Reports and Releases
FIT Biotech gives an update on its operational directions under new management
FIT BIOTECH OY
COMPANY RELEASE 20 May 2016
FIT Biotech gives an update on its operational directions under new management
The Board of Directors of the Finnish biotechnology company FIT Biotech Oy (NASDAQ: FITBIO) has today approved its new business plan, based on its strategy and following the nomination of the new CEO, Mr. James Kuo. The following is a summary of its strategy and current operational activities, together with insofar non-published details regarding the timing of the expected research results, current grant application processes and status of its licence agreement.
Business environment and strategic focus
The size of the global pharmaceutical market keeps growing and has by now exceeded the USD trillion milestone. The markets are showing that biological pharmaceuticals are strengthening their position in the treatment of various diseases: the pharmaceutical markets as a whole are expected to grow 4-7% per year, whereas the corresponding number for biological pharmaceuticals is 11%. In addition to biological and chemical drugs, gene-based treatments are becoming more and more common on the pharmaceutical market. In gene-based treatments, the genes transported into cells by vectors induce the cell to produce a desired protein with a therapeutic effect on the target disease. This is a rapidly growing market area, and many large pharmaceutical companies have recently entered into high value deals with biotechnology companies based on their early stage research results.
These market developments further strengthen FIT Biotech's belief that its strategy of focusing on gene-based treatments is the right one, and that its future development projects should concentrate on this area.
FIT Biotech's current product development portfolio consists of several drug candidates that share the GTU vector platform. The goal is to demonstrate proof-of-concept of the drug candidates in pre-clinical studies and then licence the further development of the drug candidates to business partners. These studies are conducted either by FIT Biotech alone or in collaboration with partners. The company has recently reviewed comprehensively its patent and IPR strategy and respective protections, and assessed it to be well aligned with the business strategy.
During this spring, FIT Biotech achieved positive pre-clinical results concerning the suitability of its GTU technology to gene-based treatments, and is continuing respective extended pre-clinical studies with the goal of demonstrating proof-of-concept. These proof-of-concept results - if positive - would both enable the company to start negotiating with pharmaceutical partners about licencing agreements, and also permit the company to continue to clinical trials. Currently FIT Biotech expects to receive the results of the proof-of-concept studies in early August this year.
In April, FIT Biotech entered into collaboration agreement with Ichor Medical Systems in US concerning a study in which FIT Biotech's GTU technology will be combined with Ichor's electroporation system. If the test results are favourable, the partners intend to incorporate the GTU technology with Ichor's electroporation system to be used in further testing as well as other development programmes for gene-based treatments against an array of serious diseases. The study results are expected to be available at the end of this year.
In January, FIT Biotech started the research collaboration with several international research institutes and two major multinational pharmaceutical companies (European HIV Vaccine Alliance, EHVA) where the drug candidate based on FIT Biotech's GTU technology had been chosen for clinical studies. This undertaking is funded by European Commission grant of EUR 22 million. Out of this, FIT Biotech has been allocated to receive approximately EUR 1 million for the purpose of covering its costs related to this project. The project is expected to run until 2021.
FIT Biotech is participating in an international consortium which has submitted a grant application to the Innovative Medicines Initiative 2 (IMI2), which is a joint project of the European Commission and the European Federation of Pharmaceutical Industries and Associations (EFPIA), coordinated by the French government research institute INSERM. In this project, FIT Biotech would be providing its technology for in vivo production of antibodies. The research results would be utilised as gene-based treatment. The grant decision is pending with expected timing for this fall.
In addition to this, FIT Biotech is also part of an international collaboration seeking a potential grant for the purpose of investigating the suitability of GTU technology for preventing infectious diseases through gene-based treatments. In this, the company adheres to its strategy by obtaining financing from third parties for its confirmatory studies.
FIT Biotech has a close strategic collaboration with Icosagen Group in Estonia, and has outsourced many of its laboratory studies to be conducted there. With the recent strategic shift towards gene-based treatments, the companies are reworking the scope of their collaboration arrangements and agreements to ensure the success of the (pre-) clinical trials in the future. The 2013 license agreement targets development of gene vaccines against bovine papilloma virus. The bovine papilloma virus vaccine project has not proven successful as reported earlier, and therefore the parties intend to focus on developing gene based treatments against papillomavirus through passive immunization instead of active vaccination. An amended license agreement is underway.
