Final Results

RNS Number : 7317Y

ValiRx PLC

19 May 2016

 

VALIRX PLC

("ValiRx", "the Company" or "the Group")

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

London, UK, 19 May 2016: ValiRx Plc (AIM: VAL), a life science company with a focus on cancer therapeutics and diagnostics for personalised medicine, today announces its final results for the year ended 31 December 2015.

Operational

·      Significant year for ValiRx both in terms of restructuring the capital of the company and technical advancements made with both therapeutic compounds

·      Phase l/ll Clinical Trial of VAL201 has confirmed that compound is well tolerated up to a putative therapeutic dose and has shown a high degree of safety, with no significant adverse events being reported

·      Expansion of VAL201 trial into a multi-centre study

·      VAL401, for the treatment of lung cancer and other oncology indications, is in the late to final stages of preparation prior to its Phase II Clinical Trial

·      Positive enhancements of ValiRx biomarker development programme, with new European, Japanese and US patents being secured during the period

·      TRAC actively marketing itself to third parties and growing its revenue stream

·      Expansion into the US with the opening of a ValiRx office in Cambridge, Boston, Massachusetts in November 2015

Post Period

·      £4.0m Convertible Loan Note Facility agreed with Bracknor on 1 April 2016

·      Placing to raise £0.5m in February 2016 with existing and new investors

Oliver de Giorgio-Miller, Non-Exec Chairman of ValiRx, commented:  "The period under review has been pleasingly satisfactory and our teams around the VAL201 and VAL401 compounds have started talking to parties for late stage clinical studies and for potential partnerships and collaboration with pharmaceutical partners.

ValiRx continues to look to expand its Intellectual Property ("IP") as its development programmes go forward and it remains open to technology acquisition opportunities and ways in which it can both deliver and grow."

*** ENDS ***

For more information, please contact:

ValiRx plc	Tel: [phone] www.ValiRx.com
Dr Satu Vainikka, Chief Executive	Tel: [phone]
Tarquin Edwards, Head of Communications	Tel: [phone] [e-mail]
Mark Treharne, Corporate Development Manager	Tel: [phone] [e-mail]
Cairn Financial Advisers LLP (Nominated Adviser)	Tel: [phone]
Liam Murray / Richard Nash
Northland Capital Partners Limited (Broker)	Tel: [phone]
Patrick Claridge / David Hignell (Corporate Finance) John Howes / Abigail Wayne (Broking)

About ValiRx Plc

ValiRx Plc is a biopharmaceutical company developing novel technologies and products in oncology therapeutics and diagnostics. The product focus is in the epigenomic analysis and treatment of cancer, but the technologies can be applied to other fields as well, such as neurology and inflammatory diseases.

The Company listed on the Alternative Investment Market ("AIM") of the London Stock Exchange in October 2006.

The Company has a pipeline of other therapeutic drugs, which are currently progressing towards clinical trials. The product focus is in the targeted analysis and treatment of cancer, but the technologies can be applied to other fields as well, such as neurology and inflammatory diseases. It actively manages projects within its portfolio as a trading company.  The ValiRx business model spreads the risks of life science technology development by minimizing financial exposure and running a set of projects to defined commercial endpoints. This maximizes returns to shareholders by adding value at the earlier stages where value increases per investment unit are the greatest.

The Company operates through the following divisional companies:

1. ValiPharma is the therapeutics division, with two embedded technologies primarily directed at the treatment of cancers.

2. ValiFinn is the biomarkers and diagnostic development division.  ValiRx acquired through its ValiFinn subsidiary, the complimentary TRAC technology to strengthen the portfolio.

3. ValiSeek is a joint venture between ValiRx and Tangent Ltd to develop Val401 in lung cancer and potentially other indications.

CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

I am pleased to report that in the last 12 months we have seen continued progress across all areas of our business.

2015 proved to be a significant year for ValiRx both in terms of restructuring the capital of the company and technical advancements made with both our therapeutic compounds, VAL201 and VAL401.  We also saw development in our Finnish subsidiary, ValiFinn, which includes TRAC and our biomarker technologies.

