REG - Cizzle Biotechnology - Interim results
28/09/2022 07:01
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RNS Number : 9078A Cizzle Biotechnology Holdings PLC 28 September 2022
28 September 2022
Cizzle Biotechnology Holdings Plc
("Cizzle", the "Company" or the "Group")
Interim results for the six months ended 30 June 2022
Cizzle Biotechnology Holdings PLC (LSE: CIZ), the UK based diagnostics
developer, is pleased to announce its interim results for the six months ended
30 June 2022.
Highlights
· On 14 February 2022 the Group announced a royalty acquisition
agreement with Conduit Pharmaceuticals Ltd ("Conduit") and St George Street
Capital ("SGSC") to acquire a 5% economic interest in the commercialisation of
the AZD1656 asset or such other assets being developed by Conduit or SGSC to
treat inflammatory pulmonary and cardiovascular diseases, for a total
consideration of £1.88m. The initial consideration of £1m was settled
through the issue of 25,000,000 new ordinary shares at a price of 4.0p per
share, with the remaining consideration of £880,000 payable in new ordinary
shares in the Company issued at 4.0 pence per share, on the sooner of
receiving shareholder approval to issue the shares or 14 February 2023.
· Spread the global reach of the Group's technology to both China and
the USA, where there is much need for the use of the early detection of lung
cancer tests:
o China: On 8 February 2022 a full commercial agreement was executed to
develop and market early lung cancer diagnostic tests in China. This agreement
will generate future revenues for the Group via a 10% royalty on the sales of
all products and services using its proprietary CIZ1B technology and from
payment for monoclonal antibodies and reagents.
o USA:
§ On 6 May 2022 the Group announced that it had signed a heads of terms to
partner with CorePath Laboratories (CorePath), a full service cancer reference
laboratory, to develop and offer its proprietary early-stage lung cancer test
throughout the USA. The proposal is that the Group would receive a 15% royalty
and royalty sharing arrangements on the direct offering of products and
services using CIZ1B via CorePath in the USA.
§ On 16 June 2022 a marketing agreement was signed with Behnke Group, USA, to
promote, identify and facilitate partnerships for Cizzle with healthcare
providers and businesses in the USA.
· On 11 April 2022 a new 12 month research agreement was signed with
the University of York, a member of the Russell Group of research-intensive
universities and one of the world's premier institutions for inspirational and
life-changing research, for the development of potential applications in
cancer diagnosis and therapy.
Post Period Highlights
· In July 2022 the Company provided an update on the Company's progress
to develop antibodies for use in its proprietary early lung cancer tests, and
to announce a new project that may extend the range of early-stage cancers
that its technology can detect. The Company reported that it was developing a
range of monoclonal antibodies to detect CIZ1B, that additional suppliers have
been engaged, and that it has a mouse monoclonal antibody that specifically
detects CIZ1B. Assay conditions for its use are now being optimised, and
further work is being done to isolate rabbit monoclonals arising from the
Company's initial proof of concept studies.
· In August 2022 LanceteClinical Medicine reported the results of
SGSC's Phase 2 clinical trial, ARCADIA. Cizzle has royalty sharing rights for
the commercialisation of AZD1656 for COVID-19 and other indications, including
inflammatory pulmonary and cardiovascular disease. SGSC is progressing
commercial discussions with potential pharmaceutical partners to fund the
additional clinical studies required and to bring AZD1656 to the market.
· In September 2022 the Company raised gross proceeds of £500,000 by
way of an equity subscription and secured a £500,000 facility to draw down on
further funds for a term of 18 months.
Commenting Allan Syms, Chairman of Cizzle Biotechnology, said:
"The Group made significant progress during the first half of 2022 towards
meeting its goal to bring to market a simple blood test capable of detecting
lung cancer early when clinical intervention can improve patient survival
rates. As reported previously, every two minutes someone is diagnosed with
cancer in the UK alone* and for lung cancer this is compounded by the fact
that in its early stage, it can be asymptomatic and remain undetected until
the disease has advanced. Our focus is therefore, to develop simple,
inexpensive, blood tests for early cancer detection that can help save lives.
