REG - ReNeuron Group plc - Interim Results
Details are given below of an analyst meeting and webcast at 9.30am this morning
14 December 2018
AIM: RENE
ReNeuron Group plc
("ReNeuron" or "the Company")
Interim Results for the six months ended 30 September 2018
ReNeuron Group plc (AIM: RENE), a UK-based global leader in the development of cell-based therapeutics, is pleased to announce its interim results for the six months ended 30 September 2018.
Highlights
· CTX stem cell therapy candidate for stroke disability:
- Patient screening and enrolment commenced in Phase IIb clinical trial in the US
- Top line data from Phase IIb study expected in early 2020
· hRPC stem cell therapy candidate for retinal diseases:
- Optimised formulation of the hRPC drug product developed and approved for use in ongoing Phase I/II clinical trial in retinitis pigmentosa in the US
- Patient dosing recommenced in Phase I/II study using optimised hRPC formulation
- Top line data from Phase I/II study expected in mid-2019
· Exosome platform:
- Programme to be re-focused on use of ExoPr0 as a drug delivery vehicle, providing greater scope for potential near-term partnering deals
· Increased business development activity in the period reflecting third party interest in the Company's core therapeutic programmes
- Active and well-progressed discussions ongoing with commercial third parties
· Reduced loss for the period of £5.32million (2017: loss of £9.57 million); reduced cash consumed by operations of £7.54 million (2017: £9.22 million); cash, cash equivalents and bank deposits at 30 September 2018 of £30.67 million (31 March 2018: £37.41 million)
Commenting on the results, Olav Hellebø, Chief Executive Officer, said:
"Our therapeutic development programmes have continued to progress well during the period. We are particularly excited to have opened the placebo-controlled Phase IIb clinical trial in the US for CTX in chronic stroke disability. We remain encouraged by the progress made in partnering discussions across all of our technologies and programmes and we hope to be able to conclude an initial out-licensing agreement in the near term.
"We have continued to maintain tight control over our operating costs, reflected in the financial statements for the period. Our cash position remains robust and we are positioned to deliver significant clinical milestones in our stroke and retinitis pigmentosa programmes over the next 18 months."
Analyst meeting and webcast:
A meeting for analysts will be held at 9.30am today at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN.
For a webcast of the analyst presentation, please log on to the following web address approximately 10 minutes before 9.30am:
http://webcasting.buchanan.uk.com/broadcast/5bf3e08d1a82c37e3088a28b
For further details please contact Buchanan on 020 7466 5000 or email reneuron@buchanan.uk.com.
A recording of the webcast will be made available on ReNeuron's website, www.reneuron.com.
Enquiries:
ReNeuron
+44 (0) 20 3819 8400
Olav Hellebø, Chief Executive Officer
Michael Hunt, Chief Financial Officer
Buchanan
+44 (0) 20 7466 5000
Mark Court, Sophie Wills, Tilly Abraham
Stifel Nicolaus Europe Limited
Jonathan Senior, Stewart Wallace, Ben Maddison (NOMAD and Joint Broker)
+44 (0) 20 7710 7600
N+1 Singer
Mark Taylor / Aubrey Powell (Joint Broker)
+44 (0) 20 7496 3000
This announcement contains inside information. The person responsible for arranging for the release of this announcement on behalf of the Company is Olav Hellebø, Chief Executive Officer.
About ReNeuron
ReNeuron is a leading, clinical-stage cell therapy development company. Based in the UK, its primary objective is the development of novel cell-based therapies targeting areas of significant unmet or poorly met medical need.
ReNeuron has used its unique stem cell technologies to develop cell-based therapies for significant disease conditions where the cells can be readily administered "off-the-shelf" to any eligible patient without the need for additional immunosuppressive drug treatments. The Company has therapeutic candidates in clinical development for disability as a result of stroke and for the blindness-causing disease, retinitis pigmentosa.
ReNeuron is also advancing its proprietary exosome technology platform as a potential new nanomedicine and as a potential delivery system for drugs that would otherwise be unable to reach their site of action.
ReNeuron's shares are traded on the London AIM market under the symbol RENE.L. Further information on ReNeuron and its products can be found at 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 also 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.
Review of therapeutic programmes
CTX for stroke disability
During the period under review, we have progressed our CTX cell therapy candidate for stroke disability into a Phase IIb clinical trial in the US. The study, PISCES III, is a placebo-controlled clinical trial and will involve 110 patients across 40 clinical trial sites in the US.
