REG - Oncimmune Hldgs PLC - Unaudited results for the 12 months to 31 May 2022
21/09/2022 07:00
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RNS Number : 0638A Oncimmune Holdings PLC 21 September 2022
This announcement contains inside information
for the purposes of the UK Market Abuse Regulation
21 September 2022
Oncimmune Holdings plc
("Oncimmune", the "Company" and, together with its subsidiaries, the
"Group")
Unaudited results for the 12 months ended 31 May 2022
The number of ImmunoINSIGHTS contracts won doubles year-on-year
Increasing ImmunoINSIGHTS penetration into top 15 global pharma
Restructuring of the EarlyCDT® Lung operation created an immediately
EBITDA-profitable product business
Oncimmune Holdings plc (AIM: ONC.L), the leading global immunodiagnostics
group, today announces its unaudited results for the twelve months ended 31
May 2022 and provides an update on recent trading. The reporting period
reflects the announced change to the Company's financial year end to 31 August
(from 31 May) and the requirement to maintain continuity of reporting pending
release of audited results for the 15 months to 31 August 2022, which is
expected to occur by the end of January 2023.
Operational Highlights
· Doubled the number of ImmunoINSIGHTS contracts year-on-year - 18 new
contracts or extensions signed in the period, an increase from 9 contracts
signed in the 12 months to 31 May 2021 and 3 contracts signed in the 12 months
to 31 May 2020
· Increased ImmunoINSIGHTS penetration into top 15 global pharma
· Weighted pipeline value of potential ImmunoINSIGHTS contracts
currently stands at over £11.0M and growing at c.£0.75M per month.
Approximately 40% revenue visibility at start of new financial year across the
combined business.
· EarlyCDT® Lung test received Medicare coverage in the US at
substantially increased in-market selling price
· Appointment of Alistair Macdonald as the new Non-executive Chair of
the Group
· Received Queen's Award for Enterprise in Innovation 2022
Financial highlights
· Recognised revenue for the period was £3.86M (2021: £3.72M)
· Gross profit for the period was £1.46M (2021: £2.86M) which
includes the majority of the ImmunoINSIGHTS commercial and production team
costs
· Administrative expenses were £7.05M (2021: £5.65M) which
incorporates £0.61M increase in the non-cash amortisation charge on
intangible assets, one-off £0.24M recruitment costs of the build-out of our
ImmunoINSIGHTS production headcount and US commercial team, and higher IT,
staff remuneration and insurance costs. Excluding these items, administration
expenses were in line with the prior year
· Research & development expenses were broadly stable at £1.52M
(2021: £1.62M) but are forecast to materially decline materially over the
forthcoming year
· Share-based payments were £1.80M (2021: £1.05M) comprising non-cash
expenses of the Group's LTIP and share options plans
· Loss after tax was £9.90M (2021: £4.72M)
Post period end
· The restructuring of the EarlyCDT® Lung product business post the
reporting period has substantially reduced the ongoing cost base by £0.5M,
which combined with increased contracted revenues, has created an immediately
EBITDA profitable EarlyCDT® Lung product business
· The current ImmunoINSIGHTS pipeline is continuing to build in value
and, encouragingly, over the past six weeks, contracts whose progress through
the pipeline had previously slowed are now being signed. These new contracts
are a mix of follow-on-studies as well as new pharma clients.
Dr Adam M Hill, CEO of Oncimmune said: "Whilst the market conditions over the
past 12 months have been undoubtedly challenging, particularly for life
science tools companies whose biotech customers have been substantially
affected, we are encouraged by the momentum of our ImmunoINSIGHTS business.
The importance of our autoantibody profiling service to pharma companies and
biotechs is evident in the growing list of blue-chip customers, which includes
many of the world's leading pharmaceutical companies. We have invested
considerable time and resources in ensuring our systems and processes meet the
highest standards which have in turn allowed us to sign an increasing number
of MSAs with global pharma companies.
