TIDMMTFB
RNS Number : 7856B
Motif Bio PLC
25 September 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO
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REGULATIONS OF SUCH JURISDICTION.
Motif Bio plc and subsidiary
("Motif Bio", or "the Group")
Motif Bio Reports
Half-Year 2018 Financial Results and Operational Progress
Motif Bio plc (AIM/NASDAQ: MTFB), a clinical-stage
biopharmaceutical company specializing in developing novel
antibiotics, today announced unaudited financial results for the
half year ended June 30, 2018 and reported on its progress year to
date.
Graham Lumsden, CEO of Motif Bio, said: "We made tremendous
progress during the first half of 2018, including completing the
submission of an NDA with the U.S. FDA for iclaprim in acute
bacterial skin and skin structure infections, which was accepted
for review in August with confirmation of a Priority Review from
FDA resulting in a PDUFA date of February 13, 2019. We are
continuing to build on our achievements and are working to increase
awareness and understanding of Motif Bio and iclaprim with
potential commercialization partners, the medical community and
investors. As partnering discussions progress, we continue to
evaluate ways to build a team of Medical Science Liaisons, Key
Account Managers and Professional Representatives to be able to
deliver iclaprim to patients in an effective and efficient manner.
Our primary focus is ensuring a successful launch and
commercialization in the first half of 2019, assuming that iclaprim
is approved for marketing by the FDA."
Corporate and Development Highlights - 2018 Year to Date:
-- New Drug Application ("NDA") submitted to the U.S. Food & Drug Administration ("FDA") for investigational drug candidate iclaprim for treatment of patients with acute bacterial skin and skin structure infections ("ABSSSI"). The NDA was accepted for filing by FDA and granted priority review. The FDA has set a target action date under the Prescription Drug User Fee Act ("PDUFA") of February 13, 2019.
-- Notice of Allowance received from the United States Patent
and Trademark Office for United States Patent Application Nos.
15/586,021 and 15/586,815 for the use of iclaprim to treat patients
with bacterial infections. The two method of use patents will
expire in November 2037.
-- New iclaprim data presented at key infectious disease
conferences, including American Society of Microbiology (ASM)
Microbe in Atlanta, GA, USA and 28th European Congress of Clinical
Microbiology and Infectious Diseases (ECCMID) in Madrid, Spain.
-- Results of REVIVE-2 Phase 3 trial in ABSSSI published in
peer-reviewed journal, Antimicrobial Agents and Chemotherapy.
-- Our operational team was strengthened by the appointment of
Stephanie Noviello, MD, MPH, as Vice President, Clinical
Development.
-- Award received from the Cystic Fibrosis Foundation to fund
important in vitro testing that will help to advance the
development of iclaprim for the treatment of lung infections in
patients with cystic fibrosis.
Financial Highlights
-- Net loss for the six months ended June 30, 2018 and 2017 was
US$7.8 million and US$29.7 million, respectively.
-- General and administrative expenses decreased by US$0.5
million to US$4.1 million in the six months ended June 30, 2018
from US$4.6 million in the six months ended June 30, 2017. This
decrease was primarily attributable to a US$0.6 million reduction
in stock-based compensation and a US$0.2 million reduction in
legal, investor relations and other professional services. This
decrease was partially offset by a US$0.3 million increase in
employee compensation.
-- Research and development expenses decreased by US$16.7
million to US$6.9 million in the six months ended June 30, 2018
from US$23.6 million in the six months ended June 30, 2017. This
decrease was primarily attributable to a US$20.6 million reduction
in expense for our REVIVE Phase 3 clinical trial program, which was
completed in 2017.
-- On May 17, 2018, we raised US$12.7 million of net proceeds,
after deducting US$0.7 million of issuance costs, from a placement
of 32,258,064 new ordinary shares at 31 pence per share to both
existing and new investors.
-- At June 30, 2018 and December 31, 2017, we had cash and cash
equivalents of US$19.8 million and US$22.7 million,
respectively.
For further information, please contact:
Motif Bio plc info@motifbio.com
Graham Lumsden (Chief Executive
Officer)
Peel Hunt LLP (NOMAD & BROKER) + 44 (0)20 7418 8900
Dr. Christopher Golden
Oliver Jackson
Northland Capital Partners Limited
(BROKER) +44 (0)203 861 6625
David Hignell/Vadim Alexandre/Rob
Rees
Walbrook PR Ltd. (UK FINANCIAL
PR & IR) +44 (0) 20 7933 8780
Paul McManus/Helen Cresswell/Lianne
Cawthorne
MC Services AG (EUROPEAN IR) +49 (0)89 210 2280
Raimund Gabriel raimund.gabriel@mc-services.eu
Solebury Trout (U.S. IR) + 1 (646) 378-2963
Meggie Purcell mpurcell@troutgroup.com
Russo Partners (U.S. PR) +1 (858) 717-2310 or +1 (212)
845 4272
David Schull david.schull@russopartnersllc.com
Travis Kruse, Ph.D. travis.kruse@russopartnersllc.com
Notes to Editors:
About Motif Bio
Motif Bio plc (AIM/NASDAQ: MTFB) is a clinical-stage
biopharmaceutical company focused on developing novel antibiotics
for hospitalised patients and designed to be effective against
serious and life-threatening infections caused by multi-drug
resistant Gram-positive bacteria, including MRSA. The Company's
lead product candidate is iclaprim. Following positive results from
two Phase 3 trials (REVIVE-1 and REVIVE-2), a New Drug Application
(NDA) was submitted to the U.S. Food & Drug Administration
(FDA) for the treatment of acute bacterial skin and skin structure
infections (ABSSSI) and is now under review, with a PDUFA date of
February 13, 2019. More than 3.6 million patients with ABSSSI are
hospitalised annually in the U.S. It is estimated that up to 26% of
hospitalized ABSSSI patients have renal impairment.
The Company also plans to develop iclaprim for hospital acquired
bacterial pneumonia (HABP), including ventilator associated
bacterial pneumonia (VABP), as there is a high unmet need for new
therapies in this indication. A Phase 2 trial in patients with HABP
has been successfully completed and a Phase 3 trial is being
planned. Additionally, iclaprim has been granted orphan drug
designation by the FDA for the treatment of Staphylococcus aureus
lung infections in patients with cystic fibrosis and is in
preclinical development for this indication.
Iclaprim has received Qualified Infectious Disease Product
(QIDP) designation from the FDA together with Fast Track status for
the ABSSSI indication. If approved for the ABSSSI indication as a
New Chemical Entity, iclaprim will be eligible for 10 years of
market exclusivity in the U.S. from the date of first approval,
under the Generating Antibiotic Incentives Now Act (the GAIN Act).
In Europe, 10 years of market exclusivity is anticipated.
