REG - Destiny Pharma PLC - Audited results for year ended 31 December 2022
13/04/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230413:nRSM0386Wa&default-theme=true
RNS Number : 0386W Destiny Pharma PLC 13 April 2023
Destiny Pharma plc
("Destiny Pharma" or "the Company")
Audited results for the year ended 31 December 2022
Exclusive North American partnering deal worth up to $570m plus royalties
secured for NTCD-M3
Phase 3 development plans finalised for XF-73 nasal following scientific
advice from FDA and EMA
XF-73 dermal commenced clinically enabling safety study sponsored by US
Government's NIAID
New XF research projects initiated in cystic fibrosis and oral mucositis
Leadership strengthened with appointment of Chief Medical Officer and two
Non-Executive Directors
Balance sheet strengthened through £7.3 million fundraise post period
end
Brighton, United Kingdom - 13 April 2023 - Destiny Pharma plc (AIM: DEST), a
clinical stage innovative biotechnology company focused on the development of
novel medicines that can prevent life-threatening infections, announces its
audited financial results for the year ended 31 December 2022.
Financial highlights
· Loss before tax of £7.7 million (2021: £6.3 million)
· R&D expenditure of £4.9 million (2021: £3.7 million)
· Other operating expenses (excluding share based payment charge)
of £2.5 million (2021: £2.3 million)
· £6.5 million gross proceeds from Q1 2022 equity fundraise
· Year-end cash and cash equivalents of £4.9 million (2021:
£4.6 million)
· Post period equity fundraise of £7.3 million (gross)
· Cash runway extended to H2 2024
Operational highlights
NTCD-M3 for prevention of C. difficile infection recurrence
· Continued progress made on preparations for the Phase 3 clinical
trial of NTCD-M3, including CMC manufacturing scale up and regulatory clarity
on Phase 3 clinical development plans.
· Positive scientific advice received from European Medicines
Agency ("EMA") on proposed Phase 3 study design.
· US and European market research confirms substantial market
opportunity for NTCD-M3. US market potential also validated by Sebela
partnering deal announced in March 2023.
· Results from US research support the use of NTCD-M3 following all
commonly used antibiotic treatments.
· Positive new data published on the absence of toxic gene transfer
to NTCD-M3 in the peer-reviewed journal, Public Library of Science One ("PLOS
ONE").
XF-73 nasal gel for prevention of post-surgical infections
· US Food and Drug Administration (FDA) has clarified Phase 3 and
US registration pathway for XF-73 nasal gel for the prevention of
post-surgical staphylococcal infections.
· EMA feedback on XF-73 nasal gel Phase 3 programme identifies a
clear route through European approval as a novel hospital infection prevention
product.
· Global Phase 3 study design finalised following discussions with
regulators and key opinion leaders.
· External European market research reports show that XF-73 nasal
gel is seen as a very promising alternative to mupirocin, the current
standard of treatment, by both clinicians and payers. The study suggests XF-73
has the potential to replace the current standard of treatment as the
preferred pre-surgical nasal decolonisation agent.
· Destiny's own market analysis, supported by independent,
specialist market research, indicates that the global peak sales for XF-73
nasal in the US and Europe could be over $1billion.
· Active partnering programme initiated and early discussions with
potential partners commenced.
Earlier pipeline and research projects
· SPOR-COV(TM), our collaboration with SporeGen to develop a novel
nasal spray to prevent viral respiratory infections, including COVID-19 and
influenza, has completed grant funded research work with next steps being
discussed and publications planned.
· Positive results in XF-73 dermal safety study from ongoing
agreement with US Government's NIAID.
· Destiny's China partner, China Medical System Holdings Limited
("CMS"), is conducting pre-clinical work on their own XF-73 dermal programme.
· XF-73 shown to enhance the activity of two antibacterial drugs
with the potential to develop improved treatments for lethal lung infections
and infected diabetic foot ulcers caused by antimicrobial resistant bacteria.
· Secured funding from the Cystic Fibrosis Foundation for new XF
research project.
· Initiated new XF research project targeted at oral mucositis.
Post period highlights
· Exclusive collaboration and co-development agreement for North
American (US, Canada and Mexico) rights to NTCD-M3 signed with Sebela
Pharmaceuticals® worth up to $570 million plus royalties. This partnership
with Sebela will finance the future clinical development and commercialisation
costs of NTCD-M3 in North America whilst the Company retains majority rights
for Europe and Rest of World. Initial collaboration work has commenced and
is progressing well.
· Successful equity fund raise of £7.3 million (gross) to enable
closing of Sebela partnering agreement, strengthen balance sheet and continue
to progress NTCD-M3 and XF-73 nasal toward Phase 3 clinical studies.
· Peer reviewed paper published in Microbiology Spectrum
concludes that NTCD-M3 is able to effectively and fully colonise the gut
following fidaxomicin administration, indicating that NTCD-M3 would be
effective in patients receiving this antibiotic, as well as older antibiotics,
such as vancomycin and metronidazole.
· Landmark XF-73 nasal Phase 2b clinical data published in the
leading US peer reviewed journal Infection Control & Hospital
Epidemiology.
