AB Science today reports its revenues for the first half of 2023
and provides an update on its activities
PRESS
RELEASE
AB SCIENCE
PRESENTS ITS FINANCIAL
INFORMATION FOR THE FIRST HALF OF 2023
AND THE KEY EVENTS OF THE PERIOD
- Clinical development
strategy based on two platforms: the late-stage
masitinib platform and the new microtubule
platform
-
Masitinib platform:
-
License search for masitinib
-
Studies in amyotrophic lateral sclerosis (ALS), mastocytosis, MCAS
and Covid-19 are ongoing
-
Ongoing EMA and Health Canada procedures for conditional
authorisation of masitinib in ALS
-
Timetable extension granted by EMA for examination of the masitinib
marketing authorization application in ALS
-
Strengthening of AB Science's intellectual property position in key
indications, with protection guaranteed until 2037 in ALS, 2041 in
multiple sclerosis and Alzheimer's disease, and 2042 in prostate
cancer
-
Microtubule platform:
-
Encouraging preliminary efficacy results for low-dose AB8939 after
three days of treatment with a bone marrow response in a patient
with acute myeloid leukemia
- No decrease in
neutrophils or platelets observed, which is unusual for a drug in
this class
- Financial
and operational information
-
Operating loss of €8.9 million as of 30 June 2023, a decrease of
7.5% compared to the first half of 2022
-
Cash position of €14.8 million as of 30 June 2022, plus the €11.1
million to be received of 2020, 2021 and 202 research tax
credit
-
Reduction in AB Science's cost structure while preserving all key
functions
Paris, September 29, 2023, 7.45pm CET
AB Science SA (Euronext -
FR0010557264 - AB) today reports its revenues for the first half of
2023 and provides an update on its activities.
CLINICAL DEVELOPMENT KEY EVENTS
FOR THE FIRST HALF OF
2023 AND SINCE JUNE 30, 2023
Clinical development strategy based on
two platforms: the late-stage masitinib
platform and the new microtubule platform
On 21 April 2023, AB Science announced its
decision to focus its development strategy as follows:
-
Allocation of current resources primarily to the development of
masitinib for the treatment of amyotrophic lateral sclerosis and
the development of the microtubule destabilizer agents (MDA)
platform, with the clinical development of AB8939 in refractory
acute myeloid leukemia and the initiation of regulatory preclinical
development of a new oral molecule in the same microtubule class
for sarcoma and solid tumors.
AB Science wants to focus the majority of our
clinical resources on the development of rare diseases with
masitinib, on the development of the microtubule platform with
AB8939 and future molecules of the same family due to the very
encouraging first results.
-
Acceleration of the process of seeking a license for
masitinib.
This acceleration is possible now that the
confirmatory Phase 3 studies have been approved by the FDA in the
United States and the major European agencies. To this end, the
Company has retained the services of a leading investment bank.
This license search is a priority in the
Company's strategy, given the number of clinical studies already
conducted and the maturity of the pipeline, and given the
additional investments required to complete the clinical program,
up to market authorizations. We want to highlight that the duration
of this license search is not predictable and that the realization
of a license is dependent on a number of factors and is not
guaranteed. However, the milestones reached at this stage are
essential factors that contribute to the feasibility of this
strategy.
As a result of the focus strategy, AB Science
has decided to adapt its organization, which lead to a significant
reduction in costs. AB Science has therefore implemented a
redundancy plan.
This strategic focus reinforces and sustains the
existing agreement between certain shareholders of AB Science and
Alain Moussy.
Update on the European Medicines
Agency’s (EMA) timetable for examination of the
masitinib marketing authorization
application in amyotrophic lateral sclerosis (ALS)
AB Science provided an update on the European
Medicines Agency’s (EMA) Committee for Medicinal Products for Human
Use (CHMP) timetable for examination of the masitinib marketing
authorization application in amyotrophic lateral sclerosis
(ALS).
The timetable extension was requested by AB
Science in order to address a question from the CHMP that arose
following implementation of a guidance, updated on July 28, 2023,
from the EMA. This guidance requested all marketing authorisation
holders to review their manufacturing processes for all products
containing chemically synthesised or biological active substances
to identify and, if necessary, mitigate the risk of presence of
nitrosamine impurities.
