REG - Fusion Antibodies - Half-year Report
19/11/2024 07:00
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RNS Number : 6794M Fusion Antibodies PLC 19 November 2024
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse (amendment)
(EU Exit) Regulations 2019/310 ("MAR"). With the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
19 November 2024
Fusion Antibodies plc
("Fusion" or the "Company")
Half year Report
Fusion Antibodies plc (AIM: FAB), specialists in pre-clinical antibody
discovery, engineering and supply for both therapeutic drug and diagnostic
applications, announces its unaudited interim results for the six months ended
30 September 2024 ("H1 FY2025").
Financial highlights
· Revenues of £1.2 million (H1 FY2024: £0.5 million)
· Expenditure on R&D maintained at £0.18 million (H1 FY2024:
£0.18 million)
· Loss of £0.76 million (H1 FY2024: £1.4 million loss)
· Cash position in the bank at 30 September 2024 was £0.4 million (31
March 2024: £1.2 million) with a further £457k owed by existing debtors
Operational highlights
· First contract to develop a bespoke non-human antibody species
OptiPhage(TM) library secured
· Continued progress in development of the OptiMAL® library
· Collaboration Agreement with the National Cancer Institute ("NCI") was
expanded to include the humanisation of several of the NCI's existing camelid
nanobodies
· Receipt of Further orders from a leading diagnostics company under the
master services agreement ("MSA") announced on 14 February 2024
Commenting on the interim results, Adrian Kinkaid, CEO of Fusion Antibodies
plc, said: "These interim figures bear witness to the significant improvements
to the business and the more favourable market conditions we have deservedly
enjoyed in the period. The Company is now well positioned, generating the
financial evidence of a significant recovery and promising growth in the
Company's prospects. Of particular note is the increase in margins
complementing the more than doubling of revenues, which is testament to the
Board's and the team's determination to move toward profitability. We remain
focused on meeting our stated goal of achieving cash flow breakeven without
needing to raise additional funds."
Investor presentations
Fusion will host a presentation on the results open to all investors via the
Investor Meet Company platform at 11.00am on Thursday, 21 November 2024,
delivered by Dr Adrian Kinkaid, CEO and Stephen Smyth, Interim CFO. Adrian
will also be presenting at the ShareSoc meeting on 12 December 2024. The
Company is committed to providing an opportunity for all existing and
potential investors to hear directly from management on these results.
Investors can sign up to Investor Meet Company for free and add to meet Fusion
Antibodies plc via the following
link: https://www.investormeetcompany.com/fusion-antibodies-plc/register-investor
(https://www.investormeetcompany.com/fusion-antibodies-plc/register-investor)
Further details on how to register for the ShareSoc meeting can be found via
the following link: Discovery Company Webinar 12 December 5:00pm - ShareSoc
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.sharesoc.org%2Fevents%2Fdiscovery-company-webinar-12-december-500pm%2F&data=05%7C02%7C%7Ca77d3b0d7e9f4c00323c08dd03d10a79%7Cb9c541d1c5cd4cf18b4e49d0b1ad9021%7C0%7C0%7C638670918593238916%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=zxNNIfsgQJgfGIcWiJq9EKjQj%2Fih3VUwUAk6L3itWJs%3D&reserved=0)
Enquiries:
Fusion Antibodies plc www.fusionantibodies.com
Adrian Kinkaid, Chief Executive Officer Via Walbrook PR
Stephen Smyth, Chief Financial Officer
Fusion Antibodies interactive investor hub https://investorhub.fusionantibodies.com/
(https://investorhub.fusionantibodies.com/)
Allenby Capital Limited Tel: +44 (0) 20 3328 5656
James Reeve/Vivek Bhardwaj (Corporate Finance)
Tony Quirke/Joscelin Pinnington (Sales and Corporate Broking)
Shard Capital Partners LLP
Damon Heath (Joint Broker) Tel: +44 (0) 207 186 9952
Walbrook PR Tel: +44 (0)20 7933 8780 or fusion@walbrookpr.com
Anna Dunphy Mob: +44 (0)7876 741
001
About Fusion Antibodies plc
Fusion Antibodies plc ("Fusion Antibodies", "Fusion" or the "Company") is a
Contract Research Organisation (CRO) located in Northern Ireland that offers a
integrated end-to-end range of antibody discovery, engineering and expression
services for all stages of human therapeutic, veterinary therapeutic and
diagnostic antibody development.
