Evgen Pharma PLC Final Results (8678P)

TIDMEVG

RNS Number : 8678P

Evgen Pharma PLC

15 June 2020

Evgen Pharma plc

(the "Company")

Final Results

Evgen Pharma plc (AIM: EVG), the clinical stage drug development company developing sulforaphane based medicines for the treatment of multiple diseases, announces its final results for the year ended 31 March 2020.

Operational highlights

-- Positive results from the STEM trial of SFX-01 in metastatic breast cancer presented at European Society of Medical Oncology Congress in Barcelona, demonstrating the stabilisation of previously progressive disease and objective responses in some patients

-- Five patients who participated in the STEM trial received SFX-01 treatment for over one year with no tumour progression

-- Results from the SFX-01 After Subarachnoid Haemorrhage ("SAS") trial did not meet primary or secondary efficacy endpoints, however the treatment was well tolerated with no safety concerns, supporting evaluation in other indications

-- Significant progress made in tablet formulation of SFX-01 that will underpin easier clinical use in a range of indications and yield economic and production benefits

-- Memorandums of Understanding reached with Guy's and St Thomas' NHS Foundation Trust, University of Dundee and University of Rochester (NY) to support clinical trials of SFX-01 in autism, non-alcoholic steatohepatitis and chronic kidney disease, respectively

-- Research collaboration with King's College London and the British Heart Foundation to investigate how SFX-01 mediates upregulation of Nrf2 in the blood-brain barrier endothelium in-vivo

Post period end highlights

-- Publication in Oncogene of preclinical data for SFX-01's role in targeting STAT3 signalling and inhibition of endocrine resistant stem-like cells in ER-positive breast cancer

Financial highlights

   --      Financial performance in-line with expectations: 

o Post tax loss of GBP2.7m (2019: loss of GBP2.6m)

o Cash outflow from operations of GBP2.6m (2019: outflow of GBP2.3m)

o Cash balance at 31 March 2020 of GBP4.1m (31 March 2019: GBP2.0m)

   --      Oversubscribed fundraising in May 2019 raised GBP5.0m before expenses 

Barry Clare, Executive Chairman of Evgen Pharma, said: "We move forward with the confidence that the value of SFX-01 as a potential drug that is active against the two key pathways of Nrf2 and STAT3 will become increasingly clear. These pathways are of significance in a range of diseases including cancer, autism and those where oxidative stress is a factor. We therefore believe that the fundamentals are in place to underpin sustainable share price growth and deliver the undoubted potential of SFX-01. On behalf of myself and the Board, I would like to thank our shareholders for their continued support and we look forward to updating the market with positive news in the coming year."

The information communicated in this announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

Enquiries:

 
 Evgen Pharma plc www.evgen.com                                           via Walbrook 
 Barry Clare, Chairman 
 Richard Moulson, CFO 
 
 finnCap www.finncap.com                                           [phone] 
 Geoff Nash / Teddy Whiley (Corporate 
  Finance) 
 Alice Lane (ECM) 
 
 Walbrook PR                              [phone] or [e-mail] 
                                                     [phone] / +44 (0)7876 
 Paul McManus / Anna Dunphy                                                    741 001 
 
 

About Evgen Pharma plc

Evgen Pharma is a clinical stage drug development company developing sulforaphane based medicines for the treatment of multiple diseases . The Company's core technology is Sulforadex (R), a method for synthesising and stabilising the naturally occurring compound sulforaphane and novel proprietary analogues based on sulforaphane. The lead product, SFX-01, is a patented composition of synthetic sulforaphane and alpha-cyclodextrin.

Clinical data from the Company's open-label Phase II STEM trial has shown that SFX-01 can halt the growth of progressing tumours in patients with oestrogen-positive (ER+) metastatic breast cancer, and in some cases significantly shrink the tumour, whilst causing very few side effects.

The Company commenced operations in January 2008 and has its headquarters at The Colony, Wilmslow, Cheshire, and its registered office is at the Liverpool Science Park, Liverpool. It joined the AIM market of the London Stock Exchange in October 2015 and trades under the ticker symbol EVG.

For further information, please visit: www.evgen.com

CHAIRMAN'S STATEMENT

We have now completed two Phase II trials on SFX-01, in different conditions and with quite separate mechanistic hypotheses. Our selections of metastatic breast cancer ("mBC") and Subarachnoid Haemorrhage ("SAH") were based on strong preclinical data sets. The mBC clinical result was positive, demonstrating the stabilisation of previously progressive disease in 24% of patients and objective responses in some others. We were surprised and disappointed that the SAH trial did not similarly follow the preclinical data, albeit this is a particularly challenging indication in which to test our drug. However, the scientific evidence for sulforaphane and SFX-01 as a potent Nrf2 activator is compelling, and the clinical belief in Nrf2 activation as a therapeutic strategy is affirmed by the endorsement of our clinical investigator partners, who wish to test SFX-01 in various diseases where Nrf2 activation is important.

