Trading Statement

RNS Number : 7081V

Sareum Holdings PLC

11 August 2020

 

(AIM: SAR)

11 August 2020

Sareum Holdings PLC

("Sareum" or the "Company")

Pre-Close Trading Statement

Sareum Holdings plc (AIM: SAR), the specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, provides the following trading update ahead of its full year results for the year ended 30 June 2020. Sareum expects to report its full audited annual results in October 2020.

A presentation to the investment community will take place on 14 August 2020 at 10.00am via the Investor Meet Company platform - please click on this link to register to attend:  https://www.investormeetcompany.com/sareum-holdings-plc/register-investor.   

OPERATIONAL HIGHLIGHTS

Selective TYK2/JAK1 Inhibitors in Autoimmune Diseases and Cancer

Sareum is continuing to advance its proprietary selective dual tyrosine kinase 2 (TYK2) / Janus kinase 1 (JAK1) inhibitors through preclinical development as potential once-daily, oral immunotherapy candidates, targeting autoimmune diseases (SDC-1801) and cancers (SDC-1802). Both molecules demonstrate high selectivity for TYK2 and JAK1 kinases, promising early safety data as well as compelling activity in relevant disease models. In addition, both programmes represent unique licensing opportunities for pharmaceutical partners as there are currently no marketed products with the selectivity profile of these molecules.

Key Objectives

· Complete preclinical (IND-enabling) studies with at least one candidate by the end of 2020.

· Decide on the initial target indications during 2H 2020 as part of preparation for first-in-human studies.

· Build a robust preclinical data package to support ongoing partnering activities.

· Continue and advance initial discussions with potential partners to secure commercial licences for its assets when they reach late preclinical or early clinical stages.

SDC-1801 (autoimmune diseases)

SDC-1801 and related molecules have shown promising activity in autoimmune disease models, including psoriasis, rheumatoid arthritis, inflammatory bowel disease and systemic lupus erythematosus (SLE).

· SDC-1801 has demonstrated excellent tolerability in toxicology studies in rodents and work is continuing towards completing the dose-finding and longer-term toxicology studies ahead of human trials.

· A robust manufacturing route has been developed to produce active ingredient under GMP (Good Manufacturing Practice) conditions for both preclinical and clinical studies.

· A formulation that will successfully deliver a therapeutic dose level has been identified, however the Company is required to deliver very high doses to SDC-1801 in order to identify a toxic dose level (maximum tolerated dose), and formulation studies for this are still ongoing.

· Encouraging preclinical data reported with Sareum's TYK2/JAK1 inhibitors in SLE disease models. These studies were conducted by co-development partner SRI International (Menlo Park, CA, USA) under a US Department of Defense (DoD) grant and recently published on the website of the Defense Technical Information Center.

SDC-1802 (cancer immunotherapy)

SDC-1802 and related TYK2/JAK1 inhibitors have shown encouraging anti-tumour activity in multiple cancer disease models. Sareum retains global commercialisation rights for TYK2/JAK1 inhibitors with profiles optimised for oncology and immuno-oncology applications.

· SDC-1802 is advancing behind SDC-1801 in preclinical development. Formulation work for oral dosing is complete and toxicology studies and further manufacturing work are planned over the coming months.

· In October 2019, Sareum presented new findings showing that SDC-1802, dosed orally as a monotherapy and in combination with chemotherapy, significantly reduces tumour growth in models of solid tumours and blood cancers. SDC-1802 was found to act through a novel immunotherapeutic mechanism of action. These findings were presented at the American Association for Cancer Research (AACR) National Cancer Institute (NCI) European Organisation for Research and Treatment of Cancer (EORTC) International Conference.

TYK2/JAK1 Inhibitors for treating symptoms of Covid-19

In its Half-Yearly report published on 26 March 2020, the Company noted that it would investigate grant funding opportunities to assess the potential use of its TYK2/JAK1 inhibitors to address the severe inflammatory responses (the "cytokine storm") and potentially fatal respiratory symptoms of Covid-19 and other viral infections.

· A grant application to fund preliminary laboratory studies designed to investigate the ability of its TYK1/JAK2 inhibitors to modulate (down-regulate) the overactive immune system in relevant cellular and mouse disease models has been submitted to UK Research and Innovation (UKRI) and a response is expected by the end of October 2020.

· These preliminary studies have been designed as a potential first step towards clinical studies, pending success and further funding.

FLT3+Aurora Inhibitors

On 26 March 2020, Sareum announced it entered a global licensing deal for its FLT3+Aurora kinase inhibitor programme targeting blood cancers with a China-based specialty pharmaceutical company (the "Licensee"). The Licensee will fund all future development activities for licensed FLT3+Aurora kinase inhibitors and has been granted the sole rights to commercialise any resulting products worldwide.

Sareum received a small upfront payment and is eligible for c.£0.90m due on certain milestones being achieved within nine months of signing and receipt of programme data by the Licensee, with a subsequent payment due on the achievement of a pre-specified development milestone. The Licensee confirmed receipt of the programme data on 7 April 2020 and research is ongoing. Sareum is also eligible to receive further revenues upon the commercialisation of any resulting products. However, there can be no certainty that the milestones will be achieved and/or that any further payments will become due.

Licensed Programme - SRA737: A Selective Chk1 inhibitor

SRA737 is a potent, highly selective, orally bioavailable small molecule inhibitor of Checkpoint Kinase 1 (Chk1), a key regulator of important cell cycle checkpoints and central mediator of the DNA Damage Response (DDR) network.

SRA737 is licensed to Sierra Oncology Inc. ("Sierra"), which has presented positive safety & efficacy data of the combination of SRA737+low-dose gemcitabine (LDG) from a broad Phase 1/2 clinical development programme potentially supporting development in anogenital cancer. Sierra has also presented compelling preclinical data supporting the use of SRA737 in combination with novel targeted therapeutic approaches, including PARP inhibitors and immune checkpoint blockade.

