DJ Arix Bioscience PLC: Interim Results for the Six Months Ended 30 June 2020
Arix Bioscience PLC (ARIX)
Arix Bioscience PLC: Interim Results for the Six Months Ended 30 June 2020
08-Sep-2020 / 07:00 GMT/BST
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Arix Bioscience plc
Interim Results for the Six Months Ended 30 June 2020
LONDON, 8 September 2020: Arix Bioscience plc ("Arix", LSE: ARIX) a global
venture capital company focused on investing in and building breakthrough
biotech companies, today announces its interim results for the period ended 30
June 2020.
Financial highlights
· Net Asset Value of GBP251.0 million (December 2019: GBP202.1 million); 185p per
share (December 2019: 149p); a 24% increase for the first six months of 2020
· Net positive portfolio revaluation of GBP51.7 million[1] in the period
· Gross Portfolio Value of GBP203.4 million (December 2019: GBP149.2 million)
· GBP11.6 million of capital deployed into the portfolio during the period
· GBP9.1 million of capital realised during the period
· Cash of GBP44.0 million (December 2019: GBP54.6 million)
· 20% IRR generated by the Gross Portfolio since inception in 2016
=--
[1] Including FX
Operational and strategic progress:
· Significantly reduced net operating costs by over 35%, to an annual run
rate of approximately GBP5.0m by the end of 2021, (down from GBP8.0m in 2019)
which represents less than 2% of current NAV (down from 4.0% in 2019).
· Further strengthened the Arix platform with the establishment of a
Scientific Advisory Board (SAB) comprised of leading researchers and industry
executives dedicated to improving treatments for patients.
· Naseem Amin appointed as Executive Chairman, bringing over 29 years of
experience in the life sciences industry. Former roles include: CSO at Smith
& Nephew, VP of Business and Clinical Development at Biogen and Genzyme.
· Christian Schetter moved into a Managing Director role, bringing 22 years
of operating experience to the senior team and a track record of building
successful biotech companies through to product approval and/or acquisition
by big pharma.
· Jonathan Tobin appointed to Managing Director, recognising his commitment
and contribution to advancing great science through Arix's portfolio of
innovative biotech companies.
· Further strengthened Arix senior team with the appointment of Noor Lalani
to Public Investments Director, bringing over 15 years of capital markets and
portfolio management expertise.
Portfolio highlights
· $391.5 million of proceeds raised by Arix portfolio companies in the year
to date
· Imara raised gross proceeds of $86.5 million in a Nasdaq IPO, in which
Arix invested $3.0 million (GBP2.4 million)
· Quench Bio completed a $35.0 million Series A financing, in which Arix
committed $6.0 million (GBP4.6 million)
· Autolus completed an $80.0 million follow-on financing from leading
institutional investors
· Amplyx completed a $53.0 million Series C extension, from new investors
Pfizer and Adage Capital
· Post-period end, VelosBio completed a $137.0 million Series B financing,
in which Arix invested $4.0 million (GBP3.2 million)
· Continued clinical progress in the portfolio:
· Autolus (17% of NAV) reported positive data from its AUTO1 programme in
adult Acute Lymphoblastic Leukaemia (adult ALL) and transitioned this
programme into a pivotal trial. The company also reported encouraging data
from its AUTO3 programme in diffuse large B-cell lymphoma (DLBCL)
· Imara (14% of NAV) reported encouraging initial Phase 2a data from its
IMR-687 clinical study for patients with sickle cell disease (SCD) and
initiated Phase 2b trials in SCD and beta-thalassemia
· Harpoon (12% of NAV) reported positive interim Phase 1 data from its
HPN424 programme in prostate cancer and announced the dosing of the first
patient with HPN217 in a Phase 1/2 clinical trial focused on relapsed,
refractory multiple myeloma (RRMM), which triggered a $50 million milestone
payment from AbbVie
· Aura (4% of NAV) presented further positive safety and efficacy data from
the ongoing AU-011 Phase 1b/2 study for choroidal melanoma
· Atox Bio (3% of NAV) completed its Phase 3 pivotal study for necrotizing
soft tissue infections (NSTI) and is preparing to submit a New Drug
Application (NDA) in Q3 2020, following a meeting with the U.S. Food and
Drug Administration (FDA)
· Amplyx (2% of NAV) announced positive top line data following the
completion of its Phase 2 clinical trial of fosmanogepix (APX001) as a
first-line treatment for patients with invasive fungal infections caused by
Candida. Additionally Amplyx announced that the first patient has been
dosed in its Phase 2 clinical trial evaluating the efficacy and safety of
MAU868 for the treatment of BK viremia in kidney transplant recipients
Outlook - Key anticipated milestones
Data generated from our clinical pipeline will be a key driver of value and
whilst clinical development is not without risk, and the recruitment of
clinical trials globally has been impacted by the coronavirus pandemic, we have
a number of portfolio companies approaching key milestones over the next 18
months. In particular, we note the following anticipated value-driving
milestones across our portfolio:
· Autolus (17% of NAV) expects to present long term follow up Phase 1 data
from its AUTO1 programme in adult ALL by the end of 2020, with pivotal data
expected in H2 2021 and approval targeted for 2022. Autolus also expects to
report updated Phase 1 data from AUTO3 in DLBCL by the end of 2020 and over
the next 18 months the company expects to transition multiple next generation
programmes into the clinic.
