REG - Polarean Imaging PLC - Half-year Report
31/08/2022 07:01
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RNS Number : 6438X Polarean Imaging PLC 31 August 2022
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 2022.
Highlights
· United States Food and Drug Administration ("FDA") acceptance of
resubmission of Polarean's New Drug Application ("NDA") following the Complete
Response Letter ("CRL") received in October 2021, with an established user fee
goal date of 30 September 2022
· The Company is responding to FDA questions and requests as FDA
reviews the resubmitted NDA
· Research system placements at McMaster University in Ontario, Canada
and Cincinnati Children's Medical Center
· Continued preparation for potential commercial launch of the
Company's product in the U.S.
· Ongoing planning for a new clinical trial to seek FDA approval for
label expansion into the high-value gas exchange applications of Polarean's
technology
· Appointment of Frank Schulkes, Dan Brague and Marcella Ruddy, MD to
the Board as Non-Executive Directors
· Appointment of Ken West as Non-Executive Chairman, following the
retirement of Jonathan Allis
· Net cash of US$22.7m as of 30 June 2022, which, based on strategic
decisions, could finance the Company into 2024
· Research collaboration with Oxford University Hospitals NHS Trust for
long-COVID
· New publications by top-tier academic researchers exploring the
applications of Xenon MRI in Asthma, COPD, cardiopulmonary disease,
endobronchial valve placement, and long-COVID
· Selection of Polarean as one of the featured companies surrounding
novel developments in interstitial lung disease at the 2022 ATS Respiratory
Innovation Summit
· Numerous presentations of new findings in various clinical scenarios
presented by researchers using Polarean's Xenon Hyperpolarisation systems at
the high-profile scientific conferences American Thoracic Society ("ATS"),
International Society for Magnetic Resonance in Medicine ("ISMRM"), and
Pulmonary Vascular Research Institute ("PVRI")
Richard Hullihen, CEO of Polarean, commented: "During the first half of this
year, we have focused on the approval process of our NDA, and addressing the
findings related to the CRL. The FDA processes are proceeding with question
and answer and other interactions with the FDA as we approach our goal action
date of 30 September 2022. We have also made appropriate progress on our
commercialisation planning activities, which include medical engagement of
pulmonology and radiology thought-leaders at scientific conferences, profiling
of our target top-tier academic institutions, and reimbursement code
investigation and applications. We are excited to welcome our latest new
researchers and sites, while renewing the capabilities of existing users,
which continue to increase clinical research momentum."
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
Ken West, Chairman
Stifel Nicolaus Europe Limited (NOMAD and Sole Corporate Broker) +44 (0)20 7710 7600
Nicholas Moore / Samira Essebiyea / William Palmer-Brown (Healthcare
Investment Banking)
Nick Adams / Fred Walsh / Nick Harland (Corporate Broking)
Walbrook PR Tel: +44 (0)20 7933 8780 or polarean@walbrookpr.com
Anna Dunphy / Phillip Marriage Mob: +44 (0)7876 741 001 / +44 (0)7867 984 082
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 ((129)Xe) as an imaging agent to visualise
ventilation. (129)Xe gas is currently being studied for visualisation of gas
exchange regionally in the smallest airways of the lungs, across the alveolar
tissue membrane, and into the pulmonary bloodstream.
In October 2020, the Group submitted a New Drug Application ("NDA") to the FDA
for hyperpolarised (129)Xe used to evaluate pulmonary function and to
visualise the lung using MRI. The Group received a complete response letter on
5 October 2021. On 30 March 2022, the Company filed the resubmission of its
NDA with the US FDA and has received a goal action date of 30 September 2022.
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.
CEO Statement
Introduction
During the six month period ending 30 June 2022, Polarean's activities were
largely focused on resubmitting the NDA for the Company's drug-device
combination. The NDA resubmission was completed in March 2022 and the
Company has received a goal action date of 30 September 2022. Post
resubmission, the Company, its suppliers and providers are responding to
questions and requests from the FDA.
The Company continued to strengthen its Board of Directors, with the addition
of three independent Directors with significant industry experience. Frank
Schulkes joined the Board as a Non-Executive Director and Chairman of the
Audit Committee in April 2022. Daniel Brague joined the Board as a
Non-Executive Director and Chairman of the Remuneration Committee in May 2022.
On 25 August 2022, Marcella Ruddy, MD was appointed Non-Executive Director
to the Board. Also in May 2022, Jonathan Allis retired from the Board and the
Remuneration Committee. Kenneth West was appointed Chairman.