A number of key milestones were met during the period including development of
the key antibodies and reagents for our early-stage cancer test and securing
important royalty bearing development and marketing collaborations in the USA
and China. We have also extended our research agreement with the University of
York to investigate the use of our biomarker in detecting other cancers.
"Looking forward we have ambitions to expand our target customer base in the
pharmaceutical industry through building a portfolio of early cancer detection
tests, companion diagnostics and royalty bearing stakes in significant drug
assets. In the longer term our technology may have application for screening
in doctor's office testing and In addition, for developing diagnostic products
which can be used to identify which patients may prove most likely to respond
to new drugs with the least side effect burden to patients. Our partnership
with SGSC is important in this regard since our first companion diagnostic
will be the delivery of a contracted test for autoimmune disease.
"We were also delighted to announce on 21 September 2022 that we have secured
additional funding of up to £1m (before expenses) to continue implementing
our strategy. This funding brings in new important shareholders to support our
ambitions and I would like to thank our new funders and existing shareholders
for their support. I look forward to reporting further progress in due
course."
*
https://www.cancerresearchuk.org/health-professional/cancer-statistics-for-the-uk#heading-Zero
Executive Chairman's statement
Operational and strategic overview
Since the completion of the acquisition of Cizzle Biotechnology Ltd ("CBL") on
14 May 2021 and admission to trading on the London Stock Exchange the Group
has focussed on realising and commercialising, through systematic development,
CBL's technology for the early detection of cancer.
Research and Development Progress
Cizzle is developing a blood test for the early detection of lung cancer. Its
technology is based on the ability to detect a stable plasma biomarker, a
variant of CIZ1 known as CIZ1B. CIZ1 is a naturally occurring cell nuclear
protein involved in DNA replication, and the targeted CIZ1B variant is highly
correlated with early-stage lung cancer.
During 2021 the Company announced a collaboration with FairJourney Biologics
("FJB") for the development and supply of proprietary key monoclonal
antibodies and other detector proteins that are required for developing an
enzyme-linked immunosorbent assay (sandwich "ELISA"). Since that time the
Company has significantly increased its knowledge on reagent performance and
assay formats and is pleased to report that monoclonal reporter antibodies
have been successfully produced by FJB.
On 11 April 2022 a new 12 month research agreement was signed with the
University of York, a member of the Russell Group of research-intensive
universities and one of the world's premier institutions for inspirational and
life-changing research, for the development of potential applications in
cancer diagnosis and therapy. This new agreement, commencing for a period of
12 months from 25 June 2022, follows the successful programme announced on 17
September 2021 for the development and validation of molecular tools with
potential application in cancer diagnosis or therapy, and their configuration
into assays for Cizzle's proprietary cancer biomarker variants. Cizzle will
own all intellectual property rights arising from the work which strengthens
the Company's position in creating new solutions for early cancer diagnostics
and therapeutic tools.
In July 2022 the Company provided an update on the Company's progress to
develop antibodies for use in its proprietary early lung cancer tests, and to
announce a new project that may extend the range of early-stage cancers that
its technology can detect. The Company reported that it was developing a
range of monoclonal antibodies to detect CIZ1B, that additional suppliers have
been engaged, and that it has a mouse monoclonal antibody that specifically
detects CIZ1B. Assay conditions for its use are now being optimised, and
further work is being done to isolate rabbit monoclonals arising from the
Company's initial proof of concept studies.
Development of new future revenue stream
On 14 February 2022 the Group announced a royalty acquisition agreement with
Conduit and SGSC to acquire a 5% economic interest in the commercialisation of
the AZD1656 asset or such other assets being developed by Conduit or SGSC to
treat inflammatory pulmonary and cardiovascular disease, for total
consideration of £1.88m. The initial consideration of £1m was settled
through the issue of 25,000,000 new ordinary shares at a price of 4.0p per
share, with the remaining consideration of £0.88m payable in new ordinary
shares at 4.0p per share, on the sooner of receiving shareholder approval to
issue the shares or 14 February 2022.
Prior to this in September 2021 the Group entered into a royalty sharing
agreement with SGSC to grant the Group potential royalty payments from the
commercialisation of SGSC's therapeutic asset AZD1656 of up to £5m, plus
potentially further payments from the use of a companion diagnostic. During
2021 the Group paid a total of £0.2m for this investment.
