IMMUPHARMA PLC — Earnings Release 2012

Apr 9, 2013

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RNS Number : 8624B

Immupharma PLC

09 April 2013

FOR IMMEDIATE RELEASE	9 APRIL 2013

PRELIMINARY RESULTS ANNOUNCEMENT

for the year ended 31 December 2012

ImmuPharma PLC (LSE:IMM), ("ImmuPharma" or the "Company"), the specialist drug discovery and development company, is pleased to announce its preliminary audited results for the year ended 31 December 2012.

Key Highlights:

·      LupuzorTM

o  Discussions continue with potential partners in parallel to discussions with Contract Research Organisations for Lupuzor's pivotal Phase III programme - Special Protocol Assessment and Fast Track Designation granted by FDA

o  American College of Rheumatology Annual Conference - Abstract presented confirms Lupuzor's superior safety and efficacy profile

o  The Centre National de la Recherche Scientifique (CNRS), Europe's largest fundamental research institution, re-affirms the effectiveness of LupuzorTM (peptide P140)

·      Nucant cancer programme IPP-204106

o  Phase I/IIa clinical trial continues with the next generation "polyplexed  Nucant" formulation in three European hospitals including the prestigious Institute Jules Bordet in Belgium - Interim data to be provided in H1 2013 followed by a Phase IIa efficacy study

·      Voted 'Best Medical Research and Development Company, Europe 2012' at The New Economy Pharmaceutical & Healthcare Awards 2012

·     Strong cash position as at 31 December 2012 of £8.9m (2011:  £12.2m)

·      Loss for the period of £3.8m (2011:  £3.3m)

·      Basic and diluted loss per share was 4.71p (2011:  4.12p)

·     Continued successful relationship with the CNRS, the largest fundamental research institute in Europe

Commenting on the year's performance and outlook Dimitri Dimitriou, Chief Executive Officer said: 

ImmuPharma would like to take this opportunity to provide further insight into the Company's activities over 2012 and into 2013, particularly for LupuzorTM, our lead compound and potential blockbuster drug for Lupus, a chronic autoimmune disease.

The Company is pursuing discussions on licensing deals such as the one concluded with Cephalon Inc. in the past, which brought ImmuPharma $45m in non-dilutive cash payments as part of a larger deal, providing validation of LupuzorTM and the management's ability to deliver corporate deals.  The pharmaceutical industry and, in particular, the large multinational companies are facing a gap in new products due to the loss of patent exclusivity of many blockbuster drugs and the lack of enough new products being discovered internally.  As a result, ImmuPharma is at the centre of the ever changing dynamics of this exciting yet challenging industry and believe LupuzorTM is an attractive asset as a licensing opportunity.

In parallel with the Company's strategy of assessing potential licensing deals, ImmuPharma is exploring the option of a financially more attractive and creative deal to retain rights until commercialisation by working closely with a specialist Contract Research Organisation ('CRO') that may help in providing funding with the key objective of completing Phase III of LupuzorTM, the final clinical trial programme, as agreed with the FDA.  The management team is committed to securing the best outcome for shareholders on any deal structure based on the potential returns we believe can be achieved on the approval and commercialisation of Lupuzor.

We were delighted recently to see the article published in Decision Resources, one of the world's leading research and advisory firms for pharmaceutical and healthcare issues, that surveyed U.S. and European rheumatologists who indicated that new therapies for the treatment of Lupus have the potential to offer substantial improvements, highlighting LupuzorTM.

Shareholders and new investors should therefore not lose sight of ImmuPharma's exciting investment proposition and stage of development.  Together with our continued strong cash position we have two potential blockbuster compounds in clinical trials:  LupuzorTM has been given the 'gold standard' approval from the FDA with a SPA and Fast Track designation.  Our cancer programme is also progressing well in its second trial in cancer patients, following the completion of a phase Ib/IIa trial last year.  The lead compound for cancer, IPP-204106, is expected to complete the ongoing trial that takes place in leading oncology centres in France and the prestigious Jules Bordet cancer Institute in Brussels, prior to entering Phase II clinical trials and if efficacy data are promising, this could also create interest from potential licensing partners.

