Silence Therapeutics plc Interim Results for the Six Months Ended 30 June 2012
LONDON, September 25, 2012 /PRNewswire/ –
Silence Therapeutics Plc (AIM: SLN), a leading international RNAi therapeutics
company, today provides a corporate update and announces its interim results for the six
months ended 30 June 2012.
Ali Mortazavi, Director of Corporate Strategy, said: “These results, including the
writedown of our Intradigm investment, mark the end of a very difficult period for Silence
Therapeutics. However, post this period, the Company has been refinanced and is uniquely
positioned to take advantage of the enormous potential of RNAi-based therapeutics.
Significant recent developments in the industry also give us confidence that RNAi is
finally poised to make the breakthroughs that it has long promised. With its strong patent
position, drugs in the clinic, unique delivery systems and exciting pre-clinical data, we
believe that the Company will be at the forefront of the new RNAi wave.”
- In June 2012, Silence published interim data from Atu027 Phase I ascending dose trial at the American Society of Clinical Oncology ('ASCO') annual meeting. Results demonstrated that Atu027 was safe and well tolerated. - Silence's partner Quark Pharmaceutical Inc. ('Quark') initiated the MATISSE trial, a large Phase IIb trial exploring PF-4523655 for the treatment of diabetic macular oedema, a leading cause of blindness in the elderly. - Quark also announced plans to expand development of PF-4523655 in glaucoma increasing the potential milestones payable to Silence on this program by US$24.8m. - Scientific advisory board established with two key opinion leaders in area of liver disease. - Collaboration deal signed with micro-RNAi partner, Miragen Inc. to explore the delivery of microRNA-based therapeutics with Silence's liver delivery system, DBTC.
- Revenue for the six months ended 30 June 2012 was GBP0.04m (six months ended 30 June 2011: GBP0.35m). - Research and development costs increased to GBP1.89m (six months ended 30 June 2011: GBP1.82m) reflecting continued investment in the development of Atu027. - Administrative expenses decreased to GBP1.13m (six months ended 30 June 2011: GBP1.56m) reflecting the closure of the US operations in August 2011. - Loss for the six months ended 30 June 2012 was GBP23.53m (six months ended 30 June 2011: loss of GBP3.43m) after impairment charges totalling GBP20.57m (six months ended 30 June 2011: GBPnil).
- In August 2012, Silence raised GBP5.20m (net of expenses). The cash position as of 30 June 2012 was GBP0.95m (at 31 December 2011: GBP3.69m). Cash usage in operating and investing activities in the half year amounted to GBP2.72m (six months ended 30 June 2011: GBP2.59m). - Atu027 Phase I ascending dose trial successfully completed demonstrating excellent safety. Plans to initiate a new study of Atu027 in combination with chemotherapy are now well advanced. - Collaborative deal signed with another micro-RNAi partner, MirEven PTY Ltd to explore the delivery of miR-7 microRNA with all three of Silence's three delivery systems. - Jerry Randall expanded his role to Executive Chairman (previously Non-Executive Chairman) following the resignation of Dr Tony Sedgwick and Max Herrmann. Ali Mortazavi appointed Director of Corporate Strategy. - Reported encouraging pre-clinical proof-of-concept results in acute lung injury with Atu111. These results were supported by research at Hannover Medical School using Atu111 in murine septic shock. - Appointed Dr Michael Khan as chief medical adviser. He is an associate professor of medicine at the University of Warwick and is a highly cited researcher and experienced clinician.
Jerry Randall, Executive Chairman of Silence Therapeutics, commented: “The completion
of the Phase I trial of Atu027 in patients with solid tumours represents a major milestone
for the Company. The strong safety profile and encouraging signs of stable disease that
Atu027 has demonstrated in the trial give us confidence to progress Atu027 to the next
stage of development. Plans for a trial combining Atu027 with chemotherapy are now well
advanced. The promising prospects for Atu027 were a major reason we were able to raise
GBP5.45m shortly after the end of the period. This fundraise is expected to support the
further development of Atu027 and Silence’s other programmes into the second half of 2014.
Silence Therapeutics is prominent in an exciting new sector in the drug development
arena known as RNA interference (‘RNAi’). The last few years have been particularly
challenging for companies working in the field as initial optimism about the technology’s
ability to transform the drug discovery and pharmaceutical process gave way to increasing
scepticism by the pharmaceutical industry and investors alike. This experience is normal
in the evolution of a new technology because our greater understanding of a field uncovers
new hurdles that need to be overcome. We believe that with continued perseverance these
hurdles will be surpassed. It is therefore gratifying to see that over the last few months
there are now real signs that the perseverance shown by Silence, our partners and our
peers is starting to deliver results.
For Silence, the first half of 2012 saw the achievement of some significant events. In
particular, we not only presented interim Phase I data from our lead programme Atu027 at
the ASCO annual meeting confirming the drug’s safety and encouraging signs of efficacy,
but also completed enrolment of patients into the study during the period. This trial has
taken three years to complete and I would like to take this opportunity to thank the staff
at Silence and our clinical partners without whose dedication this milestone would not
have been achieved.
