REG - Synairgen plc - Interim Results
21/09/2023 07:00
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RNS Number : 1345N Synairgen plc 21 September 2023
Synairgen plc
('Synairgen' or the 'Company')
Interim results for the six months ended 30 June 2023
Southampton, UK - 21 September 2023: Synairgen plc (LSE: SNG), the respiratory
company developing SNG001, an investigational formulation for inhalation
containing the immunomodulatory broad-spectrum antiviral protein interferon
beta, today announces its unaudited interim results for the six months ended
30 June 2023.
Highlights (including post period-end)
Operational
· Progressing the Company's patient identification strategy through
biomarker and existing clinical data analysis. This will enable the Company to
identify patients at higher risk of disease progression, including those with
deficient innate immune response and/or high viral load, who might therefore
be more likely to respond to SNG001 in future clinical studies.
· Conducting non-interventional preparatory work to expand hospitalised
patient populations for potential treatment with SNG001, which are likely to
include: ventilated patients with confirmed viral pneumonia; and patients who
are unable to clear virus and become persistent viral "shedders", a majority
of whom are immunocompromised. Subject to this preparatory work and regulatory
approval timelines, trials are anticipated to start in H1 2024.
· Insights from non-interventional studies and the substantial body of
evidence gathered to date from previous clinical trials will inform a robust
clinical programme for the development of SNG001.
Financial
· Cash and deposit balances of £14.6 million at 30 June 2023 (30 June
2022: £18.0 million; 31 December 2022: £19.7 million). Post period-end
receipt of FY 2022 research and development tax credit of £2.4 million.
· Loss before tax for the six months ended 30 June 2023 was £5.2
million (30 June 2022: £14.0 million loss).
o Research and development expenditure for the six months ended 30 June 2023
was £3.5 million (30 June 2022: £11.1 million) as expenditure on the Phase 3
SPRINTER trial, substantially completed in 2022, decreased and manufacturing
activities reduced.
o Administrative expenses for the six months ended 30 June 2023 were £2.1
million (30 June 2022: £2.9 million), with the reduction being attributable
to the pre-commercialisation activities incurred in 2022.
Richard Marsden, CEO of Synairgen, said: "We are focused on progressing our
method of identifying those individuals most likely to respond to SNG001
treatment using the large body of data already gathered through previous
trials and new non-interventional research, which is currently underway. We
hope to maximise the benefits of treatment with SNG001 by targeting patients
most likely to respond to treatment by applying both existing and new
technologies for patient selection in our next trials of SNG001. This will
enable us to focus on the most appropriate patients which will ultimately lead
to trials of SNG001 in more targeted, but still large, patient populations at
high risk of severe outcomes."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
For further enquiries, please contact:
Synairgen plc
Media@synairgen.com (mailto:Media@synairgen.com)
Tel: + 44 (0) 23 8051 2800
Cavendish Capital Markets Limited (NOMAD and Joint Broker)
Geoff Nash, Charlie Beeson (Corporate Finance)
Sunila de Silva (ECM)
Tel: + 44 (0) 20 7220 0500
Numis Securities Limited (Joint Broker)
Freddie Barnfield, Duncan Monteith, Euan Brown
Tel: + 44 (0) 20 7260 1000
ICR Consilium (Financial Media and Investor Relations)
Mary-Jane Elliott, Namrata Taak, Lucy Featherstone
Synairgen@consilium-comms.com (mailto:Synairgen@consilium-comms.com)
Tel: +44 (0) 20 3709 5700
Notes for Editors
Synairgen is a UK-based respiratory company focused on drug discovery and the
development of SNG001 (inhaled interferon beta) as potentially the first
host-targeted, broad-spectrum antiviral treatment delivered directly into the
lungs for severe viral lung infections.
Millions of people globally are hospitalised every year due to viral lung
infections and there are currently no approved antiviral therapies for the
majority of these patients. Synairgen is developing SNG001 to address this
need.
