TIDM4BB
4basebio PLC
("4basebio", the "Company" or the "Group")
Half-year Report
for the six months ended 30 June 2023
4basebio PLC (AIM: 4BB), Cambridge, UK, 21 September 2023 - 4basebio PLC, an
innovation driven biotechnology company enabling and accelerating development of
advanced therapy medicinal products (ATMPs) through its high performant
synthetic DNA products and non-viral, thermostable nucleic acid delivery
platform, announces its unaudited half-year results for the six months ended 30
June 2023.
Operational Highlights (including post period end)
· DNA and HermesT revenues exceeded £200k for the half year
· Supply Agreement signed for provision of DNA for clinical studies announced
on 24 May 2023
· Announcement of Bill & Melinda Gates Foundation grant on 1 August 2023
· Three patent additional filings during the period
· Demonstrated in vivo efficacy of HermesT delivery system
Financial Highlights
· Cash balances of £3.6 million at period end
· Loss for the period of £3.6 million (H1 2022 loss: £2.4 million)
· Net cash outflow from operating activities of £3.0 million (H1 2022: £2.5
million)
Commenting on the interim results, Dr Heikki Lanckriet, CEO and CSO, said "We
are pleased to report continued commercial progress since recording first DNA
and HermesT revenues in 2022. We have seen a good influx of early stage projects
as we are gearing up our commercial effort and this has manifested in H1 2023
revenue growth, with overall revenues in line with full year 2022, driven
primarily by DNA sales.
"During the period, our commercial focus has been on early stage engagement with
potential clients seeking DNA for their clinical programs, with this approach
leading to the onboarding of multiple clients. Typical customer projects
commence with lower value research grade product supply. As new client programs
progress over time, we expect the demand to move to full GMP, with individually
higher value product supply opportunities occurring. One such example of this
is our supply agreement with Neomatrix S.r.l. which was recently announced and
where 4basebio will supply DNA into a cancer neoantigen vaccine program.
"Alongside this commercial traction, our progress towards overall GMP
certification is important and continues, with 4basebio now in position to
manufacture GMP compliant critical starting material for mRNA and AAV markets.
"We are also delighted to have received a grant from the Bill & Melinda Gates
Foundation to progress a project focussed on thermal stability of our HermesT
nanoparticle and our innovative synthetic DNA payloads.
"Alongside the ongoing commercial development, 4basebio remains a technology
company, which is evidenced by the progress in developing its portfolio of
patent families. As a Group, we continue to innovate and find novel solutions
to challenges experienced by clients, with additional DNA products being
developed as a result. The flexibility in our platform which enables this
innovation also offers clear competitor differentiation.
"We continue to invest in our technology platforms and overall cash expenditure
during the period was in line with management expectations. For the remainder
of 2023, we expect to continue this investment in technology, commercial
activities and production capabilities.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.
For further enquiries, please contact:
4basebio PLC +44 (0)12 2396 7943
Heikki Lanckriet, CEO and CSO
Cairn Financial Advisers LLP (Nominated Adviser) +44 (0)20 7213 0880
Jo Turner / Sandy Jamieson
Cavendish Capital Markets Limited (Broker)
Geoff Nash/Richard Chambers/Charlotte Sutcliffe +44 (0)20 7220 0500
Lionsgate Communications (Media Enquiries) +44 (0)77 91892509
Jonathan Charles
Notes to Editors
4basebio (AIM: 4BB) is an innovation driven life biotechnology company focussed
on accelerating the development of advanced therapy medicinal products (ATMPs)
through its high performant synthetic DNA products and non-viral, cell targeting
nucleic acid delivery platform. The Company's objective is to become a market
leader in the manufacture and supply of high quality synthetic DNA products for
research, therapeutic and pharmacological use as well as development of target
specific non-viral vectors for the efficient delivery of payloads in patients.
The Company is offering GMP compliant DNA starting materials suitable for use in
AAV viral vector production as well as mRNA vaccine and therapeutics production.