Neil Clark, Chief Executive Officer of Destiny Pharma, commented:
"Destiny Pharma has made good progress in 2022 and in the first quarter of
2023. We recently completed our first major out-licensing deal for NTCD-M3 and
successfully strengthened our balance sheet through a fundraise of £7.3
million (gross) in March 2023 which was supported by new and existing
investors. This has extended our cash runway to H2 2024 and removed the
significant overhang of Phase 3 clinical development costs for NTCD-M3, whilst
providing for potential milestone payments, as NTCD-M3 is commercialised, of
up to $570m as well as royalties. Our priority now is to continue seeking
additional partners for our two late stage clinical assets and to bring
forward the earlier stage research projects. There is an urgent global need
for new, innovative infection prevention medicines and Destiny Pharma believes
that our targeted and diversified pipeline meets this clinical need and has
substantial commercial potential that will drive value generation in the
future."
Webcast
Destiny Pharma will host a webcast presentation followed by a live Q&A
session at 10:30 am BST today, accessible via the Investor Meet Company
platform.
The presentation is open to analysts and all existing and potential new
shareholders.
Investors can sign up to Investor Meet Company for free, and add to
meet Destiny Pharma plc via:
https://www.investormeetcompany.com/destiny-pharma-plc/register-investor
(https://www.investormeetcompany.com/destiny-pharma-plc/register-investor) .
Investors who already follow Destiny Pharma plc on the Investor Meet Company
platform will automatically be invited.
This announcement has been released by Shaun Claydon, Chief Financial Officer
(CFO), on behalf of the Company.
For further information, please contact:
Destiny Pharma plc
Neil Clark, CEO
Shaun Claydon, CFO
+44 (0)1273 704 440
pressoffice@destinypharma.com (mailto:pressoffice@destinypharma.com)
Optimum Strategic Communications
Mary Clark / Nick Bastin / Jonathan Edwards / Eleanor Cooper
+44 (0) 7931 5000 66
DestinyPharma@optimumcomms.com (mailto:destinypharma@optimumcomms.com)
finnCap Ltd (Nominated Advisor and Joint Broker)
Geoff Nash / George Dollemore, Corporate Finance
Alice Lane / Nigel Birks / Harriet Ward, ECM
+44 (0) 207 220 0500
Shore Capital (Joint Broker)
Daniel Bush / James Thomas / Lucy Bowden
+44 (0) 207 408 4090
MC Services AG
Anne Hennecke / Andreas Burckhardt
+49-211-529252-12
Stern IR - US
Janhavi Mohite
+1-212-362-1200
janhavi.mohite@sternir.com (mailto:janhavi.mohite@sternir.com)
About Destiny Pharma
Destiny Pharma is a clinical stage, innovative biotechnology company focused
on the development of novel medicines that can prevent life-threatening
infections. Its pipeline has novel microbiome-based biotherapeutics and XF
drug clinical assets including NTCD-M3, a Phase 3 ready treatment for the
prevention of C. difficile infection (CDI) recurrence which is the leading
cause of hospital acquired infection in the US and also XF-73 nasal gel, which
has completed a positive Phase 2 clinical trial targeting the prevention of
post-surgical staphylococcal hospital infections including MRSA. It is also
co-developing SPOR-COV(TM), a novel, biotherapeutic product for the prevention
of COVID-19 and other viral respiratory infections and has earlier grant
funded XF drug research projects.
For further information on the Company, please visit www.destinypharma.com
(http://www.destinypharma.com)
Forward looking statements
Certain information contained in this announcement, including any information
as to the Group's strategy, plans or future financial or operating
performance, constitutes "forward-looking statements". These forward looking
statements may be identified by the use of forward-looking terminology,
including the terms "believes", "estimates", "anticipates", "projects",
"expects", "intends", "aims", "plans", "predicts", "may", "will", "seeks"
"could" "targets" "assumes" "positioned" or "should" or, in each case, their
negative or other variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions. These
forward-looking statements include all matters that are not historical facts.
They appear in a number of places throughout this announcement and include
statements regarding the intentions, beliefs or current expectations of the
Directors concerning, among other things, the Group's results of operations,
financial condition, prospects, growth, strategies and the industries in which
the Group operates. The directors of the Company believe that the expectations
reflected in these statements are reasonable but may be affected by a number
of variables which could cause actual results or trends to differ materially.
Each forward-looking statement speaks only as of the date of the particular
statement. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that
may or may not occur in the future or are beyond the Group's control. Forward
looking statements are not guarantees of future performance. Even if the
Group's actual results of operations, financial condition and the development
of the industries in which the Group operates are consistent with the
forward-looking statements contained in this document, those results or
developments may not be indicative of results or developments in subsequent
periods.
Chief Executive Officer's Statement
Operational and strategic review
We have maintained our focus on infection prevention and all our pipeline
projects have made good progress in the period under review. The late stage of
our lead clinical assets and the diversification in our pipeline reduces the
risk in our approach to drug development.
