MGC Pharmaceuticals - June 2023 Quarter Activity Report and Cash Flow
28/07/2023 08:00
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RNS Number : 5469H MGC Pharmaceuticals Limited 28 July 2023
June 2023 Quarter Activity Report and
Cash Flow Statement
28 July 2023
ASX Code: MXC
LSE Code: MXC
Key Highlights:
· CannEpil®, MGC Pharma's Investigational Medicinal Product
("IMP") is now available in the United Kingdom by Named Patient Request to be
prescribed by doctors on The General Medical Council ("GMC") specialist
register across the UK.
· The first UK patient has received CannEpil® through the 'I AM
Billy Foundation', supporting the RESCAS study.
· MGC's Maltese fully automated, large scale pharmaceutical
production facility has now been granted EU-Good Manufacturing Practice (GMP)
certification.
· MGC Pharma has received permission from the Slovenian Ministry of
Health to undergo research with Psilocybin.
· UK led fundraising closed on 13 April 2023, raising a total of
£1,204,525 (A$2,204,281) (before expenses).
MGC Pharmaceuticals Ltd (MGC Pharma, MGC or the Company) a European based
pharmaceutical company specialising in the production and development of plant
derived medicines, is pleased to provide its Quarterly Activity Report for the
three months ending 30(th) June 2023.
Roby Zomer, Managing Director and CEO of MGC Pharma, commented: "We are
delighted to report on a very productive June quarter for the business.
Cannepil is now available in the UK and can be prescribed by doctors on the
GMC and it has been received by the first UK patient through the 'I AM Billy
Foundation'. The Company has also received permission from the Slovenian
Ministry of Health to undergo research with Psilocybin which reinforces our
commitment to growth and innovation as we look to expand our presence in the
growing industry of Psychedelics."
Key Company Activities
CannEpil® Approved to Specialist Register for GMC Prescription in the UK
CannEpil®, MGC Pharma's Investigational Medicinal Product ("IMP") is now
available in the United Kingdom by Named Patient Request to be prescribed by
doctors on The General Medical Council ("GMC") specialist register across the
UK. The products will be supplied in order to meet the needs of individual
patients where an unmet medical need exists. The availability via Named
Patient Request follows the announcement that MGC Pharma is
providing CannEpil® to an observational trial supported by the 'I am Billy
Foundation'.
As announced on 31 May 2023 CannEpil®, MGC Pharma's Investigational Medicinal
Product ("IMP") has now been successfully imported and received by its first
patients in the United Kingdom. The first UK patient has received CannEpil®
through the 'I AM Billy Foundation', supporting the RESCAS study.
Additionally, the Company has delivered CannEpil® to its first patient in the
UK via the Named Patient Request programme.
CannEpil® is in the process of a clinical development programme for patients
suffering from refractory (or drug-resistant) epilepsy.
Malta Production Facility- EU GMP Approval Granted
MGC's Maltese fully automated, large scale pharmaceutical production facility
has now been granted EU-Good Manufacturing Practice (GMP) certification.
A formal grant of GMP accreditation, an internationally recognised standard,
guarantees high quality, standardised production protocols and further enables
quality control of MGC proprietary products within key markets globally. The
facility was built with the support of an 80% EU cash funded grant from Malta
Enterprises, with the facility commissioned during 2022.
The facility will be able to produce all MGC medicines and supplements and
will be able to provide third party production services for other
pharmaceutical companies - adding a new potential revenue stream for MGC
Pharma. MGC's in house production capacity in Malta is now over 20,000 units a
day of finished dose forms, which can support all future needs of CannEpil®
and CimetrA™ once marketing authorisation is obtained in the USA and Europe.
Slovenian Ministry of Health approval for research with Psilocybin
MGC Pharma has received permission from the Slovenian Ministry of Health to
undergo scientific research development on the psychedelic compound
Psilocybin. The permission granted covers the development of analytical
methods, research of physical-chemical properties of Psilocybin and
development of pharmaceutical forms that would be suitable for administration.
