Cambridge, UK, 16 April 2018 – Abzena plc (AIM: ABZA, ‘Abzena’ or the ‘Group’), a life sciences group providing services and technologies enabling the development and manufacture of biopharmaceutical products, today announces its unaudited pre-close update for the year ended 31 March 2018 (‘FY2018’).
Following a stronger second half to the year, the Group expects to report revenue for the full year of £22.0m, an increase of c.18% (FY2017: £18.6m), and an adjusted EBITDA loss in line with the Board’s expectations. The Group achieved annual revenue growth of c.60% in manufacturing and c.15% in chemistry. As previously announced, lower immunology service revenues was the principal reason behind lower biology revenues (c.14% lower than FY2017), which is expected to be reversed in FY2019.
As at 31 March 2018, Abzena had a cash position of £6.8m (30 September 2017: £16.9m) reflecting the Group’s continued investment in its facilities, equipment and services, and funding of operating losses during the year.
The value of contracts secured in the second half of FY2018 was £15.3m, up 49% from the first half’s total of £10.2m, resulting in the Group starting the current financial year with committed forward contracts of £11.4m. These contracts include a multi-product programme transitioning from cell line development to manufacturing process development and GMP manufacturing, ADC manufacturing programmes, annual renewal of continuing chemistry service contracts and increased immunology bookings enabled by the Group’s broader immunology, bioassay and bioanalytical capabilities.
As previously announced, construction of the Group’s GMP ADC manufacturing facility in Bristol PA (USA) has been completed. Two significant contracts, for delivery in FY2019, are already committed to this facility and the Group expects to see further benefits from its investment here.
The biologics manufacturing operation in San Diego has completed its first cell culture batch production using the Sartorius 500L stirred tank bioreactor. The Group is starting to realise the benefits of a cell culture and purification process development and manufacturing platform able to efficiently support Abzena’s customer needs through to manufacture of clinical product.
The first stage of the consolidation of the Group’s San Diego biomanufacturing operations is on track, and the transfer of the Group’s biomanufacturing process and analytical development group to the new facility at Lusk Boulevard, San Diego, is underway. The Group has commissioned the design work for stage two of the manufacturing operation at the Lusk facility and, subject to securing funding, expects to complete the build-out of the facility during calendar year 2019.
The Group is encouraged by the revenue growth demonstrated in the second half of FY2018 and is targeting annual revenue growth in FY2019 at a slightly higher rate to that seen for FY2018. Growth in FY2019 is expected to be second-half weighted as projects mature through the Group’s combined service offering.
The Group recently strengthened the leadership team at its San Diego biomanufacturing business, with a focus on maximising the operational efficiencies achievable as a result of the recent significant facility and equipment investment. In addition, the Group expects to shortly appoint an Interim Chief Operating Officer who will have a broad remit across the Group’s service areas
The Board continues to monitor closely Abzena’s funding position. The Board has taken actions to reduce capital expenditure in the first half of the new financial year and is implementing a cost reduction programme to significantly reduce operating costs, with the benefits expected to be observed in FY2019 and beyond. This programme is designed to ensure Abzena’s resource base and infrastructure are optimised to meet its clients’ needs. Although the Board expects these actions to extend the cash runway of the Group significantly, additional working capital will be required to support the Group within the next twelve months and the Board is working with its advisers to explore appropriate options.
John Burt, Chief Executive Officer, Abzena plc, commented:
“We are building momentum towards the full realisation of our scientific and commercial potential. Notwithstanding the challenges to our original growth plans, we have seen increased engagement from a broadening portfolio of customers with Abzena’s talented scientific teams. This has driven the growth in the business, particularly in the second half of the year.
“We are starting to realise the benefits of the capital investment programme that we have pursued over the last year. At the same time, we are taking the necessary steps to ensure that the Group has its resources and infrastructure aligned to match customers’ increasing demands for our services and technologies.
“Abzena remains focused on effectively supporting our customers while driving our business through this transition period to sustainable growth.”
John Burt, Chief Executive Officer
Julian Smith, Chief Financial Officer
+44 1223 903498
Numis (Nominated Adviser and Broker)
Clare Terlouw / James Black / Paul Gillam
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N+1 Singer (Joint Broker)
Aubrey Powell / Liz Yong
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Melanie-Toyne Sewell / Alex Shaw / Deborah Bell
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Notes to Editors
Abzena (AIM: ABZA) provides proprietary technologies and complementary services to enable the development and manufacture of biopharmaceutical products.
The term ‘ABZENA Inside’ is used by Abzena to describe products that have been created using its proprietary technologies and are being developed by its partners, and include Composite Human Antibodies™ and ThioBridge™ Antibody Drug Conjugates (ADCs). Abzena has the potential to earn future licence fees, milestone payments and/or royalties on ‘ABZENA Inside’ products.
Abzena offers the following services and technologies across its principal sites in Cambridge (UK), San Diego, California (USA) and Bristol, Pennsylvania (USA):
- Biology research studies, including immunogenicity assessment of candidate biopharmaceutical products and bioassay development;
- Protein engineering to create humanized antibodies and deimmunised therapeutic proteins;
- Cell line development for the manufacture of recombinant proteins and antibodies;
- Contract process development and GMP manufacture of biopharmaceuticals, including monoclonal antibodies and recombinant proteins for preclinical and clinical studies;
- Contract synthetic chemistry and bioconjugation research services, focused on antibody-drug conjugates (ADCs);
- Proprietary site-specific conjugation technologies and novel payloads for ADC development;
- GMP manufacturing of ADC linkers, payloads & combined linker-payloads; and
- GMP analytical services for biopharmaceutical manufacturing projects.