REG - Polarean Imaging PLC - Half-year Report

Polarean ImagingAnnouncement

02/09/2021 07:00

RNS Number : 4465K
  
Polarean Imaging PLC
  
02 September 2021
  
 

Polarean Imaging Plc
("Polarean" or the "Company")
 
Half-year Report  
 
Polarean Imaging plc (AIM: POLX), the medical-imaging technology company, with an investigational drug-device combination product for magnetic resonance imaging (MRI), announces its unaudited interim results for the six months ended 30 June 2021.
 
Highlights
·    Raised £27 million gross proceeds in an oversubscribed financing, including continued support of strategic investors, Bracco Imaging S.p.A and Nukem Isotopes GmbH as well as institutional investor Amati AIM VCT plc, joined by several new UK and US institutional investors.
·    Appointment of Chief Financial Officer, Chuck Osborne, to the Board
·    Additional research unit order for a 9820 Xenon Polariser system from the University of British Columbia in Vancouver, Canada
·    Installation of its 9820 Xenon Polariser system for the University of Texas MD Anderson Cancer Center
·    Presentation of data at both the American Thoracic Society ("ATS") and the International Society for Magnetic Resonance in Medicine ("ISMRM") virtual conferences
·    Publication of first peer reviewed COVID-19 research by Professor Fergus Gleeson at the University of Oxford
·    Net cash of US$38.2m as of 30 June 2021
 
Post-period end 
·    Frequent interactions with the FDA as they review the NDA in advance of our target PDUFA goal date of 5 October 2021
·    Preparation for launch of product including recruitment of employees into our sales and marketing organization
·    Planning to broaden the awareness of Polarean technology through exhibitions at CHEST and RSNA 2021 and numerous topical conferences
 
Richard Hullihen, CEO of Polarean, commented: "During the first half of 2021 the Company raised its largest financing to date with its oversubscribed £27 million gross proceeds financing. We appreciate the continued support from our existing strategic, institutional and retail investors and welcome several new significant institutional investors.  The proceeds from this round are being used to plan and execute the launch of our product in accordance with our current target PDUFA date of 5 October 2021.  We continue to sell new polarisers systems for research use, as the amount of polarised Xenon research continues to increase. We look forward to providing our shareholders with updates regarding further progress and specifically the status of our target PDUFA date of 5 October 2021, and we thank them for their continued support on this exciting journey."
 
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.
 
Enquiries:
 




Polarean Imaging plc


www.polarean.com / www.polarean-ir.com




Richard Hullihen, Chief Executive Officer


Via Walbrook PR




Jonathan Allis, Chairman


 




 


 




 
 
 
Stifel Nicolaus Europe Limited (NOMAD and Sole Corporate Broker)


 




Nicholas Moore / Ben Maddison / Samira Essebiyea (Healthcare Investment Banking)


+44 (0)20 7710 7600




Nick Adams / Fred Walsh (Corporate Broking)


 




 


 




Walbrook PR


Tel: +44 (0)20 7933 8780 or polarean@walbrookpr.com




Paul McManus / Anna Dunphy


Mob: +44 (0)7980 541 893 / +44 (0)7879 741 001



 
 
 
 
 
 



 
About Polarean (www.polarean.com) 
The Company and its wholly owned subsidiary, Polarean, Inc. (together the "Group") are revenue-generating, investigational drug-device combination companies operating in the high-resolution medical imaging research space. 
 
The Group develops equipment that enables existing MRI systems to achieve an improved level of pulmonary function imaging and specialises in the use of hyperpolarised Xenon gas (129Xe) as an imaging agent to visualise ventilation. 129Xe gas is currently being studied for visualisation of gas exchange regionally in the smallest airways of the lungs, across the alveolar tissue barrier, and into the pulmonary bloodstream. 
 
In October 2020, the Group submitted a New Drug Application ("NDA") to the FDA for hyperpolarised 129Xe used to evaluate pulmonary function and to visualise the lung using MRI. In December 2020, the Group received confirmation of acceptance of its NDA by the FDA, with a target PDUFA action date of 5 October 2021.
 