· Imara (14% of NAV) expects to announce updated results from its IMR-687
Phase 2a clinical study in sickle cell disease (SCD) by the end of 2020 and
report interim Phase 2b data in SCD and beta-thalassemia in 2021.
· Harpoon (12% of NAV) expects to present interim data from its HPN536
Phase1/2a clinical trial for ovarian and pancreatic cancer and initiate the
HPN328 Phase 1/2 clinical study in small cell lung cancer by the end of 2020.
· Artios (8% of NAV) expects to file an Investigational New Drug (IND)
application for its ATR inhibitor programme by the end of 2020, with Phase 1
initiation planned for H1 2021.
· LogicBio (8% of NAV) expects to initiate a Phase 1/2 clinical study for
LB-001 for the treatment of methylmalonic acidemia in the first half of 2021.
· Aura (4% of NAV) expects to initiate a Phase 2 clinical trial evaluating
suprachoroidal (SC) delivery of AU-011 in patients with choroidal melanoma,
in the second half of 2020. Aura also expects to report Phase 2 data from the
Phase 3 eligible patient cohort of its clinical trial evaluating intravitreal
injection (IVT) administration of AU-011 in patients with choroidal melanoma
in H1 2021.
· Atox Bio (3% of NAV) expects to submit an NDA with the FDA by the end of
2020, for its NSTI drug reltecimod, under Accelerated Approval Pathway.
· Amplyx (2% of NAV) expects to report interim Phase 2 data in Candida auris
and invasive aspergillosis by the end of 2020 and plans to initiate a Phase 3
trial in invasive candidiasis by the end of 2021.
Dr Naseem Amin, Executive Chairman of Arix Bioscience plc, commented:
"This has been a pivotal period for Arix and our companies. We have refocused
and streamlined the business, significantly reducing costs in order to maximise
returns for our shareholders. Over the period our portfolio has continued to
make strong progress, with a number of companies reaching important clinical
milestones and completing additional financing rounds at higher valuations.
The COVID-19 pandemic has presented an unprecedented challenge to the
healthcare sector and economies worldwide. During this time, we have been
working closely with our portfolio companies to help support them through this
disruption and minimise any impact to ongoing clinical trials and scientific
research. We have been fortunate in seeing minimal delays to clinical trials
across the portfolio, in part due to the acute setting that many of these
companies operate in. We syndicate all our deals with top tier biotech venture
capital firms, and as such our portfolio companies are well financed and well
positioned to navigate through any potential delays as a result of the
pandemic.