"The commercial pipeline has grown well under our new Chief Business Officer
who was appointed in September 2021. As we start the new financial year, our
current visibility of revenue from the combined ImmunoINSIGHTS pharma services
and EarlyCDT® Lung product businesses is greater than approximately 40% of
management's total FY2023 expectations . Furthermore, with a
current pipeline valued at £11.0M and growing at £0.75M a month, as well as
being driven by a stable and experienced commercial team, the Board has
confidence in FY2023 being an inflexion year in the commercial growth of the
Company."
The Director and Officer of the Company named below take responsibility for
this announcement.
For further information:
Oncimmune Holdings plc
Dr Adam M Hill, Chief Executive Officer
Matthew Hall, Chief Financial Officer
contact@oncimmune.co.uk (mailto:contact@oncimmune.co.uk)
Singer Capital Markets (Nominated Adviser and Joint Broker)
Aubrey Powell, Harry Gooden, George Tzimas, James Fischer
+44 (0)20 7496 3000
WG Partners (Joint Broker)
David Wilson, Nigel Barnes, Erland Sternby
+44 (0)20 3705 9321
Investor Relations:
John Goold
IR@oncimmune.com
About Oncimmune
ImmunoINSIGHTS Service Business
Oncimmune is a leading immunodiagnostics developer, primarily focused on the
growing fields of immuno-oncology, autoimmune disease and infectious diseases.
The ImmunoINSIGHTS service business leverages Oncimmune's technology platform
and methodologies across multiple diseases, to offer life-science
organizations actionable insights for therapies across the development and
product lifecycle. Our core immune-profiling technology is underpinned by our
library of over eight thousand immunogenic proteins, one of the largest of its
kind. This helps identify trial participants and patients into clinically
relevant subgroups, enabling development of targeted and more effective
treatments.
Oncimmune's ImmunoINSIGHTS service business is based at the Company's
discovery research centre in Dortmund, Germany. The business platform enables
life science organizations to optimize drug development and delivery, leading
to more effectively targeted and safer treatments for patients.
The ImmunoINSIGHTS development team is based in the US and Europe and
Oncimmune is seeking to replicate the Dortmund facility in the US in the
medium term.
EarlyCDT Product Business
Oncimmune's immunodiagnostic technology, EarlyCDT, can detect and help
identify cancer on average four years earlier than standard clinical
diagnosis. Our lead diagnostic test, EarlyCDT Lung, targets a vast market
estimated to grow to £3.8bn by 2024. With over 200,000 tests already
performed for patients worldwide and its use being supported by peer reviewed
data in over 12,000 patients, we are poised to become an integral component of
future lung cancer detection programs, globally.
Oncimmune's diagnostic products business is located at its laboratory facility
in Nottingham, UK.
For more information, visit www.oncimmune.com (http://www.oncimmune.com)
Operational and commercial review, including post period events
ImmunoINSIGHTS
There were 18 new or extensions to existing contracts signed in the period, an
increase from nine contracts signed in the 12 months to 31 May 2021 and 3
contracts signed in the 12 months to 31 May 2020.
The current pipeline continues to build in overall value and, encouragingly,
over the past six weeks, we have begun signing contracts whose progress
through the pipeline had previously slowed. These new contracts are a mix of
follow-on-studies as well as new pharma clients.
The current weighted value of the commercial pipeline of potential contracts
currently stands at over £11.0M and is growing at c.£0.75M month-on-month.
Within the £11.0M of weighted pipeline, we have approximately £1.8M of new
contracts which have completed their legal processes and are in the execution
phase, and therefore we anticipate commencing work on these projects in Q1
2023. Together with existing signed contracts whose revenue is also expected
to be recognised in Q1 2023, we anticipate recognising total revenue for Q1
2023 of approximately £2.3M. Thereafter, the pipeline is showing a further
£2.5M of potential revenue expected to be recognised over Q2 2023.