In summary, we would like to thank our shareholders and the CNRS, our research partner, for their support and we look forward to providing a further update in the near future.

For further information please contact:

ImmuPharma plc	+ 44 (0) 20 7152 4080
Dimitri Dimitriou, Chief Executive Officer
Dr Robert Zimmer, President and Chief Scientific Officer
Richard Warr, Chairman
Tracy Weimar, Vice President, Operations and Finance
Lisa Baderoon, Head of Investor Relations	+ 44 (0) 7721 413496
Panmure, Gordon & Co., NOMAD & Broker	+44 (0) 20 7886 2500
Fred Walsh
Hannah Woodley
Cenkos Securities plc, Joint Broker	+44 (0) 20 7397 8900
Stephen Keys, Camilla Hume

Report of the Chairman, the Chief Executive Officer and the President

2012 has been a year of solid progress for ImmuPharma.  We have initiated discussions with a large number of multinational pharmaceutical companies as a new partner for LupuzorTM.  In parallel, we have also opened discussions with some of the largest and most competent Contract Research Organisations with the view of retaining rights to LupuzorTM and thereby generating maximum shareholder return.  Our exciting cancer programme has begun the second Phase I/IIa clinical trial, with the newly discovered polyplexed Nucant formulation in three European hospitals including the prestigious Jules Bordet cancer institute in Belgium.  We have received a further €570,000 grant funding from French government organisations to add to the €1.15m previously received to support this cancer programme.  Further, we were delighted to have been voted 'Best Medical Research and Development Company, Europe 2012' at The New Economy Pharmaceutical & Healthcare Awards 2012. 

Following the reacquisition of the rights to LupuzorTM from Cephalon, Inc arising from their acquisition by Teva Pharmaceuticals, ImmuPharma has been focused on licensing and development options to complete the final development phase.  LupuzorTM has received approval from the US Food and Drug Administration (FDA) to start Phase III with a Special Protocol Assessment (SPA) as well as having received Fast Track designation. In November, together with its key opinion leader co-authors, ImmuPharma presented LupuzorTM's Phase IIb data at the American College of Rheumatology annual conference. During 2012, numerous discussions have been held with a variety of potential partners.  We expect to have further news on LupuzorTM during 2013. 

For reference, ImmuPharma entered into a corporate licensing deal with Cephalon in 2008 while in the middle of our Phase IIb study, which ImmuPharma designed, managed and funded. Cephalon paid ImmuPharma $15m before the results of the phase IIb study for the exclusive option to enter into the worldwide license. Following positive results of the ImmuPharma phase IIb study in early 2009, Cephalon exercised its option by paying a further $30m for an exclusive worldwide license. This was part of an agreement worth $500m in cash milestone payments plus royalties on product sales. Upon completion of the license agreement, Cephalon assumed all responsibilities and costs for the development and commercialisation of Lupuzor™.

In May 2011, Cephalon agreed to a takeover bid by Teva. The acquisition was finalized on October 14, 2011.  Due to a change of control provision and given the fact that Teva has a competing drug candidate for Lupus (laquinimod), based on the key provisions of the agreement between ImmuPharma and Cephalon, Immupharma requested and was granted the return of the rights for Lupuzor™.  ImmuPharma regained LupuzorTM at an exciting stage in its development.  The FDA has granted LupuzorTM approval to start Phase III with a Special Protocol Assessment (SPA) and Fast Track designation. 

