Silence Therapeutics Plc: Unaudited Preliminary Results for the Year Ended 31 December 2011
LONDON, March 21, 2012 /PRNewswire/ –
Silence Therapeutics Plc [http://silence-therapeutics.com ] (AIM: SLN), a leading
international RNAi therapeutics company
[http://silence-therapeutics.com/pipeline/clinical-programs/#!/about-us ], today announces
its unaudited preliminary results for the year ended 31 December 2011.
- Impressive interim data from Phase I trials of Atu027 (lead programme in metastatic cancer) presented at the American Society of Clinical Oncology conference in June 2011. The data showed disease stabilisation and other indications of potential efficacy. Atu027 remains one of the most advanced RNAi therapeutic candidates in cancer. - Silence's leadership position in RNAi delivery validated by three new partnerships including deals with a top 10 Pharma company, InteRNA Technologies and miRNA Therapeutics. These agreements covered all three of Silence's proprietary delivery technologies and two were for the delivery of a new form of RNA therapeutic (microRNA), showing the versatility of our portfolio. - Positive clinical data from Silence's partners Quark Pharmaceuticals and Pfizer - the Phase II trial of PF-04523655 in diabetic macular oedema showed it to be more effective than laser therapy. Quark has now initiated a phase IIb trial. This compound is based on Silence's AtuRNAi technology. - Silence streamlined and reorganised its operations to increase efficiency and reduce cash spend. As part of this, the facility in Redwood City, California was closed; headcount in some non-critical roles was reduced in Berlin; and the non-executive Board membership was also reduced. - Enhanced commercial focus and strengthened business development team with the appointment of Georg Buchner as VP Business Development, focused on partnering Silence's assets and accessing non-dilutive sources of finance. - Silence possesses one of the world's most comprehensiveRNAi technology intellectual property portfolios which was further strengthened in 2011 with the issuance of patents in Japan and the US. - In May 2011, Silence raised GBP5.51m net of expenses to fund development of the pipeline and investment in the RNAi technology platform. Combined with the impact of the restructuring, the cash runway extends to the end of Q3 2012.
POST YEAR-END EVENTS
- Dr Tony Sedgwick was promoted to Chief Executive Officer in February 2012. - Deal announced with miRagenTherapeutics in January 2012 for the delivery of microRNAs using the DBTC liver delivery system - Silence's second deal on DBTC and third for microRNAs. - Creation of a Scientific Advisory Board with two Key Opinion Leaders in the area of liver disease - see separate announcement issued today [http://silence-therapeutics.com/news-and-events ].
Tony Sedgwick, Chief Executive Officer of Silence Therapeutics, commented: “In 2011
Silence Therapeutics has built a significantly stronger and more commercially-driven
business. The quality of our RNAi therapeutic platform is high and our pipeline is strong.
We expect clinical data from our lead programme, Atu027, in 2012 and look to generating
income from our partnering activities. I am particularly excited by the Company’s growth
prospects from here and am focused on achieving shareholder value uplift in 2012 and
Analyst briefing and conference call
There will be a meeting for analysts today at 09:30am at M:Communications (1 Ropemaker
Street, 11th Floor CityPoint Building, London EC2). There will also be a live call for
analysts at 09:30 GMT. The conference call can be accessed by dialling:
Participant PIN code: 64342375
A replay will be made available on Silence Therapeutics’ website shortly after the
call for a period of one month.
This press release includes forward-looking statements that are subject to risks,
uncertainties and other factors. These risks and uncertainties could cause actual results
to differ materially from those referred to in the forward-looking statements. All forward
looking statements are based on information currently available to Silence Therapeutics
and Silence Therapeutics assumes no obligation to update any such forward-looking
Silence Therapeutics is a leading RNAi therapeutics product and technology platform
company with proprietary delivery systems. We have created two powerful platforms and a
strong pipeline to exploit our impressive technological know how and IP.
Despite the difficult economic times, and capital market turmoil, with the support of
our shareholders, in 2011 we were able to announce positive progress in our internal
clinical programme, refinance and streamline the business, as well as sign further
collaborative agreements covering our RNAi delivery technologies.
We believe that our achievements throughout the year validate the Board’s decision to
focus on building an independent and high value RNAi therapeutics company. Indeed,
industry commentators believe that the field of oligonucleotide therapeutics, of which
RNAi is a part, may be the third major drug development platform after small molecules and
When we reported to shareholders in our 2010 Annual Report, we predicted that ’2011
would be a year rich in data from RNAi clinical trials’, both from Silence Therapeutics
and other companies in this therapeutic area. This has proved to be the case, with
encouraging interim Phase I data from our lead product, Atu027 for metastatic cancer,
which we were pleased to be able to present at the prestigious annual American Society of
Clinical Oncology (‘ASCO’) meeting in June 2011 and we also plan to present further data
for Atu027 at the upcoming ASCO meeting in June 2012. We believe it to be one of the most
interesting and potentially promising RNAi therapeutics in clinical development. During
the year, our partner Quark Pharmaceuticals also presented positive Phase II data with
PF-04523655, which incorporates our AtuRNAi technology, in the area of diabetic macular
Silence Therapeutics’ RNAi therapeutic platform, comprising our delivery technologies,
siRNA sequences and structural features, has been validated by nine partnerships (some of
these via our licensee Quark Pharmaceuticals). In 2011 alone, we were pleased to add three
new deals including delivery deals with InteRNA Technologies, miRNA Therapeutics and a top
10 Pharmaceutical company. As a result, we now have links to four of the world’s leading
Assuming these collaborations continue to proceed successfully, we believe that
associated milestone payments represent a significant potential revenue stream to Silence
Therapeutics in the coming years.
