TIDMSLN
RNS Number : 3742I
Silence Therapeutics PLC
12 August 2021
Silence Therapeutics Reports Half-Year 2021 Results
- Full enrollment achieved for four cohorts of the APOLLO study
of SLN360 in healthy individuals living with high levels of
lipoprotein(a)
- Silence to host R&D Day in New York City on October 21, 2021
August 12, 2021
LONDON, Silence Therapeutics plc , AIM: SLN and Nasdaq: SLN ("
Silence " or " the Company "), a leader in the discovery,
development and delivery of novel short interfering ribonucleic
acid (siRNA) therapeutics for the treatment of diseases with
significant unmet medical need, today announced results for its
half-year ended June 30, 2021.
Mark Rothera, President and CEO of Silence Therapeutics,
commented: "The first half of 2021 was marked by strong execution,
highlighted by the first clinical data from our proprietary mRNAi
GOLD(TM) platform that successfully translated results from
pre-clinical models into humans. In addition to achieving positive
clinical data from our platform, we started dosing patients in two
wholly owned programs and added two new targets to our partnered
pipeline. The progress we made across both our proprietary and
partnered pipelines underscores our firm commitment to maximize the
substantial opportunity of our mRNAi GOLD(TM) platform and enable
2-3 INDs per year beginning in 2023."
"Looking ahead, we have now fully enrolled four cohorts of the
APOLLO study of SLN360 in healthy individuals living with high
levels of Lp(a) and we anticipate topline data in the first quarter
of 2022. We look forward to discussing the progress of our SLN360
and SLN124 programs as well as our broader pipeline in more detail
during our R&D Day on Thursday, October 21(st) in New York
City."
Half-Year 2021 and Recent Corporate Highlights
Proprietary Pipeline
SLN360
-- Started dosing patients and completed enrollment in four
cohorts of the APOLLO phase 1 single-ascending dose study of SLN360
in healthy individuals living with high levels of lipoprotein(a),
or Lp(a), a genetically determined cardiovascular risk factor
affecting around 20% of the world's population. The APOLLO study
protocol includes the option to add a fifth cohort if the Company
wants to further evaluate the clinical profile of SLN360.
SLN124
-- Announced positive topline results from the GEMINI healthy
volunteer study of SLN124, an siRNA targeting TMPRSS6, a gene that
limits the liver's ability to produce the body's central iron
regulator - hepcidin. The 8-week, randomized, double-blind,
placebo-controlled, single-ascending dose study of SLN124
demonstrated safety and proof-of-mechanism to support the ongoing
SLN124 GEMINI II phase 1 program in patients with thalassemia and
myelodysplastic syndrome (MDS). Data from the healthy volunteer
study showed:
o All doses of SLN124 (1.0, 3.0 and 4.5 mg/kg doses) were safe
and generally well-tolerated with no serious or severe treatment
emergent adverse events (TEAEs) or TEAEs leading to withdrawal.
o Following a single dose, SLN124 increased average hepcidin up
to approximately four-fold and reduced serum iron by around
50%.
o Effects on hepcidin and iron appear to be dose dependent and
were still observed at the end of the 8-week study at all dose
levels, indicating a sustained and long duration of action.
-- Started dosing patients in the GEMINI II phase 1
single-ascending dose studies of SLN124 for thalassemia and
MDS.
-- Presented preclinical data highlighting the potential of
SLN124 to address a range of hematological conditions characterized
by iron dysregulation at the European Haematology Association (EHA)
Congress.
o A poster entitled, Non-clinical safety of SLN124, a GalNAc
conjugated 19-mer double stranded siRNA targeting TMPRSS6
facilitating evaluation in clinical studies, showed the strong
preclinical safety profile of SLN124 that is consistent with
clinical results reported from the GEMINI healthy volunteer
study.
o A second poster entitled, Anti-TMPRSS6 RNAi Therapy as a Novel
Treatment Option for Polycythaemia Vera (PV), highlighted the
potential for SLN124 to address broader hematological diseases by
controlling hepcidin expression.
Partnered Pipeline
-- Started work on a second undisclosed target with AstraZeneca
and are on-track to initiate work on a total of five disease
targets within the first three years of the siRNA collaboration for
cardiovascular, renal, metabolic, and respiratory diseases.
-- Initiated work with Mallinckrodt on a third and final target
covered under the collaboration for complement-mediated diseases
and began IND-enabling studies for SLN501, an siRNA targeting
C3.
New Appointments
-- Appointed Dr. Michael H. Davidson to the Silence Board of
Directors as a Non-Executive Director and Craig Tooman to the
Executive Leadership Team as Chief Financial Officer.
Upcoming Events and Anticipated Data Milestones
-- Silence will host an R&D day in New York City on the
morning of Thursday, October 21, 2021. The event will be webcasted
live for those unable to attend in-person. More information will be
made available via press release closer to the date.
-- Additional results from the GEMINI healthy volunteer study of
SLN124 will be presented at an upcoming medical congress, pending
abstract acceptance.
-- Topline data from the APOLLO phase 1 single-ascending dose
study of SLN360 in people with high Lp(a) is now anticipated in the
first quarter of 2022 versus the second half of 2021. The Company
remains on-track to start phase 2 development in the second half of
2022 pending regulatory discussions.
-- Topline data from the GEMINI II phase 1 single-ascending dose
studies of SLN124 in people with thalassemia and MDS is now
anticipated in the third quarter of 2022 versus the second half of
2021 primarily due to COVID-19.
Financial Highlights for the Half-Year Ended June 30, 2021
Craig Tooman, CFO of Silence Therapeutics, commented: "During
the first half of 2021, we were successful in completing an
oversubscribed GBP30.8 million private placement led by top-tier
U.S. institutional healthcare funds. We further improved our cash
position with the receipt of approximately GBP33.7 million of
non-dilutive capital from our collaboration partners. The GBP81.2m
in cash, cash equivalents, and term deposits as of June 30, 2021
positions us well to advance our proprietary technology
platform."
