Oxford Biomedica Regulatory News (OXB)

11 Sep 2007 07:00

Oxford Biomedica PLC11 September 2007 For Immediate Release 11 SEPTEMBER 2007 OXFORD BIOMEDICA PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Oxford, UK - 11 September 2007: Oxford BioMedica (LSE: OXB), a leading genetherapy company, announced today its interim financial results for the sixmonths ended 30 June 2007. Year to date highlights: Operational highlights: TroVax(R) (multiple cancers) • Global development and commercialisation deal with sanofi-aventis • Successful first DSMB review of Phase III TRIST study in renal cancer • First milestone under sanofi-aventis agreement achieved • Encouraging further Phase II results in renal cancer • Sanofi-aventis to start Phase III trial in metastatic colorectal cancer • QUASAR to start Phase III trial in early-stage colorectal cancer ProSavin(R) (Parkinson's disease) • Regulatory submission for start of Phase I/II trial in Parkinson's disease Other • Acquisition of Oxxon Therapeutics for £16 million in shares • Initiated new anti-cancer development programme • Licensing agreement for LentiVector(R) technology with major US biotechnology company Financial highlights: • Received initial payment of £19.7 million from sanofi-aventis • Revenue recognised of £2.0 million (H1 2006: £0.2 million) • Research and development costs of £10.8 million (H1 2006: £9.5 million) • Loss after tax of £9.3 million (H1 2006: £8.7 million) • Net cash generated1 of £10.4 million (H1 2006: cash burn1 £5.4 million) • Gross cash and cash equivalents acquired with Oxxon Therapeutics of £3.8 million • Net cash2 at 30 June of £42.5 million (30 June 2006: £38.7 million) 1. Net cash generated/used in operating activities plus sales and purchases of non-current assets 2. Cash, cash equivalents and current financial assets Commenting on the interim results, Oxford BioMedica's Chief Executive, ProfessorAlan Kingsman, said: "We have made excellent progress in the first half of theyear. Our collaboration with sanofi-aventis on TroVax is a significant event forthe Company. It validates our development strategy for TroVax and the product'spotential commercial value. The payments from the collaboration have also putthe Company in a strong financial position. Patient recruitment into the PhaseIII TRIST trial of TroVax in renal cancer continues to be rapid, andsanofi-aventis is now planning to start a Phase III trial in colorectal cancer.Following the completion of our landmark deal with sanofi-aventis, we conducteda strategic review of our pipeline to prioritise programmes for accelerateddevelopment in order to maximise shareholder value. Arising from this review isthe key development priority of starting the first clinical trial of ProSavin inParkinson's disease, and we are on track with the regulatory process for thisstudy. We look forward to pursuing our development and commercial goals withconfidence. The Company has never been stronger than it is today." Analyst meeting: An analyst briefing will be held at 10:00 am today at the offices of BuchananCommunications, 45 Moorfields, London EC2Y 9AE. Web cast: Simultaneously to the analyst briefing at 10.00 am, there will be a live audioweb cast of the results presentation. To connect to the web cast facility,please go to the Company's website: http://www.oxfordbiomedica.co.uk/approximately 10 minutes (09:50 am) before the start of the briefing. This willalso be available for replay shortly after the presentation. -Ends- For further information, please contact: Oxford BioMedica plc: Professor Alan Kingsman, Chief Executive Tel: +44 (0)1865 783 000 City/Financial Enquiries: Lisa Baderoon/ Mark Court/ Mary-Jane Johnson Tel: +44 (0)20 7466 5000Buchanan Communications Scientific/Trade Press Enquiries: Gemma Price/ Holly Griffiths/ Katja Stout Tel: +44 (0)20 7268 3002Northbank Communications Notes to editors 1. Oxford BioMedica Oxford BioMedica (LSE: OXB) is a biopharmaceutical company specialising in thedevelopment and commercialisation of novel cancer immunotherapies and gene-basedmedicines. The Company was established in 1995 as a spin-out from OxfordUniversity, and is listed on the London Stock Exchange. The Company has a platform of gene delivery technologies, which are based onhighly engineered viral systems. Oxford BioMedica has in-house clinical,regulatory and manufacturing know-how. The lead product candidate is TroVax(R),an immunotherapy for multiple solid cancers, which is licensed to sanofi-aventisfor global development and commercialisation. A Phase III trial of TroVax inrenal cancer is ongoing and Phase III trials in colorectal cancer are planned.Oxford BioMedica has two other oncology therapies in clinical development andexpects to start a Phase I/II trial of its novel gene therapy for Parkinson'sdisease, ProSavin(R), in 2007. The Company is underpinned by over 80 patent families, which represent one ofthe broadest patent estates in the field. The Company has a staff ofapproximately 80 split between its main facilities in Oxford and its whollyowned subsidiary, BioMedica Inc, in San Diego, California. Corporate partnersinclude sanofi-aventis for TroVax and Wyeth for a novel targeted antibodytherapy. The Company also has collaborations with Sigma-Aldrich, MolMed andVirxsys and has licensed technology to multiple partners, including Biogen Idec,Merck & Co, GlaxoSmithKline and Pfizer. Further information is available at www.oxfordbiomedica.co.uk Chairman's and chief executive's report In the first half of 2007, the Company achieved a major objective in securing aglobal partner for TroVax. The agreement with sanofi-aventis brings theexperience and resources of a leading oncology company to bear on the programme.The payments to Oxford BioMedica could amount to €518 million if TroVax isregistered for certain defined indications, plus additional undisclosedcommercial milestones and royalties. This is one of the most valuable licensingagreements for an active cancer immunotherapy to date. The initial payment was€29 million. A further payment of €9 million was triggered by the achievement ofthe first development milestone, which was announced on 11 September 2007. Othersignificant events since the beginning of 2007 include further encouraging PhaseII results for TroVax in renal cancer, the acquisition of Oxxon Therapeutics tostrengthen the Company's intellectual property position in immunotherapy, aregulatory submission for clinical development of ProSavin in Parkinson'sdisease, and initiation of a new anti-cancer development programme. Strategy Oxford BioMedica's mission is to be the leading company in the development andcommercialisation of innovative gene-based medicines, thereby creating a highlyprofitable biopharmaceutical company. Following the Company's globalcollaboration with sanofi-aventis for TroVax, Oxford BioMedica has reassessedits development priorities to ensure that internal resources are focused onproduct candidates that offer the greatest potential value to shareholders. Theevaluation considered the potential commercial opportunity together with theanticipated profile, timelines and