Scancell Holdings Plc Final Results (0051K)

TIDMSCLP

RNS Number : 0051K

Scancell Holdings Plc

16 September 2016

16 September 2016

Scancell Holdings Plc

("Scancell" or the "Company")

Final Results for the year ended 30 April 2016

Landmark four year survival achieved in resected SCIB1 patients

Emerging pipeline of three products across five cancer indications

Scancell Holdings plc, ('Scancell' or the 'Company') the developer of novel immunotherapies for the treatment of cancer, announces results for the year ended 30 April 2016.

Highlights

-- SCIB1 continues to deliver significant survival data from the Phase 1/2 clinical trial in patients with Stage III/IV melanoma

o Currently 19 of the 20 patients with resected tumours at study entry remain alive

o Of the 16 patients who received 2-4mg doses of SCIB1

-- Median observation time since entry is 49 months, a landmark survival milestone

-- Only two new incidences of disease progression have been recorded since December 2013

o Of the four patients who received 8mg doses of SCIB1

-- Median observation time since entry is 18 months

-- None have progressed and none have died

o As announced on 17 June 2016, treatment for the eight patients in the long-term continued dosing phase has been suspended due to the clinical trial supplies no longer being within the original specification

o New SCIB1 material being manufactured to support a new study of SCIB1 in combination with a checkpoint inhibitor will also be made available to these continuation patients (subject to regulatory approval)

o Plans for the US clinical study of SCIB1 in combination with a checkpoint inhibitor remain on track, enrolment expected to commence in Q3 2017

o The final Clinical Study Report will be issued later this year and will support our US IND submission

   --      Continued progress made in development of lead product, Modi-1, from Moditope(R) platform 

o Enrolment for first-in-man clinical study in triple negative breast cancer, ovarian cancer and osteosarcoma expected to commence in early 2018

-- Strategic collaboration with Karolinska Institutet to explore the role of citrullination in cancer, a key mechanism underpinning the Moditope(R) platform

-- GBP6.2m (GBP5.8m net) raised through a firm placing and open offer involving both existing and new shareholders

   --      John Chiplin appointed Chairman 
   --      Loss for the year of GBP2,583,273 (2015: loss GBP2,414,630) 
   --      Group cash balance at 30 April 2016 was GBP6,527,435 (30 April 2015: GBP3,059,001) 

Post Period Highlights

-- Scancell's executive management team restructured to align expertise with the strategic direction outlined in fundraising

   --      Dr Alan Lewis appointed to Board as Non-Executive Director 
   --      Opening of new offices in San Diego, US and Oxford, UK to support Company's growth plans 

Dr John Chiplin, Executive Chairman of Scancell, said:

"We have continued to make significant progress in the period, both in terms of the maturing clinical data with SCIB1 and further scientific developments on both the ImmunoBody(R) and Moditope(R) platforms. We now have a pipeline of three products across five cancer indications and clinical success with any one of these products could transform the value of the business. The Board believes that further clinical studies could add significant value to the Company and is continuing to explore a number of funding options to ensure that the Company has the resources to progress these programmes further.

"Scancell has arrived at an exciting point in its development. We now have the opportunity to transform the business from a small UK-based and largely scientifically-based enterprise into an international force in immuno-oncology. We remain committed to driving this process forward in the US and elsewhere, and to realising the value that has been accumulating over recent years, both for the benefit of our shareholders and cancer patients."

For Further Information:

Scancell Holdings Plc

 
 Dr John Chiplin, Executive 
  Chairman                                          [phone] 
  Dr Richard Goodfellow,       Scancell Holdings     [phone] 
  CEO                           Plc                  1000 
 
 Freddy Crossley (Corporate                         [phone] 
  Finance)                                           2500 
  Tom Salvesen (Corporate      Panmure Gordon        [phone] 
  Broking)                      & Co                 2500 
 
                                                    [phone] 
 Mo Noonan/Simon Conway        FTI Consulting        1000 
 

About Scancell

Scancell is developing novel immunotherapies for the treatment of cancer based on its ImmunoBody(R) and Moditope(R) technology platforms.

