Crucell Announces Second Quarter 2009 Results

• In the second quarter of 2009 total revenues and other operating income increased by 32% to €78.7 million, compared to €59.6 million in the same period of 2008. The increase was mainly driven by growth in sales of the pentavalent children's vaccine Quinvaxem®, despite some phasing of shipments into the second half of the year. Travel vaccines and other products also showed double digit sales growth.
• Crucell announced collaboration with the PATH Malaria Vaccine Initiative (MVI) and the United States Agency for International Development (USAID) Malaria Vaccine Development Program (MVDP) to accelerate development of its malaria vaccine.
• Crucell announced positive results of a second Phase II clinical study of its rabies monoclonal antibodies, which started in May 2008 (the Philippines).
• Crucell signed a non-exclusive PER.C6® research license agreement with  Momotaro-Gene Inc. for the production of a gene therapy product for the treatment of prostate cancer, including the right to perform a first-in-man Phase I clinical trial program.
• Crucell signed a non-exclusive PER.C6® research license agreement with Australian-based Patrys Ltd. for the production of several undisclosed antibodies.
• Construction of our new vaccine manufacturing facility in Korea, which started in December 2008, is progressing well. Structural work on the site has been completed and electrical and mechanical engineering is progressing according to plan. First test runs are planned for the first half of 2010.

• Combined total revenues and other operating income for the second quarter were €78.7 million, compared to €59.6 million in the same quarter of 2008. The increase of 32% was mainly driven by growth in sales of our paediatric vaccines, in particular Quinvaxem®. Travel vaccines and other products also showed double digit sales growth.
• Gross margins were 39% in the quarter, compared to 36% in the second quarter of 2008. Although our margins improved significantly versus last year, a stronger Swiss Franc against the Euro and Korean Won against the US Dollar increased costs and offset the margin improvement. These currency effects will continue to put pressure on margins.
• The Company achieved operating profit of €3.2 million in the second quarter of 2009. This represents a significant improvement over the €9.0[3] million operating loss in the same quarter of 2008. Income tax charges and currency effects resulted in a net loss of €1.8 million in the quarter, a significant improvement compared to a net loss of €7.4 million in the same quarter of 2008.
• Income taxes were €2.2 million in the second quarter, mainly payable in Korea and Sweden. Income tax charge compared to profit before tax is relatively high. Operating profits in Korea and Sweden are partially offset by an operating loss in the Netherlands, effectively reducing profit before tax on a consolidated basis.
• Net cash used in operating activities in the second quarter was €6.9 million, down from €18.0 million used in the same quarter of 2008.
• Cash used in investing activities amounted to €10.1 million, reflecting the capital investment in our new plant in Korea.
• Cash and cash equivalents at the end of the second quarter of €121.6 million, versus €171.0 million at year-end 2008.

• Quinvaxem®: Fully liquid pentavalent vaccine against five important childhood diseases.
• Hepavax-Gene®: Recombinant vaccine against hepatitis B.
• Epaxal® Junior: Paediatric dose (0.25mL) of Epaxal®, the only aluminum-free vaccine against hepatitis A for use in children.
• MoRu-Viraten®: Vaccine for protection against measles and rubella (for all age groups).

• Epaxal®: Aluminum-free vaccine against hepatitis A.
• Vivotif®: Oral vaccine against typhoid fever.
• Dukoral®: Oral vaccine against cholera and diarrhea caused by ETEC (enterotoxigenic E. coli).

• Inflexal® V: A virosomal adjuvanted vaccine against influenza (for all age groups). Due to the seasonality of the product, we build inventory in the first half of the year to sell flu vaccines in the second half of the year.

• Flavimun® - Live Attenuated Yellow Fever Vaccine: Flavimun® was submitted for registration in Switzerland in March 2009. Submission in Germany is expected before the end of 2009.

• Influenza - Seasonal Flu Vaccine (FluCell collaboration with sanofi pasteur): This seasonal influenza vaccine is being developed by Crucell's partner sanofi pasteur, using PER.C6® technology. Phase II testing of the cell-based influenza vaccine was initiated in the USA in November 2007. In the third quarter of 2008, Crucell received a milestone payment from sanofi pasteur for progress of the Phase II trials involving healthy adult volunteers in the USA. The trials focus on the safety profile and immunogenicity of the cell-based vaccine. All data collected so far confirm that the PER.C6® cell line supports the growth of all flu virus strains in high quantities. The cell line has also been found to be commercially scalable to any desired scale and no problems related to the PER.C6® cell line have been encountered to date.