costs of development of each product. In oncology, the strategy is to expand the immunotherapy platform, asdemonstrated by the acquisition in March 2007 of Oxxon Therapeutics, whichincluded key assets in prime-boost immunotherapy. The acquisition value forOxxon was £16 million, which was satisfied by the issue of Oxford BioMedicashares. The assets acquired included cash and cash equivalents of £3.8 million. In addition to its immunotherapy efforts, the Company's priority in oncologywill be to develop gene-based approaches that have the broadest possibleapplication, and thus the greatest commercial opportunity. In particular, theCompany initiated a new anti-cancer programme, called EndoAngio-GT, in July 2007through a licensing agreement with Children's Hospital Boston for two genes thatblock blood vessel growth (angiogenesis). The new programme is expected tobenefit from development synergies with the Company's RetinoStat productcandidate, which uses the same genes to treat vision loss due to maculardegeneration. EndoAngio-GT's anti-angiogenic approach could be applied to thetreatment of a wide range of solid tumours. The mode of action is similar toRoche/Genentech's product Avastin(R), but with potential advantages in terms ofsafety and dosing regimens. Avastin(R) generated global sales of approximately£1.2 billion in 2006. As a result of the strategic review of its anti-cancer product opportunities,Oxford BioMedica is seeking industry partners for further development of MetXiaand its Gene-Directed Enzyme Prodrug Therapy (GDEPT) technology. MetXia hasapplications in niche markets as a localised treatment for certain cancers. Ithas been successfully evaluated in Phase I/II trials in locally accessiblebreast and an ongoing Phase II trial in non-resectable pancreatic cancer. Thesestudies have confirmed that MetXia can transform tumour tissue in a mannerexpected to increase the local activity of chemotherapy. The strategic prioritisation of the pipeline is consistent with the Company'sobjective of starting clinical development with at least one new product peryear. The first clinical priority is to start the planned trial of ProSavin.This novel gene therapy could offer a major advance to the treatment ofParkinson's disease. The second priority is RetinoStat for wet age-relatedmacular degeneration. Regulatory approval of the Phase I/II trial of ProSavin isexpected before the end of 2007 and a submission to start trials of RetinoStatis planned for 2008. Following the licensing of TroVax, the Company has reviewed its strategy forlater-stage development and commercialisation of its in-house programmes andcore technologies. For certain products and territories, the Company will lookto co-develop and co-commercialise with partners, enabling Oxford BioMedica toretain more value from the commercialisation of its products and move towards afully integrated business model with specialty sales and marketing capabilities. R&D Pipeline TroVax(R) TroVax is Oxford BioMedica's lead cancer immunotherapy product candidate. It isdesigned to stimulate a specific anti-cancer immune response and has potentialapplication in most solid tumours and at all stages of disease. The productinduces an immune response against the tumour associated antigen 5T4, which isbroadly distributed throughout a wide range of solid tumours. The productconsists of a Modified Vaccinia Ankara (MVA) vector, engineered to include thegene for 5T4. In March 2007, a global licensing agreement was signed with sanofi-aventis forrights to develop and commercialise TroVax in all cancers. Subsequently, newPhase II results in renal cancer were reported, the Data Safety Monitoring Boardconducted its first analysis of the Phase III TRIST study, and progress was madetowards the start of two Phase III trials in colorectal cancer. Both new trialsare expected to commence enrolment of patients within the next 12 months. The agreement with sanofi-aventis is one of the largest alliances in the fieldof cancer immunotherapy. Under the terms of this agreement, Oxford BioMedicareceived an initial payment of €29 million. A further payment of €9 million wastriggered by the achievement of the first development milestone, on recruitmentof 350 patients in the TRIST study, which was announced on 11 September 2007.The Company could receive a total of €518 million in initial and milestonepayments if development and registration targets are met for certain definedindications. The agreement includes additional undisclosed regulatory milestonepayments for other cancer types, undisclosed commercial milestones when salesreach certain levels, and escalating royalties on global sales. Sanofi-aventisand Oxford BioMedica are co-funding the ongoing TRIST study and sanofi-aventisis committed to funding all other research, development, regulatory andcommercialisation activities. Furthermore, Oxford BioMedica retains an option toparticipate in the promotion of TroVax in the USA and the European Union. The Phase III TRIST (TroVax Renal Immunotherapy Survival Trial) study commencedin November 2006 in patients with locally advanced or metastatic clear cellrenal carcinoma. The trial is a randomised, placebo-controlled, two-arm studycomparing TroVax in combination with standard of care to placebo with standardof care. The standard of care therapy is Sutent(R) (sunitinib), interferon-alphaor interleukin-2. The protocol stratifies treatment between the standard of careoptions to ensure that the allocation of TroVax and placebo is rigorouslybalanced. Over 350 patients have been randomised out of a target enrolment ofapproximately 700 patients. Approximately 100 sites are open for recruitment inthe USA, the European Union and Eastern Europe. The primary endpoint for thetrial is survival improvement; secondary endpoints include progression-freesurvival, tumour response rates and quality-of-life scores. The trial is beingconducted under a Special Protocol Assessment (SPA) agreement from the US Foodand Drug Administration (FDA). It is expected to complete in 2009. In July 2007, the independent Data Safety Monitoring Board (DSMB) for the TRISTstudy completed its first scheduled interim analysis. The DSMB concluded thatthe trial should continue as planned without modification. The DSMB reviewedsafety and anti-cancer immune responses from the first 50 patients enrolled. TheDSMB is independent of Oxford BioMedica and sanofi-aventis. It is comprised ofleading clinicians and a biostatistician with relevant expertise in thetreatment of renal cancer and the conduct of clinical trials. At the Annual Meeting of the American Society of Clinical Oncology in June 2007,Oxford BioMedica and sanofi-aventis reported new data from two Phase II trialsof TroVax in renal cancer. TroVax was well tolerated with no serious adverseevents attributable to the treatment and the product induced anti-5T4 antibodyresponses in 91% of patients. Twenty-four of 35 evaluable patients with clearcell renal carcinoma (68%) showed disease control. Two patients had completeresponses, three had partial responses and 19 had stable disease for periodsexceeding three