Interim Results

RNS Number : 8915Q

ReNeuron Group plc

05 December 2016

 

Details are given below of an analyst meeting and webcast at 9.00am this morning

 

 

5 December 2016

AIM: RENE

ReNeuron Group plc

("ReNeuron" or "the Company")

 Interim Results for the six months ended 30 September 2016

 

ReNeuron Group plc (AIM: RENE), a UK-based global leader in the development of cell-based therapeutics, is pleased to announce its interim results for the six months ended 30 September 2016.

 

Highlights in the period

·      CTX stem cell therapy candidate for motor disability as a result of stroke:   

-     Positive Phase II efficacy data announced today in PISCES II clinical trial - see separate announcement issued this morning

-     Phase I clinical trial data from PISCES I study published in The Lancet

-     Clinical trial application for controlled, pivotal study planned for H1 2017 in US and UK

·      hRPC stem cell therapy candidate for retinitis pigmentosa:

-     Second dose cohort completed in US Phase I/II clinical trial

-     Safety and efficacy data from Phase I/II study due during the course of 2017

-     Pivotal clinical trial planned to commence in 2018

·      CTX stem cell therapy candidate for critical limb ischaemia:

-     Phase I clinical trial ongoing - safety data expected in early 2017

·      Exosome nanomedicine platform:

-     Glioblastoma multiforme selected as first clinical target

-     Pre-clinical development continues, supported by £2.1m Innovate UK grant

·      Loss for the period of £7.70 million (2015: loss of £4.48 million); cash consumed by operations of £6.99 million (2015: £5.26 million)

·      Cash, cash equivalents and bank deposits at 30 September 2016 of £60.08 million (31 March 2016: £65.71 million)

Commenting on the results, Olav Hellebø, ReNeuron's Chief Executive Officer, said:

"Our therapeutic development programmes have progressed well during the period, culminating in today's announcement of positive Phase II data from the PISCES II clinical trial of our CTX cell therapy candidate for stroke disability.  The results of this study represent the most important clinical milestone in ReNeuron's history and enable us to progress the CTX treatment into advanced clinical development in this indication.  The unmet medical need in chronic stroke disability is enormous and we are delighted that we are now one step closer to being able to offer an effective therapy to these patients. 

"We are also very pleased with the pace of progress in the US Phase I/II clinical trial of our hRPC cell therapy candidate for retinitis pigmentosa during the period. ReNeuron remains well-funded to advance all of its therapeutic programmes through to further significant clinical milestones and we look forward to reporting further progress in the months ahead."

Analyst meeting and webcast:

A meeting for analysts will be held at 9.00am today at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN.

For a webcast of the analyst presentation, please log on to the following web address approximately 10 minutes before 9.00am:

http://vm.buchanan.uk.com/2016/reneuron051216/registration.htm

For further details please contact Buchanan on 020 7466 5000.

A recording of the webcast will be made available on ReNeuron's and Buchanan's websites, www.reneuron.com and www.buchanan.uk.com.

Enquiries:

ReNeuron	[phone]
Olav Hellebø , Chief Executive Officer
Michael Hunt, Chief Financial Officer
Buchanan	[phone]
Mark Court, Sophie Cowles, Stephanie Watson
Stifel Nicolaus Europe Limited	[phone]
Jonathan Senior, Stewart Wallace, Ben Maddison (NOMAD and Broker)

About ReNeuron

ReNeuron is a leading, clinical-stage cell therapy development company.  Based in the UK, its primary objective is the development of novel cell-based therapies targeting areas of significant unmet or poorly met medical need.  

ReNeuron has used its unique stem cell technologies to develop cell-based therapies for significant disease conditions where the cells can be readily administered "off-the-shelf" to any eligible patient without the need for additional immunosuppressive drug treatments.  The Company has therapeutic candidates in clinical development for motor disability as a result of stroke, for critical limb ischaemia and for the blindness-causing disease, retinitis pigmentosa.   

ReNeuron is also advancing its proprietary exosome technology platform as a potential new nanomedicine targeting cancer and as a potential delivery system for gene therapy treatments.

ReNeuron's shares are traded on the London AIM market under the symbol RENE.L.  Further information on ReNeuron and its products can be found at www.reneuron.com.

