TIDMSAR
RNS Number : 8439B
Sareum Holdings PLC
13 October 2020
Sareum Holdings PLC
("Sareum" or the "Company")
FINAL RESULTS FOR THE YEARED 30 JUNE 2020
Cambridge, UK, 13 October 2020 - Sareum Holdings plc (AIM: SAR),
the specialist drug development company delivering targeted small
molecule therapeutics to improve the treatment of cancer and
autoimmune diseases, announces its results for the year ended 30
June 2020.
The Company will be holding a presentation to investors on 16
October 2020 at 10.00 a.m. via the Investor Meet Company platform -
please click on this link to register to attend:
https://www.investormeetcompany.com/sareum-holdings-plc/register-investor.
The Company expects to publish its Annual Report and Accounts,
along with the Notice of the Company's Annual General Meeting, in
November 2020.
OPERATIONAL HIGHLIGHTS (including post-period updates)
Proprietary Programmes - Selective TYK2/JAK1 Inhibitors in
Autoimmune Diseases and Cancer
SDC-1801 (autoimmune diseases)
-- A new formulation specifically designed to deliver higher
exposure levels of SDC-1801 has recently been developed by the
Company, which is suitable for progressing into the further
toxicology studies needed prior to applying to investigate SDC-1801
in human trials.
-- SDC-1801 has demonstrated excellent tolerability in initial
toxicology studies in rodents. A formulation that is predicted to
deliver a therapeutic dose level has also been identified.
-- If progress is successful, the application to commence first
human trials is expected to be made during Q1 2021.
SDC-1802 (cancer immunotherapy)
-- Formulation work for oral dosing of SDC-1802 is complete and
toxicology studies and further manufacturing work are planned over
the coming months.
-- In October 2019, Sareum presented new findings showing that
SDC-1802, dosed orally as a monotherapy and in combination with
chemotherapy, significantly reduces tumour growth in models of
solid tumours and blood cancers.
-- In October 2020, the Company received a Notice of Allowance
for its US patent covering SDC-1802, the grant of which will
complete the patent protection of this compound in all major
territories.
TYK2/JAK1 Inhibitors for treating symptoms of Covid-19
-- A grant application has been submitted to UK Research and
Innovation (UKRI) to fund preliminary laboratory studies
investigating the potential of Sareum's TYK2/JAK1 inhibitors to
address the severe inflammatory responses (the "cytokine storm")
and potentially fatal respiratory symptoms of Covid-19 and other
viral infections.
-- A response is expected by the end of October 2020 which, if
successful, will enable initial studies to begin shortly
thereafter.
Licensed Programmes
FLT3+Aurora Inhibitors (haematological cancers)
-- On 26 March 2020, Sareum announced it entered a global
licensing deal for its FLT3+Aurora kinase inhibitor programme
targeting blood cancers with a China-based specialty pharmaceutical
company (the "Licensee").
-- Sareum received an upfront payment and is eligible to receive
an additional c.GBP0.90m should certain milestones be achieved by
January 2021, being within nine months of signing and receipt of
programme materials by the Licensee. Sareum is also eligible to
receive a further development-based milestone, and revenues upon
the commercialisation of any resulting products.
SRA737: A Selective Chk1 inhibitor (solid cancers)
-- The licence holder for SRA737, Sierra Oncology Inc.
("Sierra"), stated in August 2020 that it was exploring internal
and external options to support the continued development of
SRA737.
-- As of 25 September 2020, Phase 1/2 trials of SRA737 as a
monotherapy and in combination with low dose gemcitabine were both
reported to be complete.
-- In March 2020, new research published in Cancer Research
highlighted the anti-cancer effect of SRA737 in multiple human lung
and colorectal cancer cells, when used in combination with small
molecules that block DNA replication and repair (B-family DNA
polymerases), further adding to the encouraging data generated on
SRA737.
AUDITED FINANCIAL HIGHLIGHTS
-- As previously indicated, R&D Tax Credit of GBP0.23m was received in January 2020.
-- Raised GBP1.02m (gross) in June 2020 through a placing by
Hybridan LLP in conjunction with an offer via PrimaryBid to
progress the Company's TYK2/JAK1 drug development programmes as
well as for working capital purposes.
-- Loss on ordinary activities for the year ended 30 June 2020
(after taxation) of GBP0.99m (2019: loss of GBP1.45m), reflecting
the Company's careful management of cash resources.
-- Cash at bank as of 30 June 2020 was GBP1.80m (GBP1.0m as of
31 December 2019; GBP0.92m as of 30 June 2019).
-- As announced on 17 December 2019, the Company confirmed that
all directors had entered a voluntary salary deferral scheme,
whereby 33% of directors' salaries were being deferred until
further notice. On 1 July 2020, the Company announced an update to
the Salary Deferral Scheme and announced the settlement of
directors' deferred salary through the issue of new ordinary
shares. The Company also agreed to reduce the terms of CEO Dr Tim
Mitchell's salary deferral from 33% to 20% of his salary going
forward. All other directors agreed to continue to defer 33% of
their salaries until further notice.