During the six month period ending 30 June 2022, we continued to sell our
polariser systems for research purposes. We completed installations at
McMaster University in Ontario, Canada and Cincinnati Children's Medical
Center.
Increasing Awareness of Company's Technology
Polarean's technology was highlighted at the ATS and the ISMRM conferences
during May 2022 with numerous abstracts related to the research use of
hyperpolarised (129)Xe accepted for presentation at the two conferences.
The academic research user base of our polarisers continues to expand and
document the research applications of our technology across the spectrum of
pulmonary disease.
In May 2022, the Company, and Oxford University Hospitals NHS Foundation Trust
("OUH") announced that they have entered into a research collaboration to
study the long-term effects of COVID-19 in patients who are still experiencing
difficulty breathing months after the virus infection is gone, as part of the
upcoming EXPLAIN study. Under the terms of the collaboration, Polarean will
provide its investigational xenon polariser system to OUH for their research.
In turn, OUH will work with Polarean to optimise the imaging workflow and
analyse the datasets coming from the newly enrolling EXPLAIN study. Through
novel analyses of gas-exchange images, Polarean and OUH hope to better
characterise long COVID and improve patient care.
Results overview
Group revenues for the first half were US$0.8m (2021: US$0.6m), largely
derived from the sale of polariser systems to McMaster University in Ontario,
Canada and Cincinnati Children's Medical Center. 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 2022 (US$7.0m) increased from
H1 2021 (US$5.5m), as regulatory costs increased to support the resubmission
of the NDA and administrative costs increased as we built infrastructure to
support the launch of our product, and non-cash share-based costs increased
due to the expense related to stock options issued in H2 2021 and H1 2022.
During H1 2022, the Company recognised Finance Expense of US$0.2m due to the
weakening of the British pound during the period versus Finance Income of
$0.4m in H1 2021 due to the strengthening of the British pound during that
period. Our overall loss before tax increased from US$4.9m to US$6.9m in the
same comparable period, due to the higher operating expenses and weakening of
the British pound described above. As of 30 June 2022, we held US$22.7m in
net cash or cash equivalents.
Post-period end events
FDA review of NDA
We, and our suppliers and providers, continue to interact with the FDA as they
review our NDA and we move through the process toward our goal action date of
30 September 2022.
Preparation for launch and future indications
We continue to prepare for the potential launch of our drug device combination
post FDA approval. In addition, we have begun clinical trial preparation for
the study most likely to be required for approval of future high-value gas
exchange indications to expand the clinical applications of our technology.
Publications and planning for conference exhibitions
As the research use of our technology continues to grow, there have been new
publications by top-tier academic researchers exploring the applications of
Xenon MRI in long-COVID and fibrotic lung disease.
We plan to utilise conference exhibitions to increase the awareness of
Polarean's technology with exhibitions planned at the American College of
Chest Physicians ("CHEST") conference in October 2022 and the Radiologic
Society of North America ("RSNA") conference in November 2022.
Outlook
We continue to believe that Polarean's technology has the potential to be of
tremendous benefit to patients and clinicians for discovering and
characterising treatable traits in pulmonary medicine. In addition, our latest
new techniques lead us into the field of research for 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$150bn and is
widespread and growing, affecting nearly 40 million Americans and 500 million
worldwide, with post COVID patients comprising a new segment approaching the
scale of asthma. Given the limitations of existing methods of diagnosis and
lung disease monitoring, we estimate that there is a significant unmet need
for safe, non-invasive, quantitative, and cost-effective image-based diagnosis
technology. We believe that our unique medical drug-device combination
utilising (129)Xe offers the ideal solution for improving pulmonary disease
diagnosis.
As we enter the final stages of the NDA review process, we look towards a
potential commercial launch before the end of 2022.