Other achievements for Silence Therapeutics in 2011 included a fundraising, which has
extended existing funding until the end of the third quarter of 2012 and we are thankful
to our shareholders for their valuable support towards this transaction. During 2011,
Silence also focused on the streamlining of the business and the significant strengthening
of the business development and management team. The latter two, we believe, represent an
appropriate response to our developing pipeline, expanding portfolio of high-quality
delivery technologies, and re-focused business approach. Assuming that our pipeline
continues to progress, Silence will be seeking deals with partners to further its
development. In addition, we believe that our strong portfolio of intellectual property
and delivery technologies makes us a partner of choice for companies active in RNA
therapeutics, and we will continue to build this important non-dilutive source of income.
As with many other approaches in the medical field, delivery of the active RNAi
therapeutic is the rate-limiting step and so we consider our suite of delivery
technologies an important asset for us and our partners.
The evolution of the Company since the beginning of 2011 has resulted in some
personnel changes, with Dr Tony Sedgwick recently appointed Chief Executive Officer, and
Dr Georg Buchner joining as Vice-President of Business Development. On behalf of the
Board, I would like to thank Dr Phil Haworth, Dr David U’Prichard and Dr James Topper, all
of whom stood down during or at the end of 2011, for their contributions to the Company as
Chief Executive Officer and Non-Executive Directors respectively. David U’Prichard, in
particular, has been with the business for almost eight years, and has been instrumental
in the development of our assets. Our thanks are also due to Thomas Christely who
initially replaced Dr Phil Haworth and has recently left the Company, to be succeded by
our new and commercially driven Chief Executive Officer, Dr Tony Sedgwick. Tony comes with
a strong background in the commercial biotech environment, and has been successfully
involved in developing biotech businesses and delivering value to shareholders.
Clinical data emphasises potential of RNAi therapeutics
With five of the estimated 13 clinical programmes ongoing worldwide using Silence
Therapeutics’ AtuRNAi technology, and having treated in excess of 300 patients, we believe
we have the industry’s broadest siRNA clinical pipeline. Looking elsewhere in the RNAi
sector in 2011, we were pleased to observe encouraging clinical data from other players,
which underlines the potential of the approach. Many of those working in this field share
our view that the range of clinical results announced in 2011 represent a significant
derisking of RNAi technology, and we look forward to further clinical advances in 2012.
The significant progress that Silence Therapeutics made in 2011 was achieved against a
backdrop of a restructing and consolidating pharmaceutical sector, restricted access to
capital for small and innovative companies, and turbulent-risk averse financial markets.
That we were able to raise GBP5.51m (net of costs) under these conditions is a testament
to the potential of the Company and the confidence placed in us by our shareholders, and
many thanks are due to shareholders for this. I am as disappointed as our shareholders are
that our increasing maturity is not yet reflected in Silence Therapeutics’ share price,
and believe that our new focused approach, coupled with the newsflow and advances we
expect to announce in 2012, will go a considerable way to building shareholder value and
enhancing our share price.
Silence Therapeutics is proud of its RNAi therapeutic platform, comprising proprietary
delivery technologies, potent siRNA sequences, and innovative RNAi structural features. We
believe that our progress in 2011 shows the synergistic value of these assets, and we look
forward to updating shareholders on further advances in the clinic and other areas
delivered via our new and focused management team throughout 2012.
We would like to thank all our shareholders for their continued support of Silence
Jerry Randall ACA
CHIEF EXECUTIVE’S REVIEW
Since joining Silence Therapeutics in September 2011, I have been excited by the
Company and the opportunities that lie ahead. As a consequence, I was pleased to take over
as Chief Executive Officer in February 2012, as I believe we have a unique proprietary
position in RNAi therapeutics and their delivery. Over the next few years, I intend to
increase the commercial focus of the Company, harness the RNAi therapeutics opportunity
and, as a result, create substantial shareholder value.
2011 has been an exciting year for Silence Therapeutics, with progress across all
areas of the business. We started this year looking forward to clinical data to validate
both the therapeutic benefit to be obtained by RNA interference (‘RNAi’ or ‘siRNA’), as
well as our proprietary delivery technologies. I am pleased to report that the Company has
delivered on this expectation, in both our proprietary and partnered programmes.
We have also worked hard on building the financial future of the business, improving
its efficiency and strengthening its commercial activities, all of which is discussed
below. Silence Therapeutics is proud of its RNAi therapeutic platform, comprising
proprietary delivery technologies, potent siRNA sequences, and innovative RNAi structural
features. We believe that our progress in 2011 shows the synergistic value of these
Encouraging clinical data
Silence Therapeutics is prominent in an exciting new sector in the drug development
arena, the translation of RNA blocking (RNAi) technology into therapies. Since we, and
others active in this area, believe that the technology has potential in a broad range of
clinical indications – including oncology, vascular, metabolic and ophthalmic diseases -
it brings the potential for better patient outcomes in these major therapeutics areas. One
of the first steps in demonstrating this potential is the generation of data from clinical
studies conducted with RNAi therapeutics.
In June 2011, Silence presented encouraging interim data from its ongoing Phase I
trial of proprietary product Atu027 in patients with solid tumours at the prestigious
annual meeting of the American Society of Clinical Oncology (‘ASCO’). We believe that
these important findings serve as valuable validation for Silence’s RNAi technology
platform, as well as its AtuPLEX(TM) delivery technology. This should stand the Company,
with its increased business development focus, in good stead as we work on partnering our
programmes and exploiting our valuable RNAi delivery intellectual property estate.