-- Raised GBP30.8m net proceeds from an oversubscribed private
placement led by top-tier U.S. institutional healthcare funds.
-- Revenues from collaborations were GBP5.8 million compared to
GBP1.1 million in the first half of 2020, primarily driven by the
AstraZeneca and Mallinckrodt collaborations.
-- Research and development (R&D) expenses increased to
GBP15.6m compared to GBP10.2m in the first half of 2020. The
increase is primarily a result of investment in experienced
personnel and clinical trial expenses related to the advancement of
our proprietary programs, SLN360 and SLN124.
-- Administrative expenses increased to GBP9.1m compared to
GBP5.2m in the first half of 2020, primarily due to increased
investment in support activities for pipeline growth, as well as
requirements of being a public company dual listed on AIM and
Nasdaq.
-- As of June 30, 2021, we had cash, cash equivalents and term
deposits of GBP81.2 million, compared to approximately GBP37.4
million at the end of December 31, 2020.
Enquiries:
Silence Therapeutics plc Tel: +1 (646) 637-3208
Gem Hopkins, Head of IR and Corporate Communications
ir@silence-therapeutics.com
Investec Bank plc (Nominated Adviser and Tel: +44(0) 20
Broker) 7597 5970
Daniel Adams/Gary Clarence
European PR Tel: +44(0) 20 3709
Consilium Strategic Communications 5700
Mary-Jane Elliott/ Angela Gray / Chris Welsh
silencetherapeutics@consilium-comms.com
About Silence Therapeutics
Silence Therapeutics is developing a new generation of medicines
by harnessing the body's natural mechanism of RNA interference, or
RNAi, to inhibit the expression of specific target genes thought to
play a role in the pathology of diseases with significant unmet
need. Silence's proprietary mRNAi GOLD(TM) platform can be used to
create siRNAs (short interfering RNAs) that precisely target and
silence disease-associated genes in the liver, which represents a
substantial opportunity. Silence's wholly owned product candidates
include SLN360 designed to address the high and prevalent unmet
medical need in reducing cardiovascular risk in people born with
high levels of lipoprotein(a) and SLN124 designed to address
iron-loading anemia conditions. Silence also maintains ongoing
research and development collaborations with AstraZeneca,
Mallinckrodt Pharmaceuticals, and Takeda, among others. For more
information, please visit https://www.silence-therapeutics.com/
.
Forward-Looking Statements
Certain statements made in this announcement are forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 and other securities laws, including
with respect to the Company's clinical and commercial prospects and
the anticipated timing of data reports from the Company's clinical
trials. These forward-looking statements are not historical facts
but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties, and other factors, some
of which are beyond the Company's control, are difficult to
predict, and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements,
including those risks identified in the Company's most recent
Admission Document and its amended Annual Report on Form 20-F filed
with the U.S. Securities and Exchange Commission on April 29, 2021.
The Company cautions security holders and prospective security
holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Company only as of the
date of this announcement. The forward-looking statements made in
this announcement relate only to events as of the date on which the
statements are made. The Company will not undertake any obligation
to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or
unanticipated events occurring after the date of this announcement
except as required by law or by any appropriate regulatory
authority.
Conference Call
Company management will host a live webcast to discuss its
half-year 2021 results and recent business performance today,
August 12, 2021 at 8:00 a.m. EDT / 13:00 BST.
Details of the webcast and conference call:
Dial-in details:
New York, United States: +1 646 741 3167
United States: 1 877 870 9135
London, United Kingdom: +44 2071 928338
United Kingdom: 08002796619
Passcode: 9869230
Webcast link: https://edge.media-server.com/mmc/p/g85x6hug
Chief Executive Officer's Report
In January I said this would be a transformational year for
Silence. Within five months we delivered the first clinical data
from our proprietary mRNAi GOLD(TM) platform that successfully
translated the results of pre-clinical models into humans. I also
set out our path to value creation. We must maximize the
substantial opportunity of our mRNAi GOLD(TM) platform to target
disease associated genes in the liver - rapidly and effectively -
through a combination of building and advancing our proprietary as
well as our partnered pipelines. We made strong progress advancing
both in the first half of the year and remain on-track to deliver
2-3 INDs per year from 2023.
Delivering our strategy
In addition to achieving positive clinical data with our
proprietary mRNAi GOLD(TM) platform , we started dosing patients in
two wholly owned phase 1 clinical programs - the APOLLO
single-ascending dose study of SLN360 for cardiovascular disease
due to high levels of lipoprotein(a), or Lp(a), and the GEMINI II
single-ascending dose studies of SLN124 for rare iron loading
anemia conditions, thalassemia and myelodysplastic syndrome
(MDS).
We also advanced our partnered pipeline. We started work on a
second undisclosed target with AstraZeneca and are on-track to
initiate work on a total of five targets within the first three
years of our collaboration for cardiovascular, renal, metabolic,
and respiratory diseases. Under our Mallinckrodt collaboration for
complement-mediated diseases, we started work on a third target and
initiated IND-enabling studies for the complement pathway C3
targeting program.
We achieved all this despite the ongoing challenges of COVID-19,
which underscores the focus and commitment of our team to control
what we can control so we can maximize our mRNAi GOLD(TM) platform
and ultimately bring life-changing medicines to patients as quickly
as possible.
Executing our clinical pipeline
While thousands of clinical trials have been substantially
delayed because of COVID-19, with slow trial recruitment being a
significant cause, we have been successful in implementing a number
of mitigation strategies to minimize this impact.
This has worked particularly well for the SLN360
single-ascending dose study where we started dosing patients in
February and have now fully enrolled four cohorts at US, European
and Australian sites. The protocol has a post-dosing follow-up
period of around five months to assess duration of action. We now
anticipate reporting topline data from the four cohorts in the
first quarter of 2022 versus the second half of 2021. Pending
regulatory discussions, we remain well positioned to start phase 2
development in the second half of next year.