Scancell's first ImmunoBody(R), SCIB1 is being developed for the treatment of melanoma. Data from the Phase 1/2 clinical trial demonstrate that SCIB1, when used as monotherapy, has a marked effect on tumour load, produces a melanoma-specific immune response and highly encouraging survival trend without serious side effects. In patients with resected disease there is increasing evidence to suggest that SCIB1 may delay or prevent disease recurrence.

Scancell's ImmunoBody(R) vaccines target dendritic cells and stimulate both parts of the cellular immune system: the helper cell system where inflammation is stimulated at the tumour site and the cytotoxic T-lymphocyte or CTL response where immune system cells are primed to recognise and kill specific cells.

Pre-clinical data on a combination of SCIB1 or SCIB2 and checkpoint inhibition (blockade of the PD-1 or CTLA-4 immune checkpoint pathways) have shown enhanced tumour destruction and significantly longer survival times than when either treatment was used alone.

Scancell has also identified and patented a series of modified epitopes that stimulate the production of killer CD4+ T cells that destroy tumours without toxicity. The Directors believe that the Moditope(R) platform could play a major role in the development of safe and effective cancer immunotherapies in the future.

CHAIRMAN'S STATEMENT

I am pleased to report the Company's final results for the year ended 30 April, 2016. Over the year, we have continued to make good progress across our two proprietary immuno-oncology platforms, with a pipeline of three products across five cancer indications under development.

SCIB1 continues to deliver compelling survival data in patients with melanoma and plans for our US Phase 2b study of SCIB1 in combination with a checkpoint inhibitor remain on track. Scancell's second ImmunoBody(R), SCIB2, will be developed for the treatment of non-small cell lung cancer in combination with a checkpoint inhibitor. Progress has also been made in the pre-clinical development of Modi-1 which is being prepared for clinical trials in three indications, triple negative breast cancer, ovarian cancer and osteosarcoma.

In April 2016, the Company raised GBP6.2m (GBP5.8m net proceeds) from a firm placing and open offer; the firm placing raised gross proceeds of GBP3.4m and the open offer GBP2.8m. These funds will enable the Company to:

-- Secure approval of an Investigational New Drug (IND) application for the SCIB1 checkpoint inhibitor combination study in patients with melanoma;

-- Manufacture a new batch of SCIB1 for the SCIB1 checkpoint inhibitor combination study and complete all preparatory work for the trial in the US;

-- Prepare and file a Clinical Trial Application (CTA) in the UK for the planned Phase 1/2 clinical trial with Modi-1, manufacture the product and to complete all of the preparatory work for such a trial in the UK; and

-- Strengthen the management and infrastructure of the Company from new offices in San Diego and Oxford.

Financial

Profit and Loss Account

The Group made an operating loss for the year to 30 April, 2016 of GBP3,043,163 (2015: loss of GBP2,959,995). There has been an increase of 3% in the operating loss over the past two years. The major reasons for this have been an increase in administrative expenses during the year as the Company has incurred additional corporate costs in preparing and developing opportunities within the US. This increase has been partially offset by a reduction in development expenses as a result of expenditure on manufacturing costs being incurred in 2014/15 but not in 2015/16 and reduced clinical trial costs for the current year as the SCIB1 study closed in October 2015.

Overall the loss for the year was GBP2,583,273 (2015: loss GBP2,414,630).

Balance Sheet

The cash at bank at 30 April 2016 was GBP6,527,435 (30 April 2015: GBP3,059,001) and net assets amounted to GBP9,992,281 (30 April 2015: GBP6,754,002).

Two Powerful Proprietary Platforms: ImmunoBody(R) and Moditope(R)

Scancell is exploiting the unrivalled potential of the immune system to seek out and destroy cancer using our two proprietary immuno-oncology platforms.

ImmunoBody(R)

Scancell's potent innovative DNA-based ImmunoBody(R) therapies generate ultra-high avidity T cell responses that target and eliminate cancerous tumours. Although there have been some successes, therapeutic vaccine development has been hampered by high failure rates that can in large measure be attributed to a failure to trigger the induction of the high avidity multi-targeted anti-tumour T cell responses that are required to control the disease. Pre-clinical studies have confirmed that the ImmunoBody(R) platform delivers killer T cell responses that are superior in magnitude to those generated by current cancer vaccines. Moreover, different T-cell epitopes can be grafted into the framework allowing for rapid customisation for the targeting of multiple tumour types.

