29 September 2023
Biodexa Pharmaceuticals PLC
(“Biodexa” or the “Company”)
Interim results for the six months ended 30 June 2023
Biodexa Pharmaceuticals PLC ( BDRX), a clinical stage biopharmaceutical company developing a pipeline of products aimed at primary and metastatic cancers of the brain, announces its unaudited interim results for the six months ended 30 June 2023 which will also be made available on the Company’s website at www.biodexapharma.com.
OPERATIONAL HIGHLIGHTS
The Company announced the following in the six months ended 30 June 2023:
- Approval by the Data Safety Monitoring Board to escalate the dose of MTX110 in recurrent glioblastoma (rGBM) to 90µM, the expected optimal therapeutic dose.
- Closing of a private placement in the US to raise $6.0m before expenses.
- Following shareholder approval, and in line with its realigned strategy, the Company de-listed from AIM and its name was changed to Biodexa Pharmaceuticals PLC.
- Initiation of a new R&D programme, MTD217, combining MTX110 with an oxidative phosphorylation inhibitor targeted at leptomeningeal carcinomatosis.
- Closing of a registered direct offering and private placement in the US to raise $3.3m before expenses.
Post period end:
- Completion of enrolment of nine patients in a Phase I study of MTX110 in diffuse midline glioma (DMG), formerly known as diffuse intrinsic pontine glioma (DIPG).
FINANCIAL HIGHLIGHTS
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For more information, please contact:
Biodexa Pharmaceuticals PLC |
| Stephen Stamp, CEO, CFO |
| Tel: +44 (0)29 2048 0180 |
| www.biodexapharma.com |
| Edison Group (US Investor Relations) Alyssa Factor Tel: +1 (860) 573 9637 Email: afactor@edisongroup.com |
| About Biodexa Pharmaceuticals PLC Biodexa Pharmaceuticals PLC (listed on BDRX) is a clinical stage biopharmaceutical company developing a pipeline of products aimed at primary and metastatic cancers of the brain. The Company’s lead candidate, MTX110, is being studied in aggressive rare/orphan brain cancer indications including recurrent glioblastoma and diffuse midline glioma. MTX110 is a liquid formulation of the histone deacetylase (HDAC) inhibitor, panobinostat. This proprietary formulation enables delivery of the product via convection-enhanced delivery (CED) at potentially chemotherapeutic doses directly to the site of the tumour, by-passing the blood-brain barrier and avoiding systemic toxicity. Biodexa's headquarters and R&D facility is in Cardiff, UK. For more information, please visit www.biodexapharma.com Forward-Looking Statements Certain statements in this announcement are forward-looking statements or information (collectively, forward-looking statements). Biodexa hereby provides cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the forward-looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “may”, “is expected to”, “anticipates”, “estimates”, “intends”, “plans”, “projection”, “could”, “vision”, “goals”, “objective” and “outlook”) are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes may not occur or may be delayed. The risks, uncertainties and other factors many of which are beyond the control of Biodexa, that could influence actual results include, but are not limited to: a limited operating history; regulatory risks; substantial capital and liquidity requirements; financing risks and dilution to shareholders; competition; reliance on management and dependence on key personnel; conflicts of interest of management; exposure to potential litigation, and other factors beyond the control of Biodexa. Forward looking statements are based on estimates and assumptions made by management in light of their experience of historical trends, current conditions and expected future developments, as well as factors that are believed to be appropriate. Such factors include, among others, Biodexa’s future product revenues, stage of development, additional capital requirements, risks associated with the completion and timing of clinical trials and obtaining regulatory approval to market Biodexa’s products, the ability to protect its intellectual property, dependence upon collaborative partners, changes in government regulation or regulatory approval processes and rapid technological change in the industry. These factors should be considered carefully and readers are cautioned to not place undue reliance on such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, Biodexa undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. You should, however, review the factors and risks we describe in the reports we will file from time to time with the US Securities and Exchange Commission after the date of this announcement. As a result of these factors, we cannot assure you that the forward-looking statements in this announcement will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. |
CHIEF EXECUTIVE’S REVIEW
Our primary focus in the first half of 2023 was on re-financing the Company before our cash runway was due to expire at the end of the first quarter of 2023 and then, having secured the immediate future, executing on our realigned strategy.