This announcement contains forward-looking statements with respect to the financial condition, results of operations and business achievements/performance of ReNeuron and certain of the plans and objectives of management of ReNeuron with respect thereto. These statements may generally, but not always, be identified by the use of words such as "should", "expects", "estimates", "believes" or similar expressions. This announcement also contains forward-looking statements attributed to certain third parties relating to their estimates regarding the growth of markets and demand for products. By their nature, forward-looking statements involve risk and uncertainty because they reflect ReNeuron's current expectations and assumptions as to future events and circumstances that may not prove accurate.  A number of factors could cause ReNeuron's actual financial condition, results of operations and business achievements/performance to differ materially from the estimates made or implied in such forward-looking statements and, accordingly, reliance should not be placed on such statements. 

Review of therapeutic programmes

CTX for stroke disability

During the period under review, we completed dosing in the Phase II clinical trial (PISCES II) of our CTX cell therapy candidate for stroke disability.  Today, we have announced positive data from this study.  PISCES II is a single arm, open-label study in patients living with disability resulting from ischaemic stroke. All 21 patients in the study have completed three-month follow-up, with ten patients followed for six months and three for twelve months.

The study's primary endpoint was for two patients to reach a minimum two-point improvement in the grasping and lifting test, sub-test number 2, of the Action Research Arm Test ("ARAT"), at three months post-treatment. Three of the 21 patients achieved this at three, six or twelve months respectively after treatment and were within a group of four responders who also showed clinically relevant improvements on the total ARAT score of arm motor performance.  Although the ARAT sub-test number 2 study endpoint was not met as some responses came later than the three-month target, the result is nonetheless highly encouraging.

Strongly positive results were also seen in the other endpoints of the study, with seven patients (33%) showing a clinically relevant improvement on the Modified Rankin Scale (a measure of disability and dependence) and eight patients (38%) showing a clinically relevant improvement on the Barthel Index (a measure of performance in activities of daily living).  In total, 15 out of 21 patients had a clinically significant response on at least one efficacy measure.  Improvements in the ARAT scores, Modified Rankin Scale and Barthel Index were all sustained throughout the follow up period.

The study also demonstrated that the CTX treatment was well tolerated, with no cell-related adverse events.  Safety and efficacy data from the study will be presented at forthcoming stroke and rehabilitation medical conferences.  The PISCES II study was part-funded by a regenerative medicine and cell therapy development grant from Innovate UK.

The above Phase II data follows the publication in August of long term follow up data from our PISCES I stroke clinical trial in The Lancet.  The PISCES I study was the first clinical trial of our CTX cell therapy candidate for stroke disability. The Lancet paper describes two-year follow up clinical data relating to the eleven stroke patients treated in the study.  Improvements in neurological status and limb function compared with pre-treatment baseline performance were observed in this study within three months of treatment and maintained throughout long term follow up.  The CTX treatment was also well-tolerated by the patients in the PISCES I study, with no cell-related or immunological adverse events reported across the four ascending dose levels.

As a result of the positive data reported from both the PISCES I and PISCES II studies, we intend to apply to the US and European regulatory authorities in early 2017 to commence a randomised, placebo-controlled, pivotal clinical trial in disabled stroke patients.  As previously announced, we are also advancing our CTX cell therapy candidate for stroke disability in Japan under regulations in that territory which offer the potential for conditional marketing approval for cell therapies at an earlier stage of clinical development than in the West.

hRPC for retinitis pigmentosa

During the period under review, the Phase I/II clinical trial of our human Retinal Progenitor Cell (hRPC) cell therapy candidate for the blindness-causing disease, retinitis pigmentosa (RP), has also progressed well. This US study, which is being conducted at Massachusetts Eye and Ear Infirmary in Boston, is an open-label, dose escalation study to evaluate the safety, tolerability and preliminary efficacy of our hRPC stem cell therapy candidate in fifteen patients with advanced RP.

Subsequent to the end of the period under review, dosing of the second dose cohort of three patients in the Phase I/II study has been completed.  Safety and tolerability data from the Phase I part of the study in the first nine patients are expected in the first half of 2017, with longer term safety data as well as efficacy read-outs from the Phase II part of the study in a further six patients expected in the second half of 2017.