To summarise, Silence Therapeutics made progress in several key areas in 2011, which
we discuss in more detail below. These include:
- Clinical trial progress for both our proprietary and partnered programmes;
- Three new delivery deals, with further progress in established programmes;
- Sharpening of our business development focus with important new top-level hires;
- Refinancing and restructuring of the organisation; and
- Further development and recognition of Silence's intellectual property portfolio, particularly in the area of RNAi delivery
Clinical trial progress for both our proprietary and partnered programmes
Clinical trial data is key to establishing the potential of RNAi therapeutics, and we
are pleased that it generated significant excitement this year both for Silence and its
Atu027, Silence Therapeutics’lead programme for cancer
In 2011 we were able to report impressive interim results from the Phase I ascending
dose clinical trial of our lead programme, cancer treatment Atu027 for solid tumours.
Atu027 incorporates our AtuPLEX(TM) delivery system with AtuRNAi, our proprietary RNAi
chemistry and specifically targets PKN3, a protein implicated in cancer growth and
These results were presented at ASCO, and showed stabilisation of the disease in 38%
of the cases (9 of 24 patients), as well as other indications of potential efficacy.
Importantly on the safety side, the trial data obtained so far have indicated that
AtuPLEX(TM) is safe in humans at dose levels above those which have shown effectiveness in
preclinical studies. Among the patients who achieved stable disease, one individual with
neuroendocrine cancer achieved disease stabilisation for nine months with a second
neuroendocrine cancer patient showing partial regression of pulmonary metastases. An
additional patient with breast cancer experienced some regression in liver metastases.
32 patients have been treated so far, and enrolment of all 33-36 patients is expected
to be completed in the first half of 2012 with results announced in the middle of the
The Company believes that the encouraging data received to date represents an
important step along the path towards realising value for shareholders. Assuming
successful completion of the Phase I study, we expect to initiate a Phase Ib/IIa clinical
study of Atu027 in the second half of 2012. The Company will also continue licensing
discussions regarding Atu027 with potential pharmaceutical partners.
Atu111, our most advanced product outside oncology
Atu111, for the treatment of acute lung injury, is our most advanced drug development
candidate outside oncology. It combines our DACC drug delivery system with AtuRNAi, and
its target is undisclosed. We have recently completed proof of concept studies in a
preclinical model of acute lung injury demonstrating very impressive results using Atu111.
Further studies are ongoing in a variety of other preclinical models of the disease.
Earlier preclinical work using Atu111 have shown sustained gene knockdown of up to
three weeks in the lung endothelium suggesting the drug could be used with a single dose.
Following the encouraging data generated from the ongoing Phase I trial of Atu027
[http://silence-therapeutics.com/content/pipeline/overview.htm ] and additional data from
preclinical models of Atu134
[http://silence-therapeutics.com/content/pipeline/overview.htm ], Silence has concluded
that the potential clinical profiles of these two products are too similar to warrant
further development of both programmes. We therefore decided in November to divert the
resources for Atu134 to other areas, specifically potential targets in the liver that
could be inhibited by using Silence’s novel liver-focused DBTC delivery system.
Silence Therapeutics has two licence agreements with partner Quark Pharmaceuticals,
for products PF-04523655 and QPI-1002, both of which are in development in two different
therapeutic indications. Quark has licensed these to Pfizer and Novartis respectively. The
positive data received from the programmes in 2011 further highlights both the potential
of RNAi therapeutics and of Silence’s AtuRNAi technology which is incorporated into these
In March 2011, Quark announced the completion of the DEGAS study, a Phase II clinical
trial of PF-04523655 for the treatment of the ophthalmic indication of diabetic macular
oedema. The product, which incorporates Silence’s AtuRNAi technology, was shown to be more
effective than laser therapy. Quark has now initiated a Phase IIb study comparing
PF-04523655 to Lucentis (Roche/Novartis), the new standard of care in the treatment of
diabetic macular oedema.
In addition, PF-04523655 recently completed a Phase II trial in the second ophthalmic
indication of age-related macular degeneration. The trial demonstrated a dose-dependent
increase in benefit of PF-04523655. Quark is now awaiting results from the Phase IIb trial
in diabetic macular oedema before deciding on plans for the drug in age-related macular
In August 2010, Quark signed an option and license agreement with Novartis for
QPI-1002 as mentioned previously. In September of that year, Quark initiated a Phase II
study in prevention of delayed graft function in patients undergoing kidney
transplantation. Recruitment into this trial has progressed well and we expect the trial
to be completed in the middle of 2012. A Phase I study has been successfully completed in
the second indication of acute kidney injury. Quark plans to initiate a Phase II trial
depending on the results of the ongoing trial in the prevention of delayed graft function.
Progress in research collaborations
Silence is pleased to have been working with AstraZeneca in the area of RNAi since
2007, in the form of two collaborations, both of which were extended in 2010. AstraZeneca
has now completed the research phase of the first of these collaborations, a research and
development collaboration focused on five respiratory and oncology targets, and nominated
three of the five targets as ‘Accepted Programmes’.
The second collaboration, for the development of novel approaches for the delivery of
siRNA molecules, was entered into in March 2008. The research phase of this collaboration
has also been completed and AstraZeneca retains the right to use the DACC delivery system
developed for their ‘Accepted Programmes’.
Valuable portfolio of delivery technologies
Efficient and safe delivery of RNAi therapeutics is key to the success of the field
and Silence Therapeutics’ programmes, as well as those of other companies active in this
area. The Company possesses three proprietary siRNA delivery technology platforms,
AtuPLEX(TM), DACC (lung) and DBTC (liver), two of which are already being used in the
programmes of partners. This comprehensive delivery platform allows our RNAi therapeutics
to reach many different organs, with the liver and lungs increasingly becoming targets of
interest in the RNAi field and the pharmaceutical industry generally.
