4D pharma plc (LON: DDDD), a pharmaceutical company focusing on the development of live biotherapeutics, has today announced the final results for the Group for the year ended 31 December 2018.
Financial highlights for the year:
· Net assets of £45.8 million (2017: £69.8 million)
· Cash and cash equivalents (including cash on deposit) of £26.2 million (2017: £50.0 million)
· Total comprehensive loss after tax of £24.3 million (2017: £19.4 million)
· Adjusted loss per share of 36.17 pence (2017: 26.08 pence)
· Basic and diluted loss per share of 36.17 pence (2017: 31.41 pence)
Operational highlights for the year:
Oncology:
· Clinical collaboration with Merck & Co., Inc. to evaluate MRx0518 in combination with Keytruda® (pembrolizumab)
· Partnership with University of Texas MD Anderson Cancer Center to evaluate our oncology candidates in various cancer settings
· Progression of lead oncology candidate, MRx0518, into Phase I/II clinical studies
o Phase I/II combination study with KEYTRUDA® (pembrolizumab) in solid tumours
o Phase I monotherapy study of MRx0518 for solid tumours in a neoadjuvant setting
Gastrointestinal disease:
· Initiation of Phase II clinical study of Blautix® in Irritable Bowel Syndrome
· Successful completion of Phase Ib Thetanix® study in paediatric Crohn’s disease
Respiratory disease:
· Regulatory progress for a Phase I/II study in asthma, expected to commence in coming months
Research:
· Progression in identifying the efficacy and mechanism of our core focus Live Biotherapeutics leading to significant publications
· Identification of two lead candidates for Parkinson’s disease via the MicroRx® platform
· Increased intellectual property portfolio with 56 patent families and over 400 patents granted
David Norwood, Chairman of 4D pharma, commented
“I am pleased to be able to announce the Group’s final results for the year ended 31 December 2018. The year has seen significant progress towards our goal of producing Live Biotherapeutics as safe and effective therapies. I would like to thank everyone in the Group for their contribution to the progress we have made in 2018.”
Duncan Peyton, Chief Executive Officer, commented
“2018 has been an exciting year for us with a number of clinical and research goals achieved. I look forward to the coming year as we prepare for clinical readouts that could revolutionise our quest to make microbiome medicines a reality for patients. “
The Annual Report, together with a notice of the Company’s Annual General Meeting, will be posted to shareholders and made available on the Company’s website, www.4dpharmaplc.com, by 28 May 2019. The Annual General Meeting will be held on Thursday 20 June 2019 at 10 a.m. in the Chicago Room, Sofitel, Terminal 5, Wentworth Drive, London Heathrow Airport, Hounslow TW6 2GD.
Chairman’s Statement
Performance
Since our last report, 4D has made significant progress taking its Live Biotherapeutic products through the clinic in oncology, gastrointestinal and respiratory disease. We now have four products in clinical development with two studies ongoing in oncology, two in gastrointestinal disease and another in respiratory disease. The speed at which 4D has been able to enter clinical development is a reflection of the reduced preclinical work necessary to take single‑strain Live Biotherapeutics into the clinic.
As we move forward, our key goal is to deliver meaningful clinical data to support the use of Live Biotherapeutics across multiple indications in oncology, gastrointestinal, respiratory and central nervous system diseases. We believe that through our ongoing programme of clinical trials, we are well positioned to achieve this.
Our research teams continue to further the understanding, both of our programmes and their mechanisms, and of the microbiome generally. Meanwhile our increasing intellectual property estate helps secure our leading position in the field.
Our culture
The success of 4D is based on close collaboration between the teams involved in all aspects of the business from discovery to manufacturing and beyond. We could not have achieved what we have without the continued support of our staff throughout our sites in Europe and those involved in our wider collaborations. I would like to thank them all for their contribution to the progress we have made in 2018.
Board and governance
We were delighted to appoint Ed Baracchini, PhD, and Professor Axel Glasmacher, MD, as independent Non‑Executive Directors in January 2019. We are already seeing benefits from their advice in terms of commercial and clinical development.
The Board is committed to maintaining high standards of governance, both at Board level and operationally throughout the business. The Group’s Corporate Governance Statement will be published in the Annual Report.