Because performing this activity was not
compatible with the conventional 30 days stop-clock, AB Science
requested an extension of this stop-clock in order to complete a
risk evaluation of the manufacturing process in terms of risk of
formation of nitrosamines in active substance and finished
product.
An extension of clock-stop is not automatic. A
request for extension together with a corresponding scientific
justification must be submitted by the applicant and needs to be
discussed in a CHMP plenary session. AB Science’s request was
accepted during the September 11-14, 2023 CHMP session.
Based on this updated timetable, the CHMP
decision on masitinib marketing authorization in ALS is expected
during the first quarter of 2024.
Based on the current stage of investigations, AB
Science is confident that the current manufacturing process of
masitinib complies with this new EMA guidance.
Strengthening of AB Science's
intellectual property position in ALS
AB Science announced that the patent office of
Japan and the patient office of Canada have issued a Notice of
Allowance (NOA) for a patent relating to methods of treating
amyotrophic lateral sclerosis (ALS) with its lead compound
masitinib.
These new patents provide strong protection for
masitinib in the treatment of ALS until 2037 and complete the IP
coverage for ALS across all key geographic areas where masitinib
could be marketed.
First complete bone marrow response in
an acute myeloid leukemia
patient in its AB8939 Phase I/II clinical
trial
AB Science announced in March 2023 a case report
from the initial stage of its Phase I/II study (AB18001) evaluating
AB8939, a microtubule destabilizer, in patients with refractory and
relapsed acute myeloid leukemia (AML).
The AML patient in question was in failure to
prior treatment with azacitidine and presented with a MECOM gene
rearrangement, which is a biomarker for resistance to standard
chemotherapies that is associated with a high-risk of disease
progression and inferior prognosis.
One month after the first treatment cycle (i.e.,
three consecutive days of AB8939 treatment) there was a drastic
reduction in bone marrow blast cells (i.e., leukemia cells), from a
pretreatment level of 55% to 5% (i.e., a morphologic leukemia free
state). Remarkably, this response was achieved at a very low dose
of AB8939, corresponding to the second step of dose increment (out
of 13 potential steps) in phase I. The patient also showed
excellent tolerance to AB8939, having experienced no
treatment-related toxicities. At the request of the investigator,
AB Science has authorized further treatment cycles of AB8939 to
this patient. One month after the second treatment cycle of three
consecutive days at this dose, a good response has been maintained
with bone marrow blasts being at 10% (corresponding to a 5-fold
reduction relative to baseline). A third treatment cycle for this
patient has been initiated.
Considering the overall study to date, there
have been no signs of moderate, severe or serious toxicity and
approximately 50% of patients have requested further treatment
cycles of AB8939 after the first cycle of treatment and a
measurement at day 28.
CONSOLIDATED FINANCIAL
INFORMATION FOR THE FIRST HALF OF
2023
The operating loss as of June 30, 2023 was 8,850
K€, compared to a loss of 9,562 K€ as of June 30, 2022, i.e. a
decrease in the operating loss of 712 K€ (7.5%).
- Operating income,
exclusively made up of sales related to the operation of a
veterinary medicine, amounted to 448 K€ as of June 30, 2023
compared to 629 K€ one year earlier, a decrease of 28.8%. This
decrease is due to a product supply disruption between August 2022
and April 2023, due to a change in the synthesis process for
Masivet active ingredient (masitinib), which required to submit a
variation of Masivet marketing authorisation to the European
Medicines Agency (EMA), which was approved in April 2023.
- Operating expenses
amounted to 9,298 K€ as of June 30, 2023, compared to 10,192 K€ as
of June 30, 2022, a decrease of 8.8%.
- Marketing expenses
decreased by 13.8% from 253 K€ as of June 30, 2022 to 218 K€ as of
June 30, 2023.
- Administrative
expenses were stable compared with 30 June 2022 (down 2%).
