Final Results

RNS Number : 5426O

Scancell Holdings Plc

12 October 2012

 



12 October 2012                                                                                                       

Scancell Holdings Plc

Final Results for the year ended 30 April 2012

Scancell Holdings plc, ('Scancell' or the 'Company') the developer of therapeutic cancer vaccines, announces results for the year ended 30 April 2012.

Highlights during the period:

·      In July 2011, Scancell raised £1.58 million, net of expenses, by way of a placing of new shares

·         New lung cancer vaccine, SCIB2 - latest anti-tumour results in animal models provide further validation of ImmunoBody® vaccine technology platform and its commercial potential

·      In November 2011, received milestone payment from Arana Therapeutics of £2.49 million net of costs

·      Completion of recruitment to Phase 1 of the clinical trial for SCIB1 in April 2012

·      Profit for the year of £557,058 (2011:loss £1,649,225)

·      Cash at year end £3,529,007 (2011: £1,110,630)

Post period highlights:

·              On 15 August, 2012 Scancell announced the development of a new platform technology, ModitopeÔ, that stimulates the production of killer CD4 T cells with powerful anti-tumour activity.

For Further Information: Scancell Holdings Plc  Dr Richard Goodfellow, Joint CEO  Professor Lindy Durrant, Joint CEO		+ 44 (0) 74 2323 0 497
Visible Value LLP: Annie Cheng, CFA		+ 44 (0) 74 2323 0497  [e-mail]
Cenkos Securities:		[phone]

Camilla Hume Stephen Keys

Chairman's Statement

I am pleased to report on the company's results for the year ended 30^th April 2012.

Steady progress has been made with Scancell's vaccine, SCIB1; recruitment to Phase 1 of the clinical trial was completed in April 2012 and Phase 2 is on schedule to be completed by the end of 2013 assuming recruitment continues at the current pace with 9 of the planned 13 patients recruited since May 2012 and additional patients being screened.

On 15 August, 2012 Scancell announced the development of a new platform technology, ModitopeÔ, that stimulates the production of killer CD4 T cells with  powerful anti-tumour activity.  The Directors believe that this new discovery could have a profound effect on the way that cancer vaccines are developed.

During the financial year Scancell raised £1.58 million, net of expenses, by way of a placing of new shares. In addition the Company received revenues of £2.85 million (before deduction of any related tax or other costs) in respect of the second tranche payment from the sale of Scancell's antibody portfolio to Arana Therapeutics in 2006.

The ImmunoBody® Technology Platform

 Scancell's mission is to develop medications that fight cancer by spurring the body's immune system. This is a form of treatment that many cancer specialists believe may hold the key to keeping a patient permanently disease-free.  Unlike traditional therapies that attack a cancer directly, immunotherapy uses the body's own internal defences to ward off the disease, with the ultimate hope of building up long term resistance to the cancer.

 Scancell's ImmunoBody® vaccines generate potent killer T-cells that target and eliminate tumours. Each ImmunoBodyÒ vaccine can be designed to target a particular cancer in a highly specific manner, offering the potential for enhanced efficacy and safety compared with more conventional approaches.

 The manipulation and enhancement of human immune systems is also relevant to the treatment of other diseases such as chronic infectious disease.  Although Scancell does not intend to venture outside the oncology arena itself, the Company intends to license ImmunoBody® to companies working in other therapeutic areas.

 SCIB1 melanoma vaccine

Scancell is conducting clinical trials of SCIB1, its DNA ImmunoBody® vaccine being developed for the treatment of melanoma. The clinical trial of SCIB1 is being conducted at five leading UK hospital centres in Nottingham, Manchester, Newcastle, Leeds and Southampton.

Phase 1 Clinical Trial

 The Phase 1 Clinical Trial commenced in June 2010 and is designed to evaluate the safety and tolerability of SCIB1 (Scancell's DNA Immunobody® vaccine being developed for the treatment of melanoma) in patients with late stage melanoma and also to gather data on the effects of SCIB1 on tumour growth and cellular immune response.

 In April 2012 Scancell completed the recruitment to the Phase 1 clinical trial of SCIB1. The Company expects to be able to announce preliminary results from Phase 1 before the end of the calendar year.

