31 October 2023
Scancell Holdings plc
("Scancell" or the "Company")
Results for the Year Ended 30 April 2023
Scancell Holdings plc (AIM: SCLP), the developer of novel immunotherapies for the treatment of cancer and infectious disease, today announces its final audited financial results for the year ended 30 April 2023 as well as a business update on progress achieved post-period.
Key highlights (including post-period) SCIB1 (SCOPE trial)
· SCIB1 reported positive data from the first stage of its Phase 2 SCOPE trial for advanced melanoma.
· SCIB1 in combination with checkpoint inhibitors (CPIs) showed an 82% objective response rate (ORR) to treatment in 11 patients, exceeding 70% ORR expectations and accompanied by meaningful tumour volume reduction
· In the real word setting in patients just receiving the doublet CPI therapy, the ORR is 50% with a progression free survival of 11.5 months
· Recruitment in the second stage is expected to be complete by the end of 2023 with data available in H1 2024 and a clear potential development pathway
· iSCIB1+ cohort could be added to SCOPE trial if the protocol amendment is approved by the MHRA with early data with iSCIB1+ available in H1 2024
Modi-1 (ModiFY trial)
· Modi-1 has completed dose escalation and safety cohorts of the Phase 1/2 ModiFY trial and is now into expansion cohorts
· Early data from patients receiving Modi-1 as a monotherapy showed good safety and tolerability, with no dose limiting toxicities observed in dose escalation cohorts
· Modi-1 demonstrated encouraging early efficacy in a head and neck cancer patient and in other hard- to-treat cancers such as high grade serous ovarian carcinoma (HGSOC) and triple negative breast cancer (TNBC)
· Early clinical data with Modi-1 expected to be available in 2024
Antibodies
· GlyMab® and AvidiMab® platforms provide potential out licensing opportunities with active discussions ongoing with Pharmaceutical and Biotech companies.
· Data presented at AACR-CIMT in September illustrated the potential of Scancell antibodies as chimeric antigen receptor T cell (CART) therapies
Corporate
· Jean-Michel Cosséry appointed as our Non-Executive Chairman, bringing over 25 years of healthcare experience and a sustained global track record of success
· Sath Nirmalananthan appointed as Chief Financial Officer
· Dr Mandeep Sehmi appointed as Head of Business Development building our commercial capabilities
Financial Highlights
· Operating loss for the 12-month period to 30 April 2023 of £11.9 million (30 April 2022: operating loss of £13.3 million)
· Group cash balance at 30 April 2023 was £19.9 million (30 April 2022: £28.7 million) with a cash runway through to early 2025 achieving the near-term clinical milestones for SCIB1 and Modi-1
.
Prof Lindy Durrant, Chief Executive Officer, Scancell, commented: "Throughout the year, we have continued to deliver strong progress across the business and have achieved a number of significant milestones. As previously communicated, our strategic focus is to continue to progress our two lead assets, SCIB1 and Modi-1, through clinical development. Both trials have made good progress throughout the year and early data is encouraging. We were particularly impressed by the recent positive data from the first stage of our SCOPE trial with SCIB1 showing an 82% objective response rates (ORR) better than 70% ORR that the trial was configured to show. We are looking forward to progressing both the SCOPE trial and the ModiFY trial and are funded to continue the development of these high-potential assets to the next near-term value inflection points.
Following our commercial license agreement with Genmab, we are continuing to have active discussions with Pharmaceutical and Biotech companies to maximize the value of our antibody platforms through additional licensing opportunities and I look forward to updating the market on those discussions in due course.
We were also pleased to welcome Jean-Michel Cosséry as Non-Executive Chairman, Sath Nirmalananthan as Chief Financial Officer and Dr Mandeep Sehmi as Head of Business Development. Now, with a bolstered leadership team, sufficient cash in place to fund our current strategy and with further key data from both the SCOPE and ModiFY trial anticipated during 2024, I believe we are well placed to achieve the potential of our treatments for patients whilst also creating and delivering significant long-term value for our shareholders."
For further information, please contact:
Scancell Holdings plc +44 (0) 20 3709 5700
Professor Lindy Durrant, CEO
Dr Jean-Michel Cosséry, Non-Executive Chairman
Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker) +44 (0) 20 7710 7600 Nicholas Moore/Samira Essebiyea/William Palmer-Brown (Healthcare
Investment Banking)
Nick Adams/Nick Harland (Corporate Broking)
Panmure Gordon (UK) Limited (Joint Broker) +44 (0) 20 7886 2500 Freddy Crossley/Emma Earl (Corporate Finance)
Rupert Dearden (Corporate Broking)
Consilium Strategic Communications +44 (0) 20 3709 5700
Mary-Jane Elliott/Matthew Neal/Chris Welsh scancell@consilium- comms.com
About Scancell
Scancell is a clinical stage biopharmaceutical company that is leveraging its proprietary research, built up over many years of studying the human adaptive immune system, to generate novel medicines to treat significant unmet needs in cancer and infectious disease. The Company is building a pipeline of innovative products by utilising its four technology platforms: Moditope® and ImmunoBody®for vaccines and GlyMab®and AvidiMab®for antibodies.
