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(AIM:SAR) |
15 October 2019 |
SAREUM HOLDINGS PLC
(“Sareum” or the “Company”)
FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2019
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014
Sareum Holdings plc (AIM: SAR), the specialised small molecule drug development business, announces its results for the year ended 30 June 2019 and provides an update of significant post-period events. The Company will host a conference call today at 10.00 a.m. (see details below).
The Company expects to publish its Annual Report and Accounts in November 2019.
Operational Highlights
Proprietary Selective TYK2/JAK1 Inhibitors in Autoimmune Diseases and Cancer
SRA737 – Chk1 inhibitor in Multiple Cancer Indications Exhibiting Defined Genetic Profiles
Corporate update – Board of Directors strengthened
Financial highlights (subject to audit)
Full Year Results 2019 available as PDF document: FY Results 2019
Dr Tim Mitchell, CEO of Sareum, commented:
“We are very pleased with the progress of our proprietary dual TYK2/JAK1 programmes. We believe these offer a novel oral immunotherapy approach to addressing unmet needs in autoimmune diseases and cancer and that their mechanism is gaining increasing interest from the pharmaceutical industry. In line with our business model, we continue to engage with potential partners with a view to securing commercial licences when they reach late preclinical or early clinical stages.
“We also remain optimistic that Sierra will be successful in finding a non-dilutive solution that will enable the development of SRA737 to advance. The positive clinical results presented in June and the exciting preclinical findings presented throughout the year from combining SRA737 with advanced cancer therapies suggests that SRA737 has significant value. In addition, the advancement of SRA737 in its clinical studies could result in Sareum receiving significant milestone payments in due course.
“We expect to report on continued progress across our active portfolio during the coming year and beyond, which we believe will result in important value generation for our shareholders.”
Conference call
Drs Stephen Parker (Chairman), Tim Mitchell (Chief Executive Officer) and John Reader (Chief Scientific Officer) will present the financial and operational results in a conference call today at 10.00 a.m. The presentation will be followed by a Q&A session.
Please dial into the call using the numbers below 5-10 minutes before the scheduled start time. Dial-in details are:
The call password is Sareum.
The results presentation is available in the Document Centre in the Investors section of the Sareum website (www.sareum.com/investors).
For further information, please contact:
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Sareum Holdings plc |
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Tim Mitchell |
01223 497 700 |
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Strand Hanson Limited (Nominated Adviser) |
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James Dance / Richard Tulloch |
020 7409 3494 |
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Hybridan LLP (Nominated Broker) |
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Claire Noyce / John Beresford-Peirse |
020 3764 2341 |
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Citigate Dewe Rogerson (Media enquiries) |
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Shabnam Bashir/ Mark Swallow/ David Dible |
020 7638 9571 |
Notes for editors:
Sareum is a specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune disease. The Company aims to generate value through licensing its candidates to international pharmaceutical and biotechnology companies at the preclinical or early clinical trials stage.
Sareum is advancing internal programmes focused on distinct dual tyrosine kinase 2 (TYK2) / Janus kinase 1 (JAK1) inhibitors through preclinical development as therapies for autoimmune diseases (SDC-1801) and cancers (SDC-1802). The Company is targeting first human clinical trials in each indication in 2020.
Sareum also has an economic interest in SRA737, a clinical-stage oral, selective Checkpoint kinase 1 (Chk1) inhibitor that targets cancer cell replication and DNA damage repair mechanisms. Preliminary data suggest SRA737 may have broad application in combination with other oncology and immune-oncology drugs in genetically defined patients.
SRA737 was discovered and initially developed by scientists at The Institute of Cancer Research in collaboration with Sareum, and with funding from Cancer Research UK. SRA737 was licensed by CRT Pioneer Fund (CPF) to Sierra Oncology, in a $328.5m plus royalties licence deal, with Sareum eligible to receive 27.5% of all payments to CPF under the agreement.
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
- Ends -
Full year results for the 12 months ended 30 June 2019
Chairman’s and CEO’s Statement
The year to end June 2019 has yielded good reasons to be optimistic about Sareum’s prospects: solid preclinical progress was made with our internal proprietary TYK2/JAK1 programmes and the results for clinical trials with SRA737, an oral Chk1 inhibitor, continued to highlight the potential of these compounds as important and valuable new approaches to treating major disorders with unmet need.
