27 September 2024
Roquefort Therapeutics
plc
("Roquefort Therapeutics" or the "Company")
Interim Results to 30 June
2024
Roquefort Therapeutics (LSE:ROQ),
the Main Market listed biotech company focused on
developing first in class drugs in the high value
and high growth immunology and oncology markets,
is pleased to announce its interim results for the six-month period
ended 30 June 2024 (the "period" or "H1").
Highlights
· Signed
a term sheet in May 2024 for the Company's first therapeutic
out-licensing deal for its Midkine antibody program with PDC FZ-LLC
("PDC") for an initial consideration of US$10 million
· Significant progress made across pre-clinical portfolio with
positive results announced in MK cells, Midkine mRNA and STAT-6
siRNA programs
· Convertible loan notes (the "Convertible Loan Notes") raising
net proceeds of £584,915 announced in May 2024 providing funds for
at least 12 months, in conjunction with Company's existing cash
reserves
· Significant cost cutting measures announced in May 2024 to
further support cashflow, while working on completing cash
generative out-licensing deals
· Sir
Martin Evans moved from his executive position as Chief Scientific
Officer to Non-Executive Director and Dr Michael Stein stepped down
as Non-Executive Director in May 2024
· Cash
at period end of £595,662 and a net loss of £596,547 for the 6
months to 30 June 2024
Post
Period End Highlights
· Additional experiments completed for potential out licensing
partners for the STAT-6 siRNA program
· European Patent Office and Japan Patent Office granted patents
for the Company's MK cell therapy, across 40 countries including
the UK, EU and Japan
· The
Company received a UK R&D refund of £123,593 in September
2024
Outlook
· The
Company continues to work with PDC towards finalising a binding
out-licensing agreement for its Midkine antibody portfolio, with
updates to be provided to the market in due course
· The
Company remains committed to securing other therapeutic licensing
deals and is in active discussions in this regard
Commenting on the Interim Results, Roquefort Therapeutics CEO,
Ajan Reginald said: "During the first half of
the year we continued with our strategy to select novel medicines
in high value pharmaceutical markets and developed them to deliver
the results required to attract Big Pharma partners. This
culminated in Roquefort Therapeutics announcing the signing of a
term sheet for our first therapeutic licensing deal with PDC,
whilst also engaging with multiple Big Pharma partners regarding
our siRNA programs in Immunology and
Inflammation.
The Board is mindful of operational costs, and in May 2024 we
raised the necessary funds for an additional 12 months, which
enables us to complete the development of our pre-clinical programs
and to retain the flexibility needed in negotiating the ongoing
out-licensing transactions. I would like to thank my colleagues at
Roquefort Therapeutics in completing the necessary pre-clinical
milestones which have allowed the Company to engage in
out-licensing discussions with large pharma companies and other
partners. With excellent pre-clinical data, and the necessary
funding in place, I am confident in our ability to complete
additional licensing deals and look forward to providing our
shareholders with further updates as
appropriate."
Chairman
Statement
I am pleased to present the interim
financial statements to shareholders for the six months ending 30
June 2024.
The highlight of the period was
signing a term sheet for the out-licensing of our Midkine antibody
portfolio to PDC, a leading MEA pharmaceutical organisation. Under
the non-binding strategic out-licensing term sheet, Roquefort
Therapeutics receives US$10 million total initial consideration
value including a guaranteed share of the trade sale proceeds on
successful completion of Phase 1 clinical trials. PDC will develop
one or more of the Midkine antibodies within a new Special Purpose
Vehicle ("SPV") to complete the Phase 1 clinical trial and then
seek a trade sale of the SPV. We are now working with PDC to
complete the definitive licence agreement, and further updates will
be made as this progresses.
A summary of the agreed commercial
terms in the term sheet are listed below:
· Initial consideration value of US$10 million, which includes
non-dilutive equity in the SPV;
· Exclusive worldwide licence granted to the SPV for 20
years;
· Within
three years, PDC to develop at least one of the Midkine antibodies
within the SPV to the completion of a Phase 1 trial and then, upon
success, to complete a trade sale of the SPV; and
· Roquefort Therapeutics will receive circa 24% from any
successful trade sale proceeds, which if the Phase 1 trial is
successful, this 24% is projected to be worth up to US$50M (gross)
based on similar phase 1 trade sales.
