RNS Number : 6900S
ReNeuron Group plc
08 November 2023
 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.

 

ReNeuron Group plc

("ReNeuron", the "Group" or the "Company")

 

Interim Results for the six months ended 30 September 2023

 

ReNeuron Group plc (AIM: RENE), a UK based leader in Stem Cell derived Exosome Technologies, announces its unaudited interim results for the six months ended 30 September 2023.

 

Iain Ross, Executive Chairman, said: "Since restructuring the business in January of this year, the ReNeuron team has been focused on generating the critical in vivo data that exemplifies the cellular and tissue targeting capabilities of CustomEXTM, our exosome drug delivery platform. I am very excited about the recent in vivo data that is being presented today at Cell 2023 in London that highlights the significant advantages of CustomEXTM and differentiates this drug delivery platform from that of our competitors. In CustomEXTM we are developing a leading-edge platform for the targeted delivery of modern-day therapies."

 

FINANCIAL HIGHLIGHTS

-      Revenue for the period of £157,000 related to income from partner funded development activities and royalty income (H1 2022: £438,000)

-      Loss for the period of £2.8 million (H1 2022: loss of £3.2 million); cost savings arising from the restructuring offset by reduced revenue and the previous year's foreign exchange gains now reversed to a small loss

-      Reduced operating costs incurred in the period of £3.5 million (H1 2022: £4.7 million) primarily explained by a reduction in clinical trial related costs and savings made in general and administration spend

-      Reduced net cash used in operating activities of £2.1 million (H1 2022: £4.3 million). This reduction being explained by the reduced costs and the receipt of the R&D tax credit for FY 2023 in the period (in the previous year the R&D tax credit was received in the second half of the year)

-      Cash, cash equivalents and bank deposits at 30 September 2023 of £5.1 million (31 March 2023: £7.2 million)

 

OPERATIONAL HIGHLIGHTS

-      During the period, the Company has been focussing on generating in vivo data to validate the CustomEXTM platform. In September we announced that the Company had successfully generated data demonstrating distinct organ and cellular targeting capabilities of its exosomes

-      Today, it was announced that the Group will be presenting the data that formed the basis of that announcement, namely:

confirmation in vitro and in vivo that exosome targeting is dependent on cell source and selection of a specific exosome population results in the improved delivery of therapeutic payloads when compared to a conventional HEK293 exosome approach;

a specific CustomEX? exosome targets the lymph nodes (immune system) proportionately more than other exosome types;

a specific CustomEX? exosome selectively targets the tubules within the kidney;

a specific CustomEX? exosome targets the lung following systemic administration;

confirmation that therapeutic payloads can be successfully delivered in vivo using the CustomEX? platform following systemic administration; and

no evidence of immune response or toxicity with any of the exosome candidates, opening up the possible use of CustomEX? for repeat administration unlike viral vectors.

-      These data highlight the significant improvement in targeting and delivery of payloads that can be achieved through the careful selection of specific exosomes from different cell sources. ReNeuron's CustomEXTM platform, is a compelling platform that offers this ability to select the exosome cell type for a partner's need and the payload / target cell of their choice, while offering a scalable and repeatable manufacturing process due to its patented conditional immortalisation technology. This technology was enabled through the Group's earlier work in producing GMP stem cells approved by the FDA and MHRA for the clinic from which the Group's exosomes are now produced.

 

Enquiries:

 

ReNeuron

www.reneuron.com/investors

Iain Ross, Executive Chairman

Via Walbrook PR

John Hawkins, Chief Financial Officer

 

 

 

Allenby Capital Limited (Nominated Adviser and Broker)

+44 (0)20 3328 5656

James Reeve/George Payne/Dan Dearden-Williams

(Corporate Finance)


Stefano Aquilino/Kelly Gardiner (Sales & Corporate Broking)




Walbrook PR (Media & Investor Relations)

+44 (0)20 7933 8780 or reneuron@walbrookpr.com

Paul McManus / Alice Woodings

+44 (0)7980 541 893 / +44 (0)7407 804 654

 

About ReNeuron

ReNeuron has developed a proprietary stem cell-derived, exosome-based, drug delivery platform with customisable cellular targeting capabilities for the delivery of complex drug modalities.