SCIB1 melanoma vaccine

SCIB1 continues to deliver strong survival data. Currently 19 of the 20 Stage III/IV patients with resected tumours remain alive. Despite additional treatment with checkpoint inhibitors and radiation therapy one patient who first experienced disease progression in September 2013 died in April 2016. Of the 16 patients who received 2-4mg doses of SCIB1 the median observation time since entry is now 49 months - a significant survival landmark and one which suggests that SCIB1 may offer curative potential in these difficult to treat patients. Indeed there have only been two new cases of disease progression in this cohort since December 2013. Of the four patients who received 8mg doses of SCIB1, the median observation time since entry is now 18 months. None of these patients have progressed and none have died. As Dr Keith Flaherty, Prof of Medicine at Harvard Medical School commented in July of this year: "The SCIB1 overall survival and progression free survival data to date go well beyond established norms for this group of patients."

The final Clinical Study Report, which will be issued later this year, will provide safety, immunology and clinical data from all patients up to 29 October 2015 (the date of the last patient's dose in the main study) to support our US IND submission.

Following quality control analysis the Company suspended dosing with the current clinical supplies of SCIB1 as the stored drug product was no longer within its original specification. With patient safety of paramount importance, the Company concluded that the clinical supplies were no longer suitable for further use, although no new side effects have emerged. The Company has recently signed a supply agreement with a new GMP manufacturer to supply materials for a planned new study of SCIB1 in combination with a checkpoint inhibitor, which will also be made available to those patients who were receiving long term treatment before their treatment was interrupted.

Plans for the US Phase 2b study of SCIB1 in combination with a checkpoint inhibitor remain on track and enrolment is expected to commence in Q3 2017. The Principal Investigator will be Dr Keith Flaherty who will be joined by leading clinicians across the US. This study is designed to meet the need for enhanced response rates to immune checkpoint therapy which still remain unacceptably low. SCIB1 induced T cell activation provides a means to increase the immunogenicity of cancer cells and subsequently the response rate to immune checkpoint therapy. We have already shown enhanced response rates and survival times using a combination of SCIB1 and checkpoint inhibitor treatment in pre-clinical models of melanoma.

The "second generation" SCIB1 construct, SCIB1 PLUS has now been characterised and will be developed to support future clinical trials in the adjuvant indication. This will eliminate the need for HLA (human leucocyte antigen) testing before treatment and will effectively double the size of the available market for SCIB1.

SCIB2 lung cancer vaccine

SCIB2 contains multiple T cell epitopes derived from the lung cancer associated antigen NY-ESO-1. In a mouse lung cancer model, survival rates with SCIB2 were comparable to that seen with anti-PD-1 checkpoint treatment and moreover, survival rates were boosted to 100% when the checkpoint therapy was combined with SCIB2. At least 80% of patients with non-small cell lung cancer (NSCLC) fail to respond to checkpoint inhibitors as their tumours are insufficiently immunogenic. Targeted T-cell activation with SCIB2 may serve to increase the immunogenicity of lung cancers and subsequently the response rate to checkpoint therapy. We are therefore planning to conduct a US based clinical study on NY-ESO-1 NSCLC patients to assess the safety and efficacy of SCIB2 in combination with a checkpoint inhibitor. The first stages of manufacture will commence in Q4 2016 with the goal of starting enrolment early in 2018.

Moditope(R)

Scancell's Moditope(R) platform technology overcomes the immune suppression induced by tumours themselves, allowing activated T cells to seek out and kill tumour cells that would otherwise be hidden from the immune system. This is achieved by stimulating the production of CD4+ T cells using citrullinated tumour-associated peptide epitopes which overcome self-tolerance and destroy tumour cells. Pre-clinical studies have shown unprecedented anti-tumour effects that can be delivered even in the absence of checkpoint therapy.