The growth in the pipeline is largely due to the planned expansion in the
ImmunoINSIGHTS commercial team which was substantially expanded from December
2021 onwards. We now have in place an established commercial team with
sufficient experience, scale and reach to adequately serve our growing pharma
client base in the US and Europe. The pipeline of commercial engagements and
proposals for potential contracts is benefiting from this enlarged commercial
team, and we are confident our strategy will result in higher volumes of
signed contracts in the near to medium term.
The Company's marketing function has been significantly enhanced with the
appointment of a Senior Director of Global Marketing, based in North America.
This appointment will be key to building brand awareness across the globe,
including through the use of digital projects and automated marketing
initiatives. The Group's website has been re-launched to focus on
ImmunoINSIGHTS and we anticipate the website will lead to an increase in
enquiries and in turn contracts as the website's technical content continues
to build.
The scale up of the Group's Dortmund facility is complete, which tripled the
facility's operating capacity through increased headcount and equipment. This
expansion has supported the signing of pilot or proof-of-concept studies,
whose completion is, more often than not, the gateway to signing larger
follow-on contracts and for which capacity needs to be in place on signing.
During the year we have deliberately directed the business and its resources
towards obtaining approved supplier status with our major pharma customers by
signing master service agreements ("MSAs"). This is particularly the case with
larger value contracts or where the study therapeutic area is clinically or
commercial sensitive. The fact that many of our larger clients are requiring
extensive procurement audits to be undertaken prior to signing MSAs is a clear
indication that we are moving up the value chain and of growing importance to
our customers. We believe that the MSAs are a necessity and create a solid
foundation for the future development of our business, as well as being of
further value in the medium term. They will enable long term relationships to
be created, will facilitate faster contract wins in the future, and help
differentiate ImmunoINSIGHTS from current and future potential competitors.
Notwithstanding the difficult global economic conditions which are impacting
decision-making and causing a slowdown in signing of new ImmunoINSIGHTS
contracts, the value and number of potential commercial contracts within our
pipeline continues to grow. Throughout the reporting period, the sales cycles
from initial discussions to contracting and implementation has lengthened.
This is partly due to the deliberate MSA process we are pursuing, under which
large pharma conducts extensive procurement processes before committing to a
long-term engagement with Oncimmune. However, once completed, these MSAs are
already beginning to provide longer term benefits by both shortening the
contracting cycle and widening our overall access to our clients' existing and
future clinical programmes.
As the Company builds its pharma services business, ImmunoINSIGHTS, the trend
for new pharma companies to undertake smaller pilot studies is being
increasingly observed. This allows customers to validate our technology and
quality of service before then signing higher value contracts with larger
sample sets. These smaller pilot studies have also been used by our clients to
compare our technology, quality of service and the value of our data
informatics and analysis, against competitors. We are pleased to report that,
whenever we have asked to perform against competitors, we have emerged as the
leading provider of immune-profiling services, which in turn has resulted in
the signing of follow-on contracts or a requirement to complete a MSA audit
process as a precursor to signing long-term supply arrangements. We are
therefore confident that, as our business grows, our reputation and market
penetration will increase to the point where pharma companies will feel
increasingly confident to award ImmunoINSIGHTS multiple contracts in differing
disease areas, as well as multi-year recurring contracts.
Having built a solid foundation in offering highly valued scientific insights
to pharma and biotech companies, the Group is now also focusing on expanding
its technological capabilities and service offerings. This is being pursued
using internal resources and, as has been announced in recent updates, the
Group is also actively evaluating potential M&A opportunities which could
accelerate this expansion. We believe there is a real opportunity to create a
market-leading organisation with a broader range of pharma services, which can
be the partner of choice for the world's leading pharma and major biotech
companies. This strategy of combining organic growth with the acquisition of
adjacent technologies is one which other pharma service providers have
successfully executed on, including companies with which our newly appointed
Chair has been involved.
