Corporate News

Polarean Imaging plc (AIM: POLX), the medical-imaging technology company, with a proprietary drug-device combination product for the magnetic resonance imaging (MRI) market, announces its unaudited interim results for the six months ended 30 June 2018.

;CEO Statement Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Cash Flow Statement Notes

Download To view a full version of the results in  PDF format click here

• Successful admission to trading on AIM on 29 March 2018
• £3m (gross) raised via a placing of 20,000,000 ordinary shares at a placing price of 15p in March 2018
• Delivery of Xenon Polarisers to Cincinnati Children's Hospital and University of Virginia
  • University of Virginia Polariser to be used exclusively for Phase III Clinical Trials
• Financial performance in-line with management expectations:
  • Revenues of US $0.75m (H1 '17: US $0.17m);
  • Operating gross margins, including grants, at over 70% margin
• Net cash at 30 June 2018 of US $1.22m

Post-period end

• Completion of successful Pilot Study prior to commencement of Phase III Trials
• Phase III FDA Clinical Trials to commence shortly
• US Patent Notice of Allowance received for polarization enhancing technology
• Placing to raise £0.8m (gross) at 16p completed on 10 July 2018

Richard Hullihen, CEO of Polarean, commented: "The burden of pulmonary disease in the USA is approximately US $150bn, with pulmonary disease widespread and growing, affecting nearly 40 million Americans. Given the limitations of existing methods of diagnosis and lung disease monitoring, we believe that there is a significant unmet need for non-invasive, quantitative, and cost-effective image-based diagnosis technology. We believe that our unique medical drug-device combination utilizing 129Xe offers the ideal solution for improving pulmonary disease diagnosis and we are confident that this will be borne out during our Phase III trials."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

 

Enquiries:

Polarean Imaging plc	www.polarean.com / www.polarean-ir.com
Richard Hullihen, Chief Executive Officer	Via Walbrook PR
Richard Morgan, Chairman
Northland Capital Partners Limited	Tel: +44 (0)20 3861 6625
David Hignell / Gerry Beaney / Jamie Spotswood (Corporate Finance) Rob Rees (Corporate Broking)
MC Services (European IR)	Tel: +49 (0)89 210 2280
Raimund Gabriel
The Life Sciences Division (Financial Adviser)
Navid Malik, Director	Mob: 07957 224 730
Alia Minhas, CEO	Mob: 07590 696 057
Walbrook PR	Tel: +44 (0)20 7933 8780 or [email protected]
Paul McManus / Anna Dunphy Helen Cresswell	Mob: +44 (0)7980 541 893 / +44 (0)7879 741 001 +44 (0)7841 917 679

 

About Polarean (www.polarean.com)

The Company and its wholly owned subsidiary, Polarean, Inc. (together the "Group") are revenue generating, medical drug-device combination companies operating in the high resolution functional magnetic resonance imaging market.

 

CEO Statement

Introduction

The six month period ending 30 June 2018 has seen Polarean make substantial progress towards its goal of undertaking and completing our Phase III Clinical Trials for our medical drug-device combination. This combination enables existing MRI systems to achieve an improved level of pulmonary function imaging through the use of hyperpolarised 129-Xenon gas (129Xe) as an imaging contrast agent.

Our Phase III trials will be used to demonstrate that our medical drug-device combination using 129Xe is capable of sharing the same claims as the approved comparator 133-Xenon (133Xe) gas scintigraphy. If the trials are successful the Company's ultimate goal will be to submit a New Drug Application ("NDA") with the same claim as 133Xe and seek FDA approval, allowing the launch of clinically approved systems to be used "for the evaluation of pulmonary function, for imaging the lungs" in early 2020.

The first half of the financial year was focussed on putting in place the funding, contracts, agreed protocols, equipment and supply agreements necessary to undertake our Phase III trials and details of these milestones were outlined in our Final Results statement announced in June. We expect the clinical trials to commence shortly and the data collection for the trials is expected to be completed during Q3 of 2019.

