N4 Pharma PLC Interim Results (0516B)

TIDMN4P

RNS Number : 0516B

N4 Pharma PLC

29 September 2022

N4 Pharma Plc

("N4 Pharma" or the "Company")

Interim Results

N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company developing Nuvec(R), a novel delivery system for vaccines and cancer treatments, announces its unaudited interim results for the six months ended 30 June 2022.

Highlights:

 
      --   Exciting opportunities identified for progression into phase 
            1 clinical trials in oncology and siRNA delivery. 
      --   Studies conducted with Nanomerics to evaluate the potential 
            of Nuvec(R) as a nano-carrier of a DNA plasmid expressing 
            TNFalpha ("TNF"), a cytokine with immune-modulating properties 
            against tumours, demonstrated a significant inhibition of 
            tumour growth derived from a human cell line. 
      --   Positive preliminary results from ongoing oral studies undertaken 
            at the University of Queensland showing Nuvec(R) delivered 
            orally has transfected cells in the small intestine. 
      --   Nuvec(R) patents granted in the US and China. Company now 
            has strong IP protection in key territories around the world. 
      --   Reduced operating loss for the period GBP750,102 (30 June 
            2021: GBP973,216) and R&D and general expenditure in line 
            with budget. 
      --   Cash position remains strong which at 30 June 2022 was GBP1,579,948 
            (31 December 2021: GBP1,784,024), again in line with budget.

Nigel Theobald, Chief Executive Officer of N4 Pharma Plc, commented:

"We have continued to make excellent progress in the period and have refined our focus in line with changing market conditions to provide us with the best opportunities to progress Nuvec(R) into the clinic. Cash expenditure has been tightly controlled to allow us to maximise outcomes whilst preserving our cash resource as far as possible. I look forward with optimism to the excellent progress we have made continuing throughout the remainder of the financial year."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

Enquiries:

 
 N4 Pharma Plc                               Via IFC Advisory 
  Nigel Theobald, CEO 
  Luke Cairns, Executive Director 
 
 SP Angel Corporate Finance LLP              Tel: + 44 (0)20 3470 0470 
  Nominated Adviser and Joint Broker 
  Matthew Johnson/Caroline Rowe (Corporate 
  Finance) 
  Vadim Alexandre/Rob Rees (Corporate 
  Broking) 
 
 Turner Pope Investments (TPI) Limited       Tel: +44 (0)20 3657 0050 
  Joint Broker 
  Andy Thacker 
 
  IFC Advisory Limited                        Tel: +44 (0)20 3934 6630 
  Financial PR 
  Graham Herring 
  Zach Cohen

About N4 Pharma

N4 Pharma is a specialist pharmaceutical company developing a novel delivery system for vaccines and cancer treatments using its unique silica nanoparticle delivery system called Nuvec(R).

N4 Pharma's business model is to partner with companies developing novel antigens for vaccines and cancer treatments to use Nuvec(R) as the delivery vehicle to get their antigen into cells to express the protein needed for the required immunity. As these products progress through pre clinical and clinical programs, N4 Pharma will seek to receive upfront payments, milestone payments and ultimately royalty payments once products reach the market.

Chairman's Statement

Half year results

I am pleased to report that in the six months ended 30 June 2022, the operating loss for the period was GBP750,102 (30 June 2021: GBP973,216) and in line with planned expenditure.

Our cash balance at 30 June 2022 was GBP1,579,948 (31 December 2021: GBP1,784,024), again in line with budget.

Operational update

Following the significant data accumulated in the preceding periods in respect of the potential for the use of Nuvec(R) in DNA vaccines, the Company's focus for 2022 was fourfold:

   --      to expand its knowledge around Nuvec(R) in oncology and gene therapy; 
   --      to undertake more substantive studies into the potential of Nuvec(R) loaded with SiRNA; 
   --      to support the University of Queensland in its oral studies using Nuvec(R); 
   --      Ongoing work under the Material Transfer Agreement ("MTA").

Market Background

The market for vaccine development has shown considerable change over the last few years, mainly due to the arrival of Covid 19 and the rapid acceleration into the market of vaccines, including novel mRNA vaccines to treat this disease. The speed of development and approval was unsurpassed by any other area and, as a consequence, companies chose to use their existing delivery systems, albeit with some potential issues and side effects, but the need for rapid vaccine development offset any such concerns. This meant that novel technologies like Nuvec(R), which have huge potential in this space, found it hard to get into development pipelines alongside existing systems.

