REG - N4 Pharma PLC - Interim Results
24/09/2024 07:00
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RNS Number : 3278F N4 Pharma PLC 24 September 2024
24 September 2024
N4 Pharma Plc
("N4 Pharma" or the "Company")
Interim Results
N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company developing
Nuvec®, a novel delivery system for vaccines and cancer treatments, announces
its unaudited interim results for the six months ended 30 June 2024.
Highlights:
· Two exciting therapeutic areas identified for the development of
products utilising Nuvec® and Liptide®.
· Positive results from collaboration with SRI International
("SRI") demonstrating the ability for Nuvec® to target cells and maintain
efficacy in the target gene cell.
· Further positive in vivo results from ongoing oral studies at the
University of Queensland to show the successful delivery of a Nuvec® capsule
into the intestine where it released its plasmid DNA payload to produce
localised protein expression.
· Application made to FDA for orphan drug designation in respect of
ECP105, for the prevention of scarring following glaucoma surgery.
· Reduced operating loss for the period £491,705 (30 June 2023:
£646,150) and R&D and general expenditure in line with budget.
· Cash position remains strong which at 30 June 2024 was
£1,204,946 (31 June 2023: £1,289,769), following a successful placing in
June to raise gross proceeds of £630,000.
· Post period end strengthening of the board with the appointment
of Mike Palfreyman as an independent Non-Executive Director.
Nigel Theobald, Chief Executive Officer of N4 Pharma Plc, commented:
"We have made excellent progress in the period and have continued to focus our
efforts to deliver the best opportunities to progress Nuvec® into the clinic
with a shift in emphasis towards product development with our first two
potential products now identified. In parallel our collaboration with SRI
continues to generate positive results and improves our data set to bring us
closer to commercial collaborations across multiple applications dependent on
any partner's needs.
"Cash expenditure continues to be tightly controlled to allow us to maximise
outcomes whilst preserving our cash resource as far as possible. I look
forward with optimism to the continuing the work and crystalising the pathway
towards commercially viable and clinically relevant products whilst presenting
our data alongside SRI to potential collaborators."
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 which has been incorporated into UK law by the European
Union (Withdrawal) Act 2018. Upon the publication of this announcement via
Regulatory Information Service, this inside information is now considered to
be in the public domain.
Enquiries:
N4 Pharma Plc Via N4 Pharma Investor Hub
Nigel Theobald, CEO
Luke Cairns, Executive Director
Engage with us directly at N4 Pharma Investor Hub Sign up at investors.n4pharma.com (https://investors.n4pharma.com/)
To find out more and see a video discussing the results and submit your https://investors.n4pharma.com/link/qy1YAy
questions visit us at: (https://investors.n4pharma.com/link/qy1YAy)
SP Angel Corporate Finance LLP Tel: +44 (0)20 3470 0470
Nominated Adviser and Joint Broker
Matthew Johnson/Caroline Rowe (Corporate Finance)
Vadim Alexandre/Rob Rees (Corporate Broking)
Turner Pope Investments (TPI) Limited Tel: +44 (0)20 3657 0050
Joint Broker
Andy Thacker
James Pope
About N4 Pharma
N4 Pharma is a specialist pharmaceutical company developing a novel delivery
system for vaccines and cancer treatments using its unique silica nanoparticle
delivery system called Nuvec®.
N4 Pharma's business model is to partner with companies developing novel
antigens for vaccines and cancer treatments to use Nuvec® as the delivery
vehicle to get their antigen into cells to express the protein needed for the
required immunity. As these products progress through pre clinical and
clinical programs, N4 Pharma will seek to receive upfront payments, milestone
payments and ultimately royalty payments once products reach the market.
Chairman's Statement
Half year results
I am pleased to report that in the six months ended 30 June 2024, £3,906 of
revenue was generated by the Group (30 June 2023: £nil).
The loss for the period was £491,705 (30 June 2023: £646,150) and in line
with planned expenditure.
Our cash balance at 30 June 2024 was £1,204,946 (30 June 2023: £1,289,769),
following a placing to raise gross proceeds of £630,000.
