REG - Destiny Pharma PLC - Full year results and review of strategic options
25/04/2024 07:00
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RNS Number : 9355L Destiny Pharma PLC 25 April 2024
25 April 2024
Destiny Pharma plc
("Destiny Pharma" or "the company")
Audited results for the year ended 31 December 2023 and commencement of review
of strategic options to support advancement of XF-73 nasal programme
Brighton, United Kingdom - 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 2023. The company also announces the
commencement of a review of strategic options to support the company's
advancement of XF-73 nasal through Phase 3 clinical trials.
Operational highlights
XF-73 nasal - taking steps to maximise value
· Engaging with a number of potential partners regarding a licencing
deal
o Positive feedback received from various parties regarding the commercial
appeal of XF-73 nasal
o In response to the feedback received to date, the company is developing a
new clinical trial design that would, subject to regulatory review, more than
halve the previously planned Phase 3 trial costs (post-period)
· Confirmed significant commercial potential and establishing US
Go-To-Market model (post-period)
· Data from largest study to date on XF‐73 published in Frontiers in
Cellular and Infection Microbiology demonstrated effectiveness of XF‐73
against all 2,527 tested antibiotic resistant and sensitive bacterial strains
obtained from patient infections
· Landmark Phase 2b clinical data for XF-73 nasal gel in cardiac
surgery patients demonstrating primary endpoint was met (significant reduction
in nasal bacteria prior to surgery) published in leading US peer reviewed
journal, Infection Control & Hospital Epidemiology
NTCD-M3 - secured collaboration and co-development deal and enhanced
competitive profile
· Partnering deal agreed with Sebela Pharmaceuticals covering North
America (US, Canada, and Mexico) worth up to $570m plus royalties; Sebela
responsible for financing all remaining clinical development and North America
commercialisation
· Strengthened CMC programme on NTCD-M3 to deliver clinical and
commercial product supply and transition from liquid to solid dose,
strengthening competitive profile; Sebela to conduct a further Phase 2 study
following market research confirming the commercial preference for a solid
dose oral formulation (post-period)
· Peer reviewed paper published in Microbiology Spectrum concludes that
NTCD-M3 is effective alongside all currently recommended antibiotics,
including fidaxomicin, in the treatment of CDI
Earlier stage pipeline - focused development of further commercial
opportunities
· Enhanced understanding of the potential commercial opportunity of the
XF pipeline with early data (antibacterial & anti-fungal)
· Encouraging data demonstrating superior efficacy of XF-73 compared to
a leading topical antibiotic against MRSA in skin infection models published
in Infection & Drug Resistance
· Preclinical data in NIAID XF-73 dermal funded study supporting the
safety profile and efficacy against a broad range of disease-relevant and
antibiotic resistant bacterial isolates (post-period); announced intention to
progress towards clinical evaluation for the treatment of diabetic foot
infections (DFI) and serious burn wound infections, two areas with a clear
unmet need and large patient populations (post-period)
· Discontinued the SPOR-COV development collaboration to focus on
potentially higher-value core pipeline assets (post-period)
Strengthened Board and management team
· Board strengthened with the appointments of Chris Tovey, CEO, and Sir
Nigel Rudd, Chair
· Dr Debra Barker resumed her position as a Non-Executive Director and
assumed the role of CMO on an interim basis
Financial highlights
· Loss before tax reduced to £6.4 million (2022: £7.7 million)
· R&D expenditure of £3.3 million (2022: £4.9 million)
· Other operating expenses (excluding share-based payment charge) of
£3.8 million (2022: £2.5 million)
· Year-end cash and cash equivalents of £6.4 million (2022: £4.9
million)
· Company funded through to Q1 2025.
XF-73 nasal update - review of strategic options to advance the programme
The company today provides an update regarding licencing for XF-73 nasal. The
company has engaged with a number of potential partners and has received some
strong and positive feedback on XF-73 nasal. However, no potential licencing
deal has, to date, been forthcoming that we believe would provide fair value
to the company and its shareholders.