We have taken a number of steps forward in the development of VAL201 in terms of its Phase I/II Clinical Trial and we have also completed the final preparatory pre-clinical work for VAL401, which now means that this drug candidate is about to enter a pivotal Phase IIb efficacy trial.

Our Finland-based operation continues to generate interest among Clinical Research Organisations ("CRO"s) regarding our unique TRAC gene expression analysis platform technology, which we acquired in February 2015.   We have seen positive enhancements of our own biomarker development programme, with new European, Japanese and US patents being secured during the period.

ValiRx attended the 2015 BIO International convention in Philadelphia, USA, which took place in June 2015 alongside many other leading UK biotechnology and biopharma businesses.  This invitation to participate in the 'Market Visit', organized by the Mayor of London's Export Programme, was very welcome recognition and an endorsement of the potential inherent in the Company's product portfolio to answer unmet needs in the treatment of cancer.  Furthermore, the visit enabled us to interface with larger US biotech companies and investors and on the back of an encouraging response from them, we have established a presence in the US with the opening in November 2015 of a ValiRx office in Cambridge, Boston, Massachusetts.  Recently, we engaged a leading US investor relations firm to further discussions with potential partners and these are continuing.

Our financial results show revenues for the year at £82,603 (2014: £87,558) with net operating expenses falling by 4% to £3,034,139 (2014: £3,164,664) after receipts of £203,391 (2014: £210,802) of grants towards R&D. The net loss for the year decreased to £2,118,335 (2014: £3,160,031) resulting in a reduced loss per share (basic and diluted) of 6.66p (2014: 13.48p).  As at 31 December 2015, the Group had cash and cash equivalents of £232,465  (2014: £452,824); however,  since the period end, our cash position has increased  following  a further raising of equity and debt finance, which we believe positions the Group well to reach its goals across all areas in 2016.

Looking to the future, I believe the company is making encouraging progress towards achieving a number of its goals.  The expansion of the VAL201 trial into a multi-centre study in prostate cancer and other solid tumours, is underway and this expansion will expedite the production of data within a shorter timeframe.  We are poised to enter VAL401 into the clinical trial process and anticipate the availability of data from this pivotal Phase IIb efficacy trial.  The opportunity for developing and exploiting the compound VAL201 for a further indication in the treatment of endometriosis or hormone induced abnormal cell growth in women, via partnering and collaboration, is similarly fast approaching and the necessary preparatory steps are underway.

Finally and in the months ahead, we will seek to exploit value from our portfolio of technological assets, whilst looking to further build on and strengthen the Group's balance sheet.

Oliver de Giorgio-Miller

Non-Exec Chairman

19 May 2016

CHIEF EXECUTIVE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2015

In what has been a pivotal period of momentum for the Group, ValiRx's lead compound VAL201, has performed exceptionally in clinical trials, demonstrating safety, tolerability and early signs of potential efficacy against prostate cancer.  Our other re-profiled and reformulated therapeutic drug, VAL401, has been prepared and is poised to enter the clinic and our diagnostic technologies are conducting various pilot studies in order to grow their revenue streams.

VAL201

The Phase l/ll Clinical Trial of VAL201 and its application in subjects with hormone resistant prostate cancer has confirmed that the compound is well tolerated up to a putative therapeutic dose and that it has shown a high degree of safety, with no drug related significant adverse events being reported.  Indeed we were delighted that the readout from the first part of the trial - from first in human dosing through to a therapeutically meaningful dose - showed such 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, both in vivo and in vitro, which completed prior to the early Human phase of development in which efficacy was shown.

VAL201 selectively prevents tumour growth by specifically inhibiting the proliferation of tumour cells. As a result, tumour growth is suppressed and metastasis is significantly reduced.  The approach is a targeted therapeutic with pre-clinical results that indicate that due to the specific nature of this treatment, this therapy was likely to be less toxic than many other therapeutic options, a result borne out by the early clinical data. The VAL201 target is also associated with other cancers and there is significant potential for VAL201 to be used as a treatment for other hormone-induced cancers, such as breast and ovarian and also endometriosis.