The company's lead drug candidate, NTCD-M3 for the prevention of CDI,
is focused on infection prevention and is very well positioned as a
targeted, naturally occurring bacterial therapy for this serious gut
infection. The NTCD-M3 programme also brings the company into the exciting
area of the human microbiome and biotherapeutics; a fast‑developing area of
medical science and investigation for new therapies. We are very pleased to
have announced in March 2023 our partnering deal for North American (US,
Canada and Mexico) rights with Sebela Pharmaceuticals.
We believe that XF-73 nasal, our other late-stage programme and the lead drug
candidate from our XF platform, has a target product profile that is very
attractive to hospital infection experts. There are many millions of hospital
operations in the US alone where a new drug is needed to help prevent
post-surgical infections. There have also been several independent papers
published in recent years from experts in the US, Europe and Asia that support
the clinical need for XF-73 nasal and the market potential of such a
preventative approach
Our biotherapeutic programmes and the human microbiome
The microbiome represents a paradigm shift that affects every aspect of
biomedicine: our gut bacteria control health, disease and drug responses
throughout the body, and can themselves be a novel type of medicine. The
microbiome therefore has the potential to be a major new therapeutic modality.
We are very excited by the potential of NTCD-M3 and SPOR-COV™ as our
biotherapeutic assets.
NTCD-M3 Clostridioides difficile programme
NTCD-M3 was developed by GI infection physician Professor Dale Gerding, who is
a world-leading specialist in C. difficile, with more than 400 peer-reviewed
journal publications, book chapters and review articles in the area. NTCD-M3
has successfully completed Phase 1 and Phase 2b trials. The Phase 2b study
demonstrated a strong safety/toxicology profile and 95% prevention of CDI
recurrence.
NTCD-M3 has also been awarded Fast Track status by the FDA. Destiny Pharma
acquired global rights to the NTCD-M3 programme in November 2020 and it has
also recently been out-licensed by the company to Sebela Pharmaceuticals who
will carry out the required clinical development including Phase 3 studies and
lead commercialisation in North America.
NTCD-M3 mechanism of action harnesses the human microbiome
NTCD-M3 is a naturally occurring non-toxigenic strain of C. difficile
bacteria, which lacks the genes that can express C. difficile toxins. It is an
oral formulation of NTCD-M3 spores and patients who have taken NTCD-M3 were
found to be protected from C. difficile infections. NTCD-M3 acts as a safe
"ground cover" preventing toxic strains of C. difficile proliferating in the
colon after antibiotic treatment. NTCD-M3 temporarily colonises the human gut
without causing any symptoms and the gut microbiome returns to normal a few
weeks after treatment.
The Phase 2 data from a completed study with NTCD-M3 were very promising. The
study was a randomised, double-blind, placebo‑controlled trial, among
173 patients aged >18 years, who were diagnosed as having CDI (either a
first episode or first recurrence). The results were a strong, statistically
significant data set showing rapid onset of colonisation which provided
protection during the early post‑treatment period, making it an ideal
complement to a vaccine and other antibiotic treatments. The rate of
recurrence ("RR") of CDI after treatment with the best dose of NTCD-M3 was
only 5%, (placebo 30%) p<0.01. The company believes this is compelling
efficacy compared with clinical trial data from other approaches.
The company has held discussions with the FDA as part of Type C meetings and
this clarified the work required to prepare for Phase 3 clinical trials
including the Phase 3 design and certain manufacturing scale-up activities.
The FDA and EMA meetings confirmed that a single Phase 3 study is required as
a randomised, double-blind, placebo-controlled trial.
It requires about 700 patients in 2:1 randomisation of active to placebo and
the primary endpoint would be the rate of recurrence of CDI at eight weeks
post-treatment in adult patients treated with antibiotics for a first episode
or first recurrence of CDI.
The company has undertaken market research to assess the US market size for
prevention of recurrence indication. The only approved drug is Merck's
Zinplava, which is expensive and reimbursed at c.$3,700, which inhibits its
uptake. It is expected that NTCD-M3 could be priced at $1,500, delivering
estimated peak US sales of c.$200 million.
The market for Europe and the rest of the world is estimated by Destiny
Pharma to be a similar size, so global sales per annum of c.$0.5 billion
could be achieved. There is also the potential for additional indications
(prevention/multiple recurrence) that could double the global peak sales to
c.$1 billion per annum.
The extra costs of care in the US per CDI patient range from $10,000 to
$20,000 and the total annual CDI‑attributable cost in the US alone was
estimated in 2016 at $6.3 billion.
Total annual CDI hospital management required nearly 2.4 million days of
inpatient stay. This is a significant burden on the US healthcare system.
SPOR-COV™ COVID-19/influenza programme
The SPOR-COV™ prophylactic approach targets the innate immune system with
the potential to develop COVID-19 protection within a few days of treatment.
The product consists of a proprietary formulation of Bacillus bacteria that
will be administered nasally as a spray. SPOR-COV™ has already been shown by
SporeGen to provide complete (100%) protection in pre-clinical models of
influenza.
SPOR-COV™ is different to vaccines in that it utilises the innate immune
system with the aim of developing COVID-19 protection within a few days after
dosing. As an "easy to use" first line of defence, it has the potential to
reduce COVID-19 infection rates and transmission significantly. The final
SPOR-COV™ product is planned to be straightforward to produce at both high
volumes and at low cost.
