Final Results

14 July 2010 GB00B39J5N63 Scancell Holdings Plc (`Scancell Holdings' or the `Company') Final Results for the year ended 30 April 2010 Scancell Holdings plc, (PLUS:SCLP), the developer of therapeutic cancer vaccines, announces its final results for the year ended 30 April 2010. Highlights: * Strong progress in the development of the Company's lead therapeutic melanoma vaccine SCIB1 * Successful fundraising of Â£2.54 million (gross) during 2010 * Loss before tax for the year of Â£1.80 million (2009: Â£0.8 million) * Cash at year end of Â£2.83 million * Since the year end the Company commenced Phase I/IIa clinical trials in humans for SCIB1 A copy of this announcement is available for download on the Company's website at http://www.scancell.co.uk/ The Directors of the issuer accept responsibility for this announcement. For further information contact: Professor Lindy Durrant Scancell Holdings Plc + 44 (0)207 245 1100 John Bick/Kirsty Corcoran Hansard Communications + 44 (0)207 245 1100 Ross Andrews/Tom Rowley Zeus Capital + 44 (0)161 831 1512 CHAIRMAN'S STATEMENT I am pleased to report on the progress of Scancell Holdings plc for the year ended 30 April 2010. Background and overview Scancell is a biopharmaceutical company focused on the cancer therapeutics market and is developing a pipeline of DNA vaccines for the treatment of cancer, based on its patented ImmunoBodyÂ® platform, which has the potential to overcome many of the limitations of conventional approaches to the development of cancer vaccines. Fund raising As previously announced, the Company has, during 2010, raised Â£2.54 million, before expenses, through the completion of an underwritten Open Offer and the placing of new Ordinary Shares to fund the working capital requirements of the Company. Financial results The financial statements have been prepared under International Financial Reporting Standards (`IFRS') which have necessitated a change in policy for accounting for a subsidiary. Previously the Group has reported its results using merger accounting however this is not permitted under IFRS and the prior period results and statement of financial position have been restated. The effects of this change in policy are detailed in the financial statements. The Group made an overall financial loss for the year of Â£1,737,129 (2009: restated loss: Â£785,732) reflecting the increased costs of the Group's development programme set out below. These costs were partially offset by receipt of the last tranche of EMDA grant of Â£37,500 (2009: Â£212,500) Interest receivable amounted to Â£2,427 (2009: Â£57,282). As noted above, the balance sheet has been restated so that the acquisition of Scancell Limited by Scancell Holdings plc has been accounted for using acquisition accounting. This has resulted in a goodwill figure of Â£3,415,120 arising on consolidation. At the end of the year, the Group's cash balances amounted to Â£2,830,145 (2009: Â£1,519,070). The increase in cash reflects the fund raising that took place in the year less the losses that have been incurred. Development The Group's lead therapeutic melanoma vaccine is SCIB1. The Group also intends to license its ImmunoBodyÂ® technology on a target by target basis to companies working in the protein and DNA vaccine field. Although the Group does not intend to venture outside the oncology arena itself, it intends to license its ImmunoBodyÂ® technology to companies working in other therapeutic areas. Scancell signed an agreement with Ichor Medical Systems ('Ichor') in July 2009, to use Ichor's TriGrid â„¢ electroporation device for the delivery of SCIB1 during Scancell's pre-clinical and clinical studies of SCIB1. 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 is confident that TriGridâ„¢ will provide the most effective delivery system for its SCIB1 melanoma vaccine as it enters clinical trials. During the year, SCIB1 has been successfully manufactured to GMP standards. The yield was excellent and over 1,200 vials have now been filled and stored for the clinical trial. SCIB1 has also completed its pre-clinical toxicology tests. There was no toxicity apart from treatment-related local effects at the injection site; a result of the administration and/ electroporation procedure. But these effects were of only minimal to moderate severity, and were almost completely resolved within four weeks. Good high avidity T cell responses were observed. In November 2009, Scancell was pleased to announce the appointment of a world-leading oncology CRO, PharmaNet Development Group (PharmaNet), to run its SCIB1 clinical trials. The Company has also appointed Oxford Immunotec to monitor T cell avidity in the SCIB1 trial. In April 2010, the proposal to conduct a Phase I clinical trial on SCIB1, was approved by the Gene Therapy Advisory Committee (`GTAC') and by the Medicines and Healthcare products Regulatory Agency (`MHRA') Medicines Division. In addition, Scancell's partner Ichor Medical Systems (`Ichor') has obtained the required parallel approval from the MHRA Devices Division for the use of Ichor's TriGridâ„¢ electroporation delivery device to administer SCIB1 to patients participating in the trial of SCIB1. A Phase I/IIa clinical trial of Scancell's