TIDMSAR
RNS Number : 4061C
Sareum Holdings PLC
01 October 2018
(AIM:SAR) 1 October 2018
SAREUM HOLDINGS PLC
("Sareum" or "the Company")
FINAL RESULTS FOR THE YEARED 30 JUNE 2018
This announcement contains inside information for the purposes
of Article 7 of regulation 596/2014
Sareum Holdings plc (AIM: SAR), the specialist in small molecule
drug development, announces its results for the year ended 30 June
2018 and provides an update of significant post-period events.
Operational highlights
-- Sierra Oncology ("Sierra"), the licence holder advancing
clinical cancer candidate SRA737, discovered by Sareum and Cancer
Research UK/Institute of Cancer Research, made strong progress with
its clinical development programmes for the Chk1 inhibitor in
patients with advanced cancer
o Phase 1/2 monotherapy trial evaluating SRA737 in patients with
tumours identified to have genetic aberrations hypothesized to
confer sensitivity to Chk1 inhibition, was expanded to include 145
genetically defined patients and prioritised for ovarian cancer
with the addition of a further 25 patients for this indication -
Phase 2 cohort expansion underway
o Phase 1/2 study of SRA737 in combination with low-dose
gemcitabine was modified to include 80 genetically defined patients
in four cancer indications, with a target cohort of high-grade
serous ovarian cancer patients replacing the originally proposed
urothelial (bladder) cancer patients - Phase 2 cohort expansion
underway
o Sierra noted its plans to initiate a Phase 1b/2 combination
trial of SRA737 with the orally administered PARP inhibitor,
niraparib, in prostate cancer patients. The trial is expected to
start in the fourth quarter of 2018
o Sierra generated preclinical data providing evidence of
synergy between SRA737 and immune checkpoint blockade and is
currently designing a clinical study for this combination
-- Sareum made good progress advancing its internal TYK2/JAK1
inhibitor programmes in autoimmune diseases and cancer
o A potent, selective small molecule inhibitor of TYK2/JAK1,
SDC-1801, has been selected for formal preclinical development as a
potential treatment for autoimmune diseases
o Separately, a distinct selective TYK2/JAK1 inhibitor with a
profile optimised for cancer - SDC-1802 - was also nominated for
preclinical development as a potential treatment for certain types
of leukaemia, lymphoma and solid tumours
o Both molecules demonstrate high selectivity for TYK2 and JAK1
kinases (particularly over related JAK2 and JAK3), compelling
activity in relevant disease models, the potential for once-daily
oral dosing and a good early safety profile
-- Sareum regained worldwide rights to preclinical-stage small
molecule inhibitors of Aurora and FLT3 kinases that have shown
potential in acute myeloid leukaemia (AML) and other haematological
cancers
o The Company is seeking a licence partner for this programme
while it concentrates its research resources on its TYK2/JAK1
preclinical development programmes
Financial highlights (subject to audit)
-- Sareum raised GBP700,000 before expenses in November 2017
through a placement of 100,000,000 new ordinary shares at 0.7p per
share to progress its drug development programmes as well as for
working capital purposes
-- Loss on ordinary activities (after taxation) of GBP1.47m (2017: profit of GBP400,000)
-- Cash at bank as at 30 June 2018 was GBP1.38m (GBP2.31m as at 30 June 2017)
Dr Tim Mitchell, CEO of Sareum Holdings plc, said: "The year
under review has seen important progress made by Sierra Oncology
with SRA737 and internally with the nomination of lead candidates
SDC-1801 and SDC-1802 from the Company's proprietary TYK2/JAK1
programme. This progress and the increasing visibility on clinical
inflection points positions the Company well to generate value for
shareholders.
"We are very pleased with the confidence, commitment and
decisiveness Sierra is showing with SRA737 in expanding and
adapting the clinical development programme based on cutting-edge
science and emerging data. We look forward to the preliminary
clinical data, which is expected from both ongoing Phase 1/2
studies in the first half of 2019, and the start of a third
clinical trial of SRA737 in combination with niraparib before the
end of 2018.
"We are particularly pleased with the progress of our internal,
proprietary TYK2/JAK1 programmes, with distinct lead candidates
being selected both for autoimmune diseases (SDC-1801) and cancer
(SDC-1802). The potential of TYK2/JAK1 inhibitors as a treatment
modality in these indications is gaining increasing clinical and
commercial validation and we believe we have strong candidates with
optimised profiles in these areas.