Adaptive immune responses include antibodies and T cells (CD4 and CD8), both of which can recognise damaged or infected cells. In order to destroy such cancerous or infected cells, Scancell uses either vaccines to induce immune responses or monoclonal antibodies (mAbs) to redirect immune cells or drugs. The Company's unique approach is that its innovative products target modifications of proteins and lipids. For the vaccines (Moditope® and ImmunoBody®) this includes citrullination and homocitrullination of proteins, whereas
its mAb portfolio targets glycans or sugars that are added onto proteins and / or lipids (GlyMab®) or enhances the potency of antibodies and their ability to directly kill tumour cells (AvidiMab®).
For further information about Scancell, please visit: https://www.scancell.co.uk/
CHAIRMAN'S STATEMENT
It is with great pleasure that I to write to you for the first time as Chairman of Scancell. Since joining in February 2023, I have been impressed by the groundbreaking science from which we have developed a pipeline of patent-protected innovative immune-oncology products and I strongly believe this is a pivotal time in the Company's evolution.
Our lead cancer vaccines, SCIB1 and Modi-1, have shown positive early efficacy results and recruitment continues on track to meet further near-term clinical milestones during 2024. These clinical assets are supplemented by our proprietary antibody platforms, GlyMab®and AvidiMab®, which provide potential for further out-licensing deals following our commercial license agreement with Genmab in October 2022.
Scancell is funded to reach these near-term milestones with sufficient funds through to early 2025 and is backed by specialist biotech investors, including Redmile Group and Vulpes Life Sciences. We have an experienced board and leadership team with a track record of delivery, combined with a highly skilled scientific team and a lean organisation, all focused on delivering value from our platforms in efficient timelines.
I'd like to take this opportunity to highlight our recent impressive results from the first stage of the Phase 2 SCOPE trial. The Phase 2 SCOPE trial is investigating SCIB1 delivered needle-free and in combination with checkpoint inhibitors (CPIs) in advanced melanoma. Remarkable initial data from 11 patients showed an 82% objective response rate (ORR) to treatment with no increase in toxicity, better than 70% ORR that the trial was configured to show. We are excited because, to our knowledge, no other combination has achieved this response rate with doublet checkpoint inhibitors in unresectable metastatic melanoma. Confirmation of this data in a larger cohort could make a significant impact on melanoma patient survival, especially as melanoma is now the most common cancer in young women and is increasing in incidence.
Our progress could not have been achieved without our talented employees and I would like to thank them for their hard work and dedication. In addition, the Board would like to thank all existing shareholders, especially Redmile Group and Vulpes Life Sciences , for their continued support as we look forward to delivering on our plans over the next 12 months and beyond.
Looking ahead we will remain focused on maintaining our momentum for SCIB1 and Modi-1 whilst actively seeking out-licensing, collaborations and partnerships to accelerate the development and commercialisation of our products and platforms. We believe the impressive data from the SCOPE trial, combined with further near-term milestones and commercial opportunities will soon provide exciting inflection drivers. We remain confident on achieving the potential of these treatments for patients, whilst creating and delivering significant long-term value for our shareholders.
Jean-Michel Cosséry
Chairman
CHIEF EXECUTIVE OFFICER'S REPORT
I am pleased to report that Scancell has delivered a strong year, achieving significant clinical and commercial milestones. In the period, the Company decided to concentrate its strategic focus and resources on its lead cancer vaccines, SCIB1 and Modi-1 which have shown positive early efficacy data. The decision to focus on these assets reflects the need to manage our resources and cash in a tough macroeconomic environment which is impacting ability to access further capital. The Company has strong confidence in its other assets and will continually assess partnering and out-licensing options to drive these assets forward and add further value.
Set out below is a summary of progress that has been made across our innovative and proprietary vaccine and antibody platforms.
VACCINES
ImmunoBody® platform
Scancell's ImmunoBody®immunotherapy platform uses the body's immune system to identify, attack and destroy tumours. This is achieved by delivering a DNA plasmid to enhance the uptake and presentation of cancer antigens to harness high avidity T cell responses, offering the potential for enhanced efficacy and safety compared with more conventional approaches. These vaccines have the potential to be used as monotherapy or in combination with checkpoint inhibitors and other agents. This platform has the potential to enhance tumour destruction, prevent disease recurrence and extend survival.
