20th Sep 2010 07:00
SILENCE THERAPEUTICS plc
("Silence Therapeutics", "Silence" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2010
London, 20 September 2010 - Silence Therapeutics Plc (AIM: SLN), a leading international RNAi therapeutics company, today announces its interim results for the six months ended 30 June 2010.
Operational Highlights
·; Successful merger of Silence and US-based RNAi therapeutics company, Intradigm Corporation, completed in January 2010 to form a leading company in the field of RNA interference (RNAi).
·; In parallel with the merger, Silence raised £15.00m (gross) through an institutional placing and a subscription of shares at a price of 23p per share.
·; Novel RNAi patent issued covering the high-value PKN-3 cancer target in the U.S. Silence's lead drug candidate, Atu027 specifically targets PKN-3.
·; Small interfering RNA (siRNA) delivery collaboration with Dainippon Sumitomo Pharma Co., Ltd to examine delivery of RNAi therapeutics expanded to additional disease targets selected by Dainippon Sumitomo.
·; Strategic plan implemented to optimally organise Silence's resources following the merger with Intradigm and integration complete. All research activities now take place at the Company's Berlin location. Other functions, including business development, legal and certain drug development activities, have been relocated to the Company's new Redwood City, California facility.
·; One year extension of ongoing siRNA delivery collaboration with AstraZeneca to examine new and enhanced delivery approaches for RNAi therapeutics.
·; Quark Pharmaceuticals announced the successful completion of a Phase I trial of QP-1002 in prevention of delayed graft function. Data were presented at the 2010 American Transplant Congress. QP-1002 incorporates Silence's AtuRNAi technology.
·; Issuance of U.S. patent covering structural modifications associated with the innovative Zamore "Design Rules" which broadly cover methods for enhancing silencing activity of RNAi therapeutics.
·; Excellent progress made with the Company's Phase I trial of Atu027. This trial remains on track and, to date, 14 patients have been treated. Trial completion is expected in the second half of 2011.
Financial Highlights
·; Revenue for the six months ended 30 June 2010 was £716,090 (six months ended 30 June 2009: £856,626)
·; Research & Development costs increased to £4.40m (six months ended 30 June 2009: £2.55m) reflecting first time inclusion of the Intradigm business.
·; Administrative expenses increased to £3.23m (six months ended 30 June 2009: £1.92m) again reflecting first time inclusion of the Intradigm business.
·; In January Silence raised £15.00m (gross). The cash position as of 30 June 2010 was £6.84m (as at 31 December 2009: £1.13m). Cash usage in operating and investing activities in the half year amounted to £8.65 million. This included repayment of £1.94m of Intradigm's short term loans and a significant reduction in other liabilities from the December 2009 level.
Board and Management Changes
·; Phil Haworth J.D. PhD, former chief executive officer of Intradigm, assumed the role of Chief Executive Officer of the enlarged Group.
·; Jerry Randall ACA, who has been a non-executive director of the board since 2008, appointed Chairman following the resignation of Ian Ross.
·; Max Herrmann ACA appointed Chief Financial Officer and Company Secretary of Silence following the resignation of Melvyn Davies.
Post-Period Events
·; Two additional, new U.S. patents issued covering structural modifications associated with the innovative Zamore "Design Rules" which broadly cover methods for enhancing silencing activity of RNAi therapeutics. As with the patent issued in June, the Company believes these patents will be of significant interest to other companies operating in the RNAi sector.
·; One-year extension of ongoing research and development collaboration signed with AstraZeneca. Under the terms of the agreement, which has progressed well since being signed in July 2007, Silence and AstraZeneca are jointly collaborating in the identification and optimisation of five novel siRNA therapeutic molecules addressing respiratory and oncology indications.
·; Quark signed an exclusive option agreement with Novartis for further development and commercialisation of QPI-1002, a drug candidate based on Silence's AtuRNAi technology. Under the terms of Silence's agreement with Quark, Silence anticipates that future milestone payments from this program could potentially exceed US$65 million.
Phil Haworth, CEO of Silence Therapeutics, commented: "2010 has been a pivotal year for Silence Therapeutics. Our new, more comprehensive structure has facilitated multiple advances in the three areas that we believe will be most critical in the coming years - partnerships, intellectual property and clinical progress. We are delighted by our progress in the first half of 2010 and look forward to continued success during the second half of 2010."
