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Alchemia Announces Half-Year Results for Period Ended 31 December 2013

BRISBANE, AUSTRALIA -- (Marketwired) -- 02/18/14 -- Alchemia Limited, (ASX: ACL) a drug discovery and development company, is pleased to announce its half year results for the six months ended 31 December 2013.

Highlights for the first half of the financial year include:

  • Total revenue of $5.0 million for the six months ended 31 December 2013
  • $4.7 million in fondaparinux profit share payments for the period
  • Cash receipts of $8.8 million in R&D tax incentives received in period due to R&D spend incurred in the previous financial year
  • Cash balance of $16.4 million as at 31 December 2013.

Generic fondaparinux

For the half year ended 31 December 2013, the Company reports that under the collaboration, development and marketing agreement with Alchemia's commercial partner, Dr Reddy's Laboratories, profits of $4.7 million were payable to Alchemia Limited. This amount is in lieu of sales made by Dr Reddy's Laboratories of Alchemia's fondaparinux in the US and takes into account the payment of $1.1 million to Dr Reddy's Laboratories by Alchemia Limited for agreed activities to improve yields and cost of goods.

Alchemia Oncology
Over the six-month period, Alchemia continued to treat patients in the Company's pivotal Phase III clinical trial of HA-Irinotecan in metastatic colorectal cancer (mCRC). The primary objective of the Phase III study is to demonstrate that HA-Irinotecan is superior to Irinotecan in its effect on Progression Free Survival (PFS). The primary endpoint of this trial will be reached when 350 patients have experienced disease progression or death.

The trial has recruited patients with 2nd or 3rd line metastatic colorectal cancer (mCRC) where patients are randomised to receive either FOLFIRI (a combination of the cancer drugs 5-FU, leucovorin and irinotecan) or FOLF(HA)-Iri in which irinotecan is replaced with Alchemia's proprietary formulation, HA-Irinotecan.

A brief study outline is as follows:

  • 415 second-line metastatic colorectal cancer patients, randomised and double-blinded: neither the patient nor clinician knows which treatment is being administered;
  • Half of patients will receive Alchemia's HA-Irinotecan in combination with 5-fluorouracil and leucovorin (test arm) and half will receive unmodified irinotecan with 5-fluorouracil and leucovorin (control arm);
  • 76 sites in Australia, the UK, Russia, Ukraine, Bulgaria, Poland and Serbia;
  • Primary endpoint of progression-free survival where the statistical assumptions are based on FOLF(HA)-Iri providing a minimum of a six week improvement in PFS compared with the control arm;
  • Primary endpoint assessed after disease progression or death in 350 patients

In addition, Alchemia has initiated an investigator-led Phase II clinical trial of HA-Irinotecan in combination with carboplatin in small cell lung cancer. Currently 27 patients have been enrolled in the study and in October of 2013, interim results were presented at the 15th World Conference of Lung Cancer in Sydney, showing that HA-Irinotecan in combination with carboplatin is safe to administer and that there are early encouraging signs of clinical activity.

Another significant advancement in the clinical development of HA-Irinotecan was achieved in May of 2013 when Alchemia and Merck Serono agreed to collaborate by supporting the initiation of a new investigator-led clinical trial of HA-Irinotecan in combination with Merck Serono's leading therapeutic antibody, Erbitux® (cetuximab), for patients with metastatic colorectal cancer (mCRC). Up to 50 patients who are candidates for second-line treatment of mCRC, will to be enrolled at six to ten sites around Australia with the trial scheduled to run for approximately 24 months. This trial is currently in the organisational stage and recruitment is expected to begin in the first half of calendar year 2014.

Alchemia's oncology programs, including HA-irinotecan, are all based on its proprietary HyACT® technology for targeting cancer therapies to tumours. The HyACT drug delivery platform presents the Company with multiple product opportunities as we believe that HyACT may be able to improve the delivery of a range of chemotherapeutic agents to cancer cells and boost drug efficacy without increasing side effects. The technology has applications ranging from small molecule cytotoxics to much larger biologics, such as monoclonal antibodies. Due to the versatility of this platform, Alchemia is seeking to further deploy this technology to improve the treatment and survival of patients with cancer.