Motif is building a patent estate to provide additional
protection for iclaprim. On August 8, 2018 the Company announced
that it had received a Notice of Allowance from the United States
Patent and Trademark Office for United States Patent Application
Nos. 15/586,021 and 15/586,815. The claims relate to the use of
iclaprim to treat patients with bacterial infections, including but
not limited to acute bacterial skin and skin structure infections,
hospital-acquired bacterial pneumonia and Staphylococcus aureus
lung infections in patients with cystic fibrosis. The two method of
use patents will expire in November 2037. Other patent applications
have been and are expected to be filed that are designed to protect
our proprietary technologies, including processes for manufacturing
the iclaprim active pharmaceutical ingredient and therapeutic
formulations, their use in pharmaceutical preparations and methods
of treating disease with iclaprim.
Forward-Looking Statements
This press release contains forward-looking statements. Words
such as "expect," "believe," "intend," "plan," "continue," "may,"
"will," "anticipate," and similar expressions are intended to
identify forward-looking statements. Forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that may cause Motif Bio's actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Motif Bio believes that these factors
include, but are not limited to, (i) the timing, progress and the
results of clinical trials for Motif Bio's product candidates, (ii)
the timing, scope or likelihood of regulatory filings and approvals
for Motif Bio's product candidates, (iii) Motif Bio's ability to
successfully commercialise its product candidates, (iv) Motif Bio's
ability to effectively market any product candidates that receive
regulatory approval, (v) Motif Bio's commercialisation, marketing
and manufacturing capabilities and strategy, (vi) Motif Bio's
expectation regarding the safety and efficacy of its product
candidates, (vii) the potential clinical utility and benefits of
Motif Bio's product candidates, (viii) Motif Bio's ability to
advance its product candidates through various stages of
development, especially through pivotal safety and efficacy trials,
(ix) Motif Bio's estimates regarding the
potential market opportunity for its product candidates, and (x)
the factors discussed in the section entitled "Risk Factors" in
Motif Bio's Annual Report on Form 20-F filed with the SEC on April
10, 2018, which is available on the SEC's web site, www.sec.gov.
Motif Bio undertakes no obligation to update or revise any
forward-looking statements.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
We are a clinical stage biopharmaceutical company engaged in the
research, development and commercialization of novel antibiotics
designed to be effective against serious and life-threatening
infections in hospitalized patients caused by multi-drug resistant
bacteria. The discovery of new antibiotics has not kept pace with
the increasing incidence of resistant, difficult-to-treat bacteria.
One of the biggest threats of antibiotic resistance is from
methicillin resistant Staphylococcus aureus ("MRSA"), a leading
cause of hospital-acquired infections and a growing cause of
infections in healthy people in the general community. In 2013, the
Centers for Disease Control and Prevention ("CDC") reported that at
least two million people became infected with antibiotic-resistant
bacteria and at least 23,000 Americans died as a direct result of
these infections. Our lead product candidate, iclaprim, is being
developed for the treatment of acute bacterial skin and skin
structure infections ("ABSSSI") and hospital-acquired bacterial
pneumonia ("HABP"), including ventilator-associated bacterial
pneumonia ("VABP"), infections that are often caused by MRSA.
Iclaprim is also being developed to treat lung infections caused by
Staphylococcus aureus in patients with cystic fibrosis.
On June 14, 2018, we announced the completion of a rolling
submission of a New Drug Application ("NDA") to the U.S. Food &
Drug Administration ("FDA") for our investigational drug candidate
iclaprim in patients with ABSSSI. This follows the successful
completion of our two global REVIVE Phase 3 clinical trials with an
IV formulation of iclaprim, for the treatment of ABSSSI. The
pre-specified FDA primary endpoints of non-inferiority of early
clinical response of iclaprim at the early time point were met.
On August 14, 2018, we announced the FDA's acceptance of our NDA
submission for iclaprim in patients with ABSSSI. The FDA granted
our NDA a priority review and set a target decision date under the
Prescription Drug User Fee Act (PDUFA) of February 13, 2019.
Iclaprim is a novel diaminopyrimidine antibiotic that inhibits
an essential bacterial enzyme called "dihydrofolate reductase"
("DHFR"). Diaminopyrimidines are a class of chemical compounds that
inhibit different enzymes in the production of tetrahydrofolate, a
form of folic acid, which is required for the production of
bacterial DNA and RNA. The inhibition of DHFR represents a
differentiated and under-utilized mechanism of action compared with
other antibiotics. We acquired iclaprim from Nuprim Inc.
("Nuprim"), following the completion of our merger with Nuprim on
April 1, 2015. Arpida AG ("Arpida"), one of the previous owners of
iclaprim, completed a comprehensive development program for
iclaprim, including two Phase 3 trials in complicated skin and skin
structure infections ("cSSSI"). Iclaprim is a targeted
Gram-positive antibiotic that is rapidly bactericidal and highly
potent against MRSA and other Gram-positive bacteria in vitro.
"Gram-positive" or "Gram-negative" refer to how bacteria react to
the Gram stain test based on the outer casing of the bacteria, and
the bacterial cell wall structure. Each type of bacteria may be
associated with different diseases. To date, iclaprim has been
studied in over 1,400 patients and healthy volunteers. Vancomycin,
a standard of care antibiotic in hospitalized patients with
infections caused by Gram-positive bacteria, is associated with
nephrotoxicity (i.e., damage to the kidneys caused by exposure to a
toxic chemical, toxin or medication), including
vancomycin-associated acute kidney injury ("VA-AKI"). Therapeutic
drug monitoring ("TDM") and dosage adjustment in patients with
renal impairment is required with vancomycin. In contrast to
vancomycin, iclaprim is minimally excreted via the kidneys (<2%
of the administered dose was recovered in the urine), and neither
TDM nor dosage adjustment were required and no nephrotoxicity was
seen with iclaprim in the REVIVE Phase 3 clinical trials. Iclaprim
has also demonstrated a low propensity for resistance development
in vitro.
We believe that iclaprim is an attractive potential candidate
for use as a first-line empiric monotherapy, the initial therapy
administered prior to the identification of the pathogen, in
severely ill patients who are hospitalized with ABSSSI and have
comorbidities, or also suffer from other health issues, such as
renal impairment or diabetes. Renal impairment affects up to an
estimated 936,000 of the approximately 3.6 million patients
hospitalized with ABSSSI annually in the United States.
On September 15, 2017, we also announced that the FDA granted
Orphan Drug Designation to iclaprim for the treatment of
Staphylococcus aureus lung infections in patients with cystic
fibrosis. This designation grants special status to a drug or
biologic under development to treat a rare disease or condition and
qualifies the sponsor of the product for various development
incentives, including tax credits for qualified clinical testing,
waiver of user fees and potentially up to seven years of market
exclusivity for the given indication, if approved. We continue to
believe that iclaprim could be a useful agent for HABP. A Phase 3
trial is being planned and commencement remains subject to
funding.