months, including three patients that were stable for more than17 months. Preliminary analysis of clinical benefit showed a statisticallysignificant relationship between reduction in tumour burden in patients withclear cell renal carcinoma and patients' anti-5T4 antibody responses (p=0.028).This supports the hypothesis that the 5T4-specific immune response induced byTroVax has therapeutic benefit. Over the next 12 months, several significant events are anticipated in thedevelopment of TroVax. Sanofi-aventis plans to start a randomised Phase IIItrial of TroVax with first-line standard therapy in patients with metastaticcolorectal cancer. The provisional trial plan is to recruit over 1,000 patientsfrom sites worldwide. The trial design is expected to be finalised and submittedto regulatory authorities within the next few months, with patient recruitmentcommencing in the first half of 2008. Separately, the QUASAR group is planning arandomised, placebo-controlled Phase III trial of TroVax in early-stage (StageII/III) colorectal cancer, which is designed to enrol approximately 3,000patients. QUASAR is a UK-based clinical trials network that is funded from avariety of sources including the UK Medical Research Council and the Departmentof Health. ProSavin(R) ProSavin is the Company's lead gene therapy product based on its proprietaryLentiVector(R) gene delivery technology. ProSavin has the potential torevolutionise the treatment of Parkinson's disease. The product uses theLentiVector system to deliver the genes for three enzymes that are required forthe synthesis of dopamine. It is administered locally to the region of the braincalled the striatum, converting cells into a replacement dopamine factory withinthe brain, thus replacing the patient's own lost source of the neurotransmitter. In the first half of 2007, Oxford BioMedica completed non-clinical safetystudies of ProSavin, required for a regulatory submission to start trials. InJuly 2007, the Company submitted a Clinical Trials Application (CTA) to theFrench Health Products Safety Agency (Agence Francaise de Securite Sanitaire desProduits de Sante - AFSSAPS). The CTA includes a proposed Phase I/II trial to beconducted at the Henri Mondor Hospital in Paris, France, which is a centre ofexcellence for neurosurgery. The proposed trial will enrol up to 18 patients whoare failing on the current standard therapy of L-DOPA but who are notexperiencing disabling dyskinesias (movement disorders that occur followingprolonged treatment with L-DOPA). There will be suitable intervals between thetreatments of each patient in the early stage of the trial. This cautiousapproach is commensurate with a "first in man" trial and has been discussed withAFSSAPS. Oxford BioMedica hopes to begin the clinical trial at the end of 2007or in early 2008. In an industry-standard preclinical model of Parkinson's disease, ProSavin'stherapeutic effect from a single administration has been maintained for over 20months. Efficacy was similar to that expected with standard daily treatment withL-DOPA but with no evidence of the disabling dyskinesias associated with L-DOPAtreatment. RetinoStat(R) RetinoStat is the Company's novel gene-based treatment for wet age-relatedmacular degeneration (AMD) and diabetic retinopathy (DR), which are caused bythe unregulated and aberrant growth of leaky and disruptive blood vessels in theretina. The product uses the LentiVector system to deliver two genes,angiostatin and endostatin, that block the formation of new blood vessels.Oxford BioMedica licensed the right to use these genes for treatment of oculardiseases in 2003. Endostatin and angiostatin are endogenous anti-angiogenicproteins discovered in the laboratory of Dr Judah Folkman, director of theVascular Biology Program at Children's Hospital Boston. In May 2007, Oxford BioMedica and collaborators at Johns Hopkins UniversitySchool of Medicine in Baltimore presented encouraging preclinical data withRetinoStat at the Association for Research in Vision and Ophthalmology AnnualMeeting. The presentation included preclinical proof of principle in anindustry-standard model of neovascular AMD. Oxford BioMedica with Johns Hopkins University and in partnership with theFoundation Fighting Blindness (FFB) and its support organisation, the NationalNeurovision Research Institute (NNRI), is conducting additional non-clinicalstudies with RetinoStat to support a regulatory submission for the start ofclinical trials. Preparations for manufacturing scale-up for the clinicalmaterial are underway. The objective is to submit an Investigational New Drug(IND) application to the US FDA for the start of trials in 2008. StarGen(TM) StarGen is Oxford BioMedica's novel gene-based therapy for the treatment ofStargardt's disease. The disease is caused by a mutation of the ABCR gene whichleads to the degeneration of photoreceptors in the retina and vision loss.StarGen uses the Company's LentiVector system to deliver a corrected version ofthe ABCR gene. It is administered directly to the retina. At the Association for Research in Vision and Ophthalmology Annual Meeting inMay 2007, Oxford BioMedica presented preclinical data with StarGen, showingefficacy in an industry-standard model of Stargardt's disease. The StarGenprogramme is part of a broad collaboration with the FFB and the NNRI to developgene-based therapies for ocular diseases. Further preclinical studies are beingconducted with researchers at Columbia University in New York. EndoAngio-GT During the first half of 2007, Oxford BioMedica initiated a new anti-cancerdevelopment programme, EndoAngio-GT, based on the anti-angiogenic genes,endostatin and angiostatin. These are the same therapeutic genes utilised inRetinoStat. The Company secured a licence to use the genes for the treatment ofcancer from Children's Hospital Boston in July 2007. RetinoStat is designed to block aberrant blood vessel growth in the retina,whereas EndoAngio-GT is targeting new blood vessels that enable tumours to growand spread. The development of EndoAngio-GT is expected to benefit fromsynergies with the RetinoStat programme. The formation of new blood vessels, known as angiogenesis, plays a critical rolein the progression of most solid tumours. It has been clinically proven thattumour growth can be suppressed by inhibiting tumour angiogenesis. Roche/Genentech's anti-angiogenic cancer treatment, Avastin(R), generated global salesof approximately £1.2 billion in 2006. Oxford BioMedica believes thatEndoAngio-GT has potential application as a treatment for a wide range of solidtumours, and has potential advantages over Avastin(R) in terms of safety anddosing regimens. Hence, the programme has substantial potential value. Hi-8(R) MEL Hi-8 MEL is a therapeutic vaccine for metastatic melanoma, which was added tothe pipeline following the Company's acquisition of Oxxon Therapeutics in March2007. The product consists of two recombinant vectors, a plasmid DNA and a MVAvirus. Both vectors encode the Mel3 polyepitope string derived from fivedifferent melanoma-associated antigens. The two vectors are administeredseparately (heterologous