Half-yearly Report
Embargoed Release: 07:00, Thursday 15th January 2009
GB00B39J5N63
Scancell Holdings plc
(`Scancell Holdings' or `the Company')
Interim Results
for the six month period to 31 October 2008
The Directors of Scancell Holdings plc, the parent company of Scancell Limited
(`Scancell'), the developer of cancer vaccines based on its patented ImmunoBodyâ„¢
platform, are pleased to announce the interim results for Scancell for the
six month period ended 31st October 2008 (`the period').
Highlights:
* Admitted to Plus markets on 24 September 2008 and raised £1.559,502 on 24th
September 2008
* Issue of equity raised £43,999.8 on the 19th of December 2008
* Following the placing of shares in September, the Company has £2,220,479
cash reserves
* Continued make good progress towards its goal of starting Phase 1 clinical
trials with SCIB1 in 2010
* Agreement to license key components of SCIB1 from National Institute for
Health (`NIH') in the final phase of negotiation
* Negotiations to secure development and commercial rights to an injection
device to deliver SCIB1 to patients progressing well
* Experienced Development Advisor appointed for SCIB1
* Presented at the Genesis 2008 Oncology Showcase
David Evans, Non-Executive Chairman of Scancell, commented:
"I am delighted to report a very successful first six months as a public
company. In 2008, we raised £1.6m in conjunction with being admitted to Plus
markets. The funds raised will provide the ability to further develop
Scancell's core technology; the ImmunoBodyTM platform and to achieve its aim of
starting Phase 1 clinical trials of SCIB1 in 2010."
For further information contact:
Company:
Scancell Holdings Plc Professor Lindy Tel: 020 7245
Durrant/ 1100
Dr Richard
Goodfellow
Corporate Advisers:
St Helen's Capital Duncan Vasey/ Tel: 020 7628
Plc 5582
Barry Hocken
Financial PR:
Hansard Group Adam Reynolds/ Tel: 020 7245
1100
Vikki Krause
About Scancell:
Scancell (www.scancell.co.uk), is a biopharmaceutical company focussed on the
cancer therapeutics market. The Company was established in 1996 as a spin-out
from the University of Nottingham and is listed on PLUS Markets (PLUS ticker:
SCEP).
Scancell is developing a pipeline of cancer vaccines based on its patented
ImmunoBodyTM platform, a revolutionary DNA vaccine technology which has the
potential to overcome the significant limitations of other therapeutic cancer
approaches. Scancell intends to take its lead melanoma vaccine, SCIB1, through
a Phase I/IIa clinical trial with completion in 2011. A positive outcome would
enable Scancell to position itself for a trade sale to one of the leading
pharmaceutical or biotechnology companies operating in the oncology market. New
approaches to cancer vaccines are constantly being sought by the major
pharmaceutical companies to overcome the limitations of existing technologies.
For example, in 2006 Pfizer acquired PowderMed, a developer of early stage DNA
vaccines and `gene gun' delivery technology as part of a major strategic move
into the cancer and infectious disease vaccine market.
The ImmunoBody approach is also expected to be applicable to the development of
therapeutic vaccines targeting infectious diseases. Importantly Scancell has
validated its technology using a range of DNA delivery methods using three
established approaches thereby permitting the company to select a delivery
method based on commercial as well as technical considerations.
Chief Executive Officer Statement:
Overview
The Company is pleased to review the first six months of the period, during
which Scancell's most significant achievements were to raise £1.6m of new funds
and to be admitted to Plus markets. This will allow Scancell to continue to
advance the development of its lead ImmunoBodyTM product, SCIB1, a melanoma
vaccine which has repeatedly shown a good anti-tumour effect in animal studies.
Scancell is expected to begin GMP manufacture in 1Q2009 and will apply for a
CTA to commence clinical trials of SCIB1 in the UK in 1Q2010.
Following successful participation at the BioEurope 2008 conference held in
November in Mannheim, Germany, Scancell continues to engage in discussions with
a number of Biotechnology and Pharmaceutical companies about licensing its
ImmunoBodyTM technology platform, in accordance with the Company's aims to
generate revenue through technology licensing to other discovery and
development companies.
Scancell is also pleased to announce it was invited to present at the leading
biotechnology conference, the Genesis Conference 2008, as part of the UK
Oncology Showcase, held in London in December 2008.
