RNS Number : 7420N
Roquefort Therapeutics PLC
27 September 2023
 

27 September 2023

 

Roquefort Therapeutics plc

("Roquefort Therapeutics" or the "Company")

 

Interim Results to 30 June 2023

 

Roquefort Therapeutics (LSE:ROQ, OTCQB:ROQAF), the Main Market listed biotech company focused on developing first-in-class medicines in the high value and high growth oncology market, is pleased to present its interim results for the six-month period ended 30 June 2023 (the "period" or "H1").

 

Highlights

·      Signed exclusive worldwide license agreement (excluding Japan) with Randox Laboratories for 10 years to utilise Midkine antibodies in the non-core medical diagnostics field:

highly synergistic - allows the Company to remain focused on the higher value therapeutic market while accelerating the diagnosis of patients with Midkine cancers to establish the Midkine cancer market

reduces the time and cost of clinical trials, and diagnostics have been shown to increase trial success rates[1]

highlights the Company's leadership position in Midkine and the Company's in-house deal making capabilities and is expected to strengthen the balance sheet

·      Formation of an expert Scientific Advisory Board of Professors Jo Martin, Trevor Jones and Armand Keating to review and advise on the development of the portfolio

·      Key milestone achieved with ROQ-A1 and ROQ-A2 Midkine antibody programs, targeting metastatic breast cancer, and lung and liver metastasis, successfully demonstrated in vivo safety in pre-clinical development programs and progressed into in vivo efficacy studies

·      The Company's first Orphan drug indication targets osteosarcoma in which, ROQ-A1 and ROQ-A2 demonstrated in vivo efficacy. This creates significant commercial potential for an Orphan drug designation which, if successful, would confer market exclusivity in multiple jurisdictions including seven years in the USA and 10 years in the EU and UK[2]

·      Portfolio further enhanced to a total of five programmes with the in-house development of a family of novel mRNA cancer medicines, which have demonstrated in vitro efficacy in validated models of breast and liver cancer

·      siRNA, MK cell therapy and Midkine oligonucleotide programs progressing into pre-clinical development  

·      Cash at period end of £1,379,021 and for the 6 months to 30 June 2023, net loss of £742,833

 

Post Period End Highlights

·      Patent portfolio significantly expanded with filing of the international phase PCT (Patent Treaty Cooperation) patent for proprietary anti-cancer mRNA and RNA oligonucleotide therapeutics, and new patent filing for its family of novel anti-cancer siRNA therapeutics

Outlook

·      On course with targets for clinical readiness for one of the Company's development programs during H2 2023

·      Near-term IND and licensing opportunities from advanced stage of development of Midkine portfolio products, MK cell and siRNA products

·      Strategic goal to take advantage of the paradigm shift that 90% of successful biotech programs are acquired by big pharma

·      Create value by identifying early innovation, developing it either in-house or with a research partner towards clinical trials and utilise experience to licence or sell to big pharma

Commenting on the Interim Results, Roquefort Therapeutics CEO Ajan Reginald said:

"In H1 2023, we have met the Company's strategic R&D targets, expanded our product portfolio to five programs with the addition of an innovative mRNA program, enhanced our IP leadership position in Midkine and STAT-6 siRNA and completed the partnership with Randox, one of the UK's leading medical diagnostics providers.

"To provide an industry context, our product portfolio now includes three programs (antibodies, siRNA and MK cell) with robust in vivo efficacy results, and so, our portfolio is more advanced in development than some leading UK biotech companies recently valued at US$100M. The STAT-6 siRNA is a good example of our strategy to discover and acquire unvalidated targets before big pharma realises the value. In July, Sanofi completed a US$1.2B deal with Recludix for their pre-clinical STAT-6 program, which is in the same pre-clinical stage of development as our STAT-6 siRNA program. Even though STAT-6 had been worked by pharma for circa 20 years, before this deal it was still an unvalidated target. After Sanofi's $Billion valuation and validation, many of the big pharma companies are seeking STAT-6 programs.

"Similarly, the Randox deal for diagnostics demonstrates the significant (under) valuation of the Midkine market, in which we have an IP leadership position. Randox, a sophisticated diagnostics company, acquired the rights for diagnostics only, and while diagnostics are highly synergistic and very important, this is a far less commercially valuable market than the Midkine therapeutics market.