• Rabies Human Monoclonal Antibody Combination (CL 184): Crucell's monoclonal antibody combination against rabies is being developed in close collaboration with sanofi pasteur using Crucell's PER.C6® manufacturing technology. In 2008, Crucell initiated two Phase II studies in the USA and the Philippines. Promising Phase I data in 2007 showed no serious adverse effects and demonstrated the expected rabies neutralizing activity upon administration. The rabies human monoclonal antibody combination was granted a Fast Track designation by the FDA Department of Health and Human Services, ensuring priority handling of the regulatory dossier. Under the terms of the collaboration agreement with sanofi pasteur, Crucell will be responsible for manufacturing the commercial product and has retained exclusive distribution rights in Europe, co-exclusive distribution rights in China and the rights to sell to supranational organizations such as UNICEF, while sanofi pasteur will have exclusive distribution rights for all other territories and co-exclusive distribution rights in China. This antibody combination is designed to be used in combination with a rabies vaccine for post-exposure prophylaxis (PEP) against this fatal disease.
• Positive preliminary results of our Phase II US study were presented to rabies experts at the 19th annual RITA meeting in Atlanta on October 1, 2008. These results triggered another milestone payment from sanofi pasteur at the end of September, as part of the total eligible amount of €66.5 million.
• A second Phase II clinical study evaluating the monoclonal antibody combination together with a rabies vaccine in healthy children and adolescents was conducted in the Philippines from May to October 2008. The completion of this study triggered another milestone payment from sanofi pasteur, at the end of October. In June 2009, Crucell announced the results of the Philippines study, which showed that the antibody combination was safe and well tolerated. Neutralizing activity levels in subjects given the antibody product were similar to those in subjects given human immunoglobulin (HRIG), the current standard for inducing immediate, passive immunity. All study participants reached adequate immunity levels. This study in children further broadens the potential patient population for Crucell's rabies monoclonal antibody combination. Detailed results of this study will be presented at the XX Rabies in the Americas RITA conference in Quebec, Canada on 18-23 October 2009.
• An additional Phase II study in healthy adults evaluating Crucell's monoclonal antibody in combination with a rabies vaccine is scheduled to start in India in the second half of 2009.  

• Tuberculosis Vaccine based on AdVac®/PER.C6® Technologies:  Development of the candidate vaccine AERAS-402/Crucell Ad35 is being carried out in collaboration with the Aeras Global TB Vaccine Foundation. Data from all AERAS-402/Crucell Ad35 trials support the immunogenicity and acceptable safety profile of the TB vaccine candidate at all dose levels evaluated.
• Phase I: US Phase I trial in healthy adults not previously immunized with Bacille Calmette-Guérin (BCG), the traditional TB vaccine, has been completed and has demonstrated that AERAS-402/Crucell Ad35 is safe in this population.
• Results of a second study in South Africa showed encouraging results, notably CD8-cell immune responses that are much higher than those seen in humans in any previous TB vaccine study.
• Two Phase I studies in healthy adults in St. Louis, USA, focusing on the immunogenicity and safety of two AERAS-402/Crucell Ad35 boost doses administered at three to six month intervals after BCG priming in healthy adults have been completed. Data from these studies specifically indicate that two injections of AERAS-402/Crucell Ad35 are immunogenic, with an acceptable safety profile, when used with a BCG-prime/AERAS-402/Crucell Ad35 in BCG vaccinated healthy adults regardless of the boosting interval. This immune response is greater than that detected in the absence of BCG prime, supporting the possible utility of AERAS-402/Crucell Ad35 as a booster vaccine. BCG prime alone shows limited efficacy.
• In October 2008, a Phase I clinical trial of the jointly developed TB vaccine was started in Kenya. The study is being conducted by the KEMRI/Walter Reed Project-Kisumu at their Kombewa Clinical Trials Center near Kisumu, in Western Kenya. Its main objective will be to test the safety of the candidate vaccine in BCG-vaccinated adults with or without latent tuberculosis. This study is fully enrolled and now in its follow-up period, with no safety issues identified.
• In April 2009, a Phase I clinical trial in infants of the jointly developed TB vaccine candidate AERAS-402/Crucell Ad35 was started in South Africa. This is the first clinical trial designed to test this vaccine candidate in infants. The Phase I study of AERAS-402/Crucell Ad35 will be conducted by the South African Tuberculosis Vaccine Initiative (SATVI) in the Western Cape region of South Africa. The main objective of the study will be to test the safety of the TB vaccine candidate in infants previously vaccinated with BCG vaccine, which is currently the only vaccine licensed to help prevent TB.
• Phase II:  In October 2008 enrollment for the first Phase II study of AERAS-402/Crucell Ad35 in Cape Town, South Africa was started. The study is being conducted by the University of Cape Town Lung Institute in conjunction with the South African Tuberculosis Vaccine Initiative. The candidate is being tested in 82 adults who have had active TB. No evidence of an unacceptable safety issue has been found in its dose escalation design after enrollment and vaccination of 48 subjects to date.

