DDDD.L Regulatory News (DDDD)

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

23 APRIL 2018

4D PHARMA PLC

("4D", the "Company" or, together with its subsidiaries, the "Group")

Final Results for the year ended 31 December 2017

4D pharma plc (AIM: DDDD), a pharmaceutical company focusing on the development of live biotherapeutics, is pleased to announce the final results for the Group for the year ended 31 December 2017.

Financial highlights for the year:

· Net assets of £69.8 million (2016: £86.5 million)

· Cash and cash equivalents (including cash on deposit) of £50.0 million (2016: £68.8 million)

· Total comprehensive loss after tax of £19.4 million (2016: £10.3 million)

· Adjusted loss per share (basic and diluted) of 26.08 pence (2016: 15.21 pence)

Operational highlights for the year:

· Successful progression of our proprietary clinical programmes in Irritable Bowel Syndrome and Paediatric Crohn's Disease

· Completion of the first clinical trial of the MicroDx diagnostic and patient stratification platform, validating the platform and representing achievement of the initial milestone from the acquisition of 4D Pharma Cork Limited in February 2016

· Data generated in this clinical study demonstrated: our ability to use patient microbiome and metabolite profiles to differentiate IBS subjects from healthy individuals; and the commonalities of the microbiome across all IBS subtypes, supporting the use of Blautix, our Live Biotherapeutic for the treatment of IBS, in all these subgroups

· Development of our intellectual property estate, the largest in the microbiome sector, to help secure and consolidate our leading position in the field, having at year end 207 granted patents and 320 patent applications, from 32 patent families

· Securing GMP certification for the production of Live Biotherapeutics at our development and manufacturing facility in León, Spain, with the potential capacity to run up to 100 million capsules per annum

The Annual Report, together with a notice of the Company's Annual General Meeting, will be posted to shareholders and made available on the Company's website, www.4dpharmaplc.com, by 27 April 2018. The Annual General Meeting will be held on Monday 21 May 2018 at 11 a.m. at the Gridiron Building, 1 Pancras Square, London N1C 4AG.

David Norwood, Chairman of 4D, commented: "I am pleased to be able to announce the Group's final results for the year ended 31 December 2017. The year has seen significant progress towards our goal of producing Live Biotherapeutics as safe and effective therapies. With its upcoming programme of trials, 4D is well placed to deliver meaningful clinical data to support the use of Live Biotherapeutics across multiple indications. I would like thank everyone in the Group for their contribution to the progress we have made in 2017."

For further information please contact:

Information on 4D

www.4dpharmaplc.com

Chairman's Statement

David Norwood, Non-executive Chairman

Strategic objectives

Since the Group's initial public offering, 4D has grown rapidly to become a world leader in the development of Live Biotherapeutics, an "end-to-end" microbiome company, from research to development and manufacture.

Our research teams continue to further the understanding, both of our programmes and their mechanisms, and of the microbiome generally. The past twelve months have seen the validation of MicroDx, our diagnostic platform enabling the stratification of IBS patients. Our GMP-certified facility in León, Spain, has enabled the development scale-up for our candidate strains and has increased clinical/production capacity to up to 100 million capsules per annum. Meanwhile our increasing intellectual property estate helps secure our leading position in the field.

As we move forward, our key goal is to deliver meaningful clinical data to support the use of Live Biotherapeutics across multiple indications. I believe that through our upcoming programme of clinical trials, we are well positioned to achieve this.

Governance and Board

The Board is committed to maintaining high standards of governance, both at Board level and operationally throughout the business.

Our people

We could not have achieved what we have without the continued support of our staff throughout our sites in Europe, and also those involved in our wider collaborations. I would like to thank them all for their contribution to the progress we have made in 2017.

David Norwood

Non-Executive Chairman

20 April 2018

Chief Executive Officer's Report

Duncan Peyton, Chief Executive Officer

4D's approach

If we step back and look at what 4D is trying to do (namely to bring to market not only new drugs but a new therapeutic modality), it is not an easy task. The FDA approved only 22 new drugs in 2016 and only eight of those were first in class. Nevertheless, we believe 4D is well positioned to achieve its goals.

