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Final Results for the Year Ended 31 December 2020

04 June 2021

Notice of Annual General Meeting

 
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Polarean Imaging plc (AIM: POLX), the medical-imaging technology company, with an investigational drug-device combination product for magnetic resonance imaging (MRI), announces its audited final results for the year ended 31 December 2020.

In addition, Polarean confirms that the Annual Report and Accounts for the year ended 31 December 2020, the Notice of the Annual General Meeting ("AGM") and a Form of Proxy are now available on the Company's website (http://www.polarean-ir.com/content/investors/annual-reports.asp) and will be posted to shareholders shortly.

Polarean's AGM will be held at 2500 Meridian Parkway, Suite 175, Durham, NC 27713, USA at 2pm BST / 9am EST on 13 July 2021. 

Highlights

  • Positive top-line results from the Phase III clinical trials using hyperpolarised 129Xenon gas, where both trials met their primary endpoint
  • Raised £8.4 million (gross), including a £2.2 million subscription from new strategic investor Bracco Imaging S.p.A. (“Bracco”)
  • Appointment of Jonathan Allis as Non-Executive Chairman
  • Appointment of Cyrille Petit as Non-Executive Director and representative of Bracco
  • Completion of a pre-New Drug Application (“NDA”) meeting with the United States Food and Drug Administration (“FDA”)
  • Acceptance of the NDA for review by the FDA, with a target Prescription Drug User Fee Act (“PDUFA”) action date of 5 October 2021
  • Net cash of US$6.3 million as of 31 December 2020

Post-period end

  • Raised £27 million gross proceeds in an oversubscribed financing, including continued support of strategic investors, Bracco Imaging S.p.A and Nukem Isotopes GmbH as well as institutional investor Amati AIM VCT plc, joined by several new UK and US institutional investors.
  • Appointment of Chuck Osborne, Chief Financial Officer, to the Board
  • Completion of Mid-Cycle Review of NDA submission with FDA
  • Publication of first peer reviewed COVID research by Professor Fergus Gleeson at the University of Oxford • Additional research unit order for a 9820 Xenon Polariser system from the University of British Columbia in Vancouver, Canada.

Richard Hullihen, CEO of Polarean, commented:“It has been a strong year for Polarean, and we have achieved some significant milestones during the period beginning with the positive readout of our Phase III clinical trials in early 2020. This was followed quickly by a successful placing and subscription in April 2020, and a further oversubscribed fundraise in March 2021 which was needed to fund sales and marketing expenses to build the commercial team and infrastructure, to support ongoing clinical trial, regulatory and medical affairs costs, to support the continued investment in research and development and to provide additional working capital and for general corporate purposes.

“We have made significant Board changes to reflect our progress and we’re very excited to have a target PDUFA date from the FDA. On behalf of the whole Board, I would like to thank our employees and shareholders for their ongoing support, and we look forward to further positive updates throughout the rest of the year.”

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
Jonathan Allis, Chairman
Stifel Nicolaus Europe Limited (NOMAD and Sole Corporate Broker)+44 (0)20 7710 7600
Nicholas Moore / Ben Maddison / Samira Essebiyea (Healthcare Investment Banking)
Nick Adams / Fred Walsh (Corporate Broking)
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

About Polarean (www.polarean.com)

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

The Group develops equipment that enables existing MRI systems to achieve an improved level of pulmonary function imaging and specialises in the use of hyperpolarised Xenon gas (129Xe) as an imaging agent to visualise ventilation. 129Xe gas is currently being studied for visualisation of gas exchange regionally in the smallest airways of the lungs, across the alveolar tissue barrier, and into the pulmonary bloodstream.

In October 2020, the Group submitted a New Drug Application (“NDA”) to the FDA for hyperpolarised 129Xe used to evaluate pulmonary function and to visualise the lung using MRI. In December 2020, the Group received confirmation of acceptance of its NDA by the FDA, with a target PDUFA action date of 5 October 2021.

TThe Group operates in an area of significant unmet medical need and the Group's technology provides a novel investigational diagnostic approach, offering a non-invasive and radiation-free functional imaging platform. The annual burden of pulmonary disease in the US is estimated to be over US$150 billion.

