Aptamer Group plc

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

Interim results for the six months ended 31 December 2023

Fundraising complete, R&D development progress and cost base reset

Aptamer Group plc (AIM: APTA), the developer of novel Optimer^® binders to enable innovation in the life sciences industry, today announces its unaudited interim results for the six months ended 31 December 2023.

Financial highlights (H1 2023)

·      Revenue £0.3 million (H1 2023: £1.0 million)

·      Cash balance at 31 December 2023 of £1.8 million (H1 2023: £1.9 million)

·      Adjusted EBITDA loss of £1.8 million (H1 2023: £2.5 million)

·     Recapitalised with £3.5 million in two equity placings.

·    Completed the reset of the fixed cost base to £3.5 million per annum in September 2023, whilst maintaining the ability to win sales and deliver projects.

Operational highlights

·      Follow-on deal with a US-based vaccine development company to develop Optimer^® binders as QC reagents was signed in July.

·      Refreshed Board in August with pre-IPO Chairman and co-founder returning to support and direct the team to revenue generation & technical delivery.

·      Contracts agreed in August with a top five pharmaceutical company to develop multiple Optimer^® binders for different applications across both pipeline assets and early discovery targets.

·      Process improvements have been successfully trialled and implemented across the platform in October to support lower sample requirements, increase capacity and improve project margins.

·      Developed broader portfolio of post-development validation assays to increase revenue and improve translation into functional products.

·      Agreement in December to the value of up to approximately £0.6 million with a genetic medicines company for Optimer^® targeting of genetic medicines to specific cell types.

·      Contract signed in December with a US-based biotechnology company for Optimer^®-Fc reagent development to new targets.

Post-period highlights

·      Developed binders for a top five pharma company undergoing external validation for IHC, with initial results reported as promising and leading to a commercial request for more material in January.

·      Entered the second phase of development with Neuro-Bio in February, to deliver additional Optimer^® binders to support Alzheimer's lateral flow test development.

·      Technical progress to date in developing the new affinity ligand platform, Optimer^®+, was made in February, highlighting the improved results compared to the current Optimer^® platform, and good tolerance in animal studies, demonstrating its potential for use in therapeutics.

·      In February, results from a gene therapy delivery partnership with a top 15 pharmaceutical company, have led to their request to validate the material in their own labs. This material is currently being manufactured at Aptamer Group for shipment. 

·      Partnership with Unilever announced in March, following successful testing of developed Optimer^® binders by Unilever to support novel applications in fast moving consumer goods, with patent applications for the binders now being prepared.

Commenting on the interim results, Stephen Hull, Chairman of Aptamer Group, said: "The strong technical delivery in the first half of the year, includes the new demonstration of binder performance in gene therapy delivery and IHC, and we are pleased that large pharmaceutical company partners have shown significant interest in binders developed for both of these applications. The data generated in these key focus areas is supporting ongoing marketing activities, and the developed expertise at Aptamer Group is being applied to customer projects to support improved protocols and faster adoption of our Optimer^® technology. Additionally, our new affinity ligand platform, Optimer^®+, has been further developed with results showing excellent performance and its viability for therapeutic use from initial animal studies.

Positive validation of Optimer^® performance both in-house from our own scientific team and from external partners has resulted in interest in the licensing of current assets, which remains part of our strategy, particularly within the key focus areas of drug delivery and IHC, where we have identified a specific market need that Optimer^® and our new Optimer^®-Fc platform are well placed to address.

The Group has continued to make encouraging progress since recapitalising in August, rebuilding the pipeline of sales opportunities and reinvigorating operations through the laboratory.  We are seeing increasing conversion of the deal pipeline, including repeat business being won and the potential for large deals in the drug delivery space."

Webinar

Dr Arron Tolley (Chief Technical Officer), Dr David Bunka (Chief Scientific Officer) and Andrew Rapson (Chief Financial Officer) will provide a live presentation relating to the Interim Results via Investor Meet Company on 28 March 2024, 15:00 GMT.