We have been very encouraged by the good progress with our TYK2/JAK1 inhibitors SDC-1801 (targeting autoimmune diseases) and SDC-1802 (targeting cancer) in formal preclinical development.
SDC-1801 is advancing as planned and has demonstrated excellent tolerability in rodent studies and has now moved into longer-term toxicology and dose-finding studies, which would form part of the regulatory documentation needed to apply to begin human trials.
We are also pleased to have the opportunity to present new preclinical data, demonstrating the anti-tumour activity of SDC-1802 (formerly SAR-20351) and novel immunotherapeutic mechanism of action in multiple cancer disease models, at the upcoming 2019 AACR-NCI-EORTC International Cancer Conference, at the end of October 2019, in Boston, USA. These data provide increasing evidence that highlight TYK2/JAK1 inhibition as a new approach to cancer therapy and further support our SDC-1802 cancer research programme.
We believe our two TYK2/JAK1 inhibitors offer a novel oral immunotherapy approach to addressing unmet needs in autoimmune diseases and cancer and the mechanism by which they act appears to be gaining increasing credibility and interest from the pharmaceutical industry. In line with our business model, we continue to engage with potential partners with a view to securing commercial licences when they reach late preclinical or early clinical stages.
With regards to SRA737, in June 2019, Sierra Oncology, the licence holder of SRA737 (an oral selective Chk1 inhibitor), announced promising preliminary efficacy and safety data at the annual meeting of the American Society of Clinical Oncology (ASCO) from two ongoing Phase 1/2 clinical trials. These trials were evaluating SRA737 across multiple cancer indications, as a monotherapy and as a combination potentiated by non-cytotoxic low-dose gemcitabine (LDG).
These data clearly highlight the potential of SRA737 to become an attractive new therapeutic option for patients in several important and underserved cancer indications. In addition, Sierra outlined a possible route to market for SRA737 in anogenital cancer, and indicative initial human trials of SRA737 in combination with other drug modalities (PARP inhibitors and immuno-oncology drugs).
Shortly after the ASCO data were presented, Sierra announced that it was exploring non-dilutive strategic options to support the next stages of development of SRA737. Sierra made this decision on the basis that it was prioritising its resources on advancing the development of its Phase 3 myelofibrosis candidate momelotinib.
We continue to believe, based on the promising clinical and preclinical data generated to date, that Sierra has every chance of finding a suitable solution that will enable the development of SRA737 to advance. This, in due course, would lead to Sareum receiving the milestone payments under the licensing agreement between Sierra and CRT Pioneer Fund (CPF), the licensor of SRA737, with which Sareum has a Co-investment and Partnership agreement. We remain in dialogue with CPF to ensure we are informed of developments and are committed to updating shareholders and the market in general as and when the restrictions in the two agreements allow.
Sierra’s decision does mean, however, that the clinical development milestones payments that Sareum could have anticipated if SRA737 development had progressed as previously planned, have now been delayed until Sierra finds a solution.
Achieving two near-term milestones in particular – dosing of the first patient with SRA737 in a Phase 1 trial in the US and/or dosing of the first patient in a randomised Phase 2 trial – would generate revenue to Sareum of around US$5.3 million. These previously confidential milestones were disclosed by Sierra for the first time in August 2019 and announced by the Company.
The short-term absence of this milestone income has led to the Company focusing its cash spend by investing in its proprietary TYK2/JAK1 inhibitor assets as efficiently as possible. The Company is therefore deploying its resources on the necessary studies that would enable these assets to enter clinical studies in late 2020 in priority indications, as well as developing a compelling data package designed to attract a development partner at an appropriate point.
We are now fully focused on these goals which would put us in a strong position to achieve a licensing agreement with a third party during the late preclinical or early clinical phases and are expected to provide significant returns to Sareum and its shareholders. The Board’s confidence is based on the quality of the Company’s drug candidates and the growing industry interest in the TYK2/JAK1 space.
Programme updates
Proprietary Pipeline – Selective TYK2/JAK1 Inhibitors in Autoimmune Diseases and Cancer
Sareum’s internal programmes focus on distinct dual TYK2/JAK1 inhibitors, which are progressing through preclinical development as therapies for autoimmune diseases (SDC-1801) and cancers (SDC-1802).
