REG - Sareum Holdings PLC - Sareum Half-Year Report
28/03/2024 07:15
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RNS Number : 6683I Sareum Holdings PLC 28 March 2024
Sareum Holdings PLC
("Sareum" or the "Company")
Half-Year Report for the Six Months Ended 31 December 2023
Cambridge, UK, 28 March 2024 - Sareum Holdings plc (AIM: SAR), a biotechnology
company developing next generation kinase inhibitors for autoimmune disease
and cancer, announces its unaudited results for the six months ended 31
December 2023.
Sareum also provides a broader update on its operational activities and
pipeline progress.
OPERATIONAL HIGHLIGHTS - INCLUDING POST-PERIOD UPDATES
SDC-1801 (autoimmune disease)
SDC-1801 is a TYK2/JAK1 inhibitor being developed as a potential new
therapeutic for a range of autoimmune diseases with an initial focus on
psoriasis, an autoimmune condition affecting the skin.
· After the period end, Sareum announced the completion of the single
ascending dose (SAD) element and the food effect study of a Phase 1a clinical
trial for the lead programme SDC-1801.
· Preliminary blinded safety, tolerability and pharmacokinetics data
from the trial indicate a favourable profile and support once daily oral
dosing of patients.
· These preliminary results indicate that SDC-1801 has the potential to
achieve therapeutically effective dose levels with no serious adverse events.
· The multiple ascending dose (MAD) study of SDC-1801 is ongoing and
topline data from the Phase 1a clinical trial are expected to be available
during Q2 2024.
· Sareum's intellectual property portfolio has been strengthened with
patent grants in China in June 2023 and Japan in November 2023. Post-period,
in March 2024, the European Patent Office has issued a Notice of Allowance for
a patent relating to SDC‐1801.
SDC-1802 (cancer immunotherapy)
SDC-1802 is a TYK2/JAK1 inhibitor being developed for cancer immunotherapy.
· Sareum continued to work on the translational studies needed to
support development of SDC-1802 during the period, in order define the optimal
cancer application before completing toxicology and manufacturing studies, but
the Company will now focus its resources on the clinical development of
SDC-1801.
SRA737 (cancer)
SRA737 is a clinical-stage oral, selective Checkpoint kinase 1 inhibitor that
targets cancer cell replication and DNA damage repair mechanisms.
· After the period end, on 2 January 2024, Sareum announced the
Company's co-development partner, the CRT Pioneer Fund ("CPF"), has entered
into a development and commercialisation licence agreement for SRA737 with a
private biopharma company based in the United States.
· Under the terms of Sareum's co-development agreements with CPF and
Cancer Research Technology Ltd, Sareum is entitled to receive 27.5% of any
income arising from this licensing of the SRA737 programme.
· Post period end, Sareum earned US$137,500 pursuant to the upfront fee
payable under the Licensing Agreement. The Company is also entitled to receive
27.5% of any future payments payable by the Licensee Company (including any
Consideration Shares received), under the terms of the Licensing Agreement.
FINANCIAL HIGHLIGHTS
• Cash at 31 December 2023 of £0.4m (£2.9m as of 31 December 2022
and £1.0m as of 30 June 2023).
• Loss on ordinary activities after taxation for the six months
ended 31 December 2023 of £2.5m, reflecting increased investment in clinical
studies and a finance charge resulting from the Riverfort facility (2022: loss
of £1.4m).
• Post period end a UK R&D tax credit of £0.4m received in
January 2024.
• Post period end, the Company is today announcing a conditional
equity fundraise of up to £1.5m (before expenses), via the issue of a total
of up to 15,000,000 new ordinary shares of 1.25 pence each in the capital of
the Company ("Ordinary Shares") at a price of 10 pence per new Ordinary Share
(the "Placing Price") (the "Fundraise").
• Up to £0.3m of the total Fundraise will be offered to retail
shareholders via the Winterflood Retail Access Platform through the issue of
new Ordinary Shares at the Placing Price.
Dr Tim Mitchell, Chief Executive Officer of Sareum, commented:
"Sareum is making steady progress with the ongoing trial of SDC-1801 and the
data we have seen so far support our confidence that it has the potential to
deliver therapeutically effective dose levels with no serious adverse events.
