TIDMDDDD
RNS Number : 5040A
4d Pharma PLC
30 September 2020
4D pharma plc
("4D", "4D Pharma" or "the Company")
Interim results for the six months ended 30 June 2020
Leeds, UK, 30 September, 2020 - 4D pharma plc (AIM: DDDD), a
pharmaceutical company leading the development of Live
Biotherapeutics, is pleased to announce the interim results for the
Company and its subsidiaries (together "the Group") for the six
months ended 30 June 2020.
Financial highlights
-- Net assets at 30 June 2020 of GBP31.5 million (30 June 2019:
GBP35.0 million and 31 December 2019: GBP22.3 million).
-- Cash and cash equivalents and short-term deposits at 30 June
2020 of GBP10.0 million (30 June 2019: GBP12.9 million and 31
December 2019: GBP3.8 million).
-- Loss and total comprehensive income for the six months ended
30 June 2020 of GBP13.6 million (30 June 2019: GBP11.3 million and
31 December 2019: GBP23.7 million).
-- Research and development expenditure for the six months ended
30 June 2020 of GBP12.4 million (30 June 2019: GBP10.8 million and
31 December 2019: GBP26.5 million).
Operational highlights
-- Delivered the first global clinical evidence of the safety
and therapeutic potential of oral Live Biotherapeutics in cancer,
in an interim analysis of 4D's clinical trial of MRx0518 in
combination with Keytruda(R) . The Part A safety phase of the
ongoing trial was successfully completed in May, and the Part B
cohort expansion phase commenced in June.
-- Completed an interim analysis of a Phase II trial of
irritable bowel syndrome (IBS) candidate Blautix(R) which
demonstrated non-futility in the primary endpoint and a safety
profile comparable to placebo.
-- Commenced a clinical trial of immunomodulatory candidate
MRx-4DP0004 in hospitalised COVID-19 patients. The Company's rapid
response was enabled by a detailed understanding of its drug
candidates driven by the MicroRx(R) platform, and the safety
profile of Live Biotherapeutics.
-- Appointed Prof. Dr. Axel Glasmacher as Non-Executive
Chairperson. Prof. Glasmacher joined 4D pharma as a Non-Executive
Director in 2019. His vast experience in the successful development
of novel cancer therapies at Celgene will be critical in guiding
the clinical development of 4D pharma's pipeline of Live
Biotherapeutics.
Since the period end
-- In July 2020 4D pharma undertook a fundraise through the
issue of new Ordinary Shares to raise approximately GBP7.7 million
in gross proceeds (GBP7.3 million net). The additional funding
provides working capital into Q1 2021 and allows sufficient cash
runway to achieve a number of major clinical readouts across
multiple programmes including oncology, respiratory and
gastrointestinal diseases.
-- In August 4D pharma announced comprehensive clinical benefit
data from Part A of the trial. The 42% disease control rate
observed in Part A of our ongoing trial far exceeded the predefined
10% threshold for expansion in Part B.
-- 4D pharma CSO Dr. Alex Stevenson and Research Director Dr.
Imke Mulder hosted an R&D webinar in which Dr. Mulder and
senior members of her team discussed the Company's MicroRx(R)
platform and development pipeline, as well as successes of 4D
pharma's functional approach to the discovery and development of
Live Biotherapeutics, followed by a Q&A session with eight
participating analysts.
-- Appointment of Dr. Katrin Rupalla as a Non-Executive
Director. Dr. Rupalla brings vast experience to 4D pharma with over
20 years of experience in the pharmaceutical industry, and
extensive regulatory and development expertise in the fields of
oncology and neuroscience.
Chairman's statement
Axel Glasmacher, Non-Executive Chairperson of 4D pharma,
commented: "2020 has undeniably been a defining period for the Live
Biotherapeutics field, and 4D pharma has continued building its
leading position. We announced proof-of-concept efficacy data in
oncology for lead candidate MRx0518, and have made meaningful
progress in other important therapeutic areas. In concert with this
growth, 4D has further expanded both its leadership expertise and
its international shareholder base. 4D pharma now looks ahead to
the remainder of 2020 and beyond, as we continue to deliver
clinical data and pioneer this rapidly developing new area of
medicine."