Operational update
After spending a significant amount of time investigating Nuvec® and
understanding its potential, we are pleased to report meaningful progress in
the development of Nuvec® as a delivery system for therapeutics. We have
previously reported on the development of a monodisperse formulation, crucial
for intravenous delivery, and the ability to load multiple siRNA molecules
onto the same Nuvec® particle. We are pleased to report that Nuvec®
delivery can be targeted to individual tissue types and that there is the
potential to use Nuvec® as an oral drug delivery approach for the treatment
of gastrointestinal ("GI") disorders. These new data have led to the
prospect of delivering two exciting lead products designed to address unmet
clinical needs.
The first, using Nuvec® has the potential to delivery an oral inflammation
inhibitor for the treatment of GI disorders including Inflammatory Bowel
Disease ("IBD") and Ulcerative Colitis ("UC"). The second product opportunity,
via our investment in Nanogenics Ltd, is exploring the use of Liptide® to
deliver a product for the prevention of scarring following surgery to treat
glaucoma. In parallel to shifting our focus towards product development, we
continue to explore other applications, particularly through our work with SRI
which, in turn, and through our marketing agreement with SRI, could lead to
further collaborations.
Nuvec®
We are now clear on a number of benefits of Nuvec® including the following:
· Its unique spikey surface structure allowing the binding of
DNA/RNA;
· It is relatively straightforward to manufacture and scale up;
· In contrast to Lipid Nanoparticles which are known to evoke an
immune response, the inert nature of nanosilica particles makes this an
unlikely (subject to confirmation) feature of Nuvec®;
· The addition of specific peptides and other ligands enables
cellular targeting;
· Any payload is protected from enzymatic digestion and pH
exposure;
· It is a simple process to load multiple siRNAs onto the same
nanoparticle for combination therapies;
· There is quick and efficient cellular uptake and endosomal
release enabling delivery of large numbers of siRNA copies into each cell; and
· It is capable of oral delivery or oligonucleotides including
siRNA and DNA.
Liptide®
Liptide's® benefits include:
· The encapsulation of the payload by the lipid element to protect
it;
· The peptide element allows efficient take up by the target cell;
· Higher delivery rates and specificity than traditional liposomal
vectors;
· High tolerability making it suitable for regular, repeat dosing;
· Improved safety profile compared to viral vectors; and
· Like a virus, Liptide® can bind to specific cell surface.
Oral Delivery
In April 2024, we announced that the Company had, through its research program
with the University of Queensland ("UQ"), undertaken further testing, in
vivo, to show the successful delivery of a Nuvec® capsule into the intestine
where it released its plasmid DNA payload to produce localised protein
expression. This work has reinforced the potential of Nuvec® as an oral
delivery system for multiple nucleotide payloads.
In this experiment, an enterically-coated capsule containing PEGylated Nuvec®
loaded with plasmid DNA expressing ovalbumin was administered on day 0 and
subsequent capsules on day 3, day 6, day 9 with a booster capsule at day 21.
Protein expression was measured to be significantly higher in the upper
gastrointestinal tract of the subject than controls (DNA alone and
non-PEGylated DNA loaded Nuvec®) up until day 25. In addition, a
significantly higher ovalbumin antibody response was measured at day 36 in the
PEGylated Nuvec® sample compared to control.
The work at UQ will now focus on combining the oral delivery work we have done
with our ability to multiple load Nuvec® with more than one RNA. The aim for
this is to show how an oral product can both reduce the unwanted inflammation
in the gut associated with IBD whilst simultaneously helping the body's
anti-inflammatory response fight back. In vitro testing of this has begun and
we hope to have in vivo testing underway before the end of the year.
We believe the market for such an oral product to treat GI inflammation to be
significant. Current therapies for immune-medicated inflammatory diseases,
such as IBD, are sub-optimal requiring regular, painful, injections which can
result in reduced patient compliance. Injectable products to treat these
disorders represented 78% of a market worth $20.4bn in 2023 and is expected to
grow by a CAGR of 3.9% to over $27.6nn by 2030¹. The ability to deliver
an oral medication targeting the same mechanism as the antibody-based
therapeutics would represent a preferable form of treatment. With 5 million
sufferers of the two main types of IBD (Crohn's disease and ulcerative
colitis) there is huge potential for a product to address this market and it
is estimated that the oral segment of this market could be worth $7bn by 2030.