The impact of COVID-19 on the SLN124 program for thalassemia and
MDS is more complex. We are thrilled that we were able to report
positive topline data in the SLN124 healthy volunteer study in May.
In addition to being the first clinical data from our mRNAi
GOLD(TM) platform, the study demonstrated safety and
proof-of-mechanism to support the ongoing SLN124 single-ascending
dose studies in patients with thalassemia and MDS. While it is
imperative that we address rare diseases in developing countries
where there is such a high unmet need, these are also the areas
hardest hit by COVID-19. For the SLN124 patient studies, we
selected multiple sites across Asia, Middle East and Europe where
thalassemia and MDS are most prevalent, however, some key sites
have not yet been activated due to COVID-19 surges. We are
uncertain today how the situation will evolve and therefore need to
be more conservative with our timelines. We are now guiding that
both of the SLN124 single-ascending dose studies in thalassemia and
MDS will readout in third quarter of 2022 versus the second half of
2021. We are looking to add further sites as a contingency and
continuing to work closely with local patient advocacy
organizations to inform and educate patients about the trials to
expedite the process.
Beyond our evaluation of SLN124 for thalassemia and MDS, the
healthy volunteer study showed the potential for SLN124 to become a
franchise that is much broader than these two indications. We
learned that SLN124 is safe and effective in increasing the
expression of hepcidin - which is the master regulator of iron
balance in the body. Through this approach, we believe SLN124 has
the potential to address a range of hematological conditions
characterized by iron imbalance.
We look forward to discussing the continued progress of our
SLN360 and SLN124 clinical programs as well as our broader pipeline
in more detail during our R&D Day on Thursday, October 21(st)
in New York City. We will have a live webcast of the meeting for
those unable to attend in-person.
Funded for growth
The first half of the year highlighted the value of leveraging a
hybrid business model. In addition to completing an oversubscribed
GBP30.8m private placement led by top-tier U.S. institutional
healthcare funds, we received GBP33.7m in non-dilutive capital from
our collaboration partners. We ended June with GBP81.2m in cash,
cash equivalents and term deposits, positioning us well to advance
our clinical pipeline and deliver on our goal of 2-3 INDs per year
beginning in 2023.
Achieving our mission
We have never been better placed to deliver on our mission to
transform the lives of patients around the world through our
precision engineered medicines and drive positive change for the
communities around us. Thank you to our staff for their hard work,
particularly through the COVID-19 era, and to our shareholders for
your continued support. I look forward to updating you on the
further implementation of our strategy in due course.
Mark Rothera
Chief Executive Officer
Condensed consolidated income statement (unaudited)
Six months ended Year ended
------------------------------
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s (except per share information)
---------------------------------------------- ------------- ------------- -----------------
Revenue 5,845 1,146 5,479
Cost of sales (3,362) - (3,762)
------------- ------------- -----------------
Gross profit 2,483 1,146 1,717
Research and development costs (15,625) (10,179) (20,209)
Administrative expenses (9,126) (5,160) (13,983)
Other (losses)/gains - net - - (3,372)
------------- ------------- -----------------
Operating loss (22,268) (14,193) (35,847)
Finance and other expenses (312) - (323)
Finance and other income 2 864 129
------------- ------------- -----------------
Loss for the period before taxation (22,578) (13,329) (36,041)
Taxation 2,530 2,300 3,494
------------- ------------- -----------------
Loss for the period after taxation (20,048) (11,029) (32,547)
============= ============= =================
Loss per ordinary equity share (basic and
diluted) (22.8) pence (13.7) pence (39.8) pence
Condensed consolidated statement of comprehensive income
(unaudited)
Six months ended Year ended
------------------------------
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
---------------------------------------------- -------------- ------------- -----------------
Loss for the period after taxation (20,048) (11,029) (32,547)
Other comprehensive expense, net of tax:
Items that may subsequently be reclassified to
profit and
loss:
Foreign exchange differences arising on
consolidation of foreign
operations (452) 585 472
------------- ------------- -----------------
Total other comprehensive income/(expense) for
the period (452) 585 472
------------- ------------- -----------------
Total comprehensive expense for the period (20,500) (10,444) (32,075)
============= ============= =================
Condensed consolidated balance sheet (unaudited)
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
---------------------------------------------- -------------- ------------- -----------------
Non-current assets
Property, plant and equipment 1,308 832 1,127
Goodwill 7,763 8,237 8,125
Other intangible assets 7 28 17
Financial assets at amortized cost 301 293 303
------------- ------------- -----------------
9,379 9,390 9,572
---------------------------------------------- ------------- ------------- -----------------
Current assets
Cash and cash equivalents 71,238 10,322 27,449
Derivative financial instrument - - 1,492
Financial assets at amortized cost - term
deposit 10,000 40,021 10,000
R&D tax credit receivable 6,066 5,360 3,536
Other current assets 3,604 2,067 4,616
Trade receivables 438 32,927 29,306
------------- ------------- -----------------
91,346 90,697 76,399
---------------------------------------------- ------------- ------------- -----------------
Non-current liabilities
Contract liabilities (62,294) (63,230) (51,337)
------------- ------------- -----------------
(62,294) (63,230) (51,337)
---------------------------------------------- ------------- ------------- -----------------
Current liabilities
Contract liabilities (6,717) (4,507) (17,042)
Trade and other payables (7,868) (4,711) (8,192)
Lease liability (179) (15) (341)
------------- ------------- -----------------
(14,764) (9,233) (25,575)
