27 September 2023

Roquefort Therapeutics plc

("Roquefort Therapeutics" or the "Company")

Interim Results to 30 June 2023

Roquefort Therapeutics (LSE:ROQ, OTCQB:ROQAF), the Main Market listed biotech company focused on developing first-in-class medicines in the high value and high growth oncology market, is pleased to present its interim results for the six-month period ended 30 June 2023 (the "period" or "H1").

Highlights

·      Signed exclusive worldwide license agreement (excluding Japan) with Randox Laboratories for 10 years to utilise Midkine antibodies in the non-core medical diagnostics field:

o  highly synergistic - allows the Company to remain focused on the higher value therapeutic market while accelerating the diagnosis of patients with Midkine cancers to establish the Midkine cancer market

o  reduces the time and cost of clinical trials, and diagnostics have been shown to increase trial success rates[1]

o  highlights the Company's leadership position in Midkine and the Company's in-house deal making capabilities and is expected to strengthen the balance sheet

·      Formation of an expert Scientific Advisory Board of Professors Jo Martin, Trevor Jones and Armand Keating to review and advise on the development of the portfolio

·      Key milestone achieved with ROQ-A1 and ROQ-A2 Midkine antibody programs, targeting metastatic breast cancer, and lung and liver metastasis, successfully demonstrated in vivo safety in pre-clinical development programs and progressed into in vivo efficacy studies

·      The Company's first Orphan drug indication targets osteosarcoma in which, ROQ-A1 and ROQ-A2 demonstrated in vivo efficacy. This creates significant commercial potential for an Orphan drug designation which, if successful, would confer market exclusivity in multiple jurisdictions including seven years in the USA and 10 years in the EU and UK[2]

·      Portfolio further enhanced to a total of five programmes with the in-house development of a family of novel mRNA cancer medicines, which have demonstrated in vitro efficacy in validated models of breast and liver cancer

·      siRNA, MK cell therapy and Midkine oligonucleotide programs progressing into pre-clinical development  

·      Cash at period end of £1,379,021 and for the 6 months to 30 June 2023, net loss of £742,833

Post Period End Highlights

·      Patent portfolio significantly expanded with filing of the international phase PCT (Patent Treaty Cooperation) patent for proprietary anti-cancer mRNA and RNA oligonucleotide therapeutics, and new patent filing for its family of novel anti-cancer siRNA therapeutics

Outlook

·      On course with targets for clinical readiness for one of the Company's development programs during H2 2023

·      Near-term IND and licensing opportunities from advanced stage of development of Midkine portfolio products, MK cell and siRNA products

·      Strategic goal to take advantage of the paradigm shift that 90% of successful biotech programs are acquired by big pharma

·      Create value by identifying early innovation, developing it either in-house or with a research partner towards clinical trials and utilise experience to licence or sell to big pharma

Commenting on the Interim Results, Roquefort Therapeutics CEO Ajan Reginald said:

"In H1 2023, we have met the Company's strategic R&D targets, expanded our product portfolio to five programs with the addition of an innovative mRNA program, enhanced our IP leadership position in Midkine and STAT-6 siRNA and completed the partnership with Randox, one of the UK's leading medical diagnostics providers.

"To provide an industry context, our product portfolio now includes three programs (antibodies, siRNA and MK cell) with robust in vivo efficacy results, and so, our portfolio is more advanced in development than some leading UK biotech companies recently valued at US$100M. The STAT-6 siRNA is a good example of our strategy to discover and acquire unvalidated targets before big pharma realises the value. In July, Sanofi completed a US$1.2B deal with Recludix for their pre-clinical STAT-6 program, which is in the same pre-clinical stage of development as our STAT-6 siRNA program. Even though STAT-6 had been worked by pharma for circa 20 years, before this deal it was still an unvalidated target. After Sanofi's $Billion valuation and validation, many of the big pharma companies are seeking STAT-6 programs.

"Similarly, the Randox deal for diagnostics demonstrates the significant (under) valuation of the Midkine market, in which we have an IP leadership position. Randox, a sophisticated diagnostics company, acquired the rights for diagnostics only, and while diagnostics are highly synergistic and very important, this is a far less commercially valuable market than the Midkine therapeutics market.

"This industry context underpins our strategy to acquire and develop medicines in novel targets such as STAT-6 and Midkine before they are highly valued to create the potential for a step-change increase in value and M&A interest with validation. Until this external (big pharma) validation, we will continue to deliver the critical R&D milestones on time and within budget and continue to progress our business development discussions. However, the application of AI to drug development, has rapidly increased the speed of validation of novel targets e.g., Recludix' validated STAT-6 in just approximately 18 months. Therefore, rapid consolidation is predicted, particularly in the UK and Europe in which 46 M&A deals totalling US$5.6 billion were completed in Q1 2023, the second biggest year in recent records[3]. Roquefort Therapeutics is well positioned in this dynamic market, and we will of course update the market as our ongoing discussions progress."

