TIDMEVG

RNS Number : 0743O

Evgen Pharma PLC

08 June 2022

Evgen Pharma plc

(the "Company")

Full Year Results

8 June 2022 - Evgen Pharma plc (AIM: EVG), the clinical stage drug development company developing sulforaphane-based medicines for the treatment of multiple diseases, announces its audited results for the year ended 31 March 2022.

Operational highlights

-- In vitro pre-clinical work supports SFX-01 use in metastatic breast cancer patients who have become resistant to the widely used class of CDK4/6 inhibitor drugs

   --      Malignant glioma Orphan Drug Designation for SFX-01 granted by FDA 

-- Publication of positive preclinical in vitro and in vivo data in glioblastoma from two independent groups of collaborators, in Italy and New Zealand

-- Encouraging early in vitro data for SFX-01 in Juvenile Myelomonocytic Leukaemia ("JMML") at the MRC Weatherall Institute, University of Oxford

-- Scale-up of the active ingredient in SFX-01 to commercial scale achieved with a number of process improvements

-- JuvLife partnership around the application of the Sulforadex(R) technology continues to progress well; US market launch of a JuvLife nutritional health product is anticipated around end- 2023

-- New formulation of SFX-01 generated in tablet form enabling scale-up to supply late-stage clinical trials and commercial use

-- Dr Helen Kuhlman and Dr Glen Clack appointed as Chief Business Officer and Chief Medical Officer respectively, completing the senior management team

   --      Outlook: 

o Intention to start healthy volunteer trial in Q4 2022 with new SFX-01 formulation

o Final preclinical work in GBM completed and now in late-stage preparation for a Phase Ib/IIa trial due to start in Q4 2022

o New academic collaborations with La Sapienza University, Rome in SFX-01 radiosensitisation and Michigan University in colon cancer

Financial highlights

   --         Financial performance in-line with expectations: 

o Cash and short-term deposits at 31 March 2022 of GBP9.0m (31 March 2021: GBP11.6m); Group funded to Q4/2023

o Post-tax loss of GBP2.7m (2021: loss of GBP2.7m)

o Cash outflow from operations of GBP2.6m (2021 outflow of GBP2.9m)

Dr Huw Jones, CEO of Evgen Pharma, said:

" Our focus during the year has been on achieving the objectives set at our 2021 fundraise, particularly around manufacturing, formulation and clinical trials preparation. With this groundwork now complete, we are pleased to have achieved very visible progress in each of our development programmes and we are anticipating another busy year which will include clinical data from both the Phase I/Ib volunteer and Phase Ib/IIa glioblastoma trials."

Enquiries:

 
 Evgen Pharma plc                        Tel: +44 207 457 2020 
  Dr Huw Jones, CEO                        enquiries@evgen.com 
  Richard Moulson, CFO 
 FinnCap (Nominated Advisor and          Tel: +44 20 7220 0500 
  Broker) 
  Geoff Nash / Teddy Whiley (Corporate 
  Finance) 
  Alice Lane/Nigel Birks (ECM) 
                                        ---------------------- 
 Instinctif Partners                     Tel: +44 207 457 2020 
  Melanie Toyne-Sewell / Rozi Morris      Evgen@Instinctif.com 
  / Agnes Stephens / Adam Loudon 
                                        ---------------------- 
 

Notes to Editors

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 Company's lead asset, SFX-01, is a patented composition of synthetic sulforaphane and alpha-cyclodextrin and has undergone clinical trials for oestrogen-positive (ER+) metastatic breast cancer. It will be entering the clinic in glioma/glioblastoma later in 2022. In September 2021 the FDA granted Orphan Drug status to SFX-01 in malignant glioma.

The Company also has a wide number of collaborations with leading academic centres in the UK, Europe and AsiaPac as part of the continuing strategy to build the data set of safety and efficacy around the compound. With respect to non-core areas, Evgen signed an outlicensing deal with JuvLife, the dietary products and functional foods division of Juvenescence Ltd, for the development of a naturally-sourced sulforaphane nutritional health supplement, stabilised using Evgen's Sulforadex(R) technology.

The Company commenced operations in January 2008 and has its headquarters and registered office at Alderley Park, Cheshire. 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

STRATEGIC REPORT

CHAIRMAN'S STATEMENT

In the last year we have had a strong focus on achieving the objectives we set out following our 2021 fundraise. In particular on manufacturing and formulation and clinical trials preparation. This groundwork sets the stage for very visible progress in our development programmes in the current year.

We have continued to concentrate our resources on specific diseases and developing these to proof of concept for onward out-licensing. This has allowed us to focus on the opportunities we believe are appropriate to our size, capabilities and resources. Equally, and because of the breadth of opportunities in sulforaphane science, we have enabled academic and biopharma companies to access our technology in other areas where there is a compelling rationale, at minimal expenditure to Evgen.

