Final Results
30 June 2011
Scancell Holdings Plc
Final Results for the year ended 30 April 2011
A Year of Significant Progress
Scancell Holdings plc, (`Scancell' or the `Company') the developer of
therapeutic cancer vaccines, announces results for the year ended 30 April 2011.
Highlights during the period:
- Key development milestone reached with lead therapeutic melanoma vaccine SCIB1
- Phase I/IIa clinical trials commenced 15 June 2010
- Secured licensing agreements with:
- The National Institutes of Health (an agency of the United States Department
of Health and Human Services); and
- Cancer Research Technology Ltd (Cancer Research UK's commercialisation and
development arm)
- Entered strategic collaborations with ImmuneRegen BioSciences, Inc and
immatics biotechnologies GmbH
- Loss before tax for the year of £1.72 million (2010: £1.8 million)
- Cash at year end £1.1 million (not including the net proceeds from the
Placing to be announced today)
To be announced today:
- New lung cancer vaccine, SCIB2 - latest anti-tumour results in animal
models provide further validation of ImmunoBody® vaccine technology platform
and its commercial potential
- placing to raise £1.73 million (before costs) to fund the working
capital of the Company
- Appointment of Richard Goodfellow as Joint Chief Executive Officer
Professor Lindy Durrant, commented:
"We believe that, following completion of the Placing, we will have
sufficient funding to complete the Phase I trials of our melanoma treatment
and to advance the development of our series of new ImmunoBody® cancer
vaccines to the pre-clinical proof of principle stage. After the Phase I
clinical trial has been completed, and if the data is positive, the Company
will seek to generate revenues from a commercial deal on the ImmunoBody®
technology and will continue with the Phase II clinical trial. A successful
outcome should present Scancell as an excellent acquisition opportunity with
an exit remaining firmly on the agenda following the completion of the Phase
II trial, expected early 2013."
Enquiries:
Scancell Holdings Plc + 44 (0)207 245 1100
Professor Lindy Durrant/Dr Richard Goodfellow
Hansard Communications + 44 (0)207 245 1100
Adam Reynolds/Guy McDougall
Zeus Capital - Nominated Adviser + 44 (0)161 831 1512
Ross Andrews/Tom Rowley
XCAP Securities Plc - Broker +44 (0) 207 101 7070
John Belliss/Parimal Kumar
Chairman's Statement
I am pleased to report on a year of significant progress in
bringing our exciting cancer vaccine technology closer to market. Separately,
today we have also announced the development of a new vaccine for the
treatment of lung cancer and a Placing. The Board believes that the proceeds
of the Placing, together with the Company's existing cash resources, will
provide sufficient capital to enable the completion of the Phase I trials on
our lead product. I will comment further on both of these matters below.
Scancell is a biopharmaceutical company focused on the cancer
therapeutics market and is developing a series of DNA vaccines for the
treatment of cancer. The Company's products are based on its patented
ImmunoBody® platform, which has the potential to overcome many of the
limitations of conventional approaches to the development of cancer vaccines.
Financial results
Profit and Loss
The Group made an operating loss for the year of £1,733,749 (2010:
£1,805,066). The reduction in direct costs is due to the slower than
anticipated recruitment of patients for the clinical trials, which have
resulted in mile-stone payments to the CRO, which runs the trials, being
delayed.
The overall financial loss for the year was £1,649,225 (2010:
£1,737,129)
Balance Sheet
At the end of the year the Group cash balances amounted to
£1,110,630 (2010: £2,830,145). The reduced cash reflects the losses that have
been incurred.
The Group's net assets at 30th April 2011 amounted to £4,635,742
(2010: 6,047,877).
The ImmunoBody® Technology Platform
Scancell's mission is to develop medications that fight cancer by
spurring the body's immune system, a form of treatment that many cancer
specialists believe may hold the key to keeping a patient permanently
disease-free. Unlike traditional therapies that attack a cancer directly,
immunotherapy uses the body's own internal defences to ward off the disease,
with the ultimate hope of building up long term resistance to the cancer.