There is a huge market opportunity for such a product, mainly as an oral
substitute for the largest sector already of TNF inhibitors and to compete
with the inhibitor drugs being developed. If such a product could take 50%
share of the existing TNF inhibitor market and 25% of the oral market, it
would potentially be worth $12bn. Even achieving just 10% of this at $1.2bn
would give the product significant potential.
(¹ 2023 Grand View Research, Inc. Inflammatory Bowel Disease Treatment.
MARKET ANALYSIS, 2018-2030).
Liptide® Glaucoma product - ECP105
ECP105 represents a simple and effective anti-fibrotic therapeutic approach
which maximises and increases surgical success in the treatment of Glaucoma by
reducing post-surgical scarring whilst avoiding exposing patients to the risk
of cytotoxic medication. Using Liptide® as a delivery system, ECP105 contains
a siRNA sequence to silence the fibrotic gene MRTF-B without cytotoxic side
effects.
During the period and year to date, the work at Nanogenics has progressed
positively despite being a little slower than we would have liked. The in
vitro proof of concept work carried out at the University of Strathclyde
demonstrated siRNA inhibition of proteins related to fibrosis in ophthalmic
indications. Delays in providing the formulation of the product to Kings
College London has resulted in an initial pilot in vivo study. The results of
the pilot have shown that the new formulation made using microfluidics is
stable and is not toxic when administered in vivo.
One of the strategic decisions taken during the period was to apply for orphan
drug designation in respect of ECP105 for which we submitted an application to
the U.S. Food and Drug Administration ("FDA") in early July, for the
prevention of scarring following glaucoma surgery. Obtaining orphan drug
status in the USA is expected to bring substantial cost and time savings on
the development work and once approved, seven years of exclusivity. The
result of the orphan drug application is expected in the next six to eight
weeks.
Nanogenics has also filed a patent application in the UK for novel siRNA
sequences that can be used as part of the ECP105 development work.
Glaucoma currently affects 80 million people worldwide and the incidence of
the disease is estimated to grow to nearly 112 million by 2040. Trabeculectomy
is the current principal approach to glaucoma filtration surgery with an
estimated 300,000 surgeries a year worldwide. Fibrosis following surgery can
result in significant failure rates as high as 50% after five years. Current
treatment for this involves using Mitomycin C off label to prevent surgery
failure but this is a highly toxic solution and one which ideally should be
avoided. With ECP105 designed to get approval for this approach but without
all the associated side effects, we believe it could represent a significant
market opportunity and one that we are in the process of seeking to define
though consultation with market practitioners.
SRI International
As announced in August 2024, SRI has successfully completed its chemistry work
to show that a Fox Three Molecular Guidance System ("MGS") can be linked to
Nuvec® without altering its loading capacity. siRNA molecules can then be
attached to the combined Nuvec®/Fox Three MGS and SRI has demonstrated that
this molecular complex is internalised only by the targeted cell type.
Further testing of the targeted modified Nuvec® has shown efficacy can be
maintained in the target cell. These two sets of data indicate that Nuvec®
can be modified to target individual tissue types with no loss of function
with respect to delivery of its payload. This ability to target different
tissue types, using a modified Nuvec®, represents a key differentiator to
competing nucleic acid delivery approaches
On the back of this data we have begun work on a combined marketing pitch deck
allowing SRI and N4 Pharma to present this data and its implications to major
pharma and biotech companies who may be seeking a targeting delivery system
for their nucleic acid programs.
Going Forward
As outlined above, whilst we continue to seek partners to work with based on
the data accumulated to date and with the work undertaken with SRI, our focus
is very much on gearing our studies towards two initial products utilising
N4's Nuvec® and Nanogenics' proprietary LipTide® technologies.
The addition of Mike Palfreyman to our board is, we consider, a real coup for
a company of our size and a fantastic endorsement of our assets. His
experience is second to none in our space and we believe he will prove
invaluable in assisting us in the advancement and commercialisation of Nuvec®
and LipTide® both in Europe and the US.