MGC Pharma is one of the first companies to obtain permission to undertake
pharmaceutical research on Psilocybin and the first in Slovenia. The company
plans to work with other pharmaceutical businesses to collaborate and provide
research capabilities for understanding the properties of Psilocybin. This
approval will allow MGC to take the Psychedelic industry one step closer to
the pharmaceutical industry by helping to develop and research new medicines
based on Psilocybin, and for MGC to provide such services to the growing
industry of Psychedelics.
June Quarter Sales Update
June Quarter Sales Update MGC Pharma revenue in the June quarter were in line
with the quarterly average sales.
Funding and Cash Flow Reporting
As announced on 11 April 2023, the Company successfully raised £1.2 million
(A$2.7m) (before expenses) by way of a conditional placing of 476,132,620 new
ordinary shares of no-par value in the capital of the Company at a price of
0.44 pence (0.8 cents) per Placing Share, and 238,066,311 Fundraise Options.
The Placing was supported by a mix of new and existing institutional and high
net worth shareholder in both the UK and Australia, including Premier Miton
and Cantheon Capital, in addition to the supplementary Broker Option raise.
At the end of the June, the Company has ~A$259k of cash on hand, and ~A$7.7m
(US$5.2m) of funding capacity available under the Mercer US$10m Convertible
Securities facility.
Accompanying this Activity Report is a Cash Flow Report for the Quarter ending
30 June 2023.
In accordance with ASX Listing Rule 4.7C.3 the Company advises that during the
June 2023 quarter, payments to related parties totalled A$196k, which
consisted of fees paid to executive and non-executive directors of the
Company.
As detailed in the accompanying Appendix 4C (Quarterly Cashflow Report),
cashflows during the quarter included A$404k cash outflows associated with
inventory production, A$921k for administration costs (including product
registration costs), and cash inflows of A$3.4m including funding received
from the Placement conducted in April.
Activities Post Quarter End
Post quarter end, the Company conditionally raised £0.65 million (A$1.24
million) (before expenses) by way of a placing (Placing) and subscription
(Subscription) of 541,666,667 new ordinary shares of no-par value (Ordinary
Shares) in the capital of the Company (Fundraising Shares) at a price of 0.12
pence (0.23 cents) per Fundraising Share ("Issue Price"). The Company also
agreed to issue one free attaching option exercisable at 0.12 pence (0.23
cents) with an expiry date of 14 July 2026 for every one Fundraising Share
subscribed for under the Placement and Subscription.
Additionally, the Company has raised £50,000 (A$95,000) from Roby Zomer, CEO
and Managing Director of the Company, pursuant to a convertible loan agreement
(CLA). The CLA allows Mr Zomer to provide an investment without requiring
advanced shareholder approval, which would otherwise be required for a direct
subscription. Additionally, certain members of the Company's management team
are subscribing for Ordinary Shares directly with the Company pursuant to
subscription letters.
Corporate and Commercial News
Appointment of Joint Broker
As stated on 30 May 2023, Oberon Capital has been appointed as a joint broker
in the UK with immediate effect alongside Peterhouse Capital.
Appointment of Public and Investor Relations Advisor
IFC Advisory has been appointed as the Company's new UK-based Public and
Investor Relations advisers. The IFC team have in-depth experience in the
pharmaceutical sector and will support MGC in its stated forward trajectory.
Personnel changes
On 1 June 2023 Mr Brett Mitchell and Mr Nativ Segev, stepped down from the
Board, reflecting the changing direction of the Company as MGC Pharmaceuticals
moves away from the medicinal cannabis sector toward a more pharma-focused
business strategy.
Dr Stephen Parker, currently Non-Executive Director of the Company, has
replaced Mr Mitchell as interim Non-Executive Chair. The Company will appoint
a new Australian non-executive director ensuring compliance with section
201A(2) of the Corporations Act and the ASX Listing Rules.
MGC Pharma has also appointed Mr. Layton Mills as a Non-Executive Director of
the Company. Mr. Mills is an experienced life-sciences executive, having
worked in the biotechnology and life sciences industries for over 15 years,
developing significant experience across human and animal health in
pharmaceutical and consumer healthcare.
