REG - Synairgen plc - Full Year Results
25/05/2022 08:31
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RNS Number : 6863M Synairgen plc 25 May 2022
Synairgen plc
('Synairgen' or the 'Company')
Results for the year ended 31 December 2021
Southampton, UK - 25 May 2022: Synairgen plc (LSE: SNG), the respiratory
company developing SNG001, an investigational formulation for inhalation
containing the broad-spectrum antiviral protein interferon beta, today
announces its preliminary statement of audited results for the year ended 31
December 2021.
Highlights (including post period-end)
Operational
· Recruited 623 patients into the Company's Phase 3 SPRINTER trial, a
double-blind, placebo-controlled trial conducted in 17 countries, to
investigate the efficacy and safety of SNG001 in people hospitalised with
COVID-19.
o The trial did not meet the primary endpoints, as previously announced.
There was, however, an encouraging signal in reduction in the relative risk
(RRR) of progression to severe disease or death within 35 days (26% reduction
in the Intention-to-Treat (ITT) population and 36% reduction in the Per
Protocol population).
o Further follow-on analyses indicated stronger treatment effects in
high-risk patient sub-groups, with the strongest effect observed in patients
with compromised respiratory function despite being on supplemental oxygen
(44% reduction in the ITT population and 70% reduction in the Per Protocol
population), who comprised approximately one-third of the overall trial
population.
o The data has further validated the favourable safety profile of SNG001.
· Recruitment started and completed in the US Government's Phase 2
ACTIV-2 trial conducted in the US to investigate SNG001 in people with
COVID-19 at home, prior to hospitalisation.
o The Data Safety Monitoring Board graduated SNG001 from Phase 2 to Phase 3
in the ACTIV-2 trial, sponsored by the National Institute of Allergy and
Infectious Diseases (NIAID), part of the National Institutes of Health, and
led by the NIAID-funded AIDS Clinical Trials Group (ACTG). The NIAID
subsequently decided to cease the Phase 3 ACTIV-2 study.
· In vitro studies confirmed potency against multiple variants of the
SARS-CoV-2 virus including Alpha, Beta and Gamma, followed early in 2022 by
Delta and Omicron.
· Significant development and scale-up of manufacturing capability.
· Strengthened its Board of Directors and senior leadership team.
Financial
· Loss from operations for the year ended 31 December 2021 of £57.9
million (2020: £17.7 million), with R&D expenditure increasing from
£15.5 million to £52.9 million (2020: £15.5 million) on account of Phase 3
trial and manufacturing activities.
· The research and development tax credit increased from £3.8 million
to £9.2 million, resulting in a loss after tax of £48.7 million (2020:
£13.9 million loss).
· Cash balances of £33.8 million at 31 December 2021 (31 December
2020: £75.0 million).
Richard Marsden, CEO of Synairgen, said: "Since the completion and reporting
of the Phase 3 SPRINTER data and subsequent analyses of different high-risk
patient groups within the trial, we remain encouraged that SNG001 has the
potential to show clinically important benefits in preventing disease
progression and death in patients with severe viral lung infections.
"We are now working in haste on discussions with platform trial organisers and
investigators, as well as regulatory authorities, the pharmaceutical and
biotech industry and government bodies to identify and establish the optimal
method of conducting further trials to confirm these findings and move
forward, not just for COVID-19, but also as a potential treatment for patients
hospitalised due to a range of viruses including influenza, RSV, adenovirus,
para-influenza and rhinoviruses."
Results webcast details
A webcast will be hosted by Synairgen's management team at 12:00 BST today,
followed by a Q&A for analysts.
