Nuformix Regulatory News (NFX)

Nuformix plc

("Nuformix" or "the Company"),

Unaudited Half Year Results

for the six months ended 30 September 2018

Significant Progress in Lead Programmes

Cambridge, UK, 20th December 2018: Nuformix (LSE: NFX), the pharmaceutical development company using cocrystal technology to unlock the therapeutic potential of approved small molecule drugs, announces the Company's unaudited results for the six months ended 30 September 2018.

KEY HIGHLIGHTS

· Pipeline Update:

· Key development milestone achieved for NXP001 in Oncology Supportive Care triggering payment of £500,000

· Additional patent filing broadening NXP002 applications in fibrotic conditions

· Continued growth of pre-clinical portfolio following the development of new drug cocrystals

· Strengthening Board:

· Dr Chris Blackwell appointed to the Nuformix Board as a Non-Executive Director

· Financial Highlights:

· Reported net loss for the period was £642,633 (2017: £127,546 loss)

· Operating profit before exceptional items for the reported period was positive at £114,020 (2017: £170,725 loss)

POST PERIOD HIGHLIGHTS

· Key milestone achieved for NXP002 programme in treating fibrosis:

· Preclinical multi-patient tissue studies were completed in partnership with Newcastle University, UK in Q4 2018

· Resulting data demonstrated NXP002 candidates strongly inhibit fibrosis ex-vivo, even in very severely fibrotic human lung tissue taken from patients at end stage with idiopathic lung fibrosis (IPF)

· In addition, a very specific action was observed against key inflammatory targets

Commenting on the outlook, Dr Dan Gooding, CEO, Nuformix plc said: "We have achieved significant progress during the period, both operationally and within our lead programmes. The results strongly validate the Company's strategy of combining a 'lean burn' model and low operational costs with early revenues from both out-licensing and collaborative development. We have continued to progress our two lead programmes during the second half of 2018, reaching significant milestones for our oncology drug NXP001 and our fibrosis drug NXP002. We can look forward to achieving further clinical and commercial progress for both programmes in the first half of 2019 whilst maintaining low operating costs."

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

Enquiries:

About Nuformix plc

Nuformix is a pharmaceutical development company using cocrystal technology to unlock the therapeutic potential of approved small molecule drugs. Nuformix's risk-mitigated development strategy has resulted in a pipeline of discoveries through which it has developed and patented novel cocrystal forms of approved small molecules.

Nuformix has created an IP portfolio of granted patents covering cocrystal forms of five small molecule drugs. Nuformix is targeting high-value unmet needs with its lead programmes in:

· NXP001: Oncology supportive care

· NXP002: Treating fibrosis

Nuformix was established in Cambridge in 2009 and has invested in pharmaceutical cocrystal R&D, establishing world-class capability and know-how in cocrystal discovery and development, yielding multiple product opportunities. 

Nuformix plc shares are traded on the London Stock Exchange's Official List under the ticker: NFX.L.

For further information, please visit www.nuformix.com.

Half Year Report

The Company is pleased to update shareholders regarding the Company's developments during the first half of the year ending 30 September 2018 and subsequent events to date in the second half.

Half Year Overview

The Company conducts pharmaceutical development activities, minimising risk in clinical development by creating innovative new therapies based on known drugs with proven safety. The Company's innovative therapies are made possible via cocrystal technology, which provides new intellectual property (IP) plus performance and commercial advantages to enable the development of new products.

Nuformix seeks to maximise the value of its existing IP portfolio by conducting clinical proof-of-concept studies for a small number of compelling assets prior to generating revenues from out-licensing.

The Company has achieved significant progress during the period, both operationally and within its lead programmes. The results strongly validate the Company's strategy of combining a 'lean burn' model and low operational costs with early revenues from both out-licensing and collaborative development.

As a result, the Company is able to report an operating profit before exceptional items for the period of £114,020 (2017: £170,657 loss). The net results for the period are impacted by share option charges, which are not cash reducing, of £765,667. Overall, the reported net loss for the period is £642,633 (2017: £127,546 loss).

Earlier this year the Company completed a full strategic review of the Nuformix lead programmes, NXP001 in oncology supportive care and NXP002 in the treatment of fibrosis and included both commercial and operational aspects. The review also looked at the Company's broader portfolio, including early-stage pipeline and potential additional projects. The review provided the Board and the Advisory Panel with a refreshed perspective on the overall commercial and development potential across the pipeline and the associated objectives for each work stream.

As a result of the strategic review, the management team identified development targets for its two lead programmes opportunities and has made significant progress during the year as follows:

NXP001 Programme: Oncology Supportive Care

· On track to deliver its first human pharmacokinetic data in H1 2019

· MHRA clearance expected in February 2019 and patients scheduled for dosing in March 2019

· All clinical materials generated and ready for study commencement

· Demonstration of bioequivalence to the reference product will trigger a £2 million milestone payment

· First milestone was achieved and the first NSB payment of £500,000 was received in Q4 2018

· In November, announced an expanded licensing agreement with NSB for the China market

· Rest of the World discussions for NXP001 commenced

Following the expanded agreement announced in November with NSB, Nuformix will be carrying out an additional pre-clinical study for NXP001 in parallel to its on-going clinical studies, to further validate additional differentiated product opportunities. Completion of the additional study will result in a milestone payment of £500,000 from NSB.