On top of this, covid vaccine development attracted much of the available funding in this space and many companies which had initiated very expensive development programmes found these programmes were no longer needed as the established two or three vaccines dominated this space, leaving little room for other products.

This has led to one of the most challenging periods in biotech development for most companies, with many now looking to reassess how they are best placed in this new environment.

Whilst the Company has been impacted by this rapidly changing environment, the versatility of our Nuvec(R) delivery system still leaves us very well placed as major biotechs reassess their plans and switch to develop novel RNA products both for vaccines and importantly cancer and gene therapy.

Having done a lot of proof of concept work showing antibody production using Nuvec(R) and how Nuvec(R) can be formulated to produce a monodisperse formulation it became clear that the Company would not be able to get any products into the clinic without a collaborative partner and the changing focus of the major biotechs meant the Company needed to look at how Nuvec(R) would work in areas these companies were now focusing on.

That said, the Company has not stopped its work in vaccines. The Company will continue to look for MTA opportunities in this space as any product being developed for a vaccine is going to need a lot of formulation development. Because the Company cannot take relevant generic vaccines into the clinic itself without significantly increased expenditure, we have decided to focus our development work on oncology and siRNA delivery as these sectors have proven clinical models the Company can access and also because Nuvec(R) can be used to work with generic siRNA and plasmids capable of being used in phase 1 clinical trials.

There are over 300 companies working in this space with 106 clinical trials already in place using siRNA. This focus has two clear advantages: the Company has a wider audience and the number of compounds it can use to collaborate with provide the opportunity to get into the clinic much more rapidly than if we focus purely on vaccines.

The Company therefore decided to start working with intravenous injection (which it could now do having solved how to produce a monodisperse formulation) and to investigate both how it works as a tumour suppressant and how it works in delivering siRNA.

We are very excited by the potential for this work.

Oncology work

The first part of 2022 saw the Company focus on an oncology work programme with Medicines Discovery Catapult ("MDC") to follow up the successful studies undertaken last year where Nuvec(R) was used as a nano-carrier of a DNA plasmid expressing TNF which had demonstrated a significant inhibition of tumour growth derived from a human cell line. Having established that Nuvec(R) could deliver an appropriate biological load, the work at MDC was to help determine the mechanism of action that produced the tumour suppression. Amongst other things, it was to seek to identify whether the Nuvec(R) loaded with TNF was directly taken up within the tumour or whether other organs took up the Nuvec(R) and produced the TNF and then released it systemically to suppress the tumour.

The result of the MDC study again showed clear tumour suppression with 10ug of TNF loaded onto Nuvec(R) which, positively, was a lower dose than used in previous studies. It also became clear that formulation is pivotal to every study as the higher dose preparation was sub-optimal, due to some observed agglomeration resulting in data unable to be obtained.

The Biochemical analysis of the 10ug arm of the study confirmed an increase in circulating plasma TNF levels. It indicated that tissues including the liver and the tumour cells may have been responsible for the transfection with the TNF plasmid and subsequent release of TNF-alpha into the circulation to suppress the tumour. The resulting data indicated that the most appropriate use of Nuvec(R) in the oncology field will likely be to combine it with one or more nucleic acids alongside a targeting ligand to allow specific cancer cells to be targeted.

TNF was chosen as a proof of concept compound to show the ability of Nuvec(R) to achieve tumour suppression and given this systemic response it means that TNF itself would not be the best compound to do further work in this space yet the successful tumour suppression seen using this has been excellent validation of Nuvec(R) as an i.v. solution for oncology.

siRNA

Having historically evaluated the potential of Nuvec(R) to carry DNA and mRNA, experiments in the period were undertaken to show that Nuvec(R) could also be loaded with siRNA and maintain a colloidally stable formulation. Since period end and as announced on 14 September 2022 the Company has shown the successful loading of Nuvec(R) with two different generic siRNA probes, GFP (Green Fluorescent protein) and EHMT-2 (Euchromatic Histone Lysine Methyltransferase 2) and both of which were shown to be easy to load and produce a monodisperse formulation and successful in meeting their respective endpoints of silencing the particular gene.

The Company has now completed initial testing on loading Nuvec(R) with both these siRNA probes, GFP and EHMT-2 at the same time. Our next step will be to test in vitro that the particle with combined siRNA is still able to meet both their respective gene silencing endpoints, as previously demonstrated with singular loading.

