Interim Results

RNS Number : 1289I

ReNeuron Group plc

07 December 2015

 



Details are given below of an analyst meeting and webcast at 9.30am this morning

 

 

7 December 2015

AIM: RENE

ReNeuron Group plc

("ReNeuron" or "the Company")

 Interim Results for the six months ended 30 September 2015

 

Guildford, UK, 7 December 2015: ReNeuron Group plc (AIM: RENE), a leading UK-based stem cell therapy development company, is pleased to announce its interim results for the six months ended 30 September 2015.

 

Highlights in the period

·      CTX stem cell therapy candidate for motor disability as a result of stroke:   

-     Phase II clinical trial ongoing - data expected during H1 2016

-     Pivotal Phase II/III clinical trial planned to commence in H2 2016

·      CTX stem cell therapy candidate for critical limb ischaemia:

-     Phase I clinical trial ongoing - data expected in H1 2016

-     Phase II clinical trial planned to commence in H2 2016

·      hRPC stem cell therapy candidate for retinitis pigmentosa:

-     First patients consented for treatment in Phase I/II clinical trial

-     ReNeuron's first US clinical study

-     Pivotal Phase II/III clinical trial planned to commence in 2017

·      Exosome nanomedicine platform:

-     Promising early pre-clinical data in cancer

-     Research collaboration extended with Benitec Biopharma utilising exosomes as a delivery system for gene therapy

·      Placing completed to raise £68.4 million, before expenses, funding all therapeutic programmes through mid or late-stage clinical development

·      Loss for the period of £4.48 million (2014: loss of £4.13 million); cash outflow from operations of £5.26 million (2014: outflow of £4.83 million); cash, cash equivalents and bank deposits at 30 September 2015 of £72.28 million (31 March 2015: £12.38 million)

Commenting on the results, Olav Hellebø, Chief Executive Officer, said:

"During the period under review, we gained regulatory approval to commence our first clinical trial in the US, a Phase I/II clinical trial of our hRPC cell therapy candidate for retinitis pigmentosa.  The first patients have been consented for treatment and we look forward to reporting progress with this important study over the coming year.  We also expect to report data from our ongoing clinical trials in critical limb ischaemia and disability as a result of stroke during 2016, representing further significant milestones in the clinical development of our CTX cell therapy candidates.  The development of our emerging exosome technology platform continues to progress well, both as a potential new nanomedicine targeting cancer and as a potential new delivery system in gene therapy. Finally, the substantial £68.4 million fundraising completed in the period has provided us with a very robust balance sheet with which to pursue the above programmes through to key clinical milestones over the next two to three years."

Analyst meeting and webcast:

A meeting for analysts will be held at 9.30am today at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN.

For a webcast of the analyst presentation, please log on to the following web address approximately 10 minutes before 9.30am:

http://vm.buchanan.uk.com/2015/reneuron071215/registration.htm.

For further details please contact Buchanan on 020 7466 5000.

A recording of the webcast will be made available on ReNeuron's and Buchanan's websites, www.reneuron.com and www.buchanan.uk.com.

Enquiries:

ReNeuron	[phone]
Olav Hellebø , Chief Executive Officer
Michael Hunt, Chief Financial Officer
Buchanan	[phone]
Mark Court, Sophie Cowles, Stephanie Watson
Cenkos Securities	[phone]
Stephen Keys, Dr Christopher Golden (NOMAD and Broker)
Russell Kerr (Sales)

About ReNeuron

ReNeuron is a leading, clinical-stage cell therapy development company.  Based in the UK, its primary objective is the development of novel cell-based therapies targeting areas of significant unmet or poorly met medical need.  

ReNeuron has used its unique stem cell technologies to develop cell-based therapies for significant disease conditions where the cells can be readily administered "off-the-shelf" to any eligible patient without the need for additional immunosuppressive drug treatments.  The Company has therapeutic candidates in clinical development for motor disability as a result of stroke, for critical limb ischaemia and for the blindness-causing disease, retinitis pigmentosa.   

ReNeuron is also advancing its proprietary exosome technology platform as a potential new nanomedicine targeting cancer and as a potential delivery system for gene therapy treatments.