The Group operates in an area of significant unmet medical need and the Group's technology provides a novel investigational diagnostic approach, offering a non-invasive and radiation-free functional imaging platform. The annual burden of pulmonary disease in the US is estimated to be over US$150 billion.


CEO Statement
 
Introduction
The six month period ending 30 June 2021 has seen Polarean make substantial progress towards its goal of seeking FDA approval for the Company's drug-device combination.  As in the normal course, post submission, the Company has responded to the question and answer process with the FDA for our submission, while preparing itself and verifying the preparation of its suppliers and providers.
 
In January, the Company appointed a new Nominated Advisor and Broker, Stifel Nicolaus Europe Limited, which led to a successful placing, subscription, and open offer which was oversubscribed in every category, including its strategic investors Nukem Isotopes and Bracco. Then in February, Chuck Osborne, the existing CFO, was appointed to the Board in order to further leverage his extensive experience in early-stage life science company management, build out and fund raising.
 
During challenging times in healthcare and hospital utilization, we continued to take research orders from leading academic centres such as BC Children's hospital in Vancouver and also to build and deliver systems, completing the installation at MD Anderson Cancer Center in Houston.
 
Presentation at Medical Conferences and Studies Utilising our Technology
The Company's technology was once again prominent at the ATS and ISMRM virtual conference during May 2021 with over 50 abstracts related to the use of hyperpolarised 129Xe accepted for presentation at the two conferences. The content of our publications and those of our customers, along with our participation is available on our website at www.polarean.com. The user base of our polarisers continues to expand and document the applications of our technology across the spectrum of pulmonary disease.
 
Importantly, the first peer reviewed article on COVID-19 Long Haul patients visualised using 129Xe have now been published (https://pubs.rsna.org/doi/10.1148/radiol.2021210033). Additional investigator-initiated government research grants are underway to study the use of our technology to assess the long-term effects of COVID-19 infection in patients. 
 
 
Results overview 
Group revenues for the first half were US$0.6m (2020: US$0.3m) and were largely derived from the sale of a polariser system to MD Anderson, in contrast to the H1 2020 revenue, which was largely from our collaboration with the University of Cincinnati for work under our SBIR grant, which has now been completed.  We continue to sell our polariser systems on a research-use-only basis to academic institutions in the US, Canada and Europe. Operating expenses for H1 2021 (US$5.5m) increased from H1 2020 (US$3.4m), as Selling and Distribution Expenses (H1 2021 US$1.8m, H1 2020 US $0.4m) increased as we are executing our plans for commercial launch. During H1 2021, the Company recognized Finance Income of US$0.4m due to the strengthening of the British pound, which more than offset the US$0.3m forgivable loan under the US Paycheck Protection Program ("PPP") we received and recognized as Finance Income in H1 2020. Our overall loss before tax increased from US$3.2m to US$4.9m in the same comparable period, due primarily to the commercial launch preparation expenses. The Company completed a £27m (~$37m) fundraise during H1 2021 via the issue of new equity and as at 30 June 2021 we held US US$38.2m in net cash or cash equivalents. 
 
 
 
Post-period end events 
 
FDA review of NDA
We continue to interact with the FDA as they review our NDA with a target date PDUFA date of 5 October 2021.
 
Preparation for launch
We continue to prepare for the potential launch of our drug device combination post FDA approval.  In particular, we have been building a sales and marketing organization with the recent recruitment of several sales positions.
 
Planning for conference exhibitions
We are continuing to increase the awareness of Polarean technology with exhibitions at CHEST in October 2021 and RSNA in December 2021.
 
Research polarisers
Researchers continue to apply for and receive grants to purchase our polariser systems, most recently BC Children's Hospital in Vancouver, BC. This system has been delivered and is proceeding to installation. We are in discussions with several research institutions and anticipate additional possible orders during calendar year 2021. 
  