 

Through the generation of several unique and scalable exosome producer cell lines, our CustomEX? platform can be optimised for specific tissues targets and payloads leading to improvements in therapeutic outcome and a reduction in off-target effects. ReNeuron offers a delivery mechanism for a variety of payloads such as siRNA, mRNA, proteins, small molecules and genes. Through its conditionally immortalised induced pluripotent stem cell (iPSC) platform, the Group can make allogeneic tissue cells of choice and has the potential to produce exosomes with tissue specific targeting ability.

 

ReNeuron's shares are traded on the London AIM market under the symbol RENE.L. For further information visit www.reneuron.com

 

This announcement contains forward-looking statements with respect to the financial condition, results of operations and business achievements/performance of ReNeuron and certain of the plans and objectives of management of ReNeuron with respect thereto. These statements may generally, but not always, be identified by the use of words such as "should", "expects", "estimates", "believes" or similar expressions. This announcement also contains forward-looking statements attributed to certain third parties relating to their estimates regarding the growth of markets and demand for products. By their nature, forward-looking statements involve risk and uncertainty because they reflect ReNeuron's current expectations and assumptions as to future events and circumstances that may not prove accurate.  A number of factors could cause ReNeuron's actual financial condition, results of operations and business achievements/performance to differ materially from the estimates made or implied in such forward-looking statements and, accordingly, reliance should not be placed on such statements.



 

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2023

 

EXECUTIVE CHAIRMAN'S STATEMENT

 

In a very uncertain world, the financial markets remain extremely volatile. Specifically, in the biotech sector many companies have found themselves coming under increasing financial pressure and as a result we have seen a number of biotech company liquidations. ReNeuron faces similar challenges in the current financial climate but the Board remains positive regarding the future viability of the business.

 

The Group ended the period to 30 September 2023 with cash, cash equivalents and bank deposits of £5.1 million with the cash runway being extended into the start of calendar Q2 2024. The Board is working diligently to ensure the continued integrity of this business and is exploring options to allow us to remain financially viable and to achieve our goal of further developing the CustomEX? exosome delivery platform and to become a "partner to the industry".

 

Nine months ago, we set out to generate critical in vivo data to support our CustomEX? exosome delivery platform and from an R&D perspective it has been a very successful period as evidenced by the data being presented today at the Cell 2023 conference in London. We have delivered on what we set out to achieve and produced some interesting and unexpected results. On reviewing the data, one potential large pharma collaborator stated "Your research is indeed ground-breaking, and it's clear that a lot of thought and effort has gone into it. We hold your work in high regard and believe in its potential".

 

I believe that in CustomEX? we are on our way to developing a leading-edge platform for the targeted delivery of modern-day therapies and, provided we continue to have our shareholders support, we can deliver on the promise of creating a highly valuable delivery platform and, consequently, a highly valued business entity.

 

I would like to thank our team in Pencoed supported by our third-party collaborators and advisers as we remain committed to progressing the development of this platform, establishing meaningful partnerships and funding the business appropriately.    

 

Outlook

The outlook for ReNeuron remains positive provided we can retain our highly dedicated team of scientists and further develop and verify the CustomEX? exosome delivery platform and conclude validating industry partnerships. We aim to do this by a variety of means including potentially raising more equity financing and/or securing a financing facility and/or entering into M&A discussions; none of which have been ruled out at the time of writing.  

 

 

 

Iain Ross

Executive Chairman

FINANCIAL REVIEW

 

Following the restructure in January 2023, costs continued to be closely controlled with spend primarily directed towards progressing the Group's proprietary exosome platform. Total operating expenses of £3.5 million for the six months (H1 2022: £4.7 million) are nearly 30% lower than the same period last year. As a result, the total comprehensive loss for the period reduced to £2.8 million (H1 2022: £3.2 million).