SCIB1
SCIB1 is the lead product from the Company's ImmunoBody®immunotherapy platform. It is currently being evaluated in a Phase 2 SCOPE trial in the UK in combination with checkpoint inhibitors for the treatment of advanced melanoma. The SCOPE study is an open-label, multi-cohort, multicentre Phase 2 study. In June 2022, the Medicines and Healthcare products Regulatory Agency (MHRA) approved a protocol amendment allowing the trial to include a cohort of advanced melanoma patients who will receive SCIB1 plus doublet therapy consisting of ipilimumab (Yervoy®) plus nivolumab (Opdivo®) in addition to the cohort who will receive SCIB1 with pembrolizumab (Keytruda®). This reflects the current treatment landscape for unresectable metastatic melanoma patients. The Phase 2 study is designed to assess whether the addition of SCIB1 treatment to CPI standard of care results in an improvement in patient outcomes for patients with metastatic disease. The primary objectives of the trial are tumour response rate, progression-free survival and overall survival in patients with advanced melanoma. The SCIB1 vaccine is delivered via a PharmaJet®needle-free injection, which provides enhanced patient acceptance versus electroporation.
In September 2023, Scancell reported positive data from the first stage in its Phase 2 SCOPE trial, investigating SCIB1 in combination with doublet therapy checkpoint inhibitors in advanced melanoma. Initial data from 11 patients showed an 82% objective response rate (ORR) to treatment, which is better than 70% ORR that the trial was configured to show. The first milestone in the SCOPE trial was to achieve responses in more than 8 out of 15 patients which would suggest that SCIB1 in combination with doublet CPI therapy might meaningfully improve current outcomes for these patients. 16 stage IV metastatic patients received this combination. 11 of these study patients have reached 13 weeks and been evaluated at radiological imaging and nine have already shown an objective response, equating to an ORR of 82% with no increase in toxicity. At this time point the reduction in tumour volume was 31%-94%. Four patients reaching the 25 weeks imaging evaluation and two reaching the 37 weeks evaluation have shown a 69%-94% and a 87%-94% reduction in total tumour burden, respectively. This compares to an ORR of 50% reported in patients just receiving this doublet CPI therapy in the real world setting with a progression free survival time of 11.5 months.
The SCOPE trial has now successfully transitioned into the second stage, which will recruit a further 27 patients (for a total of 43). The aim is to achieve at least 18 further responses (i.e., 27 responses in total) which would statistically demonstrate that SCIB1, in combination with doublet therapy, exceeds currently achievable ORRs. Based upon the first 11 patients there is a greater than 90% probability that the second phase will also be successful. The second stage of recruitment is expected to be complete by the end of 2023 with data available in H1 2024.
If validated in the second stage of the SCOPE trial this will provide confidence to initiate a randomised phase 2/3 adapted registration programme in patients with unresectable melanoma. The Phase 2 part of the adapted trial should take 18 months and we anticipate it will generate significant partner interest.
iSCIB1+
iSCIB1+ is a modified version of SCIB1 developed using the company's AvidiMab®platform. iSCIB1+ also includes more melanoma-specific epitopes so it can be used by a broader patient population rather than SCIB1 which is limited to the 40% of patients who have the appropriate HLA. Furthermore, iSCIB1+ has competitive advantages to SCIB1, including potentially increased potency and extending the patent life by 15 years to 2031.
Given the significant improvements in potency, utility and patent life with iSCIB1+, the Company plans to include an iSCIB1+ cohort in the SCOPE trial once a protocol amendment has been approved by the MHRA. The amendment to the current trial protocol, to include a new parallel cohort with the double CPIs with iSCIB1+, has been submitted to the MHRA and we are awaiting a response.
The unresectable melanoma market represents a potential $1.5 billion per annum market.
Moditope® platform
Moditope®is a versatile proprietary cancer vaccine platform that targets stress-induced post-translational modifications (siPTMs) of proteins. This discovery has allowed the Company to develop a completely new class of potent and selective therapeutic vaccines. Examples of such modifications include citrullination, an enzyme-based conversion of arginine to citrulline, and homocitrullination, in which lysine residues are converted to homocitrulline. Expression of peptides containing these modifications have been demonstrated to induce potent CD4 cytotoxic T cells that induce anti-tumour activity without any associated toxicity.
Modi-1
Modi-1, which targets citrullinated cancer antigens, is the first therapeutic vaccine candidate to emerge from Company's Moditope®platform. Modi-1 consists of three citrullinated tumour-associated peptides exploiting the normal immune response to stressed cells, which is largely mediated by cytotoxic CD4 T cells. The peptides are linked to AMPLIVANT®, a potent adjuvant which, in preclinical models, enhanced the immune response of Modi-1 10-to-100 fold and resulted in highly efficient tumour clearance, including protection against tumour recurrence. AMPLIVANT®is the subject of a worldwide licensing and collaboration agreement with ISA Pharmaceuticals for the manufacturing, development and commercialisation of Modi-1.