Synairgen is quoted on AIM (LSE: SNG). For more information about Synairgen,
please see www.synairgen.com (http://www.synairgen.com) .
OPERATIONAL REVIEW
Synairgen is progressing with vital foundational work in readiness to commence
further clinical trials of SNG001 as a broad spectrum antiviral treatment.
This work is based on key learnings from the COVID-19 pandemic, which have
accelerated the development of new approaches including the broader
application of key virus testing in hospitals for symptomatic patients and the
advancement of technologies that increase understanding of how respiratory
viruses impact the individual, particularly immune system function, using
blood and airway fluid samples.
Before commencing further trials of SNG001, and taking into account our
helpful learnings from previous studies, Synairgen is developing a patient
identification strategy applying existing and new technologies and biomarkers
to identify patients whose disease is being actively driven by virus (high
virus load) and/or who are struggling to mount an effective antiviral response
(deficient innate immune response). The Company believes that these patients
are most likely to demonstrate a response to SNG001, with potential benefits
in respect of future trial size, duration and costings. By using Synairgen's
proposed targeted approach to patient identification the Company is able to
better design studies with fewer subjects and thus reduce cost and timings for
its drug development.
A study led by the Universities of Southampton and Leicester, involving over
300 adults hospitalised with viral acute respiratory illness, reported that
higher viral loads were associated with a prolonged length of stay in the
hospital. This suggests that viral load measured at the point of hospital
admission could be used in clinical trials, and potentially in clinical
practice, to predict those at risk of extended hospitalisation.(1) Building
upon this, Synairgen is exploring the relationship between virus load and
other risk factors which predict poor outcome in hospitalised patients to
inform the development of SNG001 in the hospital setting.
In addition, the Company is expanding the populations of interest to include
mechanically ventilated patients in ICU with confirmed viral pneumonia and
patients unable to clear virus and become persistent virus shedders, the
majority of whom are immunocompromised.
The overall patient identification approach should lead to trials of SNG001 in
more targeted, but still large, patient populations at high risk of
deterioration/progression to severe outcomes.
In the first half of 2023, Synairgen continued this foundational work to
determine the most relevant trials to support its goals. With respiratory
viral infections being responsible for upwards of three million
hospitalisations in the US each year(2) the Company remains committed to
address this significant unmet need. Despite the great need, there are few
therapeutics available to treat the range of viruses that cause these
hospitalisations.
Additionally, Synairgen continued to share findings from its trials of SNG001
in COVID-19 patients, including at the American Thoracic Society 2023
conference in May and, post-period end, at the European Respiratory Society
2023 congress in September. These conferences are an extremely valuable way to
build the Company's network and showcase the need for a broad-spectrum
antiviral.
In summary, Synairgen is continuing to work at pace, partnering with high
quality researchers and collaborators, to ensure it has the right trial
designs, equipped with the right diagnostic tools, to be able to identify
trial participants potentially most likely to benefit from a broad-spectrum
antiviral and SNG001. This work (including biomarker assessments), together
with the substantial body of evidence gathered from clinical trials with
SNG001 to date, will inform a robust clinical development programme for
SNG001. It is the Company's goal to commence trials as soon as possible,
subject to approval timelines, and within H1 2024.
FINANCIAL REVIEW
Statement of Comprehensive Income
The loss from operations for the six months ended 30 June 2023 (H1 2023) was
£5.5 million (six months ended 30 June 2022 (H1 2022): £14.0 million loss;
year ended 31 December 2022 (FY 2022): £20.3 million loss) with research and
development expenditure amounting to £3.5 million (H1 2022: £11.1 million;
FY 2022: £14.9 million) and other administrative expenses £2.1 million (H1
2022: £2.9 million; FY 2022: £5.4 million).
The reduction in research and development expenditure from £11.1 million to
£3.5 million is attributable to the lower expenditure on the Phase 3 SPRINTER
trial, which was substantially completed in 2022, and reduced manufacturing
activities.
