23 Sep 2014 07:00
4D Pharma plc
("4D" or "the Company")
Interim results for the period ended 30 June 2014
4D Pharma plc (AIM: DDDD), a pharmaceutical company focussing on developing a number of projects targeting important new therapeutic areas, is pleased to announce its interim results covering the period from 10th January 2014 (the date of incorporation of 4D) to 30th June 2014 (or "the period").
Financial Highlights
· Total assets as at 30th June 2014 of £17.2m
· Cash and cash equivalents at 30th June 2014 of £14.1m
· Cash and cash equivalents at 31st August 2014 of £33.2m
Corporate Highlights
· Initial public offering on AIM completed in February 2014 raising a total of £16.55m before expenses
· Further placing in June 2014 raising a total £21.5m before expenses
· Increased the Company's stake in GT Biologics to 83.5%
Other Highlights
· Developed and initiated the Company's discovery platform MicroRx, producing a proprietary library of 1600 novel bacteria
· Discovery pipeline generated using MicroRx and expected to grow significantly over the coming 12 months.
Since the period end
· Acquired The Microbiota Company Limited, a company formed to develop a patented bacteria for the treatment of irritable bowel syndrome and related disease
· Granted orphan drug designation for Rosburix™ for the treatment of Paediatric Colitis
· Announced that Thetanix, a treatment for Paediatric Crohns, and Blautix™, a treatment for irritable bowel syndrome ("IBS"), are anticipated to enter clinical trials in Q2 2015.
· Current discovery pipeline generated using MicroRx and is expected to grow significantly over the coming 12 months.
Chairman's statement
"4D has made great steps towards bringing a new class of therapeutics to market and I am satisfied with the start the company has made. In addition to the progress in our research and clinical programmes, we have built a strong group of shareholders who share and believe in our vision for 4D," stated Dave Norwood, Chairman of 4D. "We believe that being in position to take this new class of therapeutics into patients next year will mark both a significant corporate and scientific milestone for 4D. In addition, with the initiation of our Micro Rx platform, we have a rapidly expanding pipeline, addressing major diseases and together with a strong balance sheet we look forward to an exciting 12 months."
For further information please contact:
4D | + 44 (0) 161 837 6205 |
Duncan Peyton, Chief Executive Officer |
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Zeus Capital Limited - Nomad and Broker | +44 (0) 161 831 1512 |
Ross Andrews |
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Dan Bate |
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Dominic Wilson (Institutional Sales) | +44 (0) 20 7533 7727 |
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4D began trading on the AIM market of the London Stock Exchange in February 2014 under the ticker symbol DDDD. For further information please visit: www.4dpharmaplc.com.
Chairman's and Chief Executive Officer's Joint Review
Overview
4D is a company focussed on a significant new therapeutic class called live biotherapeutics.
Live biotherapeutics are a new class of drugs, exploiting recent advances in our understanding of how the bacteria naturally present in the body play a pivotal role in developing and regulating our immune system and other aspects of our health.
4D has established a world leading position in the development of live biotherapeutics through the ability to isolate and identify bacteria that have a therapeutic effect from the proprietary Micro Rx platform and rapidly take them through a development programme and into clinical trials.
The use of a live biotherapeutics as a drug is thought to have significant advantages over the traditional approach of chemical entities or biologics such as antibodies, especially with autoimmune diseases such as Crohns and ulcerative colitis as targeted by 4D. Currently, treatment options depend on severity. Corticosteroids, immunomodulators and anti-TNF therapies are often used, but have been linked to a variety of side effects ranging from infection to certain cancers.
Blautix™ - Irritable Bowel Syndrome
IBS is a functional bowel disorder characterised by discomfort, pain and changes in bowel habits. Symptoms can be mild, moderate or severe. Mild symptoms, which occur infrequently, can sometimes interfere with normal daily functioning. Moderate symptoms are more intense, occur more frequently, and often interfere with daily functioning. Severe symptoms chronically interfere with daily functioning. It is estimated that 10-15% of the population have IBS, with only 30-35% of patients seeking medical attention, the majority of which have persistent symptoms. There are currently few approved treatment options, all of which focus on the modulation of symptoms.
Blautix™ has been developed as a treatment for IBS, and is now anticipated to enter clinical trials in Q2 2015. It is currently intended that these studies would be primarily concerned with evaluating safety and tolerability of the products. Additionally, some clinical effects of the treatments would be assessed in healthy volunteers and a small number of symptomatic IBS individuals.
Thetanix™ - Paediatric Crohns
Thetanix™ is a live biotherapeutic for the treatment of Paediatric Crohns ("PCD").