We enter the second half of 2020 with strong momentum in our portfolio and with
multiple additional clinical data readouts expected. In addition to clinical
milestones, there is potential for M&A, strategic partnerships and other
financing events across the portfolio, which could significantly increase the
value of our companies, and in turn our NAV. Whilst the development of
important new medicines always carries risk, over the next three years we
expect to see at least two additional IPOs across the portfolio and at least
two exits. We are targeting an annual IRR of 15 to 25 per cent, generating a
NAV of up to GBP500m by 2023. Through strong execution of our strategy we expect
to generate significant returns for our investors over the medium to long term,
through capital growth and the potential for distributions where returns exceed
the capital needed for reinvestment. We have a highly seasoned leadership and
ambitious team, supported by a high calibre Scientific Advisory Board and
Board, and close relationships with pharmaceutical and academic partners. These
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DJ Arix Bioscience PLC: Interim Results for the Six -2-
give us a unique platform and competitive advantage to execute our strategy." Conference Call and Presentation Information The Arix interim results presentation is available to view on our investor relations website at: https://arixbioscience.com/investor-relations/events-presentations [1] The Arix management team will host a Q&A conference call today, 8 September, at 12:30 pm BST/ 7:30am EST, to answer questions on the interim financial results and operational progress. To access the live and subsequent replay of this webcast, please register here [2]. The call may also be accessed by dialling +44 (0)330 336 9411 or +1 323-794-2597. Please reference confirmation code 8212826. [ENDS] Enquiries For more information on Arix, please contact: Arix Bioscience plc Charlotte Parry, Head of Investor Relations +44 (0)20 7290 1072 charlotte@arixbioscience.com Optimum Strategic Communications Mary Clark, Supriya Mathur T: +44 (0) 20 3950 9144 optimum.arix@optimumcomms.com About Arix Bioscience plc Arix Bioscience plc is a global venture capital company focused on investing in and building breakthrough biotech companies around cutting edge advances in life sciences. We collaborate with exceptional entrepreneurs and provide the capital, expertise and global networks to help accelerate their ideas into important new treatments for patients. As a listed company, we are able to bring this exciting growth phase of our industry to a broader range of investors. www.arixbioscience.com [3] Arix Bioscience plc Half-Yearly Report and Condensed Consolidated Interim Financial Statements Six months ended 30 June 2020 Executive Chairman Statement Overview Arix has made strong progress in the first half of 2020. Net Asset Value (NAV) increased by 24% over the first six months of 2020 to GBP251 million (185p per share), and we see significant momentum building across our portfolio. Since moving into the Executive Chairman role in April 2020, I have been working with the board and management team to refocus and strengthen the business, in order to drive value for our shareholders. We have made considerable progress in the past few months and I am confident that the business is now optimally positioned to maximise the significant potential across the portfolio and as such, returns for investors. Notably we have reduced net operating costs (excluding depreciation and amortisation) by over 35% to an annual run rate of approximately GBP5.0m in 2021, (down from GBP8.0m in 2019) which represents less than 2% of current NAV. We have expanded the expertise of the team and further enhanced our networks, with the addition of a Scientific Advisory Board, comprising leading researchers and industry executives. We have also completed a portfolio and strategy review, following which we have decided to focus on 11 companies (out of 16 in the Gross Portfolio) which we believe have the potential to deliver significant value for investors over the short to medium term. These 11 companies make up 97% of Gross Portfolio Value. We will continue to work closely with these companies, supporting our active investments through important clinical milestones. There is already significant value in these companies and with multiple clinical milestones expected over the next 18 months, we see significant growth potential across this portfolio in the near term. In addition to clinical milestones, there is potential for M&A, strategic partnerships and other financing events across the portfolio which could significantly increase the value of our companies, and in turn our NAV. Over the next three years we expect to see at least two additional IPO's, two or more exits and there is potential for three approved products across the portfolio by 2023. We are targeting an IRR of 15%-25%, generating a NAV of up to GBP500m by 2023. We remain focused on life sciences, investing in the most innovative companies addressing serious unmet medical need, unconstrained by geography, stage of development and therapeutic area. Going forward, we see 10-15 portfolio companies as the portfolio size that the management team can support. We expect two-thirds of our investments will be in clinical stage companies, with the remainder in seed and Series A investments. Overall, the portfolio made good progress in the first six months of 2020, with several companies reaching important clinical milestones and completing additional financing rounds, as detailed below. We invested GBP12 million into the Gross Portfolio in the period, including new investments in Imara, VelosBio and Quench Bio, as well previously tranched milestone investments