Scancell Holdings Regulatory News (SCLP)

31 January 2020

Scancell Holdings Plc

("Scancell" or the "Company")

Interim Results for the six months ended 31 October 2019

ImmunoBody® and Moditope® progress; new AvidiMab™ platform garners three agreements

Scancell, the developer of novel immunotherapies for the treatment of cancer, announces its interim results for the six months ended 31 October 2019.

Highlights:

·; The Company signed three collaboration agreements (including post period) for its new proprietary AvidiMab™ technology platform

·; Initiation of UK arm of SCIB1 Phase 2 clinical trial following regulatory and ethical approvals; patient screening has now commenced

·; Vulpes Life Science Fund invested, through share subscription and post period purchase, to become a majority shareholder at 17.3% following in-depth scientific and commercial due diligence

·; Established Clinical Advisory Board chaired by Professor Robert Coleman to provide strategic guidance and support as the Company further develops its lead Moditope® candidate, Modi-1

·; Modi-1 manufacturing and toxicity testing underway to support anticipated start of Phase 1/2 study in several solid tumour indications including triple negative breast, ovarian, head and neck, and renal cancer

·; Cancer Research UK planning a Phase 1/2 trial to investigate the safety and efficacy of SCIB2 using a new nanoparticle formulation to effectively deliver this ImmunoBody® to patients with solid tumours

·; Martin Diggle and Dr Ursula Ney appointed as Non-Executive Directors to the Board, with Dr Matthew Frohn standing down on 31 October 2019

·; The Company presented at the CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference in Paris, France

·; Loss for the 6-month period of £3.09 million (2018: loss: £3.68 million)

·; Group cash balance at 31 October 2019 was £5.79 million (April 2019: £4.56 million)

Post Period Highlights:

·; The Company is now actively pursuing a new IND application for SCIB1 in the US and will update the market on the outcome of the FDA's review in due course

·; The European Patent Office announced its intention to grant Scancell's application for a European patent for its modified enolase peptides

Cliff Holloway, Chief Executive of Scancell, commented:

"We are pleased to report another six months of progress at Scancell, which included welcoming Vulpes Life Science Fund as a new significant shareholder. We have also further advanced our product pipeline and commenced the UK arm of our SCIB1 Phase 2 trial in melanoma. Our new AvidiMab™ platform has generated significant interest and we have signed three agreements with different partners to evaluate its potential, that if successful, could translate into important commercial deals."

A full copy of the announcement can be found on the Scancell website: www.scancell.co.uk

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR).

For Further Information:

About Scancell

Scancell is developing novel immunotherapies for the treatment of cancer based on its ImmunoBody®, Moditope® and AvidiMab™ technology platforms.

ImmunoBody® vaccines target dendritic cells and stimulate both parts of the cellular immune system. They have the potential to be used as monotherapy or in combination with checkpoint inhibitors and other agents. This platform has the potential to enhance tumour destruction, prevent disease recurrence and extend survival.

·; SCIB1, the lead programme, is being developed for the treatment of melanoma. A phase 1/2 clinical trial has so far successfully demonstrated survival data of more than five years.

·; SCIB2 is being developed for the treatment of non-small cell lung cancer and other solid tumours. Scancell has entered into a clinical development partnership with Cancer Research UK (CRUK) for SCIB2.

Moditope® represents a completely new class of potent and selective immunotherapy agents based on stress-induced post-translational modifications (siPTM). It stimulates the production of killer CD4 T cells which overcome the immune suppression induced by tumours, allowing activated T cells to seek out and kill tumour cells that would otherwise be hidden from the immune system. Moditope® alone, or in combination with other agents, has the potential to treat a wide variety of cancers.

·; Modi-1 is being developed for the treatment of solid tumours including triple negative breast cancer, ovarian cancer and head and neck cancer.

AvidiMab™ is a patent protected technology platform which increases the avidity of human antibodies by promoting non-covalent Fc-Fc interactions. This modification induces the direct tumour cell killing properties of Scancell's anti-glycan monoclonal antibodies (mAbs) but has broad potential to increase the avidity or potency of any therapeutic monoclonal antibody including those being developed for autoimmune diseases, as well as cancer.

For further details, please see our website: www.scancell.co.uk

CHAIRMAN'S STATEMENT

I am pleased to report on theresults of Scancell Holdings plc (the "Group") for the six months ended 31 October 2019. In June 2019, we welcomed Vulpes Life Science Fund ("Vulpes") as a new shareholder investing £3.87 million and acquiring 16.7% of the Group. This investment was made after Vulpes had conducted scientific and commercial due diligence on Scancell over a considerable period of time. Since the half year, Vulpes purchased an additional 2,925,000 ordinary shares in the Company at a price of 5.2p per share. Following the purchase, Vulpes holds 80,549,311 ordinary shares representing 17.3% of the company.

