21 Sep 2011 07:00
SILENCE THERAPEUTICS plc ("Silence Therapeutics", "Silence" or "the Group") INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2011
London, 21 September 2011 - Silence Therapeutics Plc (AIM: SLN), a leading international RNAi therapeutics company, today provides a corporate update and announces its interim results for the six months ended 30 June 2011.
Highlights
* New German-based CEO appointed
* Business development operations strengthened, including the appointment of
a Chief Business Officer, highlighting an increased commercial focus for
the Group to monetise its strong portfolio of clinical and pre-clinical assets. * US location closed and operations centralised in Berlin. * Rationalisation and reorganisation of the Group has reduced burn rate. * Non-executive Board membership reduced. * Atu027 Phase I ascending dose trial continues with excellent safety at doses beyond those showing biological activity in preclinical studies. * Continued progress with our three proprietary delivery systems enabling specific, targeted organ delivery. * Collaboration deal signed with micro-RNAi partner, InteRNA. * Fundraising in May 2011 increases cash runway to H2 2012.
In more detail
* Thomas Christ©ly has been appointed the new Chief Executive Officer of
Silence. Thomas was previously COO of Silence and has been with the Group
for 10 years. Thomas brings to his new role considerable expertise in
negotiating pharmaceutical deals and in people leadership. His appointment
ensures the continuity of relationships with our collaboration partners and
our staff, as well as making important use of his long-term familiarity
with the science and IP.
* As separately announced today, Tony Sedgwick has been appointed as Chief
Business Officer of Silence. Tony is a highly experienced executive in the
life sciences arena and has a strong track record in licensing agreements
in the biotechnology space. Tony will build a larger team in business
development to significantly increase our activity to generate non-dilutive
funding from deals.
* The US operations of Silence, based in Redwood City, California have been
closed. The US-based business development and legal functions will be
absorbed elsewhere in the Group. The operations of the Group will now be
based in Berlin, where our research and development facilities have always
been located, with the exception of a small management presence in London.
* The cost base and operations have been streamlined by reducing some non-critical staff, closing of the US operation and reducing the non-executive Board. This has helped to increase our cash runway.
* We have seen encouraging interim results from the Phase I ascending dose
clinical trial of the cancer treatment, Atu027. These results were presented at the American Society of Clinical Oncology (ASCO) Annual Meeting and the data presented showed disease stabilisation and other indications of potential efficacy, as well as demonstrating that the
AtuPLEXâ„¢ delivery system is safe in humans at dose levels which has showed
biological activity in pre-clinical species. As of August 2011, 27 patients
have been treated. The trial is approaching the top of the dose range and
enrolment is expected to be completed in early 2012 with results announced
in mid-2012.
* Post-period end, we announced a new collaboration with InteRNA to
investigate the potential of Silence's proprietary AtuPLEXâ„¢ delivery system
in the development of novel microRNAi therapeutics targeting cancer. microRNA intervention is an exciting new therapeutic area for which the Silence technology platform is well suited. * Silence's partner, Quark Pharmaceuticals (`Quark'), announced the
completion of the DEGAS study, a Phase II trial of PF-04523655 (`PF-`655')
in diabetic macular oedema. This compound was sublicensed by Quark to Pfizer and is based on Silence's AtuRNAi technology. It was shown to be more effective than laser therapy. Quark is also initiating a Phase IIb study of this compound in this indication.
* Issuance of a Japanese patent that provides protection for the Company's
novel AtuRNAi molecules in Japan. This patent represents another critical
asset to support our efforts to establish valuable partnerships with
leading Japanese pharmaceutical companies.
* Issuance of a new US patent that broadens the Company's existing protection
of optimised RNAi molecules, including its proprietary AtuRNAi platform.
Financial Highlights
* Revenue for the six months ended 30 June 2011 was £354,078 (six months
ended 30 June 2010: £716,090).
* Research and Development costs decreased to £1.82m (six months ended 30
June 2010: £4.40m) reflecting the reorganisation of R&D in April 2010
following the acquisition of Intradigm Corporation ("Intradigm").
* Administrative expenses decreased to £2.00m (six months ended 30 June 2010:
£3.23m) again reflecting the reorganisation of R&D in April 2010 following
the acquisition of Intradigm. Excluding the restructuring cost of £0.44m
with respect to closing the Redwood City facility in the US, Administrative
expenses were £1.56m.
* In May 2011, Silence raised £5.51m (net of expenses. The cash position as
of 30 June 2011 was £6.49m (at 31 December 2010: £3.57m). Cash usage in
operating and investing activities in the half year amounted to £2.59m (six
months ended 30 June 2010: £6.65m).
Board and Management Changes - Post-Period
* In August 2011, Silence announced a company reorganisation to consolidate
and streamline the Company's operations. Related to this reorganisation:
* Silence closed its facility in Redwood City, California and reduced
headcount in its Berlin, Germany, facility from 32 to 27. As the decision
to close the Redwood City facility was taken prior to the period-end, a
restructuring charge of £0.44m was recorded in the first half of 2011.