Chairman's Statement
Introduction
The Board is pleased to report 4basebio is making good progress in its
commercial development and also continues to expand its technology and product
offering. With significant focus on customer engagement, revenue momentum is now
building, with DNA and HermesT sales for the half year exceeding like for like
sales for the full year 2022. Alongside this, the capabilities of the Group
continue to expand with additional resource across commercial, operations and
R&D activities and with overall headcount increasing to 78 at the end of June
2023.
As expected and as indicated in our 2022 Annual Report, the Group incurred a net
loss for the first half of 2023. 4basebio continues to implement its strategy
requiring ongoing investment in technology and product commercialisation,
including GMP, which it expects will generate significant revenues and
profitability over time.
Operational Review
4basebio operates from four locations near Cambridge, UK and Madrid, Spain,
having recently taken a long lease over a second property adjacent to its clean
room facility in the UK. This additional property will house laboratories and
offices supporting the manufacturing and quality teams in the business. The
Group's head office at Norman Way will accommodate R&D and general support
functions.
Over the first half of the year, the Group has focussed on three key areas:
· Commercialisation of its product offering, in particular DNA
· Continued progression of GMP implementation
· Ongoing technology platform development and generation of Intellectual
Property
Across all three areas, the Group continues to make good progress. In the year
to date, DNA and HermesT revenues exceeded like for like revenues for 2022.
Whilst it remains difficult to provide guidance over how revenues may develop
during the early stages of commercial development, we expect revenue growth to
accelerate over time. From our early commercial activity, however, it is
evident that there is clear customer demand to adopt 4basebio synthetic DNA into
development programs, with multiple customer evaluation projects now completed
and progressing towards more valuable HQ and GMP products.
Implementation of GMP quality standards remains an ongoing task with the Group
now able to manufacture GMP compliant critical starting materials for feeding
into the mRNA and AAV markets, two key areas for revenue growth for 4basebio.
Our next objective is to secure GMP certification along with the ability to
produce GMP certified drug substance DNA products. In light of this objective,
the quality, manufacturing and regulatory teams will continue to grow over the
course of 2023 and 2024 to support the Group's GMP objectives. The board
remains positive that the Group will secure the desired GMP certification in
2024.
Finally, the investment in, and development of, the Group's technology platforms
continues, with three further patent filings during the period. The board
considers 4basebio's synthetic DNA platform as being unique in its flexibility,
thereby offering optimised and bespoke solutions for a range of cell and gene
therapy and vaccine applications.
Swift commercial progress is a key objective for the Group. Alongside this, the
board continues to believe that investing in the Group's technology platforms to
further optimise and expand its product offering is central to creating and
realising shareholder value.
In summary, the board is pleased with the continued progress which has been made
during the first half of 2023. The Group is validating its commercial
proposition by way of customer revenues while at the same time it continues to
strengthen its market position with ongoing patent filings around its
technologies. The board considers the Group to be extremely well placed to
continue the commercial exploitation of its DNA and nanoparticle technology.
Business outlook
Over the second half of the financial year, the Group expects to continue to
secure new clients and recognise revenues from the sale of DNA and HermesT. As
previously indicated, the Group will also continue investing in its technologies
and staff teams, so that ongoing expenditure will continue to significantly
exceed revenues, with the Group reporting a loss for the full year, which will
be funded by drawing on the loan facility with 2Invest AG.
Financial Review
The results for the period ended 30 June 2023 and the consolidated balance sheet
at that date reflect the consolidated performance and position of 4basebio PLC
and all its subsidiary companies.
Revenue
Revenue in the first six months of 2023 ("H1 2023") was £0.24 million (H1 2022:
£0.15 million). The increase in revenues relates entirely to the sale of DNA
and HermesT.
Cost of sales
Cost of sales in H1 2023 was £77k (H1 2022: £37k). Cost of sales reflects a
combination of amortisation on previously capitalised intangible assets linked
to kit sales and direct inputs for DNA production.