Realigned strategy
In the course of seeking finance for the Company in late 2022 it became clear to us that a company developing therapeutics was more investable than a drug delivery platform company. Accordingly, the Board determined that the Company should be repositioned as a therapeutics company, based around its MTX110 clinical asset, supported by its three enabling technologies, Q-Spera™, MidaSolve™ and MidaCore™.
Going forward, our strategy is to move our development programmes into the clinic and add value by generating clinical data to demonstrate proof-of-concept before seeking partners.
Strategic acquisitions
With a single clinical asset, MTX110 being developed for three types of rare brain cancers, the Board has looked for opportunities to broaden the Company’s R&D pipeline through acquisitions of companies or licensing of assets with a focus on rare diseases and/or oncology. In December 2022, we entered into an agreement to acquire Bioasis Technologies, Inc. (Bioasis) and organised a $10.0m financing, however the transaction was voted down in General Meeting in January 2023. We continue to look for suitable assets which are either in the clinic or expected soon to enter the clinic and to which value can be added in the near term.
R&D update
MTX110
MTX110, a novel formulation of panobinostat administered through convection enhanced delivery (CED), is in clinical development for intractable brain cancers including recurrent glioblastoma (rGBM), diffuse midline glioma (DMG) and medulloblastoma.
MTX110 employs our MidaSolve technology to solubilize panobinostat, a histone deacetylase (HDAC) inhibitor, so that it can be delivered directly to a patient’s brain tumour via an onboard pump and catheter (or CED) system. Our Phase I study of MTX110 in rGBM is ongoing at two clinical centres: Duke University and Baptist MD Anderson Cancer Center. In January 2023, the Data Safety Monitoring Board approved escalation of the dose of MTX110 in rGBM to 90µM, the expected optimal therapeutic dose. The study aims to recruit two cohorts, each with a minimum of four patients; the first cohort will receive MTX110 following implantation of the CED system and the second cohort will also receive MTX110 but with an option, at the discretion of the treating investigator, to re-position the catheter into an area of new lesion upon tumour progression with the objective of increasing tumour coverage and improving survival.
In July 2023, the second Phase I study in DMG at Columbia University completed the enrolment of nine patients. All patients (age range 4-17 years) received radiation therapy as standard of care. Each patient subsequently underwent surgery with implantation of an intratumoral catheter and a programmable subcutaneous pump and eight out of nine patients received two infusions of MTX110 via CED separated by a period of one week. No dose limiting toxicities related to the study drug have been reported.
A Phase I study of MTX110 in medulloblastoma remains ongoing at the University of Texas.
Q-Sphera
The Company’s drug delivery technologies have been de-prioritised. We intend to continue our existing, and seek new, collaborations for our technology but we will not be expanding our internal Q-Sphera pipeline.
Q-octreotide and Q-brexpiprazole remain available for potential licensing.
MTD217
In March 2023 we announced the start of a new preclinical development programme, coded MTD217, which explores simultaneous inhibition of key metabolic pathways in oncology, including the so-called Warburg effect and oxidative phosphorylation (OXPHOS). We have been able to demonstrate up to a six-fold synergistic effect of administering MTX110 with an OXPHOS inhibitor in vitro in three patient-derived cancer cell lines. On the back of those data, we have established new patent positions to protect these combination formulations. Our initial target is treatment of leptomeningeal disease, a lethal complication in which metastatic cancer cells invade the cerebrospinal fluid and central nervous system.