Subject to the outcome of the Phase I/II study, we expect to be able to file an application in early 2018 to commence a pivotal clinical trial of hRPC in RP.  A positive outcome from this study is expected to form the basis for subsequent marketing authorisation filings in both the US and Europe.

CTX for critical limb ischaemia

Our CTX cell therapy candidate for critical limb ischaemia (CLI) is currently in a Phase I clinical trial in the UK.  CLI is a condition that results in loss of blood flow to the lower limb.  The condition is common in diabetics and can ultimately lead to amputation.  We expect to have safety data available from the CLI study slightly later than planned, in early 2017.  We are encouraged that no adverse safety events have been reported thus far in the patients treated in the Phase I study. The study has been part-funded by a Biomedical Catalyst grant from Innovate UK.

Exosome nanomedicine platform

During the period under review, we have continued to advance our exosome nanomedicine programme. Exosomes are nanoparticles secreted from all cells including ReNeuron's proprietary CTX stem cell line. They play a key role in cell-to-cell signalling and early research with CTX-derived exosomes has demonstrated that they may have a significant effect in regulating cell growth and apoptosis in cancer.  During the period under review, we announced that we had selected glioblastoma multiforme (GBM) as the first clinical target for ExoPr0, our first exosome nanomedicine candidate.  GBM accounts for 16 per cent of all diagnosed brain cancers, with 25,000 patients diagnosed per annum in the US and Europe combined. 

Our exosome nanomedicine programme benefits from an Innovate UK grant to part-fund manufacturing process development as well as pre-clinical efficacy and toxicity testing of the ExoPr0 candidate.  We see the optimisation of methods to harvest, characterise and purify CTX-derived exosomes, as well as further clarification of the mechanism of action of ExoPro, as key research priorities ahead of late pre-clinical development of the ExoPro candidate.  On this basis, and assuming a successful outcome to the above plan of work, we expect to be able to commence a first human clinical trial with ExoPr0 in 2018.

Financial review

In the six months to 30 September 2016, revenues were £22,000 (2015: £11,000) in addition to which grant income of £366,000 was received and is shown as other operating income (2015: £244,000).

Research and development expenditure increased in the period to £7.88 million (2015: £3.72 million).  This increase in R&D expenditure, broadly  consistent with the increase in spend seen in the second half of the previous financial year, reflects the increased level of clinical trial activity and associated cell manufacturing and process development costs across the Group's therapeutic programmes. General and administrative expenses increased marginally to £2.14 million (2015: £1.93 million) in the period. 

Finance income, which represents income received from the Group's cash and investments and gains from foreign exchange, was £1.00 million in the period (2015: £156,000). The increase in finance income reflects the increase in average cash and investment balances compared to the equivalent prior period, as well as a favourable movement in exchange rates during the period on cash and investments held in foreign currency. The total tax credit for the period was £940,000 (2015: £756,000).

As a result of the above, the total comprehensive loss for the period increased to £7.70 million (2015: £4.48 million), in line with internal forecasts.

Cash consumed by operations in the period increased to £6.99 million (2015: £5.26 million), broadly reflecting the increase in operating costs in the period. The Group had cash, cash equivalents and bank deposits totalling £60.08 million as at 30 September 2016 (31 March 2016: £65.71 million).

Summary and outlook

Our therapeutic development programmes have progressed well during the period, culminating in today's announcement of positive Phase II data from the PISCES II clinical trial of our CTX cell therapy candidate for stroke disability.  The results of this study represent the most important clinical milestone in ReNeuron's history and enable us to progress the CTX treatment into advanced clinical development in this indication.  The unmet medical need in chronic stroke disability is enormous and we are delighted that we are now one step closer to being able to offer an effective therapy to these patients. 

We are also very pleased with the pace of progress in the US Phase I/II clinical trial of our hRPC cell therapy candidate for retinitis pigmentosa during the period. ReNeuron remains well-funded to advance all of its therapeutic programmes through to further significant clinical milestones and we look forward to reporting further progress in the months ahead.

