REG - ReNeuron Group plc - Interim Results for the six months ended 30 Sept
08/11/2023 07:15
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RNS Number : 6900S ReNeuron Group plc 08 November 2023
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018.
ReNeuron Group plc
("ReNeuron", the "Group" or the "Company")
Interim Results for the six months ended 30 September 2023
ReNeuron Group plc (AIM: RENE), a UK based leader in Stem Cell derived Exosome
Technologies, announces its unaudited interim results for the six months ended
30 September 2023.
Iain Ross, Executive Chairman, said: "Since restructuring the business in
January of this year, the ReNeuron team has been focused on generating the
critical in vivo data that exemplifies the cellular and tissue targeting
capabilities of CustomEX(TM), our exosome drug delivery platform. I am very
excited about the recent in vivo data that is being presented today at Cell
2023 in London that highlights the significant advantages of CustomEX(TM) and
differentiates this drug delivery platform from that of our competitors. In
CustomEX(TM) we are developing a leading-edge platform for the targeted
delivery of modern-day therapies."
FINANCIAL HIGHLIGHTS
- Revenue for the period of £157,000 related to income from partner
funded development activities and royalty income (H1 2022: £438,000)
- Loss for the period of £2.8 million (H1 2022: loss of £3.2
million); cost savings arising from the restructuring offset by reduced
revenue and the previous year's foreign exchange gains now reversed to a small
loss
- Reduced operating costs incurred in the period of £3.5 million
(H1 2022: £4.7 million) primarily explained by a reduction in clinical trial
related costs and savings made in general and administration spend
- Reduced net cash used in operating activities of £2.1 million (H1
2022: £4.3 million). This reduction being explained by the reduced costs and
the receipt of the R&D tax credit for FY 2023 in the period (in the
previous year the R&D tax credit was received in the second half of the
year)
- Cash, cash equivalents and bank deposits at 30 September 2023 of
£5.1 million (31 March 2023: £7.2 million)
OPERATIONAL HIGHLIGHTS
- During the period, the Company has been focussing on generating in
vivo data to validate the CustomEX(TM) platform. In September we announced
that the Company had successfully generated data demonstrating distinct organ
and cellular targeting capabilities of its exosomes
- Today, it was announced that the Group will be presenting the data
that formed the basis of that announcement, namely:
o confirmation in vitro and in vivo that exosome targeting is dependent on
cell source and selection of a specific exosome population results in the
improved delivery of therapeutic payloads when compared to a conventional
HEK293 exosome approach;
o a specific CustomEX™ exosome targets the lymph nodes (immune system)
proportionately more than other exosome types;
o a specific CustomEX™ exosome selectively targets the tubules within the
kidney;
o a specific CustomEX™ exosome targets the lung following systemic
administration;
o confirmation that therapeutic payloads can be successfully delivered in
vivo using the CustomEX™ platform following systemic administration; and
o no evidence of immune response or toxicity with any of the exosome
candidates, opening up the possible use of CustomEX™ for repeat
administration unlike viral vectors.
- These data highlight the significant improvement in targeting and
delivery of payloads that can be achieved through the careful selection of
specific exosomes from different cell sources. ReNeuron's CustomEX(TM)
platform, is a compelling platform that offers this ability to select the
exosome cell type for a partner's need and the payload / target cell of their
choice, while offering a scalable and repeatable manufacturing process due to
its patented conditional immortalisation technology. This technology was
enabled through the Group's earlier work in producing GMP stem cells approved
by the FDA and MHRA for the clinic from which the Group's exosomes are now
produced.
Enquiries:
ReNeuron www.reneuron.com/investors (http://www.reneuron.com/investors)
Iain Ross, Executive Chairman Via Walbrook PR
John Hawkins, Chief Financial Officer
Allenby Capital Limited (Nominated Adviser and Broker) +44 (0)20 3328 5656
James Reeve/George Payne/Dan Dearden-Williams
(Corporate Finance)
Stefano Aquilino/Kelly Gardiner (Sales & Corporate Broking)
Walbrook PR (Media & Investor Relations) +44 (0)20 7933 8780 or reneuron@walbrookpr.com
(mailto:reneuron@walbrookpr.com)
Paul McManus / Alice Woodings +44 (0)7980 541 893 / +44 (0)7407 804 654
About ReNeuron
ReNeuron has developed a proprietary stem cell-derived, exosome-based, drug
delivery platform with customisable cellular targeting capabilities for the
delivery of complex drug modalities.