The range of services offered includes antibody discovery/generation,
development, characterisation, optimisation, and small-scale production. In
addition, the Company also offers antigen design, antigen expression, antibody
purification and sequencing, antibody humanisation using Fusion's proprietary
CDRx(TM) platform and cell line development, producing antibody generating
stable cell lines optimised for use downstream by the customer to produce
material for clinical trials. Since 2012, the Company has successfully
sequenced and expressed many thousands of antibodies and successfully
completed over 270 humanisation projects for its international customer base,
which has included eight of the top 10 global pharmaceutical companies by
revenue.
At every stage, our client's vision is central to how we work in combining the
latest technological advances with cutting edge science. In this work our
world-class humanization and antibody optimization platforms harness the power
of natural somatic hypermutation (SHM) to ensure the best molecule goes to the
clinic.
Fusion Antibodies' growth strategy is based on enabling Pharma and Biotech
companies get to the clinic more effectively, using molecules with optimized
therapeutic profile and enhanced potential for successful development and
approval and, ultimately, on speeding up the drug discovery and development
process. Our Integrated Therapeutic Antibody Services ("ITA") offering
enhances the efficiency of this process by providing a continuous service
offering from as early as target nomination to as far as stable cell line.
Fusion's use of SHM to create a fully human antibody library to capture the
human antibody repertoire addresses a continuing market need in antibody
discovery.
Fusion Antibodies' emphasis on antibody therapeutics is based on the size and
growth rate in the sector, with the market valued at $186 billion in 2021 and
forecast to surpass $400 billion by 2028. As of June 2022, there were 150
approved antibody therapies on the market and nearly 600 antibody drugs in
clinical trials.
CHAIRMAN'S STATEMENT
Operational Review
Following on from the end of FY2024, the first six months to 30 September 2024
showed a significant improvement over H1 FY2024. The steady recovery is
encouraging as we move into the second half of the year and beyond. The Board
continues to be optimistic about the prospects for the remainder of the
current financial year and for further growth into FY2026. Nevertheless, the
Board remains prudently mindful of potential market volatility and the
inherent science-based risks in any antibody-based discovery and development,
whether human or veterinary, therapeutics or diagnostics.
Our mission is to get better antibodies into the clinic more rapidly. In this
way we enable biopharmaceutical, veterinary and diagnostic companies to
discover new antibodies and maximise their performance so that highly
optimized molecules are available to enter the clinic more efficiently for the
benefit of global health and the global healthcare industry. The combination
of our current Discovery, Engineering and Supply services aims to enhance the
client journey with the development of high performing antibodies to their
targets. We continue to develop new improved services and technologies to
ensure we are at the cutting edge of the market as the partner of choice.
The Company continues to attract new clients for its established services,
such as humanization, as well as for our novel technologies such as
OptiPhage(TM) and Mammalian Display. We secured an initial purchase order for
the former which was announced on 14 April 2024 to develop a bespoke
OptiPhage(TM) library for a non-human antibody species with a leading global
provider of antibodies for use in research and diagnostics.
The Mammalian Display service is also gaining traction and in particular has
enjoyed considerable success with a major client, delivering a level of
expression that is more than an order of magnitude higher than that client's
existing commercial manufacturing processes. We have also received further
orders from a leading diagnostics company under the master services agreement
announced on 14 February 2024 and continue to build this important
relationship.
We seek to build on these and other technological advantages to help further
differentiate Fusion's premium offerings and to command higher margins than
are achievable from more routine services. Commercially, we are building on
the diagnostic contracts already gained where we can see further opportunities
to work with new partners in this sector. Additionally, we are working hard
to gain more exposure in the growing veterinary market and building awareness
within this specialist client base.
It is particularly pleasing to have achieved considerable improvements in
margins in H1 FY2025 and we seek to ensure that this trend continues for the
rest of the current year and beyond.
Financial Review
Revenues for the six-month period ending 30 September 2024 were £1.2 million
(H1 FY2024: £0.5 million). All revenues were for core services and contained
no milestone payments.
The 27% gross profit percentage on underlying revenues was higher than in the
same period last year due to the continued realisation of cost savings from
restructuring implemented (H1 FY2024: (15)%).
R&D expenditure in H1 FY2025 was £176k, a similar level to the comparable
period in FY2024 (H1 FY2024: £182k) reflecting the continuing investment,
particularly in the OptiMAL® Library project.
SG&A expenditure of £943k was £210k lower than in H1 FY2024 due
primarily to restructuring and cost saving measures which we began
implementing in H2 FY2023.
Loss for the period resulting from the above was £758k (H1 FY2024: £1.36
million loss).