Chairman's Statement 

I am pleased to present the interim results to shareholders for the six months ended 30 June 2023.  2022 was an incredibly busy period for the Company having completed the integration of the Oncogeni portfolio and enhanced our network of partnerships with leading cancer research centres. These partnerships complement our own world-class in-house expertise and laboratory infrastructure, enabling us to implement a broader and more effective development strategy and this distributed R&D model remains highly scalable and cost effective.

Building on the foundations laid in 2022 the Company has made significant R&D and strategic progress across the preclinical portfolio, particularly within our anti-cancer target, Midkine, where the Company has the leading portfolio and intellectual property suite. Our patent protected Midkine antibody programs achieved the relevant development milestones in the period on time and within budget. In January we announced our Midkine antibody programs, targeting metastatic breast cancer and metastatic lung cancer, demonstrated in vivo safety. 

During the period Roquefort Therapeutics formed its first Scientific Advisory Board (SAB) in order to help support its strategy and drive value through our preclinical programs. Professors Jo Martin, Trevor Jones and Armand Keating all with a wealth of experience formed the SAB during March, working closely with Chief Scientific Officer Martin Evans. This is a strong team of researchers, biopharmaceutical innovators and clinicians with an emphasis on linking pre-clinical research, clinical trials, production of medicines and the care of patients.  The Company is using its drug development expertise to complete pre-clinical development to reach valuation milestones for licensing transactions or a sale of a clinical program.

Pre-clinical progress

Further progress has since been made with our research partner, La Trobe University, and Roquefort Therapeutics is releasing further in vivo efficacy results for our lead antibody programs, CAB-101 (ROQA2) and CAB-102 (ROQA1) as well as a new program for an osteosarcoma orphan drug indication.  Osteosarcoma is the Company's first orphan drug indication and reflects the strategic decision to target cancer niches in which, there remains a high unmet clinical need. There are significant commercial benefits of an orphan drug indication such as market exclusivity for seven years in the USA and ten years in the EU and UK, tax credits for the clinical drug testing cost, fee reductions and, on average, have a higher success rate in clinical trials with a biomarker, in this case Midkine.

The in vivo efficacy study tested the anti-cancer killing ability of CAB-101 and CAB-102 in a validated experimental model of osteosarcoma. Treatment with CAB-101 was found to produce a statistically significant reduction in lung metastasis, and CAB-102 was found to reduce proliferation (growth rate) of the primary tumour.  The more detailed experimental results remain under embargo pending publication at a leading cancer research conference.  This is a particularly promising scientific and commercial strategy which was delivered on time and on budget and we will announce more updates on our pre-clinical progress and business development activities during H2.

Our anti-cancer RNA oligonucleotide program targeting Midkine expressing cancers produced >90% in vitro efficacy (at the mRNA level) in human liver and neuroblastoma cancer cells. This work has been conducted through strategic research partnerships at the Faculty of Medicine and Health at the University of Sydney and the Immune Oncology Laboratory at the School of Biomedical Sciences, University of New South Wales (UNSW). These experiments have unveiled a promising breakthrough in liver cancer treatment. Through the utilisation of these novel oligonucleotides, we have achieved remarkable in vitro efficacy, successfully inducing a significant reduction in full-length Midkine and generating a non-functional Midkine variant within liver cancer cells. This discovery holds immense potential for patients battling liver cancer, offering a new avenue for therapeutic intervention. The Company's anti-cancer RNA oligonucleotide program will now progress into in vivo studies which are planned to complete in Q4 2023.

During the period, the Company's portfolio grew materially. In March, the drug discovery team developed four mRNA pre-clinical therapeutics targeting Roquefort Therapeutics' novel Midkine target. This new program has been developed in-house within the Company's existing budget and schedule.

The significance of the mRNA program is twofold. First, it highlights Roquefort Therapeutics' internal R&D capacity to develop cutting edge pre-clinical cancer medicines within the Company's strategy and which complements the Company's ability to select and acquire external programs; and second, anti-cancer mRNA is a commercially attractive field, which is highly synergistic with the Company's existing oligonucleotide Midkine program. Further, in June 2023, Roquefort Therapeutics announced the successful completion of in vitro studies for the anti-cancer mRNA therapeutic in breast and liver cancer. The studies demonstrated a statistically significant reduction in both proliferation and migration.

mRNA is a very attractive field in biotech with a market size of circa $31 billion, led by Pfizer, Moderna and BioNTech and, within this highly innovative field, we are developing a Midkine niche which is unique for a biotech company of our size. These early in vitro results validate our strategy that demonstrating a significant reduction in both proliferation and migration are an early proxy for metastasis. Additionally, our intellectual property portfolio has been enhanced through updated patent filing. 