prime-boost) to induce broad melanoma-specific T-cellresponses. Oxxon Therapeutics has evaluated Hi-8 MEL in two clinical trials. Updatedresults from a Phase II trial were presented at the American Association ofImmunologists Annual Meeting in May 2007. The trial, in 41 patients with StageIII/IV melanoma, was designed to evaluate the immune and clinical responseselicited by Hi-8 MEL. The product was highly immunogenic with 91% of patientsthat received the optimal dose showing an antigen-specific immune response. Interms of clinical benefit, eight patients (20%) showed a period of diseasecontrol. The presentation included follow-up of one patient that exhibited asustained partial response for more than two years. The median survival forimmune responders was 100 weeks versus 37 weeks for non-responders (p < 0.001). Oxford BioMedica plans to add further patients to the Phase II trial to confirmthe optimal dose and formulation of Hi-8 MEL for Phase III development. Theextension to the study is expected to start in 2008. MetXia(R) MetXia is Oxford BioMedica's localised anti-cancer therapy, designed to enhancethe effectiveness of cyclophosphamide, which is a widely used anti-cancer agent.MetXia uses a highly engineered retroviral gene delivery system to deliver aspecific human cytochrome P450 gene. The product is administered locally to thetumour site, enabling the P450 enzyme to be produced within the tumour. Theenzyme activates the prodrug cyclophosphamide at the tumour site, thusincreasing the effective concentration of the anti-tumour, cytotoxic derivativeof cyclophosphamide in the tumour mass. MetXia is potentially useful as a localised treatment of certain solid tumours,particularly those where cyclophosphamide is commonly used as a treatment. TheCompany is targeting its development efforts for MetXia on the treatment ofpancreatic cancer through direct administration of both MetXia andcyclophosphamide to the tumour. A dose-escalation, two-stage Phase II trial inpatients with non-resectable pancreatic tumours is expected to complete in 2007. In this study, MetXia and cyclophosphamide are delivered directly to thepancreatic tumour via a catheter, which is inserted through an artery. Nineteenpatients have been treated to date. The first part of the trial has beencompleted. This was an open-label evaluation of two dose levels of MetXiaalongside a low dose of cyclophosphamide. The second part of the study is ongoing. Patients are treated with MetXia at theoptimal dose, and with ascending doses of cyclophosphamide to determine themaximum tolerated levels of cyclophosphamide. Three dose levels ofcyclophosphamide have been fully evaluated to date. The results suggest thatdirect intra-arterial administration of MetXia and cyclophosphamide to thetumour is well tolerated, up to the completed dose level, and that MetXiainduces efficient gene expression of P450 enzyme at the tumour site. Encouragingly, of ten patients that are evaluable for analysis of tumourresponses, two patients have shown disease stabilisation. Another patient hasshown a reduction in tumour marker levels. Patient survival is difficult tointerpret for this heterogeneous patient group but has ranged from four to morethan 108 weeks. The Company concluded in its recent strategic review and evaluation to seekpartners for further development and commercialisation of MetXia. This willenable the Company to focus its resources on higher development priorities withgreater potential commercial value. CME-548 In collaboration with Oxford BioMedica, Wyeth is developing a novel targetedantibody therapy for the treatment of cancer. The product, CME-548, uses OxfordBioMedica's monoclonal antibody against the 5T4 tumour associated antigen,linked to the anti-cancer agent calicheamicin. Preclinical development ofCME-548 is ongoing. TroVax-Vet TroVax-Vet is Oxford BioMedica's veterinary 5T4-targeted immunotherapy programmefor the treatment of cancer in companion animals, focusing on dogs and cats.Oxford BioMedica entered a research agreement for the development of the productwith a leading animal health firm in 2003. Following the sanofi-aventiscollaboration for TroVax in human cancers, Oxford BioMedica has decided oncommercial grounds not to renew the collaboration for TroVax-Vet. Technology Licensing Oxford BioMedica's technology licensing activities exploit the potential of itssuite of gene delivery technologies by providing third-party access forresearch, product development or specific applications. Licensees of theCompany's technology include GlaxoSmithKline, Merck & Co and Pfizer. In July 2007, another major US-based biotechnology company licensed theLentiVector gene delivery technology for research activities in a jointagreement with Sigma-Aldrich. Sigma-Aldrich is Oxford BioMedica's strategicpartner and exclusive licensee for the commercialisation of the LentiVectortechnology for research use. Viragen, which licensed the LentiVector technology in 2004 for the developmentof an avian transgenic biomanufacturing system, reported further progress withthe technology and published results in a leading medical journal in January2007. However, in June 2007, Viragen halted development of the programme as partof its efforts to streamline its research focus. Oxford BioMedica and the RoslinInstitute, which was collaborating with Viragen on the development of the aviantransgenic system, are exploring alternative ways to advance the technology. Intellectual Property The Company broadened its intellectual property estate in immunotherapy throughthe acquisition of Oxxon Therapeutics in March 2007. The key technology withinOxxon was prime-boost, which is a method of producing a potent and specific Tcell-mediated immune response to any disease-related antigen. The prime-boostplatform has broad potential applications in developing prophylactic as well astherapeutic products. Oxxon owned or had exclusively licensed a number of patentfamilies covering the prime-boost technology. With the addition of Oxxon's intellectual property, Oxford BioMedica's patentportfolio expanded to 131 granted patents at 30 June 2007, compared to 116 inthe previous year. A further 185 patent applications are pending. The Companyhas a further 18 licenses from third parties for key technologies. In July 2007, Oxford BioMedica signed a license agreement with Children'sHospital Boston to extend the Company's existing rights for the anti-angiogenicgenes, endostatin and angiostatin, for the treatment of cancer in theEndoAngio-GT programme. The Company had previously licensed rights to the genesfor the treatment of ocular diseases, and is employing the genes in RetinoStat. Finance The TroVax licence with sanofi-aventis has transformed the Company's financialoutlook. Revenue of £2.0 million in the first half of 2007 was higher than inany previous financial period, and for the first time the Company was able toreport a positive cash flow from operations. The acquisition of OxxonTherapeutics brought in cash and cash equivalents of £3.8 million. The net lossfor the first half of 2007 was £9.3 million (H1 2006: £8.7 million). The totalof