"The advancement of these candidates through preclinical
development and, pending satisfactory progress, into human clinical
trials, is a clear focus for the Company. Our strategic goal is to
generate compelling evidence for the potential of these candidates
in their respective disease areas to facilitate a licensing
agreement at an optimal value. In the meantime, we will continue
discussions with potential licence partners for these exciting
candidates."
Sareum Holdings plc
Tim Mitchell 01223 497 700
WH Ireland Limited (Nominated Adviser)
Chris Fielding / James Sinclair-Ford 020 7220 1666
Hybridan LLP (Broker)
Claire Noyce 020 3764 2341
Citigate Dewe Rogerson (Media enquiries)
Shabnam Bashir/ 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 disease. The Company generates value through
licensing its candidates to international pharmaceutical and
biotechnology companies at the preclinical or early clinical trials
stage.
Sareum's leading clinical-stage programme, SRA737, a novel
Checkpoint kinase 1 (Chk1) inhibitor licensed to NASDAQ-listed
Sierra Oncology, is in Phase 2 clinical trials targeting ovarian
and other advanced cancers. The key role of Chk1 in cancer cell
replication and DNA damage repair suggests that SRA737 may have
broad application as a targeted therapy in combination with other
oncology and immune-oncology drugs in genetically defined
patients.
Sareum is also advancing internal programmes focused on distinct
dual tyrosine kinase 2 (TYK2) /Janus kinase 1 (JAK1) inhibitors
through preclinical development as therapies for autoimmune
diseases and cancers. TYK2 and JAK1 have roles in pro-inflammatory
responses in autoimmune diseases (e.g. psoriasis, rheumatoid
arthritis, inflammatory bowel diseases and lupus) and tumour cell
proliferation in certain cancers (e.g. T-cell acute lymphoblastic
leukaemia and some solid tumours). The Company is targeting first
human clinical trials in each indication in 2020.
The Company also has an Aurora+FLT3 inhibitor targeting
haematological cancers, which is at the preclinical development
stage.
Sareum Holdings plc is listed on the AIM market of the London
Stock Exchange, trading under the ticker SAR. For further
information, please visit www.sareum.co.uk
Full year results for the twelve months ended 30 June 2018
Chairman and CEO's Statement
The year under review has seen important progress made by Sierra
Oncology ("Sierra") with SRA737, and internally with the nomination
of preclinical development candidates SDC-1801 and SDC-1802 from
the Company's proprietary TYK2/JAK1 programmes. This progress and
the increasing visibility on clinical inflection points positions
the Company well to generate value for shareholders.
The Directors are very pleased with the confidence, commitment
and decisiveness Sierra is showing with SRA737 in expanding and
adapting the clinical development programme based on cutting-edge
science and emerging data.
Preliminary data is expected to be reported from both ongoing
Phase 1/2 studies in the first half of 2019 - the SRA737
monotherapy study and the SRA737-low dose gemcitabine combination
study - and a third clinical trial of SRA737 in combination with
the PARP inhibitor niraparib is expected to start before the end of
the 2018.
Sierra remains well funded to deliver key clinical milestones
with SRA737 through 2020, with $125M cash (as at the end of June
2018).
Sareum is eligible to receive payments, which could total $88M,
plus sales royalties from the ongoing development and
commercialisation of SRA737 as it advances over the coming years,
and the progress reported provides added confidence to the Board
that such payments will be forthcoming as milestones are
achieved.
The progress of the internal and proprietary TYK2/JAK1
programmes is also very encouraging with distinct lead candidates
being selected both for autoimmune diseases (SDC-1801) and cancer
(SDC-1802). The potential of TYK2/JAK1 inhibitors as a treatment
modality in these indications is gaining increasing clinical and
commercial validation and the Board believes that the Company is
entering these areas with strong candidates.
The Company is focusing its research resources on advancing
these candidates through preclinical development and, pending the
satisfactory progress, into human clinical trials, targeted for
2020. Our strategic goal is to generate compelling evidence for the
potential of these candidates in their respective disease areas to
facilitate a licensing agreement at an optimal value. In the
meantime, we will continue discussions with potential licence
partners for these exciting candidates.
