ANGLE plc ("the Company")

BUSINESS UPDATE

ANGLE plc (AIM:AGL OTCQX:ANPCY), a world-leading liquid biopsy company, is pleased to provide a review of business progress, an unaudited trading update for 2022 and prospects for 2023.

2022: a breakthrough year

2022 has been a breakthrough year for ANGLE with the world's first FDA product clearance for a system to harvest cancer cells from patient blood for subsequent analysis following a sustained effort by the Company for over six years including extensive dialogue and formal pre-submissions with FDA, and the submission of over 400 technical reports and documents and processing of over 16,000 samples to demonstrate system performance. This was followed by ANGLE's pivotal ovarian cancer study delivering best in class results with sensitivity and specificity of 90% and 93% respectively, far out-performing standard of care for the detection of ovarian cancer demonstrating the value of the Parsortix^® system for real-world clinical decision-making.

These achievements have placed ANGLE in a strong position to play a leading role in the emerging US$ 100 billion dollar liquid biopsy market for personalised cancer care by providing intact cancer cells for analysis, the "best sample" for guiding targeted treatment decisions, improving patient outcomes and reducing healthcare costs. ANGLE is executing its strategy to commercialise the Parsortix system with three core elements, a pharma services business to utilise the Parsortix system in cancer drug trials to drive early revenues, a corporate partnership business to combine Parsortix with downstream analysis techniques and a product business with partners in different geographies to provide a distribution channel for Parsortix instruments and consumables.

Taking action to navigate market conditions

Like many businesses in the sector, ANGLE has been subject to wider economic and market headwinds, which have worsened during the second half of the year. Despite market conditions, in July 2022, ANGLE moved rapidly post FDA approval to complete a capital raise of £20.1 million (£18.9 million net of expenses) to support the Company's commercialisation plans through to mid-2024, and then initiated a streamlining of the Company's operations in H2 to increase cash runway further into H2 2024 in response to challenging market conditions.

This, along with proposed changes to the UK R&D Tax Credit scheme making the cost of undertaking R&D in Canada 50% more expensive than in the UK, led to the decision to close the Company's Canadian operations and centralise all R&D at the Company's UK facilities. The Company has moved swiftly to deliver this change and has recently completed an orderly wind down of the Canadian facility.

The decision has also been taken to focus development of downstream molecular analysis of Parsortix harvested cancer cells to third party platforms in preference to the Company's inhouse HyCEAD Ziplex platform. The latter had proved highly sensitive and successful in analysis of Parsortix liquid biopsy samples but required significant ongoing investment to enable the assay to be offered in a product format (as opposed to being limited to provision of a service from ANGLE clinical laboratories). Meanwhile, third-party molecular platforms have greatly improved in sensitivity and reduced in cost and now offer an installed base of molecular products already in the market, which can be leveraged for new Parsortix applications.

While the overall impact of wider market conditions has slowed down ANGLE's commercial acceleration post FDA clearance, all aspects of the Company's strategy and potential for the Parsortix system remain intact. The management team is focusing the Company's resources carefully and expects 2023 to be a further year of progress for ANGLE in preparation for rapid expansion, whilst recognising this may take longer than previously anticipated until broader market conditions stabilise.

2022 unaudited trading update and 2023 outlook

Actions taken to control the cost base and the closure of Canadian operations, as described above, are on track to deliver the anticipated cost savings of £2.6 million in 2023 and £4.0 million per annum thereafter. The closure has resulted in c. £1 million of non-cash write-offs of intangible and tangible assets and c. £1 million of closure costs.

Cash at year end 2022 is expected to be in line with expectations at c. £32 million and the Company has no debt. Reported revenue for the year ended 31 December 2022 is expected to be just above £1 million, while operating loss for the year is estimated at c. £22 million and, excluding the one-off closure costs for Canada, is also in line with expectations. Approximately £0.5 million of revenue expected in 2022 is now expected to be recognised in 2023 due to delays outside the Company's control and a number of expected sales were either delayed or impacted by the wider market backdrop.

Due to the current adverse market conditions, the need across the industry to control expenditure has affected a number of pipeline opportunities with some customers focusing on their nearer term assets with additional buyer caution. Revenue for 2023 is expected to show strong growth but likely to be materially below current market expectations.