* Thomas Christ©ly, former Chief Operating Officer of Silence, was appointed
Chief Executive Officer effective 19 September 2011 following the
resignation of Dr Philip Haworth.
* Dr James Topper resigned from the Board of Directors effective 29 July 2011
and Dr David U'Prichard will leave the Board at the end of 2011. * Announced today, Tony Sedgwick appointed as Chief Business Officer strengthening the business development function. Tony will enlarge
Silence's business development team with further members as Silence seeks
to obtain further collaborations and partnerships that will generate
non-dilutive funds for the Company.
Other Post-Period Events
* Received a notice of allowance of a new US patent covering novel siRNA
delivery technologies. This patent provides protection for a core component
of the Company's proprietary AtuPLEXâ„¢ delivery platform, which is
incorporated in Silence's lead internal compound, Atu027, and in other RNAi
therapeutic candidates.
* Issuance of a Japanese patent covering certain methods for screening a
therapeutic agent for the treatment and/or prevention of any disease that
involves elevated activity within the PI3-kinase pathway. This new
intellectual property includes coverage for the use of protein kinase N 3
("PKN3") for screening of therapeutic agents, thus preventing others from
using PKN3 for screening purposes.
Thomas Christ©ly, CEO of Silence Therapeutics, commented: "The restructuring,re-organisation and refocus of Silence Therapeutics is now complete. It haspositioned Silence to be a leaner, more efficient organisation, poised tofurther develop its world leading RNAi asset portfolio. As a new andstrengthened management team, we will have a sharper focus on identifyingpartners to help progress the development and partnering of our assets, therebygenerating non-dilutive cash and/or funding to extend our cash runway.Technically, as we escalate through higher doses in our internal Atu027oncology program, the interim data consolidate our belief that Atu027 is a safeand effective drug in patients. Our partner Quark also reported encouragingPhase II data in diabetic macular oedema in collaboration with Pfizer. We havestrengthened our patent portfolio, streamlined our organisation and securedsufficient funding to continue this successful development. Although thisprogress has yet to be reflected in Silence's share price, we are convincedthat siRNA therapeutics will become a major drug class similar in importance tomonoclonal antibodies, due to the various advantages of siRNA therapeutics. Inorder to overcome the known challenges of delivering siRNA into cells, Silencehas also expanded its proprietary delivery technologies from AtuPLEXâ„¢, to nowinclude DACC and DBTC. This comprehensive delivery platform allows our RNAitherapeutics to reach and affect many different cell types. The breakthroughshave arisen from Silence's decade or more of investigating the actions anddisposition of different oliogonucleotides in collaboration with several largepharmaceutical companies. Thus Silence offers today the most comprehensive RNAitherapeutic platform, founded on a portfolio of advanced deliverytechnologies."
For further information, please contact:
Silence Therapeutics Singer Capital Markets Thomas Christ©ly/Max Herrmann Shaun Dobson/Claes Sp¥ng +49 30 9489 2800/+44 20 7491 6520 +44 20 32057500 t.christ©ly@silence-therapeutics.com shaun.dobson@singercm.com m.herrmann@silence-therapeutics.com claes.spang@singercm.com
Vida Communication (US) M:Communications (Europe)
Tim Brons (media)/Stephanie Diaz Peter Laing / Emma Thompson
(investors) +44 20 7920 2359 / +44 20 7920 2342 +1 (415) 675-7400 healthcare@mcomgroup.com tbrons@vidacommunication.com sdiaz@vidacommunication.com CHAIRMAN'S STATEMENT2011 has been a time of significant change and refocus for Silence. Over recentyears Silence has progressed strongly in initially the preclinical and now theclinical arena, on the back of its unique platform. We have evolved to become amore mature, experienced and focused oncology biotechnology company. Thisprogress has however been inhibited in the past by the complex structure of theoperations. With the support of some new significant investors, we have nowdealt with this in 2011.The geography of the Group has been rationalised and operations focussed on ourstate of the art research and development facility in Berlin. We have alsostreamlined our R&D team in Berlin and reduced non-critical costs, whilstretaining our unique ability to identify, create, validate and appropriatelydeliver target oligonucleotides.We have appointed a new CEO from inside the Group. I am delighted that Thomashas been promoted to this position, ensuring continuity with our collaborationpartners, our staff, IP and science.Thomas Christ©ly has more than 20 years experience in corporate and businessdevelopment and finance. He, and the team at Silence, successfully executed themerger of Atugen AG with Silence Therapeutics plc in 2005. His track recordincludes concluding major collaborations with AstraZeneca, Pfizer and DainipponSumitomo, multiple financing transactions as well as M&A, divestments andstrategic restructurings. Mr. Christ©ly joined Atugen AG in 2001 as ChiefFinancial Officer and became Chief Operating Officer in 2002 prior to beingappointed its Chief Executive Officer in 2006. We are confident that Thomas hasthe experience and initiative necessary to move the Company toward theachievement of its corporate, scientific and clinical objectivesThere are many challenges ahead in a difficult environment, but Thomas is wellequipped to take on these challenges, and I wish him every success in this newposition.In conjunction with the appointment of Thomas, we are significantlystrengthening the Business Development team and its priorities. Silence hasdeveloped an enviable portfolio of clinical and pre-clinical assets, which