Through the generation of several unique and scalable exosome producer cell
lines, our CustomEX™ platform can be optimised for specific tissues targets
and payloads leading to improvements in therapeutic outcome and a reduction in
off-target effects. ReNeuron offers a delivery mechanism for a variety of
payloads such as siRNA, mRNA, proteins, small molecules and genes. Through its
conditionally immortalised induced pluripotent stem cell (iPSC) platform, the
Group can make allogeneic tissue cells of choice and has the potential to
produce exosomes with tissue specific targeting ability.
ReNeuron's shares are traded on the London AIM market under the symbol RENE.L.
For further information visit www.reneuron.com (http://www.reneuron.com/)
This announcement contains forward-looking statements with respect to the
financial condition, results of operations and business
achievements/performance of ReNeuron and certain of the plans and objectives
of management of ReNeuron with respect thereto. These statements may
generally, but not always, be identified by the use of words such as "should",
"expects", "estimates", "believes" or similar expressions. This announcement
also contains forward-looking statements attributed to certain third parties
relating to their estimates regarding the growth of markets and demand for
products. By their nature, forward-looking statements involve risk and
uncertainty because they reflect ReNeuron's current expectations and
assumptions as to future events and circumstances that may not prove
accurate. A number of factors could cause ReNeuron's actual financial
condition, results of operations and business achievements/performance to
differ materially from the estimates made or implied in such forward-looking
statements and, accordingly, reliance should not be placed on such statements.
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2023
EXECUTIVE CHAIRMAN'S STATEMENT
In a very uncertain world, the financial markets remain extremely volatile.
Specifically, in the biotech sector many companies have found themselves
coming under increasing financial pressure and as a result we have seen a
number of biotech company liquidations. ReNeuron faces similar challenges in
the current financial climate but the Board remains positive regarding the
future viability of the business.
The Group ended the period to 30 September 2023 with cash, cash equivalents
and bank deposits of £5.1 million with the cash runway being extended into
the start of calendar Q2 2024. The Board is working diligently to ensure the
continued integrity of this business and is exploring options to allow us to
remain financially viable and to achieve our goal of further developing the
CustomEX™ exosome delivery platform and to become a "partner to the
industry".
Nine months ago, we set out to generate critical in vivo data to support our
CustomEX™ exosome delivery platform and from an R&D perspective it has
been a very successful period as evidenced by the data being presented today
at the Cell 2023 conference in London. We have delivered on what we set out to
achieve and produced some interesting and unexpected results. On reviewing the
data, one potential large pharma collaborator stated "Your research is indeed
ground-breaking, and it's clear that a lot of thought and effort has gone into
it. We hold your work in high regard and believe in its potential".
I believe that in CustomEX™ we are on our way to developing a leading-edge
platform for the targeted delivery of modern-day therapies and, provided we
continue to have our shareholders support, we can deliver on the promise of
creating a highly valuable delivery platform and, consequently, a highly
valued business entity.
I would like to thank our team in Pencoed supported by our third-party
collaborators and advisers as we remain committed to progressing the
development of this platform, establishing meaningful partnerships and funding
the business appropriately.
Outlook
The outlook for ReNeuron remains positive provided we can retain our highly
dedicated team of scientists and further develop and verify the CustomEX™
exosome delivery platform and conclude validating industry partnerships. We
aim to do this by a variety of means including potentially raising more equity
financing and/or securing a financing facility and/or entering into M&A
discussions; none of which have been ruled out at the time of writing.
Iain Ross
Executive Chairman
FINANCIAL REVIEW
Following the restructure in January 2023, costs continued to be closely
controlled with spend primarily directed towards progressing the Group's
proprietary exosome platform. Total operating expenses of £3.5 million for
the six months (H1 2022: £4.7 million) are nearly 30% lower than the same
period last year. As a result, the total comprehensive loss for the period
reduced to £2.8 million (H1 2022: £3.2 million).
At 30 September 2023, the Group had cash, cash equivalents and bank deposits
of £5.1 million with the Group's latest internal projections (assuming no new
revenues or funding) showing a cash runway to April 2024, ahead of which point
further revenues and/or a capital injection will be required.
Details on the Directors' assessment on going concern is provided in note 3 to
the interim financial statements.