Outlook
As we await the FDA's decision on the approval of iclaprim, with
a scheduled PDUFA date of February 13, 2019, we remain focused on
optimizing our commercialization strategy for iclaprim and ensuring
a successful drug launch in the U.S. In parallel with partnering
discussions, we are evaluating ways to build the appropriate team
ahead of launch as well as complementary strategic growth
opportunities. As we near our PDUFA date, we continue to evaluate
additional capital raising opportunities to fund our growth and
continuing operations and expect that a positive decision by the
FDA will be a key driver of future value in the Company.
Results of Operations:
Comparison of the six months ended June 30, 2018 and June 30,
2017
General and Administrative Expenses
General and administrative expenses decreased by US$0.5 million
to US$4.1 million in the six months ended June 30, 2018 from US$4.6
million in the six months ended June 30, 2017. This decrease was
primarily attributable to a US$0.6 million reduction in stock-based
compensation, which was higher in the 2017 period partially due to
a previously disclosed out-of-period correction and a US$0.2
million reduction in legal, investor relations and other
professional fees. This decrease was partially offset by a US$0.3
million increase in employee compensation.
Research and Development Expenses
Research and development expenses decreased by US$16.7 million
to US$6.9 million in the six months ended June 30, 2018 from
US$23.6 million in the six months ended June 30, 2017. This
decrease was primarily attributable to a US$20.6 million reduction
in expense for our Phase 3 clinical trial program, which was
completed in 2017. This decrease was partially offset by a US$3.8
million increase in costs relating to regulatory and clinical
operating activities, chemistry, manufacturing and control ("CMC")
requirements and other non-clinical development activities.
Interest Income and Interest expense
Interest income was US$9 thousand for the six months ended June
30, 2018, compared to US$52 thousand for the six months ended June
30, 2017. Interest income is earned based on cash holdings during
the period. Interest expense was US$1.1 million for the six months
ended June 30, 2018 due to interest on our US$15.0 million loan
with Hercules Capital Inc. drawn in November 2017 as well as the
amortization of deferred financing costs from the Hercules loan.
There was no outstanding debt or interest expense during the six
months ended June 30, 2017.
Gain (Loss) from Revaluation of Derivative Liabilities
In November 2016, we issued warrants that are classified as a
liability due to potential variability in the number of shares that
may be issued upon exercise if we fail to maintain an effective
registration statement. We issued additional warrants in 2017 that
are also classified as a derivative liability. These derivative
liabilities are carried at fair value and are remeasured each
reporting period using the Black-Scholes option pricing model. Our
stock price has a significant impact on the value of the liability
and, in general, a decrease in our stock price will decrease our
derivative liability balance and decrease the loss from revaluation
of our derivative liabilities, or cause us to recognize a gain from
revaluation of our derivative liabilities. The gain for the six
months ended June 30, 2018 was US$4.3 million, compared to a loss
of US$1.4 million for the six months ended June 30, 2017.
Net Foreign Exchange Loss
The net foreign exchange loss for the six months ended June 30,
2018 was US$0.1 million, compared to a loss of US$0.1 million in
the six months ended June 30, 2017. In both periods the loss
recognized relates to the re-measurement of our Sterling
denominated cash deposits to US dollars at the closing US dollar to
Sterling exchange rate as well as the gains and losses resulting
from the settlement of transactions denominated in foreign
currency.
As previously disclosed, our interim financial statements for
the six months ended June 30, 2017 include a cumulative adjustment
of $1.1 million for the correction of a prior period error. Stock
based compensation expense was understated primarily due to
recognizing expense only when an award vested, not over the
required service period using a graded vesting approach as required
under IFRS 2. The Group previously assessed the materiality of the
out-of-period adjustment on all impacted periods and concluded that
the cumulative adjustment to correct the error should be recorded
in the six months ended June 30, 2017. The adjustment did not have
an impact on the cash resources of the Group.
Our unaudited interim condensed consolidated statement of
comprehensive loss for the six months ended June 30, 2017 presented
herein includes a US$0.2 million reclassification from research and
development to general and administrative expense. This
reclassification had no effect on the reported operating results
and cash flows for the period.
Liquidity and Capital Resources
At June 30, 2018 and December 31, 2017, we had cash and cash
equivalents of approximately US$19.8 million and US$22.7 million,
respectively.
We do not expect to generate significant revenue unless and
until we obtain regulatory approval for and commercialize our
current or any future product candidates. We anticipate that we
will continue to generate losses in the near term as we seek
regulatory approvals for our product candidates and begin to
commercialize any approved products. We are subject to all of the
risks applicable to the development of new drugs, and we may
encounter unforeseen expenses, difficulties, complications, delays
and other unknown factors that may harm our business.
Our operations have been financed primarily by net proceeds from
the issuance of ordinary shares on the AIM Market of the London
Stock Exchange, issuance of American Depository Shares ("ADSs") on
the NASDAQ Capital Market, the net proceeds of our Hercules Loan
Agreement entered into in November 2017 and, prior to 2016, the
issuance of convertible promissory notes to related parties. Our
primary uses of capital are, and we expect will continue to be in
the short term, expenses associated with the manufacturing and
commercialization of our product candidate as well as
compensation-related expenses.
Cash used to fund operating expenses is affected by the timing
of when we pay expenses, as reflected in the change in our
outstanding accounts payable and accrued expenses.
Our future funding requirements will depend on many factors,
which may include the following:
-- the cost, timing and outcomes of pursuing regulatory approvals;
-- the terms and timing of any collaborative, licensing and
other arrangements that we may establish, including any required
milestone and royalty payments thereunder; and
-- the cost and timing of establishing administrative, sales,
marketing and distribution capabilities;
-- the cost and timing of potential in-licensing, acquisitions or similar transactions;
-- the scope, rate of progress, results and cost of future
preclinical studies and clinical trials and other related
activities;
-- the cost of formulation, development, manufacturing of
clinical supplies and establishing commercial supplies of our
current product candidates and any other product candidates that we
may develop, in-license or acquire;
-- the emergence of competing technologies and their achieving
commercial success before we do or other adverse market
developments.
We expect to continue to incur losses. Our ability to achieve
and maintain profitability depends upon the successful development,
regulatory approval and commercialization of our product candidates
and achieving a level of revenues adequate to support our cost
structure. We may never achieve profitability, and unless and until
we do, we will continue to need to raise additional capital. We
will be required to raise additional capital through equity or debt
financings within the next year to continue the development and
commercialization of current product candidates and to continue to
fund operations at the current cash expenditure levels. If we are
unable to raise additional capital when required or on acceptable
terms, we may have to (i) significantly delay, scale back or
discontinue the development and/or commercialization of one or more
product candidates; (ii) seek collaborators for product candidates
at an earlier stage than otherwise would be desirable and on terms
that are less favorable than might otherwise be available; or (iii)
relinquish or otherwise dispose of rights to technologies, product
candidates or products that we would otherwise seek to develop or
commercialize ourselves on unfavorable terms.
