C4X Discovery Holdings
plc
("C4XD", "C4X
Discovery" or the "Company")
Half-year results for the six months
ended 31 January 2024
Excellent portfolio progress supported
by a robust balance sheet
$11 million preclinical milestone
payment by AstraZeneca
C4XD seeks voluntary delisting from the
London Stock Exchange AIM
27 March
2024 - C4X Discovery Holdings plc
(AIM: C4XD), a pioneering Drug Discovery company, today announces
its half-year results for the six months ended 31 January
2024.
Operational
Highlights (including post-period events)
· Announced today:
C4XD seeks voluntary delisting from the London Stock Exchange AIM
(see separate release)
· Receipt of $11
million preclinical milestone payment from AstraZeneca under the
exclusive worldwide licence agreement worth up to $400 million, for
C4XD's NRF2 Activator programme.
· α4β7 integrin
inhibitor programme for inflammatory bowel disease ("IBD")
delivered compounds showing improved activity at a lower dose
compared to example competitor compounds in a pharmacodynamic model
after oral dosing. The project is moving towards the selection of a
pre-clinical candidate.
· C4XD internal
portfolio expanded in inflammatory diseases with new programmes
identified progressing towards Lead Optimisation.
· Indivior acquired
C4XD's oral Orexin-1 receptor antagonist, C4X_3256 (INDV-2000), for
substance use disorder under an asset purchase agreement for £15.95
million.
· In
April 2021, C4XD signed a world-wide exclusive agreement with
Sanofi, for an oral pre-clinical IL-17A inhibitor programme worth
up to €414 million with first milestone payment of €3 million
received in July 2022.
· MALT-1 inhibitor
programme progressing towards candidate shortlist as partnering
process ongoing.
Financial
Highlights
· Revenue was £24.6
million (January 2023: £1.7m) reflecting receipt of £15.9 million
from sale of Orexin-1 receptor antagonist programme and $11 million
milestone payment from AstraZeneca.
· Total profit
after tax of £17.8 million or 7.06 pence per share (January 2023:
loss of £3.9m or 1.55 pence per share).
· R&D expenses
remained at £5.2 million (January 2023: £5.2m), reflecting focused
investment in key drug discovery programmes focused on
immune-inflammatory diseases.
· Net assets of
£24.6 million (January 2023: £13.6m).
· Net cash as at 31
January 2024: £13.1 million (31 January 2023: £9.6m), before
post-period receipt of $11 million milestone payment from
AstraZeneca in February 2024.
Dr Clive Dix,
Executive Chairman of C4X Discovery, said:
"C4XD
has demonstrated time and again our expertise to discover and
develop high value, novel small molecule drugs. We have announced
three major deal partnerships with world leading pharmaceutical
companies, one of which has since acquired the programme outright
demonstrating our scientific and deal-making capabilities. The
Company is in a strong financial position with the potential for
further milestone payments over the next 18 months. As we progress
our lead programme through the discovery phase towards the clinic
and with a clear focus on immuno-inflammatory diseases, the Board
feel it necessary to address the perceived under-valuation of our
business in the public market and the subsequent inability to
access the future funding the Board believes is required to allow
C4XD to flourish.
"The healthcare sector in the financial markets
has proved challenging in recent years and has been further
hindered by wider macro and economic events happening worldwide,
which have collectively had a negative impact on the valuations of
smaller companies in general. At the same time, funding for private
companies has continued to remain resilient. The Board has
concluded that the current public market valuation does not reflect
the underlying potential of our business or our achievements to
date and believe that this is unlikely to change in the
short-to-medium term. Consequently, the Board believes that C4XD's
growth prospects, and the ability to
execute its strategy to develop precision therapeutics in
immuno-inflammatory diseases, will be best
accomplished as a private company, where we can potentially access
a larger quantum of future funding required to accelerate our
strategy and drive towards discovery and development inflection
points to maximise revenue from our portfolio. We therefore believe
that a cancellation of the Company's admission on AIM is in the
best interest for shareholders and for the future of our business
as a whole, and we are excited for the road ahead."