The live presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 27 March 2024, 09:00 GMT, or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet Aptamer Group Plc via:

https://www.investormeetcompany.com/aptamer-group-plc/register-investor

Investors who already follow Aptamer Group Plc on the Investor Meet Company platform will automatically be invited.

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For further information, please contact:

Aptamer Group plc

Steve Hull                                                                                     +44 (0) 1904 217 404

SPARK Advisory Partners Limited - Nominated Adviser  

Andrew Emmott / Adam Dawes                                                          +44 (0) 20 3368 3550

Turner Pope Investments - Broker

James Pope / Andrew Thacker                                                           +44 (0) 20 3657 0050

About Aptamer Group plc

Aptamer Group develops custom affinity binders through its proprietary Optimer^® platform to enable new approaches in therapeutics, diagnostics, and research applications. The Company strives to deliver transformational solutions that meet the needs of life science researchers and developers.

Optimer^® binders are oligonucleotide affinity ligands that can function as an antibody alternative. The global affinity ligand market is currently worth over $170 billion.

Aptamer has successfully delivered projects for a range of global pharma companies, diagnostic development companies, and research institutes, covering multiple application areas with the objective of establishing royalty-bearing licenses.

Chairman's Statement

Aptamer Group has signed contracts with a number of new and repeat customers, including major pharmaceutical companies, in the first half of the year. Following the recapitalising of the business in August 2023, the new management team has worked hard to implement its strategy and rebuild customer confidence, whilst demonstrating the performance of the technology platform through increased delivery of technical data. Despite first half revenues below previous market expectations, £0.8 million of deals were signed in December 2023 contributing to a signed deals pipeline today of £1.3 million, which are at various stages of being progressed through the laboratory to recognise as revenue.

With a focus on remaining at the forefront of aptamer technology, the initial demonstration of our proprietary Optimer^®+ platform has yielded positive results, particularly for its application in the therapeutic space. In addition, we continue to see particular interest for our current binders in drug delivery, where there is a recognised market need for new delivery mechanisms to support targeting drugs to different tissues. We aim to continue to build the required data and binders to meet the needs of this sector and increase penetration into the high value therapeutics market.

Divisional Performance

Aptamer Solutions

Aptamer Solutions provides custom services for the development of oligonucleotide-based aptamer and Optimer^® binders for use as research tools, quality control reagents and affinity ligands to support bioprocessing applications.

Since the Company was recapitalised in August 2023, several deals have been signed with partners that require Optimer^® development to enable improved assay solutions for discovery and pipeline assets. In addition to supporting customers with new projects where antibodies have proven intractable, we are also seeing a number of returning customers, demonstrating the performance of the platform.

Two new projects were initiated with a top five pharmaceutical partner, to develop Optimer^® binders for use in research assays and immunohistochemistry (IHC). This builds on the adoption of our Optimer^®-Fc platform for use in automated IHC workflows. These contracts represent repeat custom, with over ten contracts now signed with this pharma partner, signifying the increasing confidence in Optimer^® technology and keenness to adopt this within major life science companies. 

Within the first half of the year, further repeat business was seen with a follow-on contract signed with a US-based vaccine development company. Following initial positive results in an earlier project, the partner sought further Optimer^® development to viral targets as critical reagents for their QC assays.

Following the launch of the Optimer^®-Fc platform to support new reagent solutions for IHC in the second half of FY23, the first half of this financial year saw the initial contract signed for Optimer^®-Fc development. The developed Optimer^®-Fc is intended as a critical reagent to support patient stratification for clinical trials. This agreement is with a US-based oncology-focused biotechnology company, with the potential for further licensing on success.

Aptamer established a new partnership with a US-based gene therapy company for the development of Optimer^® binders to key biomarkers in neurodegenerative disease. The Optimer^® binders will be used with an antibody in a sandwich pair format to advance neuroscience disease research where alternative affinity ligands have previously failed to deliver the required performance.

In the bioprocessing field, the Company signed a new deal with a top ten pharmaceutical company to develop Optimer^® binders as affinity ligands to support the downstream bioprocessing of advanced therapy medicinal products. The binders will be used to streamline the manufacturing process and offer enhanced purification of the product, solutions for which are not currently available within the market.