Cash Flows
Six months ended
-------------------------------
June 30, 2018 June 30, 2017
--------------- --------------
(in thousands) US$ US$
Net cash (used in) / provided by:
Operating activities (14,872) (16,486)
Financing activities 12,048 24,124
Effect of exchange rate changes on
cash and cash equivalents (22) 34
(2,846) 7,672
=============== ==============
Operating Activities
Net cash used in operating activities was US$14.9 million in the
six months ended June 30, 2018, primarily from regulatory and
clinical operating activities, including activities supporting our
NDA submission, and a $4.1M reduction in current liabilities. Net
cash used in operating activities was US$16.5 million for the six
months ended June 30, 2017, which primarily reflects the clinical
development of iclaprim.
Financing Activities
Net cash provided by financing activities amounted to US$12.1
million in the six months ended June 30, 2018, primarily due to net
proceeds of US$12.7 million from the May 17, 2018 placement of
32,258,064 new ordinary shares at 31 pence per share and US$0.1
million of proceeds from warrant and option exercises. These
proceeds were partially offset by US$0.8 million in cash interest
paid under our Hercules Loan Agreement. For the six months ended
June 30, 2017, net cash provided of $24.1 million was primarily
from the June 23, 2017 placement of 66,666,667 new ordinary shares
at 30 pence per share.
Financial Statements:
Motif Bio plc
Unaudited interim condensed consolidated statements of comprehensive loss
For the six months June 30, 2018 and 2017
(in thousands, except share and per share data)
For the six months ended
June 30,
-----------------------------------
Note 2018 2017
----- ------------ -------------------
US $ US $
Operations
General and administrative expenses 2 (4,138) (4,621)
Research and development expenses 2 (6,877) (23,601)
Operating loss (11,015) (28,222)
Interest income 3 9 52
Interest expense 3 (1,055) -
Gain (loss) from revaluation of derivative liabilities 8 4,360 (1,427)
Net foreign exchange loss (67) (116)
Loss before income taxes (7,768) (29,713)
Income tax expense 4 (9) -
Net loss for the period (7,777) (29,713)
------------ -------------------
Total comprehensive loss for the period (7,777) (29,713)
============ ===================
Net loss per share 5
Basic (0.03) (0.15)
Diluted (0.04) (0.15)
============ ===================
Weighted average number of ordinary shares
Basic 272,199,780 199,299,910
Diluted 277,586,288 199,299,910
============ ===================
The accompanying footnotes are an integral part of these
condensed consolidated interim financial statements.
Motif Bio plc
Unaudited interim condensed consolidated statements of financial
position
At June 30, 2018 and December 31, 2017
(in thousands)
At June 30,
At December
Note 2018 31, 2017
----- ------------- ---------------------------
US $ US $
ASSETS
Non-current assets
Intangible assets 6,196 6,196
Other non-current assets 21 23
Total non-current assets 6,217 6,219
------------- ---------------------------
Current assets
Prepaid expenses and other current
assets 362 318
Cash 19,805 22,651
Total current assets 20,167 22,969
------------- ---------------------------
Total assets 26,384 29,188
============= ===========================
LIABILITIES
Non-current liabilities
Term loan, net of deferred financing
costs 7 14,255 14,057
Other non-current liabilities 7 109 23
------------- ---------------------------
Total non-current liabilities 14,364 14,080
Current liabilities
Trade and other payables 6 7,204 10,890
Derivative Liability 8 8,169 12,626
Payable on completion of clinical
trial - 500
Total current liabilities 15,373 24,016
------------- ---------------------------
Total liabilities 29,737 38,096
============= ===========================
Net liabilities (3,353) (8,908)
============= ===========================
EQUITY
Share capital 9 4,032 3,589
Share premium 9 93,456 80,873
Group reorganization reserve 9 9,938 9,938
Accumulated deficit 9 (110,779) (103,308)
Total equity (3,353) (8,908)
============= ===========================
The accompanying footnotes are an integral part of these
condensed consolidated interim financial statements.
Motif Bio plc
Unaudited interim condensed consolidated statements of changes in equity
For the six months ended June 30, 2018 and 2017
(in thousands)
Group
Share Share reorganization Accumulated
capital premium reserve deficit Total
US $ US $ US $ US $ US $
----------------- ----------------- ------------------------ ---------------------- ---------
Balance at
December 31,
2016 2,728 57,349 9,938 (60,206) 9,809
Loss for the
period - - - (29,713) (29,713)
----------------- ----------------- ------------------------ ---------------------- ---------
Total
comprehensive
loss for the
period - - - (29,713) (29,713)
Issue of share
capital 847 24,570 - - 25,417
Cost of
issuance - (1,735) - - (1,735)
Exercise of
share options
and warrants 9 414 - - 423
Share-based
payments - - - 1,321 1,321
----------------- ----------------- ------------------------ ---------------------- ---------
Balance at
June 30, 2017 3,584 80,598 9,938 (88,598) 5,522
================= ================= ======================== ====================== =========
Balance at
December 31,
2017 3,589 80,873 9,938 (103,308) (8,908)
Loss for the
period - - - (7,777) (7,777)
----------------- ----------------- ------------------------ ---------------------- ---------
Total
comprehensive
loss for the
period - - - (7,777) (7,777)
Issue of share
capital 433 12,989 - - 13,422
Cost of
issuance - (749) - - (749)
Exercise of
share options
and warrants 10 343 - - 353
Share-based
payments - - - 306 306
----------------- ----------------- ------------------------ ---------------------- ---------
Balance at
June 30, 2018 4,032 93,456 9,938 (110,779) (3,353)
================= ================= ======================== ====================== =========
The accompanying footnotes are an integral part of these
condensed consolidated interim financial statements.
Motif Bio plc
Unaudited interim condensed consolidated statements of cash flows
For the six months June 30, 2018 and 2017
(in thousands)
Six months ended
June 30,
---------------------------------
2018 2017
--------- ----------------------
US $ US $
Operating activities
Operating loss for the period (11,015) (28,222)
Adjustments to reconcile net loss to
net cash used in activities:
Share-based payments 306 1,321
Interest receivable 9 -
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (45) (16)
Trade and other payables (4,127) 10,431
--------- ----------------------
Net cash used in operating activities (14,872) (16,486)
--------- ----------------------
Financing activities
Proceeds from issue of share capital 13,422 25,417
Costs of issuance of share capital (749) (1,547)
Proceeds from exercise of warrants and
options 145 254
Interest paid (770) -
--------- ----------------------
Net cash provided by financing activities 12,048 24,124
--------- ----------------------
Net change in cash (2,824) 7,638
Cash beginning of the period 22,651 21,830
Effect of foreign exchange rate changes (22) 34
--------- ----------------------
Cash, end of the period 19,805 29,502
========= ======================
The accompanying footnotes are an integral part of these
condensed consolidated interim financial statements.