Destiny Pharma believes the commercial appeal of this asset is very clear,
however feedback from potential partners has highlighted their desire for
further clarification regarding the cost of Phase 3 clinical trials and
prevailing perceptions of the commercial potential of antibiotics. Destiny
Pharma has therefore taken steps to re-evaluate aspects of the final clinical
development approach to act on this feedback and enhance the attractiveness of
XF-73 nasal. These steps include developing a new clinical trial design that,
subject to regulatory review, would more than halve the previously anticipated
Phase 3 trial costs without reducing XF-73 nasal's market potential, label, or
benefits to patients. Further, the company is conducting an ongoing exercise
to broaden understanding of the market potential for XF-73 nasal in the US to
present potential partners with a clearer, more-in-depth picture of the
product's value as a preventative treatment, and how commercial organisations
can realise this value. With the benefit of this enhanced proposition, the
company will continue to engage with interested parties.
Whilst licencing activities continue, Destiny Pharma believes that it is
appropriate to evaluate alternative options to maximise value from XF-73 nasal
and progress the programme. To that end, the Board and management are now
undertaking a review of strategic options to determine how best to support the
company's advancement of XF-73 nasal through Phase 3 clinical trials.
This review will consider a range of strategic options for XF-73 nasal,
including licensing and the company securing finance to enable it to conduct
the Phase 3 clinical studies. Currently, the review is not actively
considering an offer for the company. A further announcement regarding the
outcome of this review will be provided in due course.
Chris Tovey, Chief Executive Officer of Destiny Pharma, commented:
"In the eight months since I joined Destiny, everything I have seen and heard
furthers my belief in the value our pipeline can bring to patients and health
systems around the world. XF-73 nasal has enormous market potential and can
make a huge difference in the prevention of surgical site infections, and the
reduction in the usage of antibiotics.
'Whilst we will now be presenting an enhanced proposition for the product to
potential partners, we also have initiated a wider review to evaluate a range
of strategic options to progress the programme and to maximise value from
XF-73 nasal. We have a team with a strong track record of bringing products to
market and I believe that we can bring this expertise to bear to give XF-73
nasal and Destiny Pharma the best chance of success."
Webcast
Destiny Pharma will host a webcast presentation followed by a live Q&A
session at 11:00 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
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. Investors who already follow Destiny Pharma plc on the Investor Meet Company
platform will automatically be invited.
For further information, please contact:
Destiny Pharma plc
Chris Tovey, CEO
Shaun Claydon, CFO
+44 (0)1273 704 440
pressoffice@destinypharma.com (mailto:pressoffice@destinypharma.com)
FTI Consulting
Ben Atwell / Simon Conway / Michael Trace
+44 (0) 203 727 1000
destinypharma@fticonsulting.com (mailto:destinypharma@fticonsulting.com)
Shore Capital (Nominated Adviser and Broker)
Daniel Bush / James Thomas / Lucy Bowden
+44 (0) 207 408 4090
About Destiny Pharma
Destiny Pharma is an innovative, clinical-stage biotechnology company focused
on the development and commercialisation of novel medicines that can prevent
life-threatening infections. The company's drug development pipeline includes
two late-stage assets XF-73 nasal gel, a proprietary drug targeting the
prevention of post-surgical staphylococcal hospital infections including MRSA
and NTCD-M3, a microbiome-based biotherapeutic for the prevention of C.
difficile infection (CDI) recurrence which is the leading cause of hospital
acquired infection in the US.
For further information on the company, please visit www.destinypharma.com
(https://url.avanan.click/v2/___http:/www.destinypharma.com___.YXAxZTpzaG9yZWNhcDphOm86ZGYxYjNjYTUyNGQ1MTFlYzdhYjQ0MThhNGEyMzEwMWQ6Njo2MjMyOjk1YjdhOTQ5OTM5MTA0MTEzNTVkMWIxMWUzYzViMzNmYzU0ZGIwOTliYjQwNWQzMzFiMTU0ZjgzYzNkMzQ2MWM6cDpG)
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 which is part of domestic UK law pursuant to the Market Abuse
(Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the
publication of this announcement, this inside information (as defined in UK
MAR) is now considered to be in the public domain.