ithas yet to fully exploit. It is critical to the success of the business thatour business development and ultimately commercial progress catches up with thescientific progress made over recent years. To this end, to support Thomas andto strengthen the commercial efforts of the Company, we have today announcedthe appointment of Tony Sedgwick as Chief Business Officer. Tony is extremelyexperienced in the licensing of biotechnology assets, and brings many years ofexperience in this area, as well as in M&A and financing transactions. Tonywill spearhead the business development function and will also grow our team inthis area to identify and secure partners for the clinical development of ourassets. These partners will bring us further validation of our delivery assetsand non-dilutive cash to extend our runway and facilitate further developmentof our portfolio.Silence has developed an enviable portfolio of assets, which is second to nonein RNAi. Our internal compound has progressed well almost to the completion ofits Phase I trial, safely passing through estimated effective dose levels, withsome indications of potential efficacy. Our two other delivery systems thatshow great promise, DACC and DBTC, have been validated in preclinical studiesand have demonstrated siRNA targeting to different cell types. Silence'sdelivery technologies have wide potential application beyond just the field ofRNAi and I am excited about the opportunities that lay in front of us.In May 2011 we completed a £5.51m (net of expenses) fundraising with thesupport of some new investors. This enabled us to extend our runway into thesecond half of 2012. The money raised will allow us to fund criticaladvancements with our clinical and preclinical pipeline programs, includingAtu027. Our increased commitment and resource in business development willenable us to meet our objectives of generating non-dilutive funding to extendour cash runway and invest further in the development of our portfolio.In June 2011, we presented positive interim data from the ongoing Phase Iclinical trial of Atu027 at ASCO. The response to this data has been extremelyfavourable, giving us great optimism as we look to the future development andpotential partnering of this promising lead compound.Our momentum in the clinic with Atu027 combined with our strong leadership andmore commercially focussed structure position us well to move forward as one ofthe leading RNAi therapeutics companies in the World. We look forward toreporting additional developments through the remainder of the year.
Thank you for your continued support of Silence Therapeutics.
Jerry Randall ACAChairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
OVERVIEW
Silence Therapeutics is prominent in an exciting new sector in the drugdevelopment arena. We lead the effort to translate RNAi therapeutics intoviable therapies for a variety of clinical indications in areas such asoncology, vascular, metabolic and ophthalmic diseases. We believe that RNAitherapeutics represent a novel and uniquely safe and effective class of drugs,that by preventing mutant or malfunctioning gene expression, have the potentialto overcome many of the limitations of existing therapies and provide improvedtreatment for people with serious diseases. The first step in proving thispotential is the generation of data from clinical studies conducted with RNAitherapeutics.In June 2011, Silence presented encouraging interim data from our ongoing PhaseI trial of Atu027 in patients with solid tumours at the ASCO Annual meeting. Wenot only observed impressive safety and tolerability, but we also sawindications of potential efficacy.These important findings serve as valuable validation for Silence's fundamentalRNAi technology platform. They also support our AtuPLEXâ„¢ delivery technology,the only systemic lipid-based siRNA delivery technology in clinical trials thatdoes not require suppression of the immune system prior to treatment. Webelieve this provides us with a significant competitive advantage that willstrengthen our ability to secure licensing partners for the delivery ofdifferent RNAi therapeutics using AtuPLEXâ„¢.The data generated with Atu027 thus far represent significant clinical progressnot only for Silence but also for the entire field of RNAi therapeutics. Webelieve that this clinical success, in addition to the continued advancement ofour internal and partnered programs, as well as the strength of ourintellectual property estate, establishes us as one of the strongest companiesin the RNAi sector.OPERATIONAL REVIEW
Advancements with Internal Pipeline Products
Atu027
Atu027 for the treatment of solid tumours is Silence Therapeutics' mostadvanced internal product candidate. Atu027, which combines our proprietarydrug delivery system, AtuPLEXâ„¢, with AtuRNAi, the Company's proprietary RNAichemistry, specifically targets PKN3, a protein implicated in cancer growth andmetastases.
The interim data recently presented at ASCO from our ongoing Phase I clinical trial of Atu027 are extremely encouraging.
Study results showed that nine of the 24 patients treated with Atu027 as ofJune 2011 achieved stable disease after repeated treatment with six of thesecases confirmed at study end (three months after treatment initiation) andthree other patients continuing to receive treatment under compassionate use.Among the patients who achieved stable disease, one individual withneuroendocrine cancer achieved disease stabilisation for nine months with asecond neuroendocrine cancer patient showing partial regression of pulmonarymetastases. An additional patient with breast cancer experienced someregression in liver metastases. In addition to the encouraging anti-tumouractivity, study results show Atu027 to be safe and well tolerated.
We expect to complete patient recruitment in the Phase I study in early 2012 and to announce results from the study in mid-2012.