Admission to AIM
In March we successfully completed a £3m fundraising (before expenses) and the listing of our shares on the AIM Market of the London Stock Exchange. These funds provide us with the funding security needed to complete our Phase III clinical trials. In addition, the funds raised from our recent £0.8m (gross) placing will further support the clinical trials and support improvements to the Company's polarisers.

Results overview
Our financial performance, with sales being made on a research-use-only basis to academic institutions in the US and Europe, remains in-line with management expectations. Revenues for the first half increased significantly from US $0.21m to US $0.75m, with gross profits hitting US $0.47m (H1 '17: US $0.17m). Gross operating margins remain at well over 50%. With a sizeable uplift in Administrative Expenses, due in the main to fees associated with our AIM admission, our overall loss before tax increased to £3.1m from £1.4m in the same comparable period. Cash controls within the business remain robust and as at 30 June 2018 we held US $1.22m in net cash or cash equivalents.

The development of stronger recurring revenues are clearly targeted for the business, assuming FDA approval is achieved. In addition, the Company's longer term strategy is for our polarisers to be operational beyond the academic research market that Polarean currently serves.

Delivery of Xenon Polarisers
Whilst we seek clinical approval for our medical drug-device combination we continue to expand our installed base of systems through additional sales of research units to academic institutions.

In May 2018 we announced the delivery of the latest model of our Xenon polariser to the Center for Pulmonary Imaging Research at the Cincinnati Children's Hospital Medical Center, with whom we hold a Small Business Innovation Research grant awarded by the National Heart, Lung and Blood Institute.

Cincinnati Children's, a non-profit academic medical center globally-renowned for its paediatric teaching and research, is a recognized leader in using hyperpolarized 129Xe for paediatric pulmonary imaging through advanced imaging techniques.

Similarly in June 2018 we were pleased to announce the delivery of our latest polariser to the University of Virginia Health System (UVa), the site of one of our Phase III Clinical Trials. UVa has been a key clinical collaborator with Polarean and, as a result of this collaboration, the Department of Radiology & Medical Imaging at UVa now has three latest-generation 129Xe Polarean polarisers installed at their site with the latest system to be used exclusively for our Phase III clinical trials.

We now have 15 Polarean Xenon polarisers in use at research institutions across the US and Europe.

Post-period end events

Following the close of the first half we provided shareholders with an update on additional progress made in preparation for the imminent start of our clinical trials, as well as additional patent protection and further funding support.

(i) Completion of successful Pilot Study prior to Phase III Clinical Trials

In last month's update we announced the completion of a Pilot Study at one of our trial sites, which validated the study design and the proposed analytical methods that will be used in the trials. The successful conclusion of the pilot has provided us with the confidence that the chosen methodology, agreed with the FDA, is appropriate and should maximise the probability that both the primary and secondary endpoints of our trials should clearly demonstrate non-inferiority of 129Xe against 133Xe.

(ii) Phase III Clinical Trials scheduled to start this month and due to complete in Q3 2019

In addition, we were also able to announce that our 'head to head' non-inferiority trials against 133Xe scintigraphy, a 40 year old nuclear medicine technique using radioactive 133Xe and gamma cameras, will commence very shortly. We expect to provide an announcement to investors as soon as the trial starts.

The Phase III Trials will evaluate two patient populations – candidate patients for lung lobe resection, and candidates for lung transplant procedures – and will encompass a total of 80 patients, across two sites: the University of Virginia and Duke University. We currently expect data collection for the Phase III Trials to complete during Q3 of 2019 and if successful, we will submit our NDA with the same claim as 133Xe soon after.

(iii) US Patent Notice of Allowance received

We also were pleased to announce receipt of a Notice of Allowance for the U.S. Patent covering "Hyperpolarized Noble Gas Production Systems with Nanocluster Suppression, Detection, and/or Filtering and Related Methods and Devices" to which we have the exclusive rights. This patent, together with our know-how, has led to increasing levels of polarisation for our MRI gas-hyperpolarisation platform and is key to advancing image quality, exploring new applications and increasing the overall efficiency of our systems. This patent adds to our IP portfolio of 29 patents with a broad area of coverage around our technology and extending into 2034.