Phase 2 Clinical Trial

Scancell obtained approval from the Cohort Review Committee to commence the Phase 2 study using the 4mg dose, the highest dose used in the Phase 1 part of the study. The approval is based upon safety data collected after all patients have been treated for 6 weeks. Recruitment and treatment of the first patient in the second part of  its Phase 1/2 clinical trial of SCIB1 commenced in May 2012. The Phase 2 part of the trial is being conducted in the five UK hospital centres in thirteen patients with Stage III/IV disease to further assess the safety of treatment and to assess the cellular immune response induced by SCIB1. Patients will be treated with a 4mg dose of SCIB1 on five occasions over a period of 6 months. The study is recruiting well with 9 patients entered and additional patients being screened. The study is on schedule to be completed by the end of 2013.  

In June 2012 the Gene Therapy Advisory Committee ('GTAC') and the Medicines and Healthcare products Regulatory Agency ('MHRA') Medicines Division gave their approval to increase the maximum treatment period from 6 months up to a further 5 years in its Phase 1/2 clinical trial of SCIB1. The continuation option will be available for patients with stable disease. Approval was also granted to further broaden the study inclusion criteria. 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 TriGrid™ electroporation delivery device to administer SCIB1 for this extended period. This approval from GTAC and MHRA provides Scancell with the opportunity to continue dosing patients whose disease has not progressed whilst receiving the SCIB1 vaccine and will allow the gathering of longer term data on late stage melanoma patients for whom the prognosis is poor.

Patents Awarded

 In a further important step in the development and commercialisation of SCIB1, Scancell has been granted a composition of matter patent in Europe for SCIB1.  This patent will protect the unique composition of the vaccine until March 2028. The Company has also had its protein ImmunoBody® vaccine patent approved in the United States. These patents will further strengthen Scancell's IP position around its proprietary ImmunoBody® vaccine platform

 SCIB2 

 On 30^th June 2011 Scancell announced that a treatment utilising a DNA vaccine based on its Immunobody® technology, in combination with Homspera®, an adjuvant developed by ImmuneRegen Biosciences Inc, has produced encouraging anti-tumour responses in animal models.

This vaccine, known as SCIB2, stimulates immune responses to the lung cancer antigen NY-ESO-1 and may also have potential utility in oesophageal, liver, gastric, prostate, ovarian and bladder cancers.

Further progress on SCIB2 has now been made. A modified version of the SCIB2 vaccine has now been developed which induces both a powerful immune response and anti-tumour effects without HomsperaÒ confirming that SCIB2 has the potential to be used, like SCIB1, without the need for an adjuvant.

SCIB2 is now ready for further development. Given the limited resources currently available to the Company, the Directors expect that this work will be undertaken by a licensing partner. The SCIB2 data provides further evidence that the ImmunobodyÒ vaccine platform has the ability to augment the immune responses necessary to destroy cancer.

The ModitopeÔ Technology Platform

 On 15 August 2012, the Company announced the development of a new platform technology, ModitopeÔ, that stimulates the production of killer CD4 T cells with powerful anti-tumour activity.  CD4 responses to cancer associated antigens have been notoriously difficult to generate whether presented as peptides, proteins or DNA. CD4 cells are vital for effective anti-tumour immunity.  Scancell has identified and patented a series of modified epitopes that overcome this limitation. Scancell's ModitopeÔtechnology produces killer CD4 T cells that destroy tumours without toxicity. The Directors believe that this new discovery could have a profound effect on the way that cancer vaccines are developed.

Financial

 Profit and Loss

As a result of the net income of £2,487,122 from the sale of the antibody portfolio the Group made a profit for the year of £557,058 (2011: loss of £1,649,225). 

The increase in development costs in the year reflects the additional patient recruitment in the clinical trials and completion of milestones resulting in payments being made to the Clinical Research Organisation which runs the trials.

 The reduction in administrative expenses is largely as a result of the non-recurring professional expenses incurred in the prior year as the Group moved from PLUS to AIM. 

Balance Sheet

At the end of the year the Group cash balances amounted to £3,529,007 (2011: £1,110,630). The increased cash arose as a result of the placing of shares of £1.58m and the profit for the year of £557,058.

 The Group's net assets at 30^th April 2012 amounted to £6,971,337(2011: £4,635,742).