Outlook
We continue to demonstrate that Polarean's technology has the potential to be of tremendous benefit to patients and a powerful new tool for clinicians in discovering and characterising treatable traits in pulmonary medicine. In addition, our latest new techniques lead us into the field of cardiology and pulmonary vascular disease which is one example of the further potential of our technology. We also look forward to evaluating new uses of our technology in pharmaceutical drug development. 
 
The burden of pulmonary disease in the USA is approximately US$150bn and is widespread and growing, affecting nearly 40 million Americans and 500 million worldwide, with post COVID patients comprising a new segment approaching the scale of asthma. Given the limitations of existing methods of diagnosis and lung disease monitoring, we estimate that there is a significant unmet need for safe, non-invasive, quantitative, and cost-effective image-based diagnosis technology. We believe that our unique medical drug-device combination utilising 129Xe offers the ideal solution for improving pulmonary disease diagnosis.
 
This is an exciting time for the Company, as we enter the final stages of submitting our NDA and look towards a potential commercial launch before the end of 2021.
 
Richard Hullihen
Chief Executive Officer
 
2 September 2021
 
 
 
 
POLAREAN IMAGING PLC
Consolidated unaudited statement of comprehensive income
for the six months ended 30 June 2021
 




 


 


 
Unaudited


 


 
Unaudited


 


 
Audited




 


 
 


6 months ended 30.6.21 US$


 


6 months ended 30.6.20 US$


 


12 months ended 31.12.20 US$




 


Note


 


 


 


 


 




 


 


 


 


 


 


 




Revenue


 


621,874


 


327,896


 


1,056,766




Cost of sales


 


(323,185)


 


(41,387)


 


(346,300)




Gross profit


 


298,689


 


286,509


 


710,466




 


 


 


 


 


 


 




Administrative expenses


 


(2,915,214)


 


(2,724,411)


 


(5,049,246)




Depreciation


 


(81,320)


 


(73,204)


 


(150,224)




Amortisation


 


(375,861)


 


(359,677)


 


(734,058)




Selling and distribution expenses


 


(1,799,324)


 


(351,754)


 


(917,783)




Share based payment expense


 


(367,397) 


 


(213,906) 


 


(474,716)




Loss from operations


 


(5,240,427)


 


(3,436,443))


 


(6,615,562)




 


 


 


 


 


 


 




Finance expense


 


(8,261)


 


(9,647)
 


 


(19,730)




Finance income


 


393,392
 


 


267,155
 


 


100,769




Loss on ordinary activities before taxation


3


(4,855,296)


 


(3,178,935)


 


(6,534,523)




 


 


 


 


 


 


 




Taxation


 


-


 


-


 


-




Loss and total other comprehensive expense


 


(4,855,296)


 


(3,178,935)


 


(6,534,523)




Basic and fully diluted loss per share (US$)


3


(0.026)


 


(0.023)


 


(0.044)




 
 
 
 
POLAREAN IMAGING PLC
Consolidated unaudited statement of financial position
at 30 June 2021




 


 


 
Unaudited


 


 
Unaudited


 


 
Audited




 


 
 


As at 30.6.21   US$


 


As at 30.6.20

US$


 


As at 31.12.20 US$




Assets


Note


 


 


 


 


 




Non-current assets


 


 


 


 


 


 




Property, plant and equipment


 


233,044


 


312,287


 


271,264




Intangible assets


 


2,502,268


 


3,119,120


 


2,810,694




Right-of-use asset


 


116,778


 


224,414


 


184,213




Trade and other receivables


 


5,539


 


5,539


 


5,539




 


 


2,857,629


 


3,661,360


 


3,271,710




Current assets


 


 


 


 


 


 




Inventories


 


1,246,311


 


950,674


 


977,924




Trade and other receivables


 


397,473


 


522,625


 


348,067




Cash and cash equivalents


 


38,197,203


 


9,190,862


 


6,282,665




 


 


39,840,987


 


