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:
- 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.
- 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."