The webcast link can be accessed here: Synairgen Preliminary Results webcast
(https://www.lsegissuerservices.com/spark/Synairgen/events/1657f61b-c247-43a7-a1c1-d78350d174d8)
To access details for the analyst Q&A, please contact:
cscsynairgen@consilium-comms.com (mailto:cscsynairgen@consilium-comms.com)
For further enquiries, please contact:
Synairgen plc
Brooke Clarke, Head of Communications
Media@syairgen.com (mailto:Media@syairgen.com)
Tel: + 44 (0) 23 8051 2800
finnCap (NOMAD and Joint Broker)
Geoff Nash, Kate Bannatyne, Charlie Beeson (Corporate Finance)
Alice Lane, Sunil de Silva (ECM)
Tel: + 44 (0) 20 7220 0500
Numis Securities Limited (Joint Broker)
James Black, Freddie Barnfield, Duncan Monteith
Tel: + 44 (0) 20 7260 1000
Consilium Strategic Communications (Financial Media and Investor Relations)
Mary-Jane Elliott, Jessica Hodgson, Namrata Taak
cscsynairgen@consilium-comms.com (mailto:cscsynairgen@consilium-comms.com)
Tel: +44 (0) 20 3709 5700
MKC STRATEGIES, LLC (US Media Relations)
Mary Conway
MConway@MKCStrategies.com (mailto:MConway@MKCStrategies.com)
Tel: +1 516-606-6545
Notes for Editors
About Synairgen
Synairgen is a UK-based respiratory company focused on drug discovery,
development and commercialisation. The Company's primary focus is developing
SNG001 (inhaled interferon beta) for the treatment of severe viral lung
infections, including COVID-19, as potentially the first host-targeted,
broad-spectrum antiviral treatment delivered directly into the lungs. SNG001
has been granted Fast Track status from the US Food and Drug Administration
(FDA). Founded by University of Southampton Professors Sir Stephen Holgate,
Donna Davies and Ratko Djukanovic in 2003, Synairgen is quoted on AIM (LSE:
SNG). For more information about Synairgen, please see www.synairgen.com
(http://www.synairgen.com) .
CHAIRMAN'S STATEMENT
This year has marked significant progress for Synairgen and the development of
our investigational candidate SNG001, inhaled interferon beta, for potential
use in treating people with COVID-19. Built on a 15-year scientific foundation
and strong rationale for use in COVID-19 and for other viruses that cause
severe viral lung infections, the Synairgen team and our consultants, partners
and advisers have been unwavering in their efforts to bring SNG001 to those
patients who may benefit.
Our business has many challenges. We operate in an environment of political
and market volatility against the ever-changing backdrop of COVID-19. Despite
these challenges, we started and completed enrolment in SPRINTER, our
first-ever Phase 3, double-blind, placebo-controlled clinical trial, conducted
in 17 countries with more than 620 participants. It was obviously
disappointing that the primary endpoints of the SPRINTER trial were not met,
however we saw what we believe is an important signal in a key secondary
endpoint towards a relative reduction in the risk of disease progression and
death (36% in the Per Protocol population) compared with placebo, on top of
current standard of care treatment. Subsequent post hoc analyses of subgroups
recognised to be at higher risk of disease progression (such as the elderly,
those with co-morbidities associated with worse COVID-19 outcomes, and those
who showed signs of respiratory compromise despite use of oxygen) suggest
further investigation is warranted. Full details are contained in the
Operating Review. These findings post hoc indicate which patients are most
likely to benefit from SNG001 and, coupled with its favourable safety profile,
have enabled Synairgen to refine the strategy for the SNG001 development
programme.
Outside the clinic, our in vitro studies of SNG001 have shown it to be potent
against all SARS-CoV-2 variants tested to date, including Alpha, Beta, Gamma,
Delta and Omicron. 1 (#_ftn1)
There have been substantial and rapid improvements in the standard of care in
the treatment and prevention of severe illness caused by SARS-CoV-2 which
means that the majority of patients are discharged from hospital without the
need for higher levels of care such as high flow oxygen or ventilation.
However, there remains a need to further improve standard of care for COVID-19
patients at high risk of progressing to more severe disease or death. In 2021,
despite new therapies and successful vaccination programmes, deaths from
COVID-19 still surpassed those of 2020. 2 (#_ftn2) As such, Synairgen is
actively seeking inclusion of SNG001 in a platform trial or other trials for
hospitalised patients so that the encouraging signal seen in reducing the
relative risk of disease progression and death in SPRINTER can be confirmed.
During the year, the Board played an important role in working with the
Company's management team to make strategic and operational decisions. In
September, I was delighted to welcome Theodora Harold to the Board as a
non-executive director and chair of the Audit Committee. I thank all of our
Board Members for their sound judgement, challenge and advice throughout the
year.
On behalf of the Board, I would like to thank our shareholders for their
continued support, and Synairgen employees and partners for staying committed
and focused through a year of challenge and change.
As we look ahead and continue to learn more about this virus which has
affected the world so significantly, our priority, using carefully managed
resources and in collaboration with experts, is clear: to rapidly confirm the
important signal we've found from the SPRINTER trial in COVID-19 and to
investigate SNG001 in patients hospitalised with a range of seasonal viruses
such as influenza, Respiratory Syncytial Virus (RSV) and para-influenza.
SIMON SHAW
CHAIRMAN
OPERATING REVIEW
Introduction
There remains an urgent need for additional treatment options, with distinct
mechanisms of action, for high-risk patients hospitalised due to COVID-19 and
other viruses, particularly to prevent progression to severe disease or death.