For further information please contact:
4D
Duncan Peyton, Chief Executive Officer + 44 (0)113 895 0130
Investor Relations ir@4dpharmaplc.com
N+1 Singer - Nominated Adviser and Joint Broker +44 (0) 20 7496
3000
Aubrey Powell / Justin McKeegan / Iqra Amin (Corporate
Finance)
Tom Salvesen (Corporate Broking)
Bryan Garnier & Co. Limited - Joint Broker +44 (0)20 7332
2500
Dominic Wilson / Phil Walker
Image Box PR
Neil Hunter / Michelle Boxall
Tel +44 (0)20 8943 4685
neil@ibcomms.agency / michelle@ibcomms.agency
www.4dpharmaplc.com
Chairperson and Chief Executive Officer's Joint Review
Axel Glasmacher, Non-Executive Chairperson, and Duncan Peyton,
Chief Executive Officer
So far in 2020, the rapidly maturing microbiome therapeutics
field has made huge strides, delivering clinical data that supports
the early research and therapeutic potential shown with the novel
modality to date. 4D pharma has continued to lead the way in
developing Live Biotherapeutic products (LBPs) to treat diseases
with high unmet medical need in tissues and organs distal from the
gut, from oncology to respiratory and diseases of the central
nervous system (CNS). Driven by our approach to LBP discovery with
the MicroRx(R) platform that is highly focussed on function, 4D
pharma's pipeline is one of the most advanced and deepest in the
field, boasting four unique clinical-stage LBP candidates and six
clinical trials ongoing in the first half of 2020.
First-in-class proof-of-concept oncology data
Earlier this year we delivered first-in-class clinical
proof-of-concept data demonstrating clinically meaningful benefit
from the combination of Live Biotherapeutic MRx0518 with the immune
checkpoint inhibitor Keytruda(R) in patients with relapsed and
refractory solid tumours.
As part of our clinical collaboration with Merck & Co., the
ongoing Phase I/II trial is enrolling heavily pre-treated patients
with solid tumours refractory to prior immune checkpoint therapy
and who have no other available treatment options. The trial is
made up of two parts - Part A, an initial safety phase assessing
dose-limiting toxicities after one three-week cycle of treatment,
and the Part B cohort expansion phase.
Part A was successfully completed in May 2020, and the safety
review committee determined that it is safe to proceed to Part B of
the study, which is ongoing.
Importantly, patients enrolled in both Parts A and B are
eligible to remain on treatment for up to two years, to assess
clinical efficacy in addition to safety and tolerability of the
combination. In the 12 patients comprising Part A, the combination
of MRx0518 and Keytruda(R) achieved a disease control rate of 42%,
including three patients who achieved partial responses - an
objective response rate (ORR) of 25% - and a further two patients
with durable stable disease of six months or longer. The updated
data has been submitted for presentation at a scientific conference
later this year.
4D pharma is now rapidly moving forward with the Part B cohort
expansion phase, opening four additional sites to accelerate
enrolment. The Company expects to make further announcements from
Part B as appropriate throughout 2020 and into 2021.
Continuing commitment to oncology
To further support this combination therapy data, in the second
half of 2020 4D pharma expects to announce initial results from a
neoadjuvant monotherapy biomarker study. This study has been
designed to investigate the immune-mediated mechanism of action of
MRx0518 in the clinical setting, by analysing tumour samples before
and after monotherapy treatment. Data generated could be highly
informative for the future development of MRx0518 and provide
insights into relevant biomarkers for patient selection and
treatment.
Highly encouraged by the early signals of clinical activity seen
in the open-label trial of MRx0518 in combination with Keytruda(R)
, and demonstrating the Company's commitment to oncology, in
January 4D pharma launched its third clinical trial of MRx0518, in
combination with radiotherapy for resectable pancreatic cancer.
Subjects will be dosed daily with MRx0518 for one week prior to
and throughout radiotherapy, up until 24 hours prior to surgical
resection. In addition to the primary endpoint of safety and
tolerability, the study will evaluate preliminary clinical efficacy
including changes in tumour-infiltrating lymphocytes and the gut
microbiome. This study is being conducted at the University of
Texas M.D. Anderson Cancer Center as part of our strategic
collaboration to evaluate 4D's Live Biotherapeutic oncology
pipeline across a range of cancer settings. Results from this study
were initially expected in Q4 2020 but recruitment has been delayed
due to COVID-19. The Company now expects to announce initial
results in 2021.
Developing a new approach to IBS
4D pharma is conducting the world's largest clinical trial of a
Live Biotherapeutic to date with its Phase II trial of Blautix(R)
for the treatment of irritable bowel syndrome (IBS).
In April, the Company announced the successful completion of an
interim futility analysis of the trial on a total of 118 IBS-C
(constipation-predominant) and 128 IBS-D (diarrhoea-predominant)
patients. This pre-specified interim analysis was not designed to
quantify interim results, only to demonstrate that the study was
not futile with respect to the primary endpoint. The interim
analysis achieved its limited objective, and 4D pharma was
encouraged to continue the analysis of the full trial data.
