27 September 2024

Roquefort Therapeutics plc

("Roquefort Therapeutics" or the "Company")

Interim Results to 30 June 2024

Roquefort Therapeutics (LSE:ROQ), the Main Market listed biotech company focused on developing first in class drugs in the high value and high growth immunology and oncology markets, is pleased to announce its interim results for the six-month period ended 30 June 2024 (the "period" or "H1").

Highlights

·      Signed a term sheet in May 2024 for the Company's first therapeutic out-licensing deal for its Midkine antibody program with PDC FZ-LLC ("PDC") for an initial consideration of US$10 million

·      Significant progress made across pre-clinical portfolio with positive results announced in MK cells, Midkine mRNA and STAT-6 siRNA programs

·      Convertible loan notes (the "Convertible Loan Notes") raising net proceeds of £584,915 announced in May 2024 providing funds for at least 12 months, in conjunction with Company's existing cash reserves

·      Significant cost cutting measures announced in May 2024 to further support cashflow, while working on completing cash generative out-licensing deals

·      Sir Martin Evans moved from his executive position as Chief Scientific Officer to Non-Executive Director and Dr Michael Stein stepped down as Non-Executive Director in May 2024

·      Cash at period end of £595,662 and a net loss of £596,547 for the 6 months to 30 June 2024

Post Period End Highlights

·      Additional experiments completed for potential out licensing partners for the STAT-6 siRNA program

·      European Patent Office and Japan Patent Office granted patents for the Company's MK cell therapy, across 40 countries including the UK, EU and Japan

·      The Company received a UK R&D refund of £123,593 in September 2024

Outlook

·      The Company continues to work with PDC towards finalising a binding out-licensing agreement for its Midkine antibody portfolio, with updates to be provided to the market in due course

·      The Company remains committed to securing other therapeutic licensing deals and is in active discussions in this regard

Commenting on the Interim Results, Roquefort Therapeutics CEO, Ajan Reginald said: "During the first half of the year we continued with our strategy to select novel medicines in high value pharmaceutical markets and developed them to deliver the results required to attract Big Pharma partners. This culminated in Roquefort Therapeutics announcing the signing of a term sheet for our first therapeutic licensing deal with PDC, whilst also engaging with multiple Big Pharma partners regarding our siRNA programs in Immunology and Inflammation. 

The Board is mindful of operational costs, and in May 2024 we raised the necessary funds for an additional 12 months, which enables us to complete the development of our pre-clinical programs and to retain the flexibility needed in negotiating the ongoing out-licensing transactions. I would like to thank my colleagues at Roquefort Therapeutics in completing the necessary pre-clinical milestones which have allowed the Company to engage in out-licensing discussions with large pharma companies and other partners. With excellent pre-clinical data, and the necessary funding in place, I am confident in our ability to complete additional licensing deals and look forward to providing our shareholders with further updates as appropriate."

Chairman Statement 

I am pleased to present the interim financial statements to shareholders for the six months ending 30 June 2024.

The highlight of the period was signing a term sheet for the out-licensing of our Midkine antibody portfolio to PDC, a leading MEA pharmaceutical organisation. Under the non-binding strategic out-licensing term sheet, Roquefort Therapeutics receives US$10 million total initial consideration value including a guaranteed share of the trade sale proceeds on successful completion of Phase 1 clinical trials. PDC will develop one or more of the Midkine antibodies within a new Special Purpose Vehicle ("SPV") to complete the Phase 1 clinical trial and then seek a trade sale of the SPV.  We are now working with PDC to complete the definitive licence agreement, and further updates will be made as this progresses.

A summary of the agreed commercial terms in the term sheet are listed below:

·      Initial consideration value of US$10 million, which includes non-dilutive equity in the SPV;

·      Exclusive worldwide licence granted to the SPV for 20 years;

·      Within three years, PDC to develop at least one of the Midkine antibodies within the SPV to the completion of a Phase 1 trial and then, upon success, to complete a trade sale of the SPV; and

·      Roquefort Therapeutics will receive circa 24% from any successful trade sale proceeds, which if the Phase 1 trial is successful, this 24% is projected to be worth up to US$50M (gross) based on similar phase 1 trade sales. 