Publication of the scientific data supporting the Moditope(R) platform in Cancer Research in December 2015 provided further endorsement of the quality of Scancell's innovative research and earlier this year we were pleased to announce a strategic collaboration with Karolinska Institutet to explore the role of citrullination in cancer, a key mechanism underpinning the Moditope(R) platform.

Modi-1

Modi-1 is comprised of two citrullinated vimentin peptides and one citrullinated enolase peptide. Vimentin and enolase peptides are highly expressed in triple negative breast cancer, ovarian cancer and osteosarcoma. In animal models a single immunisation of Modi-1 resulted in a 100% survival rate. We are now actively planning a first-in-man clinical study to assess the safety and objective response rate of Modi-1 in all three target cancers which is expected to commence enrolment in early 2018.

Management and infrastructure changes

In May 2016, the Company made changes to the structure of Scancell's executive management team to align expertise with the strategic direction outlined in the fundraising, completed in April 2016. I have assumed the role of Executive Chairman and will be directly involved in raising the profile of the Company in the US. Dr Richard Goodfellow became CEO and Professor Lindy Durrant became Chief Scientific Officer, allowing her to focus fully on her innovative work that underpins the Company's novel technology platforms. In order to support the Company's ambitious US growth plans, an office has been opened in San Diego and Dr Alan Lewis, who is based in the US has recently joined the Board as a non-executive director. Alan brings a wealth of industry experience, both commercially and financially and has extensive experience in drug discovery and development. In addition, we have opened an office on the Oxford Science Park from which all UK development activities will henceforth be coordinated.

The Board recognises that the progress made over the year would not have been possible without the dedication and support of all our staff and, on behalf of the directors, I offer our thanks to them.

Outlook

The Company has made significant progress during the course of the past year, both in terms of the maturing clinical data with SCIB1 and further scientific developments on both the ImmunoBody(R) and Moditope(R) platforms. We now have a pipeline of three products (SCIB1, SCIB2, Modi-1) across five cancer indications (melanoma, lung, breast, ovarian cancer and osteosarcoma) and clinical success with any one of these products could transform the value of the business. The Board therefore believes that further clinical studies could add significant value to the Company and is continuing to explore with its advisors a number of funding options to ensure that the Company has the resources to progress these programmes further.

Scancell has arrived at an exciting point in its development. We now have the opportunity to transform the business from a small UK based and largely scientifically based enterprise into an international force in immuno-oncology. I remain committed to driving this process forward in the US and elsewhere, and to realising the value that has been accumulating over recent years, both for the benefit of our shareholders and cancer patients.

John Chiplin

Chairman

 
CONSOLIDATED PROFIT OR LOSS AND 
 OTHER COMPREHENSIVE INCOME STATEMENT                          2016                        2015 
 FOR THE YEARED 30 APRIL 2016                               GBP                         GBP 
 
Development expenses                                    (2,009,046)                 (2,118,366) 
 
Administrative expenses                                 (1,034,117)                   (841,629) 
                                         --------------------------  -------------------------- 
OPERATING LOSS (note 2)                                 (3,043,163)                 (2,959,995) 
 
Interest receivable and similar 
 income                                                      13,552                     131,513 
                                         --------------------------  -------------------------- 
LOSS BEFORE TAXATION                                    (3,029,611)                 (2,828,482) 
 
Taxation (note 3)                                           446,338                     413,852 
                                         --------------------------  -------------------------- 
LOSS AND TOTAL COMPREHENSIVE INCOME 
 FOR THE YEAR                                           (2,583,273)                 (2,414,630) 
                                         --------------------------  -------------------------- 
 

EARNINGS PER ORDINARY SHARE (pence)

(note 4)

 
Continuing operations 
Basic                   (1.14)p  (1.07)p 
 
Diluted                 (1.14)p  (1.07)p 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 30 April 2016

 
                     Share        Share     Share       Retained 
                   Capital      Premium    Option       Earnings         Total 
                       GBP          GBP       GBP            GBP           GBP 
 Balance 1st 
  May 2014         224,951   16,036,276   522,358    (7,706,321)     9,077,264 
 