PCD is a chronic inflammatory bowel disease that causes inflammation, or swelling, across the lining of the digestive tract. Crohn's disease most often affects the end of the small intestine but can happen anywhere along the digestive tract from mouth to anus. In addition to gastro intestinal symptoms (diarrhoea, rectal bleeding, abdominal pain), children with PCD often experience growth failure, malnutrition, pubertal delay and bone demineralisation. Approximately 20% of patients with Crohn's disease present when they are younger than 20 years and it is estimated that there are around 41,000 children in the USA with PCD.
Thetanix™ has been designated with orphan drug status by the FDA and is expected to enter trials in Q2 2015. Due to the inherent characteristics of Thetanix™, it is intended that the trial will be conducted in patients, and although concerned primarily with safety and tolerability, some clinical effects of Thetanix™ will be assessed .
Rosburix™ - Paediatric Colitis
Rosburix is being developed for the treatment of paediatric colitis ("PUC"), and was awarded orphan drug designation by the FDA in August 2014.
PUC is an inflammation, or painful swelling of the lining of the large intestine or colon. The inflammation can lead to sores and ulcers which can bleed, produce pus and cause pain. Although some patients with PUC do show periods of remission, PUC is a long term condition, with patients requiring management throughout life. Despite a number of approved therapeutic options for treatment, surgical removal of the colon is still required in many cases and in the US it is estimated that 8% of paediatric patients undergo colectomy at 1 year, 15% at 3 years, and 20% at 5 years following diagnosis.
It is estimated that in the US, 28 of every 100,000 children are affected with PUC and it is one of the most common gastrointestinal conditions managed by gastroenterologists in the US. There is a clear, unmet medical need for better therapeutic treatments for children suffering from PUC.
Rosburix™ is expected to enter trials in 2016.
MicroRx - proprietary platform
MicroRx has been developed by 4D.
This platform is an engine allowing 4D to discover bacteria with potential therapeutic effects in target disease areas.
Since May 2014, MicroRx has provided a proprietary library of over 1000 bacteria. The initial screen of only a small proportion of this library has already generated a number of interesting leads that are currently being evaluated as potential treatments for a variety of autoimmune conditions.
To date 4D has only focussed MicroRx on autoimmune targets, but is expected to begin to look at other areas such as cancer and CNS related diseases.
Financial results
The consolidated loss on ordinary activities of £0.5m for the period is in line with expectations and includes the ordinary activities of GT Biologics following the increase in 4D's ownership to 83.5% in June 2014.
The group has a strong balance sheet with net assets of £16.6m and cash and cash equivalents of £14.1m. As at 31st August 2014, it has cash and cash equivalents of £33.2m.
David Norwood | Duncan Peyton |
Chairman | Chief Executive Officer |
22 September 2014 | 22 September 2014 |
Consolidated Statement of Comprehensive Income
For the period ended 30 June 2014
Period to | ||
30 June 2014 | ||
(Unaudited) | ||
£'000 | ||
Notes | ||
Revenue | 116 | |
Product development costs | (130) | |
Gross (loss)/profit | (14) | |
Administrative expenses | (507) | |
Operating loss | (521) | |
Finance income | 25 | |
Finance costs | (5) | |
Loss on ordinary activities before taxation and minority interest | (501) | |
Taxation | 3 | 0 |
Minority interest | 37 | |
(464) | ||
Loss for the period and total comprehensive loss for the period | ||
Loss per share: | ||
Basic and diluted loss for the period | 4 | (1.43)p |
Diluted loss for the period | 4 | (1.43)p |
Consolidated Statement of Changes in Equity
For the period ended 30 June 2014
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| Issued |
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| equity | Share | Revenue | Total | |||
| capital | premium | reserve | equity | |||
| £'000 | £'000 | £'000 | £'000 | |||
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At 10 January 2014 | - | - | - | - | |||
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Loss for the period to 30 June 2014 | - | - | (464) | (464) | |||
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Issue of share capital | 93 | 17,238 | - | 17,331 | |||
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At 30 June 2014 | 93 | 17,238 | (464) | 16,867 | |||
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Consolidated Statement of Financial Position
As at 30 June 2014
30 June 2014 | ||
(Unaudited) | ||
£'000 | ||
Notes | ||
Assets | ||
Non-current assets | ||
Tangible fixed assets | 215 | |