---------------------------------------------- ------------- ------------- -----------------
Net assets 23,667 27,624 9,059
============= ============= =================
Capital and reserves attributable to the
owners of the parent
Share capital 4,487 4,141 4,165
Capital reserves 221,097 184,065 186,891
Translation reserve 1,766 2,331 2,218
Accumulated losses (203,683) (162,913) (184,215)
------------- ------------- -----------------
Total shareholders equity 23,667 27,624 9,059
============= ============= =================
Condensed consolidated statement of changes in equity
(unaudited)
Six Months ended June 30, 2020 (unaudited)
Share Capital Translation Accumulated
Capital Reserves Reserve Losses Total
GBP 000s GBP 000s GBP 000s GBP 000s GBP 000s
-------------------------- --------- --------- ----------- ----------- --------
At January 1, 2020 3,919 167,243 1,746 (151,999) 20,909
Recognition of share-based
payments - 1,353 - - 1,353
Options exercised in the
period - (115) - 115 -
Proceeds from shares
issued 222 15,584 - - 15,806
-------- --------- ----------- ----------- --------
Transactions with owners
recognised directly
in equity 222 16,822 - 115 17,159
-------- --------- ----------- ----------- --------
Loss for the period - - - (11,029) (11,029)
Other comprehensive income -
Foreign exchange differences
arising on
consolidation of foreign
operations - - 585 - 585
-------- --------- ----------- ----------- --------
Total comprehensive expense
for the period - - 585 (11,029) (10,444)
-------- --------- ----------- ----------- --------
At June 30, 2020 4,141 184,065 2,331 (162,913) 27,624
-------- --------- ----------- ----------- --------
Six Months ended June 30, 2021 (unaudited)
Share Capital Translation Accumulated
Capital Reserves Reserve Losses Total
GBP 000s GBP 000s GBP 000s GBP 000s GBP 000s
------------------------- --------- --------- ----------- ----------- --------
At January 1, 2021 4,165 186,891 2,218 (184,215) 9,059
Recognition of
share-based payments - 4,206 - - 4,206
Options exercised in the
period - (580) - 580 -
Proceeds from shares
issued 322 30,580 - - 30,902
-------- --------- ----------- ----------- --------
Transactions with owners
recognised directly
in equity 322 34,206 - 580 35,108
-------- --------- ----------- ----------- --------
Loss for the period - - - (20,048) (20,048)
Other comprehensive
expense -
Foreign exchange
differences arising on
consolidation of foreign
operations - - (452) - (452)
-------- --------- ----------- ----------- --------
Total comprehensive expense
for the period - - (452) (20,048) (20,500)
-------- --------- ----------- ----------- --------
At June 30, 2021 4,487 221,097 1,766 (203,683) 23,667
======== ========= =========== =========== ========
Condensed consolidated statement of cash flows (unaudited)
Six months ended Year ended
------------------------------
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
---------------------------------------------- -------------- ------------- -----------------
Cash flow from operating activities
Loss before tax (22,578) (13,329) (36,041)
Depreciation charges 241 204 476
Amortization charges 10 10 20
Charge for the period in respect of
share-based payments 4,206 1,353 4,395
Net foreign exchange loss - - 4,864
(Gain) on derivative financial instrument - - (1,492)
Finance and other expenses 312 - 323
Finance and other income (2) (865) (129)
(Gain) on disposal of property, plant, and
equipment 69 - (3)
Decrease/(increase) in trade and other
receivables 28,868 (32,923) (34,166)
Decrease/(increase) in other current assets 1,012 (1,182) (3,731)
Decrease in current financial assets at
amortized cost - other - 1 1
(Decrease)/increase in trade and other
payables (323) (2,177) 1,303
Decrease in derivative financial instrument 1,492
Increase in contract liabilities 631 49,744 50,386
Cash provided/(spent) on operations 13,938 836 (13,794)
R&D tax credits received - - 3,018
------------- ------------- -----------------
Net cash inflow/(outflow) from operating
activities 13,938 836 (10,776)
------------- ------------- -----------------
Cash flow from investing activities
Redemption/(purchase) of financial assets at
amortized cost - term deposits 2 (20,021) 10,000
Interest received 2 63 129
Purchase of property, plant, and equipment (453) (394) (511)
Purchase of intangible assets - (3) (3)
Proceeds from sale of property, plant, and
equipment - - 3
------------- ------------- -----------------
Net cash (outflow)/inflow from investing
activities (449) (20,355) 9,618
------------- ------------- -----------------
Cash flow from financing activities
Repayment of lease liabilities (616) (272) (402)
Proceeds from issue of share capital 30,902 15,806 15,830
------------- ------------- -----------------
Net cash inflow from financing activities 30,286 15,534 15,428
------------- ------------- -----------------
Increase/(decrease) in cash and cash equivalents 43,775 (3,985) 14,270
------------- ------------- -----------------
Cash and cash equivalents at start of the period 27,449 13,515 13,515
Effect of exchange rate fluctuations on cash and
cash equivalents held 14 792 (336)
------------- ------------- -----------------
Cash and cash equivalents at end of the period 71,238 10,322 27,449
============= ============= =================
Results of Operations
Comparison of the S ix Months Ended June 30, 2021 and 2020
Revenue
Revenue for the six months ended June 30, 2021 was GBP5.8
million ( six months ended June 30, 2020: GBP1.1 million). The
increase was primarily due to the AstraZeneca and Mallinckrodt
collaborations which delivered GBP1.3 million (six months ended
June 30, 2020: GBPnil) and GBP3.8 million (six months ended June
30, 2020: GBP0.5 million) of revenue respectively in 2021.
Research and Development Expenses
The following table summarizes our research and development
expenses for the six months ended June 30, 2021 and 2020, based on
their classification as direct or indirect.
Six months ended
-----------------------------
June 30, 2021 June 30, 2020
GBP 000s GBP 000s
-------------- -------------
Research and development expenses
Direct 14,276 8,182
Indirect 1,349 1,997
------------- -------------
Total 15,625 10,179
============= =============
Research and development expenses for the six months ended June
30, 2021 were GBP15.6 million as compared to GBP10.2 million for
the six months ended June 30, 2020, an increase of GBP5.4 million.