Moreover, Blautix was shown to have a safety profile comparable
to placebo, with 3% and 2% patient discontinuation due to adverse
events in the Blautix(R) and placebo arms respectively, and mild or
moderate adverse events reported in 24% of subjects for both
Blautix(R) and placebo arms.
The trial has now completed enrolment of approximately 370
patients and 4D pharma expects to announce full topline results in
the first few days in Q4. Blautix(R) has the potential to be the
world's first disease modifying therapy for IBS, by treating the
underlying microbiome cause of disease.
New challenges, new ideas, new opportunities
The SARS-CoV-2 global pandemic has posed an unprecedented
challenge, not just to the pharmaceutical sector but almost every
aspect of our society. However, it has also spurred unprecedented
levels of innovation, to rapidly find solutions to a new
problem.
4D pharma recognised the potential for its novel therapeutics to
contribute to the management of the pandemic, with its
immuno-modulatory Live Biotherapeutic MRx-4DP0004. Importantly, the
inherent safety of LBPs is highly attractive when mounting a rapid
and effective response to a novel disease. MRx-4DP0004 is in an
ongoing clinical trial in asthma patients, and to date has
demonstrated an excellent safety profile, as expected. Further, as
studies emerged describing the immune response to SARS-CoV-2
infection, 4D recognised that the hyperinflammatory response
associated with more severe cases of COVID-19 aligned with the
unique immune modulating profile of MRx-4DP004 previously
demonstrated in vitro and in vivo.
4D was able to move from ideation to approval of a UK Phase II
trial in under a month, and to site opening in just three months.
This speed and responsiveness were made possible by 4D's functional
understanding of its drug candidates through the MicroRx(R)
platform, as well as its pioneering Clinical and Regulatory teams
which have been instrumental in shaping the clinical development
path of a whole new class of drug. As the COVID-19 pandemic has
evolved in the UK, case numbers and hospitalisations have
fluctuated resulting in unpredictable recruitment rates across all
clinical trials in the field, including but not limited to 4D
pharma's Phase II trial in patients hospitalised with COVID-19. As
previously reported, the Company initially expected results from
this trial in Q4 2020, though this will be dependent on future
dynamics and case numbers. The Company continues to evaluate
strategic options to support enrolment, and looks forward to
announcing data and findings from the study as soon as reasonably
possible.
Continuing to expand our shareholder base
In February 4D pharma completed a fundraising by way of placing
and subscription of new Ordinary Shares, raising gross proceeds of
GBP22 million (GBP20.5 million net). The fundraising also included
the allotment of warrants, through which each placee and subscriber
was allotted one warrant for every two fundraising shares
subscribed. The warrants have an exercise price of 100 pence and
may be exercised at any time up to five years from the date of
admission.
This was followed, in July, by a second placing and subscription
of new Ordinary Shares, raising gross proceeds of approximately
GBP7.7 million (GBP7.3 million net). In both fundraises 4D pharma
brought in new investors, from both Europe and the US, in addition
to continued support and participation from certain existing
investors. As previously announced, the Company continues to
evaluate opportunities with regards to the US capital markets which
the Board believes would provide a platform for longer-term funding
for the business to achieve its strategic goals.
The net proceeds of the two fundraisings, excluding any proceeds
from the exercise of warrants and together with existing cash
resources, are anticipated to provide the Company with sufficient
working capital through into Q1 2021 (see note 2). The funds will
support 4D pharma's ongoing clinical trials in oncology, IBS and
asthma, and are expected to provide cash runway to a number of
major clinical readouts. One of these milestones, comprehensive
clinical benefit data from Part A of our trial of MRx0518 in
combination with Keytruda(R) in oncology, has already been achieved
in 2020. 4D pharma expects to announce additional clinical readouts
in oncology, IBS and COVID-19 in H2 2020 and into 2021.
Building strong leadership
As 4D pharma continues to grow as a business, from a pioneering
research outfit to an established clinical-stage biotech, we have
ensured our leadership reflects this development. In 2019 we
welcomed Prof. Dr. Axel Glasmacher (former Senior Vice President
and Head of Clinical Research and Development Hematology Oncology
at Celgene), Dr. Ed Baracchini (former CBO of Xencor, among others)
and Dr. Sandy Macrae (current CEO of Sangamo Therapeutics) as
Non-Executive Directors.
In April 2020, Prof. Glasmacher was appointed as Non-Executive
Chairperson of 4D pharma. His impressive background in the
successful clinical development of novel oncology therapies has
been invaluable in refining our clinical development strategy, in
particular regarding lead immuno-oncology candidate MRx0518 but
also across our Live Biotherapeutic pipeline.