Scancell's ImmunoBody® vaccines generate potent killer T-cells that
target and eliminate tumours. Each ImmunoBody vaccine can be designed to
target a particular cancer in a highly specific manner, offering the potential
for enhanced efficacy and safety compared with more conventional approaches.
In addition to developing its own products, the Company intends to
license ImmunoBody® on a target by target basis to companies working in the
cancer vaccine field. The manipulation and enhancement of human immune systems
is also relevant to the treatment of other diseases such as chronic infectious
disease. Although Scancell does not intend to venture outside the oncology
arena itself, the Company intends to license ImmunoBody® to companies working
in other therapeutic areas.
Collaboration with immatics biotechnologies GmbH
On 29 June 2010 Scancell entered into a research collaboration agreement with
immatics biotechnologies GmbH ("immatics") to explore the development of novel
ImmunoBody® vaccines for colorectal cancer. As part of the agreement,
colorectal cancer-specific TUMAPs (Tumour Associated Peptides) will be
incorporated into the ImmunoBody® platform to create vaccines targeted towards
colorectal cancer. If the research project is successful, immatics and Scancell
will explore additional product candidates.
Collaboration with ImmuneRegen BioSciences, Inc.
On 4 June 2010 Scancell announced that a treatment utilising a DNA vaccine
based on ImmunoBody®, in combination with ImmuneRegen BioSciences, Inc.®'s
lead compound, Homspera®, had significantly improved the immune response of
the vaccine in an animal model.
Follow-up studies on an ImmunoBody® vaccine targeting the lung
cancer antigen NY-ESO-1 combined with Homspera have produced encouraging
results in animal models, as announced today.
Product Development
SCIB1 - Melanoma
On 15 June 2010 the Company announced the enrolment and treatment
of the first patient in a multicentre Phase I/IIa clinical trial of SCIB1,
Scancell's DNA ImmunoBody® vaccine for the treatment of melanoma. The trial
will evaluate the safety and tolerability of SCIB1 in patients with late stage
melanoma. The trial, which is currently based at five leading UK hospital
centres in Nottingham, Manchester, Leeds, Southampton and Newcastle and being
run by world-leading oncology CRO, PharmaNet Development Group, is expected to
be completed in early 2013. The Company has also appointed Oxford Immunotec to
collect immune response data during the trial.
Advanced melanoma currently has a very poor prognosis with late
stage disease having a median survival of approximately six months. The Phase
I trial will be in nine Stage III/IV malignant melanoma patients.
Phase II of the clinical trial is expected to commence in 4Q11 and
is aimed at generating further immune response data. If positive, this would
provide clinical validation for both SCIB1 and the entire ImmunoBody® Platform
which, together with the pipeline of pre-clinical vaccine candidates, would
enable the Company to position itself for a trade sale to one of the leading
pharmaceutical or biotechnology companies operating in the oncology market.
The vaccine will be injected using Ichor Medical Systems' TriGridâ„¢
electroporation delivery device.
Ichor Medical Systems ('Ichor') and Scancell entered into an agreement in July
2009 for the TriGridâ„¢ electroporation device to be used for the delivery of
SCIB1 during Scancell's pre-clinical and clinical studies. In vivo
electroporation is widely regarded as an effective method of enhancing the potency
of DNA vaccines by up to 100 -fold compared to conventional methods of delivery.
Scancell's IP position around SCIB1 has been further strengthened by the signing of
a worldwide non-exclusive licensing agreement with the National Institutes of Health
(`NIH'), an agency of the United States Department of Health and Human Services, for
use of the melanoma antigens TRP-2 and gp100, developed in the laboratory of Steven
A. Rosenberg, M.D., Ph.D., at the National Cancer Institute. These antigens will be
utilised as key components of SCIB1.