The ModiFY study is an open-label, multicohort, multicentre, adaptive Phase 1/2 trial with Modi-1 being administered alone or in combination with CPIs in patients with head and neck, triple negative breast and renal tumours and as a monotherapy in patients with ovarian cancer, where there are no approved CPI therapies and in patients with the other tumour types where CPIs are not indicated. Modi-1 stimulates CD4 T cells which may directly impact tumour growth however in some patients if the tumour environment is highly immunosuppressive, these T cells may need to be protected by CPIs. This open label Phase 1/2 study is assessing the safety and immunogenicity of two citrullinated vimentin peptides and citrullinated enolase peptide. This open label study will recruit over 100 patients in up to 20 UK clinical trial sites. In addition, the effect of Modi-1 in promoting T-cell infiltration into the tumour will be assessed in a neoadjuvant cohort in which a further 30 patients with head and neck cancer will be treated with Modi-1 with or without CPI, prior to their first surgical resection.
The ModiFY trial has completed its dose escalation and safety cohorts. Data from patients receiving the Modi- 1 cancer vaccine as a monotherapy showed that it was safe and well tolerated and demonstrated encouraging early efficacy in a head and neck cancer patient and in other hard-to-treat cancers such as high grade serous ovarian carcinoma (HGSOC) and triple negative breast cancer (TNBC). The cohort of 16 ovarian cancer patients receiving Modi-1 has now been fully recruited. All patients had failed on previous treatments and their disease was actively progressing when they entered the study. Following treatment with Modi-1 44% of patients achieved stable disease for at least 8 weeks, with some patients experiencing a longer duration of disease stability for 4 months or more. The number of patients who have experienced long periods of stable disease following monotherapy with Modi-1 is encouraging in this difficult to treat cancer and the Company believes that combination therapy with checkpoint inhibitors, which are not currently approved for the treatment of ovarian cancer, could further improve outcomes for this patient group. Evaluation of Modi-1 plus checkpoint inhibitors in other tumour types in the ongoing Phase 1/2 study, will provide supporting data for this proposed combination use.
In the other monotherapy cancer cohorts, a total of eight patients have received full dose Modi-1. One TNBC patient remains on trial with stable disease beyond 35 weeks. One head and neck patient achieved a partial response. Recruitment is ongoing.
In July 2023, the ModiFY study moved into the expansion cohorts, following approval by the safety review committee. The expansion cohorts include Modi-1 in combination with checkpoint inhibitors (CPI) and in the neoadjuvant setting. All three patients in Cohort 4 have now successfully received two doses of Modi-1 plus CPI and the treatments were well tolerated with no safety concerns. 21 patients will be recruited into each cohort. Patients with triple negative breast cancer will not be included in this part of the study as these patients receive checkpoints in combination with chemotherapy which may induce citrullination in normal cells and induce toxicity.
This study will recruit 30 patients who will be randomised at diagnosis to receive either two doses of Modi-1 three weeks apart or two doses of Modi-1 plus one dose of CPI. Tumour biopsies will be taken prior to immunisation and from the tumour resection 6 weeks following the initial vaccination. The two tumour samples will allow the extent of T cell infiltration and activation pre- and post-Modi-1 vaccination to be assessed with and without a checkpoint inhibitor.
Early clinical data with Modi-1 expected to be available in 2024.
Modi-2
Modi-2, which targets homocitrullinated cancer antigens, is the second therapeutic vaccine candidate from the Company's Moditope®platform and has the potential to address different cancer indications to Modi-1, including tumours with a particularly immunosuppressive environment.
In November 2022, the Company in-licensed the SNAPvax? technology from Vaccitech plc, a clinical-stage biopharmaceutical company engaged in the discovery and development of novel immunotherapies and vaccines. The agreement allows Scancell to formulate and manufacture Modi-2. The SNAPvax? technology enables peptides to self-assemble with TLR-7/8a, a powerful adjuvant, to promote strong T cell responses and is proven to successfully overcome formulation issues associated with immunogenic peptide antigens, which are often highly hydrophobic and prone to manufacturing challenges with conventional formulations. Modi-2 will use SNAPvax? to co-deliver homocitrullinated peptide antigens and TLR-7/8a adjuvants in self- assembling nanoparticles designed to prime tumour killing T cells.
The Company expects that the combination of Modi-2 with a highly effective platform for inducing T cells (Vaccitech's SNAPvax? technology) will lead to a potentially superior therapeutic vaccine candidate.
COVIDITY
As previously disclosed, the Company has decided not to take this vaccine forward in house due to the large size of later stage trials and the competitive Covid-19 landscape, however the previous positive data in February 2023 for COVIDITY demonstrates the validation of the vaccine platform, including AvidiMab®. The Company will now seek a partner to progress the COVIDITY vaccine programme.