Also in April of this year, we welcomed Glenn Dourado as our
Chief Business Officer. Glenn brings to 4D a wealth of expertise in
biopharma business development and strategy, with extensive
experience particularly in NASDAQ-listed biotech and the field of
oncology. His extensive experience will steer 4D pharma's ongoing
business development activities, as 4D's suite of development
candidates progresses into and through the clinic, and we seek to
generate value from our refined and optimised MicroRx(R) platform
through additional collaborations.
After the period end, in September 2020, 4D pharma further
increased the experience of its Board with the addition of Dr.
Katrin Rupalla as Non-Executive Director. Dr. Rupalla brings to 4D
pharma over 20 years of experience in the pharmaceutical industry,
and extensive regulatory and development expertise in the fields of
oncology and neuroscience. Dr. Rupalla currently serves as Senior
Vice President, Global Head Regulatory Affairs, Medical
Documentation and R&D Quality at CNS-specialist biopharma
Lundbeck. She has previously served in several senior positions at
Celgene, Roche and Bristol-Myers Squibb (BMS), including BMS Global
Head of Oncology Regulatory and Head of BMS R&D China.
Throughout her career, she has led multiple regional and global
teams responsible for obtaining approvals for multiple new
therapeutics and indications, including blockbuster cancer
therapies Opdivo, Yervoy, Rituxan, Avastin and Revlimid, among
others.
Lastly, 2020 also marks the retirement of 4D pharma's long-time
Chairperson David Norwood. David served as 4D's Chairperson from
its inception in 2014 until earlier this year, and on behalf of the
Board we would like to thank him for his incredible contribution
and commitment helping to bring 4D to where it is today.
These appointments in 2020 collectively bring decades of
experience in successful novel drug development to 4D pharma's
leadership, reflecting the Company's rapid growth and increasing
focus on delivering clinical data.
Conclusion
In the first half of 2020, we have begun to convert on the
strong clinical foundations laid in previous years, delivering the
robust clinical data the field has been demanding, while continuing
to expand our clinical development activities. We have added yet
more experience to our Board, positioning 4D pharma to continue its
growth throughout the remainder of 2020 and beyond. So far 2020 has
the makings of a pivotal year for the microbiome field, and we look
forward to continuing to pioneer this rapidly maturing novel area
of medicine, and delivering more ground-breaking data.
Axel Glasmacher
Non-Executive Chairperson
Duncan Peyton
Chief Executive Officer
30 September 2020
Development Pipeline
Programme Indication Development Stage Status
Blautix IBS-C, IBS-D Phase II Topline results expected
Sep-Oct 2020
--------------------- ------------------ -------------------------
MRx-4DP0004 COVID-19 Phase II Ongoing
--------------------- ------------------ -------------------------
MRx0518 Immune checkpoint Phase I/II Ongoing; Part A safety
inhibitor refractor stage complete, Part
solid tumours B enrolling
--------------------- ------------------ -------------------------
MRx0518 Solid tumours Phase I Ongoing; Initial data
expected Q4 2020
--------------------- ------------------ -------------------------
MRx0518 Pancreatic cancer Phase I Ongoing; Initial data
expected 2021 *
--------------------- ------------------ -------------------------
MRx-4DP0004 Asthma Phase I/II Ongoing *
--------------------- ------------------ -------------------------
Thetanix Crohn's disease Phase I Successful Phase I
completed
--------------------- ------------------ -------------------------
MRx0573 Solid tumours Preclinical Demonstrated in vivo
efficacy
--------------------- ------------------ -------------------------
MRx1299 Solid tumours Preclinical Demonstrated in vivo
efficacy
--------------------- ------------------ -------------------------
MRx0005 Neurodegeneration Preclinical Demonstrated in vivo
efficacy
--------------------- ------------------ -------------------------
MRx0029 Neurodegeneration Preclinical Demonstrated in vivo
efficacy
--------------------- ------------------ -------------------------
Various Autoimmune disease Preclinical Demonstrated in vivo
efficacy
--------------------- ------------------ -------------------------
Vaccines research Vaccines Discovery Research collaboration
collaboration and option to license
agreement with MSD
--------------------- ------------------ -------------------------
* Delayed due to COVID-19
Group Statement of Total Comprehensive Income
For the six months to 30 June 2020
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2020 2019 2019
Notes GBP000 GBP000 GBP000
---------------------------------------- ------- ----------- ----------- ------------
Revenue 275 - 211
Research and development costs (12,418) (10,796) (26,512)
Administrative expenses (4,404) (2,337) (4,359)
Foreign currency gains/(losses) 920 (739) (1,006)
Other operating income 21 16 34
---------------------------------------- ------- ----------- ----------- ------------
Operating loss before non-recurring
cost (15,606) (13,856) (31,632)