Vaccines, antibodies and antivirals have done much to reduce the risks
associated with COVID-19, however there is growing evidence that protection
from the virus afforded by vaccines is not comprehensive and may wane over
time. Furthermore, there are limitations to many direct-acting COVID-19
therapeutics, particularly in respect of continuing efficacy against new
variants as they emerge. Additional market research conducted by Synairgen
also indicates that current therapies do not fully meet the current medical
need. 3 (#_ftn3)
2021 achievements
2021 was a significant year in which Synairgen made important progress
investigating SNG001 for the possible treatment of COVID-19 in both the
hospital and home settings.
1. Started and completed recruitment into the Company's Phase 3 SPRINTER
trial, a double-blind, placebo-controlled trial conducted in 17 countries to
investigate the efficacy of SNG001 in 623 patients hospitalised with COVID-19.
2. Recruitment was started and completed in the US Government's ACTIV-2
Phase 2 trial conducted in the US to investigate SNG001 in people with
COVID-19 at home, prior to hospitalisation.
3. In vitro studies confirmed potency against multiple variants of the
SARS-CoV-2 virus including Alpha, Beta and Gamma (followed early in 2022 by
Delta and Omicron).
In addition, the Company focused on the regulatory, commercial and
manufacturing activities that would be required to support use of SNG001 in
hospitals following potential regulatory approval including expedited routes.
Topline SPRINTER data
The topline data from the SPRINTER trial, announced in late February 2022,
showed that the primary endpoints of earlier hospital discharge and recovery
were not met, likely due to improvements in standard of care such as
vaccination programmes, the use of antivirals and anti-inflammatories, and
changes in hospital practices since the beginning of the pandemic. The Company
did observe an encouraging signal with respect to a reduction in the relative
risk of patients progressing to severe disease or death (36% in the Per
Protocol population 4 (#_ftn4) ). Further post hoc analysis of this endpoint
suggested that SNG001 prevented disease progression in patient groups with
recognised risk factors, such as older age, the existence of certain
co-morbidities and compromised respiratory function. The strongest effects
were observed in patients with compromised respiratory function (high
respiratory rate and low oxygen saturations) despite being on supplemental
oxygen, who represented approximately one-third of the patients in the trial,
where SNG001 significantly reduced the risk of progression compared to placebo
(44% in the Intention-To-Treat population and 70% in the Per Protocol
population) in this post hoc analysis.
Summary
Given the evolution of COVID-19, emergence of variants and the changing
treatment landscape, and on the advice of our independent clinical and
scientific advisers, we are actively seeking to have SNG001 included in
further COVID-19 trials which would provide adequate statistical power to
evaluate the encouraging effects we observed in SPRINTER, as well as further
investigation of SNG001 in patients hospitalised with a range of seasonal
viruses such as influenza, RSV and para-influenza.
Despite the challenging environment outlined above, Synairgen continues to
explore the potential of SNG001 in three settings:
1. In people hospitalised with COVID-19, including in high-risk
sub-populations such as those with compromised respiratory function, despite
use of supplemental oxygen;
2. For possible use as a broad-spectrum antiviral for people hospitalised
with other severe viral lung infections caused by a range of 'regular'
seasonal viruses; and,
3. As a possible future pandemic preparedness option for government
agencies.
Rationale for SNG001 in COVID-19
There is a strong scientific rationale underpinning SNG001 for use in treating
COVID-19, combined with a good safety profile and a growing body of
encouraging clinical data which will help us better understand the role SNG001
can play in helping patients at risk of developing severe illness due to
respiratory viruses.
Interferon beta ('IFN-beta') is a naturally-occurring protein, orchestrating
the body's antiviral responses. Synairgen's SNG001 is a formulation containing
the fully glycosylated form of IFN-beta (IFN-beta-1a) for direct delivery to
the lungs via specific nebulisers. It is near to pH neutral, and is free of
mannitol, arginine and human serum albumin (which may be pharmacologically
active in the airways), making SNG001 suitable for inhaled delivery direct to
the site of infection.
There is strong evidence that deficiency in IFN-beta production by the lung
could explain the enhanced susceptibility in higher-risk patient groups to
developing severe lower respiratory tract (lung) disease during respiratory
viral infections, including COVID-19. 5 (#_ftn5)
Viruses, including coronaviruses such as SARS-CoV-2, have evolved mechanisms
to suppress IFN-beta production, helping the virus to evade the innate immune
system. The addition of IFN-beta before or during viral infection of lung
cells in vitro either prevents or greatly reduces viral replication. 6
(#_ftn6) The Company has conducted in vitro testing against SARS-CoV-2
variants of concern (VOC) including Alpha, Beta, Gamma, Delta and Omicron and
shown potent antiviral activity at concentrations that are readily achievable
following inhaled delivery of interferon beta.