TYK2 and JAK1 are both 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 promoting inflammatory responses in autoimmune diseases and tumour cell proliferation in certain cancers.
There are currently no marketed products with specific selectivity for TYK2. However, members of the JAK family are the targets of several marketed and clinical-stage drugs in both disease areas. There is notable interest in the pharmaceutical industry for novel molecules that can selectively target TYK2 and JAK1, and particularly for those that can avoid side-effects from inadvertent activity via JAK2 or JAK3.
We remain optimistic about both Sareum programmes given they have progressed well in preclinical development since formal candidate selection in September 2018, building on the compelling efficacy seen in autoimmune and cancer models, the potential for once-daily oral dosing and good early safety profiles.
Additional research to refine the Company’s clinical plans, including prioritisation of indications, is underway for clinical trials, which are targeted to start in late 2020, subject to successful progress and financing.
SDC-1801 – targeting autoimmune diseases
SDC-1801 and related molecules have previously shown promising activity in autoimmune disease models, including psoriasis, rheumatoid arthritis, inflammatory bowel disease and systemic lupus erythematosus (lupus).
SDC-1801 is currently being advanced through a series of toxicology and other preclinical studies designed to form part of the regulatory documentation needed to apply to begin human trials in healthy volunteers, which are targeted to begin in 2020, subject to successful progress and financing.
The compound has demonstrated excellent tolerability in toxicology studies in rodents (as reported in June 2019), with doses up to 30 times the level that displayed good responses in efficacy studies. Dosing in two short-term dose range finding studies has now completed and laboratory analysis of the data obtained is on-going. These studies have been designed to identify low, medium and high doses to use in specific longer-term toxicology studies.
In addition, a short and robust manufacturing route has been developed for SDC-1801 to produce active ingredient for both preclinical and clinical studies and the product required for the next round of toxicology studies has been delivered. Research is ongoing to find the most reliable manufacturing process for the best solid form of the molecule to progress into clinical studies.
Sareum has a co-development agreement with SRI International (Menlo Park, CA, USA), a non-profit scientific research institute, to develop TYK2 inhibitors in autoimmune diseases. SRI, working under a US Department of Defense (“DoD”) grant, has completed a preclinical study using Sareum TYK2/JAK1 inhibitors in lupus disease models and the final report from this study is expected to be made public by the DoD in the near future.
Sareum retains commercialisation rights for these and other TYK2 inhibitors with profiles optimised for oncology and immuno-oncology applications.
SDC-1802 – targeting cancers
SDC-1802 and related TYK2/JAK1 inhibitors have previously shown encouraging anti-tumour activity in multiple cancer disease models.
Sareum will present new preclinical data supporting these findings at the American Association for Cancer Research (AACR) National Cancer Institute (NCI) European Organisation for Research and Treatment of Cancer (EORTC) International Conference, to be held 26-30 October 2019 in Boston, USA.
The presentation will describe how SDC-1802 (formerly SAR-20351) significantly reduces tumour growth in disease models of cancer of the pancreas, colon, skin and kidney, plus B-cell lymphoma. The studies also determined that SDC-1802 induces this anti-cancer activity through a novel immunotherapeutic mechanism of action that stimulates the local immune system to attack cancer cells.
These positive results were seen when SDC-1802 was dosed orally, as a monotherapy or in combination with chemotherapy/ They provide increasing evidence that TYK2/JAK1 inhibition could become a new approach to cancer therapy and further supports the SDC-1802 cancer research programme.
Sareum’s recent and current activities have been geared towards the toxicology studies designed to gain insight to the maximum-tolerated doses (MTD) of SDC-1802 in rodents, as it has been doing for SDC-1801.
The Company has completed formulation studies to maximise the amount of compound delivered following oral dosing of SDC-1802. The chemistry to produce SDC-1802 uses the same sequence of reactions as those utilised in the production of SDC-1801. Formal optimisation of this process has not yet been initiated for SDC-1802, however, the compound has already been prepared on a >100g scale, meaning the Company has enough material in hand to initiate short-term toxicology studies in rodents.
Sareum intends to publish further research from its TYK2/JAK1 programmes at conferences and in peer-reviewed publications in the future to support its ongoing business development activities with potential partners.
