TIDMDDDD
RNS Number : 2473C
4d Pharma PLC
28 September 2018
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
("4D", "4D Pharma" or "the Company")
Interim results for the six months ended 30 June 2018
4D pharma plc (AIM: DDDD), a pharmaceutical company leading the
development of Live Biotherapeutics, is pleased to announce the
interim results for the Company and its subsidiaries (together "the
Group") for the six months ended 30 June 2018.
Financial highlights
-- Net assets as at 30 June 2018 of GBP58.7 million (30 June
2017: GBP75.3 million and 31 December 2017: GBP69.8 million)
-- Cash and cash equivalents and short-term deposits at 30 June
2018 of GBP36.6 million (30 June 2017: GBP59.8 million and 31
December 2017: GBP50.0 million)
-- Loss attributable to the owners of the parent undertaking for
the six months ended 30 June 2018 of GBP11.3 million (30 June 2017:
GBP11.3 million* and 31 December 2017: GBP19.4 million*)
-- Research and development expenditure for the six months ended
30 June 2018 of GBP11.8 million (30 June 2017: GBP8.3 million and
31 December 2017: GBP16.9 million)
Operational and clinical highlights
-- Entering into clinical collaboration agreement with
subsidiary of MSD (tradename of Merck & Co., Inc., Kenilworth,
N.J., USA) to conduct a clinical trial evaluating the combination
of KEYTRUDA(R) (pembrolizumab), an anti-PD-1 therapy marketed by
MSD, and 4D's Live Biotherapeutic candidate MRx0518 in patients
with solid tumours; the phase I study will evaluate safety,
tolerability and preliminary clinical benefit of the combination of
KEYTRUDA(R) with MRx0518 in patients who progressed on prior PD-1
inhibitor therapy with renal, bladder, melanoma and non-small cell
lung cancer
-- Clearance by the Medicines and Healthcare Products Regulatory
Agency ("MHRA") of the Clinical Trial Application for MRx0518, the
first Live Biotherapeutic trial in cancer; the first-in-human,
two-part phase Ib study will evaluate the safety, tolerability and
anti-tumour immuno-modulatory effects of MRx0518 in patients with
multiple solid tumour types
-- Clearance by the US Food and Drug Administration ("FDA") of
an Investigational New Drug Application for Blautix, the Group's
Live Biotherapeutic for the treatment of Irritable Bowel Syndrome
("IBS"); the double-blind, placebo-controlled multicentre phase II
study will evaluate the efficacy and safety of Blautix in patients
with IBS with constipation ("IBS-C") and IBS with diarrhoea
("IBS-D")
-- Clearance by the MHRA and the Health Products Regulatory
Authority ("HPRA") to commence the phase II study of Blautix at
sites in the UK and Ireland
Since the period end
-- Positive top-line results for the Phase Ib study of the
Company's Live Biotherapeutic Thetanix in paediatric patients with
Crohn's disease; achieving the primary objective of demonstrating
that Thetanix was well tolerated with a good safety profile
* Note: this includes a GBP3.5 million non-recurring charge in
relation to the successful completion of the first milestone for 4D
Pharma Cork Limited.
Chairman's statement
David Norwood, Chairman of 4D pharma, commented: "Through the
successful development of its clinical programmes in the first half
of 2018, the Company continues to lead the development of Live
Biotherapeutics, as we seek to secure robust clinical data to
support the use of this new class of drugs across multiple
indications, and from there to progress towards our goal of
producing Live Biotherapeutics as safe and effective therapies. I
would once again like to thank the Board, our employees and our
shareholders for their continued support."
For further information please contact:
4D +44 (0)113 895 0130
Duncan Peyton, Chief Executive Officer
Zeus Capital Limited - Nomad and Joint Broker
Dan Bate / Jordan Warburton / Jamie
Peel +44 (0)161 831 1512
Bryan Garnier & Co. Limited - Joint
Broker
Dominic Wilson / Phil Walker +44 (0)20 7332 2500
For further information please also visit:
www.4dpharmaplc.com.
Chairman and Chief Executive Officer's Joint Review
David Norwood, Non-Executive Chairman, and Duncan Peyton, Chief
Executive Officer
The microbiome
Whilst 4D is founded on science, innovation and forward
thinking, it is history that tells us the most.
The work of von Behring and the development of serum therapy
evolved through decades of research into the multi-billion dollar
industry of antibody technology. The approval of Epogen in 1989 is
another example, beginning in the 17th century with the first blood
transfusions in animals that eventually led to the development of
Epogen, one of the first drugs to come out of the biotech industry.
