Oxford Cannabinoid Technologies Holdings plc

("OCTP" or the "Company")

Interim results for the six months ended 31 October 2022

Oxford Cannabinoid Technologies Holdings plc, the pharmaceutical company developing prescription cannabinoid medicines for approval by global regulatory agencies and targeting the US$ multi-billion pain market, is pleased to announce its interim results for the six months ended 31 October 2022 (the "Period").

Operational Highlights

·    Pre-clinical activities for the Company's lead programme, OCT461201 (programme 1), remained on track and on budget

o  Phase I clinical trial is due to commence in Q1 2023 with interim results anticipated in Q2 2023

o  Master service agreement and work order signed with Simbec Research Limited in preparation for the commencement of the Phase I clinical trial

·    The Company remains on target to be at pre-clinical stage (programme 3) and lead stage (programme 4) in Q2 2023 as well as Phase I ready for programme 2 in Q1 2023, at which time further development for these programmes will be placed on hold

·    Inaugural meeting of Scientific Advisory Board

Financial Highlights

·    Robust balance sheet, debt-free with cash reserves of approximately £5m at Period-end (30 April 2022: £9.2m) which are expected to be fully utilised during Q1 2024

·    Approximately £3.1m of R&D costs were incurred, primarily on the Company's lead drug candidate OCT461201, which accounted for approximately £1.5m of the total, with progress being made on all four programmes

·    Administrative costs of £1.34m include salary and associated costs of £662k and a share based (non-cash) payment charge of £61k in advance of the Phase I clinical trial for programme 1

·    R&D tax credit in the first half of £840k (30 April 2022: £760k), with tax losses surrendered for the R&D tax credit payment

Post Period Highlights

·    Completion of the pre-clinical work for OCT461201 under the Group's £2.6m contract research agreement with Aptuit (Verona) SRL, a subsidiary of Evotec SE

·    Appointment of Clarissa Sowemimo-Coker, previously Chief Operating Officer, as interim CEO 

·    Submission of combined clinical trial application ("CTA") for review by the Wales Research Ethics Committee (REC) and the UK Medicines and Healthcare products Regulatory Agency

Interim CEO, Clarissa Sowemimo-Coker, commented: "This was a busy and pivotal period for the Company and we are delighted with the progress. The groundwork has been laid for an exciting 2023, with our focus firmly on the commencement of the Phase I clinical trial for programme 1. We have worked hard as a team to get to this point which represents a hugely significant milestone for the Company and our shareholders."

Analyst Briefing, 09.30, Today 23 January 2023

A briefing for analysts will be held at 09.30 today. Analysts interested in attending should contact Walbrook PR by emailing oxcantech@walbrookpr.com or by calling 020 7933 8780.

Investor Presentation, 16.30, Today 23 January 2023

A live online presentation via the Investor Meet Company platform will also be held at 16.30 GMT today, which is open to all existing and potential shareholders.

Investors can sign up to Investor Meet Company for free and add to meet Oxford Cannabinoid Technologies Holdings plc via: https://www.investormeetcompany.com/oxford-cannabinoid-technologies-holdings-plc/register-investor

Investors who already follow OCTP on the Investor Meet Company platform will automatically receive an invitation to the event.

The unaudited interim report for the 6 months ended 31 October 2022 is available on the Company's website at:  www.oxcantech.com  and in hard copy form at the Company's registered office at Prama House, 267 Banbury Road, Oxford, OX2 7HT.

It is also available for inspection at:

www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism. 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018). With the publication of this announcement, this information is now considered to be in the public domain.

The Directors of the Company accept responsibility for the content of this announcement.

About Oxford Cannabinoid Technologies Holdings Plc:

Oxford Cannabinoid Technologies Holdings plc ("OCTP") is the holding company of a pharmaceutical Group developing prescription cannabinoid medicines targeting the US$ multi-billion global pain market.

OCTP currently has a portfolio of four drug development programmes. Its lead compound, OCT461201, will initially target neuropathic and visceral pain (including irritable bowel syndrome ("IBS") and chemotherapy induced peripheral neuropathy ("CIPN")), with Phase 1 clinical trials, aimed at demonstrating safety and tolerability, due to commence in the near term. Interim trial results are expected in Q2 2023.  The global market for CIPN alone was valued at US$1.61bn in 2020 and is forecast to reach US$2.37bn by the year 2027.