The Company will look to achieve synergies across our Midkine antibody, anti-cancer RNA oligonucleotide and mRNA programs which will make R&D and pre-clinical development more cost effective. 

The other two programs within our portfolio are also progressing. Our STAT-6 siRNA program has already demonstrated in vivo efficacy in colon cancer, and now the therapy is being combined with a lipid nanoparticle for delivery.  Further results on our STAT-6 siRNA program will be reported in due course. The MK Cell program is also completing testing in a combination therapy with results expected in Q4 2023.

Our five pre-clinical programs, which are in in vivo and in vitro studies, continue to progress on track and we look forward to announcing further progress in due course.

Commercial Progress

In February 2023, the Company made significant strategic and commercial progress by completing a licence and royalty agreement with Randox Laboratories to utilise the Group's Midkine antibody portfolio for clinical diagnostics. The transaction highlights the Group's in-house deal making capabilities and strategic focus in therapeutics. The partnership with Randox for cancer diagnostics validates the Company's strategy to target Midkine and brings a companion diagnostic.

This highly complementary and synergistic partnership increases the likelihood of clinical trial success, in which diagnostics is an essential element, in addition to reducing the associated time and cost for the Company.

Post Period End

In August 2023, the Company announced the development of four additional siRNA sequences to complement the existing siRNA portfolio.  These new siRNA sequences expand the Company's portfolio of siRNA medicines that attack the targets STAT-6 (Signal Transducer and Activator of Transcription) and its SH2 (Src-homology-2) domain.  The Company's siRNA sequences are being developed in combination with nano-particle delivery systems to target the hard-to-treat, high mortality solid cancers including colon and breast cancer with results expected in Q4 2023.

Strategy & Outlook

The Company's strategy is to discover and develop first-in-class cancer medicines within the oncology market and to seek out and secure licencing opportunities to crystalise value and fund the business going forward. Within this field, Roquefort Therapeutics focuses on the cancers that are resistant to current medicines including breast, colon and liver cancer, where patient survival rates remain poor. The Company's programs focus on the novel cancer targets Midkine and STAT-6, both of which are associated with this poor survival. By blocking Midkine and STAT-6, the Company has shown in in vivo studies, that both the cancer growth rate and metastasis are reduced, which are the characteristics of first-in-class cancer medicines. The significant developments made during the period speak to the Company's strategic objectives of developing value accretive programs which have significant potential as first-in-class medicines where survival rates are poor.  

The pre-clinical progress across all our programs is highly encouraging and within budget and in-keeping with our strategy and we look forward to updating shareholders on our pre-clinical and business development progress in due course.

Financial Review

For the six months to 30 June 2023, the Group reported a net loss of £742,833, mostly relating to administrative expenses and research & development expenses, and held cash at the period end of £1,379,021.

Directors

The following directors have held office during the period to 30 June 2023:

·      Mr Stephen West, Executive Chairman

·      Mr Ajan Reginald, Chief Executive Officer

·      Prof. Sir Martin Evans, Chief Scientific Officer

·      Dr Darrin Disley, Non-Executive Director

·      Ms Jean Duvall, Non-Executive Director

·      Mr Simon Sinclair, Non-Executive Director

·      Dr Michael Stein, Non-Executive Director

Corporate Governance

The UK Corporate Governance Code (September 2014) ("the Code"), as appended to the Listing Rules, sets out the Principles of Good Corporate Governance and Code Provisions which are applicable to listed companies incorporated in the United Kingdom. As a Standard listed company on the Main Market, the Company is not subject to the Code; however, the Board acknowledges the importance of high standards of corporate governance and endeavours, given the Company's size and the constitution of the Board, to comply with the principles set out in the QCA Corporate Governance Code. The QCA Code sets out a standard of minimum best practice for small and mid-size quoted companies and the Company has analysed its corporate governance with respect to that code which can be found on its website at https://www.roquefortplc.com/corporate-governance.

Responsibility Statement

The Directors are responsible for preparing the Unaudited Interim Condensed Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ("DTR") and with International Accounting Standard 34 on Interim Reporting ("IAS 34"). The Directors confirm that, to the best of their knowledge, this condensed interim report has been prepared in accordance with IAS 34 as adopted by the European Union. The interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

•      an indication of important events that have occurred during the six months ended 30 June 2023 and their impact on the condensed financial statements for the period, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

•      related party transactions that have taken place in the six months ended 30 June 2023 and that have materially affected the financial position of the performance of the business during that period.

ENDS

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LEI: ‎254900P4SISIWOR9RH34