Outlook and strategy
Whilst our core strategy remains unchanged - to generate sufficient
proof-of-concept data to attract larger pharmaceutical and biotechnology
partners to enter into collaborations with us to explore using Nuvec® as
their chosen delivery system for therapeutic agents - it has evolved. The
collaboration with SRI has served to enhance this data pool for our core
strategy with the significant ability of Nuvec® now being able to target
cells. Through our investment in Nanogenics and the successful oral work we
are now in a position to focus some of our resources on the development of
products with clearly addressable and potentially material markets, these
initially being IBD and Glaucoma.
We believe that this is the right strategy for the Company given where we sit
today and increasingly are able to attract the right partners and personnel to
help us achieve our goals.
On behalf of the Board, I would like to thank all of our shareholders for
their continued support and look forward to providing further updates on our
progress.
Chris Britten
Chairman
24 September 2024
Six months to 30 June 2024 Six months to 30 June 2023 Twelve months to 31 December 2023
(Unaudited) (Unaudited) (Audited)
£ £ £
Revenue 3,906 - 1,953
Gross profit 3,906 - 1,953
Expenses
Research and development costs (114,030) (192,630) (619,392)
General and administration costs (379,924) (452,276) (717,980)
Costs of purchase of investments - - (89,175)
Operating loss for the period (490,048) (644,906) (1,424,594)
Finance (expenditure)/income (1,657) (1,244) -
Loss for the period before tax (491,705) (646,150) (1,424,594)
Taxation - - 147,816
Loss for the period after tax (491,705) (646,150) (1,276,778)
Other comprehensive income net of tax - - -
Total comprehensive loss for the period (491,705) (646,150) (1,276,778)
Total comprehensive loss for the year is attributable to:
Equity owners of N4 Pharma Plc (454,867) (646,150) (1,269,331)
NCI (36,838) - (7,447)
(491,705) (646,150) (1,276,778)
Loss per share attributable to owners of the parent
Weighted average number of shares:
Basic 285,395,734 233,780,349 242,889,938
Diluted 285,395,734 233,780,349 242,889,938
Basic loss per share (0.16p) (0.28p) (0.52p)
Diluted loss per share (0.16p) (0.28p) (0.52p)
All activities derive from continuing operations.
The notes below form an integral part of these financial statements.
Notes 30 June 2024 30 June 2023 31 December 2023
(Unaudited) (Unaudited) (Audited)
£ £ £
Assets
Non-current assets
Goodwill 61,210 - 61,210
61,210 61,210
Current assets
Trade and other receivables 69,021 209,447 187,045
Cash and cash equivalents 1,204,946 1,289,769 1,027,112
1,273,967 1,499,216 1,214,157
Total Assets 1,335,177 1,499,216 1,275,367
Liabilities
Current liabilities
Trade and other payables (11,613) (14,856) (26,224)
Accruals and deferred income (44,428) (38,921) (55,502)
Total liabilities (56,041) (53,777) (81,726)
Net current assets 1,217,926 1,445,439 1,132,431
Net Assets 1,279,136 1,445,439 1,193,641
Equity
Share capital 4 9,849,946 9,205,946 9,345,946
Share premium 5 14,940,829 14,698,569 14,874,469
Share option reserve 6 114,225 107,385 107,385
Reverse acquisition reserve 5 (14,138,244) (14,138,244) (14,138,244)
Merger relief reserve 5 279,347 279,347 279,347
Retained earnings (9,796,134) (8,707,564) (9,341,267)
Non Controlling interest 9 29,167 - 66,005
Total Equity 1,279,136 1,445,439
1,193,641
(i) Six months ended 30 June 2024 - Unaudited
Share Capital Share Premium Share Option Reserve Reverse Acquisition Reserve Merger Relief Reserve Retained Earnings Non-controlling interest Total Equity
£ £ £ £ £ £ £ £
Balance at 1 January 2024 9,345,946 14,874,469 107,385 (14,138,244) 279,347 (9,341,267) 66,005 1,193,641
Total comprehensive loss for the period - - - - - (454,867) (36,838) (491,705)
Share issue 504,000 126,000 - - - - - 630,000