SCIB1 vaccine in advanced melanoma patients commenced in June 2010 and is expected to be completed in 2012. The trials are based at three leading UK hospital centres in Nottingham, Manchester and Newcastle. The first patient was treated with the vaccine on 10 June 2010. Preliminary immune response and safety data from Part 1 of the study is expected to be available in 2011. Part 2 of the study, which will be conducted in less severely ill patients, is expected to generate further immune response data which, if positive, would provide clinical validation for both SCIB1 and the entire ImmunoBodyÂ® Platform. The Directors believe that a positive outcome would enable the Group to position itself for a trade sale to one of the leading pharmaceutical or biotechnology companies operating in the oncology market. The Directors also intend to license the Group's ImmunoBodyÂ® technology on a target by target basis to companies working in the protein and DNA vaccine field. The manipulation and enhancement of patients' immune systems is also relevant to the treatment of other diseases such as chronic infectious disease and inflammation. Although Scancell does not intend to venture outside the oncology arena itself, it intends to license its ImmunoBodyÂ® technology to companies working in other therapeutic areas. 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. 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 ImmunoBodyÂ® vaccines for the treatment of melanoma in humans incorporating epitopes from these targets. Since the year end the company has entered into a research collaboration agreement with immatics biotechnologies GmbH ("immatics") to explore the development of novel ImmunoBodyÂ® vaccines for colorectal cancer. In this research collaboration with immatics, colorectal cancer-specific TUMAPs will be incorporated into Scancell's ImmunoBodyÂ® platform to create ImmunoBodyÂ® vaccines targeted towards colorectal cancer. If the research project is successful, immatics and Scancell will explore the further development of any product candidates. Outlook Following the successful fund raising in March 2010 the Directors believe that the existing funds held by or available to the Company, together with anticipated future revenues, will be sufficient to allow completion of the Phase I/IIa clinical trial and, if there is a positive outcome, this would demonstrate clinical proof of principle for SCIB1. In addition the Company is planning to design and test its second ImmunoBodyÂ® product, SCIB2, to the animal proof of principle stage. The Directors believe that data from these studies, if positive, would significantly enhance the value of the business and create a company with both products in the clinic and the potential for generating a pipeline of new products - an excellent profile for a drug discovery business. The Directors also believe that a positive outcome would enable to the Company to position itself for a trade sale to one of the leading pharmaceutical or biotechnology companies operating in the oncology market. The Ordinary Shares of the Company were originally admitted to trading on PLUS in September 2008. However, now that the Company has further strengthened its financial position and progressed the development of SCIB1, the Directors believe that it would be in the best interests of the Company and its shareholders for the Ordinary Shares to be admitted to trading on the AIM market of the London Stock Exchange. The Directors believe that this represents a natural transition for the Company and that the potential benefits of an AIM listing will include an increased public profile for the Company. An announcement explaining the admission process will be made today and an AIM Admission Document will be sent to Shareholders shortly. The continued support of our investors is much appreciated. The Board also recognises that the progress made over this period would not have been possible without the dedication and determination of all our staff and, on behalf of the Board, I offer our warmest thanks to them. David Evans Chairman CONSOLIDATED INCOME STATEMENT 2010 2009 Â£ Â£ REVENUE - - Cost of sales (1,091,351) (676,039) -------------------------- -------------------------- Gross loss (1,091,351) (676,039) Administrative expenses (751,365) (427,764) -------------------------- -------------------------- (1,842,716) (1,103,803) Other operating income 37,650 212,631 -------------------------- -------------------------- OPERATING (LOSS) (1,805,066) (891,172) Interest receivable and similar 2,427 57,282 income -------------------------- -------------------------- (LOSS) BEFORE TAXATION (1,802,639) (833,890) Taxation 65,510 48,158 -------------------------- -------------------------- (LOSS) AFTER TAXATION (1,737,129) (785,732) ================= ================= EARNINGS PER ORDINARY SHARE (pence) Basic (16.2)p (9.4)p Diluted (16.2)p (9.4)p CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2010 2009 Â£ Â£ ASSETS Non-current assets Plant and machinery 131,763 82,265 Goodwill 3,415,120 3,415,120 -------------------------- -------------------------- 3,546,883 3,497,385 -------------------------- -------------------------- Current assets Trade and other receivables 122,636 