TIDMSAR
RNS Number : 8437P
Sareum Holdings PLC
15 October 2019
(AIM:SAR)
15 October 2019
SAREUM HOLDINGS PLC
("Sareum" or the "Company")
FINAL RESULTS FOR THE YEARED 30 JUNE 2019
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014
Sareum Holdings plc (AIM: SAR), the specialised small molecule
drug development business, announces its results for the year ended
30 June 2019 and provides an update of significant post-period
events. The Company will host a conference call today at 10.00 a.m.
(see details below).
The Company expects to publish its Annual Report and Accounts in
November 2019.
Operational Highlights
Proprietary Selective TYK2/JAK1 Inhibitors in Autoimmune
Diseases and Cancer
-- Advancing two distinct molecules selected from proprietary
dual tyrosine kinase 2 (TYK2) / Janus kinase 1 (JAK1) programmes as
potential once-daily, oral immunotherapies for autoimmune diseases
(SDC-1801) and cancers (SDC-1802)
o SDC-1801 has demonstrated excellent tolerability in toxicology
studies in rodents and has progressed into longer-term toxicology
and dose-finding studies, which would form part of the regulatory
documentation needed to apply to begin human trials
o Additional research to refine the Company's clinical plans,
including prioritisation of indications, is continuing, with
detailed profiling of SDC-1801 in human tissue, and of SDC-1802 in
immune-competent mouse models of cancer
o Positive preclinical data demonstrating the anti-tumour
activity of SDC-1802 via novel immunotherapeutic mechanism of
action to be presented at the upcoming 2019 AACR-NCI-EORTC
International Cancer Conference
o Human clinical trials are targeted to start in late-2020,
subject to successful progress and financing
o Programmes continue to attract interest from international
pharmaceutical companies
SRA737 - Chk1 inhibitor in Multiple Cancer Indications
Exhibiting Defined Genetic Profiles
-- In June 2019, Sierra Oncology ("Sierra"), the licence holder
of SRA737 (an oral selective Chk1 inhibitor), announced promising
preliminary efficacy and safety data at the annual meeting of the
American Society of Clinical Oncology (ASCO) from two ongoing Phase
1/2 clinical trials. These trials were evaluating SRA737 across
multiple indications, both as a monotherapy and as a combination,
potentiated by non-cytotoxic low-dose gemcitabine (LDG)
-- In June 2019, following its ASCO presentation, Sierra
announced it was exploring non-dilutive strategic options to
support the next stages of development of SRA737, as it had decided
to prioritise the development of its Phase 3 myelofibrosis
candidate, momelotinib
-- The ongoing SRA737 monotherapy and SRA737+LDG combination
Phase 1/2 studies continue with completion expected in the first
half of 2020
-- Sierra also presented evidence at international congresses
highlighting the potential of combining SRA737 with other novel
therapeutic approaches that are gaining traction as mainstays of
targeted cancer treatment, including PARP inhibition (PARPi) and
immune checkpoint blockade
Corporate update - Board of Directors strengthened
-- Dr Michael Owen and Mr Clive Birch were appointed as
Non-Executive Directors in November 2018, bringing significant
experience in the development of innovative biopharmaceutical
products and in financial management and corporate governance
Financial highlights (subject to audit)
-- Raised GBP850,000 before expenses in November 2018, through a
placement of 130,769,231 new ordinary shares at 0.65p per share, to
progress internal drug development programmes as well as for
working capital purposes
-- Raised GBP781,484 before expenses through a placement and
offer of 195,371,000 new ordinary shares at 0.4p per share that
completed in July 2019, to progress the Company's TYK2/JAK1 drug
development programmes as well as for working capital purposes
-- Loss on ordinary activities (after taxation) of GBP1.45m (2018: loss of GBP1.47m)
-- Cash at bank as at 30 June 2019 was GBP0.92m (excluding the
GBP0.78m raised in the placing that completed in July 2019)
(GBP1.54m as at 31 December 2017; GBP1.38m as at 30 June 2018)
Dr Tim Mitchell, CEO of Sareum, commented:
"We are very pleased with the progress of our proprietary dual
TYK2/JAK1 programmes. We believe these offer a novel oral
immunotherapy approach to addressing unmet needs in autoimmune
diseases and cancer and that their mechanism is gaining increasing
interest from the pharmaceutical industry. In line with our
business model, we continue to engage with potential partners with
a view to securing commercial licences when they reach late
preclinical or early clinical stages.
"We also remain optimistic that Sierra will be successful in
finding a non-dilutive solution that will enable the development of
SRA737 to advance. The positive clinical results presented in June
and the exciting preclinical findings presented throughout the year
from combining SRA737 with advanced cancer therapies suggests that
SRA737 has significant value. In addition, the advancement of
SRA737 in its clinical studies could result in Sareum receiving
significant milestone payments in due course.
"We expect to report on continued progress across our active
portfolio during the coming year and beyond, which we believe will
result in important value generation for our shareholders."
Conference call
Drs Stephen Parker (Chairman), Tim Mitchell (Chief Executive
Officer) and John Reader (Chief Scientific Officer) will present
the financial and operational results in a conference call today at
10.00 a.m. The presentation will be followed by a Q&A
session.