During the period, progress in validating Optimer^® binders developed for Unilever has been positive. External validation of the Optimer^® binders by Unilever has been successful and, post period, Aptamer and Unilever are now working to patent these binders for use in novel fast moving consumer goods applications.

Post period end, the Company announced that Optimer^® binders previously developed for a top five pharmaceutical company have shown promising results in the partner's own IHC validation studies. Validation studies are ongoing with this partner and may result in a license.

As the need for novel biomarkers for new diseases continues to grow and novel therapeutics are progressing through the clinic; our partners are increasingly investigating Optimer^® technology to meet their increasing need for affinity ligands that can support these new targets, many of which have proven intractable with alternative technologies. Delivering benefits of ethical compliance, rapid development to meet tight timelines, and both cost-efficiencies and security in supply; Optimer^® binders are offering much-needed innovation to enable new research and bioprocessing solutions.

Aptamer Diagnostics

Aptamer Diagnostics focuses on the development and integration of Optimer^® binders into diagnostic platforms. Optimer^® binders offer significant advantages, including the detection of novel diagnostic targets, increased stability and batch-to-batch consistency. Our platform supports multiple diagnostic formats, such as Enzyme-Linked Immunosorbent Assay (ELISA), flow cytometry, biosensors and cell and tissue imaging.

Aptamer continues to work with a range of companies to support diagnostic development with Optimer^® binders. Post period, the Company entered the second phase of development with the UK-based biotechnology company Neuro-Bio Ltd. Following success in the first development phase delivering Optimer^® binders to Neuro-Bio's biomarker for Alzheimer's disease, Aptamer has agreed the development of additional binders to form an Optimer^® pair that will enable a wholly Optimer^®-based lateral flow test for the early diagnosis of Alzheimer's disease.

As the global need for diagnostics continues to grow, Optimer^® binders are being explored by our partners across the diagnostic industry for a range of applications. Their excellent target recognition, consistent and ethical supply, temperature stability and batch reproducibility, enable simple global logistics and position our Optimer^®-based tests as an antibody alternative for use in diagnostics.

Aptamer Therapeutics

Aptamer Therapeutics delivers contract research services in the field of therapeutics, using our Optimer^® platform to develop binders for use as Optimer^®-drug conjugates, Optimer^®-enabled gene therapies, and Optimer^® agonists and antagonists for therapeutic application.

Within the Aptamer Therapeutics business, a material contract was signed with a genetic medicines company for the development of Optimer^® binders to enable the targeted gene therapy delivery to specific cell types. The deal comprises up to approximately £0.6 million in development fees with the potential for further licensing upon successful demonstration of the binders.

Post period end, Aptamer announced that Optimer^® binders developed for a top 15 pharmaceutical company to enable gene therapy delivery, have demonstrated selective delivery and gene knockdown in our own lab-based experiments. Based upon the inhouse results of these binders, the pharmaceutical partner has requested the material for their own validation, with a view to licensing the molecule if successful.

Targeted delivery of therapeutic payloads remains a significant challenge, particularly within the emerging field of gene therapy. Optimer^® binders have a significant advantage as small, oligonucleotide-based molecules offer a novel solution for our partners to overcome some of the challenges faced in the delivery of diverse payloads from gene therapies to targeted radiotherapy. Optimer^® advantages include increased tissue penetration, low immunogenicity, and the potential for convenient manufacture as contiguous molecules or site-directed conjugation for simpler analysis of critical therapeutic attributes.

Operational progress

As part of the Company's strategy set by the newly appointed Board during the period, Aptamer Group is focused on increasing commercial traction to drive high impact partnerships and delivering process improvements through the current Optimer^® platform, while maintaining a tight cost discipline. A summary of our delivery against each of these three areas is provided below:

1.   To achieve EBITDA and cash break-even position

Following the recapitalisation of the Company and appointment of the new Board in August, the Company set challenging targets to reach EBITDA and cash break-even within two years. This remains the Board's aim. The new Board and strategy to deliver process improvements and marketing data are now helping to produce a qualified pipeline of opportunities that are evidence of tangible progress towards that target.