---------------------------------------- ------- ----------- ----------- ------------
Non-recurring income - - 2,659
---------------------------------------- ------- ----------- ----------- ------------
Operating loss after non-recurring cost (15,606) (13,856) (28,973)
Finance income 5 65 61
Finance expense (88) (286) (514)
---------------------------------------- ------- ----------- ----------- ------------
Loss before taxation (15,689) (14,077) (29,426)
Taxation 3 1,963 2,086 5,360
---------------------------------------- ------- ----------- ----------- ------------
Loss for the period (13,726) (11,991) (24,066)
Other comprehensive income:
Exchange differences on translating
foreign operations 165 658 379
---------------------------------------- ------- ----------- ----------- ------------
Loss and total comprehensive income
for the period (13,561) (11,333) (23,687)
---------------------------------------- ------- ----------- ----------- ------------
Loss per share
Basic and diluted for the period 4 (14.06)p (18.31)p (36.75)p
---------------------------------------- ------- ----------- ----------- ------------
Group Statement of Financial Position
At 30 June 2020
At At At
30 June 30 June 31 December
2020 2019 2019
Notes GBP000 GBP000 GBP000
------------------------------- ------- --------- -------- ------------
Assets
Non-current assets
Property, plant and equipment:
- Owned assets 4,150 4,635 4,196
- Right-of-use assets 911 1,051 964
Intangible assets 14,181 14,258 13,988
Taxation receivables 191 247 188
------------------------------- ------- --------- -------- ------------
19,433 20,191 19,336
------------------------------- ------- --------- -------- ------------
Current assets
Inventories 212 288 198
Trade and other receivables 2,046 1,713 1,118
Taxation receivables 8,228 7,470 6,122
Cash and cash equivalents 10,027 12,895 3,836
------------------------------- ------- --------- -------- ------------
20,513 22,366 11,274
------------------------------- ------- --------- -------- ------------
Total assets 39,946 42,557 30,610
------------------------------- ------- --------- -------- ------------
Liabilities
Current liabilities
Trade and other payables 6,423 2,940 6,192
Lease liabilities 73 65 68
Contingent consideration 5 - 375 -
------------------------------- ------- --------- -------- ------------
6,496 3,380 6,260
------------------------------- ------- --------- -------- ------------
Non-current liabilities
Lease liabilities 1,027 1,099 1,043
Contingent consideration 5 - 2,145 -
Deferred tax 966 965 964
------------------------------- ------- --------- -------- ------------
1,993 4,209 2,007
------------------------------- ------- --------- -------- ------------
Total liabilities 8,489 7,589 8,267
------------------------------- ------- --------- -------- ------------
Net assets 31,457 34,968 22,343
------------------------------- ------- --------- -------- ------------
Capital and reserves
Share capital 6 274 164 164
Share premium 6 130,186 108,296 108,296
Merger reserve 958 958 958
Translation reserve 611 725 446
Other reserve (864) (864) (864)
Share-based payments reserve 1,010 699 367
Retained earnings (100,718) (75,010) (87,024)
------------------------------- ------- --------- -------- ------------
Total equity 31,457 34,968 22,343
------------------------------- ------- --------- -------- ------------
Approved by the Board and authorised for issue on 29 September
2020.
Duncan Peyton
Director
29 September 2020
Group Statement of Changes in Equity
For the six months to 30 June 2020
Share-
based
Share Share Merger Translation Other payment Retained
capital premium reserve reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
At 30 January 2019 164 108,296 958 67 (864) 708 (63,566) 45,763
Loss and total comprehensive
income for the period - - - 658 - - (11,991) (11,333)
Issue of share-based compensation - - - - - 538 - 538
Lapsed options - - - - - (547) 547 -
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
At 30 June 2019 164 108,296 958 725 (864) 699 (75,010) 34,968
Loss and total comprehensive
income for the period - - - (279) - - (12,075) (12,354)
Issue of share-based compensation - - - - - (271) - (271)
Lapsed options - - - - - (61) 61 -
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
At 31 December 2019 164 108,296 958 446 (864) 367 (87,024) 22,343
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
Issue of share capital 110 21,890 - - - - - 22,000
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
Total transactions with owners
recognised in equity for the
period 110 21,890 - - - - - 22,000
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
Loss and total comprehensive
income for the period - - - 165 - - (13,726) (13,561)
Issue of share-based compensation - - - - - 675 - 675
Lapsed options - - - - - (32) 32 -
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
At 30 June 2020 274 130,186 958 611 (864) 1,010 (100,718) 31,457
---------------------------------- -------- -------- -------- ----------- -------- -------- --------- --------
Group Cash Flow Statement
For the six months to 30 June 2020
Unaudited
Unaudited six months
six months ended Audited
ended 30 June year to
30 June 2019 31 December