"More broadly, we're increasingly encouraged by the potential of the TYK2/JAK1
class, both from a scientific and commercial perspective."
"With the additional funding that will be announced today, we are well placed
to complete the Phase 1a clinical trial of SDC-1801."
"We look forward to the topline data from the MAD part of our Phase 1a
clinical trial in Q2 2024, and to continuing to progress this promising
molecule through clinical development."
For further information, please contact:
Sareum Holdings plc
Tim Mitchell, CEO 01223 497700
Lauren Williams, Head of Investor Relations ir@sareum.co.uk
Strand Hanson Limited (Nominated Adviser)
James Dance / James Bellman 020 7409 3494
Peel Hunt LLP (Joint Corporate Broker)
James Steel / Patrick Birkholm 020 7418 8900
Hybridan LLP (Joint Corporate Broker)
Claire Noyce 020 3764 2341
ICR Consilium (Financial PR)
Jessica Hodgson / Davide Salvi / Kumail Waljee 020 3709 5700
About Sareum
Sareum (AIM: SAR) is a biotechnology company developing next generation kinase
inhibitors for autoimmune disease and cancer.
The Company is focused on developing next generation small molecules which
modify the activity of the JAK kinase family and have best-in-class potential.
Its lead candidate, SDC-1801, simultaneously inhibits TYK2 and JAK1. SDC-1801
is a potential treatment for a range of autoimmune diseases, and is planned to
enter clinical development with an initial focus on psoriasis.
Sareum is also developing SDC-1802, a TYK2/JAK1 inhibitor with a potential
application for cancer immunotherapy.
Sareum Holdings plc is based in Cambridge, UK, and is quoted on the AIM market
of the London Stock Exchange, trading under the ticker SAR. For further
information, please visit the Company's website at www.sareum.com
(about:blank)
CHAIRMAN'S STATEMENT
Sareum has made good progress during and after this period progressing its
lead clinical asset, SDC-1801, through a Phase 1a study. The single ascending
dose (SAD) part and the food effect study of SDC-1801 have progressed well,
giving the Company continued confidence over the clinical momentum in the
trial and optimism as we move towards the completion the study.
The multiple ascending dose (MAD) portion of SDC-1801 is nearing completion.
Sareum aims to conclude this part of the trial by the end of Q2 2024.
Subject to data review, additional funding and/or potential licencing
opportunities, we endeavour to be in a position to commence a Phase 2a study
in psoriasis patients before the end of 2024.
It is becoming increasingly clear that the TYK2/JAK1 class offers great
potential for the treatment of autoimmune disease, with potential for broad
coverage and increased efficacy across key targets, lower toxicity and
potentially stronger efficacy. We believe SDC-1801 has the potential to be a
best-in-class TYK2/JAK1 inhibitor for autoimmune diseases and we're excited
about its progress in this ongoing clinical study. While the MAD study is
still in progress, interim data shows that levels of SDC-1801 in blood are
already in the expected therapeutic range, and achieve concentrations greater
than those predicted to reduce signalling of cytokines dependent on TYK2
and/or JAK1 activity by 50% for a sustained period following once daily oral
dosing. Safety data remains blinded, but no serious adverse events have been
reported to date.
We were also encouraged that, after the period end, Sareum's co-development
partner, the CPF entered into a development and commercialisation license
agreement for SRA737 with a private biopharma company based in the US. We
are delighted that a partner has been identified to take this molecule forward
into further development.
We look forward to providing further updates in due course.
PROGRAMME UPDATES
SDC-1801
SDC-1801 is a TYK2/JAK1 inhibitor being developed as a potential new
therapeutic for a range of autoimmune diseases with an initial focus on
psoriasis, an autoimmune condition affecting the skin.
SDC-1801 is currently in a Phase 1a trial, designed to investigate the safety,
tolerability, pharmacokinetics and pharmacodynamics of an oral formulation of
SDC-1801 in healthy subjects (trial ID ACTRN12623000416695p). This is a
randomised, placebo-controlled trial with single and multiple ascending oral
dose studies. This trial includes a single ascending dose study (Part 1), a
multiple ascending dose study (Part 2) and a food effects study (Part 3).