into existing portfolio companies (Atox Bio, STipe Therapeutics and Aura Biosciences). In aggregate, our portfolio companies raised $392 million during the six-month period, putting them in a strong position to execute on their important clinical development programmes. As we continue to place a greater emphasis on realisations, we were pleased to sell down a further 15% of our holding in Harpoon during the period; we achieved a blended price of over $21 a share, near the stock's all-time highs, which generated cash proceeds of $8.1 million (GBP6.6 million). We have now realised GBP10.9 million from our investment in Harpoon, at an IRR of 49%, and still retain an 8.8% stake in the business, which was valued at GBP29.5 million at the period end. To date we have realised GBP13 million from the Gross Portfolio through active management of our public holdings, leveraging our deep understanding of the companies we have invested in to optimise the timing of our disposals. We expect to derive further value from the growth of our portfolio over the next 12-18 months, through either M&A, IPO and/or equity sale, which will provide fresh capital for us to re-invest in the next generation of the portfolio and offers the potential to return value to shareholders. The timing of any disposals is guided by our deep understanding of the risk adjusted value of our portfolio companies, which we have been invested in and worked closely with for several years. Portfolio Performance Portfolio companies continued to make good clinical and financial progress. Successful financing rounds with valuation uplifts were completed by Imara (+46%), VelosBio (+95%) and Quench Bio (+40%). In addition, the share prices of portfolio companies listed on the Nasdaq generally performed well during the period. Operationally, there was good progress in the portfolio, with notable highlights including positive data readouts from Autolus, Harpoon, Aura, Amplyx and Imara, along with new trial initiations from Autolus, Harpoon and Aura. Our portfolio companies are collectively running 19 clinical trials and conducting over 20 pre-clinical studies, providing Arix with multiple shots on goal for value creation. Key Portfolio Company Updates Clinical Companies Imara (17% of GPV, 14% of NAV) Imara is developing IMR-687 for the chronic treatment of sickle cell disease (SCD) and beta-thalassemia. The company made strong operational and clinical progress over the period, notably completing a successful Nasdaq IPO raising $86.5 million. Arix invested a further $3.0 million (GBP2.3 million) in the IPO, retaining a total stake of 9.0% in the business. At 30 June, Arix's stake was valued at GBP34.8m, reflecting a valuation increase of GBP19.6m in the period. Imara has also made strong clinical progress this year. During the period, the company reported positive Phase 2a interim safety and efficacy data for its lead product candidate, IMR-687, in patients with SCD. The data demonstrated that IMR-687 was well tolerated as a monotherapy and in combination with hydroxurea (HU), the current standard of care. Following these results, the company has initiated Phase 2b clinical trials in both SCD and beta-thalassemia. Additionally, the FDA granted IMR-687 Orphan, Fast Track and Rare Pediatric Disease designations in patients with beta-thalassemia. Post period end, the European Commission granted Orphan Drug designation for IMR-687 for patients with SCD. IMR-687 has previously been granted Orphan Drug, Fast Track and Rare Pediatric Disease designations from the FDA for patients with SCD. Finally, Imara is leveraging IMR-687's differentiated mechanism of action to begin preclinical studies exploring its potential for the treatment of heart failure with preserved ejection fraction, or HFpEF. The company expects to report top-line data from its ongoing Phase 2a clinical trial in SCD during the fourth quarter of 2020 and currently does not anticipate any delays due to the COVID-19 pandemic. Harpoon Therapeutics (15% of GPV, 12% of NAV) Harpoon is a clinical-stage immunotherapy company developing a novel class of T cell engagers that harness the power of the body's immune system to treat patients suffering from cancer and other diseases. The company continues to make good clinical progress with its TriTAC(R) T cell engager pipeline. During the period Harpoon presented encouraging interim Phase 1 data for its lead programme, HPN424, in patients with metastatic castration-resistant prostate cancer. Initial safety data showed that HPN424 is generally well tolerated, and early signals of clinical activity were suggested by multiple patients remaining on study for more than 24 weeks. During the period Harpoon also provided an update on its second programme, HPN536, currently being studied for the treatment of mesothelin-expressing tumours. Harpoon highlighted that the dose escalation portion of the study was progressing and, as of May 2020, included 15 ovarian and 10 pancreatic cancer patients. Adverse events were shown to be transient and manageable, and early pharmacokinetic data showed half-life extension supporting once-weekly dosing. In addition, the company announced the dosing of the first patient with HPN217
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DJ Arix Bioscience PLC: Interim Results for the Six -3-
in a Phase 1/2 clinical trial focused on relapsed/refractory multiple myeloma
(RRMM). HPN217 is covered by a global development and option agreement with
AbbVie Inc. and dosing of the first patient in the clinical trial triggered a
$50 million milestone payment, which was received in June. HPN217 targets
B-cell maturation antigen (BCMA), a well-validated target expressed on multiple
myeloma cells. HPN217 is Harpoon's third product candidate to enter the clinic.
