Evgen Pharma plc

("Evgen" or "the Company" or "the Group")

Half year Report

Evgen Pharma plc (AIM: EVG), the clinical stage drug development company developing sulforaphane-based medicines for the treatment of multiple diseases, announces its unaudited interim results for the six months ended 30 September 2022.

Operational highlights

Financial highlights

Dr Huw Jones, Chief Executive Officer of Evgen Pharma, said:

"During the period the regulatory authorities have been highly supportive of our efforts through approvals for our clinical work and receipt of scientific advice, whilst our manufacturing effort is producing commercial grade tablets. Two new academic collaborations have been commenced, and we have seen pre-clinical progress in our key focus areas of breast cancer and glioblastoma.

"Post period there has been a transformative transaction completed with STALICLA SA. This deal not only broadens the application of SFX-01 into  new indications; autism spectrum disorder (ASD) and other neurodevelopmental disorders, but also provides substantial cash payments if we hit our milestones successfully. Our human volunteer clinical trial has commenced on time underpinning both our internal programmes and the ASD study with our new partner. Our collaboration in Rome has yielded data on radio-sensitising mechanisms of SFX-01 supportive of its use in cancers requiring radiotherapy e.g. brain cancer.

"We look forward to seeing clinical data on our new enteric coated tablet in the first half of next year and to seeing continued data flow from our numerous academic collaborations. Later in the calendar year we anticipate further milestone payments from STALICLA on the basis of a successful partnership.  Our cash runway is substantial at a turbulent time for our industry which sets a good foundation for the busy times ahead."

Notes to Editors

About Evgen Pharma plc 

Evgen Pharma is a clinical stage drug development company developing sulforaphane based medicines for the treatment of multiple diseases. The Company's core technology is Sulforadex®, a method for synthesising and stabilising the naturally occurring compound sulforaphane and novel proprietary analogues based on sulforaphane. 

The Company's lead asset, SFX-01, is a patented composition of synthetic sulforaphane and alpha-cyclodextrin and has undergone clinical trials for oestrogen-positive (ER+) metastatic breast cancer. In September 2021 the FDA granted Orphan Drug status to SFX-01 in malignant glioma.

The Company also has a wide number of collaborations with leading academic centres in the UK, Europe and AsiaPac as part of the continuing strategy to build  safety and efficacy data sets around the compound. With respect to non-core areas, Evgen signed an out-licensing deal with JuvLife, the dietary products and functional foods division of Juvenescence Ltd, for the development of a naturally-sourced sulforaphane nutritional health supplement, stabilised using Evgen's Sulforadex® technology. Evgen also has a licensing deal with STALICLA SA in neurodevelopmental disorders and schizophrenia.

The Company has its headquarters and registered office at Alderley Park, Cheshire. It is listed on AIM in London and trades under the ticker symbol EVG.  

For further information, please visit: www.evgen.com 

OVERVIEW

This has been a period of significant progress for Evgen, from progress in academic collaborations to scale-up of GMP manufacturing and with financial performance in-line with expectations.

Strategy update

The aim for the current financial year is to drive the progress of the clinical programmes, whilst building further value through additional partnering and scientific collaborations.

Academic collaborations have made good progress during the period with encouraging data, particularly in radio-sensitisation.

On the clinical side, the healthy volunteer pharmacokinetic/pharmacodynamic (''PK/PD'') study of the new SFX-01 formulation started on schedule and will provide a broad set of data regarding the performance of the new formulation   by H2 2023 - giving key insights into how it acts within the human body. This data will be important for the further investigation of SFX-01 in glioblastoma (''GBM''). On the advice of key opinion leaders, additional pre-clinical work and an early-stage clinical trial of SFX-01 in patients with GBM will be conducted to generate more data on how SFX-01 enters the brain tumour, and interacts with molecular targets in such tissue.   This early clinical work should further de-risk the Phase 2 clinical trial, as well as extending the cash runway.

The ongoing scale-up and production of the new formulation of SFX-01 to GMP standards has been a major focus of activity, and is a key development which will be important for future clinical studies conducted by Evgen and its partners.

Considerable progress has  been made in business development which culminated with a substantial partnership signed post period end.

Conclusion

Post period saw a transformative development for Evgen, with the very substantial out-licensing deal with STALICLA SA (STALICLA), announced in October 2022, extending the application of SFX-01 into neurodevelopmental disorders and underpinning the potential for the lead compound beyond oncology and inflammation. This reduces the Company's risk profile, and the non-dilutive upfront payments and initial milestones also significantly extend the Company's cash runway, leaving it well positioned to execute further on its growth strategy.