 

At 30 September 2023, the Group had cash, cash equivalents and bank deposits of £5.1 million with the Group's latest internal projections (assuming no new revenues or funding) showing a cash runway to April 2024, ahead of which point further revenues and/or a capital injection will be required.

 

Details on the Directors' assessment on going concern is provided in note 3 to the interim financial statements.

 

FINANCIAL HIGHLIGHTS

(£'000)

Six months ended 30 September 2023

Six months ended 30 September 2022

Year ended 31 March 2023

Cash, cash equivalents & bank deposits

5,075

10,464

7,153

Net cash used in operating activities

2,101

4,323

7,484

Revenue

157

438

530

Operating expenses

3,457

4,712

7,645

Finance income

91

466

478

Total comprehensive loss

2,841

3,176

5,408

 

Revenue and Other Operating Income

 

In the six months to 30 September 2023, recognised revenues, which related to partner funded development activities were £106,000 (H1 2022: £393,000). Income related to royalty income, was £51,000 (H1 2022: £45,000).

 

Operating expenses

 

Total operating expenses reduced in the period to £3.5 million (H1 2022: £4.7 million).

 

This reduction in costs followed the restructuring in January 2023. Research and development (R&D) expenditure reduced to £2.2 million (H1 2022: £3.0 million) with general and administrative expenses declining in the period to £1.3 million (H1 2022: £1.7 million).

 

Finance income/expense

 

Finance income represented income received from the Group's cash and investments and gains from foreign exchange, with losses from foreign exchange shown in finance expense.

 

Finance income was £91,000 in the period (H1 2022: £466,000). The prior period included foreign exchange gains of £429,000, whereas in the current period there was a foreign exchange loss of £11,000, included in finance expense, which also includes lease interest of £8,000 (H1 2022: £10,000).

 

The Group holds cash and investments in foreign currencies to hedge against operational spend in those currencies. The strengthening of sterling during the period resulted in a decrease in valuation of the Group's foreign currency balances.

 

Taxation

 

The taxation credit for the period of £0.4 million primarily comprised an R&D tax credit (H1 2022: £0.6 million). The amount of the R&D tax credit reduced in line with the reduction in research and development spend.

 

Cash flow

 

Net cash used in operating activities in the period reduced to £2.1 million (H1 2022: £4.3 million). This reduction in cash used reflected the reduction in costs and the receipt of the £1.2 million R&D tax credit during the first half of the year (in the prior year the R&D tax credit of £1.5 million was received in the second half of the year).

 

The Group had cash, cash equivalents and bank deposits totalling £5.1 million as of 30 September 2023 (31 March 2023: £7.2 million).

 

Statement of financial position

 

The Company invested in property, plant and equipment in the prior year and no capital investment was required in the six months to 30 September 2023. As such the non-current assets reduced in the period reflecting the depreciation of the existing assets.

 

Current assets include a corporation tax receivable of £0.4 million comprising the amount due from R&D tax credits for the current period (30 September 2022: £2.0 million). This debtor was lower than 2022 due to the earlier receipt of the tax credit for the year ended 31 March 2023 and the reduction in research and development expenditure impacting the current period tax credit.

 

Current liabilities primarily comprise trade and other payables at £3.7 million which were £2.5 million lower than the same period last year (30 September 2022: £6.2 million) and £0.5 million lower than at the year-end (31 March 2023: £4.2 million).

 

Non-current liabilities represented the lease liability relating to the Company's premises. The lease liability reduced by £0.1 million during the period.