In July, Harpoon also submitted an IND for HPN328, its fourth TriTAC pipeline
programme, for the treatment of DLL3-expressing tumours including small cell
lung cancer. During the second half of 2020, Harpoon expects to advance HPN328
into the clinic and report data from its HPN536 programme.
As of the date of Harpoon's second quarter interim report, the company had not
yet experienced any material delays or impacts as a result of COVID-19.
Autolus Therapeutics (21% of GPV, 17% of NAV)
Autolus is developing next generation programmed T cell therapies for the
treatment of cancer. The company continued to make strong clinical progress in
the period, reporting encouraging Phase 1 data in its AUTO1 programme in adult
ALL, which showed a favourable safety profile, high level of clinical activity,
with a high rate of CRs that continue to be sustained. Notably, these positive
results have enabled Autolus to progress AUTO1 to a pivotal Phase 1b/2 trial.
The company is targeting having full data by the end of 2021, with potential
Biologics License Application (BLA) filing targeted for 2022.
During the period, Autolus also reported positive data from its second later
stage programme, AUTO3, in diffuse large B-cell lymphoma (DLBCL), which showed
encouraging signs of durable complete responses and a strong safety profile,
supporting potential for outpatient use. As an outpatient therapy, AUTO3 would
be able to reach the total addressable relapsed refractory DLBCL patient
population, giving it a strong competitive advantage.
Autolus also presented positive pre-clinical data across several different next
generation programmes at the American Association for Cancer Research (AACR)
conference in June. These included AUTO5 (T cell lymphoma), AUTO6 NG (small
cell lung cancer) and AUTO7 (prostate cancer).
During the COVID-19 crisis Autolus has continued to manufacture from its UK
operations at the Cell and Gene Therapy Catapult located in Stevenage without
interruption, including supply of clinical product for the treatment of US
DLBCL patients in its AUTO3 study.
Autolus will have a further data updates for AUTO3 at ESMO in September and
further updates for both AUTO1 and AUTO3 in Q4 2020 and expects to initiate new
Phase 1 clinical trials in pediatric ALL (AUTO1NG) and multiple myeloma (AUTO8)
in the second half of 2020.
VelosBio (9% of GPV, 7% of NAV)
VelosBio is a next-generation oncology company, developing novel antibody-drug
conjugates (ADCs) to treat haematological cancers and solid tumours. Shortly
after the period-end, VelosBio completed an oversubscribed Series B financing
of $137.0 million following strong interest from leading, global healthcare
investors. The financing recognised a 95% (GBP7.9 million) uplift in the book
value of Arix's holding in VelosBio at 30 June.
The proceeds from the Series B round will be used to further advance the
clinical development of Velos' lead compound, VLS-101, and support the
continued expansion of its pipeline of bispecific antibodies and
next-generation ADCs against the novel cancer target, ROR1 (a cell surface
antigen present on a range of haematologic and solid tumour malignancies).
VLS-101 is a ROR1-directed ADC that is currently being studied in a
first-in-human Phase 1 clinical trial in patients with refractory haematologic
cancers, with studies in solid tumour patients to begin later this year. The
company expects to report Phase 1 data from VLS-101, in haematological cancers,
by the end of this year.
On 31 August, VelosBio announced the FDA has granted the company Fast Track and
Orphan Drug designation for VLS-101 for the treatment of patients with mantle
cell lymphoma (MCL).