Cash used in operations was £752k, compared with £1,213k used in H1 FY2024.
The H1 FY2025 operational outflow includes the £176k investment in R&D.
The total outflow was £760k and the closing cash balance at 30 September 2024
was £439k with a further £457k owed from existing debtors.
Key Performance Indicators
The key performance indicators (KPIs) regularly reviewed by the Board are:
KPI H1 FY2025 H1 FY2024
Underlying revenue growth 123% (71)%
EBITDA* £(734)k (£1.23m)
Cash used in operations £(752)k (£1.35m)
* Earnings before interest, tax, depreciation and amortisation
The investment in R&D and the impact on EBITDA is set out in Note 12 to
these statements. EBITDA for the period was a loss of £734k (H1 FY2024:
£1.29 million loss) and adjusting for research and development expenditure
shows an EBITDA loss excluding R&D of £558k for the period (H1 FY2024:
£1.11 million loss).
Outlook
In Q3, the Company has continued to see an improvement in lead generation and
prospective customer engagement. We have seen the positive outcome of
diversifying into adjacent markets such as Diagnostics and see potential
growth opportunities in all of our services going forward. Continued
efficiency improvements are also expected to contribute to further margin
improvement. The Board is confident that the sector is recovering and the
prospects for the Company remain very encouraging. Whilst challenges remain
for our international customer base, we continue to meet these challenges and
capitalise on the opportunities presented.
Cash continues to be well controlled, and it remains a key strategic goal to
achieve cash flow break even without having to raise additional equity
capital.
Statement of Directors' Responsibilities
The Directors confirm, to the best of their knowledge:
· The condensed set of financial statements has been prepared in
accordance with IAS34 'Interim Financial Reporting';
· The interim management report includes a fair review of the
information required by DTR 4.2.7R of the Disclosure and Transparency Rules of
the of the United Kingdom's Financial Conduct Authority, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the remaining
six months of the year, and gives a true and fair view of the assets,
liabilities, financial positions and profit for the period of the Company; and
· The interim management report includes a fair review of the
information required by DTR 4.2.8R of the Disclosure and Transparency Rules of
the United Kingdom's Financial Conduct Authority, being a disclosure of
related party transactions and changes therein since the previous annual
report.
On behalf of the Board
Dr Simon Douglas
Non-executive Chairman
18 November 2024
Condensed Statement of Comprehensive Income
For the six months ended 30 September 2024
6 months to 30.09.24 6 months to 30.09.23 Year to 31.03.24 Audited
Unaudited Unaudited £'000
£'000 £'000
Notes
Revenue 1,207 541 1,136
Cost of sales (882) (625) (1,181)
Gross profit (loss) 325 (84) (45)
Other operating income 10 - - 5
Administrative expenses 3 (1,119) (1,335) (2,247)
Operating loss (794) (1,419) (2,288)
Finance income 4 4 2 3
Finance costs 4 (2) (3) (5)
Loss before tax (792) (1,420) (2,289)
Income tax credit 5 34 63 63
Loss for the period (758) (1,357) (2,226)
Total comprehensive loss for the period
(758) (1,357) (2,226)
Pence Pence Pence
Basic loss per share 6 (0.8) (2.3) (3.9)
Condensed Statement of Financial Position
As at 30 September 2024
As at As at As at
30.09.24 30.09.23 31.03.24
Unaudited Unaudited Audited
Notes
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 7 97 250 158
97 250 158
Current assets
Inventories 230 524 460
Trade and other receivables 762 471 557
Current tax receivable - 326 46
Cash and cash equivalents 439 487 1,199
1,431 1,808 2,262
Total assets 1,528 2,058 2,420
Liabilities
Current liabilities
Trade and other payables 417 537 564
Borrowings 8 23 17 20
440 554 584
Net current assets 990 1,254 1,678
Non-current liabilities
Borrowings 8 9 30 23
Provisions for other liabilities and charges
20 20 20
Total liabilities 469 604 627
Net assets 1,059 1,454 1,793
Equity
Called up share capital 12 3,815 2,378 3,815
Share premium reserve 7,743 7,981 7,743
(Accumulated losses)/retained earnings
(10,499) (8,905) (9,765)
Equity 1,059 1,454 1,793
Condensed Statement of Changes in Equity
For the six months ended 30 September 2024
6 months ended 30 September 2024 Called up share capital Share premium reserve Accumulated losses Total
Unaudited £'000 £'000 £'000 Equity
£'000
At 1 April 2024 3,815 7,743 (9,765) 1,793
Loss for the period - - (758) (758)
Issue of share capital - - - -
Share options - value of employee services
- - 24 24
Total transactions with owners, recognised directly in equity
- - 24 24