There has also been good progress made with our three immuno-oncology platforms, which is outlined below.

ImmunoBody® platform

ImmunoBody® is designed to generate potent T cell responses capable of specific anti-tumour effects in a wide range of cancer types. ImmunoBody® vaccines target dendritic cells and stimulate both CD4 and CD8 T cells with the ability to identify, target and eliminate cancer cells. These cancer vaccines have the potential to be used as monotherapy or in combination with checkpoint inhibitors and other agents. This platform has the potential to enhance tumour destruction, prevent disease recurrence and extend survival.

• SCIB1, our lead product, is being developed for the treatment of metastatic melanoma. In a Phase 1/2 clinical trial, survival with SCIB1 treatment appears superior to historical survival rates, with 14 of 16 resected patients receiving 2-4 mg doses of SCIB1 surviving for more than five years (as reported in February 2018).

• SCIB2 is being developed for the treatment of non-small cell lung cancer (NSCLC) and other solid tumours. Scancell has entered into a clinical development partnership with Cancer Research UK (CRUK) for SCIB2.

SCIB1 Phase 2 clinical trial in combination with a checkpoint inhibitor

The Phase 2 clinical trial is designed to assess whether the addition of SCIB1 to the checkpoint inhibitor pembrolizumab (Keytruda) will result in an improvement in the tumour response rate, progression-free survival and overall survival in 25 patients with advanced melanoma.

Scancell submitted an Investigational New Drug (IND) application in the US to the Food and Drug Administration (FDA) in July 2018. Following the submission, the FDA requested additional information from Ichor Medical Systems ("Ichor") on the TriGrid® 2.0 electroporation delivery system.

As reported in April 2019, the Company has received the necessary regulatory and ethical approvals to initiate the UK arm of the SCIB1 clinical trial. However, in order to initiate patient recruitment in the UK under the IND application submitted to the FDA, prior approval of the IND is required. Having considered the ethical issues related to patients awaiting enrolment into the UK sites, Scancell decided to withdraw its IND application in the US to allow the UK arm of the trial to proceed. The Company is now actively pursuing a new IND application and will update the market on the outcome of the FDA's review in due course.

Recruitment of patients at the current UK trial centre who meet all the necessary study inclusion and exclusion criteria has proved to be slower than anticipated. In order to help accelerate patient recruitment, Scancell plans to increase the number of clinical sites in the UK and subject to an open IND, initiate patient recruitment in the US.

SCIB2

SCIB2, Scancell's second ImmunoBody® therapy, targets an antigen called NY-ESO-1, which is expressed on a range of solid tumours, including NSCLC, oesophageal, ovarian, bladder and prostate cancers, neuroblastoma, melanoma and sarcoma.

Pre-clinical studies have demonstrated that administration of SCIB2 as a liposomal nanoparticle results in potent immune responses and prolonged survival. The nanoparticle technology utilises known lipid carriers that are optimised to deliver SCIB2 DNA to immune cells. The liposomal nanoparticles protect the DNA from degradation and facilitate efficient uptake, expression and T-cell activation against cancer cells. The nanoparticle delivery system provides an alternative approach to electroporation, which has been used to

deliver other ImmunoBody® agents to patients. Cancer Research UK are now planning a clinical trial to investigate the safety and efficacy of the SCIB2-nanoparticle complex in patients with solid tumours.

Moditope® platform

Scancell's Moditope® represents a completely new class of potent and selective immunotherapy agents based on stress-induced post-translational modifications (siPTMs). Examples of such modifications are citrullination, an enzyme-based conversion of arginine to citrulline, and homocitrullination (or carbamylation), in which lysine residues are converted to homocitrulline. Expression of peptides containing these modifications have been demonstrated to induce potent CD4 cytotoxic T-cells to eliminate cancer. Previous pre-clinical studies have demonstrated that conjugation of these Moditope® peptides to Amplivant® enhances anti-tumour immune responses 10-100 fold and resulted in highly efficient tumour eradication, including protection against tumour recurrence.

Modi-1

Mod-1 consists of two citrullinated vimentin peptides and one citrullinated enolase peptide each conjugated to Amplivant®. Vimentin and enolase peptides are highly expressed in triple negative breast, ovarian, head and neck, and renal cancer, as well as many other cancers.