Dr Tim Mitchell, CEO of Sareum, commented :
"Sareum has continued to make good progress with the preclinical
development of our proprietary dual TYK2/JAK1 inhibitor programmes.
Most recently, we have overcome an important formulation challenge
with SDC-1801, which will now be advanced into the toxicology
studies needed to complete our preparations for clinical
trials.
"In addition, we are pleased to have raised additional funding
during the period, which will be deployed to advance our
proprietary programmes towards clinical development and build a
robust data package to support our ongoing partnering activities
for these exciting and differentiated assets.
"We were pleased to sign a global licensing deal for our
FLT3+Aurora inhibitor programme targeting blood cancers with a
China-based specialty pharma company during the period. Progress is
being made by the Licensee in line with its development plan.
Further good progress would enable us to receive a
success-dependent milestone payment by January 2021 from this
agreement.
"Regarding SRA737, we continue to monitor Sierra Oncology's
activities as it explores options to fund the future development of
this novel compound. We were pleased to note that as of 25
September 2020, the website www.clinicaltrials.gov is reporting
that the Phase 1/2 trials of SRA737 as a monotherapy and in
combination with low dose gemcitabine in solid cancers are
complete. We look forward to the results of these completed trials
being disclosed. We will provide further updates on this and other
programmes when appropriate."
For further information, please contact:
Sareum Holdings plc
Tim Mitchell, CEO 01223 497 700
Strand Hanson Limited (Nominated Adviser)
James Dance / Richard Tulloch 020 7409 3494
Hybridan LLP (Nominated Broker)
Claire Noyce / John Beresford-Peirse 020 3764 2341
Citigate Dewe Rogerson (Financial PR)
Mark Swallow/ David Dible 020 7638 9571
About Sareum
Sareum is a specialist drug development company delivering
targeted small molecule therapeutics to improve the treatment of
cancer and autoimmune diseases. The Company aims to generate value
through licensing its candidates to international pharmaceutical
and biotechnology companies at the preclinical or early clinical
trials stage.
Sareum is advancing internal programmes focused on distinct dual
tyrosine kinase 2 (TYK2) / Janus kinase 1 (JAK1) inhibitors through
preclinical development as therapies for autoimmune diseases,
including the "cytokine storm" immune system overreaction to
Covid-19 and other viral infections, (SDC-1801) and cancer
immunotherapy (SDC-1802).
The Company's preclinical FLT3+Aurora inhibitor programme
targeting haematological cancers is licensed to a China-based
specialty pharma company.
Sareum also has an economic interest in SRA737, a clinical-stage
oral, selective Checkpoint kinase 1 (Chk1) inhibitor that targets
cancer cell replication and DNA damage repair mechanisms.
Preliminary Phase 2 and comprehensive preclinical data suggest
SRA737 may have broad application in combination with other
oncology and immune-oncology drugs in genetically defined
patients.
SRA737 was discovered and initially developed by scientists at
The Institute of Cancer Research in collaboration with Sareum, and
with funding from Sareum and Cancer Research UK. SRA737 was
licensed by CRT Pioneer Fund (CPF) to Sierra Oncology Inc. Sierra
is currently exploring options to obtain the funding or support
necessary to advance the future development of SRA737.
Sareum Holdings plc is listed on the AIM market of the London
Stock Exchange, trading under the ticker SAR. For further
information, please visit the Company's website at
www.sareum.com.
- Ends -
Full year results for the 12 months ended 30 June 2020
Chairman's and CEO's Statement
Sareum's primary focus during the year has been to continue
advancing its proprietary, selective dual tyrosine kinase 2 (TYK2)
/ Janus kinase 1 (JAK1) inhibitors through preclinical development.
These exciting candidates are being developed as potential
once-daily, oral immunotherapies targeting autoimmune diseases
(SDC-1801) and cancers (SDC-1802).
Both molecules demonstrate high selectivity for TYK2 and JAK1
kinases, with promising early safety data as well as compelling
activity being seen in relevant disease models.
In addition, both programmes represent unique licensing
opportunities for pharmaceutical partners as there are currently no
marketed products with the selectivity profile of these
molecules.
The Company continues to advance these development programmes
and was successful in raising just over GBP1 million in June 2020
to enable it to continue pursuing the following key objectives:
-- Complete experimental clinical trial enabling studies with at
least one candidate by the end of 2020. Having recently succeeded
in developing a higher dose formulation for toxicity testing, the
Company expects to submit a Clinical Trials Application (CTA) in Q1
2021.