Other administrative expenditure decreased from £2.9 million in H1 2022 to
£2.1 million in H1 2023 on account of pre-commercialisation activities
incurred in 2022.
The research and development tax credit decreased from £1.6 million in H1
2022 to £0.5 million in H1 2023 on account of the reduced qualifying
expenditure and the reduction in the small or medium enterprises (SME) R&D
scheme rates effective as of 1 April 2023.
The loss after tax for H1 2023 was £4.7 million (H1 2022: £12.4 million; FY
2022: £17.6 million) and the basic loss per share was 2.36p (H1 2022: 6.16p
loss; FY 2022: 8.76p loss).
Statement of Financial Position and Cash Flows
At 30 June 2023, net assets amounted to £16.0 million (30 June 2022: £24.9
million; 31 December 2022: £20.3 million), including cash and deposit
balances of £14.6 million (30 June 2022: £18.0 million; 31 December 2022:
£19.7 million). Post period-end, in August 2023, the tax credit of £2.4
million in respect of FY 2022 was received.
The principal elements of the £5.1 million reduction in cash and deposit
balances during H1 2023 (H1 2022: £15.8 million reduction; FY 2022: £14.2
million reduction) were:
· Cash used in operations £5.3 million (H1 2022: £15.8 million
outflow; FY 2022: £23.4 million outflow);
· Research and development tax credits received of £nil (H1 2022:
£nil; FY 2022: £9.1 million); and
· Interest received £0.3 million (H1 2022: £nil; FY 2022: £0.1
million).
The other significant changes in the statement of financial position were:
· Current tax receivable: 30 June 2023: £2.9 million; 30 June 2022:
£10.6 million; 31 December 2022: £2.4 million on account of the lower
research and development tax credit receivable. As noted above, the 2022 tax
credit of £2.4 million was received in August 2023.
· Trade and other payables: 30 June 2023: £2.7 million; 30 June 2022:
£4.6 million; 31 December 2022: £3.3 million, in line with the reduction in
the level of operating expenditure.
The Company's cash resources are sufficient to cover its plans to design and
establish data from an observational study and two
investigator-led/Synairgen-sponsored Phase 2 clinical trials, including
manufacture of active and placebo for use in these trials. Regardless of the
outcome of these activities, which are uncertain, the Company's available
resources are sufficient to cover existing committed costs and the estimated
costs of these activities until at least 30 September 2024, being a period of
at least twelve months from the date of this report and, for this reason, the
financial statements have been prepared on a going concern basis.
Change of Name of Nominated Adviser and Joint Broker
The Company also announces that its Nominated Adviser and Joint Broker has
changed its name to Cavendish Capital Markets Limited following completion of
its own corporate merger.