ReNeuron's shares are traded on the London AIM market under the symbol RENE.L.  Further information on ReNeuron and its products can be found at www.reneuron.com.

This announcement contains forward-looking statements with respect to the financial condition, results of operations and business achievements/performance of ReNeuron and certain of the plans and objectives of management of ReNeuron with respect thereto. These statements may generally, but not always, be identified by the use of words such as "should", "expects", "estimates", "believes" or similar expressions. This announcement also contains forward-looking statements attributed to certain third parties relating to their estimates regarding the growth of markets and demand for products. By their nature, forward-looking statements involve risk and uncertainty because they reflect ReNeuron's current expectations and assumptions as to future events and circumstances that may not prove accurate.  A number of factors could cause ReNeuron's actual financial condition, results of operations and business achievements/performance to differ materially from the estimates made or implied in such forward-looking statements and, accordingly, reliance should not be placed on such statements.

Operational Review

Therapeutic programmes

We have continued to make considerable progress during the period across our therapeutic programmes and it highlights the increasing breadth of the Company's pipeline that we now have two clinical trials in progress in the UK, a clinical trial now open for enrolment in the US and an exciting early-stage exosome nanomedicine programme.

During the period under review, we obtained regulatory approval from the US FDA to commence a Phase I/II clinical trial in the US with our Human Retinal Progenitor Cell (hRPC) therapy candidate for retinitis pigmentosa (RP).  RP is a group of hereditary diseases of the eye that lead to progressive loss of sight due to cells in the retina becoming damaged and eventually dying.  The FDA has also granted Fast Track designation to our hRPC programme targeting RP.  This designation provides eligibility for an accelerated approval and priority review process by the FDA and  the Orphan Drug Designation already granted for our RP programme in both the US and Europe provides the potential for a significant period of market exclusivity once approved in these major territories.

The Phase I/II clinical trial in RP patients is now open for enrolment and, importantly, marks the initiation of clinical trial activity in the US with our therapeutic programmes.   The study is being conducted at Massachusetts Eye and Ear Infirmary in Boston, a world-renowned clinical centre for the treatment of retinal diseases.  The trial design is an open-label, dose escalation study to evaluate the safety, tolerability and preliminary efficacy of our hRPC stem cell therapy candidate in 15 patients with advanced RP.  The first patients have been recruited to the study and initial safety and tolerability data from the study are expected in the second half of 2016.

Subject to the outcome of the Phase I/II study, we are planning to file an application to commence a pivotal Phase II/III clinical trial with our therapy for RP in 2017. This trial is expected to be the basis for subsequent marketing authorisation filings in both the US and Europe.

During the period, the clinical team from Glasgow's Southern General Hospital presented long-term follow-up data from the PISCES Phase I clinical trial with our CTX stem cell therapy candidate for motor disability as a result of stroke.  There continued to be no cell-related or immunological adverse events reported in any of the eleven patients treated in the study out to at least 24 months post-treatment, with improvements in neurological status and limb function maintained throughout long-term follow-up compared with pre-treatment baseline performance. 

A UK multi-site Phase II clinical trial (PISCES II) is ongoing to examine the efficacy of CTX in patients with motor disability as a result of ischaemic stroke.  Sufficient suitable patients have been identified to complete the first cohort in the study, with data expected in the first half of 2016.  At this point, and subject to an overall assessment of the collective data from the Phase I and Phase II studies, we are planning to curtail the Phase II study and file an application to commence a controlled, pivotal Phase II/III clinical trial in patients with motor disability as a result of ischaemic stroke.

Our CTX cell therapy candidate for critical limb ischaemia (CLI) is currently in a Phase I clinical trial in the UK.  CLI is a condition that results in loss of blood flow to the lower limb, is common in diabetics and can ultimately lead to amputation.   We expect safety data from this study in the first half of 2016, sufficient to enable us to initiate a Phase II placebo-controlled clinical trial later that year.

