REG - ValiRx PLC - Final Results
VALIRX PLC
("ValiRx", "the Company" or "the Group")
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017
London, UK, 10 April 2018: ValiRx Plc (AIM: VAL), a life science company, which focuses on clinical stage cancer therapeutic development, taking proprietary & novel technology for precision medicines towards commercialisation and partnering, today announces its final results for the year ended 31 December 2017.
HIGHLIGHTS
Operational Highlights
· Period of substantive and encouraging development across drug portfolio taking lead compounds to significant value inflection points;
· Phase l/ll Clinical Trial of VAL201 has continued to demonstrate high safety and tolerability and has received MHRA approval to extend and expand the scope of the clinical trial to treat prostate cancer;
· Completion of VAL401's Phase II Clinical Trial in patients with lung cancer - with trial data offering palliative stage patients an improvement in symptoms alongside improved survival prospects;
· Period saw the optimized, commercially viable, 2nd generation development of the VAL101 molecule derived from ValiRx's proprietary GeneICE platform to shut down rebellious genes causing cancer and potentially some neurological disorders - preparation is underway for the compound's entry into the clinic;
· VAL301 is in late pre-clinical phase initially for the treatment of the gynaecological condition, endometriosis - a reformulation of VAL201, which pre-clinical studies suggest does not compromise bone density or fertility. Final laboratory tests are underway prior to advancing the VAL301 compound into additional toxicology and then clinical trials;
· Patent protection and portfolio coverage was extended for Val201 and VAL401 during the period with US patent granted for VAL201 in Q1 2018.
Financial Highlights
· Four Placings during the period raising £3.07m to advance the clinical trial of VAL201 and for the pre-clinical progress of other programmes;
· Marked 36.4 % reduction in total comprehensive loss for the year to £3.02m (2016: Loss £4.75m) reflecting decrease in clinical trial expenditure on medicinal products;
· Loss per share from continuing operations of 1.90p (2016: Loss 8.54p);
· Cash and cash equivalents as at 31 December 2017 of £701,410 (2016: £560,763).
Oliver de Giorgio-Miller, Non-Exec Chairman of ValiRx, commented:
"I believe the Group has seen substantive and encouraging developments across its portfolio during the period to December 2017. The progress of our core clinical products, VAL201 and VAL401 has been substantial and both have reached significant value inflection points. The current momentum and exciting trajectory of both compounds offer potential investors an investable proposition and an attractive offering to joint venture partners."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For more information, please contact:
ValiRx plc
Tel: +44 (0) 20 3008 4416
Dr Satu Vainikka, Chief Executive
Tel: +44 (0) 20 3008 4416
Tarquin Edwards, Head of Communications.
Tel: +44 (0) 7879 458 364
Cairn Financial Advisers LLP (Nominated Adviser)
Liam Murray / Jo Turner
Tel: +44 (0) 20 7213 0880
Novum Securities Limited
Colin Rowbury
Tel: +44 (0) 20 7399 9400
Notes for Editors
About ValiRx
ValiRx is a biotechnology oncology focused company specialising in developing novel treatments for cancer and associated biomarkers. It aims to make a significant contribution in "precision" medicine and science, namely to engineer a breakthrough into human health and well-being, through the early detection of cancer and its therapeutic intervention.
The Company's business model focuses on out-licensing therapeutic candidates early in the development process. By aiming for early-stage value creation, the company reduces risk considerably while increasing the potential for realising value. The group is already in licensing discussions with major players in the oncology field.
ValiRx's two classes of drugs in development, which each have the potential for meeting hitherto unmet medical needs by existing methods, have worldwide patent filings and agreed commercial rights. They originate or derive from World class institutions, such as Cancer Research UK and Imperial College.
Until recently, cancer treatments relied on non-specific agents, such as chemotherapy. With the development of target-based agents, primed to attack cancer cells only, less toxic and more effective treatments are now possible. New drugs in this group-such as those in ValiRx's pipeline-promise to greatly improve outcomes for cancer patients.