2020 restated 2019
Notes GBP000 GBP000 GBP000
-------------------------------------------- ------- ----------- ----------- ------------
Loss after taxation (13,726) (11,991) (24,066)
Adjustments for:
Depreciation of property, plant and
equipment 508 531 1,065
Amortisation of intangible assets 110 144 216
Loss/(profit) on disposal of property,
plant and equipment - 29 (17)
Loss on disposal of property, plant
and equipment - - 29
Lease liabilities included in the Income
Statement* 68 76 159
Finance income (5) (65) (61)
Finance expense 88 286 514
Expenses on issue of shares 1,498 - -
Release of contingent consideration - - (2,659)
Share-based compensation 675 538 267
-------------------------------------------- ------- ----------- ----------- ------------
Cash flows from operations before movements
in working capital (10,784) (10,452) (24,553)
Changes in working capital:
(Increase)/decrease in inventories (14) 2 92
(Increase)/decrease in trade and other
receivables (1,037) (584) 130
Increase in taxation receivables (2,111) (2,190) (780)
Increase in trade and other payables 19 299 3,555
-------------------------------------------- ------- ----------- ----------- ------------
Cash outflow from operating activities (13,927) (12,925) (21,556)
-------------------------------------------- ------- ----------- ----------- ------------
Cash flows from investing activities
Purchases of property, plant and equipment (160) (271) (538)
Purchase of software and other intangibles (15) (18) (57)
Cash received on disposal of assets - - 43
Interest received 5 76 94
Monies drawn from deposit - 10,174 10,174
-------------------------------------------- ------- ----------- ----------- ------------
Net cash (outflow)/inflow from investing
activities (170) 9,961 9,716
-------------------------------------------- ------- ----------- ----------- ------------
Cash flows from financing activities
Proceeds from issues of ordinary share
capital 6 22,000 - -
Expenses on issue of shares (1,498) - -
Lease liability payments* (126) (104) (197)
Interest paid* (88) (90) (180)
-------------------------------------------- ------- ----------- ----------- ------------
Net cash inflow/(outflow) from financing
activities 20,288 (194) (377)
-------------------------------------------- ------- ----------- ----------- ------------
Increase/(decrease) in cash and cash
equivalents 6,191 (3,158) (12,217)
Cash and cash equivalents at the start
of the year 3,836 16,053 16,053
-------------------------------------------- ------- ----------- ----------- ------------
Cash and cash equivalents at the end
of the year 10,027 12,895 3,836
-------------------------------------------- ------- ----------- ----------- ------------
* Lease liability payments reported in the June 2019 interim
accounts have been updated to separately identify the cash flow
effect of the implementation of IFRS 16. The net effect of the
change is as follows:
Original Restated Adjustment
----------------------------------------- -------- -------- ----------
Lease liabilities included in the Income
Statement - 76 76
Increase in trade and other payables 187 299 112
Lease liability payments (6) (104) (98)
Interest paid - (90) (90)
------------------------------------------ -------- -------- ----------
Increase in cash and cash equivalents 181 181 -
------------------------------------------ -------- -------- ----------
Notes to the Interim Financial Report
For the six months to 30 June 2020
1. Basis of preparation
The Group's half-yearly financial information, which is
unaudited, consolidates the results of 4D pharma plc and its
subsidiary undertakings up to 30 June 2020. The Group's accounting
reference date is 31 December. 4D pharma plc's shares are quoted on
the AIM market of the London Stock Exchange (AIM).
The Company is a public limited liability company incorporated,
registered and domiciled in the UK. The consolidated financial
information is presented in round thousands of Pounds Sterling
(GBP000).
The interim accounts for the six months ended 30 June 2020 and
30 June 2019 are unaudited.
Full audited financial statements of the Group in respect of the
period ended 31 December 2019, which drew attention to the material
uncertainty over the going concern basis of preparation but
received an unqualified audit opinion, did not contain a statement
under section 498(2) or (3) of the Companies Act 2006 and have been
delivered to the Registrar of Companies.
The accounting policies used in the preparation of the financial
information for the six months ended 30 June 2020 are in accordance
with the recognition and measurement criteria of International
Financial Reporting Standards as adopted by the European Union
(IFRS) and are consistent with those which will be adopted in the
annual financial statements for the year ending 31 December
2020.
Whilst the financial information included has been prepared in
accordance with the recognition and measurement criteria of IFRS,
the financial information does not contain sufficient information
to comply with IFRS.
4D pharma plc has not applied IAS 34 'Interim Financial
Reporting', which is not mandatory for UK AIM listed groups, in the
preparation of this interim financial report.