Following this work on TNF and initial siRNA compounds, the Company has undertaken a review of where it believes it will likely get greatest traction to allow a commercial license deal to be agreed.

After the development of successful mRNA vaccines as highlighted in the 'Market Background' section above, major companies in this space now appear to be focusing future development on gene therapy treatments using, in particular, siRNA to silence identified pathways involved in cancer. Given the pre-clinical status of Nuvec(R) the Company believes that focusing its work on loading more than one siRNA sequence onto the same nanoparticle will result in silencing of complementary pathways leading to an increased therapeutic response and establish a significant differential in this marketplace.

Having established the capability of Nuvec(R) to carry two siRNA simultaneously and assuming the combination still provides a functional response, the Company is undertaking a series of experiments over the coming months using two siRNA sequences directed against known, and clinically validated, oncology targets. Specifically, the targets are the EGFR signalling pathway, which regulates cell cycle progression and BCl-2, which regulates apoptosis. Silencing of the EGFR will inhibit cell division while silencing BCl-2 will promote apoptosis and the potential for additive or synergistic effects will be explored. Initial studies will be conducted in vitro using a PC9 lung cancer cell line and this will be followed by in vivo studies in xenograft tumours of the same cell line.

Successful completion of this work will give strong clinical validation for using Nuvec(R) in this space and will be presented to collaboration partners who have their own siRNA in early clinical development with a view to licensing Nuvec(R)

The Company believes this is the most appropriate way to commercialise Nuvec(R)

Oral Studies at the University of Queensland ("UQ")

During the period UQ has, utilising the grant funding obtained by N4 Pharma and UQ, pursued the longer term study on oral applications for Nuvec(R). Early results were promising with UQ successfully demonstrating via an in vivo pre-clinical study that Nuvec(R) loaded with a red fluorescent protein (mCherry) DNA and formulated and administered in capsules was able to successfully transfect cells in the small intestine. Whilst this first study was limited in scope this is a significant step in establishing how Nuvec(R) could be delivered orally.

The next step in this work is for UQ to repeat the success of this in vivo study which the Company understands will be undertaken soon.

MTA

As announced in the results for the year ended 31 December 2021, due to the strict confidentiality around MTAs, we have decided to only announce further MTAs when able to without restrictions of confidentiality or in respect of a defined commercial agreement. With regard to the MTA previously announced, work remains ongoing but the degree of progress is largely determined by our partner's own R&D work and drug launches.

Going Forward

As outlined above, whilst we continue to seek partners to work with based on the data accumulated to date utilising DNA plasmids with Nuvec(R) for oncology and vaccines, the focus of our controllable R&D spend will be both on siRNA loaded onto Nuvec(R) and building on the encouraging data obtained to date. In the background, we are keeping a keen eye on developments at UQ with the oral work, which could be hugely significant if successful. We also remain open to acquiring additional assets.

Intellectual Property

In January of this year, we were pleased to announce that the UQ had informed the Company that it had been notified by the US Patent Attorney of the granting of its patent application in relation to Nuvec(R) in the United States and that the Chinese authorities had granted a patent in China. The granting of patents in these two large markets, together with those previously granted, gives the Company strong intellectual property protection in key territories around the world, a vital component for potential licensing deals.

Outlook and strategy

Our strategy remains unchanged - to generate sufficient proof of concept data with a view to attracting large pharma and biotech partners to enter into collaborations with us to explore using Nuvec(R) as their chosen delivery system to get products into clinic. What is clear is that the formulation is different for each plasmid and a critical path when working with any new plasmids. The early results from our siRNA work is extremely encouraging and if, as we hope, results continue to be positive, this would indicate that we are significantly closer to a breakthrough point for Nuvec(R) in achieving commerciality.

We have remained extremely prudent in our R&D and general expenditure. There is almost unprecedented economic uncertainty at the moment which has undoubtedly impacted our share price. Markets in general have been hit badly and N4 Pharma has been no exception. Whilst, as a pre revenue business, it is almost inevitable we will at some point need to access further funding be it from grants, equity markets or other means, I want to assure shareholders that we remain well funded, certainly for our medium term needs.

On behalf of the Board, I would like to thank all of our shareholders for their continued support and look forward to providing further updates on our progress.

John Chiplin

Chairman

29 September 2022