Encouragingly, the Company has already seen several new orders confirmed in the first week of January, which may reflect customers awaiting the start of their new budget year. The pipeline for both pharma and product sales remains strong and growing, with the Company's distributor network build out progressing as planned. The Company remains confident in the opportunities for the business, delivering on commercial milestones, building revenues and controlling costs.

Growth opportunities

Significant expansion of the pharma services pipeline

The pharma services business continues to offer the potential for near term revenues in the large cancer drug trials market where ANGLE is clearly differentiated. The FDA clearance has helped open doors to pharma and the pipeline of potential pharma services customers has expanded significantly. There are now multiple new customers and projects in discussion, including with major pharma companies. As previously indicated, the sales process for pharma services can be prolonged and market conditions have delayed completion of some of these new opportunities. We have found a high level of repeat business opportunities with existing customers and prospects remain very positive for rapid growth of this business. We look forward to providing further updates in the future.

Progress with laboratory accreditations

To support its pharma services business, ANGLE has been seeking regulatory accreditation of its clinical laboratories in the United States and UK. ANGLE is pleased to report that ISO 15189 Accreditation has been received for the United States laboratory and is expected for the UK laboratory shortly. This is an important achievement and demonstrates that ANGLE's clinical laboratories maintain globally recognised quality standards. This is particularly relevant for pharma services customers that require evidence that the laboratories are stable, robust, compliant, and subject to periodic external inspections by recognised organisations. Registration and preparation is also complete for CLIA accreditation, which is required for patient management in the United States, and the process will be completed once the first laboratory developed tests (LDTs) are being offered from the laboratories, which is a requirement.

Corporate partnerships

ANGLE is in discussions with several potential parties regarding the development of an assay for HER-2 analysis in breast cancer. The impetus for this programme has increased with the recent developments in relation to the approval of drugs for "HER-2 low" status.

Following a review of third-party molecular systems, ANGLE has focused its resources on evaluating the performance of Parsortix samples in combination with multiple third-party downstream DNA and RNA sequencing technologies. Initial results from these evaluations have been highly encouraging and ANGLE believes this will open the door to partnering discussions with these technology providers, who are keen to add "content" to their product menus.

Building a network of distribution partners

With a view to driving longer term product revenues, during the year ANGLE has expanded its commercial operations team, including product management, logistics, service and maintenance, and, following the FDA clearance, has successfully established agreements to build an international network of oncology focused distribution partners in Europe, including Germany, Austria, Czech Republic, Switzerland and France, the Middle East, China, India and New Zealand, with other geographies in discussion. These partners all provide valuable sales, implementation and ongoing service and maintenance support in their chosen markets. We expect product sales to build gradually with expansion being stimulated over time by downstream assays, clinical utility and reimbursement processes.

Developing assays to support adoption

To support adoption of its technology by adding "content", ANGLE has been developing a suite of imaging assays (branded Portrait⁺) and molecular assays (branded Landscape⁺) to analyse the cancer cells harvested by the Parsortix system. These assays are designed to build a menu for ANGLE's pharma services business and to be sold as products for third-party customers through the growing distribution network for use with the Parsortix system.

Refining plans for ovarian cancer assay

Following the excellent results from its ovarian cancer study, ANGLE has carefully considered the most appropriate commercial route for this test. With a view to maximising commercial potential and recognising the improvement in sensitivity and reduction in costs of other molecular systems with an established installed base, the Landscape⁺ Ovarian assay will now be optimised utilising a third-party molecular analysis platform. Several candidates are currently being evaluated. Validation of the optimised assay can be undertaken utilising patient samples stored from the already completed studies. The major advantage of this approach is it will leverage the third party installed base providing them with "content" and will allow a larger scale product-based commercialisation strategy for ovarian cancer substantially increasing market potential and the rate of adoption.

Progress with prostate cancer studies

ANGLE is also moving ahead with its prostate cancer studies utilising the Parsortix system to assess the presence and severity of prostate cancer via a blood test in collaboration with Solaris Health Holdings, LLC / MidLantic Urology LLC. Studies are expected to complete in 2023 with a view to Solaris marketing a Parsortix prostate cancer test to its patient base of over 729,000 unique patients annually.

ANGLE Founder and Chief Executive, Andrew Newland, commented:

"It has been a breakthrough year for ANGLE, with both FDA clearance and excellent results from the ovarian cancer study. Whilst we have not yet seen the expected acceleration in revenue, the pipeline of opportunities is growing strongly and we are encouraged by the level of engagement with pharma companies, including major pharma companies, medtech companies and clinical laboratories globally. ANGLE has the resources in place to deliver on its strategic and commercial plans and starts the new year cautiously optimistic despite the challenging market."