Selling and administration expenses
Selling, general and administrative expenses were a combined £1.9 million in H1
2023 (H1 2022: £1.4 million) This includes non-cash items relating to
amortisation and depreciation of £190k and share options charges of £87k.
Otherwise, expenditure increased with additional headcount across business
development, legal and support services.
Operations expense
Operations expense was £0.6 million (H1 2022: £0.4 million) This reflects the
scaling of the manufacturing and quality assurance team between the two periods.
Research and development
Overall research and development expenditure for H1 2023 was £1.8 million (H1
2022: £1.5 million), of which £0.3 million was capitalised in the period (H1
2022: £0.5 million). Overall expenditure increased due to the ongoing expansion
of the UK team. Capitalised expenditure relates to platform research undertaken
in Spain.
Tax
Tax represents R&D tax credits expected to be recovered in relation to
expenditure during the first half of the year.
Balance sheet
Non-current assets increased to £6.5 million at 30 June 2023 from £5.8 million
at 31 December 2022; this related to additions of tangible fixed assets in the
UK and capitalised R&D expenditure in Spain as shown in notes 6 and 7 to the
half year results. Current assets fell to £5.1 million at 30 June 2023 from
£5.9 million at 31 December 2022, due primarily to cash outflows during the
first half of 2023. As a result, closing cash balances at 30 June 2023 stood at
£3.6 million (31 December 2022: £4.4 million).
Current liabilities were stable at £1.5 million at 30 June 2023 (31 December
2022: £1.5 million) with a modest decline in short term financial liabilities
offset by an increase in trade payables. Long term financial liabilities reflect
the drawdown on the 2Invest AG loan facility. As a result, overall long term
liabilities stood at £6.7 million as at 30 June 2023 (31 December 2022: £3.1
million). Other long term liabilities represent deferred grant income in Spain.
Share Capital at both 30 June 2023 and 31 December 2022 reflects the capital
contributions arising from the 2020 spin out process as explained in note 3.2 to
the financial statements included in the Annual Report for 2021.
Cash flow
Net cash outflows from operations were £3.0 million for the period ended 30 June
2023 (period ended 30 June 2022: outflows of £2.5 million). This reflects an
increase in operating cashflows directly arising from the growth in operations
between the periods as presented in the profit and loss statement.
Cash outflows from investing activities declined with the investment in tangible
fixed assets of £0.4 million for the period ended 30 June 2023 (period ended 30
June 2022: £1.0 million) relating to both operations and R&D equipment. In
addition, intangible assets including capitalised development expenditure in
4basebio S.L.U. represented a cash outflow of £0.3 million from £0.4 million in
period ended 30 June 2022.
Cashflows from financing for the period ended 30 June 2023 reflect in particular
the drawdowns from 2Invest AG under the loan facility of £3.5 million, partially
offset by repayments of Spanish softloans.
Exchange differences for the period represent changes in the British pound value
of cash balances held in foreign currency, almost entirely euro denominated.
Tim McCarthy
Chairman
20 September 2023
Consolidated statement of profit or loss and other comprehensive income
for the six months ended 30 June 2023
in £`000 Note Six months ended 30 Six months Year
June 2023 ended 30 ended
(unaudited) June 2022 31
(unaudited) December
2022
(audited)
Revenues 238 152 268
Cost of goods (77) (37) (29)
sold
Gross profit 161 115 239
Sales and (248) (97) (245)
marketing
expenses
Administration (1,603) (1,306) (2,711)
expenses
Operations (596) (367) (928)
expense
Research and (1,596) (1,024) (2,081)
non
-capitalised
development
expenses
Other (18) (37) (181)
operating
expenses
Other 136 2 67
operating
income
Loss from (3,764) (2,714) (5,840)
operations
Finance (98) (16) (89)
expense
Loss before (3,862) (2,730) (5,929)
tax
Income tax 4 307 300 779
credit /
expense
Loss for the (3,555) (2,430) (5,150)
period
Loss per
share
5 (0.29) (0.20) (0.42)
· Basic
and diluted
(in
£/share)
Items that may
be
reclassified
to the income
statement in
subsequent
periods
Exchange (243) 173 447
rate
adjustments
Total (3,798) (2,257) (4,703)
comprehensive
income
All of the loss for each period is from continuing operations.