A reset of Aptamer's cost base was completed by 30 September, 2023. This included the reduction of previously budgeted costs for premises, overheads and development, directors and staff, from approximately £6.4 million in the year ended 30 June 2023, to approximately £3.5 million for the current financial year. As part of this process, there was a reduction in operational headcount to the level required to meet forecasted revenues, where the top performers were retained and incentivised, and a reduction in the Company's operational footprint. This reset of the cost base, along with continued tight cost discipline, is intended to support the move towards a positive cash flow position over the next two years.

2.   To implement platform process improvements and generate marketing data

Improving the Optimer^® platform processes allow increased margins and enables improved services for customers. The first wave of process improvements has been completed and integrated into the platform, streamlining production for increased capacity and reduced customer material requirements. Further process improvements are ongoing to reduce development timelines and improve success rates, with new updates being trialed prior to implementation within the platform. The Group anticipates that this work will be completed by June 2024.

Additionally, a range of post-development validation assays have been added to the Group's service offering.  This broader range of functional assays enables demonstration of the performance of Optimer^® binders in the same end use applications that partners wish to adopt. Validation and assay development services offer additional revenue from fee-for-service projects and support faster translation of the technology to the Company's partners, whilst also delivering high quality data to support marketing activities.

Data generation for marketing purposes evidences the applications of the Optimer^® platform to increase technology adoption. Data generation has focused on two specific areas: Optimer^®-based pharmaceuticals for gene therapy delivery and precision chemotherapy and the Optimer^®-Fc platform for the immunohistochemistry (IHC) market.

Lab-based experiments at Aptamer Group using developed Optimer^® binders for gene therapy delivery have shown selective delivery and gene knockdown. This data was recently presented at the Biologics UK conference and has also resulted in a request from a top 15 pharmaceutical partner to trial the Optimer^® within their laboratories, with a view to licensing, if successful. This Optimer^® can be tailored for the delivery of multiple gene therapy or chemotherapeutic conjugates, with the potential to form a series of novel pharmaceutical entities. Further validation work is continuing in-house to increase this data pack and support the commercial licensing of this product.

The development of our novel Optimer^®-Fc platform for IHC applications uses custom-developed target-specific Optimer^® binders conjugated to an antibody Fc portion. This 'plug-and-play' affinity toolkit could allow the simple integration of Optimer^® binders into existing commercial automated IHC workflows to support improved processes for current targets and enable the development of novel biomarkers in automated IHC applications. The progress made in validating this platform resulted in the first commercial contract for Optimer^®-Fc tools being signed in December 2023, valued at up to £147,500. A patent application protecting this platform has now been submitted. Additional IHC validation of a broader panel of Optimer^® binders and the Optimer^®-Fc reagents is continuing in-house and is anticipated to be completed by July 2024, providing complete data packs and technical know-how for marketing in this field.

3.   To increase commercial traction and broaden the market for our technology

The new strategy for the delivery of improved validatory data in the focus areas of targeted drug delivery and IHC has supported increased commercial traction since the beginning of the period. We anticipate this progress will continue, allowing the core fee-for-service offering to expand and act as a horizon-scanning platform for future license fee opportunities while the Group moves toward profitability.

In the first half, a material agreement was signed with a genetic medicines company for targeted drug delivery at the value of up to £0.6 million, contributing to over £1.3 million of signed deals currently being processed or awaiting processing through the laboratory. The Company expects to progress the £1.3 million of signed work and a proportion of an additional £2.9 million of contracts in advanced-stage negotiations through the laboratory before the end of the financial year, subject to target material being delivered by customers in a timely manner and scientific attrition.

A continued focus on licensing the Optimer^® technology has resulted in the emergence of a number of potential opportunities within the current pipeline post period end. While management is aware of the long timeframes associated with reaching and securing licensing agreements, earlier projects are starting to come to fruition and may contribute to revenue over the next two years. An ongoing partnership with a top 15 pharmaceutical company for gene therapy delivery has resulted in their request to validate the developed binders in their own laboratories, with a view to licensing if successful. Additionally, a top five pharma partner is currently evaluating developed Optimer^® binders for IHC, with initial results reported as promising. Finally, the current partnership with a Unilever for binders to support novel applications in fast moving consumer goods is progressing to patenting following positive results at Aptamer Group and Unilever's labs. This will allow the next stage of commercial advancements with our partner.