We have been prudent in the management of our finances, with a cash balance as at the end of the year of GBP9.0m (2020: GBP11.6m). The fundraise in March 2021, which generated gross proceeds of GBP11m, has enabled us to strengthen our management team and undertake a number of activities that would otherwise have constrained our development. We have made much progress, and some aims, for example the manufacturing technology transfer and glioblastoma pre-clinical validation, have been completed.

Our partnership with JuvLife, the dietary products and functional foods division of Juvenescence Ltd, is an additional application of our Sulforadex(R) technology in a field we would not otherwise be able to exploit. JuvLife has a well-qualified and experienced team that has made good progress during the last year. With a US market launch planned for around the end of 2023, this monetisation of our sulforaphane technology and expertise will provide valuable revenues and risk mitigation for shareholders, as well as validation of our strategy.

Our senior team was completed with the appointments of Dr Helen Kuhlman as Chief Business Officer and Dr Glen Clack as Chief Medical Officer. This has resulted in a significantly more active business development activity, giving us a higher profile amongst potential partners. It has also brought considerable clinical trial expertise, both internally and via key opinion leaders, and thus allowed us to design our clinical trials to give the best chance of success.

At the end of the year we had sufficient cash resources to fund us through the potential value enhancement points from both completion of current pre-clinical projects and, in particular, clinical data from both the Phase I/Ib volunteer and phase Ib/IIa glioblastoma trials. We are also going to be seeking to extend our business partnerships around our technology and development pipeline. We look forward to reporting further achievements that add value for our shareholders in the current year.

Barry Clare

Chairman

STRATEGIC REPORT

CHIEF EXECUTIVE'S REPORT

In the past year we have concentrated on the projects and programmes for which we raised funds in March 2021, as a result, it has been a busy year for the Company. In particular, we have focused on pre-clinical projects, technology transfer and scale-up of manufacturing, and preparations for two clinical trials - a phase I volunteer study and a glioblastoma efficacy study. The manufacturing programme was initiated shortly after the funding was closed and has since been completed. The pre-clinical programmes have been progressed with some concluded, and we are in the late stages of preparation for the two clinical trials. More detail of this progress is described below.

Looking forward, the glioblastoma trial will follow on shortly after the human volunteer study commences. The goal is to generate sufficiently compelling efficacy data that a large partner licenses the programme and progresses it into a registration study(ies). Equally, the pre-clinical work in mBC is designed to attract a partner to support the next clinical development in this indication. At the same time, we will continue seeking new partnerships and collaborations.

Clinical stage programmes

Metastatic breast cancer ("mBC")

Breast cancer remains the biggest cause of cancer deaths in women worldwide, and ER+ve/HER2-ve breast cancer accounts for circa two thirds of all such cancers. The drugs used increasingly in first line treatment of ER+ve/HER2-ve mBC patients, being CDK4/6 inhibitors, which were first approved for general use in the US in 2017 now have global sales in excess of $5 billion per annum.

Evgen has generated encouraging data with SFX-01 in mBC in a Phase II clinical trial. Since the commencement of this trial, the class of drugs known as CDK4/6 inhibitors have increasingly been adopted in these patients. Evgen is broadening the investigation into how SFX-01, in combination with other treatments, can improve outcomes for patients with HR+ breast tumours that have become resistant to this relatively new class of agents. This includes research into STAT3 and pSTAT3, a protein that controls transcription of information from DNA to messenger RNA; and SHP2, a non-receptor protein tyrosine phosphatase that is associated with many cancers including breast cancer.

In particular, we are expanding our work with Professor Rob Clarke at the Manchester Breast Centre with in vitro pre-clinical work to assess the impact of SFX-01 in CDK4/6 inhibitor resistance models. An increasing body of in vitro data from these models shows that SFX-01 may suppress tumour growth and metastasis in patients who have become resistant to CDK4/6 inhibitors. Encouragingly, SFX-01 reduces the viability and mammosphere colony formation of palbociclib-resistant tumour cell lines in vitro.

In addition, this extended collaboration will include in vivo models to provide the optimum support for clinical trial design and/or licensing in patients with ER+ve/HER2-ve breast cancer, where CDK4/6 inhibitors such as palbociclib are showing weakening effectiveness. Evgen anticipates data from both in vitro and in vivo work later in the year.

Glioma/glioblastoma

Our brain cancer programme progressed strongly in the last year. Glioma is the most common form of brain tumour affecting around 5 per 100,000 people. The more severe, grade IV classification, glioblastoma, is a very serious form of malignant brain tumour representing 45% of all cases and has a poor prognosis with median survival of around 14 months. The five-year survival of the severe grades is 5%. The therapeutic options for glioma are limited to surgery, radiotherapy and the one drug widely available, temozolomide. There is a clear unmet need for more treatments for use in conjunction with the current standard of care.