John Berriman                                                                       Olav Hellebø

Chairman                                                                                 Chief Executive Officer

5 December 2016

Unaudited Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2016

		Six months ended	Six months ended	Year ended
		30 September	30 September	31 March
		2016	2015	2016
	Note	£'000	£'000	£'000
Revenue		22	11	29
Research and development costs		(7,883)	(3,716)	(10,272)
General and administrative costs		(2,137)	(1,931)	(4,015)
Other operating income	5	366	244	534
Operating loss		(9,632)	(5,392)	(13,724)
Finance income		997	156	878
Loss before income taxes		(8,635)	(5,236)	(12,846)
Tax credit on loss on ordinary activities		940	756	1,492
Total comprehensive loss for the period		(7,695)	(4,480)	(11,354)
Total comprehensive loss attributable to:
- Equity owners of the Company		(7,695)	(4,480)	(11,354)
Basic and diluted loss per share	6	(0.2p)	(0.2p)	(0.4p)

Unaudited Consolidated Statement of Financial Position

as at 30 September 2016

		30 September	30 September	31 March
		2016	2015	2016
		£'000	£'000	£'000
Assets
Non-current assets
Property, plant and equipment		544	145	361
Intangible assets		1,272	1,591	1,591
Investments - bank deposit		-	-	5,000
Other non-current assets		11	281	11
		1,827	2,017	6,963
Current assets
Trade and other receivables		787	832	1,421
Corporation tax receivable		2,363	2,028	2,764
Investments - bank deposit		39,659	49,993	43,283
Cash and cash equivalents		20,417	22,283	17,426
		63,226	75,136	64,894
Total assets		65,053	77,153	71,857
Equity
Equity attributable to owners of the Company
Share capital		31,646	31,567	31,646
Share premium		97,704	97,704	97,704
Capital redemption reserve		8,964	8,964	8,964
Merger reserve		2,223	2,223	2,223
Accumulated losses		(80,074)	(66,428)	(72,879)
Total equity		60,463	74,030	67,658
Liabilities
Non-current Liabilities
Provisions		-	605	-
Financial liabilities: finance leases		-	1	-
		-	606	-
Current Liabilities
Trade and other payables		4,446	2,516	3,700
Provisions		143	-	498
Financial liabilities: finance leases		1	1	1
		4,590	2,517	4,199
Total liabilities		4,590	3,123	4,199
Total equity and liabilities		65,053	77,153	71,857

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 30 September 2016

			Share	Capital
	Share		premium	Redemption	Merger	Accumulated losses	Total
	capital		account	Reserve	reserve		Equity
	£'000		£'000	£'000	£'000	£'000	£'000
As at 1 April 2015	17,888		46,267	8,964	2,223	(62,206)	13,136
Issue of new ordinary shares		13,679	54,696	-	-	-	68,375
Costs of share issue		-	(3,259)	-	-	-	(3,259)
Share-based credit		-	-	-	-	258	258
Loss for the period		-	-	-	-	(4,480)	(4,480)
As at 30 September 2015		31,567	97,704	8,964	2,223	(66,428)	74,030
Issue of new ordinary shares		79	-	-	-	-	79
Share-based credit		-	-	-	-	423	423
Loss for the period		-	-	-	-	(6,874)	(6,874)
As at 31 March 2016		31,646	97,704	8,964	2,223	(72,879)	67,658
Share-based credit		-	-	-	-	500	500
Loss for the period		-	-	-	-	(7,695)	(7,695)
As at 30 September 2016		31,646	97,704	8,964	2,223	(80,074)	60,463

Unaudited Consolidated Statement of Cash Flows

for the six months ended 30 September 2016

		Six months ended	Six months ended	Year ended
		30 September	30 September	31 March
		2016	2015	2016
	Note	£'000	£'000	£'000
Cash consumed by operations	7	(6,992)	(5,263)	(11,920)
Income tax credit received		1,340	-	-
Cash outflow from operating activities		(5,652)	(5,263)	(11,920)
Cash flows from investing activities
Capital expenditure		(255)	(18)	(293)
Purchase of intangible asset		-	-	-
Interest received		274	59	345
Net cash generated by investing activities		19	41	52
Cash flows from financing activities
Finance lease principal payments		-	-	-
Proceeds from issuance of ordinary shares		-	68,375	68,454
Costs of share issue		-	(3,259)	(3,259)
Bank deposit matured/(placed)		8,624	(49,993)	(48,283)
Net cash generated by financing activities		8,624	15,123	16,912
Net increase in cash and cash equivalents	8	2,991	9,901	5,044
Cash and cash equivalents at the start of period		17,426	12,382	12,382
Cash and cash equivalents at the end of period	9	20,417	22,283	17,426