Amplyx (3% of GPV, 2% of NAV)
Amplyx is a clinical stage biopharmaceutical company developing innovative
therapies for debilitating and life-threatening diseases in patients with
compromised immune systems. During the period Amplyx announced positive topline
data following the completion of its Phase 2 clinical trial of fosmanogepix
(APX001) as a first-line treatment for patients with invasive fungal infections
caused by Candida. The trial met its primary efficacy endpoint, demonstrating a
treatment success rate of 80%. Fosmanogepix was well tolerated with no
treatment-related serious adverse events or discontinuations and importantly,
patients were able to easily transition from intravenous to oral formulations
during their treatment.
In August, post period end, Amplyx announced that the first patient has been
dosed in its Phase 2 clinical trial evaluating the efficacy and safety of
MAU868 for the treatment of BK viremia in kidney transplant recipients. MAU868
is a novel, human monoclonal antibody that potently neutralises all four major
genotypes of BK virus (BKV), for which there are currently no treatment
options. Dosing the first patient represents a strong start to this important
clinical trial and a key milestone in Amplyx's development programme, taking
the business one step closer to bringing a first-in-class treatment to the
vulnerable patients at risk for this devastating transplant complication.
The current pandemic has highlighted how devastating infectious diseases can be
and reinforces the need for new and novel anti-infective agents capable of
combating emerging threats. During these unprecedented times, Amplyx is aware
of the challenges being faced by health services and the clinicians at the
front line of delivering health care. Despite these challenges, their Phase 2
studies and expanded access programs remain open.
Aura Biosciences (4% of GPV, 4% of NAV)
Aura Biosciences is a clinical-stage biopharmaceutical company developing a new
class of oncology therapies based on the combination of a viral like particle
with high affinity to tumour cells coupled to a laser-activatable dye. Aura's
drug binds to malignant tumour cells with high specificity and once the dye is
activated by a short laser treatment there is an acute tumour cell necrosis.
During the period, Aura presented updated clinical data from its ongoing Phase
1b/2 clinical trial evaluating the safety and efficacy of light-activated
AU-011, Aura's lead product candidate for the first line treatment of primary
choroidal melanoma, a rare and aggressive type of eye cancer. This open-label,
multicentre trial is designed to investigate single and multiple ascending
doses of light-activated AU-011, administered via intravitreal injection, in
adult subjects with clinically diagnosed primary choroidal melanoma. The
clinical data presented during the period show that AU-011 has a favourable
preliminary safety profile, controls tumour growth rate, and preserves vision
in the vast majority of patients, including those at high risk for vision loss
with tumours close to the fovea and optic nerve. In the Phase 2 part of this
study the company has enrolled patients with documented tumour growth prior to
treatment, constituting the patient population targeted in a potential future
Phase 3 study. In this cohort an optimised dose and treatment schedule is
applied. The data are currently maturing to provide support of tumour growth
control at 12 months post treatment in this relevant Phase 3 eligible patient
population and the trial continues to be supportive of further clinical
investigation in pivotal studies.
Aura is also planning to initiate a Phase 2 clinical trial evaluating
suprachoroidal (SC) delivery of AU-011 in patients with choroidal melanoma, in
the second half of 2020. Aura believes that delivering AU-011 into the
suprachoroidal space within the eye, has the potential to maximise
bioavailability at the tumour site and could allow for the treatment of a wider
range of tumour sizes (small to medium size tumours), and therefore, a larger
number of patients.
Atox Bio (3% of GPV, 3% of NAV)
Atox Bio is a late stage clinical company that develops immunotherapies for
critically ill patients. During the period, Atox Bio announced results from its
Phase 3 clinical trial for patients with Necrotizing Soft Tissue Infection
("Flesh Eating Disease"). The results were published in the journal Annals of
Surgery in a paper titled "A Novel Immune Modulator for Patients with
Necrotizing Soft Tissue Infections (NSTI): Results of a Multicenter, Phase 3
Randomized Controlled Trial of Reltecimod (AB 103)". Results from the trial
showed that Atox Bio's drug Reltecimod had a positive effect on resolution of
organ dysfunction patients with necrotizing soft tissue infection (NSTI).