-- Continue preclinical studies to determine the initial target
indications prior to the start of first-in-human studies.
-- Continue building a robust preclinical data package to support ongoing partnering activities.
-- Continue and advance initial discussions with potential
partners to secure commercial licences for these assets when they
reach late preclinical or early clinical stages.
In addition, the Covid-19 pandemic has presented a further
opportunity where these programmes may have application. The
Company has submitted an application for grant funding from UK
Research and Innovation (UKRI) for preliminary laboratory studies
to assess the potential of its TYK2/JAK1 inhibitors to address the
severe inflammatory responses (the "cytokine storm") and
potentially fatal respiratory symptoms of Covid-19 and other viral
infections. Whilst there can be no certainty that the application
will be successful, a decision is expected by the end of October,
and if it is positive, the Company intends to initiate the studies
as soon as possible thereafter.
The Company was pleased to announce in March 2020 that it had
signed a global licensing agreement for its FLT3+Aurora kinase
inhibitors targeting haematological (blood) cancers with a
China-based specialty pharmaceutical company. Under this agreement,
Sareum received a small upfront payment of GBP50,000 and is
eligible to receive a further c.GBP0.90 million should certain
milestones be achieved by January 2021. The Licensee reports that
progress is being made in line with its development plan, with the
prospect that further good progress will enable the Company to
receive the milestone payment. The Company is also eligible for
additional success-based development and commercialisation
payments. However, there can be no certainty that the milestones
will be achieved or that any further payments will become due.
With regards to the Chk1 inhibitor SRA737, the licensee, Sierra
Oncology Inc. ("Sierra"), noted in August 2020 that it was
exploring options to support the continued development of SRA737.
This candidate has demonstrated encouraging preliminary results in
Phase 1/2 clinical trials, particularly in anogenital cancer, and
promising data from preclinical studies in combination with a range
of other therapeutic approaches. The Board was pleased to see that
both clinical trials are now being reported as completed on the
website www.clinicaltrials.gov and looks forward to the final
results being disclosed. The Company remains in dialogue with CRT
Pioneer Fund (CPF), the licensor of SRA737 to Sierra, and will
update the market with any meaningful developments.
From an operational perspective, Sareum has remained fully
functional during the Covid-19 pandemic. To date there has been
limited impact on the Company's network of Contract Research
Organisations. While this has not so far affected the Company's
timeline to a large extent, there may be longer delays or other
factors that impact effectiveness if restrictions on work and
movement are increased.
Finally, the Board continues rigorously to manage the working
capital position of the Company and has taken steps, including
through a Board salary deferral scheme, to maximise its cash
runway. The Company remains focused on deploying its funds to
ensure the continued progress of its two TYK2/JAK1 programmes
towards achieving their key development objectives and thereby
increasing the value of the business.
PROGRAMME UPDATES
Selective TYK2/JAK1 Inhibitors in Autoimmune Diseases and
Cancer
SDC-1801 (autoimmune diseases)
SDC-1801 and related molecules have shown promising activity in
autoimmune disease models, including psoriasis, rheumatoid
arthritis, inflammatory bowel disease and systemic lupus
erythematosus (SLE).
Sareum has progressed SDC-1801 through preclinical studies that
have shown the compound to have excellent tolerability in
toxicology studies in rodents and work is continuing towards
completing the dose-finding and longer-term toxicology studies
ahead of human trials.
The Company has identified a formulation that is predicted to
deliver a therapeutic dose level. A higher dose formulation has
recently been developed, which is suitable to enable progression
into the toxicology studies needed prior to applying to investigate
SDC-1801 in human trials. This work is expected to be substantially
complete in 2020 and, if successful, the CTA to gain approval to
start first in human trials is expected to be submitted during Q1
2021.
A robust manufacturing route has been developed to produce
active ingredient under GMP (Good Manufacturing Practice)
conditions for both preclinical and clinical studies.
In addition, in June 2020, encouraging data were reported from
preclinical studies with Sareum's TYK2/JAK1 inhibitors in disease
models of systemic lupus erythematosus. These studies were
conducted by co-development partner SRI International (Menlo Park,
CA, USA) under a US Department of Defense (DoD) grant and published
on the website of the Defense Technical Information Center.
SDC-1802 (cancer immunotherapy)
SDC-1802 and related TYK2/JAK1 inhibitors have shown encouraging
anti-tumour activity in multiple cancer disease models. Sareum has
global commercialisation rights for TYK2/JAK1 inhibitors with
profiles optimised for oncology and immuno-oncology
applications.
SDC-1802 is advancing behind SDC-1801 in preclinical
development. Formulation work for oral dosing is complete and
toxicology studies and further manufacturing work are planned over
the coming months.
