Corporate News
Final Results for the Year Ended 31 December 2020
04 June 2021
Notice of Annual General Meeting
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.
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
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
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$) | 9 | (0.044) | (0.057) |
The results reflected above relate to continuing activities.
There are no items of other comprehensive income for the year other than the loss above and therefore no separate statement of other comprehensive income has been presented.
Consolidated Statement of Financial Position
Notes | 2020 US$ | 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
Company Statement of Financial Position
Notes | 2020 | 2019 | |
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$939,516).
These financial statements were approved and authorised for issue by the Board of Directors on 2 June 2021 and were signed on its behalf by:
Jonathan Allis
Non-Executive Chairman
Consolidated Statement of Changes in Equity
Share capital US$ | 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 | 11,063,075 | 1,078,335 | 7,813,337 | (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 2019 | 55,776 | 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 2020 | 78,200 | 23,840,571 | 1,540,419 | 4,322,527 | (4,122,345) | 25,659,372 |
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 equivalents | 848,506 | (179,001) |
Cash and cash equivalents at the beginning of period | 56,765 | 235,766 |
Cash and cash equivalents at end of period | 911,271 | 56,765 |
Notes on Financial Statements
The notes are available in the printable pdf of the results. To download it, please click here.
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