SCIB2 - Lung Cancer
Today Scancell announced encouraging anti-tumour results in animals
using its new product, SCIB2. This DNA vaccine is also based on the Company's
ImmunoBody® technology and is used in combination with Homspera®, an adjuvant
developed by ImmuneRegen BioSciences, Inc.® as mentioned above.
The vaccine stimulates immune responses to the lung cancer antigen
NY-ESO-1 and may also have potential utility in oesophageal, liver, gastric,
prostate, ovarian and bladder cancers. Unlike classical adjuvants, Homspera®
did not enhance the SCIB2 systemic immune response but did make it more
effective at the tumour site. This could have profound implications for cancer
vaccine therapy.
Licence Agreements
National Institute of Health
On 13 May 2010 the Company announced a worldwide non-exclusive
licensing agreement with the National Institutes of Health (`NIH'), an agency
of the United States Department of Health and Human Services, for use of the
melanoma antigens TRP-2 and gp100, developed in the laboratory of Steven A.
Rosenberg, M.D., Ph.D., at the National Cancer Institute. These antigens will
be utilized as key components of Scancell's lead ImmunoBody® vaccine for
melanoma, SCIB1.
Under the agreement, Scancell has agreed to pay the US Public
Health Service an undisclosed upfront fee in addition to certain milestone
fees and a royalty on future sales of SCIB1. Scancell will have the right to
develop and commercialise its ImmunoBody® vaccines for the treatment of
melanoma in humans incorporating epitopes from these targets.
Cancer Research Technology Ltd
On 10 August 2010 Scancell announced an agreement with Cancer
Research Technology Ltd (`CRT'), Cancer Research UK's commercialisation and
development arm, granting the Company the rights to a human antibody known as
105AD7.
105AD7 is a human monoclonal antibody that mimics the complement
regulatory protein, CD55. The antibody was discovered and originally developed
at the University of Nottingham with support from Cancer Research UK and has
previously been evaluated in clinical trials for osteosarcoma. The agreement
will give Scancell a worldwide licence to use 105AD7 for the development of
ImmunoBody® vaccines for any immunotherapy indication.
The licence will be restricted to the use of the antibody as a
framework for future ImmunoBody® vaccines.
Under the terms of the agreement, Scancell made an upfront payment
to CRT and will make further milestone payments as development progresses and
royalty payments on future product sales. Scancell will exclusively fund the
development work and have sub-licensing rights on agreed terms.
£1.73 million fund raising
In addition to the lung cancer vaccine success above, Scancell has
today announced a placing to raise £1.73 million (£1.52 million, net of costs)
to provide additional working capital for the Company. The Directors believe
that the funds raised will be sufficient to enable the completion of the Phase
I clinical trial of the Company's lead therapeutic melanoma vaccine, SCIB1.
After the Phase I clinical trial has been completed, the Company
will seek to generate revenues from a commercial deal on the ImmunoBody®
technology. However if the Company is unable to generate revenues from a
commercial agreement or if it takes longer than expected to reach a commercial
agreement on the technology then a further fundraising may be required in mid
2012 in order to provide sufficient working capital to enable completion of
the Phase II clinical trial for SCIB1.
Staff
The Board recognises that the progress made over the year would not
have been possible without the dedication and determination of all our staff
and, on behalf of the directors, I offer our warmest thanks to them.
Outlook
We believe that, following completion of the Placing, we will have
sufficient funding to complete the Phase I trial of our melanoma treatment
whilst continuing to advance the development of new vaccines for other cancer
indications. A successful outcome should present Scancell as an excellent
acquisition opportunity with an exit remaining firmly on the agenda following
the completion of the Phase II trial, expected in early 2013.