404,590 Cash and cash equivalents 2,830,145 1,519,070 -------------------------- -------------------------- 2,952,781 1,923,660 -------------------------- -------------------------- TOTAL ASSETS 6,499,664 5,421,045 -------------------------- -------------------------- LIABILITIES Current Liabilities Trade and other payables (451,787) (166,731) -------------------------- -------------------------- TOTAL LIABILITIES (451,787) (166,731) -------------------------- -------------------------- NET (LIABILITIES)/ASSETS 6,047,877 5,254,314 ================= ================= SHAREHOLDERS' EQUITY Called up share capital 158,733 102,756 Share premium 8,321,808 5,911,105 Profit and loss account (2,432,664) (759,547) -------------------------- -------------------------- TOTAL SHAREHOLDERS' EQUITY 6,047,877 5,254,314 ================= ================= CONSOLIDATED CASH FLOW STATEMENT 2010 2009 Â£ Â£ Net cash outflow from operating activities (1,504,392) (1,097,893) Returns on investment and servicing of finance 2,427 57,282 Taxation 190,376 38,962 Capital expenditure (72,148) (23,383) Acquisitions - 879,570 __________ __________ (1,383,737) (145,462) Financing 2,694,812 1,664,532 __________ _________ Increase/(Decrease) in cash in the period 1,311,075 1,519,070 ========= ======== Reconciliation of net cash flow to movement in net funds Increase/(Decrease) in cash in the period 1,311,075 1,519,070 ________ ________ Change in net funds resulting from cashflows 1,311,075 1,519,070 ________ ________ Movement in net funds in the year 1,311,075 1,519,070 Net funds at 1 May 1,519,070 - ________ ________ Net funds at 30 April 2,830,145 1,519,070 ======= ======= NOTES 1 BASIS OF PREPARATION AND GOING CONCERN The financial statements have 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. In preparing the underlying financial information the Directors have applied certain first time adoption provisions allowed by IFRS 1. These standards remain subject to ongoing amendment and / or interpretation and are therefore still subject to change. Accordingly information contained in the financial statements may need updating for subsequent amendments to IFRS required for first time adoption or for new standards issued post balance sheet date. The Company has established IFRS accounting policies for the year ended 30 April 2010 and applied these policies and the opening balance sheet at its date of transition being 1st May 2008. The transition to IFRS has not affected the company's cash flows. The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies. The notes to the financial statements set out areas involving a higher degree of judgement or complexity, or areas where assumptions are significant to the financial statements such as intangible assets. Although these estimates are based upon management's best knowledge of the amount event or actions, actual results may ultimately differ from those estimates. The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. 2 OTHER OPERATING INCOME 2010 2009 Â£ Â£ Sundry receipts 150 131 Government Grants 37,500 212,500 ------------------ ------------------ 37,650 212,631 ------------------ ------------------ 3 OPERATING LOSS 2010 2009 Â£ Â£ Operating profit is stated after charging/(crediting): Depreciation on tangible fixed assets 22,649 27,770 Operating lease rentals 14,056 14,056 Research and development 1,091,351 676,039 Auditors' remuneration - fee payable for audit of the 6,000 6,000 company Auditors' remuneration - fee payable for audit of the 6,000 6,000 subsidiary company Directors' remuneration 49,347 37,725 ========== ========== 4 TAXATION Analysis of the tax credit The tax credit on the loss on ordinary activities for 2010 Restated the year was as follows: 2009 Current tax Â£ Â£ UK corporation tax Corporation tax provision (65,510) (48,158) ========== ========== 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: 2010 2009 Â£ Â£ (Loss) on ordinary activities before tax (1,802,639) (833,890) ========== ========== Profit on ordinary activities multiplied by the (378,554) (175,117) standard rate of tax in the UK (21%) Effects of: Disallowed expenditure 52 79 Timing differences (11,960) (3,473) Research and development tax refund (65,510) (48,158) Unrelieved trading losses carried forward 390,462 178,511 Current tax credit (65,510) (48,158) ========== ========== The company has tax losses to carry forward against future profits of approximately Â£4,360,000 (2009: Â£2,700,000) A deferred tax asset has not been recognised in respect of these losses as the subsidiary company 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 Â£915,600 (2009: Â£567,000). 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: 2010 2009 Â£'000 Â£'000 (Loss) for the year after taxation (1,737,129) (785,732) _______ _______ No. No. Basic weighted average of ordinary shares of 1p 10,733,335 8,334,283 each _______ _______ Basic earnings (pence per share) (16.2)p (9.4)p _______ _______ Fully diluted earnings (pence per share) (16.2)p (9.4)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 2009 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 shortly. 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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