OCTP's drug development pipeline, comprises  both natural and synthetic compounds, and includes compounds targeting trigeminal neuralgia, a severe type of face pain, and cannabinoid derivatives targeting pain and potentially other therapeutic areas. Having established an exclusive license agreement with Canopy Growth Corporation for their entire pharmaceutical cannabinoid derivative library, OCTP now has a portfolio of over 400 derivatives and intellectual property rights including 14 patent families and associated research data.

OCTP has a clearly defined path to commercialisation, revenues and growth. The Group is developing drug candidates through clinical trials to gain regulatory approval (FDA/MHRA/EMA) that will enable medical professionals to prescribe them with confidence. OCTP's portfolio aims to balance risk, value and time to market, whilst ensuring market exclusivity around all its key activities.

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identied by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

CEO's Interim Management Statement

Oxford Cannabinoid Technologies Holdings plc ("OCTP" or the "Company") is the holding company of a pharmaceutical group developing prescription cannabinoid medicines for approval by global regulatory agencies and targeting the US$ multi-billion pain market. The group is comprised of OCTP and its wholly owned subsidiary Oxford Cannabinoid Technologies Ltd ("OCT") ("Group").

This unaudited interim report for the six-month period ended 31 October 2022 should be read in conjunction with the Group's published annual report for the period ended 30 April 2022 and the public announcements made by the Group during the interim reporting period (accessible at www.oxcantech.com).

The Group has continued to build on the positive start made to the current financial year. During the period, progress was made on all four of the Group's drug development programmes, particularly regarding the Group's lead candidate OCT461201 ("Programme 1") as the Group prepared for Programme 1's Phase I clinical trial to commence in January 2023. During the period the Group added strength and depth to its advisory team by appointing Axis Capital Markets Limited and finnCap Limited as its corporate brokers.

In August 2022 the Group held the first meeting of its Scientific Advisory Board ("SAB"), which was formed in April 2022. The SAB's current members include Professor Robert Dworkin, Professor Anthony Dickenson and Doctor Giorgio Lambru. The SAB's core aim is to link the Group's pre-clinical research and clinical trials with the needs of patients.

Programme 1

OCT461201, is a selective cannabinoid receptor type 2 agonist which has shown potential as an effective therapy for chemotherapy induced peripheral neuropathy ("CIPN") as well as irritable bowel syndrome ("IBS"). The global market for CIPN alone was valued at US$1.61bn in 2020 and is forecast to reach US$2.37bn by the year 2027. Work under the Group's £2.6 million contract research agreement with Aptuit (Verona) SRL, a subsidiary of Evotec SE (together "Evotec"), which commenced in July 2021 is now complete. Post period-end, in December 2022 Evotec provided the Company with a submission-ready regulatory document and will deliver an approved batch of drug product to the Phase I clinical trial unit during Q1 2023.

In July 2022 the Company announced its master service agreement and work order with Simbec Research Limited, part of the Simbec-Orion Group Ltd ("Simbec-Orion") for its first-in-human clinical trial for Programme 1. Work on the Group's first Phase I clinical trial is due to commence in Q1 2023 using Simbec-Orion's Phase I clinical site, accredited by the UK Medicines & Healthcare products Regulatory Agency ("MHRA"), which includes in-house bioanalytical capabilities, and which is based in Merthyr Tydfil, Wales, UK. Simbec-Orion will provide an end-to-end, full-service clinical development solution including project management, medical and technical writing, medical monitoring and pharmacovigilance, as well as bioanalytical and statistical activities to support pharmacokinetic studies.

Post period-end, in January 2023 the Company announced submission of its combined clinical trial application ("CTA") to the MHRA and Wales Research Ethics Committee (REC) and attended the related REC review meeting. This Phase I first-in-human clinical trial will be performed in healthy volunteers, with a single ascending dose ("SAD"). The trial will be aimed at demonstrating the safety and tolerability of the drug product, while providing pivotal information on the pharmacokinetic profile of OCT461201 to confirm its value as a potential drug. OCTP is awaiting the results of the review meeting and will provide a further update on the outcome in due course.

Programme 2

In October 2021, the Company announced trigeminal neuralgia ("TN") as the initial target for OCT130401. TN is a chronic pain condition that causes an excruciating, stabbing, electric shock-like facial pain. It has a fast and unexpected onset and because of this has been difficult to treat. Each episode may only last a few seconds, but some people will suffer multiple (up to 100) episodes during one day. It is on the rise with between approximately 10,000 and 15,000 new cases in the United States diagnosed each year. The Directors estimate that in 2021 there were between 60,000 to 95,000 people living with the condition in the UK.