The increasing commercial traction developed over the first half of the year demonstrates that there is a continued demand for Optimer^® binders across the life sciences, with traction in the drug delivery space, where high value and high impact contracts can be targeted. As we progress the partnership in the fast-moving consumer goods space, we aim to translate this potential of Optimer^® technology into additional markets for a broader market penetrance. To support increased commercial traction new marketing materials and a new Company website are under development, which are expected to launch this year.

R&D developments

Following the Fundraise in August 2023, £0.3 million was ringfenced to support R&D activities within the Company. These funds have been put to good use, with strong developments in demonstrating Optimer^® delivery of functional gene therapies, validation of Optimer^® binders and the Optimer^®-Fc platform in IHC, and the progression of our novel affinity ligand platform, Optimer^®+.

Results generated for Optimer^® drug delivery and IHC during the first half of the year have been used to support marketing activities. Ongoing R&D activities in these areas will bolster the available evidence to support increased adoption whilst further increasing the team's technical knowledge in these fields. The developed in-house expertise in drug delivery and IHC applications can be applied to customer specific projects to support with improved protocols and allow faster adoption of the Optimer^® technology within customer labs for improved downstream success.

Work to develop the novel Optimer^®+ platform has resulted in the demonstration of the new affinity ligands as possessing improved performance and development times compared to the current platform, as well as being stable and well tolerated in mice, indicating the basic requirements for therapeutic use. Optimer^®+ uses a modified oligonucleotide library that creates hybrid Optimer^®-peptide binders engineered with a scaffold structure that bridge the gap between traditional aptamers and protein-based affinity ligands and occupy a niche between large biologics and small molecule drugs. Development of the new platform is ongoing at Aptamer Group, alongside discussions with partners to scale manufacturing processes. The new platform is expected to launch to the market in FY25.

Board and Senior Management Changes

During the first half, the Board was restructured to include Stephen Hull returning to the Company as Executive Chairman after leading the Group to flotation in 2021 with Dr Arron Tolley. Dr Tolley returned as Chief Technical Officer, while Dr David Bunka moved to Chief Scientific Officer to concentrate on research and development activities for the Group. Dean Fielding and Dr Adam Hargreaves joined the Company as new Independent Non-Executive Directors. Dean Fielding is an experienced senior company director with extensive prior involvement as a board member of listed companies. Dr Adam Hargreaves is a board-certified pathologist who brings a broad range of expertise in both diagnostics and early-stage pharmaceutical efficacy and safety development to support Aptamer's technical strategy. The Company intends to appoint a Chief Executive Officer when appropriate to do so.

Andrew Rapson, the previous Head of Finance, was promoted to Chief Financial Officer and Company Secretary, and Alastair Fleming remains as Chief Operating Officer.

The previous Board members, Dr Ian Gilham (Executive Chairman), Dr Rob Quinn (Interim Chief Executive Officer and Chief Financial Officer), Dr John Richards (Non-Executive Director) and Angela Hildreth (Non-Executive Director), resigned on 21 August 2023. We thank them for their service over the prior 20 months. 

Macro environment

The Board and senior management team continue to monitor risk factors that could affect the business. These risks include the wider macroeconomic environment and global supply chain, with the management team actively working to ensure that the business is well placed to act on and mitigate such risks where possible.

In FY23, the reduction in available investment and tighter budgeting across the life science industry impacted the Group's pipeline conversion numbers as clients, from top pharma companies to small biotech companies, had reduced available budgets for R&D outsourcing. Additionally, many of our partners' projects stalled, and licensing revenue was slower to achieve than anticipated. The new Board has responded to this by resetting Company targets during the period and moving focus to fee-for-service revenue, with product licensing removed from the revenue forecast until clearer timelines are available.