Reaching Global Markets
During the six months to 30 June 2022 the Company extended its global reach of
the Group's technology to both China and the USA, where there is much need for
the use of the early detection of lung cancer tests:
· China: On 8 February 2022 a full commercial agreement was executed to
develop and market early lung cancer diagnostic tests in China. This agreement
will generate future revenues for the Group via a 10% royalty on the sales of
all products and services using its proprietary CIZ1B technology and from
payment for monoclonal antibodies and reagents.
· USA:
o On 6 May 2022 the Group announced that it had signed a heads of terms to
partner with CorePath Laboratories (CorePath), a full service cancer reference
laboratory, to develop and offer its proprietary early-stage lung cancer test
throughout the USA. The proposal is that the Group would receive a 15% royalty
and royalty sharing arrangements on the direct offering of products and
services using CIZ1B via CorePath in the USA.
o On 16 June 2022 a marketing agreement was signed with Behnke Group, USA,
to promote , identify and facilitate partnerships for Cizzle with healthcare
providers and businesses in the USA.
Funding
Post period end, in September 2022 the Company completed a fund raising
providing gross proceeds of £500,000 by way of a subscription for its shares
and secured a £500,000 facility to draw down on further funds for a term of
18 months, if required. The funds will be used to provide working capital for
the Company and to continue development of a laboratory-developed test ("LDT")
accredited service for the early detection of lung cancer and taking the
Company's proprietary CIZ1B biomarker blood test through to UKCA, CE marking
and/or FDA 510(k) clearance.
Financial overview
During the six months ended 30 June 2022, the Company continued its focus on
being a healthcare diagnostics developer. The Group consists of Cizzle
Biotechnology Holdings PLC as the parent company with wholly owned
subsidiaries, Cizzle Biotechnology Ltd ("CBL") and Cizzle Biotech Ltd
(formerly Enfis Ltd). The current Group structure was formed when the Company
completed the acquisition of CBL on 14 May 2021 and was admitted to trading on
the standard list of the London Stock Exchange.
The financial results for the six months to 30 June 2022 are summarised as
follows:
· Corporate expenses, before exceptional items: £345,000 (H1 2021:
£119,000).
· Exceptional corporate expenses relating to a share option charge:
£70,000 (H1 2021: £Nil)
· Taxation credit: £25,000 (H1 2021: £Nil)
· Total comprehensive loss in H1 2021: £390,000 (H1 2021, Loss
£3,238,000).
· Loss per share in H1 2021: (1.43)p, (H1 2021, Loss of (3.79)p).
· Cash balances as at 30 June 2022: £444,000 (30 June 2021 CBL:
£1,425,000).
Responsibility Statement
We confirm that to the best of our knowledge:
· the interim financial statements have been prepared in accordance
with International Accounting Standards 34, Interim Financial Reporting;
· give a true and fair view of the assets, liabilities, financial
position and loss of the Company;
· the Interim report includes a fair review of the information required
by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the set of interim financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
· the Interim report includes a fair review of the information required
by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information
required on related party transactions.
The interim report was approved by the Board of Directors and the above
responsibility statement was signed on its behalf by Allan Syms on 27
September 2022.
Enquiries:
Cizzle Biotechnology Holdings plc Via IFC Advisory
Allan Syms (Executive Chairman)
Allenby Capital Limited +44(0) 20 33285656
John Depasquale
Alex Brearley
Novum Securities Limited +44(0) 20 7399 9400
Colin Rowbury
Jon Bellis
IFC Advisory Limited +44(0) 20 3934 6630
Tim Metcalfe
Florence Chandler
About Cizzle Biotechnology
Cizzle Biotechnology is developing a blood test for the early detection of
lung cancer. Cizzle Biotechnology is a spin- out from the University of
York, founded in 2006 around the work of Professor Coverley and colleagues.
Its proof-of-concept prototype test is based on the ability to detect a stable
plasma biomarker, a variant of CIZ1 known as CIZ1B. CIZ1 is a naturally
occurring cell nuclear protein involved in DNA replication, and the targeted
CIZ1B variant is highly correlated with early-stage lung cancer.
