced that Dr Robert K. Zeldin would join the Company as the new Chief Medical Officer (CMO), effective 1st December 2015, to lead the Company’s global clinical development, regulatory and medical affairs activities. Dr Zeldin brings significant industry experience, having held senior level clinical development positions at Merck & Co., Inc. and Novartis Pharmaceuticals Corp. Dr Zeldin replaces Dr Dominique Tersago who previously held the CMO position.

Outlook 2016
In the second quarter of 2016, the Company expects to report Phase I/IIa results from its study of the wholly-owned, inhaled anti-RSV Nanobody, ALX-0171, in 35 infants aged 3-24 months and 18 infants, aged 1-5 months, who had been hospitalised with an RSV infection.

In the first half of 2016, it is expected that the results will be announced from the Phase Ib study of the bi-specific anti-IL-17A/F Nanobody (ALX-0761), exclusively licensed to Merck KGaA, in patients with moderate to severe psoriasis.

In the third quarter of 2016, the Company expects that the first patients from the Phase III HERCULES study of its wholly-owned anti-vWF Nanobdy, caplacizumab, will have rolled-over into a three-year follow-up study to evaluate the long term safety and clinical effect of caplacizumab.

In the third quarter of 2016, Ablynx expects to communicate top line results from the monotherapy and combination therapy studies with the anti-IL-6R Nanobody, ALX-0061, in patients with RA. Following a review of the complete RA data package, AbbVie is expected to decide before the end of 2016 whether it wishes to exercise its option to license ALX-0061 in RA. If AbbVie decides to exercise its option, Ablynx will receive a US$75 million milestone payment and AbbVie will then be responsible for providing all the resources to further develop and commercialise ALX-0061 in this indication. Ablynx will then be eligible to receive regulatory and sales milestones plus double-digit royalties.

In the fourth quarter of 2016, Ablynx intends to initiate a worldwide, Phase II dose ranging study with inhaled ALX-0171 in approximately 120 infants, aged 1-24 months, who have been hospitalised with an RSV infection.

During 2016, the Company expects that up to 4 new partnered programmes could enter the clinic (Boehringer Ingelheim already started a Phase Ib trial with the anti-VEGF/Ang2 Nanobody in January 2016) and additional pre-clinical data with partners may be obtained, thereby triggering milestone payments to Ablynx.

The net cash burn for the full year 2016 is expected to be in the range of €65-75 million, not including the potential licensing payment of US$75 million by AbbVie for ALX-0061 in RA.

Detailed financial review
Income statement

Total revenues increased by 57% to €77.5 million (2014: €49.3 million), driven by increased FTE funding and increased recognised income, mainly from the upfront payment by AbbVie made in 2013.

Total research and development costs increased to €83.1 million (2014: €54.5 million) in line with growth in external development costs, which are largely related to clinical trials expenditure for caplacizumab, ALX-0061 and ALX-0171.

General and administrative costs remained broadly unchanged at €11.4 million (2014: €11.0 million).

As a result of the foregoing, the operating loss increased to €17.0 million (2014: €16.2 million).

The net financial loss of €37.6 million comprises finance income of €1.8 million, which relates to interest income and exchange gains, and finance costs of €39.4 million. These finance costs mainly include non-cash expenditure resulting from the fair value calculation and amortisation of the convertible bond components (as a result of the higher share price at year-end compared to the share price at the time of the convertible bonds issuance), and the interest paid on the convertible bonds of €1.6 million.

As a result of the foregoing, the net loss for 2015 increased to €54.5 million (2014: €12.7 million).

As the Company incurred losses in all of the relevant periods, the Company had no taxable income and therefore paid no income taxes.

Balance sheet
The Company’s intangible assets include a portfolio of patents which are fully amortised, and technology licenses which are being amortised over 5, 18 and 20 years. The intangible assets also include software licenses. The Company expenses all its research and development activities.

The Company’s non-current tangible assets include the Company’s laboratory and office equipment, the investments in its facilities, tax receivables and €1.6 million restricted cash, which is a cash pledge that the Company has provided for the lease of its main office and laboratory building. The Company owns one small facility (which it previously rented) and continues to invest in equipment for its research activities. Tax receivables include an R&D tax credit receivable of €14.5 million.

The Company’s current assets of €246.1 million consist mainly of cash and cash equivalents and other short-term financial investments.

Shareholders’ equity decreased from €75.5 million at the end of 2014 to €27.9 million at the end of 2015, mainly as a result of the incorporation of the loss for the period.

Non-current liabilities relate to the senior unsecured bonds due on 27 May 2020 with a principal value of €100 million.

Current liabilities consist mainly of trade payables and deferred income related to the upfront payments received from partners.

Cash flow statement
Cash flow from operating activities represented a net outflow of €69.0 million in 2015 compared to a net outflow of €32.3 million in 2014. The difference primarily relates to the higher number of clinical trials being run by the Company. 

Cash flow from investing activities represented a net outflow of €39.7 million compared to a net outflow of €6.2 million in 2014. The net cash outflow comprises primarily the net movements in cash and cash equivalents (on deposit with a term of less than 1 month) and other short-term financial investments (on deposit with a term greater than 1 month).

Cash flow from financing activities represented a net inflow of €100.6 million compared to a net inflow of €39.7 million in 2014. The difference primarily relates to €97.2 million net proceeds from the issuance of convertible bonds and €5.2 million from the exercise of warrants.

The Company ended the period with a total liquidity position of €236.2 million (2014: €206.2 million) which consists of cash and cash equivalents of €3.6 million, other short-term financial investments of €231.0 million and restricted cash of €1.6 million.

Webcast and presentation
Ablynx will host a conference call/webcast today at 4 pm CET, 10 am ET. The webcast may be accessed by clicking here. To participate in the Q&A, please dial +32(0)2 404 06 62, using confirmation code 4640794. Shortly thereafter, a replay of the webcast will be available on the Company’s website: http://www.ablynx.com/news/events-presentations/.

Financial calendar 2016
31 March – online publication annual report 2015
28 April – annual general meeting 2016
12 May – results Q1 2016
25 August – half year results 2016
23 November – results Q3 2016

Shareholders’ clubs 2016 at Ablynx (Dutch language only)
9 March at 5.45pm
18 May at 5.45pm
14 September at 5.45pm
7 December at 5.45pm
To attend an event, please register via email: investors@ablynx.com, stating your name and preferred date.

Notes To Editors
About Ablynx

Ablynx is a biopharmaceutical company engaged in the development of Nanobodies®, proprietary therapeutic proteins based on single-domain antibody fragments, which combine the advantages of conventional antibody drugs with some of the features of small-molecule drugs. Ablynx is dedicated to creating new medicines which will make a real difference to society. Today, the Company has more than 40 proprietary and partnered programmes in development in various therapeutic areas including inflammation, haematology, immuno-oncology, oncology and respiratory disease. The Company has collaborations with multiple pharmaceutical companies including AbbVie, Boehringer Ingelheim, Eddingpharm, Genzyme, Merck & Co., Inc., Merck KGaA, Novartis, Novo Nordisk and Taisho Pharmaceuticals. The Company is headquartered in Ghent, Belgium. More information can be found on www.ablynx.com.

Issued for and on behalf of Ablynx by Instinctif Partners.

For more information please contact: ablynx@instinctif.com

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