During the period, we continued to advance our exosome nanomedicine programme.  Exosomes are lipid-based nanoparticles secreted from all cells and which are believed to play a key role in the transfer of beneficial proteins and particularly non-coding RNAs from one cell to another.  We aim to exploit the therapeutic potential of exosomes derived from our own proprietary stem cell lines and we have filed multiple patent applications covering the composition, manufacture and therapeutic use of our exosome nanomedicine platform.

We have identified a novel mechanism by which exosomes from our CTX stem cells may inhibit the growth and migration of cancer cells in pre-clinical models of the disease.  We are continuing to investigate the mechanism of action and utility of our exosome nanomedicine platform in a range of potential cancer indications.  Alongside this, we are also optimising the process of harvesting exosomes from CTX cell production as a prelude to selecting the most suitable clinical development candidate. 

During the period, we extended our research collaboration with Australia-based Benitec Biopharma ("Benitec"), a leader in the field of therapeutics focused on gene silencing.  Following positive results in early studies, the collaboration is investigating the potential of our CTX-derived exosomes as a delivery system for Benitec's proprietary gene silencing technology, targeting cancer as well as ophthalmic and neurologic diseases.

Other activities

During the period, we completed a Placing to raise £68.4 million, before expenses.  This financing provides funding into the second half of 2018 and will enable us to take all of our current programmes into early or mid-stage clinical development and, subject to future clinical data and regulatory approvals, will enable us to take our therapeutic programmes in retinitis pigmentosa and motor disability as a result of stroke through late-stage clinical development to the point of application for marketing authorisation. 

We remain on track to relocate our existing business operations to our new facility in South Wales in the early part of next year, with cell production suites planned to come on-stream at a later date, once qualified for use and licensed for clinical and commercial manufacture.

Last week, we announced the appointment of Dr Michael Owen as a Non-executive Director of the Company.  Mike brings a wealth of scientific and commercial biotech and pharmaceutical experience to the Board and will also chair the Company's Scientific Advisory Board.

Financial review

In the six months to 30 September 2015, revenues were £11,000 (2014: £11,000) in addition to which grant income of £244,000 was received and is shown as other operating income (2014: £265,000).

Research and development expenditure was at a similar level to the equivalent prior period at £3.72 million (2014: £3.75 million).  This expenditure will increase during the remainder of the financial year as clinical trial activity and associated cell manufacturing spend continues to increase. General and administrative expenses increased to £1.83 million (2014: £1.43 million). This increase is consistent with the increase seen in the second half of the previous financial year and is largely a result of the strengthening of the senior management team as well as project management and other costs associated with the upcoming relocation of the business to South Wales. 

Interest received increased in the period to £59,000 (2014: £40,000) as a result of higher levels of cash deposits following the fund raise.  The total tax credit for the period was £756,000 (2014: £739,000).

As a result of the above, the total comprehensive loss for the period increased to £4.48 million (2014: £4.13 million), in line with both internal and consensus analyst forecasts.

Cash outflow from operations in the period increased to £5.26 million (2014: £4.83 million), reflecting the increase in operating costs in the period. The Group had cash, cash equivalents and bank deposits totalling £72.28 million as at 30 September 2015 (31 March 2015: £12.38 million).  As mentioned above, in August 2015, the Company issued 1,367,411,939 new ordinary shares at 5.0p per share to raise £68.37m before expenses, by means of a placing with new and existing investors. Net proceeds were £65.12 million.

Summary and outlook

During the period under review, we gained regulatory approval to commence our first clinical trial in the US, a Phase I/II clinical trial of our hRPC cell therapy candidate for retinitis pigmentosa.  The first patients have been consented for treatment and we look forward to reporting progress with this important study over the coming year.  We also expect to report data from our ongoing clinical trials in critical limb ischaemia and disability as a result of stroke during 2016, representing further significant milestones in the clinical development of our CTX cell therapy candidates.  The development of our emerging exosome technology platform continues to progress well, both as a potential new nanomedicine targeting cancer and as a potential new delivery system in gene therapy. Finally, the substantial £68.4 million fundraising completed in the period has provided us with a very robust balance sheet with which to pursue the above programmes through to key clinical milestones over the next two to three years.