David Evans
Chairman
CONSOLIDATED INCOME STATEMENT 2011 2010
FOR THE YEAR ENDED 30 APRIL
2011 £ £
REVENUE - -
Cost of sales (848,629) (1,091,351)
--------- ---------
Gross loss (848,629) (1,091,351)
Administrative expenses (885,120) (751,365)
--------- ---------
(1,733,749) (1,842,716)
Other operating income - 37,650
--------- ---------
OPERATING (LOSS) (1,733,749) (1,805,066)
Interest receivable and
similar income 9,613 2,427
--------- ---------
(LOSS) BEFORE TAXATION (1,724,136) (1,802,639)
Taxation (74,911) (65,510)
--------- ---------
(LOSS) AFTER TAXATION (1,649,225) (1,737,129)
=========== ===========
EARNINGS PER ORDINARY SHARE (pence)
Basic (10.4)p (16.2)p
Diluted (10.4)p (16.2)p
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2011
Loss for the year (1,649,225) (1,737,129)
All results relate to continuing activities.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2011
Share
Share Premium Retained Total
capital Account earnings Equity
£ £ £ £
At 1st May 2010 158,733 8,321,808 (2,432,664) 6,047,877
475,860
(Loss) for the year (1,649,225) (1,649,225)
Share issue 785 47,215 48,000
Share option costs 189,090 189,090
At 30th April 2011
159,518 8,369,023 (3,892,799) 4,635,742
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2011
ASSETS 2011 2010
Non-current assets
Plant and machinery 98,933 131,763
Goodwill 3,415,120 3,415,120
--------- ---------
3,514,053 3,546,883
--------- ---------
Current assets
Trade and other receivables 132,846 122,636
Cash and cash equivalents 1,110,630 2,830,145
--------- ---------
1,243,476 2,952,781
--------- ---------
TOTAL ASSETS 4,757,529 6,499,664
--------- ---------
LIABILITIES
Current Liabilities
Trade and other payables (121,787) (451,787)
--------- ---------
TOTAL LIABILITIES (121,787) (451,787)
--------- ---------
NET ASSETS 4,635,742 6,047,877
=========== ===========
SHAREHOLDERS' EQUITY
Called up share capital 159,518 158,733
Share premium 8,369,023 8,321,808
Profit and loss account (3,892,799) (2,432,664)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 4,635,742 6,047,877
=========== ===========
CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR
ENDED 30 APRIL 2011
2011 2010
Net cash outflow from (1,842,219) (1,504,392)
operating activities
returns on investment and 9,613 2,427
servicing of finance
Taxation 65,510 190,376
Capital expenditure (419) (72,148)
(1,767,515) (1,383,737)
Financing 48,000 2,694,812
Increase/(Decrease) in cash (1,719,515) 1,311,075
in the period
Reconciliation of net cash (1,719,515) 1,311,075
flow to movement in net
funds
Change in net funds (1,719,515) 1,311,075
resulting from cashflows
Movement in net funds in (1,719,515) 1,311,075
the year
Net funds at 1 May 2,830,145 1,519,070
Net funds at 30 April 1,110,630 2,830,145
NOTES
1 BASIS OF PREPARATION AND GOING CONCERN
These financial results do not comprise statutory accounts for the
year ended 30 April 2011 within the meaning of Section 434 of the Companies
act 2006. The financial information in this announcement has been extracted
from the audited financial statements for the year ended 30 April 2011.
The financial information has been prepared in accordance with
International Financial Reporting Standards (`IFRS'), as adopted by the
European Union, and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
The financial statements have been prepared under the historical
cost convention and in accordance with applicable accounting standards.
Going Concern
The Auditor's report included in the audited financial statements
for the year ended 30 April 2011 is unqualified but includes an emphasis of
matter drawing attention to the existence of a material uncertainty which may
cast doubt about the Company's ability to continue as a going concern.
The Directors have reviewed the funding position for the forward
period and considered the viability of business plans and budgets. These show
that currently available cash resources will be sufficient to enable the group
to meet its commitments until around November 2011 based on budgeted
expenditure.