This announcement contains inside information for the purpose
of the UK Market Abuse Regulations.
- Ends -
Contacts
C4X Discovery
Holdings
|
|
Mo Noonan, Communications
|
+44 (0)787 6444977
|
|
|
Panmure Gordon
(UK) Limited (NOMAD and Broker)
|
|
Freddy Crossley, Emma Earl (Corporate
Finance)
|
+44 (0)20 7886 2500
|
Rupert Dearden (Corporate Broking)
|
|
|
|
C4X Discovery
Media - ICR Consilium
|
|
Mary-Jane Elliott, Chris Gardner, Angela
Gray
|
+44 (0)203 709 5700
|
Notes to
Editors:
About C4X
Discovery
C4X Discovery (C4XD) is a pioneering Drug Discovery
company, combining scientific expertise with cutting-edge
technologies to efficiently deliver world‑leading medicines. We
have a highly valuable and differentiated approach to Drug
Discovery through our enhanced molecular design and patient
stratification capabilities, generating small molecule drug
candidates across multiple disease indications focused on
immuno-inflammation. We are advancing our internal portfolio which
ranges from early-stage target opportunities to late-stage Drug
Discovery programmes and we have two commercially partnered
programmes with Sanofi and AstraZeneca, and one clinical stage
candidate which has been acquired by Indivior.
For more information visit us at
www.c4xdiscovery.com or follow us on twitter
@C4XDiscovery.
Corporate
Overview
The latter half of 2023 saw excellent progress
across our portfolio with each of our programmes successfully
advancing during the period, supporting our strategic decision to
focus on immuno-inflammatory diseases. The outright £15.95 million
acquisition by Indivior of our Orexin-1 receptor antagonist
programme for the treatment of substance abuse disorder, laid a
solid financial base to advance our newly focused portfolio
towards, and potentially, into the clinic. Our balance sheet was
further bolstered post period in February 2024 by the $11 million
milestone payment from AstraZeneca triggered by preclinical
progress of our NRF2 Activator programme, positioning us with a
robust cash position.
With immuno-inflammation drug discovery
expertise at our core, we are building a valuable and commercially
relevant, small-molecule drug portfolio. Our molecules have
Best-in-Class and First-in-Class potential to treat patients across
a range of immuno-inflammatory diseases. Our aim to develop
alternative oral treatments not only has the potential to broaden
patient access to much needed treatments, but also enable easier
treatment regimens and potentially reduce the healthcare
burden.
Our lead internal programme, focused on oral
small molecule inhibitors of α4β7, has the potential to deliver a
low dose Best-In-Class α4β7 inhibitor therapy for the treatment of
inflammatory bowel disease ("IBD") where an effective oral therapy
remains highly sought-after. This programme is progressing through
late-stage discovery studies and towards selection of a
pre-clinical candidate. In addition, insights garnered from our
PatientSeek platform to identify stratification signals in IBD
patients could both inform and potentially de-risk the clinical
development path for the α4β7 programme.
We continue to advance our portfolio of
early-stage discovery immuno-inflammatory projects towards Lead
Optimisation. These projects target clear unmet medical need,
combined with significant commercial potential. Through our
Conformetrix technology, we are able to produce valuable chemical
equity through the interpretation of conformational insight into
the behaviour of molecules. These insights enable a more accurate
molecule design that is best suited to our therapeutics targets. We
use PatientSeek to inform our target selection choices, based on
identification of patient stratification opportunities. We
anticipate moving two of these projects into Lead Optimisation by
the end of 2024, when we will be able to provide greater
detail.
We have out-licensed two programmes to leading
pharmaceutical companies, AstraZeneca and Sanofi. We were thrilled
to receive the first milestone payment under our exclusive
worldwide licensing agreement worth up to $400 million with
AstraZeneca, signed only a little over a year earlier, for C4XD's
NRF2 Activator programme. The worldwide exclusive license with
Sanofi worth up to €414 million for C4XD's oral IL-17A inhibitor
programme previously paid its first milestone payment of €3 million
in July 2022.