Additionally, we made progress with
further out-licensing discussions, notably for our STAT-6 siRNA
program, with potential out-licensing partners requesting
additional immunology in
vitro experiments to be conducted. These preliminary
experiments were completed in September 2024 with the Company's
STAT-6 siRNA demonstrating efficacy in a validated in vitro experimental model of
immunological disease. The Company believes that these positive
immunology results enhance the Company's existing positive oncology
results and therefore strengthens the program's attractiveness to
potential licensees. The Company will update the market as this
process progresses.
Producing compelling pre-clinical
data remains important to our strategy of attracting partners to
out-licence and sell our programs, and during the period we also
provided encouraging updates on our MK cells, Midkine mRNA and
STAT-6 siRNA oncology programs. In February 2024, we announced
superior in vivo efficacy,
when combining our MK cells with natural killer cells to
demonstrate anti-cancer effect in leukaemia and
lymphoma.
In March 2024 we announced
significant pre-clinical development milestones, reporting positive
results in Midkine mRNA and STAT-6 siRNA programs. The Company
continued developing, in validated in vivo models, its Midkine mRNA
therapeutics in combination with lipid nanoparticle ("LNP")
delivery systems to target liver cancer, where Midkine is
associated with disease progression. The experiment demonstrated
safety and efficacy in reducing functional Midkine and is
significant as it demonstrates when combining with a LNP, our mRNA
as a potential anti-cancer medicine. This offers the potential to
be a first in class medicine targeting the US$3 billion liver
cancer market. The STAT-6 siRNA program continues to produce
compelling data, and in March 2024, via validated in vivo models of colon cancer, we
demonstrated efficacy of our four siRNA sequences in reducing
STAT-6 expression by 40-50%. Similarly to the Midkine mRNA program,
this offers the potential to be a first in class medicine in the
US$12 billion colon cancer market.
In order to provide additional
funding, the Company announced on 23 May 2024 the issuance of
unsecured Convertible Loan Notes raising net proceeds of £584,915.
This provides the Company with the necessary funding to continue to
conduct pre-clinical studies and continue out-licensing
discussions. The funding is sufficient for 12 months from June 2024
and is independent of any funds the Company receives from licensing
deals. In addition to participating in the Convertible Loan Notes
fundraise, the Directors' of Roquefort Therapeutics demonstrated
their commitment to securing a licensing deal by taking a 50%
reduction in salaries and Directors fees effective from 1 March
2024, and in August 2024 this reduction was increased to 75%. It is
intended that salaries and Directors' fees will be re-instated to
100% when a cash generative licensing deal is completed.
Outlook
The Company continues with its
strategy to discover first in class medicines, enhance their appeal
through pre-clinical R&D and to then license or sell the
program. Roquefort Therapeutics remains in active out-licensing
discussions with potential partners, and it is our goal to secure
binding agreements with one or more partners. We are working
towards reaching a binding agreement with PDC for our Midkine
antibody portfolio as well as re-engaging with big pharma for our
STAT-6 siRNA program now that we have demonstrated efficacy in a
validated in vitro
experimental model of immunological disease. The fundraise leaves
the Company with the necessary funds to continue out-licensing
discussions, and the Board is confident in the Company's ability to
sign further agreements, which in turn are expected to generate
value for all stakeholders.
Financial Review
For the 6 months to 30 June 2024,
the Group reported a net loss of £596,547, mostly relating to administrative
expenses. The Group maintained a sufficient balance sheet position
at 30 June 2024, most notably holding cash at period end of
£595,662.