cash, cash equivalents and available for sale investments at 30 June 2007 was£42.5 million (30 June 2006: £38.7 million). Revenue in the first half of 2007 was £2.0 million. The initial receipt from thesanofi-aventis TroVax licence was £19.7 million (€29 million), of which £1.9million was recognised as revenue in the first half of 2007. The remaining £17.8million was classified as deferred income and is expected to be recognised asrevenue over the next 21 to 33 months. Technology licence income was £0.1million (H1 2006: £0.2 million). Cost of sales of £0.1 million relates toroyalties payable on relevant in-licensed patents.. Operating costs were £13.2 million: £2.4 million (22%) higher than the firsthalf of 2006. Increased staff costs accounted for £1.3 million. Charges forshare options were £0.2 million higher than the first half of 2006 at £0.4million. External clinical and preclinical costs were similar to last year'slevel at £5.1 million (H1 2006: £5.3 million). Legal and professional feesassociated with the TroVax licence in 2007 were approximately £0.3 million.Oxxon expenses were £0.6 million, comprising £0.3 million for closure of theformer Oxxon offices and laboratories including severance payments, and £0.3million running costs during the close-down period. The Oxxon business is nowfully integrated into Oxford BioMedica. Grant income was £0.2 million lower than the first half of 2006. Net interestincome of £0.9 million was the same as in the first half of 2006. The tax creditof £1.1 million was £0.4 million higher than the first half of 2006, mostly dueto higher eligible staff costs. Overall the net loss was £9.3 million (H1 2006: £8.7 million). The acquisition of Oxxon in March 2007 was valued at £16 million, and wassatisfied by the issue of 27,551,628 Oxford BioMedica shares to Oxxonshareholders for the entire share capital of Oxxon and 4,219,618 shares for therepayment of a loan from Oxxon shareholders to Oxxon. The number of sharesissued was determined by a reference price of 50.36p per share, being theaverage closing price of Oxford BioMedica shares over the 30 days to 8 March2007. Oxxon's key investors, who currently retain an interest in OxfordBioMedica shares, are the venture capital firms Quester, MVM Life SciencePartners and US-based East Hill Management. The acquisition resulted in an increase of £13.1 million in Oxford BioMedica'sintangible assets at 30 June 2007 due to the provisional fair value attributedto Oxxon's prime-boost intellectual property and the Hi-8 MEL melanoma vaccineprogramme. In accordance with the Companies Act, the premium of £13.6 million onthe consideration shares for the Oxxon acquisition has been credited to a mergerreserve. Due to the £19.7 million initial receipt from sanofi-aventis, net cash generatedfrom operations in the first half of 2007 was £9.0 million (H1 2006: net cashused in operations £5.8 million). Interest received was £0.8 million (H1 2006:£0.5 million) and tax credit received was £0.8 million (H1 2006: nil), makingthe net cash flow from operating activities £10.6 million (H1 2006: cash used£5.3 million). Purchases of tangible and intangible fixed assets, net of saleproceeds were £0.2 million (H1 2006: £0.1 million), resulting in net cashgenerated of £10.4 million (H1 2006 net cash burn £5.4 million). Cash and cash equivalents (gross) acquired with Oxxon were £3.8 million. Currentpayables acquired, net of current receivables and tax credit, were £0.6 million.Cash expenses of the acquisition were £0.4 million. Issues of shares for cash onthe exercise of share options raised £0.2 million (H1 2006: £0.2 million). Overall, cash, cash equivalents and available for sale investments increased by£14.0 million from £28.5 million at 31 December 2006 to £42.5 million at 30 June2007. The achievement of the first development milestone in the sanofi-aventisTroVax agreement, which was announced on 11 September 2007, triggers the paymentto Oxford BioMedica of a further €9 million (approximately £6 million). In summary, the Company's financial position remains strong, enabling it to moveforward aggressively in the development of its prioritised product candidates. Outlook The collaboration with sanofi-aventis on TroVax has been a transforming eventfor Oxford BioMedica. It validates the programme and provides the resources tocomplete development and commercialisation of the product. Furthermore, theinitial payment and milestone payments to Oxford BioMedica provide valuablefunding for the Company's other in-house programmes. Importantly, the TroVaxprogramme remains on track, including recruitment into the Phase III TRIST studyin renal cancer and the start of other planned trials. In addition to TroVax,the Company has prioritised and is seeking to accelerate development of bothProSavin in Parkinson's disease and RetinoStat in wet age-related maculardegeneration. Following its strategic review, the Company is focusing in-house developmentefforts on programmes that offer the highest potential commercial value. Thishas led to the addition to the pipeline of a novel anti-cancer programme,EndoAngio-GT, which has broad potential application in the treatment of solidtumours, and the decision to seek partners for further development of MetXia andthe GDEPT technology for the localised treatment of certain cancers. The Company expects several clinical and commercial events over the next 12months, including another milestone linked to the TRIST study of TroVax, thestart of Phase III trials in colorectal cancer by sanofi-aventis and QUASAR, andthe start of the Phase I/II trial of ProSavin in Parkinson's disease. Inaddition, the Company continues to evaluate new opportunities to expand itspipeline of novel gene-based medicines. Consolidated income statementfor the six months ended 30 June 2007 Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) Notes £'000 £'000 £'000 Revenue 3 2,041 208 760Cost of sales (124) - -Research and development costs (10,767) (9,456) (19,523)Administrative expenses (2,453) (1,352) (2,699) Administrative expenses comprise:Administrative expenses before (2,123) (1,352) (2,699)exceptionals Exceptional administrative expenses 4 (330) - - Total administrative expenses (2,453) (1,352) (2,699) Other operating income: grants 16 249 360receivable Operating loss (11,287) (10,351) (21,102) Interest payable and similar charges (17) (13) (29)Interest receivable 955 952 1,743 Loss before tax (10,349) (9,412) (19,388)Taxation 1,097 744 1,762 Loss for the period (9,252) (8,668) (17,626) Basic loss and diluted loss per ordinary share 5 (1.8p) (1.7p) (3.5p) The notes on pages 13 to 21 form part of this financial information Consolidated balance sheetat 30 June 2007 Notes 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000AssetsNon-current assetsIntangible assets 6 14,814 1,641 1,665Property, plant and equipment 7 761 944 819 15,575 2,585 2,484Current assetsTrade and other receivables 8 3,822 1,772 2,202Current tax assets 2,914 1,943 2,309Financial assets: Available for sale investments 33,924 31,000 20,500Cash and cash equivalents 9 8,611 7,651 8,043 49,271 42,366 