Synairgen plc - Preliminary results for the year ended 30 June 2008
31 Jul 2008
Synairgen (LSE: SNG), the drug discovery company focused on asthma and COPD, today announces its preliminary results for the year ended 30 June 2008.
Operational highlights
* Preparation for and
commencement of dual-centre Phase I study (SG004) of inhaled
interferon beta ('IFN-beta') in moderate asthmatics;
* Exclusive in-licence
and supply agreement signed with Rentschler Group for novel
patent-protected formulation of IFN-beta for the treatment of
respiratory diseases by inhalation;
* Development and
validation of biomarkers in blood and sputum relevant to IFN-beta
response; and
* Advancement of core
technology platform, including biobank.
Financial highlights
* Research and development expenditure for
the year: £2.0 million (2007: £1.5
million);
* Post tax loss for the
year: £2.2 million (2007: £1.6 million); and
* Cash at 30 June 2008:
£4.0 million (2007: £6.0 million).
Commenting on the results, Simon Shaw, Chairman of Synairgen, said: "Against a backdrop of increasing evidence of the impact of virus infection on respiratory patients, the primary focus of our current resources continues to be on expediting our two potential blockbuster indications (asthma and COPD) for inhaled interferon beta."
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
Sarah MacLeod / Simon Hockridge
BUSINESS OVERVIEW
During the year to 30 June 2008, we have made significant progress on our core programmes and have, in parallel, continued to develop our relationships with potential partners in the pharmaceutical industry.
The Group's finances have remained under tight control in
preparation for the next clinical trial of our lead programme,
inhaled interferon beta ('IFN-beta'), which is being developed to
prevent exacerbations of asthma and Chronic Obstructive Pulmonary
Disease
('COPD').
At the same time we have further enhanced the Group's technology platform based upon the use of our "biobank" of samples from both healthy volunteers and those with respiratory conditions. Samples from the biobank are used to create cell-based assays for target discovery and validation, screening of novel compounds, and modelling the pharmacokinetic and pharmacodynamic effects of new therapies.
Our success with this approach is largely due to the
well-characterized nature of the
biobank, which enables us to differentiate confidently between
healthy controls and samples from volunteers with respiratory
disease at different levels of severity. This capability has not
only given rise to our own proprietary research and development
programmes, but also represents a focal point for collaborative
work with the biopharmaceutical industry, which is itself
increasingly exploring new ways of harnessing innovation from
companies such as Synairgen.
Synairgen's proprietary activities
Synairgen currently has one programme in clinical development for two separate indications, and a second at the preclinical testing stage. In addition the application of proteomics to our biobank and some targeted research alongside the University of Southampton continues to yield further innovative discovery opportunities.
Inhaled IFN-beta
Synairgen's lead programme is the use of inhaled IFN-beta to combat the debilitating effect of virus infections, typically human rhinovirus, (the common cold), on asthma and COPD sufferers. The common cold causes up to 80% of all hospitalisations associated with asthma and is also a significant cause of COPD exacerbations. A therapy that prevents or minimises this effect in either patient group would address a major and costly unmet clinical need, and would add significantly to the respiratory physician's armoury, with potential market place revenues in each indication of well over $1 billion per annum.
This year, in preparation for our first study in moderate asthma, we have achieved a significant number of project milestones:
In the first half of the year we successfully completed the analysis of the first safety study (SG003) in atopic subjects (healthy volunteers who have allergies).
Since then, we have selected and exclusively in-licensed a novel formulation of IFN-beta for the treatment of respiratory diseases by inhalation from the Rentschler Group of Germany, including appropriate access to the regulatory and safety data that supported the marketing authorisation application for systemic administration of IFN-beta for multiple sclerosis sufferers. This patent-protected formulation has many advantages over alternative IFN-beta preparations and is suitable for both clinical development and the market place. We have successfully completed the pre-clinical safety studies to allow this formulation to be used in our next trial (SG004).
Furthermore we have secured the supply of a specialist
inhalation device, the I-neb®, manufactured by Respironics
Inc., which we have validated for use in the next trial. The I-neb
has the advantage over alternative systems in that it enables
liquid aerosol delivery to be biased to the conducting (central)
airways, which are the primary sites of rhinovirus
infection in the lungs.
Each of these steps was necessary for us to assemble a package
that met the needs of the
development plan and the regulatory authorities. The establishment
of appropriate infrastructure, quality systems and documentation to
conduct SG004, which will primarily
investigate the safety and tolerability of inhaled IFN-beta at
escalating single and multiple
doses in moderate asthmatic patients, was carried out during the
first half of 2008. In June 2008, we received all necessary
approvals to commence the study, which will be conducted at both
the Wellcome Trust Clinical Research Facility in Southampton and
the Medicines Evaluation Unit in Manchester. The first volunteer
entered into the study on 28 July 2008 and the study is expected to
complete in the second quarter of 2009.
Alongside the preparation for SG004, we have worked on developing and validating biomarkers in blood and sputum to indicate whether inhaled IFN-beta sets in motion the body's natural anti-viral defences.
During the forthcoming year, SG007 will be advanced at Southampton and Imperial College under the guidance of Professors Ratko Djukanovic and Sebastian Johnston respectively. This study seeks to validate the administration of rhinovirus to moderate asthmatics, in advance of our first clinical proof of concept Phase IIa studies in asthma and COPD (SG005 and SG006), which are scheduled for the winter season of 2009/10.