The Company listed on the AIM Market of the London Stock Exchange in October 2006 and trades under the ticker symbol: VAL
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2017
In my report for the year ended 31 December 2016, I informed our shareholders that we were making important strides in growing our internal R&D capabilities, such that we remain at the forefront of personalised and precision medicine. I am pleased to report that our research, understanding and ambition to find more effective solutions to the treatment of cancer have moved on further since then. The integration of our in-house team with an advisory board of oncologists and clinical nurse specialists has been providing valuable insight into how we can more rapidly bring safe, efficacious, therapeutic and palliative medicines to cancer patients to meet hitherto unmet needs.
In 2017, we saw consistent progress made with our first therapeutic. VAL201 continued to demonstrate high safety and tolerability, as well as preliminary therapeutic activity throughout the clinical study, culminating in receiving approval from the UK Medicines and Healthcare Products Regulatory Agency and the Research Ethics Committee to substantially raise the dosing level in patients with locally advanced or metastatic prostate cancer in order to reach therapeutic levels and reduce disease progression. This is a testament to the appetite for new drugs devoid of the serious side effects reported with current prostate cancer treatments, in particular complete and general androgen hormone deprivation. We look forward to reporting on the clinical trial as it progresses throughout this current year.
In parallel, we continued to advance the reformulation of VAL201 into VAL301 for the treatment of Endometriosis, a painful and debilitating gynaecological condition with high unmet clinical needs. We have established from our pre-clinical studies that VAL201's specific mode of action also has the potential to provide a potent therapeutic effect to manage the symptoms of this disorder more safely than current treatments, which are widely known to cause a large number of side effects including loss of bone density and/or infertility. Going forward, the Company's focus is to complete laboratory tests before progressing VAL301 to clinical trials.
A particularly noteworthy achievement by the Company in the reporting period was the successful completion of the VAL401 Phase ll clinical study in patients with late stage non-small cell lung cancer, the most common form of lung cancer. The data analysed by Ariana, a leading digital health Company, focused on developing advanced therapeutic decision support systems, has advocated the therapeutic potential for VAL401 as a single therapy in treating this cancer. Ariana has also advocated the compound's therapeutic and palliative potential when combined with both traditional chemotherapies and immune-oncology treatments. Palliative stage patients could expect to see improvements in symptoms with the added benefit of improved survival prospects. The encouraging 60% overall response rate provides a strong foundation for the next stage of clinical testing. The measure of immune competency of the treated patients was also a pleasingly unexpected addition to the results. In sum, we are very excited to see such a good response rate for a condition with huge unmet medical need.
Furthermore, these results came hot on the heels of ValiRx receiving notification that a further method-of-treatment patent has been granted by the US Patent Office covering the use of VAL201 in the treatment of prostate cancer. VAL201 now has five patents families in its portfolio, four of which have been fully granted and with one allowed. VAL201's patent protection now extends across territories that include US, Japan, Australia, Europe and the UK, providing coverage in the world's major markets.
Another important breakthrough during the year was the development of an optimised, commercially viable second generation of the VAL101 molecule derived from our proprietary GeneICE platform, which has been shown in earlier studies to shut down rebellious genes causing cancer and potentially some neurological disorders. We can now take VAL101 in to late pre-clinical studies in preparation of the compound's entry into the clinic.
Our financial results show the total comprehensive loss for the year ended 31 December 2017 was £3,019,684, a decrease of 36.4% on the previous year (2016: £4,748,003) and a loss per share from continuing operations of 1.90p (2016: Loss 8.54p). This marked reduction in our loss was attributable to a decrease in clinical trial expenditure as the manufacturing costs for both of the investigational medicinal products, VAL201 and VAL401, that were incurred for their respective trials, were borne during 2016.
In December 2017, we announced the final conversion of the CLN Agreement with Yorkville - thus resulting in no further obligations existing with Yorkville. Simultaneously, we raised £1.0 million of gross proceeds through the issue of 23,529,412 new ordinary shares at a price of 4.25 pence per share for advancing the clinical trial of VAL201 and for the pre-clinical progress of other programmes. As at year-end, the Group had cash and cash equivalents of £701,410 (2016: £560,763).