In a different mode of action in breast cancer models, SFX-01 has been shown to down regulate STAT3, a therapeutic target of increasing interest in a number of tumour types. We therefore remain committed to the on-going clinical development of SFX-01 both in breast cancer, and in pursuing a range of diseases where there is evidence supporting potential clinical benefit with Nrf2 up-regulation.

To this end we are expanding our programme of UK and international collaborations, working with highly- regarded clinical investigators who wish to test SFX-01 clinically in diseases they are researching. We have entered into Memorandums of Understanding with Guy's and St Thomas' Hospitals in London (autism), Dundee University (Non-Steroidal Acute Hepatitis) and University of Rochester, New York State (chronic kidney disease). We hope that at least one of these indications will progress to clinical trial.

We were very pleased with the oversubscribed fundraising completed in May 2019 which achieved GBP5m before expenses in difficult market conditions. This provided us with a strengthened balance sheet, the resources to undertake product formulation that will facilitate the next mBC trial and other investigator-led clinical studies, and funds to complete long term toxicology studies that will remove current restrictions on the duration of clinical trial treatment phases.

In relation to the COVID-19 epidemic, all personnel have been working entirely remotely since the UK was put into lockdown. Previously, some remote working was routine and hence this change should not affect our operations significantly. Evgen operates a virtual business model, outsourcing most R&D and all manufacturing activities. To date, there have been minor delays to our pre-clinical and manufacturing outsourcers and with no on-going clinical trials we are not affected by the focus of trial sites on COVID-19.

After 10 years at Evgen, Steve Franklin resigned from the Company at the end of April this year. Steve has made a huge contribution to the progress of Evgen to date and he leaves with our very best wishes. A search is ongoing for a new CEO to lead the Company and to continue to accelerate the growth of the business.

We move forward with the confidence that the value of SFX-01 as a potential drug that is active against the two key pathways of Nrf2 and STAT3 will become increasingly clear.

We therefore believe that the fundamentals are in place to underpin sustainable share price growth and deliver the undoubted potential of SFX-01.

Barry Clare

Executive Chairman

12 June 2020

STRATEGIC REPORT

The Directors present their Strategic Report for the year ended 31 March 2020. The Operational Overview, Key Performance Indicators, Financial Review and Principal Risks and Uncertainties sections form part of the Strategic Report.

OPERATIONAL OVERVIEW

INTRODUCTION

Evgen is a clinical stage drug development company focussed on the development of sulforaphane-based compounds, a new class of pharmaceuticals which are synthesised in a proprietary, well-tolerated, stable formulation. We have a comprehensive intellectual property package over this technology. Our pipeline exploits sulforaphane's activity in two separate biochemical pathways; inhibition of pSTAT3, of importance in controlling cancer metastases, and up-regulation of Nrf2, a therapeutic target associated with a broad range of diseases which are characterised by excessive oxidative stress and inflammation.

Sulforaphane has attracted huge scientific interest and has been shown to have anti-cancer and neuroprotective qualities in a wide range of preclinical and clinical studies, for example breast cancer, prostate cancer, multiple sclerosis and autism.

Our lead product, SFX-01, has demonstrated efficacy in a Phase II trial for advanced metastatic breast cancer. It has been used to treat over 130 people in clinical trials and is well-tolerated with predominantly mild side-effects.

Evgen has exclusive rights to the only technology (Sulforadex(R)) proven to synthesise this very unstable molecule in a stabilised composition that will satisfy regulatory and medicinal needs for a pharmaceutical and that can be used as a therapeutic.

CLINICAL TRIAL RESULTS AND STRATEGY REVIEW

Our aim on going public was to complete two Phase II trials on SFX-01 in different conditions with quite separate mechanistic hypotheses; the objective being to manage the risk profile typically associated with Phase II trials and demonstrate efficacy in at least one indication. To this end, we have had a success with the STEM trial, with SFX-01 being tested in 46 patients that had become resistant to all currently approved hormone therapies. In this difficult to treat population, SFX-01 halted the progressive disease for at least six months in 25% of patients, with at least two patients showing demonstrable tumour shrinkage. Furthermore, five patients went on to have their progressive disease halted for at least a year, and one patient continued to receive SFX-01 treatment for over 18 months.

Given that the ultimate aim is to target patients earlier in the disease pathway (i.e. prior to them being resistant to all approved hormone therapies), we believe that the results from STEM bode well for the probability of success of a randomised, double blind follow-on trial. The details of that trial design and associated costings will be finalised in 2020, and we are escalating the activity associated with securing non-dilutive funding to pay for all, or substantially all, of a follow-on trial.

We were surprised that the strong preclinical data for SFX-01 in SAH was not reflected in the SAS trial. Whilst we recognised that trials in stroke are challenging, we were nevertheless confident of observing some favourable effects given the strength of the preclinical data. The study met our expectations with regard to safety and tolerability, but missed the other key primary endpoint associated with the modulation of blood flow in the middle cerebral artery; this blood flow being a means of measuring the onset of vasospasm that leads to the Delayed Cerebral Ischaemia ("DCI"). Several cognitive measures constituted secondary endpoints, and, whilst the study was not powered to demonstrate statistical efficacy for these endpoints, we had expected to see a favourable trend across the different questionnaire-based tests that ascertain the extent of any cognitive deficit.