Dosing of the final subjects in the SAD part of the trial has now concluded
and the safety review committee for the trial has reviewed available
data. The SAD study randomised participants in a 3:1 ratio to a single dose
of SDC-1801 or placebo in six dose cohorts. Preliminary blinded safety,
tolerability and pharmacokinetics data from the trial indicate a favourable
profile and support one daily oral dosing of patients. These preliminary
results indicate that SDC-1801 has the potential to achieve therapeutically
effective dose levels with no serious adverse events.
The food effect study part of the trial has also been completed. The results
of this study demonstrated no significant food effect on SDC-1801 blood
levels, which will allow full flexibility in dose timing in future clinical
studies.
The MAD study is nearing completion and topline data from the Phase 1a
clinical trial are expected to be available during Q2 of 2024. If the results
are satisfactory, the Company plans to assess funding and licensing options to
further the development of SDC-1801 through a Phase 2a trial.
The goal of the proposed Phase 2a trial would be to recruit up to 24 psoriasis
patients, with the study expected to be started by the end of 2024.
SDC-1802
SDC-1802 is a TYK2/JAK1 inhibitor being developed for cancer and cancer
immunotherapy applications.
The Company is now prioritising existing resources on the clinical development
of its lead product, SDC-1801.
FINANCIAL REVIEW
At 31 December 2023 Sareum had cash of £0.4m (2022: £2.9m) and subsequently
received a UK R&D tax credit of £0.4m in January 2024.
The loss on ordinary activities after taxation for the six months ended 31
December 2023 was £2.5m (2022: loss of £1.4m), reflecting ongoing clinical
trial preparation costs and a finance charge resulting from the Riverfort
facility.
As announced on 12 March 2024, due to downward pressure on the Company's share
price, Sareum was unable to draw down the third prepayment of £0.3m under the
Equity Prepayment Facility with RiverFort entered into on 3 August 2023 (the
"Facility"). The Company is today announcing a conditional equity fundraise of
up to £1.5m (before expenses), via the issue of a total of up to 15,000,000
new Ordinary Shares at the Placing Price of 10 pence per new Ordinary Share
(the "Fundraise"). The net proceeds from the Fundraise are intended to be
used by the Company to complete its SDC-1801 Phase 1a clinical studies and,
together with the receipt of anticipated R&D tax credits in the amount of
£0.7m which is expected in September 2024, for general working capital
purposes.
Furthermore, as part of the Company's ongoing steps to minimise its cash
utilisation, certain Directors and advisers have agreed to settle cash amounts
owed in new Ordinary Shares and the Directors have agreed to defer a portion
of their salaries going forward, so as to ensure the completion of the
SDC-1801 Phase 1a clinical trial can be achieved. Further details will be
included in the Company's announcement regarding the Fundraise.
The Company has drawn £2.3m to date pursuant to the Facility from two
prepayment deposits. Any amounts drawn under the Facility are due for
settlement by August 2025 (the "Maturity Date"), either by the issues of
shares or repayment in cash. As at 31 December 2023 there was a balance of
£1.6m remaining to be settled, and as of 26 March 2024 this balance was
£1.1m. The Company expects to settle this by the issuance of shares or cash
payment prior to the Maturity Date. No further drawdown are expected to be
made under the Facility.
OUTLOOK
Sareum has successfully completed the SAD segment and the food effect study of
its Phase 1a clinical trial for its leading program, SDC-1801. These initial
findings suggest that SDC-1801 has the potential to reach therapeutically
effective dosage levels without causing any serious adverse events.
The MAD portion of SDC-1801 is nearing completion. The Fundraise announced
today along with certain cash cost savings being implemented, will provide the
Company with sufficient capital to complete its Phase 1a clinical trial and
topline data from the Phase 1a trial are expected to be available by the end
of Q2 2024. If the results are satisfactory, the Company plans to assess
funding and licensing options to further the development of SDC-1801 through a
Phase 2a trial.