For more information please see https://cizzlebiotechnology.com
(https://cizzlebiotechnology.com)
You can also follow the Company through its twitter account @CizzlePlc and on
LinkedIn.
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2022
Group Group Group
Six months ended Six months ended Year ended
30 June 2022 2021 31 December 2021
Unaudited Unaudited Audited
Notes £'000 £'000 £'000
Revenue - - -
Cost of Sales - - -
Gross Profit - - -
Administrative Expenses
-on going administrative expenses (345) (119) (552)
-share option charge (70) - (299)
- IPO transaction costs - (304) (303)
-reverse acquisition expenses - (2,815) (2,804)
Total administrative expenses including exceptional items (415) (3,238) (3,958)
Operating (Loss) and (loss) before income tax (415) (3,238) (3,958)
Income tax 3 25 - 37
(Loss) and total comprehensive income for the period attributable to the
equity shareholders of the parent
(390) (3,238) (3,921)
Earnings per share (Loss)- basic and diluted - pence 4 (1.43)p (3.79)p (2.4)p
Consolidated Statement of Financial Position
as at 30 June 2022
Group Group Group
30 June 30 June 31 December
2022 2021 2021
Notes Unaudited Unaudited Audited
£'000 £'000 £'000
Non-Current Assets
Intangible asset 2,080 - 200
Total Non-Current Assets 2,080 - 200
Current Assets
Trade and other receivables 87 99 80
Cash and cash equivalents 444 1,425 875
Total Current Assets 531 1,524 955
Total Assets 2,611 1,524 1,155
Equity
Ordinary shares 3,495 3,493 3,493
Share premium 33,564 31,521 32,566
Share capital reduction reserve 10,081 10,081 10,081
Share option reserve 405 13 335
Shares to be issued - deferred consideration 880 - -
Reverse acquisition reserve (40,021) (38,953) (40,021)
Retained losses (5,907) (4,833) (5,517)
Total equity
2,497 1,322
937
Liabilities
Current liabilities
Trade and other payables 114 202 218
Total current liabilities 114 202 218
Total equity and liabilities 2,611 1,524 1,155
Consolidated Statement of Cash Flows
For the six months ended 30 June 2022
Group Group Group
6 Months 6 Months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Cash flow from operating activities
(415) (3,238) (3,958)
Operating (loss) before tax
Adjustment for:
Reverse acquisition share based expense - 2,815 2,804
Share option charge 70 - 299
Transaction costs settled through share issue - - 32
Share based payment to former director - - 11
Operating cash flow before working capital movements (345) (423) (812)
Decrease / increase in trade and other receivable 18 (49) 7
(Decrease) / increase in trade and other payables (104) (116) (204)
Net cash used in operating activities (431) (588) (1,009)
Cash flow from investing activities
Cash acquired in acquisition of subsidiary - 46 46
Purchase of investment in intangible assets - - (200)
Net cash inflow / (outflow) from investing activities - 46 (154)
Cash flow from financing activities
Proceeds from the issue of ordinary shares (net of issue costs) 1,970 2,041
Borrowings repaid - (10) (10)
Net cash (outflow) / inflow from financing activities - 1,960 2,031
Net increase/ (decrease) in cash and cash equivalents (431) 1,418 868
Cash and cash equivalents at the start of the period 875 7 7
Cash and cash equivalents at the end of the period 444 1,425 875
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2022 (unaudited)
Group Ordinary Share Share Reverse Retained Total
Share Premium Capital Option Deferred consideration - shares to be issued Acquisition Losses
Capital Redemption Reserve Reserve
Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
£'000
At 1 January 2022 3,493 32,566 335 (40,021) (5,517) 937
10,081 -
Issue of shares for the acquisition of intangible asset 2 998 - - - 1,000
- -
Deferred consideration arising on the acquisition of an intangible asset - - - - - 880
- 880
Share option charge - - - 70 - - 70
-
Comprehensive Loss for the Period - - - - (390) (390)
- -
At 30 June 2022 3,495 33,564 405 (40,021) (5,907) 2,497
10,081 880
For the six months ended 30 June 2021 (unaudited)
Group Ordinary Share Share Reverse Retained Total
Share Premium Capital Option Acquisition Losses
Capital Redemption Reserve Reserve
Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 - - - - (1,595) (1,595)
-
Recognition of plc equity at acquisition date 3,470 8,852 - (38,953) - (16,550)