Direct research and development expenses increased by GBP6.1
million, while indirect expenses decreased by GBP0.6 million. The
largest contributor to the increase in R&D spend is R&D
personnel costs (including payroll, consultants, travel and
recruitment fees), which increased from GBP3.1 million in the first
six months of 2020 to GBP5.4 million in the first six months of
2021, as well as clinical trial and clinical material expenses
relating to the SLN124 and SLN360 proprietary programs.
Administrative Expenses
Administrative expenses were GBP9.1 million for the six months
ended June 30, 2021 as compared to GBP5.2 million for the six
months ended June 30, 2020. Administrative expenses consist of
personnel costs, allocated expenses and other expenses for outside
professional services, including legal, audit, tax and accounting
services and public relations and investor relations services.
Personnel costs consist of salaries, bonuses, benefits, recruitment
costs and share-based payment expense for personnel in executive,
finance, business development and other support functions. Other
administrative expenses include office space-related costs not
otherwise allocated to research and development expense, costs of
our information systems and costs for compliance with the
day-to-day requirements of being a listed public company. We
anticipate that our administrative expenses will continue to
increase in the future to support our continued research and
development activities of our product candidates.
Finance and Other Income (Expense)
Finance income includes:
-- interest earned on our cash, cash equivalents and short-term
deposits was GBP2k and GBP67k for the six months ended June 30,
2021 and 2020, respectively. The decrease is primarily attributable
to fewer instances of funds being placed on term deposits through
the first half of 2021 due to lower available cash balances and
also due to a general decrease in interest rates being offered by
Deposit Taking Institutions.
-- net foreign exchange gains of GBP802k and GBPnil for the six
months ended June 30, 2021 and 2020, respectively; foreign exchange
gains relate to cash held in foreign currencies.
Finance expense for the six months ended June 30, 2021 was
GBP312k (six months ended June 30, 2020: GBPnil), attributable to
net foreign exchange losses incurred primarily from foreign
currency denominated bank accounts.
Taxation
We have recognised U.K. research and development tax credits of
GBP2.3 million for the six months ended June 30, 2021 as compared
to GBP2.3 million for the six months ended June 30, 2020. We expect
to receive the amount in respect of the full year 2020 in 2021.
Liquidity and Capital Resources
Overview
Since our inception, we have incurred significant operating
losses. We anticipate that we will continue to incur losses for at
least the next several years. We expect that our research and
development and administrative expenses will increase in connection
with conducting clinical trials and seeking marketing approval for
our product candidates, as well as costs associated with operating
as a public company. As a result, we will need additional capital
to fund our operations, which we may obtain from additional equity
financings, debt financings, research funding, collaborations,
contract and grant revenue or other sources.
As of June 30, 2021, we had cash, cash equivalents and term
deposits of GBP81.2 million (June 30, 2020: GBP50.3 million).
We do not currently have any approved products and have never
generated any revenue from product sales or otherwise. To date, we
have financed our operations primarily through the issuances of our
equity securities and from upfront, milestone and research payments
under collaboration agreements with third parties.
We have no ongoing material financing commitments, such as lines
of credit or guarantees, that are expected to affect our liquidity
over the next five years, other than leases.
Cash Flows
The following table summarizes the results of our cash flows for
the six months ended June 30, 2021 and 2020.
Six months ended
------------------------------
June 30, 2021 June 30, 2020
GBP 000s GBP 000s
-------------- -------------
Net cash inflow from operating activities 13,938 836
Net cash (outflow) from investing activities (449) (20,355)
Net cash inflow from financing activities 30,286 15,534
------------- -------------
Increase/(decrease) in cash and cash equivalents 43,775 (3,985)
============= =============
Operating activities
The increase in net cash generated from operating activities of
GBP13.5 million for the six months ended June 30, 2021 from net
cash inflow of GBP0.8 million for the six months ended June 30,
2020 was primarily due to the $40 million ( GBP30.8 million)
upfront payment from AstraZeneca in the first half of 2021
partially offset by higher research, development and administrative
costs, share based payments charge, increase in contract
liabilities and a decrease in trade & other receivables.
Investing activities
Net cash outflow from investing activities was GBP0.5 million
for the six months ended June 30, 2021, compared to GBP20.4 outflow
for the six months ended June 30, 2020 which was primarily due to
the purchase of short-term deposits. Short-term deposits for the
six months ended June 30, 2021 were GBP10.0 million.
Financing activities
The increase in net cash from financing activities to GBP30.7
million for the six months ended June 30, 2021 ( six months ended
June 30, 2020: GBP15.5 million), was due to the proceeds from the
issuance of share capital. The only other financing activity for
the six months ended June 30, 2021 GBP0.2 million ( six months
ended June 30, 2020: GBP0.3 million) was the repayment of lease
liabilities.
Notes to the financial statements
Six months ended June 30, 2021
1.1 General information
Silence Therapeutics plc and its subsidiaries (together the
'Group') are primarily involved in the discovery, delivery and
development of RNA therapeutics. Silence Therapeutics plc, a public
company limited by shares registered in England and Wales, with
company number 02992058, is the Group's ultimate parent Company.
The Company's registered office is 27 Eastcastle Street, London,
W1W 8DH and the principal place of business is 72 Hammersmith Road,
London, W14 8TH.
These condensed interim financial statements were approved for
issue on August 12, 2021.
These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year ended December
31, 2020 were approved by the board of directors on March 31, 2021
and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
The financial statements have not been reviewed or audited.
1.2 Basis of preparation
On December 31, 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
international accounting standards, with future changes being
subject to endorsement by the UK Endorsement Board. Silence
Therapeutics Plc transitioned to UK-adopted international
accounting standards in its consolidated financial statements on
January 1, 2021. This change constitutes a change in accounting
framework. However, there is no impact on recognition, measurement
or disclosure in the period reported as a result of the change in
framework.