Our preclinical findings and the growing commercial and scientific momentum
building around the TYK2/JAK1 class, support our continued excitement about
the potential for SDC-1801 to be a superior option to approved oral therapies
for the treatment of autoimmune diseases.
The Board of Sareum continues to apply a rigorous approach to capital
allocation to the development of our assets, particularly in the current
challenging economic environment, and maintains a clear focus on bringing
these medicines to patients as efficiently as possible, while maximising value
for shareholders.
Consolidated Statement of Comprehensive Income for the six months ended 31
December 2023
Notes Unaudited Unaudited Audited
Six months ended
Six months ended
Year
31 Dec 23
31 Dec 22
ended
30 Jun 23
£'000 £'000
£'000
Revenue - - -
Other operating income - - -
Operating expenses (2,536) (1,748) (4,048)
Share of profit/(loss) of associate 4 - (18)
Operating loss (2,532) (1,748) (4,066)
Finance expense (761) - -
Finance income 19 17 41
Loss before tax (3,274) (1,731) (4,025)
Tax 3 765 285 833
Loss on ordinary activities after taxation (2,509) (1,446) (3,192)
Total comprehensive income for the period (2,509) (1,446) (3,192)
Total comprehensive income attributable to:
Owners of the parent (2,509) (1,446) (3,192)
Basic and diluted loss per share (pence) 5 (3.6)p (2.1)p (4.7)p
Consolidated Balance Sheet as at 31 December 2023
Note Unaudited Unaudited Audited
As at As at As at
31 Dec 2023 31 Dec 2022 30 Jun 2023
£'000 £'000 £'000
Non-current assets
Computers and equipment - 1 1
Investment in associate 46 23 46
46 24 47
Current assets
Debtors 1,513 380 979
Cash and cash equivalents 408 2,941 994
1,921 3,321 1,973
Creditors: amounts due within one year (489) (460) (867)
Net current assets 1,432 2,861 1,106
Total assets less current liabilities 1,478 2,885 1,153
Creditors: amounts due after one year 2 (1,061) - -
Net assets 417 2,885 1,153
Equity
Called-up share capital 878 851 851
Share premium 22,675 20,925 20,925
Share-based compensation reserve 311 325 325
Foreign exchange reserve 10 - 14
Retained earnings (23,457) (19,216) (20,962)
Total equity 417 2,885 1,153
Consolidated Statement of Changes in Equity for the six months ended 31
December 2023
Share capital Share premium Share-based compensation reserve Foreign exchange reserve Retained earnings Total
£'000
£'000 £'000 £'000 £'000 £'000
As at 30 June 2022 (audited) 851 20,925 325 - (17,770) 4,331
Loss for the period - - - (1,446) (1,446)
As at 31 December 2022 (unaudited) 851 20,925 325 (19,216) 2,885
Arising on consolidation - _ - 14 - 14
Loss for the period - - - - (1,746) (1,746)
As at 30 June 2023 (audited) 851 20,925 325 14 (20,962) 1,153
Issue of share capital (net) 27 1,750 - - 1,777
Transfer in respect of options exercised - - (14) 14 -
Arising on consolidation (4) (4)
Loss for the period - - - (2,509) (2,509)
As at 31 December 2023 (unaudited) 878 22,675 311 10 (23,457) 417
Consolidated Cash Flow Statement for the six months ended 31 December 2023
Unaudited Unaudited Audited
Six months ended
Six months ended
Year ended
31 Dec 2023
31 Dec 2022
30 Jun 2023
£'000 £'000 £'000
Net cash flow from operating activities
Continuing operations:
Loss before tax (3,274) (1,731) (4,024)
Add back/ (deduct):
Depreciation 1 1 1
Finance expense 761
Finance income (18) (17) (41)
Foreign exchange differences (4) 24
Share of result of associate (4) - 18
Operating cash flows before movements in working capital (2,538) (1,747) (4,022)
(Increase)/decrease in trade and other receivables (149) (3) (65)
Increase/(decrease) in trade and other payables (377) 5 411
Cash used in operations (3,064) (1,745) (3,676)
Tax received 378 408 409
Net cash outflow from operating activities (2,686) (1,337) (3,267)
Cash flows from investing activities
Purchase of tangible fixed assets - - -
Interest received 18 17 41
Licence fee received from associate 88
Investment in associate (83) - (41)
Net cash inflow/(outflow) from investing activities 23 17 -
Cash flows from financing activities
Other financing received 300 - -
Net proceeds from issue of share capital 1,777 - -
Net cash inflow from financing activities 2,077 - -
(Decrease)/increase in cash and equivalents (586) (1,320) (3,267)
Cash and cash equivalents at start of period 994 4,261 4,261
Cash and cash equivalents at end of period 408 2,941 994
NOTES TO THE UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023
1. Basis of financial information and accounting policies
These interim financial statements are unaudited and do not constitute
statutory financial statements within the meaning of Section 434 of the
Companies Act 2006. The Annual Report and Accounts for the year ended 30
June 2023 has been delivered to the Registrar of Companies and is available
from Sareum's web site, www.sareum.com. The report of the auditor on those
accounts was not qualified and contained no statement under Section 498 of the
Companies Act 2006.