At 30 September 2024 3,815 7,743 (10,499) 1,059
6 months ended 30 September 2023 Called up share capital Share premium reserve Retained earnings Total
Unaudited £'000 £'000 £'000 Equity
£'000
At 1 April 2023 1,040 7,647 (7,564) 1,123
Loss for the period - - (1,357) (1,357)
Issue of share capital 1,338 334 - 1,672
Share options - value of employee services
- - 16 16
Total transactions with owners, recognised directly in equity
- - 16 16
At 30 September 2023 2,378 7,981 (8,905) 1,454
Year ended 30 March 2024 Called up share capital Share premium reserve Accumulated losses Total
Audited £'000 £'000 £'000 Equity
£'000
At 1 April 2023 1,040 7,647 (7,564) 1,123
Loss for the year - - (2,226) (2,228)
Share options - value of employee services
- - 25 25
Total transactions with owners, recognised directly in equity
2,775 96 25 2,896
At 31 March 2024 3,815 7,743 (9,765) 1,793
Statement of Cash Flows
For the six months ended 30 September 2024
6 months to 6 months to Year to 31.03.24
30.09.24 30.09.23 Audited
Unaudited Unaudited £'000
£'000 £'000
Cash flows from operating activities
Loss for the period (758) (1,357) (2,226)
Adjustments for:
Share based payment expense 24 16 86
Depreciation 60 125 220
Finance income (4) (2) (3)
Finance costs 2 3 5
Income tax credit (80) (63) (63)
Decrease/(increase) in inventories 230 15 79
Decrease/(increase) in trade and other receivables (79) 219 133
(Decrease)/increase in trade and other payables (148) (307) (280)
Cash used in operations (752) (1,351) (2,049)
Income tax received - - 280
Net cash used in operating activities (752) (1,351) (1,769)
Cash flows from investing activities
Purchase of property, plant and equipment - - (2)
Finance income - interest received 4 2 3
Net cash generated by/(used in) investing activities 4 2 1
Cash flows from financing activities
Proceeds from issue of share capital - 1,672 2,808
Proceeds from new borrowings - - -
Repayments of borrowings (11) (28) (33)
Finance costs - interest paid (2) (3) (5)
Net cash (used in)/generated from financing activities (13) 1,641 2,770
Net increase/(decrease) in cash and cash equivalents (761) 292 1,002
Cash and cash equivalents at the beginning of the period
1,199 195 195
Effects of exchange rate changes on cash and cash equivalents 1 - 2
Cash and cash equivalents at the end of the period 439 487 1,199
Notes to the Interim Results
For the six months ended 30 September 2024
1 Basis of Preparation
The condensed financial statements comprise the unaudited results for the six
months to 30 September 2024 and 30 September 2023 and the audited results for
the year ended 31 March 2024. The financial information for the year ended 31
March 2024 does not constitute the full statutory accounts for that period.
The Annual Report and Financial Statements for the year ended 31 March 2024
have been filed with the Registrar of Companies. The Independent Auditor's
Report on the Annual Report and Financial Statements for the year ended 31
March 2024 was unmodified and did not contain a statement under s498(2) or
s498(3) of the Companies Act 2006. The Auditor's report contained a material
uncertainty related to going concern.
The condensed financial statements for the period ended 30 September 2024 have
been prepared in accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and with IAS 34 'Interim Financial Reporting' as
adopted by the UK. The information in these condensed financial statements
does not include all the information and disclosures made in the annual
financial statements.
Going concern
At 30 September 2024 the Company had a cash balance of £0.4 million (together
with debtor balances of £457k). The Directors have reviewed detailed
projections for the Company. These projections are based on estimates of
future performance and have been adjusted to reflect various scenarios and
outcomes that could potentially impact the forecast outturn. Based on these
estimates, the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for at least 12 months
from the reporting date without raising additional funds. Accordingly, they
have prepared these condensed financial statements on the going concern basis.
The Directors note that there is inherent uncertainty in any cash flow
forecast, however this is further exacerbated given the nature of the
Company's trade and the industry in which it operates. Due to the risk that
revenues and the related conversion of revenue to cash inflows may not be
achieved as forecast over the going concern period, the Directors believe that
there exists a material uncertainty that may cast significant doubt on the
Company's ability to continue as a going concern without raising additional
funds and it may be unable to realise its assets and discharge its liabilities
in the normal course of business.