33,054LiabilitiesCurrent liabilitiesTrade and other payables 10 8,864 5,771 4,671Deferred income 11 7,645 83 92Provisions 12 56 61 58 16,565 5,915 4,821 Net current assets 32,706 36,451 28,233 Non-current liabilitiesOther non-current liabilities 13 95 - -Deferred income 11 10,205 - -Provisions 12 587 671 627 10,887 671 627 Net assets 37,394 38,365 30,090 Shareholders' equityOrdinary shares 5,341 4,996 5,014Share premium 108,938 106,311 106,732Merger reserve 14,310 711 711Other reserves (623) (633) (627) Retained earnings - deficit (90,572) (73,020) (81,740) Total equity 37,394 38,365 30,090 The notes on pages 13 to 21 form part of this financial information Consolidated cash flow statementfor the six months ended 30 June 2007 Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) Notes £'000 £'000 £'000Cash flows from operating activitiesCash generated by/(used in) operations 14 9,029 (5,752) (17,726)Interest received 809 482 1,440Tax credit received 771 - 650Overseas tax paid (8) (25) (25) Net cash from operating activities 10,601 (5,295) (15,661) Cash flows from investing activitiesProceeds from sale of property, 1 - 1plant and equipment Purchases of property, plant and equipment (97) (82) (192)Purchases of intangible assets (63) - (24)Net (purchase)/maturity of available for sale investments (13,424) (7,500) 3,000Cash and cash equivalents acquired with subsidiary 15 3,759 - -Acquisition costs (382) - - Net cash (used in)/generated by investing activities (10,206) (7,582) 2,785 Cash flows from financing activitiesNet proceeds from issue of ordinary share capital 175 234 629 Effects of exchange rate changes (2) (23) (27) Net increase/(decrease)in cash and 568 (12,666) (12,274)cash equivalentsCash and cash equivalents at 1 January 8,043 20,317 20,317Cash and cash equivalents at period end 9 8,611 7,651 8,043 The notes on pages 13 to 21 form part of this financial information Statement of changes in shareholders' equity Group Share Share Translation Merger Retained capital premium reserve reserve earnings (deficit) Total £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2006 4,984 106,097 (627) 711 (64,565) 46,600Exchange adjustments - - (6) - - (6)Loss for the 6 months ended 30 June 2006 - - - - (8,668) (8,668)Share options 12 214 - - - 226 Proceeds from shares issuedValue of employee services - - - - 213 213 At 30 June 2006 (unaudited) 4,996 106,311 (633) 711 (73,020) 38,365 Exchange adjustments - - 6 - - 6Loss for the 6 months ended 31 December 2006 - - - - (8,958) (8,958)Share options 13 227 - - - 240 Proceeds from shares issuedValue of employee services - - - - 238 238Issue of shares excluding share options 5 155 - - - 160Refund in respect of share issue costs - 39 - - - 39 At 31 December 2006 (audited) 5,014 106,732 (627) 711 (81,740) 30,090 Exchange adjustments - - 4 - - 4Loss for the 6 months ended 30 June 2007 - - - - (9,252) (9,252)Shares issued in acquisition 318 2,083 - 13,599 - 16,000Share options 9 133 - - - 142 Proceeds from shares issuedValue of employee services - - - - 420 420Costs of share issues - (10) - - - (10) At 30 June 2007 (unaudited) 5,341 108,938 (623) 14,310 (90,572) 37,394 The notes on pages 13 to 21 form part of this financial information Notes to the financial information 1 Basis of preparation The financial information for the six months ended 30 June 2007 is unaudited andhas been prepared in accordance with the Group's accounting policies asdescribed in note 2 and in accordance with the Listing Rules of the FinancialServices Authority. The financial information for the six months ended 30 June2006 is also unaudited. These results have not been reviewed by the Group'sAuditors. The financial information relating to the year ended 31 December 2006has been extracted from the full report for that year. The report of theAuditors on the 2006 accounts was unqualified. The statutory accounts for theyear ended 31 December 2006 were approved at the Company's Annual GeneralMeeting on 3 May 2007 and have been delivered to the Registrar of Companies. Thefinancial information in this report does not constitute statutory accountswithin the meaning of Section 240 of the Companies Act 1985. Copies of the interim results for the six months ended 30 June 2007 are beingsent to all shareholders. Details can also be found on the Company's website atwww.oxfordbiomedica.co.uk. Further copies of the interim results and copies ofthe full report and accounts for the year ended 31 December 2006 can be obtainedby writing to the Company Secretary, Oxford BioMedica plc, Medawar Centre,Oxford Science Park, Oxford, OX4 4GA. This announcement was approved by the Board of Oxford BioMedica plc on 10September 2007. Use of estimates and assumptions The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Estimates and judgements are continually made and are based onhistoric experience and other factors, including expectations of future eventsthat are believed to be reasonable in the circumstances. Critical accounting estimates and assumptions Where the Group makes estimates and assumptions concerning the future, theresulting accounting estimates will seldom exactly match actual results. Due tothe amounts involved, the estimates and assumptions of the amounts accrued forclinical trial costs have a greater risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the present financial year.The Group uses a percentage-of-completion method to accrue for such costs. Thismethod requires the Group to estimate the services performed by contractors todate as a proportion of total services to be performed. 2 Accounting policies The Group accounting policies are set out in the annual report for the yearended 31 December 2006. The following policies have been expanded to takeaccount of business developments in 2007. The accounting policies have beenapplied consistently to all the financial periods presented. Revenue The Group generates revenue as a result of product and technology licencetransactions. Product licence transactions typically have an initial upfrontnon-refundable payment on execution of the licence, and the potential forfurther payments conditional on achieving specific milestones, plus royalties onproduct sales. Technology licence transactions typically have an initial upfrontnon-refundable payment on execution of the licence and the potential for furtherannual maintenance payments for the term specified in the licence. Where theinitial fee paid is non-refundable and there are no ongoing commitments from theGroup and the licence has no fixed end date, the Group recognises the elementreceived up front as a payment in consideration of the granting of the licenceon execution of the contract. Amounts receivable in respect of milestonepayments are recognised as revenue when the specific conditions stipulated inthe licence agreement have been met. Maintenance fees within the contracts arespread over the period to which they relate, usually a year. Otherwise, amountsreceivable are recognised in the period in which related costs are incurred, orover the period to completion of the relevant phase of development. Amountsrecognised exclude