Barrier function
The cells lining a healthy individual's lung (the "epithelium") form a natural barrier to protect against unwanted particles and environmental contamination of the sensitive underlying tissues. Synairgen has shown this barrier to be defective in asthma sufferers. In particular, the tight junction proteins that normally "knit" epithelial cells together are poorly organised and contribute to the creation of a "leaky" barrier. Synairgen's first candidate in this arena is SNG-3, a protein that re-organises and re-establishes this barrier. This is currently being tested in collaboration with Wayne State University, USA, in proprietary models established by Professor David Bassett, with results expected during the second half of 2008. In addition, Synairgen is seeking to screen other potential candidates for this exciting area, using our proprietary patent-protected screening assays applied to samples from our biobank.
Collaborative and discovery activities
Alongside our proprietary programmes, we continue to work with
collaborators using our proprietary technology platform and the
"bench-to-bedside" expertise afforded by being so closely
associated with the University of Southampton's School of Medicine
and the NHS
Trust at Southampton General Hospital.
During the year, the discovery programme with our unnamed North American biotechnology partner completed the second phase of its work and has identified novel targets worthy of further investigation. We are currently discussing next steps with the partner.
Our in-house proteomics work has continued to generate interesting discoveries through analysis of lung tissue. In conjunction with academic investigators we continue to develop the areas from which new proprietary and partnered programmes will emerge.
Intellectual property and technology platform
During the year, we added two significant pieces of intellectual property to our portfolio; first we obtained an exclusive licence to the patent-protected Rentschler formulation of IFN-beta; an essential milestone for our lead programme. In February 2008, a US patent was granted for our proprietary screening method to test the effect of potential drug candidates on the lung's barrier function.
Our biobank activities increased substantially during the period, with the 200th bronchoscopy conducted in house. We are now in the enviable position of holding a broad bank of well-characterised samples, to which we continue to add, and which provides a valuable platform for our future research activities.
Staff
In an organisation which is deliberately kept lean, none of this
would be possible without the dedication and focus of our small but
highly expert team consisting of both scientists, including aerosol
and epithelial assay specialists, and Synairgen's core clinical
team of
nurses and doctors who collect biobank samples and carry out our
clinical trials so
effectively.
FINANCIAL REVIEW
The financial focus of the period under review has been consistent with a primary tenet of this company since its foundation in 2003; namely to achieve significant biotechnological and clinical advances efficiently and as cost effectively as possible. This allows us to maximize the use of our cash and ensure that we have a sensible period in which to move to the next stage of our lead development programmes.
International Financial Reporting Standards
This is the first annual financial statements for the Group presented under International Financial Reporting Standards as adopted by the European Union ('IFRS'). The comparative figures have also been restated to reflect this. There has been no significant impact on the Group in either the current year or the restated historic results.
Income statement
Group revenue for the year ended 30 June 2008 was £nil (year ended 30 June 2007: £78k). The operating loss for the year was £2.76 million (2007: loss of £2.23 million). Research and development expenditure increased from £1.52 million to £2.00 million as the Group increased its investment into the IFN-beta, barrier function and other programmes. The most significant investment has been into the IFN-beta programmes for asthma and COPD. Following the in-licensing of the Rentschler formulation, pre-clinical work has been satisfactorily completed and significant regulatory preparation work has been required to secure the approvals for the forthcoming SG004 safety study in moderate asthmatics. Other areas of expenditure have included progression of COPD programme and preparation for the multi-centre SG007 study to characterise the common cold model in asthma. With regards to the barrier function programme, the main external costs related to further pre-clinical formulation work. Other administrative costs were held at their 2007 level of £0.75 million. Interest receivable decreased from £0.34 million to £0.29 million. The increase in the tax credit from £0.25 million to £0.32 million reflects the higher level of expenditure which qualifies for UK research and development tax credits. The loss after tax was £2.15 million (2007: loss of £1.64 million) and the loss per share was 9.92p (2007: loss of 7.56p).
Balance sheet and cash flow
At 30 June 2008, net assets amounted to £4.19 million (30 June 2007: £6.25 million) including net funds of £4.00 million (2007: £6.01 million).
The principal elements of the £2.01 million decrease
(2007: £1.47 million decrease) in net funds were:
* cash used in
operations of £2.50 million (2007: £1.97 million
outflow);
* interest received of
£0.30 million (2007: £0.36 million); and
* research and
development tax credits received of £0.25 million (2007:
£0.27
million).
Capital expenditure amounted to £0.07
million (2007 £0.13 million) and comprised
investment into patent and licence costs and equipment.
OUTLOOK
In July 2008, we commenced SG004, a critical study for our lead IFN-beta programme, and we expect it to complete during the next year. This will allow us to move on to the clinical proof of concept stage (Phase IIa), for which preparation has also commenced. In short, the primary focus of Synairgen's current resources is on successfully progressing our two potential blockbuster indications (asthma and COPD) for inhaled IFN-beta over the next phase of development.
In addition, knowing that the Group's research and early
development capability has broader utility, we are currently
responding to significant interest in collaborative work using our
proprietary technology platform, in respect of barrier function,
virus work, and other challenges facing the lung. In this arena our
goal is to build our base of projects and
intellectual property interest through collaborative
non-conflicting programmes that complement our core focus.
The full text of this announcement is available on RNS.