Share issue cost - (59,640) - - - - - (59,640)
Share based payment charge - - 6,840 - - - - 6,840
At 30 June 2024 9,849,946 14,940,829 114,225 (14,138,244) 279,347 (9,796,134) 29,167 1,279,136
(ii) Six months ended 30 June 2023 - Unaudited
Share Capital Share Premium Share Option Reserve Reverse Acquisition Reserve Merger Relief Reserve Retained Earnings Non-controlling interest Total Equity
£ £ £ £ £ £ £ £
Balance at 1 January 2023 9,205,946 14,698,569 103,954 (14,138,244) 279,347 (8,061,414) - 2,088,158
Total comprehensive loss for the period - - - - - (646,150) - (646,150)
Share based payment charge - - 3,431 - - - - 3,431
At 30 June 2023 9,205,946 14,698,569 107,385 (14,138,244) 279,347 (8,707,564) - 1,445,439
(iii) Twelve months ended 31 December 2023 - Audited
Share Capital Share Premium Share Option Reserve Reverse Acquisition Reserve Merger Relief Reserve Retained Earnings Non-controlling interest Total Equity
£ £ £ £ £ £ £ £
Balance at 1 January 2023 9,205,946 14,698,569 103,954 (14,138,244) 279,347 (8,061,414) - 2,088,158
Non-controlling interest on acquisition of subsidiary - - - - - - 62,930 62,930
Shares in subsidiary issued to NCI - - - - - (10,522) 10,522 -
Total comprehensive loss for the year - - - - - (1,269,331) (7,447) (1,276,778)
Share issue 140,000 210,000 - - - - - 350,000
Share issue cost - (34,100) - - - - - (34,100)
Share based payment charge - - 3,431 - - - - 3,431
At 31 December 2023 9,345,946 14,874,469 107,385 (14,138,244) 279,347 (9,341,267) 66,005 1,193,641
The notes below form an integral part of these financial statements.
Six months to 30 June 2024 Six months to 30 June 2023 Twelve months to 31 December 2023
(Unaudited) (Unaudited) (Audited)
£ £ £
Operating activities
Loss after tax (491,705) (646,150) (1,276,778)
Finance expenditure 1,657 1,244 3,674
Share based payments to employees - 3,431 3,431
Share based payment charge 6,840 - -
Taxation credit - - (147,816)
Operating loss before changes in working capital (483,208) (641,475) (1,417,489)
Movements in working capital:
Decrease/ (increase) in trade and other receivables 118,024 37,070 44,230
(Decrease)/increase in trade payables and accruals (25,685) (24,111) 3,838
Cash used in operations (390,869) (628,516) (1,369,421)
Taxation credit received - - 163,997
Net cash flows used in operating activities (390,869) (628,516) (1,205,424)
Investing activities
Net cash on acquisition of Subsidiary - - 781
Net cash flows from investing activities - - 781
Financing activities
Finance (expenditure)/income (1,657) (1,244) (3,674)
Proceeds of ordinary share issue 630,000 - 350,000
Costs of share issue (59,640) - (34,100)
Net cash flows generated by/ (used in) from financing activities 568,703 (1,244)
312,226
177,834 (629,760)
(892,417)
Net decrease/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period/ year 1,027,112 1,919,529
1,919,529
1,204,946 1,289,769 1,027,112
Cash and cash equivalents at 30 June/ 31 December
The notes below form an integral part of these financial statements.
1. Corporate Information
N4 Pharma Plc (the "Company"), is the holding Company for N4 Pharma UK Limited
("N4 UK"), and Nanogenics Limited ("Nanogenics"), and together form the Group
(the "Group"). N4 Pharma UK Limited is a specialist pharmaceutical company
engaged in the development of mesoparticulate silica delivery systems to
improve the cellular delivery and potency of vaccines.
Nanogenics is a specialist pharmaceutical company engaged in the development
of a Liptide@ platform to deliver a proprietary siRNA sequence to silence a
fibrotic gene.
The Company was incorporated and registered in England and Wales on 6 July
1979 as a public limited company and its shares are admitted to trading on AIM
(LSE: N4P). The Company's registered office is located at 6th Floor, 60
Gracechurch Street, London, EC3V 0HR.