1. General information and basis of preparation
These unaudited interim condensed consolidated financial
statements for the six months ended June 30, 2018 together with the
notes thereto (the "Unaudited Interim Condensed Consolidated
Financial Statements") of Motif Bio plc (the "Company" and together
with its subsidiary, Motif BioSciences Inc. the "Group") have been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB") and as adopted by the European Union. As
permitted by International Accounting Standard 34 - "Interim
financial reporting" ("IAS 34"), the Unaudited Interim Condensed
Consolidated Financial Statements do not include all disclosures
required for a full presentation and do not constitute statutory
financial statements. The Unaudited Interim Condensed Consolidated
Financial Statements should be read in conjunction with the Motif
Bio plc Annual Consolidated Financial Statements for the years
ended December 31, 2017, 2016 and 2015, which have been prepared in
accordance with IFRS as issued by IASB and in conformity with IFRS
as adopted by the European Union. The Unaudited Interim Condensed
Consolidated Financial Statements were approved for issuance by the
Board of Directors on September 24, 2018.
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial information and the reported amounts of revenue and
expenses during the period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates. Reference
should be made to the section "Critical Accounting Policies and
Significant Judgments and Estimates" in the Annual Consolidated
Financial Statements for the years ended December 31, 2017, 2016
and 2015 for a detailed description of the accounting policies and
more significant estimates and judgments used by the Group. The
accounting policies adopted in the preparation of these financial
statements are consistent with those presented in the Group's 2017
Annual Consolidated Financial Statements.
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ("the functional
currency"). The Unaudited Interim Condensed Consolidated Financial
Statements are presented in United States Dollars (US $), which is
Motif Bio plc's functional and presentation currency. However,
during the reporting period the Company had exposure to Sterling.
Foreign currency transactions are translated into the functional
currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at period end
exchange rates are generally recognized in profit or loss.
The unaudited interim condensed consolidated statement of
comprehensive loss for the six months ended June 30, 2017 includes
a US$0.2 million reclassification from research and development to
general and administrative expense. This reclassification had no
effect on the reported operating results and cash flows for the
period. The unaudited interim condensed consolidated statement of
cash flows for the six months ended June 30, 2017 were adjusted to
present the proceeds from issuance of share capital in accordance
with IAS 7. The adjustment did not have an impact on the net cash
provided by financing activities.
Going Concern
As of June 30, 2018, the Group had US$19.8 million in cash. Net
cash used in operating activities was US$14.8 million for the six
months ended June 30, 2018. Net loss for the six months ended June
30, 2018 was US$7.8 million. The Group expects to incur losses for
the immediate future as it prepares for commercialization and to
the extent it advances additional research, development and
clinical trials of iclaprim. The Group is unable to predict the
extent of any future losses or when the Group will become
profitable, if at all.
The Hercules Loan Agreement (Note 7) subjects the Group to
various affirmative and restrictive covenants, including, but not
limited to, financial reporting obligations, and certain
limitations on indebtedness and liens. Compliance with these
covenants may limit the Group's flexibility in operating its
business. Additionally, there are circumstances where the Loan may
be accelerated if the Group does not maintain compliance with
covenants or incurs other event of default under the Hercules Loan
Agreement.
The Group will be required to raise additional capital within
the next year to continue the development and commercialization of
current product candidates and to continue to fund operations at
the current cash expenditure levels. The Group cannot be certain
that additional funding will be available on acceptable terms, or
at all. To the extent that the Group raises additional funds by
issuing equity securities, its stockholders may experience
significant dilution. Any debt financing, if available, may involve
restrictive covenants that impact the Group's ability to conduct
business. If the Group is unable to raise additional capital when
required or on acceptable terms, it may have to (i) significantly
delay, scale back or discontinue the development and/or
commercialization of one or more product candidates; (ii) seek
collaborators for product candidates at an earlier stage than
otherwise would be desirable and on terms that are less favorable
than might otherwise be available; or (iii) relinquish or otherwise
dispose of rights to technologies, product candidates or products
that the Group would otherwise seek to develop or commercialize
itself on unfavorable terms.
On August 8, 2018, the Group announced the receipt of a Notice
of Allowance from the United States Patent and Trademark Office for
United States Patent Application Nos. 15/586,021 and 15/586,815 for
the use iclaprim. The two method of use patents will expire in
November 2037. On August 14, 2018, the Group announced the FDA's
acceptance of its NDA submission for iclaprim in patients with
ABSSSI. The PDUFA, or Prescription Drug User Fee Act, date is set
for February 13, 2019. The Group believes that these could provide
the basis for increased investor interest in the Group and, hence,
potentially provide greater opportunities to raise additional
capital.
These financial statements have been prepared under the
assumption that the Group will continue as a going concern. Due to
the Group's recurring and expected continuing losses from
operations, the Group has concluded there is substantial doubt in
the Group's ability to continue as a going concern within one year
of the issuance of these financial statements without additional
capital becoming available. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
Segment Information
The chief operating decision-maker is considered to be the Board
of Directors of Motif Bio plc. The chief operating decision-maker
allocates resources and assesses performance of the business and
other activities at the operating segment level. In addition, they
review the IFRS consolidated financial statements.
The chief operating decision-maker has determined that the Group
has one operating segment - the development and commercialization
of pharmaceutical formulations. Although the Group has some
activities in the U.K., the finance and most management functions
take place in the U.S.
Fair value disclosures
The Group's cash, prepaid expenses and other current assets and
trade and other payables are stated at their respective historical
carrying amounts, which approximates fair value due to their
short-term nature. The Group's derivative liability is measured at
fair value using Level 1 and 2 inputs. See discussion in Note 8 on
the inputs utilized in the Black-Scholes option pricing model and
for a rollforward of the derivative liability from December 31,
2017 to June 30, 2018. The Group determined that the book value of
the Hercules Loan Agreement (Note 7) approximates its fair value as
of June 30, 2018 due to the interest being tied to the U.S. Prime
Rate. There were no transfers between fair value levels during the
six months ended June 30, 2018 or 2017.
When measuring the fair value of an asset or a liability, the
Group uses observable market data as far as possible. Fair values
are categorized into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as
follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
-- Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
-- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
2. Breakdown of expenses by nature
Six months ended
June 30, 2018 June 30, 2017
(in thousands) US $ US $
------------- -------------
General and administrative
Employee compensation, benefits and share-based payments............... 1,522 1,774
Director, legal and professional
................................................................... 1,346 1,763
Investor and public relations advisory
fees................................................ 641 558
Other
expenses...........................................................................
..................... 629 526
------------- -------------
4,138 4,621
============= =============
Research and
development............................................................................. 6,877 23,601
===== ======
3. Finance income and costs
Six months ended
June 30, 2018 June 30, 2017
(in thousands) US $ US $
------------- -------------
Finance income
Interest from financial
assets.......................................................................... 9 52
------------- -------------
9 52
------------- -------------
Finance costs
Interest
expense...........................................................................
..................... (771) -
Accretion of end of term
payment................................................................. (86) -
Amortization of deferred financing
costs..................................................... (198) -
------------- -------------
(1,055) -
------------- -------------
Net finance
costs.............................................................................
................. (1,046) 52
============= =============
4. Income tax expense
The Group has recorded a loss for the six months ended June 30,
2018 and for all periods presented. The Group does not expect to
have a material tax obligation.
5. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Group by the weighted average
number of shares in issue during the year. Diluted EPS is computed
by dividing net income (loss) by the weighted average of all
potentially diluted share of common stock that were outstanding
during the periods presented.
The treasury stock method is used in the calculation of diluted
EPS for potentially dilutive liability classified options and
warrants, which assumes that any proceeds received from the
exercise of in-the-money options and warrants, would be used to
purchase common shares at the average market prices for the
period.
Six months ended
----------------------------
June 30, 2018 June 30, 2017
(in thousands, except share and per share data) US $ US $
------------- -------------
Basic
Net
loss...............................................................................
.................... (7,777) (29,713)
------------- -------------
Basic weighted average shares in issue............................................. 272,199,780 199,299,910
------------- -------------
Basic loss per
share..............................................................................
. (0.03) (0.15)
============= =============
Diluted
Net
loss...............................................................................
.................... (7,777) (29,713)
Effect of dilutive securities: liability-classified warrants................. (4,360) -
------------- -------------
Diluted net
loss...............................................................................
....... (12,137) (29,713)
Weighted average shares in issue - basic......................................... 272,199,780 199,299,910
Incremental dilutive shares from liability-classified warrants (treasury stock
method)................................................................... 5,386,508 -
------------- -------------
Weighted average shares in issue - diluted...................................... 277,586,288 199,299,910
------------- -------------
Diluted loss per
share........................................................................... (0.04) (0.15)
============= =============
The following potentially dilutive securities outstanding at
June 30, 2018 and 2017 have been excluded from the computation of
diluted weighted average shares outstanding, as they would be
antidilutive.
Six month ended
2018 2017
---------- -------------
Warrants............................................................................
.................... 11,409,904 47,537,905
Share
options.............................................................................
........... 19,189,798 18,398,299
---------- -------------
30,599,703 65,936,204
---------- -------------
6. Trade and other payables
At June 30, 2018 At December 31, 2017
(in thousands) US $ US $
---------------- ----------------------------
Trade payables (1)
...............................................................
................... 3,492 6,464
Accrued expenses - Contract research
organization...................... 118 1,293
Accrued expenses - Other (2)
.............................................................. 3,594 3,009
Other
Payable........................................................
................................ - 124
---------------- ----------------------------
7,204 10,890
================ ============================
(1) Trade payables at June 30, 2018 and December 31, 2017
include $2.3 million and $5.7 million, respectively, billed by the
Group's contract research organization.
(2) Accrued expenses at June 30, 2018 and December 31, 2017
include $2.3 million and $1.3 million, respectively, owed to the
Group's supplier of active pharmaceutical ingredient.
7. Interest bearing loans and borrowings
(in thousands) At June 30, 2018 At December 31, 2017
Non-current liabilities US $ US $
---------------- ------------------------
Term
Loan...............................................................
............................... 15,000 15,000
Deferred financing
costs..............................................................
....... (745) (943)
14,255 14,057
================ ========================
On November 15, 2017, the Group entered into a credit agreement
(the "Hercules Loan Agreement") for up to $20 million in debt
financing with Hercules Capital, Inc. ("Hercules"). Pursuant to the
credit agreement, Hercules agreed to loan the Group $20.0 million
in two tranches. The first tranche of $15.0 million was drawn down
at closing, with the remaining $5.0 million available upon the
achievement of certain milestones anticipated in 2019, or at
Hercules's discretion.
These milestones include (i) (x) the FDA has accepted the New
Drug Application for marketing approval with respect to "Iclaprim"
product for the treatment of patients with acute bacterial skin and
skin structure infection ("ABSSSI") and (y) enrollment of first
patient in its Phase 3 clinical study of "Iclaprim" product for the
treatment of hospital-acquired bacterial pneumonia ("HABP"), (ii)
market approval receive from the FDA with respect to "Iclaprim"
product for the treatment of patients with ABSSSI, or (iii) at the
discretion of Hercules.
The terms include an initial interest-only period of 15 months,
extendable to 21 months on the achievement of certain milestones; a
30-month capital and interest repayment period thereafter; an
interest rate tied to the US prime rate, currently 10.5% as of June
30, 2018, and customary security over all assets of the Group,
except for intellectual property where there is a negative pledge.
In addition, there is a payment of US$0.4 million due at the end of
the term of the loan. Under the credit agreement, the Group issued
Hercules warrants to purchase up to 73,452 of its ADS (each
representing 20 ordinary shares) at an exercise price of US$9.53
per ADS, representing 3.5% warrant coverage of the total loan
facility. Hercules also has the right, in its discretion, to
participate in any subsequent financing, such as an equity
offering, in an amount up to US$1 million. In connection with the
Hercules Loan Agreement closing, the Group incurred US$0.5 million
in fees and issued warrants with a fair value of approximately
US$0.4 million. Both items are classified as a direct reduction
from the Hercules Loan Agreement balance and will be amortized over
the life of the Loan using the effective interest rate method. The
Group is also subject to an end of term charge equal to 2.15% of
the total loan capacity. The end of term charge is payable upon
loan maturity or the date that the Group prepays the outstanding
loan balance. For the six months ended June 30, 2018, the Group
recognized total interest expense of US$1.1 million, comprised of
interest expense of US$0.8 million, accretion expense related to
the end-of-term payment of US$0.1 million and amortization expense
related to the deferred financing costs of US$0.2 million.
8. Warrants
Warrant activity
The Company has issued warrants for services performed and in
conjunction with various equity financings. The Company's warrants
have either a Sterling or US Dollar exercise price. The following
is a summary of the Company's warrant activity during the six
months ended June 30, 2018:
Weighted Average
Number of Warrants Exercise Price
---------------------------- --------------------------
Ordinary shares ADS (3) Ordinary shares ADS
---------------- --------- ----------------- --------
Outstanding as of
January 1, 2018 22,672,867 1,336,354 GBP 0.272 $8.08
Granted - - - -
Exercised (757,315) - GBP 0.246 -
--------------- --------- ------ --------- ----
Outstanding as of
June 30, 2018 21,915,552 1,336,354 GBP 0.273 $8.08
=============== ========= ====== ========= ====
The Company's warrants outstanding and exercisable as of June
30, 2018 were as follows:
Type of Warrant Outstanding Number Outstanding and Exercisable Exercise Price Expiration Date
---------------------------- ---------------------------------- ---------------- -----------------
Ordinary shares (1) 1,367,089 GBP GBP 0.20 April 2, 2020
Ordinary shares (1) 1,082,384 GBP GBP 0.50 July 21, 2020
Ordinary shares (2) 10,505,648 GBP GBP 0.322 November 23, 2021
ADS (2) (3) 1,202,902 US $ 8.03 November 23, 2021
Ordinary shares (1) 8,960,431 GBP GBP 0.20 April 2, 2025
ADS (2) (3) (4) 10,000 US $ 7.26 July 31, 2022
ADS (2) (3) 73,452 US $ 9.53 November 14, 2022
(1) Warrants totaling 11,409,904 of ordinary shares are equity
classified.