Please dial into the call using the numbers below 5-10 minutes
before the scheduled start time. Dial-in details are:
-- UK Toll Free: 0808 109 0700
-- Standard International Access: +44 (0)20 3003 2666
The call password is Sareum.
The results presentation is available in the Document Centre in
the Investors section of the Sareum website
(www.sareum.com/investors).
For further information, please contact:
Sareum Holdings plc
Tim Mitchell 01223 497 700
Strand Hanson Limited (Nominated Adviser)
James Dance / Richard Tulloch 020 7409 3494
Hybridan LLP (Nominated Broker)
Claire Noyce / John Beresford-Peirse 020 3764 2341
Citigate Dewe Rogerson (Media enquiries)
Shabnam Bashir/ Mark Swallow/ David
Dible 020 7638 9571
Notes for editors:
Sareum is a specialist drug development company delivering
targeted small molecule therapeutics to improve the treatment of
cancer and autoimmune disease. The Company aims to generate value
through licensing its candidates to international pharmaceutical
and biotechnology companies at the preclinical or early clinical
trials stage.
Sareum is advancing internal programmes focused on distinct dual
tyrosine kinase 2 (TYK2) / Janus kinase 1 (JAK1) inhibitors through
preclinical development as therapies for autoimmune diseases
(SDC-1801) and cancers (SDC-1802). The Company is targeting first
human clinical trials in each indication in 2020.
Sareum also has an economic interest in SRA737, a clinical-stage
oral, selective Checkpoint kinase 1 (Chk1) inhibitor that targets
cancer cell replication and DNA damage repair mechanisms.
Preliminary data suggest SRA737 may have broad application in
combination with other oncology and immune-oncology drugs in
genetically defined patients.
SRA737 was discovered and initially developed by scientists at
The Institute of Cancer Research in collaboration with Sareum, and
with funding from Cancer Research UK. SRA737 was licensed by CRT
Pioneer Fund (CPF) to Sierra Oncology, in a $328.5m plus royalties
licence deal, with Sareum eligible to receive 27.5% of all payments
to CPF under the agreement.
Sareum Holdings plc is listed on the AIM market of the London
Stock Exchange, trading under the ticker SAR. For further
information, please visit www.sareum.co.uk
- Ends -
Full year results for the 12 months ended 30 June 2019
Chairman's and CEO's Statement
The year to end June 2019 has yielded good reasons to be
optimistic about Sareum's prospects: solid preclinical progress was
made with our internal proprietary TYK2/JAK1 programmes and the
results for clinical trials with SRA737, an oral Chk1 inhibitor,
continued to highlight the potential of these compounds as
important and valuable new approaches to treating major disorders
with unmet need.
We have been very encouraged by the good progress with our
TYK2/JAK1 inhibitors SDC-1801 (targeting autoimmune diseases) and
SDC-1802 (targeting cancer) in formal preclinical development.
SDC-1801 is advancing as planned and has demonstrated excellent
tolerability in rodent studies and has now moved into longer-term
toxicology and dose-finding studies, which would form part of the
regulatory documentation needed to apply to begin human trials.
We are also pleased to have the opportunity to present new
preclinical data, demonstrating the anti-tumour activity of
SDC-1802 (formerly SAR-20351) and novel immunotherapeutic mechanism
of action in multiple cancer disease models, at the upcoming 2019
AACR-NCI-EORTC International Cancer Conference, at the end of
October 2019, in Boston, USA. These data provide increasing
evidence that highlight TYK2/JAK1 inhibition as a new approach to
cancer therapy and further support our SDC-1802 cancer research
programme.
We believe our two TYK2/JAK1 inhibitors offer a novel oral
immunotherapy approach to addressing unmet needs in autoimmune
diseases and cancer and the mechanism by which they act appears to
be gaining increasing credibility and interest from the
pharmaceutical industry. In line with our business model, we
continue to engage with potential partners with a view to securing
commercial licences when they reach late preclinical or early
clinical stages.
With regards to SRA737, in June 2019, Sierra Oncology, the
licence holder of SRA737 (an oral selective Chk1 inhibitor),
announced promising preliminary efficacy and safety data at the
annual meeting of the American Society of Clinical Oncology (ASCO)
from two ongoing Phase 1/2 clinical trials. These trials were
evaluating SRA737 across multiple cancer indications, as a
monotherapy and as a combination potentiated by non-cytotoxic
low-dose gemcitabine (LDG).
These data clearly highlight the potential of SRA737 to become
an attractive new therapeutic option for patients in several
important and underserved cancer indications. In addition, Sierra
outlined a possible route to market for SRA737 in anogenital
cancer, and indicative initial human trials of SRA737 in
combination with other drug modalities (PARP inhibitors and
immuno-oncology drugs).
Shortly after the ASCO data were presented, Sierra announced
that it was exploring non-dilutive strategic options to support the
next stages of development of SRA737. Sierra made this decision on
the basis that it was prioritising its resources on advancing the
development of its Phase 3 myelofibrosis candidate momelotinib.