Olav Hellebø                                                                 Michael Hunt

Chief Executive Officer                                                  Chief Financial Officer

7 December 2015

Unaudited Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2015

		Six months ended	Six months ended	Year ended
		30 September	30 September	31 March
		2015	2014	2015
	Note	£'000	£'000	£'000
Revenue		11	11	30
Research and development costs		(3,716)	(3,750)	(7,250)
General and administrative costs		(1,834)	(1,433)	(3,693)
Other operating income	3	244	265	519
Operating loss		(5,295)	(4,907)	(10,394)
Finance income		59	40	91
Loss before income taxes		(5,236)	(4,867)	(10,303)
Tax credit on loss on ordinary activities		756	739	1,397
Total comprehensive loss for the period		(4,480)	(4,128)	(8,906)
Total comprehensive loss attributable to:
- Equity owners of the Company		(4,480)	(4,128)	(8,906)
Basic and diluted loss per share	4	(0.2p)	(0.2p)	(0.5p)

Unaudited Consolidated Statement of Financial Position

as at 30 September 2015

		30 September	30 September	31 March
		2015	2014	2015
		£'000	£'000	£'000
Assets
Non-current assets
Property, plant and equipment		145	184	161
Intangible assets		1,591	1,272	1,591
Other non-current assets		281	275	281
		2,017	1,731	2,033
Current assets
Trade and other receivables		832	674	400
Corporation tax receivable		2,028	1,493	1,272
Investments - bank deposit		49,993	6,000	-
Cash and cash equivalents		22,283	10,101	12,382
		75,136	18,268	14,054
Total assets		77,153	19,999	16,087
Equity
Equity attributable to owners of the Company
Share capital		31,567	17,888	17,888
Share premium		97,704	46,267	46,267
Capital redemption reserve		8,964	8,964	8,964
Merger reserve		2,223	2,223	2,223
Accumulated losses		(66,428)	(57,536)	(62,206)
Total equity		74,030	17,806	13,136
Liabilities
Non-current Liabilities
Provisions		605	364	605
Financial liabilities: finance leases		1	2	1
		606	366	606
Current Liabilities
Trade and other payables		2,516	1,826	2,344
Financial liabilities: finance leases		1	1	1
		2,517	1,827	2,345
Total liabilities		3,123	2,193	2,951
Total equity and liabilities		77,153	19,999	16,087

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 30 September 2015

		Share	Capital
	Share	premium	Redemption	Merger	Accumulated losses	Total
	capital	account	Reserve	reserve		Equity
	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 April 2014	17,888	46,267	8,964	2,223	(53,625)	21,717
Share-based credit	-	-	-	-	217	217
Loss for the period	-	-	-	-	(4,128)	(4,128)
As at 30 September 2014	17,888	46,267	8,964	2,223	(57,536)	17,806
Share-based credit	-	-	-	-	108	108
Loss for the period	-	-	-	-	(4,778)	(4,778)
As at 31 March 2015	17,888	46,267	8,964	2,223	(62,206)	13,136
Issue of new ordinary shares	13,679	54,696	-	-	-	68,375
Costs of share issue	-	(3,259)	-	-	-	(3,259)
Share-based credit	-	-	-	-	258	258
Loss for the period	-	-	-	-	(4,480)	(4,480)
As at 30 September 2015	31,567	97,704	8,964	2,223	(66,428)	74,030

Unaudited Consolidated Statement of Cash Flows

for the six months ended 30 September 2015

		Six months ended	Six months ended	Year ended
		30 September	30 September	31 March
		2015	2014	2015
	Note	£'000	£'000	£'000
Cash consumed by operations	5	(5,263)	(4,834)	(9,124)
Income tax credit received		-	-	879
Cash outflow from operating activities		(5,263)	(4,834)	(8,245)
Cash flows from investing activities
Capital expenditure		(18)	(22)	(61)
Purchase of intangible asset		-	-	(319)
Interest received		59	40	91
Net cash generated/(consumed) by investing activities		41	18	(289)
Cash flows from financing activities
Finance lease principal payments		-	-	(1)
Proceeds from issuance of ordinary shares		68,375	-	-
Costs of share issue		(3,259)	-	-
Bank deposit (placed)/matured		(49,993)	-	6,000
Net cash generated by financing activities		15,123	-	5,999
Net increase/(decrease) in cash and cash equivalents	6	9,901	(4,816)	(2,535)
Cash and cash equivalents at the start of period		12,382	14,917	14,917
Cash and cash equivalents at the end of period	7	22,283	10,101	12,382