The Company’s stated value-generating strategy is to secure commercial licences when its assets reach late preclinical or early clinical stages and management is engaged in initial discussions with several potential partners.
Licensed programme – SRA737: A Selective Chk1 inhibitor
SRA737 is a potent, highly selective, orally bioavailable small molecule inhibitor of Checkpoint Kinase 1 (Chk1), a key regulator of important cell cycle checkpoints and central mediator of the DNA Damage Response (DDR) network.
SRA737 was discovered and initially developed by scientists at The Institute of Cancer Research (London, UK) in collaboration with Sareum, and with funding from Cancer Research UK (“CRUK”). CRT Pioneer Fund (“CPF”), which is dedicated to financing assets and companies including projects derived from CRUKs oncology drug discovery portfolio, licensed SRA737 to the Nasdaq-listed company Sierra Oncology in 2016. In return, CPF is eligible for up to US$328.5 million, including an upfront payment of US$7 million and US$321.5 million payable upon the achievement of certain developmental, regulatory and commercial milestones, plus royalties on future sales.
CPF has a Co-investment and Partnership agreement with Sareum. Under this agreement Sareum is eligible to receive 27.5% of all payments made to CPF as SRA737 advances, equivalent to up to a total of US$88 million in future milestone payments, plus sales royalties.
SRA737 clinical update
During 2018/2019, SRA737 was investigated by Sierra in a broad clinical development programme targeting patients with genetically defined tumours of different origins that harbour genomic alterations linked to increased DNA replication stress. Such tumours are hypothesised to be more sensitive to Chk1 inhibition.
At the American Society of Clinical Oncology (ASCO) annual meeting in June 2019, Sierra presented positive preliminary clinical data from two first-in-human Phase 1/2 studies evaluating SRA737 across multiple indications, as a monotherapy and as a combination potentiated by non-cytotoxic low-dose gemcitabine (LDG).
The studies delivered highly encouraging results:
Anogenital cancer is an indication for which the second-line metastatic setting represents a significant unmet medical need, with there being no approved therapies and a very poor life expectancy for patients.
SRA737 Preclinical Opportunities
Sierra also presented evidence highlighting the potential of combining SRA737 with other novel therapeutic approaches that are gaining traction as mainstays of targeted cancer treatment. These include PARP inhibition (PARPi) and immune checkpoint blockade.
SRA737 – Current Status
The development work that Sierra has conducted has positioned SRA737 as potentially one of the leading clinical assets targeting the DDR pathway, with clinical safety & efficacy of SRA737 +/- LDG supporting standalone development and compelling preclinical data supporting its use in combination with both PARP inhibitors (PARPi) and immuno-oncology (IO) therapy such as immune checkpoint blockade.
Sierra had stated that future studies were being planned to investigate SRA737 further in all of these areas. However, in June 2019, a few days after its ASCO presentation, Sierra announced it was exploring non-dilutive strategic options to support the next stages of development of SRA737, as it had decided to prioritise the development of its Phase 3 myelofibrosis candidate, momelotinib.
The ongoing SRA737 monotherapy and SRA737+LDG combination Phase 1/2 studies are expected to run through to completion, currently anticipated in the first half of 2020 (clinicaltrials.gov database).
Sareum continues to believe that, based on the promising clinical and preclinical data generated to date, Sierra has every chance of finding a suitable solution that will enable it to advance the development of SRA737. However, Sierra’s decision does mean that the clinical development milestone payments that Sareum could have anticipated if SRA737 development had progressed as previously planned, have now been delayed until Sierra finds a solution.
The achievement of two near-term milestones in particular – dosing of the first patient with SRA737 in a Phase 1 trial in the US and/or dosing of the first patient in a randomised Phase 2 trial – will generate revenue to Sareum of around US$5.3 million. These previously confidential milestones were disclosed by Sierra for the first time in August 2019.
Sareum remains in dialogue with CPF to ensure it is informed of developments and is committed to updating shareholders and the market in general as and when it can.
Aurora+FLT3 Inhibitors
While the Company focuses its research resources on completing the preclinical development of its TYK2/JAK1 programmes, it is seeking a licence partner for the Aurora+FLT3 programme and discussions are ongoing with a number of interested parties.