We continue to believe, based on the promising clinical and
preclinical data generated to date, that Sierra has every chance of
finding a suitable solution that will enable the development of
SRA737 to advance. This, in due course, would lead to Sareum
receiving the milestone payments under the licensing agreement
between Sierra and CRT Pioneer Fund (CPF), the licensor of SRA737,
with which Sareum has a Co-investment and Partnership agreement. We
remain in dialogue with CPF to ensure we are informed of
developments and are committed to updating shareholders and the
market in general as and when the restrictions in the two
agreements allow.
Sierra's decision does mean, however, that the clinical
development milestones payments that Sareum could have anticipated
if SRA737 development had progressed as previously planned, have
now been delayed until Sierra finds a solution.
Achieving two near-term milestones in particular - dosing of the
first patient with SRA737 in a Phase 1 trial in the US and/or
dosing of the first patient in a randomised Phase 2 trial - would
generate revenue to Sareum of around US$5.3 million. These
previously confidential milestones were disclosed by Sierra for the
first time in August 2019 and announced by the Company.
The short-term absence of this milestone income has led to the
Company focusing its cash spend by investing in its proprietary
TYK2/JAK1 inhibitor assets as efficiently as possible. The Company
is therefore deploying its resources on the necessary studies that
would enable these assets to enter clinical studies in late 2020 in
priority indications, as well as developing a compelling data
package designed to attract a development partner at an appropriate
point.
We are now fully focused on these goals which would put us in a
strong position to achieve a licensing agreement with a third party
during the late preclinical or early clinical phases and are
expected to provide significant returns to Sareum and its
shareholders. The Board's confidence is based on the quality of the
Company's drug candidates and the growing industry interest in the
TYK2/JAK1 space.
Programme updates
Proprietary Pipeline - Selective TYK2/JAK1 Inhibitors in
Autoimmune Diseases and Cancer
Sareum's internal programmes focus on distinct dual TYK2/JAK1
inhibitors, which are progressing through preclinical development
as therapies for autoimmune diseases (SDC-1801) and cancers
(SDC-1802).
TYK2 and JAK1 are both members of the Janus Kinase (JAK) family
of protein kinase enzymes with important roles in maintaining a
healthy immune system. Both kinases have well-documented roles in
promoting inflammatory responses in autoimmune diseases and tumour
cell proliferation in certain cancers.
There are currently no marketed products with specific
selectivity for TYK2. However, members of the JAK family are the
targets of several marketed and clinical-stage drugs in both
disease areas. There is notable interest in the pharmaceutical
industry for novel molecules that can selectively target TYK2 and
JAK1, and particularly for those that can avoid side-effects from
inadvertent activity via JAK2 or JAK3.
We remain optimistic about both Sareum programmes given they
have progressed well in preclinical development since formal
candidate selection in September 2018, building on the compelling
efficacy seen in autoimmune and cancer models, the potential for
once-daily oral dosing and good early safety profiles.
Additional research to refine the Company's clinical plans,
including prioritisation of indications, is underway for clinical
trials, which are targeted to start in late 2020, subject to
successful progress and financing.
SDC-1801 - targeting autoimmune diseases
SDC-1801 and related molecules have previously shown promising
activity in autoimmune disease models, including psoriasis,
rheumatoid arthritis, inflammatory bowel disease and systemic lupus
erythematosus (lupus).
SDC-1801 is currently being advanced through a series of
toxicology and other preclinical studies designed to form part of
the regulatory documentation needed to apply to begin human trials
in healthy volunteers, which are targeted to begin in 2020, subject
to successful progress and financing.
The compound has demonstrated excellent tolerability in
toxicology studies in rodents (as reported in June 2019), with
doses up to 30 times the level that displayed good responses in
efficacy studies. Dosing in two short-term dose range finding
studies has now completed and laboratory analysis of the data
obtained is on-going. These studies have been designed to identify
low, medium and high doses to use in specific longer-term
toxicology studies.
In addition, a short and robust manufacturing route has been
developed for SDC-1801 to produce active ingredient for both
preclinical and clinical studies and the product required for the
next round of toxicology studies has been delivered. Research is
ongoing to find the most reliable manufacturing process for the
best solid form of the molecule to progress into clinical
studies.
Sareum has a co-development agreement with SRI International
(Menlo Park, CA, USA), a non-profit scientific research institute,
to develop TYK2 inhibitors in autoimmune diseases. SRI, working
under a US Department of Defense ("DoD") grant, has completed a
preclinical study using Sareum TYK2/JAK1 inhibitors in lupus
disease models and the final report from this study is expected to
be made public by the DoD in the near future.
Sareum retains commercialisation rights for these and other TYK2
inhibitors with profiles optimised for oncology and immuno-oncology
applications.
SDC-1802 - targeting cancers
SDC-1802 and related TYK2/JAK1 inhibitors have previously shown
encouraging anti-tumour activity in multiple cancer disease
models.