2. Accounting Policies
Adoption of New and Revised International Financial Reporting Standards
There are no new standards or amendments effective in the period ended 30 June
2024 which have had a material impact.
Basis of Preparation:
The Group's condensed consolidated interim financial statements have been
prepared in accordance with International Accounting Standard ("IAS") 34,
"Interim Financial Reporting".
The annual consolidated financial statements for the year ended 31 December
2023 were prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the United Kingdom.
The condensed consolidated interim financial information for the six months
ended 30 June 2024 are unaudited. In the opinion of the Directors, the
condensed consolidated interim financial information presents fairly the
financial position, and results from operations and cash flows for the period.
These condensed consolidated interim financial statements been prepared on the
basis of accounting principles applicable to a going concern.
The Group prepares regular business forecasts and monitors its projected cash
flows, which are reviewed by the Board. Forecasts are adjusted for reasonable
sensitivities that address the principal risks and uncertainties to which the
Group is exposed, thus creating a number of different scenarios for the Board
to challenge. In those cases, where scenarios deplete the Group's cash
resources too rapidly, consideration is given to the potential actions
available to management to mitigate the impact of one or more of these
sensitivities, in particular the discretionary nature of costs incurred by the
Group, in order to ensure the continued availability of funds.
The financial statements are presented in Sterling, which is the Group's
functional currency as the UK is the primary environment in which it operates.
Basis of Consolidation:
These condensed consolidated interim financial statements have been prepared
in accordance with IFRS 10, as a result of the consolidation of the Company,
N4 UK and Nanogenics, for the comparative six month period ended 30 June 2023
and the comparative twelve month period to 31 December 2023 and the current
six month period ended 30 June 2024.
Significant Accounting Policies:
The condensed consolidated interim financial statements have been prepared
under the historical cost convention, as modified for the following items, in
accordance with International Financial Reporting Standards ('IFRS') as
adopted by the United Kingdom:
• Share-based payments related to investment acquisition are
measured at fair value shown in the Merger Reserve.
• Share-based payments related to employee costs are measured at
fair value shown in the Statement of Comprehensive Income.
• The associated Share Options are measured at fair value using
the Black Scholes model (see note 6).
All accounting policies are consistent with those applied in the Annual Report
and there have been no amendments or changes in accounting policies during the
period.
Segmental reporting:
The Group operated in one business segment, that of the development and
commercialisation of medicines via its delivery system called Nuvec® and its
liptide platform called ECP105.
The Directors consider that there are no identifiable business segments that
are subject to risks and returns different to the core business. The
information reported to the Directors, for the purposes of resource allocation
and assessment of performance, is based wholly on the overall activities of
the Group.
Seasonality
The nature of the business is not deemed to be impacted by seasonal
fluctuations and as such performance is expected to be consistent.
3. Critical Accounting Judgements and Estimates
The preparation of the condensed consolidated interim financial statements in
conformity with IFRS requires management to make certain estimates,
assumptions and judgements that affect the application of accounting policies
and the reported amounts of assets and liabilities and the reported amounts of
income and expenses during the reporting period.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
In the process of applying the Group's accounting policies, management has
decided the following estimates and assumptions are material to the carrying
amounts of assets and liabilities recognised in the condensed consolidated
interim financial statements.
Critical judgements
Research and development expenditure
The key judgements surrounding the Research & Development expenditure is
whether the expenditure meets the criteria for capitalisation. Expenditure
will only be capitalised when the recognition criteria is met and is otherwise
written off to the Consolidated Statement of Comprehensive Income.
The recognition criteria include the identification of a clearly defined
project with separately identifiable expenditure where the outcome of the
project, in terms of its technical feasibility and commercial viability, can
be measured or assessed with reasonable certainty and that sufficient
resources exist to complete a profitable project. In the event that these
criteria are met, and it is probable that future economic benefit attributable
to the product will flow to the Group, then the expenditure will be
capitalised.
