TIDMC4XD
RNS Number : 5669H
C4X Discovery Holdings PLC
08 June 2017
C4X Discovery Holdings plc
("C4XD", "C4X Discovery" or the "Company")
Issue of equity
8 June 2017 - C4X Discovery Holdings plc (AIM: C4XD), a
pioneering drug discovery company, has today issued and allotted
921,075 new ordinary shares of 1p each ("Ordinary Shares"), in two
tranches.
The first issue of 34,200 Ordinary Shares relates to the
satisfaction of loans made to Adorial Limited ("Adorial") by the
directors of Adorial, now employees of C4XD, prior to its
acquisition by C4XD in March 2016. The second issue of 886,875
Ordinary Shares is to certain former employees exercising options
which were granted on 13 October 2014.
Accordingly, an application has been made for 921,075 new
Ordinary Shares to be admitted to trading on AIM and it is expected
that admission will take place at 8.00 a.m. on 14 June 2017. The
new Ordinary Shares will rank pari passu with the existing Ordinary
Shares.
Following Admission, the Company's enlarged issued share capital
will comprise 46,555,087 Ordinary Shares with one voting right per
share. There are no Ordinary Shares held in treasury. Therefore, in
accordance with the FCA's Disclosure and Transparency Rule 5.6.1,
the Company confirms that following Admission, the total number of
voting rights in the Company will be 46,555,087.
--S-
For further information, please contact:
C4X Discovery Holdings plc
Clive Dix, Chief Executive Officer 07801 865 803
Panmure Gordon (UK) Limited (NOMAD) 020 7886 2500
Freddy Crossley, Duncan Monteith (Corporate Finance)
Tom Salvesen (Corporate Broking)
Consilium Strategic Communications
Mary-Jane Elliott, Matthew Neal, Melissa Gardiner
0203 709 5700
About C4X Discovery
C4X Discovery aims to become the world's most productive drug
discovery engine by exploiting cutting edge technologies to design
and create best-in-class small-molecule candidates targeting a
range of high value therapeutic areas. The company's goal is to
drive returns through early-stage revenue-generating deals with the
pharmaceutical industry.
C4X Discovery has a state-of-the-art suite of proprietary
technologies across the drug discovery process. The company's
innovative DNA-based target identification platform (Taxonomy3(R))
utilises human genetic datasets to identify novel patient-specific
targets leading to greater discovery productivity and increased
probability of clinical success. This is complemented by C4XD's
novel drug design platform which comprises two innovative chemistry
technologies, Conformetrix and Molplex, that combine 4D molecular
shape analyses (based on experimental data) with best-in-class
computational chemistry. This provides new and unprecedented
insight into the behaviour of drug molecules, enabling the
production of potent selective compounds faster and more cost
effectively than the industry standard.
C4X Discovery is advancing its in-house pipeline in addiction,
diabetes and inflammation with a number of new drug candidates
identified and further progress made towards the clinic. In
selecting new targets C4X Discovery will focus on the high-value
disease areas of inflammation and neurodegeneration, and will
continue to maximise value from opportunistic areas, for example,
immuno-oncology, addiction, and diabetes.
The Company was founded as a spin-out from the University of
Manchester. It has a highly experienced management team and Board
who have delivered significant value creation within the healthcare
sector historically and have enabled C4XD to reach multiple value
inflexion points since IPO. For additional information please go
to: www.c4xdiscovery.com
INTERIM CHAIRMAN AND CEO'S STATEMENT:
Global licensing of pre-clinical stage assets continues to
increase in both number of deals and deal value, with the number of
pre-clinical deals worth greater than $10 million increasing from
50 in 2012 to 78 in 2015 and the value of up-front payments for
these pre-clinical deals increasing by 289 per cent. to
approximately $2.4 billion (BIO Industry Analysis, Emerging
Therapeutic Company Investment and Deal Trends, 25 May 2016). We
remain confident in our ability to capture the increasing value
associated with pre-clinical licensing deals by generating a
high-value asset portfolio focussed in disease areas with high
partnering interest. Our goal, once at 'steady state', is to
produce four or more assets suitable for partnering each year, and
we expect to complete at least one revenue-generating deal on our
portfolio in the next 12 months. We will drive long-term
shareholder value by strategically re-investing deal revenue into
the Company's Drug Discovery Engine to achieve sustainable
productivity in the medium- to long-term.
In the past period, we have focussed on continuing to build our
unique Drug Discovery Engine capabilities to achieve our aim of
becoming the world's most productive, self-sustaining drug
discovery company. Our ongoing disease areas of focus are
inflammation, neurodegeneration and opportunistic disease areas:
for example, immuno-oncology, addiction and diabetes.
Discovery Engine and portfolio progress
We have made significant progress growing our discovery
portfolio to eight projects across a number of
commercially-attractive therapeutic areas, and made making key
findings using our proprietary Taxonomy3(R) target discovery
platform. We aim to partner all of C4X Discovery's drug assets
pre-clinically, enabling partners (who are better placed to do so)
take on the technical and financial risk associated with clinical
development.
Key highlights
Addiction
Our most advanced drug discovery programme aims to provide a
novel oral medicine for addiction, which represents a substantial
area of unmet medical need and is forecast to be worth an estimated
$13 billion per annum by 2018 (GBI Research 2012). Our novel
pre-clinical candidate molecule, an Orexin-1 antagonist candidate,
is scheduled to be ready for clinical development by the end of
2017. Earlier this year, C4X completed its first GMP batch
synthesis of drug substance. This has provided the material to
complete the remaining toxicology studies and enabled drug product
supply in preparation for the first clinical study. In parallel,
our candidate has also been tested in pre-clinical models of
nicotine addiction where it showed significant activity in reducing
nicotine-seeking behaviour which has demonstrated its potential use
for the treatment of smoking cessation in patients who relapse.
Inflammation
In addition, significant progress has been made in the Company's
drug discovery programmes for the treatment of inflammatory
diseases. C4X Discovery has identified potent novel activators of
the NRF-2 pathway, which is important in mediating lung diseases
such as chronic obstructive pulmonary disease ("COPD"), and
Pulmonary Arterial Hypertension ("PAH"). Recently, we have
demonstrated significant upregulation of the NRF-2 pathway in lung
cell assays with lead compounds that are also bioavailable in vivo
via the oral route.
Our small molecule programme against Interleukin-17 ("IL-17"), a
high value clinically validated target for inflammation and
autoimmune diseases such as psoriasis, has also produced promising
pre-clinical data recently. Current marketed drugs that target
IL-17 are based on injectable monoclonal antibodies, with the
identification of orally available small molecules proving
extremely challenging for this target. C4XD's Conformetrix
technology has enabled the identification of small molecules that
can selectively block IL-17 activity whilst keeping the molecular
size of the molecule in the traditional 'drug-like' range, offering
the potential for more convenient oral or topical treatment which
could also increase the number of patients who can access drugs
targeting this mechanism. Studies are now underway to optimise
these for oral delivery in vivo.
Taxonomy3(R) target discovery
Our proprietary DNA-based target discovery technology
Taxonomy3(R) continues to produce novel target data in commercially
valuable disease areas. Analysis of a clinical rheumatoid arthritis
dataset has identified multiple novel targets that have not
previously been genetically linked with this major disease and a
drug discovery programme against the first of these targets
continues to make progress.
In neurodegeneration, Taxonomy3(R) has identified multiple novel
targets in discrete patient sub-groups for the treatment of
Parkinson's Disease that could potentially provide an opportunity
in stratified medicine. The Company has recently reproduced the
analysis from a second patient dataset confirming this discovery.
The selection process to choose the first target to be prosecuted
in a drug discovery programme is underway. Analysis of an
Alzheimer's disease dataset has also been initiated with an
additional five further clinical disease datasets planned for
analysis in 2017 to provide the Company with multiple novel targets
in high-value and therapeutic areas with significant partnering
interest.
Portfolio outlook
Overall, C4X Discovery's discovery asset portfolio continues to
grow in-line with the Company's strategy and we are progressing
well to achieving our ambitions of producing four partnerable
assets per annum at 'steady state'. We will continue to invest in
both existing and new programmes to ensure we remain on-track to
achieve our vision of being the world's most productive,
self-sustaining Drug Discovery Engine.
Technology
Our suite of combined proprietary technologies forms the core of
our state-of-the-art Drug Discovery Engine that combines novel drug
design, using sophisticated analysis of NMR data (Conformetrix),
with novel target discovery through multivariate analysis of
genetic datasets (Taxonomy3(R)). MolPlex, our pioneering in-house
computational chemistry software complements these platforms by
bringing a virtual compound library that enables rapid
identification of starting points for new discovery programmes,
self-learning virtual docking simulations, and prediction of
drug-like molecular properties. Together with our highly
experienced team of scientists, these three technologies form our
Discovery Engine. Used in conjunction with industry-standard
chemical and biology techniques, accessed via our network of
contract research organisations, this represents the full
complement of capabilities required to deliver viable pre-clinical
candidates suitable for advancement into clinical development in
collaboration with pharma partners.
Strategic alliances
In September 2016, we announced a new multi-target risk-sharing
alliance with Evotec AG ("Evotec"), a leading drug discovery and
development alliance company (the "Agreement"). The new Agreement
builds on our previous strategic collaboration between the two
companies announced in January 2015 and will enable us to increase
the output of our Discovery Engine with reduced risk and,
potentially, lower cost.
C4XD and Evotec are now working together to develop new small
molecule drugs across a range of targets and therapeutic areas. As
part of the Agreement, Evotec is applying its extensive assay and
screening technologies, laboratory scientists and medicinal
chemistry know-how to selected C4XD programmes, in return for
funding to partially cover operational costs, milestones dependent
on developmental success and a share of potential future royalties.
Programmes under the Agreement will run until the point of
Potential Development Candidate (PDC) nomination, after which C4XD,
which retains all IP, will have the right to out-license successful
projects to the pharma industry.
Strengthening management
Delivering on our vision requires strong leadership, in
November, we strengthened our Board with the appointment of Dr
Craig Fox, Chief Scientific Officer, and Brad Hoy, Chief Financial
Officer. Both Craig and Brad bring a wealth of knowledge and
experience to the Company and will make a significant contribution
to the execution of our new strategy.
Fundraising
In September 2016, C4XD completed a GBP5.0 million fundraise
through the conditional placing of 4,901,961 new ordinary shares at
a price of 102 pence per Ordinary Share. The fundraising saw
Calculus Capital Limited and Polar Capital LLP join C4XD's share
register.
This fundraising was followed in March 2017 (post-period end) by
the successful closing of a GBP7.0 million fundraise at 85 pence
per share. The new cash will be used to support the execution and
acceleration of our strategy by strengthening our balance sheet as
partnering discussions and strategic collaborations progress,
expanding our commercial capability and supporting working capital
during the expansion of our pipeline portfolio.
Financial review
Revenue for the six months ended 31 January 2017 at GBP0.1
million was lower than the equivalent prior period (six month
period ended 31 January 2016: GBP0.2 million) reflecting the
previously disclosed discontinuation of fee-for-service agreements.
C4XD expects future revenues to be derived from licensing and other
income from commercial agreements with industry partners relating
to C4XD's pre-clinical drug assets.
Research and development expenses at GBP3.0 million for the six
months ended 31 January 2017 showed a slight increase compared to
the equivalent prior period (six month period ended 31 January
2016: GBP2.7 million), reflecting progress being made across our
in-house pipeline.
At GBP1.0 million, administrative expenses for the six months
ended 31 January 2017 are in line with those reported in the
equivalent prior period (six month period ended 31 January 2016:
GBP0.9 million).
The net loss for the six months ended 31 January 2017 amounted
to GBP3.0 million or a loss of 8.34 pence per Ordinary Share (six
month period ended 31 January 2016: GBP2.7 million or loss of 8.76
pence per Ordinary Share).
C4XD had net assets at 31 January 2017 of GBP6.0 million (31
July 2016: GBP4.3 million and 31 January 2016: GBP5.3 million) and
cash, cash equivalents, short-term investments and deposits of
GBP2.2 million (31 July 2016: GBP1.3 million and 31 January 2016:
GBP5.0 million). Since the period end, C4XD has completed a GBP7.0
million fundraise in March 2017 through the placing of 8,235,294
new Ordinary Shares at a price of 85 pence per Ordinary Share.
Outlook
C4X Discovery's combination of state-of-the-art proprietary
technologies, highly experienced scientific team and industry
experience uniquely positions the Company to fulfil the
pharmaceutical industry's demand for high quality early-stage drug
candidates. As the Company accelerates towards its goal of becoming
the world's most productive, self-sustaining drug discovery engine,
it aims to expand its commercial capabilities and continue building
a portfolio of commercially attractive pre-clinical assets, in
addition to progressing partnering discussions to complete at least
one revenue-generating deal on the C4XD portfolio in the next 12
months. The Board is excited about the Company's opportunities and
its future within the wider evolution of the UK drug discovery
market.
Interim consolidated statement of comprehensive income
For the six months ended 31 January 2017
Six months Six months Year
to to to
31 January 31 January 31 July
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Notes
Revenue 2 78 165 279
Cost of sales (2) (8) (12)
Gross profit 76 157 267
Research and development
expenses (3,013) (2,738) (5,239)
Administrative expenses (951) (896) (1,817)
Operating loss (3,888) (3,477) (6,789)
Finance income 1 26 32
Loss on ordinary
activities before
taxation (3,887) (3,451) (6,757)
Taxation 3 850 736 1,436
Loss for the period
and total comprehensive
loss for the period (3,037) (2,715) (5,321)
============= ============= ==========
Loss per share :
Basic and diluted
loss for the period 4 (8.34)p (8.76)p (16.83)p
============= ============= ==========
Interim consolidated statement of changes in equity
For the six months ended 31 January 2017
Share
Issued based Capital
equity Share payment Merger contribution Revenue
capital premium reserve reserve reserve reserve Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 August
2015 2,335 10,013 51 920 195 (5,546) 7,968
Loss for
the six
months to
31 January
2016 - - - - - (2,715) (2,715)
Share-based
payments - - 17 - - - 17
At 31 January
2016 2,335 10,013 68 920 195 (8,261) 5,270
======== ======== ========= ======== ============== ========= ========
Loss for
the six
months to
31 July
2016 - - - - - (2,606) (2,606)
Issue of
share capital 15 1,584 - - - - 1,599
Share-based
payments - - 42 - - - 42
At 31 July
2016 2,350 11,597 110 920 195 (10,867) 4,305
======== ======== ========= ======== ============== ========= ========
Loss for
the six
months to
31 January
2017 - - - - - (3,037) (3,037)
Issue of
share capital 49 4,951 - - - - 5,000
Expenses
of placing - (285) - - - - (285)
Share-based
payments - - 67 - - - 67
At 31 January
2017 2,399 16,263 177 920 195 (13,904) 6,050
======== ======== ========= ======== ============== ========= ========
Interim consolidated statement of financial position
As at 31 January 2017
31 January 31 January 31 July
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
Notes GBP000 GBP000 GBP000
Assets
Non-current assets
Property, plant and
equipment 100 84 94
Intangible assets 587 57 654
Goodwill 1,192 - 1,192
1,879 141 1,940
------------------------------------ --------------- ----------
Current assets
Trade and other receivables 547 377 429
Income tax asset 2,250 700 1,400
Short-term investments - 3,006 -
and cash on deposit
Cash and cash equivalents 2,194 2,011 1,328
4,991 6,094 3,157
------------------------------------ --------------- ----------
Total assets 6,870 6,235 5,097
------------------------------------ --------------- ----------
Liabilities
Current liabilities
Trade and other payables (820) (965) (792)
(820) (965) (792)
------------------------------------ --------------- ----------
Total liabilities (820) (965) (792)
------------------------------------ --------------- ----------
Net assets 6,050 5,270 4,305
==================================== =============== ==========
Capital and reserves
Issued equity capital
5 2,399 2,335 2,350
Share premium 5 16,263 10,013 11,597
Share-based payment
reserve 177 68 110
Merger reserve 920 920 920
Capital contribution
reserve 195 195 195
Revenue reserve (13,904) (8,261) (10,867)
Total equity 6,050 5,270 4,305
==================================== =============== ==========
Approved by the Board and authorised for issue on 27 April
2017
Brad Hoy
Chief Financial Officer
27 April 2017
Interim consolidated cash flow statement
For the six months ended 31 January 2017
Six months Six months Year
to to to
31 January 31 January 31 July
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
Notes GBP000 GBP000 GBP000
Loss after tax and interest (3,037) (2,715) (5,321)
Adjustments for:
Depreciation of property, plant
and equipment 21 17 33
Amortisation of intangible assets 67 2 55
Share-based payments 67 17 59
Taxation (850) (736) (1,436)
Changes in working capital
(Increase)/decrease in trade
and other receivables (118) 11 (40)
Increase/(decrease) in trade
and other payables 68 253 (28)
Decrease in deferred revenue (40) (37) (56)
Cash outflow from operating
activities (3,822) (3,188) (6,734)
Research and development tax
credit received - 736 736
Net cash outflow from operating
activities (3,822) (2,452) (5,998)
------------ ------------ ----------
Cash flows from investing activities:
Purchases of property, plant
and equipment (27) (16) (42)
Purchases of intangible fixed
assets - - (50)
Acquisition of subsidiary (net
of cash acquired) - - (67)
Decrease in cash placed on deposit - 994 4,000
Net cash (outflow)/inflow from
investing activities (27) 978 3,841
------------ ------------ ----------
Cash flows from financing activities:
Proceeds from the issue of ordinary 5,000 - -
share capital 5
Expenses of placing (285) - -
Net cash inflow from financing 4,715 - -
activities
------------ ------------ ----------
Increase/(decrease) in cash
and cash equivalents 866 (1,474) (2,157)
Cash and cash equivalents at
the start of period 1,328 3,485 3,485
------------ ------------ ----------
Cash and cash equivalents at
the end of the period 2,194 2,011 1,328
Monies placed on deposit - 3,006 -
------------ ------------ ----------
Cash, cash equivalents and deposits
at the end of the period 2,194 5,017 1,328
============ ============ ==========
Notes to the interim financial report
For the six months ended 31 January 2017
1. Corporate information
The principal activity of the C4X Discovery Holdings plc is
research and development, a review of which is included in the
Interim Chairman's and CEO's Joint Review.
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 27
April 2017.
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
2016.
The interim financial information for the six months ended 31
January 2017 and 31 January 2016 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 2016. The 2016 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 2016.
Basis of consolidation
This interim financial report consolidates the financial
statements of C4X Discovery Holdings plc and the entities it
controls (its subsidiaries).
Segmental information
Operating segments
At 31 January 2017, 31 July 2016 and 31 January 2016 the Group
operated as one segment, focussed on becoming the world's most
productive Drug Discovery Engine.
This is the level at which operating results are reviewed by the
chief operating decision maker (i.e. the Chief Executive Officer)
to make decisions about resources, and for which financial
information is available.
All revenues have been generated from continuing operations and
are from external customers.
Six months Six months Year to
to to
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
Analysis of revenue
Amounts earned under
fee-for-service collaborations 78 165 279
----------- ----------- --------
78 165 279
----------- ----------- --------
Geographical information
The Group operates in two main geographic area, although both
are managed in the UK. The Group's revenue per geographical segment
based on customer's location, is as follows:
Six months Six months Year to
to to
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
Analysis of revenue
UK 78 107 151
Europe (excluding UK) - 58 128
----------- ----------- --------
78 165 279
----------- ----------- --------
All of the Group's assets are held in the UK and all of its
capital expenditure arises in the UK.
3. Tax
The tax credit is made up as follows:
Six months Six months Year to
to to
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
UK corporation tax losses - - -
in the period
Research and development
income tax credit receivable (850) (700) (1,400)
Adjustment in respect
of prior periods - (36) (36)
----------- ----------- --------
(850) (736) (1,436)
----------- ----------- --------
4. Loss per share
31 31
31 January January July
2017 2016 2016
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ----------------------- -----------
Loss for the financial
period attributable to
equity shareholders (3,037) (2,715) (5,321)
Weighted average number
of shares: No. No. No.
Ordinary shares in issue 36,412,279 30,988,550 31,616,625
Basic loss per share
(pence) (8.34)p (8.76)p (16.83)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 Ordinary Share Deferred Share Total
shares shares capital shares premium
Number Number GBP000 GBP000 GBP000 GBP000
Ordinary and
deferred shares
at 31 July 2015
and 31 January
2016 2,025,000 30,988,550 310 2,025 10,013 12,348
------------------ ---------- ----------- --------- --------- --------- -------
Issue of share
capital - 1,508,207 15 - 1,584 1,599
------------------ ---------- ----------- --------- --------- --------- -------
Ordinary and
deferred shares
as at 31 July
2016 2,025,000 32,496,757 325 2,025 11,597 13,947
------------------ ---------- ----------- --------- --------- --------- -------
Issue of share
capital - 4,901,961 49 - 4,951 5,000
Expenses of
placing - - - - (285) (285)
------------------ ---------- ----------- --------- --------- --------- -------
Ordinary and
deferred shares
at 31 January
2017 2,025,000 37,398,718 374 2,025 16,263 18,662
------------------ ---------- ----------- --------- --------- --------- -------
6. Post Balance Sheet Event
Completion of a GBP7.0 million fundraise in March 2017 through
the placing of 8,235,294 new Ordinary Shares with existing and new
investors at a price of 85 pence per Ordinary Share.
7. Interim financial report
A copy of this interim condensed financial report is available
on C4XD's website at www.c4xdiscovery.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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