value added tax. Differences between cash received andamounts recognised are included as deferred revenue where cash received exceedsrevenue recognised and as accrued revenue where revenue has yet to be billed tothe customer. Exceptional items Exceptional items represent significant items of income and expense which due totheir nature or the expected infrequency of the events giving rise to them, arepresented separately on the face of the income statement to give a betterunderstanding to shareholders of the elements of financial performance in theperiod, so as to facilitate comparison with prior periods and to better assesstrends in financial performance. Exceptional items include non-recurringreorganisation costs. Intangible assets Intangible fixed assets, relating to intellectual property rights acquiredthrough licensing or assigning patents and know-how are carried at historiccost, less accumulated amortisation, where the useful life of the asset isfinite and the asset will probably generate economic benefits exceeding costs.Where a finite useful life of the acquired intangible asset cannot bedetermined, the asset is not subject to amortisation but is tested annually forimpairment. No amortisation has been charged to date, as the productsunderpinned by the intellectual property rights are not yet available forcommercial use. Expenditure on product development is capitalised as an intangible asset andamortised over the expected useful life of the product concerned. Capitalisationcommences from the point at which technical feasibility and commercial viabilityof the product can be demonstrated and the Group is satisfied that it isprobable that future economic benefits will result from the product oncecompleted. Capitalisation ceases when the product receives regulatory approvalfor launch. No such costs have been capitalised to date. Expenditure on research activities and development activities that do not meetthe above criteria, including ongoing costs associated with acquiredintellectual property rights and intellectual property rights generatedinternally by the Group, is charged to the income statement as incurred.Intellectual property and in-process research and development from acquisitionsare recognised as intangible assets at fair value. Any residual excess ofconsideration over the fair value of net assets in an acquisition is recognisedas goodwill in the financial statements. 3 Segmental analysis The Group's primary segment reporting is by geographical location of assets,with business sector as the secondary format. Revenue and loss on ordinaryactivities before taxation are derived entirely from the principal activity,biotechnology research and development. The business segments comprise theGroup's UK and US operations. The majority of the Group's activities take placein the UK, with the US subsidiary providing intellectual property management andbusiness development support to the UK operation. Since the reorganisation of USactivities in 2004, expenditure in the USA accounts for less than 10% of Groupcosts. Purchases and sales between subsidiaries are eliminated on consolidation. The Group's revenue derives wholly from assets located in the UK. Bydestination, revenue derives from the European Union and the USA. Year Six months Six months ended Revenue by destination ended ended 31 30 June 30 June December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 European Union 1,919 28 56North America 122 180 704Total revenue 2,041 208 760 4 Exceptional administrative expenses Exceptional administrative expenses of £330,000 (2006: nil) were restructuringcosts associated with the integration of Oxxon Therapeutics Limited ('Oxxon')and closure of the former Oxxon offices and laboratories following theacquisition of Oxxon in March 2007. Severance and related costs for former Oxxonemployees were £247,000. Fixed asset write-offs (mostly leasehold improvements)were £73,000. Other expenses were £10,000. 5 Basic loss and diluted loss per ordinary share The basic loss per share has been calculated by dividing the loss for the periodby the weighted average number of shares of 521,354,933 in issue during the sixmonths ended 30 June 2007 (six months ended 30 June 2006: 499,147,326; yearended 31 December 2006: 499,865,620). The Company had no dilutive potential ordinary shares in either period whichwould serve to increase the loss per ordinary share. There is therefore nodifference between the loss per ordinary share and the diluted loss per ordinaryshare. 6 Intangible assets 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000CostAt 1 January 1,927 1,920 1,920Additions - through business combination 13,086 - -Additions - separately 63 - 24Disposals - (17) (17)At period end 15,076 1,903 1,927ImpairmentAt 1 January 262 279 279Disposals - (17) (17)At period end 262 262 262Net book amount at period end 14,814 1,641 1,665 The value of intangibles acquired with the acquisition of Oxxon TherapeuticsLimited (note 15) is provisional, as a formal valuation has not yet beencompleted. The valuation is expected to be finalised in the financial statementsfor the year ended 31 December 2007. 7 Property, plant & equipment Office equipment, Computer Short fixtures equipment leasehold and and Laboratory improvements fittings software equipment Totals £'000 £'000 £'000 £'000 £'000CostAt 1 January 2007 2,608 87 281 2,670 5,646Exchange adjustments (8) - - - (8)Additions - through 79 10 2 8 99business combinationAdditions - separately 2 6 9 77 94Dilapidation asset - (10) - - - (10)effect of change indiscount rateDisposals (79) (9) - (13) (101) At 30 June 2007 2,592 94 292 2,742 5,720 DepreciationAt 1 January 2007 2,267 81 224 2,255 4,827Exchange adjustments (8) - - - (8)Charge for the period 52 5 21 90 168Disposals (12) (3) - (13) (28) At 30 June 2007 2,299 83 245 2,332 4,959 Net book amount at 30 June 2007 293 11 47 410 761 Office equipment, Computer Short fixtures equipment leasehold and and Laboratory improvements fittings software equipment Totals £'000 £'000 £'000 £'000 £'000 CostAt 1 January 2006 2,270 86 270 2,650 5,276Exchange adjustments (27) - (1) - (28)Additions at cost 36 1 14 62 113Dilapidation asset 338 - - - 338recognised in the periodDisposals - (1) (10) (40) (51) At 30 June 2006 2,617 86 273 2,672 5,648 DepreciationAt 1 January 2006 2,093 74 212 2,066 4,445Exchange adjustments (27) - (1) - (28)Charge for the period 158 6 16 157 337Disposals - (1) (10) (39) (50) At 30 June 2006 2,224 79 217 2,184 4,704 Net book amount at 30 June 2006 393 7 56 488 944 Office equipment, Computer Short fixtures equipment leasehold and and Laboratory improvements fittings software equipment Totals £'000 £'000 £'000 £'000 £'000CostAt 1 January 2006 2,270 86 270 2,650 5,276Exchange adjustments (47) - (2) - (49)Additions at cost 50 3 34 111 198Dilapidation asset 335 - - - 335recognised in the periodDisposals - (2) (21) (91) (114) At 31 December 2006 2,608 87 281 2,670 5,646 DepreciationAt 1 January 2006 2,093 74 212 2,066 4,445Exchange adjustments (47) - (1) - (48)Charge for the period 221 9 34 273 537Disposals - (2) (21) (84) (107) At 31 December 2006 2,267 81 224 2,255 4,827 Net book amount at 31 December 2006 341 6 57 415 819 8 Trade and other receivables 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000Amounts falling due after more than one yearOther receivables - rent deposit 146 190 150Amounts falling due within one yearTrade receivables 9 158 241Other receivables 1,362 881 765Other tax receivable 330 173 220Prepayments 1,903 349 603Accrued income 72 21 223 3,676 1,582 2,052 Total trade and other receivables 3,822 1,772 2,202 Other receivables include £652,000 (June 2006: £34,000; December 2006: £245,000)due from the Group's collaborative partner Sigma-Aldrich for reimbursement oflegal costs in respect of litigation in the United States of America againstOpen Biosystems. 