Directors
The following directors have held
office during the period to 30 June 2024:
Stephen West
Trevor Ajanthan (Ajan)
Reginald
Prof. Sir Martin Evans
Dr Darrin Disley
Ms Jean Duvall
Dr Simon Sinclair
Dr Michael Stein (resigned on 23 May
2024)
Corporate Governance
The UK Corporate Governance Code
(September 2014) ("the Code"), as appended to the Listing Rules,
sets out the Principles of Good Corporate Governance and Code
Provisions which are applicable to listed companies incorporated in
the United Kingdom. As a standard listed company, the Company is
not subject to the Code; however, the Board acknowledges the
importance of high standards of corporate governance and
endeavours, given the Company's size and the constitution of the
Board, to comply with the principles set out in the QCA Corporate
Governance Code. The QCA Code sets out a standard of minimum best
practice for small and mid-size quoted companies.
Responsibility Statement
The Directors are responsible for
preparing the Unaudited Interim Condensed Financial Statements in
accordance with the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority ("DTR") and with
International Accounting Standard 34 on Interim Reporting ("IAS
34"). The Directors confirm that, to the best of their knowledge,
this condensed interim report has been prepared in accordance with
IAS 34 as adopted by the European Union. The interim management
report includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8, namely:
• an
indication of important events that have occurred during the six
months ended 30 June 2024 and their impact on the condensed
financial statements for the period, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
•
related party transactions that have taken place in the six months
ended 30 June 2024 and that have materially affected the financial
position of the performance of the business during that
period.
ENDS
Enquiries:
|
Roquefort Therapeutics plc
|
+44 (0)20
3918 8633
|
|
Stephen West (Chairman) / Ajan
Reginald (CEO)
|
|
|
SP
Angel Corporate Finance LLP (Broker)
David Hignell / Vadim Alexandre /
Devik Mehta
|
+44 (0) 20
3470 0470
|
|
Buchanan (Public Relations)
Ben Romney / Jamie Hooper / George
Beale
|
+44 (0)20
7466 5000
|
|
Peak
IR (Investor Relations)
Seb Wykeham
|
+33 (0)7
44 44 15 42
|
LEI: 254900P4SISIWOR9RH34
ROQUEFORT THERAPEUTICS PLC -
CONDENSED INTERIM FINANCIAL STATEMENTS
NOTES TO THE INTERIM FINANCIAL INFORMATION
FOR
THE 6 MONTHS ENDED 30 JUNE 2024
1 General Information
The Company was incorporated on 17
August 2020 as a public company in England and Wales with company
number 12819145 under the Companies Act.
The address of its registered office
is 85 Great Portland Street, First Floor, London, England, W1W
7LT.
The principal activity of the
Company is to develop pre-clinical next generation medicines
focused on hard-to- treat cancers.
The Company listed on the London
Stock Exchange ("LSE") on 22 March 2021.
The condensed consolidated interim
financial statements of the Group have been prepared in accordance
with UK adopted International Accounting Standards as issued by the
UK Accounting Standards Board (ASB). They have been prepared under
the assumption that the Group operates on a going concern
basis.
2 New Standards and
Interpretations
New and revised accounting standards
adopted for the period ended 30 June 2024 did not have any material
impact on the Group's accounting policies. There are a number of
standards, amendments to standards, and interpretations which have
been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The Group is currently assessing the
impact of these new accounting standards and amendments. The Group
does not expect any other standards issued by the IASB, but not yet
effective, to have a material impact on the Group.
3 Summary of Significant Accounting
Policies
Basis of Preparation
These condensed consolidated interim
financial statements do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2023 were approved by the
Board of Directors on 25 April 2024 and delivered to the Registrar
of Companies. The report of the auditors on those accounts was
unqualified and did not contain any statement under section 498 of
the Companies Act 2006; however, it did contain an emphasis of
matter paragraph relating to a material uncertainty in relation to
going concern identified by the Directors and appropriately
disclosed in the financial statements.
These condensed consolidated interim
financial statements have been prepared in accordance with the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority and with IAS 34 "Interim Financial Statements." The
condensed consolidated interim financial statements do not include
all disclosures that would otherwise be required in a complete set
of financial statements but have been prepared in accordance with
the existing accounting policies of the Group. The
condensed consolidated interim financial statements should be read
in conjunction with the annual financial statements for the year
ended 31 December 2023, which have been prepared in accordance with
UK adopted International Accounting Standards and the
Companies Act 2006.
The condensed consolidated interim
financial statements for the period ended 30 June 2024 are
unaudited.