Due to the current strategic focus, FIT Biotech is concentrating its resources on the above projects. Other already started development projects, such as collaboration with QYH Biotech in China, will be carried forward as they proceed. However, the company has currently reduced expectations from the QYH project. Other non-relevant research projects, such as Ebola virus vaccine, have been either discontinued or are on hold. The company is currently investigating the possibility of gearing up its laboratory and production capabilities for the purposes of future scalability.
As published prior to this release, the company is in the process of securing the capital resources it needs in order to conduct the necessary proof-of-concept studies as well as entering into the next stage of development, and to ensure the continuity of its operations and implementing its business plan. The current success in pre-clinical studies, international collaborations as well as strengthening of the top management have placed the company in a better position to investigate financing opportunities and liquidity internationally.
Mr. James Kuo, CEO of FIT Biotech Oy, stated: "FIT Biotech is entering into a highly interesting stage of its development right now. The market for gene-based treatments is growing rapidly, and we have seen some very large deals done in the market recently. We are at the right place at the right time; now we need to carry our activities forward to the next level."
Chairman of the Board
FIT Biotech Oy
Telephone: +358 50 372 0824
Certified Advisor: Translink Corporate Finance Oy, telephone +358 20 743 2790
FIT Biotech Oy in brief
FIT Biotech Oy is a biotechnology company established in 1995. The company develops and licenses its patented Gene Transport Unit vector technologies (GTU®; gtGTU®) for new-generation medical treatments. FIT Biotech's gene transport technologies meet a significant medical challenge in the usability of gene based treatments and therapeutic DNA vaccines. FIT Biotech applies and develops the vector technologies in its drug development programmes. Examples of application areas include cancer (gene based treatments), infectious diseases such as HIV and tuberculosis, and animal vaccines.
FIT Biotech shares are listed on the First North Finland market maintained by Nasdaq OMX Helsinki Oy. The trading code of the company is FITBIO.
This company release contains certain forward-looking statements relating to our business, including our plans to develop drug and gene delivery technologies and/or DNA vaccines, our expectations regarding our research and development programs and our capital resources. Actual events or results may differ from the expectations set forth herein as a result of a number of factors, including uncertainties inherent in pre-clinical studies, clinical trials and product development programs (including, but not limited to, the fact that pre-clinical and clinical results referenced in this release may not be indicative of results achievable in other trials or for other indications, that the studies or trials may not be successful or achieve the results desired, including safety and efficacy, that pre-clinical studies and clinical trials may not commence or be completed in the time periods anticipated, that results from one study may not necessarily be reflected or supported by the results of other similar studies and that results from an animal study may not be indicative of results achievable in human studies), the availability of funding to support continuing research and studies in an effort to prove safety and efficacy of our technology as a delivery mechanism, our ability to support our pipeline of active gene-based treatment and vaccine products, the ability of our collaborators to attain development and commercial milestones for products we license and product sales that will enable us to receive future payments and royalties, the adequacy of our capital resources, the availability or potential availability of alternative therapies or treatments for the conditions targeted by the company or its collaborators, including alternatives that may be more efficacious or cost-effective than any therapy or treatment that the company and its collaborators hope to develop, our ability to enter into partnerships in conjunction with our research and development programs, evaluation of potential opportunities, issues involving product liability, issues involving patents and whether they or licenses to them will provide the company with meaningful protection from others using the covered technologies, whether such proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity and whether the company can finance or devote other significant resources that may be necessary to prosecute, protect or defend them, the level of corporate expenditures, assessments of the company's technology by potential corporate or other partners or collaborators, capital market conditions, the impact of government healthcare proposals and other factors set forth in our publications and/or filings from time to time. There can be no assurance that any product in company's pipeline will be successfully developed or manufactured, that final results of clinical studies will be supportive of regulatory approvals required to market licensed products, or that any of the forward-looking information provided herein will be proven accurate. FIT Biotech does not assume any obligation to update any forward-looking statements contained herein unless required by applicable legislation.
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 BCC Research: Biologic Therapeutic Drugs: Technologies and Global Markets, January 2015.