Because of the importance of appropriate delivery in this therapeutic area, we believe
our delivery platform will deliver significant value to the Company via non-exclusive
- AtuPLEX enables the delivery of siRNA molecules to targeted diseased tissues and cells in the vascular endothelium (blood vessels), while increasing their bioavailability and intracellular uptake. It incorporates Silence's proprietary lipid AtuFect and is used to embed siRNAs into a multiple lipid bi-layer structure. It is incorporated in Atu027.
- The DACC novel lipid delivery system enables functional, highly specific and efficient delivery of siRNA molecules selectively to the lung endothelium with a long duration of action (over three weeks). Like AtuPLEX, it also incorporates Silence's proprietary lipid AtuFect and is used to embed siRNAs into a multiple lipid bi-layer structure. The DACC delivery system is incorporated in Atu111, Silence's preclinical development candidate for the treatment of acute lung injury.
- The DBTC delivery system is lipid-based and targets the liver. Studies have shown it to be well tolerated and have a significant duration of action. It therefore has therapeutic potential in areas such as heptatocellular carcinoma, liver fibrosis and acute liver failure.
Three new delivery deals
The value of this portfolio of delivery technologies was underlined in 2011 with the
signature of three agreements with new partners, InteRNA Technologies B.V, miRNA
Therapeutics Inc. and a top 10 Pharmaceutical company. Interestingly, two of these three
agreements were for a different form of RNA therapeutic to the siRNA approach being used
by Silence Therapeutics, i.e. microRNA. This emphasises the value of our delivery
In September, we established an agreement with InteRNA Technologies B.V., which is
developing microRNA (‘miRNA’)-based therapeutics for cancer. MicroRNA intervention is an
exciting new therapeutic area for which the Silence technology platform is well suited,
and the deal was our first in this area. We are looking forward to the results from this
collaboration, which we believe will demonstrate the potential of AtuPLEX(TM) for the
delivery of RNA-based therapeutics outside of the RNAi arena.
Under the agreement, we will combine Silence’s proprietary AtuPLEX(TM) delivery system
with InteRNA’s novel microRNAs to develop multiple novel candidate drugs. The two
companies will then undertake in vitro and in vivo studies of the candidate drugs and
select lead candidates for further evaluation. Silence is eligible to receive upfront fees
as well as staged research payments if the collaboration progresses.
The potential of Silence Therapeutics’ delivery technologies in this new area was
further underlined in October 2011 with our second miRNA deal. The collaboration, with
miRNA Therapeutics, is to investigate the potential of both AtuPLEX and our DBTC delivery
system with our partner’s novel microRNAs for the treatment of cancer. We are pleased that
our first deal on DBTC is in this exciting new therapeutic area. Silence Therapeutics will
formulate selected miRNA sequences into AtuPLEX and DBTC in order to generate candidate
drugs, which will then undergo in vitro and in vivo testing at miRNA in order to select
those to take forward for further evaluation.
In October 2011 we also signed an siRNA delivery collaboration for DACC with top 10
Pharmaceutical company – our first deal covering this technology for delivery to the lung.
Under the terms of the agreement, our partner will provide us with specific siRNAs, which
we will formulate into the DACC delivery system. Silence and its partner will undertake in
vitro and in vivo studies of the DACC-formulated siRNAs developed under the agreement and
select lead candidates for further evaluation.
Ongoing delivery collaborations progress
In addition to these exciting new deals, we have an ongoing siRNA delivery
collaboration with Dainippon Sumitomo signed in 2008. Under this collaboration, we are
jointly leveraging Silence’s proprietary siRNA molecules and delivery technologies to
demonstrate delivery of RNAi therapeutics to specific disease targets. This agreement,
which originally included two drug targets, was expanded in 2010 to include two more.
Securing our financial position
Silence Therapeutics ended 2010 with cash reserves of GBP3.57m and we indicated in the
first quarter of 2011 that we would be seeking additional funding to drive continued
development of the Company. Accordingly, in May 2011, Silence successfully raised GBP5.51m
net of expenses through a placing and open offer.
Given the substantial financial and economic volatility experienced globally over the
last few years, particularly in the biotechnology sector, we were extremely pleased with
this result, which gave us a substantially improved financial footing, and extended the
cash runway to the end of the third quarter of 2012 from existing cash resources alone.
The fundraising was supported by both existing and new shareholders, whom we thank for
their support, and welcome to Silence Therapeutics.
Part of the proceeds are to be used to, among other things, complete the ongoing Phase
I trial and initiate a Phase Ib trial of Atu027, and advance preclinical development of
the Atu111 programme for lung disease. As shareholders can see, we have made progress in
these areas and expect to continue to do so.
A streamlined business focused on business development
Increased financial efficiency
As 2011 progressed it became clear to Silence Therapeutics that, in order to create a
more streamlined and efficient business, some streamlining and consolidation of operating
sites was needed. Following the 2010 acquisition of Intradigm Inc., managing and working
across our three sites in the UK, Germany and the US had generated considerable
operational difficulties as well as increased costs.
In April 2011, we announced plans to close our Redwood City office in California. This
was completed in August. As a consequence of this, our US-based CEO, Dr Phil Haworth,
stepped down. I joined the business in September initially as Chief Business Officer, but
was delighted to be able to accept the appointment as Chief Executive Officer in February
2012 following the departure of Thomas Christely, who took on the role of CEO briefly
after the departure of Dr Haworth.