Both the development of antibodies and Epogen show us that from a
complex source (whether this be blood or serum), through scientific
endeavour, the focus ultimately ends on functional singularity.
At 4D we believe the development of Live Biotherapeutics is
another example of form following function. From the initial
reports of faecal matter used in the fourth century to treat food
poisoning and diarrhoea, through the development and use of faecal
transplants to treat clostridium difficile infection in the 1950s,
we are now seeing the first Live Biotherapeutics entering the
clinic. However, whereas early Chinese medicine and faecal
transplants primarily treated gastrointestinal issues, the Live
Biotherapeutics developed by 4D not only treat disease of the gut,
but also address the major challenges of cancer, asthma and
autoimmune conditions.
Today, rather than form following function, development of new
drugs is arguably restricted by the common tools available (i.e.
small molecules, proteins and antibodies), and could be considered
function following form. Furthermore, drug development is targeted
towards a single "validated" target, despite the knowledge that
disease pathways do not operate in isolation. Considering this, it
is perhaps no surprise that drugs have significant side effects,
and that not all drugs are effective in all patients.
At the level of complex organisms, functionality exists at
different levels (organs, tissues and cells), with cells being the
simplest unit of independent functionality. Considering more recent
history, if the functionality of a single cell can be harnessed in
context (i.e. in the state in which it exists naturally), for
example with Chimeric Antigen Receptor (CAR-T) or stem cell
transplants, the effects are remarkable.
Within the microbiome, a single strain is the simplest cellular
unit of functionality, and the microbiome is now understood to have
significant functionality relevant to human health.
It is this potential that 4D is seeking: form following
function, single strains impacting known disease pathways.
Working with pharma
As more research is done within the field of the microbiome and
more papers are published, whether by third parties or those more
recently published by the 4D research teams, the stronger the
interest grows in the microbiome from the pharmaceutical
industry.
The pharmaceutical industry is actively seeking out new
innovation, not only in new therapeutics, but also in ways to
enhance their existing therapies.
An example of this innovation is the clinical collaboration
agreement 4D announced in early June, with a subsidiary of MSD
(tradename of Merck & Co., Inc., Kenilworth, N.J., USA).
This trial will evaluate MRx0518, 4D's lead oncology programme,
which has shown therapeutic potential in a variety of tumour types
in pre-clinical models and has the potential for synergy in
combination with checkpoint inhibitor therapies. The phase I study
will evaluate safety, tolerability and preliminary clinical benefit
of the combination of KEYTRUDA(R) with MRx0518 in patients who
progressed on prior PD-1 inhibitor therapy with renal, bladder,
melanoma and non-small cell lung cancer.
Working within a developing regulatory and clinical
environment
The microbiome and Live Biotherapeutics is an emerging field,
and as such the regulations are evolving.
The US Food and Drug Administration ("FDA") issued a guidance
document in 2016 relating to early stage clinical development of
Live Biotherapeutic products. Following on from this, the European
Pharmacopoeia has adopted three new quality standards for Live
Biotherapeutics for human use in April 2018, with the new texts
becoming effective in April 2019. 4D contributed to the development
of these quality standards, acting as the UK's representative on
the working party that developed the standards.
Throughout regulatory discussions relating to the development of
4D's own products, the focus has primarily been on the safety of
patients, but also on developing the thinking surrounding Live
Biotherapeutics through rigorous scientific debate. This
interaction has led to 4D conducting phase I trials in patients as
opposed to healthy subjects, not only demonstrating the potential
to develop safer drugs, but also granting us an insight, albeit at
a low level, into what we may expect to see in patient population
earlier than under traditional development timelines.
Notwithstanding that our trials to date have been in patients,
4D is now preparing to expand these trials to generate data that is
both significant and statistically relevant to further demonstrate
the potential in the microbiome. An example of this is our phase II
study in Irritable Bowel Syndrome ("IBS"), a double-blind,
placebo-controlled multicentre trial currently being conducted with
500 patients across sites in Europe and the United States. As
previously announced, this is the largest trial being conducted
with a Live Biotherapeutic which, if successful, we believe will be
sufficient to demonstrate efficacy and bring more understanding to
the development of Live Biotherapeutics.
Developing a scientific viewpoint/standing
At 4D the bedrock of our business is research; only if 4D
continues to build world-leading research will we ultimately
succeed.
Whilst we continuously push our programmes through development,
the innovative work of our scientific teams continues. One measure
of success of our research is the development of our intellectual
property estate and 4D continues to lead the field. We now have 355
granted patents across 46 patent families. As our teams uncover new
bacteria that are therapeutically relevant, and unpick the
mechanism of action or develop novel production techniques, the
intellectual property estate will continue to grow in size and
value.