(2) Warrants totaling 10,505,648 of ordinary shares and
1,336,354 of ADS are liability classified.
(3) Each ADS represents 20 ordinary shares.
(4) Warrant provides for purchase up to 60,000 ADSs, of which
10,000 ADSs were vested and exercisable as of June 30, 2018.
Liability classified warrants
ADS warrants
On November 23, 2016, the Group closed an initial U.S. public
offering of 2,438,491 ADS and 1,219,246 ADS warrants at a price of
US $6.98 per ADS/warrant combination. Each ADS represents 20
ordinary shares. The warrants have an exercise price of US$8.03 per
ADS and expire on November 23, 2021. In the event the Group fails
to maintain the effectiveness of its Registration Statement and a
Restrictive Legend Event has occurred, the warrant shall only be
exercisable on a cashless basis. This would result in variability
in the number of shares issued and therefore, the warrants were
designated as a financial liability carried at fair value through
profit and loss. On issuance of the ADS warrants, the Group
recorded a derivative liability of US$3.8 million using the
Black-Scholes model. The Group develops its own assumptions for use
in the Black-Scholes option pricing model that have observable
inputs and available market data to support the fair value. This
method of valuation involves using inputs such as the fair value of
the Group's common stock, stock price volatility of comparable
companies, the contractual term of the warrants, risk free interest
rates and dividend yields. The Group has a limited trading history
in its common stock, therefore, expected volatility is based on
that of reasonably similar publicly traded companies. Due to the
nature of these inputs, the valuation of the warrants is considered
Level 1 and 2 measurements.
On August 1, 2017, the Group issued to a third party a warrant
to purchase up to 60,000 ADSs at an exercise price of US$7.26 per
ADS. The warrant vested 5,000 ADSs at issuance, with the remaining
55,000 ADS vesting upon satisfaction of various performance
conditions related to the Group's stock price and trading volumes.
A total of 10,000 ADSs were vested as of June 30, 2018. Once
vested, the warrant may be exercised on a cashless basis and
expires on July 31, 2022. Exercising on a cashless basis would
result in variability in the number of shares issued and therefore,
the warrants were designated as a financial liability carried at
fair value through profit and loss. On issuance of the ADS
warrants, the Group recorded a derivative liability of US$0.1
million using the Black-Scholes model.
On November 14, 2017, in conjunction with the Hercules Loan
Agreement, the Group issued Hercules a warrant to purchase up to
73,452 ADSs at an exercise price of US$9.53 per ADS, representing
3.5% warrant coverage of the total loan facility. The warrant may
be exercised on a cashless basis, and is immediately exercisable
through November 14, 2022. Exercising on a cashless basis would
result in variability in the number of shares issued and therefore,
the warrants were designated as a financial liability carried at
fair value through profit and loss. On issuance of the ADS
warrants, the Group recorded a derivative liability of US$0.4
million using the Black-Scholes model.
At June 30, 2018 and December 31, 2017, the liability classified
ADS warrants had a fair value of US$5.6 million and US$8.9 million
using the following weighted-average assumptions in the
Black-Scholes model:
June 30, December 31,
2018 2017
-------- ------------
Share price (US
$).......................................................................................
.... 8.20 10.81
Exercise price (US
$)....................................................................................... 8.08 8.08
Expected
volatility...............................................................................
............. 73 % 76 %
Number of periods to
exercise......................................................................... 3.47 3.97
Risk free
rate.....................................................................................
............... 2.68 % 2.10 %
Expected
dividends................................................................................
.......... - -
Ordinary warrants
On November 23, 2016, the Group placed 22,863,428 ordinary
shares together with 11,431,714 warrants over ordinary shares at a
price of 28 pence per share/warrant combination. The warrants have
an exercise price of GBP0.322 per warrant and expire on November
23, 2021. In the event that the Group fails to maintain the
effectiveness of the Registration Statement, the warrant shall only
be exercisable on a cashless basis. This would result in
variability in the number of shares issued and therefore, the
warrants were designated as a financial liability carried at fair
value through profit and loss. On issuance of the warrants, the
Group recorded a derivative liability of US$1.8 million using the
Black-Scholes model.
At June 30, 2018 and December 31, 2017, the liability classified
ordinary warrants had a fair value of US$2.5 million and US$3.7
million using the Black-Scholes model and the following
assumptions:
June 30, December 31,
2018 2017
-------- ------------
Share price
(GBP)................................................................................
............ 0.34 0.41
Exercise price
(GBP)................................................................................
........ 0.322 0.322
Expected
volatility...........................................................................
................. 73 % 76 %
Number of periods to
exercise......................................................................... 3.40 3.90
Risk free
rate.................................................................................
................... 2.63 % 2.09 %
Expected
dividends............................................................................
............... - -
The following is a summary of the Group's liability classified
warrant activity, including both ADS and Ordinary warrants, during
the six months ended June 30, 2018:
Fair value
(in thousands)
Liability classified warrants US $
---------------------------------------------------------------------------------------------------- ----------
Balance at December 31, 2017......................................................................... 12,626
Issued during the
period................................................................................. -
Exercised during the
period............................................................................ (83)
Impact of foreign
exchange............................................................................. (14)
Gain from revaluation of derivative liabilities............................................... (4,360)
----------
Balance at June 30,
2018............................................................................... 8,169
----------
9. Share capital
Allotted, called up and fully paid: Number US $
------------------------------------------------------------------------------------------------------------ ----------- -----
(in thousands, except share data)
In issue at December 31,
2017.............................................................................................. 263,519,128 3,589
----------- -----
Issued:
Ordinary shares of 1p
each......................................................................................... 757,315 9
Ordinary shares of 1p
each......................................................................................... 32,258,064 433
Ordinary shares of 1p
each......................................................................................... 125,736 1
In issue at June 30,
2018....................................................................................................... 296,660,243 4,032
----------- -----
During January through June of 2018, 757,315 ordinary shares
were issued upon the exercise of warrants.
On May 17, 2018, the Group placed 32,258,064 new ordinary shares
at 31 pence per share and received US$12.7 million of net
proceeds.
In June 2018, 125,736 ordinary shares were issued upon the
exercise of a stock option.
Share premium represents the excess over nominal value of the
fair value consideration received for equity shares, net of
expenses of the share issue. Retained deficit represents
accumulated losses.
The group reorganization reserve arose in March 2015 when Motif
Bio plc became the parent of the Group. This was a common control
transaction and therefore outside the scope of IFRS 3- "Business
Combinations." The transaction has therefore been accounted for as
a group reorganization and the Group is presented as if the Company
has always owned Motif BioSciences Inc. The reserve on
consolidation represents the difference between the nominal value
of the shares of the Company issued to the former stockholders of
Motif BioSciences Inc. and the share capital and share premium of
Motif BioSciences Inc. at the date of the transaction. As stated,
the nominal value of the Company shares was used in the calculation
of the reorganization reserve.