Additionally, we made progress with further out-licensing discussions, notably for our STAT-6 siRNA program, with potential out-licensing partners requesting additional immunology in vitro experiments to be conducted. These preliminary experiments were completed in September 2024 with the Company's STAT-6 siRNA demonstrating efficacy in a validated in vitro experimental model of immunological disease. The Company believes that these positive immunology results enhance the Company's existing positive oncology results and therefore strengthens the program's attractiveness to potential licensees. The Company will update the market as this process progresses.

Producing compelling pre-clinical data remains important to our strategy of attracting partners to out-licence and sell our programs, and during the period we also provided encouraging updates on our MK cells, Midkine mRNA and STAT-6 siRNA oncology programs. In February 2024, we announced superior in vivo efficacy, when combining our MK cells with natural killer cells to demonstrate anti-cancer effect in leukaemia and lymphoma.

In March 2024 we announced significant pre-clinical development milestones, reporting positive results in Midkine mRNA and STAT-6 siRNA programs. The Company continued developing, in validated in vivo models, its Midkine mRNA therapeutics in combination with lipid nanoparticle ("LNP") delivery systems to target liver cancer, where Midkine is associated with disease progression. The experiment demonstrated safety and efficacy in reducing functional Midkine and is significant as it demonstrates when combining with a LNP, our mRNA as a potential anti-cancer medicine. This offers the potential to be a first in class medicine targeting the US$3 billion liver cancer market. The STAT-6 siRNA program continues to produce compelling data, and in March 2024, via validated in vivo models of colon cancer, we demonstrated efficacy of our four siRNA sequences in reducing STAT-6 expression by 40-50%. Similarly to the Midkine mRNA program, this offers the potential to be a first in class medicine in the US$12 billion colon cancer market.

In order to provide additional funding, the Company announced on 23 May 2024 the issuance of unsecured Convertible Loan Notes raising net proceeds of £584,915. This provides the Company with the necessary funding to continue to conduct pre-clinical studies and continue out-licensing discussions. The funding is sufficient for 12 months from June 2024 and is independent of any funds the Company receives from licensing deals. In addition to participating in the Convertible Loan Notes fundraise, the Directors' of Roquefort Therapeutics demonstrated their commitment to securing a licensing deal by taking a 50% reduction in salaries and Directors fees effective from 1 March 2024, and in August 2024 this reduction was increased to 75%. It is intended that salaries and Directors' fees will be re-instated to 100% when a cash generative licensing deal is completed.

Outlook

The Company continues with its strategy to discover first in class medicines, enhance their appeal through pre-clinical R&D and to then license or sell the program. Roquefort Therapeutics remains in active out-licensing discussions with potential partners, and it is our goal to secure binding agreements with one or more partners.  We are working towards reaching a binding agreement with PDC for our Midkine antibody portfolio as well as re-engaging with big pharma for our STAT-6 siRNA program now that we have demonstrated efficacy in a validated in vitro experimental model of immunological disease. The fundraise leaves the Company with the necessary funds to continue out-licensing discussions, and the Board is confident in the Company's ability to sign further agreements, which in turn are expected to generate value for all stakeholders.

Financial Review

For the 6 months to 30 June 2024, the Group reported a net loss of £596,547, mostly relating to administrative expenses. The Group maintained a sufficient balance sheet position at 30 June 2024, most notably holding cash at period end of £595,662.

Directors

The following directors have held office during the period to 30 June 2024:

Stephen West

Trevor Ajanthan (Ajan) Reginald

Prof. Sir Martin Evans

Dr Darrin Disley

Ms Jean Duvall

Dr Simon Sinclair

Dr Michael Stein (resigned on 23 May 2024)

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, 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.

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 2024 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 2024 and that have materially affected the financial position of the performance of the business during that period.

ENDS

Enquiries:

LEI: ‎254900P4SISIWOR9RH34