Additional Clinical Trial Centres

Our desire to open additional Clinical Trial Centres has been stated in previous updates.  These centres will be integrated into the study to assist with the dose expansion stage of the trial, in which strengthening of the dosing, safety and tolerability data will continue while further aspects of VAL201 anti-tumour activity are investigated. The additional capacity this trial-centre expansion represents will help ensure trial completion according to the expected timetable.  Currently, further cohorts of subjects are being recruited as the dose elevation phase completes.

Endometriosis

The VAL201 clinical trial protocol also permits investigation of other solid hormone resistant tumour types.  In the light of the excellent results shown by the compound with respect to tolerability and safety and with promising pre-clinical evidence of the compound's efficacy with respect to the treatment of the non-cancerous condition of endometriosis, we have started the design of the protocol to test VAL201 for its clinical potential in the treatment of the debilitating female condition, Endometriosis.  Our preclinical results are good and encouraging and we anticipate this to be an important development of the compound's therapeutic use.

Endometriosis is a gynaecological medical condition in which cells from the lining of the uterus (endometrium) appear and flourish outside the uterine cavity (lined by endometrial cells), which are under the influence of female hormones. These endometrial-like cells in areas outside the uterus (endometriosis) are influenced by hormonal changes and respond in a way that is similar to the cells found inside the uterus and symptoms often worsen with the menstrual cycle. The treatments chosen will depend on symptoms, age, and lifestyle plans. VAL201 has been shown to reduce abnormal endometrial growth, whilst leaving other hormone-induced activities working normally.  ValiRx's initial in-vitro results show a reduction in endometrial lesion size directly related to dose and two generations of offspring produced by treated animals.  This strongly suggests that the peptide does not affect fertility the same way most other treatments do.

VAL401

The Company's Clinical Efficacy trials of the novel cancer treatment drug, VAL401, for the treatment of lung cancer and other oncology indications, is in the late to final stages of preparation.  The trial, namely  (VAL401-001: "A Phase II study to assess the efficacy, safety and tolerability of VAL401 in the treatment of patients with locally advanced or metastatic Non-Small Cell Lung Cancer (NSCLC) after failure of at least one prior chemotherapeutic regimen") has been registered with the European Union Drug Regulating Authorities Clinical Trials Database (EudraCT).

VAL401 is the reformulation of a generic drug that has over 20 years of clinical use for treatment of chronic non-oncology conditions. The re-formulation allows the drug to access previously unexploited anti-cancer activity. VAL401 is progressing satisfactorily through its remaining preclinical development and towards clinical Phase II trials for the treatment of lung cancer and other oncology indications. Progress into clinical trials will comprise a shorter than usual route to Market Authorisation by use of prior clinical data gathered on the original generic drug. Preclinical efficacy data has been collected in both non-small cell lung, prostate and pancreatic cancers. Preclinical toxicology has revealed no side effects beyond those expected from the parent drug, with preclinical pharmacokinetic data allowing bridging from VAL401 to the historical full clinical data package on the parent drug. Formulation stability tests are currently underway to complete the CMC package.

TRAC

In February 2015, ValiRx acquired the Finnish gene expression and biomarker technology 'Transcript Analysis with the Aid of Affinity Capture' ("TRAC") for use by its wholly owned biomarker unit, ValiRx Finland Oy (ValiFinn"), based in Oulu, Finland.  This TRAC technology has already strengthened ValiFinn's biomarker development and service offering, by providing a high-content gene expression analysis platform, which will support ValiRx's development of oncology biomarkers and will support the Group's development of its oncology drug pipeline.  TRAC is actively marketing itself to third parties growing its revenue stream.