For further information, please contact the following:
|
Silence Therapeutics plc |
Vida Communication (US) |
|
+44(0)20 7491 6520 |
+ 415 675-7400 |
|
Phil Haworth, Chief Executive Officer |
Stephanie Diaz (investors) |
|
Max Herrmann, Chief Financial Officer |
Tim Brons (media) |
|
|
|
|
Nominated Advisers |
M:Communications (Europe) |
|
Singer Capital Markets |
+44 207 920 2330 |
|
+44(0)20 3205 7500 |
Mary-Jane Elliott |
|
Shaun Dobson/Claes Sprang |
Emma Thompson |
|
|
|
Company website
www.silence-therapeutics.com
CHAIRMAN'S STATEMENT
To date, 2010 has been a year of great change and advancement for Silence Therapeutics. Following the merger with Intradigm, which was completed in the first week of January, the Company set out to establish a new plan designed to fully leverage the new entity's superior scientific platform, intellectual property and managerial expertise.
In the first half of the year alone, the new company has successfully:
·; Made progress with each of its partnerships, three of which were either expanded or extended;
·; Advanced our most valuable internal asset, Atu027, in the clinic; and,
·; Secured, what has the potential to be, some of the most valuable and useful intellectual property issued within this sector
These core assets, combined with an unparalleled siRNA delivery capability have established Silence Therapeutics as one of the leading RNAi therapeutics companies in the world. We look forward to reporting additional developments through the balance of the year.
Thank you for your continued support of Silence Therapeutics.
Jerry Randall ACA
Chairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
OVERVIEW
Silence Therapeutics is a world leader in RNAi therapeutics and utilises the industry's most sophisticated technology via an unparalleled, proprietary delivery platform. There is currently intense excitement around the RNAi therapy arena and Silence Therapeutics' technology is utilised in nearly half of all reported siRNA clinical programs ongoing worldwide.
The first half of 2010 has been a time of great opportunity for Silence Therapeutics. With the completion of our merger with Intradigm in January, we established one of the strongest, most scientifically capable companies in the RNAi sector. This strength was demonstrated through our multiple successes in three important areas: progress in the clinic, partnering & scientific leadership and intellectual property.
OPERATIONAL REVIEW
Clinical Advancement - Atu027
In June 2009, Silence initiated a Phase I study of Atu027, its lead drug candidate for the treatment of advanced solid tumours. Atu027 specifically targets PKN-3, a molecule involved in cancer growth and metastasis formation. Atu027 is Silence's most advanced clinical candidate for a systemically delivered siRNA using the Company's proprietary AtuPLEX delivery technology. It is Silence's belief that Atu027 may ultimately be a valuable treatment option for cancer patients that do not respond to standard therapy.
The Phase I trial, being conducted at the Marienhospital in Herne, Germany, is an open-label, dose-finding study to address the safety, tolerability and pharmacokinetics of Atu027. This trial has 11 dosing regimens and we are presently dosing the fifth cohort. We are advancing through the dosing protocol as planned and we remain on target to have results in the second half of 2011.
In addition to our Atu027 program, we are advancing three other preclinical programs internally: Atu134 for acute lung injury; and Atu111 and Atu150, both for solid tumours. We look forward to reporting our progress with these programs in the future.
Progress with Partnered Programs
During 2010, we have made tremendous progress with our ongoing partnered programs. At present, Silence Therapeutics' technology is utilised in nearly half of all reported siRNA clinical programs ongoing worldwide. This demonstrates the value and the impact that Silence's technology represents to the sector.
With respect to the clinical progress being made by our partners, Quark Pharmaceuticals recently announced the successful completion of a Phase I trial of QP-1002 in prevention of delayed graft function. QP-1002 is a drug candidate based on Silence's AtuRNAi technology, and these positive data were presented at the 2010 American Transplant Congress. More recently, Quark signed an exclusive option agreement with Novartis for further development and commercialisation of QPI-1002. As part of Silence's QPI-1002 agreement with Quark, we anticipate that Silence may receive future milestone payments from this program that could potentially exceed US$65 million.
Since the beginning of 2010, Silence has also achieved a significant degree of validation for our multiple ongoing partnerships with AstraZeneca and Dainippon Sumitomo.
·; In March, Silence and Dainippon Sumitomo Pharma Co., Ltd agreed to expand our ongoing siRNA delivery collaboration to examine delivery of RNAi therapeutics to additional disease targets selected by Dainippon Sumitomo.
·; In April, Silence and AstraZeneca agreed to a one-year extension of the ongoing siRNA delivery collaboration to examine new and enhanced delivery approaches for RNAi therapeutics.
·; In July, Silence and AstraZeneca signed a one-year extension of the ongoing research and development collaboration. Under the terms of the agreement, which has progressed well since being signed in July 2007, Silence and AstraZeneca are jointly collaborating in the identification and optimisation of five novel siRNA therapeutic molecules addressing respiratory and oncology indications.
We are very pleased with the significant and rapid progress that we have made with each of our ongoing partnerships. In addition, we are dedicating considerable resources to identifying and executing new, valuable partnerships to further leverage our scientific capabilities and expand our pipeline.