(iv) Placing to raise £0.8m (gross) at 16p completed

On the 10 July we announced the successful completion of a Placing to raise an additional £0.8 million at a price of 16 pence (before expenses) in response to strong demand from institutional and EIS/VCT investors. We are very pleased with support shown by new and existing shareholders and these additional funds will further support our clinical trials in the US and the improvements we continue to make to our polarisers.

(v) Delivery of Polariser to Duke for Clinical Trial

in August 2018 we were pleased to announce the delivery of our latest polariser to the Duke Unversity (Duke), the site of one of our Phase III Clinical Trials. Duke has been a key technology and clinical collaborator with Polarean and, as a result of this collaboration, the Department of Radiology at Duke now has three 129Xe Polarean polarisers installed at their site with the latest system to be used exclusively for our Phase III clinical trials.

Outlook
I am excited that we will shortly start our FDA Phase III clinical trials and I look forward to updating shareholders once it commences and with our progress.

The burden of pulmonary disease in the USA is approximately US $150bn, with pulmonary disease widespread and growing, affecting nearly 40 million Americans. Given the limitations of existing methods of diagnosis and lung disease monitoring, we believe that there is a significant unmet need for non-invasive, quantitative, and cost-effective image-based diagnosis technology. We believe that our unique medical drug-device combination utilizing 129Xe offers the ideal solution for improving pulmonary disease diagnosis and we are confident that this will be borne out during our Phase III trials.

 

Richard Hullihen
Chief Executive Officer

22 August 2018

 

Consolidated unaudited statement of comprehensive income
for the six months ended 30 June 2018

	Note	Unaudited 6 months ended 30.6.18 US$		Unaudited 6 months ended 30.6.17 US$		Audited 12 months ended 31.12.17 US$
Revenue		1,026,926		205,085		1,237,163
Cost of sales		(279,455)		(33,712)		(297,215)
Gross profit		747,471		171,373		939,948
Administrative expenses		(3,106,922)		(1,502,079)		(4,051,000)
Depreciation		(4,489)		(2,885)		(7,478)
Amortisation		(308,426)		(2,300)		(361,746)
Selling and distribution expenses		(20,998)		(15,474)		(28,752)
Share based payment expense		(87,400)		(402,007)		(414,866)
Loss from operations		(2,780,764)		(1,753,372)		(3,923,894)
Finance Charges		(52,654)		(7,160)		(34,056)
Finance Income		27		-		129
Loss on ordinary activities before taxation	3	(2,833,391)		(1,760,532)		(3,957,821)
Taxation		-		-		-
Loss and total other comprehensive expense		(2,833,391)		(1,760,532)		(3,957,821)
Basic and fully diluted loss per share (US$)	3	(0.057)		(0.062)		(0.139)

 

Consolidated unaudited statement of financial position
As at 30 June 2018

		Unaudited As at 30.6.18 US$		Unaudited As at 30.6.17 US$		Audited As at 31.12.17 US$
Assets	Note
Non-current assets
Property, plant and equipment		23,403		16,398		21,341
Intangible assets		4,352,824		5,020,696		4,661,250
Trade and other receivables		12,536		5,539		12,539
		4,388,763		5,042,633		4,695,130
Current assets
Inventories		1,069,342		392,932		649,860
Trade and other receivables		1,148,306		22,209		488,861
Cash and cash equivalents		1,374,866		1,712,073		960,217
		3,592,514		2,127,214		2,098,938
Total assets		7,981,277		7,169,847		6,794,068
Equity
Share capital	4	36,396		23,291		23,291
Share premium		6,432,812		1,808,587		1,448,037
Group reorganisation reserve		7,813,337		7,813,337		7,813,337
Other equity		-		-		87,305
Share based payment reserve		913,945		813,686		826,545
Retained losses		(9,591,499)		(4,560,819)		(6,758,108)
Total equity		5,604,991		5,898,082		3,440,407
Liabilities
Non-current liabilities
Deferred revenue		-		36,152		-
Contingent consideration		316,000		316,000		316,000
		316,000		352,152		316,000
Current liabilities
Trade and other payables		1,908,079		521,719		1,906,376
Borrowings	5	149,878		379,541		1,104,723
Deferred revenue		2,329		18,353		26,562
		2,060,286		919,613		3,037,661
Total equity and liabilities		7,981,277		7,169,847		6,794,068

