September 26, 2024
Biodexa Pharmaceuticals PLC
(“Biodexa” or the “Company”)
Interim results for the six months ended June 30,
2024
Biodexa Pharmaceuticals PLC (Nasdaq: BDRX), an
acquisition-focused clinical stage biopharmaceutical company
developing a pipeline of innovative products for the treatment of
diseases with unmet medical needs, today announces its unaudited
interim results for the six months ended June 30, 2024 which will
also be made available on the Company’s website at
www.biodexapharma.com
OPERATIONAL HIGHLIGHTS
The Company announced the following in the six months ended June
30, 2024:
- Exclusive worldwide
licensing of eRapa™, a Phase 3 ready asset with a lead indication
of Familial Adenomatous Polyposis (“FAP”) together with access to a
$17 million grant.
- Six month data of
eRapa in FAP showing an 83% non-progression rate and a
statistically significant reduction on overall polyp burden,
announced at the Digestive Disease Week scientific meeting in
Washington D.C.
- 12 month data of
eRapa in FAP showing a 75% non-progression rate and median overall
decrease in polyp burden of 17%, presented at the bi-annual InSIGHT
scientific meeting in Barcelona.
- 12 month overall
survival of patient #1 in the Company’s MAGIC-G1 Phase 1 study of
MTX110 in recurrent Glioblastoma (“rGBM”).
- 16.5 months overall
survival of patients in a Phase 1 study of MTX110 in Diffuse
Midline Glioma, subsequently presented at the International
Symposium on Pediatric Neuro-oncology (ISPNO 2024).
- Allowance by the US
Patent and Trademark Office of Family 13 (“Prevention of Pancreatic
Cell Degeneration”), a key component of tolimidone
exclusivity.
Post period end:
- Approval by Health
Canada to proceed with a Phase 2a dose confirmation study of
tolimidone in Type 1 diabetes to be conducted by the University of
Alberta Diabetes Institute.
- An update on the
status of cohort A in the MAGIC-G1 study: patients #1 and #2 have
deceased with overall survival (OS) since start of treatment of 12
months and 13 months, respectively. Patients #3 and #4 remain alive
with progression free survival (PFS) since the start of treatment
of 6 and 9 months, respectively and OS thus far of 12 and 11 months
respectively.
FINANCIAL HIGHLIGHTS
- Receipt of $6.05 million in gross proceeds from the exercise of
certain Series E and Series F warrants to purchase 4.4 million
ADSs. The warrant inducement included a reduction in exercise price
and issuance of replacement Series G and Series H warrants.
- R&D costs decreased to £2.19 million in 1H24 (1H23: £2.25
million) reflecting a reduction in spend on the MAGIC-G1 study in
rGBM, termination of legacy drug delivery projects and lower
personnel costs offset by the addition of MTD228 (tolimidone) and
MTX230 (eRapa) preclinical and study initiation costs.ministrative
costs decreased to £2.03 million (1H23: £2.29 million) as a result
of a positive reversal in foreign exchange and a reduction in
professional fees offset by increases in share-based payment charge
and sundry other costs.
- Administrative costs decreased to £2.03 million (1H23: £2.29
million) as a result of a positive reversal in foreign exchange and
a reduction in professional fees offset by increases in share-based
payment charge and sundry other costs.
- Net cash used in operating activities (after changes in working
capital) in 1H24 was £4.81 million (1H23: £3.88million).
- The Company’s cash balance at June 30, 2024 was £5.06 million.
The cash balance at August 31, 2024 was £5.71 million.
Post period end:
- Receipt of $5.0
million in gross proceeds from a Registered Direct Offering of 5.1m
ADSs and 0.3m Pre-funded warrants together with a private placement
of Series J and Series K warrants.
- Payment of the final
match, enabling access to the remainder of the $17 million grant
from the Cancer Prevention and Research Institute of Texas
(“CPRIT”), which will be used to fund the upcoming Phase 3
registrational study of eRapa in the orphan indication of FAP.
Commenting, Stephen Stamp, CEO and CFO, said “It was a busy
first half for Biodexa. Licensing in eRapa, a Phase 3 ready asset
with access to $17 million of non-dilutive grant funding, is an
enormous step forward. The second half will be about executing on
our lead programs. We already have approval from Health Canada for
the IIT Phase 2a study of tolimidone in Type 1 diabetes and we are
working diligently to set up a global Phase 3 registrational study
of eRapa in FAP so we can begin recruiting early next year.”
For more information, please contact:
Biodexa Pharmaceuticals PLC
Stephen Stamp, CEO, CFO
Tel: +44 (0)29 2048 0180
www.biodexapharma.com
About Biodexa
Biodexa Pharmaceuticals PLC (listed on NASDAQ: BDRX) is a
clinical stage biopharmaceutical company developing a pipeline of
innovative products for the treatment of diseases with unmet
medical needs. The Company’s lead development programs include
eRapa, under development for Familial Adenomatous Polyposis and
Non-Muscle Invasive Blader Cancer; tolimidone, under development
for the treatment of type 1 diabetes; and MTX110, which is being
studied in aggressive rare/orphan brain cancer indications.
eRapa is a proprietary oral formulation of rapamycin, also known
as sirolimus. Rapamycin is an mTOR (mammalian Target Of Rapamycin)
inhibitor. mTOR has been shown to have a significant role in the
signalling pathway that regulates cellular metabolism, growth and
proliferation and is activated during tumorgenesis.
Tolimidone is an orally delivered, potent and selective
activator of Lyn kinase. Lyn is a member of the Src family of
protein tyrosine kinases, which is mainly expressed in
hematopoietic cells, in neural tissues, liver, and adipose tissue.
Tolimidone demonstrates glycemic control via insulin sensitization
in animal models of diabetes and has the potential to become a
first in class blood glucose modulating agent.
MTX110 is a solubilised formulation of the histone deacetylase
(HDAC) inhibitor, panobinostat. This proprietary formulation
enables delivery of the product via convection-enhanced delivery
(CED) at chemotherapeutic doses directly to the site of the tumor,
by-passing the blood-brain barrier and potentially avoiding
systemic toxicity.
Biodexa is supported by three proprietary drug delivery
technologies focused on improving the bio-delivery and
bio-distribution of medicines. Biodexa’s headquarters and R&D
facility is in Cardiff, UK. For more information visit
www.biodexapharma.com.
Forward-Looking Statements
Certain statements in this announcement may constitute
“forward-looking statements” within the meaning of legislation in
the United Kingdom and/or United States. Such statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and are based on management’s belief
or interpretation. All statements contained in this announcement
that do not relate to matters of historical fact should be
considered forward-looking statements. In certain cases,
forward-looking statements can be identified by the use of words
such as “plans”, “expects” or “does not anticipate”, or “believes”,
or variations of such words and phrases or statements that certain
actions, events or results “may”, “could”, “would”, “might” or
“will be taken”, “occur” or “be achieved.” Forward-looking
statements and information are subject to various known and unknown
risks and uncertainties, many of which are beyond the ability of
the Company to control or predict, that may cause their actual
results, performance or achievements to be materially different
from those expressed or implied thereby, and are developed based on
assumptions about such risks, uncertainties and other factors set
out herein.
Reference should be made to those documents that Biodexa shall
file from time to time or announcements that may be made by Biodexa
in accordance with the rules and regulations promulgated by the
SEC, which contain and identify other important factors that could
cause actual results to differ materially from those contained in
any projections or forward-looking statements. These
forward-looking statements speak only as of the date of this
announcement. All subsequent written and oral forward-looking
statements by or concerning Biodexa are expressly qualified in
their entirety by the cautionary statements above. Except as may be
required under relevant laws in the United States, Biodexa does not
undertake any obligation to publicly update or revise any
forward-looking statements because of new information, future
events or events otherwise arising.
CHIEF EXECUTIVE’S REVIEW
Our primary focus in the first half of 2024 was on assimilating
tolimidone, licensed in December 2023, into our portfolio and
searching for additional clinical-stage assets to diversify and
advance our pipeline which ultimately led to the licensing of eRapa
in May 2024.
eRapa License
In line with our strategy to build a sustainable therapeutics
company in rare/orphan diseases, we continue to search for
opportunities to broaden and diversify our development pipeline. On
April 25, 2024, we entered into a License and Collaboration
Agreement (“LCA”) with Rapamycin Holdings, Inc. (d/b/a Emtora
Biosciences), relating to the license of eRapa, an oral formulation
of rapamycin (also known as sirolimus) for use in all diseases,
states or conditions in humans. Under the LCA, we obtained an
exclusive, worldwide, sublicensable right to develop, manufacture,
commercialize, or otherwise exploit products containing rapamycin.