In June 2019, Sierra announced it was exploring non-dilutive strategic options to support the next stages of development of SRA737. Sierra appointed a new Chief Executive Officer, Dr Stephen Dilly, on 1 June 2020.  In the notes to Sierra's most recent 10-Q Quarterly Report, dated 6 August 2020, it stated that it is exploring options to support the continued development of SRA737. However, there can be no assurance that Sierra will obtain the funding or support necessary to advance SRA737 or, even if it does secure funding, that any funding will ultimately be used to advance SRA737. The Company will continue to monitor the public statements released by Sierra and will update the market should there be any meaningful developments.

· In March 2020, new research published in the peer-reviewed journal Cancer Research highlighted the anti-cancer effect of SRA737 in multiple human lung and colorectal cancer cells, when used in combination with small molecules that block the function of a family of proteins involved in DNA replication and repair (B-family DNA polymerases).*

*R.F. Rogers et al. CHK1 inhibition is synthetically lethal with loss of B-family DNA polymerase function in human lung and colorectal cancer cells. (2020) Cancer Research https://cancerres.aacrjournals.org/  

Impact of Covid-19 on operations

The Company has been following UK government advice to minimise risk to staff. At present, Sareum remains fully operational, although management's effectiveness may be impacted if restrictions are increased. To date there has been minimal impact on the Company's network of Contract Research Organisations, with some minor delays in the delivery of chemical intermediates and solvents. While this has not so far affected the Company's timelines, there may be delays if further restrictions on work and movement are added.

Salary Deferral Scheme

As announced on 17 December 2019, the Company confirmed that all directors had entered a voluntary salary deferral scheme, whereby 33% of directors' salaries were being deferred until further notice (the "Salary Deferral Scheme").

On 1 July 2020, the Company announced an update on the Salary Deferral Scheme and announced the settlement of directors' deferred salary through the issue of new ordinary shares of 0.025p each in the capital of the Company.

The Company also agreed to reduce the terms of Dr Tim Mitchell's salary deferral from 33% to 20% of his salary going forward. All other directors agreed to continue to defer 33% of their salaries until further notice.

Financial highlights (subject to audit)

· As previously indicated, R&D Tax Credit of £0.23m received in January 2020.

· Raised £1,022,222 before expenses in June 2020 through a fundraising comprising a placing by Hybridan LLP in conjunction with an offer via PrimaryBid, to progress the Company's TYK2/JAK1 drug development programmes as well as for working capital purposes.

· Loss on ordinary activities (after taxation) of £0.96m (2019: loss of £1.45m), reflecting the Company's careful management of cash resources.

· Cash at bank as at 30 June 2020 was £1.8m (£1.0m as at 31 December 2019; £0.92m as at 30 June 2019).

Dr Tim Mitchell, CEO of Sareum, commented :

"The past year has seen Sareum advance the preclinical development of our proprietary dual TYK2/JAK1 inhibitor programmes, with the goal of completing preclinical development of at least one candidate by the end of 2020. We are particularly pleased to have raised additional funding during the period, which will be deployed to advance these programmes towards clinical development and build a robust data package to support our ongoing partnering activities for these exciting and differentiated assets.

"We were pleased to sign a global licensing deal for our FLT3+Aurora inhibitor programme targeting blood cancers with a China-based specialty pharma company during the period. Sareum is potentially eligible to receive a success-dependent milestone payment during Q1 2021 from this agreement, as well as future revenues pending successful progress.

"We continue to monitor Sierra's activities as it explores options to fund the future development of SRA737 and we will provide further updates on this and other programmes when appropriate."

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

For further information, please contact: 

Sareum Holdings plc

Tim Mitchell, CEO    01223 497 700

Strand Hanson Limited (Nominated Adviser)

James Dance / Richard Tulloch                                      020 7409 3494

Hybridan LLP (Nominated Broker)

Claire Noyce / John Beresford-Peirse                           020 3764 2341

Citigate Dewe Rogerson (Financial PR)

Mark Swallow/ David Dible                                           020 7638 9571

About Sareum

Sareum is a specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases. The Company aims to generate value through licensing its candidates to international pharmaceutical and biotechnology companies at the preclinical or early clinical trials stage.

Sareum is advancing internal programmes focused on distinct dual tyrosine kinase 2 (TYK2) / Janus kinase 1 (JAK1) inhibitors through preclinical development as therapies for autoimmune diseases, including the "cytokine storm" immune system overreaction to Covid-19 and other viral infections, (SDC-1801) and cancer immunotherapy (SDC-1802). The Company is targeting completion of IND-enabling studies for at least one of these candidates in 2020.

The Company's preclinical FLT3+Aurora inhibitor programme targeting haematological cancers is licensed to a China-based specialty pharma company.

Sareum also has an economic interest in SRA737, a clinical-stage oral, selective Checkpoint kinase 1 (Chk1) inhibitor that targets cancer cell replication and DNA damage repair mechanisms. Preliminary data suggest SRA737 may have broad application in combination with other oncology and immune-oncology drugs in genetically defined patients.

SRA737 was discovered and initially developed by scientists at The Institute of Cancer Research in collaboration with Sareum, and with funding from Sareum and Cancer Research UK. SRA737 was licensed by CRT Pioneer Fund (CPF) to Sierra Oncology Inc. Sierra is currently exploring options to obtain the funding or support necessary to advance the future development of SRA737.

Sareum Holdings plc is listed on the AIM market of the London Stock Exchange, trading under the ticker SAR. For further information, please visit the Company's website at www.sareum.com.

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