In October 2019, Sareum presented new findings showing that
SDC-1802, dosed orally as a monotherapy and in combination with
chemotherapy, significantly reduces tumour growth in models of
solid tumours and blood cancers. SDC-1802 was found to act through
a novel immunotherapeutic mechanism of action.
These findings were presented at the American Association for
Cancer Research (AACR) National Cancer Institute (NCI) European
Organisation for Research and Treatment of Cancer (EORTC)
International Conference.
On 8 October 2020, Sareum received a Notice of Allowance from
the US Patent and Trademark Office for a US patent to protect
SDC-1802 and pharmaceutical preparations thereof. Subject to
certain formalities being completed, the Company expects that the
patent will be granted within three months of this date. Grant of
this patent will complete the patent protection for this programme
across all major territories and follows similar patent protection
granted in Europe and in Japan and China.
The Company believes that the grant of this patent will enhance
the value of its TYK2/JAK1 inhibitor programmes overall and the
Company's negotiating position as it continues to engage in
discussions with potential licence partners.
TYK2/JAK1 Inhibitors for treating symptoms of Covid-19
There is substantial evidence in the scientific literature to
suggest that inhibitors of TYK2/JAK1 signalling could address the
severe inflammatory responses (the "cytokine storm") and
potentially fatal respiratory symptoms of Covid-19 and other viral
infections.
Several clinical trials with JAK kinase inhibitors have been
started to investigate the potential of targeting this pathway as a
therapeutic approach. On 8 October 2020, Eli Lilly & Co.
reported promising data from its Phase 3 trials of baricitinib,
which inhibits JAK1/JAK2 kinase-mediated cytokine release, in
hospitalised Covid-19 patients. The data showed that baricitinib in
combination with the anti-viral drug remdesivir significantly
reduced the time to recovery vs remdesivir alone, particularly in
patients that required supplemental oxygen. Mortality was also
decreased, again more pronounced in patients receiving oxygen.
Based on the growing evidence to support this approach, and the
fact that several other clinical studies with JAK inhibitor
molecules have been initiated in response to the Covid-19 pandemic,
Sareum has applied for grant funding to conduct preliminary
laboratory studies investigating the ability of its TYK2/JAK1
inhibitors to modulate (down-regulate) the overactive immune system
in relevant cellular and mouse disease models.
A grant application has been submitted to UK Research and
Innovation (UKRI) and, whilst there can be no certainty that the
application will be successful, a response is expected by the end
of October 2020. If the application is successful, the Company
intends to initiate studies as soon as possible thereafter.
These preliminary studies have been designed as a potential
first step towards clinical studies, pending success and further
funding.
Licensed Programmes
FLT3+Aurora Inhibitors
On 26 March 2020, Sareum announced it entered a global licensing
deal for its FLT3+Aurora kinase inhibitor programme targeting blood
cancers with a China-based specialty pharmaceutical company (the
"Licensee"). Under the terms of the agreement, the Licensee will
fund all future development activities for the licensed compounds
and has been granted the sole rights to commercialise any resulting
products worldwide.
Sareum received a small upfront payment on signing and is
eligible for c.GBP0.90 million due on certain milestones being
achieved within nine months of signing and receipt of programme
data by the Licensee, with a subsequent payment due on the
achievement of a pre-specified development milestone. The Licensee
confirmed receipt of the programme materials on 7 April 2020 and is
making progress in line with its development plan.
Sareum is also eligible to receive a further development-based
milestone, and revenues upon the commercialisation of any resulting
products. However, there can be no certainty that any milestones
will be achieved and/or that any further payments will become
due.
Licensed Programme - SRA737: A Selective Chk1 inhibitor
SRA737 is a potent, highly selective, orally bioavailable small
molecule inhibitor of Checkpoint Kinase 1 (Chk1), a key regulator
of important cell cycle checkpoints and central mediator of the DNA
Damage Response (DDR) network.
SRA737 is licensed to Sierra Oncology, which has presented
positive preliminary safety & efficacy data of the combination
of SRA737+low-dose gemcitabine (LDG) from a broad Phase 1/2
clinical development programme, which potentially supports further
development in anogenital cancer. As of 25 September 2020, both
this combination trial and an SRA737 monotherapy study are now
being reported as completed on the website www.clinicaltrials.gov
and the final results are anticipated to be published in due
course.
Sierra has also presented compelling preclinical data supporting
the use of SRA737 in combination with novel targeted therapeutic
approaches, including PARP inhibitors and immune checkpoint
blockade.
