Final Results
14 July 2010
GB00B39J5N63
Scancell Holdings Plc
(`Scancell Holdings' or the `Company')
Final Results for the year ended 30 April 2010
Scancell Holdings plc, (PLUS:SCLP), the developer of therapeutic cancer
vaccines, announces its final results for the year ended 30 April 2010.
Highlights:
* Strong progress in the development of the Company's lead therapeutic
melanoma vaccine SCIB1
* Successful fundraising of £2.54 million (gross) during 2010
* Loss before tax for the year of £1.80 million (2009: £0.8 million)
* Cash at year end of £2.83 million
* Since the year end the Company commenced Phase I/IIa clinical trials in
humans for SCIB1
A copy of this announcement is available for download on the Company's website
at http://www.scancell.co.uk/
The Directors of the issuer accept responsibility for this announcement.
For further information contact:
Professor Lindy Durrant Scancell Holdings Plc + 44 (0)207 245 1100
John Bick/Kirsty Corcoran Hansard Communications + 44 (0)207 245 1100
Ross Andrews/Tom Rowley Zeus Capital + 44 (0)161 831 1512
CHAIRMAN'S STATEMENT
I am pleased to report on the progress of Scancell Holdings plc for the year
ended 30 April 2010.
Background and overview
Scancell is a biopharmaceutical company focused on the cancer therapeutics
market and is developing a pipeline of DNA vaccines for the treatment of
cancer, based on its patented ImmunoBody® platform, which has the potential to
overcome many of the limitations of conventional approaches to the development
of cancer vaccines.
Fund raising
As previously announced, the Company has, during 2010, raised £2.54 million,
before expenses, through the completion of an underwritten Open Offer and the
placing of new Ordinary Shares to fund the working capital requirements of the
Company.
Financial results
The financial statements have been prepared under International Financial
Reporting Standards (`IFRS') which have necessitated a change in policy for
accounting for a subsidiary. Previously the Group has reported its results
using merger accounting however this is not permitted under IFRS and the prior
period results and statement of financial position have been restated. The
effects of this change in policy are detailed in the financial statements.
The Group made an overall financial loss for the year of £1,737,129 (2009:
restated loss: £785,732) reflecting the increased costs of the Group's
development programme set out below. These costs were partially offset by
receipt of the last tranche of EMDA grant of £37,500 (2009: £212,500)
Interest receivable amounted to £2,427 (2009: £57,282).
As noted above, the balance sheet has been restated so that the acquisition of
Scancell Limited by Scancell Holdings plc has been accounted for using
acquisition accounting. This has resulted in a goodwill figure of £3,415,120
arising on consolidation.
At the end of the year, the Group's cash balances amounted to £2,830,145 (2009:
£1,519,070). The increase in cash reflects the fund raising that took place in
the year less the losses that have been incurred.
Development
The Group's lead therapeutic melanoma vaccine is SCIB1. The Group also intends
to license its ImmunoBody® technology on a target by target basis to companies
working in the protein and DNA vaccine field. Although the Group does not
intend to venture outside the oncology arena itself, it intends to license its
ImmunoBody® technology to companies working in other therapeutic areas.
Scancell signed an agreement with Ichor Medical Systems ('Ichor') in July 2009,
to use Ichor's TriGrid â„¢ electroporation device for the delivery of SCIB1
during Scancell's pre-clinical and clinical studies of SCIB1. In vivo
electroporation is widely regarded as an effective method of enhancing the
potency of DNA vaccines by up to 100 -fold compared to conventional methods of
delivery. Scancell is confident that TriGridâ„¢ will provide the most effective
delivery system for its SCIB1 melanoma vaccine as it enters clinical trials.
During the year, SCIB1 has been successfully manufactured to GMP standards. The
yield was excellent and over 1,200 vials have now been filled and stored for
the clinical trial. SCIB1 has also completed its pre-clinical toxicology tests.
There was no toxicity apart from treatment-related local effects at the
injection site; a result of the administration and/ electroporation procedure.