A collaboration with Dr Claudio Festuccia and colleagues at the Universities of L'Aquila, Rome and Rieti, Italy has generated highly positive data for SFX-01 in pre-clinical models of glioma and glioblastoma. Using standard in vitro and in vivo pre-clinical models as well as orthotopic models, where glioma cells are implanted in brain tissue representing a more disease-relevant model, both tumour shrinkage and significantly extended survival times were demonstrated for SFX-01. Furthermore, SFX-01 was also found to potentiate (i.e. substantially increase) the therapeutic effect of radiotherapy in these models. The first of two papers relating to this has been published in a peer-reviewed journal and a second paper is being finalised for submission. ( Colapietro et al, Pharmaceuticals, 2021, 14, 1082 ).

Further pre-clinical work conducted by Dr Euphemia Leung and Prof Bruce Baguley of the University of Auckland, New Zealand in GBM cells has been published in the pre-print journal BioRxIV ( Leung, Wright and Baguley, 2021 ). This in vitro data describes the effect of SFX-01 in GBM cells and 3D spheroids from several patients in New Zealand, together with the more commonly used commercially available cell lines. 3D spheroids are aggregations of tumour cells that more closely reflect the structure of tumours in patients. In these in vitro experiments, SFX-01 demonstrated inhibition of glioblastoma cell growth, supporting the results from the work of Dr Festuccia.

In September 2021, we received the grant of Orphan Drug Designation from the FDA in the US for Malignant Glioma, affording the programme additional data protection and other financial incentives.

We are now at a late stage in designing a Phase Ib/IIa clinical study and liaising with potential trial sites in the UK and across Europe. The trial is planned to commence in Q4 2022 and will follow on shortly after the human volunteer study commences. It is designed as a phase Ib/IIa, randomised, double-blind, placebo-controlled trial with sequential modules that enable the trial to be adapted as clinical data is generated. Initially c.20 patients will be recruited; depending on results this may increase by up to a further 70 patients to achieve proof of concept in both methylated and unmethylated glioblastoma patients. The goal is to generate sufficiently compelling efficacy data to attract a partner to license the programme and progress it into a registration study. Data from this trial will be released during 2023.

Other clinical trials

An important use of proceeds from the fundraise completed in March 2021 was to conduct a Phase I/Ib study in healthy volunteers of our new SFX-01 formulation. The trial will be a placebo-controlled, dose-escalating, randomised trial that will assess the pharmacokinetic (how a drug is absorbed and circulates in the body), and pharmacodynamic (how a drug engages with our target molecules) properties of the new form and formulation.

The overall design of the trial is now complete, a Clinical Research Organisation has been contracted to recruit subjects and conduct the trial, and a dialogue with the MHRA has commenced. The intention is to start the trial in Q4 this year as soon as the new tablet formulation of SFX-01 has been finalised and manufactured in sufficient quantities. We expect to announce the results during the first half of 2023.

As part of the UK's initiative to fight the global COVID-19 pandemic, Evgen, Dundee University and NHS Tayside worked together to assess SFX-01 in patients with respiratory distress due to COVID-19 and other infective agents. The trial was stopped when an analysis of the interim data did not show sufficient efficacy; with hindsight, it is probable that the patients enrolled had progressed too far and were too ill to respond. However, the costs of the trial were limited because they were mostly covered by the grant income, and as a positive, the trial added 65 additional patients to our database of safety and tolerability of SFX-01. Overall, we are proud that we were part of the COVID-19 effort.

Pre-clinical programmes

We continue to support academic research to broaden the potential range of applications for SFX-01 and increase our mechanistic understanding in these different disease areas.

Haematological malignancies

Pre-clinical data has demonstrated that SFX-01 is effective in in vitro models of certain blood cancers including Juvenile Myelomonocytic Leukaemia (JMML) and Acute Myelomonocytic Leukaemia (AML).

JMML is a very rare form of blood cancer that predominantly affects young children. It is an aggressive and difficult to treat disease and currently the only effective treatment for most patients is allogeneic haematopoietic stem cell transplantation (HSCT).

In a study at the MRC Weatherall Institute, University of Oxford, the effect of SFX-01 on cells from tissue donated by patients with JMML through the UK Paediatric MDS/JMML programme was investigated. The data demonstrated significant reduction of cell proliferation and increased apoptosis (cell death) of JMML stem cells in the presence of SFX-01, compared to normal controls. The study also showed that SFX-01 significantly impacted cell proliferation and increased cytotoxicity in GDM-1 cells, an AML cell line.