 Loss for the 
  year                                               (2,414,630)   (2,414,630) 
 Share option 
  charge                                   91,368                       91,368 
 
 Balance 30 
  April 2015       224,951   16,036,276   613,726   (10,120,951)     6,754,002 
 
 Share issue        36,607    6,186,653                              6,223,260 
 Expenses of 
  issue                       (437,634)                              (437,634) 
 Loss for the 
  year                                               (2,583,273)   (2,583,273) 
 Share option 
  charge                                   35,926                       35,926 
 
 Balance at 
  30 April 2016    261,558   21,785,295   649,652   (12,704,224)     9,992,281 
                  --------  -----------  --------  -------------  ------------ 
 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 April 2016

 
                                              2016                  2015 
ASSETS                                         GBP                   GBP 
Non-current assets 
Plant and machinery                         64,611                86,504 
Goodwill                                 3,415,120             3,415,120 
                                ------------------    ------------------ 
                                         3,479,731             3,501,624 
                                 -----------------     ----------------- 
Current assets 
Trade and other receivables                120,765               136,785 
Tax receivables                            440,001               660,504 
Cash and cash equivalents                6,527,435             3,059,001 
                               -------------------   ------------------- 
                                         7,088,201             3,856,290 
                              --------------------  -------------------- 
 
TOTAL ASSETS                            10,567,932             7,357,914 
                               -------------------  -------------------- 
LIABILITIES 
Current Liabilities 
Trade and other payables                 (575,651)             (603,912) 
                               -------------------   ------------------- 
TOTAL LIABILITIES                        (575,651)             (603,912) 
                               -------------------   ------------------- 
NET ASSETS                               9,992,281             6,754,002 
                                       ===========           =========== 
 
SHAREHOLDERS' EQUITY 
Called up share capital                    261,558               224,951 
Share premium                           21,785,295            21,785,295 
Share option reserve                       649,652               613,726 
Profit and loss account               (12,704,224)          (10,120,951) 
                              --------------------  -------------------- 
TOTAL SHAREHOLDERS' EQUITY               9,992,281             6,754,002 
                                      ============          ============ 
 

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 30 April 2016

 
                                                    2016                  2015 
                                                    GBP                   GBP 
Operating activities 
Cash generated from operations                       (2,997,585)           (2,763,460) 
Income taxes received                                    666,841               124,713 
                                            --------------------  -------------------- 
Net cash from operating activities                   (2,330,744)           (2,638,747) 
                                            --------------------  -------------------- 
 
Investing activities 
Grant monies                                               9,776                64,668 
Loan repayment                                                 -                49,725 
Finance income                                             3,776                17,121 
                                            --------------------  -------------------- 
Net cash used by investing activities                     13,552               131,514 
                                            --------------------  -------------------- 
 
Financing activities 
Proceeds from issue of share capital                   6,223,260                     - 
Expenses of share issue                                (437,634)                     - 
                                            --------------------  -------------------- 
Net cash generated from financing 
 activities                                            5,785,626                     - 
                                            --------------------  -------------------- 
 
Net increase in cash and cash equivalents              3,468,434           (2,507,233) 
 
Cash and cash equivalents at beginning 
 of the year                                           3,059,001             5,566,234 
                                            --------------------  -------------------- 
Cash and cash equivalents at end 
 of the year                                           6,527,435             3,059,001 
                                            --------------------  -------------------- 
 

NOTES TO THE FINANCIAL INFORMATION

For the year ended 30 April 2016

   1     BASIS OF PREPARATION 

These financial results do not comprise statutory accounts for the year ended 30 April 2016 within the meaning of Section 434 of the Companies Act 2006. The financial information in this announcement has been extracted from the audited financial statements for the year ended 30 April 2016.

The financial statements have been prepared on the going concern basis on the grounds that the directors have reviewed the funding available and the group's cash flow forecast and are content that sufficient resources are available to enable the group to continue in operation for at least twelve months from the date of approval of these accounts.

The financial information has been prepared in accordance with International Financial Reporting Standards ('IFRS'), as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards.