The condensed consolidated interim
financial statements are presented in £ unless otherwise stated,
which is the Company's functional and presentational
currency.
Going concern
The preparation of the financial
statements requires an assessment on the validity of the going
concern assumption.
The Directors, having made due and
careful enquiry, are of the opinion that the Company and the Group
have adequate working capital to execute its operations over the
next 12 months. As a result, the Directors have adopted the going
concern basis of accounting in the preparation of the interim
financial statements.
Accounting policies
The same accounting policies,
presentation and methods of computation have been followed in
these condensed consolidated interim
financial statements as were applied in the
preparation of the Company's and the Group's financial statements
for the period ended 31 December 2023.
Segment reporting
The Group considers it has one
operating segment and therefore the results are as presented in the
primary statements.
Forward-looking
statements
Certain statements in this condensed
set of consolidated interim financial statements are forward
looking. Although the Group believes that the expectations
reflected in these forward-looking statements are reasonable, we
can give no assurance that these expectations will prove to be
correct. As these statements involve risks and uncertainties,
actual results may differ materially from those expressed or
implied by these forward-looking statements. We undertake no
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise.
4 Critical accounting estimates and
judgements
In preparing the condensed
consolidated interim financial statements, the Directors have to
make judgements on how to apply the Company's accounting policies
and make estimates about the future. Estimates and judgements are
continuously evaluated based on historical experiences and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances. In the future, actual
experience may deviate from these estimates and
assumptions.
Actual results may differ from these
estimates. In preparing these condensed consolidated interim
financial statements, the significant judgements made by management
in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
financial statements for the year ended 31 December
2023.
5 Financial risk management
The Group's activities expose it to
a variety of financial risks, including market risk (which includes
currency risk and interest rate risk), credit risk and liquidity
risk. The condensed consolidated interim financial statements do
not include all financial risk management information and
disclosures required in the annual financial statements; they
should be read in conjunction with the Group's annual financial
statements as at 31 December 2023. There have been no changes in
any risk management policies since the year.
6 Earnings per Ordinary
Share
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Period
ended
30 June
2024
£
|
Period
ended
30 June
2023
£
|
Year ended
31 December
2023
£
|
|
Loss attributable to equity
shareholders
|
(579,499)
|
(782,358)
|
(1,744,540)
|
|
Weighted number of ordinary shares
in issue
|
129,149,998
|
121,850,000
|
129,149,998
|
|
Basic and diluted loss per share in pence
|
(0.45)
|
(0.64)
|
(1.35)
|
7 Borrowings
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
30 June
2024
£
|
30 June
2023
£
|
31 December
2023
£
|
|
Convertible loan notes
|
584,915
|
-
|
-
|
|
Finance charge
|
11,137
|
|
|
|
Accrued interest
|
13,645
|
-
|
-
|
|
|
609,697
|
-
|
-
|
The Convertible Loan Notes are
unsecured with a 12 month maturity, have a total face value of
£655,000 and have been issued to noteholders at 95% of the face
value. A finance charge has been recognised for the period,
being the difference between the face value and net proceeds
received apportioned over the life of the loan notes. The interest
rate is 12.5% accrued daily and paid upon conversion (in shares) or
repayment (in cash). The conversion price of the Convertible Loan
Notes is calculated as the lower of a) 6 pence per share; and b)
90% of the price equal to the 10-day volume-weighted average price
calculated backwards from the date which is three business days
prior to the notice of conversion given to the Company.
8 Trade and other
payables
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
30 June
2024
£
|
30 June
2023
£
|
31 December
2023
£
|
|
Trade creditors
|
135,631
|
274,755
|
144,841
|
|
Accruals and other
creditors
|
117,427
|
95,543
|
162,273
|
|
|
253,058
|
370,298
|
307,114
|
9 Share Capital
|
|
Ordinary
Shares
|
Share
Capital
|
Share
Premium
|
Total
|
|
|
No.