"This industry context underpins our strategy to acquire and develop medicines in novel targets such as STAT-6 and Midkine before they are highly valued to create the potential for a step-change increase in value and M&A interest with validation. Until this external (big pharma) validation, we will continue to deliver the critical R&D milestones on time and within budget and continue to progress our business development discussions. However, the application of AI to drug development, has rapidly increased the speed of validation of novel targets e.g., Recludix' validated STAT-6 in just approximately 18 months. Therefore, rapid consolidation is predicted, particularly in the UK and Europe in which 46 M&A deals totalling US$5.6 billion were completed in Q1 2023, the second biggest year in recent records[3]. Roquefort Therapeutics is well positioned in this dynamic market, and we will of course update the market as our ongoing discussions progress."

 

Chairman's Statement 

I am pleased to present the interim results to shareholders for the six months ended 30 June 2023.  2022 was an incredibly busy period for the Company having completed the integration of the Oncogeni portfolio and enhanced our network of partnerships with leading cancer research centres. These partnerships complement our own world-class in-house expertise and laboratory infrastructure, enabling us to implement a broader and more effective development strategy and this distributed R&D model remains highly scalable and cost effective.

 

Building on the foundations laid in 2022 the Company has made significant R&D and strategic progress across the preclinical portfolio, particularly within our anti-cancer target, Midkine, where the Company has the leading portfolio and intellectual property suite. Our patent protected Midkine antibody programs achieved the relevant development milestones in the period on time and within budget. In January we announced our Midkine antibody programs, targeting metastatic breast cancer and metastatic lung cancer, demonstrated in vivo safety. 

During the period Roquefort Therapeutics formed its first Scientific Advisory Board (SAB) in order to help support its strategy and drive value through our preclinical programs. Professors Jo Martin, Trevor Jones and Armand Keating all with a wealth of experience formed the SAB during March, working closely with Chief Scientific Officer Martin Evans. This is a strong team of researchers, biopharmaceutical innovators and clinicians with an emphasis on linking pre-clinical research, clinical trials, production of medicines and the care of patientsThe Company is using its drug development expertise to complete pre-clinical development to reach valuation milestones for licensing transactions or a sale of a clinical program.

Pre-clinical progress

Further progress has since been made with our research partner, La Trobe University, and Roquefort Therapeutics is releasing further in vivo efficacy results for our lead antibody programs, CAB-101 (ROQA2) and CAB-102 (ROQA1) as well as a new program for an osteosarcoma orphan drug indication.  Osteosarcoma is the Company's first orphan drug indication and reflects the strategic decision to target cancer niches in which, there remains a high unmet clinical need. There are significant commercial benefits of an orphan drug indication such as market exclusivity for seven years in the USA and ten years in the EU and UK, tax credits for the clinical drug testing cost, fee reductions and, on average, have a higher success rate in clinical trials with a biomarker, in this case Midkine.

The in vivo efficacy study tested the anti-cancer killing ability of CAB-101 and CAB-102 in a validated experimental model of osteosarcoma. Treatment with CAB-101 was found to produce a statistically significant reduction in lung metastasis, and CAB-102 was found to reduce proliferation (growth rate) of the primary tumour.  The more detailed experimental results remain under embargo pending publication at a leading cancer research conference.  This is a particularly promising scientific and commercial strategy which was delivered on time and on budget and we will announce more updates on our pre-clinical progress and business development activities during H2.

Our anti-cancer RNA oligonucleotide program targeting Midkine expressing cancers produced >90% in vitro efficacy (at the mRNA level) in human liver and neuroblastoma cancer cells. This work has been conducted through strategic research partnerships at the Faculty of Medicine and Health at the University of Sydney and the Immune Oncology Laboratory at the School of Biomedical Sciences, University of New South Wales (UNSW). These experiments have unveiled a promising breakthrough in liver cancer treatment. Through the utilisation of these novel oligonucleotides, we have achieved remarkable in vitro efficacy, successfully inducing a significant reduction in full-length Midkine and generating a non-functional Midkine variant within liver cancer cells. This discovery holds immense potential for patients battling liver cancer, offering a new avenue for therapeutic intervention. The Company's anti-cancer RNA oligonucleotide program will now progress into in vivo studies which are planned to complete in Q4 2023.

