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C4X Discovery (C4XD)

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Thursday 29 April, 2021

C4X Discovery

Interim Results

RNS Number : 9911W
C4X Discovery Holdings PLC
29 April 2021
 

 

 

This announcement contains inside information

 

C4X Discovery Holdings plc

("C4XD", "C4X Discovery" or the "Company")

 

Half-year results for the six months ended 31 January 2021

 

Up to €414 million out-licensing to Sanofi of IL-17A oral inhibitor programme

 

Drug discovery programmes advance across high value portfolio

 

29 April 2021 - C4X Discovery Holdings plc (AIM: C4XD), a pioneering Drug Discovery company, today announces its interim results for the six months ended 31 January 2021.

 

Dr Clive Dix, CEO of C4X Discovery, commented: "C4X Discovery has continued to advance its high value portfolio of commercially attractive drug candidates for future partners and, post-period end, a €414 million agreement was signed with Sanofi for our IL-17A oral inhibitor programme, demonstrating the value of C4XD's Drug Discovery expertise and our business model.  C4XD's focus will now be to further augment the portfolio, continue to build its network of partnerships and advance the pipeline of proprietary and partnered projects.  With two programmes now successfully partnered and a roadmap of potential cash milestones over the next 12-24 months, the Board is confident that, through the delivery of next generation, high quality out-licensing opportunities, C4XD can deliver significant value for shareholders ."

 

Operational highlights (including post-period events):

 

· Indivior's Phase 1 with C4X_3256 progressing.   Single ascending dose study in healthy volunteers successfully completed in April 2021 and preparation for multiple ascending dose study underway

· One of C4XD's NRF-2 lead activators C4X-6746 shown to significantly inhibit disease score in a pre-clinical model of inflammatory bowel disease ("IBD"). Candidate nomination and preliminary safety studies continue

· α4β7 integrin inhibitor programme for the treatment of IBD demonstrated significant selectivity vs α4β1 in vitro and oral bioavailability in PK studies. Discussions with potential partners under CDA continue

· C4XD and LifeArc risk-share collaboration to progress a small molecule MALT-1 inhibitor programme has made progress, with three novel series identified

· Post-period

§ Exclusive worldwide licensing agreement with Sanofi for C4XD's IL-17A oral inhibitor programme worth up to €414 million including:

§ €7 million upfront

§ €407 million in potential development, regulatory and commercialisation milestones, of which €11 million is in pre-clinical milestones

§ Potential for single-digit royalties

§ Following scientific progress over the last year, C4XD is now taking on the leadership of the MALT-1 programme from LifeArc to drive it towards the later stages of drug discovery and deliver a commercial deal

§ Appointment of Simon Harford as a Non-Executive Director to the Board

 

 

 

Financial highlights:

 

· Successful fundraise of £15.0 million (before expenses) with a total of 107,142,858 shares issued to both new and existing shareholders

· R&D investment was £3.3 million in the six months ending 31 January 2021, down £0.3million from the £3.6 million in the six months ended 31 January 2020

· Cash, cash equivalents, short-term investments and deposits at 31 January 2021 of £15.4 million (31 July 2020: £5.6 million and 31 January 2020: £5.5 million)

Cash events post-period:

- Imminent €7 million upfront payment following the deal with Sanofi

- Received £1.8m R&D tax credit due in respect of the financial year ended 31 July 2020

· Strong cash position and manageable fixed cost base means the Company has sufficient funding for the foreseeable future

· Net assets at 31 January 2021 of £19.0 million (31 July 2020: £8.1 million and 31 January 2020: £10.3 million)

 

Analyst conference call today

 

Dr Clive Dix, Chief Executive Officer, and members of the management team will host a webcast for analysts at 10.30am UK time today. A copy of the final results presentation will be released later this morning on the Company website at www.c4xdiscovery.com.  Please contact Consilium Strategic Communications for details on [email protected] / +44  203709 5700.