During the period, pre-clinical work continued with the Group's research partners, Charles Rivers Laboratories Edinburgh Ltd ("Charles Rivers"), Purisys LLC ("Purisys") and Oz UK Ltd ("Oz UK"). Charles Rivers is working to complete the preclinical safety and pharmacological activity for the metered dose inhaler developed with Purisys, which provides the current Good Manufacturing Practice ("cGMP") active product ingredients. Oz UK is developing the formulation and the device. In August 2022 the Company announced a strategic budget review, which realigned its development and expenditure programme to focus on bringing Programme 1 through its Phase I clinical trial and to extend the Group's cash runway.. As a result, the focus for OCT1301401 shifted to completing pre-clinical work ensuring that Programme 2 is Phase I ready early in 2023, at which time further development will be placed on hold.

Programmes 3 and 4

OCTP has progressed its work with Dalriada Drug Discovery Inc ("Dalraida") and Oxford Stemtech Ltd ("Stemtech") during the period. Dalriada continued to screen the Group's pharmaceutical cannabinoid derivative library, including 335 derivatives and 14 patent families, which was licensed from Canopy Growth Corporation ("Canopy Growth") in September 2021 in addition to creating additional cannabinoid derivatives, growing the Group's proprietary library by 50.

The drug development agreement with Stemtech is supporting R&D for all the Company's drug development programmes, with a particular focus on Programmes 3 and 4. Stemtech's cutting-edge "Pain-in-a-dish" model replicates human pain using stem cells from volunteers that are re-programmed into pain neurons.

The Group aims to be at pre-clinical stage (Programme 3) and lead candidate stage (Programme 4) with these compounds in Q2 2023 at which time further development will be paused.

The agreements signed across all of the Group's drug programmes reflect the Group's core ethos: to partner with organisations recognised as "best-in-class" that can drive quality and shareholder value. In a cannabis market where unlicensed medicines remain abundant and unproven, our underlying philosophy remains unchanged: that it is only the development of cannabinoid-based medicines through existing channels of licensed drug development that allows the medical community to prescribe drugs with confidence and in volume.

Principal Risks and Uncertainties

The principal risks and uncertainties of the Group are as detailed in the annual report and are summarised below.  These risks and uncertainties are reviewed throughout the year and since the annual report was issued for the period ended 30 April 2022 no new principal risks have been identified.

The principal risks are as follows:

·    unsuccessful or delayed development;

·    cash flow and cash resources;

·    key staff dependency;

·    quality assurance;

·    legal claims;

·    unlicensed medical cannabis;

·    reputational damage; and

·    volatile share price.

Related Parties

There were no related party transactions in the period or changes in the related party transactions described in the last annual report that have had or could have a material effect on the financial position or performance of the Group.

Related party disclosures for prior periods are given in note 8.

Going Concern and Viability Statement

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the annual report (accessible via www.oxcantech.com) and remain unchanged for the six months ended 31 October 2022.  Further disclosure is given in note 2(b).

The Group prepares budgets and cashflow forecasts to ensure that the Group can meet its liabilities as they fall due. Cash resources remain within forecast at £5m which are expected to be fully utilised during Q1 2024. In line with the IPO prospectus, the Board anticipate conducting the next fund raising during the 2023/24 financial year, post the results of its Phase I trial.

The Directors remain confident that the Group is working in alignment with the development plan set out in the IPO prospectus, despite extremely challenging market conditions, not anticipated at the time of the IPO. Aside from the decision to pause the clinical Phase I for OCT130401, original timelines are being met, key partners have been onboarded and there is good progress across all four programmes. The internal controls framework is being continually refined and enhanced, and cash management remains disciplined.

Outlook

The fundamentals of the Group remain strong, delivering against the strategy laid out in the IPO prospectus and with the Phase I clinical trial for Programme 1 fully funded.