 

John Hawkins

Chief Financial Officer

 



 

INTERIM FINANCIAL STATEMENTS

 

Unaudited Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2023

 



Six months ended

Six months ended

Year ended



30 September

30 September

 31 March



2023

2022

2023


Note

£'000

£'000

£'000

Revenue

4

157

438

530

Research and development costs


(2,177)

(2,986)

(4,463)

General and administrative costs


(1,280)

(1,726)

(3,182)

Operating loss

 

(3,300)

(4,274)

(7,115)

Finance income

6

91

466

478

Finance expense

7

(19)

(10)

(20)

Loss before income taxes

 

(3,228)

(3,818)

(6,657)

Taxation

8

387

642

1,249

Loss and total comprehensive loss for the period

 

(2,841)

(3,176)

(5,408)

Loss and total comprehensive loss attributable to equity owners of the company

 

(2,841)

(3,176)

(5,408)






Basic and diluted loss per ordinary share

9

(5.0p)

(5.6p)

(9.5p)

 



 

Unaudited Consolidated Statement of Financial Position

as at 30 September 2023

 



30 September

30 September

31 March



2023

2022

2023


Note

£'000

£'000

£'000

Assets

 




Non-current assets

 




Property, plant and equipment


258

354

338

Right-of-use asset

10

234

331

283

Intangible assets


186

186

186



678

871

807

Current assets

 




Trade and other receivables


317

456

500

Corporation tax receivable


353

2,036

1,185

Investments - bank deposits


-

1,000

1,000

Cash and cash equivalents


5,075

9,464

6,153



5,745

12,956

8,838

Total assets


6,423

13.827

9,645






Equity

 




Equity attributable to owners of the company

 




Share capital

11

572

571

572

Share premium account

11

113,925

113,925

113,925

Capital redemption reserve


40,294

40,294

40,294

Merger reserve


2,223

2,223

2,223

Accumulated losses


(154,593)

(149,931)

(151,957)

Total equity


2,421

7,082

5,057

Liabilities

 




Current Liabilities

 




Trade and other payables


3,657

6,249

4,167

Lease liabilities


156

151

153



3,813

6,400

4,320

Non-current liabilities

 

 



Lease liabilities


189

345

268



189

345

268

Total liabilities

 

4,002

6,745

4,588

Total equity and liabilities


6,423

13,827

9,645

 



 

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 30 September 2023

 



Share

Capital

 




Share

premium

redemption

Merger

Accumulated

Total

 

capital

account

reserve

reserve

losses

Equity

 

£'000

£'000

£'000

£'000

£'000

As at 1 April 2022

571

113,925

40,294

2,223

(147,125)

9,888

Credit on share-based payment

-

-

-

-

370

370

Loss and total comprehensive loss for the period

-

-

-

-

(3,176)

(3,176)

As at 30 September 2022

571

113,925

40,294

2,223

(149,931)

7,082

Exercise of employee share options

1

-

-

-

-

1

Credit on share-based payment

-

-

-

-

206

206

Loss and total comprehensive loss for the period

-

-

-

-

(2,232)

(2,232)

As at 31 March 2023

572

113,925

40,294

2,223

(151,957)

5,057

Credit on share-based payment

-

-

-

-

205

205

Loss and total comprehensive loss for the period

-

-

-

-

(2,841)

(2,841)

As at 30 September 2023

572

113,925

40,294

2,223

(154,593)

2,421

 



 

Unaudited Consolidated Statement of Cash Flows

for the six months ended 30 September 2023

 



Six months ended

Six months ended

Year ended



30 September

30 September

 31 March



2023

2022

2023


Note

£'000

£'000

£'000

Cash flows from operating activities

 




Cash used in operations

12

(3,312)

(4,310)

(8,920)

Overseas taxes paid


(16)

(3)

(5)

Income tax credit received


1,235

-

1,461

Interest paid


(8)

(10)

(20)

Net cash used in operating activities


(2,101)

(4,323)

(7,484)






Cash flows from investing activities

 




Capital expenditure


-

(156)

(220)

Bank deposit matured


1,000

4,000

4,000

Interest received


110

32

131

Net cash generated by investing activities


1,110

3,876

3,911






Cash flows from financing activities

 