 

Consolidated unaudited statement of changes in equity
As at 30 June 2018

	Share capital	Share premium	Group re- organisation	Other equity	Share based payment reserve	Retained earnings	Total equity
Balance as at 31 December 2016 (audited)	1	-	1,976,367	-	238,172	(2,800,287)	(585,747)
Loss and total comprehensive income for the year	-	-	-	-	-	(3,957,821)	(3,957,821)
Transaction with owners
Issue of shares	2,970	1,982,094	-	-	-	-	1,985,064
Share issue costs	-	(534,057)	-	-	173,507	-	(360,550)
Share-based payments	-	-	-	-	414,866	-	414,866
Group re-organisation	20,320	-	5,836,970	-	-	-	5,857,290
Convertible loans	-	-	-	87,305	-	-	87,305
Balance as at 31 December 2017 (audited)	23,291	1,448,037	7,813,337	87,305	826,545	(6,758,108)	3,440,407
Loss and total comprehensive income for the period	-	-	-	-	-	(2,833,391)	(2,833,391)
Transaction with owners
Issue of shares	13,105	5,124,897	-	(87,305)	-	-	5,050,697
Share issue costs	-	(140,122)	-	-	-	-	(140,122)
Share-based payments	-	-	-	-	87,400	-	87,400
Balance as at 30 June 2018 (unaudited)	36,396	6,432,812	7,813,337	-	913,945	(9,591,499)	5,604,991

 

Consolidated unaudited cash flow statement
for the six months ended 30 June 2018

		Unaudited 6 months ended 30.6.18 US$	Unaudited 6 months ended 30.6.17 US$	Audited 12 months ended 31.12.17 US$
Cashflows from operating activities
Loss for the period before taxation		(2,833,391)	(1,760,532)	(3,957,821)
Adjustments for non-cash/non-operating items:
Depreciation of plant and equipment		4,489	2,884	7,478
Amortisation of intangible assets		308,426	2,300	361,746
Increase in provision for contingent consideration		-	-	-
Share based compensation		87,400	402,007	414,866
Interest paid		52,654	2,160	34,056
Interest received		(27)	-	(129)
Write off of share issuance costs		-	156,953	-
		(2,380,449)	(1,194,228)	(3,139,804)
Changes in working capital:
(Increase) in inventories		(419,482)	(71,271)	(328,199)
(Increase) in trade and other receivables		(659,448)	(7,753)	(440,931)
Increase/(decrease) in trade and other payables		10,026	(12,121)	1,343,861
Decrease in deferred revenue		(24,233)	(22,675)	(50,618)
Taxation		-	-	-
Net cash flows used from operating activities		(3,473,586)	(1,308,048)	(2,615,691)
Investing activities
Purchase of plant and equipment		(6,551)	(7,298)	(16,834)
Net cash used in investing activities		(6,551)	(7,298)	(16,834)
Financing activities
(Repayment of) proceeds from borrowings		(116,126)	275,000	1,047,014
Issue of shares		4,063,539	2,656,732	2,481,808
Interest paid		(52,654)	(2,160)	(34,056)
Interest received		27	-	129
Net cash from financing activities		3,894,786	2,929,572	3,494,895
Net increase in cash and equivalents		414,649	1,614,226	862,370
Cash and equivalents at beginning of period		960,217	97,847	97,847
Cash and equivalents at end of period		1,374,866	1,712,073	960,217

 

Notes

The notes to the financial statement are available in the PDF download.