Sareum will present new preclinical data supporting these
findings at the American Association for Cancer Research (AACR)
National Cancer Institute (NCI) European Organisation for Research
and Treatment of Cancer (EORTC) International Conference, to be
held 26-30 October 2019 in Boston, USA.
The presentation will describe how SDC-1802 (formerly SAR-20351)
significantly reduces tumour growth in disease models of cancer of
the pancreas, colon, skin and kidney, plus B-cell lymphoma. The
studies also determined that SDC-1802 induces this anti-cancer
activity through a novel immunotherapeutic mechanism of action that
stimulates the local immune system to attack cancer cells.
These positive results were seen when SDC-1802 was dosed orally,
as a monotherapy or in combination with chemotherapy/ They provide
increasing evidence that TYK2/JAK1 inhibition could become a new
approach to cancer therapy and further supports the SDC-1802 cancer
research programme.
Sareum's recent and current activities have been geared towards
the toxicology studies designed to gain insight to the
maximum-tolerated doses (MTD) of SDC-1802 in rodents, as it has
been doing for SDC-1801.
The Company has completed formulation studies to maximise the
amount of compound delivered following oral dosing of SDC-1802. The
chemistry to produce SDC-1802 uses the same sequence of reactions
as those utilised in the production of SDC-1801. Formal
optimisation of this process has not yet been initiated for
SDC-1802, however, the compound has already been prepared on a
>100g scale, meaning the Company has enough material in hand to
initiate short-term toxicology studies in rodents.
Sareum intends to publish further research from its TYK2/JAK1
programmes at conferences and in peer-reviewed publications in the
future to support its ongoing business development activities with
potential partners.
The Company's stated value-generating strategy is to secure
commercial licences when its assets reach late preclinical or early
clinical stages and management is engaged in initial discussions
with several potential partners.
Licensed programme - SRA737: A Selective Chk1 inhibitor
SRA737 is a potent, highly selective, orally bioavailable small
molecule inhibitor of Checkpoint Kinase 1 (Chk1), a key regulator
of important cell cycle checkpoints and central mediator of the DNA
Damage Response (DDR) network.
SRA737 was discovered and initially developed by scientists at
The Institute of Cancer Research (London, UK) in collaboration with
Sareum, and with funding from Cancer Research UK ("CRUK"). CRT
Pioneer Fund ("CPF"), which is dedicated to financing assets and
companies including projects derived from CRUKs oncology drug
discovery portfolio, licensed SRA737 to the Nasdaq-listed company
Sierra Oncology in 2016. In return, CPF is eligible for up to
US$328.5 million, including an upfront payment of US$7 million and
US$321.5 million payable upon the achievement of certain
developmental, regulatory and commercial milestones, plus royalties
on future sales.
CPF has a Co-investment and Partnership agreement with Sareum.
Under this agreement Sareum is eligible to receive 27.5% of all
payments made to CPF as SRA737 advances, equivalent to up to a
total of US$88 million in future milestone payments, plus sales
royalties.
SRA737 clinical update
During 2018/2019, SRA737 was investigated by Sierra in a broad
clinical development programme targeting patients with genetically
defined tumours of different origins that harbour genomic
alterations linked to increased DNA replication stress. Such
tumours are hypothesised to be more sensitive to Chk1
inhibition.
At the American Society of Clinical Oncology (ASCO) annual
meeting in June 2019, Sierra presented positive preliminary
clinical data from two first-in-human Phase 1/2 studies evaluating
SRA737 across multiple indications, as a monotherapy and as a
combination potentiated by non-cytotoxic low-dose gemcitabine
(LDG).
The studies delivered highly encouraging results:
-- SRA737 demonstrated notable anti-cancer activity in multiple
indications including a 30% Overall Response Rate (ORR) in
evaluable patients with anogenital cancer treated with
SRA737+LDG.
Anogenital cancer is an indication for which the second-line
metastatic setting represents a significant unmet medical need,
with there being no approved therapies and a very poor life
expectancy for patients.
-- Additionally, evaluable subjects whose tumours harboured
distinct genetic profiles (RAS wild type with FA/BRCA gene network
mutations) displayed favourable outcomes across multiple
indications, with an ORR of 25%.
SRA737 Preclinical Opportunities
Sierra also presented evidence highlighting the potential of
combining SRA737 with other novel therapeutic approaches that are
gaining traction as mainstays of targeted cancer treatment. These
include PARP inhibition (PARPi) and immune checkpoint blockade.
-- At the DDR Therapeutics Summit in January 2019, Sierra noted
promising data demonstrating that Chk1 inhibition, with agents such
as SRA737, could address the significant and growing clinical
problem of acquired resistance to PARP inhibitors.
-- At the American Association of Cancer Research (AACR)
conference in April 2019, Sierra showed that SRA737+LDG induced
significant anti-tumour activity when combined with anti-PD-L1
immunotherapy. These data demonstrated durable tumour regressions
in a mouse model of small cell lung cancer (SCLC). These data were
subsequently published in the Journal of Thoracic Oncology,
alongside additional data showing substantial additive improvements
in efficacy when SRA737 was combined with anti-PD-1 immunotherapy
in mouse models of colon, bladder and pancreatic cancer.
