Corporate News & RNS

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 2024 (“H1 FY2025”). 

Financial highlights

• Revenues of £1.2 million (H1 FY2024: £0.5 million)
• Expenditure on R&D maintained at £0.18 million (H1 FY2024: £0.18 million)
• Loss of £0.76 million (H1 FY2024: £1.4 million loss)
• Cash position in the bank at 30 September 2024 was £0.4 million (31 March 2024: £1.2 million) with a further £457k owed by existing debtors
  

Operational highlights

• First contract to develop a bespoke non-human antibody species OptiPhage^TM library secured
• Continued progress in development of the OptiMAL® library
• Collaboration Agreement with the National Cancer Institute (“NCI”) was expanded to include the humanisation of several of the NCI’s existing camelid nanobodies
• Receipt of Further orders from a leading diagnostics company under the master services agreement (“MSA”) announced on 14 February 2024

Commenting on the interim results, Adrian Kinkaid, CEO of Fusion Antibodies plc, said: “These interim figures bear witness to the significant improvements to the business and the more favourable market conditions we have deservedly enjoyed in the period. The Company is now well positioned, generating the financial evidence of a significant recovery and promising growth in the Company’s prospects. Of particular note is the increase in margins complementing the more than doubling of revenues, which is testament to the Board’s and the team’s determination to move toward profitability. We remain focused on meeting our stated goal of achieving cash flow breakeven without needing to raise additional funds.”

Investor presentations

Fusion will host a presentation on the results open to all investors via the Investor Meet Company platform at 11.00am on Thursday, 21 November 2024, delivered by Dr Adrian Kinkaid, CEO and Stephen Smyth, Interim CFO. Adrian will also be presenting at the ShareSoc meeting on 12 December 2024. The Company is committed to providing an opportunity for all existing and potential investors to hear directly from management on these results.

Investors can sign up to Investor Meet Company for free and add to meet Fusion Antibodies plc via the following link: https://www.investormeetcompany.com/fusion-antibodies-plc/register-investor 

Further details on how to register for the ShareSoc meeting can be found via the following link:  Discovery Company Webinar 12 December 5:00pm - ShareSoc

Enquiries:

About Fusion Antibodies plc

Fusion Antibodies plc (“Fusion Antibodies”, “Fusion” or the “Company”) is a Contract Research Organisation (CRO) located in Northern Ireland that offers a integrated end-to-end range of antibody discovery, engineering and expression services for all stages of human therapeutic, veterinary therapeutic and diagnostic antibody development.

The range of services offered includes antibody discovery/generation, development, characterisation, optimisation, and small-scale production. In addition, the Company also offers antigen design, antigen expression, antibody purification and sequencing, antibody humanisation using Fusion's proprietary CDRx^TM platform and cell line development, producing antibody generating stable cell lines optimised for use downstream by the customer to produce material for clinical trials. Since 2012, the Company has successfully sequenced and expressed many thousands of antibodies and successfully completed over 270 humanisation projects for its international customer base, which has included eight of the top 10 global pharmaceutical companies by revenue.

At every stage, our client’s vision is central to how we work in combining the latest technological advances with cutting edge science. In this work our world-class humanization and antibody optimization platforms harness the power of natural somatic hypermutation (SHM) to ensure the best molecule goes to the clinic.

Fusion Antibodies’ growth strategy is based on enabling Pharma and Biotech companies get to the clinic more effectively, using molecules with optimized therapeutic profile and enhanced potential for successful development and approval and, ultimately, on speeding up the drug discovery and development process. Our Integrated Therapeutic Antibody Services (“ITA”) offering enhances the efficiency of this process by providing a continuous service offering from as early as target nomination to as far as stable cell line. Fusion’s use of SHM to create a fully human antibody library to capture the human antibody repertoire addresses a continuing market need in antibody discovery.

Fusion Antibodies’ emphasis on antibody therapeutics is based on the size and growth rate in the sector, with the market valued at $186 billion in 2021 and forecast to surpass $400 billion by 2028. As of June 2022, there were 150 approved antibody therapies on the market and nearly 600 antibody drugs in clinical trials.