Drug Discovery

Alchemia's VAST technology utilises pyranose as a scaffold to generate novel molecules that are more diverse and complex in shape than the typical compounds used in drug discovery. Using these chemistries the Company has developed an array of compounds it refers to as, "Diversity Scanning Array" (DSA), which represents approximately 14,000 pyranose-based compounds that systematically arrange typical binding groups in a broad range of possible three-dimensional orientations. This array has the ability to identify the shape and functional requirements of molecules that modulate a target.

On the basis of this technology, Alchemia established a multi-target drug discovery collaboration with AstraZeneca AB in April of 2013, where Astra Zeneca will apply the technology across a variety of therapeutic areas including oncology, respiratory, cardiovascular, metabolism, infection and neuroscience. This collaboration will exploit the unique shape diversity provided by DSA and versatility offered by VAST to approach difficult therapeutic targets in innovative ways. Following the signing of the agreement, a copy of the DSA has been transferred to AstraZeneca AB and high throughput screening campaigns are ongoing on several targets.

Alchemia has also put in place strong collaborations with the Institute for Molecular Biosciences (University of Queensland) to discover novel inhibitors of selected ion channels and with the Monash Institute for Pharmaceutical Science to discover novel allosteric modulators of the Family B G-protein coupled receptors. These collaborations aim to discover new treatments for pain, chronic obstructive pulmonary disease and type II diabetes. The collaborations are supported by government grants, which help fund specialised biology teams in the respective institutes, fully focussed on the collaborative drug discovery efforts. These types of collaborations maximise the use of the VAST platform in a highly cost efficient manner.

Financials

The Group reported a net loss of $5.5 million for the six months ended 31 December 2013, an improvement from its $5.9 million loss for the six months ended 31 December 2012.

Total income for the period was $5.0 million, a decrease of $4.4 million from the previous period (2013: $9.4 million), during which the Group received $4.5 million R&D tax incentive income.

Operating expenses of $10.7 million were lower than the corresponding period of $15.5 million). The reduction in Administrative and Corporate Costs of $1.9 million was mainly related to the costs associated with the deferment of the demerger and listing of Audeo Oncology, Inc., which was expensed in December of 2012. The reduction in costs associated with conducting the HA-Irinotecan Phase III trial in patients with mCRC of $3.5 million relates to a significant spend in the six months to 31 December 2012 due to the registrational trial.

Over the course of the reporting period, Alchemia has seen a significant net increase in cash balances, (including cash, cash equivalents and term deposits) from $6.1 million as at 31 December 2012 to $16.4 million as at 31 December 2013. Cash balance in the period was boosted by cash receipts of $5.9 million royalty payments from Dr Reddy's and $8.8 million from R&D tax incentives versus operating expenditure of just $11.2 million.

The group acquired capital items totalling $0.2 million during the period, up from $0.1 million in the prior year period.

About Alchemia Limited - www.alchemia.com.au

Alchemia is a drug discovery and development company marketing FDA approved fondaparinux, an injectible antithrombotic in the US, as well as other major markets via partner Dr. Reddy's Laboratories. The Company is also developing a late stage oncology product pipeline with multiple ongoing trials through its proprietary HyACT drug delivery platform, which targets anti-cancer drugs to solid tumours. Lead asset HA-Irinotecan is in a pivotal Phase III clinical trial for the treatment of metastatic colorectal cancer. HA-Irinotecan is also in two Phase II investigator-led trials, one of which is in collaboration with Merck Serono combining HA-Irinotecan with Erbitux® (cetuximab). Alchemia is also exploring additional small molecule drug discovery targets via an internal discovery platform VAST, based on the Company's deep chemistry expertise. The VAST technology is being developed in collaboration with leading academic institutions and is partnered with AstraZeneca AB.

Erbitux® is a trademark of Merck KGaA.

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