But these effects were of only minimal to moderate severity, and were almost
completely resolved within four weeks. Good high avidity T cell responses were
observed.
In November 2009, Scancell was pleased to announce the appointment of a
world-leading oncology CRO, PharmaNet Development Group (PharmaNet), to run its
SCIB1 clinical trials. The Company has also appointed Oxford Immunotec to
monitor T cell avidity in the SCIB1 trial.
In April 2010, the proposal to conduct a Phase I clinical trial on SCIB1, was
approved by the Gene Therapy Advisory Committee (`GTAC') and by the Medicines
and Healthcare products Regulatory Agency (`MHRA') Medicines Division. In
addition, Scancell's partner Ichor Medical Systems (`Ichor') has obtained the
required parallel approval from the MHRA Devices Division for the use of
Ichor's TriGridâ„¢ electroporation delivery device to administer SCIB1 to
patients participating in the trial of SCIB1.
A Phase I/IIa clinical trial of Scancell's SCIB1 vaccine in advanced melanoma
patients commenced in June 2010 and is expected to be completed in 2012. The
trials are based at three leading UK hospital centres in Nottingham, Manchester
and Newcastle.
The first patient was treated with the vaccine on 10 June 2010. Preliminary
immune response and safety data from Part 1 of the study is expected to be
available in 2011. Part 2 of the study, which will be conducted in less
severely ill patients, is expected to generate further immune response data
which, if positive, would provide clinical validation for both SCIB1 and the
entire ImmunoBody® Platform. The Directors believe that a positive outcome
would enable the Group to position itself for a trade sale to one of the
leading pharmaceutical or biotechnology companies operating in the oncology
market.
The Directors also intend to license the Group's ImmunoBody® technology on a
target by target basis to companies working in the protein and DNA vaccine
field. The manipulation and enhancement of patients' immune systems is also
relevant to the treatment of other diseases such as chronic infectious disease
and inflammation. Although Scancell does not intend to venture outside the
oncology arena itself, it intends to license its ImmunoBody® technology to
companies working in other therapeutic areas.
Scancell's IP position around SCIB1 has been further strengthened by the
signing of a worldwide non-exclusive licensing agreement with the National
Institutes of Health (`NIH'), an agency of the United States Department of
Health and Human Services, for use of the melanoma antigens TRP-2 and gp100,
developed in the laboratory of Steven A. Rosenberg, M.D., Ph.D., at the
National Cancer Institute. These antigens will be utilised as key components of
SCIB1.
Under the agreement, Scancell has agreed to pay the US Public Health Service an
undisclosed upfront fee in addition to certain milestone fees and a royalty on
future sales of SCIB1. Scancell will have the right to develop and
commercialise its ImmunoBody® vaccines for the treatment of melanoma in humans
incorporating epitopes from these targets.
Since the year end the company has entered into a research collaboration
agreement with immatics biotechnologies GmbH ("immatics") to explore the
development of novel ImmunoBody® vaccines for colorectal cancer. In this
research collaboration with immatics, colorectal cancer-specific TUMAPs will be
incorporated into Scancell's ImmunoBody® platform to create ImmunoBody®
vaccines targeted towards colorectal cancer. If the research project is
successful, immatics and Scancell will explore the further development of any
product candidates.
Outlook
Following the successful fund raising in March 2010 the Directors believe that
the existing funds held by or available to the Company, together with
anticipated future revenues, will be sufficient to allow completion of the
Phase I/IIa clinical trial and, if there is a positive outcome, this would
demonstrate clinical proof of principle for SCIB1. In addition the Company is
planning to design and test its second ImmunoBody® product, SCIB2, to the
animal proof of principle stage. The Directors believe that data from these
studies, if positive, would significantly enhance the value of the business and
create a company with both products in the clinic and the potential for
generating a pipeline of new products - an excellent profile for a drug
discovery business.
The Directors also believe that a positive outcome would enable to the Company
to position itself for a trade sale to one of the leading pharmaceutical or
biotechnology companies operating in the oncology market.