Forward looking statements
Certain information contained in this announcement, including any information
as to the company'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 company's results of operations,
financial condition, prospects, growth, strategies and the industries in which
the company 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
company's control. Forward looking statements are not guarantees of future
performance. Even if the company's actual results of operations, financial
condition and the development of the industries in which the company 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 review of strategic options for XF-73 nasal
Destiny Pharma has two lead assets which have both successfully completed
Phase 2 and have been shown to be effective and well tolerated. They act
through two completely different mechanisms, reducing the risk in the pipeline
through clear diversification.
We believe that XF-73 nasal, the lead drug candidate from our XF platform, has
a target product profile that is very attractive to surgeons and 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.
Our other lead drug candidate, NTCD-M3, for the prevention of CDI, is focused
on infection prevention and very well positioned as a targeted, naturally
occurring bacterial therapy for this serious gut infection. The NTCD-M3
programme positions the company in the exciting area of the human microbiome
and biotherapeutics, which is a fast‑developing area of medical science and
investigation for new therapies.
Our XF platform
The XF platform is delivering several exciting research and clinical
programmes focusing on infection prevention with the potential to deliver not
only patient benefits, but also clear cost savings to healthcare systems
across the world, whilst delivering safe, effective anti-infective treatments
that also address the issue of antimicrobial resistance ("AMR").
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. 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 potential new US indication 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 completed in 2021 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
surgical procedures.
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.
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
develops rapidly and can 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. Destiny Pharma believes this is clear support for the need
for an alternative treatment for nasal decolonisation as presented by XF-73
nasal, which has no observed bacterial (MRSA) resistance to date. (Ref.
Mupirocin Resistance in Staphylococcus aureus: A Systematic Review and
Meta‑Analysis - Dadashi et al 2020).
Phase 3 study designs for XF-73 nasal
Destiny Pharma is developing a new clinical trial design, which builds upon
previous engagement with the key regulators in the US and Europe, that, we
believe, will more than halve the previously planned Phase 3 trial costs. The
new clinical trial design maintains the previous target indication and
commercial opportunity. The company is engaged in a comprehensive partnering
campaign with the aim of finding one or more partners to enable the
progression to Phase 3 study, in 2025.
The proposed 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 prevention
of post-surgical Staphylococcal infections. This would be the first approval
of a product for this indication, which creates both significant
differentiation from other products, and access to a very large commercial
opportunity.
The commercial opportunity for XF-73 nasal
The Board believes that XF-73 nasal gel can be priced competitively across the
world, has both excellent efficacy against a wide range of gram-positive
bacteria especially S.aureus (including MRSA), has an excellent safety profile
and addresses the key challenge of AMR.
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 also be significant for the initial indication of "prevention
of post-surgical staphylococcal infections".
XF research programmes
During the period under review, the company has continued to work on several
projects 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.
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. Phase 2b NTCD-M3 data was published in the prestigious Journal of
the American Medical Association (Gerding DN et al JAMA 2015;313:1719).
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 in 2023
out-licensed the programme to Sebela Pharmaceuticals (US, Canada and Mexico)
who will fund all the remaining 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, conducted with a liquid
formulation, was 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.
Prior to signing the collaboration and co‐development agreement with Sebela,
the company held discussions with the FDA as part of Type C meetings and this
clarified the minimum work required to prepare for Phase 3 clinical trials,
including the Phase 3 design and certain manufacturing scale-up activities.
