Synairgen plc - Interim results for the six months ended 31 December 2007
12 Mar 2008
Synairgen plc (LSE: SNG), the drug discovery company focused on asthma and chronic obstructive pulmonary disease ('COPD'), today announces its interim results for the six months ended 31 December 2007.
Operational Highlights
* September 2007, exclusive licence and supply agreement
signed with
Rentschler Group for supply of novel formulation
of interferon beta
('IFN-beta');
* Progression of preclinical and regulatory work on
Rentschler IFN-beta
formulation and delivery system in preparation
for dual-centre Phase I
safety study (SG004) in moderate asthmatics,
anticipated commencement Q2
2008;
* SG004 designed to provide evidence that anti-viral system
can be
activated in asthma by delivery of inhaled
IFN-beta; and
* Advancement of SNG-3, a biological designed to restore
barrier function
in asthma. Manufacturing process development
commenced. Collaboration
initiated with Wayne State University to test
efficacy of the protein in an
asthma-like in vivo model.
Financial highlights
* Research and development expenditure for the period:
£1.02 million
(2006: £0.67 million);
* Post tax loss for the period: £1.09 million (2006:
loss of £0.73
million); and
* Net funds at 31 December 2007 of £5.13 million (31
December 2006: £6.74
million).
Commenting on the results, Simon Shaw, Chairman of Synairgen, said: "This period has seen us continue to develop our novel lead programmes efficiently and at a level of cost which belies their enormous market potential. Our lean organisation enables us to devote maximum resources to the delivery of these projects whilst retaining a relatively low cash burn for this industry. We look forward, regulatory approval permitting, to commencing the next stage of our exciting interferon programme this year."
For further information, please contact:
Synairgen
Tel: + 44 (0) 2380 512 800
Richard Marsden, Managing Director
John Ward, Finance Director
Hogarth
Partnership
Tel: + 44 (0) 20 7357 9477
Melanie
Toyne-Sewell
Mobile: +44 (0) 7767 66 00 40
Simon Hockridge
CHAIRMAN'S STATEMENT
OPERATING REVIEW
The first six months of the year have seen considerable operational progress particularly on our three lead programmes: IFN-beta to prevent common cold-induced exacerbations of asthma and COPD, and SNG-3, our protein designed to restore the lung's epithelial barrier function in asthma.
Candidate
Indication Programme status
Discovery
Preclinical Clinical
phase
development Phase I
IFN-beta
(SNG-1)
Asthma
-
IFN-beta
(SNG-2)
COPD
-
Barrier function protein
Asthma
-
(SNG-3)
Proteomics
Asthma
-
Barrier function screen
Asthma
-
and lesion
Peptide
delivery
Asthma
-
Collaboration
Asthma
-
IFN-beta for asthma and COPD
There is a great need for products that can help patients with
lung disease defend themselves against viruses such as the common
cold and influenza. The common cold virus is considered to be the
greatest cause of hospitalisations for asthma, and has been
similarly implicated in COPD. The anti-viral defence in asthmatic
and COPD patients is recognised as deficient with particularly
difficult consequences for the lungs. Research shows that low doses
of IFN-beta significantly boost the anti-viral defences in
asthmatic and COPD airway cell cultures. Synairgen is developing an
inhaled formulation of IFN-beta for asthma
and COPD.
Synairgen is working with an expert group of clinical teams around the world to commence proof of concept studies in asthma and COPD in late 2009 (SG005 and SG006 respectively). In these studies, asthmatics and 'healthy' smokers will be given a common cold and will be treated with either inhaled placebo or IFN-beta. During summer 2008 a clinical trial (SG007), in partnership with members of our expert group, will commence, which will further characterise/progress the common cold model in asthma - required for SG005. Also in 2008, in collaboration with the University of Southampton and the University of Athens, a study (SG008) will be initiated to investigate asthmatic patients admitted into hospital for virally-induced exacerbations. These patients are Synairgen's target market for the IFN-beta product.
From late 2006, it became clear that securing an exclusive patent-protected source of IFN-beta would enhance the attractiveness of the programme and expand the universe of potential partners. In September 2007, a significant milestone was achieved through our exclusive licence agreement with the Rentschler Group of Germany. Rentschler is a specialist international developer and manufacturer of biopharmaceuticals. It is collaborating with Synairgen to provide its novel patent-protected formulation of IFN-beta, analytical and regulatory services, and data to support use of its IFN-beta compound. This agreement also commits future supply of product on an exclusive basis.