Delivery via the inhaled route results in a high local concentration in the
lungs, the site of the infection. We believe these concentrations could not be
accomplished at the lining of the lungs via the injected route, and indeed
recent studies have shown systemic use of IFN-beta through injection is
ineffective in fighting COVID-19 in the lungs. 7 (#_ftn7)
2021 clinical progress in COVID-19
Synairgen conducted a Phase 2 trial of SNG001 in people with COVID-19 in 2020,
consisting of both a Hospital and a Home Cohort. The Hospital Cohort generated
positive results with patients treated with SNG001 being twice as likely to
recover over the treatment period compared to those receiving placebo. This
was a clear signal that patients on drug recovered faster than those on
placebo. There were also trends towards prevention of progression to severe
disease or death and faster hospital discharge. This was a robust,
double-blind, placebo-controlled trial conducted at nine specialist hospital
sites in the UK in the first few months of the pandemic, at a time when
hospital practices for COVID-19 were not yet established, and when patients
were unvaccinated and were not treated with antiviral and anti-inflammatory
treatments available in 2021. The data from the Hospital Cohort were peer
reviewed and published in the Lancet Respiratory Medicine in November 2020.
Building on the positive results seen in the Hospital Cohort of the Phase 2
trial, the Company worked with regulatory authorities to design a larger Phase
3 trial (SPRINTER) to evaluate SNG001 in people hospitalised due to COVID-19
who required supplemental oxygen.
Synairgen began recruitment into the SPRINTER trial in January 2021 and
concluded recruitment in November 2021. The SPRINTER trial was a global Phase
3, randomised, placebo-controlled, double-blind, multi-site clinical trial
assessing the efficacy and safety of inhaled SNG001 on top of standard of care
for the treatment of adults hospitalised due to COVID-19 requiring treatment
with supplemental oxygen by mask or nasal prongs. Patients requiring high-flow
nasal oxygen therapy, non-invasive ventilation, or endotracheal intubation
(invasive ventilation) and patients that were vaccinated at randomisation were
excluded (exclusion of vaccinated patients was later removed via protocol
amendment). COVID-19 was confirmed using a validated molecular test for the
presence of the SARS-CoV-2 virus. The trial enrolled 623 patients, randomised
(1:1) to treatment with inhaled SNG001 or placebo at more than 100 sites
across the following 17 countries: Argentina, Belgium, Brazil, Colombia,
France, Germany, India, Israel, Italy, Mexico, Netherlands, Portugal, Romania,
Serbia, Spain, the United Kingdom and the United States.
There was no difference between SNG001 and placebo in the hospital discharge
or recovery primary endpoints in the trial, with the majority of patients
discharged from hospital within the treatment period. We believe this is due
to the improvements in standard of care driven by vaccines, the use of
antivirals and anti-inflammatories, and changes in hospital practices. For
further context, when the Phase 2 trial was conducted in March 2020, systemic
corticosteroids and antivirals for COVID-19 were not routinely being used.
Accordingly, no patients in the Phase 2 trial received any of these treatments
for COVID-19. When the Phase 3 SPRINTER trial was conducted in 2021, there was
considerably higher routine use of dexamethasone and remdesivir, meaning that
almost 90% of SPRINTER patients were also being treated with systemic
corticosteroids, around 20% were taking remdesivir, and around 30% of patients
were vaccinated to some degree.
Nevertheless, a 36% reduction in the risk of disease progression or death (a
key secondary endpoint) was observed in the Per Protocol population, which
trended towards statistical significance (p=0.119), which we believe is an
important signal.
The potential importance of this signal triggered a more comprehensive, post
hoc analysis of the SPRINTER data to 'stress test' the robustness of this
encouraging observation. The analyses focused on the disease progression
endpoint in high-risk groups and showed a consistent trend in favour of SNG001
with respect to a reduction in the risk of progression to develop severe
disease or death. The strongest treatment effect was in patients who, despite
being on supplemental oxygen, had compromised respiratory function at baseline
(low oxygen saturation or a high breathing rate). This group represented
around one third of the overall trial population.