Scientific Leadership - Delivery, Structural Modification, Sequences
From a scientific standpoint, Silence began the year in a strong position. In the first half of 2010, this position has expanded significantly, and today, we own one of the most comprehensive and valuable technology platforms in the RNAi sector. This platform, which is well-protected by a strong intellectual property portfolio, is comprised of the three areas we believe are critical to building, protecting and commercialising RNAi therapeutics:
·; Proprietary delivery technologies
o Silence's delivery platform is one of the industry's broadest, including lipid and polymer technologies, offering drug developers an increased opportunity for successful delivery to specific tissues to cause specific therapeutic benefits. Today Silence is capable of delivering drug to more organs and tissues than any other company in the sector.
·; Potent siRNA sequences
o Silence has issued and pending patents on multiple high-value siRNA sequences of varying structure.
·; Innovative siRNA structural features
o Silence has issued and pending patents directed to one of the industry's most advanced siRNA chemical modification technologies optimised for improved stability, yield and safety.
o In June, July and August of this year, Silence was issued three new U.S. patents covering structural modifications associated with the innovative Zamore "Design Rules" which broadly cover methods for enhancing silencing activity of RNAi therapeutics. We believe these patents will be of tremendous value, not only to the Company, but to others working in the RNAi sector.
FINANCIAL REVIEW
In conjunction with its merger with Intradigm, in January 2010 Silence raised £15.00m (£14.36m net of expenses) in a placing and subscription of shares. This funding is expected to provide cash resources that will support the Company's operations into the second quarter of 2011 excluding any milestones or other receipts that the Company believes it could receive over the same period.
Revenue in the first half of 2010 at £0.72m (2009: £0.86m) was slightly below that in the prior year. Lower grant income and non-recurrence of a license fee received in 2009 for M.vaccae was partially offset by funding in the period from the Dainippon Sumitomo collaboration, which was signed in August 2009. Research and development expenditure at £4.40m was significantly higher than in the prior year due to the first time inclusion of Intradigm (2009: £2.55m). However, following the strategic plan announced in April 2010, research and development costs are expected to be lower in the second half of 2010. The cost of implementing the strategic plan totalled £0.48m in the first half of the year. Administrative expenses in the first half of 2010 increased to £3.23m from £1.92m in 2009. The increase in administrative expenses is primarily attributed to first time inclusion of Intradigm as well as costs related to the integration of the two businesses.
The net loss for the half-year was £7.05 million before taxation (six months to 30 June 2009: £3.57 million; full year 2009: £ 7.51 million). Cash usage in operating and investing activities in the half year amounted to £8.65 million. This included repayment of £1.94m of Intradigm's short term loans and a significant reduction of our other liabilities from the December 2009 level, which left the Group with cash at bank of £6.84 million at the period end.
RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties that could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The risks which were identified and outlined in the Annual Report and Accounts 2009 in the Directors' Report on page 14, which does not form part of this interim statement, and which include clinical and regulatory risk, competition and intellectual property risk, and economic, financial and counterparty risk, have not changed and therefore remain relevant for the remaining six months of 2010.
SUMMARY AND OUTLOOK
As we stated at the beginning of the year, our goal is to be the leader in the RNAi therapeutics sector and the clear partner-of-choice for our current and future pharmaceutical collaborators.
In the first half of 2010, we believe we have demonstrated our ability to achieve this goal through the following successes:
·; Strong clinical progress with both our internal and partnered programs;
·; Silence's technology is currently the basis for nearly half of all RNAi clinical candidates worldwide;
·; Our partners continue to validate our approach through the expansion and extension of our collaborative efforts;
·; Our technology platform is unparalleled, comprised of industry leading delivery capability, structural modification features and potent siRNA sequences;
·; Our intellectual property portfolio is one of the most functional and valuable in the sector, providing Silence with a tremendous asset today and in the future.
In light of the advances we have made in the first half of the year, we look ahead to the second half of 2010 with great optimism.
Thank you for your continued support of Silence Therapeutics.
Philip Haworth, JD, Ph.D.