4. Share Capital
Allotted, called up and fully paid 30 June 2024 (Unaudited) 30 June 2023 (Unaudited) 31 Dec 2023 (Audited)
£ £ £
394,780,379 Ordinary Shares of 0.4p each (30 June 2023: 233,780,379 and 31 1,579,121 935,121 1,075,121
December 2023: 268,780,349 Ordinary shares of 0.4p each)
137,674,431 Deferred Shares of 4p each 5,506,977 5,506,977 5,506,977
279,176,540 Deferred Shares of 0.99p each 2,763,848 2,763,848 2,763,848
9,849,946 9,205,946 9,345,946
All ordinary shares rank equally in all respects, including for dividends,
shareholder attendance and voting rights at meetings, on a return of capital
and in a winding-up.
During the period 118,000,000 new ordinary shares of 0.4p each were issued
through a placing and 8,000,000 new ordinary shares of 0.4p each were issued
through a subscription in June 2024 at a share price of 0.5p per share
generating gross proceeds of £630,000.
The 137,674,431 deferred shares of 4p, have no right to dividends nor do the
holders thereof have the right to receive notice of or to attend or vote at
any general meeting of the Company. On a return of capital or on a winding up
of the Company, the holders of the deferred shares shall only be entitled to
receive the amount paid up on such shares after the holders of the ordinary
shares have received the sum of £1,000,000 for each ordinary share held by
them.
The 279,176,540 deferred shares of 0.99p shall be entitled to receive a
special dividend, which is payable upon the repayment to the Company of any
amount owed under certain loan agreements, after which the Company shall, in
priority to any distribution to any other class of share, pay to the holders
of the Special Deferred Shares an aggregate amount equal to the amount repaid
pro rata according to the number of such shares paid up as to their nominal
value held by each shareholder. They shall be entitled to no other
distribution save for a special dividend and shall not be entitled to receive
notice of or attend or vote at a general meeting of the Company. On a return
of capital on a winding up of the Company, they shall only be entitled to
receive the amount paid up on such shares up to a maximum of 0.99 pence per
share after the holders of the Ordinary Shares and the Deferred Shares of 4p
have received their return on capital.
5. Reserves
The share premium account represents the amount received on the issue of
ordinary shares by the Company in excess
of their nominal value less issue costs and is non-distributable.
The merger relief reserve arose on the Company's acquisition of N4 UK and
consists of both the consideration shares and deferred consideration amounting
to £279,347. There is no legal share premium on the shares issued as
consideration as section 612 of the Companies Act 2006, which deals with
merger relief, applies in respect of the acquisition.
The reverse acquisition reserve arises due to the elimination of the Company's
investment in N4 UK. Since the shareholder in N4 UK became a shareholder of
the Company, the acquisition is accounted for as though the legal acquiree (N4
UK) is the accounting acquirer.
Share premium reserve
The share premium reserve comprises the excess of consideration received over
the par value of the shares issued, plus the nominal value of share capital at
the date of redesignation at no par value.
Share option reserve
The share option reserve comprises the fair value of options granted, less the
fair value of lapsed and expired options.
Retained earnings
Retained earnings comprises of accumulated results to date.
6. Share-based Payments and Share Option Reserve
Options
The Company has the ability to issue options to Directors to compensate them
for services rendered and incentivise them to add value to the Group's
longer-term share value. Equity settled share-based payments are measured at
fair value at the date of grant. The fair value determined is charged to the
Statement of Comprehensive Income on a straight-line basis over the vesting
period based on the Group's estimate of the number of share options that will
vest.
Cancellations of equity instruments are treated as an acceleration of the
vesting period and any outstanding charge is recognised in full immediately.
Fair value is measured using a Black Scholes pricing model. The key
assumptions used in the model have been adjusted based on management's best
estimate for the effects of non-transferability, exercise restrictions and
behavioral considerations. The inputs into the model were as follows:
2017 Options 2018 Options 2019 Options 2020 Options
Share price 6.375p 6.6p 3.55p 4.8p
Exercise price 7p 6.6p 3.55p 4.8p
Expected volatility 27.2% 45.2% 37.4% 29.9%
Expected option life 3 years 6.5 years 6.5 years 6.5 years
Risk free rate 4.75% 5.00% 5.00% 5.00%
As at 30 June 2024, there were 7,046,513 (30 June 2023: 7,046,513, 31 December
2023: 7,046,513) options in existence over ordinary shares of the Company.