Subdivision of share capital and placing

 On 25^th July 2011 the shareholders of the Company approved resolutions for:

·      The proposed subdivision of each Existing Ordinary Share of 1p into 10 new Ordinary Shares of 0.1p each; and

·      A placing to raise £1.73 million, before costs, by means of the issue of 34,575,410 new Ordinary Shares at 5 pence per share to fund the working capital of the Company.

Following the approval of these resolutions the Company raised £1.58 million, net of costs

 Board of Directors

 Dr Richard Goodfellow was appointed Joint Chief Executive Officer on 30 June 2011 as the Board recognised that Dr Goodfellow's position had evolved into a separate leadership role from that held by Professor Lindy Durrant, including management of Scancell's commercial activities, investor and City liaison.

 On 18 August 2011, Scancell announced the appointment of Kate Cornish-Bowden as a non-executive director. Kate is a Chartered Financial Analyst and has extensive experience of corporate governance as an institutional investor. She is currently a non-executive director of Investec Structured Products Calculus VCT plc. I am confident that she will make an invaluable contribution to the Scancell Board going forward.

 Arana Therapeutics

On 1 December 2006, Scancell sold its portfolio of antibodies to Arana Therapeutics (then known as Peptech (UK) Limited and subsequently acquired by Cephalon, Inc, which itself is now owned by Teva Pharmaceutical Industries Limited). The consideration for the sale was a cash payment of £2 million, which was paid on completion of the sale, plus a possible further sum of £2.85 million gross which was payable when a milestone was achieved relating to the development of a drug derived from any of the antibodies which were the subject of the sale. On 16 November 2011, Scancell received payment of the further payment of £2.85 million from Cephalon Inc which, after the payment of bonuses and advisor costs, amounted to £2.49 million.

Outlook

 The broad utility and potential of the ImmunoBody® platform continues to be supported by new research. This was exemplified in June 2011 by the discovery of a new candidate vaccine (SCIB2) which has potential for the treatment of lung and other epithelial cancers. The Board is confident that the research undertaken by Professor Durrant and her team will lead to the discovery of further vaccine candidates for other indications. Any such discoveries will provide further confirmation that the ImmunoBody® platform can deliver multiple product candidates and underpin the value of the business as a product plus platform proposition.

 Phase 2 of the clinical trials for SCIB1 in melanoma commenced in May 2012 and is on schedule to be completed by the end of 2013. The Directors believe that a successful outcome, if achieved, would confirm the potential of SCIB1 as an exciting new cancer treatment as well as validating the Immunobody® platform technology, thereby presenting Scancell as an attractive acquisition opportunity.

 The discovery of the highly innovative ModitopeÔ platform opens up a new approach to the development of cancer vaccines. Whilst currently at an early stage, we are aware that the opportunities could be considerable in addition to Scancell's existing platform technology. As a result, the Board is actively evaluating its strategic options for this new technology platform and will be consulting with key shareholders in this regard.  We are excited by the potential and are resolute in our aim of creating the greatest value for shareholders. The Board will update the market in due course.

The Board is pleased with the Company's progress over the period, and would like to thank all those involved with Scancell for their dedication and support.

David Evans

Chairman

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 APRIL 2011		2012 £	2011 £ (restated)
Continuing operations
Development expenses		(1,221,339)	(848,629)

Administrative expenses		(740,132)	(885,120)
		------------------------------------------	------------------------------------------
OPERATING (LOSS)		(1,961,471)	(1,733,749)

Interest receivable and similar income		31,407	9,613
		------------------------------------------	------------------------------------------
(LOSS) BEFORE TAXATION		(1,930,064)	(1,724,136)

Taxation	4	-	(74,911)
		-------------------------------------------	-------------------------------------------
(LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS		(1,930,064)	(1,649,225)

Discontinued operations

PROFIT FOR THE YEAR FROM DISCONTINUED OPERATIONS                            2      2,487,122                              -

PROFIT/(LOSS) FOR THE YEAR                                                                                               557,058          (1,649,225)

EARNINGS PER ORDINARY SHARE (pence)                                         5

Continuing and discontinued operations

Basic                                                                                                                  0.30p           (10.4)p

Diluted                                                                                                                0.27p           (10.4)p

Continuing operations only

Basic                                                                                                                (1.04)p           (10.4)p    

Diluted                                                                                                              (1.04)p           (10.4)p    