Outlook
2018 has been an exciting year for 4D Pharma with numerous clinical goals achieved. I look forward to the coming year and beyond with great anticipation as we prepare for clinical readouts that could revolutionise our quest to make microbiome medicines a reality for patients.
David Norwood
Non-Executive Chairman
20 May 2019
Chief Executive Officer’s Report
Building towards our goal of delivering Live Biotherapeutics to the market, 2018 has been an important year for 4D.
We continue to focus our attention on our oncology portfolio and expand our footprint in the US, having struck partnerships with Merck & Co., Inc. (known as MSD outside the United States and Canada) and MD Anderson Cancer Center to develop our Live Biotherapeutics in the field of oncology. Our collaboration with Merck & Co. advances the clinical development of MRx0518, combining it with the world-leading oncology product, whilst also providing further validation of our capabilities. Our strategic collaboration with MD Anderson Cancer Center will provide a long-term platform to evaluate our Live Biotherapeutics across a range of clinical cancer settings with some of the world’s leading clinicians in this field.
We have maintained our clinical and regulatory progress throughout the year. Having received regulatory clearance from the FDA, MHRA and HPRA in November 2018 we commenced a large Phase II study of Blautix® in patients with IBS, further demonstrating our commitment to generating the robust clinical data required to support the approval of our products. This is not only an important trial for 4D but also for the microbiome medicine space being the largest trial in the space and is designed to deliver statistically significant data.
Research
We have always believed in the importance of understanding the mechanism and identifying the effector molecules of our products in the same way that is done with more traditional drug candidates. The continued effort by our research teams has generated further data supporting our functionality approach helping 4D define the field and identify novel ways forward. This not only gives us a leading edge in the field but also translates into more straightforward interactions with clinicians, regulators and the broader pharmaceutical industry.
Over the past twelve months the Group has continued work on expanding the use of the MicroRx® platform to further understand the mechanism of action of the Live Biotherapeutic Products in the product pipeline. This has led to the successful publication of a number of papers in peer-reviewed scientific journals. The insights provided are proving vital to decisions about the optimal clinical pathway for our products and in ongoing discussions with regulatory bodies and potential collaborators.
The expansion of MicroRx® has also allowed 4D to explore business development opportunities beyond the core focus programmes in oncology, gastrointestinal disease, respiratory disease and CNS disease and we anticipate that this will lead to further partnering opportunities in the coming year.
Oncology
We were delighted to announce our agreement with Merck & Co. in June to conduct a clinical study evaluating the combination of Keytruda® (pembrolizumab), an anti-PD-1 therapy, and MRx0518 in patients with solid tumours. The Phase I/II study is evaluating safety, tolerability and anti-tumour effect in patients with advanced cancers who have progressed on prior anti-PD-1 therapy. The study opened in early January and recruitment is ongoing at the MD Anderson Cancer Center where the study is taking place.
A second clinical study, a randomised, placebo-controlled Phase Ib study of MRx0518 as a monotherapy in a neoadjuvant setting for patients due to undergo surgery as a first treatment for solid tumours, is also ongoing. This study is taking place in the UK at Imperial College London and will assess the safety, tolerability and anti-cancer effects of MRx0518. These patients will receive MRx0518 as a neoadjuvant for two to four weeks prior to surgery. As participants will be treatment naïve, the study allows an unambiguous assessment of the anti-tumour immunological effects of MRx0518 in a clinical setting.
Throughout the year we have continued our work identifying the mechanism of action of our lead candidate, MRx0518. We published a key paper in January 2019, which outlines the role of the bacterial flagellin in stimulating the immune system.
In light of the focus on oncology, 4D has sought to engage with the best partners in the field as we progress our programmes through the clinic. In January 2018 we formally announced our strategic collaboration with the University of Texas MD Anderson Cancer Center which we have been working with through 2018. The alliance brings together MD Anderson’s translational medicine and clinical research capabilities with 4D’s expertise in the discovery and development of Live Biotherapeutics (“LBPs”). The collaboration will evaluate our LBP oncology pipeline across a range of cancer settings, including pancreatic cancer with a near-term focus on MRx0518.