· Participants in the Per Protocol population with compromised
respiratory function (oxygen saturation of ≤ 92% or respiratory rate ≥ 21
breaths/min at baseline) treated with SNG001 had a 70% reduction in the risk
of progression to severe disease or death compared to placebo (Odds Ratio (95%
Confidence Interval) 0.23 (0.06, 0.98); p=0.046).
SNG001 was well tolerated in the SPRINTER trial with a favourable safety
profile consistent with previous studies:
· The proportion of patients with any treatment-emergent adverse events
(TEAE) related to study treatment was 22.6% for SNG001 vs. 25.4% for placebo,
· The proportion of patients with any serious TEAE was 12.6% for SNG001
vs. 18.2% for placebo,
· The proportion of patients with a serious respiratory TEAE was 4.7%
for SNG001 vs. 9.9% for placebo.
These findings are consistent with an effect on disease progression.
This trend seen with respect to prevention of progression to severe disease or
death, supported by the post hoc analysis, provides a strong rationale to
investigate SNG001 in a further targeted COVID-19 trial, and more widely in
patients hospitalised with a range of seasonal viruses such as influenza, RSV
and para-influenza, which can lead to severe viral lung infections requiring
hospitalisation. The stronger treatment effect observed in patients with
compromised lung function at baseline in the post hoc analyses suggests that
these patients should be targeted in future trials.
Home use of SNG001 in the US Government's ACTIV-2 trial
SNG001 was also investigated during 2021 as part of the US National Institute
of Health's ACTIV programme to accelerate the development of the most
promising COVID-19 treatments with the ultimate aim of identifying treatments
which reduce hospitalisations. The ACTIV-2 study, sponsored by the National
Institute of Allergy and Infectious Diseases (NIAID), part of the National
Institutes of Health, and led by the NIAID-funded AIDS Clinical Trials Group
(ACTG), tested a number of treatments in adults in an outpatient setting who
had documented positive SARS-CoV-2 infection.
The Phase 2 evaluation of SNG001 saw the recruitment of approximately 220
participants across US sites, in a home-based setting, split between SNG001
and placebo. If an investigational agent showed promise by demonstrating
safety and efficacy signals through 28 days following administration, it moved
from Phase 2 to Phase 3, which was planned to include significantly more
patients.
In October 2021, the Data Safety Monitoring Board recommended graduation of
SNG001, based on data from the Phase 2 trial, to Phase 3. As the Company and
the ACTIV-2 team were preparing to initiate recruitment for Phase 3, the
Omicron variant became the dominant variant in the US, causing a significant
shift in the nature of the pandemic. In March 2022, due to the need to modify
the study design in light of the emergence of the Omicron variant of
SARS-CoV-2, the US National Institutes of Health (NIH) ACTIV-2 trial team
asked Synairgen to temporarily pause preparation activities for ACTIV-2 Phase
3 until the timeline for the activation of SNG001 in the trial could be
clarified. Several weeks later, the National Institutes of Health (NIH) halted
all patient recruitment in ACTIV-2 and discontinued all arms of the trial,
including the one to evaluate SNG001.
As a result, discussions with NIH, NIAIDS and the ACTIV teams are ongoing to
try to identify an appropriate clinical trial to continue the evaluation of
SNG001 in the home environment.
Adding to our finding from the Home Cohort of the Company's Phase 2 trial in
2020, the ACTIV-2 trial also demonstrated that patients can successfully
initiate treatment "remotely", self-administering SNG001 at home with the
support of a YouTube video. Importantly, patients can be initiated on SNG001
without the need for a face-to-face meeting with a healthcare professional,
reducing the burden on hospital facilities and minimising the risk of onward
infection.
We now anticipate receiving the Phase 2 data from the ACTIV-2 team in the
summer of 2022, which will be factored into the SNG001 clinical development
plan to further build the case that SNG001 may have an important role in
combatting COVID-19 and future emerging virus threats.
Building Readiness for the Future
Over the course of 2021, in readiness for the possibility that our Phase 3
SPRINTER data would have been sufficient for regulatory submissions (which
would require a high level of immediate activity to support use of SNG001
under expedited approval pathways), the Company began building its
capabilities and capacity in the areas of regulatory, commercial,
manufacturing, communications, quality and finance. This included
strengthening its senior leadership team as well as establishing commercial
and distribution partnerships and preparing the foundations for a US
commercial organisation. With the SPRINTER data now analysed, the Company is
carefully managing its team and cost base in order to progress the path for
SNG001 as rapidly as possible using the various avenues as described.
Leadership team
The Company senior management team was strengthened with newly created roles
including:
· Richard Hennings: Richard joined in March 2021 as Chief Commercial
Officer, having previously held commercial leadership roles at Verona Pharma,
Gilead Sciences, Novartis and AstraZeneca.