Clarissa Sowemimo-Coker

Chief Executive Officer

20 January 2023

Financial and Operational Highlights

Operational and financial highlights for the six months ended 31 October 2022 are as follows:

·    OCT entered into a master service agreement and work order ("MSA") with Simbec-Orion for its first-in-human Phase I clinical trial for its lead compound, OCT461201 with the clinical trial due to commence in Q1 2023;

·    In view of the continuing market uncertainty and an increasingly challenging macro-economic outlook the Board agreed in August 2022 to temporarily delay Phase I clinical trials of OCT130401, its second programme enabling cash to be preserved and extending the cash runway of the Company;

·    Development work for Programmes 3 and 4 continued, with the Company still on target to be at pre-clinical stage (for programme 3) and lead stage (for programme 4) with these programmes in Q2 2023;

·    During the six-month period there were key staff changes at director and operational level alongside changes in corporate brokers;

·    OCTP established its Scientific Advisory Board shortly prior to the period commencing with the first meeting held during this period;

·    Research costs of £3,147k were incurred, of which £1,516k relates to OCT461201 ("Programme 1"), with progress being made across all four of the Group's programmes;

·    As stated in the Company's last set of interim accounts the closure of the London head office (from 31 March 2022) generates cost savings of over £130k p.a.; 

·    Overall, administrative costs increased to £1.34m with the main costs in the six months relating to salaries and associated expenses (£662k);

·    The Group has accrued a Research and Development ("R&D") tax credit of £840k in the six months. There was a debtor of £1,599k at the period end relating to R&D tax credits (2021: £408k);

·    Cash absorbed by operations was £4.2m (30 April 2022: £5.4m) (6 months to November 2021 £2.6m) and cash reserves stood at £4.9m at 31 October 2022 (30 April 2022: £9.2m).

Paul Smalley

Chief Financial Officer

20 January 2023

Directors' Statements

Responsibility Statement

The current Directors, whose names and functions are set out below, with the registered office located at Prama House, 267 Banbury Road, Oxford OX2 7HT, accept responsibility for the information contained in this unaudited interim report and condensed financial statements, which have not been audited by an independent auditor, for the six months ended 31 October 2022. To the best of the knowledge of the Directors:

·    the unaudited condensed consolidated interim financial statements are prepared in accordance with the applicable set of accounting standards (including UK adopted IAS 34 Interim Financial Reporting), and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the undertakings included in the consolidation taken as a whole; and

·    the CEO's Interim Management Report includes a fair review of the information required under rules 4.2.7 and 4.2.8 of the Disclosure Guidance and Transparency Rules (being: (1) indication of the important events during the first six months, and their impact on the unaudited condensed interim financial statements: (2) a description of principal risks and uncertainties for the remaining six months of the year; (3) related parties' transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance  of the entity during that period; and (4) any changes in the related parties transactions described in the last annual report that could have a material effect on the financial position or performance of the enterprise in the first six months of the current financial year).

The Directors confirm that the condensed interim financial statements comply with the above requirements.

Directors and their functions:

·    Julie Pomeroy - Non-Executive Chairperson

·    Dr John Lucas - Chief Executive Officer (resigned 02 December 2022)

·    Clarissa Sowemimo-Coker - Interim Chief Executive Officer (appointed 02 December 2022, previously Chief Operating Officer)

·    Paul Smalley - Finance Director (appointed 17 October 2022)

·    Karen Lowe - Finance Director (resigned 17 October 2022)

·    Bishrut Mukherjee - Non-Executive Director

·    Neil Mahapatra - Non-Executive Director

·    Charanjit Cheryl Dhillon - Non-Executive Director

·    Richard Hathaway - Non-Executive Director

Forward Looking Statements

Certain statements in this announcement are forward-looking statements. Such statements may relate to OCTP's business, strategy and plans.

Statements that are not historical facts, including statements about OCTP's or its management's beliefs and expectations, are forward-looking statements. Words such as 'believe', 'anticipate', 'estimates', 'expects', 'intends', 'aims', 'potential', 'will', 'would', 'could', 'considered', 'likely', and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of doing so.

By their nature, forward-looking statements involve a number of risks, uncertainties or assumptions, some known and some unknown, many of which are beyond OCTP's control that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the plans and events described herein.

Forward-looking statements contained in these interim financial accounts regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Nor are they indicative of future performance and OCTP's actual results of R&D and financial condition and the development of the industry and markets in which OCTP plan to operate may differ materially from those made in or suggested by the forward-looking statements.

You should not place undue reliance on forward-looking statements because such statements relate to events and depend on circumstances that may or may not occur in the future. Except as required by law, OCTP is under no obligation to update (and will not) or keep current the forward-looking statements contained herein or to correct any inaccuracies which may become apparent in such forward-looking statements. Forward-looking statements reflect OCTP's judgement at the time of preparation of these unaudited interim condensed financial statements and are not intended to give any assurance as to future result.

Robin Bennett

Company Secretary

20 January 2023