ImmuPharma has also made promising progress with its anti-cancer nucleolin antagonist ("Nucant") peptide programme.  Having received approval from the French regulatory authorities, Agence Francaise de Securite Sanitaire des Produits de Sante (AFSSAPS), it initiated an initial Phase I dose ranging tolerability and safety study in three hospitals in France which is now complete. Patients were suffering from different types of cancer including breast, lung and bladder cancers which had all metastasised. No serious drug related adverse events were reported. 6 out of the 14 patients had a proven stabilization and for 2 out of the 6 the stabilization lasted for more than 6 months.  ImmuPharma initiated a Phase I/II study based on the next generation "polyplexed Nucant", assessing the safety in a dose ranging tolerability study with the new formulation to be followed by a Phase II efficacy study designed to treat various cancers in approximately 30 patients to identify appropriate biomarkers. This trial is being conducted in three hospitals in Europe including the prestigious Institute Jules Bordet, an Integrated Multidisciplinary Centre which is the only autonomous hospital in Belgium totally dedicated to cancer. Our further intention is to conduct follow-up studies on patients showing the appropriate biomarkers with glioblastoma (brain tumour), metastatic melanoma, and pancreatic cancer where nuclear proteins play a key role. 

Additionally, we have been working to raise ImmuPharma's profile in the investment community and strive to maintain an effective dialogue with our investors.  Further, we were pleased to have launched a new company website to ensure that investors have access to all key corporate information and to have launched a new LupuzorTM website to provide an in-depth look at this promising potential product. 

ImmuPharma plc

Report of the Chairman, the Chief Executive Officer and the President

Our key objectives for 2013 are to initiate the final development phase of LupuzorTM, either with a licensing partner or with a prestigious Contract Research Organisation, to advance our cancer programme and to develop the rest of our asset base.  We value the support and look forward to enhancing our key relationship with the Centre National de la Recherche Scientifique (CNRS), the largest fundamental research institution in Europe.  As in previous years, this is to be achieved with solid financial management and careful controlled expenditure. 

ImmuPharma is looking forward to another promising year in 2013.  The Board would like to thank its shareholders for their ongoing support as well as its scientific advisors and the Centre Nationale de la Recherche Scientifique in France for their collaboration.

Richard Warr                      Dimitri F. Dimitriou                           Dr Robert Zimmer

Chairman                               Chief Executive Officer                        President

Financial Review

The year ended 31 December 2012 was a year focused on finding a suitable partner for LupuzorTM and on ensuring the progress of our cancer programme with the initiation of the next clinical trial.  We were delighted to have received €570,000 of further grant funding from French government organisations.

Income Statement

The overall loss for the year ended 31 December 2012 was £3.8m (2011:  £3.3m).  During 2012, research and development expenditure was £1.6m which is in line with that incurred in 2011.  Administrative expenses were £2.6m up from £2.2m in 2011.  The Group posted a £76,327 loss on foreign exchange in 2012 compared to a gain of £0.2m on foreign exchange in 2011.  This arises from the translation of the US dollar balance held by the Group's French subsidiaries.  To date, the Group has not entered into any formal hedging arrangements to protect against such fluctuations.  Total comprehensive loss for the period was £4.2m (2011:  £3.6m), £0.3m greater than the loss for the year as a result of exchange differences on translation of foreign operations.

In previous years, IFRS2, relating to share-based payments has had an impact on the Group's results.  There is a charge in the accounts of £67,072 which represents the current year charge for options previously granted.  This is a notional amount stipulated by IFRS2 (and calculated using a statistical model) as a result of granting the options.  A further £52,120 is due to be charged over the next two years accounts under IFRS2, being the remainder of the fair value charge.

Balance Sheet

Cash and cash equivalents at 31 December 2012 amounted to £8.9m (2011:  £12.2m).  Financial borrowings were £1,288k (2011:  £969k).  This is primarily the conditional advance, from the French Government, for use in the development of our cancer programme.  No interest is payable. 

Results

The Group recorded a loss for the year of £3.8m (2011:  £3.3m).  Basic and diluted loss per share was 4.71p (2011:  4.12p).  No dividend is proposed.

Treasury Policy

The policy continues to be that surplus funds of the Group are held in interest-bearing bank accounts on short or medium maturities, until commitments to future expenditure are made, when adequate funds are released to enable future expenditure to be incurred.  The Group's Treasury Policy and controls are straightforward and approved by the Board.

Financial Strategy

The overall strategy is to successfully find a suitable partner to advance LupuzorTM and to maintain a tight control over cash resources whilst enabling controlled development of the potential product portfolio.