Consolidated statement of financial position
30 June 2023
in £'000 Note 30 June 31 December
2023(unaudited) 2022
(audited)
Assets
Intangible 6 2,366 2,124
assets
Property, 7 4,088 3,633
plant and
equipment
Other non 34 35
-current
assets
Non-current 6,488 5,792
assets
Inventories 199 133
Trade 60 54
receivables
Other 1,251 1,359
current
assets
Cash and 8 3,558 4,351
cash
equivalents
Current 5,068 5,897
assets
Total 11,556 11,689
assets
Liabilities
Financial (321) (415)
liabilities
Trade (528) (490)
payables
Other (635) (613)
current
liabilities
Current (1,484) (1,518)
liabilities
Financial (6,551) (2,935)
liabilities
Other (110) (116)
liabilities
Non-current (6,661) (3,051)
liabilities
Total (8,145) (4,569)
liabilities
Net assets 3,411 7,120
Share 11,132 11,130
capital
Share 706 706
premium
Merger 688 688
reserve
Capital 13,394 13,307
reserve
Foreign (229) 14
exchange
reserve
Profit and (22,280) (18,725)
loss
reserve
Total 9 3,411 7,120
Equity
Consolidated statement of changes in equity
for the six months ended 30 June 2023
in £`000 Share Share premium Merger Capital Foreign Profit
Total
capital reserve reserve exchange and
equity
loss
reserve
Balance at 11,130 706 688 13,179 (433) (13,575)
11,695
1
January
2022
(audited)
Loss for - - - - - (5,150)
(5,150)
the year
Foreign - - - - 447 -
447
Exchange
difference
arising on
translation
of
4basebio
S.L.U.
Share based - - - 128 - -
128
payments
Balance at 11,130 706 688 13,307 14 (18,725)
7,120
31
December
2022
(audited)
in £`000] Share Share premium Merger Capital Foreign Profit
Total
capital reserve reserve exchange and
equity
loss
reserve
Balance at 11,130 706 688 13,307 14 (18,725)
7,120
1
January
2023
(audited)
Loss for - - - - - (3,555)
(3,555)
the year
Foreign - - (243) -
(243)
Exchange
difference
arising on
translation
of
4basebio
S.L.U.
Share - - - 87 - -
87
option
charge
Shares 2 - - - - -
2
issued in
period
Balance at 688 (229) (22,280)
3,411
30 11,132 706 13,394
June 2023
(unaudited)
Consolidated statement of cash flows
for the six months ended 30 June 2023
in £'000 30 June 30 June 31 December
2023(unaudited) 2022(unaudited) 2022
(audited)
Net loss for (3,555) (2,430) (5,150)
the period
Adjustments
to reconcile
net loss for
the period
to net
cashflows
Income taxes (307) (300) (779)
Interest 98 16 89
charge
Depreciation 315 226 404
of property,
plant and
equipment
Amortisation 16 13 27
and
impairment
of
intangible
assets
Other non 87 57 136
-cash items
Tax receipt 561 - 401
Working
capital
changes:
(Increase)/d (104) (216) 140
ecrease in
trade
receivables
and other
current
assets
Increase/(de (28) 157 (2)
crease) in
trade
payables
and other
current
liabilities
(Increase)/d (70) 10 30
ecrease in
inventories
Net Cash (2,987) (2,467) (4,704)
flows from
operating
activities
Investments (406) (969) (1,155)
in property,
plant and
equipment
and
intangible
assets
Investments (330) (404) (786)
in
capitalised
development
and
intangible
assets
Cash flows (736) (1,373) (1,941)
from
investing
activities
Net 3,187 (272) 1,412
receipt/(paym
ent) of
loans
Interest (26) (17) (93)
paid
Capital (49) (38) (75)
lease
payments
Proceeds of 2 - -
shares issue
Cash flows 3,114 (327) 1,244
from
financing
activities
Net change (609) (4,167) (5,401)
in cash and
cash
equivalents
Exchange (184) 178 166
differences
Cash and 4,351 9,586 9,586
cash
equivalents
at the
beginning of
the period
Cash and 3,558 5,597 4,351
cash
equivalents
at the end
of the
period
Notes to the financial statements
For the six months ended 30 June 2023
1. General information
4basebio PLC (the "Company" or "4basebio") is registered in England and Wales
with company number 13519889.