Underpinning the significant progress made
during the period, the Company has a robust cash position and
manageable fixed cost base. Cash, cash equivalents, short-term
investments and deposits were £13.1 million at 31 January 2024 (31
January 2023: £9.6 million) before post-period receipt of the $11
million milestone payment in February 2024. R&D investment
remained at £5.2 million in the six months ending 31 January 2024
(January 2023: £5.2 million), reflecting focused investment in key
drug discovery programmes. Administrative expenses were £1.8
million for the six months ended January 2024 (January 2023: £1.6
million).
Outlook
C4XD has demonstrated time and again our
expertise to discover and develop high value, novel small molecule
drugs. We have announced three major deal partnerships with world
leading pharmaceutical companies, one of which has since acquired
the programme outright demonstrating our scientific and deal-making
capabilities. The Company is in a strong financial position with
the potential for further milestone payments over the next 18
months. As we progress our lead programme through the discovery
phase towards the clinic and with a clear strategic focus on
immuno-inflammatory diseases, the Board feel it necessary to
address the perceived under-valuation of our business in the public
market and the subsequent inability to access the future funding
the Board believes is required to allow C4XD to
flourish.
The healthcare sector in the financial markets
has proved challenging in recent years and has been further
hindered by wider macro and economic events happening worldwide,
which have collectively had a negative impact on the valuations of
smaller companies in general. At the same time, funding for private
companies has continued to remain resilient. The Board has
concluded that the current public market valuation does not reflect
the underlying potential of our business or our achievements to
date and believe that this is unlikely to change in the
short-to-medium term. Consequently, the Board believes that C4XD's
growth prospects, and the ability to
execute its strategy to develop precision therapeutics in
immuno-inflammatory diseases, will be best
accomplished as a private company, where we can potentially access
a larger quantum of future funding required to accelerate our
strategy and drive towards discovery and development inflection
points to maximise revenue from our portfolio. We therefore believe
that a cancellation of the Company's admission on AIM is in the
best interest for shareholders and for the future of our business
as a whole, and we are excited for the road ahead.
Interim consolidated statement of
comprehensive income
For the six months ended 31 January
2024
|
|
Six months
|
Six months
|
Year
|
|
|
to
|
to
|
to
|
|
|
31 January
2024
|
31 January
2023
|
31 July
2023
|
|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
|
£000
|
£000
|
£000
|
|
Notes
|
|
|
|
|
|
|
|
|
Revenue
|
3
|
24,646
|
1,676
|
1,710
|
|
|
|
|
|
Cost of sales
|
|
-
|
(22)
|
(38)
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
24,646
|
1,654
|
1,672
|
|
|
|
|
|
Research and development
expenses
|
|
(5,195)
|
(5,194)
|
(10,894)
|
Administrative expenses
|
|
(1,803)
|
(1,638)
|
(4,192)
|
|
|
|
|
|
|
|
|
|
|
Operating profit
/(loss)
|
|
17,648
|
(5,178)
|
(13,414)
|
|
|
|
|
|
Finance income
|
|
158
|
15
|
22
|
Finance costs
|
|
(8)
|
(12)
|
(24)
|
|
|
|
|
|
Profit /(loss) before
taxation
|
|
17,798
|
(5,175)
|
(13,416)
|
|
|
|
|
|
Taxation
|
4
|
-
|
1,296
|
2,305
|
|
|
|
|
|