 

During the period, the Company's portfolio grew materially. In March, the drug discovery team developed four mRNA pre-clinical therapeutics targeting Roquefort Therapeutics' novel Midkine target. This new program has been developed in-house within the Company's existing budget and schedule.

 

The significance of the mRNA program is twofold. First, it highlights Roquefort Therapeutics' internal R&D capacity to develop cutting edge pre-clinical cancer medicines within the Company's strategy and which complements the Company's ability to select and acquire external programs; and second, anti-cancer mRNA is a commercially attractive field, which is highly synergistic with the Company's existing oligonucleotide Midkine program. Further, in June 2023, Roquefort Therapeutics announced the successful completion of in vitro studies for the anti-cancer mRNA therapeutic in breast and liver cancer. The studies demonstrated a statistically significant reduction in both proliferation and migration.

 

mRNA is a very attractive field in biotech with a market size of circa $31 billion, led by Pfizer, Moderna and BioNTech and, within this highly innovative field, we are developing a Midkine niche which is unique for a biotech company of our size. These early in vitro results validate our strategy that demonstrating a significant reduction in both proliferation and migration are an early proxy for metastasis. Additionally, our intellectual property portfolio has been enhanced through updated patent filing. 

 

The Company will look to achieve synergies across our Midkine antibody, anti-cancer RNA oligonucleotide and mRNA programs which will make R&D and pre-clinical development more cost effective. 

 

The other two programs within our portfolio are also progressing. Our STAT-6 siRNA program has already demonstrated in vivo efficacy in colon cancer, and now the therapy is being combined with a lipid nanoparticle for delivery.  Further results on our STAT-6 siRNA program will be reported in due course. The MK Cell program is also completing testing in a combination therapy with results expected in Q4 2023.

 

Our five pre-clinical programs, which are in in vivo and in vitro studies, continue to progress on track and we look forward to announcing further progress in due course.

 

Commercial Progress

In February 2023, the Company made significant strategic and commercial progress by completing a licence and royalty agreement with Randox Laboratories to utilise the Group's Midkine antibody portfolio for clinical diagnostics. The transaction highlights the Group's in-house deal making capabilities and strategic focus in therapeutics. The partnership with Randox for cancer diagnostics validates the Company's strategy to target Midkine and brings a companion diagnostic.

 

This highly complementary and synergistic partnership increases the likelihood of clinical trial success, in which diagnostics is an essential element, in addition to reducing the associated time and cost for the Company.

 

Post Period End

In August 2023, the Company announced the development of four additional siRNA sequences to complement the existing siRNA portfolio.  These new siRNA sequences expand the Company's portfolio of siRNA medicines that attack the targets STAT-6 (Signal Transducer and Activator of Transcription) and its SH2 (Src-homology-2) domain.  The Company's siRNA sequences are being developed in combination with nano-particle delivery systems to target the hard-to-treat, high mortality solid cancers including colon and breast cancer with results expected in Q4 2023.

 

Strategy & Outlook

The Company's strategy is to discover and develop first-in-class cancer medicines within the oncology market and to seek out and secure licencing opportunities to crystalise value and fund the business going forward. Within this field, Roquefort Therapeutics focuses on the cancers that are resistant to current medicines including breast, colon and liver cancer, where patient survival rates remain poor. The Company's programs focus on the novel cancer targets Midkine and STAT-6, both of which are associated with this poor survival. By blocking Midkine and STAT-6, the Company has shown in in vivo studies, that both the cancer growth rate and metastasis are reduced, which are the characteristics of first-in-class cancer medicines. The significant developments made during the period speak to the Company's strategic objectives of developing value accretive programs which have significant potential as first-in-class medicines where survival rates are poor.  

The pre-clinical progress across all our programs is highly encouraging and within budget and in-keeping with our strategy and we look forward to updating shareholders on our pre-clinical and business development progress in due course.

 

Financial Review

For the six months to 30 June 2023, the Group reported a net loss of £742,833, mostly relating to administrative expenses and research & development expenses, and held cash at the period end of £1,379,021.