Financing
February 2023 Private Placement*
Following the termination of the Bioasis acquisition and related financing, we were successful in raising $6.0m before expenses in a private placement in the US in February 2023. We issued 8,125 ADSs (3,250,200 ordinary shares), 155,461 pre-funded warrants (62,184,525 ordinary shares), 32,327 Series A warrants (12,931,020 ordinary shares) and 48,491 Series B warrants (19,396,530 ordinary shares). In addition, 1,342 warrants (536,800 ordinary shares) were issued to the placement agent and 1,562 warrants exercisable for ADSs (625,000 ordinary shares) were issued to an investor in connection with a waiver of certain rights. All warrants issued were exercisable for ADSs.
May 2023 Registered Direct Offering and Private Placement*
We utilised our capacity under our Registration Statement on Form F-3 to raise $3.32m in a registered direct offering in the US. In connection with the registered direct offering and related private placement, we issued 276,699 ADSs (110,679,610 ordinary shares), 415,043 Series C warrants (166,017,300 ordinary shares) and 276,689 Series D warrants (110,675,600 ordinary shares). In addition, 11,067 warrants (4,426,800 ordinary shares) were issued to the placement agent. All warrants issued were exercisable for ADSs.
*The above ADS numbers reflect the ADS ratio change effected on 5 July 2023.
1H23 FINANCIAL REVIEW
The unaudited results for the six months ended 30 June 2023 are discussed below:
Key performance indicators (KPIs):
| 1H 2023 | 1H 2022 | Change | |
| Total gross revenue(1) | £0.30m | £0.47m | (36)% |
| R&D costs | £2.25m | £2.41m | (7)% |
| R&D as % of operating costs | 50% | 57% | n/a |
| Net cash inflow/(outflow) for the period | £2.39m | £(3.63)m | n/m |
| (1) Total revenue represents income from R&D collaborations. | |||
Biodexa’s KPIs focus on the key areas of operating results, R&D spend and cash management. These measures provide information on the core R&D operations. Additional financial and non-financial KPIs may be adopted in due course.
Revenues
Total revenue for the six months to 30 June 2023 was £0.30m compared to £0.47m in the first six months of 2022, a decrease of 36%. Revenue in 1H23 and 1H22 was entirely comprised of income from R&D collaborations with Janssen.
Research and Development
R&D costs in 1H23 reduced by £0.16m, or 7%, to £2.25m compared with £2.41m in 1H22. The percentage of R&D costs as a percentage of operating costs reduced in the period to 50% from 57%. The reduction in R&D costs in 1H23 reflects the decision made by the Directors to reposition as a therapeutics company and to not expand our internal drug delivery platform. The resulting cost-reduction program in March 2023 saw seven staff members being made redundant at a one-time cost of £88,000. These reductions were offset in part by increased spend on the MTX110 Phase 1 clinical trial costs of £0.3m.
Administrative Costs
Administrative expenses in 1H23 increased by 24% to £2.29m from £1.85m in 1H22. The increase in administrative costs in 1H23 is a result of the Company expensing legal and professional fees of £0.40m in connection with the successful financing transactions and aborted acquisitions.
Finance Income and Expense
Finance income in 1H23 and 1H22 included gains in respect of an equity settled derivative financial liability of £0.39m (1H22: £0.40m). The gain arose as a result of the fall in the Biodexa share price. In addition, the Company earned interest on cash deposits.
Finance expense in the period related to lease liabilities.
Cash Flows
Cash outflows from operating activities in 1H23 were £3.88m compared to £3.54m in 1H22, driven by a net loss of £3.57m (1H22: £3.06m) and after positive working capital of £0.21m (1H22: negative £0.05m) and other negative non-cash items totalling £0.52m (1H22: negative £0.43m).
Net cash generated in investing activities in 1H23 of £0.02m (1H22: outflow £0.02m) includes interest received on cash deposits of £0.02m.
Net cash generated in financing activities in 1H23 was £6.25m (1H22: outflow £0.08m), which was driven by receipt of funds from share issuances, including the exercise of pre-funded warrants, of £6.35m. This was offset by payments on lease liabilities of £0.10m.
Overall, cash increased by £2.39m in 1H23 compared to a decrease of £3.63m in 1H22. This resulted in a cash balance at 30 June 2023 of £5.23m compared with £6.42m at 30 June 2022 and £2.84m at 31 December 2022.