SCIB1
Scancell's lead ImmunoBodyTM product SCIB1, is designed to stimulate a powerful
immune response against the melanoma antigen tyrosinase related protein 2
(TRP-2), a well-known melanoma target. SCIB1 is specifically directed towards
an important sub-set of melanoma patients (HLA-A2), accounting for around 50%
of melanoma cases, although future refinements may enable the product to treat
all melanoma patients. It is expected that treatment will initially be directed
towards Stage 2b/3 patients, those with evidence of disease progression
following surgery, representing some 50% of all patients under treatment. It is
therefore expected that around 25% of melanoma patients worldwide (32,500 per
annum) would be prospective candidates for SCIB1.
Scancell has validated its technology using a range of DNA delivery methods and
has identified three suitable approaches. The system best suited to the task,
from both a scientific and commercial perspective, will be selected over the
next few months.
During the period, Dr Sally Adams was appointed as Development Advisor for
SCIB1, bringing extensive experience in the development of biopharmaceuticals
to Scancell including specific knowledge in the field of DNA vaccines.
Agreements to license key components of SCIB1 from the NIH are in final
negotiations and discussions to secure the development and commercial rights to
an injection device for the delivery of SCIB1 to patients continue to progress
well. A positive outcome from the Phase 1/11 clinical trial programme in 2011
will justify further Phase II trials and validate the entire ImmunoBodyTM
platform.
SCIB2
Scancell's second ImmunoBodyTM, SCIB2, is an anti-angiogenic vaccine that is
expected to have utility in the treatment of any solid tumour, either as
monotherapy or in combination with tumour specific vaccines such as SCIB1.
Scancell will design and test a second ImmunoBodyTM, SCIB2 to the animal proof
of principle stage.
In addition, Scancell continues to seek additional targets for the ImmunoBodyTM
technology, both for its internal development pipeline and with pharmaceutical
and biotechnology company partners.
Financial Review
Profit and Loss Account
In the first six months of 2008, the Company incurred a loss before interest
and tax of £263,929, interest receivable (£23,978) and tax credits (£21,825)
reduced the loss for the period to £218,126.
Balance Sheet
At the period end the Group had Cash reserves of £2.2m following its successful
placing of shares in September for £1.56m.
Outlook
We are delighted with the progress of Scancell to date and our successful
fundraising completed earlier in the year will allow us to further develop
Scancell's core technology. The continuing development of SCIB1 and the
bolstering of its team by the appointment of Dr Adams has strengthened the
outlook for Scancell. In addition, Scancell will continue to develop a number
of ImmunoBodyTM products and intends to extend its product pipeline to further
validate its technology. The opportunities presented by the Immunobodyâ„¢
technology platform increases our expectation of extracting additional revenues
from future licensing transactions and royalty payments. Scancell is ideally
placed in a niche and rapidly advancing area of immunology and we believe that
over time Scancell has the ability to become a market leader.
The directors of the Issuer accept responsibility for this announcement.
Professor Lindy Durrant
Chief Executive Officer
15 January 2008
Consolidated Profit and Loss Account
For the Period 14 April 2008 to 31 October 2008
Notes Period 01.05.08 Year ended
to 31.10.08 30.04.2008
£ £
TURNOVER - 231
Cost of sales 129,158 241,262
GROSS LOSS (129,158) (241,031)
Administrative expenses 134,771 268,657
OPERATING LOSS 3 (263,929) (509,688)
Interest receivable and similar 23,978 60,649
income
LOSSON ORDINARY ACTIVITIES (239,951) (449,039)
BEFORE TAXATION
Tax on (loss)/profit on ordinary 4 (21,825) (43,732)
activities
LOSSFOR THE FINANCIAL PERIOD (218,126) (405,307)
AFTER TAXATION
CONTINUING OPERATIONS
None of the company's activities were acquired or discontinued during the
current year or previous year.
TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains and losses other than the losses for the
current period or the previous year.