Patients in the study will be treated between 6 and 12 months after their stroke and will be randomised to receive either the CTX therapy or placebo treatment. The primary end-point of the PISCES III study is the proportion of patients in the treated and placebo arms showing a clinically important improvement on the modified Rankin Scale (mRS) at six months post-treatment compared with baseline. The mRS is a global measure of disability or dependence upon others in carrying out activities of daily living and is accepted by regulatory authorities as an appropriate end-point for marketing approval in stroke disability.
To date, 33 out of the 40 sites targeted for participation in the PISCES III study have been identified and the first sites have now been opened, with patient screening and recruitment underway. We expect the first patient in the study to be randomised shortly and, subject to meeting patient recruitment targets, we expect top-line data from the study in early 2020. We expect the PISCES III clinical trial to be one of two pivotal studies required to support a marketing authorisation for the therapy in this indication.
hRPC for retinal diseases
During the period, we successfully developed a new cryo-preserved formulation of the hRPC drug product to optimise the sub-retinal implantation of the cells and to extend the shelf life of the drug product. Following the requisite regulatory approvals for this new hRPC formulation, we have recommenced patient dosing in the ongoing Phase I/II study in the US in retinitis pigmentosa (RP). The Phase I/II study, which is being undertaken at Massachusetts Eye and Ear Infirmary in Boston, is an open-label, dose escalation study to evaluate the safety, tolerability and preliminary efficacy of our hRPC stem cell therapy candidate in patients with advanced RP.
The clinical trial protocol for the Phase I/II study has been amended to allow for a larger patient population to be treated in the study and for a further study centre to be added, which will be open for patient enrolment shortly. Based on this, we expect short term read-outs from the Phase I/II study in mid-2019, with a Phase IIb study planned to commence thereafter. As also reported previously, we intend to seek approval to commence a Phase II clinical trial with our hRPC cell therapy candidate in patients with cone-rod dystrophy (CRD) to begin shortly after the start of Phase IIb testing of this candidate in RP. CRD is a group of rare eye disorders associated with a loss of cone cells in the retina resulting in deterioration of central visual acuity and colour vision.
Exosome platform
Pre-clinical development work has continued during the period with ExoPr0, our first CTX-derived exosome therapeutic candidate. Exosomes are nanoparticles secreted from cells including our proprietary CTX stem cell line. Exosomes play a key role in cell-to-cell signalling and early research with ExoPr0 has demonstrated its potential as both a novel therapeutic candidate and as a drug delivery vehicle.
We have recently reassessed how best to exploit our CTX cell-based exosome platform to maximise potential near-term commercial opportunities. In this regard, we intend to devote greater resource to the application of ExoPr0 as a vector for delivering biological drugs since this is where we see the greatest near-term opportunity for value-generating business development deals. We will therefore devote less internal resource to the pursuit of ExoPr0 as a therapeutic agent in its own right, preferring instead to pursue this application in collaboration with other academic and commercial third parties under existing grant-funded programmes. As a result, we do not now expect to undertake the previously planned oncology clinical trial with ExoPr0 in 2019.
Other activities
During October, we presented data demonstrating for the first time that our lead CTX cell line can be successfully reprogrammed to an embryonic stem cell-like state and then differentiated along a different path from the original cell line. Importantly, ReNeuron's immortalisation technology remained functional in the reprogrammed cells. These results, albeit early stage, are particularly encouraging as they demonstrate that our CTX cell line could be used to produce new conditionally immortalised allogeneic (i.e. non-donor-specific) cell lines from any of the three germ layers: ectoderm, mesoderm and endoderm. We are now working to develop further new allogeneic cell lines, including NK and T-cells (the cells that can be modified to attack cancer cells), as potential therapeutic agents for out-licensing to third parties.
Our technologies and therapeutic programmes have increasingly attracted the interest of commercial third parties as they have progressed through pre-clinical and clinical development. As a result, we are in active and well-progressed discussions with commercial third parties relating to all of our platform technologies and programmes, with a view to potential collaboration and/or out-licensing deals in due course. These potential deals, if successfully concluded, will provide strong third-party validation to our technologies and programmes as well as an important source of potential non-dilutive funding to the Company.
During the period, an exclusivity fee of $2.5 million was received from one such third party relating to a potential out-license of our hRPC retinal stem cell technology. Although this particular potential licensee withdrew from the deal for reasons unrelated to ReNeuron's technology, we remain confident of securing an initial out-licence deal in the near term.
Financial review
In the six months to 30 September 2018, revenues were £27,000 (2017: £24,000) in addition to which grant income of £508,000 was received and is shown as other operating income (2017: £240,000). Other operating income also includes £1,893,000 (2017: £Nil) in respect of the exclusivity fee received during out-licencing negotiations.