With the clear focus on the development of SDC-1801 and
SDC-1802, Sareum has decided it will commit no further funding to
the Aurora+FLT3 programme and a licence partner is being
sought.
From a financial perspective, the Company continues to employ
rigorous capital management in the development of its internal
assets and its overall business.
Programme updates
SRA737 - Selective Checkpoint Kinase 1 (Chk1) inhibitor
(licensed to Sierra Oncology)
Sierra Oncology made strong progress with its clinical
development programmes for SRA737 in patients with advanced cancer:
ongoing trials were advanced, significantly expanded and
re-prioritised for ovarian cancer based on emerging biological and
clinical validation; plans for combination studies with SRA737 and
other treatment modalities were announced, aiming to broaden its
clinical utility across cancer.
SRA737 is a potent, highly selective, orally bioavailable small
molecule inhibitor of Chk1, a key regulator of important cell cycle
checkpoints and central mediator of the DNA Damage Response (DDR)
network. SRA737 was licensed to Sierra in September 2016 for
development and commercialisation, with Sareum eligible to receive
up to $90M in up-front and milestone payments plus sales
royalties.
SRA737 is being investigated by Sierra in a broad clinical
development programme targeting cancer patients with genetically
defined tumours that harbour genomic alterations linked to
increased DNA replication stress and hypothesised to be more
sensitive to Chk1 inhibition, with plans for additional clinical
studies:
-- SRA737-01 - a Phase 1/2 monotherapy trial evaluating SRA737
in genetically defined patients in six cancer indications and
prioritised for ovarian cancer - Phase 2 cohort expansion is
underway with preliminary data expected to be reported in the first
half of 2019
-- SRA737-02 - a Phase 1/2 study of SRA737 in combination with
low-dose gemcitabine in genetically defined patients in four cancer
indications - Phase 2 cohort expansion is underway with preliminary
data expected to be reported in the first half of 2019
-- SRA737-03 - a Phase 1b/2 combination trial of SRA737 with the
orally administered PARP inhibitor, Zejula(R) (niraparib), in
prostate cancer patients is expected to start in the fourth quarter
of 2018
-- SRA737-04 - a programme to investigate potential synergy
between SRA737 and immune checkpoint blockade is underway and a
clinical study for this combination is being designed
SRA737-01 - Phase 1/2 SRA737 Monotherapy Trial
Sierra made important progress with the SRA737-01 monotherapy
study during the past 12 months and has adapted the design and
focus of the study as new data provide a greater understanding of
the opportunity as well as enhanced biological and clinical
validation for the mechanism of action.
The dose-escalation Phase 1 study is complete with SRA737 found
to be well tolerated at the selected dose. The cohort expansion
Phase 2 portion is underway and enrolling genetically defined
patients into indication-specific cohorts. Sierra announced, at an
R&D Update in February, that these Phase 2 cohorts would be
expanded from eight to 20 patients across six cancer
indications.
In its second quarter 2018 results update in August, Sierra
further refined the study focus on high grade serous ovarian cancer
(HGSOC), supported by emerging data in the field that provides
clinical validation for Chk1 inhibition in this indication.
Accordingly, Sierra Oncology is prioritising the enrolment of
approximately 65 genetically defined HGSOC patients into this trial
(adding 25 more HGSOC patients), while continuing to enrol patients
into the trial's other indications (total trial enrolment target of
145 patients).
The target indications are:
-- High-grade serous ovarian cancer (HGSOC)
-- CCNE1-driven HGSOC
-- Castration-resistant prostate cancer (mCRPC)
-- Non-small cell lung cancer (NSCLC)
-- Head and neck squamous cell carcinoma (HNSCC) or squamous cell carcinoma of the anus (SCCA)
-- Colorectal cancer (mCRC)
Sierra is also expanding the number of sites recruiting patients
into the trial from three active sites (as of the third quarter of
2017) to a planned 15 active sites across the UK, to support its
increased enrolment.
Owing to the amendments made to the Phase 2 portion of the
study, Sierra expects to report preliminary clinical data in the
first half of 2019 (previously fourth quarter of 2018).