Richard Hullihen
Chief Executive Officer
30 August 2022
POLAREAN IMAGING PLC
Consolidated unaudited statement of comprehensive income
for the six months ended 30 June 2022
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
30 June 2022 30 June 2021 31 December 2021
US$ US$ US$
Note
Revenue 834,087 621,874 1,185,427
Cost of sales (539,247) (323,185) (677,402)
Gross profit 294,840 298,689 508,025
Administrative expenses (1,480,119) (1,224,162) (3,024,123)
Research, development and regulatory expenses (2,522,166) 1,691,052 (3,493,273)
Depreciation (139,058) (81,320) (177,349)
Amortisation (392,739) (375,861) (757,016)
Selling and distribution expenses (1,738,265) (1,799,324) (5,557,829)
Share based payment expense (701,832) (367,397) (1,814,882)
Total operating expenses (6,974,179)984,594) (5,539,116) (14,824,472)
Loss from operations (6,679,339) (5,240,427) (14,316,447)
Finance expense (241,322) (8,261) (21,101)
Finance income 2,530 393,392 321,544
Loss on ordinary activities before taxation 3 (6,918,131) (4,855,296) (14,016,004)
Taxation - - -
Loss and total other comprehensive expense (6,918,131) (4,855,296) (14,016,004)
Basic and fully diluted loss per share (US$) 3 (0.033) (0.026) (0.071)
POLAREAN IMAGING PLC
Consolidated unaudited statement of financial position
at 30 June 2022
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December 2021
2022 2021 US$
US$
US$
Assets Note
Non-current assets
Property, plant and equipment 504,484 233,044 634,779
Intangible assets 1,887,717 2,502,268 2,193,843
Right-of-use asset 336,203 116,778 422,816
Trade and other receivables 5,539 5,539 5,539
2,733,943 2,857,629 3,256,977
Current assets
Inventories 1,571,100 1,246,311 1,426,810
Trade and other receivables 1,958,292 397,473 970,968
Cash and cash equivalents 22,690,308 38,197,203 28,874,908
26,219,700 39,840,987 31,272,686
Total assets 28,953,643 42,698,616 34,529,663
Equity
Share capital 4 103,194 101,545 101,642
Share premium 59,179,376 59,003,465 59,022,919
Group reorganisation reserve 7,813,337 7,813,337 7,813,337
Share-based payment reserve 4,362,164 2,212,848 3,660,332
Accumulated losses (45,778,339) (29,699,500) (38,860,208)
Total equity 25,679,732 39,431,695 31,738,022
Liabilities
Non-current liabilities
Deferred income 157,702 219,954 145,747
Lease liability 5 285,493 21,017 358,837
Contingent consideration 316,000 316,000 316,000
759,195 556,971 820,584
Current liabilities
Trade and other payables 2,179,232 2,549,096 1,731,114
Lease liability 5 144,767 137,589 130,949
Deferred income 190,717 23,265 108,994
2,514,716 2,709,950 1,971,057
Total equity and liabilities 28,953,643 42,698,616 34,529,663
POLAREAN IMAGING PLC
Consolidated unaudited statement of changes in equity
at 30 June 2022
Share premium Group re-organisation
Share capital Share-based payment reserve Accumulated losses Total equity
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
Comprehensive income
Loss and total comprehensive income for the period
- - - - (9,160,708) (9,160,708)
Transactions with owners
Issue of shares 97 23,943 - - - 24,040
Share issue costs - (4,489) - - - (4,489)
Share-based payments - - - 1,447,484 - 1,447,484
Balance as at 31 December 2021 (audited)
101,642 59,022,919 7,813,337 3,660,332 (38,860,208) 31,738,022
Loss and total comprehensive income for the period
- - - - (6,918,131) (6,918,131)
Issue of shares 1,552 156,457 - - - 158,009
Share issue costs - - - - - -
Share-based payments - - - 701,832 - 701,832
Balance as at 30 June 2022 (unaudited)
103,194 59,179,376 7,813,337 4,362,164 (45,778,339) 25,679.732
POLAREAN IMAGING PLC
Consolidated unaudited cash flow statement
for the six months ended 30 June 2022
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
30 June 2022 30 June 2021 31 December 2021
US$ US$ US$
Cash flows from operating activities
Loss for the period before taxation (6,918,131) (4,855,296) (14,016,004)
Adjustments for non-cash/non-operating items:
Depreciation of plant and equipment 139,058 81,320 177,349
Amortisation of intangible assets 392,739 375,861 757,015
Loss on disposal of property, plant and equipment 1,927 - 590
Loss on remeasurement of right-of-use assets - - 11,660
Share based compensation 701,832 367,398 1,814,882
Finance expense 241,322 8,261 21,101
Finance income (2,530) (470) (321,544)
(5,443,783) (4,022,926) (11,554,951)
Changes in working capital:
Increase in inventories (144,290) (268,387) (448,886)
Increase in trade and other receivables (987,325) (49,406) (622,901)
Increase in trade and other payables 435,439 1,310,426 382,247
Increase/(decrease) in deferred revenue 106,358 (127,696) (5,976)
Net cash flows used in operating activities (6,033,601) (3,157,989) (12,250,467)
Cash flows from investing activities
Purchase of plant and equipment (10,689) (43,099) (541,454)
Net cash used in investing activities (10,689) (43,099) (541,454)
Cash flows from financing activities
Issue of shares 158,009 37,283,856 37,307,896
Cost of issue - (2,097,617) (2,102,106)
Interest paid (228,378) -
Interest received 2,530 470 321,544
Principal elements of lease payments (59,527) (62,822) (122,069)
Interest elements of lease payments (12,944) (8,261) (21,101)
Net cash generated from (used in) financing activities (140,310) 35,115,626 35,384,164
Net increase (decrease) in cash and equivalents (6,184,600) 31,914,538 22,592,243
Cash and equivalents at beginning of period 28,874,908 6,282,665 6,282,665
Cash and equivalents at end of period 22,690,308 38,197,203 28,874,908
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 2021.