Additional attributes are that it can be stockpiled almost indefinitely
without the need for cold chain refrigeration as it is a very stable product.
It could be made available globally as a cost-effective measure in the fight
against COVID-19 as well as new COVID strains and other respiratory viral
infections.
In 2020, Destiny Pharma announced that Innovate UK ("IUK") awarded a grant of
£800,000 to fund the majority of the £1 million cost of the initial
SPOR-COV™ programme. The pre-clinical efficacy work was performed at the
University of Liverpool using their expertise in respiratory infection models
and host immunity to infection. The manufacturing and formulation
development work has been carried out by HURO, an experienced manufacturer of
bacterial product formulations based in Vietnam and part of PAN Group.
The plan was to complete the required pre-clinical safety and efficacy studies
and also develop the manufacturing process by mid-2022 and be ready
to commence the first human clinical studies thereafter. This was achieved
and the partners are looking at next steps including seeking partners to help
co-fund further work, and further announcements will be made later in 2023.
Our XF platform
The XF platform has demonstrated that it is delivering several exciting
research and clinical programmes focusing on infection prevention with the
potential to deliver clear cost savings to healthcare systems across the world
whilst delivering safe, effective anti-infective treatments that also address
the issue of AMR. The lead programme from the XF platform is XF-73 nasal.
Clinical data underpinning the XF‑73 nasal programme is strong
The positive Phase 2b results announced in 2021 confirmed the potential of
XF-73 nasal gel. XF-73 (exeporfinium chloride) was awarded Qualified
Infectious Disease Product ("QIDP") status by the FDA in 2015. Within the QIDP
award, the FDA also confirmed a new US disease indication for XF-73 nasal;
namely the "prevention of post‑surgical staphylococcal infections",
including MRSA. This represents a new US market for which no existing product
is approved.
Destiny Pharma has now completed seven successful clinical trials in over 300
subjects with XF-73 nasal gel, which included measures of its efficacy in
reducing nasal colonisation by Staphylococcus aureus.
The Phase 2b study was a multi‑centre, randomised, placebo‑controlled
study of multiple applications of a single concentration of XF-73 nasal gel to
assess the antimicrobial effect of XF-73 nasal gel on commensal
Staphylococcus aureus nasal carriage in patients scheduled for cardiac
surgical procedures. The study results were excellent and confirmed that XF-73
nasal delivers effective decolonisation of the nose before surgery and the
Phase 2 results were published in March 2023 in the US journal Infection
Control & Hospital Epidemiology.
Destiny Pharma's experience in carrying out this clinical study has confirmed
the increasing compliance in US hospitals with best practice, whereby patients
are screened, and carriers of Staphylococcus aureus are decolonised prior to
surgery. This is very supportive of the potential sales in the initial market
for XF-73 nasal gel in the large US hospital surgery market.
The medical need to combat surgical infections is significant
Patient carriage of Staphylococcus aureus strains, including MRSA, is
recognised as a growing problem and the testing of patients entering hospital
for surgery is widespread in many countries, including the US.
Landmark outcome studies (Bode et al 2010) have demonstrated that reduction
of all strains of Staphylococcus aureus can significantly reduce the
post‑surgical infection rate by 60% and reduce mortality.
In response to these and other findings, the US Surgical Infection Society
("SIS"), the Society for Hospital Epidemiologists of America ("SHEA"), the
Infectious Disease Society of America ("IDSA") and the American Society of
Hospital Pharmacists ("ASHP") published guidelines recommending that in
the US all Staphylococcus aureus (including MRSA) carriers should be
decolonised in all cardiovascular and most orthopaedic surgeries.
AHRQ/IDSA/SHEA recommended an even more aggressive treatment strategy,
Universal Decolonisation ("UD") of all Intensive Care Unit ("ICU") patients
without screening, awarding a Grade I (highest) level of evidence rating. US
hospital groups, including the Hospital Corporation of America, are now
implementing UD for all patients entering the ICU.
In 2020, the Journal of the American Medical Association ("JAMA") published
updated guidelines that instruct US surgeons to perform topical intranasal
decolonisation prior to surgery with the highest strength, IA recommendation.
This publication advocates improving recovery after surgery and the
recommendation was clear that topical therapy be applied universally to all
cardiac surgical patients, not only Staphylococcus aureus carriers.
This is clear support for the approach proposed by Destiny Pharma with XF-73
nasal gel.
In Europe, similar guidelines exist recommending decolonisation of
Staphylococcus aureus positive patients prior to certain surgeries.
The antibiotic mupirocin is often used off-label in the US for these
applications, although it has two key disadvantages in that it is slow acting,
requiring five days of dosing, and staphylococcal resistance to mupirocin can
develop rapidly and become widespread. Consequently, many guidelines are
accompanied with a resistance warning related to mupirocin use. In 2020,
another new review concluded that global mupirocin-resistant Staphylococcus
aureus prevalence had increased to 7.6% and that mupirocin-resistant MRSAs
have increased by 13.8% and consequently the monitoring of mupirocin use
remains critical.