In conclusion, I believe the Group has seen substantive and encouraging developments across its portfolio during the period to December 2017. The progress of our core clinical products, VAL201 and VAL401 has been substantial and both have reached significant value inflection points. The current momentum and exciting trajectory of both compounds offer potential investors an investable proposition and an attractive offering to joint venture partners. I would like to take this opportunity to express my sincere gratitude to all shareholders, fellow Directors, and every member of the Group for the trust and support accorded to the Board in positioning ValiRx among the frontrunners in the fields of personalised and precision medicine.
Oliver de Giorgio-Miller
Chairman
10 April 2018
CHIEF EXECUTIVE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2017
The year ending in December 2017 has been of profound importance to ValiRx. Not only did the Company see its two clinical compounds make exciting strides forward through the year, but it also saw those advances culminate towards the end of the period under review.
The conclusion of VAL401's Phase II lung cancer clinical trial and the production of positive trial data showed that the VAL401 treatment has a measureable improvement on patient quality of Life, in addition to a positive impact on the disease and an extension in the overall survival of patients.
The period also saw ValiRx's VAL201 compound showing good safety, tolerability and early efficacy in clinical trials. Following the good results, VAL201's Phase I/II prostate cancer clinical trial received approval from the UK Medicines and Healthcare Products Regulatory Agency ("MHRA") and the Research Ethics Committee ("REC") for the Company to expand and substantial increase the dose being administered to patients. This will allow treatment to more speedily reach its full therapeutic potential and deliver its potential anti-cancer impact.
The company's preclinical developments of VAL301 and VAL101 are going ahead with exciting and encouraging results.
During the year, the Company's patent portfolio has been greatly strengthened with patent grants for VAL401 and VAL201 in major territories. This expanding patent protection further supports the company's business model and gives The Company the basis for meaningful discussions with potential future partners.
These advances are of real significance for the Group and to patients, as ValiRx and its compounds become more attractive to potential partners and take a step forward towards addressing unmet need.
VAL401
Lung cancer
VAL401 is a re-formulation of existing drug Risperidone, into an orally administered gelatin capsule, showing in pre-clinical testing, anti-cancer properties in several oncological models. The period under review has been a defining period for VAL401's clinical development and in Q4 2017, ValiSeek, the joint venture between ValiRx and Tangent Reprofiling Limited, completed the Phase II trial and released pharmacokinetic data. Following analysis, ValiSeek announced positive formal data on the VAL401 compound and of its disease impact. The results clearly demonstrated that the VAL401 treatment had a statistically significant improvement on the overall survival of patients with non-small cell lung cancer compared to those receiving no treatment.
This excellent and very positive breakthrough was boosted after the period end, when further collected data showed that the VAL401 treatment has also measureable improvement on patient's quality of life. Together, the results advocate the potential for VAL401 in treating very late stage cancer patients in the palliative arena. This data also implies the potential for VAL401, in the as yet untested combinations with, both traditional chemotherapies and immune-oncology treatments. Palliative stage patients could expect to see an improvements in symptoms with VAL401 treatment, together with improved survival prospects. The results seen in this first all-comer trial, provides a strong foundation for VAL401's next stage of clinical testing.
With the lung cancer market projected to be valued at USD 7.9 billion in 2020 at a CAGR of 6.6%, the Company continues to be in discussion with a number of large pharmaceutical companies who are looking to fill their pipelines in this important unmet medical therapeutic area.
VAL201
Excellent Safety and tolerability data together with early efficacy data leads to enhancement of the VAL201 Dose Escalation Clinical Study
During 2017, the VAL201 clinical trial has demonstrated an excellent safety and tolerability profile. In addition, the treatments of patients with the compound showed early signs of efficacy with relatively low doses. Based on these results and in December 2017, ValiRx received MHRA approval for the enhancement of its VAL201 dose escalation and expansion clinical trial. This approval allows for a substantial increase in the amount and frequency of VAL201 being administered to patients, thereby allowing treatment to more speedily reach its full therapeutic potential and potential anti-cancer impact. This represents a pivotal and substantial breakthrough for the VAL201 prostate cancer compound and the Company expects the accelerated study to speed-up the human development of the treatment, saving both time and money.