With the US-based business development and legal functions absorbed elsewhere in the
Group, its operations are now based in Berlin, where our R&D facilities have always been
located. In addition there is a small management presence in London.
In addition to the closure of the US facility, we were able to further streamline the
business by reducing headcount in Berlin from 32 to 27, via the loss of some non-critical
roles, and reducing the size of our Board. The latter had become too large following the
acquisition of Intradigm Corporation, and as a consequence, Dr James Topper and Dr David
U’Prichard resigned from the Board of Directors effective 29 July 2011 and 31 December
2011, respectively. We thank both Dr Topper and Dr U’Prichard for their valuable
contribution to Silence Therapeutics.
These measures helped us to increase our cash runway and, combined with our
fundraising, mean that we have sufficient funding to last us until the end of the third
quarter of 2012.
Significantly strengthened business development focus
With encouraging data so far from the Phase I trial of Atu027, and the level of
interest in Silence Therapeutics’ RNAi delivery technologies, in 2011, it was clearly time
to invest more significantly in our business development activities. An important part of
this will be the partnering of and generation of value from these assets. In addition,
with the availability of finance significantly reduced in the current economic crisis, the
global biotechnology sector has increasingly accessed non-dilutive financing from sources
such as public sector organisations (for example, research councils and leading
charities). We consider this to be a major objective in our enhanced business development
Strong business development team
Our business development activity was further enhanced in November 2011 with the
appointment of Dr Georg Buchner, formerly Vice-President of Corporate and Business
Development at Novacta Biosystems Ltd (‘Novacta’), as Vice-President Business Development.
Prior to joining Novacta, Georg was Business Development Director at Haptogen Ltd where he
was instrumental in the sale of the business to Wyeth (now part of Pfizer) in 2007. He has
a PhD in Molecular Genetics from King’s College London and an MBA from The University of
Cambridge’s Judge Institute of Management, and will be working with Tony to continue
broaden our collaborations with global pharmaceutical and biotechnology companies.
Strength through Intellectual Property
Our broad and diverse intellectual property portfolio continues to provide us with a
competitive advantage and a strong proprietary position in the RNAi therapeutics space. We
believe that we have been successful in aggressively building one of the world’s most
comprehensive RNAi patent estates and expect that this asset will continue to offer
significant support for our ongoing partnering activities.
Our patent estate covers the areas which we believe to be pivotal to the successful
development of RNAi therapeutics, from the structure of the molecules themselves to how
they are delivered. In addition, we have achieved significant successes in establishing
key levels of patent protection for our technologies in Europe, the USA and Japan,
offering opportunities in these important healthcare markets. Silence remains committed to
the expansion and strengthening of its intellectual property portfolio in target markets
around the globe. In 2011 we made progress in both the US and Japan, covering RNAi
structures and delivery, as well as receiving further confirmation of the strength of the
Zamore Design Rules patents, as discussed below.
Patent issuance and success versus challenges
In the US, a new patent that broadens Silence Therapeutics’ existing protection of
optimised RNAi molecules, including our proprietary AtuRNAi platform, was issued. Also in
that territory, we received a notice of allowance of a new patent that provides protection
for a core component of our proprietary AtuPLEX(TM) delivery platform.
Protection in Japan was enhanced by issuance of a patent covering novel AtuRNAi
molecules, which will support our efforts to establish partnerships with leaders in the
pharmaceutical industry there. In addition, we received news of issuance of a Japanese
patent covering methods for screening a therapeutic agent for the treatment and/or
prevention of any disease that involves elevated activity within the PI3-kinase pathway.
This new intellectual property includes coverage for the use of the gene target protein
kinase N beta (PKN3) for screening of therapeutic agents, and is important to us as PKN3
is the target of our leading therapeutic programme Atu027.
Our patents in this area were further supported in December 2011 with a positive
outcome from an oral hearing at the European Patent Office (‘EPO’) over opposition to
Silence’s granted European Patent EP 1 536 827 “Further use of protein kinase N beta”. The
Opposition division of the EPO decided to uphold the patent in amended form, now
restricted to metastatic cancers. This is the focus of Silence’s ongoing Atu027 Phase I
study, and we are pleased that the product continues to be protected by this intellectual
property and other patents, for example, those around AtuPLEX and the AtuRNAi sequence
used in the product.
Silence has exclusive licenses covering three patent families from the University of
Massachusetts Medical School collectively known as the ‘Zamore Design Rules’. In 2011,
following an anonymous request, four of the US patents covering the Zamore Design Rules
successful completed re-examination by the US Patent and Trademark Office (‘USPTO’) and in
December 2011, we were able to report that the USPTO had issued ‘Notices of Intent to
Issue Re-examination Certificates’. In Europe, the patent is currently being opposed by
Alnylam and other parties.
Investors Relations (‘IR’) Strategy
Silence Therapeutics maintains active communications and an investor relations’
strategy to provide transparency and maximise dialogue with its stakeholders.
As part of its 2011 IR strategy, Silence has held investor meetings across Europe and
attends investor conferences internationally throughout the year, full details of which
can be found on the Company website (http://silence-therapeutics.com).
In line with the London Stock Exchange’s Alternative Investment Market (‘AIM’)
requirements, Silence discloses its investor news on a frequent basis via its Regulatory
Information Service provider and the Company holds a number of conference calls and
meetings throughout the year in order to reach investors effectively. In addition, the
Company’s website serves as an effective tool for investor communications.