SRA737-02 - Phase 1/2 Combination Trial of SRA737 plus Low Dose
Gemcitabine (LDG)
This trial aims to explore the effect of LDG (gemcitabine being
a chemotherapy that causes replication stress and DNA damage) in
potentiating the anti-tumour effect of SRA737 in patients with
genetically profiled cancers. Preclinical data were presented at
the AACR-NCI-EORTC congress in October 2017 supporting the
principle of the combination study.
Sierra completed the Phase 1 dose-escalation phase of the study
in the first half of 2018, with the SRA737+LDG combination being
well tolerated. The Phase 2 cohort expansion portion is now
underway. As with the monotherapy study, Sierra has expanded
enrolment and prioritised recruitment for ovarian cancer. The
cohort expansion phase is targeting enrolment of 80 genetically
selected patients across four indications, including advanced or
metastatic:
-- HGSOC (replacing urothelial carcinoma);
-- Small cell lung cancer (SCLC);
-- Soft tissue sarcoma; and
-- Cervical/anogenital cancer.
Again, due to the amendments made to the Phase 2 part of the
study, preliminary data is expected to be reported by Sierra in the
first half of 2019 (previously fourth quarter of 2018).
SRA737-03 - Phase 1b/2 Combination Trial of SRA737 plus a PARP
inhibitor
Sierra is also continuing to prepare for the planned initiation
of a combination trial of SRA737 with the approved PARP inhibitor
Zejula(R) niraparib, developed by US company Tesaro. PARP
inhibitors prevent the repair of DNA damage and several have been
approved as targeted treatments for cancer and other indications,
including Lynparza(R) olaparib (AstraZeneca), Rubraca(R) rucaparib
(Clovis Oncology) and Zejula(R). Sierra presented preclinical data
during its R&D Update in February and in April, as a
late-breaking abstract at the American Association of Cancer
Research (AACR) Annual Meeting, supporting SRA737's synergistic
activity in combination with a PARP inhibitor.
The multi-centre Phase 1b/2 study will evaluate this combination
in subjects with metastatic castration-resistant prostate cancer
(mCRPC) and is expected to initiate in the fourth quarter of 2018.
The lead investigator is Professor Johann de Bono, a leading
prostate cancer expert at The Institute of Cancer Research and The
Royal Marsden NHS Foundation Trust in London.
SRA737-04 - Combination of SRA737 with Immuno-Oncology
Agents
Sierra presented preclinical data in February providing evidence
of biological synergy between SRA737 and immune checkpoint
blockade, a breakthrough approach to cancer therapy that blocks the
ability of the tumour cell to evade recognition and attack by the
immune system. Sierra is investigating the potential of this
combination approach, with further preclinical data expected to be
presented in the first half of 2019 and is currently designing a
clinical study.
Proprietary Pipeline
Selective TYK2/JAK1 Inhibitors in Autoimmune Diseases and
Cancer
Clear focus on advancement of distinct preclinical development
candidates through preclinical development in autoimmune diseases
and in cancer: strong candidates exhibit potentially best- and
first-in-class properties, respectively, in these indications
The majority of Sareum's focus during the period has been on
undertaking the studies to enable the nomination of lead
preclinical candidates from its TYK2/JAK1 programme (formerly
described as the TYK2 programme) with distinct profiles optimised
for development in autoimmune diseases and cancer.
TYK2 and JAK1 are members of the Janus Kinase (JAK) family of
protein kinase enzymes with important roles in maintaining a
healthy immune system. Both kinases have well-documented roles in
pro-inflammatory responses in autoimmune diseases and tumour cell
proliferation in certain cancers. Members of the JAK family are the
targets of several marketed and clinical-stage drugs in both
disease areas, although there are currently no marketed products
with specific selectivity for TYK2.
During September 2018, Sareum announced that it had nominated
lead preclinical candidates from its programme in both autoimmune
diseases and cancers. In each case, the candidates, known as
SDC-1801 and SDC-1802, were selected from a novel series of
compounds designed and identified by Sareum following a rigorous
process, and that demonstrate potentially best- or first-in-class
potential with the following characteristics:
-- Proprietary small molecules that are potent and selective for
TYK2 and JAK1 kinases (avoiding JAK2 and JAK3, which have known
negative side-effect issues)
-- Compelling activity in relevant disease models
-- Suitable for once or twice daily oral dosing
-- Good toxicological profile (in assays to date)
-- Straightforward synthesis
Sareum has prioritised its resources towards the development of
these two candidates through preclinical studies towards first
clinical studies, targeted for 2020. The Company is developing its
TYK2 programmes with the intention of generating compelling
preclinical and potentially early clinical data, the basis of which
will define the timing and future development and partnering
strategy for these candidates.