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30^th APRIL 2012

Profit/(Loss) for the year                                                                                    557,058     (1,649,225)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Share	Share
	Share	premium	option	Retained	Total
	capital	account	reserve	earnings	Equity
	£	£	£	£	£
At 1st May 2010	158,733	8,321,808	-	(2,432,664)	6,047,877
Change in accounting
policy			90,197	(90,197)	-
Restated balances	158,733	8,321,808	90,197	(2,522,861)	6,047,877
(Loss) for the year				(1,649,225)	(1,649,225)
Share issue	785	47,215			48,000
Share option costs			189,090	-	189,090
At 30th April 2011	159,518	8,369,023	279,287	(4,172,086)	4,635,742
(restated)
At 1st May 2011 (restated)	159,518	8,369,023	279,287	(4,172,086)	4,635,742
Profit for the year				557,058	557,058
Share issue	34,952	1,535,710			1,570,662
Share option costs			207,875		207,875
At 30th April 2012	194,470	9,904,733	487,162	(3,615,028)	6,971,337

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 APRIL 2012

                                                                                                                         2012              2011

                                                                                                                         £                      £

ASSETS

Non-current assets
Plant and machinery		106,267	98,933
Goodwill		3,415,120	3,415,120
		------------------------------------------	------------------------------------------
		3,521,387	3,514,053
		------------------------------------------	------------------------------------------
Trade and other receivables		131,106		58,626
Tax receivables		74,220		74,220
Cash  and cash equivalents		3,529,007		1,110,630
		------------------------------------------		------------------------------------------
		3,734,333		1,243,476
		-----------------------------------------		-----------------------------------------
TOTAL ASSETS		7,255,720		4,757,529
		----------------------------------------		-----------------------------------------
LIABILITIES
Current Liabilities
Trade and other payables		(284,383)		(121,787)
		------------------------------------------		------------------------------------------
TOTAL LIABILITIES		(284,383)		(121,787)
		------------------------------------------		------------------------------------------
NET ASSETS		6,971,337		4,635,742
		==========================================		==========================================

SHAREHOLDERS EQUITY

Called up share capital		194,470	159,518
Share premium		9,904,733	8,369,023
Share option reserve		487,162	279,287
Profit and loss account		(3,615,028)	(4,172,086)
		------------------------------------------	------------------------------------------
TOTAL SHAREHOLDERS' EQUITY		6,971,337	4,635,742
		==========================================	==========================================

CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR

ENDED 30 APRIL 2012 

                                                                                                                         2012              2011

                                                                                                                              £                    £

Operating activities

Cash generated from operations                                                                      859,620    (1,842,221)

Income taxes received                                                                                               -         65,510

Net cash from operating activities                                                               859,620    (1,776,711)

Investing activities

Asset acquisition                                                                                           (43,312)              (419)

Finance income                                                                                               31,407             9,613      

Net cash used by investing activities                                                           (11,905)             9,194

Financing activities

Proceeds from issue of share capital                                                             1,752,771            48,000

Expenses of share issue                                                                                 (182,109)                    -                  

Net cash generated from financing activities                                            1,570,662            48,000

Net increase in cash and cash equivalents                                               2,418,377     (1,719,517)

Cash and cash equivalents at beginning of the year                               1,110,630       2,830,145

                                                                                                                 _______       ________

Cash and cash equivalents at end of the year                                          3,529,007       1,110,630

NOTES

1     BASIS OF PREPARATION

These financial results do not comprise statutory accounts for the year ended 30 April 2012 within the meaning of Section 434 of the Companies act 2006. The financial information in this announcement has been extracted from the audited financial statements for the year ended 30 April 2012.

The financial information has 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. 

The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards.

2      DISCONTINUED OPERATIONS

Under an agreement dated 1^st December 2006 the company sold its pre-clinical pipeline of cell killing monoclonal antibodies to Peptech (UK) Limited (now Cephalon Inc) for an initial consideration of £2,000,000 with a further amount of £2,850,000 payable if certain performance criteria are achieved.

These performance criteria were met during the year and the results of the discontinued activities are set out below.      