Corporate Update
During the year, Sareum took steps to improve its financial management and corporate governance and its ability to execute its product development and growth strategies.
In November 2018, Sareum appointed Michael Owen, PhD and Clive Birch, FCA as Non-Executive Directors, bringing significant relevant experience and expertise. Dr Owen and Mr Birch will also serve the Board as members of the Audit & Risk, Remuneration and Nominations Committees.
Dr Owen has worked in biomedical research, and in the pharmaceutical and biotechnology industries for nearly 40 years in a number of executive, board and advisory roles. He is the co-founder and first Chief Scientific Officer of Kymab Ltd, a biopharmaceutical company based in Cambridge, UK, prior to which he worked for GlaxoSmithKline as SVP and Head of Research for Biopharmaceuticals R&D. He currently serves on the boards of several public and private companies in UK, Europe and the US and has also advised notable specialist life science investment firms such as Abingworth LLP and the CRT Pioneer Fund.
Mr Birch is an Independent Non-Executive Director of Cambridge Innovation Capital plc and a retired partner of PricewaterhouseCoopers where, as head of the Cambridge office of PwC, his role was as an auditor and reporting accountant with an industry specialism in technology and healthcare companies. He was also part of the teams involved in fund raising and listing those clients on various markets.
Financial Review
Sareum ended the year to 30 June 2019 with net assets of £1.09 million (2018: £1.63 million) of which £0.92 million (2018: £1.38 million) comprised cash at bank.
The cash balance includes proceeds from a placement that raised £850,000 before expenses in November 2018, through the placement of 130,769,231 new ordinary shares at 0.65p per share.
It does not include the proceeds from a placement and offer that was announced in June 2019 and completed in July 2019 raising £781,484 before expenses through the placement of 195,371,000 new ordinary shares at 0.4p per share, as these funds had not been transferred to the Company’s bank account as at the balance sheet date. These funds were received on 3 July 2019. The cash balance as at 30 September 2019 was £1.39 million.
The new funds are being deployed to progress the Company’s TYK2/JAK1 drug development programmes as well as for working capital purposes.
Non-cash assets include a R&D tax credit of £231,000, the receipt of which is expected as cash in Q1 2020.
Operating expenses for the period at £1.68 million (2018: £1.71 million) have remained approximately in line with that of the previous 12-month period as the Company continues to focus its research expenditure on its TYK2 autoimmune disease and cancer programmes.
The loss on ordinary activities (after taxation) was £1.45 million (2018: £1.47 million).
Outlook
Good progress is continuing to be made with our wholly owned TYK2/JAK1 inhibitor assets and positive clinical and preclinical data has been generated with SRA737. However, these positives have been somewhat overshadowed by Sierra’s decision, which has delayed the achievement of near-term clinical milestones that would have resulted in significant revenue for Sareum.
The Board continue to believe that the data with SRA737 clearly highlights its potential to become an attractive new therapeutic option for patients in several important and underserved cancer indications. Final results from the two ongoing clinical trials are expected in 2020. This gives the Board confidence that Sierra will find a solution that will enable the development of SRA737 to advance, and, in due course, Sareum would receive the milestone payments for which it is eligible.
The Board remains in dialogue with CPF to ensure it is informed of developments and is committed to updating shareholders and the market in general as and when it can.
The Board and management are also continuing to employ rigorous capital management in the development of its internal assets and its overall business.
The Company is fully focused advancing the preclinical development programmes with SDC-1801 and SDC-1802. These programmes are designed to enable the selection of priority indications for clinical studies so that the Company can continue to generate compelling evidence for these candidates to facilitate ongoing discussions with potential partners towards future licensing agreements at optimal valuations. The Directors will continue to review the potential higher value of a later-stage licensing deal versus the requirement for any extra funding.
The Company expects to report on continued progress during the coming year and beyond, which the Board believes will demonstrate the value that is being generated from both internally and externally controlled programmes.
Dr Stephen Parker Dr Tim Mitchell
Chairman Chief Executive Officer
Sareum Limited
Unit 2A, Langford Arch
London Road, Pampisford
Cambridge CB22 3FX
United Kingdom
tel: +44 (0) 1223 497700
fax: +44 (0) 1223 497701