Additional Clinical Trial Centres
To facilitate the enhancement of the VAL201 trial, ValiRx will continue workin with UCLH and also with other oncology clinical sites to participate in this latter part of the trial. Results from this stage can be taken forward by the Company or a partner into subsequent, larger, outcomes-oriented clinical trials. These will establish VAL201's effects as an anti-cancer agent, on overall survival and on the health-related quality of life in patients with prostate cancer.
Prostate cancer
VAL201 is a potentially major breakthrough therapeutic treatment of Advanced Prostate Cancer due to its novel mechanism of action. A number of studies have demonstrated that Src kinase complete inhibition strongly reduces prostate cancer growth but may have side effects. VAL201 specifically targets the association of androgen receptor with Src,SH3 domain, a signal that is important in tumour cell proliferation without suppressing other Src-AR induced activities. This provides an advantage to current therapies, which in addition to abolishing the division signalling pathways, potentially also inhibit the other Androgen Receptor (AR) functions including metabolism.
The readout from the first part of the Phase l/ll clinical trial - showed strong safety and tolerability, in all trial subjects. Other measurements taken were completely consistent and comparable to the results seen in the pre-clinical studies. Furthermore, the trial has also shown indications of efficacy and disease stabilisation on imaging and a reduction of PSA progression, in the majority of patients. Importantly, the Pre-clinical data has also shown tumour growth suppression and significant reduction of metastatic growth.
The VAL201 target is also associated with other cancers with significant potential to be used as a treatment for other hormone-induced cancers, such as breast and ovarian, pancreatic and others and also for the non-cancerous, but very debilitating condition, Endometriosis.
VAL301
Endometriosis
VAL301 is derived from our lead compound, VAL201 and is currently in late-stage pre-clinical development as a non-invasive, effective treatment for the non-cancerous, but hugely debilitating gynaecological condition, Endometriosis. Earlier pre-clinical work on VAL201 has highlighted the compound's potential to protect women from Endometriosis, with a minimal impact on bone density or fertility, which are major drawbacks frequently encountered with the current commonly used drugs and therapies for this condition. Our focus now is to complete the pre-clinical package and arrive at the optimal formulation so that the Company obtains the necessary regulatory approvals to enter VAL301 into a clinical trial in 2018.
GeneICE/VAL101
Our GeneICE "rebellious gene" editing technology has shown continued good progress in its late pre-clinical phase. With the programme currently benefitting from a second Eurostars grant totalling up to €2.6 million., this programme has been through scientific, medical and commercial evaluation. Rebellious genes are the ones that are working when/where they should not e.g. in cancers, inflammatory conditions, Alzheimer's and autoimmune diseases. ValiRx's proprietary GeneICE technology enables the design of compounds for selective binding and silencing of these specific genes. The lead GeneICE lead compound has been designed against a gene expressing Bcl-2 protein, which has been implicated and associated with various cancers. Pre-clinical work during the period under review has been conducted with our partners, DKFZ, Heidelberg and Pharmatest in Finland, to generate a commercially viable molecular structure for VAL101. ValiRx was pleased to report commercially viable efficient manufacturing capabilities for the compunds and preliminary results for the optimised second generation of the VAL101 molecule are demonstrating gene silencing. As such, ValiRx intends to accelerate VAL101's late pre-clinical studies in preparation for the compound's entry into the clinic.
Portfolio of Clinical Patent Families
The table below provides details of patents in the VAL201 portfolio that have been either fully granted or allowed.