-- At an analysts' meeting held during ASCO, Sierra presented
similarly striking data with the SRA737+LDG plus anti-PD-L1
combination in a mouse model of colorectal cancer, with 80%
regressions observed following three treatment cycles.
SRA737 - Current Status
The development work that Sierra has conducted has positioned
SRA737 as potentially one of the leading clinical assets targeting
the DDR pathway, with clinical safety & efficacy of SRA737 +/-
LDG supporting standalone development and compelling preclinical
data supporting its use in combination with both PARP inhibitors
(PARPi) and immuno-oncology (IO) therapy such as immune checkpoint
blockade.
Sierra had stated that future studies were being planned to
investigate SRA737 further in all of these areas. However, in June
2019, a few days after its ASCO presentation, Sierra announced it
was exploring non-dilutive strategic options to support the next
stages of development of SRA737, as it had decided to prioritise
the development of its Phase 3 myelofibrosis candidate,
momelotinib.
The ongoing SRA737 monotherapy and SRA737+LDG combination Phase
1/2 studies are expected to run through to completion, currently
anticipated in the first half of 2020 (clinicaltrials.gov
database).
Sareum continues to believe that, based on the promising
clinical and preclinical data generated to date, Sierra has every
chance of finding a suitable solution that will enable it to
advance the development of SRA737. However, Sierra's decision does
mean that the clinical development milestone payments that Sareum
could have anticipated if SRA737 development had progressed as
previously planned, have now been delayed until Sierra finds a
solution.
The achievement of two near-term milestones in particular -
dosing of the first patient with SRA737 in a Phase 1 trial in the
US and/or dosing of the first patient in a randomised Phase 2 trial
- will generate revenue to Sareum of around US$5.3 million. These
previously confidential milestones were disclosed by Sierra for the
first time in August 2019.
Sareum remains in dialogue with CPF to ensure it is informed of
developments and is committed to updating shareholders and the
market in general as and when it can.
Aurora+FLT3 Inhibitors
While the Company focuses its research resources on completing
the preclinical development of its TYK2/JAK1 programmes, it is
seeking a licence partner for the Aurora+FLT3 programme and
discussions are ongoing with a number of interested parties.
Corporate Update
During the year, Sareum took steps to improve its financial
management and corporate governance and its ability to execute its
product development and growth strategies.
In November 2018, Sareum appointed Michael Owen, PhD and Clive
Birch, FCA as Non-Executive Directors, bringing significant
relevant experience and expertise. Dr Owen and Mr Birch will also
serve the Board as members of the Audit & Risk, Remuneration
and Nominations Committees.
Dr Owen has worked in biomedical research, and in the
pharmaceutical and biotechnology industries for nearly 40 years in
a number of executive, board and advisory roles. He is the
co-founder and first Chief Scientific Officer of Kymab Ltd, a
biopharmaceutical company based in Cambridge, UK, prior to which he
worked for GlaxoSmithKline as SVP and Head of Research for
Biopharmaceuticals R&D. He currently serves on the boards of
several public and private companies in UK, Europe and the US and
has also advised notable specialist life science investment firms
such as Abingworth LLP and the CRT Pioneer Fund.
Mr Birch is an Independent Non-Executive Director of Cambridge
Innovation Capital plc and a retired partner of
PricewaterhouseCoopers where, as head of the Cambridge office of
PwC, his role was as an auditor and reporting accountant with an
industry specialism in technology and healthcare companies. He was
also part of the teams involved in fund raising and listing those
clients on various markets.
Financial Review
Sareum ended the year to 30 June 2019 with net assets of GBP1.09
million (2018: GBP1.63 million) of which GBP0.92 million (2018:
GBP1.38 million) comprised cash at bank.
The cash balance includes proceeds from a placement that raised
GBP850,000 before expenses in November 2018, through the placement
of 130,769,231 new ordinary shares at 0.65p per share.
It does not include the proceeds from a placement and offer that
was announced in June 2019 and completed in July 2019 raising
GBP781,484 before expenses through the placement of 195,371,000 new
ordinary shares at 0.4p per share, as these funds had not been
transferred to the Company's bank account as at the balance sheet
date. These funds were received on 3 July 2019. The cash balance as
at 30 September 2019 was GBP1.39 million.
The new funds are being deployed to progress the Company's
TYK2/JAK1 drug development programmes as well as for working
capital purposes.
Non-cash assets include a R&D tax credit of GBP231,000, the
receipt of which is expected as cash in Q1 2020.
Operating expenses for the period at GBP1.68 million (2018:
GBP1.71 million) have remained approximately in line with that of
the previous 12-month period as the Company continues to focus its
research expenditure on its TYK2 autoimmune disease and cancer
programmes.
The loss on ordinary activities (after taxation) was GBP1.45
million (2018: GBP1.47 million).
Outlook
Good progress is continuing to be made with our wholly owned
TYK2/JAK1 inhibitor assets and positive clinical and preclinical
data has been generated with SRA737. However, these positives have
been somewhat overshadowed by Sierra's decision, which has delayed
the achievement of near-term clinical milestones that would have
resulted in significant revenue for Sareum.