Proceeds from the issue of ordinary shares


-

-

1

Principal element of lease payments


(76)

(66)

(148)

Net cash used in financing activities


(76)

(66)

(147)






Net decrease in cash and cash equivalents

13

(1,067)

(513)

(3,720)

Effect of foreign exchange rates


(11)

429

325

Cash and cash equivalents at the start of period


6,153

9,548

9,548

Cash and cash equivalents at the end of period

14

5,075

9,464

6,153

 



 

Notes to the Interim Financial Statements

for the six months ended 30 September 2023

 

1. General information and basis of preparation

ReNeuron Group plc is an AIM listed company incorporated and domiciled in the United Kingdom under the Companies Act 2006. The Company's registered office and its principal place of business is Pencoed Business Park, Pencoed, Bridgend CF35 5HY. Its shares are listed on the Alternative Investment Market ("AIM") of the London Stock Exchange.

 

These Interim Financial Statements were prepared by the Directors and approved for issue on 8 November 2023. They have not been audited.

 

These 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 March 2023 were approved by the Board of Directors on 15 June 2023 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain statements under 498 (2) or (3) of the Companies Act 2006. The auditor's report did however contain an emphasis of matter regarding a material uncertainty related to going concern.

 

As permitted, these Interim Financial Statements have been prepared in accordance with UK AIM rules and with International Accounting Standard 34 "Interim financial reporting". They should be read in conjunction with the Annual Financial Statements for the year ended 31 March 2023, which have been prepared in accordance with UK adopted International Accounting Standards (IFRS) and the applicable legal requirements of the Companies Act 2006.

 

2. Accounting policies

The accounting policies applied are consistent with those of the Annual Financial Statements for the year ended 31 March 2023, as described in those Annual Financial Statements. Where new standards or amendments to existing standards have become effective during the year, there has been no material impact on the net assets or results of the Group.

 

3. Going concern

The operations of the Group are currently being financed from funds that have been raised from share placings, commercial partnerships and grants.

 

The goal of the Group is to achieve the commercial validation of the CustomExTM platform by generating in vivo data aimed at differentiating the platform from that of its competitors. As previously reported, the Group has been successful in generating such data and the group is now further broadening its capabilities with a focus on the functional delivery of specific payloads.

 

The Directors continue to seek opportunities to secure further revenues/funding sufficient for the short to medium term future needs of the business and the current favourable in vivo data should enhance those opportunities. Considerable emphasis is placed on communication with shareholders, potential investors and other commercial organisations in order to maximise the chances of success in exploiting these opportunities.

 

In January 2023, the Group undertook a restructuring of the business with the underlying cost base reduced and resources re-aligned to meet the immediate needs of the business. Based on the Directors' assessment, the current cash runway is forecast to extend until April 2024, ahead of which point further revenues and/or a capital injection will be required.

 

Based on the internal forecasts prepared and various options being explored and considered by the Board, the Directors consider it appropriate to continue to adopt the going concern basis in the preparation of these interim results. However, there is no guarantee that attempts to secure adequate cash inflows from the Group's exosome platform and IP or through equity fund raising within the timescales stated above will be successful. These conditions indicate the existence of a material uncertainty, which may cast significant doubt about the Group's ability to continue as a going concern. These unaudited interim financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

 

4. Revenue


Six months

Six months



Ended

Ended

 Year ended


30 September

30 September

31 March


2023

2022

 2023


£'000

£'000

£'000

Royalty income

51

45

136

Income associated with development activities

106

393

394


157

438

530

 

Royalty income is derived from the licensed sale of the Group's products to customers in the USA.

Income associated with development activities relates to fees received under research agreements and is generated in the United Kingdom, the USA, the People's Republic of China and South East Asia.

 

5. Segment information

The Group has identified the Executive Chairman as the Chief Operating Decision Maker (CODM). The CODM manages the business as one segment, the development of stem cell derived exosome technologies. Since this is the only reporting segment, no further information is included. The information used internally by the CODM is the same as that disclosed in the Interim Financial Statements. Revenue is analysed in note 4 above.