The Ordinary Shares of the Company were originally admitted to trading on PLUS
in September 2008. However, now that the Company has further strengthened its
financial position and progressed the development of SCIB1, the Directors
believe that it would be in the best interests of the Company and its
shareholders for the Ordinary Shares to be admitted to trading on the AIM
market of the London Stock Exchange. The Directors believe that this represents
a natural transition for the Company and that the potential benefits of an AIM
listing will include an increased public profile for the Company. An
announcement explaining the admission process will be made today and an AIM
Admission Document will be sent to Shareholders shortly.
The continued support of our investors is much appreciated. The Board also
recognises that the progress made over this period would not have been possible
without the dedication and determination of all our staff and, on behalf of the
Board, I offer our warmest thanks to them.
David Evans
Chairman
CONSOLIDATED INCOME STATEMENT 2010 2009
£ £
REVENUE - -
Cost of sales (1,091,351) (676,039)
-------------------------- --------------------------
Gross loss (1,091,351) (676,039)
Administrative expenses (751,365) (427,764)
-------------------------- --------------------------
(1,842,716) (1,103,803)
Other operating income 37,650 212,631
-------------------------- --------------------------
OPERATING (LOSS) (1,805,066) (891,172)
Interest receivable and similar 2,427 57,282
income
-------------------------- --------------------------
(LOSS) BEFORE TAXATION (1,802,639) (833,890)
Taxation 65,510 48,158
-------------------------- --------------------------
(LOSS) AFTER TAXATION (1,737,129) (785,732)
================= =================
EARNINGS PER ORDINARY SHARE (pence)
Basic (16.2)p (9.4)p
Diluted (16.2)p (9.4)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2010 2009
£ £
ASSETS
Non-current assets
Plant and machinery 131,763 82,265
Goodwill 3,415,120 3,415,120
-------------------------- --------------------------
3,546,883 3,497,385
-------------------------- --------------------------
Current assets
Trade and other receivables 122,636 404,590
Cash and cash equivalents 2,830,145 1,519,070
-------------------------- --------------------------
2,952,781 1,923,660
-------------------------- --------------------------
TOTAL ASSETS 6,499,664 5,421,045
-------------------------- --------------------------
LIABILITIES
Current Liabilities
Trade and other payables (451,787) (166,731)
-------------------------- --------------------------
TOTAL LIABILITIES (451,787) (166,731)
-------------------------- --------------------------
NET (LIABILITIES)/ASSETS 6,047,877 5,254,314
================= =================
SHAREHOLDERS' EQUITY
Called up share capital 158,733 102,756
Share premium 8,321,808 5,911,105
Profit and loss account (2,432,664) (759,547)
-------------------------- --------------------------
TOTAL SHAREHOLDERS' EQUITY 6,047,877 5,254,314
================= =================
CONSOLIDATED CASH FLOW STATEMENT 2010 2009
£ £
Net cash outflow from operating activities (1,504,392) (1,097,893)
Returns on investment and servicing of finance 2,427 57,282
Taxation 190,376 38,962
Capital expenditure (72,148) (23,383)
Acquisitions - 879,570
__________ __________
(1,383,737) (145,462)
Financing 2,694,812 1,664,532
__________ _________
Increase/(Decrease) in cash in the period 1,311,075 1,519,070
========= ========
Reconciliation of net cash flow to movement in net funds
Increase/(Decrease) in cash in the period 1,311,075 1,519,070
________ ________
Change in net funds resulting from cashflows 1,311,075 1,519,070
________ ________
Movement in net funds in the year 1,311,075 1,519,070
Net funds at 1 May 1,519,070 -
________ ________
Net funds at 30 April 2,830,145 1,519,070
======= =======
NOTES
1 BASIS OF PREPARATION AND GOING CONCERN
The financial statements have been prepared in accordance with International
Financial Reporting Standards (`IFRS'), as adopted by the European Union, and
with those parts of the Companies Act 2006 applicable to companies reporting
under IFRS. In preparing the underlying financial information the Directors
have applied certain first time adoption provisions allowed by IFRS 1. These
standards remain subject to ongoing amendment and / or interpretation and are
therefore still subject to change. Accordingly information contained in the
financial statements may need updating for subsequent amendments to IFRS
required for first time adoption or for new standards issued post balance sheet
date.