This condensed consolidated interim financial report for the
half-year reporting period ended June 30, 2021 has been prepared in
accordance with UK-adopted International Accounting Standard 34,
'Interim Financial Reporting' (IAS 34)
The interim report does not include all of the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended December 31, 2020, which was prepared in accordance with
"international accounting standards in conformity with the
requirements of the Companies Act 2006".
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting
period.
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results might differ from these estimates.
In preparing these condensed interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
are disclosed in the 'Critical Accounting Policies, Judgments and
Estimates' section on Page 20.
2. Going concern
The financial statements have been prepared on a going concern
basis that assumes that the Group will continue in operational
existence for the foreseeable future.
The 2020 coronavirus (COVID-19) pandemic became increasingly
prevalent in Europe, the UK and the US where the Group's principal
operations are conducted. Significant restrictions have now been
imposed by the governments of those countries where the Group has
operations, as well as the countries of external parties with which
we conduct our business. In compliance with these restrictions, the
Group and its employees have adapted to new working arrangements to
ensure business continuity as far as is reasonably practicable in
the short to medium term. This has so far proven to be effective,
with Management maintaining a strong line of communication with all
employees during this period.
The main risk posed to the Group by the pandemic is the
potential slowing of Research & Development activities
including possible knock-on delays in clinical trial data and
sustained fixed costs during periods of relative inactivity. Whilst
this would result in a lengthening of the Group's cash runway in
the medium term, in the longer term these factors could limit the
Group's ability to meet its corporate objectives. This risk is
mitigated by the receipt of $60m (GBP47.9 million) of the upfront
payments in respect of the AstraZeneca collaboration and the $45m
(net of expenses approximately $42.0 million / GBP30.8 million)
from the private placement, both of which significantly increase
the Group's baseline cash runway.
Based on the current operating forecasts and plans and,
considering the cash, cash equivalents and term deposit at June 30,
2021, the Directors are confident that the Group has sufficient
funding for the foreseeable future and at least one year from the
date of these condensed interim financial statements. For this
reason, they continue to adopt the going concern basis in preparing
the financial statements.
3. Revenue
Revenue from collaboration agreements for the 6 months ended
June 30, 2021 relates to the Research collaboration agreements the
Group entered into with Mallinckrodt plc in July 2019, Takeda
Pharmaceutical Company Limited in January 2020 and AstraZeneca plc
in March 2020.
Revenue for the 6 months ended June 30, 2021 comprised GBP5,677k
of Research collaboration income (6 months to June 30, 2020:
GBP995k) and GBP168k of royalty income (6 months to June 30, 2020:
GBP151k).
Six months ended Year ended
-----------------------------
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
-------------- ------------- -----------------
Revenue from Contracts with Customers
Research collaboration - Mallinckrodt plc 3,788 474 3,817
Research collaboration - Astra Zeneca 1,271 - 22
Research collaboration - Other 618 521 1,414
------------- ------------- -----------------
Research collaboration - total 5,677 995 5,253
Royalties 168 151 226
------------- ------------- -----------------
Total revenue from contracts with customers 5,845 1,146 5,479
============= ============= =================
Under our collaboration agreement with Mallinckrodt, we received
an upfront cash payment of GBP16.4 million ($20 million) in 2019
and are eligible to receive specified development, regulatory and
commercial milestone payments. We received milestone payments of
GBP2.9 million or $4 million during the 6 months ended June 30,
2021. In addition to these payments, Mallinckrodt has agreed to
fund some of our research personnel and preclinical development
costs. We recognize the upfront payment, milestone payments,
payments for personnel costs and other research funding payments
over time, in accordance with IFRS 15. During the 6 months ended
June 30,2021, we recognized a total of GBP3.8 million in revenue
under this agreement.
Under our collaboration agreement with AstraZeneca, we received
an upfront cash payment of GBP17.1 million ($20m) in 2020 with a
further amount of GBP30.8 million ($40 million) received in May
2021. We recognize the upfront payment and milestone payments over
time, in accordance with IFRS 15. During the 6 months ended June
30, 2021, we recognized a total of GBP1.3m in revenue under this
agreement.
We entered into a Technology Evaluation Agreement with Takeda on
January 7, 2020 to explore the potential of our platform to
generate siRNA molecules against a novel, undisclosed target
controlled by Takeda. Under our collaboration agreement, we
received a milestone payment of GBP1.6 million ($2 million) during
the year ended December 31, 2020. We recognize the milestone
payments over time, in accordance with IFRS 15. Our activities
under the Technology Evaluation Agreement were effectively complete
as of June 30, 2021. We may negotiate to enter into an exclusive
follow-on license and collaboration agreement covering the Takeda
target at some point in the future.
4. Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board. The chief operating
decision maker (CODM), who has been identified as the Chief
Executive Officer responsible for allocating resources and
assessing performance of the operating segments.
For the 6 months ended June 30, 2021 and 6 months ended June 30,
2020, the CODM determined that the Group had one business segment,
the development of RNAi-based medicines. This is in line with
reporting to senior management. The information used internally by
the CODM is the same as that disclosed in the financial
statements.