Whilst this preliminary data is from a small sample size, the effect is statistically significant in reducing cell proliferation and increasing apoptosis. A preclinical and clinical strategy for a development programme of SFX-01 in blood cancers such as JMML and AML is being assessed.

Other cancers

We have agreed to support two academic groups that have requested provision of SFX-01 for use in cancer models of interest to them:

-- A group at the University of Rome, Department of Radiology and Radiotherapy wishes to investigate SFX-01 as a radio sensitising agent for the treatment of Rhabdomyosarcoma, a rare juvenile cancer. This follows the data generated at the University of L'Aquila showing an enhanced effect from radiotherapy in GBM models with administration of SFX-01. The data generated could support the use of SFX-01 in radiotherapy more generally.

-- A group at the University of Michigan wishes to investigate SFX-01 for anti-inflammatory and anti-tumour activity in two mouse models of colon cancer, as well as human organoid models of familial adenomatous polyposis and colorectal cancer.

Outlicensing

With the expansion of the management team, we have substantially increased our business development activities, including attendances at a number of relevant conferences and an ongoing dialogue with industry over potential in-licensing and out-licensing transactions.

Our first commercial out-licensing deal was signed with Juvenescence in September 2020. This was for a license to our Sulforadex(R) sulforaphane stabilisation technology in a number of non-pharmaceutical applications. JuvLife, the dietary products and functional foods division of Juvenescence Ltd, has since been making good progress with the development of a naturally-sourced sulforaphane nutritional health supplement, stabilised using our Sulforadex(R) technology. In particular, it has identified a source of sulforaphane and completed small scale batches of the complexed product in a commercial facility. The scale-up process is now underway to enable safety studies to commence.

We have supported this development with our expertise in sulforaphane science and chemistry. Juvenescence is planning a market launch around the end of 2023 which will yield milestones of more than $1.5m at that point, with further sales-related milestones and royalties to follow.

This agreement monetises one element of Evgen's sulforaphane technology platform within a timescale considerably shorter than that typical of pharmaceutical development. It contains provisions which ensure a clear differentiation between potential nutritional health products and pharmaceutical products, including limitations on daily dose.

We will continue to seek such partnerships and collaborations around both core and non-core assets, including our Sulforadex(R) technology.

Manufacturing programme

A further use of proceeds from the March 2021 funding was to transfer our production from a small facility in the US, where the Sulforadex(R) IP was created, to a global pharmaceutical manufacturer with the know-how and experience to scale-up the production process from prototype to in-market. This has been achieved to the point where a recent manufacturing run achieved almost a 10x higher yield, in a process which has been simplified and is significantly more cost-effective. In addition, we have replaced the hand-filled capsules used previously with an enteric-coated tablet formulation which can also be produced at scale. Unlike the capsules, the tablets have a coating which releases sulforaphane to a targeted part of the intestine. This is expected to improve the pharmacokinetics of SFX-01 and to minimise any gastro-intestinal side effects.

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

We are currently producing sufficient active pharmaceutical ingredient , drug product and placebo tablets to support multiple clinical trials.

People

During the year we have strengthened our senior management team in two key roles: Dr Glen Clack has joined as Chief Medical Officer and Dr Helen Kuhnman as Chief Business Officer. Both are highly experienced in their fields and we now have the senior level expertise we need to execute our plans and programmes.

Outlook

Since the 2021 fundraise we have achieved a number of key clinical and operational achievements that will lead to the commencement of two clinical trials by the end of the calendar year, with the generation of data during 2023. Potentially we will also have pre-clinical data sets to support further our breast cancer programme and that point to trials in other indications. Our partner Juvenescence is progressing well towards market launch around the end of 2023 and this will provide commercial revenues to defray a material part of our cost base. In the meantime, we will be advancing preclinical studies and our business development strategy.

I would like to thank our shareholders for their continued support and to the team for their efforts in driving the strategy forward. We believe the next 12 months will be extremely busy and that we will build further value.

Dr Huw Jones

Chief Executive

KEY PERFORMANCE INDICATORS

Key Performance Indicators include a range of financial and other 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.

 
                                                            2022       2021 
                                                          (GBPm)     (GBPm) 
-----------------------------------------------------  ---------  --------- 
 Year-end cash, short-term investments and cash held 
  on deposit                                                 9.0       11.6 
 

The decrease in year-end cash reflects working capital, manufacturing, pre-clinical and clinical expenditures less receipt of the R&D tax credit (GBP0.53m). There was no fundraising activity in the year.

 
                                                           2022       2021 
                                                         (GBPm)     (GBPm) 
----------------------------------------------------  ---------  --------- 
 Net cash outflow from operating activities (before 
  monies placed on fixed term deposits)                     2.6        2.9 
 

The net cash outflow reflects corporate costs and the costs incurred in manufacturing scale-up, pre-clinical and clinical expenditures.