In May 2019, the Company provided an update on progress towards initiating the Modi-1 Phase 1/2 clinical trial, with initiation of Good Manufacturing Practice (GMP) synthesis of the Modi-1 peptide conjugates at the PolyPeptide Group's facilities in The Netherlands. This has been progressed further with formulation work being undertaken by AMRI (Glasgow, UK), a global contract and manufacturing organisation.

Significant progress has been made since the May update, including successful completion of GMP drug substance manufacture for two of the three conjugates that comprise the Modi-1 product, with high yields and purity levels achieved. In addition, formal regulatory-compliant toxicity studies are nearing completion and a successful Scientific Advice meeting has been held with the Paul Ehrlich Institut regulatory authority (the leading European authority on the safety of vaccines). There have been some technical challenges regarding the third peptide conjugate which are being actively addressed. This has led to a delay in completing all the necessary processes and documentation required for regulatory submission to start our planned clinical study in the UK. Hence, it is now anticipated that subject to a timely resolution of the identified issues and subsequent regulatory review, the clinical study will commence in the latter half of this calendar year.

Clinical Advisory Board

The Company announced that it has appointed six world-leading clinicians to establish its Clinical Advisory Board (CAB). The Board is chaired by Professor Robert Coleman and will provide strategic guidance and support as the Company prepares for its lead Moditope® candidate, Modi-1, to enter the clinic in multiple tumour types, including head and neck, breast, renal and ovarian cancer.

Patents

The European Patent Office has announced its intention to grant Scancell's application for a European patent for its modified enolase peptides.

This patent will add to the protection of the Company's pipeline of Moditope® vaccines for the treatment of cancer. Commercial exclusivity will be provided in all major European territories such as: Austria, Belgium, Switzerland, Germany, Denmark, Spain, Finland, France, United Kingdom, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Sweden and Turkey.

AvidiMab™ and antibodies targeting tumour associated glycans (TaGs)

In April 2018 Scancell acquired several monoclonal antibodies (mAbs) and underlying antibody enhancement technology, AvidiMab™, from the University of Nottingham. Since then the Company has been building on this portfolio as potential novel target cancer treatments.

Most mAbs for the treatment of cancer target proteins on the cancer cell surface and subsequently mediate an immune response to eliminate that cell. However, there remains an unmet need for new and improved therapeutic targets, as well as improved approaches to mediate cell killing. All cells are covered by a dense layer of sugar structures, called glycans, which change when a normal cell turns into a cancerous one. Hence, tumour-associated glycans (TaGs) are motifs that are associated with tumour malignancies which can be targeted by antibodies. Scancell's development pipeline includes mAbs against specific TaGs with superior affinity and selectivity profiles, that have now been further engineered using the Company's AvidiMab™ technology; this confers the Scancell anti-TaG mAbs with the ability to directly kill tumour cells.

AvidiMab™ has broad potential to increase the avidity or potency of any therapeutic monoclonal antibody including those being developed for autoimmune diseases, as well as cancer. A patent application has been filed that seeks broad protection for the AvidiMab™ technology establishing it as Scancell's third proprietary immunotherapy platform technology, together with ImmunoBody® and Moditope®.

We are pleased to be able to report significant progress in recent months, having signed three collaboration and non-exclusive research agreements with leading antibody technology companies in Europe, the USA and China to evaluate our anti-TaG mAbs including those enhanced with the AvidiMab™ technology. TaGs can be targeted by several other tumour cell killing approaches, including antibody drug conjugates (ADC), redirected T-cells, and also adoptive cell therapies such as chimeric antigen receptor (CAR) T cells. Under the terms of the collaboration and research agreements, Scancell and its partners will evaluate the potential of the anti-TaG mAbs, in these various formats.

Corporate

During the six-month period Scancell announced the appointment of Martin Diggle as a Non-Executive Director of the Company. Martin's extensive experience of investment management in the life science sector will add a valuable perspective and insight to the Board of Directors. In addition, Dr Ursula Ney was appointed a Non-Executive Director in October 2019. Ursula has over twenty years' experience in senior leadership roles in the pharmaceutical and biotechnology industry and her late stage development experience in this sector will be invaluable as the Company continues to develop its product pipeline.

Matthew Frohn resigned as a Non-Executive Director of Scancell after serving on the Board since 2008 and I would like to thank him for the invaluable contribution that he has made to the Group and wish him well for the future.

Financial

Profit or Loss and Other Comprehensive Income Statement

The Group made an operating loss for the six months to 31 October 2019 of £3.09 million (2018: loss of £3.68 million).