Gastrointestinal disease
Our lead product in gastrointestinal disease, Blautix®, for IBS has made significant progress. We secured regulatory approvals in both the US and EU to commence our Phase II study of Blautix® in moderate to severe constipation-predominant IBS and diarrhoea-predominant IBS. This Phase II randomised, double-blind, placebo-controlled, multicentre study is now enrolling and will recruit up to 500 participants at sites across the US and EU. We believe that this study represents the largest clinical trial of a Live Biotherapeutic to date. It should be noted that the primary endpoint, overall response rate, is an FDA-approved endpoint for the registration of new IBS products.
During 2018 we also completed the Phase Ib study of Thetanix®, our product for Crohn’s disease. This study in paediatric patients successfully met the primary outcomes of safety and tolerability and demonstrated results that match to the preclinical data.
Building on the data from the Phase I study we have been consulting with leading figures in the field and it has become clear that the need for a safe and effective solution in the paediatric population is growing in importance.
Respiratory disease
We have significantly advanced our asthma programme this year and received regulatory approval for our Phase I/II placebo-controlled study in poorly controlled asthma from the UK’s MHRA in December. This study will primarily evaluate the safety and tolerability of MRx-4DP0004 in combination with existing maintenance therapy and has a range of secondary endpoints designed to evaluate efficacy. Further regulatory submissions are ongoing in the EU and US and we anticipate commencing the study in these territories shortly.
As with all our LBP programmes we have also focussed on furthering understanding the function and potential mechanism of our candidate. To this end in August we published a paper demonstrating the activity of MRx-4DP0004 in preclinical models of severe asthma. MRX-4DP0004 protects against airway inflammation by reducing both neutrophilic and eosinophilic infiltration concurrently as this is something that is not achievable with current therapies. This gives us further confidence that 4D has the capabilities to develop novel therapies for complex diseases.
Intellectual property
Since its inception, 4D has sought to establish a sector-leading IP portfolio robustly protecting its candidate therapies. By implementing an aggressive approach to securing patent protection, supported by first class science, 4D now has the largest and most comprehensive IP portfolio in the Live Biotherapeutics space with over 400 granted patents across over 50 patent families. Statutory exclusions to the patentability of naturally occurring matter, perceived by some to preclude meaningful patent protection for LBPs, have not constituted a barrier to 4D. All candidates in clinical development are protected by granted patents in the US, Europe and Japan with pending applications in all other significant jurisdictions.
Financial summary
In the year to December 2018, our cash and cash equivalents and short-term deposits reduced from £50.0 million to £26.2 million, with a loss before tax of £28.4 million (compared with £24.0 million in the year to December 2017). Our claim for research and development tax credit was £4.7 million (compared with £3.5 million in the year to December 2017).
Our cash burn for the year was in line with expectation, reflecting the increased costs of taking existing and new clinical programmes forward and preparing for upcoming Phase I and II trials.
The Group continues to manage its cash deposits prudently and invests its funds across a number of financial institutions which have investment grade credit ratings. The Board has continued to operate a robust set of financial controls including rolling short-term and long-term forecasts to assist in the control and prioritisation of resources.
The Directors estimate that the cash held by the Group together with known receivables will be sufficient to support the current level of activities into the fourth quarter of 2019. The Directors are continuing to explore sources of finance available to the Group and have a reasonable expectation that they will be able to secure sufficient cash inflows into the Group to continue its activities for not less than twelve months from the date of approval of these accounts. They have therefore prepared the financial statements on a going concern basis.
Because the additional finance is not committed at the date of approval of these financial statements, these circumstances represent an uncertainty as to the Group’s ability to continue as a going concern.
Should the Group be unable to obtain further finance such that the going concern basis of preparation was no longer appropriate, adjustments would be required including to reduce the carrying value of assets to their recoverable amounts, and to provide for future liabilities that may arise.
Outlook
Throughout 2018, 4D made significant progress towards its goal of producing Live Biotherapeutics as safe and effective therapies. 4D, at the forefront of this revolutionary field, is well positioned to deliver positive clinical results to establish confidence in the potential of this new class of medicines. Over the next 12 to 24 months, the Group will lead the way in generating robust clinical data to support the use of this new class of drugs across indications including oncology, gastrointestinal and respiratory disease. Our research programme and the progression of the MicroRx® platform continue to advance our understanding as we continue developing our novel Live Biotherapeutics at the forefront of this revolutionary field.
Duncan Peyton
Chief Executive Officer
20 May 2019