Importantly, we have concluded that the SAS results are likely to be specific to that condition and because animal models for SAH can translate poorly to SAH in patients. In addition, our dosing regime, restricted to a maximum of 28 days, may have been too short to impact cognitive measures at three and six months. There remains a strong rationale for clinically testing SFX-01 in any condition that is mechanistically linked to Nrf2, as evidenced by the recent positive developments at Reata (NASDAQ: RETA). Reata is developing Nrf2 activators based on triterpenoids and with positive top-line results in pivotal trials in Friedriech's Ataxia and Alport Syndrome has a current market capitalisation of circa US$5bn. This illustrates that the fundamentals of Nrf2 activation as a therapeutic strategy are sound and SFX-01 is a potent and well tolerated Nrf2 activator; on this basis we advance with confidence in SFX-01 and believe that the main driver to ultimate success is perseverance.

Given the funding constraints suffered by small cap drug development companies in the UK, our strategy is to move to a business model where we facilitate multiple clinical trials on SFX-01 in risk-sharing arrangements, with the objective of attracting non-dilutive funding from grants and/or charities to wholly or substantially fund future clinical activity. This strategy has three key components:

(1) Our first priority is to ensure the continued development of the breast cancer programme. We will complete the trial design and cost a clinical trial protocol and then seek non-dilutive funding for Evgen and/or an affiliated clinical institution to sponsor the trial.

(2) In parallel we aim to leverage the extensive pre-clinical and clinical data that shows the potential for SFX-01, as a sulforaphane delivery platform, to be used in diseases that are beyond our capacity to pursue.

(3) In addition, we will pursue opportunities to apply our intellectual property on stabilised sulforaphane to non-pharmaceutical opportunities which offer a more rapid route to market.

We will therefore support a number of proposed Investigator-Initiated Trials - these are trials led by a clinician from a well-renowned institution, with that institution being the sponsor for the trial. Evgen will provide support as required (in the confines of an investigator sponsored study), sharing our knowledge, experience and the methods and laboratories used for pharmacodynamic and pharmacokinetic endpoints. All such trials are subject to grant funding being procured and Evgen will supply clinical centres with SFX-01 and, where appropriate, a placebo.

Evgen will have the right to access the clinical data on fair commercial terms to advance its clinical and commercial development. Since the principal funding for these trials will be obtained by the investigator/ institution they have limited impact on our cash reserves.

We have announced three Memorandums of Understanding relating to further potential trials in non-alcoholic steatohepatitis, chronic kidney disease and autism, and are in discussions for others. We are hopeful that at least one of these will be awarded a grant so as to commence in H2 this year or H1 2021.

Finally, we are now in a period where we are using funds from the last investment round to complete the technical package required to support this strategy. This involves investment in Chemistry, Manufacturing and Controls ("CMC") in developing a tablet formulation for world-wide distribution to multiple clinical centres, and investment in the toxicology package to be able to support trials of longer dosing duration (i.e. over 28 days). By the time this CMC investment period is complete, we could initiate a portfolio of clinical trials such as those described above.

We believe this strategy offers the best route to enhance shareholder value and the opportunity for all stakeholders to benefit from the undoubted potential of SFX-01 and our broader technology platform.

CLINICAL PROGRAMMES

METASTATIC BREAST CANCER

Breast cancer is the biggest cause of cancer deaths in women worldwide. In around 75% of breast cancers, the hormone oestrogen plays a key part in tumour growth. Such tumours express the oestrogen receptor (ER+) and, if the cancer is metastatic, endocrine therapy has been the principal approach to treatment. It is thought that hormone independent cancer stem cells are implicated in the development of resistance to hormone therapy and the spread of the disease by metastases. Since 2012, Evgen has worked with University of Manchester scientists at the Cancer Research UK Manchester Institute and together we have generated promising data showing SFX-01 reduces the number of cancer stem cells in patient-derived breast cancer tissue in xenograft models. The xenograft studies used a combination of hormone therapy and SFX-01, with the role of SFX-01 being to target the cancer stem cell population. Crucially, the data also showed that SFX-01 is unique, compared with existing marketed therapies, in deactivating phosphorylated STAT3, a key agent in driving cancer metastases and resistance to current standards of care. This data was recently published in the prestigious journal, Oncogene.