ANTIBODIES
GlyMab®
The GlyMab®platform provides a powerful and versatile approach to generating novel antibody drug candidates for our own clinical pipeline but also to create upfront, milestone and revenue generating partnerships with other companies in areas such as drug targeting to capitalise on other groups expertise. The GlyMab®antibodies bind to sugar motifs, rather than peptide epitopes, found on the surface of glycosylated proteins and lipids expressed by cancer cells. The Company currently has a pipeline of five anti-glycan mAbs: SC129, SC134, SC2811, SC88 and SC27 that target solid tumours including pancreatic, small cell lung, colorectal and gastric cancers. All of these drug candidates have now been successfully humanised and are ready for the next stage of development.
The GlyMab®antibodies can be developed into redirecting T cell bispecific (TCB) antibodies with the potential of entering the clinical trials providing a promising new therapeutic approach for treating cancer. TCB antibodies have dual-binding specificity which crosslinks tumour cells via their glycans with an activating receptor CD3 on T cells. This results in activation of killer T cells and tumour cell death. These antibodies are particularly potent in tumours which have lost the T cell recognition molecule major histocompatibility antigen (MHC) or where there is limited T cell infiltration as they by-pass normal T cell activation pathways and redirect the host immune system to the tumour. SC134 has now been successfully developed in the lab as a TCB.
In October 2022, Scancell signed its first commercial license agreement with Genmab. Genmab were granted a worldwide license to an anti-glycan monoclonal antibody generated via Scancell's proprietary GlyMab®platform, for the development and commercialisation of novel therapeutic products. The Company received
£5.3 million in up front payment as well as potential milestone payments of up to $208 million for each product developed and commercialised, up to a maximum of $624 million if Genmab develops and commercialises products across all defined modalities. The Company will also receive low single digit royalties from Genmab on net sales of all commercialised products.
AvidiMab®
AvidiMab®is a versatile proprietary platform technology that can enhance the avidity and thereby the potency of any antibody. To date, the Company has used AvidiMab®in its internal programmes to:
· Engineer the anti-glycan mAbs to improve their ability to directly kill tumour cells.
· Engineer other mAbs to enhance their potency and/or extend their patent lifetime.
· Increase the breadth of response and potency of Scancell's ImmunoBody® cancer products.
· Increase the potency of the T cell response in Scancell's COVID-19 vaccine which in turn should lead to improvements in long-term protection and immunological memory.
AvidiMab®platform successfully applied to internal programmes, including iSCIB1+ and COVIDITY, and holds potential to enhance the efficacy of third-party antibodies.
CORPORATE
The Company has been building its organisational capabilities through key appointments to the Board and Leadership teams.
During the year Jean-Michel Cosséry was appointed as the Non-Executive Chairman. Jean-Michel brings to Scancell over 25 years of experience in the pharmaceutical and biotechnology industries and a sustained global track record of success in commercial operations as well as in capital raising, US and European public offerings, business development and M&A. We are already capitalising on his experience as we continue on our journey to deliver the next stage of growth.
The Company has also recently appointed Sath Nirmalananthan as Chief Financial Officer and Dr Mandeep Sehmi as Head of Business Development. Both appointments bring highly relevant experience from the pharmaceutical sector to the company that will further enhance its commercial capabilities and accelerate the Company forward in achieving its strategic objectives.
FINANCIAL REVIEW
Profit or Loss and Other Comprehensive Income Statement
The Group made an operating loss for the year to 30 April 2023 of £11.9 million (2022: operating loss of £13.3 million). Revenue from the licencing deal with Genmab of £5.3 million reduced the operating loss significantly.
The increase in development expenditure to £11.6 million (2022: £9.5 million) reflects an increase in average numbers of research and clinical staff from 33 to 43 together with additional costs incurred with increased recruitment in the SCOPE and ModiFY clinical trials and completion of the COVID clinical trial.
Administrative expenditure has increased by 4% to £5.0 million (2022: £4.8 million).
During the previous year the group received grant income of £0.97 million from Innovate UK. This ceased at 31 March 2022.
Interest payable of £1.2 million (2022 restated: £1.8 million) largely relates to the effective interest on the convertible loan notes (CLNs) which were issued in August and November 2020. The interest paid on the Convertible Loan Notes in the year amounted to £0.5 million (2022: £0.5 million)
The finance expense of £1.5 million (2022 restated: finance income £16.0 million) relating to the derivative liability is the fair value adjustment of the derivative liability at 30 April 2023. The finance expense and prior year's credit are not cash items and have no impact upon the Company's cashflow.
The restated loss on the substantial modification of the CLNs for the year ended 30 April 2022 amounting to
£7.2 million arose from accounting adjustments from the replacement of the CLNs in existence at 27 October 2021 with new CLNs with a later maturity date.
