Corporate News & RNS

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Article 7 under the Market Abuse Regulations (EU) No. 596/2014 (“MAR”). With the publication of this announcement, this information is now considered to be in the public domain.

Fusion Antibodies plc (AIM: FAB), specialists in pre-clinical antibody discovery, engineering and supply for both therapeutic drug and diagnostic applications, announces its unaudited interim results for the six months ended 30 September 2019 (H1 FY2020).

Operational

• Increase in orders and revenues in H1 FY2020 over H1 FY2019
• First commercial projects of the new Rational Affinity Maturation Platform (“RAMP™”) service
• Continuing development of Mammalian Antibody Library, on track for delivery in 2020

Financial

• Continued improvement in revenues for H1 FY2020 of £1.75m (H1 FY2019: £0.66m)
• Continued reduction in loss for H1 FY2020 of £0.47m (H1 FY2019: £0.74m loss)
• Cash position at 30 September 2019 was £1.31m (31 March 2019: £1.98m)
• Trading for the year ending 31 March 2020 to date has been in line with market expectations

Commenting on the interim results, Paul Kerr, CEO of Fusion Antibodies plc, said: “Our revenues are growing apace, and we have seen a solid improvement in the performance of the business for this period, compared to the previous six months. We have received our first commercial revenues from early adopters ofRAMP™, and the feedback from the service has been very promising. We are on target to deliver significant revenue growth year on year and, as always, I would like to thank our shareholders and staff for all their valued support.”

Enquiries:

About Fusion Antibodies plc - www.fusionantibodies.com

Fusion is a Belfast based contract research organisation ("CRO") providing a range of antibody engineering services for the development of antibodies for both therapeutic drug and diagnostic applications.

The Company's ordinary shares were admitted to trading on AIM on 18 December 2017. Fusion provides a broad range of services in antibody generation, development, production, characterisation and optimisation. These services include antigen expression, antibody production, purification and sequencing, antibody humanisation using Fusion's proprietary CDRxTM platform and the production of antibody generating stable cell lines to provide material for use in clinical trials. Since 2012, the Company has successfully sequenced and expressed over 250 antibodies and successfully completed over 150 humanisation projects for its international, blue-chip client base, which has included eight of the top 10 global pharmaceutical companies by revenue.

The Company was established in 2001 as a spin out from Queen’s University Belfast. The Company’s mission is to enable pharmaceutical and diagnostic companies to develop innovative products in a timely and cost-effective manner for the benefit of the global healthcare industry. Fusion Antibodies provides a broad range of services in antibody generation, development, production, characterisation and optimisation.
Fusion Antibodies growth strategy is based on combining the latest technological advances with cutting edge science to deliver new platforms that will enable Pharma and Biotechs get to the clinic faster and ultimately speed up the drug development process. 

The global monoclonal antibody therapeutics market was valued at $95.5 billion in 2017 and is forecast to surpass $174.2 billion in 2026, an increase at a CAGR of 6.9 per cent. for the period 2018 to 2026. In 2018, seven of the world’s ten top selling drugs were antibody-based therapeutics with the combined annual sales of these drugs exceeding $62 billion.

Operational Review

As announced in October 2019, the Company’s order levels and revenues in the first six months of the financial year showed significant growth on the previous six-month period and a marked recovery from the comparable period last year. This has been achieved by addressing a number of external competitive pressures seen over the last two years, and by improving the Company’s marketing function and business development strategy.

In this period the Company recorded its first commercial revenues from the new RAMP™ service. RAMP™ provides customers with improvements to antibody affinity and other biophysical characteristics to optimise performance of their antibody. This service is available either as part of the suite of Fusion’s services or as a standalone service to companies with existing antibodies with sub-optimal performance. Initial results from early adopting customers are very promising and the commercial roll out of the service will continue throughout the year with presentations at scientific conferences and targeted marketing.

Having now launched the RAMP™ service, the next service in the development pipeline is the Mammalian Antibody Library (“the Library”). The Library will add an important new offering for antibody discovery and the Directors believe it will represent a technologically superior solution when compared to traditional methods and to other library offerings already available in the market. The Library is also expected to provide the additional benefit of a significant reduction in the time taken for this initial drug development phase. The Library will complement the Company’s existing discovery services and it will be offered alongside the traditional techniques providing an improved range of options to our customers.