The company has finalised the Phase 3 study designs for XF-73 nasal at the end
of 2022 after seeking scientific advice from the key regulators in the US and
Europe. Destiny Pharma is now able to establish the size and costs of the
Phase 3 studies and has started a targeted partnering campaign with the aim of
finding one or more partners in 2023 if possible.
The agreed plan is to carry out two Phase 3 randomised, double-blind,
placebo-controlled clinical trials in patients undergoing two different
surgical procedures. The planned studies could deliver a data set that would
support the preferred, broad label for XF-73 nasal gel, supporting its use in
all major surgeries as a novel treatment delivering fast, effective nasal
decolonisation. This is also a very large commercial opportunity. In summary,
the two planned studies are:
Study 1: Adult patients undergoing mastectomy with immediate reconstruction or
use of tissue expanders at risk of post-surgical staphylococcal infections who
have screened positive for S. aureus carriage.
Study 2: Adult patients undergoing emergency or expedited hip Hemiarthroplasty
("HA") surgery to treat femoral fractures at risk of post-surgical
staphylococcal infections who have screened positive for S. aureus carriage.
Studies could commence in 2024 with potential approval in 2027. Partners are
being sought help fund/co-fund the studies and lead commercialisation.
The commercial opportunity for XF-73 nasal is over $1 billion dollars
There is a significant market for a new drug that can assist in the
"prevention of post-surgical staphylococcal infections", particularly in the
US. There are approximately 41 million surgeries per year in the US alone,
all of which expose patients to the risk of post-surgical infections.
The market analysis undertaken by Destiny Pharma and its specialist
consultants supports the view that XF-73 nasal could achieve annual peak sales
in the US alone of over $1 billion and peak sales in Europe and the rest of
the world could be $500 million for the initial indication of "prevention of
post-surgical staphylococcal infections".
The most recent independent market reviews carried out in 2019 and 2022
updated the company's understanding of current US and EU clinical practice,
the competitor environment for the proposed XF-73 nasal gel formulation,
pricing sensitivities and the payers' assessment of the target product profile
("TPP") of XF-73 nasal.
XF research programmes
During the period under review the company has continued to work on several
university collaborations looking at the activity of the XF platform in
selected infection models including the activity of XF compounds against
bacteria and fungi embedded in biofilms. The company also entered new research
projects testing XF compounds in models of oral mucositis and cystic fibrosis,
the latter research project being supported by a funding award from the Cystic
Fibrosis Foundation. The continuing research work adds to the understanding of
the XF platform's novel mode of action and helps identify potential new
opportunities to develop targeted research projects that may lead to new
clinical development opportunities for the XF platform. The company will
continue to seek grant and other non-dilutive funding support for these
earlier stage research projects as it has done with some success with
approximately £3.5 million in grant funding secured since the IPO in 2017.
Outlook for Destiny Pharma
The recently announced partnering deal for NTCD-M3 demonstrates that
management are delivering on the company's strategy. The Board and management
are now focused on delivering further deals in 2023, especially with regards
to XF-73 nasal. The strengthened balance sheet following the March 2023
fundraise provides Destiny Pharma with working capital through to H2 2024,
enabling us to complete our obligations regarding the manufacturing of NTCD-M3
clinical material for the clinical development work that will be carried out
by our US partner Sebela Pharmaceuticals. Following the positive XF-73 Phase 3
design discussions held with regulators in 2022, the company now has clarity
on the Phase 3 programme for the US and Europe that adds to our existing
strong data package. We in a good position to find partners for
XF‑73 nasal and that is a key corporate target for 2023.
Our cash resources are also being used to develop new dermal infection
clinical candidates from the pre‑clinical XF pipeline, contribute to
progressing our COVID-19 SPOR-COV™ collaboration and to capitalise on
commercial opportunities including additional grant funding, partnering, and
licensing deals. Whilst the short-term focus is clearly on our two highly
valuable lead assets, Destiny Pharma will continue to establish research
programmes through existing and new collaborations and, where possible, seek
additional non-dilutive funding support as it has done successfully in the
period under review.
Destiny Pharma has a great opportunity as a focused UK biotechnology company
with two high-quality, late-stage clinical assets targeted at infection
prevention. Both are backed up by strong Phase 2 clinical data and have clear
commercial positioning. The Board and employees are excited about the next
stage in the company's development and delivering on our strategy to build a
world-leading infection prevention pipeline and to build a very valuable
company for our shareholders.
Neil Clark
Chief Executive Officer
13 April 2023
Chief Financial Officer's Statement
Financial Review
During 2022, we successfully clarified the US and EU Phase 3 clinical
development plan for XF-73 nasal and commenced an active partnering campaign
to secure a commercialisation partner for the XF-73 nasal programme in 2023.
We also continued to invest in the important manufacturing scale-up process
for our NTCD-M3 programme, required for Phase 3 clinical studies and product
commercialisation. This scale-up process, including delivery of clinical study
material, is targeted to complete by the end of 2023. Further progress was
also made in our earlier programmes with two active dermal infection projects
running in the US and China, completion of the SPOR-COV™ COVID-19
grant-funded collaboration, initiation of a new XF research project targeting
oral mucositis and an award from the Cystic Fibrosis Foundation to investigate
the potential of XF-73 as a novel treatment for cystic fibrosis patients
infected with MRSA.