The loss before taxation amounted to £14.2 million (2022 restated: £6.3 million) and the R&D tax credit increased to £2.4 million (2022: £1.7 million). This increase reflects the increased development expenditure incurred during the year.
Overall, the loss for the year was £11.9 million (2022 restated: loss £4.6 million).
Statement of Financial Position
At 30 April 2023, the Group had net liabilities of £6.2 million (2022 restated: £4.8 million net assets) including cash at bank of £19.9 million (2022: £28.7 million). The net liabilities have arisen at 30 April 2023 as a result of amending the convertible loan notes' derivative liability valuation, as described further below and incurring losses of £11.9 million for the year.
The tax receivable due at the end of the year amounted to £4.2 million (2022: £3.0 million) and relates to the R&D tax credit for the 2021/22 tax year plus the tax credit for the year to 30 April 2023. The 2021/22 tax credit of £1.7million has been received post year-end.
The increase in Trade and other payables to £3.0 million (2022: £2.1 million) is due to increased expenditure during the year as development activities have increased.
The Derivative Liabilities represents the fair value of the conversion feature of the CLNs with changes in value being shown in the Consolidated Profit or Loss and Other Comprehensive Income Statement as a finance income or expense.
Consolidated Cash Flow Statement
As at 30 April 2023 bank balances amounted to £19.9 million (2022: £28.7 million). As can be seen in the Consolidated Cash Flow Statement, there has been a decrease in cash and cash equivalents of £8.8 million (2022: decrease £12.3 million). The Company has been able to progress on all research and development platforms with the cash used for this being £9.4 million (2022: £11.5 million), purchase of fixed assets amounting to £0.2million (2022: £1.3 million), and payment of interest on the Convertible Loan Notes of £537k (2022: £537k).
Prior Period Restatement
The Company and its auditor reviewed the valuation and accounting for convertible loan notes and identified certain corrections required to the current and prior periods' Group and company results, as fully described in note 24 to the consolidated financial statements, included in the Report and Accounts for the year ended 30 April 2023 which are now available on the Company's website..
This prior period restatement also resulted in adjustments to the cashflow statements, in respect of adjusting loss before tax, non-cash revaluation gains/losses and non-cash interest payable. There was no impact on cash itself and the prior period restatement does not impact the convertible loans' notional amounts or maturity dates disclosed.
OUTLOOK
Given the significant clinical and commercial milestones achieved in the period, positive early efficacy data, and with sufficient resources to fund our current strategy, the Company is confident it will achieve its near-term clinical milestones. Key milestones for the following 18 months include:
· Second stage of SCOPE study in advanced melanoma with SCIB1 anticipated to complete recruitment by the end of 2023 with data available in H1 2024
· iSCIB1+ planned to be included in the SCOPE study. Protocol amendment pending MHRA approval
· Phase 2/3 seamless adaptive registration trial with SCIB1 or iSCIB1+ to begin in 2024
· ModiFY trial to continue recruitment in the expansion cohorts with early clinical data expected in 2024
· Continue to assess out-licensing options for the GlyMab® and AvidiMab® platforms providing a source of non-dilutive cash to drive our other assets forward in development
The Board is pleased with the progress that the Company has achieved over the period and would like to thank our shareholders once again for their continued support.
Professor Lindy Durrant
Chief Executive Officer
CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME STATEMENT for the
year ended 30 April 2023
| Notes | 2023 £'000 | 2022 £'000 Restated1 |
| Revenue | 5,271 | - |
| Cost of sales | (525) | - |
| Gross Profit | 4,746 | - |
| Development expenses | (11,645) | (9,477) |
| Administrative expenses | (5,021) | (4,787) |
| Grant income | - | 965 |
| OPERATING LOSS 2 | (11,920) | (13,299) |
| Interest receivable and similar income | 284 | 4 |
| Interest payable | (1,215) | (1,777) |
| Loss on substantial modification of convertible loan notes | - | (7,244) |
| Finance (expense) / income relating to derivative liability revaluation | (1,453) | 16,044 |
| LOSS BEFORE TAXATION | (14,304) | (6,272) |
| Taxation 3 | 2,368 | 1,703 |
| LOSS FOR THE YEAR AND TOTAL COMPREHENSIVE LOSS | (11,936) | (4,569) |