Furthermore, in March 2020, new research published in the
peer-reviewed journal Cancer Research highlighted the anti-cancer
effect of SRA737 in multiple human lung and colorectal cancer
cells, when used in combination with small molecules that block the
function of a family of proteins involved in DNA replication and
repair (B-family DNA polymerases).*
In June 2019, Sierra announced it was exploring non-dilutive
strategic options to support the next stages of development of
SRA737. Sierra has since appointed a new Chief Executive Officer,
Dr Stephen Dilly, on 1 June 2020. On 6 August, in the notes to
Sierra's 10-Q Quarterly Report, it stated that it is exploring
options to support the continued development of SRA737.
The Company remains committed to updating the market when there
are any meaningful developments announced by Sierra.
*R.F. Rogers et al. CHK1 inhibition is synthetically lethal with
loss of B-family DNA polymerase function in human lung and
colorectal cancer cells. (2020) Cancer Research
https://cancerres.aacrjournals.org/
Impact of Covid-19 on operations
The Covid-19 pandemic has affected everyday activities on an
unprecedented global scale. The Company has been following UK
government advice to minimise risk to staff. At present, Sareum
remains fully operational, although management's effectiveness may
be impacted if restrictions are increased. To date there has been
only minor impact on the Company's network of Contract Research
Organisations, with some short delays in the delivery of chemical
intermediates and solvents, and a slight increase in lead times
when initiating experiments. Whilst this has not so far affected
the Company's timelines to a large extent, there may be longer
delays if further restrictions on work and movement are added.
FINANCIAL REVIEW
Sareum ended the year to 30 June 2020 with net assets of GBP1.80
million (2019: GBP1.09 million) of which GBP1.80 million (GBP1.00
million as of 31 December 2019; GBP0.92 million as of 30 June 2019)
comprised cash at bank.
The cash balance includes proceeds from a placement that raised
GBP1.02 million (gross) in June 2020, which comprised a placing by
Hybridan LLP in conjunction with an offer via PrimaryBid, resulting
in the issue of, in aggregate, 170,370,400 new ordinary shares of
0.025p each in the capital of the Company ("Ordinary Shares") at
0.6p per share.
The new funds are being deployed to progress the Company's
TYK2/JAK1 drug development programmes as well as for working
capital purposes.
Non-cash assets include a R&D tax credit of GBP135,000,
which is expected to be received as cash in January 2021.
Operating expenses for the period at GBP1.14 million (2019:
GBP1.68 million) have been significantly reduced compared to the
previous 12-month period as the Company carefully manages its
financial resources and focuses its research expenditure on its
proprietary TYK2/JAK1 autoimmune disease and cancer programmes.
Loss on ordinary activities for the period (after taxation) was
GBP0.99 million (2019: loss of GBP1.45 million), again reflecting
the Company's careful management of cash resources.
Salary Deferral Scheme
As announced on 17 December 2019, the Company confirmed that all
directors had entered a voluntary salary deferral scheme, whereby
33% of directors' salaries were being deferred until further notice
(the "Salary Deferral Scheme").
On 1 July 2020, the Company announced an update on the Salary
Deferral Scheme and announced the settlement of directors' accrued
deferred salaries up to 30 June 2020, after deducting all
applicable taxes which will be settled by the Company, through the
issue of new Ordinary Shares (the "Deferred Salary Shares"). The
issue of the Deferred Salary Shares had a positive effect of
reducing the Company's accrued liabilities by an aggregate amount
of GBP124,152 (including the cash settlement of applicable
taxes).
The Company also agreed to reduce the terms of CEO Dr Tim
Mitchell's salary deferral from 33% to 20% of his salary going
forward. All other directors agreed to continue to defer 33% of
their salaries until further notice.
Outlook
The past year has seen Sareum advance the preclinical
development of its proprietary dual TYK2/JAK1 inhibitor programmes.
The Company has successfully developed a higher dose formulation of
SDC-1801 in recent weeks, which is suitable to enable progression
into the toxicology studies needed prior to applying to investigate
SDC-1801 in human trials. This work is expected to be substantially
complete in 2020 and, if successful, the CTA is expected to be
submitted during Q1 2021.
The Company also awaits the outcome of its grant application to
UK Research and Innovation (UKRI), and, whilst there can be no
certainty that the application will be successful, a response is
expected by the end of October 2020. If the application is
successful, the Company intends to initiate studies as soon as
possible thereafter.
The successful fundraise during the period is being deployed to
advance Sareum's TYK2/JAK1 programmes towards clinical development
and build a robust data package to support ongoing partnering
activities for these differentiated assets. Further updates will be
given as these programmes advance through material milestones.
The Company's financial position could be strengthened further
by January 2021, if continued positive progress in the licensed
FLT3+Aurora inhibitor programme triggers the c.GBP0.90 million due
on certain milestones being achieved. It should be noted though,
that whilst the Licensee reports progress is being made, there can
be no certainty that the milestone payment will become due.
Regarding SRA737, Sareum continues to monitor Sierra's
activities as it explores options to, both internally and
externally, fund the future development of this novel compound.