The Board continue to believe that the data with SRA737 clearly
highlights its potential to become an attractive new therapeutic
option for patients in several important and underserved cancer
indications. Final results from the two ongoing clinical trials are
expected in 2020. This gives the Board confidence that Sierra will
find a solution that will enable the development of SRA737 to
advance, and, in due course, Sareum would receive the milestone
payments for which it is eligible.
The Board remains in dialogue with CPF to ensure it is informed
of developments and is committed to updating shareholders and the
market in general as and when it can.
The Board and management are also continuing to employ rigorous
capital management in the development of its internal assets and
its overall business.
The Company is fully focused advancing the preclinical
development programmes with SDC-1801 and SDC-1802. These programmes
are designed to enable the selection of priority indications for
clinical studies so that the Company can continue to generate
compelling evidence for these candidates to facilitate ongoing
discussions with potential partners towards future licensing
agreements at optimal valuations. The Directors will continue to
review the potential higher value of a later-stage licensing deal
versus the requirement for any extra funding.
The Company expects to report on continued progress during the
coming year and beyond, which the Board believes will demonstrate
the value that is being generated from both internally and
externally controlled programmes.
Dr Stephen Parker Dr Tim Mitchell
Chairman Chief Executive Officer
Consolidated statement of comprehensive income for the year
ended 30 June 2019
2019 2018
Notes GBP GBP
CONTINUING OPERATIONS
Revenue - -
Other operating income - -
Administrative expenses (1,676,439) (1,709,699)
Share of (loss)/profit of
associates (10,016) (12,264)
OPERATING LOSS (1,686,455) (1,721,963)
------------- -----------------
Finance income 4,085 3,745
------------- -----------------
LOSS BEFORE INCOME TAX 5 (1,682,370) (1,718,218)
Income tax 6 229,905 248,697
------------- -----------------
LOSS FOR THE YEAR (1,452,465) (1,469,521)
-----------------
TOTAL COMPREHENSIVE EXPENSE
FOR THE YEAR (1,452,465) (1,469,521)
------------- -----------------
Loss attributable to:
Owners of the parent (1,452,465) (1,469,521)
============= =================
Total comprehensive income
attributable to:
Owners of the parent (1,452,465) (1,469,521)
============= =================
Earnings per share expressed
in pence per share: 7
Basic and diluted (0.05)p (0.05)p
Consolidated balance sheet as at 30 June 2019
2019 2018
Notes GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets - -
Property, plant and equipment - 8,000
Investments in Associates 4 31,359 41,375
------------- -------------
31,359 49,375
------------- -------------
CURRENT ASSETS
Trade and other receivables 59,476 137,832
Tax receivable 230,933 253,562
Cash and cash equivalents 8 919,343 1,375,275
------------- -------------
1,209,752 1,766,669
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 146,926 183,455
------------- -------------
NET CURRENT ASSETS 1,062,826 1,583,214
------------- -------------
NET ASSETS 1,094,185 1,632,589
============= =============
SHAREHOLDERS' EQUITY
Called up share capital 718,997 686,305
Share premium 13,162,052 12,395,744
Share-based compensation reserve 407,872 292,811
Merger reserve 27 27
Retained earnings (13,194,763) (11,742,298)
------------- -------------
TOTAL EQUITY 1,094,185 1,632,589
============= =============
Consolidated statement of changes in equity for the year ended
30 June 2019
Called up Share-based
share Retained compensation Merger
capital earnings Share premium reserve reserve Total equity
GBP GBP GBP GBP GBP GBP
------------- ------------- -------------- -------------- ------------- --------------
Balance at 30
June 2017 661,305 (10,272,777) 11,765,111 191,945 27 2,345,611
------------- ------------- -------------- -------------- ------------- --------------
Changes in
equity
------------- ------------- -------------- -------------- ------------- --------------
Issue of share
capital 25,000 - 630,633 - - 655,633
------------- ------------- -------------- -------------- ------------- --------------
Total
comprehensive
income - (1,469,521) - - - (1,469,521)
------------- ------------- -------------- -------------- ------------- --------------
Share-based
compensation - - - 100,866 - 100,866
------------- ------------- -------------- -------------- ------------- --------------
Balance at 30
June 2018 686,305 (11,742,298) 12,395,744 292,811 27 1,632,589
------------- ------------- -------------- -------------- ------------- --------------
Changes in
equity
------------- ------------- -------------- -------------- ------------- --------------
Issue of share
capital 32,692 - 766,308 799,000
------------- ------------- -------------- -------------- ------------- --------------
Total
comprehensive
income - (1,452,465) - (1,452,465)
------------- ------------- -------------- -------------- ------------- --------------
Share-based
compensation - - - 115,061 115,061
------------- ------------- -------------- -------------- ------------- --------------
Balance at 30
June 2019 718,997 (13,194,763) 13,162,052 407,872 27 1,094,185
------------- ------------- -------------- -------------- ------------- --------------
Consolidated cash flow statement for the year ended 30 June
2019
2019 2018
Notes GBP GBP
Cash flows from operating activities
Cash generated from operations 9 (1,515,764) (1,635,688)
Tax received 252,534 43,365
------------ ------------
Net cash outflow from operating
activities (1,263,230) (1,592,323)
------------ ------------
Cash flows from investing activities
Interest received 4,085 3,745
------------ ------------
Net cash from investing activities 4,085 3,745
------------ ------------
Cash flows from financing activities
Loan repayment by director 4,213 2,711
Share issue 32,692 25,000
Share premium on share issue 766,308 630,633
------------ ------------
Net cash inflow from financing
activities 803,213 658,344
------------ ------------
Decrease in cash and cash equivalents (455,932) (930,234)
Cash and cash equivalents at
beginning of year 8 1,375,275 2,305,509
------------ ------------
Cash and cash equivalents at
end of year 8 919,343 1,375,275
============ ============
Notes to the consolidated financial statements for the year
ended 30 June 2019
1. Basis of preparation
The consolidated financial statements of Sareum Holdings plc and
its subsidiaries (the Group) have been prepared in accordance with
International Financial Reporting Standards (IFRS), as adopted for
use in the European Union, with IFRIC interpretations and with
those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. The financial statements have been prepared
under the historical cost convention.