- Research and
development expenses decreased by 886 K€, i.e 10.9 %, from 8,099 K€
as of June 30, 2022 to 7,213 K€ as of June 30, 2023. This variation
is mainly explained by:
-
the increase in the research tax credit (633 K€),
-
the decrease in the value of warrants issued as payment for
research and development services, from 414 K€ as of 30 June 2022
to 160 K€ as of 30 June 2023.
The financial income as of June 30, 2023 is a
loss of 1,569 K€ compared to a gain of 2,424 K€ one year earlier.
As of June 30, 2023, financial income (1,042 K€) corresponded
mainly to the difference between the cancellation of the
recognition of the ADPC debt following their cancellation for 3,692
K€ and the recognition of the new E shares, created to replace the
ADPCs and with a value of 2,908 K€ as of 30 June 2023. This
transaction generated net proceeds of 784 K€. Financial expenses
(2,610 K€) mainly relate to the restatement of the bond loan
contract (985 K€), interest on loans (947 K€) and the discounting
of conditional advances (652 K€). These effects had no cash
impact.
The net loss as of June 30, 2023 amounts to
10,411 K€ compared to a loss of 7,141 K€ as of June 30, 2022.
The following table summarizes the consolidated
financial statements for the first half of 2023 prepared in
accordance with IFRS, and comparative information with the first
half of 2022:
In thousands of euros, except for share data |
30/06/2023 |
30/06/2022 |
Net turnover |
448 |
629 |
Cost of sales and marketing expenses |
(219) |
(158) |
Marketing expenses |
(218) |
(253) |
Administrative expenses |
(1,648) |
(1,682) |
Research and development expenses |
(7,213) |
(8,099) |
Operating
income |
(8,850) |
(9,562) |
Financial income |
1,042 |
3,847 |
Financial expenses |
(2,610) |
(1,423) |
Financial
income |
(1,569) |
2,424 |
Net
income |
(10,411) |
(7,141) |
Other comprehensive income for the period net of
tax |
51 |
174 |
Total comprehensive income for the period |
(10,360) |
(6,967) |
Basic earnings per share - in euros |
(0.22) |
(0.15) |
Diluted earnings per share - in euros |
(0.22) |
(0.15) |
In thousands of euros |
30/06/2023 |
31/12/2022 |
Cash and cash equivalents |
14,786 |
7,269 |
Total Assets |
33,198 |
23,841 |
Equity |
(19,225) |
(35,670) |
Non-current liabilities |
1,209 |
393 |
Trade payables |
12,417 |
12,248 |
Current liabilities |
21,381 |
23,079 |
OTHER CORPORATE INFORMATION FOR THE
FIRST HALF OF 2023 AND SINCE JUNE 30,
2023
Drawdown of the
second tranche of
€6 million under its financing agreement with the
European Investment Bank
AB Science announced in January 2023 that it has
received payment of €6.0 million as the second tranche of a €15
million loan from the European Investment Bank (EIB).
The second tranche has a maturity of five years
and is therefore repayable in January 2028. It carries a
capitalized annual interest rate of 7.0% and the issuance of
115,830 warrants, each giving the right to subscribe to one
ordinary share of AB Science at 14.0 euros for 15 years. These
warrants represent 0.22% of the current capital of the Company (if
they were to be exercised in their entirety).
Financial restructuring
On 21 April 2023, AMY S.A.S and Alain Moussy
(majority shareholders), AB Science and the minority shareholder
entities (including in particular the convertible bondholders, the
Tax Research Credit lenders and the APDC holders) signed an
Agreement relating to:
(i) the implementation of AB
Science's new strategy,
(ii) the financing of AB
Science and (iii) the
restructuring of AB Science's bond debt and Class C preference
shares.
These transactions were the subject of an
agreement signed by the parties on 21 April 2023, the date on which
all transactions were accounted for, and are detailed in section 12
of the notes to the consolidated financial statements as of 30 June
2023.
Restructuring of convertible bonds
issued in February 2022 and Class C preferred shares
AB Science announced on 21 April 2023 the
negotiation of a framework agreement under which the terms and
conditions of the bond issue agreement (entered into with the
holders of the US$8.5 million convertible bonds issued in February
2022 and to which 50,000 warrants were attached with an exercise
price of 000 warrants with an exercise price of EUR 12.65) would be
amended to provide, on 15 July 2023 and automatically, for the
conversion of all the convertible bonds into ordinary shares of AB
Science on the basis of a price per share of EUR 5.75 (i.e. the
subscription price of the New Shares).