Sareum has an ongoing co-development agreement with SRI
International (Menlo Park, CA, USA) to develop TYK2 inhibitors in
autoimmune diseases and retains commercialisation rights for these
and other TYK2 inhibitors with profiles optimised for oncology and
immuno-oncology applications.
SDC-1801 - Autoimmune Diseases
SDC-1801 will undergo a series of toxicology and other
preclinical studies over the coming 12-18 months in preparation for
first human clinical trials in healthy volunteers. The molecule has
already shown compelling activity in disease models of psoriasis
and rheumatoid arthritis, while closely related molecules
(including a previously reported advanced lead, SAR-20347), have
also shown good activity in models of inflammatory bowel disease
and systemic lupus erythematosus (lupus).
Sareum believes SDC-1801 represents a strong candidate entering
an area of increasing industry interest with substantial clinical
validation. The Company's view has been formed based on the
progress of molecules in clinical development by Bristol-Myers
Squibb (BMS-986165; TYK2 inhibitor) and Pfizer (PF-06700841;
TYK2/JAK1 inhibitor) in psoriasis and other autoimmune diseases,
which has been promising but also shown signals that suggest there
is an opportunity for a molecule with best-in-class properties.
Furthermore, several licensing deals for preclinical and
clinical-stage assets have been completed recently in the sector
with highly attractive economic terms, such as:
-- TD-1473 (a pan-JAK inhibitor) - licensed by Janssen from
Theravance (2018) at the end of Phase 1 studies for $100M cash
up-front, up to $900M in milestone payments, plus royalties(*)
-- Filgotinib (JAK1 inhibitor) - licensed by Gilead from
Galapagos (2015) at the end of Phase 2 trials for $300M cash and
$425M equity investment up-front, up to $1,350M in milestone
payments, plus 20%+ royalties(*)
-- Undisclosed TYK2 inhibitor (plus other assets) - Celgene
formed an alliance with Nimbus Therapeutics (2017) in preclinical
stage for undisclosed up-front and milestone payments
Approved products targeting the JAK family with blockbuster
sales potential, despite warnings based on side effects related to
JAK2/JAK3 activity, include:
-- Xeljanz(R) tofacitinib (Pfizer) (JAK1/JAK3 inhibitor) -
approved for rheumatoid and psoriatic arthritis and ulcerative
colitis, with 2017 sales of $1.35Bn(*) , despite black box warnings
for serious infections and lymphoma
-- Olumiant(R) baricitinib (Eli Lilly) (JAK1/JAK2 inhibitor) -
approved from rheumatoid arthritis, with expected peak sales of
approximately $1Bn(*) , but with black box warnings for serious
infections, lymphoma and thrombosis
-- Jakafi(R) ruxolitinib (Incyte/Novartis) - approved for
myelofibrosis and polycythemia vera (a type of blood cancer) with
2017 sales of $1.1Bn(*) despite warnings of infections and blood
cell counts
The scale of the deals and sales delivered/forecast for these
candidates and products targeting TYK2 and related JAK family
members gives Sareum confidence in the exciting, high value market
opportunity for SDC-1801.
*Sources include company information and analyst consensus as
reported in BioWorld "FDA approves Lilly and Incyte's baricitinib
for second-line RA treatment" 4 June 2018
SDC-1802 - Cancer
As with SDC-1801, Sareum's lead candidate for cancer indications
is set to undergo preclinical development in preparation for human
clinical studies targeted for 2020.
In previous studies, Sareum has seen compelling activity of
SDC-1802 and related molecules in disease models of:
-- Blood cancers dependent on TYK2/STAT pathway signalling -
T-cell acute lymphoblastic leukaemia (T-ALL) and B-cell
lymphoma
-- Solid tumours dependent on TYK2-dependent interleukin signalling - kidney, colon cancers
-- Solid tumours via local immune system modulation - kidney, colon, pancreas, skin
The Company's findings across all these indications are also
supported by strong evidence in the literature.