 
                      2022       2021 
                    (GBPm) 
                               (GBPm) 
----------------  --------  --------- 
 Operating loss        3.2        3.2 
 

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

FINANCIAL REVIEW

The financial performance for the year ended 31 March 2022 was in line with expectations.

Losses

The total loss for the year was GBP2.7m (31 March 2021: GBP2.7m) including a charge for share-based compensation of GBP0.1m (2021 credit: GBP0.1m). Operating expenses excluding share-based compensation were lower than in 2021 at GBP3.0m (2021: GBP3.5m) reflecting completion of toxicology in the prior year and reduced manufacturing technology transfer costs, offset in part by an increase in payroll costs with the recruitment of additional senior staff and preparatory work for the forthcoming clinical trials.

Research and development (R&D) expenditure

Our external spend on R&D expenditure was GBP1.4m, a reduction of GBP0.6m (31 March 2021: GBP2.0m) on the prior year. This reflects the completion of the toxicology and technology transfer costs noted above, and we expect R&D costs to increase in the current year with manufacture of SFX-01 for the planned clinical trials and the costs associated with such trials.

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. Where such options lapse ahead of their vesting date the relevant charges are written back. As a consequence of certain option lapses there was an overall charge for the year in relation to share-based payments of GBP0.1m (2021 credit: GBP0.11m), which has no impact on cash flows.

Headcount

Average headcount of the Group for the year was 9 (2021: 8).

Taxation

The Group has elected to claim research and development tax credits under the small or medium enterprise research and development scheme of GBP0.44m (2021: GBP0.54m).

Share capital

No issues of shares were made during the year. At 31 March 2022 and 31 March 2021 there were 274,888,117 shares of 0.25p each in issue.

Cash flows and financial position

The cash position (including short term deposits) at 31 March 2022 decreased to GBP9.0m (31 March 2021: GBP11.6m) reflecting R&D and corporate costs, less GBP0.53m received from R&D tax credits.

GOVERNANCE

Employee engagement

As a very small company in terms of staff, Board members have multiple points of contact with staff; through Board meeting feedback, participation in weekly management meetings involving all staff, and ad hoc interactions in relation to specific matters.

These forums provide staff with an opportunity to give their views which can then be taken into account in making decisions likely to affect their interests.

Specific matters of concern to them as employees are dealt with in management meetings and by email. Corporate developments and Company performance are discussed weekly in management meetings.

All staff are eligible for the Group's share option scheme and this encourages involvement in the Company's performance.

Stakeholder Engagement

The Group has a small number of major suppliers and consultants that support its delivery of strategy and corporate goals. The selection of, relationships with, and execution of, contracted work by these parties is considered at least weekly by the Executive Directors and at each Board meeting by all Directors. Where appropriate, the Chairman and/ or non-executive directors participate in engagement with these parties, and where appropriate, Board members are involved in meetings with such parties.

PRINCIPAL RISKS AND UNCERTAINTIES

Evgen is a biopharmaceutical company and, in common with other companies operating in the sector, is subject to a number of risks. The principal risks and uncertainties identified by the Group for the year ending 31 March 2022 are set out below.

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 to some delays in pre-clinical programmes because our scientific partners have had access to their laboratories restricted. Continuation of the pandemic for further sustained periods may affect:

-- 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 pre-clinical, clinical and production programmes to agreed timelines.

Development

The Group is at a relatively early stage of development and may not be successful in its efforts to develop approved or marketable products. Technical risk is present at each stage of the development process which is a highly regulated environment which presents technical and operational risk. There can be no guarantee that the Group will be able to, or that it will be commercially advantageous for the Group to, develop its Intellectual Property through entering into licensing deals with pharmaceutical companies.

Commercial

The biotechnology and pharmaceutical industries are very competitive. The Group's competitors include major multinational pharmaceutical companies, biotechnology companies and research institutions. Many of its competitors have substantially greater financial, technical and other resources. The Group's competitors may succeed in developing, acquiring or licensing drug product candidates that are more effective or less costly than those the Group is developing, or may develop, and this may have a material adverse impact on the Group.

Regulatory

The Group's operations are subject to laws, regulatory approvals, and certain government directives, recommendations and guidelines. There can be no assurance that future legislation will not impose further government regulation which may adversely affect the business or financial condition of the Group.

Intellectual property (IP)

The Group's success depends in part on its ability to obtain and maintain patent protection for its technology and potential products in the United States, Europe and other countries. If the Group is unable to obtain and maintain patent protection for its technology and potential products, or if the scope of patent protection is not sufficiently broad, competitors could develop and commercialise similar technology and products, which could materially affect the Group's ability to successfully commercialise its technology and potential products. The Group is exposed to additional IP risks, including infringement of IP rights, involvement in lawsuits and the inability to protect the confidentiality of its trade secrets which could have an adverse effect on the success of the Group.