During 2023, the company has reviewed the chemistry, manufacturing and
controls (CMC) programme for NTCD-M3. Following this review, the company
changed its contract development manufacturing organisation for NTCD-M3 in
order to strengthen manufacturing for clinical trial material and improve
future commercial supply. In doing so, this supports the necessary transition
of NTCD-M3 from a liquid to a solid dose formulation, which, based on market
research with physicians and patients is the preferred formulation, and
therefore further strengthens the competitive profile of NTCD-M3. As a result
of these changes, Sebela Pharmaceuticals intend to conduct a small Phase 2
study to create new data on the solid dose formulation and de-risk the Phase 3
study. Sebela has the right, at its own cost, to complete any further trials.
The company is working with Sebela through the joint steering committee to
accelerate the development plan to commercialisation.
In 2024 the plan is to complete the necessary manufacturing process
development to enable the production of product for clinical trial supply and
to strengthen manufacturing for future commercial supply. Following this, our
partner, Sebela Pharmaceuticals, can then initiate the next stage of clinical
development in 2025.
SPOR-COV
Following the period end we notified SporeGen of our intention not to extend
our collaboration development after it concludes in April 2024, as we focus
resources on development of the XF platform and our other key company pipeline
programmes.
Outlook for Destiny Pharma
Destiny Pharma will continue to progress along its course to become a
world‑leading, anti‑infective company that develops products that play
both an important role in protecting vulnerable patients across the world from
potential lethal infections and achieves commercial success.
Given the significant opportunity that it presents, management will be focused
on securing progression of XF-73 nasal into Phase 3 study as quickly as
possible. Destiny Pharma is developing a new clinical trial design, which
builds upon previous engagement with the key regulators in the US and Europe,
that, we believe, will more than halve the previously planned Phase 3 trial
costs. The new clinical trial design maintains the previous target indication
and commercial opportunity. To enable Destiny Pharma to capitalise on the
significant and important potential of XF-73 nasal, the Board are now
undertaking a review of strategic options for XF-73 nasal to determine how
best to support the company's advancement of the programme.
The partnering deal for NTCD-M3 announced with Sebela demonstrates that
management are able to deliver on the company's strategy and are able to find
partners to support the development of the company's key assets through the
final stages of development to approval and commercialisation. Management will
continue to look at opportunities to strengthen the programme to enhance
commercial competitiveness such as the shift to a solid dose oral
presentation.
Additionally, cash resources are also being used to progress the exciting
pipeline candidates from the pre‑clinical XF pipeline, with the XF-73 dermal
programme being the most important. 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,
listed on AIM, 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 company and to build a very
valuable company for our shareholders.
Chris Tovey
Chief Executive Officer
24 April 2024
Chief Financial Officer's Statement
Financial review
During 2023 we intensified partnering activities for our lead asset, XF-73
nasal, and completed US market analysis that confirmed the significant market
opportunity for this asset of up to $1 billion in the US alone. We also
continued to progress the scale-up manufacture required for Phase 3 clinical
studies and commercialisation. Our target remains progressing XF-73 nasal into
Phase 3 clinical studies as quickly as possible.
We were pleased to announce, in February 2023, an exclusive collaboration and
co-development agreement for North American rights for NTCD-M3 with Sebela
Pharmaceuticals, a key milestone event for the company. In conjunction with
this transaction, we strengthened the company's balance sheet, securing £7.3
million gross proceeds via an equity fundraise from existing and new
investors.
The total comprehensive loss for the year was £5.7 million (2022: £6.5
million).
At 31 December 2023 the company had cash and cash equivalents totalling £6.4
million (2022: £4.9 million), providing a cash runway until Q1 2025. Details
of the Directors' assessment on going concern is provided in note 3 to the
financial statements.
Revenue
Destiny Pharma is a clinical stage research and development company and is yet
to commercialise and generate sales from its current programmes. During the
year, the company received £0.8 million of licence fee income by way of an
upfront payment from Sebela Pharmaceuticals, under its exclusive collaboration
and co-development agreement for NTCD-M3 (2022: £nil).