Consolidated Balance Sheet
31 October2008
Notes 31.10.2008 30.04.2008
£ £
FIXED ASSETS
Tangible assets 7 75,729 86,652
Investments 8 - -
CURRENT ASSETS
Debtors 9 81,681 51,145
Cash in bank and in hand 2,220,479 997,747
2,302,160 1,048,892
CREDITORS
Amounts falling due within one 10 91,891 88,351
year
NET CURRENT ASSETS 2,210,269 960,541
TOTAL ASSETS LESS CURRENT 2,285,998 1,047,193
LIABILITIES
CAPITAL AND RESERVES
Called up share capital 11 102,022 76,030
Share premium 12 1,430,939 -
Merger reserve 12 5,043,428 5,043,428
Profit and los account 12 (4,290,391) (4,072,265)
14 2,285,998 1,047,193
Company Balance Sheet
31 October 2008
Notes 31.10.2008
£
FIXED ASSETS
Tangible assets 7 -
Investments 8 76,030
76,030
CURRENT ASSETS
Debtors 9 1,458,300
CREDITORS
Amounts falling due within one 10 1,369
year
NET CURRENT ASSETS 1,456,931
TOTAL ASSETS LESS CURRENT 1,532,961
LIABILITIES
CAPITAL AND RESERVES
Called up share capital 11 102,022
Share premium 12 1,430,939
SHAREHOLDERS' FUNDS 14 1,532,961
Consolidated Cash Flow Statement
for the Period 14 April 2008 to 31 October 2008
Notes Period Year Ended
30.04.2008
01.05.08
to
31.10.2008
£ £
Net cash outflow from operating 15 (258,177) (439,442)
activities
Returns on investments and 16 23,978 60,649
servicing of finance
Taxation - (148,727)
Capital Expenditure 16 - (516)
(234,199) (528,036)
Financing 16 1,456,931 20,845
Increase in cash in the period 1,222,732 (507,191)
Reconcilliation of net cash flow 17
to movements in net funds
Increase in cash in the period 1,222,732 (507,191)
Change in net funds resulting 1,222,732 (507,191)
from cash flows
Movement in net funds in the 1,222,732 (507,191)
period
Net funds at 1 May 997,747 1,504,938
Net funds at 1 May/31 October 2,220,479 997,747
Notes to the Consolidated Financial Statements
for the Year Ended 30 April 2008
1. ACCOUNTING POLICIES
Accounting convention
The financial statements have been prepared under the historical cost
convention.
Basis of preparation
The interim report for the six month period, does not comprise full accounts
within the meaning of the Companies Act 2006. The interim financial information
is not audited.
Basis of consolidation
The consolidated accounts include the accounts of the company and its
subsidiary undertaking. The group consists of the parent company and Scancell
Limited, the combination took place on 3rd June 2008 and is accounted for as a
merger following the requirement of Financial Reporting Standard 6
'Acquisitions and mergers' and in compliance with Paragraph 11 of Schedule 6 of
the Large and Medium-Sized Companies and Groups (Accounts and Reports)
Regulations 2008.
Basis of comparative information
The comparative consolidated profit and loss account has been presented as if
the merger took place on the first day of each financial period presented and
as though the Group, as presently constituted, had been in existence throughout
these periods. The figures for the year to 30 April 2008 have been extracted
from the audited Scancell Limited accounts adjusted for the shares issued by
the Company as consideration as if they had always been in issue. Any
difference between the nominal value of the shares acquired by the Company and
those issued by the Company to acquire them is taken to reserves.
The results for the comparative 6 month period to 31 October 2007 are not
presented given it is not a requirement for a Limited company to prepare
interim results and hence they have not been historically prepared.
Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life.
Plant and machinery - 25% on reducing balance
Computer equipment - 33% on reducing balance
Deferred tax
Deferred tax is provided in full on timing differences which result in an
obligation at the balance sheet date, to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based
in current tax rates and law. Timing differences arise from the inclusion of
items of income and expenditure in taxation computations in periods different
from those in which they are included in the financial statements. Deferred tax
assets are recognised to the extent that it is regarded more likely than not
that they will be recovered. Deferred tax assets and liabilities are not
discounted.
Research and development
Expenditure on research and development is written off in the year in which it
is incurred.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling at the balance sheet date. Transactions in foreign
currencies are translated into sterling at the rate of exchange ruling at the
date of transaction. Exchange differences are taken into account in arriving at
the operating result.
Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the profit and loss account
on a straight line basis over the period of the lease.
2. STAFF COSTS
Period Year Ended
30.04.08
01.05.08 to
31.10.08
£ £
Wages and salaries 73,271 126,076
Social security costs 6,201 11,539
79,472 137,615
The average monthly number of employees during the period was as follows:
Period Year Ended
30.04.08
01.05.08 to
31.10.08
Research employees 3 3
Other employees 1 1
4 4
3. OPERATING LOSS
The operating loss is stated after charging:
Period Year Ended
01.05.08 to
31.10.08 30.04.07
£ £
Other operating leases 6,917 10,763
Depreciation - owned assets 10,923 26,983
Auditor's Remuneration - 10,000
Research and development expenditure 144,917 222,927
Directors' emoluments and other benefits etc 14,000 15,000
4. TAXATION
Analysis of the tax credit
The tax credit on the loss on ordinary activities for the year was as follows:
Period 01.05.08 Year Ended
to 31.10.08 30.04.08
£ £
Current tax: (21,825) (43,732)
UK corporation tax
Tax on (loss)/profit on ordinary activities (21,825) (43,732)
The subsidiary company has tax losses to carry forward against future profits
of approximately £2,350,000 (30 April 2008 -£2,200,000)
A deferred tax asset has not been recognised in respect of these losses as the
company does not anticipate sufficient taxable profits to arise within the
immediate future to fully utilise them.