FINANCIAL HIGHLIGHTS Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(£'000)
Cash, cash equivalents & bank deposits 5,075 10,464 7,153
Net cash used in operating activities 2,101 4,323 7,484
Revenue 157 438 530
Operating expenses 3,457 4,712 7,645
Finance income 91 466 478
Total comprehensive loss 2,841 3,176 5,408
Revenue and Other Operating Income
In the six months to 30 September 2023, recognised revenues, which related to
partner funded development activities were £106,000 (H1 2022: £393,000).
Income related to royalty income, was £51,000 (H1 2022: £45,000).
Operating expenses
Total operating expenses reduced in the period to £3.5 million (H1 2022:
£4.7 million).
This reduction in costs followed the restructuring in January 2023. Research
and development (R&D) expenditure reduced to £2.2 million (H1 2022: £3.0
million) with general and administrative expenses declining in the period to
£1.3 million (H1 2022: £1.7 million).
Finance income/expense
Finance income represented income received from the Group's cash and
investments and gains from foreign exchange, with losses from foreign exchange
shown in finance expense.
Finance income was £91,000 in the period (H1 2022: £466,000). The prior
period included foreign exchange gains of £429,000, whereas in the current
period there was a foreign exchange loss of £11,000, included in finance
expense, which also includes lease interest of £8,000 (H1 2022: £10,000).
The Group holds cash and investments in foreign currencies to hedge against
operational spend in those currencies. The strengthening of sterling during
the period resulted in a decrease in valuation of the Group's foreign currency
balances.
Taxation
The taxation credit for the period of £0.4 million primarily comprised an
R&D tax credit (H1 2022: £0.6 million). The amount of the R&D tax
credit reduced in line with the reduction in research and development spend.
Cash flow
Net cash used in operating activities in the period reduced to £2.1 million
(H1 2022: £4.3 million). This reduction in cash used reflected the reduction
in costs and the receipt of the £1.2 million R&D tax credit during the
first half of the year (in the prior year the R&D tax credit of £1.5
million was received in the second half of the year).
The Group had cash, cash equivalents and bank deposits totalling £5.1 million
as of 30 September 2023 (31 March 2023: £7.2 million).
Statement of financial position
The Company invested in property, plant and equipment in the prior year and no
capital investment was required in the six months to 30 September 2023. As
such the non-current assets reduced in the period reflecting the depreciation
of the existing assets.
Current assets include a corporation tax receivable of £0.4 million
comprising the amount due from R&D tax credits for the current period (30
September 2022: £2.0 million). This debtor was lower than 2022 due to the
earlier receipt of the tax credit for the year ended 31 March 2023 and the
reduction in research and development expenditure impacting the current period
tax credit.
Current liabilities primarily comprise trade and other payables at £3.7
million which were £2.5 million lower than the same period last year (30
September 2022: £6.2 million) and £0.5 million lower than at the year-end
(31 March 2023: £4.2 million).
Non-current liabilities represented the lease liability relating to the
Company's premises. The lease liability reduced by £0.1 million during the
period.
John Hawkins
Chief Financial Officer
INTERIM FINANCIAL STATEMENTS
Unaudited Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2023
Six months ended Six months ended Year ended
30 September 30 September 31 March
2023 2022 2023
Note £'000 £'000 £'000
Revenue 4 157 438 530
Research and development costs (2,177) (2,986) (4,463)
General and administrative costs (1,280) (1,726) (3,182)
Operating loss (3,300) (4,274) (7,115)
Finance income 6 91 466 478
Finance expense 7 (19) (10) (20)
Loss before income taxes (3,228) (3,818) (6,657)
Taxation 8 387 642 1,249
Loss and total comprehensive loss for the period (2,841) (3,176) (5,408)
Loss and total comprehensive loss attributable to equity owners of the company (2,841) (3,176) (5,408)
Basic and diluted loss per ordinary share 9 (5.0p) (5.6p) (9.5p)
Unaudited Consolidated Statement of Financial Position
as at 30 September 2023
30 September 30 September 31 March
2023 2022 2023
Note £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 258 354 338
Right-of-use asset 10 234 331 283
Intangible assets 186 186 186
678 871 807
Current assets
Trade and other receivables 317 456 500
Corporation tax receivable 353 2,036 1,185
Investments - bank deposits - 1,000 1,000
Cash and cash equivalents 5,075 9,464 6,153
5,745 12,956 8,838
Total assets 6,423 13.827 9,645
Equity
Equity attributable to owners of the company
Share capital 11 572 571 572
Share premium account 11 113,925 113,925 113,925