IFRS comprise standards and interpretations approved by the
IASB. IFRS as adopted by the European Union differ in certain
respects from IFRS as issued by the IASB. However, consolidated
financial statements for the financial years presented would be no
different had IFRS as issued by the IASB been applied. References
to IFRS hereafter should be construed as references to IFRS as
adopted by the European Union.
Going concern
The directors consider that the cash held at the year-end,
together with the proceeds of the placing received in July 2019,
which amounted to GBP781,484 before expenses, will be sufficient to
meet the forecast expenditure for at least one year from the date
of signing the financial statements. In the event that there is a
shortfall, the directors will implement cost savings to ensure that
the cash resources last for this period of time. For this reason
the financial statements have been prepared on a going concern
basis.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 30 June each year. Control is
achieved where the Company has the power to govern the financial
and operating policies of another entity or business, so as to
obtain benefits from its activities. The consolidated financial
statements present the results of the Company and its subsidiaries
(the Group) as if they formed a single entity. Inter-company
transactions and balances between Group companies are eliminated on
consolidation.
2. Statutory Information
Sareum Holdings plc is a public company, registered in England
and Wales. The company's registered number is 05147578 and the
registered office address can be found in note 11 below.
3. Accounting policies
The principal accounting policies applied are set out below.
Property, plant and equipment
Depreciation is provided at the following annual rates in order
to write off each asset over its estimated useful life:
Motor vehicles - straight line over three years
Fixtures and computers - straight line over three or four years
Financial instruments
Financial instruments are classified and accounted for,
according to the substance of the contractual arrangement, as
either financial assets, financial liabilities or equity
instruments. An equity instrument is any contract that evidences a
residual interest in the assets of the Company after deducting all
of its liabilities.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand
deposits and other short term highly liquid investments that are
readily convertible to a known amount of cash and are subject to
insignificant risk of change in value.
Taxation
Current taxes are based on the results shown in the financial
statements and are calculated according to local tax rules, using
tax rates enacted or substantially enacted by the balance sheet
date.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events have occurred at that date that will
result in an obligation to pay more, or a right to pay less or to
receive more tax, with the following exception:
Deferred tax assets are recognised only to the extent that the
Directors consider that it is more likely than not that there will
be suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax
rates that are expected to apply in the periods in which timing
differences reverse, based on the tax rates and laws enacted or
substantively enacted at the balance sheet date.
Research and development
Expenditure on research and development is written off in the
year in which it is incurred.
Operating lease agreements
Rentals applicable to operating leases where substantially all
the benefits and risks of ownership remain with the lessor are
charged against profits on a straight-line basis over the period of
the lease.
Pension contributions
The Group does not operate a pension scheme for the benefit of
its employees but instead makes contributions to their personal
pension policies. The contributions due for the period are charged
to the profit and loss account.
Employee share scheme
The Group has in place a share option scheme for employees,
which allows them to acquire shares in the Company. Equity-settled
share-based payments are measured at fair value at the date of
grant. The fair value of options granted is recognised as an
expense spread over the estimated vesting period of the options
granted. Fair value is measured using the Black-Scholes model,
taking into account the terms and conditions upon which the options
were granted.
Revenue recognition
Revenue is measured as the fair value of the consideration
received or receivable in the normal course of business, net of
discounts, VAT and other sales related taxes and is recognised to
the extent that it is probable that the economic benefits
associated with the transaction will flow to the Company. Grant
income is recognised as earned based on contractual conditions,
generally as expenses are incurred.
Investment in associates
An associate is an entity over which the Company has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not
control or joint control over those policies. Investments in
associates are accounted for using the equity method, whereby the
investment is initially recognised at cost and adjusted thereafter
for the post-acquisition change in the associate's net assets with
recognition in the profit and loss of the share of the associate's
profit or loss.