This interim consolidated financial information for the six months ended 30
June 2022 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 2021, which have been
prepared in accordance with UK-adopted International Accounting 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 has been prepared in accordance
with the accounting policies adopted in the Group's most recent annual
financial statements for the year ended 31 December 2021. The judgements,
estimates and assumptions applied in the interim condensed consolidated
financial information, including the key sources of estimation uncertainty,
were the same as those applied in the Group's last annual financial statements
for the year ended 31 December 2021.
The interim consolidated financial information for the six months ended 30
June 2022 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 2021 are also unaudited.
This interim consolidated financial information is presented in US Dollars
(US$).
2. Going concern
The interim consolidated financial information for the six months ended 30
June 2022 have been prepared on the going concern basis.
The Directors consider the going concern basis of preparation to be
appropriate in preparing the interim consolidated financial information. 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 interim consolidated
financial information.
3. Loss per share
The basic and diluted loss per share for the period ended 30 June 2022 was
US$0.033 (2021: US$0.026) The calculation of loss per share is based on the
loss of US$6,918,331 for the period ended 30 June 2022 (2021: loss of
US$4,855,296) and the weighted average number of shares in issue during the
period for calculating the basic profit per share of 210,921,193 shares (2021:
184,552,681).
4. Called up share capital
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
US$ US$ US$
Allotted, issued and fully paid
Ordinary Shares 103,194 101,545 101,642
The number of shares in issue was as follows: Number of shares
Balance at 1 January 2021 163,212,935
Issued during the period 44,932,142
Exercised warrants 928,089
Balance at 30 June 2021 209,073,166
Issued during the period
Exercised options 176,800
Balance at 31 Dec 2021 209,249,966
Issued during the period
Exercised options 3,190,024
Balance at 30 June 2022 212,439,990
5. Borrowings
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
US$ US$ US$
Non-current
Lease liability 285,493 21,017 358,837
Current
Lease Liability 144,767 137,589 130,949
Total 430,260 158,606 489,786
6. Share based payments
Share Options
The Company grants share options at 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 in the
period ended 30 June 2022 are as follows:
Number of share options Weighted average exercise price
(US$)
Outstanding at 1 January 2022 24,443,312 0.50
Granted during period 1,316,000 0.67
Exercised during period (3,190,024) 0.05
Forfeited during period (2,381,364) 1.03
Outstanding at 30 June 2022 20,187,924 0.47
Exercisable at 30 June 2022 12,330,672 0.18
There were 1,316,000 options granted in the period to 30 June 2022. There were
3,190,024 options exercised and 2,381,364 options forfeited in the period to
30 June 2022.
The weighted average contractual life of the share options outstanding at the
reporting date is 6 years and 166 days.
Share Warrants
The Company grants share warrants at its discretion to Directors, management,
employees, advisors and lenders. These are accounted for as equity settled
transactions. Terms of warrants vary from agreement to agreement.
Details of warrants granted, exercised, forfeited and outstanding in the
period ended 30 June 2022 are as follows:
Number of Weighted average exercise price (US$)
share warrants
Outstanding at 1 January 2022 3,054,129 0.01
Exercised during the period - -
Forfeited during the period - -
Outstanding at 30 June 2022 3,054,129 0.01
Exercisable at 30 June 2022 3,054,129 0.01
No warrants were granted, exercised or forfeited during the six months ended
30 June 2022.
The weighted average contractual life of the share warrants outstanding at the
reporting date is 2 years and 19 days.
7. Events after the reporting period
Between 1 July 2022 and 31 July 2022, the Company issued a total of 607,519
new ordinary shares of 0.037 pence each in the capital of the Company upon the
exercise of share options. The options had an exercise price of 15 pence per
share.
On 25 August 2022, the Company granted options over a total of 573,000
ordinary shares of 0.037 pence each in the capital of the Company to a new
Director and to a new employee of the Company.
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