|
£
|
£
|
£
|
|
|
|
|
|
|
|
At 1 January 2023
|
129,149,998
|
1,291,500
|
4,403,094
|
5,694,594
|
|
Movement for the year
|
-
|
-
|
-
|
-
|
|
At
31 December 2023
|
129,149,998
|
1,291,500
|
4,403,094
|
5,694,594
|
|
Movement for the period
|
-
|
-
|
-
|
-
|
|
As
at 30 June 2024
|
129,149,998
|
1,291,500
|
4,403,094
|
5,694,594
|
10 Share Based Payment
Reserves
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
30 June
2024
£
|
30 June
2023
£
|
31 December
2023
£
|
|
Opening balance
|
385,537
|
375,135
|
375,135
|
|
NED and Advisor warrants
|
10,958
|
5,201
|
10,402
|
|
CLN Broker warrants
|
10,506
|
-
|
-
|
|
|
407,001
|
380,336
|
385,537
|
The fair value of the services
received in return for the warrants granted are measured by
reference to the fair value of the warrants granted. The estimate
of the fair value of the warrants granted is measured based on the
Black-Scholes valuations model. Measurement inputs and assumptions
are as follows:
|
Warrant
|
Number of
warrants
|
Share Price
|
Exercise
Price
|
Expected
volatility
|
Expected
life
|
Risk free
rate
|
Expected
dividends
|
|
Director
|
750,000
|
£0.05
|
£0.05
|
50.00%
|
5
|
0.15%
|
0.00%
|
|
Director
|
750,000
|
£0.05
|
£0.10
|
50.00%
|
5
|
0.15%
|
0.00%
|
|
Completion
|
3,000,000
|
£0.10
|
£0.10
|
50.00%
|
3
|
0.15%
|
0.00%
|
|
Senior Management
|
4,500,000
|
£0.10
|
£0.15
|
50.00%
|
5
|
0.15%
|
0.00%
|
|
Broker
|
1,320,000
|
£0.10
|
£0.10
|
50.00%
|
3
|
0.15%
|
0.00%
|
|
Corporate Advisor
|
175,000
|
£0.10
|
£0.10
|
50.00%
|
3
|
0.15%
|
0.00%
|
|
NED and Advisor
|
900,000
|
£0.08
|
£0.15
|
50.00%
|
5
|
0.15%
|
0.00%
|
|
CLN broker
|
497,800
|
£0.06
|
£0.08
|
50.00%
|
5
|
3.63%
|
0.00%
|
|
TOTAL
|
11,892,800
|
|
|
|
|
|
|
Warrants
|
|
Number of
Warrants
|
Exercise
Price
|
Expiry
date
|
|
At at 1 January 2023
|
35,375,000
|
£0.106
|
|
|
Expired during the year
|
(11,500,00)
|
£0.102
|
21 March
2023
|
|
As
at 31 December 2023
|
23,875,000
|
£0.109
|
|
|
Expired during the period
|
(480,000)
|
£0.05
|
22 March
2024
|
|
Granted during the period
|
6,720,300
|
£0.075
|
23 May
2029
|
|
As
at 30 June 2024
|
30,115,300
|
£0.102
|
|
The weighted average time to expiry
of the warrants as at 30 June 2024 is 4.94 years (2023: 2.7
years).
The expected volatility was
calculated using the Exponentially Weighted Moving Average Mode.
Due to limited trading history comparable listed peer company
information was used.
11 Related Party
Transactions
During the period the Company raised
£655,000 in gross proceeds via the issue of convertible loan
notes. Chairman Stephen West, CEO Ajan Reginald and
Non-Executive Director Dr Darrin Disley all participated in the
raise with Mr West investing £26,750, Mr Reginald investing £25,000
and Dr Disley investing £20,000.
There were no other related party
transactions during the period ended 30 June 2024.
12 Post Balance Sheet
Events
There has been no significant change
in either the financial performance or the financial position of
the Group since 30 June 2024.
13 Ultimate Controlling
Party
As at 30 June 2024, there was no
ultimate controlling party of the Company.
14 Nature of the Consolidated Condensed
Interim Financial Statements
The Company Financial Information
presented above does not constitute statutory accounts for the
period under review.
15 Approval of the Condensed Interim
Financial Statements
The Condensed Interim Financial
Statements were approved by the Board of Directors on 26 September
2024.