10,664,161


 


7,608,656




Total assets


 


42,698,616


 


14,325,521


 


10,880,366
 




 


 


 


 


 


 


 




Equity


 


 


 


 


 


 




Share capital


4


101,545


 


77,518


 


78,200




Share premium


 


59,003,465


 


23,573,058


 


23,840,571




Group reorganisation reserve


 


7,813,337


 


7,813,337


 


7,813,337




Share-based payment reserve


 


2,212,848


 


1,584,640


 


1,845,450




Accumulated losses
 
 
 


 


(29,699,500)


 


(21,488,616)


 


(24,844,204)




Total equity


 


39,431,695


 


11,559,936


 


8,733,354




 


 


 


 


 


 


 




Liabilities


 


 


 


 


 


 




Non-current liabilities


 


 


 


 


 


 




Deferred income


 


219,954


 


192,817


 


219,954




Lease liability 


5


21,017


 


149,487


 


91,609




Contingent consideration


 
 


316,000


 


316,000


 


316,000




 


 


556,971


 


658,304


 


627,563




Current liabilities


 


 


 


 


 


 




Trade and other payables


 


2,549,096


 


1,985,828


 


1,348,866




Lease liability 


5


137,589


 


102,213


 


129,819




Deferred income


 


23,265


 


19,239


 


40,763




 


 


2,709,950


 


2,107,280


 


1,519,449




Total equity and liabilities
 


 
 


42,698,616
 


 


14,325,521
 


 


10,880,366




 
 
POLAREAN IMAGING PLC
Consolidated unaudited statement of changes in equity
at 30 June 2021




 


 
 
Share capital


 
Share premium 


 
Group re-organisation


 
 
Share-based payment reserve


 
 
Accumulated losses


 
 
Total equity




Balance as at 31 December 2019 (audited)


55,776


13,659,912


7,813,337


1,370,734


(18,309,681)


4,590,078




Loss and total comprehensive income for the period


-


-


-


-


(3,178,935)


(3,178,935)




Issue of shares


21,742


10,427,537


-


-


-


10,449,279




Share issue costs


-


(514,391)


-


-


-


(514,391)




Share-based payments


-


-


-


213,906


-


213,906




Balance as at 30 June 2020 (unaudited)


 
77,518


 
23,573,058


 
7,813,337


 
1,584,640


 
(21,488,616)


 
11,559,937




Comprehensive income


 


 


 


 


 


 




Loss and total comprehensive income for the period


 
-


 
-


 
-


 
-


 
(3,355,588)


 
(3,355,588)




Transactions with owners


 


 


 


 


 


 




Issue of shares


682


275,836


-


-


-


276,518




Share issue costs


-


(8,323)


-


-


-


(8,323)




Share-based payments


-


-


-


260,810


-


260,810




Balance as at 31 December 2020 (audited)


 
78,200


 
23,840,571


 
7,813,337


 
1,845,450


 
(24,844,204)


 
8,733,354




Loss and total comprehensive income for the period


 
-


 
-


 
-


 
-


 
(4,855,296)


 
(4,855,296)




Issue of shares


23,345


37,260,511


-


-


-


37,283,856




Share issue costs


-


(2,097,617)


-


-


-


(2,097,617)




Share-based payments


-


-


-


367,398


-


367,398




Balance as at 30 June 2021 (unaudited)


 
101,545


 
59,003,465


 
7,813,337


 
2,212,848


 
(29,699,500)


 
39,431,695




 


 


 


 


 


 


 




 


 


 


 


 


 


 




 


 


 


 


 


 


 




 
 
POLAREAN IMAGING PLC
Consolidated unaudited cash flow statement
for the six months ended 30 June 2021




 


 


 
Unaudited


 
Unaudited


 
Audited




 


 
 


6 months ended 30.6.21
US$


6 months ended 30.6.20 
US$


12 months ended 
31.12.20
US$




Cash flows from operating activities


 


 


 


 




Loss for the period before taxation


 