Operating expenses
Operating expenses, which exclude the share-based payment charge of £0.5
million (2022: £0.5 million) during the period, amounted to £7.1 million
(2022: £7.4 million). Included within this total are R&D costs totalling
£3.3 million (2022: £4.9 million) which were £1.6 million lower than the
prior year. This was largely due to the re-phasing of manufacturing costs for
our NTCD-M3 programme. We successfully transitioned to a new CDMO for the
programme in the second half of the year and are pleased with progress since
the change.
Other operating costs increased by 51% to £3.8 million (2022: £2.5 million).
Other operating costs are split between general overheads, which increased by
£1.1 million to £2.2 million (2022: £1.1 million), and employee costs,
which increased by £0.2 million to £1.6 million (2022: £1.4 million).
During the year, one-off operating costs were incurred in relation to changes
to the Board, as we strengthened the leadership team, and completing the
Sebela transaction. We also increased spend on business development
activities, including completing US market analysis for XF-73 nasal.
Taxation
The company received a repayment of £1.2 million in respect of the R&D
tax credit claimed during the year ended 31 December 2022. The R&D tax
credit receivable in the balance sheet of £0.8 million is an estimate of the
cash repayment the company expects to qualify for in respect of activities
during the year ended 31 December 2023. However, as at the date of this
report, these amounts have not yet been agreed with HMRC.
Cash flow
Net cash outflow from operating activities in 2023 was £5.5 million (2022:
£5.9 million) against an operating loss of £6.7 million (2022: £7.8
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 £1.2
million and net movements in working capital of £(0.4) million.
Net cash from financing activities during the year of £6.7 million represents
the net proceeds of the equity fundraise in the first quarter of 2023 (2022:
£6.1 million). The net increase in cash and cash equivalents during the
period was £1.5 million (2022: increase of £0.3 million).
Balance sheet
Total assets increased to £10.0 million (2022: £8.8 million), largely due to
a higher cash and cash equivalents compared to the prior year.
Intangible assets comprise the initial acquisition cost of NTCD-M3, acquired
in November 2020, and a milestone payment to NTCD LLP of £0.1 million
following completion of the Sebela transaction. Other receivables, and
prepayments decreased to £1.2 million (2022: £1.6 million), which was
primarily due to a lower R&D tax credit compared to the prior year.
Year-end cash and cash equivalents totalled £6.4 million (2022: £4.9
million.
Total liabilities decreased to £0.8 million (2022: £1.2 million), primarily
due to lower accrued development costs at the year end compared to the prior
year.
Shaun Claydon
Chief Financial Officer
24 April 2024
Statement of comprehensive income
For the year ended 31 December 2023
Year ended Year ended
31 December 31 December
2023 2022
Notes £ £
Continuing operations
Licence fee income 7 831,552 -
Other operating income - 154,499
Administrative expenses (7,092,067) (7,397,014)
Share-based payment expense (475,479) (533,829)
Loss from operations (6,735,994) (7,776,344)
Finance income 5 289,756 64,800
Loss before tax (6,446,238) (7,711,544)
Taxation 6 789,202 1,207,975
Loss and total comprehensive loss for the year from continuing operations (5,657,036) (6,503,569)
Loss per share - pence
Basic 8 (6.2)p (9.3)p
Diluted 8 (6.2)p (9.3)p
Statement of financial position
As at 31 December 2023
As at As at
31 December 31 December
2023 2022
Notes £ £
Assets
Non-current assets
Property, plant and equipment 19,235 24,621
Intangible assets 9 2,341,469 2,261,435
Non-current assets 2,360,704 2,286,056
Current assets
Other receivables 10 899,725 1,410,452
Prepayments 314,452 195,814
Cash and cash equivalents 11 6,382,603 4,903,461
Current assets 7,596,780 6,509,727
Total assets 9,957,484 8,795,783
Equity and liabilities
Equity
Share capital 12 952,719 733,071
Share premium 39,568,625 33,043,569
Accumulated losses (31,332,176) (26,150,619)
Shareholders' equity 9,189,168 7,626,021
Current liabilities