Furthermore regarding ValiRx's proprietary 'gene-silencing' GeneICE technology (or "Gene inactivation by chromatin engineering"), the Board believes there are further synergies and advantages to be gained through GeneICE's access to and pairing with TRAC's gene expression analysis technology.  Since GeneICE down regulates "rebellious Genes", TRAC can be used as a fast method to test GeneICE expression biomarkers and is well placed to select future GeneICE therapeutic targets.

GeneICE

Activities are continuing within the GeneICE Eurostars pre-clinical programme.

GeneICE "rebellious gene" technology continues to show good progress in the pre-clinical phase - the programme currently benefits from a second Eurostars grant for up to €1.6 million.

Rebellious genes are genes that are overexpressed when they should not be or are erroneously expressed, e.g. in cancers, inflammatory conditions, Alzheimer's and autoimmune diseases. ValiRx's proprietary GeneICE technology enables the selective silencing of specific genes by targeted histone deacetylation leading to chromatin condensation. This prevents access and silences gene expression. In nature histone deacetylation of a particular gene is brought about by recruitment of a histone deacetylase complex (HDAC) to the gene. GeneICE constructs mimic this natural mechanism by delivery to the nucleus of a dual-module construct comprising: The binding of GeneICE construct to its target gene leads to deacetylation of the histones associated with the gene, localised chromatin condensation and gene silencing.

Outlook

In conclusion, the period under review has been pleasingly satisfactory and our teams around the VAL201 and VAL401 compounds have started talking to parties for late stage clinical studies and for potential partnerships and collaboration with pharmaceutical partners.

ValiRx continues to look to expand its Intellectual Property ("IP") as its development programmes go forward and it remains open to technology acquisition opportunities and ways in which it can both deliver and grow shareholder value.

Dr Satu Vainikka

Chief Executive Officer

19 May 2016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
	2015	2014
	£	£
Revenue	82,603	87,558
Cost of sales	(77,875)	(61,025)
Gross profit	4,728	26,533
Research and development	(1,543,441)	(1,772,338)
Administrative expenses	(1,694,089)	(1,603,128)
Other operating income	203,391	210,802
Operating loss	(3,029,411)	(3,138,131)
Fair value profit/(loss) on derivative financial assets	463,023	(72,202)
Finance income	1,074	8,023
Loss on disposal of financial assets	-	(437,493)
Finance costs	(1,793)	(1,532)
Loss on ordinary activities before taxation	(2,567,107)	(3,641,335)
Income tax expense	391,202	396,864
Loss on ordinary activities after taxation	(2,175,905)	(3,244,471)
Non-controlling interest	57,570	84,440
Loss for the year and total comprehensive income	(2,118,335)	(3,160,031)
Loss per share from continuing operations	(6.66)p	(13.48)p

There are no recognised gains and losses other than those passing through the Consolidated Statement of Comprehensive Income.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
	Share capital	Share premium	Merger reserve	Reverse acquisition reserve	Share option reserve	Non controlling interests	Retained earnings	Total
	£	£	£	£	£	£	£	£
Balance at 1 January 2014	6,359,357	5,925,231	637,500	602,413	73,852	-	(10,367,941)	3,230,412
Changes in equity for 2014
Loss for the year	-	-	-	-	-	(84,440)	(3,160,031)	(3,244,471)
On acquisition of subsidiary	-	-	-	-	-	110,814	-	110,814
Issue of shares	922,449	2,069,701	-	-	-	-	-	2,992,150
Costs in respect of shares issued	-	(390,200)	-	-	-	-	-	(390,200)
Movement in the year	-	-	-	-	89,324	-	-	89,324
Transfer between share option reserve and retained earnings	-	-	-		(9,032)	-	9,032	-
Balance at 31 December 2014	7,281,806	7,604,732	637,500	602,413	154,144	26,374	(13,518,940)	2,788,029
Changes in equity in 2015
Loss for the year	-	-	-	-	-	(57,570)	(2,118,335)	(2,175,905)
On acquisition of subsidiary	-	-	-	-	-	110,265	-	110,265
Issue of shares	838,930	3,291,070	-	-	-	-	-	4,130,000
Costs in respect of shares issued	-	(368,940)	-	-	-	-	-	(368,940)
Movement in the year	-	-	-	-	49,375	-	-	49,375
Balance at 31 December 2015	8,120,736	10,526,862	637,500	602,413	203,519	79,069	(15,637,275)	4,532,824