We took the opportunity to strengthen our balance sheet in the first quarter
of the year, raising £6.5 million gross proceeds from investors, enabling us
to maintain momentum in our programmes whilst seeking commercial partners. We
slightly increased headcount and welcomed a new Chief Medical Officer during
the year.
Following the year end, in February 2023, we announced an exclusive
collaboration and co-development agreement for North American rights for
NTCD-M3 with Sebela Pharmaceuticals, a key milestone event for the company. A
condition of the Sebela transaction was the strengthening of the company's
balance sheet and we announced a fundraise of up to £8 million via a £7
million Placing and £1 million Open Offer at the same time. The fundraise was
successfully approved by shareholders on 16 March 2023, the final gross
proceeds amounting to £7.3 million. Proceeds will be utilised in advancing
our key programmes and strengthening the company's balance sheet as we
intensify partnering activities, particularly for XF-73 nasal. The fundraise
was achieved against the backdrop of challenging market conditions and we are
very pleased to have received support from both existing and new investors.
Revenue
Destiny Pharma is a clinical stage research and development company and is yet
to commercialise and generate sales from its current programmes. The company
received grant income of £0.2 million (2021: £0.1 million) during the
period.
Operating expenses
Operating expenses, which exclude the share-based payment charge of £0.5
million (2021: £0.4 million) during the period, amounted to £7.4 million
(2021: £6.0 million). Included within this total are R&D costs totalling
£4.9 million (2021: £3.7 million) which were £1.2 million higher than prior
year. This was largely due to increased activity in our NTCD-M3 programme as
we progressed the manufacturing scale-up process and clinical and regulatory
work in preparation for commencement of Phase 3 clinical studies.
Other operating costs increased 6% to £2.5 million (2021: £2.3 million).
Other operating costs are split between general overheads, which remained flat
at £1.1 million (2021: £1.1 million) and employee costs, which increased by
£0.2 million to £1.4 million (2021: £1.2 million).
Loss on ordinary activities before tax
Loss before tax for the year was £7.7 million (2021: £6.3 million).
Taxation
The company received a repayment of £0.9 million in respect of the R&D
tax credit claimed during the year ended 31 December 2021. The R&D tax
credit receivable in the balance sheet of £1.2 million is an estimate of the
cash repayment the company expects to qualify for in respect of activities
during the year ended 31 December 2022. However, as at the date of this
report, these amounts have not yet been agreed with HMRC.
Loss per share
Basic and diluted loss per share for the year was 9.3 pence (2021: 8.9
pence).
Cash flow
Net cash outflow from operating activities in 2022 was £5.9 million (2021:
£5.1 million) against an operating loss of £7.8 million (2021: £6.3
million), with the major reconciling items being the non-cash charge for
share-based payments of £0.5 million, the R&D credit received of £0.9
million, grant income of £0.1 million and other net movements in working
capital of £0.4 million.
Net cash from financing activities during the year of £6.1 million represents
the net proceeds of the equity fundraise in March 2022 (2021: £nil). The net
increase in cash and cash equivalents during the period was £0.3 million
(2021: decrease of £5.1 million).
Balance sheet
Total assets increased to £8.8 million (2021: £8.3 million) largely due to a
higher R&D tax credit claimed and a higher balance of cash and cash
equivalents compared to prior year.
Intangible assets solely comprise the initial acquisition cost of NTCD-M3,
acquired in November 2020.Other receivables, and prepayments increased to
£1.6 million (2021: £1.3 million) which was primarily due to a higher
R&D tax credit compared to prior year.
Year-end cash and cash equivalents totalled £4.9 million (2021: £4.6
million). This figure does not include the proceeds of the fundraise nor the
upfront receipt under the NTCD-M3 partnering deal, both of which completed
post year end.
Total liabilities increased to £1.2 million (2021: £0.8 million) primarily
due to accrued development costs in relation to the NTCD-M3 programme.
Outlook
During the next financial year, the company will focus on completing the
manufacturing scale-up to deliver clinical trial material for the NTCD-M3
clinical programme being run by our partner Sebela, continue to progress XF-73
nasal toward commencement of Phase 3 clinical studies and develop its early
stage pipeline. The company will remain focused on maintaining a disciplined
cost base, seeking to minimise spend on non-core R&D activities.
The successful partnering of NTCD-M3 and fundraise in March 2023 provides the
company with a strong balance sheet as it continues to progress its pipeline
and actively secure a partner to co-fund required Phase 3 studies and lead
commercialisation of XF-73 nasal.