Post-period end
On 5 July 2023, and in an effort to bring the ADS price into compliance with NASDAQ’s minimum bid price per share requirement, we effected a ratio change in the number of ordinary shares represented by our ADSs from five ordinary shares per ADS to 400 ordinary shares per ADS.
Going concern
Biodexa has experienced net losses and significant cash outflows from cash used in operating activities over the past years as it develops its portfolio. For the six months to 30 June 2023, the Group incurred a consolidated loss from operations of £3.57m (1H22: £3.06m) and negative cash flows from operating activities of £3.88m (1H22: £3.54m). As of 30 June 2023, the Group had accumulated deficit of £138.97m.
The Group’s future viability is dependent on its ability to raise cash from financing activities to finance its development plans until commercialisation, generate cash from operating activities and to successfully obtain regulatory approval to allow marketing of its development products. The Group’s failure to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.
The Group's consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
As at 30 June 2023, the Group had cash and cash equivalents of £5.23m. The Directors forecast that the Group currently has enough cash to fund its planned operations into the first quarter of 2024. If the Company does not secure additional funding before the first quarter of 2024, it will no longer be a going concern and would likely be placed in Administration.
The Directors have prepared cash flow forecasts and considered the cash flow requirement for the Group for the next three years including the period 12 months from the date of approval of this interim financial information. These forecasts show that further financing will be required before the first quarter of 2024 assuming, inter alia, that certain development programs and other operating activities continue as currently planned. If we raise additional funds through the issuance of debt securities or additional equity securities, it could result in dilution to our existing shareholders, increased fixed payment obligations and these securities may have rights senior to those of our ordinary shares (including the ADSs) and could contain covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Any of these events could significantly harm our business, financial condition and prospects.
In the Directors’ opinion, the environment for financing of small and micro-cap biotech companies continues to be challenging. While this may present acquisition and/or merger opportunities with other companies with limited or no access to financing, as noted above, any attendant financings by Biodexa are likely to be dilutive. The Directors continue to evaluate financing options, including those connected to acquisitions and/or mergers, potentially available to the Group. Any alternatives considered are contingent upon the agreement of counterparties and accordingly, there can be no assurance that any of alternative courses of action to finance the Company would be successful. This requirement for additional financing in the short term represents a material uncertainty that may cast significant doubt upon the Group and Parent Company’s ability to continue as a going concern. Should it become evident in the future that there are no realistic financing options available to the Company which are actionable before its cash resources run out then the Company will no longer be a going concern. In such circumstances, we would no longer be able to prepare financial statements under paragraph 25 of IAS 1. Instead, the financial statements would be prepared on a liquidation basis and assets would stated at net realizable value and all liabilities would be accelerated to current liabilities.
The Directors believe there are adequate options and time available to secure additional financing for the Company and after considering the uncertainties, the Directors consider it is appropriate to continue to adopt the going concern basis in preparing these financial statements.
Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the timing of clinical trials. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. If we lack sufficient capital to expand our operations or otherwise capitalize on our business opportunities, our business, financial condition and results of operations could be materially adversely affected.
Stephen Stamp
Chief Executive Officer and Chief Financial Officer
Consolidated Statements of Comprehensive Income
For the year six month period ended 30 June
| Note | 2023 unaudited £’000 | 2022 unaudited £’000 | |
| Revenue | 298 | 468 | |
| Other income | - | 16 | |
| Research and development costs | (2,251) | (2,413) | |
| Administrative costs | (2,291) | (1,849) | |
| Loss from operations | (4,244) | (3,778) | |
| Finance income | 2 | 410 | 404 |
| Finance expense | 2 | (22) | (24) |
| Loss before tax | (3,856) | (3,398) | |
| Taxation | 3 | 288 | 337 |
| Loss) for the period attributable to the owners of the parent | (3,568) | (3,061) | |
| Other comprehensive income: | |||
| Items that will or may be reclassified subsequently to profit or loss: | |||
| Total other comprehensive gain net of tax | - | - | |
| Total comprehensive loss attributable to the owners of the parent | (3,568) | (3,061) | |
| Loss per share | |||
| Basic and diluted loss per ordinary share – pence | 4 | (4)p | (62)p |
The accompanying notes form part of these financial statements
Distribution costs, sales and marketing are immaterial in 2023 and 2022 and have been included within administrative costs.