Development expenditure has increased slightly to £1.98 million (2018: £1.84 million). The fall in administrative expenditure to £1.11 million (2018: £1.83 million) reflects reduced expenditure on patent and licence fees in the period.

Statement of Financial Position

At 31 October 2019, the net assets of the Group amounted to £10.66 million (April 2019: £9.34 million) including cash at bank of £5.79 million (April 2019: £4.56 million).

Current assets include tax receivable due at the end of the year of £1.66 million (April 2019: £1.83 million) and relates to the R&D tax credit for the year ended 30 April 2019 amounting to £1.09 million and an estimate of the amount recoverable at 31 October 2019. The tax credit of £1.09 million for the last financial year was received in December 2019.

As mentioned in the 2018/19 Financial Statements, we are carrying forward pre-paid expenditure relating to Modi-1 manufacture which will be expensed in the second half of the current financial year.

Consolidated Cash Flow Statement

The main reason for the increase in cash over the six-month period to 31 October, 2019 is the receipt of net proceeds from new investment of £3.83 million and receipt of the 2017/18 tax credit of £0.75 million which has offset the cash outflows from operating activities.

Outlook

This has been a busy period for Scancell with progress being made across all three platforms.

We have advanced our lead ImmunoBody® programme, initiating a Phase 2 clinical trial of SCIB1 in the UK. The Company is actively pursuing additional clinical sites to increase the recruitment rate. Pre-clinical studies with SCIB2 have shown that the administration of SCIB2 as a liposomal nanoparticle resulted in potent immune responses and prolonged survival in tumour models. CRUK continue their internal development of SCIB2 towards a planned clinical trial to investigate the safety and efficacy of the SCIB2-nanoparticle complex in combination with a checkpoint inhibitor in patients with solid tumours.

GMP drug substance manufacture of two of the three peptide conjugates comprising our Modi-1 vaccine has successfully been completed and regulatory-compliant toxicity studies are nearing completion. We have experienced some challenges with the GMP manufacture of the third conjugate, which are being addressed; as a result we anticipate the start of the clinical trial to take place during H2 2020. The clinical study will assess the safety and efficacy of Modi-1 in several solid tumour indications.

The AvidiMab™ platform and our anti-TaG antibodies are generating significant commercial interest. Three companies are now actively evaluating these antibodies in various formats which could potentially lead to one or more commercial transactions later this year.

The significant investment from Vulpes at the beginning of the financial period extended the Company's cash runway. However, as anticipated, in order to realise the potential of the technologies Scancell will need to raise further funding during 2020.

John Chiplin

Chairman

Scancell Holdings plc

Consolidated Profit or Loss and Other Comprehensive Income Statement

for the six-month period to 31 October 2019

Scancell Holdings plc

Consolidated Statement of Changes in Equity

for the six-month period to 31 October 2019

Scancell Holdings plc

Consolidated Statement of Financial Position

as at 31 October 2019

Scancell Holdings plc

Consolidated Cash Flow Statement

for the six-month period to 31 October 2019

Scancell Holdings plc

Notes to the Interim Financial Statements

for the six-month period to 31 October 2019

1 Basis of preparation

This interim statement for the six-month period to 31 October 2019 is unaudited and was approved by the Directors on 30 January 2020. The financial information contained in the interim report has been prepared in accordance with the accounting policies set out in the annual report and accounts for the year ended 30 April 2019.

The financial information contained in the interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the full preceding year is based on the statutory accounts for the year ended 30 April 2019, upon which the auditors, BDO LLP, issued an unqualified audit opinion which did not contain any statement under section 498(2) or 498(3) of the Companies Act 2006. The audited statutory accounts for the year ended 30 April 2019 have been lodged with the Registrar of Companies.

As permitted, this interim report has been prepared in accordance with AIM Rule 18 and not in accordance with IAS 34 "Interim Financial Reporting" therefore it is not fully in compliance with IFRS as adopted by the European Union.

2 Earnings per share

Basic earnings per share, from continuing operations, is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

The calculations of earnings per share are based on the following losses and numbers of shares.

At 31 October 2019 the Company had 465,355,867 Ordinary Shares of 0.1p in issue.

3 Taxation

Taxation for the six months ended 31 October 2019 is based on the effective rates of taxation which are estimated to apply for the year ended 30 April 2020. 

4 Interim results

These results were approved by the Board of Directors on 30 January 2020. Copies of the interim report are available to the public from the Group's registered office and the Group's website, www.scancell.co.uk.