22 August 2018
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.
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Cash Flow Statement
- 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
- 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.
|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|
|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
|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.
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.
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.
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 $150bn, with pulmonary disease widespread and growing, affecting nearly 40 million Americans. Given the limitations of existing methods of diagnosis and lung disease monitoring, we believe that there is a significant unmet need for non-invasive, quantitative, and cost-effective image-based diagnosis technology. We believe that our unique medical drug-device combination utilizing 129Xe offers the ideal solution for improving pulmonary disease diagnosis and we are confident that this will be borne out during our Phase III trials.
Chief Executive Officer
22 August 2018
|Cost of sales||(279,455)||(33,712)||(297,215)|
|Selling and distribution expenses||(20,998)||(15,474)||(28,752)|
|Share based payment expense||(87,400)||(402,007)||(414,866)|
|Loss from operations||(2,780,764)||(1,753,372)||(3,923,894)|
|Loss on ordinary activities before taxation||3||(2,833,391)||(1,760,532)||(3,957,821)|
|Loss and total other comprehensive expense||(2,833,391)||(1,760,532)||(3,957,821)|
|Basic and fully diluted loss per share (US$)||3||(0.057)||(0.062)||(0.139)|
|Property, plant and equipment||23,403||16,398||21,341|
|Trade and other receivables||12,536||5,539||12,539|
|Trade and other receivables||1,148,306||22,209||488,861|
|Cash and cash equivalents||1,374,866||1,712,073||960,217|
|Group reorganisation reserve||7,813,337||7,813,337||7,813,337|
|Share based payment reserve||913,945||813,686||826,545|
|Trade and other payables||1,908,079||521,719||1,906,376|
|Total equity and liabilities||7,981,277||7,169,847||6,794,068|
|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)|
|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)|
|Balance as at 30 June 2018 (unaudited)||36,396||6,432,812||7,813,337||-||913,945||(9,591,499)||5,604,991|
|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|
|Write off of share issuance costs||-||156,953||-|
|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)|
|Net cash flows used from operating activities||(3,473,586)||(1,308,048)||(2,615,691)|
|Purchase of plant and equipment||(6,551)||(7,298)||(16,834)|
|Net cash used in investing activities||(6,551)||(7,298)||(16,834)|
|(Repayment of) proceeds from borrowings||(116,126)||275,000||1,047,014|
|Issue of shares||4,063,539||2,656,732||2,481,808|
|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|
The notes to the financial statement are available in the PDF download.