CHAIRMAN’S STATEMENT

Operational Review

Following on from the end of FY2024, the first six months to 30 September 2024 showed a significant improvement over H1 FY2024.   The steady recovery is encouraging as we move into the second half of the year and beyond. The Board continues to be optimistic about the prospects for the remainder of the current financial year and for further growth into FY2026. Nevertheless, the Board remains prudently mindful of potential market volatility and the inherent science-based risks in any antibody-based discovery and development, whether human or veterinary, therapeutics or diagnostics.  

Our mission is to get better antibodies into the clinic more rapidly. In this way we enable biopharmaceutical, veterinary and diagnostic companies to discover new antibodies and maximise their performance so that highly optimized molecules are available to enter the clinic more efficiently for the benefit of global health and the global healthcare industry. The combination of our current Discovery, Engineering and Supply services aims to enhance the client journey with the development of high performing antibodies to their targets.  We continue to develop new improved services and technologies to ensure we are at the cutting edge of the market as the partner of choice.

The Company continues to attract new clients for its established services, such as humanization, as well as for our novel technologies such as OptiPhage^TM and Mammalian Display. We secured an initial purchase order for the former which was announced on 14 April 2024 to develop a bespoke OptiPhage^TM library for a non-human antibody species with a leading global provider of antibodies for use in research and diagnostics.

The Mammalian Display service is also gaining traction and in particular has enjoyed considerable success with a major client, delivering a level of expression that is more than an order of magnitude higher than that client’s existing commercial manufacturing processes. We have also received further orders from a leading diagnostics company under the master services agreement announced on 14 February 2024 and continue to build this important relationship.

We seek to build on these and other technological advantages to help further differentiate Fusion’s premium offerings and to command higher margins than are achievable from more routine services.  Commercially, we are building on the diagnostic contracts already gained where we can see further opportunities to work with new partners in this sector.  Additionally, we are working hard to gain more exposure in the growing veterinary market and building awareness within this specialist client base. 

It is particularly pleasing to have achieved considerable improvements in margins in H1 FY2025 and we seek to ensure that this trend continues for the rest of the current year and beyond.

Financial Review

Revenues for the six-month period ending 30 September 2024 were £1.2 million (H1 FY2024: £0.5 million). All revenues were for core services and contained no milestone payments.

The 27% gross profit percentage on underlying revenues was higher than in the same period last year due to the continued realisation of cost savings from restructuring implemented (H1 FY2024: (15)%).

R&D expenditure in H1 FY2025 was £176k, a similar level to the comparable period in FY2024 (H1 FY2024: £182k) reflecting the continuing investment, particularly in the OptiMAL® Library project.

SG&A expenditure of £943k was £210k lower than in H1 FY2024 due primarily to restructuring and cost saving measures which we began implementing in H2 FY2023.

Loss for the period resulting from the above was £758k (H1 FY2024: £1.36 million loss).

Cash used in operations was £752k, compared with £1,213k used in H1 FY2024. The H1 FY2025 operational outflow includes the £176k investment in R&D. The total outflow was £760k and the closing cash balance at 30 September 2024 was £439k with a further £457k owed from existing debtors.

Key Performance Indicators

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

* Earnings before interest, tax, depreciation and amortisation

The investment in R&D and the impact on EBITDA is set out in Note 12 to these statements. EBITDA for the period was a loss of £734k (H1 FY2024: £1.29 million loss) and adjusting for research and development expenditure shows an EBITDA loss excluding R&D of £558k for the period (H1 FY2024: £1.11 million loss).

Outlook

In Q3, the Company has continued to see an improvement in lead generation and prospective customer engagement. We have seen the positive outcome of diversifying into adjacent markets such as Diagnostics and see potential growth opportunities in all of our services going forward.   Continued efficiency improvements are also expected to contribute to further margin improvement. The Board is confident that the sector is recovering and the prospects for the Company remain very encouraging.  Whilst challenges remain for our international customer base, we continue to meet these challenges and capitalise on the opportunities presented.

Cash continues to be well controlled, and it remains a key strategic goal to achieve cash flow break even without having to raise additional equity capital.

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’;
• 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.

On behalf of the Board

Dr Simon Douglas
Non-executive Chairman

18 November 2024

Condensed Statement of Comprehensive Income

For the six months ended 30 September 2024

Condensed Statement of Financial Position

As at 30 September 2024

Condensed Statement of Changes in Equity

For the six months ended 30 September 2024

Statement of Cash Flows

For the six months ended 30 September 2024