EarlyCDT® Lung
In July 2022, the Nottingham-based product business was restructured, to
substantially lower its cost base and ensure that this business is immediately
EBITDA profitable on existing contracted revenues, before the benefit of any
further volume growth.
Biodesix, Inc. (Nasdaq: BDSX) ("Biodesix"), the Group's US distributor of the
EarlyCDT Lung product (marketed in the US as NodifyCDT®), recently announced
that WPS Government Health Administrators, the Medicare Administrative
Contractor with jurisdiction for Biodesix's Kansas laboratory, has provided a
coverage determination for the NodifyCDT® Lung nodule test at an in-market
selling price which is approximately 10 times the current selling price.
Medicare coverage is expected to drive faster and wider adoption of the test
across the US which will in turn provide increased revenues to the Group over
time. Overall sales in the US are also underpinned by our existing commercial
contract with Biodesix, which provides minimum sales volumes.
Biodesix also recently announced that Royal Philips is to incorporate the
results from tests performed on the NodifyCDT® Lung nodule into the Philips
Lung Cancer Orchestrator lung cancer patient management system. We anticipate
that this development will lead to an increase in awareness of the test
amongst clinicians across the US and in turn increase in the volume of tests
performed.
Product sales continued to our distributor base outside of the US, although
sales volumes are still affected by the COVID-19 pandemic.
The iDx-Lung (1) programme, a collaboration between the University of Leeds,
the Southampton Clinical Trials Unit at the University of Southampton, is
ongoing, with 4,400 patients recruited to date in Southampton and Leeds.
A successful real-world screening evaluation pilot with the Norfolk and
Waveney Clinical Commissioning Group ("CCG") has been completed and the final
report is expected in the coming months. Adoption of the EarlyCDT Lung test
within this NHS CCG is expected in the second half of calendar 2022.
A second pilot study screening over 2,000 patients has also been signed and is
anticipated to commence in the second half of calendar 2022. This study will
be undertaken alongside a regional cancer alliance which will add further
exposure for the EarlyCDT® Lung test within this specialist group of clinical
leaders focused on improving the cancer pathways and outcomes for patients. On
completion of the pilot and the associated report, we anticipate this will
lead to an ongoing supply contract.
New appointment to Chair
On 8 July 2022, Alastair Macdonald was appointed as Non-executive Chair of the
Group. Alistair succeeds Meinhard Schmidt, who has retired from the Board. The
Company has already recorded its thanks to Meinhard for his services to the
Company; helping guide the Company through its IPO and supporting the senior
management team on the strategic evolution of the business.
Alistair brings a 25-year career in life sciences to Oncimmune. Until recently
he was CEO of one of the world's leading integrated CRO, Syneos Health, Inc.
("Syneos") (Nasdaq: SYHN; market cap c.US$6.6BN), prior to which he was CEO of
INC Research ("INC") which merged with inVentiv Health to become Syneos in
2017. During his time with INC and then Syneos, revenues grew both organically
and through a series of acquisitions from $20M to over $5.0BN.
Queen's Award for Enterprise in Innovation 2022
Oncimmune was awarded the Queen's Award for Enterprise 2022 in the innovation
category, endorsing Oncimmune as a leading developer of applied
immunodiagnostics for the early detection of disease, drug discovery and
development.
Financial highlights
Recognised revenue for the period was £3.86M (2021: £3.72M). Throughout the
reporting period we experienced a progressive slowdown in the signing of new
ImmunoINSIGHTS contracts. More detail for the reasons behind this can be found
in the operational and commercial review. More recently, however, we have
begun to sign new contracts which had previously slowed within the commercial
pipeline. Additionally, in June 2022, Biodesix announced the successful
Medicare coverage determination for EarlyCDT® Lung in the US at an in-market
selling price which is approximately 10 times the current selling price.
Coincident with this announcement, we have received updated revenue forecasts
from Biodesix which confirm an increase in order volumes as well as an
increase in the average in-market selling price which has resulted in an
uplift in our quarterly royalty revenues.
