TIDMPYC
RNS Number : 8277W
Physiomics PLC
12 November 2014
Physiomics Plc
("Physiomics" or "the Company")
Final Results for the year ended 30 June 2014
Chairman's Statement
Summary of Results in the year ended 30 June 2014
-- The turnover of the Company increased by 12% to GBP267,903 (2013: GBP240,000).
-- The operating loss reduced by 15% to GBP465,265 (2013: GBP548,342).
-- On 30 June 2014 the surplus of shareholders' funds was GBP136,487 (2013: GBP255,821).
This year, Physiomics has made good progress advancing Virtual
Tumour Clinical and has broadened its offering into the
personalised medicine market.
In summary we have
-- Delivered two case studies validating Virtual Tumour
Clinical, partially funded by a Technology Strategy Board
Biomedical Catalyst grant.
-- Won further pre-clinical projects from our existing large pharma customer base.
-- Identified potential Virtual Tumour Clinical projects to
follow-on from this pre-clinical work.
-- Signed a deal with a speciality pharma company to determine
the mechanism of action of one of their candidates.
-- Gained our first large pharma customer for our cardiotoxicity
platform. Launched a web-based portal "EasyAP(TM)" to provide
access to literature models of cardiotoxicity.
-- Continued discussions with relevant partners around
increasing the scope of the business by way of M&A.
-- Initiated a new project with a large pharma client to develop
an immunomodulatory module for Virtual Tumour. Immunomodulatory
agents are being pursued by several large pharmas following the
clinical success of agents targeting PD-1 and CTLA-4.
-- Signed a heads of terms agreement with Diatech
Pharmacogenomics to enter the personalised medicine field,
initially in Italy.
-- Initiated discussions with a large software provider to
determine if part or all of Virtual Tumour could be sold as part of
their offering.
Dr Paul Harper, Non-Executive Chairman
Chairman and Chief Executive Officer's Statement
Introduction
During the period Physiomics successfully applied Virtual Tumour
to clinical predictions for the first time. This was an important
step forward for a number of reasons:
Firstly, there was a large degree of direct interest from
customers and potential customers for this service. Secondly, the
unmet need for better clinical dosing schedules is driven by the
need to accelerate development programmes, reduce costs and bring
forward potential revenues by designing clinical protocols that are
already optimised for patient dosing. The current most commonly
used method for determining the clinical regimen is to increase the
dosage of the most effective regimen from animal studies to human
scale. Animal models often poorly reflect the situation in a human
patient due to for example disparities in relative sizes,
physiology and pharmacokinetics, parameters that are all
fundamental to drug efficacy. The approximations generated through
this approach, when used to design a clinical study, can contribute
to the failure of a clinical trial. Thirdly the cost of failure in
the clinical setting vastly outweighs that in the pre-clinical
setting.
Given the high cost and the subsequent consequences arising from
a failed clinical trial, if customers can be shown (through pilot
projects) that a predictive technology is able to improve the
chances of clinical success, then they are likely to progressively
adopt the new paradigm. Drug development has for so long relied
almost exclusively on extrapolating data from studies in animal
models to direct dosing in patients that embracing a new 'black
box' based technology approach is a major policy change, despite
the fact that adoption of system modelling is being encouraged by
FDA and similar agencies.
The predictive power of Virtual Tumour Clinical has been
demonstrated in two different indications so far. Initial marketing
of the results to large pharmaceutical companies has led to a
positive expression of interest. There has also been a desire to
see how the technology performs across a number of further
indications. Therefore it is the intention of the Company to
perform further validation studies in other types of cancer, in
addition to initiating collaborations with large pharma companies.
Discussions with collaborators to set up such case studies are well
advanced.
Relationships with our existing large pharma customer base were
strengthened in the period with a number of new pre-clinical
projects. These projects have the potential to be extended into the
first large pharma Virtual Tumour Clinical projects in due
course.
The Company's activities in the cardiotoxicity arena have
gathered pace. Early stage drug candidates are now routinely
screened for cardiotoxic effects, as required by the regulatory
authorities. In particular, all candidate drugs must be screened
for activity against the hERG potassium channel. However, such
screening is time-consuming and costly. It is also known that a
large number of candidates are incorrectly progressed or discarded
based on hERG activity alone.