 

Directors

The following directors have held office during the period to 30 June 2023:

 

·      Mr Stephen West, Executive Chairman

·      Mr Ajan Reginald, Chief Executive Officer

·      Prof. Sir Martin Evans, Chief Scientific Officer

·      Dr Darrin Disley, Non-Executive Director

·      Ms Jean Duvall, Non-Executive Director

·      Mr Simon Sinclair, Non-Executive Director

·      Dr Michael Stein, Non-Executive Director

 

Corporate Governance

The UK Corporate Governance Code (September 2014) ("the Code"), as appended to the Listing Rules, sets out the Principles of Good Corporate Governance and Code Provisions which are applicable to listed companies incorporated in the United Kingdom. As a Standard listed company on the Main Market, the Company is not subject to the Code; however, the Board acknowledges the importance of high standards of corporate governance and endeavours, given the Company's size and the constitution of the Board, to comply with the principles set out in the QCA Corporate Governance Code. The QCA Code sets out a standard of minimum best practice for small and mid-size quoted companies and the Company has analysed its corporate governance with respect to that code which can be found on its website at https://www.roquefortplc.com/corporate-governance.

 

Responsibility Statement

The Directors are responsible for preparing the Unaudited Interim Condensed Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ("DTR") and with International Accounting Standard 34 on Interim Reporting ("IAS 34"). The Directors confirm that, to the best of their knowledge, this condensed interim report has been prepared in accordance with IAS 34 as adopted by the European Union. The interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

•      an indication of important events that have occurred during the six months ended 30 June 2023 and their impact on the condensed financial statements for the period, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

•      related party transactions that have taken place in the six months ended 30 June 2023 and that have materially affected the financial position of the performance of the business during that period.

 

ENDS

Enquiries:

Roquefort Therapeutics plc

Stephen West (Chairman) / Ajan Reginald (CEO)

+44 (0)20 3290 9339

 

Hybridan LLP (Joint Broker)

Claire Louise Noyce

 

Optiva Securities Limited (Joint Broker)

 

+44 (0)203 764 2341

Christian Dennis

 

Buchanan (Public Relations)

Ben Romney / Jamie Hooper / George Beale

 

+44 (0)20 3411 1881

 

 

+44 (0)20 7466 5000

 

 

LEI: ‎254900P4SISIWOR9RH34

 


 

 



Unaudited

Unaudited

Audited



6 Month

Period ended 30 June 2023

6 Month Period ended 30 June 2022

Year ended

31 December 2022


Note

£

£

£






Revenue

6

200,000

-

-

Cost of goods


-

-

-

Gross profit


200,000

-

-






Administrative expenses


(765,611)

(485,530)

(1,306,561)

Research and development


(365,435)

(69,288)

(319,315)

Share based payments - directors and senior managers


(5,201)

(57,511)

(8,427)

Depreciation


(1,189)

-

-

Amortisation of intangible assets


-

(149,952)

-

Operating loss


(937,436)

(762,281)

(1,634,303)






Finance income


-

-

-

Loss before taxation


(937,436)

(762,281)

(1,634,303)






Income tax


155,078

-

18,886

Total loss for the period attributable to equity holders of the Company


(782,358)

(762,281)

(1,615,417)

 


 

 

 

Other comprehensive income / (loss)


39,525

-

(14,989)

Total comprehensive loss attributable to equity holders of the Company


(742,833)

(762,281)

(1,630,406)

 

 





Basic and diluted earnings per ordinary share (pence)

7

(0.64)

(2.05)

(1.56)

 

 

The notes form an integral part of the Unaudited Condensed Interim Financial Statements




 

 

Unaudited

Unaudited

Audited



Note

 

As at

30 June

2023

£

As at

30 June

2022

£

As at

31 December

2022

£

Assets



 

 

 

 

Non-current assets



 

 

 

 

Property, Plant & Equipment




52,855

-

-

Intangible assets




5,343,505

1,331,578

5,343,505

Total non-current assets




5,396,360

1,331,578

5,343,505

 







Current assets                                             







Trade and other receivables


8


345,832

98,520

101,738

Cash and cash equivalents 




1,379,021

3,328,573

2,322,974

Total current assets

 

 

 

1,724,853

3,427,093

2,424,712

Total assets

 

 

 

7,121,213

4,758,671

7,768,217








Equity and liabilities







Equity attributable to shareholders







Share capital


10


1,291,500

719,000

1,291,500

Share premium


10


4,403,094

3,460,595

4,403,094

Share based payments reserve


11


380,336

424,219

375,135

Merger relief reserve



3,700,000

450,000

3,700,000

Retained deficit




(3,331,086)