Critical accounting estimates and areas of judgement
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates. The
estimates and assumptions that have the most significant effects on
the carrying amounts of the assets and liabilities in the financial
information are considered to be research and development costs and
equity-settled share-based payments.
Accounting standards and interpretations not applied
At the date of authorisation of these financial statements, the
following standards and interpretations relevant to the Group that
have not been applied in these financial statements were in issue
but not yet effective:
Standard Effective for accounting periods
starting on or after
IFRS 16 Leases 1 January 2019
Amendments Clarifies how IAS 28 interacts with 1 January 2019
to IAS 28 IFRS 9
Annual improvements to IFRS Standards 2015-2017 1 January 2019
cycle
Amendments Definition of material 1 January 2020
to IAS 1
The Directors anticipate that the adoption of these standards
and interpretations in future years will have no material impact on
the financial statements of the Group.
No standards or interpretations adopted in the year had any
material impact on the financial statements of the Group.
4. Investments in associates
Interest
in associates
GBP
Cost
At 1 July 2018 and 30 June 2019 1,138,125
Impairment
At 1 July 2018
Impairment for year 1,096,750
10,016
---------------
At 30 June 2019 1,106,766
---------------
Net book value
At 30 June 2019 31,359
===============
At 30 June 2018 41,375
===============
Interest in joint venture
The Investment in Associates represents the investment by the
Group in the partnership with the Cancer Research Technology
Pioneer Fund to advance the Chk1 programme. The associate has been
accounted for using the equity method in the consolidated financial
statements. Sareum's interest in the associate partnership is
27.5%. As at 30 June 2019, the partnership had net assets of
GBP121,195 (2018: GBP157,474) and had incurred cumulative losses of
GBP552,025 (2018: GBP515,746).
5. (Loss)/profit before income tax
The (loss)/profit before income tax is stated after
charging:
2019 2018
GBP GBP
Other operating leases 18,420 13,902
Depreciation - owned assets 8,000 5,333
Research and development 939,174 1,035,708
Auditor's remuneration - see analysis below 13,375 13,100
======== ==========
The analysis of auditor's remuneration
is as follows:
Fees payable to the Company's auditor for
the audit of the annual accounts:
Audit of the Company 4,600 4,500
Audit of subsidiaries 7,450 7,300
-------- ----------
Total audit fees 12,050 11,800
Fees payable to the Company's auditor for
other services:
Taxation services 1,325 1,300
Total fees payable to the Company's auditor 13,375 13,100
======== ==========
6. Income tax
2019 2018
GBP GBP
Current tax:
UK corporation tax credit on (losses)/profits
of the period (225,985) (252,534)
Adjustments recognised in the current year
in relation to the current tax of prior
years (3,920) 3,837
---------- ----------
Tax credit to the income statement (229,905) (248,697)
========== ==========
The credit for the year can be reconciled to the accounting loss
as follows:
2019 2018
GBP GBP
(Loss)/profit before tax (1,682,370) (1,718,218)
============
At standard rate of 19% (2017: 19.75%) (319,650) (326,461)
Effects of:
Capital allowances in excess of depreciation (699) 699
Other timing differences 633 55
Unutilised tax losses 192,869 181,835
Losses surrendered for research and development
tax credits (less uplift) 126,847 143,872
Research and development tax credits claimed (225,985) (252,534)
Prior year adjustments (3,920) 3,837
------------
Actual current tax credit in the year (229,905) (248,697)
============
7. Loss per share
The calculation of (loss)/profit per share is based on the
following data:
Basic (loss)/profit per share:
2019 2018
(Loss)/profit on ordinary activities after
tax GBP(1,452,465) GBP(1,469,521)
Weighted average number of shares for
basic loss per share 2,826,717,857 2,705,771,933
Basic (loss)/profit per share (0.05)p (0.05)p
As the Group generated a loss for the period, there was no
dilutive effect in respect of share options.
8. Cash and cash equivalents
2019 2018
GBP GBP
Bank deposit account 908,676 1,368,687
Bank accounts 10,667 6,588
----------
919,343 1,375,275
==========
9. Reconciliation of (loss)/profit before income tax to cash
generated from operations
2019 2018
GBP GBP
(Loss)/profit before income tax (1,682,370) (1,718,218)
Depreciation charges 8,000 5,333
Share-based compensation 115,061 100,866
Share of cost of associate 10,016 12,264
Finance income (4,085) (3,745)
------------
(1,553,378) (1,603,500)
(Increase)/decrease in trade and other
receivables 74,143 (60,109)
Increase in trade and other payables (36,529) 27,921
------------
Cash used in operations (1,515,764) (1,635,688)
============
10. Dividend
The Directors are not able to recommend payment of a
dividend.
11. Copies of the report and accounts
Copies of the report and accounts will be posted to those
shareholders that have requested them, will be available from the
Company's registered office at 2a Langford Arch, London Road,
Pampisford, Cambridge CB22 3FX, and will be placed on the Company's
website at http://www.sareum.com/.
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
FR CKQDPCBDDFKD
(END) Dow Jones Newswires
October 15, 2019 02:00 ET (06:00 GMT)
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