· Richard Francis: Richard joined in September 2021 as Senior Vice
President for CMC, bringing more than 35 years' experience in the development,
regulatory approval and commercialisation of many biopharmaceutical products
including Cablivi®, Orthoclone OKT3®, Remicade®, and ReoPro®.
· Brooke Clarke: Brooke joined in September 2021 as Senior Vice
President, Head of Communications, with more than 30 years' strategic
communications and corporate affairs experience, including most recently
leadership roles at Shire plc and Hikma plc.
· Gareth Walters: Gareth joined in October 2021 as Chief Regulatory
Officer and brings a wide range of experience from pre-clinical to
commercialisation. He previously held senior regulatory and commercial roles
at Chugai Pharmaceuticals and Roche.
· Helen Gearing: Helen joined in December 2021 as Senior Vice President
for Finance. Prior to joining Synairgen, Helen was responsible for leading,
building and scaling the finance function of Seqirus, a global leader in
influenza vaccines, and prior to that was with GSK.
Regulatory
In preparation for regulatory submissions in the US, Europe and the UK,
Synairgen's regulatory team continued engagement with the US Food and Drug
Administration (FDA), the EMA and the MHRA on requirements and content for
regulatory submissions.
With SNG001 having been granted Fast Track status from the FDA, the US was the
priority focus of preparatory activities for a potential regulatory Emergency
Use Authorisation submission and launch.
With the SPRINTER data now analysed, we are exploring all avenues in order to
expedite the development of SNG001.
Manufacturing & distribution
Manufacturing pharmaceutical products has been very challenging due to
COVID-19, with shortages in key ingredients, components, equipment and
manufacturing slots. Despite these challenges, Synairgen made good progress in
commercial scale manufacturing processes for drug substance and drug product,
and continued to build inventory, distribution, pre-commercialisation and
commercialisation capabilities:
· Process Performance Qualification commercial scale manufacturing
batches of the drug substance (the raw ingredient IFN-beta) with our partner
Akron Biotechnology;
· Drug product in pre-filled glass syringes (the finished format,
ready-to-use) in partnership with Catalent at commercial supportive scale
following completion of Process Performance Qualification;
· Completed a commercial scale manufacturing batch and testing using
polyethylene blow-fill-seal container technology to mitigate against the
global supply chain shortages of medical grade glass and the reduction of
available syringe filling manufacturing slots caused by the number of vaccines
and therapeutics in development for COVID-19;
· Long-term stability studies for both drug substance and drug product
initiated to support regulatory submissions; and,
· Built inventory of certain specific long-lead time items needed to
administer the drug to patients.
The progress made in manufacturing during the year means the Company is in a
good position to support further potential clinical trials in COVID-19 and for
other viruses that cause hospitalisations.
In readiness for a possible regulatory authorisation in the US, the Company
also made good progress in identifying potential COVID-19-experienced partners
for in-market support activity such as pharmacovigilance and medical affairs
to support healthcare professionals and patient support programmes. Synairgen
also identified the required structure and roles for a US commercial
organisation and these can be mobilised in the future as required but due to
cost conservation currently there is no requirement to deploy such US
personnel.
FINANCIAL REVIEW
Statement of Comprehensive Income
The loss from operations for the year ended 31 December 2021 was £57.9
million (2020: £17.7 million) with research and development expenditure
amounting to £52.9 million (2020: £15.5 million) and other administrative
expenses of £5.0 million (2020: £2.2 million).
Clinical trial expenditure increased significantly during 2021 as the Phase 3
SPRINTER trial commenced patient recruitment in January 2021. Other clinical
trial expenditure included the completion of the SG016 Home trial and the
ACTIV-2 trial, including some preparatory costs for the Phase 3 element of the
trial. Alongside the clinical trial activity, regulatory activities were
increased in preparation for potential regulatory submissions in 2022.
The remainder of the research and development expenditure has been focussed on
upscaling SNG001 manufacturing development activities and procuring long lead
time components. A number of drug substance commercial scale batches were
completed during 2021, including three Process Performance Qualification (PPQ)
batches. Two different drug product activities were advanced during the year,
with PPQ batches of both pre-filled glass syringes and polyethylene
blow-fill-seal containers being manufactured. The Company has also invested in
the development of release assays at a US-based supplier. The internal
Chemistry Manufacturing and Controls (CMC) team has been strengthened during
the year with a number of new senior hires.
Other administrative expenses increased from £2.2 million to £5.0 million.