With both clinical trials now reported to be complete, final
results are anticipated in the future. Sareum is committed to
providing further updates on this programme when information
becomes available.
Overall, the Company expects to report on continued progress
with its internal, proprietary programmes and its licensed
programmes during the coming year. For its TYK2/JAK1 inhibitor
programmes, the Directors will continue to review the potential
higher value of a later-stage licensing deal versus the requirement
for any additional funding.
Meanwhile, the Board and management will continue to employ
rigorous capital management in the development of its internal
assets and its overall business, with a clear focus on generating
value for shareholders.
Dr Stephen Parker Dr Tim Mitchell
Chairman Chief Executive Officer
Consolidated statement of comprehensive income for the year
ended 30 June 2020
2020 2019
Notes GBP GBP
CONTINUING OPERATIONS
Revenue 47,204 -
Other operating income - -
Administrative expenses (1,142,153) (1,676,439)
Share of (loss)/profit of
associates (29,726) (10,016)
OPERATING LOSS (1,124,675) (1,686,455)
------------ -----------------
Finance income 4,554 4,085
------------ -----------------
LOSS BEFORE INCOME TAX 5 (1,120,121) (1682,370)
Income tax 6 134,208 229,905
------------ -----------------
LOSS FOR THE YEAR (985,913) (1,452,465)
-----------------
TOTAL COMPREHENSIVE EXPENSE
FOR THE YEAR (985,913) (1,452,465)
------------ -----------------
Loss attributable to:
Owners of the parent (985,913) (1,452,465)
============ =================
Total comprehensive income
attributable to:
Owners of the parent (985,913) (1,452,465)
============ =================
Earnings per share expressed
in pence per share: 7
Basic and diluted (0.03)p (0.05)p
Consolidated balance sheet as of 30 June 2020
2020 2019
Notes GBP GBP
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 2,628 -
Investments in Associates 4 1,633 31,359
------------- -------------
4,261 31,359
------------- -------------
CURRENT ASSETS
Trade and other receivables 59,768 59,476
Tax receivable 135,233 230,933
Cash and cash equivalents 8 1,802,857 919,343
------------- -------------
1,997,858 1,209,752
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 198,537 146,926
------------- -------------
NET CURRENT ASSETS 1,799,321 1,062,826
------------- -------------
NET ASSETS 1,803,582 1,094,185
============= =============
SHAREHOLDERS' EQUITY
Called up share capital 810,433 718,997
Share premium 14,765,926 13,162,052
Share-based compensation reserve 407,872 407,872
Merger reserve 27 27
Retained earnings (14,180,676) (13,194,763)
------------- -------------
TOTAL EQUITY 1,803,582 1,094,185
============= =============
Consolidated statement of changes in equity for the year ended
30 June 2020
Called up Share-based
share Retained compensation Merger
capital earnings Share premium reserve reserve Total equity
GBP GBP GBP GBP GBP GBP
Balance at 30
June 2018 686,305 (11,742,298) 12,395,744 292,811 27 1,632,589
Changes in
equity
Issue of share
capital 32,692 - 766,308 - - 799,000
Total
comprehensive
income - (1,452,465) - - - (1,452,465)
Share-based
compensation - - - 115,061 - 115,061
Balance at 30
June 2019 718,997 (13,194,763) 13,162,052 407,872 27 1,094,185
Changes in
equity
Issue of share
capital 91,436 - 1,603,874 - - 1,695,310
Total
comprehensive
income - (985,913) - - - (985,913)
Share-based - - - - - -
compensation
Balance at 30
June 2020 810,433 (14,180,676) 14,765,926 407,872 27 1,803,582
Consolidated cash flow statement for the year ended 30 June
2020
2020 2019
Notes GBP GBP
Cash flows from operating activities
Cash generated from operations 9 (1,042,995) (1,515,764)
Tax received 229,908 252,534
------------ ------------
Net cash outflow from operating
activities (813,087) (1,263,230)
------------ ------------
Cash flows from investing activities
Purchase of tangible fixed assets (3,263) -
Interest received 4,554 4,085
------------ ------------
Net cash from investing activities 1,291 4,085
------------ ------------
Cash flows from financing activities
Loan repayment by director - 4,213
Share issue 91,436 32,692
Share premium on share issue 1,603,874 766,308
------------ ------------
Net cash inflow from financing
activities 1,695,310 803,213
------------ ------------
Increase/(Decrease) in cash
and cash equivalents 883,514 (455,932)
Cash and cash equivalents at
beginning of year 8 919,343 1,375,275
------------ ------------
Cash and cash equivalents at
end of year 8 1,802,857 919,343
============ ============
Notes to the consolidated financial statements for the year
ended 30 June 2020
1. Basis of preparation
The consolidated financial statements of Sareum Holdings plc and
its subsidiaries (the Group) have been prepared in accordance with
International Financial Reporting Standards (IFRS), as adopted for
use in the European Union, with IFRIC interpretations and with
those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. The financial statements have been prepared
under the historical cost convention.
