MGC Pharmaceuticals - March 2023 Quarterly Activities and Cash Flow
28/04/2023 07:13
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RNS Number : 8526X MGC Pharmaceuticals Limited 28 April 2023
MGC Pharmaceuticals Ltd.
March 2023 Quarter Activity Report and
Cash Flow Statement
28 April 2023
ASX, LSE: MXC
Key Highlights:
· Clinical trials to be used in the US FDA Investigational New Drug
submission continue to demonstrate the efficacy and the anti-inflammatory
effects of CimetrA™; these include pharmacokinetic profile and Mechanism of
Action studies.
· Over the Counter Status granted to COVID-19 treatment ArtemiC™
in the USA, can now be stocked on USA pharmacy shelves; supply and
distribution partner, AMC, has submitted a purchase order to the value of US$2
million following the listing on the National Drug Code Database.
· First patient enrolled in the ZAM app in association with an
observational trial for CannEpil® on patients with Refractory, or drug
resistant, Epilepsy.
· MGC Pharma concluded a successful fundraise of c. £2.09m post
quarter end supported by new and existing shareholders, brokers, and high net
worth individuals in both the UK and Australia.
MGC Pharmaceuticals Ltd ('MGC Pharma' or 'the Company') a European based
pharmaceutical company specialising in the production and development of plant
inspired medicines is pleased to provide its Quarterly Activity Report for the
three months ending 31(st) March 2023.
Roby Zomer, co-founder, Managing Director and CEO of MGC Pharmaceuticals,
commented: "The March quarter has proved significant for the Company as we
advance progress toward Investigational New Drug (IND) submission with the FDA
for key proprietary products, CimetrA™ and ArtemiC™. This clinical trial
pathway and pipeline have been major catalysts in the fundraise and activities
post quarter end, and we will continue to build on this momentum, increasing
our global retail footprint and meeting the highest standards of
pharmaceutical excellence."
Company Activities
CimetrA™
MGC Pharma completed pre-clinical rodent studies on CimetrA™ in January, a
major step in the clinical pathway to the targeted US Food and Drug
Administration (FDA) IND Submission. Research using rodent and mammalian
models were used to delineate the pharmacokinetic profile and general safety
of the drug, as well as identifying toxicity patterns over a given period for
the treatment before it advances to the next stage of trials, as stipulated in
the FDA criteria. No anomalies were observed over the course of the study, nor
were any clinical or behavioural adverse events recorded.
In March, the Company completed the pre-clinical study on CimetrA™,
exploring the Mechanism of Action (MoA) of the product. The study showed
that the administering of CimetrA™ following a stimulated immune response
resulted in a significant decrease in IL-32 mRNA expression and a subsequent
decrease in inflammation. This study was the final preclinical mechanism of
action study and will enable the Company to expand future trials to show its
efficacy against further indications. The study results will form part of
the FDA application to register CimetrA™ as an IND.
ArtemiC™
In March, ArtemiC™, MGC Pharma's proprietary, clinically tested COVID-19
treatment, was granted over-the-counter (OTC) status on the National Drug Code
Database (NDC) of the FDA, facilitated by MGC Pharma's supply and distribution
partner, AMC Pharma, LLC. ArtemiC™ can now be found on the FDA National
Drug Code Directory under the code: 83278.
OTC status means that AMC will be able to sell ArtemiC™ via US-based
Pharmacy Benefit Management (PBM) networks, including prescription discount
services, from April 2023. AMC are negotiating with the largest US pharmacy
networks, and independent pharmacies for the inclusion of ArtemiC™ in
shelf space now that the NDC has been listed, increasing retail access and
subsequent sales.
Following the NDC Listing, AMC submitted a purchase order for US$2m
of ArtemiC™, with production to commence immediately, for delivery in two
instalments in Q3 and Q4 of this year. The NDC status is a major breakthrough
for the company, as MGC Pharma works to expand global footprint and retail
access.
CannEpil® and ZAM
The first patient was enrolled in the Company's proprietary data collection
app and machine learning algorithm, ZAM, in order to log the data from an
observational study monitoring the effects of CannEpil®, MGC Pharma's
epilepsy treatment. The app is recording daily metrics from patients, their
symptoms, and the impact of their treatment in order to establish a baseline.
This will provide both MGC Pharma and medical practitioners with a detailed
record of the study and an enhanced understanding of the effects of CannEpil®
on Refractory Epilepsy patients.
March Quarter Sales Update
MGC Pharma revenue in the March quarter was lower than average mainly due to
seasonality issues with new year sales and establishing new pharma regulatory
approvals and distribution channels for CannEpil in the UK and key EU markets,
core activities that will build strong foundation for future growth.
Admin, staff and corporate costs were reduced by 3% in the March quarter due
to a costs rationalisation review.
Funding and Cash Flow Reporting
Using the US$10 million Convertible Securities Financing Facility with Mercer
Street Global Opportunity Fund, LLC, a fund managed by United States-based
institutional fund manager Mercer Street Capital Partners, LLC, MGC Pharma
drew down US$1,100,000 during the quarter. This will be used to fund working
capital requirements and to further our clinical trial pathway and pipeline.
At the end of March, the Company had ~A$315K of cash on hand, and ~A$7.65m
(US$5.05m) of funding capacity available under the Mercer US$10m Convertible
Securities facility.
Accompany this Activity Report is a Cash Flow Report for the Quarter ending 31
March 2023.
In accordance with ASX Listing Rule 4.7C.3 the Company advises that during the
March 2023 quarter, payments to related parties totalled A$172K, which
consisted of fees paid to executive and non-executive directors of the
Company.