The Company is domiciled in England and the registered office of the Company is
25 Norman Way, Over, Cambridge CB24 5QE. 4basebio PLC is the parent of a group
of companies (together, "the Group"). The Group focusses on life sciences and in
particular the development of synthetic DNA and nanoparticles suitable for
inclusion in, or delivery of, therapeutic payloads for cell & gene therapies and
vaccines.
The Company's shares are traded on London Stock Exchange's AIM market. The
international securities number (ISIN) number for its AIM traded shares is
GB00BLD8ZL39; its ticker symbol is 4bb.l.
The interim report was approved by the board of directors on 20 September 2023.
2. Significant accounting policies
Basis of preparation
This half year report, which is not audited, has been prepared in accordance
with the measurement and recognition criteria of UK adopted International
Accounting Standards. It does not include all the information required for full
annual financial statements and should be read in conjunction with the financial
statements of the Company and its subsidiaries (the "Group") for the year ended
31 December 2022.
The accounting policies applied in this half year report are consistent with
those in the financial statements for the year ended 31 December 2022, as
described in those financial statements.
Significant judgments
In the application of the Group's accounting policies, management is required to
make judgments, estimates and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other sources. The
significant judgments made in relation to the financial statements are further
set out below.
Going concern
The directors have, at the time of approving the half year report, a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing the financial statements.
Internally-generated intangible assets - research and development expenditure
Development expenditure is capitalised when the conditions referred to in Note 4
of the Company's 2022 annual report are met. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and future periods if
the revision affects both current and future periods.
3. Foreign currencies
The functional currency of the Group is British Pounds.
The principal currency rate of the Group other than the British Pounds is the
euro which has developed as follows in relation to the equivalent of one pound
(GBP/£):
in Closing Average
GBP exchange exchange
rate rate
30 31 Six Six months Year ended 31
June December months ended 30 June December 2022
2023 2022 ended 30 2022
June
2023
Euro 0.8869 0.8764 0.8424 0.8524
0.8583
4. Income taxes
The Group anticipates claiming R&D tax credits in both the UK and Spain in
relation to the year ended 31 December 2023. The quantum of such claims for the
first half of 2023 is estimated at £0.3 million (period ending 30 June 2022:
£0.3 million).