Chief Executive Officer
SILENCE THERAPEUTICS PLC
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2010
|
|
Note |
Six months ended |
|
Six months ended |
|
Year ended 31 December |
|
|
|
30 June 2010 |
|
30 June 2009 |
|
2009 |
|
|
|
(Un-audited) |
|
(Un-audited) |
|
(Audited) |
|
|
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
Revenue |
3 |
716,090 |
|
856,626 |
|
1,723,289 |
|
|
|
|
|
|
|
|
|
Research and development costs |
|
(4,400,728) |
|
(2,554,426) |
|
(5,073,333) |
|
|
|
|
|
|
|
|
|
Gross loss |
|
(3,684,638) |
|
(1,697,800) |
|
(3,350,044) |
|
|
|
|
|
|
|
|
|
Administrative expenses |
|
(3,227,213) |
|
(1,915,498) |
|
(4,204,371) |
|
|
|
|
|
|
|
|
|
Operating loss |
3 |
(6,911,851) |
|
(3,613,298) |
|
(7,554,415) |
|
|
|
|
|
|
|
|
|
Finance and other income |
|
54,989 |
|
38,667 |
|
46,104 |
|
Loss on sale of assets |
|
(154,471) |
|
- |
|
- |
|
Finance expense |
|
(42,408) |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
Loss for the period before taxation |
|
(7,053,741) |
|
(3,574,631) |
|
(7,508,311) |
|
|
|
|
|
|
|
|
|
Taxation credit for the period |
5 |
- |
|
- |
|
37,714 |
|
|
|
|
|
|
|
|
|
Retained loss for the period after taxation attributable to Equity Holders |
|
|
|
|
|
|
|
transferred from reserves |
|
(7,053,741) |
|
(3,574,631) |
|
(7,470,597) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per Ordinary Equity Share (basic and diluted) |
4 |
(2.52)p |
|
(2.66)p |
|
(5.55)p |
|
|
|
==== |
|
==== |
|
===== |
All transactions arose from continuing activities and there are no recognised gains or losses other than those presented above.
SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2010
|
|
|
Six months ended |
|
Six months ended |
|
Year ended 31 December |
|
|
|
30 June 2010 |
|
30 June 2009 |
|
2009 |
|
|
|
(Un-audited) |
|
(Un-audited) |
|
(Audited) |
|
|
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
Loss for the period after taxation |
|
(7,053,741) |
|
(3,574,631) |
|
(7,470,597) |
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
Exchange differences arising on consolidation of foreign operations |
|
562,310 |
|
(1,065,235) |
|
(410,482) |
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
(6,491,431)
|
|
(4,639,866)
|
|
(7,881,079) |
|
|
|
|
|
|
|
|
SILENCE THERAPEUTICS PLC
CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2010
|
|
Note |
30 June |
|
30 June |
|
31 December |
|
|
|
|
2010 |
|
2009 |
|
2009 |
|
|
|
|
(Un-audited) |
|
(Un-audited) |
|
(Audited) |
|
|
|
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
302,702 |
|
396,288 |
|
376,676 |
|
|
Goodwill |
7 |
28,478,960 |
|
7,704,390 |
|
8,130,972 |
|
|
Other intangible assets |
|
1,039,147 |
|
733,492 |
|
736,117 |
|
|
|
|
29,820,809 |
|
8,834,170 |
|
9,243,765 |
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Trade and other receivables |
|
575,000 |
|
724,331 |
|
560,190 |
|
|
Current tax assets |
|
- |
|
- |
|
59,198 |
|
|
Cash and cash equivalents |
|
6,836,177 |
|
3,057,038 |
|
1,131,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
7,411,177 |
|
3,781,369 |
|
1,750,534 |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Trade and other payables |
|
(2,750,139) |
|
(828,676) |
|
(2,103,144) |
|
|
|
|
|
|
|
|
|
|
|
Net current assets/(liabilities) |
|
4,661,038 |
|
2,952,693 |
|
(352,610) |
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
34,481,847 |
|
11,786,863 |
|
8,891,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and Reserves attributable to the Company's Equity Holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
2,798,915 |
|
1,349,134 |
|
1,350,334 |
|
|
|
|
|
|
|
|
|
|
|
Capital reserves |
|
80,443,613 |
|
49,843,163 |
|
49,810,071 |
|
|
|
|
|
|
|
|
|
|
|
Translation reserve |
|
3,443,317 |
|
2,226,254 |
|
2,881,007 |
|
|
|
|
|
|
|
|
|
|
|
Profit and loss account |
|
(52,203,998) |
|
(41,631,688) |
|
(45,150,257) |
|
|
|
|
|
|
|
|
|
|
|
Equity Holders' funds |
|
34,481,847 |
|
11,786,863 |
|
8,891,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2010
|
(Un-audited) |
Share |
Capital |
Translation |
Profit and loss |
Total |
|
|
Capital |
Reserves |
Reserve |
Account |
|
|
|
£ |
£ |
£ |
£ |
£ |
|
At 1 January 2010 |
1,350,334 |
49,810,071 |
2,881,007 |
(45,150,257) |
8,891,155 |
|
|
|
|
|
|
|
|
Recognition of share-based payments |
- |
820,077 |
- |
- |
820,077 |
|
Transfer upon: |
|
|
|
|
|
|
-exercise of options in period |
- |
- |
- |
- |
- |
|
-lapse of vested options in period |
- |
- |
- |
- |
- |
|
Shares issued in year |
1,448,581 |
29,813,465 |
- |
- |
31,262,046 |
|
Transactions with owners |
1,448,581 |