                                                                                                                  2012              2011      

                                                                                                                       £                    £

Profit for the year from discontinued activities:

Revenues                                                                                               2,850,000                  -

Cost of sales                                                                                             362,878                  -

Profit before tax                                                                                      2,487,122                  -

Attributable income tax expense                                                                           -                   -

Profit for the year from discontinued operations                                          2,487,122                  -

        Cashflows form discontinued activities:

        Net cash inflows from operating activities                                                 2,850,000                  -

        Net cash outflows from operating avtivities                                                  362,878                  -

        Net cash inflows from operating activities                                                 2,487,122                  -

3      OPERATING LOSS

	2012	2011
	£	£
Operating profit is stated after charging/(crediting):
Depreciation on tangible fixed assets	35,978	33,250
Operating lease rentals	14,056	14,056
Research and development	1,221,339	848,629
Auditors' remuneration - fee payable for audit of the company	6,250	6,000
Auditors' remuneration - fee payable for audit of the subsidiary company	6,250	6,000
Auditors' remuneration for non-audit services	2,850	-
Directors' remuneration	50,950	37,012
	============================	============================

4      TAXATION

The tax credit on the loss on ordinary activities for the year was as follows:	2012	2011
Current tax	£	£
UK corporation tax credits due on R&D expenditure	-	(74,220)
Adjustment to prior year	-	(691)
	_____________	_______________
	-	(74,911)
	==========================	==========================

 

        Factors affecting the tax charge

        The tax assessed for the years is lower than the applicable rate of corporation tax in the UK.  The difference is explained below:

	2012	2011
	£	£
Profit/(Loss)  on ordinary activities before tax	557,058	(1,724,136)
	========================================	========================================
Profit/(Loss) on ordinary activities multiplied by the standard rate of tax in the UK (20%)	111,412	(362,069)
Effects of:
Disallowed expenditure	42,217	79,408
Timing differences	(21,706)	2,983
Enhanced tax relief on R&D expenditure	(159,642)	(56,726)
Reduced tax relief for losses surrendered for R&D tax credits	-	37,110
Prior period refund	-	(691)
Unrelieved losses carried forward	27,719	225,074
	_____________________	_____________________
Current tax charge/(credit)	-	(74,911)
	========================================	========================================

               The Group has tax losses to carry forward against future profits of approximately £5,585,000 (2011: £5,100,000).

A deferred tax asset has not been recognised in respect of these losses as the Group 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 20% is £1,090,000 (2011: £1,071,000)

5      EARNINGS PER SHARE

Basic earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows:

		2012 £	2011 £
Earnings used in the calculation of basic earnings per share		557,058	(1,649,225)
Profit for the year from discontinued operations included in the calculation of basic earnings per share		(2,487,122)
Earnings used in calculation of basic earnings per share from continuing operations		(1,930,064)	(1,649,225)
Weighted average number of ordinary shares of 0.1p (2011) 1p each for the calculation of basic earnings per share		186,184,758	15,932,565

        Diluted earnings per share

        The earnings used in the calculation of diluted earnings per share are as follows:

		2012 £	2011 £
Earnings used in the calculation of basic earnings per share		557,058	(1,649,225)
Profit for the year from discontinued operations included in the calculation of basic earnings per share		(2,487,122)	-
Earnings used in calculation of diluted earnings per share from continuing operations		(1,930,064)	(1,649,225)

The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows.

Weighted average number of ordinary shares of 0.1p (2011) 1p each for the calculation of basic earnings per share		186,184,758	15,932,565
Shares deemed to be issued for no consideration in respect of share options		18,374,520	1,837,452
Weighted average number of ordinary shares of 0.1p (2011) 1p each for the calculation of diluted earnings per share		204,559,278	17,770,017

As the Group is reporting a loss from continuing operations 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 audited statutory accounts in respect of the prior year ended 30 April 2011 have been delivered to the Registrar of Companies. The auditors issued an unqualified audit opinion which did not contain any statement under section 498(2) or 498(3) of the Companies Act 2006. Without qualifying that opinion, the auditors drew attention to the fact that the Company's plan to raise additional funds by the placing of shares was subject to shareholder approval.

7      AVAILABILITY OF ACCOUNTS

This announcement is not being posted to shareholders. The Report and Accounts will be posted to shareholders later today. Copies of this announcement and further copies of the Report and Accounts can be downloaded from the Company's website: www.scancell.co.uk.

 

END

 

 

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