It is planned that the Library will be delivered as a technologically ready project in H1 FY2021 (i.e. April to September 2020) with presentations to key opinion leaders, targeted marketing activity and performance of pilot studies commencing in the second half of FY2021. The Directors expect that the Company will be in a position to generate meaningful revenues from this service from FY 2022.

Financial Review

Revenues for the six-month period to 30 September 2019 were £1.75 million (H1 FY2019: £0.66 million). This continues the improvement seen in H2 FY2019 and is the Company’s strongest performance to date in a six-month period.

Operating loss for the first half was £0.62 million (H1 FY2019: £0.89 million). This result reflects that the Company has continued to invest in research and development of new services, expansion of capacity and development of sales and marketing, with a view to continued growth.

Basic loss per share has further reduced to £0.021 per share versus £0.034 loss per share in H1 FY2019.

Gross profit margin of 42% has improved on H1 FY 2019 (17%) although slightly below that seen in H2 FY2019 (45%) due to continued recruitment and training of scientists to enable the Company to deliver future growth. Revenue grants relating to employment are included in other income.

Administrative expenses include expenditure on overheads, board costs, sales and marketing, research and development as well as depreciation. Administrative expenses of £1.4 million have increased compared with H1 FY2019 of £1.1 million as a result of further investment in research and development, sales and marketing and an increase in depreciation arising from the investment in capital equipment throughout FY2019.

Cash used in operations was £0.55 million compared with £0.45 million used in H1 FY2019. The planned investment of funds in research and development, business development and marketing was expected to increase cash usage in H1 FY2020 and therefore this is in line with the Board’s expectations. EBITDA losses are reducing as shown in the Key Performance Indicators below and, as the laboratory expansion is complete, capital expenditure for the period reduced to £0.04 million compared with £1.22 million in H1 FY 2019. The cash at bank figure of £1.31million at 30 September 2019 is in line with Company plans. The Directors have reviewed detailed projections for the Company. These projections are based on estimates of future performance and have been adjusted to reflect various scenarios and outcomes that could potentially impact the forecast outturn. Based on these estimates, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for 12 months from the reporting date.  Accordingly, they have prepared these condensed financial statements on the going concern basis.

The Board is not recommending the payment of a dividend in relation to the first half of the current financial year.

Key Performance Indicators

The key performance indicators (KPIs) regularly reviewed by the board are:

* Earnings before interest, tax, depreciation and amortisation

Outlook

The Board is pleased to report that the company has restored revenues in all areas of its services, and is confident of sustained performance for the remainder of this year. The uptake of RAMP™ has been promising to date and the Company is optimistic for this to continue in the second half of the year.

The Directors believe that the antibody therapeutic market continues to grow, and that Fusion Antibodies remains in a strong position to grow and return to profitability.

However, the Company relies on multiple orders which, on average, are each worth below £100k and which the Company can execute within 2-3 months. The consequence of this is that the Board has limited visibility of orders and revenues beyond a three-month horizon.  However, the Directors continue to be confident that growth in order levels for existing and new services will continue.

Statement of Directors’ Responsibilities

The Directors confirm, to the best of their knowledge:

• The condensed set of financial statements has been prepared in accordance with IAS34 ‘Interim Financial Reporting’, as adopted by the European Union;
• The interim management report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules of the of the United Kingdom’s Financial Conduct Authority, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year, and gives a true and fair view of the assets, liabilities, financial positions and profit for the period of the company; and
• The interim management report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority, being a disclosure of related party transactions and changes therein since the previous annual report.

By order of the Board

Dr Simon Douglas
Non-executive Chairman

2 December 2019

Condensed Statement of Comprehensive Income
For the six months ended 30 September 2019

Condensed Statement of Financial Position
As at 30 September 2019

Condensed Statement of Changes in Equity
For the six months ended 30 September 2019

Cash Flow Statement
For the six months ended 30 September 2019