(1,676,602)

(2,548,728)

Currency translation reserve




25,160

5,159

(14,365)

Total equity

 

 

 

6,469,004

3,382,371

7,206,636

Liabilities







Non-Current liabilities







Deferred tax liabilities




281,911

281,911

281,911

Current liabilities







Trade and other payables


9


370,298

1,094,389

279,670

Total liabilities

 

 

 

652,209

1,376,300

561,581

Total equity and liabilities

 

 

 

7,121,213

4,758,671

7,768,217

 

The notes form an integral part of the Unaudited Condensed Interim Financial Statements


 



Unaudited

Unaudited

Audited



6 Month

Period ended

30 June 2023

6 Month Period ended 30 June 2022

Year ended 31 December 2022



£

£

£

Cash flow from operating activities





Loss before income tax


(937,436)

(762,281)

(1,634,303)

 

Adjustments for:





Share based payment


5,201

57,511

8,427

Foreign exchange


31,865

(5,160)

(9,918)

Taxation


-

-

18,886

Depreciation


1,189

-

-

Amortisation of intangible asset


-

149,952

-

Changes in working capital:





(increase) /decrease in receivables


(86,268)

2,083,286

(20,318)

Increase / (decrease) in payables


96,922

(121,325)

59,750

Net cash (used in)/ from operating activities

 


(888,527)

1,401,983

(1,577,476)

Cash flow from investing activities





Acquisition of subsidiary, net of cash acquired


-

-

(103,478)

Purchase of Property, Plant & Equipment


(54,043)

-

-

Net cash used in investing activities

 

 

(54,043)

-

(103,478)

Cashflows from financing activities





Proceeds from fundraise


-

1,015,000

3,121,202

Share issue costs


-

-

(18,990)

Net cash from financing activities

 


-

1,015,000

3,102,212






Net increase/(decrease) in cash and cash equivalents

(942,570)

2,416,983

1,421,258

Cash and cash equivalents at beginning of the period

2,322,974

899,721

899,721

Foreign exchange impact on cash


(1,383)

11,869

1,995

Cash and cash equivalents at end of the period

1,379,021

3,328,573

2,322,974

 

 

The notes form an integral part of the Unaudited Condensed Interim Financial Statement



Ordinary

Share capital

Share Premium

Share

Based Payment Reserve

Merger relief reserve

 

Retained earnings

Translation Reserve

 

Total equity


£

£

£

£

£

£

£

As at 1 January 2022

719,000

3,460,595

366,708

450,000

(914,321)

624

4,082,606

Loss for the period

-

-

57,511

-

(762,281)

4,535

(700,235)

As at 30 June 2022

719,000

3,460,595

424,219

450,000

(1,676,602)

5,159

3,382,371

Loss for the period

-

-

-

-

(853,136)

-

(853,136)

Exchange differences

-

-

-

-

-

(19,524)

(19,524)

Total comprehensive loss for the period

-

-

-

-

(853,136)

(19,524)

(872,660)

Transactions with owners






 

 

Ordinary shares issued

572,500

942,499

-

3,250,000

-

-

4,764,999

Stamp duty on share issue

-

-

-

-

(18,990)

-

(18,990)

Warrants charge

-

-

(49,084)

-

-

-

(49,084)

Total transactions with owners

572,500

942,499

(49,084)

3,250,000

(18,990)

-

4,696,925

As at 31 December 2022

1,291,500

4,403,094

375,135

3,700,000

(2,548,728)

(14,365)

7,206,636

 

 

 

 

Loss for the period

-

-

-

-

(782,358)

-

(782,358)

Exchange differences

-

-

-

-

-

39,525

39,525

Total comprehensive loss for the year

-

-

-

-

(782,358)

39,525

(742,833)

Transactions with owners






 

 

Ordinary shares issued

-

-

-

-

-

-

-

Stamp duty on share issue

-

-

-

-

-

-

-

Warrants charge

-

-

5,201

-

-

-

5,201

Total transactions with owners

-

-

5,201

-

-

-

5,201

As at 30 June 2023

1,291,500

4,403,094

380,336

3,700,000

(3,331,086)

25,160

6,469,004

 

 

The notes form an integral part of the Unaudited Condensed Interim Financial Statements


1              General Information

The Company was incorporated on 17 August 2020 as a public company in England and Wales with company number 12819145 under the Companies Act.