The increase was attributable firstly to the establishment of a commercial
team and preparatory activities for a potential launch in 2022, and secondly,
to the increase in administrative and financial personnel and professional
costs to accommodate the increase in scale of the business.
The research and development tax credit increased from £3.8 million to £9.2
million on account of the increased qualifying project expenditure, primarily
on the SPRINTER trial and manufacturing development activities. The credit
equates to 17% of our 2021 research and development expenditure (2020: 25%).
The loss after tax for 2021 was £48.7 million (2020: £13.9 million) and the
basic loss per share was 24.28p (2020: basic loss per share of 9.46p).
Statement of Financial Position and Cash Flows
At 31 December 2021, net assets amounted to £37.0 million (2020: £85.1
million), including cash balances of £33.8 million (2020: £75.0 million).
The principal elements of the £41.2 million decrease during the year ended 31
December 2021 (2020: £72.5 million increase) in cash balances were:
· Cash outflows from operations before changes in working capital:
£57.2 million (2020: £17.3 million), with the increase being attributable to
the higher operating loss as discussed above;
· Changes in working capital: £12.2 million inflow (2020: £7.5
million outflow) on account of the reduction in trade and other receivables
and the increase in trade and other payables as detailed below;
· Research and development tax credits received: £3.9 million (2020:
£0.9 million) on account of the increased 2020 tax credit;
· Share issue proceeds (net of costs): £nil (2020: £97.9 million);
and,
· Net settlement of options £nil (2020: £1.3 million outflow).
The other significant changes in the statement of financial position were:
· Current tax receivable increased from £3.8 million to £9.1 million
on account of the higher research and development tax credit receivable;
· Trade and other receivables decreased from £9.4 million to £1.5
million on account of a reduction in manufacturing and clinical trial
prepayments; and,
· Trade and other payables increased from £3.3 million to £7.6
million, reflecting the increased level of activity.
OUTLOOK
On the back of the data from the Phase 3 SPRINTER trial and subsequent
analyses of different high-risk patient groups within the trial, we are
encouraged that SNG001 has the potential to show clinically important benefits
in preventing disease progression and death. This data was well received at
the recent ATS International Conference in San Francisco in mid-May 2022. We
are now, working in haste, fully focussed on discussions with platform trial
organisers and investigators, as well as regulatory authorities, the
pharmaceutical and biotech industry and government bodies to identify and
establish the optimal method of conducting further trials to confirm these
findings and provide the Company with the evidence required for a regulatory
submission. In addition, building on our existing body of evidence, we are
actively exploring the opportunity to collaborate and trial the product as a
broad-spectrum, virus-agnostic treatment in patients hospitalised with a range
of seasonal viruses such as influenza, RSV and para-influenza.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
Year Year
ended 31 December ended 31 December
2021 2020
Notes £000 £000
Research and development expenditure (52,857) (15,495)
Other administrative expenses (5,009) (2,246)
Total administrative expenses and Loss from operations (57,866) (17,741)
Finance income 11 19
Finance expense (2) (10)
Loss before tax (57,857) (17,732)
Tax 9,194 3,816
2
Loss and total comprehensive loss for the period attributable to equity (48,663) (13,916)
holders of the parent
Loss per ordinary share 3
Basic and diluted loss per share (pence) (24.28)p (9.46)p
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Share capital Share premium Merger reserve Retained Total
deficit
£000 £000 £000 £000 £000
At 1 January 2020 1,094 28,262 483 (27,586) 2,253
Issue of ordinary shares 905 100,170 - - 101,075
Transaction costs in respect of share issues - (3,187) - - (3,187)
Recognition of share-based payments - - - 207 207
Net settlement of share options - - - (1,291) (1,291)
Loss and total comprehensive loss for the year - - - (13,916) (13,916)
At 31 December 2020 1,999 125,245 483 (42,586) 85,141
Issue of ordinary shares 14 - - - 14
Recognition of share-based payments - - - 508 508
Loss and total comprehensive loss for the year - - - (48,663) (48,663)
At 31 December 2021 2,013 125,245 483 (90,741) 37,000
Consolidated Statement of Financial Position
as at 31 December 2021
31) 31)
December) December)
2021) 2020)
£000) £000)
Assets
Non-current assets
Intangible assets 53) 44)
Property, plant and equipment 173) 250)
Right-of-use assets -) 94)
226) 388)
Current assets
Inventories -) 41)
Current tax receivable 9,055) 3,771)
Trade and other receivables 1,530) 9,372)
Cash and cash equivalents 33,827) 74,976)