As detailed in the accompany Appendix 4C (Quarterly Cash Flow Report),
cashflows during the quarter included $38K cash outflows associated with
inventory production, A$2.46m for administration costs (including product
registration costs), and cash inflows A$1.58m in funding received from the
drawdown of the Mercer Convertible Security facility.
Activities Post Quarter End
Post quarter end, the company successfully raised an aggregated £2.09 million
(A$3.82m) 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 shareholders in both the UK and Australia, including Premier Miton and
Cantheon Capital, in addition to the supplementary Broker Options raise.
Corporate and Commercial News
Over the course of the quarter, a number of personnel and advisor changes were
announced:
Appointment of Auditor
The Company appointed Australian Chartered Accounting firm, Hall Chadwick
Chartered Accounts ("Hall Chadwick"), as its external financial auditor,
following a review of the Company's external auditor arrangements, and its
cost reduction strategy. The board has selected Hall Chadwick based on their
expertise, capacity to undertake the 31 December 2022 audit review, and fee
structure. Hall Chadwick is also the Company's incumbent Australian taxation
advisor, which is expected to provide synergies in service delivery.
Personnel changes
The Board announced the resignation of non-executive director Mr Evan Hayes,
as part of the Company's transition to a dedicated life sciences
pharmaceuticals company. As a result of Mr Hayes' departure, MGC Pharma's
board will be reduced to 5 directors, with the Company continuing to evaluate
the composition of the board over the next 6 months to ensure that it reflects
its position as a European based life sciences pharmaceutical company.
Company Secretary and CFO
Tom Cairns, previously MGC's Group Financial Controller, was promoted to MGC
Pharma's Chief Accounting Officer (CFO equivalent).
Messrs Rowan Harland and Arron Canicais of SmallCap Corporate Pty Ltd, a Perth
based corporate advisory firm, have been appointed Joint Company Secretaries.
--Ends-
Authorised for release by the board of directors, for further information
please contact:
MGC Pharmaceuticals Ltd MGC Pharmaceuticals Ltd
Roby Zomer Arron Canicais / Rowan Harland
CEO & Managing Director Joint Company Secretaries
+61 8 6382 3390 +61 8 6382 3390
info@mgcpharma.com.au (mailto:info@mgcpharma.com.au) info@mgcpharma.co.uk (mailto:info@mgcpharma.co.uk)
UK PR Advisors UK Brokers
Tavistock Peterhouse Capital
Charles Vivian / Tim Pearson Charles Goodfellow / Lucy Williams / Duncan Vasey
+44 207 920 3150 +44 207 469 0930
mgcpharma@tavistock.co.uk (mailto:mgcpharma@tavistock.co.uk) cg@peterhousecap.com (mailto:cg@peterhousecap.com) / lw@peterhousecap.com
(mailto:lw@peterhousecap.com)
UK Financial Consultant
SW4 Partners
Rupert Fane / Nilesh Patel
rupert@sw4partners.com (mailto:rupert@sw4partners.com)
/ nilesh@sw4partners.com (mailto:nilesh@sw4partners.com)
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 inspired 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:
Twitter: @MGC_Pharma
Facebook: @mgcpharmaceuticals
LinkedIn: MGC Pharmaceuticals Ltd.
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 31 March 2023
Consolidated statement of cash flows Current quarter $A'000 Year to date
(9 months)
$A'000
1. Cash flows from operating activities 567
3,388
1.1 Receipts from customers
1.2 Payments for (328) (1,564)
(a) research and development
(b) product manufacturing and operating costs (38) (2,098)
i) cost of sales / inventory
ii) operating costs - (2)
(c) advertising and marketing (185) (510)
(d) leased assets - -
(e) staff costs (1,310) (4,362)
(f) administration and corporate costs (including product registrations) (1,146) (3,993)
1.3 Dividends received (see note 3) - -
1.4 Interest received - 44
1.5 Interest and other costs of finance paid - (0)
1.6 Income taxes paid - (2)
1.7 Government grants and tax incentives - 1,160
1.8 Other (GST/VAT refund) - 619
1.9 Net cash from / (used in) operating activities (2,440) (7,320)
2. Cash flows from investing activities Current quarter Year to date
$A'000
(9 months)
$A'000
2.1 Payments to acquire:
(a) entities - -
(b) businesses - -
(c) property, plant and equipment (20) (723)
(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 (20) (723)
3. Cash flows from financing activities Current quarter Year to date
$A'000
(9 months)
$A'000
3.1 Proceeds from issues of equity securities (excluding convertible debt - -
securities)
3.2 Proceeds from issue of convertible debt securities 1,582 6,948
3.3 Proceeds from exercise of options - -
3.4 Transaction costs related to issues of equity securities or convertible debt - -
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 1,582 6,948
4. Net increase / (decrease) in cash and cash equivalents for the period Current quarter Year to date (9 months)
$A'000
$A'000
4.1 Cash and cash equivalents at beginning of period 1,134 1,886
4.2 Net cash from / (used in) operating activities (item 1.9 above) (2,440) (7,320)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (20) (723)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 1,582 6,948
4.5 Effect of movement in exchange rates on cash held 60 (476)
4.6 Cash and cash equivalents at end of quarter 315 315
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 290 1,077
5.2 Call deposits 26 56
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) 315 1,134
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 172
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) (2,440)
8.2 Cash and cash equivalents at quarter end (Item 4.6) 315
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) 7,967
8.5 Estimated quarters of funding available (Item 8.4 divided by Item 8.1) 3.3
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.
28 April 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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