Options in existence during the current and previous periods and year are as
follows:
Ordinary shares under option
Name Date of Grant Expiry Date Exercise Price £
2015 Options
Gavin Burnell 14.10.15 1,351,210 14.10.25 2.8p
Luke Cairns 14.10.15 675,302 14.10.25 2.8p
2017 Options
Luke Cairns 03.05.17 717,143 03.05.27 7p
David Templeton 03.05.17 717,143 03.05.27 7p
Paul Titley 03.05.17 717,143 03.05.27 7p
2019 Options
John Chiplin 21.05.19 717,143 21.05.29 3.55p
Christopher Britten 21.05.19 717,143 21.05.29 3.55p
2020 Options
David Templeton 18.05.20 717,143 18.05.30 4.8p
Luke Cairns 18.05.20 717,143 18.05.30 4.8p
Total options 7,046,513
Each option entitles the holder to subscribe for one ordinary share in N4
Pharma Plc. Options do not confer any voting rights on the holder.
The aggregate fair value of the share options issued is as follows:
30 June 2024 (Unaudited) 30 June 2023 (Unaudited) 31 Dec 2023 (Audited)
£ £ £
2015 Options 18,492 18,492 18,492
2017 Options 26,884 26,884 26,884
2019 Options 22,793 22,793 22,793
2020 Options 27,223 27,223 27,223
95,392 95,392 95,392
Warrants
Warrants in existence during the current and previous year are as follows:
Exercise Price £
Date of Grant Ordinary shares under option Expiry Date Fair value at 30 June 2024 £
25.11.22 3,162,000 24.11.25 0.02 11,993
07.06.24 7,560,000 06.06.27 0.005 6,840
The warrants entitle holders to subscribe for new ordinary shares at any time
in the period of three years following the grant of the warrants. The expiry
date for the warrants is 24 November 2025 and 6 June 2024.
Fair value is measured using a Black Scholes pricing model.
An amount of £6,840 has been recognised in the Share Premium and in the Share
Option Reserve in relation to the warrants (30 June 2023: £nil).
7. Earnings per Share
Basic earnings per share is calculated by dividing the loss after tax
attributable (excluding the deemed cost of acquisition) to the equity holders
of the Company by the weighted average number of shares in issue during the
period.
Diluted earnings per share is calculated by adjusting the weighted average
number of shares outstanding to assume conversion of all potential dilutive
shares, namely share options and warrants which could be bought for less than
a market price.
8. Interest in other entities
The Group's principal subsidiaries at 30 June 2024 are set out below. Unless
otherwise stated, they have share capital consisting solely of ordinary shares
that are held directly by the Group, and the proportion of ownership interests
held equals the voting rights held by the Group. The country of incorporation
or registration is also their principal place of business.
Name of entity Place of business/country of incorporation Ownership interest held by the group Ownership interest held by non-controlling interests Principal activities
30 June 2024 30 June 2023 30 June 2024 30 June 2023
% % % %
Nanogenics Limited UK 70.82 - 29.18 - Research and experimental development on biotechnology
N4 Pharma UK Limited UK 100 100 - - Delivery of vaccines and therapeutics
9. Non-controlling interest
Below is financial information for Nanogenics given that it has
non-controlling interest that is material to the Group.
Statement of Financial Position 30 June 2024 30 June 2023 31 Dec 2023
£ £ £
Current Assets 106,805 - 239,833
Current liabilities (6,849) - (13,633)
Current Net assets 99,956 - 226,200
Accumulated NCI 29,167 - 66,005
Statements of Comprehensive Income 30 June 2024 30 June 2023 31 Dec 2023
£ £ £
Revenue 3,906 - 1,953
Expenses (130,151) - (27,475)
Loss for the period (126,245) - (25,522)
Loss allocated to NCI (36,838) - (7,447)
10. Subsequent Events
Mike Palfreyman has been appointed as a Non-Executive Director as of 9
September 2024.
There were no further significant subsequent events that require adjustment or
disclosure in these condensed consolidated interim financial statements.
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