Q 3 2001 report English

Tripep AB (publ.) - Interim Report for the period January-September 2001 · In CTN 002, the ongoing phase II study of GPG®, treatment has been completed on a total of 27 patients, and efficacy analyses have been performed. Only three patients met the study's criteria for a positive response. As a result, the planned phase III program will not be started. · In-depth analysis of the results from CTN 002 continues. The best response, pertaining to a decline in the number of virus copies in the blood and the desired increase in CD4 cells, was obtained in the group with lowest dosage. · The company's resources are now being focused on the projects judged to have the fastest track to clinical use. Parallel with this, evaluation and negotiations surrounding the inlicensing of projects in clinical stages are being conducted. · The company does not yet have any revenue. Costs during the period were below budget. · Tripep's business mission is to develop and commercialize pharmaceuticals based on proprietary and inlicensed research. With its PPI (protein polymerization inhibition) technology, Tripep can develop candidate drugs for treating HIV and substances that inhibit the hepatitis C virus and the inflammation protein TNF-alpha. Tripep's second technology platform, RAS (Redirecting Antibody Specificity), involves redirecting existing antibodies in the body to attack a new target. Further, Tripep has inlicensed an additional technology, called parvovirus-capsid (PVC). For a description of the company's technologies, please visit our website: www.tripep.se. Operations Research projects Tripep is engaged in a number of research projects based on the company's patented technologies. PPI, Protein Polymerization Inhibitors With its PPI technology, Tripep is developing candidate drugs for treatment of HIV, the hepatitis C virus, and for inhibition of the inflammatory protein TNF-alpha. In view of the negative result of the ongoing phase II study of GPG®, a review is also being conducted of other projects based on the PPI technology. An intensive effort has been launched to find out why so few patients responded in the CTN 002 study and to develop methods for studying uptake, metabolism, secretion, etc. - all in the aim of investigating the conditions for resuming a clinical development program for GPG®. In addition, in its own research laboratories Tripep has developed a number of new substances with activity against the HIV virus. Patent applications have been filed for these. RAStm , Redirecting Antibody Specificity Staphylococcus Aureus - Research is under way of a novel method of attacking resistant staphylococci that cause nosocomial (hospital acquired) infections. A number of interesting substances have been identified for evaluation in models that closely resemble the clinical situation. PVC, Parvovirus-capsid PCV - Polycythemia vera is distinguished by the uncontrolled growth of red blood cells, a disease for which there is no effective treatment. In collaboration with Swedish Orphan, Tripep is developing new candidate drugs for this condition. Planning of preclinical studies is currently under way to evaluate the effect on the growth of red blood cells. Vaccines Hepatitis C, ChronVac-Ctm - therapeutic vaccine The problem of developing a drug targeted at hepatitis C is that, like HIV, this virus constantly mutates, thereby evading the immune system. Tripep's researchers have therefore directed their research at trying to attain an immunity against stable components of hepatitis C, i.e., components that cannot be changed by mutation. The discovery made by Tripep's researchers results in model system, in a considerably better immune response than that found by other research groups working with stable hepatitis C regions. A patent application has been filed for this discovery, and further development of the vaccine, ChronVac-Ctm, will be conducted with an industrial partner. HIV 1 - Tripep's patented amino acid sequences are used in research on a prophylactic HIV vaccine as well as on a therapeutic vaccine combined with inhibitory agents. Collaboration surrounding this is in progress with the Vaccine Research Institute of San Diego, from which Tripep has inlicensed a very interesting carrier technology which likely leads to better immune response than existing technologies. This collaboration is developing according to plan. Hepatitis C - prophylactic vaccine Tripep has the opportunity, in collaboration with the Vaccine Research Institute of San Diego, to work under development of a prophylactic vaccine targeted at hepatitis C. Ongoing studies In CTN 002, the ongoing phase II study of GPG®, treatment has been completed on a total of 27 patients, and efficacy analyses have been performed. Only three patients met the study's criteria for a positive response. The company has determined that in humans it has not been possible to satisfactorily reproduce the favorable HIV-inhibiting effect that has been achieved in test tubes. As a result, it is not possible to start the planned phase III study. In-depth analysis of the results from CTN 002 continues. Surprisingly, a decline in the number of virus copies and desired increase in CD4 cells was only seen in the group that received the lowest dosage. There can be many reasons for this, such as - in the case of the higher doses - a downward adjustment of the active uptake