In March 2019, we announced positive results from the open-label Phase II trial of SFX-01 in 46 patients with oestrogen-positive metastatic breast cancer. In particular we demonstrated:

   --     Conclusive evidence of anti-cancer activity via objective responses (tumour shrinkage) 

-- 24% of patients showed a durable clinical benefit for at least six months, despite the late stage of disease and patients' established resistance to hormone therapy. Of these, five patients were still receiving SFX-01 at 12 months and one patient still remains on treatment after 18 months

   --     A mild and favourable side effect profile for an anti-cancer drug 

We are embarking on a campaign to source non-dilutive funds for a follow-on placebo-controlled randomised trial in ER+ metastatic breast cancer, to generate the data that would maximise the likelihood of a corporate partnership/out-licensing deal. Such funding may be sourced from direct grants, cancer charities or possibly via investigator-led trials.

Based upon consultation with our clinicians and KOLs, our preferred market positioning of SFX-01 is in combination with hormone therapy following progression on CDK4/6 inhibitors. Resistance to CDK4/6i (which will ultimately manifest in all patients) will become the new challenge that needs to be addressed.

Key activities that will facilitate the next mBC clinical trial are:

   --     Ensuring our preclinical data package is sufficient and robust to support the study design 
   --     Finalising the Clinical Trial Protocol synopsis and establishing full costings 
   --     Using the funds we raised in 2019 to: 

- Finalise the development of the new tablet formulation for mBC study and also investigator-led trials in new indications

   -     Expand the toxicology package to enable longer-term dosing in investigator-led trials 
   --     Securing non-dilutive funding to fund part, or all, of the mBC study. 

SUBARACHNOID HAEMORRHAGE ("SAH")

In November we announced results from our trial of SFX-01 in SAH. Unfortunately, the primary endpoint of reducing blood flow velocity in the middle cerebral artery was not achieved, with no significant difference between the SFX-01 and placebo arms. Furthermore, whilst the secondary endpoints were not statistically powered, there were no consistent differences seen between SFX-01 and placebo in key cognition, quality of life and clinical outcomes at three and six months. This was surprising given the strong preclinical data for sulforaphane in animal models of SAH and other forms of stroke. SFX-01 was however shown to be well-tolerated with no safety concerns.

In the multi-centre, randomised, double-blind, placebo-controlled SAS Phase II clinical trial, patients were dosed for a maximum of 28 days following a SAH, covering the period at which they are at risk of a Delayed Cerebral Ischaemia. Patients were then monitored for a further five months to assess their recovery by collecting endpoints including cognitive measurements.

After an extensive review with our clinical advisors, we have concluded that the results of the SAS trial cannot be used to discount the viability of a trial in any other indication linked to the Nrf2 pathway including those of the central nervous system. SAH is a traumatic and serious condition and the likelihood is that the animal models are poorly prognostic of the clinical condition in humans.

What we do know is that Nrf2 pathway remains an attractive target for therapeutic intervention in many diseases characterised by oxidative stress and inflammation, and that SFX-01 is a potent activator of the Nrf2 pathway with a relatively benign safety profile. On this basis, there is no sound rationale for believing the SAS trial read-out will be precedent to other indications.

NON-CLINICAL PROGRAMMES

We are making good progress with the activities set out in the use of funds statement relating to the April 2020 fundraising.

Specifically, we have contracted with a large Clinical Research Organisation to start the extended toxicology programme that is needed to support a broader diversity of clinical trial designs - including being able to dose for greater than 28 days in patients who do not have terminal disease. The pilot work has been completed, the full programme has started and will conclude later in this year.

With regard to the formulation work to develop a new tablet - required to scale manufacturing and support multiple trials - we have also contracted with a large and well-established Contract, Development and Manufacturing Organisation to initiate that work. Work is well underway and expected to be completed by the end of the year.

Additional work to add value to the supply chain proposition is also underway.

PRE-CLINICAL COLLABORATIONS

In addition to our core in-house programmes, we continue to support academic research to broaden the range of applications for SFX-01 and increase our mechanistic understanding in these different disease areas.

Currently, we are working with research groups conducting pre-clinical work to investigate the potential of SFX-01, inter alia, in: triple negative breast cancer (University of Manchester, UK), glioblastoma (University of L'Aquila, Italy), osteoarthritis (RVC, University of London, UK) and ischaemic stroke and autism (both at King's College London, UK).

We are hopeful that some of these projects will progress into clinical evaluation over the next few years.

Finally, we have a mechanistic collaboration with Imperial College, London to use advanced chemical proteomics technology to detect targets for SFX-01 and other sulforaphane analogues in live cells or tissues in specific disease model systems. This should provide greater understanding of mechanism(s) of action and contribute data important for current and future clinical development. The first data from this collaboration was presented at the end of March providing further elucidation of the potential mechanism of action of SFX-01 in metastatic breast cancer, and suggesting potential biomarkers for determining the efficacy of SFX-01 in this indication. In particular, that SFX-01 influences growth hormone signalling and that phosphorylated STAT3 and, interestingly, MIF (macrophage migration inhibitory factor), may be a useful biomarker for response to SFX-01.

INTELLECTUAL PROPERTY UPDATE

Our IP portfolio continues to be strengthened with a number of key patents being granted. The current status of the intellectual property portfolio is as follows:

-- From the "parent" patent family entitled "Stabilised Sulforaphane" patents are granted in Australia, Canada, EU, US, Japan and Hong Kong.