Pursuant to the terms of the LCA, the Company and Emtora
established a joint development committee to monitor and progress
the development of eRapa.
Emtora has conducted a Phase 1 study of eRapa in prostate
cancer, a Phase 2 study in FAP and has an ongoing Phase 2 study in
Non-muscle Invasive Bladder Cancer. Preparations are under way for
a registrational Phase 3 study of eRapa in FAP.
In consideration for the license, we made an upfront payment of
378,163 ADSs (equal to five percent of our then outstanding
Ordinary Shares, calculated on a fully-diluted basis). In addition,
we are also responsible for up to an aggregate $31.5 million in
sales milestones within the first six months of commercial sale of
a first-approved indication of eRapa in certain markets with
decreasing milestones for subsequent approvals for additional
indications. There is also a one-time $10.0 million milestone
payable upon cumulative net sales of $1.0 billion. Further, we are
also obligated to pay Emtora single digit tiered royalties on net
sales of eRapa, in addition to honouring Emtora’s legacy royalty
obligations and paying Emtora fees related to income derived from
sublicensing and partnering of eRapa. In addition, a promissory
note previously issued by Emtora in favour of the Company in the
amount of $0.25 million was forgiven. We also made an additional
$0.5 million payment which was used for a match to an advance from
the CPRIT. Emtora had secured a grant of $17.0 million from CPRIT
to support the Phase 3 study of eRapa in FAP. The grant requires a
1 for 2 match and Biodexa was expected to fund the match of up to
$7.5 million, being 50% of the remaining CPRIT grant, which was
completed in September 2024. Grant funding is available once the
match payment has been certified and CPRIT has approved eligible
trial expenses. In certain instances, CPRIT may advance payments
before eligible trial expenses have been incurred.
Upon a change of control of the Company, we will issue Emtora a
warrant exercisable for 1,604,328 ADSs. The LCA also provides us
with the exclusive option to acquire all of the capital stock of
Emtora on commercially reasonable terms in the 90 days after
acceptance of the filing of an NDA by the U.S. Food and Drug
Administration (the “FDA”).
R&D update
Following the in-licensing of eRapa, our development pipeline
has not only advanced in terms of clinical stage but expanded to
six programmes overall, four of which are orphan indications:
eRapa
eRapa is a proprietary oral formulation of rapamycin, also known
as sirolimus. Rapamycin is an mTOR (mammalian Target Of Rapamycin)
inhibitor. mTOR has been shown to have a significant role in the
signalling pathway that regulates cellular metabolism, growth and
proliferation and is activated during tumorgenesis1. Rapamycin is
approved in the US for organ rejection in renal transplantation as
Rapamune®(Pfizer). Through the use of nanotechnology and pH
sensitive polymers, eRapa is designed to address the poor
bioavailability, variable pharmacokinetics and toxicity generally
associated with the currently available forms of rapamycin. eRapa
is protected by a number of issued patents which extend through
2035, with other pending applications potentially providing further
protection beyond 2035.
Familial Adenomatous Polyposis (“FAP”)
FAP is an orphan indication characterized by a proliferation of
polyps in the colon and/or rectum, usually occurring in mid-teens.
There is no approved therapeutic option for treating FAP patients,
for whom active surveillance and surgical resection of the colon
and/or rectum remain the standard of care. If untreated, FAP
typically leads to cancer of the colon and/or rectum. There is a
significant hereditary component to FAP with a reported incidence
of one in 5,000 to 10,000 in the US1 and one in 11,300 to 37,600 in
Europe2. eRapa has received Orphan Designation in the US with plans
to seek such designation in Europe. Importantly, mTOR has been
shown to be over-expressed in FAP polyps – thereby underscoring the
rationale for using a potent and safe mTOR inhibitor like eRapa to
treat FAP.
An open-label Phase 2 study (NCT04230499) was conducted by
Emtora in seven U.S. centres of excellence in 30 adult patients.
Patients were sequentially enrolled into three dosing cohorts of 10
patients each for a 12-month treatment period: 0.5mg every other
day (Cohort 1), 0.5mg daily every other week (Cohort 2), and 0.5mg
daily (Cohort 3). Upper and lower endoscopic surveillance occurred
at baseline and after six months. Primary endpoints were safety and
tolerability of eRapa and percentage change from baseline in polyp
burden, as measured by the aggregate of all polyp diameters.
In May 2024, results of the Phase 2 study at six months were
presented at the prestigious 2024 Digestive Disease Week annual
meeting in Washington D.C. by Carol Burke, MD, the Principal
Investigator. In summary, at six months, eRapa appeared safe and
well-tolerated with a significant 24% reduction in the total polyp
burden at six months compared with baseline (p=0.04) and an overall
83% non-progression rate.
In June 2024, results of the Phase 2 study at 12 months were
presented at the bi-annual InSIGHT meeting in Barcelona by Dr
Burke. Overall, 21 of 28 (75%) patients were deemed to be
non-progressors at 12 months with a median reduction in polyp
burden of 17%. In Cohort 2, the likely dosage regimen for Phase 3,
eight of nine (89)% of patients were deemed non-progressors at 12
months with a median reduction in polyp burden of 29%. Over the
course of 12 months, there were four related Grade 3 or higher and
one related Serious Adverse Event reported during the trial and 95%
compliance rate at 12 months. One patient was removed from the
trial due to non-compliance.
The Phase 3 registrational study is planned to be a double-blind
placebo-controlled design recruiting approximately 150 high risk
patients diagnosed with germline or phenotypic FAP. The primary
clinical endpoint is expected to be the first progression free
survival event which will comprise composite endpoints including
major surgery. A ‘Type C’ meeting with the FDA is planned for 4Q24
to finalise the protocol and related matters. A $17 million grant
from CPRIT will support this study.
Non-muscle Invasive Bladder Cancer (“NMIBC”)
NMIBC refers to tumors found in the tissue that lines the inner
surface of the bladder. The most common treatment is transurethral
resection of the bladder tumor followed by intravesical Bacillus
Calmette-Guerin (“BCG”) with chemotherapy depending upon assessment
of risk of recurrence. NMIBC is the fourth most common cancer in
men with an incidence of 10.1 per 100,000 and 2.5 per 100,000 in
women3.
Our ongoing multi-centre, double-blind, placebo-controlled Phase
2 study in NMIBC is expected to enrol up to 166 patients with
primary endpoints of safety/tolerability and relapse free survival
after 12 months of treatment. The Phase 2 study, which is supported
by a $3.0 million non-dilutive grant from the National Cancer
Institute, part of the National Institutes of Health, is expected
to read out in mid-2025.
MTD228 – Tolimidone
Tolimidone was originally discovered by Pfizer and was developed
through Phase 2 for the treatment of gastric ulcers. Pfizer
undertook a broad pre-clinical program to characterize the
pharmacology, pharmacokinetics, metabolism and toxicology of
tolimidone. Pfizer discontinued development of the drug due to lack
of efficacy for that indication in a Phase II clinical trial.
Tolimidone is a selective activator of the enzyme Lyn kinase
which increases phosphorylation of insulin substrate-1, thereby
amplifying the signalling cascade initiated by the binding of
insulin to its receptor.
Type 1 Diabetes (“T1D”)
Tolimidone’s potential utility in T1D has been demonstrated by
several ground-breaking preclinical studies conducted by the
University of Alberta, where Lyn kinase was identified as a key
factor for beta cell survival and proliferation in in vitro and in
vivo models. Most importantly, tolimidone was able to induce
proliferation in beta cells isolated from human cadavers. From a
mechanism of action perspective, tolimidone has been shown to both
prevent beta cell degradation and to stimulate beta cell
proliferation. In a meta analysis of 1,202 articles and 193
studies, the incidence of T1D was shown to be 15 per 100,000 with a
prevalence of 9.5 per 10,000 of the population4.
