Ark Announces a Major Business Re-Structuring, a Significant Reduction In Its Fixed Cost Base and the Appointment of a New Chairman
London, UK, 9 September 2010: Ark Therapeutics Group plc ("Ark" or the "Company") announces today a strategic re-structuring of its business along with organisational changes as summarised below.
· The Company will focus its resources on the development and licensing of its advanced gene technology platforms; progress its exciting early stage product pipeline through appropriate R&D collaborations with industrial partners and exploit the utilisation of, and revenue generating opportunities for, its established proprietary technology systems, process development and scale-up capabilities and facilities based in Kuopio, Finland.
· The Company will re-focus its internal R&D resources principally on four therapeutic programmes:
o The proprietary VEGF-D programmes already in early clinical trials in refractory angina and peripheral vascular disease being developed in collaboration with the AI Virtanen Institute in Finland.
o The Neuropilin-1 and Foetal Growth Restriction pre-clinical programmes being developed in collaboration with University College London.
The Company will seek to partner programmes at an appropriate stage of development thereby accessing the knowledge and expertise of larger partners whilst also increasing the probability of regulatory and commercial success. To this end each of these programmes has already attracted interest from potential collaborative partners and it is anticipated that at least one of these projects will be partnered in 2011.
· The Group has developed a world leading manufacturing capability in Kuopio, Finland with state-of-the-art facilities and the management and personnel skills to develop and validate manufacturing processes for a wide range of virally delivered and other biological products. A major focus will be to exploit this capability to create further value.
· Whilst over the last few months the Company has made progress with the development of Trinam®, the Board has concluded that a partner or licensee should be sought as the cost of development, the internal resource requirement and the clinical risk/reward ratio in this clinical setting is no longer appropriate for a Company of Ark's size. In addition the Company will continue its efforts to out-license Cerepro®. It should be noted, however, that future cash flow requirements for the re-shaped Company do not rely on any upside from either of these products.
· With the Company now reshaped and repositioned for the future, Andrew Christie has decided to step down from his role as Chairman. Iain Ross, who has been working closely with the Board and Martyn Williams, CEO, to re-structure the business, has agreed to take on the role of Executive Chairman. Mr Christie has agreed to remain on the Board for a limited time to ensure an orderly transition and until a new independent non-executive director with product development experience is appointed.
· As a result of the initiatives above the Company will further reduce its overall headcount thereby significantly reducing the fixed cost base of the business and approximately halving the Group's ongoing net monthly cash burn. Taking into account the one-off costs of re-structuring of the business and the income generating initiatives already underway, including the sale of the Company's woundcare business, the directors believe the Company will have sufficient funds to support the business into 2013 by which time some significant value inflection points will have been established.
Martyn Williams, CEO of Ark, said: "We believe that this restructuring will enable Ark to maximise the value from our core strengths while significantly reducing the risk profile of the business. With a much reduced cash burn and a leaner, more focused operation, Ark is now better positioned to deliver shareholder value."
For further information:
Ark Therapeutics Group plc Tel: + 44 (0)20 7388 7722 Martyn Williams, CEO Iain Ross, Chairman Financial Dynamics Tel: +44 (0)20 7831 3113 Ben Atwell Susan Quigley
Notes to Editors
Ark Therapeutics Group plc
Ark Therapeutics Group plc is a specialist healthcare group (the "Group") addressing high value areas of unmet medical need within vascular disease and cancer. These are large and growing markets, where opportunities exist for effective new products to generate significant revenues.
Ark has an early stage pipeline emanating from collaborations with University College, London and the AI Virtanen Institute in Kuopio, Finland, the development of which it intends to progress in collaboration with pharmaceutical and biotech partners.
In addition Ark has the ability to off-set a proportion of its R&D costs and to generate sustainable revenues through the exploitation of its proprietary technology platform, process development, scale-up and manufacturing capabilities on behalf of third parties.
Ark has its origins in businesses established in the mid-1990s by Professor John Martin and Mr Stephen Barker of University College London and Professor Seppo Ylä-Herttuala of the AI Virtanen Institute at the University of Kuopio, Finland, all of whom remain consultants on the Company's research and development programmes.
Ark's shares were first listed on the London Stock Exchange in March 2004 (AKT.L).
This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Group's products and services), and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in forward-looking statements include those relating to Ark's funding requirements, regulatory approvals, clinical trials, reliance on third parties, intellectual property, key personnel and other factors. These forward-looking statements speak only as at the date of this announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.
Posted: September 2010