The Company believes that the encouraging data to date and the importantvalidation of our AtuPLEXâ„¢ delivery system on which Atu027 is based, areimportant factors in realising value for shareholders. Upon completion of thePhase I study, we expect to initiate a Phase Ib clinical study of Atu027 in thesecond half of 2012. The Company will also continue licensing discussionsregarding Atu027 with potential pharmaceutical partners.
Atu134
Atu134 is the Company's second potential cancer therapy. Like Atu027, Atu134combines our proprietary AtuPLEXâ„¢ drug delivery system with the Company'sproprietary RNAi chemistry. Atu134 specifically targets CD31, a target that hasso far proved intractable to small molecule and antibody approaches. Silencehas now completed studies in multiple preclinical cancer models, whichdemonstrated that Atu134 appears to have a profound impact in slowing theprogression of solid tumours. Production of Good Manufacturing Practice (GMP)materials for final preclinical toxicology studies has commenced, and we expectto initiate these studies in the first half of 2012. We remain on track to filean Investigational Medicinal Product Dossier (IMPD) in Europe in the secondhalf of 2012.
Partnered Programs
In March 2011, our partner, Quark Pharmaceuticals, announced the completion ofthe DEGAS study, a Phase II clinical trial of PF-04523655 for the treatment ofdiabetic macular oedema. PF-04523655, which incorporates Silence's AtuRNAitechnology and is sublicensed to Pfizer by Quark, was shown to be moreeffective than laser therapy. We believe that this data broadly support thepotential utility of RNAi therapeutics and specifically validates Silence`sAtuRNAi technology. Quark plans to conduct a Phase IIb study which we expect tobe initiated shortly. In addition, PF-04523655 recently completed a Phase IItrial as a treatment for age-related macular degeneration. We anticipate Pfizer/Quark to announce results from this study later this year.In addition to our partnerships with Quark for PF-04523655, we have an ongoinglicence with Quark for QPI-1002. Quark has established an option agreement withNovartis for QPI-1002. A Phase II study is ongoing in kidney transplantation,and a Phase I study has been successfully completed in acute kidney injury.
We also have two ongoing collaborations with AstraZeneca: one is for the development of novel approaches for the delivery of siRNA molecules entered into in March 2008, and the other, established in 2007, is for research and development of five targets in respiratory and oncology indications. Both collaborations were extended in 2010. Under the research and development collaboration, AstraZeneca has now selected all five targets, and we expect to complete evaluation of these targets by the end of 2011.
Additionally, we have an ongoing siRNA delivery collaboration with DainipponSumitomo in which we are jointly leveraging Silence's proprietary siRNAmolecules as well as delivery and targeting technologies to demonstratefunctional delivery of RNAi therapeutics to specific disease targets in thebody. This agreement, which originally included two drug targets at the time itwas established in 2008, was expanded in 2010 to include an additional two drugtargets. This collaboration continues to make good progress.After the end of the first half, we established a new agreement with InteRNATechnologies B.V., a biopharmaceutical company developing pathway targetedmicroRNA (miRNA)-based therapeutics for cancer. Under the agreement, we willcombine Silence's proprietary AtuPLEXâ„¢ delivery system with InteRNA's novelmicroRNAs to develop novel microRNA therapeutics for the treatment of cancer.Under the terms of the agreement, InteRNA will provide Silence with specificmiRNA sequences which Silence will formulate with its AtuPLEXâ„¢ delivery systemin order to develop multiple candidate drugs. Silence and InteRNA willundertake in vitro and in vivo studies of the candidate drugs developed underthe agreement and select certain lead candidates for further evaluation.Silence is eligible to receive upfront fees as well as staged researchpayments. This agreement is important in demonstrating the additional potentialvalue of AtuPLEXâ„¢ beyond the delivery of siRNAs.Each of our collaborations is progressing well, and we believe they providetestament to the value that the pharmaceutical industry assigns to Silence andits science. For the remainder of 2011 and beyond, we are dedicating efforts toidentifying and executing new, value enhancing partnerships that will furtherleverage our scientific capabilities, build our financial strength and expandour pipeline.
Continued Intellectual Property Strength
Our broad and diverse intellectual property portfolio continues to provide uswith a competitive advantage and a strong proprietary position in the RNAitherapeutics space. We believe that we have been successful in aggressivelybuilding one of the World's most comprehensive RNAi patent estates and expectthat this asset will continue to offer significant support for our ongoingpartnering activities. Importantly, we have achieved significant successes inestablishing key levels of patent protection for our technologies in Europe,the USA and Japan, offering opportunities in all of these important markets.