44,412) 88,160)
Total assets 44,638) 88,548)
Liabilities
Current liabilities
Trade and other payables (7,638) (3,279)
Lease liabilities -) (128)
Total liabilities (7,638) (3,407)
Total net assets 37,000) 85,141)
Equity
Capital and reserves attributable to equity holders of the parent
Share capital 2,013) 1,999)
Share premium 125,245) 125,245)
Merger reserve 483) 483)
Retained deficit (90,741) (42,586)
Total equity 37,000) 85,141)
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
Year Year
ended 31 ended 31
December December
2021 2020
£000 £000
Cash flows from operating activities
Loss before tax (57,857) (17,732)
Adjustments for:
Finance income (11) (19)
Finance expense 2) 10)
Lease adjustment (4) -)
Depreciation of property, plant and equipment 92) 90)
Depreciation of right-of-use assets 94) 161)
Amortisation of intangible fixed assets 9) 9)
Share-based payment charge 508) 207)
Cash flows from operations before changes in working capital (57,167) (17,274)
Decrease in inventories 41) -)
Decrease/(Increase) in trade and other receivables 7,841) (9,244)
Increase in trade and other payables 4,359) 1,789)
Cash used in operations (44,926) (24,729)
Tax credit received 3,910) 910)
Net cash used in operating activities (41,016) (23,819)
Cash flows from investing activities
Interest received 12) 31)
Purchase of intangible assets (18) (37)
Purchase of property, plant and equipment (15) (39)
Net cash used in investing activities (21) (45)
Cash flows from financing activities
Proceeds from issue of ordinary shares 14) 101,075)
Transaction costs in respect of share issues -) (3,187)
Net settlement of share options -) (1,291)
Principal paid on lease liabilities (124) (196)
Interest paid on lease liabilities (2) (15)
Net cash (used in)/generated from financing activities (112) 96,386)
(Decrease)/Increase in cash and cash equivalents (41,149) 72,522)
Cash and cash equivalents at beginning of the year 74,976) 2,454)
Cash and cash equivalents at end of the year 33,827) 74,976)
Notes
1. Basis of preparation
The financial information of the Group set out above does not constitute
"statutory accounts" for the purposes of Section 435 of the Companies Act
2006. The financial information for the year ended 31 December 2021 has been
extracted from the Group's audited financial statements which were approved by
the Board of directors on 24 May 2022 and will be delivered to the Registrar
of Companies for England and Wales in due course. The financial information
for the year ended 31 December 2020 has been extracted from the Group's
audited financial statements for that period which have been delivered to the
Registrar of Companies for England and Wales. The reports of the auditors on
both these financial statements were unqualified, did not include any
references to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and did not contain a statement under
Section 498(2) or Section 498(3) of the Companies Act 2006. Whilst the
financial information included in this preliminary announcement has been
prepared in accordance with the recognition and measurement criteria of UK
adopted International Financial Reporting Standards ('IFRSs'), this
announcement does not itself contain sufficient information to comply with
those IFRSs. This financial information has been prepared in accordance with
the accounting policies set out in the December 2021 report and financial
statements.
2. Tax
The tax credit of £9,194,000 (2020: £3,816,000) relates to research and
development tax credits in respect of the year ended 31 December 2021
(£9,055,000) and an adjustment in respect of prior periods (£139,000).
3. Loss per ordinary share
Basic loss per share is calculated by dividing the loss attributable to
ordinary equity holders of the parent company by the weighted average number
of ordinary shares in issue during the year.
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per
ordinary share are identical to those used for basic loss per share. This is
because the exercise of share options would have the effect of reducing the
loss per ordinary share and is therefore antidilutive under the terms of IAS
33.
1 (#_ftnref1) Synairgen. SNG001 inhibits SARS-CoV-2 variant infection in
cell based assays. 2021-2
2 (#_ftnref2) CBS News, November 23, 2021
3 (#_ftnref3) IQVIA market research, December 2021. On file.
4 (#_ftnref4) The main reason patients were excluded from the Per Protocol
population was failure to receive two full doses in the first three days of
treatment.
5 (#_ftnref5) Zheng Y, Zhuang MW, Han L, et al. Severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2) membrane (M) protein inhibits type I and
III interferon production by targeting RIG-I/MDA-5 signaling. Signal Transduct
Target Ther. 2020;5:299.
6 (#_ftnref6) Synairgen data on file.
7 (#_ftnref7) WHO Solidarity Trial Consortium. Repurposed Antiviral Drugs
for Covid-19 - Interim WHO Solidarity Trial Results. N Engl J Med.
2021;384:497-511.
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