Prior to commencing the proof of concept studies, we have to demonstrate the safety of inhaled IFN-beta. During the period, we have completed the analysis of the first single dose safety study of inhaled IFN-beta (SG003) and have prepared for our second study: a multiple dose study in moderate asthmatics (SG004). This preparation has included completion of a local tolerance study of the Rentschler formulation, optimisation of the Rentschler formulation with the delivery device, biomarker identification, and compilation of an IMPD (Investigational Medicinal Product Dossier).
In SG004 we will also seek to demonstrate, through the measurement of biomarkers, that we are successfully 'switching on' the anti-viral defence which is considered to be defective in asthma.
SG004 will be conducted at two sites in order to expedite the study timeline. The data from SG004 will be used to support the two proof of concept studies in asthma and COPD (SG005 and SG006).
It is Synairgen's intention to partner the IFN-beta programme with one of the major pharmaceutical companies that can complete the development of, and ultimately market, a product which represents a breakthrough, first-in-class compound. We have an ongoing dialogue with several large pharmaceutical companies in respect of the IFN-beta opportunity and keep them appraised of the status of the programme as we take it through the important early milestones.
Barrier function in asthma
The cells that line the lungs form a barrier that prevents unwanted particles in the air that we breathe from aggravating the sensitive underlying tissue. Using our models of human airway cultures we have shown this barrier to be defective in asthma. In particular, 'tight junction' proteins that normally 'knit' these cells together are poorly organised in asthma, making this barrier 'leaky'.
Using a patented screening assay (US patent granted February 2008), we have identified a protein (SNG-3) that reorganises and re-establishes the barrier without promoting unwanted structural changes in the lung. We have initiated the cGMP manufacturing steps for SNG-3 with Alpha Biologics, in preparation for an inhaled toxicology programme.
In parallel, we are collaborating with Professor David Bassett at Wayne State University (US) to test the protein in a murine model of poor barrier function, with results expected later this year. We hope to initiate a proof of mechanism clinical trial within two years.
Other activity
Synairgen's other programmes are designed to provide future candidates for development and these are progressing according to timescales and are achieving their objectives; not least of which is the discovery programme in conjunction with an unnamed biotechnology partner.
Our research is dependent upon the airway models of asthma and COPD which require a constant supply of fresh cells collected from the airways of our volunteers. During the period, we conducted our 200th bronchoscopy; an achievement made possible through the hard work of the Synairgen team.
FINANCIAL REVIEW
Income statement
The operating loss for the six months ended 31 December 2007 was
£1.42 million (2006: loss of £1.00 million). Research
and development expenditure increased from £0.67 million to
£1.02 million as the Company prepares for the forthcoming
IFN-beta safety study in asthmatics using the Rentschler
formulation and scales up its barrier function protein programme.
Administrative costs increased from £0.37 million to
£0.40 million. Interest receivable decreased from £0.17
million to £0.16 million on account of lower deposit
balances. The increase in the tax credit from £0.09 million
to £0.17 million reflects the higher level of expenditure
that qualifies for UK research and development tax credits. The
loss after tax was £1.09 million (2006: loss of £0.73
million) and the loss per share
was 5.0p (2006: loss of 3.4p).
Balance sheet and cash flow
At 31 December 2007, net assets amounted to £5.20 million (31 December 2006: £7.11 million), including net funds of £5.13 million (2006: £6.74 million).
Cash outflow for the six months to 31 December 2007 was £0.89 million (six months ended 31 December 2006: £0.75 million).
Adoption of International Financial Reporting Standards ('IFRS')
The Company has adopted IFRS as adopted for use in the European Union on 1 July 2007. Comparative numbers in the financial information have been restated and a reconciliation of the previously reported UK GAAP information to that compiled under IFRS is shown in note 4 to the financial information.
OUTLOOK
Over the course of 2008 we expect to attain some significant milestones on our lead projects. Pending clinical trial approval for SG004, we will be commencing the first clinical trial of our lead compound in its target asthma population. In addition, through our collaboration with Wayne State University, we expect to see the first in vivo results of our barrier function-restoring protein SNG-3.
Simon Shaw
Chairman
The full text of this announcement is available on RNS.