30,633,542 |
- |
- |
32,082,123 |
|
|
|
|
|
|
|
|
Loss for six months to 30 June 2010 |
- |
- |
- |
(7,053,741) |
(7,053,741) |
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
Exchange differences arising on consolidation of foreign subsidiaries |
- |
- |
562,310 |
- |
562,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2010 |
2,798,915 |
80,443,613 |
3,443,317 |
(52,203,998) |
34,481,847 |
|
|
|
|
|
|
|
SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE SIX MONTHS ENDED 30 JUNE 2009
|
(Un-audited) |
Share |
Capital |
Translation |
Profit and loss |
Total |
|
|
Capital |
Reserves |
Reserve |
Account |
|
|
|
£ |
£ |
£ |
£ |
£ |
|
At 1 January 2009 |
1,199,134 |
47,010,414 |
3,291,489 |
(38,057,057) |
13,443,980 |
|
|
|
|
|
|
|
|
Recognition of share-based payments |
- |
332,749 |
- |
- |
332,749 |
|
Transfer upon: |
|
|
|
|
|
|
-exercise of options in period |
- |
- |
- |
- |
- |
|
-lapse of vested options in period |
- |
- |
- |
- |
- |
|
Shares issued in period |
150,000 |
2,500,000 |
|
|
2,650,000 |
|
Transactions with owners |
150,000 |
2,832,749 |
- |
- |
2,982,749 |
|
|
|
|
|
|
|
|
Loss for six months to 30 June 2009 |
- |
- |
- |
(3,574,631) |
(3,574,631) |
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
Exchange differences arising on consolidation of foreign subsidiaries |
- |
- |
(1,065,235) |
- |
(1,065,235) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2009 |
1,349,134 |
49,843,163 |
2,226,254 |
(41,631,688) |
11,786,863 |
|
|
|
|
|
|
|
SILENCE THERAPEUTICS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2009
|
(Audited) |
Share |
Capital |
Translation |
Profit and loss |
Total |
|
|
Capital |
Reserves |
Reserve |
Account |
|
|
|
£ |
£ |
£ |
£ |
£ |
|
At 1 January 2009 |
1,199,134 |
47,010,414 |
3,291,489 |
(38,057,057) |
13,443,980 |
|
|
|
|
|
|
|
|
Recognition of share-based payments |
- |
661,704 |
- |
- |
661,704 |
|
Transfer upon: |
|
|
|
|
|
|
-exercise of options in period |
- |
(4,514) |
- |
4,514 |
- |
|
-lapse of vested options in period |
- |
(372,883) |
- |
372,883 |
- |
|
Shares issued in period |
151,200 |
2,515,350 |
- |
- |
2,666,550 |
|
Transactions with owners |
151,200 |
2,799,657 |
- |
377,397 |
3,328,254 |
|
|
|
|
|
|
|
|
Loss for the year ended 31 December 2009 |
- |
- |
- |
(7,470,597) |
(7,470,597) |
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
Exchange differences arising on consolidation of foreign subsidiaries |
- |
- |
(410,482) |
- |
(410,482) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2009 |
1,350,334 |
49,810,071 |
2,881,007 |
(45,150,257) |
8,891,155 |
|
|
|
|
|
|
|
SILENCE THERAPEUTICS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2010
|
|
|
Six months to |
Six months to |
Year ended |
|
|
|
30 June 2010 |
30 June 2009 |
31 December 2009 |
|
|
|
(Un-audited) |
(Un-audited) |
(Audited) |
|
Cash flows from operating activities |
|
£ |
£ |
£ |
|
Loss before taxation |
|
(7,053,741) |
(3,574,631) |
(7,508,311) |
|
Adjustments for: |
|
|
|
|
|
Depreciation charges |
|
95,650 |
63,476 |
150,293 |
|
Amortisation charges |
|
102,760 |
128,499 |
220,658 |
|
Loss on sale of fixed assets |
|
154,471 |
- |
19,577 |
|
Charge for the period in respect of share-based payments |
|
719,043 |
339,845 |
661,704 |
|
Foreign exchange movement |
|
119,235 |
(14,476) |
198,717 |
|
Finance expense |
|
42,408 |
- |
- |
|
Finance income |
|
(54,989) |
(38,667) |
(46,104) |
|
|
|
(5,875,163) |
(3,095,954) |
(6,306,466) |
|
Decrease in trade and other receivables |
|
154,647 |
271,961 |
438,512 |
|
(Decrease)/increase in trade payables |
|
(1,786,416) |
42,283 |
1,168,543 |
|
|
|
|
|
|
|
Cash absorbed by operations |
|
(7,506,932) |
(2,781,710) |
(4,696,411) |
|
Income taxes received |
|
59,198 |
- |
48,516 |
|
|
|
|
|
|
|
Net cash outflow from operating activities |
|
(7,447,734) |
(2,781,710) |
(4,647,895) |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Acquisition of subsidiary - cash acquired |
|
746,108 |
|
|
|
Repayment of notes payable |
|
(1,938,673) |
- |
- |
|
Proceeds from the sale of property, plant and equipment |
|
77,323 |
- |
- |
|
Finance expense |
|
(42,408) |
- |
- |
|
Interest received |
|
54,989 |
38,667 |
46,104 |
|
Additions to property, plant and equipment |
|
(11,287) |
(6,347) |
(36,648) |
|
Additions to other intangible assets |
|
(31,142) |
(104,146) |
(188,494) |
|
|
|
|
|
|
|
Cash (used in)/generated from investing activities |
|
(1,145,090) |
(71,826) |
(179,038) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Net proceeds from issue of share capital and options |
|
14,358,313 |
