REG - Fusion Antibodies - Year-end trading statement

Fusion AntibodiesAnnouncement

30/04/2024 07:00

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RNS Number : 4836M  Fusion Antibodies PLC  30 April 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.

 

30 April 2024

 

Fusion Antibodies plc

("Fusion" or the "Company")

 

Year-end trading statement

 

Fusion Antibodies plc (AIM: FAB), specialists in pre-clinical antibody
discovery, engineering and supply for both therapeutic drug and diagnostic
applications, provides an unaudited trading update for the year ended 31 March
2024 ("FY2024").

 

Highlights

 

·    Unaudited revenues for FY2024 of £1.14m (FY2023: £2.90m)

 

·    Increased activity in the second half of FY2024, including:

 

o  the entry into a collaboration agreement with the National Cancer
Institute for the use of OptiMAL®;

 

o  a first purchase order received under a master services agreement ("MSA")
with a leading diagnostics company; and

 

o  a follow-on project received with a US based biotechnology client.

 

·    Fundraise announced in February 2024, raising £1.37m (before
expenses) for general working capital and investment into commercial
activities

 

·    Significant increase in sales pipeline opportunities during H2
FY2024, with an orderbook at 31 March 2024 of £0.75m, representing 65 per
cent. of total FY2024 unaudited revenues

 

·    Cash position as at 31 March 2024 of £1.2m (31 March 2023: £0.2m)

 

During FY2024, Fusion was presented with several commercial challenges. Most
notably, a significant downturn in venture capital investment into
biotechnology companies, including therapeutic antibody development
programmes, impacted Fusion's primary customer type going into the financial
year. This directly impacted the Company's revenues for the year.

 

The Company took steps to meet the challenges presented by the increasing
headwinds in H1 through a significant restructuring exercise, reducing various
costs including a 38% reduction in headcount.  Furthermore, a new commercial
strategy was implemented, additionally targeting the adjacent Diagnostic,
Veterinary Medicine and Research Antibody markets. This diversification has
made the sales pipeline more resilient with less exposure to individual
sectors.

 

During H2 FY2024, the adverse investment conditions, although improving,
continued to impede certain clients placing orders, with some pipeline
projects yet to convert and some being received later than anticipated. In
several cases this was due to availability of client provided materials. This
resulted in revenue for H2 FY2024 being lower than was anticipated at the time
of announcement of the H1 FY2024 interim results.

 

Despite the effects of the headwinds described above, Fusion's client
conversion rate nevertheless improved throughout FY2024, with February and
March of 2024 being the Company's highest earning months of FY2024. This
contributed to revenues in the fourth quarter of FY2024 being approximately
47% higher than the first quarter of FY2024.

 

This increase in activity towards the end of the financial year has resulted
in a marked increase in the Company's sales opportunity pipeline. The
Company's order book as at 31 March 2024 was approximately £0.75m,
representing approximately 65% of the total FY2024 unaudited revenues.

 

This increase in activity and the order book will provide a foundation for
revenue growth in the current financial year ("FY2025").

 

The Company achieved a number of exciting developments in H2 FY2024,
including:

 

·    signing a collaboration agreement with the National Cancer Institute
("NCI") for the use of OptiMAL® in the discovery of novel antibodies against
targets selected by NCI post year end;

 

·    securing an estimated $650,000 follow-on project under a
collaborative research and development agreement with a US based biotechnology
company that Fusion started working with in 2021;

 

·    receipt of a first purchase order under a new MSA with a leading
diagnostics company - with further orders having been received under the MSA
by the customer subsequently; and

 

·    securing its first OptiPhage(TM) contract whereby Fusion will design
a phage display library using the diversity principles behind the OptiMAL®
library.

 

The Board of Fusion believe that these developments provide strong evidence
that the Company's diversification strategy, together with the recovering
economic climate, provide confidence for growth in FY2025.

 

To support Fusion's new commercial and sales strategy, the Company
successfully raised £1,375,000 in February 2024 through a placing of new
ordinary shares in the Company (the "Placing"). The issue price of the Placing
was a small discount of 5.66% to the prevailing share price despite
challenging market conditions and the Company has begun to apply the Placing
proceeds to strengthen its commercial team.

 

The Company's cash balance as at 31 March 2024 was £1.2m, positioning the
Company well for the current economic environment.

 

Adrian Kinkaid, CEO of Fusion, commented: "The 2023 calendar year was very
challenging for our clients and therefore also for us. We responded by taking
difficult but necessary action whilst also extending our traction with
adjacent markets (notably diagnostics, research antibodies and veterinary
medicine). As a result, we have secured some excellent new clients, including
global leaders in their respective fields, who are now engaging with the
Company for multiple projects, several of which are being run in parallel.
Achieving this diversification in client base, combined with a recovery in our
core human therapeutic sector, provides a very welcomed improvement in market
conditions going forward. We remain optimistic for our prospects and look
forward to updating the market further. We continue to be thankful to our
shareholders for all their support."

 

Enquiries:

 

 Fusion Antibodies plc                                               www.fusionantibodies.com
 Adrian Kinkaid, Chief Executive Officer                             Via Walbrook PR

 Stephen Smyth, Chief Financial Officer

 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 is a Belfast based contract research organisation ("CRO") providing a
range of antibody engineering services for the development of antibodies for
both therapeutic drug and diagnostic applications.

 

The Company's ordinary shares were admitted to trading on AIM on 18 December
2017. Fusion provides a broad range of services in antibody generation,
development, production, characterisation and optimisation. These services
include antigen expression, antibody production, purification and sequencing,
antibody humanisation using Fusion's proprietary CDRx (TM) platform and the
production of antibody generating stable cell lines to provide material for
use in clinical trials. Since 2012, the Company has successfully sequenced
and expressed over 250 antibodies and successfully completed over 200
humanisation projects and has an international, blue-chip client base, which
has included eight of the top 10 global pharmaceutical companies by revenue.

 

The Company was established in 2001 as a spin out from Queen's University
Belfast. The Company's mission is to enable pharmaceutical and diagnostic
companies to develop innovative products in a timely and cost-effective manner
for the benefit of the global healthcare industry. Fusion Antibodies provides
a broad range of services in antibody generation, development, production,
characterisation and optimisation.

 

Fusion Antibodies growth strategy is based on combining the latest
technological advances with cutting edge science to deliver new platforms that
will enable Pharma and Biotech companies get to the clinic faster, with the
optimal drug candidate and ultimately speed up the drug development process.

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