Trade and other payables 13 768,316 1,169,762
Current liabilities 768,316 1,169,762
Total equity and liabilities 9,957,484 8,795,783
Statement of changes in equity
For the year ended 31 December 2023
Share Share Accumulated
capital premium losses Total
£ £ £ £
1 January 2022 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
Comprehensive loss for the year
Total comprehensive loss - - (5,657,036) (5,657,036)
Total comprehensive loss for the year - - (5,657,036) (5,657,036)
Contributions by and distributions to owners
Issue of share capital 219,648 7,127,065 - 7,346,713
Costs of share issue - (602,009) - (602,009)
Share-based payment expense - - 475,479 475,479
Total contributions by and distributions to owners 219,648 6,525,056 475,479 7,220,183
31 December 2023 952,719 39,568,625 (31,332,176) 9,189,168
Statement of cash flows
For the year ended 31 December 2023
Year ended Year ended
31 December 31 December
2023 2022
£ £
Cash flows from operating activities
Loss before income tax (6,446,238) (7,711,544)
Depreciation of property, plant and equipment 6,196 12,328
Share-based payment expense 475,479 533,829
Finance income (289,756) (64,800)
(6,254,319) (7,230,187)
(Increase)/decrease in other receivables and prepayments (26,684) 14,316
(Decrease)/increase in trade and other payables (401,446) 396,326
Cash used in operations (6,682,449) (6,819,545)
Tax received 1,207,975 927,256
Net cash used in operating activities (5,474,474) (5,892,289)
Cash flows from investing activities
Purchase of property, plant and equipment (810) (1,067)
Purchase of intangible assets (80,034) -
Interest received 289,756 64,800
Net cash inflow from investing activities 208,912 63,733
Cash flows from financing activities
New shares issued net of issue costs 6,744,704 6,086,455
Net cash inflow from financing activities 6,744,704 6,086,455
Net increase in cash and cash equivalents 1,479,142 257,899
Cash and cash equivalents at the beginning of the year 4,903,461 4,645,562
Cash and cash equivalents at the end of the year 6,382,603 4,903,461
Notes to the financial statements
1. General 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. Going concern
The company has not yet recorded any sales revenues and funds its operations
through periodic capital issues, commercial partnerships and research grants.
Management prepares detailed working capital forecasts which are reviewed by
the Board on a regular basis. These forecasts consider sensitivities on
receipts and costs. Based on the Directors' current forecasts the company's
current cash runway is forecast to extend until Q1 2025 at which point a
further capital injection would be required.
The Directors continue to evaluate all options to fund the development of its
assets in a way that realises maximum value whilst meeting the future needs of
the company, including continuing discussions with a number of potential
partners for its lead assets. However, there is no guarantee that attempts to
secure adequate cash inflows from commercial partnerships or through equity
fund raising or other sources within the timescales stated above will be
successful. These conditions indicate the existence of a material uncertainty,
which may cast significant doubt about the company's ability to continue as a
going concern.
The Directors have a reasonable expectation that the company will be able to
secure the necessary funds to have adequate cash resources to continue to meet
the requirements of the business. Accordingly, the Board continues to adopt
the going concern basis in preparing the financial statements.
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
2023 2022
£ £
Finance income
Deposit account interest 289,756 64,800
6. Income tax
31 December 31 December
2023 2022
£ £
Research and development tax credits based on costs in the financial year (789,202) (1,207,975)
7. Licence fee income
31 December 31 December
2023 2022
£ £
Licence fee income 831,552 -
Licence fees for the year ended 31 December 2023 comprise an upfront payment
of $1 million (£0.8 million) received from Sebela Pharmaceutical® ("Sebela")
relating to the exclusive collaboration and co-development agreement
("licensing agreement") for NTCD-M3, signed in February 2023.