Silence also participates in the evolving social media scene and communicated
digitally online with frequency using a number of resources including Facebook, LinkedIn
and YouTube. In February 2012, Silence launched its new website, designed with a range of
interactive features and online social media tools, to reflect the new direction and more
commercial focus of the Company. These included twitter feeds, company news flashes and
regular industry updates from its real-time RNAi Hub.
SUMMARY AND OUTLOOK
During 2011, Silence Therapeutics has built a significantly stronger business, more
able to deal with the rigours of today’s financial climate and better placed to exploit
our wealth of assets. By restructuring the business, strengthening the management team,
and raising a significant amount of financing in challenging economic conditions we
believe we have more than justified the decision made at the beginning of the year to
remain an independent business.
Exciting year ahead
2012 will be an important and exciting year for Silence Therapeutics with a new and
commercially focused management team, the Company is set to achieve shareholder value
uplift. Importantly, there will be clinical data from us, both for Atu027 and our
partnered products, as well as other companies in the sector. 2012 clinical news flow
expected from us and our partners includes the anticipated start of Phase Ib/IIa clinical
trials with Atu027. This will be an important milestone for Silence Therapeutics.
As well as continuing to develop our pipeline, key priorities for Silence this year
are to secure the Company’s financial future and to continue to generate value through
partnering. Our fundraising and moves to reduce cash burn this year have extended our cash
runway to the end of the third quarter of 2012, not taking into account potential
milestones from our collaboration partners.
With our enhanced business development function, we will be looking at building value
and generating income through our partnering activities. One of our priorities in this
area is the signature of out-licensing or co-development agreements for Atu027 or other
internal candidates such as Atu111, assuming they continue to generate encouraging data.
Silence also believes that the quality of its RNAi therapeutic platform – including
AtuRNAi and our portfolio of delivery technologies – will continue to be recognised by
partners in licensing deals and research collaborations. We are proud of our list of
partners – which includes four of the top 10 global Pharmaceutical companies – and expect
to add to it in 2012.
Silence plans to attend scientific and medical conferences throughout the year in
order to undertake a structured outreach to our key audiences. We are pleased to confirm
that during 2012, Dr Klaus Giese, Silence’s Chief Scientific Officer, plans to present at
a number of world-leading biopharmaceutical events.
Another area of focus for the business development team will be looking to access
non-dilutive forms of financing, such as grants from the large research charities. In
recent years this type of funding has grown in importance to the global biopharmaceutical
sector, partly driven by financial and economic conditions. Silence Therapeutics considers
it an important option for the company to develop our pipeline of therapeutics and build
Providing as it does the foundation of our business, we will continue to prosecute,
defend and grow our intellectual property portfolio. Areas of focus for additional patent
protection include all essential components of RNAi therapeutic development, including
multiple proprietary siRNA delivery technologies, potent siRNA sequences and key siRNA
sequence and chemical modifications, as well as specific high-value disease targets.
2012 looks to be an exciting year for us. In concluding my comments, it is important
for me to note that the achievements we made in 2011 were only possible through the hard
work and dedication of our staff, and the support of our shareholders. My thanks are due
to all of you, as we work together to bring much-needed RNAi therapeutics to patients.
Tony Sedgwick, Ph.D.
Chief Executive Officer
Silence successfully strengthened its financial position in May 2011 through a placing
and open offer that generated proceeds of GBP5.51 million (net of costs). This funding
provided cash resources that will support the Company’s operations to the end of the third
quarter of 2012. This is without taking into account any milestone, additional equity
fundraisings or other such receipts that the Company believes it could receive in 2012.
Revenue generated in the year decreased to GBP0.69m in 2011 from GBP2.37m in 2010.
Revenue recognised in the year related to income from Silence’s collaborations with
AstraZeneca and Dainippon Sumitomo. The decrease in revenue in 2011 primarily reflects
lower income from Dainippon Sumitomo and the milestone from Quark earned in 2010.
Research and development expenses
Research and development expenses during the year decreased to GBP3.36m in 2011 from
GBP5.82m in 2010. The decrease in research and development expense is primarily driven by
the closure of Intradigm’s Palo Alto, California research facility in April 2010 as well
as a reduction in headcount at the Berlin R&D facility, announced in August 2011.
Administrative expenses during the year decreased to GBP3.12m (GBP2.65m before
restructuring charges) in 2011 from GBP5.20m in 2010. The decrease in administrative
expenses is again driven by the closure of the Intradigm’s research facility in 2010
followed by the closure of the Redwood City facility in August 2011 as well as a reduction
in expenditure in the London head office. The full benefit of these measures will be
reflected in lower administrative costs from 2012 onwards.
Financial income was GBP0.06m in 2011 compared to GBP0.10m in 2010. Interest income
remained low on cash balances during 2011 reflecting the continued low interest rate
Corporation tax payable in 2011 and 2010 was GBPNil.
Liquidity, cash, cash equivalents and money market investments
The Group’s cash position at year-end was GBP3.69m. At the end of 2010, Silence had
cash of GBP3.57m. A further GBP5.51m net of expenses was raised in May 2011 through a
placing of 296,693,065 shares at 2p and open offer.
The net cash outflow from operating activities in 2011 was GBP5.11m (2010: GBP10.55m)
against an operating loss of GBP5.79m (2010: GBP8.66m) primarily reflecting the impact of
a reduction in other working capital of GBP0.68m and non-cash items such as depreciation,
amortisation and share option charges of GBP0.78m (2010: GBP0.98m).
Trade and other receivables at year-end were GBP0.17m (2010: GBP0.78m). The decrease
reflects receipts of a milestone payment due from Quark, which was received in early
January 2011. Trade and other payables were GBP1.26m at year-end (2010: GBP1.69m). Trade
and other payables were lower at 31 December 2011 reflecting lower levels of expenditure.