As a first step in the continued clinical development of
tolimidone, a Phase 2a Investigator Initiated Trial (IIT) at the
University of Alberta Diabetes Institute is designed to establish
the minimum effective dose of tolimidone in patients with T1D. The
study, which was approved by Health Canada in July 2024 is expected
to recruit 12 patients initially across three dose groups. The
study will measure C-peptide levels (a marker for insulin) and
HbA1c (a marker for blood glucose) after three months compared with
baseline and the number of hyperglycemic events.
MTX110
MTX110 is a solubilised formulation of the histone deacetylase
(HDAC) inhibitor, panobinostat. This proprietary formulation
enables delivery of the product via convection-enhanced delivery
(CED) at chemotherapeutic doses directly to the site of the
brain tumor, by-passing the blood-brain barrier and potentially
avoiding systemic toxicity. All three types of brain cancer
being studied are orphan.
Recurrent Glioblastoma (“rGBM”)
Our Phase 1 MAGIC-G1 study (NCT05324501) of MTX110 in rGBM
completed the dose escalation part of the study with the
recruitment of the fourth patient in Cohort A. In February
2024 we announced Patient #1, who had received sub-optimal
infusions of 60µM of MTX110 had survived for12 months from the
start of treatment (OS=12). GBM universally recurs and once it does
median overall survival according to a retrospective analysis of
299 patients reported in the Journal of Neuro-Oncology is 6.5
months. Post period end, we provided an update on the status of
cohort A in the MAGIC-G1 study: patients #1 and #2 have deceased
with overall survival (OS) since start of treatment of 12 months
and 13 months, respectively. Patients #3 and #4 remain alive with
progression free survival (PFS) since the start of treatment of 6
and 9 months, respectively and OS thus far of 12 and 11 months
respectively. GBM virtually always recurs with median Progression
Free Survival of 1.5–6.0 months and median Overall Survival of
2.0–9.0 months5.
Diffuse Midline Glioma (“DMG”)
In February 2024 we announced headline data from a Phase 1 IIT
study conducted by Columbia University in newly diagnosed patients
with DMG. As this was the first ever study of repeated infusions to
the pons via an implanted CED catheter, the primary objective of
the study was safety and tolerability and, accordingly, the number
of infusions was limited to two, each of 48 hours, 7 days apart in
nine patients. One patient suffered a severe adverse event assessed
by the investigators as not related to the study drug.
Although not powered to reliably demonstrate efficacy, median
overall survival (OS) of patients in the study was 16.5 months
compared with median survival rate in a cohort of 316 cases of 10.0
months (Jansen et al, 2015. Neuro-Oncology 17(1):160-166).
Study investigators subsequently presented the results of the
trial at the 21st International Symposium on Pediatric
Neuro-Oncology (ISPNO 2024) in Philadelphia.
Medulloblastoma
An IIT Phase I study of MTX110 in medulloblastoma remains
ongoing at the University of Texas.
Financing
As a pre-revenue biotech company, securing adequate finance to
fund operations to an out-licensing and/or partnering event is a
constant focus. On the back of the eRapa in-licensing and the
subsequent announcement of positive 6-month and 12-month data of
eRapa in FAP, we accomplished two financings; the first in May 2024
and the second post period end in July 2024.
May 2024 Warrant Exercises
On May 22, 2024, we raised $6.05 million of gross proceeds from
the exercise of previously issued warrants following an agreement
between the Company and several accredited investors to exercise
existing Series E warrants and Series F warrants to purchase up to
an aggregate of 4,358,322 ADSs. The warrant holders agreed to
exercise the Series E and/or Series F warrants at an exercise price
of $1.50 (reduced from $2.20) per ADS.
In consideration for the immediate exercise of the Series E
and/or Series F warrants for cash, we issued one replacement
warrant for each Series E warrant exercised in the form of a Series
G warrant, and one replacement warrant for each Series F warrant
exercised in the form of a Series H warrant. The Series G and
Series H warrants are exercisable for five years and one year,
respectively, at $2.50 each.
July 2024 Registered Direct Offering and Private Placement
On July 22, 2024, we utilised our capacity under our
Registration Statement on Form F-3 to raise $5.0 million in gross
proceeds in a Registered Direct Offering with certain institutional
investors for the sale of an aggregate of 5,050,808 ADSs and
278,975 pre-funded warrants at a price of $0.94 per ADS. In a
concurrent Private Placement, we issued and sold to the Investors
(i) Series J warrants exercisable for 5,329,783 ADSs, and (ii)
Series K Warrants to purchase an aggregate of 5,329,783 ADSs. The
Series J and Series K warrants are exercisable for five years and
one year, respectively, at $1.00 per ADS each.
1.
https://rarediseases.org/rare-diseases/familial-adenomatous-polyposis/
2.
https://www.orpha.net/en/disease/detail/733#:~:text=FAP%20has%20a%20birth%20incidence,colorectal%20cancer%20(CRC)%20cases.
3. Cassell et
al., World J Oncol. 2019 Jun; 10(3): 123–131.
4.
National Library of Medicine, Mobasseri et al., published online
2020 Mar 30. doi: 10.34172/hpp.2020.18
5. Birzu
et al. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7794906
1H24 FINANCIAL REVIEW
The unaudited results for the six months ended June 30, 2024 are
discussed below:
Key performance indicators (KPIs):
|
1H
2024 |
1H
2023 |
Change |
|
|
|
|
R&D
costs |
£2.19m |
£2.25m |
(3)% |
R&D as % of
operating costs |
52% |
50% |
5% |
Net cash
(outflow)/inflow for the period |
£(0.92)m |
£2.39m |
N/M |
|
|
|
|
Biodexa’s KPIs focus on the key areas of operating results,
R&D spend and cash management. These measures provide
information on the core R&D operations. Additional financial
and non-financial KPIs may be adopted in due course.
Revenues
Total revenue for the six months to June 30, 2024 was £Nil
compared to £0.30 million in the first six months of 2023. The
R&D collaboration with Janssen, which represented the entire
revenue in 1H23, concluded in September 2023.
Research and Development
R&D costs in 1H24 reduced by £0.06 million, or 3%, to £2.19
million compared with £2.25 million in 1H23. The percentage of
R&D costs as a percentage of total operating costs increased to
52% in the period from 50%. The reduction in R&D costs in 1H24
reflects a reduction in spend of £0.54 million on the MAGIC-G1
study in rGBM, the termination of legacy drug delivery projects and
lower personnel costs offset by the addition of MTD228 (tolimidone)
and MTX230 (eRapa) for a combined expenditure of £0.65 million in
1H24.
Administrative Costs
Administrative costs in 1H24 decreased by £0.26 million, or 11%
to £2.03 million from £2.29 million in 1H23. The decrease in
administrative costs in 1H24 is a result of a positive reversal in
foreign exchange of £0.23 million and a reduction in professional
fees of £0.14 million offset by increases in share-based payment
charge of £0.12 million and sundry other costs.
Finance Income and Expense
Finance income in 1H24 and 1H23 included gains in respect of an
equity settled derivative financial liability of £0.75 million
(1H23: £0.39 million). The gains arose as a result of the fall in
the Biodexa share price. In addition, the Company earned
interest on cash deposits.
Finance expense in the period related to lease liabilities and
discounted interest on deferred consideration.
Cash Flows
Cash outflows from operating activities in 1H24 were £4.81
million compared to £3.88 million in 1H23, driven by a net loss of
£3.31 million (1H23: £3.57 million) and after negative working
capital of £0.87 million (1H23: positive £0.21 million) and other
negative non-cash items totalling £0.63 million (1H23: negative
£0.52 million).
Net cash used in investing activities in 1H24 of £0.75 million
in 1H24 resulted from the purchase of eRapa licence for total
consideration of £3.07 million including cash consideration
of £0.85 million (1H23: £Nil) offset by £0.10 million of
interest received (1H23: £0.02 million).
Net cash generated in financing activities in 1H24 was £4.65
million (1H23: inflow £6.25 million), which was driven by receipts
from share issuances, including warrants, net of costs of £4.74
million offset by payments on lease liabilities of £0.09
million.
Overall, cash decreased by £0.92 million in 1H24 compared to an
increase of £2.39 million in 1H23. This resulted in a cash
balance at June 30, 2024 of £5.06 million compared with £5.23
million at June 30, 2023 and £5.97 million at December 31,
2023.