| LOSS PER ORDINARY SHARE (pence) | 4 | | |
| Continuing Basic | |
(1.50)p |
(0.56)p |
| Diluted | | (1.50)p | (0.56)p |
 |
1 Please refer to note 5 for further details on the prior period restatement
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 30 April 2023
|
|
|
|
|
| 2023 | 2022 | 2021 |
|
| £'000 | £'000 | £'000 |
|
| | Restated1 | Restated1 |
| ASSETS | | | |
| Non-current assets | | | |
| Tangible fixed assets | 1,246 | 1,579 | 692 |
| Right-of-use assets | 1,003 | 1,165 | 283 |
| Goodwill | 3,415 | 3,415 | 3,415 |
| | 5,664 | 6,159 | 4,390 |
|
Current assets Trade and other receivables |
538 |
647 |
968 |
| Income tax assets | 4,148 | 2,990 | 2,590 |
| Cash and cash equivalents | 19,920 | 28,725 | 41,110 |
| | 24,606 | 32,362 | 44,668 |
|
TOTAL ASSETS |
30,270 |
38,521 |
49,058 |
|
LIABILITIES Non-current liabilities Convertible Loan note |
(18,481) |
(17,857) |
(15,119) |
| Derivative liability | (14,000) | (12,547) | (22,893) |
| Lease liabilities | (746) | (856) | (63) |
| | (33,227) | (31,260) | (38,075) |
| Current liabilities Trade and other payables |
(2,970) |
(2,137) |
(2,087) |
| Lease liabilities | (306) | (315) | (208) |
| | (3,276) | (2,452) | (2,295) |
|
TOTAL LIABILITIES |
(36,503) |
(33,712) |
(40,370) |
| | | | |
| NET (LIABILITIES)/ASSETS | (6,233) | 4,809 | 8,688 |
| SHAREHOLDERS' EQUITY | | ||
| Called up share capital | 819 | 815 | 815 |
| Share premium account | 65,181 | 65,019 | 65,019 |
| Share option reserve | 2,123 | 1,395 | 705 |
| Retained losses | (74,356) | (62,420) | (57,851) |
| TOTAL SHAREHOLDERS' (DEFICIT) / EQUITY | (6,233) | 4,809 | 8,688 |
|
1 Please refer to note 5 for further details on the prior period restatement
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 April 2023
| | Share Capital | Share Premium | Share Option | Retained losses |
Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance 1st May 2021 | 815 | 65,019 | 705 | (47,054) | 19,485 |
| Prior Year Adjustment | - | | - | (10,797) | (10,797) |
| Balance 1st May 2021 (restated1) | 815 | 65,019 | 705 | (57,851) | 8,688 |
| Share option credit | - | - | 690 | - | 690 |
| Loss for the year and other comprehensive loss | - | - | - | (4,569) | (4,569) |
| Balance 30 April 2022 (restated1) | 815 | 65,019 | 1,395 | (62,420) | 4,809 |
| Share issue | 4 | 162 | - | - | 166 |
| Loss for the year and other comprehensive loss | - | - | - | (11,936) | (11,936) |
| Share option credit | - | - | 728 | - | 728 |
| Balance 30 April 2023 | 819 | 65,181 | 2,123 | (74,356) | (6,233) |
|
1 Please refer to note 5 for further details on the prior period restatement
|
Cash flows from operating activities | 2023 £'000 | 2022 £'000 Restated1 |
| Loss before tax | (14,304) | (6,272) |
| Adjustments for: | | |
| Finance income | (284) | (4) |
| Lease interest paid | 54 | 48 |
| Convertible loan interest payable | 1,161 | 1,729 |
| Finance expense / (income) for derivative liability revaluation | 1,453 | (16,044) |
| Loss on substantial modification of convertible loan notes | - | 7,244 |
| Depreciation | 536 | 381 |
| Amortisation of right-of-use asset | 366 | 359 |
| Share-based payment charge | 728 | 690 |
| Cash used in operations before changes in working capital | (10,290) | (11,869) |
| Decrease in other receivables | 111 | 321 |
| Increase in accounts and other payables | 829 | 51 |
| Cash used in operations | (9,350) | (11,497) |
| Tax credits received | 1,210 | 1,304 |
| Net cash used in operating activities | (8,140) | (10,193) |
| Investing activities | | |
| Purchase of tangible fixed assets | (203) | (1,268) |
| Finance income | 284 | 4 |
| Net cash generated from / (used in) investing activities | 81 | (1,264) |
| Financing activities | | |
| Proceeds from issue of share capital | 166 | - |
| Convertible loan interest paid | (537) | (537) |
| Lease payments | (3275) ) | (391)- |
| Net cash (used in) financing activities | (746) | (928) |
|
Net (decrease)/increase in cash and cash equivalents |
(8,805) |
(12,385) |
| Cash and cash equivalents at beginning of the year | 28,725 | 41,110 |
| Cash and cash equivalents at end of the year | 19,920 | 28,725 |
|
1 Please refer to note 5 for further details on the prior period restatement
1 BASIS OF PREPARATION
These financial results do not comprise statutory accounts for the year ended 30 April 2023 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 2023. The auditors reported on those accounts and their report (i) was unqualified; (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under section 498 (2) or (3) of the Companies Act 2006. The statutory accounts for the year ended 30 April 2023 have not yet been delivered to the Registrar of Companies.