Gross profit for the period was £1.46M (2021: £2.86M), which for the
reporting period, includes the majority of the costs of the ImmunoINSIGHTS
commercial and production teams. During the reporting period the cost of both
teams increased substantially compared to the prior year.
Administrative expenses were £7.05M (2021: £5.65M). Certain costs were
higher in the reporting period including one-off recruitment costs of £0.24M
associated with the build-out of our ImmunoINSIGHTS production headcount and
US commercial team, £0.13M of IT costs to move staff to home-working during
the COVID-19 pandemic, £0.53M of increased staff remuneration and £0.16M of
increased insurance costs. Also included is a non-cash £0.61M increased
amortisation charge against Intangible assets. Excluding these costs,
administration expenses are in line with the prior year.
In August 2022, a restructuring of the Nottingham-based EarlyCDT® Lung
product business was undertaken which reduced the ongoing cost base by
approximately £0.5M and, when combined with the recent increase in contracted
revenues, has created an immediately EBITDA profitable business.
Research & development expenses were stable at £1.52M (2021: £1.62M).
For the forthcoming year to 31 August 2023, we anticipate research &
development expenditure to significantly reduce in line with our priority
focus on the commercial activities of the Group.
Share-based payments were £1.80M (2021: £1.05M) representing the non-cash
cost of expensing the Group's LTIP and share options plans.
Loss after tax was £9.90M (2021: £4.72M).
Gross cash balance at the period end was £2.53M (31 May 2021: £8.63M; 30
November 2021: £2.97M) and net debt at the period end was £8.16M (31 May
2021: £0.83M; 30 November 2021: £5.39M), after investment, including
capacity growth. The Company drew down an additional €3.0M (c. £2.50M) in
December 2021 under the IPF facility to fund the acceleration in the
ImmunoINSIGHTS business, including the expansion of the US-based commercial
team.
In August 2022, the Group's renewed its debt banking facility with IPF
Partners. The new terms provide for a 12-month deferral of all principal
repayments until June 2023, no further issue of warrants, no change in the
fixed existing cash margin rate of 9%, and the continued repayment of interest
as from September 2022. The new facility terms are expected to provide the
Group with a cash headroom to continue to grow the commercial pipeline and
convert that pipeline into signed contracts, revenue, and cash. An arrangement
fee of EUR €1.5M has been agreed which is payable at final maturity of the
debt, with up to 50% (EUR €0.75M) of this fee able to be offset against any
warrants already issued to IPF Partners.
(1) NHS Lung Health Check Programmes in Wessex and Yorkshire as part of the
iDx-LUNG evaluation programme
Consolidated statement of comprehensive income
Unaudited Audited
Year to Year to
31 May 31 May
2022 2021
£'000 £'000
Total Total
Revenue 3,859 3,722
Cost of sales (2,402) (865)
Gross profit/(loss) 1,457 2,857
Research and development expenses (1,517) (1,615)
Administrative expenses (7,052) (5,652)
Share-based payment (1,800) (1,046)
(10,369) (8,313)
Other income 326 311
Operating loss (8,586) (5,145)
Finance income - 403
Finance costs (943) (954)
Finance costs - net (943) (551)
Loss before taxation (9,529) (5,696)
Taxation 17 1,068
Loss after tax from continuing operations the financial year (9,512) (4,628)
Other comprehensive income
Exchange translation differences (384) (91)
Loss after tax and total comprehensive income for the year attributable to (9,896) (4,719)
equity holders
Basic and diluted loss per share (13.7)p (7.17)p
Consolidated statement of financial position
Unaudited Audited
31 May 31 May
2022 2021
£'000 £'000
Assets
Non-current assets
Goodwill 1,578 1,578
Intangible assets 3,237 4,116