The Company has established IFRS accounting policies for the year ended 30
April 2010 and applied these policies and the opening balance sheet at its date
of transition being 1st May 2008. The transition to IFRS has not affected the
company's cash flows.
The preparation of financial statements in accordance with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise judgement in the process of applying the accounting policies. The
notes to the financial statements set out areas involving a higher degree of
judgement or complexity, or areas where assumptions are significant to the
financial statements such as intangible assets. Although these estimates are
based upon management's best knowledge of the amount event or actions, actual
results may ultimately differ from those estimates.
The financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.
2 OTHER OPERATING INCOME
2010 2009
£ £
Sundry receipts 150 131
Government Grants 37,500 212,500
------------------ ------------------
37,650 212,631
------------------ ------------------
3 OPERATING LOSS
2010 2009
£ £
Operating profit is stated after charging/(crediting):
Depreciation on tangible fixed assets 22,649 27,770
Operating lease rentals 14,056 14,056
Research and development 1,091,351 676,039
Auditors' remuneration - fee payable for audit of the 6,000 6,000
company
Auditors' remuneration - fee payable for audit of the 6,000 6,000
subsidiary company
Directors' remuneration 49,347 37,725
========== ==========
4 TAXATION
Analysis of the tax credit
The tax credit on the loss on ordinary activities for 2010 Restated
the year was as follows:
2009
Current tax £ £
UK corporation tax Corporation tax provision (65,510) (48,158)
========== ==========
Factors affecting the tax charge
The tax assessed for the years are lower than the applicable rate of
corporation tax in the UK. The difference is explained below:
2010 2009
£ £
(Loss) on ordinary activities before tax (1,802,639) (833,890)
========== ==========
Profit on ordinary activities multiplied by the (378,554) (175,117)
standard rate of tax in the UK (21%)
Effects of:
Disallowed expenditure 52 79
Timing differences (11,960) (3,473)
Research and development tax refund (65,510) (48,158)
Unrelieved trading losses carried forward 390,462 178,511
Current tax credit (65,510) (48,158)
========== ==========
The company has tax losses to carry forward against future profits of
approximately £4,360,000 (2009: £2,700,000)
A deferred tax asset has not been recognised in respect of these losses as the
subsidiary company does not anticipate sufficient taxable profits to arise in
the foreseeable future to fully utilise them.
The estimated value of the deferred tax asset not recognised measured at a
standard rate of 21% is £915,600 (2009: £567,000).
5 EARNINGS PER SHARE
The earnings per ordinary share has been calculated using the profit for the
year and the weighted average number of ordinary shares in issue during the
year as follows:
2010 2009
£'000 £'000
(Loss) for the year after taxation (1,737,129) (785,732)
_______ _______
No. No.
Basic weighted average of ordinary shares of 1p 10,733,335 8,334,283
each
_______ _______
Basic earnings (pence per share) (16.2)p (9.4)p
_______ _______
Fully diluted earnings (pence per share) (16.2)p (9.4)p
_______ _______
As the Group is reporting a loss for both years then, in accordance with IAS33,
the share options are not considered dilutive because the exercise of the share
options would have the effect of reducing the loss per share.
6 DELIVERY OF ACCOUNTS
The statutory accounts in respect of the prior year ended 30 April 2009 have
been delivered to the Registrar of Companies and the auditors of the Company
made a report thereon under Section 235 of the Act. That report was an
unqualified report and did not contain a statement under Section 237 (2) or (3)
of the Act.
7 AVAILABILITY OF ACCOUNTS
This announcement is not being posted to shareholders. The Report and Accounts
will be posted to shareholders shortly. Copies of this announcement and further
copies of the Report and Accounts can be downloaded from the Company's website:
www.scancell.co.uk
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