The financial statements have been prepared on the going concern basis on the grounds that the directors have reviewed the funding available and the group's cash flow forecast and are content that sufficient resources are available to enable the group to continue in operation for at least twelve months from the date of approval of these financial statements.
These financial statements have been prepared in accordance with UK adopted international accounting standards applicable to companies reporting under IFRS. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policies.
| 2 | OPERATING LOSS | | |
| | | 2022 | 2021 |
| | | £'000 | £'000 |
| | Operating Loss is stated after charging/(crediting): | | |
| | Grant income | - | (965) |
| | Depreciation on tangible fixed assets | 536 | 381 |
| | Amortisation of right-of-use asset | 366 | 360 |
| | Research and development | 11,645 | 9,477 |
| | Foreign exchange losses / (gains) | 358 | (2) |
| | Auditors' remuneration - fee payable for audit of the company | 42 | 32 |
| | Auditors' remuneration - fee payable for audit of the subsidiary | | |
| | company | 41 | 32 |
| | Auditors remuneration - non -audit services | - | 8 |
Directors' remuneration 757 1,185
3 TAXATION
The tax credit on the loss on ordinary activities for the year was as follows:
2023 2022
Current tax £'000 £'000
UK corporation tax credits due on R&D expenditure 2,399 1,754 Adjustment to prior year (31) (51)
2,368 1,703
3 
TAXATION (continued) Factors affecting the tax credit
The tax assessed for the year is lower than the applicable rate of corporation tax in the UK. The difference is explained below:
2023 2022
£'000 £'000
Loss on ordinary activities before tax (14,304) (6,272)
| Loss on ordinary activities multiplied by the small company rate of | | |
| tax in the UK (19.49%) (2022: 19%) | (2,788) | (1,192) |
| Effects of: | | |
| Disallowed (income)/expenditure on convertible loan | 510 | (1,345) |
| Other disallowed expenditure | 172 | 131 |
| Other timing differences | 49 | 23 |
| Enhanced tax relief on R&D expenditure | (929) | (771) |
| Prior year (under)/ over provision | 31 | 51 |
Unrelieved losses carried forward 587 1,400
Current tax (credit) (2,368) (1,703)
The Group has tax losses to carry forward against future profits of approximately £38.53 million (2022:
£35.22 million).
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 the prevailing rate of tax when the timing differences are expected to reverse is £9.8 million (2022: £8.8million). This is based on the substantively enacted rates at the balance sheet date. The current UK corporation rate is 25%, effective from1 April 2023, as set out in the Finance Bill 2021 which was substantively enacted on 24 May 2021.
In addition to the deferred tax asset on losses, the Group has a potential future tax deduction on share options of £1,961,000 (2022: £1.397,000) and a deferred tax asset of £490,000 (2022: £349,000) thereon. The additional tax deduction will crystallise at the point the options are exercised. As the utilisation of this additional deduction against taxable profits in the Group is uncertain, no deferred tax asset has been recognised in respect of the future tax deduction on share options.
Taxation receivable is £4,147,700 (2022: £2,990,000).
4 LOSS PER SHARE
Basic loss per share
The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share is as follows:
| | 2023 | 2022 |
| £'000 | £'000 Restated | |
| Loss used in calculation of basic loss per share | (11,936) | (4,569) |
|
Weighted average number of ordinary shares of 0.1p each | Number | Number |
| for the calculation of basic loss per share | 816,051,311 | 815,218,831 |
4 LOSS PER SHARE (continued)
Diluted loss per share
As the Group is reporting a loss from continuing operations for both years then, consequentially, the share options are not considered dilutive because the exercise of the share options would have the effect of reducing the loss per share.
At the year end the issued share capital amounted to 818,903,461 ordinary shares.
5 PRIOR PERIOD RESTATEMENT
The Company and its auditor reviewed the valuation and accounting for convertible loan notes and identified certain corrections required to the current and prior periods' Group and company results, as fully described in note 24 to the consolidated financial statements, included in the Report and Accounts for the year ended 30 April 2023.
This prior period restatement also resulted in adjustments to the cashflow statements, in respect of adjusting loss before tax, non-cash revaluation gains/losses and non-cash interest payable. There was no impact on cash itself and the prior period restatement does not impact the convertible loans' notional amounts or maturity dates disclosed.
The consolidated financial statements are available on the Company website (see note 7).
6 DELIVERY OF ACCOUNTS
The audited statutory accounts in respect of the prior year ended 30 April 2022 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.
7 AVAILABILITY OF ACCOUNTS
This announcement is not being posted to shareholders. Copies of this announcement can be downloaded from the Company's website: www.scancell.co.uk together with copies of the Report and Accounts for the year ended 30 April 2023.
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