The address of its registered office is 85 Great Portland Street, First Floor, London W1W 7LT, United Kingdom.

The principal activity of the Company during the period ended 30 June 2023 was to develop pre-clinical next generation medicines focused on hard-to-treat cancers.

The Company listed on the London Stock Exchange ("LSE") on 22 March 2021.

The condensed consolidated interim financial statements of the Group have been prepared in accordance with UK adopted International Accounting Standards as issued by the UK Accounting Standards Board (ASB). They have been prepared under the assumption that the Group operates on a going concern basis.

2              New Standards and Interpretations

New and revised accounting standards adopted for the period ended 30 June 2023 did not have any material impact on the Group's accounting policies. There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.   The following amendments are effective for the period beginning 1 January 2024:

·    FRS 16 Leases (Amendment - Liability in a Sale and Leaseback);

·    IAS 1 Presentation of Financial Statements (Amendment - Classification of Liabilities as Current or Non-current); and

·    IAS 1 Presentation of Financial Statements (Amendment - Non-current Liabilities with Covenants)

 

The Group is currently assessing the impact of these new accounting standards and amendments. The Group does not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities. The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Group.

3              Summary of Significant Accounting Policies

Basis of Preparation

These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022 were approved by the Board of Directors on 4 June 2023 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006; however, it did contain an emphasis of matter paragraph relating to a material uncertainty in relation to going concern identified by the directors and appropriately disclosed in the financial statements

These condensed consolidated interim financial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and with IAS 34 "Interim Financial Statements." The condensed consolidated interim financial statements do not include all disclosures that would otherwise be required in a complete set of financial statements but have been prepared in accordance with the existing accounting policies of the Group. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2022, which have been prepared in accordance with UK adopted International Accounting Standards and the Companies Act 2006.

The condensed consolidated interim financial statements for the period ended 30 June 2023 are unaudited.

The condensed consolidated interim financial statements are presented in £ unless otherwise stated, which is the Company's functional and presentational currency.

Going concern

The preparation of the financial statements requires an assessment on the validity of the going concern assumption.

After due consideration of financial forecasts, current cash resources and the Group's plan to complete licencing deals, the Directors are of the opinion that the Company and the Group have adequate working capital to execute its operations over the next 12 months. As a result, the Directors have adopted the going concern basis of accounting in the preparation of the interim financial statements.

Accounting policies

The same accounting policies, presentation and methods of computation have been followed in these condensed consolidated interim financial statements as were applied in the preparation of the Company's and the Group's financial statements for the period ended 31 December 2022.

Segment reporting 

The Group considers it has one operating segment and therefore the results are as presented in the primary statements.

Forward-looking statements 

Certain statements in this condensed set of consolidated interim financial statements are forward looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct. As these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

4              Critical accounting estimates and judgments

In preparing the condensed consolidated interim financial statements, the Directors have to make judgments on how to apply the Company's accounting policies and make estimates about the future. Estimates and judgments are continuously evaluated based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions.

Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December 2022.

5              Financial risk management  

The Group's activities expose it to a variety of financial risks, including market risk (which includes currency risk and interest rate risk), credit risk and liquidity risk. The condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December 2022. There have been no changes in any risk management policies since the year end.

6              Revenue

 

Unaudited

Unaudited

Audited

 

 

Period ended

30 June

 2023

£

Period ended

30 June

 2022

£

Year ended

31 December 2022

£

License fee revenue

200,000

-

-

 

200,000

-

-

7              Earnings per Ordinary Share


Unaudited

Unaudited

Audited


Period ended

30 June

2023

£

Period ended

30 June

2022

£

Year ended

31 December 2022

£

Loss attributable to equity shareholders

(782,358)

(762,281)

(1,615,417)

Weighted number of ordinary shares in issue 

121,850,000

37,209,663

103,479,476

Basic and diluted loss per share in pence

(0.64)

(2.05)

(1.56)

 

8              Trade and other receivables


Unaudited

Unaudited

Audited


30 June

2023

£

30 June

2022

£

31 December 2022

£

Other receivables

127,330

65,344

45,124

Prepayments and accrued income

109,436

33,176

56,614

R&D tax credit receivable

109,066

-

-

 

345,832

98,520

101,738

 

9              Trade and other payables


Unaudited

Unaudited

Audited


30 June

2023

£

30 June

2022

£

31 December 2022

£

Trade creditors

274,755

36,997

68,379

Accruals and other creditors

95,543

42,392

211,291

Sundry creditor

-

1,015,000

-

 

370,298

1,094,389

279,670

 

10           Share Capital

 

Ordinary Shares

Share Capital

Share Premium

Total

 

No.