Physiomics' in silico platform takes into account activity
against hERG and two additional ion channels to deliver better
predictions of action potential time courses and duration based on
several literature models. In silico prediction of cardiotoxic side
effects is therefore a more effective way of helping to select
which candidates to progress. In addition to Physiomics'
cardiotoxicity simulation service, we have now launched our
web-based EasyAP(TM) application. EasyAP(TM) allows access to the
service to a broad range of customers, by allowing customers to run
simulations on their own computers on a pay-per-compound or annual
subscription basis.
Physiomics gained its first large pharma customer for
cardiotoxicity prediction in the period and the Directors hope that
this new platform will attract further customers.
A heads of terms agreement with Diatech Pharmacogenomics was
signed in the period. If translated into a full agreement, this
collaboration would provide Physiomics with access to the majority
of clinical centres in Italy and also an opportunity to develop
personalised medicine models. When combined with Physiomics'
Virtual Tumour, which provides information on how much drug to give
and when to give it, we believe it will provide an industry-leading
platform to support oncology clinical trials worldwide.
The search for an appropriate M&A partner to further build
Physiomics and provide the best outcome for shareholders has
continued in the period and significant discussions have taken
place.
Finally, after the period ended Physiomics gained its first
large pharma project to model immunomodulatory agents using Virtual
Tumour. Immunomodulatory, or 'immune therapy' agents have been
described as an extremely hot topic in the oncology field at
present. A number of high profile clinical trials are ongoing and
several large pharma companies are entering the field for the first
time. The Directors believe that, if the project is successful,
this will lead to further interest in Virtual Tumour from other
large pharma companies who are active in this area.
Technology Development
(i) Virtual Tumour product improvements
The immune system can play a significant role in the course of a
cancer. While in some cases the immune system does not seem to
recognise and attack a tumour, in many other patients the cells of
the immune system are recruited to the vicinity of the tumour, but
fail to kill enough cancer cells to be really effective. Over the
last few years a number of drug candidates have emerged aimed at
activating the latent immune response to a tumour or removing a
'brake' on the immune response created by the cancer itself.
Several large pharmaceutical companies have targeted this response,
with some notable successes in the clinic. Given this burgeoning
interest from our primary customer base, Physiomics started to
develop an immune system module to work in tandem with Virtual
Tumour, to model the effects of these agents. It became clear that
one pharma partner in particular was very keen to develop such a
model and so our first commercial project in this area was
initiated in September 2014. This project should provide all the
data required to develop a functional model which could be sold on
to other potential customers.
(ii) Virtual Tumour Clinical
Two critical case studies were completed in the period, allowing
us to develop, test and validate Virtual Tumour Clinical for the
first time. The first study related to prostate cancer and the data
came from the National Institutes of Health (NIH) in the USA. This
study allowed us to determine which of the key parameters of the
model needed to be modified in order to make accurate clinical
predictions. The second project, in collaboration with Oxford
University, was a blind validation study in melanoma. Here we
showed that we could make accurate predictions of the outcome of
combination therapies in a clinical trial. This was achieved by
priming Virtual Tumour with key human data and gaining a deep
understanding of the relevant tumour growth rates from the
literature. Both case studies were extremely encouraging,
demonstrating that the basic architecture of the existing
pre-clinical Virtual Tumour could be translated into a clinical
setting with the appropriate modifications. The melanoma case study
was supported by a Technology Strategy Board Biomedical Catalyst
grant award.
(iii) Cardiac toxicity prediction service
During the period Physiomics gained its first large pharma
customer for cardiotoxicity prediction. Feedback obtained during
the project and from other potential customers suggested that, in
addition to predicting the overall risk of cardiac side effects,
customers may also like to predict the outcome of scientific
experiments that provide the direct effect of a candidate on a
particular ion channel on a particular cell line, which may also
provide an useful insight into cardiac toxicity risk. The
regulatory agencies are also taking a keen interest in such
predictions. For this reason we extended the scope of our
cardiotoxicity predictions to include literature models which
predict 'action potentials' on cell lines, in our web-based
EasyAP(TM) platform, which was launched recently.