With any new drug, whether or not first in class, or new modality there is risk. Any new drug or modality brings concern over safety, and it is rightly the top priority for the industry and regulators. More than 50% of traditional drug programme failures can be attributed to safety.

Notwithstanding this, given the pull for new or better medicines, industry and investors are prepared to accept such risks and, as we have recently seen with the interest in CAR-T therapies, successfully bringing a new therapeutic class to market can deliver significant value to investors.

It is widely believed that Live Biotherapeutics and the microbiome will go some way to address such risks, by bringing a different approach to treatment regimes and to disease, and doing so safely. This puts a high expectation on Live Biotherapeutics and the field of microbiome research, and to date the field has fallen short of this expectation.

Building upon our work and investment in research, clinical progression and manufacturing capability, we believe 4D is well positioned to change this. During 2017 we have laid the groundwork to take our products into patients across a host of disease areas with the aim to provide robust clinical data to demonstrate the potential of Live Biotherapeutics.

Current clinical programmes

We have worked with regulators and clinicians, both in Europe and the United States, to develop Blautix, our clinical programme in Irritable Bowel Syndrome ("IBS"). Building on the patient data from the phase I trials, which both reinforced the safety of our Live Biotherapeutics and highlighted promising efficacy signals, we believe Blautix to address a key underlying cause of the disease and not just the symptoms, as is the case with current available treatments.

Consequently, we are looking to address the IBS subtypes (IBS-C (constipation) and IBS-D (diarrhoea)) in our upcoming phase II trial. Targeting commencement of dosing in the second half of 2018, the trial will be conducted in both Europe and the United States. The trial will look to dose up to 500 patients, to give sufficient power to indicate efficacy, as well as providing further insights into a disease which is estimated to affect over 10% of the global population, but, irrespective of its prevalence is not yet well understood.

We have completed dosing in the phase I study of Thetanix, our clinical programme in Paediatric Crohn's Disease, and we will report the outcome of this study in the coming months. Moving to the next stage of the development of Thetanix, we have decided to initially focus our efforts on the adult population. The rationale for this is that, whilst the need for a safe and effective paediatric solution remains high, it is a reflection of the severe nature of the disease that our recruitment for the phase Ib trial was slow, with a number of eligible patients screened experiencing flare before they could enter the trial.

We will explore opportunities to remain active with this group of patients and continue to involve those patients and clinicians we have been working with.

The Thetanix phase II study will recruit adult Crohn's Disease patients and we anticipate making regulatory submissions for this study in the second half of 2018.

Oncology and other pending clinical programmes

An area of increasing interest in the microbiome field, and one 4D has long focussed on, is oncology.

In late 2015 our proprietary MicroRx discovery platform identified a bacterium, MRx0518, that had shown efficacy in pre-clinical cancer models. Through 2017, we have concentrated on two areas of MRx0518 development, firstly unpicking the mode of action and secondly preparing for clinical studies.

We believe understanding mechanism is critical to the development of Live Biotherapeutics as a therapeutic class; we do not believe the field can continue to take an "ecobiotic" approach to therapeutics, simply relying on a correlation of the presence/absence of bacteria. We aim to understand how the bacteria influence disease by using MicroRx to pick out strains that have a functional effect on pathways that are known (by clinicians, regulators and industry alike) to be associated with disease. As recently announced, 4D has highlighted key aspects of the mode of action of MRx0518, identifying a specific component of the bacteria that stimulates pathways known to be associated with the body's response to cancer; these findings are to be investigated further in upcoming clinical trials.

Our approach to the clinical development of MRx0518 encompasses parallel studies to evaluate safety, efficacy and anti-tumour immunity in the monotherapy and combination settings.

Our first trial in oncology is a monotherapy study investigating the effect of MRx0518 on patients with solid tumours in the neoadjuvant setting. We are treating patients between diagnosis, where a biopsy is taken, and resection, with a follow-up post-surgery.