£

£

£






At 31 December 2021

71,900,000

719,000

3,460,595

4,179,595

At 30 June 2022

71,900,000

719,000

3,460,595

4,179,595

Issue of ordinary shares

50,000,000

500,000

-

500,000

Issue of ordinary shares

7,249,998

72,500

942,499

1,014,999

At 31 December 2022

129,149,998

1,291,500

4,403,094

5,694,594

Movement for the period

-

-

-

-

As at 30 June 2023

129,149,998

1,291,500

4,403,094

5,694,594

 

 

 

11           Share Based Payment Reserves

 

Unaudited

Unaudited

Audited


30 June

2023

£

30 June

2022

£

31 December 2022

£

Opening balance

375,135

366,708

366,708

NED and Advisor warrants vesting

5,201

57,511

8,427

 

380,336

424,219

375,135

 

 

The fair value of the services received in return for the warrants granted are measured by reference to the fair value of the warrants granted. The estimate of the fair value of the warrants granted is measured based on the Black-Scholes valuations model. Measurement inputs and assumptions are as follows:

 

Warrant

Number of warrants

Share Price

Exercise Price

Expected volatility

Expected life

Risk free rate

Expected dividends

Director

750,000

£0.05

£0.05

50.00%

5

0.15%

0.00%

Director

750,000

£0.05

£0.10

50.00%

5

0.15%

0.00%

Broker

1,500,000

£0.05

£0.01

50.00%

0.08

0.15%

0.00%

Broker Placing

480,000

£0.05

£0.05

50.00%

3

0.15%

0.00%

Completion

3,000,000

£0.10

£0.10

50.00%

3

0.15%

0.00%

Senior Mgt

4,500,000

£0.10

£0.15

50.00%

5

0.15%

0.00%

Optiva

1,320,000

£0.10

£0.10

50.00%

3

0.15%

0.00%

Orana

175,000

£0.10

£0.10

50.00%

3

0.15%

0.00%

NED and Advisor

900,000

£0.08

£0.15

50.00%

5

0.15%

0.00%

TOTAL

13,375,000

 






 

 Warrants

Number of Warrants

Exercise Price

Expiry date 

At 31 December 2021

34,475,000

£0.105


Issued on 28 April 20221

900,000

£0.15

28 April 2027

At 30 June 2022

35,375,000

£0.106


At 31 December 2022

35,375,000

£0.106


Expired in the period

(11,500,000)

-

22 March 2023

As at 30 June 2023

23,875,000

£0.109


150% of the warrants vest on 28 April 2023 and the remainder vest on 28 April 2024

The weighted average time to expiry of the warrants as at 30 June 2023 is 2.7 years (30 June 2022: 3.10 years).

The expected volatility was calculated using the Exponentially Weighted Moving Average Mode. Due to limited trading history comparable listed peer company information was used.

12           Related Party Transactions

There were no related party transactions during the period ended 30 June 2023.

13           Post Balance Sheet Events

There has been no significant change in either the financial performance or the financial position of the Group since 30 June 2023.

14           Ultimate Controlling Party

As at 30 June 2023, there was no ultimate controlling party of the Company.

15           Nature of the Consolidated Condensed Interim Financial Statements

The Company Financial Information presented above does not constitute statutory accounts for the period under review.

16           Approval of the Condensed Interim Financial Statements

The Condensed Interim Financial Statements were approved by the Board of Directors on 26 September 2023.

 



[1] Thomas D. W., Burns J., Audette J., Carroll C., Dow-Hygelund C., Hay C. (2016). Clinical development success rates (2006-2015). Retrieved from www.bio.org

[2] https://www.orpha.net/consor/cgi-bin/Education_AboutOrphanDrugs.php?lng=EN&stapage=ST_EDUCATION_EDUCATION_ABOUTORPHANDRUGS_COMPARISON

[3] https://mergers.whitecase.com/highlights/european-biotech-enjoys-a-burst-of-deal-making-activity#!

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