Change of Australian Registered Office and Principal Place of Business
The Company's Australian registered office and principal place of business
have changed to the following:
Registered Office: Postal Address: Telephone: Fax:
Suite 1, 295 Rokeby Road Suite 1, 295 Rokeby Road +61 8 6555 2950 +61 8 6166 0261
Subiaco WA 6008 Subiaco WA 6008
Authorised for release by the board of directors, for further information
please contact:
MGC Pharmaceuticals Ltd MGC Pharmaceuticals Ltd
Roby Zomer Rowan Harland
CEO & Managing Director Company Secretary
+61 8 6555 2950 +61 8 6555 2950
info@mgcpharma.co.uk (mailto:info@mgcpharma.co.uk) info@mgcpharma.co.uk (mailto:info@mgcpharma.co.uk)
UK Brokers UK Brokers
Peterhouse Capital Oberon Capital
Charles Goodfellow / Lucy Williams / Duncan Vasey Aimee McCusker / Adam Pollock
+44 207 469 0930 +44 203 179 5300
cg@peterhousecap.com (mailto:cg@peterhousecap.com) / lw@peterhousecap.com aimeemccusker@oberoninvestments.com
(mailto:lw@peterhousecap.com) (mailto:aimeemccusker@oberoninvestments.com) adampollock@oberoninvestments.com
(mailto:adampollock@oberoninvestments.com)
UK IR/PR Advisers
IFC Advisory
Graham Herring / Tim Metcalfe / Zach Cohen
+44 203 934 6630
mgcpharma@investor-focus.co.uk (mailto:mgcpharma@investor-focus.co.uk)
About MGC Pharma
MGC Pharmaceuticals Ltd (LSE: MXC, ASX: MXC) is a European based
pharmaceutical company, focused on developing and supplying accessible and
ethically produced plant derived medicines, combining in-house research with
innovative technologies, with the goal of finding or producing treatments to
for unmet medical conditions.
The Company's founders and executives are key figures in the global
pharmaceuticals industry and the core business strategy is to develop and
supply high quality plant inspired medicines for the growing demand in the
medical markets in Europe, North America and Australasia.
MGC Pharma has a robust development pipeline targeting two widespread medical
conditions and has further products under development.
MGC Pharma has partnered with renowned institutions and academia to optimise
the development of targeted plant inspired medicines, to be produced in the
Company's EU-GMP Certified manufacturing facilities.
MGC Pharma has a growing patient base in Australia, the UK, Brazil and Ireland
and has a global distribution footprint via an extensive network of commercial
partners meaning that it is poised to supply the global market.
Follow us through our social media channels:
LinkedIn: MGC Pharmaceuticals Ltd.
Twitter: @MGC_Pharma
Facebook: @mgcpharmaceuticals
Instagram: @mgc_pharma
Appendix 4C
Quarterly cash flow report for entities
subject to Listing Rule 4.7B
Name of entity
MGC PHARMACEUTICALS LTD
ABN Quarter ended ("current quarter")
30 116 800 269 30 June 2023
Consolidated statement of cash flows Current quarter $A'000 Year to date (12 months)
$A'000
1. Cash flows from operating activities 691
4,079
1.1 Receipts from customers
1.2 Payments for (213) (1,777)
(a) research and development
(b) product manufacturing and operating costs (404) (2,502)
i) cost of sales / inventory
ii) operating costs - (2)
(c) advertising and marketing (191) (701)
(d) leased assets - -
(e) staff costs (1,627) (5,989)
(f) administration and corporate costs (including product (921) (4,913)
registrations)
1.3 Dividends received (see note 3) - -
1.4 Interest received - 44
1.5 Interest and other costs of finance paid (2) (2)
1.6 Income taxes paid - (2)
1.7 Government grants and tax incentives 2 1,162
1.8 Other (GST/VAT refund) - 619
1.9 Net cash from / (used in) operating activities (2,664) (9,984)
2. Cash flows from investing activities Current quarter Year to date (12 months)
$A'000
$A'000
2.1 Payments to acquire:
(a) entities - -
(b) businesses - -
(c) property, plant and equipment (16) (739)
(d) investments - -
(e) intellectual property - -
(f) other non-current assets - -
2.2 Proceeds from disposal of: - -
(a) entities
(b) businesses - -
(c) property, plant and equipment - -
(d) investments - -
(e) intellectual property - -
(f) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (cash acquired through assets acquisition) - -
2.6 Net cash from / (used in) investing activities (16) (739)
3. Cash flows from financing activities Current quarter Year to date (12 months)
$A'000
$A'000
3.1 Proceeds from issues of equity securities (excluding convertible debt 2,698 2,698
securities)
3.2 Proceeds from issue of convertible debt securities - 6,948
3.3 Proceeds from exercise of options - -
3.4 Transaction costs related to issues of equity securities or convertible debt (81) (81)
securities
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other (loan entity which where control was gained after quarter-end) - -
3.10 Net cash from / (used in) financing activities 2,617 9,565
