Tripep AB (publ) - Interim Report for the period January-June 2001

Tripep AB (publ) - Interim Report for the period January-June 2001 · CTN 002, the phase II study of GPG®, continues. A status report including efficacy data will be presented on Monday, September 17, 2001. · Tripep's researchers have identified a candidate drug for hepatitis C, entailing a breakthrough for Tripep's research outside the GPG project. · 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 primarily on the company's patented technologies. The project that has developed the furthest is GPG®, a potential new inhibitory agent for HIV. GPG attacks the virus through a new mechanism of action, called protein polymerization inhibition (PPI). Owing to this unique mechanism of action, the substance has proved effective even in inhibiting growth of multiresistant strains of HIV. With its PPI technology, Tripep can develop additional candidate drugs for treating other chronic diseases, including substances that inhibit the hepatitis C virus and the inflammation protein TNF-alpha. Aside from the GPG® project, Tripep is conducting a number of research projects in the preclinical phase, all of which are based on the company's patented technologies. For a description of the company's technologies, we refer you to our website: www.tripep.se. Operations Research projects Based on the company's patented technologies, Tripep is engaged in eight research projects in four different areas. PPI, Protein Polymerization Inhibitors GPG® - GPG® is currently being tested in phase II studies on HIV infected patients. Hepatitis C - In collaboration with researchers at University College in Dublin, work is in progress on developing a candidate drug for treating hepatitis C. TNF-alpha - Research is under way on identifying agents that can inhibit the inflammatory protein TNF-á, which is significant in the clinical picture of chronic intestinal inflammation and rheumatoid arthritis, among other conditions. Redirecting Antibody Specificity (RAS) Staphylococcus Aureus - Research is under way of a novel method of attacking resistant staphylococci that cause nosocomial (hospital acquired) infections. PVC, Parvovirus-capsid PCV - In collaboration with Swedish Orphan, Tripep is developing a new candidate drug for polycythemia vera (PCV), a disease distinguished by uncontrolled growth of red blood cells, for which there is no effective treatment. Vaccines Hepatitis C - 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 vaccine research at trying to attain an immunity against stable components of hepatitis C, i.e., ones that cannot be changed by mutation. The discovery made by Tripep's researchers results in a considerably better immune response than that found by other research groups working with stable hepatitis C components. A patent application has been filed for this discovery, and the company intends to seek a commercial partner for further development of the vaccine. HIV 1 - Tripep's patented amino acid sequences are being used for research on a prophylactic HIV vaccine as well as a therapeutic vaccine to be used in combination with inhibitory agents. Collaboration surrounding this is in progress with the Vaccine Research Institute of San Diego, from which Tripep has inlicensed a very promising carrier technology which likely leads to better immune response than existing technologies. Hepatitis C - prophylactic vaccine Also in collaboration with the Vaccine Research Institute of San Diego, work is under way on developing a prophylactic vaccine targeted at hepatitis C. Ongoing studies CTN 002, the phase II study of GPG, is currently being conducted at twelve therapy centers in Europe - five in Sweden, three in Barcelona, two in Denmark, and one each in Rome and Helsinki. To date, approximately 30 patients are completed in the study. The code is being broken and evaluation of the test results will commence after the stock market closes on September 14, 2001. A status report including efficacy data will be presented on September 17, 2001. GPG is being administered to patients who are currently not responding adequately to treatment for HIV-1, in three dosage levels as a supplement to the treatment the patients are already receiving. This regimen is being conducted over the course of six weeks, with a four- week follow-up. Thus far in the study, GPG has been tolerated very well. Tripep will continue to include new patients in the study. The toxicological studies of GPG are progressing according to plan. The first long-term study (six months on rats) has been completed and analyzed. The study confirms the favorable safety profile of GPG. A twelve-month toxicological study (on mini pigs) was completed during the summer. Analysis is in progress. Research and development During the second quarter Tripep completed its own virological safety and organic chemistry laboratories. R&D resources also include own laboratories for cell culturing, peptide synthesis, molecular biology and analysis. Together with the recruitment made by the company, Tripep now has its own research resources required for further development of the projects included in its R&D pipeline. Collaboration agreements The company 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. Tripep's strategy is to develop parts of the company's project portfolio in collaboration with partners who can contribute both expertise and other resources. As previously reported, the company is working actively to reach a collaboration agreement surrounding its therapeutic hepatitis C vaccine. Clinical Advisory Board In order to help Tripep design, evaluate and strategically plan for future clinical studies, a Clinical Advisory Board (CAB) has been established. The CAB will meet at least twice a year to issue opinions on the continued development of GPG. The CAB is chaired by Professor Anders Sönnerborg. Other members are Professor Luc Perrin, Dr. Graeme Moyle, and Dr. Bonaventura Clotet, all very highly respected HIV specialists from various parts of Europe. The Board held its first meeting during the summer and discussed, above all, key issues concerning the design of future clinical studies ahead of initial meetings with the U.S. Food and Drug Administration. The 1st IAS Conference on HIV Pathogenesis and Treatment GPG, which exhibits a new mechanism of action for treatment of HIV, was presented at the 1st IAS Conference on HIV Pathogenesis and Treatment in Buenos Aires, which was held from July 8-11, 2001. A lecture and two posters were presented. These are available on Tripep's website: www.tripep.se. Both mechanisms of action for GPG and the outcome of CTN 003 - the clinical study of GPG on healthy volunteers - were presented. As previously reported, the study demonstrated that the pharmacodynamic effect of GPG, i.e., the effect it has in the body, remains longer than expected. Result 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 8.1 million (6.6) during the second quarter and approximately SEK 14.3 million (11.8) for the first half of 2001. Of this total, SEK 5.5 million (3.1) and SEK 10.0 million (8.8) pertained to costs for external researchers and subcontractors, respectively. Financial position The company's liquid assets amounted to SEK 193.2 million at June 30, 2001 (March 3, 2001: SEK 208.5 million). In addition, the company has a confirmed, unutilized conditional loan of SEK 15 million from the National Swedish Industrial Development Fund. The market value of short-term investments in fixed-income and other yield-generating funds was SEK 185.2 million at June 30, 2001. These generated a total return of 1.4 percent during the period. Shareholders' equity was SEK 178.8 million at June 30, 2001 (March 31, 2001: SEK 193.4 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, 422,400 are owned by the company. During the period, 53,880 Class A warrants were canceled. A total of 117,000 Class B warrants were sold to key persons at market price. The sale generated SEK 0.2 million, which was added directly to shareholders' equity. Capital expenditures During the second quarter the company's net capital expenditures in equipment amounted to approximately SEK 0.7 million (2.0). Net capital expenditures during the first half of 2001 totaled approximately SEK 1.1 million (4.8). Human resources At the end of the reporting period, the company had a staff of 49 (42 at the end of the first quarter), of whom 24 were employees (17 at the end of the first quarter). Since the end of the second quarter an additional two researchers have been hired. The company's active recruitment phase is now completed. Financial calendar Interim report January-September 2001 October 16 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 Accounting principles This interim report has been prepared in conformity with recommendation RR20 of the Swedish Financial Accounting Standards Council and using the same accounting and valuation principles as in the 2000 Annual Report. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/30/20010830BIT00040/bit0001.doc Full Report http://www.waymaker.net/bitonline/2001/08/30/20010830BIT00040/bit0001.pdf Full Report