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Chairman’s Statement

 

The critical achievements for the Company for 2020 were, of course, successful completion of the New Drug Application and its submission and acceptance for review by the US Food & Drug Administration. The Company now moves to process of preparing for commercial launch.  Meanwhile, current events have made clear that medicine is still not fully equipped to analyse and understand the many ways that pulmonary function can be affected by disease. The Company looks forward to working with its growing installed base of luminary researchers to help understand the diagnosis, methods of action and therapies for all pulmonary disease.

The Company has been very pleased with the results of the Placing, Subscription and Open Offer conducted shortly after appointing Stifel Nicolaus Europe Limited as its nominated adviser and broker. The results speak for themselves, but completing an oversubscribed £27 million Placing, Subscription and Open Offer is a very positive outcome for the Company.

Polarean continues its explorations with the pharma industry. Our initial expectations of synergies in development and clinical trials have been further characterised owing to the specific reproducibility of our technology versus currently used endpoints in development and clinical trials, and we look forward to exploring these potential relationships more fully as we develop our own infrastructure and resource base to better match their requirements.

Our primary focus for the coming year will be the planning and preparation for commercial launch and then initiating the launch post approval. This is an important phase in company development, we have resource and skilled service providers underway in this effort and we look forward to the unique combination of technology and opportunity that define the future for hyperpolarised noble gas imaging of pulmonary function.

The Company has been fortunate in its ability to attract and retain long-term professional investors who I thank for their support. I would also like to thank Bracco Imaging for their commitment to the Company and participation in the recent equity raise. I can say they have specific insight into this global market for the technologies that so dramatically enhance the contributions of medical imaging equipment to medicine and patient care, and they have brought those to our Board and share them openly.

As we move from research into daily clinical use, we look forward to furthering the global understanding of the COVID-19 medical case by providing the types of quantitative information necessary for fully understanding its mechanisms and post-infection consequences.

On behalf of the Board, I thank the employees, stakeholders and shareholders for their support, without which none of this would have been possible.


Jonathan Allis
Non-Executive Chairman

2 June 2021

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Chief Executive Officer’s Statement

2020 – Year of Accomplishment of Critical Goals

Having completed its Phase 3 trials successfully, the Group spent the majority of the year focused on the creation and submission of its New Drug Application (“NDA”). This submission includes not only the Clinical Trial and Drug information but also the submission on our polariser QA station and drug delivery device. Making the submission and having the US Food & Drug Administration (“FDA”) accept it for review are major milestones toward approval of our NDA by the FDA and ultimately toward commercialisation of hyperpolarised noble gas imaging for the assessment of pulmonary function.

Advisers

The company appointed a new joint Broker, Stifel Nicolaus Europe Limited, in December 2020, and followed that up by appointing them as the Company’s nominated adviser and sole broker early in 2021. This has had a significant effect in financial markets and in the Company’s share register.

The Opportunity

The US healthcare system’s annual burden of pulmonary disease continues unabated costing US$150 billion [each year] and our Directors still see a tremendous opportunity to bring our technology’s quantitative, reproducible, non-invasive method for diagnostic and therapeutic guidance to medicine. With regard to the global COVID-19 pandemic, initial grants have been awarded to several of our users and collaborators in the UK and North America and promising preliminary results are emerging and finding their way into publications. We have refined and extended our development of the healthcare economic analyses of our technology to support the adoption by providers of hyperpolarised noble gas imaging, working with KOL’s and experts in the field. Over the planning horizon of the first 48 months post commercial launch, the Group maintains its intent to address the high end of the US academic and teaching hospital market segment, which comprises approximately the top 1000 institutions nationally having multiple Centres of Excellence in Pulmonary Medicine and Radiology. The combined addressable capital equipment market there for our products approaches US$500M in equipment sales alone, with the consequent drug sales following as laid out in recently published research.

While working to achieve FDA approval for clinical use, Polarean continues to serve the medical imaging research market by providing xenon polarisers to enable functional MRI of the pulmonary system.  This brings dynamic, reproducible, high-resolution, regional, quantitative, image-based information to pulmonary physicians and researchers whose best alternative tool is spirometry, with its limitations in use for measurement of expired breath. Over the last several years we expanded our installed base of systems at luminary academic research centres to include the Universities of Kansas, Iowa and British Columbia.  In addition, we received an order for a polariser system from MD Anderson, All of these organizations are well known for their research and clinical applications of emerging technologies.