Going concern
Biodexa has experienced net losses and significant cash outflows
from cash used in operating activities over the past years as it
develops its portfolio. For the six months to June 30, 2024, the
Group incurred a consolidated loss from operations of £3.31 million
(1H23: £3.57 million) and negative cash flows from operating
activities of £4.81 million (1H23: £3.88 million). As of June 30,
2024, the Group had accumulated deficit of £147.88 million.
The Group’s future viability is dependent on its ability to
raise cash from financing activities to finance its development
plans until commercialisation, generate cash from operating
activities and to successfully obtain regulatory approval to allow
marketing of its development products. The Group’s failure to raise
capital as and when needed could have a negative impact on its
financial condition and ability to pursue its business
strategies.
The Group's consolidated interim financial information has been
presented on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business.
As at June 30, 2024, the Group had cash and cash equivalents of
£5.06 million. The Directors forecast that the Group currently has
enough cash to fund its planned operations into the first quarter
of 2025. If the Company does not secure additional funding before
the first quarter of 2025, it will no longer be a going concern and
would likely be placed in Administration.
The Directors have prepared cash flow forecasts and considered
the cash flow requirement for the Group for the next three years
including the period 12 months from the date of approval of this
interim financial information. These forecasts show that
further financing will be required before the first quarter of 2025
assuming, inter alia, that certain development programs and other
operating activities continue as currently planned. If we raise
additional funds through the issuance of debt securities or
additional equity securities, it could result in dilution to our
existing shareholders, increased fixed payment obligations and
these securities may have rights senior to those of our ordinary
shares (including the ADSs) and could contain covenants that would
restrict our operations and potentially impair our competitiveness,
such as limitations on our ability to incur additional debt,
limitations on our ability to acquire, sell or license intellectual
property rights and other operating restrictions that could
adversely impact our ability to conduct our business. Any of these
events could significantly harm our business, financial condition
and prospects.
On August 27, 2024, the Company received notification from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
advising that the Company was not in compliance with the minimum
bid requirement set forth in NASDAQ’s rules for continued listing
of its securities. The Company has requested a Hearing Panel which
has paused any suspension or delisting action pending the hearing.
If the Company's ADSs are delisted, it could be more difficult to
buy or sell the Company's ADSs or to obtain accurate quotations,
and the price of the Company's ADSs could suffer a material
decline. Delisting may impair the Company's ability to raise
capital.
In the Directors’ opinion, the environment for financing of
small and micro-cap biotech companies continues to be challenging.
While this may present acquisition and/or merger opportunities with
other companies with limited or no access to financing, as noted
above, any attendant financings by Biodexa are likely to be
dilutive. The Directors continue to evaluate financing
options, including those connected to acquisitions and/or mergers,
potentially available to the Group. Any alternatives considered are
contingent upon the agreement of counterparties and accordingly,
there can be no assurance that any of alternative courses of action
to finance the Group would be successful. This requirement for
additional financing in the short term represents a material
uncertainty that may cast significant doubt upon the Group’s
ability to continue as a going concern. Should it become evident in
the future that there are no realistic financing options available
to the Group which are actionable before its cash resources run out
then the Group will no longer be a going concern. In such
circumstances, we would no longer be able to prepare financial
statements under paragraph 25 of IAS 1. Instead, the financial
statements would be prepared on a liquidation basis and assets
would be stated at net realizable value and all liabilities would
be accelerated to current liabilities.
The Directors believe there are adequate options and time
available to secure additional financing for the Group and after
considering the uncertainties, the Directors consider it is
appropriate to continue to adopt the going concern basis in
preparing these financial statements.
Our forecast of the period of time through which our financial
resources will be adequate to support our operations is a
forward-looking statement and involves risks and uncertainties, and
actual results could vary as a result of a number of factors,
including the timing of clinical trials. We have based this
estimate on assumptions that may prove to be wrong, and we could
utilize our available capital resources sooner than we currently
expect. If we lack sufficient capital to expand our operations or
otherwise capitalize on our business opportunities, our business,
financial condition and results of operations could be materially
adversely affected.
Stephen Stamp
Chief Executive Officer and Chief Financial Officer
Consolidated Statements of Comprehensive Income
For the year six month period ended June 30
|
Note |
2024 unaudited £’000 |
2023 unaudited £’000 |
Revenue |
|
- |
298 |
Research and
development costs |
|
(2,189) |
(2,251) |
Administrative costs |
|
(2,034) |
(2,291) |
Loss from
operations |
|
(4,223) |
(4,244) |
Finance
income |
3 |
839 |
410 |
Finance expense |
3 |
(49) |
(22) |
Loss before
tax |
|
(3,433) |
(3,856) |
Taxation |
4 |
125 |
288 |
Loss for the
period attributable to the owners of the parent |
|
(3,308) |
(3,568) |
Total comprehensive loss attributable to the owners of the
parent |
|
(3,308) |
(3,568) |
Loss per
share |
|
|
|
Basic and diluted
loss per ordinary share – pence |
5 |
(0.1p) |
(3.6)p |
The accompanying notes form part of these financial
statements
Consolidated Statements of Financial Position
|
|
Note |
As at June 30, 2024 unaudited £’000 |
As at December 31, 2023 £’000 |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Property, plant
and equipment |
|
|
436 |
571 |
Intangible assets |
|
6 |
6,008 |
2,941 |
|
|
|
6,444 |
3,512 |
Current
assets |
|
|
|
|
Trade and other
receivables |
|
|
1,922 |
637 |
Taxation |
|
|
547 |
422 |
Cash and cash equivalents |
|
|
5,055 |
5,971 |
|
|
|
7,524 |
7,030 |
Total assets |
|
|
13,968 |
10,542 |
Liabilities |
|
|
|
|
Non-current
liabilities |
|
|
|
|
Deferred
consideration |
|
7 |
1,552 |
- |
Borrowings |
|
|
208 |
295 |
|
|
|
1,760 |
295 |
Current
liabilities |
|
|
|
|
Trade and other
payables |
|
|
1,689 |
1,240 |
Deferred
consideration |
|
7 |
459 |
- |
Borrowings |
|
|
174 |
169 |
Derivative financial liability |
|
8 |
1,159 |
4,160 |
|
|
|
3,481 |
5,569 |
Total liabilities |
|
|
5,241 |
5,864 |
Issued
capital and reserves attributable to owners of the parent |
|
|
|
|
Share
capital |
|
9 |
8,689 |
6,253 |
Share
premium |
|
|
91,242 |
86,732 |
Merger
reserve |
|
|
53,003 |
53,003 |
Warrant
reserve |
|
|
3,674 |
3,457 |
Accumulated deficit |
|
|
(147,881) |
(144,767) |
Total equity |
|
|
8,727 |
4,678 |
Total equity and liabilities |
|
|
13,968 |
10,542 |
The accompanying notes form part of these financial
statements
Consolidated Statements of Cash Flows
For the six month period ended June 30
|
Note |
2024 unaudited £’000 |
2023 unaudited £’000 |
Cash flows
from operating activities |
|
|
|
Loss for the
period |
|
(3,308) |
(3,568) |
Adjustments
for: |
|
|
|
Depreciation
of property, plant and equipment |
|
67 |
72 |
Depreciation
of right of use asset |
|
68 |
70 |
Amortisation
of intangible fixed asset |
|
1 |
1 |
Finance
income |
3 |
(839) |
(410) |
Finance
expense |
3 |
49 |
22 |
Share-based
payment expense |
|
150 |
15 |
Taxation |
4 |
(125) |
(288) |
Foreign
exchange losses |
|
2 |
- |
Cash flows from operating activities before changes in working
capital |
|
(3,935) |
(4,086) |
(Increase)/Decrease in trade and other receivables |
|
(1,298) |
103 |
Increase in
trade and other payables |
|
426 |
309 |
Decrease in provisions |
|
- |
(207) |
Cash used
in operations |
|
(4,807) |
(3,881) |
Taxes payments |
|
- |
- |
Net cash used in operating activities |
|
(4,807) |
(3,881) |
Consolidated Statements of Cash Flows (continued)
For the six month period ended June 30
|
Note |
2024 unaudited £’000 |
2023 unaudited £’000 |
Investing
activities |
|
|
|
Purchases of
property, plant and equipment |
|
- |
(4) |
Proceeds from
disposal of fixed assets |
|
- |
- |
Purchase
intangible asset |
|
(852) |
- |
Interest received |
|
98 |
24 |
Net cash
generated from/(used in) investing activities |
|
(754) |
20 |
Financing
activities |
|
|
|
Interest
paid |
|
- |
(7) |
Amounts paid
on lease liabilities |
|
(93) |
(95) |
Share issues including warrants, net of costs |