Having secured a class leading patent position, our research
teams are able to lead the debate on the role of the microbiome and
development of Live Biotherapeutics.
Over the last six months the research teams have presented at
key microbiome conferences and published papers on some of their
findings with immediate relevance to our clinical programmes, such
as the potential of the microbiome to serve as novel therapeutic
inhibitors of the human enzyme histone deacetylase ("HDAC"), which
could lead to new programmes in cancer or neurodegeneration. As we
continue our world-leading research, and build our patent
portfolio, we will continue to publish and discuss our work.
Conclusion
At 4D pharma we face the challenge of bringing a new blockbuster
drug, in a new therapeutic class, to transform patient lives.
We can only continue to meet this challenge if we focus on the
core principles of developing science and delivering therapies.
David Norwood
Non-Executive Chairman
Duncan Peyton
Chief Executive Officer
27 September 2018
Group Statement of Total Comprehensive Income
For the six months to 30 June 2018
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2018 2017 2017
Notes GBP000 GBP000 GBP000
------------------------------------------------- ----------- ----------- ------------
Research and development costs (11,829) (8,305) (16,911)
Administrative expenses (1,969) (1,047) (3,529)
Foreign currency gains/(losses) 605 (439) (431)
------------------------------------------------- ----------- ----------- ------------
Operating loss before non-recurring cost (13,193) (9,791) (20,871)
Non-recurring costs - (3,474) (3,474)
------------------------------------------------- ----------- ----------- ------------
Operating loss after non-recurring cost (13,193) (13,265) (24,345)
Finance income 190 287 482
Finance expense (167) (17) (123)
------------------------------------------------- ----------- ----------- ------------
Loss before taxation (13,170) (12,995) (23,986)
Taxation 3 2,520 1,179 3,541
------------------------------------------------ ----------- ----------- ------------
Loss for the year (10,650) (11,816) (20,445)
Other comprehensive income
Exchange differences on translating foreign
operations (652) 566 1,057
------------------------------------------------- ----------- ----------- ------------
Loss for the year and total comprehensive income
for the year (11,302) (11,250) (19,388)
------------------------------------------------- ----------- ----------- ------------
Loss per share
Basic and diluted for the year 4 (16.26)p (18.22)p (31.41)p
------------------------------------------------ ----------- ----------- ------------
Group Statement of Financial Position
At 30 June 2018
At At At
30 June 30 June 31 December
2018 2017 2017
Notes GBP000 GBP000 GBP000
---------------------------------------------- -------- -------- ------------
Assets
Non-current assets
Property, plant and equipment 5,001 4,782 5,211
Intangible assets 14,515 14,604 14,674
Taxation receivables 84 23 56
---------------------------------------------- -------- -------- ------------
19,600 19,409 19,941
---------------------------------------------- -------- -------- ------------
Current assets
Inventories 262 194 253
Trade and other receivables 2,193 2,813 3,238
Taxation receivables 6,442 3,892 4,308
Short-term investments and cash on deposit 15,151 10,000 38,133
Cash and cash equivalents 21,405 49,772 11,865
---------------------------------------------- -------- -------- ------------
45,453 66,671 57,797
---------------------------------------------- -------- -------- ------------
Total assets 65,053 86,080 77,738
---------------------------------------------- -------- -------- ------------
Liabilities
Current liabilities
Trade and other payables 3,251 7,899 4,982
---------------------------------------------- -------- -------- ------------
3,251 7,899 4,982
---------------------------------------------- -------- -------- ------------
Non-current liabilities
Deferred tax 965 963 965
Other payables 5 2,165 1,875 2,005
------------------------------------- ------- -------- --------
3,130 2,838 2,970
---------------------------------------------- -------- -------- ------------
Total liabilities 6,381 10,737 7,952
---------------------------------------------- -------- -------- ------------
Net assets 58,672 75,343 69,786
---------------------------------------------- -------- -------- ------------
Capital and reserves
Share capital 164 162 164
Share premium account 108,296 105,909 108,296
Merger reserve 958 958 958
Translation reserve 16 177 668
Other reserve (864) (864) (864)
Share-based payments reserve 628 248 440
Retained earnings (50,526) (31,247) (39,876)
---------------------------------------------- -------- -------- ------------
Total equity 58,672 75,343 69,786
---------------------------------------------- -------- -------- ------------
Approved by the Board and authorised for issue on 27 September
2018.