(4,855,296)


(3,178,935)


(6,534,522)




Adjustments for non-cash/non-operating items:


 


 


 


 




Depreciation of plant and equipment


 


81,320


73,204


150,224




Amortisation of intangible assets


 


375,861


359,677


734,058




Share based compensation


 


367,398


213,906


474,716




Interest paid


 


-


-


19,730




Interest received


 


(470)


(92)


(100,769)




 


 


(4,031,187)


(2,532,240)


(5,256,563)




Changes in working capital:


 


 


 


 




Increase in inventories


 


(268,387)


(396,462)


(423,093)




Increase in trade and other receivables


 


(49,406)


114,157


288,096




Increase/(decrease) in trade and other payables


 


1,310,426


189,407


(424,714)




Increase/(decrease) in deferred revenue


 


(127,696)


(27,085)


21,576




Net cash flows used from operating activities


 


(3,166,250)


(2,652,223)


(5,794,698)




 


 


 


 


 




Cash flows from investing activities


 


 


 


 




Purchase of plant and equipment


 


(43,099)


(29,534)


(65,531)




Net cash used in investing activities


 


(43,099)


(29,534)


(65,531)




 


 


 


 


 




Cash flows from financing activities


 


 


 


 




Issue of shares


 


37,283,856


10,449,279


10,725,797




Cost of issue


 


(2,097,617)


(514,391)


(522,714)




Interest paid


 


-


-


-




Interest received


 


470


92


100,769




Funds received from PPP loan


 


-


22,840


-




Principal elements of lease payments


 


(71,083)


(56,717)


(103,097)




Interest elements of lease payments


 


8,261


9,647


(19,730)




Net cash generated from financing activities


 


35,123,887


9,910,750


10,181,025




 


 


 


 


 




Net increase in cash and equivalents


 


31,914,538


7,228,993


4,320,796




Cash and equivalents at beginning of period


 


6,282,665


1,961,869


1,961,869




Cash and equivalents at end of period


 


38,197,203
 


9,190,862
 


6,282,665




 


 


 


 


 




 
NOTES TO THE INTERIM ACCOUNTS 


1. Basis of presentation
 
The accounting policies adopted are consistent with those of the previous financial year ended 31 December 2020.
 
This interim consolidated financial information for the six months ended 30 June 2021 has been prepared in accordance with AIM rule 18, 'Half yearly reports and accounts'. This interim consolidated financial information is not the group's statutory financial statements within the meaning of section 434 of the Companies Act 2006 (and information as required by section 435 of the Companies Act 2006) and should be read in conjunction with the annual financial statements for the year ended 31 December 2020, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and have been delivered to the Registrar of Companies. The auditors have reported on those accounts; their report was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis of matter without qualifying their report and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
 
The interim consolidated financial information for the six months ended 30 June 2021 is unaudited. In the opinion of the Directors, the interim consolidated financial information presents fairly the financial position, and results from operations and cash flows for the period. Comparative numbers for the six months ended 30 June 2020 are also unaudited. 
 
This interim consolidated financial information is presented in US Dollars ($).
 
2. Going concern
 
The interim consolidated financial information for the six months ended 30 June 2021 have been prepared on the going concern basis. 
 
The Directors consider the going concern basis of preparation to be appropriate in preparing the financial statements. In considering the appropriateness of this basis of preparation, the Directors have received the Group's working capital forecasts for a minimum of 12 months from the date of the approval of this financial information. Based on their consideration the Directors have reasonable expectation that the Group has adequate resources to continue for the foreseeable future and that carrying values of intangible assets are supported. Thus, they continue to adopt the going concern basis of accounting in preparing this financial information.
 
3. Loss per share
 
The basic and diluted loss per share for the period ended 30 June 2021 was US$0.026 (2020: US$0.023) The calculation of loss per share is based on the loss of US$4,855,296 for the period ended 30 June 2021 (2020: loss of US$3,178,935) and the weighted average number of shares in issue during the period for calculating the basic profit per share of 184,552,681 shares (2020: 137,598,239).
 