For further information:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the EU Market Abuse Regulation (596/2014). Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.

For Frequently Used Terms, please see the Company's website on https://angleplc.com/investor-relations/glossary/

Notes for editors

About ANGLE plc www.angleplc.com 

ANGLE is a world leading liquid biopsy company with sample-to-answer solutions. ANGLE's proven patent protected circulating tumor cell (CTC) harvesting technology is known as the Parsortix^® system.

ANGLE's Parsortix^® system is FDA cleared for its intended use in metastatic breast cancer and is currently the first and only FDA cleared medical device to harvest intact circulating cancer cells from blood.

Intended use

The Parsortix^® PC1 system is an in vitro diagnostic device intended to enrich circulating tumor cells (CTCs) from peripheral blood collected in K₂EDTA tubes from patients diagnosed with metastatic breast cancer. The system employs a microfluidic chamber (a Parsortix cell separation cassette) to capture cells of a certain size and deformability from the population of cells present in blood. The cells retained in the cassette are harvested by the Parsortix PC1 system for use in subsequent downstream assays. The end user is responsible for the validation of any downstream assay. The standalone device, as indicated, does not identify, enumerate or characterize CTCs and cannot be used to make any diagnostic/prognostic claims for CTCs, including monitoring indications or as an aid in any disease management and/or treatment decisions.

The Parsortix system enables a liquid biopsy (a simple blood test) to be used to provide the circulating metastatic breast cancer cells to the user in a format suitable for multiple types of downstream analyses. The system is based on a microfluidic device that captures cells based on a combination of their size and compressibility. The system is epitope independent and can capture all phenotypes of CTCs (epithelial, mesenchymal and EMTing CTCs) as well as CTC clusters in a viable form (alive). CTCs harvested from the system enable a complete picture of a cancer to be seen; as being an intact cell they allow DNA, RNA and protein analysis as well as cytological and morphological examination and may provide comparable analysis to a tissue biopsy in metastatic breast cancer. Because CTC analysis is a non-invasive process, unlike tissue biopsy, it can be repeated as often as needed. This is important because cancer develops and changes over time and there is a clear medical need for up-to-date information on the status of a patient's tumor. In addition, the live CTCs harvested by the Parsortix system can be cultured, which offers the potential for testing tumor response to drugs outside the patient.

The Parsortix technology is the subject of 26 granted patents in Europe, the United States, China, Australia, Canada, India, Japan and Mexico with three extensive families of patents are being progressed worldwide.

In the United States, the Parsortix^® PC1 system has received a Class II Classification from FDA for use with metastatic breast cancer patients. FDA clearance is seen as the global gold standard. ANGLE's Parsortix system is the first ever FDA cleared system for harvesting CTCs for subsequent analysis. ANGLE has applied the IVD CE Mark to the same system for the same intended use in Europe.

ANGLE has also completed three separate 200 subject clinical studies under a programme designed to develop an ovarian cancer pelvic mass triage test, with the results showing best in class accuracy (AUC-ROC) of 95.4% with sensitivity of 90% and specificity of 93%. This excellent clinical result demonstrates the utility of cells harvested by the Parsortix system, which the Company believes is the "best sample" for liquid biopsy analysis as it recovers intact, living cancer cells that are involved in the progression of the disease providing prospective information.

ANGLE has established formal collaborations with world-class cancer centres and major corporates such as Abbott, Philips and QIAGEN, and works closely with leading CTC translational research customers. These Key Opinion Leaders (KOLs) are working to identify applications with medical utility (clear benefit to patients), and to secure clinical data that demonstrates that utility in patient studies. The body of evidence as to the benefits of the Parsortix system is growing rapidly from our own clinical studies in metastatic breast cancer and ovarian cancer and also from KOLs with 76 peer-reviewed publications and numerous publicly available posters from 33 independent cancer centres, available on our website.

ANGLE has established clinical services laboratories in the UK and the United States to accelerate commercialisation of the Parsortix system and act as demonstrators to support product development. The laboratories offer services globally to pharmaceutical and biotech customers for use of Parsortix in cancer drug trials and, once the laboratories are accredited and tests validated, will provide Laboratory Developed Tests (LDTs) for patient management.