 

For further information, please contact:

 

C4X Discovery Holdings plc

 

Mo Noonan, Communications

+44 (0) 787 6444977

 

 

Panmure Gordon (UK) Limited (NOMAD and Broker)

+44 (0) 20 7886 2500

Freddy Crossley, Emma Earl (Corporate Finance)

 

Rupert Dearden (Corporate Broking)

 

 

 

Consilium Strategic Communications

 

Mary-Jane Elliott, Chris Gardner, Matthew Neal

+44 (0) 20 3709 5700

 

Notes to Editors:

 

About C4X Discovery

 

C4X Discovery ("C4XD") is a pioneering Drug Discovery company combining scientific expertise with cutting-edge Drug Discovery technologies to efficiently deliver world‑leading medicines, which are developed by our partners for the benefit of patients.  We have a highly valuable and differentiated approach to Drug Discovery through our enhanced DNA-based target identification and candidate molecule design capabilities, generating small molecule drug candidates across multiple disease areas including inflammation, neurodegeneration, oncology and addictive disorders.  Our commercially attractive portfolio ranges from early stage novel target opportunities to late stage Drug Discovery programmes ready for a commercial deal and to date we have successfully out-licensed two programmes with one candidate in clinical development.

 

We collaborate with leading pharmaceutical and life sciences companies to enrich our expertise and take our assets through pre-clinical and clinical development.  Through early-stage revenue-generating licensing deals, we realise returns from our high value pre-clinical assets which are reinvested to maximise the value of our Drug Discovery portfolio.  For more information visit us at www.c4xdiscovery.com or follow us on twitter @C4XDiscovery .

 

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

 

 

Corporate Overview

 

C4XD saw progress across its drug discovery portfolio, with a number of programmes making significant advances, particularly in inflammation with the announcement post period of a €414 million exclusive, worldwide out-licensing agreement with Sanofi for our IL-17A inhibitor programme.  Together with advancements in early innovation projects and partnered collaborations, C4XD continues to focus on building a sustainable pipeline of potential future out-licensing opportunities. 

 

The Company has a strong cash position and manageable fixed cost base that means the Company has sufficient funding for the foreseeable future. In October 2020, C4XD announced a £15 million placing, providing the Company with a robust financial base from which to advance its portfolio.  Cash, cash equivalents, short-term investments and deposits were at 31 January 2021 of £15.4 million (31 July 2020: £5.6 million and 31 January 2020: £5.5 million). Cash events post-period included the imminent €7 million upfront payment following the deal with Sanofi and the Company has also received £1.8m R&D tax credit due in respect of the financial year ended 31 July 2020. Going forward any proceeds arising from the exercise of the Warrants in the placing as announced 21 October 2020 will further strengthen the cash position of the Company.

 

R&D investment remained stable and was £3.3 million in the six months ending 31 January 2021, down £0.3million from the £3.6 million in the six months ended 31 January 2020. Likewise Administrative Expenses were also down £0.1 million, to £1.2million from £1.3 million in the prior year.

 

Post period, in April 2021, we welcomed Simon Harford to the Board of C4XD as a Non-Executive Director.  He joins with more than 30 years of expertise across key financial markets and will be a valuable asset as we grow C4XD and expedite deals such as the one recently announced with Sanofi.

 

Drug Discovery Pipeline

 

Oral Orexin-1 Antagonist (C4X_3256/INDV-2000) - Partnered with Indivior

The US$294 million licensing deal with Indivior for C4XD's oral Orexin-1 receptor antagonist C4X_3256, also known as INDV-2000, for the treatment of addiction continues to progress.  INDV-2000 has recently completed a Phase I first in human single ascending dose clinical trial for the treatment of opioid dependence (https://www.clinicaltrials.gov/ct2/show/NCT04413552).  Preparation for the initiation of a multiple ascending dose study to be conducted by Indivior is underway.

 

Oral IL-17A Inhibitor Programme - Partnered with Sanofi

C4XD has identified small molecules in its oral IL-17 inhibitor programme that can selectively block IL-17 activity whilst maintaining molecular size of the molecule in the traditional "drug-like" range.  A novel, potent oral series of IL-17 inhibitors that significantly reduce IL-17 induced inflammation in vivo is being optimised towards candidate shortlist.  In April 2021, C4XD announced an out-licensing agreement with Sanofi for its IL-17A inhibitor programme for up to €414 million.  The Company will receive an upfront payment of €7 million and could receive up to a further €407 million in potential development, regulatory and commercialisation milestones, of which €11 million is in pre-clinical milestones, in addition to single digit royalties.  Sanofi will take control of the programme but will continue to work with C4XD in the next discovery phase to utilise our Conformetrix technology and expertise as the programme progresses towards the clinic.