These financial statements do not include the adjustments that would result if
the Company were unable to continue as a going concern.
Accounting policies
The condensed financial statements have been prepared in a manner consistent
with the accounting policies set out in the financial statements for the year
ended 31 March 2024 and on the basis of the International Financial Reporting
Standards (IFRS) as adopted for use in the UK that the Company expects to be
applicable at 31 March 2025. IFRS are subject to amendment and interpretation
by the International Accounting Standards Board (IASB).
2 Segmental information
For all the financial periods included in these condensed financial
statements, all the revenues and costs relate to the single operating segment
of research, development and manufacture of recombinant proteins and
antibodies.
3 Administrative expenses
6 months to 30.09.24 6 months to 30.09.23 Year to 31.03.24
Unaudited Unaudited Audited
£'000 £'000 £'000
Research & development 176 182 254
Selling, general and administration 943 1,153 1,993
1,119 1,335 2,247
4 Finance income and costs
6 months to 30.09.24 6 months to 30.09.23 Year to 31.03.24
Unaudited Unaudited Audited
£'000 £'000 £'000
Income
Bank interest receivable 4 2 3
6 months to 30.09.24 6 months to 30.09.23 Year to 31.03.24
Unaudited Unaudited Audited
£'000 £'000 £'000
Expense
Interest expense on other borrowings 2 3 5
5 Income tax credit
6 months to 30.09.24 6 months to 30.09.23 Year to 31.03.24
Unaudited Unaudited Audited
£'000 £'000 £'000
Current tax (34) (63) (63)
6 Loss per share
6 months to 6 months to Year to
30.09.24 30.09.23 31.03.24
Unaudited Unaudited Audited
Number Number Number
Loss for the financial year (758) (1,357) (2,190)
Loss per share pence pence pence
Basic (0.8) (2.3) (3.9)
Basic earnings per share is calculated by dividing the basic earnings for the
period by the weighted average number of shares in issue during the period.
6 months to 6 months to Year to
30.09.24 30.09.23 31.03.24
Unaudited Unaudited Audited
Number Number Number
Issued ordinary shares at the end of the period
95,365,564 59,453,714 95,365,564
Weighted average number of shares in issue during the period 95,365,564 46,496,775 55,556,020
7 Property, plant and equipment
Right of use assets Leasehold Plant & Fixtures, fittings & equipment Total
£'000 property machinery £'000 £'000
£'000 £'000
Cost
At 1 April 2024 14 844 2,398 277 3,533
Additions - - - - -
Disposals - - (6) - (6)
At 30 September 2024 14 844 2,392 277 3,527
Accumulated depreciation
At 1 April 2024 11 844 2,271 249 3,375
Disposals - - (5) - (5)
Depreciation charged in the period
2 - 47 12 61
At 30 September 2024 13 844 2,313 261 3,431
Net book value
At 30 September 2024 1 - 80 16 97
At 31 March 2024 3 - 127 28 158
8 Borrowings
At 30 September At 30 September At 31 March
2024 2023 2024
£'000 £'000 £'000
At 1 April 2024 43 75 75
Additions in period - - -
Interest 2 3 5
Repayments (13) (31) (37)
At period end 32 47 43
Amounts due in less than 1 year 23 17 23
Amounts due after more than 1 year 9 30 20
32 47 43
Borrowings are secured by a fixed and floating charge over the whole
undertaking of the Company, its property, assets and rights in favour of
Northern Bank Ltd trading as Danske Bank.
9 Retirement benefits obligations
The Company operates a defined contribution scheme, the assets of which are
managed separately from the Company.
10 Transactions with related parties
The Company had the following transactions with related parties during the
period:
Invest Northern Ireland is a shareholder in the Company. The Company received
invoices for rent and estate services amounting to £60,000 (6 months ended 30
September 2023: £38,000, year ended 31 March 2024: £79,000). There was a
balance of £4,500 payable to Invest NI at the reporting dates presented.
11 Events after the reporting date
There have been no events from the reporting date to the date of approval
which need to be reported.
12 Reconciliation of loss to EBITDA and EBITDA excluding
R&D expenditure
6 months to 30.09.24 6 months to 30.09.23 Year to 31.03.24
Unaudited Unaudited Audited
£'000 £'000 £'000
Loss before tax (792) (1,420) (2,289)
Finance (income)/expense (2) 1 2
Depreciation and amortisation 60 125 219
EBITDA (734) (1,294) (2,069)
Expenditure on research and development 176 182 254
EBITDA excluding research and development (558) (1,112) (1,815)
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