2. Going concern
The Group and parent company are subject to a number of risks
similar to those of other development-stage pharmaceutical
companies. These risks include, amongst others, generation of
revenues in due course from the development portfolio and risks
associated with research, development and obtaining regulatory
approvals of its products. Ultimately, the attainment of profitable
operations is dependent on future uncertain events which include
obtaining adequate financing to fulfil the Group's commercial and
development activities and generating a level of revenue to support
the Group's cost structure.
The Directors have prepared detailed financial forecasts and
cash flows looking beyond 12 months from the date of the approval
of these financial statements. In developing these forecasts, the
Directors have made assumptions based upon their view of the
current and future economic conditions that are expected to prevail
over the forecast period. The Directors estimate that the cash held
by the Group together with known receivables and the proceeds of
the fundraise in July 2020 will be sufficient to support the
current level of activities into Q1 2021. The Directors are
continuing to explore sources of finance available to the Group
including equity and debt, and have a reasonable expectation that
they will be able to secure sufficient cash inflows into the Group
to continue its activities for not less than 12 months from the
date of approval of these accounts. They have therefore prepared
the financial statements on a going concern basis.
Because the additional finance is not committed at the date of
approval of these financial statements, these circumstances
represent a material uncertainty as to the Group's ability to
continue as a going concern. Should the Group be unable to obtain
further finance such that the going concern basis of preparation
were no longer appropriate, adjustments would be required including
to reduce the balance sheet values of assets to their recoverable
amounts, and to provide for future liabilities that may arise.
3. Taxation
The tax credit is made up as follows:
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2020 2019 2019
GBP000 GBP000 GBP000
----------------------------------------------- ----------- ----------- ------------
Current income tax
Total current income tax 2,010 2,086 5,373
Adjustment in respect of prior years (47) - (13)
----------------------------------------------- ----------- ----------- ------------
Total income tax credit recognised in the year 1,963 2,086 5,360
----------------------------------------------- ----------- ----------- ------------
4. Loss per share
(a) Basic and diluted
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2020 2019 2019
GBP000 GBP000 GBP000
------------------------------------------------------ ----------- ----------- ------------
Loss for the year attributable to equity shareholders (13,726) (11,991) (24,066)
------------------------------------------------------ ----------- ----------- ------------
Weighted average number of shares:
Ordinary shares in issue 97,647,688 65,493,842 65,493,842
------------------------------------------------------ ----------- ----------- ------------
Basic loss per share (pence) (14.06)p (18.31)p (36.75)p
------------------------------------------------------ ----------- ----------- ------------
The basic and diluted loss per share are the same as the effect
of share options is anti-dilutive.
(b) Adjusted
Adjusted loss per share is calculated after adjusting for the
effect of non-recurring income in relation to the re-assessment of
the contingent liability.
Reconciliation of adjusted loss after tax:
30 June 30 June 31 December
2020 2019 2019
GBP000 GBP000 GBP000
-------------------------------------- -------- -------- -----------
Reported loss after tax (13,726) (11,991) (24,066)
Non-recurring income - - (2,659)
-------------------------------------- -------- -------- -----------
Adjusted loss after tax (13,726) (11,991) (26,725)
-------------------------------------- -------- -------- -----------
Adjusted basic loss per share (pence) (14.06)p (18.31)p (40.81)p
-------------------------------------- -------- -------- -----------
5. Contingent consideration
Unaudited Unaudited
six months six months Audited
ended ended year to
30 June 30 June 31 December
2020 2019 2019
GBP000 GBP000 GBP000
-------------------------------------------------- ----------- ----------- ------------
Brought forward - 2,325 2,325
Fair value adjustment on contingent consideration - - (2,659)
Unwinding of discount - 195 334
-------------------------------------------------- ----------- ----------- ------------
- 2,520 -
-------------------------------------------------- ----------- ----------- ------------
Analysed as follows:
Within one year - 375 -
More than one year - 2,145 -
-------------------------------------------------- ----------- ----------- ------------
- 2,520 -
-------------------------------------------------- ----------- ----------- ------------
The above contingent consideration relates to the amounts due on
the remaining milestones which form part of the original contingent
acquisition costs for the entire issued share capital in Tucana
Health Limited (now 4D Pharma Cork Limited) on 10 February
2016.
The contingent consideration is based on milestones in the
development of the MicroDx diagnostic platform which has been
designed to diagnose, stratify and monitor the treatment of
patients based on their gut microbiome, the bacteria which colonise
the human gastrointestinal tract. There were three milestones
involved in the contingent consideration, these being:
1) Technical validation of a diagnostic platform for IBS
dysbiosis
The milestone was achieved by 23 August 2017 and triggered the
issue of 635,692 shares for an aggregate market value of EUR2.6
million (at GBP3.7575 per 4D pharma plc share, being the average
mid-market price of a 4D share for the five business days
immediately preceding the date of allotment). The shares were
subsequently admitted on 31 August 2017.