   2      OPERATING LOSS 
 
                                              2016          2015 
                                               GBP           GBP 
Operating Loss is stated after 
 charging/(crediting): 
Depreciation on tangible fixed 
 assets                                     21,893        29,117 
Operating lease rentals                     12,500        14,523 
Research and development                 2,009,046     2,118,366 
Auditors' remuneration - fee payable 
 for audit of the company                    8,250         7,250 
Auditors' remuneration - fee payable 
 for audit of the subsidiary company        10,775         7,250 
Auditors' remuneration for non-audit 
 services                                    1,500         1,260 
Directors' remuneration                    330,448       150,413 
                                       ===========  ============ 
 
   3      TAXATION 

Analysis of the tax credit

 
The tax credit on the loss on 
 ordinary activities for the year 
 was as follows:                                                 2016                               2015 
Current tax                                                       GBP                                GBP 
UK corporation tax credits due 
 on R&D expenditure                                           440,001                            422,976 
Adjustment to prior year                                        6,337                            (9,124) 
                                                            _________                          _________ 
                                                              _______                            _______ 
                                                              446,338                            413,852 
                                    =================================  ================================= 
 

Factors affecting the tax charge

The tax assessed for the years is lower than the applicable rate of corporation tax in the UK. The difference is explained below:

 
                                                                        2016                                      2015 
                                                                         GBP                                       GBP 
Loss on ordinary activities before 
 tax                                                             (3,029,611)                               (2,828,482) 
                                    ========================================  ======================================== 
 
  Loss on ordinary activities 
  multiplied 
  by the small company rate of tax 
  in the UK (20%)                                                  (605,922)                                 (565,696) 
 
Effects of: 
Disallowed expenditure                                                 8,733                                    20,028 
Timing differences                                                     7,777                                     9,010 
Enhanced tax relief on R&D 
 expenditure                                                       (343,593)                                 (327,849) 
Reduced tax relief for losses 
 surrendered for R&D tax credits                                     166,897                                   160,439 

Prior year over provision                                            (6,337)                                     9,124 
Unrelieved losses carried forward                                    326,107                                   281,092 
                                                       _____________________                     _____________________ 
Current tax (credit)                                               (446,338)                                 (413,852) 
                                    ========================================  ======================================== 
 

The Group has tax losses to carry forward against future profits of approximately GBP11,180,000 (2014: GBP9,575,000)

A deferred tax asset has not been recognised in respect of these losses as the Group does not anticipate sufficient taxable profits to arise in the foreseeable future to fully utilise them.

The estimated value of the deferred tax asset not recognised measured at the prevailing rate of tax when the timing differences are expected to reverse is GBP1,888,000 (2015: GBP1,894,300).

   4      EARNINGS PER SHARE 

Basic earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows:

 
                                                            2016                    2015 
                                                             GBP                     GBP 
 Earnings used in the calculation 
  of basic earnings per share                        (2,583,273)             (2,414,630) 
 Profit for the year from discontinued 
  operations included 
  in the calculation of basic 
  earnings per share                       _____________________   _____________________ 
 Earnings used in calculation 
  of basic earnings per share 
  from continuing operations                         (2,583,273)             (2,414,630) 
 
 Weighted average number of 
  ordinary shares of 0.1p each 
  for the calculation of basic 
  earnings per share                                 227,558,335             224,950,683 
 

Diluted earnings per share

As the Group is reporting a loss from continuing operations for both years then, in accordance with IAS33, the share options are not considered dilutive because the exercise of the share options would have the effect of reducing the loss per share.

   5      DELIVERY OF ACCOUNTS 

The audited statutory accounts in respect of the prior year ended 30 April 2015 have been delivered to the Registrar of Companies. The auditors issued an unqualified audit opinion which did not contain any statement under section 498(2) or 498(3) of the Companies Act 2006.

   6      AVAILABILITY OF ACCOUNTS 

This announcement is not being posted to shareholders. Copies of this announcement can be downloaded from the Company's website: www.scancell.co.uk. together with copies of the Report and Accounts.

This information is provided by RNS

The company news service from the London Stock Exchange

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September 16, 2016 02:00 ET (06:00 GMT)