Business Development Strategy
Further pre-clinical Virtual Tumour projects were forthcoming in
the period. The Directors believe that the interest in Virtual
Tumour Clinical will translate into further projects which are
likely to start in the pre-clinical phase and extend through to the
clinical setting, as it will be clear from the outset that
Physiomics can provide predictions of optimised clinical regimens.
Several new leads have been generated in the period which provides
confidence that the customer base will be extended in the near
future. In addition, our increased scope of services means that we
can sell multiple services into the same large pharma customer and
this strategy has already borne fruit. The US will remain an
important target territory for such services and an ongoing focus
for our lead generation efforts.
The initial response to our EasyAP(TM) web-based cardiotoxicity
portal is being closely monitored. To the knowledge of the
directors, there is no commercially available website that provides
users with models that they can run using their own data and with
no input required from the provider. There may be further
opportunities to provide web-based versions of industry models
which will be studied if EasyAP(TM) is successful.
Finally we have also started to investigate whether Virtual
Tumour or elements of it could be provided as software or a
web-based platform. This will make the technology easier and more
cost effective to access for customers than the current service
offering. At least one large software provider has shown interest
in adding Virtual Tumour to its software and initial discussions
have taken place. Over the next period Physiomics will evaluate
whether and how Virtual Tumour could be integrated into this
company's system. The advantage of this approach is that such large
software vendors are already selling products to nearly all of the
major pharmaceutical companies worldwide, so a subsequent deal with
such a company would provide a ready and extensive sales
channel.
Outlook
The landscape of the pharmaceutical sector remains mixed, with a
number of notable companies downsizing and closing key sites. The
failed Pfizer bid for Astra Zeneca and the Abbvie bid for Shire,
interfered with the decision making processes in each of the
companies, shelving or at least delaying any significant plans.
Events that have an impact on decision making have occurred
throughout the Industry, slowing the pace of development and
deferring the need for third party services. Fortunately oncology
remains an important indication in those companies that have
programmes. Certain key pharma clients have made significant
pipeline and resource decisions, most notably focusing efforts on
immunomodulatory agents for the treatment of cancers. Physiomics
has aligned itself with this trend and the Directors are confident
that this will allow us to engage with new customers. We believe
the interest displayed in Virtual Tumour Clinical has vindicated
our strategy to develop further the technology into the clinical
arena and large pharma collaborations are also expected in this
regard. The pipeline of potential opportunities is the strongest
that we have seen in recent years.
In addition the Company has the opportunity to extend the scope
of its predictive technology for oncology through its collaboration
with Diatech Pharmacogenomics. Initially focusing on the delivery
of already marketed drugs to patients, the work could be extended
in future to help support decisions on appropriate patient
populations for clinical trials.
Finally interest from large software providers in the Virtual
Tumour platform, the launch of our first web-based models and the
continued search for the right M&A deal suggest that the next
period will be an exciting one in the development of
Physiomics.