The estimated value of the deferred tax asset not recognised, measured at a
standard rate of 21% is £493,500 (30 April 2008 - £462,000).
5. PROFIT OF THE PARENT COMPANY
As permitted by Section 230 of the Companies Act 1985, the profit and loss
account of the parent company is not presented as part of these financial
statements.
The parent company made no profit or loss in the period to 31 October 2008.
6. MERGER INFORMATION
Scancell Limited and Scancell Holdings plc merged on 6th June 2008, this was
effected by the existing shareholders of Scancell Limited being give 4 shares
in Scancell Holdings plc for each of their original shares, this transfer was
completed on 14th July 2008.
No significant accounting adjustments were required to achieve consistency of
accounting policies as a result of the merger.
Scancell Limited had losses in the current period of £37,239 prior to the
merger, and had net assets of £1,009,954.
7. TANGIBLE FIXED ASSETS
Group Plant and
machinery
£
COST
At 1 May 2008
And 31 October 2008 253,628
DEPRECIATION
At 1 May 2008 166, 976
Charge for period 10,923
At 31 October 2008 177.899
NET BOOK VALUE
At 31 October 2008 75,729
At 30 April 2008 86,652
8. FIXED ASSET INVESTMENTS
Company Shares in group
undertakings
£
COST
Additions 76,030
At 31 October 2008 76,030
NET BOOK VALUE
At 31 October 2008 76,030
The group or the company's investments at the balance sheet date in the share
capital of companies include the following:
Subsidiary
Scancell Limited
Nature of business: Discovery and
development of treatments for cancer
%
Class of shares: holding
Ordinary 100.00 31.10.08 30.04.08
£ £
aggregate capital and reserves 829,066 1,047,193
Loss for the period (218,126) (405,307)
9. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Company
31.10.08 30.4.08 31.10.08
£ £ £
Trade debtors 8 8 -
Amounts owed by group - - 1,450,420
undertakings
Other debtors 16,116 7,405 7,880
Tax 65,557 43,732 -
81,681 51,145 1,458,300
10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Company
31.10.08 30.4.08 31.10.08
£ £ £
Trade creditors 30,555 32,344 -
Social security and other taxes 7,838 3,428 -
Other creditors 53,498 52,579 1,369
91,891 88,351 1,369
11. CALLED UP SHARE CAPITAL
Authorised: Class Nominal value 31.10.08 30.4.08
Number
20,000,000 (30.04.08 Ordinary shares 1p 200,000 200,000
20,000,000)
200,000 200,000
Allotted, issued and Class: Nominal value: 31.10.08 30.4.08
fully paid:
Number:
10,202,218 (30.04.08 Ordinary shares 1p 102,022 76,030
7,603,048)
102,022 76,030
On 3rd June 2008 the company issued 6,267,500 1p ordinary shares at par on the
basis of 4 shares for every one share held in Scancell Limited.
On 15th July 2008 the company issued 1,335,548 1p ordinary shares at par on the
basis of 4 shares for every one share held in Scancell Limited, in accordance
with the drag along provisions. Following this transfer the merger of Scancell
Limited and Scancell Holdings plc was complete.
On 22nd September 2008, the company was listed on the plus market and 2,599,170
Ordinary Shares of 1p each were issued as fully paid at a premium of 59p per
share.
Share options
The company had the following share options in place at 31 October 2008.
The Chairman, Mr D Evans, was granted 304,000 options in Scancell Holdings Plc
exercisable at 60 pence per share.
These options shall vest and become capable of exercise according to the
following schedule:
Number of Shares Vested over which
Net Exit value Option Granted
Between £5m & £15m 76,000
Between £15m & £25m 152,000
Over £25m 304,000
The Company has granted St Helen's Capital Plc an option to subscribe for
ordinary shares in the Company totaling two per cent of the fully diluted share
capital of the Company. This option will be exercisable at 60 pence per share
and shall be exercisable for a period of 5 years from the date of admission.