• Malaria Vaccine based on AdVac®/PER.C6® Technologies: Crucell and its collaborator, the US National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), are conducting a Phase I trial in the USA for a recombinant malaria vaccine, Ad35-CS, based on the company's AdVac® technology and PER.C6® manufacturing platform. The vaccine candidate is made by inserting the gene for the circumsporozoite protein (CSP) from the Plasmodium falciparum malaria parasite into adenoviral vectors, which act as a 'vehicle' for vaccination delivery. The study is being carried out at two sites, Vanderbilt University in Nashville, Tennessee and Stanford University in Palo Alto, California. All four cohorts have been enrolled, and ongoing safety monitoring has revealed no significant safety concerns to date. Boost vaccinations for the fourth and final group of volunteers is underway. Preliminary examination of the blinded data from the first three cohorts indicates that the vaccine is immunogenic. Detailed analysis of the data awaits completion of the fourth cohort and unblinding of the data. 
• In July 2009 Crucell announced a new collaboration with US-based MVI and USAID MVDP to accelerate development of a promising new type of malaria vaccine. Through funding from the USAID MVDP, the partners will conduct studies to determine the effectiveness of Crucell's novel prime-boost vaccine approach against the malaria parasite P. falciparum. This approach uses Crucell's proprietary recombinant adenoviruses (a type of virus associated with the common cold and other mild respiratory infections), to deliver a malaria antigen to the immune system. Using Crucell's AdVac® technology with two different adenovirus vectors-Ad35 and Ad26-as delivery mechanisms, this approach seeks to elicit a protective immune response obtained from delivering the circumsporozoite protein (CSP).

• Multivalent Filovirus (Ebola & Marburg) Vaccine based on AdVac®/PER.C6® Technologies: In October 2008 Crucell announced that it has secured a NIAID/NIH contract to advance the development of Ebola and Marburg vaccines, with the ultimate aim of developing a multivalent filovirus vaccine. The contract provides funding of up to $30 million, with additional options, which may be triggered at the discretion of the NIH, worth a further $40 million. The Phase I study of an adenovirus 5 (Ad5)-based Ebola vaccine that Crucell is developing in partnership with the Vaccine Research Center (VRC) of the NIAID/NIH, showed safety and immunogenicity at the doses evaluated. Based on these results, a second Phase I study of an Ebola and/or Marburg vaccine is anticipated. This will use alternative multivalent adenovirus vectors that are able to bypass pre-existing immunity against Ad5.

• HIV Vaccine based on AdVac®/PER.C6® Technologies: The Investigational New Drug Application (IND) for Phase I of the trial with Harvard Medical School (supported by the NIH) was approved by the FDA in January 2008. In April 2008, Crucell announced the start of a Phase I clinical study of the novel recombinant HIV vaccine, using adenovirus serotype 26 (rAd26) as vector, that Crucell is jointly developing with the Beth Israel Deaconess Medical Center. The rAd26 vector is specifically designed to avoid the pre-existing immunity to the more commonly used adenovirus serotype 5 (Ad5). The Phase I clinical study is being conducted at the Brigham and Women's Hospital in Boston, USA and is focused on assessing the safety and immunogenicity of the vaccine. Enrollment is ongoing and involves 48 healthy volunteers. Dose escalation has proceeded without difficulty and the third cohort (10^11 vp/dose) has been fully enrolled. Boost vaccinations are ongoing.

• Alternative Adenovirus Serotype Technologies: In November 2008, the leading scientific journal Nature published a study that demonstrated the value of Crucell's alternative adenovirus serotype technologies. Using Crucell's AdVac® vaccine technology and PER.C6® manufacturing technology, scientists engineered the rare adenovirus serotypes Ad26 and Ad35 to express a protein of SIV, the non-human primate equivalent of HIV. Rare serotype adenoviral vectors-such as rAd26 and rAd35 vectors- have been developed by Crucell to provide more potent prime-boost vaccine regimens. The study, which investigated the immunogenicity and protective efficacy of different vaccination regimes using rAd26, rAd35 or rAd5 as a prime, followed by a boost with rAd5, showed that in particular the rAd26/rAd5 combination elicits a strong T-cell immune response and provides protection against the HIV-like virus in non-human primate models. Crucell has several vaccines in development using alternative rAd26 and rAd35 vectors, including vaccines against malaria and tuberculosis.