Dr Paul Harper, Non-Executive Chairman
Dr Mark Chadwick, Chief Executive Officer
Income Statement for the year ended 30 June 2014
Year ended Year ended
30-Jun-14 30-Jun-13
GBP GBP
Revenue 267,903 240,000
Net operating expenses (733,168) (776,520)
Share-based compensation - (11,822)
Operating loss (465,265) (548,342)
Finance income 1,013 4,551
Finance costs - -
Loss before taxation (464,252) (543,791)
UK corporation tax 38,631 43,220
Loss for the year attributable to equity shareholders (425,621) (500,571)
----------- -----------
Loss per share (pence)
Basic and diluted (0.026) p (0.033) p
Statement of financial position as at 30 June 2014 Company Number: 4225086
Year ended Year ended
30-Jun-14 30-Jun-13
GBP GBP
Non-current assets
Intangible assets 11,669 16,336
Property, plant and equipment 3,589 4,250
Investments 1 1
15,259 20,587
Current assets
Trade and other receivables 96,576 180,717
Cash and cash equivalents 132,358 179,162
228,934 359,879
Total assets 244,193 380,466
------------ ------------
Current liabilities
Trade and other payables (107,706) (124,645)
Total liabilities (107,706) (124,645)
------------ ------------
Net assets 136,487 255,821
------------ ------------
Capital and reserves
Share capital 687,663 602,620
Capital reserves 4,017,602 3,796,358
Retained earnings (4,568,778) (4,143,157)
Equity shareholders' funds 136,487 255,821
------------ ------------
Statement of changes in equity for the year ended 30 June
2014
Share Share-based Total
Share premium compensation Retained shareholders'
capital account reserve Earnings funds
GBP GBP GBP GBP GBP
At 1 July 2012 599,420 3,697,169 80,567 (3,642,586) 734,570
Share issue (net
of costs) 3,200 6,800 - -
Loss for the year - - - (500,571) 10,000 (500,571)
Share-based compensation - - 11,822 - 11,822
At 30 June 2013 602,620 3,703,969 92,389 (4,143,157) 255,821
Share issue (net
of costs) 85,043 221,244 - -
Loss for the year - - - (425,621) 306,287 (425,621)
Share-based compensation - - - - -
At 30 June 2014 687,663 3,925,213 92,389 (4,568,778) 136,487
-------- ---------- ------------- ------------ ------------------
Cash Flow Statement for the year ended 30 June 2013
Year ended Year ended
30-Jun-14 30-Jun-13
GBP GBP
Cash flows from operating activities:
Operating loss (465,265) (548,342)
Amortisation and depreciation 7,925 8,540
Share-based compensation - 11,822
(Decrease) increase in receivables 85,833 (47,994)
Decrease in payables (16,939) 19,114
Cash generated from operations (388,446) (556,860)
UK corporation tax received 36,939 32,373
Interest paid - -
Net cash generated from operating activities (351,507) (524,487)
Cash flows from investing activities:
Interest received 1,013 4,551
Purchase of non-current assets, net of grants received (2,597) (1,852)
Net cash received by investing activities (1,584) 2,699
----------- -----------
Cash outflow before financing (353,091) (521,788)
Cash flows from financing activities:
Issue of ordinary share capital (net of expenses) 306,287 10,000
Net cash from financing activities 306,287 10,000
----------- -----------
Net decrease cash and cash equivalents (46,804) (511,788)
Cash and cash equivalents at beginning of year 179,162 690,950
Cash and cash equivalents at end of year 132,358 179,162
----------- -----------
Earnings per share
The calculations of loss per share are based on the following
losses and numbers of shares.
2014 2013
GBP GBP
Loss on ordinary activities after tax (425,621) (500,571)
============= =============
No. No.
Weighted average no of shares:
For basic and diluted loss per share 1,666,241,670 1,502,013,088
================= =================
Basic and diluted loss per share (0.026p) (0.033p)
================= =================
Notes
1. Extract from Annual Report and Accounts
The financial information set out above does not constitute
statutory accounts within the meaning of the Companies Act
2006.
2. Basis of preparation
Physiomics Plc has adopted International Financial Reporting
Standards ("IFRS"), IFRIC interpretations and the Companies Act
2006 as applicable to companies reporting under IFRS.
3. Report Distribution
Copies of the annual report will be sent to shareholders on
18(th) November 2014 and will be available for a period of one
month to the public at the offices of Physiomics Plc, The Magdalen
Centre, Robert Robinson Avenue, Oxford Science Park, Oxford, OX4
4GA, and at the Company's website www.physiomics-plc.co.uk.
4. Annual General Meeting
The Annual General Meeting of the Company will be held at the
offices of Taylor Vinters LLP, Tower 42, 33rd Floor, 25 Old Broad
Street, London, EC2N 1HQ at 11.00 am on 15 December 2014.
Contacts:
Physiomics Plc
Dr Mark Chadwick, Chief Executive Officer, +44 (0)1865
784980
WH Ireland Limited
Katy Mitchell
+44 (0) 161 832 2174
Communications Portfolio Ltd. (media enquiries)
Ariane Comstive
+44 7785 922 354
ariane.comstive@communications-portfolio.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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