U.K. Germany Total
GBP 000s GBP 000s GBP 000s
--------- -------- --------
Non-current assets
As at December 31, 2020 689 8,883 9,572
As at June 30, 2020 458 8,932 9,390
As at June 30, 2021 571 8,808 9,379
Revenue analysis for the 6 months ended June 30, 2020
Research collaboration 995 - 995
Royalties - 151 151
-------- -------- --------
995 151 1,146
====================================================== ======== ======== ========
Revenue analysis for the year ended December 31, 2020
Research collaboration 5,253 - 5,253
Royalties - 226 226
-------- -------- --------
5,253 226 5,479
====================================================== ======== ======== ========
Revenue analysis for the 6 months ended June 30, 2021
Research collaboration 5,677 - 5,677
Royalties - 168 168
-------- -------- --------
5,677 168 5,845
====================================================== ======== ======== ========
5. Loss per ordinary equity share (basic and diluted)
The calculation of the loss per share is based on the loss for
the 6 months to June 30, 2021 after taxation of GBP20,048k (6
months ended June 30, 2020: loss of GBP11,029k) and on the weighted
average ordinary shares in issue during the year of 88,121,772 (6
months ended June 30, 2020: 80,619,119).
The options outstanding at June 30, 2021 and June 30, 2020 are
considered to be anti-dilutive as the Group is loss-making.
6. Goodwill
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
-------------- ------------- -----------------
Balance at start of the period 8,125 7,692 7,692
Translation adjustment (362) 545 433
------------- ------------- -----------------
Balance at end of the period 7,763 8,237 8,125
============= ============= =================
7. Derivative financial instruments
Derivative financial instruments relate to an open forward
currency contract measured at fair value through the income
statement. The fair value was calculated from data sourced from an
independent financial market data provider using
mid-market-end-of-day data as of Close of Business date as December
31, 2020. The derivative contract in place at December 31, 2020 was
closed out on May 28, 2021.
The fair value of the derivative is calculated based on level 2
inputs under IFRS 13.
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
-------------- ------------- -----------------
Derivatives carried at fair value - - 1,492
The fair value of financial instruments that are not traded in
active market, in the case an over-the-counter derivative, is
determined using valuation techniques which maximize the use of
observable market data and rely as little as possible on entity
specific estimates. As all significant inputs required to fair
value an instrument are observable, this derivative financial
instrument is included in level 2.
The specific valuation technique used to value this derivative
is the present value of future cash flow based on the forward
exchange rate relative to its value based on the year-end exchange
rate.
The derivative fair value movement is disclosed in the Income
Statement under "Other (losses)/gains - net". For the six month
period to June 30, 2021 the gain on the derivative financial
instrument (GBP1.02 million), which was closed out in May 2021,
matched the related loss (GBP1.02 million) on the receivable,
resulting in a net nil impact on the Income Statement.
8. Contract liabilities
Contract liabilities comprise entirely deferred revenue in
respect of the Mallinckrodt, Takeda and AstraZeneca plc Research
collaborations. The current contract liabilities represent the
amount of estimated revenue to be reported in the next 12 months
related to amounts invoiced to our partners. The current and
non-current contract liabilities include only recharge expenses and
milestones achieved through June 30, 2021.
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
-------------- ------------- -----------------
Contract liabilities:
Current 6,717 4,507 17,042
Non-current 62,294 63,230 51,337
------------- ------------- -----------------
Total contract liabilities 69,011 67,737 68,379
============= ============= =================
Current Non-current Total
-------------- ------------- -----------------
GBP 000s GBP 000s GBP 000s
Contract liabilities:
At January 1, 2020 2,478 15,515 17,993
Additions during period 3,024 47,715 50,739
Revenue unwound during period (995) - (995)
------------- ------------- -----------------
At June 30, 2020 4,507 63,230 67,737
============= ============= =================
Additions during period 4,862 - 4,862
Revenue unwound during period (4,220) (4,220)
Program rephasing 11,893 (11,893) -
------------- ------------- -----------------
At December 31, 2020 17,042 51,337 68,379
============= ============= =================
At January 1, 2021 17,042 51,337 68,379
Additions during period 2,270 4,039 6,309
Revenue unwound during period (5,677) (5,677)
Program rephasing (6,917) 6,917 -
------------- ------------- -----------------
At June 30, 2021 6,717 62,294 69,011
============= ============= =================
9. Taxation
A GBP2.3 million current tax asset was recognised in respect of
research and development tax credits in the six months ended June
30, 2021 (six months ended June 30, 2020: GBP2.3 million).
Additionally, the current tax asset expected to be received in
respect of research and development tax credits for the year ended
December 31, 2020 is GBP3.5 million.
10. Capital reserves
Share based Capital
Share premium Merger payment redemption
account reserve reserve reserve Total
GBP 000s GBP 000s GBP 000s GBP 000s GBP 000s
-------------- ------------- ------------ ------------- --------
At January 1,
2019 133,242 22,248 2,437 5,194 163,121
Shares issued 3,767 3,767
On options in
issue during
the year 1,141 584 1,725
On vested
options
lapsed
during the
year -
On options
exercised
during the
year (1,370) (1,370)
------------- ------------- ------------ ------------- --------
Movement in
the year 4,908 - (786) - 4,122
------------- ------------- ------------ ------------- --------
At December 31,
2019 138,150 22,248 1,651 5,194 167,243
============= ============= ============ ============= ========
Shares issued 15,396 15,396
On options in
issue during
the year 188 4,395 4,583
On vested
options
lapsed
during the
year -
On options
exercised
during the
year (331) (331)
------------- ------------- ------------ ------------- --------
Movement in
the year 15,584 - 4,064 - 19,648
------------- ------------- ------------ ------------- --------
At December 31,
2020 153,734 22,248 5,715 5,194 186,891
============= ============= ============ ============= ========
Shares issued 32,585 - - - 32,585
On options in
issue during
the period - - 4,206 - 4,206
On vested
options
lapsed
during the
period - - - - -
On options
exercised
during the
period 442 - (580) - (138)
Costs
capitalised
in respect of
issuance of
shares during
the period (2,447) - - (2,447)
------------- ------------- ------------ ------------- --------
Movement in
the period 30,580 - 3,626 - 34,206
------------- ------------- ------------ ------------- --------
At June 30, 2021 184,314 22,248 9,341 5,194 221,097
============= ============= ============ ============= ========
June 30, 2021 June 30, 2020 December 31, 2020
GBP 000s GBP 000s GBP 000s
-------------- ------------- -----------------
Authorised, allotted, called up and fully paid
ordinary shares, par value GBP 0.05 4,487 4,141 4,165
Number of shares in issue 89,735,448 82,826,259 83,306,259
The Group has only one class of share. All ordinary shares have
equal voting rights and rank pari passu for the distribution of
dividends.