Our Organisation

The Group encountered material changes in its shareholder base during the year and as a result its Board composition. We closed a round of financing totalling £8.4 million which included investment by an additional strategic investor, Bracco Diagnostics, a global manufacturer of imaging contrast agents, and which brought with it appointment of another non-executive director Mr. Cyrille Petit, Chief Corporate Development Officer there. We are very happy to have someone with Mr. Petit’s background on the Board.

Our Operations

In 2020, our contract manufacturer built 3 of our 9820 polarisers systems. In addition, we brought on a second contract manufacturer to help us meet anticipated demand from both the research and clinical market, once we receive our anticipated FDA approval. We see and welcome the expansion of our installed base in top tier institutions. We made planned advances in our quality systems and engineering infrastructure as we move toward maturing in our new regulated environment.

R&D

We continued to invest in our intellectual property portfolio during the year. Filings in other territories and additional progress in existing patent filings involving gas exchange and pulmonary vascular disease were made. Our group has continued to push the design of the systems forward, with key advances in ease of use and manufacturability making progress to plan. We made valuable progress on our software and image display projects, which will come into play in the near future.

2020 Financial results

Broadly speaking, we achieved our plan in 2020, with revenues slightly below plan and expenses also diligently managed to below plan. We raised £8.4 million in April 2020 in a placing designed to carry us through our submission approval. We have maintained our pricing and margins throughout the year on equipment, albeit timing of grant receipts slightly diluted overall margins. It is still the case that the majority of our research systems are procured through grant mechanisms and while the outcomes are typically known as their process unfolds, the ultimate fiscal timing of these projects is difficult to predict with certainty as many involve public procurement cycles.

2021 and Beyond

We cautiously plan to receive regulatory approval the second half of 2021. In the meantime, we continue to collaborate with researchers in the US and abroad and look to expand our installed base of research systems, and have a pipeline supporting that plan. The exciting new developments in COVID-19, cardiology and pulmonary vascular disease are deepening, and our knowledge base about these conditions is expanding.

Most exciting is the additional investment we received in our oversubscribed £27 million placing and open offer as led by Stifel earlier this year. This raise will fund our commercialisation and launch programmes at a high level and provide for earlier initiation of follow-on trials and market exploration.

The “129Xe MRI Clinical Trials Consortium” is continuing the studying of the application of our technology to the case of post infection COVID-19 patients to assess the long-term effects and case management of these patients. We are standardising performance and tools across the installed base to facilitate this.

We continue to explore opportunities with potential strategic partners in pharma and in other geographic markets that could lead to important developments in new applications and uses for our technology, expansion into new territories, and which may bring economic benefits to the group going forward.

Polarean is fortunate to have an outstanding collection of world-class collaborators and customers in both the US and Europe. Additionally, we support the “129Xe MRI Clinical Trials Consortium” and the crucial work they do in collaborative research, training investigators, providing infrastructure for evaluating new techniques, and multi-institution sharing of magnetic resonance (MR) techniques and image analysis methods. In addition, we continue to develop and expand our working relationships with MRI systems manufacturers and exclusive relationships with global industrial gas suppliers, all key to our future as we scale the business.

Polarean has a dedicated team of professionals without whose efforts these accomplishments would not be possible. On behalf of the entire staff of Polarean Imaging, I would like to thank you for their support of the Group, and we look forward to continuing to develop and deliver this critical lifesaving and life-improving technology to physicians and patients everywhere.

 

 

Richard Hullihen
Chief Executive Officer

2 June 2021

 

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Consolidated Statement of Comprehensive Income

 

 Notes 2020
US$
 2019
US$
Revenue 4 1,056,766  2,301,093
Cost of sales  (346,300)  (925,612)
Gross profit  710,466  1,375,481
     
Administrative expenses  (5,049,246)  (6,010,119)
Depreciation 11 (150,224)  (63,121)
Amortisation 12 (734,058)  (683,873)
Selling and distribution expenses  (917,783)  (324,791)
Share-based payment expense 19 (474,716)  (305,747)
Total administrative expenses  (7,326,027)  (7,387,651)
Operating loss 6 (6,615,562)  (6,012,170)
Finance income 7 100,769  508
Finance expense 7 (19,730)  (91,678)
Loss before tax  (6,534,523)  (6,103,340)
Taxation 10 -  -
Loss for the year and total other comprehensive expense  (6,534,523)  (6,103,340)
     
Loss per share    
Basic and diluted (US$)9(0.044) (0.057)

 

 

The results reflected above relate to continuing activities.