Capital redemption reserve 40,294 40,294 40,294
Merger reserve 2,223 2,223 2,223
Accumulated losses (154,593) (149,931) (151,957)
Total equity 2,421 7,082 5,057
Liabilities
Current Liabilities
Trade and other payables 3,657 6,249 4,167
Lease liabilities 156 151 153
3,813 6,400 4,320
Non-current liabilities
Lease liabilities 189 345 268
189 345 268
Total liabilities 4,002 6,745 4,588
Total equity and liabilities 6,423 13,827 9,645
Unaudited Consolidated Statement of Changes in Equity
for the six months ended 30 September 2023
Share Capital
Share premium redemption Merger Accumulated Total
capital account reserve reserve losses Equity
£'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2022 571 113,925 40,294 2,223 (147,125) 9,888
Credit on share-based payment - - - - 370 370
Loss and total comprehensive loss for the period - - - - (3,176) (3,176)
As at 30 September 2022 571 113,925 40,294 2,223 (149,931) 7,082
Exercise of employee share options 1 - - - - 1
Credit on share-based payment - - - - 206 206
Loss and total comprehensive loss for the period - - - - (2,232) (2,232)
As at 31 March 2023 572 113,925 40,294 2,223 (151,957) 5,057
Credit on share-based payment - - - - 205 205
Loss and total comprehensive loss for the period - - - - (2,841) (2,841)
As at 30 September 2023 572 113,925 40,294 2,223 (154,593) 2,421
Unaudited Consolidated Statement of Cash Flows
for the six months ended 30 September 2023
Six months ended Six months ended Year ended
30 September 30 September 31 March
2023 2022 2023
Note £'000 £'000 £'000
Cash flows from operating activities
Cash used in operations 12 (3,312) (4,310) (8,920)
Overseas taxes paid (16) (3) (5)
Income tax credit received 1,235 - 1,461
Interest paid (8) (10) (20)
Net cash used in operating activities (2,101) (4,323) (7,484)
Cash flows from investing activities
Capital expenditure - (156) (220)
Bank deposit matured 1,000 4,000 4,000
Interest received 110 32 131
Net cash generated by investing activities 1,110 3,876 3,911
Cash flows from financing activities
Proceeds from the issue of ordinary shares - - 1
Principal element of lease payments (76) (66) (148)
Net cash used in financing activities (76) (66) (147)
Net decrease in cash and cash equivalents 13 (1,067) (513) (3,720)
Effect of foreign exchange rates (11) 429 325
Cash and cash equivalents at the start of period 6,153 9,548 9,548
Cash and cash equivalents at the end of period 14 5,075 9,464 6,153
Notes to the Interim Financial Statements
for the six months ended 30 September 2023
1. General information and basis of preparation
ReNeuron Group plc is an AIM listed company incorporated and domiciled in the
United Kingdom under the Companies Act 2006. The Company's registered office
and its principal place of business is Pencoed Business Park, Pencoed,
Bridgend CF35 5HY. Its shares are listed on the Alternative Investment Market
("AIM") of the London Stock Exchange.
These Interim Financial Statements were prepared by the Directors and approved
for issue on 8 November 2023. They have not been audited.
These Interim Financial Statements do not comprise statutory accounts within
the meaning of section 434 of the Companies Act 2006. Statutory accounts for
the year ended 31 March 2023 were approved by the Board of Directors on 15
June 2023 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified and did not contain statements
under 498 (2) or (3) of the Companies Act 2006. The auditor's report did
however contain an emphasis of matter regarding a material uncertainty related
to going concern.
As permitted, these Interim Financial Statements have been prepared in
accordance with UK AIM rules and with International Accounting Standard 34
"Interim financial reporting". They should be read in conjunction with the
Annual Financial Statements for the year ended 31 March 2023, which have been
prepared in accordance with UK adopted International Accounting Standards
(IFRS) and the applicable legal requirements of the Companies Act 2006.
2. Accounting policies
The accounting policies applied are consistent with those of the Annual
Financial Statements for the year ended 31 March 2023, as described in those
Annual Financial Statements. Where new standards or amendments to existing
standards have become effective during the year, there has been no material
impact on the net assets or results of the Group.
3. Going concern
The operations of the Group are currently being financed from funds that have
been raised from share placings, commercial partnerships and grants.
The goal of the Group is to achieve the commercial validation of the
CustomEx(TM) platform by generating in vivo data aimed at differentiating the
platform from that of its competitors. As previously reported, the Group has
been successful in generating such data and the group is now further
broadening its capabilities with a focus on the functional delivery of
specific payloads.