10,081
Issue of shares for acquisition of subsidiary 21 20,610 - - - 20,631
-
Issue of shares for cash 2 2,198 - - - - 2,200
Issue of shares in settlement of fees - 32 32
Issue of warrants - (13) - 13 - - -
Cost of share issue - (158) - - - - (158)
Comprehensive Loss for the Period - - - - (3,238) (3,238)
-
At 30 June 2021 3,493 31,521 13 (38,953) (4,833) 1,322
10,081
Consolidated Statement of Changes in Equity (continued)
For the year ended 31 December 2021 (Audited)
Group Ordinary Share Share Reverse Retained Total
Share Premium Capital Option Acquisition Losses
Capital Redemption Reserve Reserve
Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 3 1,585 - - (1,596) (8)
-
Issue of shares - 11 - - - 11
-
Transfer to reverse acquisition reserve (3) (1,596) - 1,599 - -
-
Recognition of plc equity at acquisition date 3,470 8,852 - (22,621) - (218)
10,081
Issue of shares for acquisition of subsidiary 21 21,679 - (21,803) - (103)
-
Reverse acquisition expense - - - 2,804 - 2,804
-
Issue of shares for cash 2 2,198 - - - 2,200
-
Issue of shares in settlement of fees - 32 - - - 32
-
Issue of warrants - (36) 36 - - -
-
Cost of share issue - (159) - - - - (159)
Share option charge - - - 299 - - 299
3,493 32,566 335 (40,021) (1,596) 4,858
10,081
Comprehensive Loss for the year - - - - (3,921) (3,921)
-
At 31 December 2021 3,493 32,566 335 (40,021) (5,517) 937
10,081
Notes to the financial statements
For the six months ended 30 June 2022 (unaudited)
1. Basis of preparation
These condensed interim financial statements have been prepared in accordance
with IAS 34 - Interim Financial Reporting using the recognition and
measurement principles of UK-adopted International Accounting Standards and
should be read in conjunction with the audited consolidated financial
statements of the Group for the year ended 31 December 2021.
The principal accounting policies used in preparing these condensed interim
financial statements are those expected to apply to the Group's Consolidated
Financial Statements for the year ending 31 December 2022.
The results for the six-months ended 30 June 2022 are the Group results.
The financial information for the six months ended 30 June 2022 is unaudited
and does not constitute statutory financial statements for those periods. The
financial information for the year ended 31 December 2021 has been extracted
from the audited financial statements for this period. The financial
information has been prepared in accordance with accounting policies
consistent with those set out in the Group financial statements for the year
ended 31 December 2021.
2. Continuing and discontinued operations
The Group is considered to have one class of business which is focused on the
early detection of lung cancer via the development of an immunoassay test for
the CIZ1B biomarker.
3. Income Tax
The Income tax credit of £25,000 for the six months ended 30 June 2022
relates to an accrual for the recovery of tax on research and development
expenditure. There was no income tax for the Group for the six months ended 30
June 2021 and an income tax credit of £37,000 for the year ended 31 December
2021.
4. Earnings per share
Group Group Group
6 months 6 months Year
ended ended ended
30 June 2022 30 June 2021 31 December 2021
Basic loss per share:
Total comprehensive (loss) - £'000 £(390) £(3,238) £(3,921)
Weighted number of Ordinary Shares - '000 271,956 85,448 160,516
(Loss) per share - operations - pence (1.43p) (3.79p) (2.4p)
As the Group result for the six months ended 30 June 2022, 30 June 2021 and
year ended 31 December 2021 is a loss, any exercise of share options or
warrants would have an anti-dilutive effect on earnings per share.
Consequently earnings per share and diluted earnings per share are the same,
as potentially dilutive share options have been excluded from the calculation.
5. Copies of Interim Report
Copies of this interim report are available upon request to members of the
public from the Company Secretary, SGH Company Secretaries Limited, 6(th)
Floor, 60 Gracechurch Street, London, EC3V 0HR. This interim report can also
be viewed on the Group's website: https://cizzlebiotechnology.com
(https://cizzlebiotechnology.com) .
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