Duncan Peyton
Director
27 September 2018
Group Statement of Changes in Equity
For the six months to 30 June 2018
Share-
based
Share Share Merger Translation Other payment Retained
capital premium reserve reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------- -------- -------- ----------- -------- -------- --------- --------
At 1 January 2017 162 105,909 958 (389) (864) 138 (19,431) 86,483
Loss and total comprehensive
income for the period - - - - - - (11,816) (11,816)
Foreign currency gains/losses
arising on consolidation of
subsidiaries - - - 566 - - - 566
Issue of share-based compensation - - - - - 110 - 110
---------------------------------- --- -------- -------- ----------- -------- -------- --------- --------
At 30 June 2017 162 105,909 958 177 (864) 248 (31,247) 75,343
Issue of share capital (net
of expenses) 2 2,387 - - - - - 2,389
---------------------------------- --- -------- -------- ----------- -------- -------- --------- --------
Total transactions with owners
recognised in equity for the
year 2 2,387 - - - - - 2,389
---------------------------------- --- -------- -------- ----------- -------- -------- --------- --------
Loss and total comprehensive
income for the period - - - - - - (8,629) (8,629)
Foreign currency gains/losses
arising on consolidation of
subsidiaries - - - 491 - - - 491
Issue of share-based compensation - - - - - 192 - 192
---------------------------------- --- -------- -------- ----------- -------- -------- --------- --------
At 31 December 2017 164 108,296 958 668 (864) 440 (39,876) 69,786
Loss and total comprehensive
income for the period - - - - - - (10,650) (10,650)
Foreign currency gains/losses
arising on consolidation of
subsidiaries - - - (652) - - - (652)
Issue of share-based compensation - - - - - 188 - 188
---------------------------------- --- -------- -------- ----------- -------- -------- --------- --------
At 30 June 2018 164 108,296 958 16 (864) 628 (50,526) 58,672
---------------------------------- --- -------- -------- ----------- -------- -------- --------- --------
Group Cash Flow Statement
For the six months to 30 June 2018
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
--------------------------------------------------- ----------- ----------- ------------
Loss after taxation (10,650) (11,816) (20,445)
Adjustments for:
Depreciation of property, plant and equipment 443 324 730
Amortisation of intangible assets 148 117 252
Loss on disposal of property, plant and equipment - 78 79
Finance income (190) (287) (482)
Finance expense 167 17 123
Non-recurring contingent consideration - 3,474 3,474
Share-based compensation 188 110 302
--------------------------------------------------- ----------- ----------- ------------
Cash flows from operations before movements
in working capital (9,894) (7,983) (15,967)
Changes in working capital:
(Increase)/decrease in inventories (9) 44 (15)
Decrease/(increase) in trade and other receivables 393 (23) (588)
Increase in taxation receivables (2,164) (578) (1,009)
(Decrease)/increase in trade and other payables (1,614) 519 389
--------------------------------------------------- ----------- ----------- ------------
Cash outflow from operating activities (13,288) (8,021) (17,190)
--------------------------------------------------- ----------- ----------- ------------
Cash flows from investing activities
Purchases of property, plant and equipment (259) (1,078) (1,885)
Purchase of software and other intangibles (4) (43) (194)
Interest received 115 147 509
Monies placed on/(drawn from) deposit 22,982 30,111 1,978
--------------------------------------------------- ----------- ----------- ------------
Net cash outflow from investing activities 22,834 29,137 408
--------------------------------------------------- ----------- ----------- ------------
Cash flows from financing activities
Hire purchase payments (6) (5) (14)
--------------------------------------------------- ----------- ----------- ------------
Net cash inflow from financing activities (6) (5) (14)
--------------------------------------------------- ----------- ----------- ------------
Increase/(decrease) in cash and cash equivalents 9,540 21,111 (16,796)
Cash and cash equivalents at the start of the
year 11,865 28,661 28,661
--------------------------------------------------- ----------- ----------- ------------
Cash and cash equivalents at the end of the
year 21,405 49,772 11,865
--------------------------------------------------- ----------- ----------- ------------
Notes to the Interim Financial Report
For the six months ended 30 June 2018
1. Basis of preparation
The Group's half-yearly financial information, which is
unaudited, consolidates the results of 4D pharma plc and its
subsidiary undertakings up to 30 June 2018. The Group's accounting
reference date is 31 December. 4D pharma plc's shares are quoted on
the AIM Market of the London Stock Exchange ("AIM").
The Company is a public limited liability company incorporated
and domiciled in the UK. The consolidated financial information is
presented in round thousands of Pounds Sterling (GBP'000).
The financial information for the six months ended 30 June 2018
and 30 June 2017 is unaudited.
Full audited financial statements of the Group in respect of the
period ended 31 December 2017, which received an unqualified audit
opinion and did not contain a statement under section 498(2) or (3)
of the Companies Act 2006, have been delivered to the Registrar of
Companies.