Financial

The Group has a limited operating history, has incurred significant losses since its inception and does not have any approved or revenue generating products. The Group expects to incur losses for the foreseeable future, and there is no certainty that the business will generate a profit. The Group may not be able to raise additional funds that will be required to support its product development programs or commercialisation efforts, and any additional funds that are raised may cause dilution to existing shareholders.

Operational

The Group's future development and prospects depend to a material extent on the experience, performance and continued service of its senior management team including the Directors. The Directors believe the senior management team is appropriately structured for the Group's size and stage of development and is not overly dependent on any one individual. The Group has entered into contractual arrangements with these individuals with the aim of securing the services of each of them. Retention of these services or the identification of suitable replacements cannot be guaranteed. The loss of the service of any of the Directors or senior management and the cost of recruiting replacements may have a material adverse effect on the Group and its commercial and financial performance.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 March 2022

 
                                                                   Year        Year 
                                                                  ended       ended 
                                                               31 March    31 March 
                                                                   2022        2021 
                                                      Notes     GBP'000     GBP'000 
---------------------------------------------------  ------  ----------  ---------- 
 Revenue                                                              -         194 
---------------------------------------------------  ------  ----------  ---------- 
 Operating expenses 
 Operating expenses                                       3     (3,047)     (3,519) 
 Share based compensation                                 4       (146)         112 
---------------------------------------------------  ------  ----------  ---------- 
 Total operating expenses                                 3     (3,193)     (3,407) 
---------------------------------------------------  ------  ----------  ---------- 
 Operating loss                                           3     (3,193)     (3,213) 
---------------------------------------------------  ------  ----------  ---------- 
 Finance income                                                      24           - 
 Loss on ordinary activities before taxation                    (3,169)     (3,213) 
 
 Taxation                                                           439         539 
---------------------------------------------------  ------  ----------  ---------- 
 Loss and total comprehensive expense attributable 
  to equity holders of the parent for the year                  (2,730)     (2,674) 
---------------------------------------------------  ------  ----------  ---------- 
 Loss per share attributable to equity holders 
  of the parent (pence)                                   6 
 
 Basic loss per share                                            (0.99)      (1.82) 
 Diluted loss per share                                          (0.99)      (1.82) 
---------------------------------------------------  ------  ----------  ---------- 
 

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION

as at 31 March 2022

 
                                                            Group                Company 
                                                        As at      As at      As at      As at 
                                                     31 March   31 March   31 March   31 March 
                                                         2022       2021       2022       2021 
                                             Notes    GBP'000    GBP'000    GBP'000    GBP'000 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 ASSETS 
 Non-current assets 
 Property, plant and equipment                              5          5          3          2 
 Intangible assets                                         53         66          -          - 
 Investments in subsidiary undertaking                      -          -         73         73 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 Total non-current assets                                  58         71         76         75 
 Current assets 
 Trade and other receivables                              125        235     10,487     10,513 
 Current tax receivable                                   425        519        361         21 
 Short-term investments and cash on 
  deposit                                               4,520      6,000      4,520      6,000 
 Cash and cash equivalents                       3      4,510      5,593      3,812      5,122 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 Total current assets                                   9,580     12,347     19,180     21,656 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 Total assets                                           9,638     12,418     19,256     21,731 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 LIABILITIES AND EQUITY 
 Current liabilities 
 Trade and other payables                                 411        607        369        562 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 Total current liabilities                                411        607        369        562 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 Equity 
 Ordinary shares                                          687        687        687        687 
 Share premium                                         27,870     27,870     27,870     27,870 
 Merger reserve                                         2,067      2,067          -          - 
 Share based compensation                                 490        359        490        359 
 Retained deficit                                    (21,887)   (19,172)   (10,160)    (7,747) 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 Total equity attributable to equity 
  holders of the parent                                 9,227     11,811     18,887     21,169 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 Total liabilities and equity                           9,638     12,418     19,256     21,731 
------------------------------------------  ------  ---------  ---------  ---------  --------- 
 
 

No Statement of Comprehensive Income is presented in these financial statements for the parent company as provided by Section 408 of the Companies Act 2006. The loss for the financial year dealt with in the financial statements of the parent company was GBP2,428k (2021: GBP1,212k).