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
2023 2022
£ £
Loss for the year attributable to shareholders (5,657,036) (6,503,569)
Weighted average number of shares 90,671,329 70,182,231
Loss per share - pence
- Basic and diluted (6.2)p (9.3)p
9. Intangible assets
Acquired
development
programmes
£
Cost
At 1 January 2022 2,261,435
Additions -
At 31 December 2022 2,261,435
Additions 80,034
At 31 December 2023 2,341,469
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. Consideration payable by the company for the asset is
made up of an upfront payment, development milestones, sales royalties and
sales milestones. The upfront payment was recognised as an addition in 2020.
In February 2023, the company signed an exclusive collaboration and
co-development agreement ("licensing agreement") for NTCD-M3 with Sebela
Pharmaceuticals. This licencing agreement triggered a milestone payment of
$100,000 (£80,034) under the company's agreement to acquire the NTCD-M3
programme. This is included as an addition in 2023.
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
2023 2022
£ £
Other receivables 110,523 202,477
Research and development tax repayment 789,202 1,207,975
899,725 1,410,452
11. Cash and cash equivalents
31 December 31 December
2023 2022
£ £
Cash and bank balances 2,704,395 1,903,461
Call deposits 3,678,208 3,000,000
Cash and cash equivalents 6,382,603 4,903,461
12. Share capital
Ordinary shares of £0.01 each 31 December 31 December
2023 2022
Number Number
Authorised((1)) n/a n/a
Allotted and fully paid
At 1 January 73,307,105 59,871,921
Issued for cash during the year 21,964,758 13,435,184
At 31 December 95,271,863 73,307,105
(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
2023 2022
£ £
Authorised n/a n/a
Allotted and fully paid 952,719 733,071
31 December 31 December
2023 2022
£ £
Share premium account 39,568,625 33,043,569
21,294,758 ordinary shares were issued during the year at a premium of
£7,127,065. Costs of share issue charged to share premium during the year
were £602,009.
Each ordinary share ranks pari passu for voting rights, dividends and
distributions, and return of capital on winding up.
Grants of options
On 12 May 2023, 213,854 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 £0.33.
On 12 May 2023, 217,500 Employee LTIP 2018 options were granted to twelve
employees at an exercise price of £0.35 per ordinary share. The fair value
per option was £0.26.
On 18 November 2023, 3,053,532 Employee LTIP 2020 options were granted to
three employees at an exercise price of £0.01 per ordinary share. The fair
value per option was £0.29.
The number and weighted average exercise prices of share options were as
follows:
31 December 2023 31 December 2022
Number of Weighted Number of Weighted
options average options average
exercise price exercise price
Balance outstanding at beginning of the year 8,868,230 £0.115 9,759,125 £0.112
Granted during year 3,484,886 £0.031 244,282 £0.360
Exercised during year (1,002,802) £0.010 (526,177) £0.024
Lapsed during year (1,684,502) £0.170 (609,000) £0.248
Options outstanding at end of the year (9,665,812) £0.087 8,868,230 £0.115
Options exercisable at the end of the year 5,615,320 £0.063 5,800,049 £0.035
The weighted average remaining contractual life of share options outstanding
at 31 December 2023 was 6.1 years (2022: 4.3 years).
The expense arising from share-based payment transactions recognised in the
year was as follows:
31 December 31 December
2023 2022
£ £
Share-based payment expense 475,479 533,829
13. Trade and other payables
31 December 31 December
2023 2022
£ £
Trade payables 395,428 172,543
Social security and other taxes 70,262 80,369
Accrued expenses 299,243 898,326
Pension contributions payable 3,383 18,524
768,316 1,169,762
14. Statutory accounts
The financial information set out above does not constitute the company's
statutory accounts for the year ended 31 December 2023 but is derived from
those accounts. The audit report on those accounts was unqualified but drew
attention to a material uncertainty related to going concern. The report did
not contain a statement under section 498 (2) or (3) of the Companies Act
2006. The statutory accounts for the year ended 31 December 2023 have not yet
been filed at Companies House.
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