Furthermore, the Company is continuing to study the effect of
combining TYK2/JAK1 inhibition with immune checkpoint inhibitors
and with chemotherapies, an area of considerable industry activity
and potential value.
As noted above, Sareum retains commercialisation rights to
SDC-1802 and other TYK2/JAK1 inhibitors optimised for oncology and
immuno-oncology applications. SDC-1802 also has the potential to
act as a back-up molecule for autoimmune indications.
Aurora+FLT3 inhibitors
Global rights regained to preclinical candidates and new
licencing partner is being sought for further development
Aurora+FLT3 kinase inhibitors target two mechanisms that are
considered important in the progression of certain cancer types:
Aurora kinase is involved in the control of tumour cell mitosis
(cell division), and FLT3 kinase over-activation is the most common
mutation in AML.
Sareum has developed small molecule inhibitors of Aurora and
FLT3 kinases that have shown evidence of activity in preclinical
models of acute myeloid leukaemia (AML) and other haematological
cancers with good tolerance of the candidate drug at the predicted
therapeutic dose, and no significant side effects being seen.
In May, the Company announced it had regained worldwide rights
to these molecules from Hebei Medical University Biomedical
Engineering Center (HMUBEC), a pharmaceutical R&D group based
in China that has been conducting preclinical development
activities.
With the nomination of lead TYK2/JAK1 candidates, Sareum has
decided to focus its resources on the development of these two
candidates. No further funding will be committed to the
Aurora+Fltt3 programme and a licence partner is being sought.
Financial Review
Sareum ended the year to 30 June 2018 with net assets of
GBP1,633,000 (2017: GBP2,346,000) of which GBP1,375,000 (2016:
GBP2,306,000) comprised cash at bank, including proceeds from a
placement, which raised GBP700,000 before expenses in November
2017. Non-cash assets include GBP254,000 of R&D tax credit,
which we would expect to receive as cash in Q1 2019.
Operating expenses for the period have increased to GBP1,710,000
(2017: GBP1,446,000): this reflects increases in research
expenditure on our TYK2 autoimmune disease and cancer
programmes.
The loss on ordinary activities (after taxation) was
GBP1,470,000 (2017: profit of GBP400,000), since no further
milestone payments from Sierra Oncology were received during the
period.
Outlook
The Directors are very pleased with the progress made across the
Company's programmes during the period: with SRA737, Sierra
Oncology continues to invest in the programme and expects to report
preliminary clinical data and further programme expansion in the
coming year; and internally, the Company expects to advance its
lead candidates from the TYK2/JAK1 programme through formal
preclinical development, targeting the first human trials in
2020.
The Company's strategic goal with its internal programmes is to
generate compelling evidence for the potential of these candidates
in their respective disease areas to facilitate a licensing
agreement at an optimal value. The Directors will continue to
review the potential higher value of a later-stage licensing deal
versus the requirement for any extra funding.
Meanwhile, Sareum continues to engage with potential partners
with a view to securing commercial licences for its proprietary
assets, while exploring new research programmes from its in-house
drug discovery platform, as well as external early stage
opportunities that can be potentially in-licensed and progressed
into the clinic.
From a financial perspective, the Company will continue to
employ rigorous capital management in the development of its
internal assets and its overall business.