Goodwill at year-end was GBP28.34m (2010: GBP28.35m). The small decrease reflects
currency translation effects. Other intangible assets at 31 December 2011 were GBP0.97m
(2010: GBP0.95m). The increase in other intangible assets primarily reflects the
additional license fees paid relating to the Zamore Design Rules patents.
Chief Financial Officer
2011 2011 2010 unaudited audited Ongoing Operations Restructuring GBP GBP GBP GBP Revenue 693,555 - 693,555 2,365,877 Research and development costs (3,360,442) - (3,360,442) (5,821,212) Gross loss (2,666,887) (2,666,887) (3,455,335) Administrative expenses (2,647,189) (471,825) (3,119,014) (5,202,938) Operating loss (5,314,076) (471,825) (5,785,901) (8,658,273) Finance income 56,646 - 56,646 95,343 Finance expense (12,817) - (12,817) (63,295) Gain/(loss) on sale of assets 5,509 - 5,509 (169,049) Loss before taxation (5,264,738) (471,825) (5,736,563) (8,795,274) Taxation - - - - Loss for the year attributable to owners of the Parent Company (5,264,738) (471,825) (5,736,563) (8,795,274) Loss per share (basic and diluted) (1.1p) (0.1p) (1.2)p (3.16)p
The accompanying accounting policies and notes form an integral part of these
2011 2010 unaudited audited GBP GBP Loss for the year after taxation (5,736,563) (8,795,274) Other comprehensive income: Exchange differences arising on consolidation of foreign operations 4,472 151,696 Total comprehensive income for the year attributable to owners of the Parent Company (5,732,091) (8,643,578)
The accompanying accounting policies and notes form an integral part of these
2011 2010 unaudited audited GBP GBP Non-current assets Property, plant and equipment 224,980 287,613 Goodwill 28,342,109 28,346,276 Other intangible assets 971,154 945,391 29,538,243 29,579,280 Current assets Inventory - 27,438 Trade and other receivables 174,346 782,596 Investments held for sale 37,423 - Cash and cash equivalents 3,687,860 3,566,877 3,899,629 4,376,911 Current Liabilities Trade and other payables 1,259,984 1,686,516 1,259,984 1,686,516 Total assets less current liabilities 32,177,888 32,269,675 Net assets 32,177,888 32,269,675 Equity Share capital 5,771,145 2,798,915 Capital reserves 81,141,424 80,269,278 Translation reserve 3,037,175 3,032,703 Retained loss (57,771,856) (53,831,221) Total equity 32,177,888 32,269,675
Share Capital Translation Retained Total capital reserves reserve loss Equity GBP GBP GBP GBP GBP At 1 January 2010 1,350,334 49,810,071 2,881,007 (45,150,257) 8,891,155 Recognition of share-based payments - 760,053 - - 760,053 Transfer upon: - exercise of options in year - - - - - - lapse of vested options in year - (2,477) - 2,477 - - lapse of vested warrants in year - (111,833) - 111,833 - Shares issued in the year 1,448,581 29,813,464 - - 31,262,045 Transactions with owners 1,448,581 30,459,207 - 114,310 32,022,098 Loss for the period - - - (8,795,274) (8,795,274) Other comprehensive income Exchange differences arising on consolidation of foreign operations - - 151,696 - 151,696 Total comprehensive income for the year attributable to owners of the parent Company - - 151,696 (8,795,274) (8,643,578) At 31 December 2010 2,798,915 80,269,278 3,032,703 (53,831,221) 32,269,675 Recognition of share-based payments - 120,474 - - 120,474 Transfer upon: - exercise of options in year - - - - - - lapse of vested options in year (1,795,928) 1,795,928 - - issued warrants in year - 795 - - 795 Shares issued in the year 2,972,230 2,546,805 - - 5,519,035 Transactions with owners 2,972,230 872,146 - 1,795,928 5,640,304 Loss for the period - - - (5,736,563) (5,736,563) Other comprehensive income Exchange differences arising on consolidation of foreign operations - - 4,472 - 4,472 Total comprehensive income for the year attributable to owners of the Parent Company - - 4,472 (5,736,563) (5,732,091) At 31 December 2011 5,771,145 81,141,424 3,037,175 (57,771,856) 32,177,888
2011 2010 unaudited audited GBP GBP Cash flow from operating activities Loss before taxation (5,736,563) (8,795,274) Depreciation charges 91,355 141,689 Amortisation charges 213,578 181,604 (Gain)/loss on sale of property, plant and equipment (5,509) 169,049 Charge for the year in respect of share-based payments 121,269 659,018 (Reduction)/increase in impairment provision against loan to subsidiary - - Finance income (56,646) (95,343) Finance expense 12,817 63,295 (5,359,699) (7,675,962) Decrease/(increase) in trade and other receivables 665,962 (43,948) Reduction/(increase) in inventory 27,438 (27,438) Increase/(decrease) in trade and other payables (431,010) (2,819,261) Cash (absorbed) by operations (5,097,309) (10,566,609) Taxation received - 59,198 Interest paid (12,817) (44,302) Net cash outflow from operating activities (5,110,126) (10,551,713) Cash flow from investing activities Acquisition of business - 746,108 Investment in assets held for sale (6,290) - Proceeds from sale of property, plant and equipment 10,185 66,407 Investment in subsidiary undertakings - - Reduction/(increase) in loans to subsidiary undertakings - - Interest received 26,764 37,565 Additions to property, plant and equipment (26,892) (31,539) Additions to intangible assets (247,586) (259,980) Net cash (used in)/generated from investing activities (243,819) 558,561 Cash flow from financing activities Proceeds from issue of share capital 5,519,035 14,358,313 Repayment of notes payable - (1,940,492) Net cash (used in)/generated from financing activities 5,519,035 12,417,821 Increase (decrease) in cash and cash equivalents 165,090 2,424,669 Cash and cash equivalents at start of year 3,566,877 1,131,146 Net increase (decrease) in the year 165,090 2,424,669 Effect of exchange rate fluctuations on cash held (44,107) 11,062 Cash and cash equivalents at end of year 3,687,860 3,566,877