2,650,000 |
2,666,550 |
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
5,765,489 |
(203,536) |
(2,160,383) |
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
1,131,146 |
3,350,187 |
3,350,187
|
|
Net increase/(decrease) in cash and cash equivalents |
|
5,765,489 |
(203,536) |
(2,160,383) |
|
Effect of exchange rate fluctuations on cash held |
|
(60,458) |
(89,613) |
(58,658) |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
6,836,177 |
3,057,038 |
1,131,146 |
|
|
|
|
|
|
|
Cash and cash equivalents include |
|
|
|
|
|
Instant access bank accounts |
|
6,836,177 |
3,057,038 |
1,131,146 |
SILENCE THERAPEUTICS PLC
Responsibility Statement of the Directors in Respect of the Interim Financial Report
We confirm that to the best of our knowledge:
·; the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union;
·; the interim management report includes a fair review of the information required by:
|
(a) |
DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
|
|
(b) |
DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. |
The Board
The Board of Directors that served during all or part of the six-month period to 30 June 2010 and their respective responsibilities can be found on pages 10 and 11 of the Silence Therapeutics Annual Report 2009. Ian Ross and Melvyn Davies have served for part of the interim period. Both resigned as directors of the Company on 3 March 2010.
Approved by the Board and signed on its behalf by
Max Herrmann
Chief Financial Officer and Company Secretary
16 September 2010
SILENCE THERAPEUTICS PLC
NOTES
1. Basis of Preparation and Accounting Policies
The interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2009 were approved by the Board of Directors on 17 May 2010 and delivered to the Registrar of Companies. Those accounts have been reported on by the Group's previous auditors - Grant Thornton UK LLP. The report of the auditors on those accounts was unqualified and did not contain any statement under Section 498 of the Companies Act 2006. However, they did contain an emphasis of matter paragraph related to going concern. This condensed consolidated interim financial information has neither been reviewed nor audited.
This condensed consolidated interim financial information for the six months ended 30 June 2010 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 - 'Interim Financial Reporting' as adopted by the European Union. This interim condensed consolidated financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2009, which have been prepared in accordance with IFRS as adopted by the European Union. Except as described below, the accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2009.
Taxes on income in interim periods are accrued using the tax rate that would be applicable to total expected annual earnings.
The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 1 January 2010 and have been applied by the Group:
·; IFRS 3 (revised), 'Business combinations and consequential amendments to IAS 27', 'Consolidated and separate financial statements' have been applied for the acquisition of Intradigm Corporation.
·; IFRS 2 (amendment), 'Share-based payment'. IFRS 2 (amendment) deals with vesting conditions and cancellations. The amendment does not have a material impact on the Group's financial statements.
·; IAS 20 (amendment), Government grants and disclosure of government assistance. The amendment does not have a material impact on the Group's financial statements.
·; IAS 32 (amendment), 'Classification of Rights Issues'. The amendment does not have a material impact on the Group's financial statements.
There are no other new standards likely to have an effect on the financial statements for the year ending 31 December 2010.
2. Going concern
The financial statements have been prepared on a going concern basis that assumes that the Group will continue in operational existence for the foreseeable future.
During the period the Group met its day-to-day working capital requirements through the cash resources raised in the placing and subscription of shares in January 2010.
The Group had a net cash inflow in the six months ended 30 June 2010 of £5.77m and at 30 June 2010 had cash balances of £6.84m. On 4 June 2010, the Group repaid all amounts outstanding on its short-term loan with Silicon Valley Bank. The loan had been taken out by Intradigm prior to its acquisition by Silence and was due for repayment at 31 December 2010.
The directors consider that the current financial position of the Group is not unusual for a drug discovery and development company.