Dr Stephen Parker Dr Tim Mitchell
Chairman Chief Executive
Officer
Consolidated statement of comprehensive income for the year
ended 30 June 2018
2018 2017
Notes GBP GBP
CONTINUING OPERATIONS
Revenue - -
Other operating income - 19,996
Administrative expenses (1,709,699) (1,445,792)
Share of (loss)/profit of
associates 5 (12,264) 1,775,725
OPERATING (LOSS)/PROFIT (1,721,963) 349,929
------------- ------------
Finance income 3,745 2,991
------------- ------------
(LOSS)/PROFIT BEFORE INCOME
TAX 5 (1,718,218) 352,920
Income tax 6 248,697 47,423
------------- ------------
(LOSS)/PROFIT FOR THE YEAR (1,469,521) 400,343
------------
TOTAL COMPREHENSIVE (EXPENSE)/INCOME
FOR THE YEAR (1,469,521) 400,343
------------- ------------
(Loss)/profit attributable
to:
Owners of the parent (1,469,521) 400,343
============= ============
Total comprehensive (expense)/income
attributable to:
Owners of the parent (1,469,521) 400,343
============= ============
Earnings per share expressed
in pence per share: 7
Basic (0.05)p 0.015p
Diluted - 0.015p
============= ============
Consolidated balance sheet as at 30 June 2018
2018 2017
Notes GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets - -
Property, plant and equipment 8,000 13,333
Investments in Associates 4 41,375 53,639
------------- -------------
49,375 66,972
------------- -------------
CURRENT ASSETS
Trade and other receivables 137,832 80,434
Tax receivable 253,562 48,230
Cash and cash equivalents 8 1,375,275 2,305,509
------------- -------------
1,766,669 2,434,173
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 183,455 155,534
------------- -------------
NET CURRENT ASSETS 1,583,214 2,278,639
------------- -------------
NET ASSETS 1,632,589 2,345,611
============= =============
SHAREHOLDERS' EQUITY
Called up share capital 686,305 661,305
Share premium 12,395,744 11,765,111
Share-based compensation reserve 292,811 191,945
Merger reserve 27 27
Retained earnings (11,742,298) (10,272,777)
------------- -------------
TOTAL EQUITY 1,632,589 2,345,611
============= =============
Consolidated statement of changes in equity for the year ended
30 June 2018
Called up Retained
share capital earnings Share premium
GBP GBP GBP
Balance at 30 June 2016 661,305 (10,673,120) 11,765,111
Changes in equity
Total comprehensive income - 400,343 -
Share-based compensation - - -
--------------- ---------------- --------------
Balance at 30 June 2017 661,305 (10,272,777) 11,765,111
Changes in equity
Issue of share capital 25,000 - 630,633
Total comprehensive expense - (1,469,521) -
Share-based compensation - - -
--------------- ---------------- --------------
Balance at 30 June 2018 686,305 (11,742,298) 12,395,744
=============== ================ ==============
Share-based
compensation
reserve Merger reserve Total equity
GBP GBP GBP
Balance at 30 June 2016 110,209 27 1,863,532
Changes in equity
Total comprehensive income - - 400,343
Share-based compensation 81,736 - 81,736
--------------- ---------------- --------------
Balance at 30 June 2017 191,945 27 2,345,611
--------------- ---------------- --------------
Changes in equity
Issue of share capital - - 655,633
Total comprehensive expense - - (1,469,521)
Share-based compensation 100,866 - 100,866
--------------- ---------------- --------------
Balance at 30 June 2018 292,811 27 1,632,589
=============== ================ ==============
Consolidated cash flow statement for the year ended 30 June
2018
2018 2017
Notes GBP GBP
Cash flows from operating activities
Cash generated from operations 9 (1,635,688) 689,837
Tax received 43,365 154,033
------------ ----------
Net cash (outflow)/inflow from
operating activities (1,592,323) 843,870
------------ ----------
Cash flows from investing activities
Purchase of tangible fixed asset - (16,000)
Repayment of investment funds - 228,977
Interest received 3,745 2,991
------------ ----------
Net cash from investing activities 3,745 215,968
------------ ----------
Cash flows from financing activities
Loan repayment by director 2,711 -
Loan to Director - (6,924)
Share issue 25,000 -
Share premium on share issue 630,633 -
------------ ----------
Net cash inflow/(outflow) from
financing activities 658,344 (6,924)
------------ ----------
(Decrease)/increase in cash
and cash equivalents (930,234) 1,052,914
Cash and cash equivalents at
beginning of year 2,305,509 1,252,595
------------ ----------
Cash and cash equivalents at
end of year 8 1,375,275 2,305,509
============ ==========
Notes to the consolidated financial statements for the year
ended 30 June 2018
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 anticipate that Sareum Holdings plc, the Company,
will secure equity-based financing sufficient to support the Group
for the foreseeable future. Sareum Holdings plc has a track record
over a number of years in raising such finance which underpins the
Directors' confidence that sufficient finance can be raised. In the
event that insufficient funds are raised, and in the absence of
further milestone payments from the Chk1 project or other licensing
income, planned expenditure would be reduced so that the existing
cash reserves would last for the foreseeable future, being not less
than one year from date of these financial statements. For this
reason 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:
Motor vehicles - straight line over three years
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. 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
IFRS 9 Financial Instruments 1 January 2018
IFRS 15 Revenue from Contracts with Customers 1 January 2018
Annual Improvements to IFRS Standards 2014-2016 1 January 2018
Cycle
IFRS 2 Classification and Measurement of 1 January 2018
Share-based Payment Transactions
IFRS 16 Leases 1 January 2018
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 2017 and 30 June 2018 1,138,125
Impairment
At 1 July 2017 1,084,486
Impairment for year 12,264
At 30 June 2018 1,096,750
---------------
Net book value
At 30 June 2018 41,375
===============
At 30 June 2017 53,639
===============
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 at 30 June 2018 the partnership had net assets of
GBP157,474 (2017: GBP200,464) and had incurred cumulative losses of
GBP515,746 (2017: GBP472,756).