Silence remains committed to the expansion and strengthening of its intellectual property portfolio in target markets around the globe. So far this year we have strengthened our intellectual property portfolio via the following:
* Issuance of a new US patent that broadens the Company's existing protection
of optimised RNAi molecules, including our proprietary AtuRNAi platform
* Issuance of a Japanese patent that provides protection for the Company's
novel AtuRNAi molecules in Japan, representing another critical asset to
support our efforts to establish valuable partnerships with leaders in the
Japanese pharmaceutical industry
* Received a notice of allowance of a new US patent that provides protection
for a core component of our proprietary AtuPLEXâ„¢ delivery platform
* Issuance of a Japanese patent covering certain methods for screening a
therapeutic agent for the treatment and/or prevention of any disease that
involves elevated activity within the PI3-kinase pathway. This new
intellectual property includes coverage for the use of PKN3 for screening
of therapeutic agents, thus preventing others from using PKN3 for screening
purposes.
Looking forward, the Company will continue to expand and strengthen ourintellectual property portfolio in target markets around the globe. In thatregard, re-examination hearings were held in the US in the first half of 2011relating to certain patents covering the `Zamore Design Rules'. Silence holdsexclusive licences to three of these patent families from the University ofMassachusetts. We anticipate a response from the US Patent and Trademark Officein the coming months. Areas of focus for additional patent protection includeall essential components of RNAi therapeutic development, including multipleproprietary siRNA delivery technologies, potent siRNA sequences and key siRNAsequence and chemical modifications, as well as specific high-value diseasetargets.
FINANCIAL REVIEW
In May 2011 Silence raised £5.93m (£5.51m net of expenses) in a placing andopen offer of shares. This funding is expected to provide cash resources thatwill support the Company's operations into the second half of 2012 evenexcluding any milestones or other receipts that the Company believes it couldreceive over this period.Revenue in the first half of 2011 at £0.35m (six months ended 30 June 2010: £0.72m) was below that in the prior year reflecting lower income from licencepartners and from grants. Research and development expenditure at £1.82m (sixmonths ended 30 June 2010: £4.40m) was significantly lower than in the prioryear. Research and development expenditure in the first half of 2010 wasunusually high because it included expenditure at Intradigm's R&D facilityprior to its closure in April 2010. Administrative expenses in the first halfof 2011 decreased to £2.00m from £3.23m in the first half of 2010. Excludingthe restructuring charge of £0.44m taken as a result of the decision to closethe Redwood City facility in the first half of 2011, Administrative expenseswere £1.56m. Again, Administrative expenses were unusually high in the firsthalf of 2010 prior to the closure of Intradigm's R&D operations.The net loss for the half-year was £3.43m before taxation (six months ended 30June 2010: £7.05m; full year 2010: £8.80m). Cash used in operating andinvesting activities in the first half of the year amounted to £2.59m (sixmonths ended 30 June 2010: £6.65m) which left the Group with cash at bank
of £6.49m at the period end.RISKS AND UNCERTAINTIES There are a number of potential risks and uncertainties that could have amaterial impact on the Group's performance over the remaining six months of thefinancial year and could cause actual results to differ materially fromexpected and historical results. The risks (identified and outlined in theAnnual Report and Accounts 2010 in the Directors' Report on page 16, which doesnot form part of this interim statement, and which include clinical andregulatory risk, competition and intellectual property risk, and economic,financial and counterparty risk) have not changed and therefore remain relevantfor the remaining six months of 2011.
SUMMARY AND OUTLOOK
In the first half of 2011, we achieved the following milestones, which we believe significantly strengthened our business and created value for shareholders:
* Restructured the Group, reducing our burn rate whilst significantly
strengthening business development.
* Announced positive interim data from our ongoing Phase I clinical trial of
Atu027. We believe this data is not only an important achievement for Silence, but also will have an important impact on the RNAi sector as a whole.
* Strengthened our financial position by closing a financing for £5.51m (net
of expenses) and focused on delivering business development success in
order to generate non-dilutive funding.
* Advanced our preclinical pipeline and in particular Atu134 in preparation
for the filing, before the end of 2012, of an application to initiate clinical trials of the programme. * Continued to make progress with all of our partnered programmes to
establish Silence as a partner-of-choice in the RNAi arena and validate our
scientific assets and technologies.
* Increased operational efficiencies by closing non-critical facilities and
completing a strategic corporate reorganisation.
* Expanded our already strong intellectual portfolio by receiving key patent
issuances with global reach.
In light of the advances we have made in the first half of the year, we look ahead to the second half of 2011 with great optimism.
Thank you for your continued support of Silence Therapeutics.