Intangible assets | 2 | 2,648 |
2,863 | ||
Current assets | ||
Trade and other receivables | 250 | |
Cash and cash equivalents | 14,100 | |
14,350 | ||
Total assets | 17,213 | |
Liabilities | ||
Current liabilities | ||
Trade and other payables | 566 | |
Current and total liabilities | 566 | |
Net assets | 16,647 | |
Capital and reserves | ||
Issued equity capital | 93 | |
Share premium | 17,238 | |
Revenue reserve | (464) | |
Minority interest | (220) | |
Total equity | 16,647 |
Approved by the Board and authorised for issue on 3 September 2014
Duncan Peyton
Director
Consolidated Cash Flow Statement
For the period ended 30 June 2014
Period to | ||
30 June 2014 | ||
(Unaudited) | ||
£'000 | ||
Loss before interest and tax | (521) | |
Adjustments for: | ||
Depreciation of tangible fixed assets | 4 | |
Minority interest | 37 | |
Changes in working capital: | ||
(Increase)/Decrease in trade and other receivables | (250) | |
(Decrease)/Increase in trade and other payables | 566 | |
Net cash outflow from operating activities | (164) | |
Cash flows from investing activities: | ||
Purchases of tangible fixed assets | (219) | |
Acquisition of subsidiary undertaking | (2,648) | |
Minority interest in subsidiary undertaking | (220) | |
Interest paid | (5) | |
Interest received | 25 | |
Net cash (outflow)/inflow from investing activities | (3,067) | |
Cash flows from financing activities: | ||
Net proceeds from the issue of ordinary share capital | 17,331 | |
Net cash inflow from financing activities | 17,331 | |
Increase/(decrease) in cash and cash equivalents | 14,100 | |
Cash and cash equivalents at the start of period | 0 | |
Cash and cash equivalents at the end of the period | 14,100 | |
Notes to the Interim Financial Report
For the period ended 30 June 2014
1. Accounting policies
Basis of preparation
This interim financial report comprises the condensed consolidated interim balance sheet as at 30 June 2014 and related consolidated interim statements of income and cash flows for the period from incorporation on 10 January 2014 to 30 June 2014. This financial information has neither been audited nor reviewed and does not comprise statutory accounts within the meaning of the Companies Act 2006.
This interim financial report has been prepared in accordance with pronouncements on interim reporting issued by the ASB, AIM Rule 18 and in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and has been prepared under the historical cost convention.
Basis of consolidation
This interim financial report consolidates the financial statements of 4D Pharma plc and the entities it controls (its subsidiaries).
2. Acquisitions
On 10 June 2014 the company acquired 37.5% of the share capital of GT Biologics Limited for a total consideration of £1,224,125 taking the total interest in the share capital of GT Biologics to 83.5% for a total consideration of £1,724,125.
The book and provisional fair value of the assets acquired are as follows:
£'000 | ||
Tangible fixed assets | 218 | |
Trade and other receivables | 115 | |
Cash and cash equivalents | 270 | |
Trade and other payables | (709) | |
Loans | (1,000) | |
Net liabilities acquired | (1,106) | |
Minority interest of net liabilities acquired | 182 | |
Net liabilities acquired after minority interests | (924) | |
Goodwill | 2,648 | |
1,724 | ||
The acquisition was satisfied as follows: | ||
Cash | 500 | |
Issue of new ordinary shares | 1,224 | |
Total consideration | 1,724 |
Notes to the Interim Financial Report (continued)
For the period ended 30 June 2014
3. Tax
There was no tax charge during this period.
4. Loss per ordinary share
30 June 2014 | ||
£'000 | ||
Loss for the financial period | ||
attributable to equity shareholders | (464) | |
Share-based payments | 0 | |
Loss for the financial period before share-based payments | (464) | |
Weighted average number of shares: | No. | |
Ordinary shares in issue | 32,389,453 | |
Adjusted loss per share before share-based payments (pence) | (1.43)p | |
Basic loss per share (pence) | (1.43)p |
5. Post Balance Sheet Events
On 14th July 2014 the Company raised £21.5m (before expenses) by way of a placing of 14,333,334 new ordinary shares at a price of 150 pence per ordinary share. Following admission of the new ordinary shares to trading on AIM, the total number of ordinary shares in issue became 51,582,834.
On 18th July 2014 the Company acquired the entire issued share capital of The Microbiota Company Limited for a consideration of approximately £0.96m (€1.2m). The consideration was satisfied by the issue of 509,285 new shares in the capital of 4D with each share being issued at £1.885, being the average mid-market price of a 4D share for the 5 business days immediately preceding the completion of the acquisition.
6. Interim financial report
A copy of this interim financial report will be available on the Company's website at www.4dpharmaplc.com