Profit /(loss) for the period and total
comprehensive loss for the period
|
|
17,798
|
(3,879)
|
(11,111)
|
|
|
|
|
|
Profit /(loss) per
share:
|
|
|
|
|
Basic profit
/(loss) for the period
|
5
|
7.06p
|
(1.55)p
|
(4.42)p
|
Diluted profit /(loss) for the
period
|
5
|
7.06p
|
(1.55)p
|
(4.42)p
|
Interim
consolidated statement of changes in equity
For the six
months ended 31 January 2024
|
Issued
equity
|
Share
|
Warrant
|
Share based
payment
|
Merger
|
Capital
contribution
|
Revenue
|
|
|
capital
|
premium
|
reserve
|
reserve
|
reserve
|
reserve
|
reserve
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
01 August 2022
|
4,316
|
53,355
|
968
|
1,543
|
920
|
195
|
(49,493)
|
11,804
|
|
|
|
|
|
|
|
|
|
Loss for the six months to
31 January 2023
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,879)
|
(3,879)
|
Issue of share capital
|
228
|
5,467
|
-
|
-
|
-
|
-
|
-
|
5,695
|
Expenses of placing
|
-
|
(287)
|
-
|
-
|
-
|
-
|
-
|
(287)
|
Exercise of options
|
1
|
5
|
-
|
-
|
-
|
-
|
-
|
6
|
Share-based payments
|
-
|
-
|
-
|
214
|
-
|
-
|
-
|
214
|
|
|
|
|
|
|
|
|
|
At
31 January 2023
|
4,545
|
58,540
|
968
|
1,757
|
920
|
195
|
(53,372)
|
13,553
|
|
|
|
|
|
|
|
|
|
Loss for the six months to
31 July 2023
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,732)
|
(7,732)
|
Share-based payments
|
-
|
-
|
-
|
211
|
-
|
-
|
-
|
211
|
|
|
|
|
|
|
|
|
|
At
31 July 2023
|
4,545
|
58,540
|
968
|
1,968
|
920
|
195
|
(60,604)
|
6,532
|
|
|
|
|
|
|
|
|
|
Profit for the six months to
31 January 2024
|
-
|
-
|
-
|
-
|
-
|
-
|
17,798
|
17,798
|
Exercise of options
|
2
|
4
|
-
|
-
|
-
|
-
|
-
|
6
|
Share-based payments
|
-
|
-
|
-
|
268
|
-
|
-
|
-
|
268
|
|
|
|
|
|
|
|
|
|
At
31 January 2024
|
4,547
|
58,544
|
968
|
2,236
|
920
|
195
|
(42,806)
|
24,604
|
Interim
consolidated statement of financial position
As at 31
January 2024
|
|
31 January
2024
|
31 January
2023
|
31 July
2023
|
|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
|
£000
|
£000
|
£000
|
|
Notes
|
|
|
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant and
equipment
|
|
35
|
43
|
39
|
Intangible assets
|
|
51
|
59
|
54
|
Goodwill
|
|
1,191
|
1,192
|
1,192
|
Right-of-use assets
|
|
240
|
563
|
402
|
|
|
1,517
|
1,857
|
1,687
|
Current assets
|
|
|
|
|
|
|
|
|
|
Trade and other
receivables
|
|
9,275
|
567
|
572
|
Income tax asset
|
|
2,305
|
3,661
|
2,305
|
Cash and cash equivalents
|
|
13,126
|
9,642
|
4,220
|
|
|
24,706
|
13,870
|
7,097
|
Total assets
|
|
26,223
|
15,727
|
8,784
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
(1,361)
|
(1,587)
|
(1,828)
|
Lease liabilities
|
|
(253)
|
(329)
|
(337)
|
|
|
(1,614)
|
(1,916)
|
(2,165)
|
Non-current liabilities
|
|
|
|
|
Trade and other payables
|
|
-
|
-
|
-
|
Lease liabilities
|
|
(5)
|
(258)
|
(87)
|
|
|
(5)
|
(258)
|
(87)
|
|
|
|
|
|
Total liabilities
|
|
(1,614)
|
(2,174)
|
(2,252)
|
Net
assets
|
|
24,604
|
13,553
|
6,532
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
Issued equity capital
|
6
|
4,547
|
4,545
|
4,545
|
Share premium
|
6
|
58,544
|
58,540
|
58,540
|
Share-based payment
reserve
|
|
2,236
|
1,757
|
1,968
|
Warrant reserve
|
|
968
|
968
|
968
|
Merger reserve
|
|
920
|
920
|
920
|
Capital contribution
reserve
|
|
195
|
195
|
195
|
Revenue reserve
|
|
(42,806)
|
(53,372)
|
(60,604)
|
Total equity
|
|
24,604
|
13,553
|
6,532
|
|
|
|
|
|
Approved by the Board and authorised for issue
on 27 March 2024
Brad Hoy
Chief Financial Officer
26 March 2024
Interim consolidated cash flow
statement
For the six
months ended 31 January 2024
|
Six months
|
Six months
|
Year