 

Oral NRF-2 Activator Programme

The Company has identified a series of keap-1 inhibitors in its oral NRF-1 activator programme, which have been found to significantly activate NRF-2 following oral dosing, providing anti-inflammatory and anti-oxidant activity. In C4XD studies, multiple lead compounds show greater than 12-hour duration of action following low oral dosing on activation of NRF-2 in key tissues such as the lung, the liver and in blood. More recently, one of C4XD's lead NRF-2 activator molecules has also been shown to significantly inhibit the disease score in a pre-clinical model of IBD in a dose-dependent manner.  Candidate nomination studies and preliminary safety studies are underway ahead of progressing to IND enabling studies, which are considered to be required in order to increase value and further differentiate from competitor molecules.

 

Oral α4β7 integrin inhibitor Programme

C4XD's oral α4β7 integrin inhibitor programme has identified novel, potent and selective α4β7 integrin inhibitors for the treatment of Inflammatory Bowel Disease ("IBD").  In August 2020, the Company announced that significant progress has been made on C4XD's early oral inhibitor programme targeting α4β7 integrin for the treatment of IBD. Effective antibody therapy against this target is already approved, removing the clinical target risk, but effective oral therapy remains highly sought after. C4XD has identified a second series of novel, potent and selective inhibitors providing a further competitive edge for this programme. This reaffirms the capability of C4XD's Conformetrix technology to discover novel chemical scaffolds for high value challenging drug targets.

 

Both series have recently demonstrated oral bioavailability in PK studies with the current focus on improving PK properties to demonstrate functional inhibition of α4β7 integrin in vivo following oral dosing. The Company is currently generating improved molecules to move to in vivo studies and, despite being early stage, the Company is in confidential discussions with several potential partners.

 

Oral MALT-1 Inhibitor Programme

In November 2018, C4XD entered into a risk-share discovery collaboration with LifeArc®, a UK medical research charity, to progress medicinal chemistry efforts on a MALT-1 inhibitor programme with applicability across oncology and inflammation indications, with a primary focus of haematological cancers. Three novel series have been identified by harnessing C4XD's Conformetrix technology and data obtained in 2020 has demonstrated functional cell activity and oral bioavailability. Optimisation studies continue to increase cellular potency with the aim of showing in vivo inhibition of the target for a prototype molecule. C4XD is now taking on leadership of the MALT-1 programme from LifeArc to drive it towards the later stages of drug discovery and deliver a commercial deal.

 

Outlook

C4X Discovery has continued to advance its high value portfolio of commercially attractive drug candidates for future partners and, post-period end, a €414 million agreement was signed with Sanofi for our IL-17A oral inhibitor programme, demonstrating the value of C4XD's Drug Discovery expertise and our business model.  C4XD's focus will now be to further augment the portfolio, continue to build its network of partnerships and advance the pipeline of proprietary and partnered projects.  With two programmes now successfully partnered and a roadmap of potential cash milestones over the next 12-24 months, the Board is confident that, through the delivery of next generation, high quality out-licensing opportunities, C4XD can deliver significant value for shareholders.

 

 

Interim consolidated statement of comprehensive income

For the six months ended 31 January 2021

 

 

 

Six months

Six months

Year

 

 

to

to

to

 

 

31 January 2021

31 January 2020

31 July

2020

 

 

(Unaudited)

(Unaudited)

(Audited)

 

 

£000

£000

£000

 

Notes

 

 

 

 

 

 

 

 

Revenue

 

-

-

-

 

 

 

 

 

Cost of sales

 

-

-

-

 

 

 

 

 

 

 

 

 

 

Gross profit

 

-

-

-

 

 

 

 

 

Research and development expenses

 

(3,304)

(3,567)

(6,858)

Administrative expenses

 

(1,217)

(1,322)

(2,708)

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(4,521)

(4,889)

(9,566)

 

 

 

 

 

Finance income

 

-

-

5

Finance costs

 

(7)

(10)

(18)

 

 

 

 

 

Loss before taxation

 

(4,528)

(4,899)

(9,579)

 

 

 

 

 

Taxation

3

888

910

1,790

 

 

 

 

 

Loss for the period and total comprehensive loss for the period

 

(3,640)

(3,989)

(7,789)

 

 

 

 

 

Loss per share :

 

 

 

 

Basic and diluted loss for the period

4

(2.19)p

(5.02)p

(8.10)p

 

 

Interim consolidated statement of changes in equity

For the six months ended 31 January 2021

 

 