• Human Monoclonal Antibodies against a broad range of Influenza strains: Crucell's scientists discovered a set of human monoclonal antibodies that provides immediate protection and neutralizes the broadest range of H5N1 strains in preclinical models. When the most powerful of these antibodies was tested in preclinical models for prevention or treatment of a potentially lethal H5N1 infection, it was shown to prevent death and cure the disease.
• In a preclinical study, Crucell's mAb CR6261 was compared with the anti-influenza drug oseltamivir (Tamiflu) in terms of its value for flu prevention and treatment. In December 2008, Crucell announced that its monoclonal antibody strongly outperformed the anti-influenza drug in these tests. The results were presented at IBC's 19th Annual International Conference on Antibody Engineering in San Diego, USA.
• The flu strains tested included the 'bird flu' strain H5N1, which experts fear has the potential to cause a pandemic, and H1N1, which is similar to the flu virus strain H1N1, a descendant of the flu virus that caused the devastating pandemic in 1918. Importantly, the study showed that CR6261 provides immediate protection against the influenza virus, suggesting that it will be able to prevent disease spread. In contrast, oseltamivir was less efficacious and in some cases not effective at all. The characterization of the antibody was described in the online journal PLoS ONE on December 16, 2008.

• Hepatitis C Antibody Combination: Crucell has obtained an exclusive license from Stanford University (Palo Alto, California) for the development of an antibody combination against the Hepatitis C virus. A large panel of fully human monoclonal antibodies against the Hepatitis C virus (HCV) is being evaluated by Crucell in a proof of concept phase. The monoclonal antibodies have been found to neutralize HCV across all genotypes tested and each recognizes a different part of the HCV surface protein.

• Blood Coagulation Factor VL/C: Preclinical work on this program continues but conclusive proof of concept is not expected in the near future.

• Crucell today announces a non-exclusive PER.C6® research license agreement with Japan-based Momotaro-Gene Inc. for the production of an adenovirus-vectored gene therapy product for the treatment of prostate cancer, including the right to perform a first-in-man Phase I clinical trial program. Financial details of the agreement were not disclosed. [June 2009]

• Production of influenza virus for the production of vaccines using PER.C6® technology, in the USA (2 patents)
• Production of viruses for the production of vaccines using PER.C6® technology, in the USA
• Aspects of improved adenoviral AdVac® vectors and AdVac® technology, in Hong Kong
• AdVac®-based malaria vaccines, in the USA
• Production of antibody fragments using PER.C6® expression technology, in the USA
• Improvements in PER.C6® expression technology, in Hong Kong
• Elements of STAR® technology, in Israel
• Targeting of adenovirus to specific cell types, in Europe

• In July 2009 the PANFLUVAC consortium consisting of eight European research partners, including Crucell, completed the first stage of their phase I clinical trial in healthy volunteers, using a virosomal vaccine against A/H5N1 influenza.

• Crucell today announces a non-exclusive PER.C6® research license agreement with Australian-based Patrys Ltd. for the production of several undisclosed antibodies. Financial details of the agreement were not disclosed. [July 2009]

• Crucell expects its combined full-year 2009 total revenues and other operating income to grow 20% in constant currencies. 
• Operating profit for 2009 is expected to improve significantly compared to 2008.
• Furthermore, the Company expects solid cash flow despite significant investments in the new facility being built in Korea. These investments are expected to total approximately €50 million, with the majority of spending in 2009.
• Crucell does not expect its results to be materially affected by the global recession. 

• Strategic risks: Concentration of sales; Use of our technologies by our partners or licensees; and Competition & pricing pressures
• Operational risks: Product development and clinical trials; Interrupted product supply; Regulatory approval; Intellectual property; Product liability exposure; Qualified personnel; Hazardous biological materials; and Competition laws.
• Financial risks: Substantial use of capital; Weakness in the global economy; Foreign currency risk; and Taxation.
• Compliance and other risks: Ethical legal and social issues related to the use of genetic technology; Protective measures included in articles of association; Not able to exercise pre-emption rights; Difficulties protecting interests in a Dutch limited liability company; and Share price volatility

• The condensed consolidated interim financial statements for the period ended June 30, 2009 give a true and fair view of the assets, liabilities, financial position and the profit or loss of the Group;
• The Directors' report gives a true and fair view of the Group's position as per June 30, 2009, the developments during the first six months of 2009 and of the expected developments, whereby, unless there are important reasons for not doing so, particular attention has been devoted to the investments and the circumstances on which the development of turnover and profitability depends.

• Condensed Consolidated Statements of Income
• Condensed Consolidated Statements of Comprehensive Income
• Condensed Consolidated Statements of Financial Position
• Condensed Consolidated Statements of Changes in Equity
• Condensed Consolidated Statements of Cash Flows

• Revenue recognition
• Valuation of deferred tax assets and liabilities
• Impairment reviews of property, plant and equipment, intangible assets and goodwill
• Valuation of defined benefit plans
• Recognition of provisions for litigations and claims

PDF file including financials