Notes to the interim financial statements

for the six months ended 30 September 2015

1.               Accounting policies and basis of preparation

1.1             Basis of preparation

The Group's unaudited interim financial statements for the half year ended 30 September 2015 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU including those applicable to accounting periods ending 31 March 2016 and the accounting policies set out in ReNeuron Group plc's Annual Report for the year ended 31 March 2015. They do not include all the statements required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at 31 March 2015.

This condensed consolidated interim financial information has not been audited or reviewed and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.  Statutory financial statements for the year ended 31 March 2015 were approved by the Board of Directors on 24 August 2015, have been filed with the Registrar of Companies for England and Wales and have been reported on by the Group's auditors. The report of the auditors on those accounts was unqualified, did not contain an emphasis-of-matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

1.2             Accounting policies

The accounting policies applied by the Group in this interim report are the same as those applied by the Group in the financial statements for the year ended 31 March 2015 subject to the following amendments to existing standards which are now effective and have been adopted by the Group . The financial statements of the Group are not materially impacted by these changes:

·     Annual Improvements 2011-2013 (effective 1 July 2014)(endorsed for 1 January 2015)

There are a number of new standards, interpretations and amendments to existing standards that are not yet effective and have not been adopted early by the Group. The future introduction of these standards is not expected to have a material impact on the financial statements of the Group.

1.3             Going concern

The Group is expected to incur significant further costs as it continues to develop its therapies and technologies through clinical development.  During the period, the Company completed a Placing to shareholders to raise £68.4 million, before expenses.  Following completion of the Placing, the Directors expect that the Group's financial resources will be sufficient to support operations into the second half of 2018. Consequently, the going concern basis has been adopted in the preparation of these interim financial statements.

2.               Segment information

Following the adoption of IFRS8 Segment Reporting, the Group has identified the Chief Executive Officer as the Chief Operating Decision Maker (CODM). The CODM manages the business as one segment, the development of cell-based therapies. Since this is the only reporting segment, no further information is included. The information used internally by the CODM is the same as that disclosed in the interim financial statements. The Group's revenue derives wholly from assets located in the United Kingdom. Analysed by location of customer all revenue is derived from the United States of America.

3.               Other operating income

Other operating income comprises Government grants from Innovate UK (Technology Strategy Board) in relation to the Group's programmes.

4.               Basic and diluted loss per share

The basic and diluted loss per share is calculated by dividing the loss for the financial period of £4,480,000 (September 2014: £4,128,000, March 2015: £8,906,000) by 2,058,105,458 shares (September 2014 and March 2015: 1,788,827,700 shares), being the weighted average number of ordinary 1p shares in issue during the period. Potential ordinary shares are not treated as dilutive as the entity is loss-making.

5.               Cash consumed by operations

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2015	2014	2015
	£'000	£'000	£'000
Loss before income tax	(5,236)	(4,867)	(10,303)
Adjustment for:
Interest received	(59)	(40)	(91)
Depreciation of tangible fixed assets	34	63	125
Provisions	-	-	241
Share-based payment charge	258	217	325
Changes in working capital
Receivables	(432)	2	270
Payables	172	(209)	309
Cash consumed by operations	(5,263)	(4,834)	(9,124)

6.            Reconciliation of net cash flow to movement in net debt

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2015	2014	2015
	£'000	£'000	£'000
Net funds at start of period	12,380	14,914	14,914
Increase/(decrease) in cash in the period	9,901	(4,816)	(2,535)
Cash inflow from decrease in debt	-	-	1
Net funds at end of period	22,281	10,098	12,380

7.            Analysis of net funds

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2015	2014	2015
	£'000	£'000	£'000
Cash at bank and in hand	22,283	10,101	12,382
Finance leases	(2)	(3)	(2)
	22,281	10,098	12,380

 

END

 

 

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