Country
Patent number
Date Filed
Granted/Allowed
United States
US 14/575065
14 March 2008
Granted
Europe
EP 08717866.1
14 March 2008
Allowed
Japan
JP 2009-553162
14 March 2008
Granted
Australia
AU 2008228274
14 March 2008
Granted
United Kingdom
GB 1118831.5
01 November 2011
Granted
There are patent applications currently pending in many other territories and covering various aspects of the programme.
The table below provides details of patents in the VAL401 portfolio that have been either fully granted or allowed.
Country
Patent number
Date Filed
Date Granted/Allowed
United States
US 9072743
26 September 2013
07 July 2015
United States
US 9375433
08 May 2015
28 June 2016
United States
US 9585887
27 May 2015
07 March 2017
United States
US 9585890
31 May 2016
07 March 2017
United States
To be allocated shortly
27 February 2017
Allowed
Australia
AU 2013322612
26 September 2013
14 September 2017
New Zealand
NZ 706067
26 September 2013
01 November 2016
Outlook
With the extremely encouraging results from our portfolio development programmes, I believe we are in a excellent position to deliver benefits to patients, as well as generate value for stakeholders. I very much look forward to the future further development of ValiRx and its therapeutic assets.
Dr Satu Vainikka
Chief Executive
10 April 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
2017
2016
£
£
Continuing operations
Other operating income
88,773
-
Research and development
(1,746,808)
(2,375,354)
Administrative expenses
(1,467,268)
(1,794,284)
Operating loss
(3,125,303)
(4,169,638)
Fair value loss on derivative
financial assets
(23,446)
(1,619,187)
Finance income
489
17
Fair value gain on derivative liability
44,146
375,621
Finance costs
(449,868)
(338,188)
Loss before income tax
(3,553,982)
(5,751,375)
Income tax credit
416,336
620,104
Loss after income tax
(3,137,646)
(5,131,271)
Discontinued operations
Profit for the year from
discontinued operations
-
182,750
(3,137,646)
(4,948,521)
Non-controlling interest
117,962
200,518
Total comprehensive loss for the year
(3,019,684)
(4,748,003)
Loss per share - basic and diluted
From continuing operations
(1.90)p
(8.54)p
From discontinued operations
N/A
0.32p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
2017
£
2016
£ASSETS
Non-current assets
Goodwill
1,602,522
1,528,923
Intangible assets
1,325,283
1,295,690
Property, plant and equipment
-
10,553
Investments
-
-
2,927,805
2,835,166
Current assets
Trade and other receivables
766,475
780,942
Tax receivable
424,094
644,497
Derivative financial assets
117,229
140,675
Cash and cash equivalents
701,410
560,763
2,009,208
2,126,877
Total assets
4,937,013
4,962,043
EQUITY
Shareholders' equity
Called up share capital
8,432,708
8,165,650
Share premium
16,419,494
12,998,102
Merger reserve
637,500
637,500
Reverse acquisition reserve
602,413
602,413
Share option reserve
464,000
331,453
Retained earnings
(23,378,744)
(20,385,278)
3,177,371
2,349,840
Non-controlling interests
(24,744)
19,619
Total equity
3,152,627
2,369,459
LIABILITIES
Current liabilities
Trade and other payables
1,394,266
1,254,139
Borrowings
390,120
1,294,299
Derivative liabilities
-
44,146
Total liabilities
1,784,386
2,592,584
Total equity and liabilities
4,937,013
4,962,043
Share capital
Share premium
Merger reserve
Reverse acquisition reserve
Share option reserve
Non-controlling interest
Retained earnings
Total
£
£
£
£
£
£
£
£
Balance at 1 January 2016
8,120,736
10,526,862
637,500
602,413
203,519
79,069
(15,637,275)
4,532,824
Changes in equity
Loss for the year
-
-
-
-
-
(200,518)
(4,748,003)
(4,948,521)
On acquisition of subsidiary
-
-
-
-
-
141,068
-
141,068
Issue of shares
44,914
3,060,507
-
-
-
-
-
3,105,421
Costs in respect of shares issued
-
(589,267)
-
-
-
-
-
(589,267)
Movement in the year
-
-
-
-
127,934
-
-
127,934
Balance at 31 December 2016
8,165,650
12,998,102
637,500
602,413
331,453
19,619
(20,385,278)
2,369,459
Changes in equity
Loss for the year
-
-
-
-
-
(117,962)
(3,019,684)
(3,137,646)
On acquisition of subsidiary
-
-
-
-
-
73,599
-
73,599
Issue of shares
267,058
3,866,468
-
-
-
-
-
4,133,526
Costs in respect of shares issued
-
(445,076)
-
-
-
-
-
(445,076)
Lapse of share options
-
-
-
-
(26,218)
-
26,218
-
Movement in the year
-
-
-
158,765
-
-
158,765
Balance at 31 December 2017
8,432,708
16,419,494
637,500
602,413
464,000
(24,744)
(23,378,744)
3,152,627
Merger reserve
The merger reserve of £637,500 exists as a result of the acquisition of ValiRx Bioinnovation Limited. The merger reserve represents the difference between the nominal value of the share capital issued by the Company and the fair value of ValiRx Bioinnovation Limited at 3 October 2006, the date of acquisition.