9 |
4,738 |
6,354 |
Net cash
generated from/(used in) financing activities |
|
4,645 |
6,252 |
Net
increase/(decrease) in cash and cash equivalents |
|
(916) |
2,391 |
Cash and
cash equivalents at beginning of period |
|
5,971 |
2,836 |
Cash and cash equivalents at end of period |
|
5,055 |
5,227 |
The accompanying notes form part of these financial
statements
Consolidated Statements of Changes in Equity
(unaudited)
|
Note |
Share capital £’000 |
Share premium £’000 |
Merger reserve £’000 |
Warrant reserve £’000 |
Accumulated deficit £’000 |
Total equity £’000 |
|
At January
1, 2024 |
|
6,253 |
86,732 |
53,003 |
3,457 |
(144,767) |
4,678 |
|
Loss for the
period |
|
- |
- |
- |
- |
(3,308) |
(3,308) |
|
Total comprehensive loss |
|
- |
- |
- |
- |
(3,308) |
(3,308) |
|
Transactions with owners: |
|
|
|
|
|
|
|
|
Shares issued
on May 22, 2024 |
9 |
1,242 |
3,730 |
- |
1,690 |
- |
6,662 |
|
Costs
associated with share issue on May 22, 2024 |
|
- |
(369) |
- |
(125) |
- |
(494) |
|
Exercise of
warrants during period |
9 |
1,043 |
1,081 |
- |
(1,348) |
- |
776 |
|
Issue of
shares to purchase intangible asset |
9 |
151 |
68 |
- |
- |
- |
219 |
|
Share-based payment charge |
|
- |
- |
- |
- |
195 |
195 |
|
Total contribution by and distributions to owners |
|
2,436 |
4,510 |
- |
217 |
195 |
7,357 |
|
At June 30, 2024 |
|
8,689 |
91,242 |
53,003 |
3,674 |
(147,881) |
8,727 |
|
|
Note |
Share capital £’000 |
Share premium £’000 |
Merger reserve £’000 |
Warrant reserve £’000 |
Accumulated deficit £’000 |
Total equity £’000 |
At January
1, 2023 |
|
1,108 |
83,667 |
53,003 |
720 |
(135,336) |
3,162 |
Loss for the
period |
|
- |
- |
- |
- |
(3,568) |
(3,568) |
Total comprehensive loss |
|
- |
- |
- |
- |
(3,568) |
(3,568) |
Transactions with owners: |
|
|
|
|
|
|
|
Shares issued
on February 15, 2023 |
9 |
1,956 |
3,013 |
- |
- |
- |
4,969 |
Costs
associated with share issue on February 15, 2023 |
|
- |
(903) |
- |
- |
- |
(903) |
Shares issued
on May 26, 2023 |
9 |
2,277 |
- |
- |
103 |
(355) |
2,025 |
Costs
associated with share issue on May 26, 2023 |
|
- |
- |
- |
- |
(527) |
(527) |
Share-based payment charge |
|
- |
- |
- |
- |
141 |
141 |
Total contribution by and distributions to owners |
|
4,233 |
2,110 |
- |
103 |
(741) |
5,705 |
At June 30, 2023 |
|
5,341 |
85,777 |
53,003 |
823 |
(139,645) |
5,299 |
The accompanying notes form part of these financial
statements
Notes Forming Part of The Consolidated Unaudited Interim
Financial Information
For the six month period ended June 30, 2024
- Basis of preparation
The unaudited interim consolidated financial information for the
six months ended June 30, 2024 has been prepared following the
recognition and measurement principles of the International
Financial Reporting Standards, International Accounting Standards
and Interpretations (collectively IFRS) issued by the International
Accounting Standards Board (IASB), and as adopted by the UK and in
accordance with International Accounting Standard 34 Interim
Financial Reporting (‘IAS 34’). The interim consolidated financial
information does not include all the information and disclosures
required in the annual financial information and should be read in
conjunction with the audited financial statements for the year
ended December 31, 2023.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting
periods.
Book values approximate to fair value at 30 June 2024, 30 June
2023 and 31 December 2023.
The condensed interim financial information contained in this
interim statement does not constitute statutory financial
statements as defined by section 434(3) of the Companies Act 2006.
The condensed interim financial information has not been audited.
The comparative financial information for the six months ended June
30, 2023 and the year ended December 31, 2023 in this interim
financial information does not constitute statutory financial
statements for that period or year. The statutory financial
statements for December 31, 2023 have been delivered to the UK
Registrar of Companies. The auditor’s report on those accounts was
unqualified and did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006. The auditor’s report did draw
attention to a material uncertainty related to going concern and
the requirement, as of the date of the report, for additional
funding to be raised by the Company by the fourth quarter of
2024.
Biodexa Pharmaceutical’s annual reports may be downloaded from
the Company’s website at
https://biodexapharma.com/investors/financial-reports-and-presentations/#financial-reports
or a copy may be obtained from 1 Caspian Point, Caspian Way,
Cardiff CF10 4DQ.
Going Concern – material uncertainty
Biodexa has experienced net losses and significant cash outflows
from cash used in operating activities over the past years as it
develops its portfolio. For the six months to June 30, 2024, the
Group incurred a consolidated loss from operations of £3.31 million
(1H23: loss £3.56 million) and negative cash flows from operating
activities of £4.81 million (1H23 £3.88 million). As of June 30,
2024, the Group had accumulated deficit of £147.88 million.
The Group’s future viability is dependent on its ability to
raise cash from financing activities to finance its development
plans until commercialisation, generate cash from operating
activities and to successfully obtain regulatory approval to allow
marketing of its development products. The Group’s failure to raise
capital as and when needed could have a negative impact on its
financial condition and ability to pursue its business
strategies.
The Group's consolidated financial statements have been
presented on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business.
As at June 30, 2024, the Group had cash and cash equivalents of
£5.06 million. The Directors forecast that the Group currently has
enough cash to fund its planned operations into the first quarter
of 2025. If the Company does not secure additional funding before
the first quarter of 2025, it will no longer be a going concern and
would likely be placed in Administration.
The Directors have prepared cash flow forecasts and considered
the cash flow requirement for the Group for the next three years
including the period 12 months from the date of approval of this
interim financial information. These forecasts show that
further financing will be required before the first quarter of 2025
assuming, inter alia, that certain development programs and other
operating activities continue as currently planned. If we raise
additional funds through the issuance of debt securities or
additional equity securities, it could result in dilution to our
existing shareholders, increased fixed payment obligations and
these securities may have rights senior to those of our ordinary
shares (including the ADSs) and could contain covenants that would
restrict our operations and potentially impair our competitiveness,
such as limitations on our ability to incur additional debt,
limitations on our ability to acquire, sell or license intellectual
property rights and other operating restrictions that could
adversely impact our ability to conduct our business. Any of these
events could significantly harm our business, financial condition
and prospects.
On August 27, 2024, the Company received notification from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
advising that the Company was not in compliance with the minimum
bid requirement set forth in NASDAQ’s rules for continued listing
of its securities. The Company has requested a Hearing Panel which
has paused any suspension or delisting action pending the hearing.
If the Company's ADSs are delisted, it could be more difficult to
buy or sell the Company's ADSs or to obtain accurate quotations,
and the price of the Company's ADSs could suffer a material
decline. Delisting may impair the Company's ability to raise
capital.
In the Directors’ opinion, the environment for financing of
small and micro-cap biotech companies continues to be challenging.
While this may present acquisition and/or merger opportunities with
other companies with limited or no access to financing, as noted
above, any attendant financings by Biodexa are likely to be
dilutive. The Directors continue to evaluate financing
options, including those connected to acquisitions and/or mergers,
potentially available to the Group. Any alternatives considered are
contingent upon the agreement of counterparties and accordingly,
there can be no assurance that any of alternative courses of action
to finance the Group would be successful. This requirement for
additional financing in the short term represents a material
uncertainty that may cast significant doubt upon the Group’s
ability to continue as a going concern. Should it become evident in
the future that there are no realistic financing options available
to the Group which are actionable before its cash resources run out
then the Group will no longer be a going concern. In such
circumstances, we would no longer be able to prepare financial
statements under paragraph 25 of IAS 1. Instead, the financial
statements would be prepared on a liquidation basis and assets
would be stated at net realizable value and all liabilities would
be accelerated to current liabilities.