Property, plant and equipment 918 664
Right-of-use assets 627 930
Deferred tax asset 927 937
7,287 8,225
Current assets
Inventories 413 143
Trade and other receivables 6,219 7,079
Contract assets 808 200
Cash and cash equivalents 2,530 8,631
9,970 16,063
Total assets 17,257 24,278
Equity
Capital and reserves attributable to the equity holders
Share capital 695 691
Share premium 40,635 40,497
Other reserves 5,894 4,094
Merger reserve 31,882 31,882
Foreign currency translation reserve (296) 88
Own shares (1,926) (1,926)
Retained earnings (79,611) (70,099)
Total equity (2,727) 5227
Liabilities
Non-current liabilities
Deferred tax 115 374
Lease liability 352 671
Other liabilities 2,000 2000
Borrowings 2,420 6,239
4,887 9,284
Current liabilities
Trade and other payables 1,963 1,979
Contract liabilities 5,180 5,175
Other statutory liabilities 40 55
Lease liability 443 310
Other liabilities - -
Borrowings 7,471 2,248
15,097 9,767
Total liabilities 19,984 19,051
Total equity and liabilities 17,257 24,278
Consolidated statement of changes in equity
Share Share Other Merger Foreign currency translation reserve Own shares Retained earnings Total
reserves
capital premium reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 June 2020 635 31,459 3,048 31,882 179 (1,926) (65,471) (194)
Loss for the year - - - - - - (4,628) (4,628)
Other comprehensive income:
Currency translation differences - - - - (91) - - (91)
Total comprehensive expense for the period - - - - (91) - (4,628) (4,719)
Transactions with owners:
Shares issued in year 50 8,331 - - - - - 8,381
Options exercised 2 106 - - - - - 108
Shares issued in relation to prior year acquisition 4 601 - - - - - 605
Share-based option charge - - 1,046 - - - - 1,046
As at 31 May 2021 691 40,497 4,094 31,882 88 (1,926) (70,099) 5,227
Loss for the year - - - - - - (9,512) (9,512)
Other comprehensive income:
Currency translation differences - - - - (384) - - (384)
Total comprehensive income - - - - (384) - (9,512) (9,896)
Transactions with owners:
Shares issued in year - - - - - - -
Exercise of options and warrants 4 138 - - - - - 142
Shares issued in relation to prior year acquisition - - - - - - - -
Share option charge - - 1,800 - - - - 1,800
As at 31 May 2022 695 40,635 5,894 31,882 (296) (1,926) (79,611) (2,727)
Consolidated statement of cash flows
Unaudited Audited
Year to Year to
31 May 31 May
2022 2021
£'000 £'000
Cash flows from operating activities
Loss before income tax (9,529) (5,696)
Adjusted by:
Depreciation and amortisation 1429 740
Share-based payment charge 1,800 1,046
Interest received - (403)
Interest expense 943 954
Gain on disposal of assets - -
Fair value gain - 176
Exchange rate movement 3 -
Changes in working capital:
(Increase)/decrease in inventories (270) 31
Increase in trade and other receivables 253 (5,837)
Increase / (decrease) in trade and other payables (428) 4,841
Cash used in operating activities (5,799) (4,148)
Interest paid (169) (885)
Interest received - 3
Income tax received (243) 503
Net cash used by operating activities (6,211) (4,527)
Cash flows from investing activities
Purchase of property, plant and equipment (504) (446)
Purchase of intangible assets - (625)
Proceeds from sale of assets - 215
Net cash (used in)/ generated from investing activities (504) (856)
Cash flows from financing activities
Net funds raised through share issue 142 8,489
Loan advances 3,345 2,728
Loan repayments (2,347) (1,135)
Principal elements of lease repayments (153) (303)
Net cash generated from financing activities 987 9,779
Movement in cash attributable to foreign exchange (375) (5)
Net change in cash and cash equivalents (6,103) 4,391
Cash and cash equivalents at the beginning of the year 8,631 4,240
Cash and cash equivalents at the end of the year 2,528 8,631
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