Total operating costs reduced in the period to £10.10 million (2017: £10.81 million). Research and development expenditure reduced to £7.54 million (2017: £8.60 million). The higher cost in the prior period reflects heightened manufacturing process development activity ahead of the commencement of the ongoing clinical trials in stroke disability and retinitis pigmentosa. General and administrative expenses increased to £2.56 million (2017: £2.21 million) as a result of increased costs associated with higher levels of business development activity.
Finance income represents 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 £0.89 million in the period (2017: £0.19 million) including foreign exchange gains of £0.75 million. In 2017, the movement in foreign exchange rates led to a foreign exchange loss of £0.62 million. The Group holds cash and investments in foreign currencies in order to hedge against operational spend in those currencies. The strengthening of sterling against the US dollar during the period has resulted in a relative appreciation of the Group's foreign currency deposits. The total tax credit for the period was £1.46 million (2017: £1.40 million).
As a result of the above, the total comprehensive loss for the period reduced to £5.32 million (2017: £9.57 million).
Cash consumed by operations in the period reduced to £7.54 million (2017: £9.22 million), broadly reflecting the receipt of the £1.9m exclusivity fee in the period and lower operating costs, offset by a reduction in working capital compared with the prior period. The Group had cash, cash equivalents and bank deposits totalling £30.67 million as at 30 September 2018 (31 March 2018: £37.41 million).
Summary and outlook
Our therapeutic development programmes have continued to progress well during the period. We are particularly excited to have opened the placebo-controlled Phase IIb clinical trial in the US for CTX in chronic stroke disability. We remain encouraged by the progress made in partnering discussions across all of our technologies and programmes and we hope to be able to conclude an initial out-licensing agreement in the near term.
We have continued to maintain tight control over our operating costs, reflected in the financial statements for the period. Our cash position remains robust and we are positioned to deliver significant clinical milestones in our stroke and retinitis pigmentosa programmes over the next 18 months.
Olav Hellebø
Chief Executive Officer
14 December 2018
Unaudited Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2018
Six months ended
Six months ended
Year ended
30 September
30 September
31 March
2018
2017
2018
Note
£'000
£'000
£'000
Revenue
27
24
43
Research and development costs
(7,543)
(8,599)
(16,657)
General and administrative costs
(2,560)
(2,210)
(4,616)
Other operating income
5
2,401
240
854
Operating loss
(7,675)
(10,545)
(20,376)
Finance income
6
893
188
320
Finance expense
7
-
(616)
(911)
Loss before income taxes
(6,782)
(10,973)
(20,967)
Tax credit on loss on ordinary activities
1,457
1,404
3,352
Total comprehensive loss for the period
(5,325)
(9,569)
(17,615)
Total comprehensive loss attributable to:
- Equity owners of the Company
(5,325)
(9,569)
(17,615)
Basic and diluted loss per share
8
(16.8p)
(30.2p)
(55.7p)
Unaudited Consolidated Statement of Financial Position
as at 30 September 2018
30 September
30 September
31 March
2018
2017
2018
£'000
£'000
£'000
Assets
Non-current assets
Property, plant and equipment
727
685
726
Intangible assets
186
186
186
913
871
912
Current assets
Trade and other receivables
1,057
812
1,285
Corporation tax receivable
4,467
3,529
3,010
Investments - bank deposit
5,951
23,923
9,500
Cash and cash equivalents
24,722
21,359
27,911
36,197
49,623
41,706
Total assets
37,110
50,494
42,618
Equity
Equity attributable to owners of the Company
Share capital
316
31,646
316
Share premium
97,704
97,704
97,704
Capital redemption reserve
40,294
8,964
40,294
Merger reserve
2,223
2,223
2,223
Accumulated losses
(108,629)
(96,381)
(103,868)
Total equity
31,908
44,156
36,669
Liabilities
Current Liabilities
Trade and other payables
5,202
6,338
5,949
Total liabilities
5,202
6,338
5,949
Total equity and liabilities
37,110
50,494
42,618
Unaudited Consolidated Statement of Changes in Equity
for the six months ended 30 September 2018
Share
Capital
Share
premium
Redemption
Merger
Accumulated losses
Total
capital
account
Reserve
reserve
Equity
£'000
£'000
£'000
£'000
£'000
£'000
As at 1 April 2017
31,646
97,704
8,964
2,223
(87,380)
53,157
Share-based credit
-
-
-
-
568
568
Loss for the period
-
-
-
-
(9,569)
(9,569)
As at 30 September 2017
31,646
97,704
8,964
2,223
(96,381)
44,156
Effect of share consolidation
(31,330)
-
31,330
-
-
-
Share-based credit
-
-
-
-
559
559
Loss for the period
-
-
-
-
(8,046)
(8,046)
As at 31 March 2018
316
97,704
40,294
2,223
(103,868)
36,669
Share-based credit
-
-
-
-
564
564
Loss for the period
-
-
-
-
(5,325)
(5,325)
As at 30 September 2018
316
97,704
40,294
2,223
(108,629)
31,908
Unaudited Consolidated Statement of Cash Flows
for the six months ended 30 September 2018
Six months ended
Six months ended
Year ended
30 September
30 September
31 March
2018
2017
2018
Note
£'000
£'000
£'000
Cash consumed by operations
9
(7,541)
(9,221)
(19,244)
Income tax credit received
-
1,890
4,357
Cash outflow from operating activities
(7,541)
(7,331)
(14,887)
Cash flows from investing activities
Capital expenditure
(133)
(72)
(235)
Interest received
188
240
383
Net cash generated by investing activities
55
168
148
Cash flows from financing activities
Bank deposit matured
4,297
397
14,525
Net cash generated by financing activities
4,297
397
14,525
Net decrease in cash and cash equivalents
(3,189)
(6,766)
(214)
Cash and cash equivalents at the start of period
27,911
28,125
28,125
Cash and cash equivalents at the end of period
24,722
21,359
27,911
Notes to the interim financial statements
for the six months ended 30 September 2018
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.