10. Share-based payments
On December 4, 2014, Motif BioSciences Inc. adopted a Share
Option Plan (the "Plan") under which options can be granted to
employees, consultants, and directors. The share price used for the
Plan prior to being traded on AIM was based on management's
assessment of the valuation of the Group given the net assets and
future potential of the Group at the time of granting.
Motif Bio plc adopted a Share Option Plan (the "New Plan") on
April 1, 2015. The New Plan replaces Motif BioSciences Inc.'s
previous share plan. There were no changes to the fair value of
share options granted under the Plan with the only change being to
grant the holders shares in Motif Bio plc rather than Motif
BioSciences Inc. upon exercising options. The exercise price for
each option will be established at the discretion of the Board
provided that the exercise price for each option shall not be less
than the nominal value of the relevant shares if the options are to
be satisfied by a new issue of shares by the Company and provided
that the exercise price per share for an option shall not be less
than the fair market value of a share on the effective date of
grant of the option. Options will be exercisable at such times or
upon such events and subject to such terms, conditions and
restrictions as determined by the Board on grant date. However, no
option shall be exercisable after the expiration of ten years after
the effective date of grant of the option.
The following is a summary of the Group's option activity for
the six months ending June 30, 2018.
Weighted
average
exercise
Number of price
share options US $
------------- -------------
Outstanding at December 31,
2017.................................................................. 17,065,534 0.32
Granted during the
period...........................................................................
........ 5,050,000 0.49
Forfeited during the
period...........................................................................
...... (2,593,750) 0.36
Cancelled during the period
............................................................................... (206,250) 0.49
Exercised during the period
................................................................................ (125,736) 0.14
Expired during the
period...........................................................................
........ - -
-------------
Outstanding at June 30,
2018........................................................................... 19,189,798 0.35
Exercisable at June 30,
2018............................................................................ 11,833,220 0.29
-------------
The total expense recognized for the periods arising from
stock-based payments are as follows:
Six months ended
June 30, 2018 June 30, 2017
US $ US $
------------- -------------
General and administrative
expense...................................................... 250 824
Research and development
expense...................................................... 56 497
------------- -------------
Total share-based payment
expense...................................................... 306 1,321
============= =============
The interim financial statements for the six months ended June
30, 2017 include a cumulative adjustment of US$1.1 million for the
correction of a prior period error. Stock-based compensation
expense was understated primarily due to recognizing expense only
when an award vested, not over the required service period using a
graded vesting approach as required under IFRS 2. The Group
previously assessed the materiality of the out-of-period adjustment
on all impacted periods and concluded that the cumulative
adjustment to correct the error should be recorded in the six
months ended June 30, 2017. This adjustment did not have an impact
on the cash resources of the Group.
11. Employee costs
The aggregate payroll costs of Executive Directors and key
management personnel were as follows:
Six months ended
June 30, 2018 June 30, 2017
US $ US $
------------- -------------
Wages and
salaries.........................................................................
................. 1,646 1,278
Social security and other employer
costs....................................................... 158 139
Share base payments(1)
.................................................................................
.. 683 733
------------- -------------
2,487 2,150
============= =============
(1) The total share based payments does not reflect the
previously disclosed out-of-period adjustment in 2017 and any
forfeitures or cancellations of option awards (Note 10).
12. Related party transactions
Transactions with Amphion Innovations plc and Amphion
Innovations US, Inc.
At June 30, 2018, Amphion Innovations plc owned 9.5% of the
issued ordinary shares in Motif Bio plc. Richard Morgan and Robert
Bertoldi were directors of both the Company and Amphion Innovations
plc in the period. Transactions between the Group and the Amphion
Group are disclosed below:
Advisory and Consultancy Agreement with Amphion Innovations US,
Inc. and Shared Office Space
On April 1, 2015, the Group entered into an Advisory and
Consultancy Agreement with Amphion Innovations US, Inc. The
consideration for the services to be provided is US$120,000 per
annum. The agreement was amended in December 2016 so that either
party may terminate the agreement at any time, for any reason, upon
giving the other party 90-days advance written notice. The Group
paid US$60,000 and US$60,000 to Amphion Innovations US, Inc. during
the six months ended June 30, 2018 and 2017, respectively, in
accordance with the terms of the agreement. As of the date of this
interim report, the agreement continues to be in force.
Consultancy Agreement with Amphion Innovations plc
On April 1, 2015, the Group entered into a Consultancy Agreement
with Amphion Innovations plc for the services of Robert Bertoldi,
an employee of Amphion Innovations plc. The consideration for his
services was US$5,000 per month. On November 1, 2015, the
consideration was increased to US$180,000 per annum. On July 1,
2016, the consideration decreased to US$75,000 per annum. The
agreement was for an initial period of 12 months and would
automatically renew each year on the anniversary date unless either
party notifies the other by giving 90-days written notice prior to
expiration. The agreement was amended in December 2016 so that
either party may terminate the agreement at any time, for any
reason, upon giving the other party 90-days advance written notice.
In July 2017, the Group amended the consulting agreement with
Amphion Innovations plc to increase the annual consideration to
US$125,000 to better reflect Robert Bertoldi's time commitment to
the Group with an effective date of January 1, 2017. The Group paid
Robert Bertoldi US$62,500 and US$37,500 during the six months ended
June 30, 2018 and 2017, respectively, in accordance with the terms
of the agreement.
Consultancy Agreement with Amphion Innovations US, Inc.
On September 7, 2016, the Group entered into a Consultancy
Agreement with Amphion Innovations US, Inc., pursuant to which
Amphion Innovations US, Inc. will provide consultancy services in
relation to the Group's obligations as a NASDAQ listed company. The
consideration for the services is $15,500 per month. The agreement
is for an initial period of 12 months, after which the agreement
terminated. The Group paid US$93,000 during the six months ended
June 30, 2017 pursuant to the terms of this agreement.
Consultancy Agreement with Jonathan Gold
On April 7, 2017, the Group entered into a consultancy agreement
with Jonathan Gold, a member of the Group's Board of Directors.
Under the terms of this agreement, Mr. Gold received a fixed fee of
US$16,167 per month for strategic financial expert advice and
guidance. The term of this agreement was twelve months, commencing
January 1, 2017. The term of the agreement would automatically
renew each month following the initial term, as long as either
party did not provide notice to the other party of its election not
to continue to renew the agreement with at least 30-days advance
notice. This agreement was suspended as of December 31, 2017.
Effective February 2, 2018, Mr. Gold assumed the executive role of
Chief Financial Officer upon the resignation of Robert Dickey IV,
the Group's former Chief Financial Officer.
13. Subsequent Events
Effective July 16, 2018, Robert Bertoldi voluntary resigned from
the Board of Directors. Robert Bertoldi continues to provide
consultancy services to Motif Bio under the terms of the
consultancy agreement with Amphion Innovations plc.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EAANLAEEPEAF
(END) Dow Jones Newswires
September 25, 2018 02:02 ET (06:02 GMT)
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