Shares at Cambridge Antibody Technology have taken a battering after the UK biotechnology firm confirmed what many analysts had predicted, namely that it will not become a profitable concern by 2008, as the firm had originally forecast.
CAT was issuing its results for the six months ended March 31, which showed that net loss was reduced 9.4% to £16.3 million, while revenues increased 16% to £9.8 million. However, the disillusionment of the market was not especially echoed by the firm, which said that it “does not now believe that its previously articulated goal of achieving profitability by 2008 remains in shareholders’ interests, as it would severely limit the company’s capacity to invest in the opportunities available to it over the next five years.”
Specifically, CAT believes that its recent deal with AstraZeneca, which saw the latter take a 20% stake in the firm and the announcement of a plan for the two companies to work on at least 25 new drug discovery programmes [[22/11/04f]] will be enough to put CAT “in a sustainable position” by 2008, but not push it into profitability.
CAT’s coffers should also benefit from payments it shall receive for the rheumatoid arthritis drug, Humira (adalimumab) from Abbott Laboratories after the UK firm won a lawsuit to increase the level of royalty payments it was receiving from the US major [[20/12/04c]], though the ruling is being disputed by Abbott [[15/02/05c]].
Still the news about no profits upset investors and analysts, but John Senior of Evolution Securities said the announcement was pretty academic following the news that CAT abandoned plans to develop Trabio (lerdelimumab), a treatment for the eye disease glaucoma, after a second Phase III trial failed to meet its clinical endpoints [[23/03/05c]].