Thomas Christ©lyChief Executive OfficerSILENCE THERAPEUTICS PLCCONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2011
Note Six months Six months Year ended ended ended 31 December 30 June 2011 30 June 2010 2010 (Un-audited) (Un-audited) (Audited) Ongoing Restructuring Combined Operations £ £ £ £ £ Revenue 3 354,078 354,078 716,090 2,365,877 Research and (1,819,213) (1,819,213) (4,400,728) (5,821,212)development costs Gross loss (1,465,135) (1,465,135) (3,684,638) (3,455,335) Administrative (1,560,413) (442,588) (2,003,001) (3,227,213) (5,202,938)expenses Operating loss 3 (3,025,548) (3,468,136) (6,911,851) (8,658,273) Finance and other 38,646 38,646 54,989 95,343 income Gain/(loss) on sale of 3,761 3,761 (154,471) (169,049) assets Finance expense - - (42,408) (63,295) Loss for the period (2,983,141) (3,425,729) (7,053,741) (8,795,274)before taxation Taxation credit for - - - - the period Retained loss for the period after taxation attributable to Equity Holders transferred from (2,983,141) (442,588) (3,425,729)
(7,053,741) (8,795,274)reserves Loss per Ordinary 4 (0.85)p (0.12)p (0.97)p (2.52)p (3.16)p Equity Share (basic and diluted) ==== ==== ==== ==== ===== All transactions, with the exception of the restructuring expenses, arose fromcontinuing activities and there are no recognised gains or losses other thanthose presented above.SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2011
Six months Six months Year ended ended ended 31 December 30 June 2011 30 June 2010 2010 (Un-audited) (Un-audited) (Audited) £ £ £ Loss for the period after (3,425,729) (7,053,741) (8,795,274)taxation Other comprehensive income: Exchange differences arising (63,235) 562,310 151,696on consolidation of foreign operations Total comprehensive income for (3,488,964) (6,491,431) (8,643,578)the period SILENCE THERAPEUTICS PLCCONSOLIDATED BALANCE SHEETAT 30 JUNE 2011 Note 30 June 30 June 31 December 2011 2010 2010 (Un-audited) (Un-audited) (Audited) £ £ £ Non-current assets Property, plant and 269,391 302,702 287,613 equipment Goodwill 28,210,456 28,478,960 28,346,276 Other intangible assets 1,048,110 1,039,147 945,391 29,527,957 29,820,809 29,579,280 Current assets Investments 27,137 - - Inventory - - 27,438 Trade and other 396,501 575,000 782,596 receivables Cash and cash equivalents 6,485,868 6,836,177 3,566,877 6,909,506 7,411,177 4,376,911 Current liabilities Trade and other payables (2,072,769) (2,750,139) (1,686,516) Net current assets 4,836,737 4,661,038 2,690,395 Net assets 34,364,694 34,481,847 32,269,675 Capital and Reserves attributable to the Company's Equity Holders Share capital 5,765,845 2,798,915 2,798,915 Capital reserves 82,886,331 80,443,613 80,269,278 Translation reserve 2,969,468 3,443,317 3,032,703 Profit and loss account (57,256,950) (52,203,998) (53,831,221) Equity Holders' funds 34,364,694 34,481,847 32,269,675 SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2011
(Un-audited) Share Capital Translation Profit and Total Capital Reserves Reserve loss Account £ £ £ £ £ At 1 January 2011 2,798,915 80,269,278 3,032,703 (53,831,221) 32,269,675 Recognition of - 76,644 - - 76,644share-based payments Issuance of warrants - 795 - - 795 Transfer upon: -exercise of options - - - - -in period -lapse of vested - - - - -options in period Shares issued in 2,966,930 2,539,614 - - 5,506,544period, net of expenses Transactions with 2,966,930 2,617,053 - - 5,583,983owners Loss for six months to - - - (3,425,729) (3,425,729)30 June 2011
Other comprehensive -
income Exchange differences - - (63,235) (63,235)arising on consolidation of foreign operations At 30 June 2011 5,765,845 82,886,331 2,969,468 (57,256,950) 34,364,694 SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE SIX MONTHS ENDED 30 JUNE 2011
(Un-audited) Share Capital Translation Profit and Total Capital Reserves Reserve loss Account £ £ £ £ £ At 1 January 2010 1,350,334 49,810,071 2,881,007 (45,150,257) 8,891,155 Recognition of - 820,077 - - 820,077share-based payments Transfer upon: -exercise of options - - - - -in period -lapse of vested - - - - -options in period Shares issued in 1,448,581 29,813,465 - - 31,262,046period, net of expenses Transactions with 1,448,581 30,633,542 - - 32,082,123owners Loss for six months to - - - (7,053,741) (7,053,741)30 June 2010
Other comprehensive
income Exchange differences - - 562,310 - 562,310arising on consolidation of foreign operations At 30 June 2010 2,798,915 80,443,613 3,443,317 (52,203,998) 34,481,847 SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2011
(Audited) Share Capital Translation Profit and Total Capital Reserves Reserve loss Account £ £ £ £ £ At 1 January 2010 1,350,334 49,810,071 2,881,007 (45,150,257) 8,891,155 Recognition of - 760,053 - - 760,053share-based payments Transfer upon: -exercise of options - (2,477) - 2,477 -in period -lapse of vested - (111,833) - 111,833 -options in period Shares issued in year, 1,448,581 29,813,464 - - 31,262,045net of expenses Transactions with 1,448,581 30,459,207 - 114,310 32,022,098owners Loss for the year - - - (8,795,274) (8,795,274)ended 31 December 2010 Other comprehensive income Exchange differences - - 151,696 - 151,696arising on consolidation of foreign operations At 31 December 2010 2,798,915 80,269,278 3,032,703 (53,831,221) 32,269,675 SILENCE THERAPEUTICS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2011