The directors have reviewed the working capital requirements of the Group for the next 12 months from the date of these interim financial statements and are confident that these can be met. The directors have a reasonable expectation that further finances will become available during the course of the next 12 months through grants, milestone and licence fee payments, relating to either new or existing agreements. In the past the Group has funded a shortfall in cash resources through the issuance of equity to institutional investors, a source, which whilst less dependable than in the past, still remains potentially available. The directors note that there is a material uncertainty as to the exact timing and source of these funds and that the failure to receive sufficient funding from these sources would cast significant doubt on the Group's ability to continue as a going concern. The directors have also taken a number of steps following the merger of Silence and Intradigm to reduce administration costs and to restrict the research and development expenditure to core areas.
Given the continued efforts noted above, the directors consider that the continued adoption of the going concern basis is appropriate and the accounts do not reflect any adjustments that would be required if they were to be prepared on any other basis.
3. Segment Reporting
For the Six Months Ended 30 June 2010
|
Business Segments |
RNAi Therapeutics |
Immunotherapy |
Unallocated Group items |
Consolidated |
|
|
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
Revenue |
716,090 |
- |
- |
716,090 |
|
Revenue from other operating segments |
- |
- |
- |
- |
|
|
|
|
|
|
|
Operating results |
(4,942,211) |
(8,952) |
(1,960,688) |
(6,911,851) |
|
Net finance income |
(201,438) |
46,502 |
13,046 |
(141,890) |
|
|
|
|
|
|
|
Net loss for the period |
(5,143,649) |
37,550 |
(1,947,642) |
(7,053,741) |
|
|
|
|
|
|
|
Segment assets |
31,621,358 |
524,678 |
5,085,950 |
37,231,986 |
|
Segment liabilities |
(2,597,898) |
- |
(152,241) |
(2,750,139) |
|
|
|
|
|
|
|
Costs to acquire property, plant and equipment |
11,287 |
-
|
-
|
11,287 |
|
Costs to acquire other intangible assets |
31,142 |
-
|
-
|
31,142 |
|
Depreciation and amortisation |
198,410 |
- |
-
|
198,410 |
|
Charge for non-cash expenses |
540,288 |
|
178,755 |
719,043 |
In accordance with IFRS 8 'Operating Segments', the identification of the Group's operating segments is based on internal management reporting as reviewed by senior management team in order to assess performance and allocate resources.
The Group is managed on a business segment basis - RNAi Therapeutics, Immunotherapy and unallocated corporate items. Transfer prices between segments are set on an arm's length basis. Segment revenue and profit include transfers between segments, which are eliminated on consolidation. The operations, segment assets and liabilities of the RNAi Therapeutics segment are located in Germany and the USA. The operations segment assets and liabilities of the remaining two segments are located in the United Kingdom and the USA.
In 2010, the total amount of costs incurred as part of the restructuring program amounted to £0.48m (2009:£Nil).
For the Six Months Ended 30 June 2009
|
Business Segments |
RNAi Therapeutics |
Immunotherapy |
Unallocated Group items |
Consolidated |
|
|
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
Revenue |
555,626 |
301,000 |
- |
856,626 |
|
|
|
|
|
|
|
Operating results |
(2,925,128) |
244,651 |
(932,821) |
(3,613,298) |
|
Net finance income |
- |
507 |
38,160 |
38,667 |
|
|
|
|
|
|
|
Net loss for the period |
(2,925,128) |
245,158 |
(894,661) |
(3,574,631) |
|
|
|
|
|
|
|
Segment assets |
10,016,507 |
387,707 |
2,211,325 |
12,615,539 |
|
Segment liabilities |
(632,976) |
(51,820) |
(143,880) |
(828,676) |
|
|
|
|
|
|
|
Costs to acquire property, plant and equipment |
6,347 |
- |
- |
6,347 |
|
Costs to acquire other intangible assets |
104,146 |
- |
- |
104,146 |
|
Depreciation and amortisation |
190,475 |
1,500 |
- |
191,975 |
|
Charge for non-cash expenses |
127,706 |
1,158 |
210,981 |
339,845 |
4. Earnings per share
The loss per share is based on the loss for the period after taxation attributable to Equity Holders of £7,053,741 (year ended 31 December 2009 - loss £7,470,957; six months ended 30 June 2009 - loss £3,574,631) and on the weighted average of 276,617,824 ordinary shares in issue during the period (year ended 31 December 2009 - 134,640,515; six months ended 30 June 2009 - 134,250,409).
The options outstanding at 30 June 2009, 31 December 2009 and 30 June 2010 are considered to be non-dilutive in that their conversion into ordinary shares would decrease the net loss per share. Consequently, there is no diluted earnings per share to report for either year.
5. Taxation
The credit for UK Corporation Tax arises from the Group taking advantage of the legislation regarding the treatment and surrender of tax losses arising from certain qualifying research and development expenditure.