Shaun Claydon
Chief Financial Officer
13 April 2023
Statement of comprehensive income
For the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
Notes £ £
Continuing operations
Other operating income 7 154,499 135,028
Administrative expenses (7,397,014) (6,016,128)
Share-based payment expense (533,829) (405,851)
Loss from operations (7,776,344) (6,286,951)
Finance income 5 64,800 15,520
Loss before tax (7,711,544) (6,271,431)
Taxation 6 1,207,975 931,951
Loss and total comprehensive loss for the year from continuing operations (6,503,569) (5,339,480)
Loss per share - pence
Basic 8 (9.3)p (8.9)p
Diluted 8 (9.3)p (8.9)p
Statement of financial position
As at 31 December 2022
As at As at
31 December 31 December
2022 2021
Notes £ £
Assets
Non-current assets
Property, plant and equipment 24,621 35,882
Intangible assets 9 2,261,435 2,261,435
Non-current assets 2,286,056 2,297,317
Current assets
Other receivables 10 1,410,452 991,913
Prepayments 195,814 347,950
Cash and cash equivalents 11 4,903,461 4,645,562
Current assets 6,509,727 5,985,425
Total assets 8,795,783 8,282,742
Equity and liabilities
Equity
Share capital 12 733,071 598,719
Share premium 33,043,569 27,091,466
Accumulated losses (26,150,619) (20,180,879)
Shareholders' equity 7,626,021 7,509,306
Current liabilities
Trade and other payables 13 1,169,762 773,436
Current liabilities 1,169,762 773,436
Total equity and liabilities 8,795,783 8,282,742
Statement of changes in equity
For the year ended 31 December 2022
Share Share Accumulated
capital premium losses Total
£ £ £ £
1 January 2021 598,169 27,085,506 (15,247,250) 12,436,425
Comprehensive loss for the year
Total comprehensive loss - - (5,339,480) (5,339,480)
Total comprehensive loss for the year - - (5,339,480) (5,339,480)
Contributions by and distributions to owners
Issue of share capital 550 5,960 - 6,510
Share-based payment expense - - 405,851 405,851
Total contributions by and distributions to owners 550 5,960 405,851 412,361
31 December 2021 598,719 27,091,466 (20,180,879) 7,509,306
Comprehensive loss for the year
Total comprehensive loss - - (6,503,569) (6,503,569)
Total comprehensive loss for the year - - (6,503,569) (6,503,569)
Contributions by and distributions to owners
Issue of share capital 134,352 6,332,565 - 6,466,917
Costs of share issue - (380,462) - (380,462)
Share-based payment expense - - 533,829 533,829
Total contributions by and distributions to owners 134,352 5,952,103 533,829 6,620,284
31 December 2022 733,071 33,043,569 (26,150,619) 7,626,021
Statement of cash flows
For the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
£ £
Cash flows from operating activities
Loss before income tax (7,711,544) (6,271,431)
Depreciation of property, plant and equipment 12,328 12,518
Share-based payment expense 533,829 405,851
Finance income (64,800) (15,520)
(7,230,187) (5,868,582)
Decrease in other receivables and prepayments 14,316 198,336
Increase/(decrease) in trade and other payables 396,326 (494,698)
Cash used in operations (6,819,545) (6,164,944)
Tax received 927,256 1,074,519
Net cash used in operating activities (5,892,289) (5,090,425)
Cash flows from investing activities
Purchase of property, plant and equipment (1,067) (30,260)
Interest received 64,800 15,520
Net cash inflow/(outflow) from investing activities 63,733 (14,740)
Cash flows from financing activities
New shares issued net of issue costs 6,086,455 6,510
Net cash inflow from financing activities 6,086,455 6,510
Net increase/(decrease) in cash and cash equivalents 257,899 (5,098,655)
Cash and cash equivalents at the beginning of the year 4,645,562 9,744,217
Cash and cash equivalents at the end of the year 4,903,461 4,645,562
Notes to the financial statements
1. Corporate information
Destiny Pharma plc (the "company") was incorporated and domiciled in the UK on
4 March 1996 with registration number 03167025. The company's registered
office is located at Unit 36, Sussex Innovation Centre, Science Park Square,
Falmer, Brighton BN1 9SB.
The company is engaged in the discovery, development and commercialisation of
novel medicines that prevent serious infections.
2. Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards. The financial statements have been
prepared under the historical cost convention except where stated otherwise
within the accounting policies.
The company's financial statements have been presented in pounds sterling
("GBP"), being the functional and presentation currency of the company.
3. Standards and interpretations issued
Certain new accounting standards and interpretations have been published that
are not mandatory for 31 December 2022 reporting periods and have not been
early adopted by the company. These standards are not expected to have a
material impact on the entity in the current or future reporting periods and
on foreseeable future transactions.
4. Segment reporting
The chief operating decision-maker is considered to be the Board of Directors
of the company. The chief operating decision-maker allocates resources and
assesses performance of the business and other activities at the operating
segment level.
The chief operating decision-maker has determined that the company has one
operating segment, the development and commercialisation of pharmaceutical
formulations. All activities take place in the United Kingdom.