Six months Six months Year ended to to 31 December 30 June 2011 30 June 2010 2010 (Un-audited) (Un-audited) (Audited) Cash flows from operating £ £ £ activities Loss before taxation (3,425,729) (7,053,741) (8,795,274) Adjustments for: Depreciation charges 60,671 95,650 141,689 Amortisation charges 86,433 102,760 181,604 (Gain)/loss on sale of property, (4,527) 154,471 169,049plant and equipment Charge for the period in respect 77,439 719,043 659,018of share-based payments Foreign exchange movement 55,339 119,235 - Finance expense - 42,408 63,295 Finance income (38,639) (54,989) (95,343) (3,189,013) (5,875,163) (7,675,962) Decrease/(increase) in trade and 358,957 154,647 (43,948)other receivables Decrease/(increase) in inventory 27,435 - (27,438) Increase/(decrease) in trade 386,254 (1,786,416) (2,819,261)payables Cash absorbed by operations (2,416,367) (7,506,932) (10,566,609) Taxation received - 59,198 59,198 Interest paid - (42,408) (44,302) Net cash outflow from operating (2,416,367) (7,490,142) (10,551,713)activities Cash flows from investing activities Acquisition of business - 746,108 746,108 Proceeds from the sale of 8,678 77,323 66,407property, plant and equipment Interest received 17,942 54,989 37,565 Additions to property, plant and (33,341) (11,287) (31,539)equipment
Additions to intangible assets (163,360) (31,142) (259,980)
Net cash (used in)/generated from (170,081) 835,991 558,561investing activities Cash flows from financing activities Net proceeds from issue of share 5,506,544 14,358,313 14,358,313capital Repayment of notes payable - (1,938,673) (1,940,492) Net cash generated from/(used in) 5,506,544 12,419,640 12,417,821investing activities Net increase in cash and cash 2,920,096 5,765,489 2,424,669equivalents Cash and cash equivalents at 3,566,877 1,131,146 1,131,146beginning of period Net increase in cash and cash 2,920,096 5,765,489 2,424,669equivalents Effect of exchange rate (1,105) (60,458) 11,062fluctuations on cash held Cash and cash equivalents at end 6,485,868 6,836,177 3,566,877of period
Cash and cash equivalents include
Instant access bank accounts 6,485,868 6,836,177 3,566,877SILENCE THERAPEUTICS PLCNOTES
1. Basis of Preparation and Accounting Policies
This condensed consolidated interim financial information for the six months ended 30 June 2011 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 - `Interim Financial Reporting' as adopted by the European Union.
The interim financial statements do not comprise statutory accounts within themeaning of Section 434 of the Companies Act 2006. The comparative figures forthe financial year ended 31 December 2010 are not the Company's statutoryaccounts for that financial year. Those accounts have been reported on by theCompany's auditors and delivered to the registrar of companies. The report ofthe auditors was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. However, the report of the auditors didcontain an emphasis of matter paragraph in relation to shareholder approval ofthe fundraising. This condensed consolidated interim financial information hasneither been reviewed nor audited.
2. Going concern
The financial statements have been prepared on a going concern basis that assumes that the Group will continue in operational existence for the foreseeable future.
During the period the Group met its day-to-day working capital requirements through the cash resources raised in the placing and subscription of shares in May 2011.
The Group had a net cash inflow in the six months ended 30 June 2011 of £2.92m and at 30 June 2011 had cash balances of £6.49m.
The directors consider that the current financial position of the Group is not unusual for a drug discovery and development company.
The directors have reviewed the working capital requirements of the Group forthe next 12 months from the date of the approval of these interim financialstatements and are confident that these can be met. The directors have areasonable expectation that further finances will become available during thecourse of the next 12 months through grants, milestone and licence feepayments, relating to either new or existing agreements. In the past the Grouphas funded a shortfall in cash resources through the issuance of equity toinstitutional investors, a source, which whilst less dependable than in thepast, still remains potentially available. The directors note that there is amaterial uncertainty as to the exact timing and source of these funds and thatthe failure to receive sufficient funding from these sources would castsignificant doubt on the Group's ability to continue as a going concern. Thedirectors have also taken a number of steps since the start of 2011 to reduceadministration costs with the closure of the Company's US operations and hasrestricted the research and development expenditure to core areas.
Given the continued efforts noted above, the directors consider that the continued adoption of the going concern basis is appropriate and the accounts do not reflect any adjustments that would be required if they were to be prepared on any other basis.
3. Segment Reporting
For the Six Months Ended 30 June 2011
Business Segments RNAi Immunotherapy Unallocated Consolidated Therapeutics Corporate items £ £ £ £ Revenue 354,078 - - 354,078 Operating results (2,964,260) (683) (503,193) (3,468,136) Finance and other income 33,205 161 9,041 42,407(net) Net loss for the period (2,931,055) (522) (494,152) (3,425,729) Segment assets 30,219,224 5,768 6,212,470 36,437,462 Segment liabilities (1,869,399) (819) (202,551) (2,072,769) Costs to acquire 33,341 - - 33,341property, plant and equipment Costs to acquire other 163,360 - - 163,360intangible assets Depreciation and 147,104 - - 147,104amortisation Charge for non-cash 71,666 - 5,773 77,439expenses
In accordance with IFRS 8 `Operating Segments', the identification of the Group's operating segments is based on internal management reporting as reviewed by the senior management team in order to assess performance and allocate resources.