Summary and outlook

Since the Fundraise in August 2023 and reset of Company management, strategy and cost base there has been significant progress against targets within Aptamer Group, with strong technical delivery leading to growing commercial traction.

The pipeline of opportunities has now been rebuilt and is beginning to convert to sales, with sustained momentum expected into the second half of the financial year. We continue to see interest in our technology platform from across the life science field, indicating a clear demand for antibody alternatives, with increasing repeat business from partners including major pharmaceutical companies.

To support the identified opportunities for the Optimer^® platform, the board has focused on the generation of validatory data, making excellent technical progress during the period within the focus areas of drug delivery and IHC. This is now supporting marketing activities to strengthen the opportunity pipeline. Additionally, the observed traction with developed Optimer^® binders undergoing evaluation at partner companies indicates the capabilities of the platform with the potential to capitalise on subsequent downstream licensing revenues that will drive long term profitability for Aptamer.

The Company has made excellent technical progress with the new Optimer^®+ programme and expects this platform to expand the capability of its binders in all applications, especially in precision medicine. The technology is fully protected with a portfolio of granted patents, ensuring the Company retains exclusive rights for all uses of the new system. Evaluation processes are ongoing within the Company and with external partners to optimise the development and large-scale manufacturing protocols, with an active marketing strategy to follow.

Financial review

Revenue

Revenue for the six months ended 31 December 2023 was £0.3 million (H1 2022: £1.0 million) following a lull in customer confidence and limited availability of working capital in the lead up to the completion of a fundraise in August 2023.  Revenues for the full year are anticipated to be second half weighted following the signing of £0.8 million of orders in December 2023. These orders, together with previously signed orders where we are awaiting customer material to be delivered to us, will contribute to revenue in the second half of this financial year.

Gross loss/profit

Gross profit for the first half of the financial year was £nil (2022: £0.5 million) as a result of low revenue. There is limited variability in the staff costs contained within cost of sales at these levels of revenue, which has resulted in the erosion of gross margin.  Otherwise, material costs remain variable with the level of revenue.

Administrative expenses

Administrative expenses were £1.7 million for the first six months of the year compared to £3.0 million for the same period last year. This decrease in costs follows the resetting of the cost base which was completed in September 2023.  Headcount reduced from 46 at 30 June 2023 to 37 at 31 December 2023.

Research and development costs

During the first half of the financial year the Group expensed £0.2 million (H1 2023: £0.4 million) within Administrative Expenses on research and development costs related to the Optimer-Fc platform for immunohistochemistry (IHC), building a body of data for Optimer-based gene therapy and precision chemotherapy, and process improvements to streamline the production process.

Adjusted EBITDA

Adjusted EBITDA was a loss of £1.8 million for the six months ended 31 December 2023 (H1 2023: £2.5 million). The decrease in loss mainly results from a reduction in administrative expenses.

Tax

The Group claims research and development tax credits. Since it is loss making, the Group elects to surrender these tax credits for a cash rebate. The benefit to the Group is included within the taxation line of the income statement and amounts to £0.1 million for the first half of the year. Within current assets is a corporation tax debtor of £0.6 million, which relates to anticipated R&D tax credits in respect of claims not yet received / submitted for the 2023 and 2024 financial years. The claim for the year to 30 June 2023  amounted to £0.5 million and was received in January 2024.

Loss for the period

The loss for the period was £1.8 million (H1 2023: £2.6 million). The basic and diluted loss per ordinary share decreased to 0.50 pence per share (H1 2023: 3.81 pence per share) based upon an average number of shares in issue during the period of 359,338,261 (H1 2023: 69,022,594)

Cash flow

The Group had £1.8 million of cash at 31 December 2023 (H1 2023: £1.9 million, FY23: £0.2 million). The cash inflow for the six-month period to 31 December 2023 was £1.5 million. During the period proceeds of £3.5m, net of costs, were received from fundraises in August 2023 and September 2023. Net cash used in operations totaled £1.8 million, which reflected operating losses for the period.  Within this operating outflow creditors decreased by £0.4 million, which had built up at the year-end prior to the completion of the fundraise.

Going concern

For the reasons set out in note 3, the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis.