TIDMN4P
RNS Number : 9930L
N4 Pharma PLC
25 April 2018
N4 Pharma Plc
("N4 Pharma" or the "Company" or the "Group")
Final Results
N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company
which improves the delivery of existing drugs and novel vaccines
and therapeutics, is pleased to announce its audited final results
for the year ended 31 December 2017.
Operational Highlights:
-- Completed the reverse takeover of N4 Pharma Limited ("RTO")
-- Successful placing to raise GBP1.5m (the "Placing") and re-admission to AIM
-- Change of name to N4 Pharma Plc (formerly known as Onzima Ventures Plc)
-- Divested investment portfolio to focus solely on reformulation of generic drugs and vaccines
-- Filing of sildenafil PCT patent application
-- Filing of additional generic product patent opportunities
Financial Highlights:
-- Total of GBP446,429 raised via warrant exercises in 2017 post-RTO
-- Cash balance at year end of approximately GBP1.3 million
Post Year End Highlights:
-- Commencement of in-vivo research programme for Nuvec(R)
-- Grant collaboration with MedImmune UK to evaluate Nuvec(R) technology
-- Appointment of Andrew Leishman as Head of Nuvec(R) development
-- Commencement of sildenafil human clinical trial
-- Total of GBP784,404 raised via warrant exercises since 1 January 2018
Nigel Theobald, CEO of N4 Pharma, commented: "The Board remains
optimistic about the future of the Company and its prospects. We
have reached a key milestone with the commencement of the pilot
human trial for our sildenafil reformulation which, if the results
are positive, will greatly advance the value of the data we have
obtained, and furthermore provide a clearer path towards
commercialisation for our reformulation. We have already announced
one collaboration for Nuvec(R) and are looking to enter into
further agreements with other companies in 2018.
Whilst our immediate focus is on those products with the
opportunity for near term commercialisation, namely sildenafil and
Nuvec(R), we remain excited about the Company's multiple potential
pipeline of products and collaborations. We will provide regular
updates as these opportunities progress."
A copy of this announcement and the Annual Report and Accounts
are available on the Company's website, www.n4pharma.com. The
Report and Accounts together with the notice of AGM will be sent to
shareholders on 27 April 2018.
Enquiries:
N4 Pharma Plc
Nigel Theobald, Via Alma PR
CEO
Stockdale Securities Tel: +44(0)20 7601
Tom Griffiths 6100
Alma PR
Josh Royston Tel: +44(0)778
Robyn Fisher 090 1979
Tel: +44(0)754
070 6191
Chief Executive's Statement
Introduction
I am pleased to present the first annual results of N4 Pharma
following its successful listing on AIM on 3 May 2017. The Company
raised gross proceeds of GBP1.5m.
Review of operations for the financial year ended 31 December
2017
During the year to 31 December 2017, as anticipated, no revenue
was generated by the Group. Other operating income included
GBP109,913 of government grants.
The operating loss for the year of GBP897,825 (9 months to 31
December 2016: GBP185,083 loss) was impacted by the costs
associated with the RTO and are in line with management's
expectations at the time of the transaction.
Key Events and Opportunities
The new Board completed its planned reorganisation of the Group
to focus on its research and development programme for both its
generic and vaccine divisions.
The net proceeds of the Placing and subsequent warrant exercises
ensure that the Group will be funded throughout 2018 and well into
2019. The funds raised will continue to enable us to produce
initial human clinical data to establish the pharmacokinetic
profile of our sildenafil reformulation and help us to determine
how we will position the Nuvec(R) vaccine delivery system for the
best approach to allow commercial engagement with potential third
party licensees.
Subsequent to the year end, the Group announced a grant
collaboration with MedImmune UK to evaluate its Nuvec(R) technology
which, if successful, would give MedImmune an option to license
Nuvec(R) for a defined area. This is the first of many such
collaborations the Group is looking to undertake as it extends its
research on Nuvec(R).
Generic Division
The main focus for the Group's generic division is the
reformulation of sildenafil (commonly known as Viagra(TM) ), where
we are seeking to improve the speed in which the drug takes effect
whilst also extending the duration of the action. We completed our
initial "in vitro" reformulation work on the drug and appointed
Bio-Images Drug Delivery Limited ("BDD") to conduct a small scale
human pilot clinical trial (the "Trial") which started as announced
on 18th April 2018.
The Trial will be conducted in twelve healthy male volunteers to
give us human pharmacokinetic data, which will determine the amount
of drug our reformulation will deliver, and which can then be
compared against existing sildenafil products. The Trial is
expected to take 8-10 weeks with top line results data available in
July 2018 with the final clinical study report expected at the end
of August 2018.
The data gathered from the Trial will enable the Group to
establish whether its reformulation has been sufficiently
successful to allow N4 Pharma to prepare for a pre-IND meeting with
the FDA towards the end of this year along with a proposed approach
to conducting a pivotal clinical study which will be required for
marketing authorisation or whether further amendments to the
reformulation may be required to optimise efficacy.
Assuming success it would then be our intention then either to
partner with a large pharmaceutical company to complete the pivotal
trial (thereby earning a licence fee and generating milestone
payments for the Group) or to explore the possibility of conducting
the pivotal trial ourselves and, in doing so, assess the balance of
increased capital risk versus the rewards relative to a company of
our size.
In addition to licensing the patents for sildenafil from Opal IP
Limited ("Opal IP") and Nuvec(R) from the University of Queensland,
we have licensed four further patents from Opal IP for
reformulations, namely valsartan, aprepitant, duloxetine and
paroxetine. Subsequently, we have decided to abandon our paroxetine
patent application. The Board believes that the drugs, such as
paroxetine, that do not make strong commercial sense will most
likely not make it through to the next stage of development. Our
initial approach for these products is to file the relevant data
needed for a Patent Co-operation Treaty ("PCT") patent application
and to evaluate the clinical and market potential before embarking
on detailed formulation development for a product to take into
clinic. In our opinion, this gives the Group the optimal chance to
secure patent protected reformulations for these products as well
as sildenafil.
Whilst we continue to commit resources to the reformulation of
sildenafil ahead of bringing it to market, we are also undertaking
all the necessary preparatory work on the other three drugs
referred to above to allow us to take them forward in the
future.
Vaccine Division
The focus for the Group's vaccine division continues to be on
generating data for our Nuvec(R) delivery system which will enable
us to engage commercially with pharmaceutical and biotech companies
which are looking to utilise delivery systems to deliver vaccines
and therapeutics they are developing. We intend to engage with
commercial partners to exploit the potential clinical utility of
Nuvec(R). Our intention is not to develop vaccines ourselves. The
business model is similar to that in our generics division in that
we aim to secure licence payments for the use of our delivery
system and ultimately royalties on any products sold using
Nuvec(R).
Initially, we are targeting collaborations and evaluation
agreements with biotech and pharmaceutical companies to evaluate
Nuvec(R) alongside their existing delivery system. We have already
announced our first collaboration with MedImmune and are working on
securing further collaborations. A successful collaboration would
then mean we could license the use of Nuvec(R) for a particular
therapeutic indication. We will therefore have numerous licensing
opportunities for our platform technology.
During the year, the Group announced the results of a study it
conducted for its Nuvec(R) silica nanoparticles ("SiNPs") delivery
system. As well as investigating tolerability, the objective of the
study (funded via a biomedical Catalyst Grant) was to determine the
in-vivo capacity for the Company's SiNPs to deliver DNA to generate
local expression of a protein. This is a key indicator as to
whether a vaccine delivery system is likely to successfully
generate an immune response. Results from the study gave us the
evidence that our SiNPs have many desirable features for use in
either a vaccine approach or to deliver therapeutic proteins to
tissues and are uncovering key commercial advantages compared to
lipid nanoparticles. This increases the scope of Nuvec's(R)
application which, in turn enhances the potential value of the
technology to potential commercial partners. The Board continues to
explore further research options and regular updates will be
provided when appropriate.
The Board is pleased to have welcomed Dr Andrew Leishman as Head
of Nuvec(R) Development. Andrew joined the Company in March 2018
and has quickly become a valued member of the team.
Currently, we are focusing our efforts on Nuvec(R) development
to help secure collaborations and have therefore placed on hold
additional research on a potential hepatitis B vaccine.
Future prospects
The Board remains optimistic about the future of the Group and
its prospects. We have reached a key milestone with the
commencement of the pilot human trial for our reformulation which,
if the results are positive, will greatly advance the value of the
data we have obtained and furthermore provide a clearer path
towards commercialisation for our sildenafil reformulation. We have
already announced one collaboration for Nuvec(R) and are looking to
enter into further agreements with other companies in 2018.
Whilst we are excited about the Group's potential pipeline of
products we are establishing, our immediate focus is on those
products with the opportunity for near term commercialisation,
namely sildenafil and Nuvec(R). In parallel, we hope shortly to
have a plan and budget in place for our pipeline of other generic
products which also seek to address potential multi-billion dollar
markets whilst, as detailed above, setting out a programme for our
vaccine work.
On behalf of the Board, I would like to thank all of our
shareholders for their continued support and welcome all new
shareholders to the Company for what we believe will be another
exciting year in the development of our business.
Nigel Theobald
Chief Executive Officer
N4 Pharma Plc
Consolidated Statement of Comprehensive Income for the year
ended 31 December 2017
Year ended Proforma
31 December 9 month period
2017 to 31 December
2016
GBP GBP
----------------------------------------- ------------------------------------------
109,913 -
Government grant
income
109,913 -
Gross Profit
(409,808) -
Research and
development
costs
General and
administration
costs (316,632) (185,083)
(281,298) -
Reorganisation costs
Operating loss for
the period (897,825) (185,083)
(1,023,734) -
Deemed cost of
acquisition
Finance income/
(expenditure) (5,299) (5,857)
Loss for the period
before tax (1,926,858) (190,940)
89,874 14,362
Taxation
Loss for the period
after tax (1,836,984) (176,578)
Other comprehensive - -
income net of tax
Total comprehensive
loss for the period
attributable to equity
owners of N4 Pharma
Plc (1,836,984) (176,578)
========================= ========================================= ==========================================
Loss per share
attributable
to owners of the
parent
Weighted average
number of shares:
Basic 64,783,082 8,844,706
Diluted 27,852,274 8,844,706
Basic loss per share (1.26p) (2.00p)
Diluted loss per
share (1.24p) (2.00p)
All activities derive from continuing operations.
N4 Pharma Plc
Consolidated Statement of Financial Position as at 31 December
2017
31 December Proforma
2017 31 December
2016
GBP GBP
-------------------------------------- -------------------------------
Assets
Non-current assets
Investments - -
--------------------------- -------------------------------------- -------------------------------
- -
Current assets
Trade and other
receivables 132,700 23,187
Cash and cash
equivalents 1,326,272 19,751
1,458,972 42,938
Total Assets 1,458,972 42,938
---------------------------- -------------------------------------- -------------------------------
Liabilities
Current liabilities
Trade and other
payables (143,788) (102,046)
Accruals and
deferred income (35,430) (20,634)
---------------------------- -------------------------------------- -------------------------------
(179,218) (122,680)
Total assets
less current
liabilities 1,279,754 (79,742)
---------------------------- -------------------------------------- -------------------------------
Non-current liabilities
Amounts falling
due after more
than one year - (204,922)
---------------------------- -------------------------------------- -------------------------------
Net Assets/ (Liabilities) 1,279,754 (284,664)
---------------------------- -------------------------------------- -------------------------------
Equity
Share capital 8,579,396 100
Share premium 8,513,670 -
Share option 147,635 -
reserve
Reverse acquisition (14,138,244) -
reserve
Merger reserve 299,045 -
Retained earnings (2,121,748) (284,764)
---------------------------- -------------------------------------- -------------------------------
Total Equity
/ (Deficit) 1,279,754 (284,664)
---------------------------- -------------------------------------- -------------------------------
The financial statements were approved by the board of directors
on 24 April 2018 and signed on its behalf:
Nigel Theobald
N4 Pharma Plc
Company Statement of Financial Position as at 31 December
2017
31 December 31 December
2017 2016
GBP GBP
----------------------------- -------------------------------
Assets
Non-current assets
Investments 1,094,747 302,705
Intercompany
loan receivable 809,000 214,949
---------------------- ----------------------------- -------------------------------
1,903,747 517,654
Current assets
Inventory of
securities - 231,591
Trade and other
receivables 51,030 197,027
Cash and cash
equivalents 1,266,921 172,430
1,317,951 601,048
Total Assets 3,221,698 1,118,702
---------------------- ----------------------------- -------------------------------
Liabilities
Current liabilities
Trade and other (4,125) -
payables
Accruals and
deferred income (16,400) (77,263)
---------------------- ----------------------------- -------------------------------
(20,525) (77,263)
Total assets
less current
liabilities 3,201,173 1,041,439
---------------------- ----------------------------- -------------------------------
Net Assets 3,201,173 1,041,439
---------------------- ----------------------------- -------------------------------
Equity
Share capital 8,579,396 8,452,782
Share premium 8,513,670 6,880,766
Share option
reserve 147,635 30,812
Merger reserve 299,045 -
Retained earnings (14,338,573) (14,322,921)
---------------------- ----------------------------- -------------------------------
Total Equity 3,201,173 1,041,439
---------------------- ----------------------------- -------------------------------
The Company recorded a pre-tax loss of GBP15,652 for the year
(31 December 2016: GBP22,000 loss).
N4 Pharma Plc
Consolidated Statement of Changes in Equity for the year ended
31 December 2017
(i) Year ended Share Share Share Reverse Merger Retained Proforma
31 December Capital Premium Option Acquisition Reserve Earnings Total
2017 Reserve Reserve Equity
GBP GBP GBP GBP GBP GBP GBP
---------------- ------------------------ ------------------------ ----------------- --------- ---------------- ------------------
Balance at 1
January
2017 100 - - - - (284,764) (284,664)
Total
comprehensive
loss for the
year - - - - - (1,836,984) (1,836,984)
Share issue 8,561,253 8,643,010 - - - - 17,204,263
Cost of share
issue - (129,340) - - - - (129,340)
Share option
reserve - - 147,635 - - - 147,635
Group
Reconstruction 18,043 - - (14,138,244) 299,045 - (13,821,156)
---------------- ------------------------ ------------------------ ----------------- --------- ---------------- ------------------
At 31 December
2017 8,579,396 8,513,670 147,635 (14,138,244) 299,045 (2,121,748) 1,279,754
(ii) Nine Share Share Share Reverse Merger Retained Proforma
months ended Capital Premium Option Acquisition Reserve Earnings Total
31 December Reserve Reserve Equity
2016
GBP GBP GBP GBP GBP GBP GBP
---------------- ------------------------ ------------------------ ----------------- --------- ---------------- ------------------
Balance at 1
April 2016 100 - - - - (108,186) (108,086)
Total
comprehensive
loss for the
period - - - - - (176,578) (176,578)
---------------- ------------------------ ------------------------ ----------------- --------- ---------------- ------------------
At 31 December
2016 100 - - - - (284,764) (284,664)
N4 Pharma Plc
Company Statement of Changes in Equity for the year ended 31
December 2017
(i) Year ended Share Share Share Merger Retained Total Equity
31 December Capital Premium Option Reserve Earnings
2017 Reserve
GBP GBP GBP GBP GBP GBP
---------------- ----------------- ------------------ --------------- --------------- ----------------
Balance at 1
January
2017 8,452,782 6,880,766 30,812 - (14,322,921) 1,041,439
Total
comprehensive
loss for the
year - - - - (15,652) (15,652)
Share issue 108,571 1,762,244 - - 1,870,815
Cost of share
issue - (129,340) - - - (129,340)
Share option
reserve - - 116,823 - - 116,823
Group
Reconstruction 18,043 - - 299,045 - 317,088
At 31
December 2017 8,579,396 8,513,670 147,635 299,045 (14,338,573) 3,201,173
(ii) Year Share Share Share Merger Retained Total Equity
ended 31 Capital Premium Option Reserve Earnings
December 2016 Reserve
GBP GBP GBP GBP GBP GBP
---------------- ----------------- ------------------ --------------- --------------- ----------------
Balance at 1
January
2016 8,409,457 6,503,000 30,812 - (14,300,921) 642,348
Share issue 43,325 377,766 - - - 421,091
Total
comprehensive
loss for the
period - - - - (22,000) (22,000)
At 31
December 2016 8,452,782 6,880,766 30,812 - (14,322,921) 1,041,439
N4 Pharma Plc
Consolidated Statement of Cash Flow for the year ended 31
December 2017
Proforma
Year ended 9 months to
31 December 31 December
2017 2016
GBP GBP
--------------------------------- -------------------------------- -------------------------------------
Operating activities
Loss before tax (1,926,858) (190,940)
Interest 5,299 5,857
Deemed cost of acquisition 1,023,734 -
Operating loss before
changes in working capital (897,825) (185,083)
Movements in working
capital:
(Increase)/ decrease
in trade and other receivables (109,513) 3,844
Increase in trade, other
payables and accruals 56,538 36,754
Cash used in operations (950,800) (144,485)
--------------------------------- -------------------------------- -------------------------------------
Net cash flows used
in operating activities (950,800) (144,485)
--------------------------------- -------------------------------- -------------------------------------
Investing activities
Cash acquired on reverse 402,990 -
acquisition
Net cash flows from 402,990 -
investing activities
--------------------------------- -------------------------------- -------------------------------------
Financing activities
Interest paid (5,299) (5,857)
Proceeds from loan advanced - 129,922
Loan repayments - (10,000)
Net proceeds of ordinary 1,988,970 -
share issue
Cost of share issue (129,340) -
Net cash flows from
financing activities 1,854,331 114,065
--------------------------------- -------------------------------- -------------------------------------
Net increase/ (decrease)
in cash and cash equivalents 1,306,521 (30,420)
Cash and cash equivalents
at beginning of the
year/ period 19,751 50,171
Cash and cash equivalents
at 31 December 1,326,272 19,751
N4 Pharma Plc
Company Statement of Cash Flow for the year ended 31 December
2017
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
---------------------------------- --------------------------------- ---------------------------------------------
Operating activities
Loss before tax (15,652) (22,000)
Interest (21,261) (5,979)
Gain on sale of investments (669) -
Operating loss before changes
in working capital (37,582) (27,979)
Movements in working capital:
Decrease/ (Increase) in
inventories 231,591 (231,591)
Decrease/ (Increase) in
trade and other receivables 145,998 (176,000)
(Decrease)/ Increase in
trade and other payables (56,738) 60,000
Cash generated/ (used)
in operations 283,269 (375,570)
---------------------------------- --------------------------------- ---------------------------------------------
Net cash flows generated/
(used) in operating activities 283,269 (375,570)
---------------------------------- --------------------------------- ---------------------------------------------
Investing activities
Proceeds from sale of investments - (9,000)
Investment costs capitalised (71,013) -
Acquisition of investment (404,605)
Loan receivable advancements (594,051) (209,000)
(1,069,669) (218,000)
Net cash flows used investing
activities
---------------------------------- --------------------------------- ---------------------------------------------
Financing activities
Interest received 21,261 -
Net proceeds of ordinary
share issue 1,988,970 179,000
Cost of share issue (129,340) -
Net cash flows from financing
activities 1,880,891 179,000
---------------------------------- --------------------------------- ---------------------------------------------
Net increase/ (decrease)
in cash and cash equivalents 1,094,491 (414,570)
Cash and cash equivalents
at beginning of the year 172,430 587,000
Cash and cash equivalents
at 31 December 1,266,921 172,430
1.1 Reporting entity
N4 Pharma Plc (the "Company"), (formerly known as Onzima
Ventures Plc) is the holding company for N4 Pharma UK Limited ("N4
UK"), (formerly known as N4 Pharma Limited) and together form the
group (the "Group"). N4 UK is a specialist pharmaceutical company
which reformulates existing drugs and vaccines to improve their
performance. The nature of the business is not deemed to be
impacted by seasonal fluctuations and as such performance is
expected to be consistent.
The Company acquired the remaining 51 per cent. of the share
capital of N4 UK on 3 May 2017 by way of a reverse takeover. The
terms of the share purchase are set out in the share purchase
agreement dated 13 April 2017. The Company is domiciled in England
and Wales and was incorporated and registered in England and Wales
on 6 July 1979 as a public limited company and its shares are
admitted to trading on AIM (LSE: N4P). The Company's registered
office is located at 6th Floor, 60 Gracechurch Street, London EC3V
0HR.
The Group consolidated financial statements have been prepared
and approved by the Directors in accordance with International
Financial Reporting Standards as adopted by the EU ("Adopted
IFRSs"). The financial statements comply with the Companies Act
2006 and give a true and fair view of the state of affairs of the
Group.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
Group consolidated financial statements.
1.2 Measurement convention
The financial statements are prepared on the historical cost
basis, except for the following item in the consolidated statement
of financial position and statement of comprehensive income:
-- Share-based payments are measured at fair value shown in the Merger Reserve.
-- Share Warrants and Options are measured at fair value using
the Black Scholes model (see note 8).
-- Equity investments are measured at fair value.
The financial statements are presented in Great British Pounds
("GBP" or "GBP").
1.3 Going concern
These financial statements have been prepared on the basis of
accounting principles applicable to a going concern. The Directors
consider that the Group will have access to adequate resources, as
set out below, to meet both operational requirements for at least
12 months from the date of approval of these financial statements.
For this reason, they continue to adopt the going concern basis in
preparing the financial statements.
The Group currently has no source of operating cash inflows,
other than government grant income, and has incurred net operating
cash outflows for the year ended 31 December 2017 of GBP950,800 (9
months to 31 December 2016: GBP144,485). At 31 December 2017, the
Group had cash balances and term deposits of GBP1,326,272 (2016:
GBP19,751) and a surplus in net working capital (current assets,
including cash, less current liabilities) of GBP1,279,754 (2016:
GBP79,742 deficit).
The Group continues to take steps to manage operational
expenditure effectively and to manage the cash required for
budgeted activities and working capital for at least 12 months from
the date of approval of the financial statements. Close monitoring
of current and forecast expenditure is undertaken by the board and
key executive decisions discussed at monthly board meetings.
As per the subsequent events note, further funds have been
received after 31 December 2017 as a result of warrants exercised
and the sale of the remaining investment in Alecto Minerals.
The Group have also been awarded a feasibility grant from
Innovate UK ("Innovate"), the UK's innovation agency, to co-fund a
collaborative project with MedImmune UK, a leading global biologics
R&D company, to explore the manufacture of a prototype using
the Group's Nuvec(R) system. The grant funding for this project is
expected to last for approximately nine months from 1 February
2018.
1.4 Basis of consolidation
On 3 May 2017, the Company became the legal parent of N4 UK
through a reverse takeover transaction ("RTO" or "reverse
takeover"). The Company was not a business as defined by IFRS 3
prior to the transaction and as such was outside of the scope of
IFRS 3, Business Combinations. The consolidated financial
statements present the substance of the transaction in accordance
with IFRS2. The comparative results to 31 December 2016 represent
the position of N4 UK prior to the reverse takeover.
The consolidated financial statements of the Company are
presented as a continuation of N4 UK's financial statements,
reflecting the commercial substance of the transaction. However,
the equity structure presented in the consolidated financial
statements reflects the equity structure of the Company, including
the new shares issued as part of the transaction. Where information
relates or includes the results of N4 UK prior to the reverse
takeover, it has been labelled 'pro forma'.
Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income
and expenses arising from intra-Group transactions, are eliminated
in preparing the consolidated financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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