-- The principal manufacturing patent application, entitled "Methods of Synthesising Sulforaphane" is granted in Australia, China, Europe, Japan and further applications are pending in Brazil, Canada, US and India.

-- A second manufacturing patent which is directed to methods of isolating and purifying sulforaphane or analogues from natural sources has been granted in Europe, US, Japan and China.

-- The patent application providing protection around novel analogues based on sulforaphane, and entitled "Sulforaphane-Derived Compounds" is granted in Australia, China, Europe, Japan and the US and pending in Canada.

During the year composition of matter SFX-01 patents were granted both in Japan and Europe with a product claim for a complex of sulforaphane and alpha-cyclodextrin. The Group has long held broad compositional patent protection in the United States since patent grant in 2011 and in Canada since grant in 2014.

Furthermore, new composition of matter filings have been made which, if successful, would add a further 20 years of patent life to the key patent family.

PEOPLE

After 10 years at Evgen, Steve Franklin resigned from the Company at the end of April this year. Steve has been pivotal in developing the Group from start up to the point where two phase II trials have been completed and substantial opportunities created. We have appointed a high quality search and selection firm to support the replacement process, and look forward to announcing a new CEO who can drive the future of Evgen in due course.

KEY PERFORMANCE INDICATORS

Key Performance Indicators include a range of financial and non- financial measures (such as clinical trial progress). Details about the progress of our development programmes (non-financial measures) are included elsewhere in this Strategic Report, and below are the other indicators (financial measures) considered pertinent to the business.

 
                                                      2020 (GBPm) 
---------------------------------------------------  ------------ 
 Year-end cash and short-term investments and cash 
  on deposit held: (2019: GBP2.0m)                            4.1 
 

The increase in year-end cash reflects the fundraising in May 2019 which raised GBP5m before expenses, offset in part by working capital, pre-clinical and clinical expenditures.

 
                                                       2020 (GBPm) 
----------------------------------------------------  ------------ 
 Net cash inflow (including short-term investments) 
  (2019: outflow: GBP1.6m)                                     2.1 
 

The net cash inflow reflects the fundraising completed during the year less working capital, pre-clinical and clinical expenditures.

 
                                    2020 (GBPm) 
---------------------------------  ------------ 
 Operating loss: (2019: GBP3.1m)            3.2 
 

The operating loss reflects pre-clinical and clinical activity in the year and related product manufacture.

FINANCIAL REVIEW

The financial performance for the year ended 31 March 2020 was in line with expectations.

Losses

The total loss for the year was GBP2.7m (31 March 2019: GBP2.6m) including a charge for share-based compensation of GBP0.2m (2019: GBP0.1m). Operating expenses excluding share based compensation were constant at GBP3.0m (2019: GBP3.0m) reflecting some reduction in payroll costs offset by increased professional fees and business development costs.

Share based compensation

Accounting standards require a charge to be made against the grant of share options and recognised in the Consolidated Statement of Comprehensive Income. This amounted to GBP0.2m (2019: GBP0.1m) and has no impact on cash flows.

Headcount

Average headcount of the Group for the year was 8 (2019: 8).

Taxation

The Group has elected to claim research and development tax credits under the small or medium enterprise research and development scheme of GBP0.45m (2019: GBP0.49m).

Share capital

A total of 321,600 ordinary shares of 0.25p each were issued pursuant to exercises of share options granted under individual share option grants. These options had exercise prices 0.875p per share.

A share placing was completed in May 2019 which raised GBP5m before expenses in difficult market conditions. This provides us with a strengthened balance sheet, the resources to undertake product formulation that will facilitate the next mBC trial and other investigator-led clinical studies, and funds to complete further toxicology studies that will remove current restrictions on the duration of clinical trial treatment phases. The placing comprised the issue of 33,333,329 ordinary shares of 0.25p each to existing and new shareholders at 15.0p per share.

Cash flows and financial position

The cash position at 31 March 2020 increased to GBP4.1m (31 March 2019: GBP2.0m). The remaining clinical expenditure on the two phase II trials of SFX-01, the costs of the tox and product formulation projects, and recurring general and administrative costs were offset by the share placing proceeds (GBP5.0m before expenses) and receipt of the 2019 tax credit (GBP0.49m).

COVID-19 pandemic

The Board is monitoring the impact of COVID-19 on the Group and its staff closely. To date, the impact on our staff and programmes has been limited, however continuation of the pandemic for a sustained period of months may affect:

   --     Our ability to raise further finance as a consequence of a depressed funding environment 
   --     Our ability to conduct and conclude partnering discussions 

-- Our ability to initiate and execute new clinical trials, whether sponsored by Evgen or Clinical Investigators

   --     Completion of the current toxicology and product formulation programmes to agreed timelines 

OUTLOOK

We look forward to completing our key toxicology and formulation work and the initiation of new clinical trials on SFX-01 in new indications. We believe that the value of SFX-01 as a potential drug active in each of the Nrf2 and STAT3 pathways will become increasingly clear and the considerable commercial opportunity this represents recognised. We will also continue to explore the opportunities for monetising our assets in non- pharmaceutical markets.