2) Clinical validation of the optimal IBS dysbiosis diagnostic
platform based on more than 1,000 patients in a multicentre
trial
It is anticipated that the clinical validation stage will be
completed in 2020. Whilst there are currently no adverse indicators
relating to the clinical validation of the platform, the time-based
criteria for the completion of the milestone, which required
completion of this phase by 23 August 2019, were not achieved and
the fair value of the contingent consideration has been reduced by
GBP1.877 million to bring the balance at 23 August 2019 to
GBPNil.
3) Regulatory approval of a diagnostic platform for IBS
dysbiosis
The third milestone is also time based and linked to approval
being achieved by 23 August 2020. Based on the patient recruitment
at milestone two it is anticipated that regulatory approval cannot
be achieved before 2021 meaning that probability of achieving
milestone three by the required date is considered to be minimal;
as a result the fair value has been reduced to GBPNil, releasing
GBP0.782 million of the contingent consideration.
6. Share capital
Ordinary Share Share
shares capital premium Total
The Company and the Group Number GBP000 GBP000 GBP000
-------------------------------------------- ----------- -------- ----------- -----------
Allotted, called up and fully paid ordinary
shares of 0.25p
At 1 January 2019, 30 June 2019 and
31 December 2019 65,493,842 163,735 108,295,837 108,459,571
-------------------------------------------- ----------- -------- ----------- -----------
Placing and issue on 18 February 2020 44,000,000 110,000 21,890,000 22,000,000
-------------------------------------------- ----------- -------- ----------- -----------
At 30 June 2020 109,493,842 273,735 130,185,837 130,459,571
-------------------------------------------- ----------- -------- ----------- -----------
The balances classified as share capital and share premium
include the total gross proceeds (nominal value and share premium
respectively) on issue of the Company's equity share capital,
comprising 0.25 pence ordinary shares.
7. Subsequent events
Fundraising events
In July 2020 the Group raised GBP7.7 million (approximately
GBP7.3 million net of expenses) through a placing of 16,807,616 new
Ordinary Shares and subscription of 5,090,784 new Ordinary Shares
with certain existing and new investors at an issue price of 35
pence per share. The net proceeds of the fundraising, together with
its existing cash resources, are expected to enable the Company to
continue to fund its operations to at least Q1 2021.
Directors' participation in the fundraising
Certain of the Directors agreed to subscribe for fundraising
shares at the issue price. The number of fundraising shares
subscribed for by each of these Directors pursuant to the
fundraising, and their resulting shareholdings immediately
following admission, of all of the new shares issued pursuant to
the fundraising are set out below:
Number Percentage
of Number of of
Number fundraising Ordinary enlarged
of existing shares Consideration Shares share
Ordinary subscribed for fundraising held on capital on
Director Shares for shares admission admission
---------------- ------------ ------------ ---------------- ---------- -----------
Duncan Peyton 7,788,407 571,428 GBP200,000 8,359,835 6.36%
Alex Stevenson 7,746,468 571,428 GBP200,000 8,317,896 6.33%
David Norwood 8,557,061 285,714 GBP100,000 8,842,775 6.73%
Axel Glasmacher Nil 30,000 GBP10,500 30,000 0.02%
---------------- ------------ ------------ ---------------- ---------- -----------
8. Principal Risks and Uncertainties
The Company operates within a complex regulatory environment,
which is subject to change. The nature of LBP development exposes
the Company to a number of additional risks and uncertainties which
could affect its ability to meet its strategic goals, its business
model and its operating environment.
The Company sets out its Company and market specific risk
factors on a continual basis in its annual reports, which
supplement the risk factors set out in its original admission
document (which is available on the Company's website). The
Company's most recently published annual report is that for the
year to 31 December 2019, which is also available on the Company's
website: https://
www.4dpharmaplc.com/en/investors/reports-presentations . In July
2020, some additional risk factors were set out in the announcement
confirming the fundraising at that time (
https://www.4dpharmaplc.com/investors/rns ). The risk factors
listed in these sources are not necessarily comprehensive, but
represent, in the Board's view, the principal risks and areas of
uncertainty that the Company currently faces. Shareholders and
potential investors should take independent advice if they wish to
consider the suitability of these risks with regard to their own
particular circumstances and investment criteria.
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END
IR LLMPTMTBTBBM
(END) Dow Jones Newswires
September 30, 2020 02:00 ET (06:00 GMT)
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