Total milestone payments from NSB will therefore increase from £2.5 million to £3 million, following the addition of this second pre-clinical milestone, which Nuformix expects to achieve in Q1 2019. The resulting data will support regulatory submissions in China to facilitate market approval of multiple NXP001-derived products.

NXP002 Programme: Treating Fibrosis

The Company is highly encouraged by the first results from its partnership with Newcastle University (UK) and using cutting-edge human tissue disease models, Nuformix has demonstrated the potential for NXP002 candidates to attenuate progression in established lung fibrosis.

Life expectancy has not changed for patients diagnosed with IPF. Few patients respond to the two currently approved treatments and have to tolerate severe side effects that dramatically impact quality of life - severe vomiting on one therapy or severe diarrhoea on the other. The promising data from the NXP002 study gives us confidence in its ability to both inhibit fibrosis and address inflammation in patients without these side effects.

Nuformix announced in September an additional patent filing, which provides further strength and breadth to the existing NXP002 patent portfolio. The additional patent filing allows Nuformix to consider a wider range of options in the treatment of fibrosis, delivering wider benefit for patients whilst maximising value for investors.

Fibrotic disease is typically associated with high patient mortality, increasing prevalence and a lack of safe and effective treatments. Whilst, fibrosis treatments are in their infancy the emerging lung fibrosis market demonstrates their blockbuster potential. Markets for other fibrotic conditions are under-developed, with large and growing patient populations (e.g. the global liver disease market is predicted to reach $12.1 billion by 2022).

Strategy

The Company is focussed on building value for shareholders through its activities in drug development and out-licensing. Nuformix uses cocrystal technology to re-engineer the crystalline form of known small molecule drugs. The resulting novel drug cocrystals have new and improved physical properties that can enable advantageous new products, in addition to strategic benefits. Furthermore, the resulting drug cocrystals are protected with new 'substance of matter' IP protection.

Nuformix's cocrystal technology expertise generates value and revenue by developing new cocrystal-based therapies using known drugs and licensing them to pharmaceutical companies post proof-of-concept. The initial product development focus is in the fields of oncology supportive care and fibrosis. However, the Company is building a pipeline of additional products behind its lead programmes, which it will continue to develop both in-house and in collaboration with external partners.

Strengthening Company Board

During the period, the Company has strengthened the Board of Directors with Dr Chris Blackwell's appointment to the Nuformix Board as a Non-Executive Director. His addition brings a wealth of proven expertise in life sciences value creation and broadens the Company's network.

Outlook

The Company will continue to progress its two lead programmes during the second half of the financial year ending 31st March 2019, with the commencement of clinical studies during Q1 of the calendar year for its NXP001 programme in oncology supportive care, which is on track to achieve significant development and commercial milestones during the period.

The Company will also continue to execute its commercial strategy as it seeks to out-license Rest of World marketing rights for NXP001, in addition to entering new collaborative development partnerships.

In fibrosis, the Company will seek to optimise delivery of candidates within its NXP002 programme, focussing on the treatment of unmet needs within idiopathic fibrosis.

In addition, the Company will continue to execute its product development strategy of using cocrystal technology to enable the redevelopment of small molecule drugs with therapeutic promise, adding value to its IP portfolio and pipeline, whilst maintaining low operating costs.

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

Nuformix plc

(Registration number: 09632100)

Unaudited Interim Results

Consolidated Income Statement and Statement of Comprehensive Income for the

Half Year Ended 30 September 2018

Nuformix plc

(Registration number: 09632100)

Unaudited Interim Results

Consolidated Statement of Financial Position as at 30 September 2018 

Nuformix plc

(Registration number: 09632100)

Unaudited Interim Results

Consolidated Statement of Changes in Equity for the Half Year Ended 30 September 2018 - Unaudited

Nuformix plc

(Registration number: 09632100)

Unaudited Interim Results

Consolidated Statement of Cash Flows for the Half Year Ended 30 September 2018

Nuformix plc

(Registration number: 09632100)

Unaudited Interim Results

Notes to the Consolidated Financial Statements for the Half Year Ended

 30 September 2018

1 Basis of preparation of interim financial information 

The consolidated interim financial statements have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as endorsed by the European Union ("IFRS") and expected to be effective at the year-end of 31 March 2018.

Accounting policies remain unchanged from the financial statements for the year ended 31 March 2018.

The interim financial statements are unaudited and do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2018, prepared in accordance with IFRS, have been filed with the Registrar of Companies. The Auditors' Report on these accounts was unqualified, did not include any matters to which the Auditors drew attention by way of emphasis without qualifying their report and did not contain any statements under section 498 of the Companies Act 2006.