References
1 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7112535/
(https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7112535/)
2 IQVIA market research Q4 2022; Sources. US CDC, HCUP, IQVIA Claims Data,
PubMed; data on file
Consolidated Statement of Comprehensive Income
for the 6 months ended 30 June 2023
Unaudited Unaudited Audited
Six months Six months
ended 30 ended 30 Year
June June ended 31
2023 2022 December
2022
Notes £000 £000 £000
Research and development expenditure (3,463) (11,106) (14,936)
Other administrative expenses (2,051) (2,903) (5,364)
Total administrative expenses and loss from operations (5,514) (14,009) (20,300)
Finance income 300 24 207
Loss before tax (5,214) (13,985) (20,093)
Tax credit 2 466 1,579 2,448
Loss and total comprehensive loss for the period (4,748) (12,406) (17,645)
Loss per ordinary share 3
Basic and diluted loss per ordinary share (pence) (2.36)p (6.16)p (8.76)p
Consolidated Statement of Changes in Equity
for the 6 months ended 30 June 2023
Share Share Merger Retained Total
Capital premium reserve deficit
£000 £000 £000 £000 £000
At 1 January 2022 2,013 125,245 483 (90,741) 37,000
Loss and total comprehensive loss for the period - - - (12,406) (12,406)
Transactions with equity holders of the Group
Issue of ordinary shares 1 - - - 1
Recognition of share-based payments - - - 323 323
1 - - 323 324
At 30 June 2022 2,014 125,245 483 (102,824) 24,918
Loss and total comprehensive loss for the period - - - (5,239) (5,239)
Transactions with equity holders of the Group
Recognition of share-based payments - - - 596 596
At 31 December 2022 2,014 125,245 483 (107,467) 20,275
Loss and total comprehensive loss for the period - - - (4,748) (4,748)
Transactions with equity holders of the Group
Recognition of share-based payments - - - 437 437
At 30 June 2023 2,014 125,245 483 (111,778) 15,964
Consolidated Statement of Financial Position
as at 30 June 2023
Unaudited Unaudited Audited
30 30 31
June June December
2023 2022 2022
£000 £000 £000
Assets
Non-current assets
Intangible assets 92 48 44
Property, plant and equipment 42 130 86
134 178 130
Current assets
Current tax receivable 2,881 10,634 2,415
Trade and other receivables 1,060 710 1,308
Other financial assets - bank deposits 4,000 - 3,750
Cash and cash equivalents 10,631 18,022 15,926
18,572 29,366 23,399
Total assets 18,706 29,544 23,529
Liabilities
Current liabilities
Trade and other payables (2,742) (4,626) (3,254)
Total liabilities (2,742) (4,626) (3,254)
Total net assets 15,964 24,918 20,275
Equity
Capital and reserves attributable to equity holders of the parent
Share capital 2,014 2,014 2,014
Share premium 125,245 125,245 125,245
Merger reserve 483 483 483
Retained deficit (111,778) (102,824) (107,467)
Total equity 15,964 24,918 20,275
Consolidated Statement of Cash Flows
for the 6 months ended 30 June 2023
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended 31
June June December
2023 2022 2022
£000 £000 £000
Cash flows from operating activities
Loss before tax (5,214) (13,985) (20,093)
Adjustments for:
Finance income (300) (24) (207)
Depreciation of property, plant & equipment 45 47 93
Amortisation 5 5 9
Share-based payment charge 437 323 919
Cash flows from operations before changes in working capital (5,027) (13,634) (19,279)
Decrease in trade and other receivables 242 825 289
Decrease in trade and other payables (512) (3,012) (4,384)
Cash used in operations (5,297) (15,821) (23,374)
Tax credit received - - 9,088
Net cash used in operating activities (5,297) (15,821) (14,286)
Cash flows from investing activities
Interest received 307 19 140
Purchase of intangible assets (54) - -
Purchase of property, plant and equipment (1) (4) (6)
Other financial assets - bank deposits
New deposits (4,000) - (3,750)
Deposit maturities 3,750 - -
Net cash generated from/(used in) investing activities 2 15 (3,616)
Cash flows from financing activities
Proceeds from issuance of ordinary shares - 1 1
Net cash generated from financing activities - 1 1
Decrease in cash and cash equivalents (5,295) (15,805) (17,901)
Cash and cash equivalents at beginning of period 15,926 33,827 33,827
Cash and cash equivalents at end of period 10,631 18,022 15,926
Notes to the Interim Financial Information
for the six months ended 30 June 2023
1. Basis of preparation
Basis of accounting
The condensed financial statements have been prepared using accounting
policies consistent with international accounting standards. While the
financial figures included in this half-yearly report have been computed in
accordance with international accounting standards applicable to interim
periods, this half-yearly report does not contain sufficient information to
constitute an interim financial report as that term is defined in IAS 34.
They do not include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in conjunction with
the 31 December 2022 Annual Report. The financial information for the half
years ended 30 June 2023 and 30 June 2022 does not constitute full financial
statements and both periods are unaudited.