Issued equity

Share

Share based payment

Merger

Capital contribution

Revenue

 

 

capital

premium

reserve

reserve

reserve

reserve

Total

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 01 August 2019

2,602

32,256

736

920

195

(29,724)

7,013

Impact of change in accounting policy

 

-

-

-

-

-

(28)

(28)

At 01 August 2019 adjusted

2,602

32,256

736

920

195

(29,724)

6,985

 

 

 

 

 

 

 

 

Loss for the six months to 31 January 2020

-

-

-

-

-

(3,989)

(3,989)

Issue of share capital

507

7,079

-

-

-

-

7,586

Expenses of placing, open offer and subscription by directors

-

(443)

-

-

-

-

(443)

Share-based payments

-

-

107

-

-

-

107

 

 

 

 

 

 

 

 

At 31 January 2020

3,109

38,892

843

920

195

(33,713)

10,246

 

 

 

 

 

 

 

Loss for the six months to 31 July 2020

-

-

-

-

-

(3,800)

(3,800)

Issue of share capital

107

1,519

-

-

-

-

1,626

Expenses of placing and open offer

-

(104)

-

-

-

-

(104)

Share-based payments

-

-

99

-

-

-

99

 

 

 

 

 

 

 

 

At 31 July 2020

3,216

40,306

942

920

195

(37,513)

8,066

 

 

 

 

 

 

 

 

Loss for the six months to 31 January 2021

-

-

-

-

-

(3,640)

(3,640)

Issue of share capital

1,072

13,928

-

-

-

-

15,000

Expenses of placing, open offer and subscription by directors

-

(551)

-

-

-

-

(551)

Share-based payments

-

-

117

-

-

-

117

 

 

 

 

 

 

 

 

At 31 January 2021

4,288

53,683

1,059

920

195

(41,153)

18,992

 

 

 

Interim consolidated statement of financial position

As at 31 January 2021

 

 

 

31 January 2021

31 January 2020

31 July

2020

 

 

(Unaudited)

(Unaudited)

(Audited)

 

 

£000

£000

£000

 

Notes

 

 

 

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

41

58

47

Intangible assets

 

88

228

157

Goodwill

 

1,192

1,192

1,192

Right-of-use assets

 

492

562

377

 

 

1,813

2,040

1,773

Current assets

 

 

 

 

 

 

 

 

 

Trade and other receivables

 

616

580

438

Income tax asset

 

2,668

3,610

1,780

Cash and cash equivalents

 

15,396

5,503

5,648

 

 

18,680

9,693

7,866

Total assets

 

20,493

11,733

9,639

 

 

 

 

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

(985)

(897)

(1,166)

Lease liabilities

 

(219)

(316)

(189)

 

 

(1,204)

(1,213)

(1,355)

Non-current liabilities

 

 

 

 

Lease liabilities

 

(297)

(246)

(218)

 

 

(297)

(246)

(218)

 

 

 

 

 

Total liabilities

 

(1,501)

(1,459)

(1,573)

Net assets

 

18,992

10,274

8,066

 

 

 

 

 

Capital and reserves

 

 

 

 

Issued equity capital

5

4,288

3,109

3,216

Share premium

5

53,683

38,892

40,306

Share-based payment reserve

 

1,059

843

942

Merger reserve

 

920

920

920

Capital contribution reserve

 

195

195

195

Revenue reserve

 

(41,153)

(33,685)

(37,513)

Total equity

 

18,992

10,274

8,066

 

 

 

 

 

 

Approved by the Board and authorised for issue on 29 April 2021

Brad Hoy

Chief Financial Officer

28 April 2021

Interim consolidated cash flow statement

For the six months ended 31 January 2021

 

 

Six months

Six months

Year

 

to

to

to

 

31 January

31 January

31 July

 

2021

2020

2020

 

(Unaudited)

(Unaudited)

(Audited)

 

£000

£000

£000

 

 

 

 

Loss after tax and interest

(3,640)

(3,989)

(7,789)

Adjustments for:

 

 

 

Depreciation of property, plant and equipment

16

25

45

Depreciation of right-of-use assets

139

131

302

Amortisation of intangible assets

69

67

138

Share-based payments

117

107

206

Finance income

-

-

(5)

Finance costs

7

10

18

Taxation

(888)

(910)

(1,790)

Changes in working capital:

 

 

 

  Decrease/(increase) in trade and other receivables

(178)