Tracy Weimar

Vice President, Operations and Finance

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

	Notes	Year ended 31 December 2012		Year ended 31 December 2011
		£		£
Continuing operations
Revenue		-		16,847
Research and development expenses		(1,620,331)		(1,619,302)
Administrative expenses		(2,554,722)		(2,233,643)
Operating loss	2	(4,175,053)		(3,836,098)
Finance costs		(80,752)		(818)
Finance income		87,552		224,013
Loss before taxation		(4,168,253)		(3,612,903)
Tax		324,219		257,523
Loss for the year		(3,844,034)		(3,355,380)
Attributable to:
Equity holders of the parent company		(3,844,034)		(3,355,380)
Earnings per ordinary share
Basic	3	(4.71p)		(4.12p)
Diluted	3	(4.71p)		(4.12p)

ImmuPharma plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

	Year ended 31 December 2012		Year ended 31 December 2011
	£		£
Loss for the financial year	(3,844,034)		(3,355,380)
Other comprehensive income
Exchange differences on translation of foreign operations	(311,193)		(255,899)
Other comprehensive income for the period, net of tax	(311,193)		(255,899)
Total comprehensive income for the period	(4,155,227)		(3,611,279)

ImmuPharma plc                                                         

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

Company No. 3929567

		31 December 2012		31 December 2011
		£		£
Non-current assets
Intangible assets		627,677		665,647
Property, plant and equipment		114,834		125,444
Total non-current assets		742,511		791,091
Current assets
Trade and other receivables		873,620		1,323,293
Cash and cash equivalents		8,893,267		12,164,784
Total current assets		9,766,887		13,488,077
Current liabilities
Financial liabilities - borrowings		249,951		142,020
Trade and other payables		773,002		689,317
Provisions		30,371		114,738
Total current liabilities		1,053,324		946,075
Net current assets		8,713,563		12,542,002
Non-current liabilities
Financial liabilities - borrowings		1,038,203		827,067
Net assets		8,417,871		12,506,026
EQUITY
Ordinary shares		8,153,246		8,153,246
Share premium		7,445,970		7,445,970
Merger reserve		106,148		106,148
Other reserves		(3,682,632)		(3,438,511)
Retained earnings		(3,604,861)		239,173
Total equity		8,417,871		12,506,026

ImmuPharma plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

		Share capital		Share premium		Merger reserve		Other reserves - Acquisition reserve		Other reserves - Translation Reserve		Other reserves- Equity shares to be issued		Retained Earnings		Total equity
		£		£		£		£		£		£		£		£
	At 1 January 2011	8,153,246		7,445,970		106,148		(3,541,203)		(1,166,648)		1,378,405		3,594,553		15,970,471
	Loss for the financial year	-		-		-		-		-		-		(3,355,380)		(3,355,380)
	Exchange differences on translation of foreign operations	-		-		-		-		(255,899)		-		-		(255,899)
	Share based payments	-		-		-		-		-		146,834		-		146,834
	At 31 December 2011	8,153,246		7,445,970		106,148		(3,541,203)		(1,422,547)		1,525,239		239,173		12,506,026
	Loss for the financial year	-		-		-		-		-		-		(3,844,034)		(3,844,034)
	Exchange differences on translation of foreign operations	-		-		-		-		(311,193)		-		-		(311,193)
	Share based payments	-		-		-		-		-		67,072		-		67,072
	At 31 December 2012	8,153,246		7,445,970		106,148		(3,541,203)		(1,733,740)		1,592,311		(3,604,861)		8,417,871
	Attributable to:-
	Equity holders of the parent company	8,153,246		7,445,970		106,148		(3,541,203)		(1,733,740)		1,592,311		(3,604,861)		8,417,871