The Directors believe there are adequate options and time
available to secure additional financing for the Group and after
considering the uncertainties, the Directors consider it is
appropriate to continue to adopt the going concern basis in
preparing these financial statements.
Our forecast of the period of time through which our financial
resources will be adequate to support our operations is a
forward-looking statement and involves risks and uncertainties, and
actual results could vary as a result of a number of factors,
including the timing of clinical trials. We have based this
estimate on assumptions that may prove to be wrong, and we could
utilize our available capital resources sooner than we currently
expect. If we lack sufficient capital to expand our operations or
otherwise capitalize on our business opportunities, our business,
financial condition and results of operations could be materially
adversely affected.
- Accounting for eRapa and CPRIT grant
The LCA entered into with Emtora meets the definition of a Joint
Arrangement under IFRS 11, specifically related to the FAP
program.
A jointly controlled escrow account was established on
completion of the LCA. All FAP program transactions are processed
through the escrow account, including the Company’s deposits of
matching funds, as set out in the agreement, the receipt of grant
funding from CPRIT and the payment of eligible R&D expenses.
Although the CPRIT grant and R&D supplier contracts are with
Emtora, the joint arrangement nature of the LCA results in Emtora
being deemed to be acting as the Company’s agent. Accordingly, the
Company recognises 100% of the grant and 100% of the R&D
expenditure. The CPRIT grant recognised is on a 1 for 2
match. In accordance with the Company’s accounting policy, the
grant, as it is the re-imbursement of directly related costs, is
credited to R&D costs in the same period in The Statements of
Comprehensive Income. The escrow account is recognised within
prepayments, CPRIT grant received in advance is recognised within
deferred revenue and any grant not yet received is recognised in
accrued income.
In 1H24 the company recognised R&D costs of £0.2 million on
the FAP project, this was made up of expenditure of £0.5 million
netted against CPRIT grant of £0.3 million.
The balances as at June 30, 2024 were as follows in relation to
the FAP project:
Prepayments
£1.2 million
Deferred revenue £0.1
million
- Finance income and expense
|
Six months ended June 30, 2024 unaudited
£’000 |
Six months ended June 30, 2023 unaudited
£’000 |
Finance
income |
|
|
Interest
received on bank deposits |
86 |
24 |
Other
interest |
2 |
- |
Gain on equity settled derivative financial liability |
751 |
386 |
Total finance income |
839 |
410 |
The gain on the equity settled derivative financial liability in
1H24 and 1H23 arose as a result of the fall in the Biodexa share
price.
|
Six months ended June 30, 2024 unaudited
£’000 |
Six months ended June 30, 2023 unaudited
£’000 |
Finance
expense |
|
|
Interest
expense on lease liabilities |
11 |
15 |
Interest
expense on deferred consideration |
38 |
- |
Other
loans |
- |
7 |
Total finance expense |
49 |
22 |
- Taxation
Income tax is recognised or provided at amounts expected to be
recovered or to be paid using the tax rates and tax laws that have
been enacted or substantively enacted at the Group Statement of
Financial Position date. Research and development tax credits are
recognised on an accruals basis and are included as an income tax
credit under current assets. The research and development tax
credit recognised is based on management’s estimate of the expected
tax claim for the period and is recorded within taxation under the
Small and Medium-sized Enterprise Scheme.
|
Six months ended June 30, 2024 unaudited
£’000 |
Six months ended June 30, 2023 unaudited
£’000 |
Income tax credit |
125 |
288 |
- Loss per share
Basic loss per share amounts are calculated by dividing the net
loss for the period from continuing operations, attributable to
ordinary equity holders of the parent company, by the weighted
average number of ordinary shares outstanding during the
period. As the Group made a loss for the period the diluted
loss per share is equal to the basic loss per share.
|
Six months ended June 30, 2024 unaudited
£’000 |
Six months ended June 30, 2023 unaudited
£’000 |
Numerator |
|
|
Loss used in
basic EPS and diluted EPS: |
(3,308) |
(3,568) |
Denominator |
|
|
Weighted average number of ordinary shares used in basic EPS |
3,280,798,115 |
99,191,082 |
|
|
|
Basic and diluted loss per share: |
(0.1)p |
(3.6)p |
The Company has considered the guidance set out in IAS 33 in
calculating the denominator in connection with the issuance of
Pre-Funded, Abeyance Shares, Series A, Series B and Series C
warrants as disclosed in note 8. Management have recognised the
warrants from the date of grant rather than the date of issue of
the corresponding Ordinary Shares when calculating the
denominator.
The Group has made a loss in the current and previous periods
presented, and therefore the options and warrants are
anti-dilutive. As a result, diluted earnings per share is presented
on the same basis as basic earnings per share.
- Intangible Assets
|
In-process research and development £’000 |
Goodwill £’000 |
IT/Website costs £’000 |
Total £’000 |
Cost |
|
|
|
|
At January 1, 2023 |
13,378 |
2,291 |
110 |
15,779 |
Acquisition |
2,938 |
– |
– |
2,938 |
At December 31, 2023 |
16,316 |
2,291 |
110 |
18,717 |
Acquisition |
3,068 |
– |
– |
3,068 |
At June 30, 2024 (unaudited) |
19,384 |
2,291 |
110 |
21,785 |
|
In-process research and development
£’000 |
Goodwill £’000 |
IT/Website Costs £’000 |
Total £’000 |
Accumulated amortisation and impairment |
|
|
|
|
At January 1, 2023 |
13,378 |
2,291 |
104 |
15,773 |
Amortisation
charge for the year |
– |
– |
3 |
3 |
At December 31, 2023 |
13,378 |
2,291 |
107 |
15,776 |
Amortisation charge for the period |
– |
– |
1 |
1 |
At June 30, 2024 (unaudited) |
13,378 |
2,291 |
108 |
15,777 |
Net book
value |
|
|
|
|
At June 30,
2024 (unaudited) |
6,006 |
– |
2 |
6,008 |
At December 31,2023 |
2,938 |
– |
3 |
2,941 |
The individual intangible assets which are material to the
financial statements are as follows:
|
Carrying amount |
Remaining amortisation period |
|
June 30, 2024 unaudited £’000 |
December 31, 2023 £’000 |
June 30, 2024 unaudited £’000 |
December 31, 2023 £’000 |
MTX228 tolimidone
acquired IPRD* |
2,938 |
2,938 |
n/a |
n/a |
MTX230 eRapa
acquired IPRD* |
3,068 |
– |
n/a |
n/a |
*asset is not yet in use and has not started amortising
On April 25, 2024 the Company entered into a License and
Collaboration Agreement (LCA) with Rapamycin Holdings, Inc. (d/b/a
Emtora Biosciences), relating to the license of eRapa. In
consideration for the License, the Company made an upfront payment
of 378,163 ADSs (equal to five percent of our then outstanding
Ordinary Shares, calculated on a fully-diluted basis). In addition,
a promissory note previously issued by Emtora in favor of the
Company in the amount of $0.25 million was forgiven and certain
historical liabilities relating to their on-going FAP and NMIBC
programs were settled. The Company is also obligated to make
quarterly payments to Emtora of $0.25 million less 75% of any
research sales by Emtora until the handover trigger event occurs.
The obligation meets the definition of a financial liability in
accordance with IAS32 and is measured at fair value in accordance
with IFRS9. Management have estimated the expected liability to be
$3.1 million and the present value as $2.5 million.
|
$’000 |
£’000 |
378,163 ADSs
issued at market value |
274 |
219 |
Promissory note
forgiven |
250 |
197 |
Historical
liabilities settled |
820 |
655 |
Quarterly payment obligation |
2,494 |
1,997 |
Recognised as intangible asset purchase (unaudited) |
3,838 |
3,068 |
In addition, the Company is also responsible for up to $31.5
million in sales milestones within the first six months of
commercial sale of a first-approved indication of eRapa in certain
markets, with decreasing milestones for subsequent approvals for
additional indications. There is also a one-time $10.0 million
milestone payable upon cumulative net sales of $1.0 billion.