NSTI is a potentially life-threatening condition with significant morbidity and
long-term mortality that has no FDA-approved treatment. As this was the first
pivotal study ever performed in NSTI, a necrotizing infection clinical
composite endpoint (NICCE) was developed. This endpoint was designed to assess
both the local and systemic components of NSTI and included the measurement of
resolution of organ dysfunction/failure. Treatment effects in composite NICCE
primary endpoint were significant in the clinically evaluable (CE) population
analysis but not in the primary modified intent to treat analysis. Atox Bio
believes that, the CE population reflects the more clinically relevant and
statistically appropriate patient population for evaluation of the treatment
effect of reltecimod. The company has reviewed the top line results of this
trial with the US Food & Drug Administration (FDA) and, based on these
discussions, plans to submit a New Drug Application (NDA) to the FDA in Q3 2020
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DJ Arix Bioscience PLC: Interim Results for the Six -4-
under the Accelerated Approval Pathway. This is a major milestone for the
company and takes it one step closer to a potential treatment option for
patients with this debilitating disease.
Pre-clinical companies
LogicBio Therapeutics (10% of GPV, 8% of NAV)
LogicBio Therapeutics is a genome editing company, dedicated to extending the
reach of genetic medicine with pioneering targeted delivery platforms. In
August, post period end, LogicBio announced that the FDA has cleared its IND
application for LB-001 for the treatment of methylmalonic acidemia in
paediatric patients. This is an important step forward for LogicBio, enabling
the company to move LB-001 towards clinical development. The SUNRISE study is a
multi-centre, open-label, Phase 1/2 clinical trial designed to assess the
safety and tolerability of a single intravenous infusion of LB-001 in
paediatric patients with MMA characterized by methylmalonyl-CoA mutase gene
(MMUT) mutations. The trial is expected to enrol eight paediatric patients with
ages ranging from six months to 12 years, initially starting with three to
12-year-old patients and then adding patients aged six months to 2 years.
LogicBio expects to initiate the Phase 1/2 clinical trial next year, enrolling
the first patient in early 2021.
LogicBio is also developing a Next Generation Capsid platform for use in gene
editing and gene therapies. Data presented have shown that the capsids deliver
highly efficient functional transduction of human hepatocytes with improved
manufacturability with low levels of pre-existing neutralizing antibodies in
human samples. Top-tier capsid candidates from this effort demonstrated
significant improvements over benchmark AAVs currently in clinical development.
LogicBio is developing these highly potent vectors for internal development
candidates and potentially for business development collaborations.
Artios Pharma (9% of GPV, 8% of NAV)
Artios continued to advance its world-leading DDR programmes, bringing the
company closer to clinical data. Artios has made significant progress on its
ATR inhibitor in-licensed from MD Anderson as well as on its Pol Theta
programme, with first development candidates for ATR (ART0380) scheduled to be
IND ready by Q4 2020 and the Pol theta candidate ART4215 by Q2 2021. These will
be important milestones for the company, taking it a step closer to clinical
development of two DDR assets in 2021, with the first Phase 1 clinical trial
expected to commence for ART0380 in January 2021. In addition, the company
continued to work on its extensive pipeline of nuclease inhibitors that work in
different genetic backgrounds. Earlier this year, the company expanded its team
with the appointment of Bryony Harrop (formerly Oncology Delivery Director at
Astra Zeneca), as Vice President of Clinical Development to prepare its broad
pipeline of innovative cancer treatments for the clinic.
Drug Discovery Companies (5% of GPV, 4% of NAV)
These companies are start-ups in the initial stages of research and
development. As such they are higher risk but have the potential to deliver
significant value as they progress towards clinical development. Notably,
during the period we announced the Series A financing and launch of Quench Bio,
a company that we created and seeded with Atlas Venture in June 2018. This is
the first company we have co-founded and formed from scratch, combining
scientific discoveries from professors in Germany with entrepreneurs and
co-investors in Boston. It encapsulates the benefits of Arix's transatlantic
footprint and culture.
COVID-19 Impact
The COVID-19 pandemic has presented an unprecedented challenge to public
healthcare systems and economies worldwide. The safety and wellbeing of our
employees is paramount, and we have adapted day-to-day operations to ensure
that our team have been able to continue to work effectively from home despite
the COVID-19 pandemic.