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2022

 
                                                                          Share 
                                    Ordinary     Share    Merger          based   Retained 
                                      shares   premium   reserve   compensation    deficit     Total 
                                     GBP'000   GBP'000   GBP'000        GBP'000    GBP'000   GBP'000 
---------------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Balance at 31 March 2020                331    17,831     2,067          1,890   (17,915)     4,204 
 Total comprehensive expense 
  for the period                           -         -         -              -    (2,674)   (2,674) 
 Transactions with owners 
 Share issue - cash                      344     9,938         -              -          -    10,282 
 Share issue - options exercised          12       101         -            (2)          -       111 
 Share issue - lapsed options              -         -         -        (1,417)      1,417         - 
 Share based compensation 
  - share options                          -         -         -          (112)          -     (112) 
 Total transactions with 
  owners                                 356    10,039         -        (1,531)      1,417    10,281 
---------------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Balance at 31 March 2021                687    27,870     2,067            359   (19,172)    11,811 
---------------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Total comprehensive expense 
  for the period                           -         -         -              -    (2,730)   (2,730) 
 Transactions with owners 
 Share issue - lapsed options              -         -         -           (15)         15         - 
 Share based compensation 
  - share options                          -         -         -            146          -       146 
---------------------------------                                                           -------- 
 Total transactions with 
  owners                                   -         -         -            131         15       146 
---------------------------------  ---------  --------  --------  -------------  ---------  -------- 
 Balance at 31 March 2022                687    27,870     2,067            490   (21,887)     9,227 
---------------------------------  ---------  --------  --------  -------------  ---------  -------- 
 

CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS

for the year ended 31 March 2022

 
                                                  Group                    Company 
                                         Year ended   Year ended   Year ended   Year ended 
                                           31 March     31 March     31 March     31 March 
                                               2022         2021         2022         2021 
                                            GBP'000      GBP'000      GBP'000      GBP'000 
--------------------------------------  -----------  -----------  -----------  ----------- 
 Cash flows from operating activities 
 Loss before taxation                       (3,169)      (3,213)      (2,803)      (1,251) 
 Interest (income) / expense                   (24)            -         (24)            - 
 Depreciation and amortisation                   16           18            2            - 
 Share based compensation                       146        (112)          146        (112) 
--------------------------------------  -----------  -----------  -----------  ----------- 
                                            (3,031)      (3,307)      (2,679)      (1,363) 
 Changes in working capital 
 Decrease / (increase)in trade 
  and other receivables                         110         (39)           26      (2,150) 
 (Decrease)/increase in trade 
  and other payables                          (196)         (46)        (193)          167 
--------------------------------------  -----------  -----------  -----------  ----------- 
 Cash used in operations                       (86)         (85)        (167)      (1,983) 
 Taxation received                              533          466           35           76 
--------------------------------------  -----------  -----------  -----------  ----------- 
 Net cash used in operating 
  activities                                (2,584)      (2,926)      (2,811)      (3,270) 
 Cash flows (used in)/generated 
  from investing activities 
 Monies received from / (placed 
  on) fixed-term deposit                      1,480      (6,000)        1,480      (6,000) 
 Interest income / (expense)                     24            -           24            - 
 Acquisition of tangible fixed 
  assets                                        (3)          (5)          (3)          (2) 
--------------------------------------  -----------  -----------  -----------  ----------- 
 Net cash (used in)/generated 
  from investing activities                   1,501      (6,005)        1,501      (6,002) 
 Cash flows from financing activities 
 Proceeds from issue of shares                    -       11,110            -       11,110 
 Issue costs                                      -        (717)            -        (717) 
--------------------------------------               -----------               ----------- 
 Net cash generated from financing 
  activities                                      -       10,393            -       10,393 
--------------------------------------  -----------  -----------  -----------  ----------- 
 Movements in cash and cash 
  equivalents in the period                 (1,083)        1,462      (1,310)        1,121 
--------------------------------------  -----------  -----------  -----------  ----------- 
 Cash and cash equivalents at 
  start of period                             5,593        4,131        5,122        4,001 
--------------------------------------  -----------  -----------  -----------  ----------- 
 Cash and cash equivalents at 
  end of period                               4,510        5,593        3,812        5,122 
--------------------------------------  -----------  -----------  -----------  ----------- 
 

NOTES TO THE FINANCIAL STATEMENTS

1. General information

Evgen Pharma plc ('the Company') is a public limited company incorporated in England & Wales and whose shares are traded on the AIM market of the London Stock Exchange under the symbol EVG. The address of its registered office is Alderley Park, Congleton Road, Nether Alderley, Cheshire, United Kingdom, SK10 4TG. The principal activity of the Company is clinical stage drug development.

2. Significant accounting policies and basis of preparation

Basis of preparation

The financial information does not include all information required for full annual financial statements and therefore does not constitute statutory accounts within the meaning of section 435(1) and (2) of the Companies Act 2006 or contain sufficient information to comply with the disclosure requirements of UK-adopted International Accounting Standards. These should be read in conjunction with the Financial Statements of the Group for the year ended 31 March 2022 which were approved by the Board of Directors on 07 June 2022.