|
|
to
|
to
|
to
|
|
31 January
|
31 January
|
31 July
|
|
2024
|
2023
|
2023
|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
£000
|
£000
|
£000
|
|
|
|
|
Profit /(loss) after tax and
interest
|
17,798
|
(3,879)
|
(11,111)
|
Adjustments for:
|
|
|
|
Depreciation of property, plant and
equipment
|
14
|
12
|
26
|
Depreciation of right-of-use
assets
|
163
|
143
|
305
|
Amortisation of intangible
assets
|
4
|
3
|
7
|
Net foreign exchange
differences
|
|
|
(89)
|
Share-based payments
|
268
|
214
|
425
|
Finance income
|
(158)
|
(15)
|
(22)
|
Finance costs
|
8
|
12
|
24
|
Taxation
|
-
|
(1,296)
|
(2,305)
|
Changes in working
capital:
|
|
|
|
Decrease/(increase) in trade and other receivables
|
(8,703)
|
2,502
|
2,497
|
(Decrease)/increase in trade and other payables
|
(467)
|
(462)
|
(211)
|
Cash
outflow from operating activities
|
8,927
|
(2,766)
|
(10,454)
|
Research and development tax credit
received
|
-
|
2,063
|
4,427
|
Net
cash outflow from operating activities
|
8,927
|
(703)
|
(6,027)
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
Purchases of property, plant and
equipment
|
(10)
|
(8)
|
(18)
|
Finance income
|
158
|
15
|
22
|
Net
cash outflow from investing activities
|
148
|
7
|
4
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
Payment of lease
liabilities
|
(175)
|
(155)
|
(329)
|
Proceeds from the issue of ordinary
share
capital
|
6
|
5,701
|
5,701
|
Expenses of placing
|
-
|
(287)
|
(287)
|
Net
cash inflow from financing activities
|
(169)
|
5,259
|
5,085
|
|
|
|
|
Increase/(decrease) in cash and cash
equivalents
|
8,906
|
4,563
|
(938)
|
Net foreign exchange
differences
|
|
|
79
|
Cash and cash equivalents at the
start of the period
|
4,220
|
5,079
|
5,079
|
Cash, cash equivalents and deposits at the end of the
period
|
13,126
|
9,642
|
4,220
|
Notes to the
interim financial report
For the six
months ended 31 January 2024
1. Corporate
information
The principal activity of the C4X Discovery
Holdings plc is research and development, a review of which is
included in the Chairman's and CEO's Statement.
C4XD is incorporated and domiciled in the
United Kingdom and its registered number is 09134041. The address
of the registered office is Manchester One, 53 Portland Street,
Manchester, M1 3LD.
The interim financial information was approved
for issue on 25 March 2024.
2. Accounting
policies
Basis of
preparation
The accounting policies adopted in this interim
financial report are consistent with those followed in the
preparation of the Group's annual report and accounts for the year
to 31 July 2023.
The interim financial information for the six
months ended 31 January 2024 and 31 January 2023 is unaudited and
does not constitute statutory accounts as defined in the Companies
Act 2006. This interim financial report includes audited
comparatives for the year to 31 July 2023. The 2023 annual
report and accounts received an unqualified audit opinion and have
been filed with the Registrar of Companies.
These interim financial statements have been
prepared in accordance with IAS34 Interim Financial
Reporting. They do not include all the information required
for a complete set of IFRS financial statements. However,
selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in the Group's financial position and performance since the
last annual consolidated financial statements as at and for the
year ended 31 July 2023.
Basis of
consolidation
This interim financial report consolidates the
financial statements of C4X Discovery Holdings plc and the entities
it controls (its subsidiaries).