The accounting policies used in the preparation of the financial
information for the six months ended 30 June 2018 are in accordance
with the recognition and measurement criteria of International
Financial Reporting Standards as adopted by the European Union
("IFRS") and are consistent with those which will be adopted in the
annual financial statements for the year ending 31 December
2018.
Whilst the financial information included has been prepared in
accordance with the recognition and measurement criteria of IFRS,
the financial information does not contain sufficient information
to comply with IFRS.
4D pharma plc has not applied IAS 34 Interim Financial
Reporting, which is not mandatory for UK AIM listed groups, in the
preparation of this interim financial report.
2. Going concern
Having prepared management forecasts and made appropriate
enquiries, the Directors are satisfied that the Group has adequate
resources for the foreseeable future as the Group is at the
start-up stage of its business lifecycle. Accordingly they have
continued to adopt the going concern basis in preparing the
financial information.
3. Taxation
The tax credit is made up as follows:
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
----------------------------------------------- ----------- ----------- ------------
Current income tax
Total current income tax 2,520 1,169 3,557
Adjustment in respect of prior years - 10 (16)
----------------------------------------------- ----------- ----------- ------------
Total income tax credit recognised in the year 2,520 1,179 3,541
----------------------------------------------- ----------- ----------- ------------
4. Loss per share
(a) Basic and diluted
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
------------------------------------------------------ ----------- ----------- ------------
Loss for the year attributable to equity shareholders (10,650) (11,816) (20,445)
------------------------------------------------------ ----------- ----------- ------------
Weighted average number of shares:
Ordinary shares in issue 65,493,842 64,858,150 65,084,561
------------------------------------------------------ ----------- ----------- ------------
Basic loss per share (pence) (16.26)p (18.22)p (31.41)p
------------------------------------------------------ ----------- ----------- ------------
The basic and diluted loss per share are the same as the effect
of share options is anti-dilutive.
(b) Adjusted
Adjusted loss per share is calculated after adjusting for the
effect of non-recurring expenses in relation to the reassessment of
the contingent liability.
Reconciliation of adjusted loss after tax:
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
-------------------------------------- ----------- ----------- ------------
Reported loss after tax (10,650) (11,816) (20,445)
Non-recurring costs - 3,474 3,474
-------------------------------------- ----------- ----------- ------------
Adjusted loss after tax (10,650) (8,342) (16,971)
-------------------------------------- ----------- ----------- ------------
Adjusted basic loss per share (pence) (16.26)p (12.86)p (26.08)p
-------------------------------------- ----------- ----------- ------------
5. Other payables
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
--------------------------------------------- ----------- ----------- ------------
Non-current payables
Contingent consideration (see below and note
6) 2,144 1,875 1,979
Hire purchase and finance leases 21 - 26
--------------------------------------------- ----------- ----------- ------------
2,165 1,875 2,005
--------------------------------------------- ----------- ----------- ------------
Contingent consideration
The non-current contingent consideration is made up as
follows:
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
-------------------------------------------- ----------- ----------- ------------
Brought forward 1,979 774 774
Reassessment of contingent consideration to
be satisfied in shares - 4,395 4,395
Discounting of estimated future cash flows - (921) (921)
Part settlement of contingent consideration
in shares - - (2,389)
Unwinding of discount 165 16 120
-------------------------------------------- ----------- ----------- ------------
2,144 4,264 1,979
-------------------------------------------- ----------- ----------- ------------
Analysed as follows:
Within one year - 2,389 -
More than one year 2,144 1,875 1,979
-------------------------------------------- ----------- ----------- ------------
2,144 4,264 1,979
-------------------------------------------- ----------- ----------- ------------
6. Contingent consideration
On 23 August 2017 635,692 new ordinary shares were issued. The
allotment represents contingent consideration in respect of the
acquisition of the entire issued share capital of 4D Pharma Cork
Limited (formerly Tucana Health Limited), which completed in
February 2016, and follows the achievement of 4D Pharma Cork's
initial milestone.
The milestone achieved reflects the technical validation of the
MicroDx diagnostic platform, enabling the stratification of IBS
patients. MicroDx has been designed to diagnose, stratify and
monitor the treatment of patients based on their gut microbiome,
the bacteria which colonise the human gastrointestinal tract.
The new 4D ordinary shares have been allotted for an aggregate
value of EUR2.6 million (at GBP3.7575 per 4D share, being the
average mid-market price of a 4D share for the five business days
immediately preceding the date of allotment) and were admitted on
31 August 2017.
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END
IR PGUWWBUPRGMM
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