In addition to the safety data this trial will generate for MRx0518, the study will provide 4D the opportunity to investigate the impact on MRx0518 on a "clean" immune system. Patients enrolled in the study will have early stage disease and thus their immune system will not have been previously exposed to cycles of other cancer therapies. The early stage of intervention in this trial further demonstrates the lower risk our Live Biotherapeutics represent in terms of safety, but also provides potential insights into how MRx0518 may influence treatment regimes post-surgery.

Working with leading institutions as partners, such as Imperial College as well as the MD Anderson Cancer Center in Houston, one of the world's most respected institutions focussed on cancer patient care and research, our work in oncology has led to the development of strategies to understand the potential of Live Biotherapeutics, whether as a single agent, adjuvant or in combination.

Furthermore, our involvement with these groups and in this space has led us to look at the potential of addressing other diseases associated with the side effects of cancer treatment with our Live Biotherapeutics, further demonstrating the impact we believe Live Biotherapeutics can have in the oncology space.

In a similar way to the development of our cancer programmes, we are continuing to advance our programme in asthma. Targeting regulatory submission for the study in Q3 2018, 4D will investigate the use of MRx0004 in a phase I/II study in asthma patients with poorly controlled symptoms. The trial will primarily investigate the safety of MRx0004 and will additionally have a suite of secondary endpoints to give an indication of efficacy.

Development

Key to the success of our programmes is the ability to deliver therapies to patients. During 2017 4D further upgraded its development and manufacturing facility in León in Spain, and it is now a standalone fully operational GMP-certified facility for the production of Live Biotherapeutics.

The team at León has now provided multiple batches of clinical material across a number of programmes and, with 4D's development team, is working on the development and scale-up of the next strains coming through the R&D platform.

Research and intellectual property

Coming full circle back to research, and from where 4D started, our scientific teams continue to lead in the understanding of mechanisms of action of our existing programmes, to discover new potential disease areas of interest, and to support our clinical efforts.

2017 was particularly significant in the development of our understanding of how the microbiome and metabolite profiles of patients can be used in both the diagnosis of disease and the identification of patients likely to respond to our Live Biotherapeutics. In March 2017, we reported interim clinical data demonstrating our ability to differentiate IBS patients from healthy individuals based on both microbiome and metabolite profiles, and the commonalities of the microbiome across all IBS subtypes. This observational study was completed in August and we are now well advanced in preparation for a larger, multi-centre trial, to further validate this work, at sites in the UK, Ireland and the US.

In tandem with research, we have focussed on developing our intellectual property estate, the largest in the microbiome sector, to help secure and consolidate our leading position in the field, having at year end 207 granted patents and 320 patent applications, from 32 patent families. To enable this focus, we have had to postpone our desire to publish our work, but now, having gained a market-leading intellectual property position, over the coming year we will be actively seeking to publish our research in leading publications and at conferences.

Financial summary

In the year to December 2017, our cash and cash equivalents and short-term deposits reduced from £68.8 million to £50.0 million, with a loss before tax of £24.0 million (compared with £11.7 million in the year to December 2016), though this included £3.5 million of non-recurring costs arising from the revaluation of the contingent consideration on Cork after it achieved the first milestone. Our claim for research and development tax credit was £3.5 million (compared with £1.8 million in the year to December 2016).

Our cash burn for the year was in line with expectation, reflecting among other things the increased costs of taking our existing clinical programmes forward, and preparing our next wave of programmes for upcoming phase I and II trials.

The Group continues to manage its cash deposits prudently and invests its funds across a number of financial institutions which have investment grade credit ratings. The deposits range from instant access to twelve-month term deposits and are regularly reviewed by the Board. Cash forecasts are updated monthly to ensure that there is sufficient cash available for the Group's foreseeable requirements.

Outlook

Throughout 2017, 4D made significant progress towards its goal of producing Live Biotherapeutics as safe and effective therapies. Over the next twelve to 24 months, the Group will, through its clinical programmes, seek to lead the way in generating robust clinical data to support the use of this new class of drugs across multiple indications.

Duncan Peyton

Chief Executive Officer

20 April 2018

Group Statement of Total Comprehensive Income

For the year ended 31 December 2017

The basic and diluted loss per share are the same as the effect of share options is anti-dilutive.

