US focus pays off for Cobra

The company recorded a pretax profit of £800,000 in the year, ended 30 September, compared to a pretax loss of £900,000 in fiscal 2002. The US accounted for just under a quarter of the added revenues, with two-thirds coming from repeat business. The importance of the US market is witnessed by the fact that the country accounts for 75 per cent of all biotechnological R&D spending.

Peter Fothergill, Cobra's chairman, noted that the company has reaped the benefit of a doubling of capacity in June for early-stage clinical supplies, through the acquisition of an additional manufacturing site in Oxford. This will serve as a dedicated process development and production unit, expanding Cobra's DNA and virus manufacturing capacity, and importantly will also support Phase I and II protein manufacture.

The facility, originally built by British Biotech for the Good Manufacturing Practice (GMP)-standard production of vaccines, is being completely refurbished. It has three manufacturing suites, one microbial, one animal cell and one equipped to manufacture either type of product will be fully validated and operational by the second quarter of 2004.

This expansion will give Cobra the capacity to support up to six GMP microbial and four animal cell programmes simultaneously and will also double its process development capability.

"This makes Cobra the only organisation that we know of able to offer customers all forms of biopharmaceutical products during their critical development phases,"​said Fothergill.

Going up-scale​

The company is also gearing up to expand its capacity to cope with the level of supply needed in Phase III trials and commercialisation, and already has a number of projects in place that look promising enough to advance to that stage of development. Cobra is looking into ways to get access to larger-scale facilities.

Fothergill expressed satisfaction that the company had achieved its hike in revenues despite a difficult environment for the biotechnology sector in the UK and Europe with regard to funding. The effect of this was a 27 per cent reduction in Cobra's contract manufacturing revenues in Continental Europe to £711,000, although the UK ducked the trend with a 158 per cent rise to £2.1 million.

David Thatcher, Cobra's chief executive, is optimistic that the worst of the biotechnology slump of the last couple of years is over. "Sentiment towards the US biotechnology sector has rebounded and 2003 is set to become the second best year ever in terms of financing,"​ he noted.

Meanwhile, although the reduced level of funds flowing into the biotechnology sector has weakened the overall market for Phase I/II biomanufacturing, the reduction in demand has been offset by the increasing involvement of non-governmental organisations in vaccines development and also investment by government agencies in measures to protect against bio-terrorism, said Thatcher.

Breaking down its revenues by product category, Cobra noted that plasmid DNA remained its largest business, with sales up 158 per cent to £3.2 million, helped by its positioning as a supplier of DNA vaccines for HIV. Cobra is manufacturing three DNA HIV/AIDS vaccine programmes sponsored by the International AIDS Vaccine Initiative (IAVI), two for the South African AIDS Vaccine Initiative (SAAVI) and two for the EUROVAC/CHIVAC Consortium.

Cobra is manufacturing the lead DNA vaccine for HIV, HIV.A, which has entered a Phase I/II trial in the UK and should generate results in the first quarter of next year. A second candidate (HIV.RENTA) is scheduled to start trials in early 2004, and a third will be in the clinic by the third quarter.

Protein manufacture revenues rose 179 per cent to £1.6 million, largely on the back of a contract to make a generic version of interferon, while virus manufacture rose 92 per cent to £1.1 million helped by the progress of projects in gene therapy. Finally, the proprietary cell line business advanced 4 per cent to £172,000