5. (Loss)/profit before income tax
The (loss)/profit before income tax is stated after
charging:
2018 2017
GBP GBP
Other operating leases 13,902 11,210
Depreciation - owned assets 5,333 3,989
Research and development 1,035,708 1,002,342
Auditor's remuneration - see analysis below 13,100 13,915
========== ==========
The share of (loss)/profit of associates
is made up of:
Share of income of associate - 1,968,147
Share of costs of associate (12,264) (192,422)
---------- ----------
Share of (loss)/profit of associate (12,264) 1,775,725
========== ==========
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 4,500 4,500
Audit of subsidiaries 7,300 7,300
---------- ----------
Total audit fees 11,800 11,800
Fees payable to the Company's auditor for
other services:
Taxation services 1,300 1,300
Other assurance services - 815
---------- ----------
Total fees payable to the Company's auditor 13,100 13,915
========== ==========
6. Income tax
2018 2017
GBP GBP
Current tax:
UK corporation tax credit on (losses)/profits
of the period (252,534) (47,423)
Adjustments recognised in the current year
in relation to the current tax of prior
years 3,837 -
---------- ---------
Tax credit to the income statement (248,697) (47,423)
========== =========
The credit for the year can be reconciled to the accounting loss
as follows:
2018 2017
GBP GBP
(Loss)/profit before tax (1,718,218) 352,920
============ ==========
At standard rate of 19% (2017: 19.75%) (326,461) 69,702
Effects of:
Capital allowances in excess of depreciation 699 (161)
Other timing differences 55 435
Unutilised tax losses 181,835 45,445
Losses surrendered for research and development
tax credits (less uplift) 143,872 (115,421)
Research and development tax credits claimed (252,534) (47,423)
Prior year adjustments 3,837 -
------------ ----------
Actual current tax credit in the year (248,697) (47,423)
============ ==========
7. Loss per share
The calculation of (loss)/profit per share is based on the
following data:
Basic (loss)/profit per share:
2018 2017
(Loss)/profit on ordinary activities after
tax GBP(1,469,521) GBP400,343
Weighted average number of shares for
basic loss per share 2,705,771,933 2,645,223,988
Basic (loss)/profit per share (0.05)p 0.015p
Diluted profit per share:
2017
Profit on ordinary activities after tax GBP400,345
Weighted average number of shares for
basic loss per share 2,741,309,965
Diluted profit per share 0.015p
As the Group generated a loss for the year to 30 June 2018,
there was no dilutive effect in respect of share options.
8. Cash and cash equivalents
2018 2017
GBP GBP
Bank deposit account 1,368,687 2,296,439
Bank accounts 6,588 9,070
---------- ----------
1,375,275 2,305,509
========== ==========
9. Reconciliation of (loss)/profit before income tax to cash
generated from operations
2018 2017
GBP GBP
(Loss)/profit before income tax (1,718,218) 352,920
Depreciation charges 5,333 3,989
Share-based compensation 100,866 81,736
Share of cost of associate 12,264 192,422
Finance income (3,745) (2,991)
--------
(1,603,500) 628,076
(Increase)/decrease in trade and other
receivables (60,109) 5,778
Increase in trade and other payables 27,921 55,983
------------ --------
Cash used in operations (1,635,688) 689,837
============ ========
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/ .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR LLFFEAAITFIT
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