Barry Clare

Executive Chairman

12 June 2020

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2020

 
                                                        Year ended   Year ended 
                                                          31 March     31 March 
                                                              2020         2019 
                                                Notes      GBP'000      GBP'000 
---------------------------------------------  ------  -----------  ----------- 
 Operating expenses 
 Operating expenses                                        (2,998)      (2,985) 
 Share based compensation                           4        (168)        (135) 
---------------------------------------------  ------  -----------  ----------- 
 Total operating expenses                                  (3,166)      (3,120) 
---------------------------------------------  ------  -----------  ----------- 
 Operating loss                                            (3,166)      (3,120) 
---------------------------------------------  ------  -----------  ----------- 
 Loss on ordinary activities before 
  taxation                                                 (3,166)      (3,120) 
 
 Taxation                                                      451          496 
---------------------------------------------  ------  -----------  ----------- 
 Loss and total comprehensive expense attributable 
  to equity holders 
  of the parent for the year                               (2,715)      (2,624) 
-----------------------------------------------------  -----------  ----------- 
 Loss per share attributable to equity 
  holders of the parent (pence)                     5 
 Basic loss per share                                       (2.10)       (2.74) 
 Diluted loss per share                                     (2.10)       (2.74) 
---------------------------------------------  ------  -----------  ----------- 
 

Consolidated Statement of Financial Position

as at 31 March 2020

 
                                                    Group 
                                                As at      As at 
                                             31 March   31 March 
                                                 2020       2019 
                                     Notes    GBP'000    GBP'000 
----------------------------------  ------  ---------  --------- 
 ASSETS 
 Non-current assets 
 Property, plant and equipment                      2          6 
 Intangible assets                                 82         98 
 Investments in subsidiary 
  undertaking                                       -          - 
----------------------------------  ------  ---------  --------- 
 Total non-current assets                          84        104 
 Current assets 
 Trade and other receivables                      196        135 
 Current tax receivable                           446        492 
 Cash and cash equivalents                      4,131      2,033 
----------------------------------  ------  ---------  --------- 
 Total current assets                           4,773      2,660 
----------------------------------  ------  ---------  --------- 
 Total assets                                   4,857      2,764 
----------------------------------  ------  ---------  --------- 
 LIABILITIES AND EQUITY 
 Current liabilities 
 Trade and other payables                         653        688 
----------------------------------  ------  ---------  --------- 
 Total current liabilities                        653        688 
----------------------------------  ------  ---------  --------- 
 Equity 
 Ordinary shares                         6        331        247 
 Share premium                                 17,831     13,240 
 Merger reserve                                 2,067      2,067 
 Share based compensation                       1,890      1,722 
 Retained deficit                            (17,915)   (15,200) 
----------------------------------  ------  ---------  --------- 
 Total equity attributable 
  to equity holders of the parent               4,204      2,076 
----------------------------------  ------  ---------  --------- 
 Total liabilities and equity                   4,857      2,764 
----------------------------------  ------  ---------  --------- 
 

Consolidated Statement of Changes in Equity

for the year ended 31 March 2020

 
                             Ordinary     Share    Merger    Share based   Retained 
                               shares   premium   reserve   compensation    deficit     Total 
                              GBP'000   GBP'000   GBP'000        GBP'000    GBP'000   GBP'000 
--------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Balance at 31 March 
  2018                            233    12,560     2,067          1,587   (12,576)     3,871 
 Total comprehensive 
  expense for the period            -         -         -              -    (2,624)   (2,624) 
 Transactions with owners 
 Share issue - cash                14       668         -              -          -       682 
 Share issue - options 
  exercised                         -        12         -              -          -        12 
 Share based compensation 
  - share options                   -         -         -            135          -       135 
-------------------------- 
 Total transactions 
  with owners                      14       680         -            135          -       829 
--------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Balance at 31 March 
  2019                            247    13,240     2,067          1,722   (15,200)     2,076 
--------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Total comprehensive 
  expense for the period            -         -         -              -    (2,715)   (2,715) 
 Transactions with owners 
 Share issue - cash                83     4,589         -              -          -     4,672 
 Share issue - options 
  exercised                         1         2         -              -          -         3 
 Share based compensation 
  - share options                   -         -         -            168          -       168 
--------------------------                                                           -------- 
 Total transactions 
  with owners                      84     4,591         -            168          -     4,843 
--------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Balance at 31 March 
  2020                            331    17,831     2,067          1,890   (17,915)     4,204 
--------------------------  ---------  --------  --------  -------------  ---------  -------- 
 