There are no items of other comprehensive income for the year other than the loss above and therefore no separate statement of other comprehensive income has been presented.

 

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Consolidated Statement of Financial Position

 

 
Notes
2020
US$
2019
US$
ASSETS    
Non-current assets    
Property, plant and equipment 11 271,264 355,958
Intangible assets 12 2,810,694 3,427,547
Right-of-use asset 24 184,213 98,263
Trade and other receivables 14 5,539 5,539
  3,271,710 3,887,307
Current assets    
Inventories 15 977,924 554,211
Trade and other receivables 14 348,067 636,783
Cash and cash equivalents 16 6,282,665 1,961,869
  7,608,656 3,152,863
TOTAL ASSETS  10,880,366 7,040,170
    
EQUITY AND LIABILITIES    
Equity attributable to holders of the parent  
Share capital 17 78,200 55,776
Share premium 18 23,840,571 13,659,912
Group re-organisation reserve 18 7,813,337 7,813,337
Share-based payment reserve 19 1,845,450 1,370,734
Accumulated losses 18 (24,844,204) (18,309,681)
  8,733,354 4,590,078
    
    
Non-current liabilities    
Deferred income 21 219,954 192,817
Lease liability 24 91,609 50,455
Contingent consideration 20 316,000 316,000
 627,563 559,272
    
Current liabilities    
Trade and other payables 22 1,348,866 1,773,582
Lease liability 24 129,819 70,914
Deferred income 21 40,763 46,324
  1,519,449 1,890,820
TOTAL EQUITY AND LIABILITIES  10,880,366 7,040,170

These Financial Statements were approved and authorised for issue by the Board of Directors on 2 June 2021 and were signed on its behalf by:

 

Jonathan Allis
Non-Executive Chairman

 

 

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Company Statement of Financial Position

 

 Notes 20202019
  US$US$
ASSETS    
Non-current assets    
Investment in subsidiary 13 4,342,848 4,342,848
  4,342,848 4,342,848
Current assets    
Trade and other receivables 14 20,454,183 11,543,854
Cash and cash equivalents 16 911,271 56,765
  21,365,454 11,600,619
TOTAL ASSETS  25,708,302 15,943,467
    
EQUITY AND LIABILITIES    
Equity attributable to holders of the parent  
Share capital 17 78,200 55,776
Share premium 18 23,840,571 13,659,912
Merger reserve 18 4,322,527 4,322,527
Share-based payment reserve 19 1,540,419 1,065,703
Accumulated losses 18 (4,122,345) (3,213,450)
  25,659,372 15,890,468
    
Current liabilities    
Trade and other payables 22 48,930 52,999
  48,930 52,999
TOTAL EQUITY AND LIABILITIES  25,708,302 15,943,467

 

As permitted by section 408 of the Companies Act 2006, no separate statement of Comprehensive Income is presented in respect of the parent Company. The loss for the financial year dealt with in the financial statements of the parent Company was US$908,895 (2019: US$939,516).

 

These financial statements were approved and authorised for issue by the Board of Directors on 2 June 2021 and were signed on its behalf by:

Jonathan Allis
Non-Executive Chairman

 

 

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Consolidated Statement of Changes in Equity

 

 Share capital
US$
Share premium
US$
Share-based payment reserve
US$
Group re-org reserve
US$
Accumulated losses
US$
Total equity
US$
As at 1 January 2019 46,427 11,063,0751,078,3357,813,337(12, 219,689)7,784,485
Comprehensive income       
Share based payment – lapsed share options - - (13,348) - 13,348 -
Loss for the year - - - - (6,103,340) (6,103,340)
Transactions with owners       
Issue of shares 6,349 2,756,289 - - - 2,762,638
Share issue costs - (159,452) - - - (159,452)
Share-based payment expense - - 305,747 - - 305,747
As at 31 December 2019 (audited) 55,776 13,659,912 1,370,734 7,813,337 (18,309,681) 4,590,078
Comprehensive income
Loss for the year - - - - (6,534,523) (6,534,523)
Transactions with owners       
Issue of shares 22,424 10,703,373 - - - 10,725,797
Share issue costs - (522,714) - - - (522,714)
Share-based payment expense - - 474,716 - - 474,716
As at 31 December 2020 78,200 23,840,571 1,845,450 7,813,337 (24,844,204) 8,733,354