The report of the auditor for the year ended 31 March 2022 and 31 March 2021 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 consolidated financial statements have been prepared under the historical cost convention.

The consolidated financial statements are presented in Sterling (GBP) and rounded to the nearest GBP'000. This is the predominant functional currency of the Group, and is the currency of the primary economic environment in which it operates.

Basis of consolidation

The financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved when the Company has the power over the investee; is exposed, or has rights, to variable return from its involvement with the investee; and, has the ability to use its power to affect its returns. The Company reassesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement of Comprehensive Income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

3. Going concern

At 31 March 2022, the Group had cash and cash equivalents, including short-term investments and cash on deposit, of GBP9.0 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 the fourth quarter of 2023. They have therefore prepared the financial statements on a going concern basis.

4. Share-based payment charge

During the years ended 31 March 2022 and 31 March 2021, 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 risk-free 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 2022 was GBP146,125 (year to 31 March 2021: credit of GBP111,664).

5. Operating loss

An analysis of the Group's operating loss has been arrived at after charging/(crediting)

 
                                                     Year        Year 
                                                    ended       ended 
                                                 31 March    31 March 
                                                     2022        2021 
                                                  GBP'000     GBP'000 
-------------------------------------------    ----------  ---------- 
 Research and development expenses: 
 Amortisation of licences                              13          16 
 Other research and development                     1,446       2,011 
 Staff costs (including share-based 
  compensation)                                     1,153         716 
 Establishment and general: 
 Depreciation of property, plant and 
  equipment                                             3           2 
 Operating lease cost - land and buildings             12          18 
 Foreign exchange loss/(profit)                         2           9 
 Other administrative expenses                        564         635 
 Total operating expenses                           3,193       3,407 
---------------------------------------------  ----------  ---------- 
 

The Group has one reportable segment, namely the development of pharmaceutical products all within the United Kingdom.

6. 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.

As at 31 March 2022 the Group had 10,587,665 (2021: 6,402,754) share options outstanding which are potentially dilutive.

 
 The calculation of the Group's            Year ended    Year ended 
  basic and diluted loss per share           31 March      31 March 
  is based on the following data:                2022          2021 
                                              GBP'000       GBP'000 
 Loss for the year attributable 
  to equity holders                           (2,730)       (2,674) 
---------------------------------------  ------------  ------------ 
 
                                           Year ended    Year ended 
                                             31 March      31 March 
                                                 2022          2021 
                                               Number        Number 
 Weighted average number of ordinary 
  shares for basic loss per share         274,888,117   147,019,536 
---------------------------------------  ------------  ------------ 
 Effects of dilution: 
  Share options                                     -             - 
 Weighted average number of ordinary 
  shares adjusted for the effects 
  of dilution                             274,888,117   147,019,536 
---------------------------------------  ------------  ------------ 
 
                                           Year ended    Year ended 
                                             31 March      31 March 
                                                 2022          2021 
                                                Pence         Pence 
 Loss per share - basic and diluted            (0.99)        (1.82) 
---------------------------------------  ------------  ------------ 
 

The weighted average numbers of ordinary shares for the years ended 31 March 2021 and 2022 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.

7. Issued capital and reserves

Ordinary shares

 
                                     Group and Company 
 Ordinary shares of                      Share      Share 
  0.25p each                           Capital    Premium     Total 
                             Number    GBP'000    GBP'000   GBP'000 
 As at 31 March 2021 
  & 31 March 2022       274,888,117        687     27,870    28,557 
---------------------  ------------  ---------  ---------  -------- 
 

There were no new shares issued in the year ending 31 March 2022.

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 2022 and 2021 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.

8. Related party transactions

Group

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

Key management compensation is disclosed in Note 6 of the consolidated financial statements. Directors' emoluments are disclosed in the Remuneration Committee Report.

During the year ended 31 March 2022, the Group purchased consultancy services totalling GBP15,995 (year ended 31 March 2021: GBP19,225) from FD Consult Ltd, a company controlled by Richard Moulson. The amount owed to FD Consult Ltd at 31 March 2022 was GBPnil (31 March 2021: GBPnil).

During the year the Group purchased services from OBN, a company for which Huw Jones acts as a non-executive director, totalling GBP1,282 (2021: GBP180). The amount owed to OBN at 31 March 2022 was GBPnil (31 March 2021: GBPnil).

Company

The Company is responsible for financing and setting Group strategy. The Company's subsidiary carried out the Group's development strategy and managed the Group's intellectual property. The Company provides interest free and unsecured funding to its subsidiary with no fixed date of repayment.

9. 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 .

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END

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June 08, 2022 02:01 ET (06:01 GMT)

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