The Board looks forward to continuing to progress its strategy which remains clearly focused on commercialising the undoubted potential of SFX-01.

OPERATIONAL UPDATE

PIPELINE

Phase I study of biomarkers including PK/PD assessment

An important use of proceeds from the fundraise completed in March 2021 is to examine the performance of Evgen's new enteric-coated tablet formulation of lead asset SFX-01 in a Phase I/Ib study of healthy volunteers. This new commercial-scale tablet formulation is being tested in a placebo-controlled, dose-escalating, randomised trial to determine how it is absorbed and circulates in the body, and how it engages with target molecules. 

The study will assess PK and PD characteristics relevant to Evgen's diseases of interest. It has been designed to yield a rich data set to inform forthcoming efficacy studies, including the proposed phase II study in autism spectrum disorder (''ASD'') that our partner, STALICLA, will run.

Following the regulatory approval announced on 3 October 2022 the study is now open for recruitment and the first eight subjects, from an anticipated total of 24, entered the trial on schedule. The results of the trial are expected in the second quarter of 2023.

Metastatic breast cancer ("mBC")

Since the start of the phase II trial of SFX-01 in metastatic breast cancer, CDK4/6 inhibitors have grown in acceptance and are becoming standard of care in first line mBC treatment. These drugs provide an extended period of progression free survival, but invariably patients become resistant to them. Accordingly, Evgen is conducting further pre-clinical work with its collaborators at the Manchester Breast Centre to assess the impact of SFX-01 in CDK4/6 resistance models. To date this work has demonstrated encouraging in vitro data. A direct target of SFX-01 was shown to be increased in patient-derived metastatic CDK4/6 resistant cells and in resistant cell lines. SFX-01 significantly reduces proliferation of these resistant cells, and in particular, it does so more efficiently than currently approved drugs on the market.

Glioblastoma (''GBM'')

Glioma is the most common form of brain tumour affecting around 5 per 100,000 people. The more severe, grade IV classification, glioblastoma, is a very serious form of malignant brain tumour representing 45% of all cases and has a poor prognosis, with median survival of around 14 months. The five-year survival of the severe grades is 5%.  Therapeutic options for glioma are limited to surgery, radiotherapy and the one drug widely available, temozolomide. There is a clear unmet need for more treatments for use in conjunction with the current standard of care.

Evgen has been consulting widely with world-renowned experts in the treatment of brain cancers with regards to the planned study. These key opinion leaders have advised that further pre-clinical work and an early-stage clinical trial of SFX-01 in patients with GBM should be conducted, to acquire more clarity on sulforaphane entering the brain tumour and its interaction with molecular targets in the tumour tissue of GBM patients. The Company expects that this approach will further de-risk the Phase 2 clinical trial.

This preliminary clinical work will be conducted as an Investigator Sponsored Study, led by Dr Marjolein Geurts, neuro-oncologist at the Erasmus University Medical Centre, the Netherlands. The Erasmus group has extensive experience in glioblastoma research, with several studies and numerous publications in this field. Evgen has already received positive and supportive regulatory scientific advice from the Dutch Medicines Evaluation Board, which also stated that there are no specific concerns related to the clinical safety profile of SFX-01 based on available data.  If the pre-clinical and ISS clinical work is successful, the trial programme is likely to be continued as an Evgen-sponsored trial. Evgen will update on the timing of this trial in due course.

PRE-CLINICAL PROJECTS

Based on previous findings from pre-clinical work in glioma, in May this year Evgen commenced a collaboration with Prof. Francesco Marampon, of Università Sapienza di Roma to investigate the hypothesis that SFX-01 could enhance the action of radiotherapy in cancer patients. Recent in vitro data from radio-sensitisation studies has provided evidence that this might be the case, and this implies a role for SFX-01 in a variety of cancers where radiotherapy is a standard treatment.  In vivo experiments will begin in Q1 2023.

A further collaboration commenced in June with Dr Grace Chen of the University of Michigan to investigate the potential anti-tumour effects of SFX-01 in colorectal cancer. Specifically, the collaboration seeks to evaluate the in vivo effects of SFX-01 in models of colorectal cancer. The activity and mechanism of action of SFX-01 on organoid growth, morphology, stemness and inflammatory markers will also be investigated using normal and malignant patient-derived organoids and tumour tissue. Initial results are expected at the end of 2023.