Consolidated Statements of Cash Flows

for the year ended 31 March 2020

 
                                               Group 
                                      Year ended   Year ended 
                                        31 March     31 March 
                                            2020         2019 
                                         GBP'000      GBP'000 
-----------------------------------  -----------  ----------- 
 Cash flows from operating 
  activities 
 Loss before taxation                    (3,166)      (3,120) 
 Depreciation and amortisation                21           21 
 Share based compensation                    168          135 
-----------------------------------  -----------  ----------- 
                                         (2,977)      (2,964) 
 Changes in working capital 
 (Increase)/decrease in trade 
  and other receivables                     (61)         (58) 
 (Decrease)/increase in trade 
  and other payables                        (35)          299 
-----------------------------------  -----------  ----------- 
 Cash used in operations                    (96)          241 
 Taxation received                           497          436 
-----------------------------------  -----------  ----------- 
 Net cash used in operating 
  activities                             (2,576)      (2,287) 
 Cash flows (used in)/generated 
  from investing activities 
 Acquisition of tangible fixed 
  assets                                     (1)            - 
-----------------------------------  -----------  ----------- 
 Net cash (used in)/generated 
  from investing activities                  (1)            - 
 Cash flows from financing 
  activities 
 Proceeds from issue of shares             5,003          761 
 Issue costs                               (328)         (67) 
-----------------------------------               ----------- 
 Net cash generated from financing 
  activities                               4,675          694 
-----------------------------------  -----------  ----------- 
 Movements in cash and cash 
  equivalents in the period                2,098      (1,593) 
-----------------------------------  -----------  ----------- 
 Cash and cash equivalents 
  at start of period                       2,033        3,626 
-----------------------------------  -----------  ----------- 
 Cash and cash equivalents 
  at end of period                         4,131        2,033 
-----------------------------------  -----------  ----------- 
 
   1.    General information 

Evgen Pharma plc ('the Company') is a public limited company incorporated in England & Wales and was admitted to trading on the AIM market of the London Stock Exchange under the symbol EVG on 21 October 2015. The address of its registered office is Liverpool Science Park Innovation Centre 2, 146 Brownlow Hill, Liverpool, Merseyside L3 5RF. The principal activity of the Company is clinical stage drug development.

   2.    Basis of preparation 

The financial information for the year ended 31 March 2019 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 12 June 2019 and which have been delivered to the Registrar of Companies for England and Wales. The report of the auditor on these financial statements was unqualified, did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006, and did not include a matter to which the auditors drew attention by way of emphasis without qualifying their report.

The report of the auditor on the 31 March 2020 financial statements was unqualified, did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006 but did include a matter to which the auditors drew attention by way of emphasis without qualifying their report relating to the basis of preparation which is reproduced below:

'Material uncertainty relating to going concern

We draw attention to note 2 in the financial statements concerning the group's ability to continue as a going concern. The going concern status of the group is dependent upon the management of the timing of settlement of its liabilities and the raising of further funds in the short to medium term. Forecasts prepared by management indicate that if they are unable to manage the group's liabilities or the external fund raising does not occur in the short to medium term they would have a requirement to seek alternative sources of funding, As stated in note 2, these events or conditions, along with other matters set forth in note 2, indicate that a material uncertainty exists which may cast doubt on the group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.'

The information included in this preliminary announcement has been prepared on a going concern basis under the historical cost convention, and in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and the International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board ("IASB") that are effective or issued and early adopted as at the date of these financial statements and in accordance with the provisions of the Companies Act 2006.

The information in this preliminary statement has been extracted from the audited financial statements for the year ended 31 March 2020 and as such, does not contain all the information required to be disclosed in the financial statements prepared in accordance with the International Financial Reporting Standards ('IFRS').

This announcement was approved by the board of directors and authorised for issue on 12 June 2020.

   3.    Going concern 

At 31 March 2020, the Group had cash and cash equivalents, including short-term investments and cash on deposit, of GBP4.13 million.

The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of the approval of these financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period.

The Directors estimate that the cash held by the Group together with known receivables will be sufficient to support the current level of activities to around the end of June 2021. The Directors are continuing to explore sources of finance available to the Group and have confidence that they will be able to secure sufficient cash inflows for the Group to continue its activities to the end of calendar 2021 and therefore for not less than 12 months from the date of approval of these financial statements; they have therefore prepared the financial statements on a going concern basis. Because the additional finance is not committed at the date of approval of these financial statements, these circumstances represent a material uncertainty as to the Group's ability to continue as a going concern. Should the Group be unable to obtain further finance such that the going concern basis of preparation were no longer appropriate, adjustments would be required including to reduce balance sheet values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify fixed assets as current assets.

   4.    Share based payment charge 

During the years ended 31 March 2020 and 31 March 2019, the Group issued a number of share options to certain employees. A Black-Scholes model was used to calculate the appropriate charge for these periods. The use of this model to calculate a charge involves using a number of estimates and judgements to establish the appropriate inputs to be entered into the model, covering areas such as the use of an appropriate interest rate and dividend rate, exercise restrictions and behavioural considerations. A significant element of judgement is therefore involved in the calculation of the charge. The total charge recognised in the year to 31 March 2020 was GBP168,000 (year to 31 March 2019 GBP135,000).