The Directors continue to seek opportunities to secure further
revenues/funding sufficient for the short to medium term future needs of the
business and the current favourable in vivo data should enhance those
opportunities. Considerable emphasis is placed on communication with
shareholders, potential investors and other commercial organisations in order
to maximise the chances of success in exploiting these opportunities.
In January 2023, the Group undertook a restructuring of the business with the
underlying cost base reduced and resources re-aligned to meet the immediate
needs of the business. Based on the Directors' assessment, the current cash
runway is forecast to extend until April 2024, ahead of which point further
revenues and/or a capital injection will be required.
Based on the internal forecasts prepared and various options being explored
and considered by the Board, the Directors consider it appropriate to continue
to adopt the going concern basis in the preparation of these interim results.
However, there is no guarantee that attempts to secure adequate cash inflows
from the Group's exosome platform and IP or through equity fund raising within
the timescales stated above will be successful. These conditions indicate the
existence of a material uncertainty, which may cast significant doubt about
the Group's ability to continue as a going concern. These unaudited interim
financial statements do not include the adjustments that would result if the
Group and Company were unable to continue as a going concern.
4. Revenue
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Royalty income 51 45 136
Income associated with development activities 106 393 394
157 438 530
Royalty income is derived from the licensed sale of the Group's products to
customers in the USA.
Income associated with development activities relates to fees received under
research agreements and is generated in the United Kingdom, the USA, the
People's Republic of China and South East Asia.
5. Segment information
The Group has identified the Executive Chairman as the Chief Operating
Decision Maker (CODM). The CODM manages the business as one segment, the
development of stem cell derived exosome technologies. Since this is the only
reporting segment, no further information is included. The information used
internally by the CODM is the same as that disclosed in the Interim Financial
Statements. Revenue is analysed in note 4 above.
6. Finance income
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Interest received 91 37 153
Foreign exchange gains - 429 325
91 466 478
7. Finance expense
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Lease interest 8 10 20
Foreign exchange losses 11 - -
19 10 20
8. Taxation
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
R & D tax credit 353 644 1,185
Overseas taxation (16) (2) (5)
Adjustments in respect of prior years 50 - 69
387 642 1,249
9. Basic and diluted loss per share
The basic and diluted loss per share is calculated by dividing the loss for
the financial period of £2,841,000 (September 2022: £3,176,000, March 2023:
£5,408,000) by 57,173,760 shares (September 2022: 57,090,147 and March 2023:
57,125,960 shares), being the weighted average number of ordinary 1p shares in
issue during the period. Potential ordinary shares are not treated as dilutive
as the entity is loss-making.
10. Right-of-use-asset
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
At beginning of the period 283 373 373
Additions - 7 7
Depreciation charge (49) (49) (97)
At end of the period 234 331 283
The net book value of the underlying assets is as follows:
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Land and buildings 230 325 278
Computer and office equipment 4 6 5
At end of the period 234 331 283
11. Share capital and share premium
Number of shares Share capital Share premium Total
£'000 £'000 £'000
As at 30 September 2022 57,063,623 571 113,925 114,496
Issue of new shares - share options exercised 82,270 1 - 1
As at 31 March 2023 57,145,893 572 113,925 114,497
Issue of new shares - share options exercised 27,867 - - -
As at 30 September 2023 57,145,893 572 113,925 114,497
12. Cash used in operations
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Loss before income tax (3,228) (3,818) (6,657)
Adjustment for:
Finance income (91) (466) (478)
Finance expense 19 10 20
Depreciation of property, plant and equipment 80 83 170
Depreciation of right-of-use asset 49 49 97
Share-based payment charges 205 370 576
Changes in working capital:
Receivables 163 87 58
Payables (509) (625) (2,706)
Cash used in operations (3,312) (4,310) (8,920)
13. Reconciliation of net cash flow to movement in net debt
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Decrease in cash and cash equivalents (1,067) (513) (3,720)
Effect of foreign exchange rates (11) 429 325
Cash inflow from increase in lease liabilities - (7) (7)
Lease repayments 84 83 168
Lease interest (8) (10) (20)
Net funds at start of period 5,732 8,986 8,986
Net funds at end of period 4,730 8,968 5,732
14. Analysis of net funds
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Cash and cash equivalents 5,075 9,464 6,153
Lease liabilities (345) (496) (421)
Net funds 4,730 8,968 5,732
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