Further, the Company is also obligated to pay Emtora single digit
tiered royalties on net sales of eRapa, in addition to honouring
Emtora’s legacy royalty obligations and paying Emtora fees related
to income derived from sublicensing and partnering of eRapa.
The LCA also provides the Company with the exclusive option to
acquire all of the capital stock of Emtora on commercially
reasonable terms in the 90 days after acceptance of the filing of
an NDA by the U.S. Food and Drug Administration (the “FDA”). If the
Company does not exercise the option, it would be required to make
additional quarterly payments, as disclosed in note 7, until the
first commercial sale of the product.
- Deferred Consideration
|
As at June 30, 2024 unaudited £’000 |
As at December 31, 2023 £’000 |
Opening
provision at January 1, |
- |
- |
On acquisition
of licence |
1,997 |
- |
Interest
expense |
38 |
- |
Foreign exchange |
(24) |
- |
|
2,011 |
- |
Less: non-current portion |
(1,552) |
- |
Current portion |
459 |
- |
The Company is obligated to make quarterly payments to Emtora of
$0.25 million less 75% of any research sales by Emtora until the
handover trigger event occurs. The obligation meets the definition
of a financial liability in accordance with IAS32 and is measured
at fair value in accordance with IFRS9. Management have estimated
the expected liability to be $3.1 million and the present value as
$2.5 million.
This financial liability is measured on Level 3, the fair value
is derived using a discounted cash flow approach. The discount rate
applied to the obligation was 11.64% (2023: n/a).
A 1% increase or decrease in the discount rate would decrease or
increase the liability by approximately £0.03 million (2023: n/a)
and £0.03 million (2023: n/a), respectively. An increase in the
liability would result in a loss in the revaluation of financial
instruments, while a decrease would result in a gain.
There were no transfers between Level 1 and 2 in the period.
- Derivative financial liability –
current
|
As at June 30, 2024 unaudited £’000 |
As at December 31, 2023 £’000 |
At January 1 |
4,160 |
85 |
Warrants
issued |
1,368 |
4,562 |
Transfer to
share premium on exercise of warrants |
(3,618) |
- |
Gain recognised in finance income within the consolidated statement
of comprehensive income |
(751) |
(487) |
|
1,159 |
4,160 |
Equity settled derivative financial liability is a liability
that is not to be settled for cash.
No warrants recognised as equity settled derivatives were
exercised in 2023.
The Company issues warrants exercisable into ADSs of the Company
as part of registered direct offerings and private placements in
the US. The number of ADSs to be issued when exercised is fixed,
however the exercise price is denominated in US Dollars being
different to the functional currency of the Company. Therefore, the
warrants are classified as equity settled derivative financial
liabilities recognised at fair value through the profit and loss
account (‘FVTPL’). The financial liability is valued using the
Black-Scholes model. Financial liabilities at FVTPL are stated at
fair value, with any gains or losses arising on re-measurement
recognised in profit or loss. The net gain or loss recognised in
profit or loss incorporates any interest paid on the financial
liability and is included in the ‘finance income’ or ‘finance
expense’ lines item in the income statement. A key input in the
valuation of the instrument is the Company share price.
Details of the warrants are as follows:
May 2024 warrants
In May 2024 the Company issued 2,359,012 Series G ADS Warrants
and 3,695,218 Series H ADS Warrants as part of the Warrant
Inducement Transaction. The exercise price per ADS is $2.50.
December 2023 warrants
In December 2023 the Company issued 3,000,063 Series E ADS
Warrants and 3,000,063 Series F ADS Warrants as part of the
Registered Offering in the US. The exercise price per ADS is
$2.20.
May 2023 warrants
In June 2023 the Company issued 276,689 Series D ADS Warrants as
part of a registered direct offering and private placement in the
US after securing shareholder approval. The exercise price per ADS
was $16.00.
May 2020 warrants
In May 2020 the Company issued 838 ADS warrants as part of a
registered direct offering in the US.
October 2019 warrants
In October 2019 the Company issued 392 ADS warrants as part of a
registered direct offering in the US.
Warrant re-price
On May 22, 2024 the Company entered into agreements with several
accredited investors to exercise existing Series E warrants and
Series F warrants, issued in December 2023, to purchase up to an
aggregate of 4,358,322 ADSs. The warrant holders agreed to exercise
the Series E and/or Series F warrants at an exercise price of $1.50
(reduced from $2.20) per ADS.
|
ADS Warrants Number |
Original price per ADS |
New price per ADS |
Equivalent Ordinary Shares (400 Ordinary Shares per ADS)
Number |
Series E warrants |
1,572,674 |
$2.20 |
$1.50 |
629,069,600 |
Series F warrants |
2,463,477 |
$2.20 |
$1.50 |
985,390,800 |
Warrants and Dara share options
The Group also assumed fully vested warrants and share options
on the acquisition of DARA Biosciences, Inc. (which took place in
2015). The number of ordinary shares to be issued when exercised is
fixed, however the exercise prices are denominated in US Dollars.
The warrants are classified equity settled derivative financial
liabilities and accounted for in the same way as those detailed
above. The financial liability is valued using the
Black-Scholes option pricing model. The exercise price of the
outstanding options is $1,903.40.
The following table details the outstanding warrants and options
over ADSs and ordinary shares recognised as equity settled
derivative financial liabilities as at June 30, 2024, December 31,
2023 and also the movement in the year:
|
At December 31, 2022 |
Lapsed |
Granted |
At December 31, 2023 |
Lapsed |
Granted |
Exercised |
At June 30, 2024 unaudited |
ADSs
warrants |
|
|
|
|
|
|
|
|
May 2024
grant |
– |
– |
– |
– |
– |
6,054,230 |
– |
6,054,230 |
December 2023
grant |
– |
|
6,000,126 |
6,000,126 |
– |
– |
(4,282,895) |
1,717,231 |
May 2023
grant |
– |
|
276,689 |
276,689 |
– |
– |
– |
276,689 |
May 2020
grant |
838 |
– |
– |
838 |
– |
– |
– |
838 |
October 19
grant |
392 |
– |
– |
392 |
– |
– |
– |
392 |
Ordinary
Shares |
|
|
|
|
|
|
|
|
DARA Options |
138 |
(10) |
– |
128 |
(29) |
– |
– |
99 |
Fair value hierarchy
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for
identical assets and liabilities;
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly; and
Level 3: techniques which use inputs that have a significant
effect on the recorded fair value that are not based on observable
market data.
The fair value of the Group’s derivative financial liability is
measured at fair value on a recurring basis. The following table
gives information about how the fair value of this financial
liability is determined.
Financial liabilities |
Fair value as at June 30, 2024 |
Fair value as at December 31, 2023 |
Fair value hierarchy |
Valuation technique(s) and key input(s) |
Significant unobservable input(s) |
Relationship of unobservable inputs to fair value
|
Equity settled financial derivative liability – Series H
warrants |
£179,000 |
– |
Level 3 |
Black-Scholes
Model |
Volatility rate of
100% determined using historical volatility of comparable
companies. |
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life
between a range of 0.1 and 0.89 years determined using the
remaining life of the share options. |
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 5.09% determined using the expected life
assumptions. |
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability – Series G
warrants |
£591,000 |
– |
Level 3 |
Black-Scholes
Model |
Volatility rate of
95% determined using historical volatility of comparable
companies. |
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life
between a range of 0.1 and 4.33 years determined using the
remaining life of the share options. |
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 4.33% determined using the expected life
assumptions. |
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability - Series F
warrants |
£16,000 |
£2,592,000 |
Level 3 |
Black-Scholes
Model |
Volatility rate of
120% determined using historical volatility of comparable
companies. |
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life
between a range of 0.1 and 0.48 years determined using the
remaining life of the share options. |
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 5.33% determined using the expected life
assumptions. |
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability – Series E
warrants |
£343,000 |
£1,444,000 |
Level 3 |
Black- Scholes
Model |
Volatility rate of
100% determined using historical volatility of comparable
companies. |
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life
between a range of 0.1 and 4.48 years determined using the
remaining life of the share options. |
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 4.33% determined using the expected life
assumptions. |
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability – Series D
warrants |
£30,000 |
£124,000 |
Level 3 |
Black- Scholes Model |
Volatility rate of 105% determined using historical volatility of
comparable companies. |
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life between a range of 0.1 and 4.43 years determined
using the remaining life of the share options. |
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 4.53% determined using the expected life
assumptions. |
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability – May 2020
warrants |
– |
– |
Level 3 |
Black- Scholes
Model |
Volatility rate of
100% determined using historical volatility of comparable
companies. |
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life
between a range of 0.1 and 1.38 years determined using the
remaining life of the share options. |
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 4.90% determined using the expected life
assumptions. |
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability – October 2019
Warrants |
– |
– |
Level 3 |
2023 – Black-
Scholes Model |
Volatility rate of
100% determined using historical volatility of comparable
companies. |
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life
between a range of 0.1 and 1.00 years determined using the
remaining life of the share options. |
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 5.09% determined using the expected life
assumptions. |
The higher the risk-free rate the higher the fair value. |
Total |
£1,159,000 |
£4,160,000 |
|
|
|
|
Changing the unobservable risk-free rate input to the valuation
model by 10% higher while all other variables were held constant,
would not impact the carrying amount of shares (2023: nil).