2011 2010 unaudited audited GBP GBP Cash and cash equivalents includes: Instant access bank accounts 3,687,860 3,566,877 Supplementary disclosure of noncash items: Issuance of share capital for merger acquisition - - Share-based compensation issued as partial consideration for merger acquisition 120,474 - Investment in subsidiary undertakings through issuance of share-based compensation - - Reduction in investment through lapse of vested options 1,795,928 -
SILENCE THERAPEUTICS PLC
NOTES TO THE ACCOUNTS
Note 1. Principal accounting policies
Note 1.1 Basis of preparation
The financial information contained in this preliminary results announcement does not
constitute the Company’s statutory accounts for the years ended 31 December 2011 or 31
The financial information for the year ended 31 December 2010 is derived from the
statutory accounts for that year which have been approved by the board of directors and
delivered to the Registrar of Companies. The auditors have reported on the 2010 accounts;
their report was (i) unqualified, (ii) did include an emphasis of matter paragraph in
relation to the material uncertainty surrounding the successful completion of an equity
fundraising and (iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The financial information for the year ended 31 December 2011 is unaudited and has
been prepared using the historical cost convention and in accordance with International
Financial Reporting Standards as adopted by the European Union. The statutory accounts for
2011 will be finalised on the basis of the financial information presented by the
directors in this preliminary results announcement and will be delivered to the Registrar
of Companies following the Company’s forthcoming annual general meeting.
The principal accounting policies used in preparing this preliminary results
announcement are those that the Company will apply in its statutory accounts for the year
ended 31 December 2011 and are unchanged from those disclosed in the Company’s Annual
Report and Accounts for the year ended 31 December 2010.
Full financial statements for the year ended 31 December 2011 will be posted to
shareholders on or shortly after 27 April 2012.
Note 1.2 Going concern
The financial statements have been prepared on a going concern basis that assumes that
the Group and Parent Company will continue in operational existence for the foreseeable
The Group had a net cash outflow from operating activities for the year ended 31
December 2011 of GBP5.11 million and at 31 December 2011 had cash balances of GBP3.69
million. Post 31 December 2011, the Group has continued to progress its research and
development programmes resulting in a further net cash outflow of GBP0.83 million to 29
February 2012. At 29 February 2012 the Group’s cash balances stood at GBP2.86 million. The
Group’s cash flow forecasts, based on current levels of research and development
expenditure, administrative costs and contracted cash inflows, show that the Group will
require additional funding during the third quarter of 2012. The Group does not currently
have any overdraft or loan facilities.
The Directors have a reasonable expectation that further finances will become
available during the course of 2012 through a combination of sources, including equity
fundraisings, grants, milestone payments from existing agreements and license fees from
entering into new agreements with business partners.
The Directors, having prepared cash flow forecasts, believe that existing cash
resources together with additional funds provided by equity fundraisings, grants,
milestone payments and license fees will provide sufficient funds for the Group to
continue its research and development programmes and to remain in operation for at least
twelve months from the date of approval of these financial statements. The Directors have
also taken a number of steps to reduce expenditure during the last 12 months including the
closure of the Group’s US operations in Redwood City, California.
SILENCE THERAPEUTICS PLC
NOTES TO THE ACCOUNTS
Note 1. Principal accounting policies (continued)
Note 1.2 Going concern (continued)
The Directors have concluded that there is a material uncertainty as to the amount and
timing that funds will be obtained from equity fundraisings, grants, milestone payments
and license fees. The Directors also note that the failure to obtain sufficient funding
from any or all of these sources would cast significant doubt on the Group’s ability to
continue as a going concern. The Group and Company may therefore be unable to continue
realising their assets and discharging their liabilities in the normal course of business.
The Directors consider that the continued adoption of the going concern basis is
appropriate and the financial statements do not reflect any adjustments that would be
required if they were to be prepared on any other basis.
The Group’s business activities, together with the factors likely to affect its future
development, performance and position are set out in the Chief Executive’s review above.
The financial position of the Group, its cash flows and liquidity position are as set out
in the Financial Review also above.
Note 1.3 Loss per share
The calculation of the loss per share is based on the loss for the financial year
after taxation of GBP5,736,563 (2010: loss GBP8,795,274) and on the weighted average of
466,864,698(2010: 278,303,966) ordinary shares in issue during the year.
The options outstanding at 31 December 2011 and 31 December 2010 are considered to be
non-dilutive in that their conversion into ordinary shares would not increase the net loss
per share. Consequently, there is no diluted loss per share to report for either year.
For further information, please contact the following: Silence Therapeutics plc +44(0)20-7491-6520 Tony Sedgwick, Chief Executive Officer Max Herrmann, Chief Financial Officer Nominated Advisers Singer Capital Markets +44(0)20-3205-7500 Shaun Dobson/Claes Sprang M:Communications +44-207-920-2330 Mary-Jane Elliott/Claire Dickinson email@example.com
SOURCE Silence Therapeutics Plc