Notes to the interim financial statements

for the six months ended 30 September 2016

1.               General information and basis of preparation

ReNeuron Group plc is an AIM listed company incorporated and domiciled in the United Kingdom under the Companies Act 2006. The Company's registered office and its principal place of business is Pencoed Business Park, Pencoed, Bridgend, CF35 5HY.

These Interim Financial Statements were prepared by the Directors and approved for issue on 5 December 2016. They have not been audited.

These Interim Financial Statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2016 were approved by the Board of Directors on 22 July 2016 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain statements under 498 (2) or (3) of the Companies Act 2006 and did not contain any emphasis of matter.

As permitted these Interim Financial Statements have been prepared in accordance with UK AIM rules and the IAS 34, 'Interim financial reporting' as adopted by the European Union. They should be read in conjunction with the Annual Financial Statements for the year ended 31 March 2016, which have been prepared in accordance with IFRS as adopted by the European Union.

2.               Accounting policies

The accounting policies applied are consistent with those of the Annual Financial Statements for the year ended 31 March 2016, as described in those Annual Financial Statements. Where new standards or amendments to existing standards have become effective during the year, there has been no material impact on the net assets or results of the Group.

Certain statements within this report are forward looking. The expectations reflected in these statements are considered reasonable. However, no assurance can be given that they are correct. As these statements involve risks and uncertainties the actual results may differ materially from those expressed or implied by these statements.

3.               Going concern

The Group is expected to incur significant further costs as it continues to develop its therapies and technologies through clinical development.  The Directors expect that the Group's financial resources will be sufficient to support operations into the second half of 2018. Consequently, the going concern basis has been adopted in the preparation of these interim financial statements.

4.               Segment information

Following the adoption of IFRS8 Segment Reporting, the Group has identified the Chief Executive Officer as the Chief Operating Decision Maker (CODM). The CODM manages the business as one segment, the development of cell-based therapies. Since this is the only reporting segment, no further information is included. The information used internally by the CODM is the same as that disclosed in the interim financial statements. The Group's revenue derives wholly from assets located in the United Kingdom. Analysed by location of customer all revenue is derived from the United States of America.

5.               Other operating income

Other operating income comprises Government grants from Innovate UK (Technology Strategy Board) in relation to the Group's programmes.

6.               Basic and diluted loss per share

The basic and diluted loss per share is calculated by dividing the loss for the financial period of £7,695,000 (September 2015: £4,480,000, March 2016: £11,354,000) by 3,164,618,541 shares (September 2015: 2,058,105,458 shares and March 2016: 2,609,315,899 shares), being the weighted average number of ordinary 1p shares in issue during the period. Potential ordinary shares are not treated as dilutive as the entity is loss-making.

7.               Cash consumed by operations

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£'000	£'000	£'000
Loss before income tax	(8,635)	(5,236)	(12,846)
Adjustment for:
Interest received	(274)	(59)	(345)
Depreciation of tangible fixed assets	73	34	92
Impairment of intangible assets	319	-	-
Provisions	(355)	-	(107)
Share-based payment charge	500	258	681
Changes in working capital
Receivables	634	(432)	(751)
Payables	746	172	1,356
Cash consumed by operations	(6,992)	(5,263)	(11,920)

8.            Reconciliation of net cash flow to movement in net debt

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£'000	£'000	£'000
Net funds at start of period	17,425	12,380	12,380
Increase in cash in the period	2,991	9,901	5,044
Cash inflow from decrease in debt	-	-	1
Net funds at end of period	20,416	22,281	17,425

9.            Analysis of net funds

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£'000	£'000	£'000
Cash at bank and in hand	20,417	22,283	17,426
Finance leases	(1)	(2)	(1)
	20,416	22,281	17,425

 

END

 

 

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