IFRS comprise standards and interpretations approved by the
IASB. IFRS as adopted by the European Union differ in certain
respects from IFRS as issued by the IASB. However, consolidated
financial statements for the financial years presented would be no
different had IFRS as issued by the IASB been applied. References
to IFRS hereafter should be construed as references to IFRS as
adopted by the European Union.
Going concern
The Directors acknowledge that there is uncertainty concerning
the outcome of the UK's negotiations to exit the EU, though do not
currently consider that this represents a significant risk to the
Group's prospects.
From an operational perspective, Sareum has remained fully
functional during the Covid-19 pandemic and there has been limited
impact on the Company's network of Contract Research Organisations.
Therefore, the Directors do not expect the pandemic to
significantly impact the operations of the Group.
The Directors consider that the cash held at the year-end will
be sufficient to meet the forecast expenditure for at least one
year from the date of signing of these the financial statements. If
there is a shortfall the Directors will implement cost savings to
ensure that the cash resources last for this period of time.
For these reasons the financial statements have been prepared on
a going concern basis.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 30 June each year. Control is
achieved where the Company has the power to govern the financial
and operating policies of another entity or business, so as to
obtain benefits from its activities. The consolidated financial
statements present the results of the Company and its subsidiaries
(the Group) as if they formed a single entity. Inter-company
transactions and balances between Group companies are eliminated on
consolidation.
2. Statutory Information
Sareum Holdings plc is a public company, registered in England
and Wales. The Company's registered number is 05147578 and the
registered office address can be found in note 11 below.
3. Accounting policies
The principal accounting policies applied are set out below.
Property, plant and equipment
Depreciation is provided at the following annual rates in order
to write off each asset over its estimated useful life:
Fixtures and computers - straight line over three or four years
Financial instruments
Financial instruments are classified and accounted for,
according to the substance of the contractual arrangement, as
either financial assets, financial liabilities or equity
instruments. An equity instrument is any contract that evidences a
residual interest in the assets of the Company after deducting all
of its liabilities.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand
deposits and other short term highly liquid investments that are
readily convertible to a known amount of cash and are subject to
insignificant risk of change in value.
Taxation
Current taxes are based on the results shown in the financial
statements and are calculated according to local tax rules, using
tax rates enacted or substantially enacted by the balance sheet
date.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events have occurred at that date that will
result in an obligation to pay more, or a right to pay less or to
receive more tax, with the following exception:
Deferred tax assets are recognised only to the extent that the
Directors consider that it is more likely than not that there will
be suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax
rates that are expected to apply in the periods in which timing
differences reverse, based on the tax rates and laws enacted or
substantively enacted at the balance sheet date.
Research and development
Expenditure on research and development is written off in the
year in which it is incurred.
Operating lease agreements
Rentals applicable to operating leases where substantially all
the benefits and risks of ownership remain with the lessor are
charged against profits on a straight-line basis over the period of
the lease.
Pension contributions
The Group does not operate a pension scheme for the benefit of
its employees but instead makes contributions to their personal
pension policies. The contributions due for the period are charged
to the profit and loss account.
Employee share scheme
The Group has in place a share option scheme for employees,
which allows them to acquire shares in the Company. Equity-settled
share-based payments are measured at fair value at the date of
grant. The fair value of options granted is recognised as an
expense spread over the estimated vesting period of the options
granted. Fair value is measured using the Black-Scholes model,
taking into account the terms and conditions upon which the options
were granted.
Revenue recognition
Revenue is measured as the fair value of the consideration
received or receivable in the normal course of business, net of
discounts, VAT and other sales related taxes and is recognised to
the extent that it is probable that the economic benefits
associated with the transaction will flow to the Company. Revenues
from licensing agreements are recognised in line with the
performance obligations being met, as outlined in the terms of the
agreement. Grant income is recognised as earned based on
contractual conditions, generally as expenses are incurred.
Investment in associates
An associate is an entity over which the Company has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not
control or joint control over those policies. Investments in
associates are accounted for using the equity method, whereby the
investment is initially recognised at cost and adjusted thereafter
for the post-acquisition change in the associate's net assets with
recognition in the profit and loss of the share of the associate's
profit or loss.
Critical accounting estimates and areas of judgement
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates. The
estimates and assumptions that have the most significant effects on
the carrying amounts of the assets and liabilities in the financial
information are considered to be research and development costs and
equity-settled share-based payments.