4. Net increase / (decrease) in cash and cash equivalents for the period Current quarter Year to date (12 months)
$A'000
$A'000
4.1 Cash and cash equivalents at beginning of period 315 1,886
4.2 Net cash from / (used in) operating activities (item 1.9 above) (2,664) (9,984)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (16) (738)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 2,617 9,565
4.5 Effect of movement in exchange rates on cash held 6 (470)
4.6 Cash and cash equivalents at end of quarter 259 259
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash
$A'000
$A'000
flows) to the related items in the accounts
5.1 Bank balances 233 289
5.2 Call deposits 26 26
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 259 315
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included 196
in item 1
6.2 Aggregate amount of payments to related parties and their associates included -
in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
The payments in 6.1 are payments to directors of the company for their service
during the quarter.
7. Financing facilities available Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements available to the entity.
$A'000
$A'000
Add notes as necessary for an understanding of the sources of finance
available to the entity.
7.1 Loan facilities - -
7.2 Credit standby arrangements - -
7.3 Other (please specify) 14,600 6,948
7.4 Total financing facilities 14,600 6,948
7.5 Unused financing facilities available at quarter - 7,652
end
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
$14.6M Convertible note facility with Mercer Street Opportunity Fund LLC.
Refer to ASX announcement on 29 July 2022 for further information.
8. Estimated cash available for future operating activities $A'000
8.1 Net cash from / (used in) operating activities (Item 1.9) (2,664)
8.2 Cash and cash equivalents at quarter end (Item 4.6) 259
8.3 Unused finance facilities available at quarter end (Item 7.5) 7,652
8.4 Total available funding (Item 8.2 + Item 8.3) 7,910
8.5 Estimated quarters of funding available (Item 8.4 divided by Item 8.1) 3.0
Note: if the entity has reported positive net operating cash flows in
item 1.9, answer item 8.5 as "N/A". Otherwise, a figure for the estimated
quarters of funding available must be included in item 8.5.
8.6 If Item 8.5 is less than 2 quarters, please provide answers to the following
questions:
1. Does the entity expect that it will continue to have
the current level of net operating cash flows for the time being and, if not,
why not?
Answer: N/A
2. Has the entity taken any steps, or does it propose to
take any steps, to raise further cash to fund its operations and, if so, what
are those steps and how likely does it believe that they will be successful?
Answer: N/A
3. Does the entity expect to be able to continue its
operations and to meet its business objectives and, if so, on what basis?
Answer: N/A
Note: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2
and 8.6.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with
accounting standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
27 July 2023
Date:
...................................................................................
[lodge
electronically without signature]
Authorised by:
...................................................................................
Roby Zomer -
Managing Director
Notes
1. This quarterly cash flow report and the accompanying
activity report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and the effect
this has had on its cash position. An entity that wishes to disclose
additional information over and above the minimum required under the Listing
Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 107: Statement of Cash Flows apply to this report. If this
quarterly cash flow report has been prepared in accordance with other
accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the
corresponding equivalent standard applies to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities, depending
on the accounting policy of the entity.
4. If this report has been authorised for release to the
market by your board of directors, you can insert here: "By the board". If it
has been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - eg Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the
market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations, the board should have
received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this
report complies with the appropriate accounting standards and gives a true and
fair view of the cash flows of the entity, and that their opinion has been
formed on the basis of a sound system of risk management and internal control
which is operating effectively.
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