During this time, we have been working closely with our portfolio companies to
help support them in navigating through this disruption and minimising impact
to ongoing clinical trials and scientific research. We have been fortunate in
seeing minimal delays to clinical trials across the portfolio, in part due to
the areas these companies operate in. We syndicate all our deals with top tier
biotech venture capital firms, and as such our portfolio companies are well
financed and well positioned to navigate through any potential delays as a
result of the pandemic. Whilst clinical development is never without risk, we
are confident that our companies are in strong positions to deliver significant
growth over the long term.
Outlook
Arix has built a promising portfolio of highly innovative biotech companies
developing therapies in important areas of medical need. Having completed the
portfolio review, I am confident that we have 11 companies that have potential
to deliver significant value for our investors over the near to medium turn. We
are working closely with these companies to help them develop their clinical
programmes, finances and options for value realisation.
Our portfolio companies have made significant progress in a relatively short
period of time and are moving towards key clinical and development milestones
in the year ahead. We enter the second half of 2020 with strong momentum in our
portfolio. We expect data from several important clinical studies by the end of
2020, notably Phase 1/2 data from Autolus, Harpoon and VelosBio and Phase 2
data from Imara. Additionally, we expect Atox Bio to submit an NDA for
Reltecimod in NSTI, taking it closer to being the first treatment for patients
with this debilitating disease. We also expect a number of these companies to
initiate further clinical studies by the end of the year, including Autolus,
Aura, and Harpoon.
In addition to clinical milestones, there is potential for M&A, strategic
partnerships and other financing events across the portfolio, which could
significantly increase the value of our companies, and in turn our NAV. Over
the next three years our goal is to derive value from the growth in our
portfolio companies, through M&A, IPOs and/or sale of equity and we expect to
deliver at least two strategic exits, at least two additional IPO's and see
potential for three approved products across the portfolio. We are targeting a
NAV of up to GBP500m by 2023, with an IRR of 15%-25%, which we believe to be both
an ambitious and attainable target based upon upcoming catalysts across the
portfolio.
Through strong execution of our strategy we expect to generate significant
returns for our investors over the medium to long term, through capital growth
and the potential for distributions where returns exceed the capital needed for
reinvestment. We have a highly seasoned leadership and ambitious team,
supported by a high calibre Scientific Advisory Board and Board, and close
relationships with pharmaceutical and academic partners. These give us a unique
platform and competitive advantage to execute our strategy.
Additionally, the Board will be working to further strengthen corporate
governance, which will include the appointment of a Senior Independent Director
as part of the Company's commitment to the UK Corporate Governance Code.
The current COVID-19 pandemic has highlighted the importance of our industry
and the continued need for innovation and new treatment options. Our vision to
address significant unmet needs in healthcare, through partnering with the most
innovative entrepreneurs, will continue to remain of profound importance and
offers significant opportunity.
Naseem Amin, MD
Executive Chairman
Condensed Consolidated Interim Statement of Comprehensive Income
Note Half Year to 30 Half Year to 30
June 2020 June 2019
(unaudited) (unaudited)
GBP'000 GBP'000
Change in fair value 8 42,624 (39,058)
of investments
Revenue 7 192 266
Administrative (3,830) (5,343)
expenses
Operating profit / 38,986 (44,135)
(loss)
Net finance income 87 480
Foreign exchange 9,306 743
gains
Impairment of - (485)
right-of-use asset
Share-based payment 11 585 (1,411)
credit/(charge)
Profit / (loss) 48,964 (44,808)
before taxation
Taxation 9 - 5,883
Profit / (loss) for 48,964 (38,925)
the period
Other Comprehensive
Income
Exchange differences 536 91
on translating
foreign operations
Total comprehensive 49,500 (38,834)
income / (loss) for
the period
Attributable to
Owners of Arix 49,500 (38,834)
Bioscience plc
Earnings per share
Basic earnings per 6 0.38 (0.30)
share (GBP)
Diluted earnings per 6 0.35 (0.30)
share (GBP)
The above condensed consolidated interim statement of comprehensive income
should be read in conjunction with the accompanying notes, on pages 13 to 20.
Condensed Consolidated Interim Statement of Financial Position
Note 30 June 2020 31 December 2019
(unaudited) (audited)
GBP'000 GBP'000
ASSETS
Non-Current Assets
Investments held at fair 8 206,157 151,921
value
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September 08, 2020 02:00 ET (06:00 GMT)
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