of GPG® from the intestines, or a breakdown of the active substance at higher doses with the current administration form (gelatin capsules). Following consultation with the Clinical Advisory Board, it has been decided that the remaining ten patients in the CTN 002 study, which is a peroral treatment study, will complete their treatment. No additional patients will be included in the study. A final report will be presented once the study is completed. In terms of safety profile, GPG® is very well tolerated. Patents Tripep's strategy is to establish patent protection in world regions that are important for the company, namely, North America, Europe and Asia. During the third quarter Tripep strengthened its patent portfolio with an additional eight patent applications. The company currently has 12 approved patents and 46 pending patents. Independent analysts have reviewed Tripep's patent portfolio and in their judgment it is sound. Collaboration agreements Tripep's strategy is to develop parts of the company's project portfolio in collaboration with partners that can contribute both expertise and other resources. Tripep has a collaboration agreement with Swedish Orphan on the development of a drug for treating polycythemia vera, a disease distinguished by the overproduction of red blood cells, and with the Vaccine Research Institute of San Diego on the development of a vaccine for HIV and a vaccine for hepatitis C. As previously reported, the company is working actively to reach a collaboration agreement on ChronVac-Ctm, its therapeutic hepatitis C vaccine. Inlicensing Since it is no longer likely that Tripep will be conducting phase III studies of GPG® under own management, the company will have overcapacity in the area of clinical studies once the CTN 002 study has been closed. The funds previously earmarked for the phase III program for GPG® will thus be available for other projects. In view of this, the Board has assigned the company management with the task of evaluating the possibility of inlicensing one or more preparations in the clinical stage. A number of such projects are currently being evaluated. Change on the Board of Directors Magnus Persson, a director on the board of Tripep AB (publ.), has announced that he is resigning from the Board with effect from October 4, 2001. Magnus Persson is a partner of HealthCap, which has sold its entire shareholding in Tripep AB (publ.). Earnings The company does not yet have any revenue. Costs during the period were below budget. The company's R&D expenditure amounted to approximately SEK 9.3 million (4.0) during the third quarter and approximately SEK 23.5 million (13.3) for the first nine months of 2001. Of this total, SEK 8.7 million (3.7) and SEK 21.8 million (10.5) pertained to costs for external researchers and subcontractors, respectively. Financial position The company's liquid assets amounted to SEK 178.6 million at September 30, 2001 (June 30, 2001: SEK 193.2 million). In addition, the company has a confirmed, unutilized conditional loan of SEK 15 million from the Swedish Industrial Development Fund. Since it is now unlikely that Tripep will be conducting phase III studies of GPG® under its own management, this can entail that the conditional loan will not be used. In such case, 75,000 options that the Industrial Development Fund holds will be returned to the company's ownership. Tripep does not need to raise additional capital for the next three-year period. The market value of short-term investments in fixed-income and other yield-generating funds was SEK 171.7 million at September 30, 2001. These generated a total return of 2.8 percent during the period. Shareholders' equity was SEK 167.1 million at September 30, 2001 (June 30, 2001: SEK 178.8 million). The company's capital stock of SEK 2,750,000 is distributed among 13,750,000 shares with a par value of SEK 0.20 each. In addition, warrants corresponding to 2,121,120 shares have been issued. Of these, 432,400 are owned by the company. Previously, 53,880 Class A options were canceled. A total of 97,000 Class B options were sold to key persons at market price. The sale generated SEK 0.2 million, which was added directly to shareholders' equity. After the end of the reporting period, 10,000 Class C options were sold to company employees at market price. The sale generated SEK 0.005 million, which was added directly to shareholders' equity. After the end of the reporting period, the Swedish Industrial Development Fund called the subscription of 100,000 shares at a price of SEK 0.20 per share, in accordance with previously issued options. Capital expenditures During the third quarter the company's net capital expenditures in equipment amounted to approximately SEK 0.1 million (0.2). Net capital expenditures during the first nine months of 2001 totaled approximately SEK 3.4 million (2.1). Human resources At the end of the reporting period, the company had a staff of 51 (49 at the end of the second quarter), of whom 26 were employees (24 at the end of the second quarter). Financial calendar Year-end report for the 2001 financial year January 25, 2002 Annual Report 2001 March 2002 Annual General Meeting for the 2001 financial year April 2002 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/16/20011016BIT00150/bit0002.doc Full Report http://www.waymaker.net/bitonline/2001/10/16/20011016BIT00150/bit0002.pdf Full Report