The Group is managed on a business segment basis - RNAi Therapeutics,Immunotherapy and unallocated corporate items. Transfer prices between segmentsare set on an arm's length basis. Segment revenue and profit include transfersbetween segments, which are eliminated on consolidation. The operations,segment assets and liabilities of the RNAi Therapeutics segment are located inGermany and the USA. The operations segment assets and liabilities of theremaining two segments are located in the United Kingdom and the USA.
In 2011, the total amount of costs incurred as part of the restructuring program amounted to £0.44m (2010:£0.48m).
For the Six Months Ended 30 June 2010
Business Segments RNAi Immunotherapy Unallocated Consolidated Therapeutics Corporate items £ £ £ £ Revenue 716,090 - - 716,090 Operating results (4,942,211) (8,952) (1,960,688) (6,911,851) Finance and other (201,438) 46,502 13,046 (141,890)income (net) Net loss for the period (5,143,649) 37,550 (1,947,642) (7,053,741) Segment assets 31,621,358 524,678 5,085,950 37,231,986 Segment liabilities (2,597,898) - (152,241) (2,750,139) Costs to acquire 11,287 - - 11,287property, plant and equipment Costs to acquire other 31,142 - - 31,142intangible assets Depreciation and 198,410 - - 198,410amortisation Charge for non-cash 540,288 178,755 719,043expenses 4. Earnings per shareThe loss per share is based on the loss for the period after taxationattributable to Equity Holders of £3,425,729 (year ended 31 December 2010 -loss £8,795,274; six months ended 30 June 2010 - loss £7,053,741) and on theweighted average of 352,015,733 ordinary shares in issue during the period(year ended 31 December 2010 - 278,303,966; six months ended 30 June 2010 -276,617,824).
The options outstanding at 30 June 2010, 31 December 2010 and 30 June 2011 are considered to be non-dilutive in that their conversion into ordinary shares would decrease the net loss per share. Consequently, there is no diluted earnings per share to report for the periods reported.
5. Related Party
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
6. Issue of SharesOn 16 May 2011, the Company raised £5.93m in cash before expenses. Thefundraising was conducted by way of a placing and open offer of 296,693,065 newOrdinary shares of 1 pence each at a price of 2 pence per share. The nominalvalue of these shares was £2,966,930.65.
Notes for editors
About Silence Therapeutics plc (www.silence-therapeutics.com)
Silence Therapeutics plc (AIM: SLN) is a leading biotechnology companydedicated to the discovery, development and delivery of targeted, systemic RNAinterference (RNAi) therapeutics for the treatment of serious diseases. Silenceoffers one of the most comprehensive short interfering RNA (siRNA) therapeuticplatforms available today based on a strong intellectual property portfolio andlarge clinical safety database. Silence's clinical siRNA product pipeline isone of the broadest in the industry. The Company possesses multiple proprietarysiRNA delivery technology platforms including AtuPLEXâ„¢ and DACC. AtuPLEXenables the broad functional delivery of siRNA molecules to targeted diseasedtissues and cells, while increasing their bioavailability and intracellularuptake. The DACC delivery system allows functional delivery of siRNA moleculesselectively to the lung endothelium with a long duration of target mRNA andprotein knock-down. Additionally, the Company has a platform of novel siRNAmolecules based around its AtuRNAi chemical modification technology, whichprovides a number of advantages over conventional siRNA molecules. Silence'sunique RNAi assets also include structural features for RNAi molecules andspecific design rules for increased potency and reduced off-target effects ofsiRNA sequences.The Company's lead internal drug candidate is Atu027, a liposomal formulationin clinical development for systemic cancer indications and one of the mostclinically advanced RNAi therapeutic candidates in the area of oncology. Atu027incorporates two of the Company's technologies, AtuRNAi and AtuPLEX. Silence iscurrently conducting an open-label, single-centre, dose-escalation Phase Istudy with Atu027 in patients with advanced solid tumors involving single, aswell as repeated, intravenous administration. Encouraging interim data werepresented at the American Society of Clinical Oncology Annual Meeting in June2011. The study is expected to be completed in the first half of 2012.
The Company's RNAi therapeutic platform has received key validation through multiple partnerships with pharmaceutical companies including AstraZeneca, Dainippon Sumitomo, Pfizer/Quark, and Novartis/Quark. Silence is actively pursuing the establishment of additional partnerships. Silence Therapeutics has operations in both Berlin and London.
Forward-Looking Statements
This press release includes forward-looking statements that are subject to risks, uncertainties and other factors. These risks and uncertainties could cause actual results to differ materially from those referred to in the forward-looking statements. All forward-looking statements are based on information currently available to Silence Therapeutics and Silence Therapeutics assumes no obligation to update any such forward-looking statements.
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