There were no transfers between Level 1 and 2 in the period.
The financial liability measured at fair value on Level 3 fair
value measurement represents consideration relating to warrants
issued in May 2024, December 2023, June 2023, May 2020 and October
2019 as part of Private Placements, Registered Direct
offerings and the Warrant Inducement Transaction.
- Share capital and reserves
Authorised, allotted and fully paid – classified as
equity |
As at June 30, 2024 unaudited Number |
As at June 30, 2024 unaudited £ |
As at December 31, 2023 Number |
As at December 31, 2023 £ |
Ordinary shares
of £0.001 each |
3,626,112,922 |
3,626,113 |
1,189,577,722 |
1,189,578 |
‘A’ Deferred
shares of £1 each |
1,000,001 |
1,000,001 |
1,000,001 |
1,000,001 |
‘B’ Deferred shares of £0.001 |
4,063,321,418 |
4,063,321 |
4,063,321,418 |
4,063,321 |
Total |
|
8,689,435 |
|
6,252,900 |
During the period the Company issued the following warrants over
ADSs, and these were recognised in the warrant reserve until
exercise:
|
Pre-Funded Warrants |
Abeyance Shares |
Series A Warrants |
Series B Warrants |
Series C Warrants |
Exercise
price |
£0.0001 |
£Nil |
$214.40 |
$214.40 |
$16.00 |
As at January
1, 2023 |
– |
– |
– |
– |
– |
Issued: |
|
– |
|
|
|
Private Placement
February 2023 |
155,461 |
– |
32,327 |
48,491 |
– |
Registered Direct
Offering May 2023 |
– |
– |
– |
– |
415,043 |
Registered
Offering December 2023 |
1,911,176 |
– |
– |
– |
– |
Adhera Assignment
and Exchange Agreement |
2,275,050 |
– |
– |
– |
– |
Exercised |
(155,461) |
– |
(32,327) |
(48,491) |
(415,043) |
As at December 31, 2023 |
4,186,226 |
– |
– |
– |
– |
Exercised |
(2,361,865) |
– |
– |
– |
– |
Lapsed |
(163) |
– |
– |
– |
– |
Warrant
inducement May 2024 |
– |
931,585 |
– |
– |
– |
As at June 30, 2024 (unaudited) |
1,824,198 |
931,585 |
– |
– |
– |
The Series A, Series B and Series C warrants are exercisable on
an ‘alternative cashless basis’ effectively allowing the holders to
exercise for nil consideration.
Ordinary and deferred shares were recorded as equity.
2024 |
|
Ordinary Shares Number |
‘A’ Deferred Shares Number |
‘B’ Deferred Shares Number |
Share Price £ |
Total consideration £’000 |
At January 1, 2024 |
1,189,577,722 |
1,000,001 |
4,063,321,418 |
|
|
February to
May 2024 |
Exercise
pre-funded warrants |
944,746,000 |
– |
– |
0.0040 |
3,732 |
February to
May 2024 |
Exercise Series
E & F warrants |
98,697,600 |
– |
– |
0.0043 –
0.0044 |
427 |
25 April
2024 |
Intangible
asset (see note 5) |
151,265,200 |
– |
– |
0.0015 |
219 |
22 May 2024 |
Warrant inducement |
1,241,826,400 |
– |
– |
0.0030 |
3,663 |
At June 30, 2024 (unaudited) |
277,971,722 |
1,000,001 |
4,063,321,418 |
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
At January
1, 2023 |
|
5,417,137 |
1,000,001 |
– |
|
|
February 15,
2023 |
Private
Placements* |
98,387,275 |
– |
– |
0.0505 |
4,967 |
May 26, 2023 |
Registered Direct
Offering* |
276,697,310 |
– |
– |
0.0097 |
2,690 |
June 14,
2023 |
Share sub-division
and re-designation |
|
|
4,063,321,418 |
n/a |
n/a |
December 21,
2023 |
Shares issued to
purchase Intangible asset (see note 5) |
323,684,800 |
– |
– |
0.0040 |
1,279 |
December 21, 2023 |
Registered Offering |
485,391,200 |
– |
– |
0.0040 |
1,918 |
At December 31, 2023 |
1,189,577,722 |
1,000,001 |
4,063,321,418 |
|
|
- Related party transaction
The Directors consider there to be no related party
transactions during the periods reported other than Directors
Remuneration.
- Contingent liabilities
The Company entered into an
Arrangement Agreement with Bioasis on December 13, 2022 as amended
on December 18, 2022. Under the agreement the Company agreed
to acquire the entire issued share capital of Bioasis for
consideration of, in aggregate, approximately C$7.4 million (c£4.4
million). The agreement was subject to shareholder approval. On
January 23, 2023 at the General Meeting to approve the Arrangement
Agreement none of the special resolutions were passed and,
accordingly, the acquisition of Bioasis did not proceed. Under the
agreement the Company agreed to reimburse Bioasis US$225,000 for
expenses relating to the transaction should the Company’s
shareholders not approve the transaction. On March 3, 2023 the
Company advised Bioasis that it would offset this liability against
the $500,000 loan it advanced to them during December 2022 and
January 2023.
As at June 30, 2024 and December 31,
2023 the Company had a contingent liability of $225,000 in relation
to this potential liability.
- Events after the reporting date
On July 22, 2024, the Company
utilised its capacity under its Registration Statement on Form F-3
to raise $5.0 million in gross proceeds in a Registered Direct
Offering with certain institutional investors for the sale of an
aggregate of 5,050,808 ADSs and 278,975 pre-funded warrants at a
price of $0.94 per ADS. In a concurrent Private Placement, the
Company issued and sold to the Investors (i) Series J warrants
exercisable for 5,329,783 Depositary Shares, and (ii) Series K
Warrants to purchase an aggregate of 5,329,783 Depositary Shares.
The Series J and Series K warrants are exercisable for five years
and one year, respectively, at $1.00 per ADS each.
On August 27,2024, the Company , received a Staff Determination
letter (the “Letter”) from the Listing Qualifications Department of
The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company of the
Staff’s determination to delist the Company’s securities from The
Nasdaq Capital Market because the Company’s securities have had a
closing bid price below $1.00 for 30 consecutive business days,
which triggers a notice of delisting pursuant to Nasdaq Listing
Rule 5550(a)(2) (the “Rule”). Normally, a company would
be afforded a 180-calendar day period to demonstrate compliance
with the Rule. However, pursuant to Listing Rule 5810(c)(3)(A)(iv),
the Company is not eligible for any compliance period specified in
Rule 5810(c)(3)(A) because the Company effected reverse stock
splits over the prior two-year period with a cumulative ratio of
250 shares or more to one.
Accordingly, and as described in the Letter, unless the Company
timely requested a hearing before a Hearings Panel (the “Panel”),
the Company’s securities would be subject to suspension/delisting.
Accordingly, the Company requested a hearing before the
Panel. The hearing request will automatically stay any
suspension or delisting action pending the hearing and the
expiration of any additional extension period granted by the Panel
following the hearing.
On September 19, 2024, the Company announced a ratio change on
its ADSs from one (1) ADS representing four hundred (400) ordinary
shares, to the new ratio of one (1) ADS representing ten thousand
(10,000) ordinary shares (the "Ratio Change"). The effective date
of the Ratio Change is expected to be October 4,2024.
vv
- 24.09.26 BDRX 2024 Interim report FINAL
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