ImmuPharma plc

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

	Notes			Year ended 31 December 2012		Year ended 31 December 2011
				£		£
Cash flows from operating activities
Cash used in operations	4			(3,448,910)		(3,614,232)
Tax				196,197		247,895
Interest paid				(4,425)		(818)
Net cash used in operating activities				(3,257,138)		(3,367,155)
Investing activities
Purchase of property, plant and equipment				(12,632)		(65,724)
Interest received				87,552		61,377
Net cash used in investing activities				74,920		(4,347)
Financing activities
Increase in bank overdraft				21,741		3,479
New loans				475,020		208,856
Loan repayments				(139,892)		(47,009)
Net cash generated from financing activities				356,869		165,326
Net decrease in cash and cash equivalents				(2,825,349)		(3,206,176)
Cash and cash equivalents at beginning of year				12,164,784		15,592,941
Effects of exchange rates on cash and cash equivalents				(446,168)		(221,981)
Cash and cash equivalents at end of year				8,893,267		12,164,784

NOTES TO THE PRELIMINARY RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2012

1          ACCOUNTING POLICIES

The financial information set out in this announcement does not comprise the Group's statutory accounts for the year ended 31 December 2012 or 31 December 2011.

The financial information has been extracted from the statutory accounts for the years ended 31 December 2012 and 31 December 2011.  The auditors reported on those accounts; their reports were unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 in respect of the years ended 31 December 2012 and 31 December 2011 and did not include references to any matters to which the auditor drew attention by way of emphasis. 

The statutory accounts for the year ended 31 December 2011 have been delivered to the Registrar of Companies, whereas those for the year ended 31 December 2012 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

The accounting policies are consistent with those applied in the preparation of the interim results for the period ended 30 June 2012 and the statutory accounts for the year ended 31 December 2011, which have been prepared in accordance with International Financial Reporting Standards ("IFRS").

The financial information is for the year ended 31 December 2012 and the comparatives are for the year ended 31 December 2011.

The Group's financial statements incorporate the financial statements of ImmuPharma plc and other entities controlled by the company ("the subsidiaries").  Control is achieved where the company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

NOTES TO THE PRELIMINARY RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2012 (continued)

2	OPERATING LOSS
	- Group	Year ended 31 December 2012		Year ended 31 December 2011
		£		£
	Operating loss is stated after charging/(crediting):
	Share based payments charge	67,072		146,834
	Employers National Insurance provision in respect of share based payments charge	(84,367)		(19,765)
	Depreciation of property, plant and equipment - owned	19,553		15,408
	Amortisation of intangible assets - patents	31,370		31,487
	Services provided by Company auditors: - Audit services	39,000		37,500
	- Other services relating to tax compliance services	3,150		11,525
	- Other services relating to taxation advisory services	550		-
	- Other services - interim review	7,250		7,250
	Audit services provided by other auditors	10,625		10,419

NOTES TO THE PRELIMINARY RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2012 (continued)

3	EARNINGS PER SHARE - Group	Year ended 31 December 2012		Year ended 31 December 2011
		£		£
	Earnings
	Earnings for the purposes of basic earnings per share being net loss after tax attributable to equity shareholders	(3,844,034)		(3,355,380)
	Number of shares
	Weighted average number of ordinary shares for the purposes of basic earnings per share	81,532,463		81,532,463
	Basic earnings per share	(4.71)p		(4.12)p
	Diluted earnings per share	(4.71)p		(4.12)p
	The Group has granted share options in respect of equity shares to be issued, the details of which are disclosed in the full set of accounts. There is no difference between basic earnings per share and diluted earnings per share as the share options are anti-dilutive.

NOTES TO THE PRELIMINARY RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2012 (continued)

4	CASH USED IN OPERATIONS	Group 31 December 2012		Group 31 December 2011
		£		£
	Operating loss	(4,175,053)		(3,836,098)
	Depreciation and amortisation	50,923		47,049
	Share-based payments	67,072		146,834
	Decrease/(increase) in trade and other receivables	785,805		(391,939)
	(Decrease)/increase in trade and other payables	(16,963)		278,543
	Decrease in provisions	(84,367)		(19,765)
	Gain/(loss) on foreign exchange	(76,327)		161,144
	Inter-company release	-		-
	Cash used in operations	(3,448,910)		(3,614,232)

This information is provided by RNS

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