Since the period end the Company has granted options to subscribe for the
Company's shares to various persons. The share options that were granted are as
follows:
Date granted Exercise price Number of shares
December 2008 50p 29,000
December 2008 60p 14,500
December 2008 £3.125 12,000
55,500
12. RESERVES
Group
Totals Profit & Loss Share Premium Merger Reserve
A/c
£ £ £ £
At May 1st 2008 971,163 (4,072,265) - 5,043,428
Deficit for the period (218,126) (218,126)
Premium on share issue 1,533,510 - 1,533,510 -
Share issue expenses (102,571 - (102,571) -
At 31 October 2008 2,183,976 (4,290,391) 1,430,939 5,043,428
Company
Totals Profit & Loss Share Premium
A/c
£ £ £
Profit for the period - - -
Premium on share issue 1,533,510 - 1,533,510
Share issue expenses (102,571 - (102,571)
At 31 October 2008 1,430,939 - 1,430,939
13. RELATED PARTY DISCLOSURES
During the period the following directors provided consultancy services to the
company as follows:
Mr N J Evans £325 (30/04/2008: £
6,876)
Dr R M Goodfellow £15,739 (30/04/2008: £
30,523)
Professor L Durrant £12,555 (30/04/2008: £
25,400)
Mr D Evans £15,000 (30/04/2008:
nil)
All of the above were conducted on normal commercial terms.
14. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Group
Period Year Ended
01.05.08 to 30.4.08
31.10.08
£ £
Loss for the financial year (218,126) (405,307)
share capital issued 1,559,502 422,945
share issue expenses (102,571) (402,100)
Net addition to shareholders' funds 1,238,805 (384,462)
Opening shareholders' funds 1,047,193 1,431,655
Closing shareholders' funds 2,285,998 1,047,193
Company
£
Profit for the financial year -
share capital issued 1,559,502
share issue expenses (102,571)
Share capital issued to subsidiary company 76,030
Net addition to shareholders' funds -
Opening shareholders' funds 1,532,961
Equity interests 1,532,961
15. RECONCILIATION OF OPERATING LOSSES TO NET CASH OUTFLOW FR5OM OPERATING
ACTIVITIES
Period Year Ended
01.05.08 to 30.4.08
31.10.08
£ £
Operating loss (263,929) (509,688)
Depreciation charges 10,923 26,983
Decrease/(Increase) in debtors (8,710) 12,394
Increase in creditors 3,539 30,869
Net cash outflow from operating activities 258,177 439,442
16. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
Period Year Ended
01.05.08 to 30.4.08
31.10.08
£ £
Returns on investment and servicing of finance
Interest received 23,978 60,649
Net cash inflow for returns on investments and (23,978 60,649
servicing of finance
Financing
Share issue 1,559,502 4,230
Share issue expenses (102,571) -
Loan to Employee Benefit Trust to subscribe for - (402,100)
shares
Premium on share issue to Employee Benefit Trust - 418,715
and directors' share issue
Net cash inflow from financing 1,456,931 20,845
17. ANALYSIS OF CHANGES IN NET DEBT
At 01.05.08 Cash flow At 31.10.08
£ £ £
Net cash:
Cash in bank and in hand 997,747 1,222,732 2,220,479
997,747 1,222,732 2,220,479
Total 997,747 1,222,732 2,220,479
18. CONTINGENT ASSETS
Under an agreement dated 1 December 2006 the Company sold its pre-clinical
pipeline of cell killing monoclonal antibodies to Peptech (UK) Ltd (now Arana
Theapeutics plc) for an initial consideration of £2,000,000 with a further
amount of £2,850,000 payable if certain performance criteria are achieved.
Payment of this amount is conditional on the antibodies reaching certain
performance criteria within a period of five years from the date of completion
of the sale. The likelihood of this further amount being received is uncertain
and the financial statements do not reflect any amounts that may be due in the
future.
19. 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 it can
continue to trade into 2010.
The Directors consider that based on the funding it has and the further steps
being taken, the Company will be able to meet all it's obligations for the
foreseeable future. Accordingly, the Directors consider that the going concern
basis is appropriate for the preparation of these financial statements.
20. POST BALANCE SHEET EVENTS
On 19 December 2008 the company issued 78,333 new ordinary shares of 1p each in
lieu of advisory fees relating to the admission of the Company onto the
PLUS-quoted market at a price of 60p per share.
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