Colorectal cancer is considered to be the third most common form of cancer worldwide, with between 1.5-2 million annual diagnoses, and the second leading cause of cancer-related deaths.  There has also been an alarming global rise in early-onset colorectal cancer occurring in individuals under 50 years of age.  Treating colorectal cancers can be difficult and does not always lead to a cure especially in advanced stages.  Therefore, there is a strong need to develop chemoprevention strategies as well as better treatment options.

BUSINESS DEVELOPMENT

STALICLA partnership

In October the Company licensed the global rights for lead asset SFX-01 in neurodevelopmental disorders and schizophrenia to STALICLA, a Swiss company specialising in the identification of specific phenotypes of ASD, using its proprietary precision medicine platform. Evgen retains the global rights for all other indications.

The financial terms are $0.5m upfront and $0.5m on completion of the human volunteer Phase 1/1b study (anticipated during Q2 2023). Thereafter, milestone payments up to commercial launch are $26.5m, including $5m on grant of IND by the FDA (anticipated in late 2023).  Total milestones of $160.5m are payable to the Company in relation to the first neurodevelopmental disorder indication under the license. Royalties payable to Evgen on sales are in the low to medium double-digit range in all scenarios, including on-licensing by STALICLA and use of SFX-01 in further licensed indications.

Previous studies with other sources of sulforaphane have shown evidence of clinical efficacy in improving symptoms of ASD (e.g. Singh et al 2014). However, patient heterogeneity provides a challenge in identifying those individuals likely to respond to therapy.  STALICLA has a unique, proprietary technology to identify ASD patients who are most likely to respond to SFX-01. This screening approach has already been used successfully to identify ideal patients for other ASD drug trials and is a key differentiator for STALICLA in developing drugs for such a wide spectrum disorder as ASD.

Evgen's partnership with STALICLA will enable the targeting of patient groups most likely to benefit from SFX-01, not only de-risking the clinical development but potentially bringing a therapeutic option to those individuals who are currently underserved, in a quick and efficient manner.

Juvenescence partnership

The partnership with Juvenescence continues to make progress and Evgen is supporting its development with the know-how and expertise we have in making sulforaphane-based compounds for human use.  It is envisaged that product launch will occur in around two years' time at which point milestone payments of over £1m will have been received.

FINANCIAL REVIEW

The financial performance for the six-month period to 30 September 2022 was in line with expectations. Operating losses increased in the period by £0.70m to £2.22m compared with £1.52m in the prior period; this reflects the increase in clinical trial activity and the related manufacturing process development and product manufacture to support this. Consequently, the total comprehensive loss for the period was £2.15m (30 September 2021: £1.52m).

The net cash outflow for the period was £1.86m (2021: £1.54m); the similar comparison with the prior period reflects working capital movements and the receipt of the R&D credit of £0.48m, which was received after the period end in the 2021/2022 financial year.

The cash position (including cash deposits, short term investments and cash equivalents) at 30 September 2022 stood at £7.17m (30 September 2021: £10.05m).

The Directors estimate that the cash held by the Group (including short-term investments and cash on deposit) will be sufficient to support the current level of activities into Q4 2024. They have therefore prepared the financial statements on a going concern basis.

OUTLOOK

In the last six months Evgen has commenced its PK/PD study on schedule and progressed the glioblastoma programme as well as starting two pre-clinical cancer programmes with attractive potential. The PK/PD study will yield important data to support future clinical efficacy trials of the Company's and its partner's programmes.

The very substantial out-licensing deal with STALICLA extends the application of SFX-01 into neurodevelopmental disorders, both reducing Evgen's risk profile and potentially providing substantial non-dilutive cash receipts.

The Board would like to thank all our shareholders for their support and look forward to progressing the Company's strategy which remains clearly focused on commercialising the undoubted potential of SFX-01.

Barry Clare                                                                          Dr Huw Jones

Chairman                                                                             CEO

8 December 2022

Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2022 - unaudited

Consolidated Statement of Financial Position

as at 30 September 2022 - unaudited

The registered number of Evgen Pharma plc is 09246681.

Consolidated Statement of Changes in Equity

for the six months ended 30 September 2022 - unaudited

Consolidated Statement of Cash Flows

for the six months ended 30 September 2022 - unaudited

1. GENERAL INFORMATION

EVGEN PHARMA PLC ("Evgen", "the Group" or "the Company") is a public limited company incorporated in England & Wales whose shares are traded on the AIM market of the London Stock Exchange under the symbol EVG.