These Interim Financial Statements were prepared by the Directors and approved for issue on 14 December 2018. 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 2018 were approved by the Board of Directors on 19 July 2018 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 and did not contain any emphasis of matter.
As permitted these Interim Financial Statements have been prepared in accordance with UK AIM rules and the IAS 34, 'Interim financial reporting' as adopted by the European Union. They should be read in conjunction with the Annual Financial Statements for the year ended 31 March 2018, which have been prepared in accordance with IFRS as adopted by the European Union.
2. Accounting policies
The accounting policies applied are consistent with those of the Annual Financial Statements for the year ended 31 March 2018, 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.
Certain statements within this report are forward looking. The expectations reflected in these statements are considered reasonable. However, no assurance can be given that they are correct. As these statements involve risks and uncertainties the actual results may differ materially from those expressed or implied by these statements.
3. Going concern
The Group is expected to incur significant further costs as it continues to develop its therapies and technologies through clinical development. The operation of the Group is currently being financed from funds that have been raised from share placings and grants.
The Directors expect that the Group's current financial resources will be sufficient to support operations for at least the next 12 months from the date of this report. The Directors are currently considering a number of options for further funding and believe that sufficient funding will be available beyond current cash resources in order to continue with the Group's ongoing clinical programmes. Consequently, the going concern basis has been adopted in the preparation of these interim financial statements.
4. Segment information
The Group has identified the Chief Executive Officer as the chief operating decision maker (CODM). The CODM manages the business as one segment, the development of cell-based therapies, and assets are predominantly based in the UK. 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. The Group's revenue derives wholly from assets located in the United Kingdom. Analysed by location of customer all revenue is derived from the United States of America.
5. Other operating income
Six months ended
Six months ended
Year ended
30 September
30 September
31 March
2018
2017
2018
£'000
£'000
£'000
Government grants
508
240
854
Exclusivity fee
1,893
-
-
2,401
240
854
6. Finance income
Six months ended
Six months ended
Year ended
30 September
30 September
31 March
2018
2017
2018
£'000
£'000
£'000
Interest received
146
188
320
Foreign exchange gains
747
-
-
893
188
320
7. Finance expense
Six months ended
Six months ended
Year ended
30 September
30 September
31 March
2018
2017
2018
£'000
£'000
£'000
Foreign exchange losses
-
616
911
8. Basic and diluted loss per share
The basic and diluted loss per share is calculated by dividing the loss for the financial period of £5,325,000 (September 2017: £9,569,000, March 2018: £17,615,000) by 31,646,186 shares (September 2017 and March 2018: 31,646,186 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. The comparative figure for September 2017 has been adjusted to reflect the 1 for 100 share consolidation which took place in January 2018.
9. Cash consumed by operations
Six months ended
Six months ended
Year ended
30 September
30 September
31 March
2018
2017
2018
£'000
£'000
£'000
Loss before income tax
(6,782)
(10,973)
(20,967)
Adjustment for:
Finance income
(893)
(188)
(320)
Depreciation of tangible fixed assets
137
110
232
Share-based payment charge
564
568
1,127
Finance expense
-
616
911
Changes in working capital
Receivables
186
196
(289)
Payables
(753)
450
62
Cash consumed by operations
(7,541)
(9,221)
(19,244)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDIR FFAFWDFASEDE
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