5. Loss per share
Six months Six months Year ended 31 December 2022
ended 30 June ended 30 June
2023 2022
Numerator
in £`000
Loss for (3,555) (2,430) (5,150)
the period
Denominator
number of
shares
Weighted 12,318,987 12,317,473 12,317,473
average
number of
registered
shares in
circulation
(ordinary
shares) for
calculating
the
undiluted
earnings
per share
Diluted and (0.29) (0.20) (0.42)
Undiluted
earnings
per share
(£/share)
6. Intangible assets
in £`000 Development costs Licences Total
Cost or acquisition value
01 January 2022 2,390 200 2,590
Additions 499 287 786
Exchange differences 151 17 168
31 December 2022 3,040 504 3,544
01 January 2023 3,040 504 3,544
Additions 263 67 330
Exchange differences (104) (14) (118)
30 June 2023 3,199 557 3,756
Cumulative amortisation and impairment
01 January 2022 1,286 33 1,319
Amortisation 9 18 27
Exchange differences 72 2 74
31 December 2022 1,367 53 1,420
01 January 2023 1,367 53 1,420
Amortisation 3 14 17
Exchange differences (45) (2) (47)
30 June 2023 1,325 65 1,390
Net book value
31 December 2022 1,673 451 2,124
30 June 2023 1,874 492 2,366
7. Property, plant and equipment
in £`000 Operating Land and Right of Assets under Total
equipment buildings use construction
assets
Cost or acquisition
value
01 January 2022 882 997 635 751 3,265
Additions 1,152 43 143 - 1,338
Transfers 751 - - (751) -
Disposals - - (143) - (143)
Exchange 18 - 8 - 26
differences
31 December 2022 2,803 1,040 643 - 4,486
01 January 2023 2,803 1,040 643 - 4,486
Additions 405 1 372 - 778
Exchange (14) (2) (3) - (19)
differences
30 June 2023 3,194 1,039 1,012 - 5,245
Cumulative
amortisation and
impairment
01 January 2022 357 51 98 - 506
Depreciation 298 89 87 - 474
Disposals - - (143) - (143)
Exchange 15 - 1 - 16
differences
31 December 2022 670 140 43 - 853
01 January 2023 670 140 43 - 853
Depreciation 230 25 60 - 315
Exchange (8) (2) (1) - (11)
differences
30 June 2023 892 163 102 - 1,157
Net book value
31 December 2022 2,133 900 600 - 3,633
30 June 2023 2,302 876 910 - 4,088
8. Cash and cash equivalents
in £`000 30 June 2023 31 December 2022
Bank balances and cash in hand 3,558 4,351
Cash and cash equivalents 3,558 4,351
9. Equity
On 14 February 2023, 2,000 shares were issued pursuant to an exercise of
employee share options. As a result, the share capital of 4basebio PLC as of 30
June 2023 amounts to a total of ?12,319,473 divided into 12,319,473 shares of ?1
(31 December 2022: ?12,317,473 shares of ?1). These are all registered ordinary
shares. There are no shares with special rights or other restrictions on voting
rights.
Share-based payments
During H1 2023, 60,000 share options to subscribe for shares in the Company were
granted to employees with an average weighted exercise price of £5.55 per
share. The share options awarded vest one quarter on the anniversary of grant,
over four years. Consistent with previous awards as explained in note 24 to the
2022 financial statements, the awards were valued using a Black Scholes
valuation model.
An overall share-based payments charge of £86,601 has been expensed in the
period with a corresponding amount recognised in equity based on fair values of
between £0.31 and £2.38 per option, as at the dates of grant.
10. Legal matters
As disclosed in note 26 of the 2022 financial statements, the Company was
notified in March 2021 of legal action against it in Germany in relation to the
spin out process of 4basebio SE (now 4basebio PLC) dating to 2020. Since 30
June 2023, the directors understand this process is now nearing a conclusion,
with any fees and costs associated with this matter expected to be below £100k.
Separately, the Company previously commenced legal proceedings against a Spanish
entity in relation to patent entitlement and breach of confidentiality and is
pursuing appropriate legal recourse. On 19 September 2023, the Company received
a counterclaim for breach of confidentiality.
11. Approval of the half year report
The half year report was approved by the board of directors and authorised for
publication on 20 September 2023.
Forward-looking statements
This announcement may contain certain statements about the future outlook for
the 4basebio. Although the directors believe their expectations are based on
reasonable assumptions, any statements about future outlook may be influenced by
factors that could cause actual outcomes and results to be materially different.
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/4basebio-plc/r/half-year-report,c3838980
END
(END) Dow Jones Newswires
September 21, 2023 02:00 ET (06:00 GMT)
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