Accounting standards and interpretations not applied
At the date of authorisation of these financial statements, the
following standards and interpretations relevant to the Group that
have not been applied in these financial statements were in issue
but not yet effective:
Standard Effective for accounting periods
starting on or after
Amendments
to IAS 1 Definition of material 1 January 2020
Amendments
to IFRS Interest Rate Benchmark Reform 1 January 2020
9
Amendments
to IFRS Definition of Business 1 January 2020
3
Conceptual Framework for Financial Reporting 1 January 2020
Amendments Sale or Contribution of assets between
to IFRS10 an Investor and its Associates or deferred indefinitely
Joint Venture
The Directors anticipate that the adoption of these standards
and interpretations in future years will have no material impact on
the financial statements of the Group.
No standards or interpretations adopted in the year had any
material impact on the financial statements of the Group.
4. Investments in associates
Interest
in associates
GBP
Cost
At 1 July 2019 and 30 June 2020 1,138,125
Impairment
At 1 July 2019 1,106,766
Impairment for year 29,726
---------------
At 30 June 2020 1,136,492
---------------
Net book value
At 30 June 2020 1,633
===============
At 30 June 2019 31,359
===============
Interest in joint venture
The Investment in Associates represents the investment by the
Group in the partnership with the Cancer Research Technology
Pioneer Fund to advance the Chk1 programme. The associate has been
accounted for using the equity method in the consolidated financial
statements. Sareum's interest in the associate partnership is
27.5%. As of 30 June 2020, the partnership had net assets of
GBP13,102 (2019: GBP121,195) and had incurred cumulative losses of
GBP660,118 (2019: GBP552,025)
5. (Loss)/profit before income tax
The (loss)/profit before income tax is stated after
charging:
2020 2019
GBP GBP
Other operating leases 17,745 18,420
Depreciation - owned assets 635 8,000
Research and development 549,348 939,174
Auditor's remuneration - see analysis
below 13,645 13,375
======== ========
The analysis of auditor's remuneration
is as follows:
Fees payable to the Company's auditor
for the audit of the annual accounts:
Audit of the Company 4,700 4,600
Audit of subsidiaries 7,600 7,450
-------- --------
Total audit fees 12300 12,050
Fees payable to the Company's auditor
for other services:
Taxation services 1,345 1,325
Total fees payable to the Company's auditor 13,645 13,375
======== ========
6. Income tax
2020 2019
GBP GBP
Current tax:
UK corporation tax credit on (losses)/profits
of the period (134,208) (225,985)
Adjustments recognised in the current
year in relation to the current tax of
prior years - (3,920)
---------- ----------
Tax credit to the income statement (134,208) (229,905)
========== ==========
The credit for the year can be reconciled to the accounting loss
as follows:
2020 2019
GBP GBP
(Loss)/profit before tax (1,120,121) (1,682,370)
============ ============
At standard rate of 19% (212,823) (319,650)
Effects of:
Capital allowances (less)/more of depreciation 64 (699)
Other timing differences (985) 633
Unutilised tax losses 137,283 192,869
Losses surrendered for research and development
tax credits (less uplift) 76,461 126,847
Research and development tax credits
claimed (134,208) (225,985)
Prior year adjustments - (3,920)
------------ ------------
Actual current tax credit in the year (134,208) (229,905)
============ ============
7. Loss per share
The calculation of (loss)/profit per share is based on the
following data:
Basic (loss)/profit per share:
2020 2019
Loss on ordinary activities after tax GBP(985,913) GBP(1,452,465)
Weighted average number of shares for
basic loss per share 3,080,071,969 2,826,717,857
Basic (loss)/profit per share (0.03)p (0.05)p
As the Group generated a loss for the period, there was no
dilutive effect in respect of share options.
8. Cash and cash equivalents
2020 2019
GBP GBP
Bank deposit account 1,794,467 908,676
Bank accounts 8,390 10,667
---------- --------
1,802,857 919,343
========== ========
9. Reconciliation of (loss)/profit before income tax to cash
generated from operations
2020 2019
GBP GBP
(Loss)/profit before income tax (1,120,121) (1,682,370)
Depreciation charges 635 8,000
Share-based compensation - 115,061
Share of cost of associate 29,726 10,016
Finance income (4,554) (4,085)
------------ ------------
(1,094,314) (1,553,378)
(Increase)/decrease in trade and other
receivables (292) 74,143
Increase/(decrease) in trade and other
payables 51,611 (36,529)
------------ ------------
Cash used in operations (1,042,995) (1,515,764)
============ ============
10. Dividend
The Directors are not able to recommend payment of a
dividend.
11. Copies of the report and accounts
Copies of the report and accounts will be posted to those
shareholders that have requested them, will be available from the
Company's registered office at 2a Langford Arch, London Road,
Pampisford, Cambridge CB22 3FX, and will be placed on the Company's
website at http://www.sareum.com/.
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END
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