6. Related Party
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
7. Acquisition of Intradigm
On 5 January 2010, the Company acquired the entire issued share capital of Intradigm Corporation, a company also engaged in the development of RNAi-based therapeutics, by issuance of 79,640,668 ordinary shares representing consideration of £16,903,732. The fair value of each share was 21.225 pence, based on the average mid-price of the shares over the preceding 10 days. Additional consideration for the acquisition included 1,138,817 immediately vesting options, which were issued to executives of Intradigm on completion of the deal.
The total cost of acquisition includes the components stated below:
|
|
|
|
|
|
|
£000s |
|
Purchase price settled in shares |
|
16,904 |
|
Value of options issued to Intradigm executives |
|
101 |
|
Total cost of acquisition |
|
17,005 |
The carrying amount and fair value of the assets and liabilities acquired are as follows:
|
|
Carrying amount |
Fair value |
|
|
£'000 |
£'000 |
|
Property, plant and equipment |
266 |
266 |
|
Other intangible assets |
- |
411 |
|
Trade and other receivable |
115 |
115 |
|
Cash and short term deposits |
801 |
801 |
|
Trade and other payables |
(1,129) |
(2,010) |
|
Short-term borrowings |
(1,877) |
(1,877) |
|
Deferred revenue |
(423) |
(423) |
|
Fair value of net liabilities acquired |
|
(2,717) |
|
Goodwill arising on acquisition |
|
19,722 |
|
|
|
17,005 |
|
|
|
|
|
|
|
|
The carrying value of goodwill arising on acquisition reflects the position Intradigm occupies in the high profile field of RNAi therapeutics, the synergies expected to arise from combination with the Company, already a leader in the field and the strengthened management team resulting from the acquisition. Due to the early stage nature of the projects, the timing of future cash flows is uncertain and so a value in use calculation is not possible. None of the goodwill is expected to be deductible for income tax purposes. Management have yet to complete their assessment of any identifiable intangible assets and the disclosed figures are therefore provisional and may be subject to change.
Reconciliation of Goodwill
|
|
|
£
|
|
Goodwill brought forward at 1 January 2010
|
|
8,130,972
|
|
Goodwill on acquisition
|
|
19,722,425
|
|
Translation adjustment
|
|
625,563
|
|
Total
|
|
28,478,960
|
If the acquisition had been completed on the first day of the financial year, it would have contributed no additional revenue and no additional operating loss to the Group results.
8. Issue of Shares in conjunction with the Intradigm acquisition
In conjunction with the acquisition of Intradigm, on 5 January 2010 the Company raised £15.00m in cash before expenses. The fundraising was conducted by way of a placing and subscription of 65,217,392 new Ordinary shares of 1 pence each at a price of 23 pence per share . The nominal value of these shares was £652,174.
9. Repayment of loan
On 4 June 2010, the Group repaid all amounts outstanding on its short-term loan with Silicon Valley Bank. The loan had been taken out by Intradigm prior to its acquisition by Silence and was due for repayment on 31 December 2010.
Notes to Editors:
About Silence Therapeutics plc (www.silence-therapeutics.com)
Silence Therapeutics plc (AIM: SLN) is a leading global biotechnology company dedicated to the discovery, development and delivery of targeted, systemic RNA interference (RNAi) therapeutics for the treatment of serious diseases. The company possesses multiple proprietary short interfering RNA (siRNA) delivery technology platforms including AtuPLEX™, a system that enables the functional delivery of siRNA molecules to targeted diseased tissues and cells, while increasing their bioavailability and intracellular uptake. A second, complementary delivery technology known as PolyTran™ uses a library of novel peptide-based biodegradable polycationic polymers for systemic siRNA administration. Additionally, the company has a platform of novel siRNA molecules, AtuRNAi, which provide a number of advantages over conventional siRNA molecules, including increased stability against nuclease degradation. Silence's unique RNAi assets also include structural features for a next generation of RNAi molecules and additional proprietary siRNA sequences against more than 50 highly valued oncology and other disease targets. The company's strong and diverse intellectual property portfolio includes exclusive licenses from the University of Massachusetts Medical School on three patent families associated with the Zamore "Design Rules," which cover broad structural features of siRNA design for more potent next generation siRNA sequences. Silence Therapeutics is headquartered in London, UK, with research and development activities in Berlin and operations in Redwood City, CA.
Forward-Looking Statements
This press release includes forward-looking statements that are subject to risks, uncertainties and other factors. These risks and uncertainties could cause actual results to differ materially from those referred to in the forward-looking statements. All forward-looking statements are based on information currently available to Silence Therapeutics and Silence Therapeutics assumes no obligation to update any such forward-looking statements.
# # #
Related Shares:
SLN.L