Reverse acquisition reserve
The reverse acquisition reserve exists as a result of the method of accounting for the acquisition of Valirx Bioinnovation Limited and Valipharma Limited.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2017
2017
£
2016
£Cash flows from operating activities
Cash outflow from operations
(2,952,275)
(4,233,412)
Interest paid
(35,897)
(338,188)
Tax credit received
636,739
375,926
Net cash outflow from operating activities
(2,351,433)
(4,195,674)
Cash flows from investing activities
Purchase of goodwill
(73,599)
(141,066)
Purchase of intangible fixed assets
(206,727)
(245,559)
Sale of subsidiary undertaking
-
857,136
Sale of tangible fixed assets
-
3,470
Non-controlling interests
73,599
141,068
Interest received
489
17
Net cash from investing activities
(206,238)
615,066
Cash flows from financing activities
New convertible loan notes
263,704
2,993,113
Repayment of convertible loan notes
(347,481)
-
Costs of convertible loan notes
-
(190,846)
Share issue
3,068,406
1,695,906
Costs of shares issued
(286,311)
(589,267)
Net cash from financing activities
2,698,318
3,908,906
Increase in cash and equivalents
140,647
328,298
Cash and cash equivalents at beginning of year
560,763
232,465
Cash and cash equivalents at end of year
701,410
560,763
The notes form part of these financial statements.
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2017
1. Reconciliation of operating loss to cash generated from operations
2017
£
2016
£Operating loss
(3,125,303)
(4,169,638)
Depreciation of property, plant and equipment
10,553
10,560
Amortisation of intangible assets
177,134
92,275
Decrease in inventory
-
11,733
Decrease/(increase) in trade and other receivables
14,467
(1,071,548)
Increase in trade and other payables
54,038
787,726
Other non-cash movements
(83,164)
(22,454)
Share option charge
-
127,934
Net cash outflow from operations
(2,952,275)
(4,233,412)
2. Basis of preparation
The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2017, but is derived from those accounts. Statutory accounts for 2017 will be delivered to the Registrar of Companies following the Company's annual general meeting.
3. Loss per ordinary share
The earnings and number of shares used in the calculation of loss per ordinary share are set out below:
2017
2016
Continuing operations
Loss for the financial period from continuing operations
(3,137,646)
(5,131,271)
Non-controlling interest
117,962
200,518
(3,019,684)
(4,930,753)
Discontinued operations
Profit for the period from discontinued operations
-
182,750
Basic
Weighted average number of shares
151,071,019
57,743,223
Loss per share - continuing operations
(1.90p)
(8.54p)
Earnings per share - discontinued operations
N/A
0.32p
4. Publication of Report & Accounts
The report and accounts for the year ended 31 December 2017 will be posted to shareholders shortly and will be available from the Company's website, http://www.valirx.com/
This information is provided by RNSThe company news service from the London Stock ExchangeENDFR SSAFIUFASEDL
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