61

203

  (Decrease)/increase in trade and other payables

(181)

(755)

(486)

Cash outflow from operating activities

(4,539)

(5,253)

(9,158)

Research and development tax credit received

-

1,376

4,086

Net cash outflow from operating activities

(4,539)

(3,877)

(5,072)

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

(11)

(5)

(14)

Finance income

-

-

5

Net cash outflow from investing activities

(1)

(1)

(9)

 

 

 

 

Cash flows from financing activities:

 

 

 

Payment of lease liabilities

(151)

(141)

(319)

Proceeds from the issue of ordinary share capital 

15,000

7,586

9,212

Expenses of placing, open offer and subscription by directors

(551)

(443)

(547)

Net cash inflow from financing activities

14,298

6,998

8,346

 

 

 

 

Increase/(decrease) in cash and cash equivalents

9,748

3,120

3,265

Cash and cash equivalents at the start of the period

5,648

2,383

2,383

Cash, cash equivalents and deposits at the end of the period

15,396

5,503

5,648

 

 

 

 

 

Notes to the interim financial report

For the six months ended 31 January 2021

 

1. Corporate information

 

The principal activity of the C4X Discovery Holdings plc is research and development, a review of which is included in the Chairman's and CEO's Statement.

 

C4XD is incorporated and domiciled in the United Kingdom and its registered number is 09134041. The address of the registered office is Manchester One, 53 Portland Street, Manchester, M1 3LD.

 

The interim financial information was approved for issue on 29 April 2021.

 

2. Accounting policies

 

Basis of preparation

The accounting policies adopted in this interim financial report are consistent with those followed in the preparation of the Group's annual report and accounts for the year to 31 July 2020, except for the following changes:

 

The interim financial information for the six months ended 31 January 2021 and 31 January 2020 is unaudited and does not constitute statutory accounts as defined in the Companies Act 2006.  This interim financial report includes audited comparatives for the year to 31 July 2020.  The 2020 annual report and accounts received an unqualified audit opinion and has been filed with the Registrar of Companies.

 

These interim financial statements have been prepared in accordance with IAS34 Interim Financial Reporting.  They do not include all the information required for a complete set of IFRS financial statements.  However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 July 2020.

 

Basis of consolidation

This interim financial report consolidates the financial statements of C4X Discovery Holdings plc and the entities it controls (its subsidiaries).

 

 

3.  Taxation 

 

 

Six months to

Six months to

Year to

 

31 January

31 January

31 July

 

2021

2020

2020

 

£000

£000

£000

 

 

 

 

UK corporation tax losses in the period

-

-

-

Research and development income tax credit receivable

(888)

(900)

(1,780)

Adjustment in respect of prior periods

-

(10)

(10)

 

 

 

 

 

(888)

(910)

(1,790)

 

 

 

 

4.  Loss per share 

 

 

 

 

 

31 January

31 January

31 July

2021

2020

2020

 

£000

£000

£000

 

 

 

 

Loss for the financial period attributable to equity shareholders

(3,640)

(3,989)

(7,789)

 

 

 

 

Weighted average number of shares:

No.

No.

No.

Ordinary shares in issue

166,412,628

79,385,238

96,123,309

Basic loss per share (pence)

(2.19)p

(5.02)p

(8.10)p

 

Diluted loss per share has not been presented above as the effect of share options issued is anti-dilutive.

 

5. Issued share capital and share premium

 

 

Deferred shares

Ordinary shares

Share capital

Deferred shares

Share premium

Total

 

Number

Number

£000

£000

£000

£000

Ordinary and deferred shares as at 31 January 2020

2,025,000

108,366,444

1,084

2,025

38,892

42,001

Issue of share capital on placing

-

10,836,700

108

-

1,518

1,626

Expenses of placing

-

-

-

-

(104)

(105)

Ordinary and deferred shares as at  31 July 2020

2,025,000

119,203,144

1,191

2,025

40,306

43,522

Issue of share capital on placing

-

99,169,286

992

-

12,892

13,884

Issue of share capital on open offer

-

7,973,572

80

 

1,036

1,116

Expenses of placing and open offer

-

-

-

-

(551)

(551)

Ordinary and deferred shares as at  31 January 2021

2,025,000

226,346,002

2,263

2,025

53,683

57,971

 

6.  Interim financial report

 

A copy of this interim condensed financial report is available on C4XD's website at www.c4xdiscovery.com.

 

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