9 Cash and cash equivalents 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Cash at bank and in hand 5,777 252 2,343Short term bank deposits 2,834 7,399 5,700Total cash and cash equivalents 8,611 7,651 8,043 In addition to the cash and cash equivalents described above, the Group heldbank deposits of £33,924,000 (June 2006: £31,000,000; December 2006:£20,500,000) with an initial term to maturity between five and twelve monthsclassified as available for sale investments. Cash at bank and in hand includes £15,000 (June 2006: nil; December 2006:£182,000) held in escrow for expenses of the TRIST Phase III clinical trial. 10 Trade and other payables - current 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Trade payables 3,397 851 1,579Other taxation and social security 157 122 315Accruals 5,310 4,798 2,777 8,864 5,771 4,671 11 Deferred income At 30 June 2007 the Group had deferred income of £17,850,000 (June 2006:£83,000; December 2006: £92,000). £7,645,000 (June 2006: £83,000; December 2006:£92,000) was current, and £10,205,000 (June 2006 and December 2006: nil) wasnon-current. Of this total balance, £17,780,000 (June 2006 and December 2006:nil) relates to initial receipts from sanofi-aventis in April 2007 under theTroVax licence agreement, which are being recognised as revenue over a period of24 to 36 months. 12 Provisions Onerous Dilapidation lease Total £'000 £'000 £'000 At 1 January 2006 - 460 460Exchange adjustments - (31) (31)Credited to the income statement - (7) (7)Tangible fixed asset recognised in the period 338 - 338Utilised in the period - (41) (41)Amortisation of discount 4 9 13 At 30 June 2006 342 390 732 Exchange adjustments - (21) (21)Credited to the income statement - (1) (1)Tangible fixed asset recognised in the period (3) - (3)Utilised in the period - (38) (38)Amortisation of discount 8 8 16 At 31 December 2006 347 338 685 Exchange adjustments - (7) (7)(Credited)/charged to the income statement - (6) (6)Tangible fixed asset recognised in the period (10) - (10)Utilised in the period - (36) (36)Amortisation of discount 9 8 17 At 30 June 2007 346 297 643 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000Current 56 61 58Non-current 587 671 627Total provisions 643 732 685 The dilapidation provision relates to anticipated costs of restoring theleasehold property in Oxford, UK to its original condition at the end of thepresent leases in 2011, discounted at 5.69% per annum (June 2006: 4.74%;December 2006: 4.96%). The provision will be utilised at the end of the leasesif they are not renewed. The onerous lease provision relates to the estimated rental shortfall in respectof a redundant property in San Diego, USA which has been sub-let for theremainder of the lease term until June 2012, discounted at 5.63% per annum (June2006: 4.72%; December 2006: 4.88%). The provision will be utilised over theremaining term of the lease. 13 Non-current liabilities 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000Other non-current liabilities - rent deposit held 95 - - 14 Cash flow from operating activities Reconciliation of loss before tax to net cash from operating activities Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Continuing operationsLoss before tax (10,349) (9,412) (19,388)Adjustment for:Depreciation 168 337 537Loss on disposal of property, plant and equipment 72 1 (1)Interest income (955) (952) (1,743)Interest expense 17 13 29Charge in relation to employee share schemes 420 213 451Changes in working capital:(Increase)/decrease in trade and other receivables (1,425) 447 (107)Increase in payables 3,364 3,671 2,596Increase/(decrease) in deferred income 17,758 (22) (13)Decrease in provisions (41) (48) (87) Net cash generated by/(used in) operations 9,029 (5,752) (17,726) 15 Acquisition of Oxxon Therapeutics Limited On 9 March 2007 the Company purchased the entire issued share capital includingall voting rights of Oxxon Therapeutics Limited ('Oxxon'). In addition, a loanof £1.7 million from the former owners of Oxxon was acquired. The purchase hasbeen accounted for as an acquisition. The assets acquired included cash and cashequivalents of £3.8 million. On 2 April 2007 in an internal reorganisation, thetrade of Oxxon Therapeutics Limited together with all its assets and liabilitieswas sold to the Group's principal operating subsidiary Oxford BioMedica (UK)Limited. From the date of acquisition to 2 April 2007 the net loss of Oxxon was £95,000.From 2 April 2007 the Oxxon business was integrated with that of OxfordBioMedica (UK) Limited, and the facilities formerly occupied by Oxxon wereclosed down. From 2 April 2007 to 30 June 2007 the net loss attributable to theOxxon acquisition was approximately £517,000 of which closure and severancecosts of £330,000 are classified as exceptional administrative expenses. All intangible assets were recognised at their provisional respective fairvalues. Any residual excess of the consideration over the fair value of netassets acquired will be recognised as goodwill in the financial statements. The fair value adjustments contain some provisional amounts which will befinalised in the accounts for the year ended 31 December 2007. Shares issuedwere valued at the average market price over the 30 days ended 8 March 2007. Acquisition of Oxxon Therapeutics Limited Carrying Provisional values pre fair value Provisional acquisition adjustment fair value £'000 £'000 £'000 Intangible fixed assets 243 12,843 13,086Property, plant and equipment 99 - 99Receivables 100 - 100Payables (930) - (930)R&D tax credit receivable 268 - 268Deferred tax liability on fair value of intangibles - (3,926) (3,926)Deferred tax asset - tax losses - 3,926 3,926Cash and cash equivalents 3,759 - 3,759Loans (1,700) 1,700 - Net assets acquired 1,839 14,543 16,382Goodwill - Consideration 16,382 Consideration satisfied by:Shares issued to acquire Oxxon share capital 13,875Shares issued to redeem loan from former parent of Oxxon 2,125Expenses of acquisition 382 16,382 The net inflow of cash and cash equivalents on the acquisition of Oxxon was: £'000 Cash and cash equivalents acquired 3,759Cash costs of acquisition (382) 3,377 The provisional value of the intangibles acquired as part of the acquisition ofOxxon was: £'000Hi-8 MEL melanoma vaccine and prime-boost intellectual property 13,086 This information is provided by RNS The company news service from the London Stock Exchange