The Company is planning to raise additional funds of approximately
£1.52m, net of costs, by means of a placing of shares on the AIM market. The
directors consider that these funds will provide sufficient working capital,
to take the Company through to completion of the Phase I trials of its
therapeutic vaccine for melanoma. The placing of shares is subject to
receiving approval from Scancell Holdings plc members. It is anticipated that,
subject to shareholder approval, the placing will take place at the end of
July 2011.
The Directors consider that on the basis of the planned funding
being received the Company will be able to meet all of its obligations until
at least July 2012. Accordingly the directors consider that the going concern
basis is appropriate for the preparation of these financial statements.
2 OTHER OPERATING INCOME
2011 2010
£ £
Sundry receipts - 150
Government Grants - 37,500
--------- ---------
- 37,650
--------- ---------
3 OPERATING LOSS
2011 2010
£ £
Operating profit is stated after
charging/(crediting):
Depreciation on tangible fixed assets 33,250 22,649
Operating lease rentals 14,056 14,056
Research and development 848,629 1,091,351
Auditors' remuneration - fee payable for audit of
the company 6,000 6,000
Auditors' remuneration - fee payable for audit of
the subsidiary company 6,000 6,000
Directors' remuneration 37,012 49,347
=========== ===========
4 TAXATION
Analysis of the tax credit
The tax credit on the loss on ordinary activities
for the year was as follows:
2011 2010
Current tax £ £
UK corporation tax credits due on R&D expenditure (74,220) (65,510)
Adjustment to prior year (691) -
___________ ___________
(74,911) (65,510)
=========== ===========
Factors affecting the tax charge
The tax assessed for the years are lower than the applicable rate
of corporation tax in the UK. The difference is explained below:
2011 2010
£ £
(Loss) on ordinary activities before tax (1,724,136) (1,802,639)
=========== ===========
(Loss) on ordinary activities multiplied by the
standard rate of tax in the UK (21%) (362,069) (378,554)
Effects of:
Disallowed expenditure 79,408 52
Timing differences 2,983 (11,960)
Enhanced tax relief on R&D expenditure (56,726) (47,467)
Reduced tax relief for losses surrendered for R&D
tax credits 37,110 32,755
Prior period refund (691) -
Unrelieved losses carried forward 225,074 339,664
___________ ___________
Current tax credit (74,911) (65,510)
=========== ===========
The Group has tax losses to carry forward against future profits
of approximately £5,100,000 (2010: £4,360,000)
A deferred tax asset has not been recognised in respect of these losses as the
Group does not anticipate sufficient taxable profits to arise in the
foreseeable future to fully utilise them.
The estimated value of the deferred tax asset not recognised measured at a
standard rate of 21% is £1,071,000 (2010: £915,600)
5 EARNINGS PER SHARE
The earnings per ordinary share has been calculated using the
profit for the year and the weighted average number of ordinary shares in
issue during the year as follows:
2011 2010
£ £
(Loss) for the year after taxation (1,649,225) (1,737,129)
_______ _______
No. No.
Basic weighted average of ordinary shares of 15,932,565 10,733,335
1p each
___ ____ __
Basic earnings (pence per share) (10.4)p (16.2)p
_______ _______
Fully diluted earnings (pence per share) (10.4)p (16.2)p
_______ _______
As the Group is reporting a loss for both years then, in accordance
with IAS33, the share options are not considered dilutive because the exercise
of the share options would have the effect of reducing the loss per share.
6 DELIVERY OF ACCOUNTS
The statutory accounts in respect of the prior year ended 30 April
2010 have been delivered to the Registrar of Companies and the auditors of the
Company made a report thereon under Section 235 of the Act. That report was an
unqualified report and did not contain a statement under Section 237 (2) or
(3) of the Act.
7 AVAILABILITY OF ACCOUNTS
This announcement is not being posted to shareholders. The Report
and Accounts will be posted to shareholders later today. Copies of this
announcement and further copies of the Report and Accounts can be downloaded
from the Company's website: www.scancell.co.uk.
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