 

 

6. Finance income


Six months

Six months



Ended

Ended

Year ended


30 September

30 September

31 March


2023

2022

 2023


£'000

£'000

£'000

Interest received

91

37

153

Foreign exchange gains

-

429

325


91

466

478

 

 

7. Finance expense


Six months

Six months



Ended

Ended

Year ended


30 September

30 September

31 March


2023

2022

 2023


£'000

£'000

£'000

Lease interest

8

10

20

Foreign exchange losses

11

-

-


19

10

20

 

 

 



 

8. Taxation


Six months

Six months



Ended

Ended

Year ended


30 September

30 September

31 March


2023

2022

 2023


£'000

£'000

£'000

R & D tax credit

353

644

1,185

Overseas taxation

(16)

(2)

(5)

Adjustments in respect of prior years

50

-

69


387

642

1,249

 

9. Basic and diluted loss per share

 

The basic and diluted loss per share is calculated by dividing the loss for the financial period of £2,841,000 (September 2022: £3,176,000, March 2023: £5,408,000) by 57,173,760 shares (September 2022: 57,090,147 and March 2023: 57,125,960 shares), being the weighted average number of ordinary 1p shares in issue during the period. Potential ordinary shares are not treated as dilutive as the entity is loss-making.

 

10. Right-of-use-asset


30 September

30 September

 31 March


2023

2022

 2023


£'000

£'000

 £'000

At beginning of the period

283

373

373

Additions

-

7

7

Depreciation charge

(49)

(49)

(97)

At end of the period

234

331

283

 

The net book value of the underlying assets is as follows:


30 September

30 September

 31 March


2023

2022

 2023


£'000

£'000

 £'000

Land and buildings

230

325

278

Computer and office equipment

4

6

5

At end of the period

234

331

283

 

11. Share capital and share premium


Number of shares

Share capital

Share premium

Total


 

£'000

£'000

£'000

As at 30 September 2022

57,063,623

571

113,925

114,496

Issue of new shares - share options exercised

82,270

1

-

1

As at 31 March 2023

57,145,893

572

113,925

114,497

Issue of new shares - share options exercised

27,867

-

-

-

As at 30 September 2023

57,145,893

572

113,925

114,497

 

 

 

12. Cash used in operations


Six months

Six months



Ended

Ended

 Year ended


30 September

30 September

31 March


2023

2022

 2023


£'000

£'000

£'000

Loss before income tax

(3,228)

(3,818)

(6,657)

Adjustment for:

 



Finance income

(91)

(466)

(478)

Finance expense

19

10

20

Depreciation of property, plant and equipment

80

83

170

Depreciation of right-of-use asset

49

49

97

Share-based payment charges

205

370

576

Changes in working capital:

 



Receivables

163

87

58

Payables

(509)

(625)

(2,706)

Cash used in operations

(3,312)

(4,310)

(8,920)

 

13. Reconciliation of net cash flow to movement in net debt


Six months

Six months



Ended

Ended

 Year ended


30 September

30 September

31 March


2023

2022

 2023


£'000

£'000

£'000

Decrease in cash and cash equivalents

(1,067)

(513)

(3,720)

Effect of foreign exchange rates

(11)

429

325

Cash inflow from increase in lease liabilities

-

(7)

(7)

Lease repayments

84

83

168

Lease interest

(8)

(10)

(20)

Net funds at start of period

5,732

8,986

8,986

Net funds at end of period

4,730

8,968

5,732

 

14. Analysis of net funds


Six months

Six months



Ended

Ended

 Year ended


30 September

30 September

31 March


2023

2022

 2023


£'000

£'000

£'000

Cash and cash equivalents

5,075

9,464

6,153

Lease liabilities

(345)

(496)

(421)

Net funds

4,730

8,968

5,732

 

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