On February 5, 2021 the Group announced a Private Placement of
2,022,218 of the Company's American Depositary Shares ("ADSs"),
each representing three ordinary shares of 5 pence each in the
capital of the Company ("Ordinary Shares"), at a price of US $22.50
per ADS, with new and existing institutional and accredited
investors (the "Private Placement"). The aggregate gross proceeds
of the Private Placement was US $45 million (approximately GBP33
million) before deducting approximately GBP2.3 million in placement
agent fees and other expenses. The financing syndicate included
Adage Capital Management LP, BVF Partners L.P., Consonance Capital,
Great Point Partners, LLC, and other investors.
The Group intends to use the net proceeds from the Private
Placement primarily to support development of the Group's pipeline
based on its mRNAi GOLD(TM) (GalNAc Oligonucleotide Discovery)
Platform, and for general corporate purposes.
Details of the shares issued by the Company during the six
months ended 30 June 2020 are as follows:
Number of shares in issue at January 1, 2020 78,370,265
Shares issued during the period 4,276,580
Options exercised at GBP 0.05 46,666
Options exercised at GBP 0.85 56,470
Options exercised at GBP 1.00 30,000
Options exercised at GBP 1.90 46,278
----------
Number of shares in issue at June 30, 2020 82,826,259
Shares issued during the period -
Options exercised at GBP 0.05 450,000
Options exercised at GBP 0.85 -
Options exercised at GBP 1.00 30,000
Options exercised at GBP 1.90 -
----------
Number of shares in issue at December 31, 2020 83,306,259
Shares issued during the period 6,066,654
Options exercised at GBP 0.05 59,114
Options exercised at GBP 0.60 80,302
Options exercised at GBP 1.06 25,000
Options exercised at GBP 1.90 198,119
----------
Number of shares in issue at June 30, 2021 89,735,448
==========
11. Related party transactions
Transactions between the Group and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
During the six months to June 30, 2021 the Group paid GBPnil
(six months to June 30, 2020: GBP75k) to Gladstone Partners
Limited, a company controlled by Director Iain Ross. The amounts
payable were settled before the relevant period ends.
Quantitative and Qualitative Disclosures about Market Risk
Market risk arises from our exposure to fluctuation in interest
rates and currency exchange rates. These risks are managed by
maintaining an appropriate mix of cash deposits in the two main
currencies we operate in, which is placed with a variety of
financial institutions for varying periods according to expected
liquidity requirements.
Interest Rate Risk
As of June 30, 2021, we had cash, cash equivalents and term
deposits of GBP81.2 million (June 30, 2020: GBP50.3 million). Our
exposure to interest rate sensitivity is impacted primarily by
changes in the underlying U.K. bank interest rates. Our surplus
cash and cash equivalents are invested in interest-bearing savings
accounts and fixed term and fixed interest rate term deposits from
time to time. We have not entered into investments for trading or
speculative purposes in the year ended December 31, 2020 or the six
months ended June 30, 2021. Due to the conservative nature of our
investment portfolio, which is predicated on capital preservation
of investments with short-term maturities, an immediate one
percentage point change in interest rates would not have a material
effect on the fair market value of our portfolio, and therefore we
do not expect our operating results or cash flows to be
significantly affected by changes in market interest rates.
Currency Risk
Our functional currency is U.K. pounds sterling, and our
transactions are commonly denominated in that currency. However, we
receive payments under our collaboration agreements in U.S. dollars
and we incur a portion of our expenses in other currencies,
primarily Euros, and are exposed to the effects of these exchange
rates. We seek to minimize this exposure by maintaining currency
cash balances at levels appropriate to meet foreseeable short to
mid-term expenses in these other currencies. Where significant
foreign currency cash receipts are expected, we consider the use of
forward exchange contracts to manage our exchange rate exposure. A
10% increase in the value of the pound sterling relative to the
U.S. dollar or Euro would not have had a material effect on the
carrying value of our net financial assets and liabilities in
foreign currencies at June 30, 2021.
Counterparty, Credit and Liquidity Risk
Our cash, cash equivalents and term deposits are on deposit with
financial institutions with a credit rating equivalent to, or
above, the main U.K. clearing banks. We invest our liquid resources
based on the expected timing of expenditures to be made in the
ordinary course of our activities. All financial liabilities are
payable in the short term, meaning no more than three months, and
we maintain adequate bank balances in either instant access or
short-term deposits to meet those liabilities as they fall due. We
believe we have had minimal credit risk relating to our trade
receivables as of June 30, 2021 and 2020, which consisted solely of
amounts due from AstraZeneca, Mallinckrodt and Alnylam.
Critical Accounting Policies, Judgments and Estimates
In the application of our accounting policies, we are required
to make judgments, estimates, and assumptions about the value of
assets and liabilities for which there is no definitive third-party
reference. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates. We review
our estimates and assumptions on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period or in
the period of the revisions and future periods if the revision
affects both current and future periods.
The following are our critical judgments that we have made in
the process of applying our accounting policies and that have the
most significant effect on the amounts recognized in our
consolidated financial statements included elsewhere in this
report.
Recent Accounting Pronouncements
We have reviewed new IFRS standards issued and updates to
existing standards in the reporting period and concluded that none
of the recent pronouncements are relevant to Silence Therapeutics
Plc (either because they relate to standards not relevant to
Silence Therapeutics Plc or because they have not yet become
effective; and there is currently no preference for early
adoption). The group did not have to change its accounting policies
or make retrospective adjustments as a result.
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