3. Revenue
|
Six months
to
|
Six months
to
|
Year to
|
|
31 January
|
31 January
|
31 July
|
|
2024
|
2023
|
2023
|
|
£000
|
£000
|
£000
|
Revenue recognised at a point in
time
- Right-to-use
licence revenue
- Milestone
revenue
|
15,950
8,683
|
1,652
-
|
1,652
-
|
Revenue recognised over
time
- Research
services revenue
- Consultancy
services
|
13
-
|
24
-
|
42
16
|
Total Revenue
|
24,646
|
1,676
|
1,710
|
Revenue in the current period has been generated
from contracts with two customers.
Revenue of £15.9 million from the agreement
with Indivior for the outright acquisition of Orexin-1 Receptor
Antagonist Programme executed on 31 July 2023 was subject to
certain performance obligations which were met on 4 August 2023
resulting in this revenue being recognised within the six months to
31 January 2024.
The revenue attributed to Milestone attainment
was generated from one customer and is recognised at a point in
time.
Revenue In the prior periods was generated from
contracts with a two customer. In the prior period, the milestone
revenue was determined to have one performance obligation and was
recognised at a point in time.
The revenue from the right-to-use licence
agreement was recognised at a single point in time when transfer of
intellectual property was completed. The revenue from provision of
consulting and technical support services under the same agreement
was recognised over time when the services were
provided.
The revenue attributed to the delivery of
research services was recognised on the same basis as in the
previous period.
4. Taxation
|
Six months
to
|
Six months
to
|
Year to
|
|
31 January
|
31 January
|
31 July
|
|
2024
|
2023
|
2023
|
|
£000
|
£000
|
£000
|
UK corporation tax losses in the
period
|
-
|
-
|
-
|
Research and development income tax
credit receivable
|
-
|
(1,296)
|
(2,305)
|
Adjustment in respect of prior
periods
|
-
|
-
|
-
|
|
-
|
(1,296)
|
(2,305)
|
5.Loss per
share
|
31 January
|
31 January
|
31 July
|
2024
|
2023
|
2023
|
|
£000
|
£000
|
£000
|
|
|
|
|
Profit /(loss) for the financial period
attributable to equity shareholders
|
17,798
|
(3,879)
|
(11,111)
|
Weighted average number of shares:
|
No.
|
No.
|
No.
|
Ordinary shares in issue
|
252,169,076
|
250,048,502
|
251,102,072
|
Number of exercisable share options
and warrants
|
32,967
|
305,197
|
855,664
|
Ordinary shares in issue for purposes
of diluted EPS
|
252,202,043
|
250,353,700
|
251,957,736
|
Basic and diluted profit /(loss)
per share
(pence)
|
7.06p
|
(1.55)p
|
(4.42)p
|
The number of exercisable share options and
warrants above are those deemed to be potentially dilutive in
nature as their exercise price is less than the average share price
for the period. As the group made a loss in the comparative period
the effects of these potential ordinary shares are not
dilutive.
6.
Issued share capital and share premium
|
Deferred
shares
|
Ordinary
shares
|
Share
capital
|
Deferred
shares
|
Warrant
reserve
|
Share
premium
|
Total
|
|
Number
|
Number
|
£000
|
£000
|
£000
|
£000
|
£000
|
Ordinary and deferred shares as at 31 January
2023
|
2,025,000
|
252,119,597
|
2,520
|
2,025
|
968
|
58,540
|
64,053
|
Ordinary and deferred shares as at 31 July
2023
|
2,025,000
|
252,119,597
|
2,520
|
2,025
|
968
|
58,540
|
64,053
|
Issue of share capital on exercise of
options
|
-
|
107,500
|
2
|
-
|
-
|
4
|
6
|
Ordinary and deferred shares
as at 31 January 2024
|
2,025,000
|
252,227,097
|
2,522
|
2,025
|
968
|
58,544
|
64,059
|
7.
Interim financial report
A copy of this interim condensed financial
report is available on C4XD's website at www.c4xdiscovery.com.