5. Net finance income
31 December 31 December
2022 2021
£ £
Finance income
Deposit account interest 64,800 15,520
6. Income tax
31 December 31 December
2022 2021
£ £
Research and development tax credits based on costs in the financial year (1,207,975) (927,256)
Utilisation of previously unrecognised tax credit - (4,695)
(1,207,975) (931,951)
7. Other operating income
31 December 31 December
2022 2021
£ £
Government grants received during the year 22,864 129,149
Government grants accrued at 31 December 131,635 5,879
154,499 135,028
Included in other receivables (note 10) 131,635 5,879
8. Loss per ordinary share
The calculation for loss per ordinary share (basic and diluted) for the
relevant period is based on the earnings after income tax attributable to
equity shareholders for the period. As the company made losses during the
period, there are no dilutive potential ordinary shares in issue, and
therefore basic and diluted loss per share are identical. The calculation is
as follows:
31 December 31 December
2022 2021
£ £
Loss for the year attributable to shareholders (6,503,569) (5,339,480)
Weighted average number of shares((1)) 70,182,231 59,851,442
Loss per share - pence
- Basic and diluted (9.3)p (8.9)p
(1) In March 2023, the company raised gross proceeds of £7.3 million
through an equity fundraise, in which a total of 20,961,956 new shares were
issued and allotted. This transaction could have significantly changed the
weighted average loss per share if it had occurred before the end of the
reported period.
9. Intangible assets
Acquired
development
programmes
£
Cost
At 1 January 2021 2,261,435
Additions -
At 31 December 2021 2,261,435
Additions -
At 31 December 2022 2,261,435
In 2020, the company acquired NTCD-M3, a development stage programme for
preventing toxic strains of C. difficile proliferating in the colon after
antibiotic treatment. The asset has not been amortised as the programme has
not yet generated products available for commercial use.
The programme has been assessed for impairment. The company considers the
future development costs, the probability of successfully progressing to
product approval and the likely commercial returns, among other factors.
The result of this assessment did not indicate any impairment in the year.
The key sensitivity for all development programmes is the probability of
successful completion of clinical trials in order to obtain regulatory
approval for sale. Should trials be unsuccessful, the programme will be fully
impaired.
10. Other receivables
31 December 31 December
2022 2021
£ £
Other receivables 202,477 64,657
Research and development tax repayment 1,207,975 927,256
1,410,452 991,913
11. Cash and cash equivalents
31 December 31 December
2022 2021
£ £
Cash and bank balances 1,903,461 2,145,562
Call deposits 3,000,000 2,500,000
Cash and cash equivalents 4,903,461 4,645,562
12. Share capital
31 December 31 December
2022 2021
Ordinary shares of £0.01 each Number Number
Authorised((1)) n/a n/a
Allotted and fully paid
At 1 January 59,871,921 59,816,921
Issued for cash during the year 13,435,184 55,000
At 31 December 73,307,105 59,871,921
(1) During the year ended 31 December 2017 the company adopted new Articles
of Association, which do not require the company to have authorised share
capital.
31 December 31 December
2022 2021
£ £
Authorised n/a n/a
Allotted and fully paid 733,071 598,719
31 December 31 December
2022 2021
£ £
Share premium account 33,043,569 27,091,466
13,435,184 ordinary shares were issued during the year at a premium of
£6,332,565. Costs of share issue charged to share premium during the year
were £380,462.
Each ordinary share ranks pari passu for voting rights, dividends and
distributions, and return of capital on winding up.
Grants of options
On 24 January 2022, 54,282 Employee LTIP 2020 options were granted to four
employees at an exercise price of £0.01 per ordinary share. The fair value
per option was £0.96.
On 6 June 2022, 190,000 Employee LTIP 2020 options were granted to one
employee at an exercise price of £0.46 per ordinary share. The fair value
per option was £0.27.
The number and weighted average exercise prices of share options were as
follows:
31 December 2022 31 December 2021
Weighted Weighted
Number of average Number of average
options exercise price options exercise price
Balance outstanding at beginning of the year 9,759,125 £0.112 9,090,846 £0.067
Granted during year 244,282 £0.360 1,215,521 £0.411
Exercised during year (526,177) £0.024 (55,000) £0.118
Lapsed during year (609,000) £0.248 (492,242) £0.010
Options outstanding at end of the year 8,868,230 £0.115 9,759,125 £0.112
Options exercisable at the end of the year 5,800,049 £0.035 6,675,226 £0.054
The weighted average remaining contractual life of share options outstanding
at 31 December 2022 was 4.3 years (2021: 4.9 years).
The expense arising from share-based payment transactions recognised in the
year was as follows:
31 December 31 December
2022 2021
£ £
Share-based payment expense 533,829 405,851
13. Trade and other payables
31 December 31 December
2022 2021
£ £
Trade payables 172,543 218,156
Social security and other taxes 80,369 82,075
Accrued expenses 898,326 453,815
Pension contributions payable 18,524 19,390
1,169,762 773,436
14. Statutory accounts
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2022 or 2021 but is derived
from those accounts. Statutory accounts for 2021 have been delivered to the
registrar of companies, and those for 2022 will be delivered in due course.
The auditor has reported on those accounts; their reports (i) were
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR KLLFFXZLBBBZRecent news on Destiny Pharma
See all newsRCS - Destiny Pharma PLC - FDA grants XF-73 Dermal QIPD for burn wound
AnnouncementRCS - Destiny Pharma PLC - Presentation at ESCMID on XF-73 Nasal Gel
AnnouncementRCS - Destiny Pharma PLC - Exploration of XF drug potential for CF
AnnouncementREG - AIM Destiny Pharma PLC - Cancellation - Destiny Pharma plc
AnnouncementREG - Destiny Pharma PLC - Last Day of Dealings on AIM
Announcement