The accounting policies applied in the preparation of this interim financial
information are consistent with those used in the financial statements for the
year ended 31 December 2022 and those expected to apply for the financial year
to 31 December 2023. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet effective.
Financial information
The financial information for the year ended 31 December 2022 does not
constitute the full statutory accounts for that period. The Annual Report and
Financial Statements for the year ended 31 December 2022 have been filed with
the Registrar of Companies. The Independent Auditor's Report on the Annual
Report and Financial Statements for the year ended 31 December 2022 was
unqualified, did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
Financial information is published on the Company's website in accordance with
legislation in the United Kingdom governing the preparation and dissemination
of financial information, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company's website is the
responsibility of the directors. The directors' responsibility also extends to
the ongoing integrity of the financial information contained therein.
Going Concern
The directors have prepared financial forecasts to estimate the likely cash
requirements of the Company over the period to 30 September 2024, given its
stage of development and lack of recurring revenues. In preparing these
financial forecasts, the directors have made certain assumptions with regards
to the timing and amount of future expenditure over which they have control.
The directors have taken a prudent view in preparing these forecasts.
The Company's available resources at the date of this report are sufficient to
cover the Company's plans to design and establish data from an observational
study and two investigator-led/Synairgen-sponsored Phase 2 clinical trials,
including manufacture of active and placebo for use in these trials.
Regardless of the outcome of these activities, which are uncertain, the
Company's available resources are sufficient to cover existing committed costs
and the estimated costs of these activities until at least 30 September 2024.
Notes to the Interim Financial Information
for the six months ended 30 June 2023 (continued)
1. Basis of preparation (continued)
Going concern (continued)
After due consideration of these forecasts and current cash resources, the
directors consider that the Company has adequate financial resources to
continue in operational existence for the foreseeable future (being a period
of at least twelve months from the date of this report) and, for this reason,
the financial statements have been prepared on a going concern basis.
Approval of financial information
The 30 June 2023 interim financial information was approved by a committee of
the Board of Directors on 20 September 2023.
2. Tax credit
The tax credit of £466,000 (six months ended 30 June 2022: £1,579,000; year
ended 31 December 2022: £2,448,000) comprises an estimate of the research and
development tax credit receivable in respect of the current period.
The deferred tax assets have not been recognised as there is uncertainty
regarding when suitable future profits against which to offset the
accumulated tax losses will arise. There is no expiration date for the
accumulated tax losses.
3. Loss per ordinary share
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 30 31
June June December
2023 2022 2022
(4,748) (12,406) (17,645)
Loss attributable to equity holders of the Company (£000)
Weighted average number of ordinary shares in issue (000) 201,345 201,345 201,360
Basic and diluted loss per share (pence) (2.36) (6.16) (8.76)
The loss attributable to shareholders and the weighted average number of
ordinary shares for the purposes of calculating the diluted loss 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. At 30 June 2023 there were
18,119,156 options outstanding (30 June 2022: 8,477,640 options outstanding;
31 December 2022: 14,450,882 options outstanding).
INDEPENDENT REVIEW REPORT TO SYNAIRGEN PLC
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2023 is not prepared, in all
material respects, in accordance with the London Stock Exchange AIM Rules for
Companies.
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2023 which comprises the Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Changes in Equity, the Consolidated Statement of
Financial Position, the Consolidated Statement of Cash Flows and the related
notes 1 to 3.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the Company are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report is not in accordance with UK adopted International Accounting Standard
34, "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the Company to
cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the London Stock Exchange AIM Rules for Companies which
require that the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the Company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the rules of the London
Stock Exchange AIM Rules for Companies for no other purpose. No person is
entitled to rely on this report unless such a person is a person entitled to
rely upon this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to
any other person or for any other purpose and we hereby expressly disclaim any
and all such liability.
BDO LLP
Chartered Accountants
Southampton, UK
Date: 20 September 2023
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
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