The consolidated interim financial statements are for the 6 months to 30 September 2018.

The interim consolidated financial information do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the group's annual financial statements for the year ended 31 March 2018, which were prepared in accordance with IFRS's as adopted by the European Union.

2 Basis of consolidation

On 16 October 2017 the Company acquired the entire issued ordinary share capital of Nuformix Technologies Limited and became the legal parent of Nuformix Technologies Limited. The accounting policy adopted by the Directors applies the principles of IFRS 3 (Revised) "Business Combinations" in identifying the accounting parent as Nuformix Technologies Limited and the presentation of the Group consolidated statements of the Company (the legal parent) as a continuation of financial statements of the accounting parent or legal subsidiary (Nuformix Technologies Limited).

The interim consolidated financial statements cover the six months ended 30 September 2018. The interim financial statements for the comparative period ended 30 September 2017 represent the substance of the reverse acquisition and are those of Nuformix Technologies Limited.

3 Going concern

The financial statements have been prepared on the going concern basis of preparation which, inter alia, is based on the directors' reasonable expectation that the Group has adequate resources to continue to operate as a going concern for at least twelve months from the date of their approval. In forming this assessment, the directors have prepared cashflow forecasts covering the period ending 30 November 2019 which take into account the likely run rate on overheads and research expenditure and the prudent expectations of income from its lead programmes.

Whilst there can be no guarantee of the successful outcome of future trials, in compiling the cashflow forecasts the directors have made cautious estimates of the likely outcome of such trials, when income might be generated and have considered alternative strategies should projected income be delayed or fails to materialise. These strategies include postponing non-committed research expenditure, securing alternative licensing arrangements from those currently planned and using the Group's established network of licensed brokers for fundraising.

After careful consideration, the directors consider that they have reasonable grounds to believe that the Group can be regarded as a going concern and, for this reason, they continue to adopt the going concern basis in preparing the Group's financial statements.

4 Exceptional Item

As part of the reverse acquisition the Group issued a number of options and warrants to existing directors, new directors and for the provision of professional services in relation to the successful completion of the transaction and in respect of the new directors' future service. Details of the share based payments can be found in note 9.

5 Loss per Share

Loss per share is calculated by dividing the loss after tax attributable to the equity holders of the Group by the weighted average number of shares in issue during the year. As no new shares were issued during the time period, the weighted average is the same as the total shares as at the start of the year.

The basic earnings per share for each comparative period shall be calculated by dividing the profit of the legal entity in each of those period by the legal entities historical weighted average number of shares outstanding multiplied by the exchange ratio.

6 Property, Plant and Equipment

7 Intangible Assets

For impairment testing purposes, management consider the operations of the Group to represent a single CGU focused on the research and development. Consequently, the goodwill is effectively allocated and considered for impairment against the business as a whole being the single CGU.

8 Share Capital

Allotted, called up and fully paid shares

9 Share Options

The Group operates share-based payments arrangements to remunerate directors and key employees in the form of a share option scheme. Equity-based share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value is determined at the grant date of the equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

As part of the reverse acquisition of Nuformix Technologies Limited the following share-based payments were made in the half year:

· 79,650,050 unapproved share options were issued on 16 October 2017. The options have a 1 year vesting period, an exercise price of 4p per share and a 4 year exercise period from vesting. The fair value of the options was determined as 1.7p per share and a charge of £638,946 has been recognised in the current period.

· 12,499,950 options under an EMI share options scheme were issued on 16 October 2017. The options have a 1 year vesting period, an exercise price of 4p per share and a 4 year exercise period from vesting. The fair value of the options was determined as 1.6p per share and a charge of £106,541 has been recognised in the current period.

· 1,625,000 Existing director warrants were issued on 15 September 2017. The warrants have a 1 year vesting period, an exercise price of 4p per share and a 2 year exercise period from vesting. The fair value of the warrants was determined as 1.4p per share and a charge of £11,406 has been recognised in the current period.

· 1,250,000 Shakespeare Martineau warrants were issued on 15 September 2017. The warrants have a 1 year vesting period, an exercise price of 4p per share and a 2 year exercise period from vesting. The fair value of the options was determined as 1.4p per share and a charge of £8,774 has been recognised in the current period.

The fair value of the options and warrants was determined using the Black-Scholes option pricing model and was an average of 1.61p per option (2017: 1.25p per option). The significant inputs into the model in respect of the options and warrants granted in the year ended 31 March 2018 were as follows:

Statement of Directors Responsibilities

We confirm that to the best of our knowledge:

1. the interim condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the IASB and adopted by the EU;

2. the interim management report includes a fair review of the information required by:

2.1. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

2.2. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

The directors of Nuformix PLC are listed in the Group's 2018 Annual Report and Accounts.

D Gooding

Chief Executive

Further copies of this document are available from the company's registered address and will be available on the company's website later today.

Nuformix plc

(Registration number: 09632100)