The address of its registered office is Alderley Park, Congleton Road, Nether Alderley, SK10 4TG. The principal activity of the Group is clinical stage drug development.

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The Group's half-yearly financial information, which is unaudited, consolidates the results of Evgen Pharma plc and its subsidiary undertaking up to 30 September 2022. The Group's accounting reference date is 31 March. Evgen Pharma plc's shares are quoted on the AIM Market of the London Stock Exchange.

The Company is a public limited liability company incorporated and domiciled in the UK. The consolidated financial information is presented in round thousands of Pounds Sterling (£'000).

The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. It does not therefore include all of the information and disclosures required in the annual financial statements. The financial information for the six months ended 30 September 2021 and 30 September 2022 is unaudited.

Full audited financial statements of the Group in respect of the period ended 31 March 2022, which received an unqualified audit opinion and did not contain a statement under section 498(2) or (3) of the Companies Act 2006, have been delivered to the Registrar of Companies.

The accounting policies used in the preparation of the financial information for the six months ended 30 September 2022 are in accordance with the recognition and measurement criteria of UK-adopted International Accounting Standards and are consistent with those which will be adopted in the annual financial statements for the year ending 31 March 2023.

Whilst the financial information included has been prepared in accordance with the recognition and measurement criteria of international accounting standards, the financial information does not contain sufficient information to comply with international accounting standards.

The Group has not applied IAS 34, Interim Financial Reporting, which is not mandatory for UK AIM listed Groups, in the preparation of this interim financial report.

Going concern

At 30 September 2022, the Group had cash and cash equivalents, including short-term investments and cash on deposit, of £7.17 million.

The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of the approval of these financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period.

The Directors estimate that the cash and cash equivalents including short-term investments and cash on deposit, held by the Group together with known receivables will be sufficient to support the current level of activities into the fourth quarter of calendar year 2024. They have therefore prepared the financial statements on a going concern basis.

Significant management judgement in applying accounting policies and estimation uncertainty

When preparing the condensed consolidated interim financial information, the Directors make a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

The following are significant management judgements and estimates in applying the accounting policies of the Group that have the most significant effect on the condensed consolidated interim financial information.  Actual results may be substantially different.

Share-based payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of the options granted is determined using the Black Scholes model, taking into consideration the best estimate of the expected life of the options and the estimated number of shares that will eventually vest.

Research and development expenditure

All research and development costs, whether funded by third parties under licence and development agreements or not, are included within operating expenses and classified as such. Research and development costs relating to clinical trials are recognised over the period of the clinical trial based on information provided by clinical research organisations. All other expenditure on research and development is recognised as the work is completed.

All ongoing development expenditure is currently expensed in the period in which it is incurred. Due to the regulatory and other uncertainties inherent in the development of the Group's programmes, the criteria for development costs to be recognised as an asset, as prescribed by IAS 38, 'Intangible assets', are not met until the product has been submitted for regulatory approval, such approval has been received and it is probable that future economic benefits will flow to the Group. The Group does not currently have any such internal development costs that qualify for capitalisation as intangible assets.

3. LOSS PER SHARE

Basic loss per share is calculated by dividing the loss for the period attributable to equity holders by the weighted average number of ordinary shares outstanding during the period. 

For diluted loss per share, the loss for the period attributable to equity holders and the weighted average number of ordinary shares outstanding during the period is adjusted to assume conversion of all dilutive potential ordinary shares. As the effect of the share options would be to reduce the loss per share, the diluted loss per share is the same as the basic loss per share.

The calculation of the Group's basic and diluted loss per share is based on the following data:

4. SHARE-BASED PAYMENTS

As at the end of the period, the reconciliation of share option scheme movements is as follows:

WAEP is an abbreviation for weighted average exercise price.

During the six-month period ended 30 September 2022, a share-based payment charge of £59,113 (six months to 30 September 2021: £80,607) was expensed to the consolidated Statement of Comprehensive Income.

The fair values of the options granted have been calculated using a Black-Scholes model.

Assumptions used were an option life of 5 years, a risk-free rate of 2 per cent., a volatility of 60 per cent. and no dividend yield.

5. ISSUED CAPITAL AND RESERVES

Ordinary shares

No new shares were issued during six-month period ended 30 September 2022.