The framework agreement has also been negotiated
with the holders of Class C preferred shares (the
“C Preferred”). It provides the C Preferred still in
circulation to be repurchased by AB Science for one symbolic euro
(and subsequently cancelled). 520,786 share warrants (each warrant
entitling the holder to subscribe for one ordinary share of AB
Science at par value for a period of 12 months) will be issued in
substitution of the C Preferred. In addition, still in substitution
of the C Preferred, it provides a new class of preferred shares to
be created, benefiting from priority dividend rights (equal to
1.25% of the net sales of masitinib or of any licensing royalties,
up to a limit of 9.0 million euros) and convertible into 750,000
ordinary shares of AB Science if the share price of AB Science
exceeds a threshold of 30 euros for more than 90 consecutive
days.
Finally, it has been proposed to the
shareholders to extend the term of certain lines of warrants
already issued, to adapt to the evolution of AB Science’s strategy
and of its clinical pipeline.
These agreements were submitted approved by the
General Meeting of AB Science held on 30 June 2023.
Capital increase for an amount of 15
million euros
AB Science announced on April 24, 2023 the
success of its capital increase through the issuance of new
ordinary shares with attached warrants, with a waiver of
preferential subscription rights.
The Capital Increase consisted of a private
placement pursuant to Articles L. 225-136 of the French Commercial
Code and L. 411-2 1° of the French Monetary and Financial Code and
has been carried out with a waiver of preferential subscription
rights, pursuant to the delegation of authority granted to the
Board of Directors under the 20th resolution of the Combined
General Shareholders’ Meeting of June 29, 2022. The Capital
Increase has taken the form of the issuance of 2,608,686 actions
new ordinary shares (the “New Shares”) to each of which are
attached a share subscription warrant (the “Warrants”).
The Capital Increase was made through a cash
contribution of approximately EUR 11.5 million and by offsetting
existing receivables, i.e. approximately EUR 3.0 million
(receivables related to the pre-financing of the research tax
credit for the 2020 financial year and maturing in 2023, as well as
approximately EUR 500,000 in interest accrued to date on the
convertible bonds issued in February 2022).
Two warrants giving the right to subscribe to
one ordinary share, all of the 2,608,686 New Shares and all of the
1,304,343 new shares that would be issued upon exercise of the
warrants, i.e. a total of 3,913,029 shares in the Company,
represent 7.36% of the Company's current share capital. The issue
price of the New Shares has been set at 5.75 euros (0.01 euro par
value and 5.74 euros issue premium) and the exercise price of the
Warrants at 8.625 euros, representing a total fundraising of
approximately EUR 15.0 million (taking into account the exercise of
the warrants, the maximum amount of the Capital Increase could be
increased by an amount of 26.3 million euros).
The Warrants may be exercised from January 1st,
2025 to December 31, 2030.
Renewal of the
Programme d’Augmentation
de Capital à Terme
(PACT) concluded
with Alpha Blue Ocean
Alpha Blue Ocean is committed to subscribe, from
April 28, 2023, to newly issued shares of AB Science (in tranches
comprised of a number of shares between 500,000 and 1 million) over
a period of 24 months, up to a maximum of 4.0 million shares in
total (or 7.2% of the company’s share capital on the basis of the
capital after the capital increase announced on 24 April 2023).
Such subscriptions for new shares shall be carried out using the
28th resolution of the Shareholder’s Meeting of June 29, 2022 (as
renewed or otherwise amended, if applicable).
By way of example, based on the April 27, 2023
closing price of AB Science’s shares, i.e 6.27 euros, on Euronext
Paris, it is estimated that AB Science could raise approximately 25
million euros through this equity financing facility.
For each tranche, the issuance price of new
shares of AB Science, subscribed by Alpha Blue Ocean, shall be
equal to 100% of the volume-weighted average price of the shares of
AB Science traded on Euronext Paris over the three trading days
preceding a tranche drawdown request.