The accounting policies adopted are consistent with those used for the
financial statements for the year ended 30 June 2023, as described therein. As
at the date of approving these interim financial statements, there are no new
standards likely to materially affect the financial statements for the year
ending 30 June 2024.
The Group made a loss after tax for the period of £2.5 million (2022: £1.4
million), as it continued to progress its research and development activities.
These activities, and the related expenditure, are in line with the budgets
previously set and are funded by regular cash investments.
The Directors consider that the cash held at the period end, together with
that projected to be received, will be sufficient for the Group to meet its
forecast expenditure for at least one year from the date of approving the
interim financial statements. If there is a shortfall, the Directors will
implement the required cost savings to ensure that the cash resources last for
this period of time. For these reasons, the interim financial statements
have been prepared on a going concern basis.
2. Financing
In August 2023 the Company entered into an Equity Prepayment Facility ("the
Facility") with RiverFort Global Opportunities PCC Ltd ("Riverfort") whereby
Riverfort would advance up to £5 million to the Company in exchange for the
issuance of equity shares. An initial advance of £2 million (net of
associated costs) was made in August 2023 and a further advance of £0.3
million was made in November 2023.
The settlement of this to date has been as follows:
£m £m £m
Converted into shares Held as cash Total
Balance advanced 2.0 0.3 2.3
Realised by the sale of shares (0.7) - (0.7)
Balance due to Riverfort as at 31 December 2023 1.3 0.3 1.6
This has been accounted for as follows
Market value of shares still held 0.5 - 0.5
Cash advanced - 0.3 0.3
Financing charge (*) 0.8 - 0.8
Balance due by the Company 0.8 0.3 1.1
1.3 0.3 1.6
*The difference of £0.8m between the amount due to Riverfort as at 31
December 2023 in respect of shares issued to them, and the market value of the
shares they still held at that date, has been accounted for as a non-cash
financing charge. To the extent that further shares are subsequently issued
to settle this balance, or the Company share price increases sufficiently,
this charge will then be reversed.
The Company expects that the balance due under the Facility, which can be
repaid by the issue of shares or payment in cash, will be settled by the
issue of shares, on or before the Facility expires in August 2025.
3. Taxation
No liability to corporation tax arises for the six-months ended 31 December
2023. Research and development tax credits, receivable as cash, are estimated
to be £0.8 million (2022: £0.3 million) for the period.
4. Dividends
The Directors do not propose a dividend in respect of the six months ended 31
December 2023.
5. Loss per share
The basic loss per share is 3.6 pence (2022: 2.1 pence), calculated by
dividing the Group's loss for the six months by 70,221,369 (2022: 68,069,416),
the weighted average number of shares in issue during the period. There is no
dilutive effect in respect of share options during the six months to 31
December 2023 because the Group generated a loss in that period.
6. Availability of Half-yearly Report
This Half-yearly Report, including the interim financial statements, is
available on request from the Company by writing to Unit 2a, Langford Arch,
London Road, Pampisford, Cambridge CB22 3FX or can be downloaded from the
Company's website www.sareum.co.uk.
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