Consolidated Statements of Financial Position
| Note | As at 30 June 2023 unaudited £’000 | As at 31 December 2022 £’000 | ||
| Assets | ||||
| Non-current assets | ||||
| Property, plant and equipment | 693 | 831 | ||
| Intangible assets | 5 | 6 | ||
| 698 | 837 | |||
| Current assets | ||||
| Trade and other receivables | 903 | 1,006 | ||
| Taxation | 1,134 | 846 | ||
| Cash and cash equivalents | 5,227 | 2,836 | ||
| 7,264 | 4,688 | |||
| Total assets | 7,962 | 5,525 | ||
| Liabilities | ||||
| Non-current liabilities | ||||
| Borrowings | 5 | 380 | 463 | |
| 380 | 463 | |||
| Current liabilities | ||||
| Trade and other payables | 1,755 | 1,447 | ||
| Borrowings | 5 | 164 | 161 | |
| Provisions | 6 | - | 207 | |
| Derivative financial liability | 7 | 364 | 85 | |
| 2,283 | 1,900 | |||
| Total liabilities | 2,663 | 2,363 | ||
| Issued capital and reserves attributable to owners of the parent | ||||
| Share capital | 8 | 5,341 | 1,108 | |
| Share premium | 84,653 | 83,667 | ||
| Merger reserve | 53,003 | 53,003 | ||
| Warrant reserve | 1,275 | 720 | ||
| Accumulated deficit | (138,973) | (135,336) | ||
| Total equity | 5,299 | 3,162 | ||
| Total equity and liabilities | 7,962 | 5,525 |
The accompanying notes form part of these financial statements
Consolidated Statements of Cash Flows
For the six month period ended 30 June
| Note | 2023 unaudited £’000 | 2022 unaudited £’000 | |
| Cash flows from operating activities | |||
| Loss for the period | (3,568) | (3,061) | |
| Adjustments for: | |||
| Depreciation of property, plant and equipment | 72 | 96 | |
| Depreciation of right of use asset | 70 | 86 | |
| Amortisation of intangible fixed asset | 1 | - | |
| Loss on disposal of fixed assets | - | 2 | |
| Finance income | 2 | (410) | (404) |
| Finance expense | 2 | 22 | 24 |
| Share-based payment expense | 15 | 100 | |
| Taxation | 3 | (288) | (337) |
| Cash flows from operating activities before changes in working capital | (4,086) | (3,494) | |
| Decrease/(increase) in trade and other receivables | 103 | (224) | |
| Increase in trade and other payables | 309 | 187 | |
| Decrease in provisions | (207) | (8) | |
| Cash used in operations | (3,881) | (3,539) | |
| Taxes payments | - | - | |
| Net cash used in operating activities | (3,881) | (3,539) |
Consolidated Statements of Cash Flows (continued)
For the six month period ended 30 June
| Note | 2023 unaudited £’000 | 2022 unaudited £’000 | |
| Investing activities | |||
| Purchases of property, plant and equipment | (4) | (33) | |
| Proceeds from disposal of fixed assets | - | 9 | |
| Interest received | 24 | 7 | |
| Net cash generated from/(used in) investing activities | 20 | (17) | |
| Financing activities | |||
| Interest paid | (7) | (5) | |
| Amounts paid on lease liabilities | (95) | (73) | |
| Share issues including warrants, net of costs | 8 | 6,354 | - |
| Net cash generated from/(used in) financing activities | 6,252 | (78) | |
| Net increase/(decrease) in cash and cash equivalents | 2,391 |