For each tranche, and after the
settlement-delivery of the new shares of AB Science following the
relevant capital increase, 80% of the proceeds of the tranche shall
be secured in an escrow account with a third-party escrow agent.
The remaining balance shall be kept by AB Science.
Following predefined trading rules for each
tranche, Alpha Blue Ocean shall manage the orderly sale, on or off
the market, of the AB Science shares subscribed to. 95% of the
proceeds shall be distributed to AB Science on a monthly basis
(minus a structuration fee), directly from Alpha Blue Ocean or by
way of a release from the escrow account.
AB Science has no obligations to draw down on
the PACT and shall utilise this innovative financing solution only
if necessary and if the market conditions are favourable to the
interests of AB Science and its shareholders.
For each drawdown, the number of shares issued
with respect to this agreement and admitted to trading will be
reported in an Euronext notice and in a specific communication on
AB Science’s website.
Investors are invited to take note of the risks
associated with this transaction, potentially dilutive of 7.2% of
the company’s share capital on the basis of the capital after the
capital increase announced on 24 April 2023, which could create
downward pressure on the AB Science share. Investors are also
invited to be vigilant before taking the decision to invest in a
company that carries out such operations, particularly when they
are carried out successively. AB Science recalls that the present
dilutive financing operation is not the first one it has put in
place.
Other events
- Other securities
transactions
During the first half of 2023, 2,739,516 share
warrants were allocated, including 115,830 to the European
Investment Bank as part of the financing agreement, 2,608,686
relating to the capital increase and 15,000 to the directors.
AB Science confirms its eligibility for PEA-PME
(a share savings plan aimed at providing finance to SMEs) in
accordance with decree no. 2014-283 of 4 March 2014 taken for the
application of article 70 of law no. 2013-1278 of 29 December 2013
of finance for 2014 fixing the eligibility of companies for
PEA-PME, i.e. less than 5,000 employees on the one hand, an annual
turnover of less than 1,500 million euros or a total balance sheet
of less than 2,000 million euros, on the other hand.
About AB ScienceFounded in
2001, AB Science is a pharmaceutical company specializing in the
research, development and commercialization of protein kinase
inhibitors (PKIs), a class of targeted proteins whose action are
key in signaling pathways within cells. Our programs target only
diseases with high unmet medical needs, often lethal with short
term survival or rare or refractory to previous line of treatment.
AB Science has developed a proprietary portfolio of molecules and
the Company’s lead compound, masitinib, has already been registered
for veterinary medicine and is developed in human medicine in
oncology, neurological diseases, inflammatory diseases and viral
diseases. The company is headquartered in Paris, France, and listed
on Euronext Paris (ticker: AB).
Further information is available on AB Science’s website:
www.ab-science.com.
Forward-looking Statements - AB
ScienceThis press release contains forward-looking
statements. These statements are not historical facts. These
statements include projections and estimates as well as the
assumptions on which they are based, statements based on projects,
objectives, intentions and expectations regarding financial
results, events, operations, future services, product development
and their potential or future performance.
These forward-looking statements can often be
identified by the words "expect", "anticipate", "believe",
"intend", "estimate" or "plan" as well as other similar terms.
While AB Science believes these forward-looking statements are
reasonable, investors are cautioned that these forward-looking
statements are subject to numerous risks and uncertainties that are
difficult to predict and generally beyond the control of AB Science
and which may imply that results and actual events significantly
differ from those expressed, induced or anticipated in the
forward-looking information and statements. These risks and
uncertainties include the uncertainties related to product
development of the Company which may not be successful or to the
marketing authorizations granted by competent authorities or, more
generally, any factors that may affect marketing capacity of the
products developed by AB Science, as well as those developed or
identified in the public documents published by AB Science. AB
Science disclaims any obligation or undertaking to update the
forward-looking information and statements, subject to the
applicable regulations, in particular articles 223-1 et seq. of the
AMF General Regulations.
For additional information, please contact:
AB ScienceFinancial
Communication & Media Relations investors@ab-science.com
- AB SCIENCE press release S1 2023 VEng VF
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