 

 

Company Statement of Changes in Equity

 

 Share capital
US$
Share premium
US$
Share-based payment reserve
US$
Merger reserve
US$
Accumulated losses
US$
Total equity
US$
As at 1 January 2019 49,427 11,063,075 773,304 4,322,527 (2,287,282) 13,921,051
Comprehensive income       
Share based payment – lapsed - - (13,348) - 13,348 -
Loss for the year - - - - (939,516) (939,516)
Transactions with owners       
Issue of shares 6,349 2,756,289 - - - 2,762,638
Share issue costs - (159,452) - - - (159,452)
Share-based payment expense - - 305,747 - - 305,747
As at 31 December 201955,776 13,659,912 1,065,703 4,322,527 (3,213,450) 15,890,468
Comprehensive income       
Loss for the year - - - - (908,895) (908,895)
Transactions with owners       
Issue of shares 22,424 10,703,373 - - - 10,725,797
Share issue costs - (522,714) - - - (522,714)
Share-based payment expense - - 474,716 - - 474,716
As at 31 December 202078,200 23,840,571 1,540,419 4,322,527 (4,122,345) 25,659,372

 

 

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Consolidated Statement of Cash Flows

 

 2020
US$   
2019
US$   
Cash flows from operating activities   
Loss before tax (6,534,522) (6,103,340)
Adjustments for non-cash/non-operating items:   
Depreciation of plant and equipment 150,224 63,121
Amortisation of intangible assets and right-of use-asset 734,058 683,873
Share-based payment expense 474,716 305,747
Finance expense 19,730 91,678
Finance income (100,769) (508)
Operating cash outflows before movements in working capital (5,256,563) (4,959,429)
(Increase)/decrease in inventories (423,093) 97,570
(Increase)/decrease in trade and other receivables 288,096 (14,737)
Decrease in trade and other payables (424,714) (285,073)
Increase in deferred income 21,576 595,961
Net cash used in operations (5,794,698) (4,565,708)
Cash flows from investing activities   
Purchase of plant and equipment (65,531) (401,327)
Net cash used in investing activities (65,531) (401,327)
Cash flows from financing activities   
Issue of shares 10,725,797
 
6,373,919
 
Cost of issue (522,714) (159,452)
Interest paid on lease liabilities (19,730) (91,678)
Interest received 100,769 508
Principal elements of lease payments (103,097) (69,993)
Net cash generated by financing activities 10,181,025  6,053,304
Net increase in cash and cash equivalents 4,320,796 1,086,268
Cash and cash equivalents at the beginning of year 1,961,869 875,601
Cash and cash equivalents at end of year 6,282,665 1,961,869

 

Company Statement of Cash Flows

 

 Year ended
31 December
2020
US$
Year ended
31 December
2019
US$
Cash flows from operating activities   
Loss before tax (908,895) (939,516)
Adjustments for non-cash/non-operating items:   
Share-based payment expense 474,716 305,747
Interest received (100,358) (508)
Operating cash outflows before movements in working capital (534,537) (634,277)
Decrease in trade and other receivables 42,372 (6,275)
Increase in trade and other payables (4,068) 24,824
Net cash used by operations (496,233) (615,728)
Cash flows from financing activities   
Issue of shares 10,725,797 6,373,918
Cost of issue (522,714) (159,452)
Interest received 100,358 508
Loans to intercompany (8,952,702) (5,778,247)
Net cash generated by financing activities 1,350,739 436,727
  
Increase/(decrease) in cash and cash equivalents848,506 (179,001)
Cash and cash equivalents at the beginning of period56,765 235,766
Cash and cash equivalents at end of period911,271 56,765

 

 

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Notes on Financial Statements

The notes are available in the printable pdf of the results. To download it, please click here.