 
4. Called up share capital
 




 


 


Unaudited


 


Unaudited


 


Audited




 


 


30.6.21
US$


 


30.6.20
US$


 


31.12.20
US$




Allotted, issued and fully paid


 


 


 


 


 


 




Ordinary Shares 


 


101,545


 


77,518


 


78,200




 


 


 


 


 


 


 




 
 




The number of shares in issue was as follows:


Number of shares




Balance at 1 January 2020


114,438,600




Issued during the period


11,666,667




Exercised warrants


766,410




Balance at 30 June 2020


161,830,007




Issued during the period


1,318,800




Exercised warrants


64,128




Balance at 31 Dec 2020


163,212,935




Issued during the period


44,932,142 




Exercised warrants


928,089




Balance at 30 June 2021


209,073,166




 
 
5. Borrowings




 


 


Unaudited


 


Unaudited


 


Audited




 


 


30.6.21
US$


 


30.6.20
US$


 


31.12.20
US$




Non-current


 


 


 


 


 


 




Lease liability


 


21,017


 


149,487


 


91,609




 


 


 


 


 


 


 




Current


 


 


 


 


 


 




Lease Liability


 


137,589


 


102,213


 


129,819




Total 


 


158,606


 


251,700


 


221,428




 


 


 


 


 


 


 




 


 


 


 


 


 


 




 
6. Share based payments
 
Share Options
The Company grants share options as its discretion to Directors, management and employees. These are accounted for as equity settled transactions. Should the options remain unexercised after a period of ten years from the date of grant the options will expire unless an extension is agreed to by the board. Options are exercisable at a price equal to the Company's quoted market price on the date of grant or an exercise price to be determined by the board. 
 
 
 
 
 
Details of share options granted, exercised, forfeited and outstanding at the year-end are as follows:
 




 


 


Number of share options


 


Weighted average exercise price

(US$)




Outstanding at 1 January 2021


 


16,884,322


 


0.19




Granted during period


 


1,250,000


 


1.12




Outstanding at 30 June 2021


 


18,134,322


 


0.26




Exercisable at 30 June 2021


 


12,699,615


 


0.14




 
There were 1,250,000 options granted in the period to 30 June 2021. No options were exercised or forfeited during the period.
 
The weighted average contractual life of the share options outstanding at the reporting date is 4 years and 361 days.
 
Share Warrants
The Company grants share warrants at its discretion to Directors, management, employees, advisors and lenders. These are accounted for as equity settled transactions. Terms of warrants vary from agreement to agreement.
 
Details for the warrants exercised, lapsed and outstanding at the period ending 30 June 2021 are as follows:
 




 


 


Number of

share warrants


 


Weighted average exercise price (US$)




Outstanding at 1 January 2021


 


3,994,165


 


0.09




Exercised during the period


 


(928,089)


 


0.20




Forfeited during the period


 


(11,947)


 


0.20




Outstanding at 30 June 2021


 


3,054,129


 


0.01




Exercisable at 30 June 2021


 


3,054,129


 


0.01




 
On 24 February 2021, 61,563 new ordinary shares were issued in the Company following the exercise of warrants at an exercise price of 15 pence per warrant. On 25 March 2021, the Company issued a further 358,713 new ordinary shares following an exercise of warrants at an exercise price of 15 pence per warrant.  On 16 April 2021 and 17 May 2021, an additional 467,733 and 40,080, respectively, new ordinary shares were issued in the Company following the exercise of warrants at an exercise price of 15 pence per warrant.
 
The weighted average contractual life of the share warrants outstanding at the reporting date is 2 years and 122 days.
 
7. Events after the reporting period
 
On 7 July 2021, the Company granted options over a total of 5,250,000 ordinary shares of £0.00037 each in the capital of the Company to certain Directors and employees of the Company.  The options vest over four years and have an exercise price of 93 pence per share.
 

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