   5.    Loss per share 

Basic loss per share is calculated by dividing the loss for the period attributable to equity holders by the weighted average number of ordinary shares outstanding during the year.

For diluted loss per share, the loss for the year attributable to equity holders and the weighted average number of ordinary shares outstanding during the year is adjusted to assume conversion of all dilutive potential ordinary shares.

As at 31 March 2020 the Group had 9,531,367 (2019: 9,075,599) share options outstanding which are potentially dilutive. The calculation of the Group's basic and diluted loss per share is based on the following data:

 
                                                     Year ended   Year ended 
                                                       31 March     31 March 
                                                           2020         2019 
                                                        GBP'000      GBP'000 
 Loss for the year attributable to equity holders 
  for basic loss and adjusted for the effects 
  of dilution                                           (2,715)      (2,624) 
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                                                Year ended   Year ended 
                                                  31 March     31 March 
                                                      2020         2019 
                                                    Number       Number 
 Weighted average number of ordinary shares 
  for basic loss per share                     129,315,418   95,857,230 
--------------------------------------------  ------------  ----------- 
 Effects of dilution: 
  Share options                                          -            - 
 Weighted average number of ordinary shares 
  adjusted for the effects of dilution         129,315,418   95,857,230 
--------------------------------------------  ------------  ----------- 
 
 
                                       Year ended   Year ended 
                                         31 March     31 March 
                                             2020         2019 
                                            Pence        Pence 
 Loss per share - basic and diluted        (2.10)       (2.74) 
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The loss and the weighted average number of ordinary shares for the years ended 31 March 2019 and 2020 used for calculating the diluted loss per share are identical to those for the basic loss per share. This is because the outstanding share options would have the effect of reducing the loss per ordinary share and would therefore not be dilutive under the terms of International Accounting Standard ("IAS") No 33.

   6.    Issued capital and reserves 

Ordinary shares

 
                                          Company 
 Ordinary shares of 0.25p each         Share Capital 
                                        Number   GBP'000 
 At 31 March 2019                   98,991,334       247 
--------------------------------  ------------  -------- 
 Issued on exercise of options         321,600         1 
 Issued under placing agreement     33,333,329        83 
 At 31 March 2020                  132,646,263       331 
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On 8 May 2019 33,333,329 ordinary shares were issued at a price of GBP0.15 raising GBP5.0 million which after share issue expenses of GBP0.3 million gave net consideration of GBP4.7 million.

On 20 May 2019 321,600 ordinary shares were issued in connection with the exercise of share options at an exercise price of 0.875 pence per share payable in cash.

The ordinary shares rank pari passu in all respects in relation to dividends and repayment of capital and have equal voting rights with one vote per share. There are no restrictions on the transferability of the shares.

The Group and Company do not have an authorised share capital as provided by the Companies Act 2006.

Other reserves

The share premium reserve represents the difference between the net proceeds of equity issues and the nominal share capital of the shares issued.

The merger reserves at 31 March 2020 and 2019 arose from the acquisition of Evgen's sole subsidiary, Evgen Ltd, in 2014 which is accounted for using the merger method of accounting.

The share based compensation reserve reflects the aggregate fair value of equity-settled share based payment transactions.

Reserves classified as retained deficit represent accumulated losses. None of the reserves are distributable.

   7.    Related party transactions 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

During the year ended 31 March 2020, the Group purchased services totalling GBP155,514 (year ended 31 March 2019: GBP131,661) from The Clinical Trial Company Limited, a company of which Richard Moulson, a Director, was a director until 31(st) December 2019. The amount owed to The Clinical Trial Company Limited at 31 March 2020 was GBPnil (31 March 2019: GBP13,922).

During the year ended 31 March 2019, the Group purchased consultancy services totalling GBP1,800 from Dr Alan Barge, a Director, there were no services purchased from Dr Alan Barge during the year ended 31 March 2020. The amount owed to Dr Alan Barge at 31 March 2020 was GBPnil (31 March 2019: GBPnil).

During the year ended 31 March 2020, the Group purchased consultancy services totalling GBP15,069 (year ended 31 March 2019: GBP14,950) from FD Consult Ltd, a company controlled by Richard Moulson. The amount owed to FD Consult Ltd at 31 March 2020 was GBPnil (31 March 2019: GBPnil).

During the year ended 31 March 2020, the Group was not charged any monitoring and Director fees totalling relating to Marc d'Abbadie's services (year ended 31 March 2019: GBP15,986) by SPARK Impact Limited, manager of North West Fund for Biomedical, a shareholder. The amount owed to SPARK Impact, manager of North West Fund for Biomedical at 31 March 2020 was GBPnil (31 March 2019: GBPnil).

   8.    Report and accounts 

A copy of the Annual Report and Accounts will shortly be sent to all shareholders with notice of the Annual General Meeting and will also be available to download from the Group's website at www.evgen.com .

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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June 15, 2020 02:00 ET (06:00 GMT)