Group Statement of Financial Position

At 31 December 2017

Registered no. 08840579

Group Statement of Changes in Equity

For the year ended 31 December 2017

Group Cash Flow Statement

For the year ended 31 December 2017

Notes to the Financial Information

For the year ended 31 December 2017

1. Basis of preparation

The financial information set out herein does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the year ended 31 December 2017 has been extracted from the Company's audited financial statements which were approved by the Board of Directors on 20 April 2018 and which, if adopted by the members at the Annual General Meeting, will be delivered to the Registrar of Companies for England and Wales.

The financial information for the year ended 31 December 2016 has been extracted from the Company's audited financial statements which were approved by the Board of Directors on 26 April 2017 and which have been delivered to the Registrar of Companies for England and Wales.

The figures for the year ended 31 December 2017 have been extracted from the statutory accounts for that year on which the auditor has issued an unqualified audit report which have yet to be delivered to the Registrar of Companies. The figures for the year ended 31 December 2016 have been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies and on which the auditor has issued an unqualified audit report. No statement has been made by the auditor under Section 498(2) or (3) of the Companies Act 2006 in respect of either of these sets of accounts.

The information included in this preliminary announcement has been prepared on a going concern basis under the historical cost convention, and in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and the International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board ("IASB") that are effective or issued and early adopted as at the date of this financial information and in accordance with the provisions of the Companies Act 2006.

The Company is a public limited company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange. The Company is incorporated in England and Wales. The registered office is 9 Bond Court, Leeds LS1 2JZ.

2. Going concern

Having prepared management forecasts and made appropriate enquiries, the directors are satisfied that the Group has adequate resources for the foreseeable future as the Group is at the development stage of its business lifecycle. Accordingly they have continued to adopt the going concern basis in preparing the information.

3. Non-recurring costs

On 23 August 2017 contingent consideration became due following the achievement of 4D Pharma Cork Ltd's initial milestone.

The contingent liability was initially calculated upon the acquisition based on the discounted probability of the potential liability at the time of acquisition. With the successful completion of the first milestone the management has had to reassess the probability of success of subsequent milestones and therefore increase the contingent liability. This has resulted in the non-recurring cost in the year to 31 December 2017 of £3.474 million (31 December 2016: £Nil).

4. Loss per share

(a) Basic and diluted

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 expenses in relation to the reassessment of the contingent liability.

Reconciliation of adjusted loss after tax:

5. Related party transactions

Group

Transactions with Directors and related entities

During the year Aquarius Equity Partners Limited, an entity controlled by Duncan Peyton and Dr Alexander Stevenson, charged the Group £2,116 for office expenses (31 December 2016: £8,368). As at 31 December 2017 £Nil was due from Aquarius Equity Partners Limited (31 December 2016: £3,144).

Transactions with key personnel and related entities

During the year summ.it assist llp, an entity in which Stephen Dunbar is a partner, recharged the Group £3,593 for IT equipment and software (31 December 2016: £23,690), £377 for IT support (31 December 2016: £4,126), £65,939 for accounting and bookkeeping services (31 December 2016: £60,328), £12,500 for staff recruitment fees (31 December 2016: £Nil) and £3,718 for other costs (31 December 2016: £3,199). At the year end £5,065 was due to summ.it assist llp (31 December 2016: £6,766).

3C SAS, an entity owned by Christophe Carité, provided consultancy services to the Group of £Nil (31 December 2016: £182,324) and recharged costs of £Nil (31 December 2016: £73,029). At the year end £Nil was due to 3C SAS (31 December 2016: £Nil).

Biomar Microbial Technologies, an entity in which Antonio Fernandez is a director, charged rent and building service costs to the Group of £302,487 (31 December 2016: £104,987). At the year end £5,469 was due to Biomar Microbial Technologies (31 December 2016: £27,411).

All related party transactions during the current and previous year were considered to be at arm's length.

6. Report and accounts

A copy of the Annual Report and Accounts will be sent to all shareholders with notice of the Annual General Meeting.