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 STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
		2015		2014
ASSETS	£	£	£	£
Non-current assets
Intangible assets		2,673,363		2,380,021
Property, plant and equipment		22,177		1,507
		2,695,540		2,381,528
Current assets
Inventories	43,950		11,150
Trade and other receivables	686,394		777,602
Derivative financial assets	1,463,023		-
Cash and cash equivalents	232,465		452,824
	2,425,832		1,241,576
LIABILITIES
Current liabilities
Trade and other payables	(588,548)		(835,075)
Net current assets		1,837,284		406,501
Net assets		4,532,824		2,788,029
SHAREHOLDERS' EQUITY
Called up share capital		8,120,736		7,281,806
Share premium		10,526,862		7,604,732
Merger reserve		637,500		637,500
Reverse acquisition reserve		602,413		602,413
Share option reserve		203,519		154,144
Profit and loss account		(15,637,275)		(13,518,940)
Total shareholders' equity		4,453,755		2,761,655
Non-controlling interests		79,069		26,374
Total equity		4,532,824		2,788,029

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2015
		2015		2014
	£	£	£	£
Net cash outflow from operating activities		(2,977,116)		(3,316,712)
Returns on investments and servicing of finance
Interest received	1,074		8,023
Interest paid	(1,793)		(1,532)
Net cash (outflow)/inflow for returns on investments and servicing of finance		(719)		6,491
Taxation		387,747		309,541
Capital expenditure and financial investment
Payments to acquire intangible assets	(389,926)		(273,846)
Payments to acquire tangible assets	(31,670)		(1,408)
Receipts from sales of investments	-		330,830
Net cash (outflow)/inflow for capital expenditure		(421,596)		55,576
Acquisitions and disposals
Non-controlling interest	110,265		63
Net cash inflow for acquisitions and disposals		110,265		63
Financing
Issue of ordinary share capital	3,050,000		2,900,000
Cost of share issue	(368,940)		(390,200)
Cost of derivative financial asset	-		(1,500,000)
Proceeds received from issue of derivative financial asset	-		1,427,798
Net cash inflow from financing		2,681,060		2,437,598
Decrease in cash in the year		(220,359)		(507,443)
Cash and cash equivalents at beginning of period		452,824		960,267
Cash and cash equivalents at end of period		232,465		452,824
Reconciliation of operating loss to net cash outflow from operating activities
			2015	2014
			£	£
Operating loss			(3,029,411)	(3,138,131)
Depreciation of tangible assets			10,906	517
Amortisation of intangible assets			91,831	90,697
Increase in stocks			(32,800)	(7,072)
Decrease/(increase) in debtors			94,663	(199,884)
Decrease in creditors within one year			(166,527)	(158,873)
Other non-cash movements			4,847	6,710
Share option charge			49,375	89,324
Net cash outflow from operating activities			(2,977,116)	(3,316,712)
Cash and cash equivalents		1 January 2015	Cash flow	31 December 2015
		£	£	£
Net cash:
Cash at bank and in hand		452,824	(220,359)	232,465

1.      Basis of preparation

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2015, but is derived from those accounts. Statutory accounts for 2015 will be delivered to the Registrar of Companies following the Company's annual general meeting.

2.      Loss per ordinary share

The earnings and number of shares used in the calculation of loss per ordinary share are set out below:

Basic:	2015	2014
	£	£
Loss for the financial period	(2,118,335)	(3,160,031)
Weighted average number of shares	31,789,529	23,434,303
Loss per share	(6.66)p	(13.48)p

There was no dilutive effect from the share options outstanding during the year.

3.      Publication of Report & Accounts

The report and accounts for the year ended 31 December 2015 will be posted to shareholders shortly and will be available from the Company's website, www.valirx.com

 

END

 

 

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