Our partner Quark has also made good progress over the period with its two lead
programmes, which are both based on Silence’s AtuRNAi technology. In February 2012, Quark
initiated a 264 patient Phase IIb trial of PF-’655 in diabetic macular oedema, a leading
cause of blindness in the elderly. In addition, Quark now plans to initiate a further
Phase II trial with the drug in glaucoma. Quark is also close to completion of a 366
patient Phase II trial of QPI-1002 in prevention of delayed graft function in kidney
2012 has seen significant Board and management changes at Silence. In February 2012,
Dr Tony Sedgwick was appointed Chief Executive Officer following the departure of Thomas
Christely. However, following the recently completed fundraising Dr Sedgwick, Annette
Clancy and Max Herrmann have decided to leave the Company. I have therefore been asked to
take on the role of Executive Chairman, which I am pleased to accept. In addition, we have
appointed Ali Mortazavi as Director of Corporate Strategy. I would like to thank Annette,
Max and Tony for their dedication and hard work and wish them well in the future.
Finally, in July this year we raised GBP5.45m before expenses from existing and new
investors. The proceeds of the fundraising have significantly enhanced the Group’s
financial position and provides it with sufficient cash resources to fund the business
until 2014. The injection of funding is expected to extend the existing window of
opportunity for exploitation of the RNAi platform and the Company’s lead development
candidate Atu027. In particular, it should enable the Company to conduct a small Phase Ib
trial and a subsequent small Phase IIa trial of Atu027. It should also enable the Company,
and its Shareholders, to benefit from potential milestone payments which may arise from
existing licensing agreements and licences which may arise from recently announced
Advancements with Internal Pipeline Products
Atu027, for the treatment of solid tumours, is Silence Therapeutics’ most advanced
internal product candidate. Atu027, which combines our proprietary drug delivery system,
AtuPLEX(TM), with AtuRNAi, the Company’s proprietary RNAi chemistry, specifically targets
PKN3, a protein implicated in cancer growth and metastases.
During the first half of 2012, we not only completed patient enrolment into our Phase
I clinical trial of Atu027 but also announced interim results at the prestigious American
Society of Clinical Oncology (‘ASCO’) meeting in June.
The Phase I clinical trial of Atu027 was an open label, single-centre, dose-finding
study in subjects with advanced solid cancer. It was designed to evaluate up to a total of
11 escalating doses of Atu027. The enrolment of patients in the last cohort in dose level
10 has now been completed. Atu027 was very well tolerated and safe up to the 10th dose
level. No premedication was needed in support of Atu027 treatment. The prospective
recommended maximum tolerated dose is 0.336 mg/kg. “Stable disease” response for three and
six months after treatment was observed in 10 and 3 patients, respectively, of the 33
evaluable patients. Two patients with neuroendocrine cancer had disease stabilisation for
9 and 12 months. Partial regression of pulmonary metastases was found in another patient.
A further patient with breast cancer showed regression of liver metastases.
Plans are now well underway to initiate a Phase Ib clinical study of Atu027 in
combination with chemotherapy. The trial is expected to start patient recruitment in late
2012 or early 2013. The Company believes that this encouraging Phase I data and the
important validation of our AtuPLEX(TM) delivery system on which Atu027 is based, are
important factors in realising value for Shareholders.
In March 2011, our partner, Quark Pharmaceuticals, announced the completion of the
DEGAS study, a Phase II clinical trial of PF-04523655 for the treatment of diabetic
macular oedema. PF-04523655, which incorporates Silence’s AtuRNAi technology and is
sublicensed to Pfizer by Quark, was shown to be more effective than laser therapy.
Based on this encouraging data, in February 2012, Quark initiated a 264 patient Phase
IIb trial of PF-’655 in patients with diabetic macular oedema. The trial is designed to
compare the efficacy of PF-’655 when used alone or in combination with Lucentis
(Novartis/Roche) against Lucentis alone in patients with diabetic macular oedema. The
trial is expected to complete in the middle of 2014.
In May 2012, Quark also announced it had amended its agreement with Pfizer to enable
it to initiate a 108 patient Phase IIa trial of PF-’655 in patients with open-angle
glaucoma (the most common type of glaucoma). Quark and Pfizer have also conducted a Phase
II trial of PF-’655 in age-related macular degeneration, the leading cause of blindness in
the elderly. In addition to royalties on product sales, milestones from these programmes
could now total up to US$120 million of which US$6 million has been received to date. A
further milestone of almost US$4 million is due to Silence on initiation by Pfizer of a
Phase III trial.
In addition to PF-’655, Quark is also developing QPI-1002 for the prevention of
delayed graft function in kidney transplant patients and for the prevention of acute
kidney injury. QPI-1002 is based on Silence AtuRNAi technology. In August 2010, Quark
signed an option and licence agreement for QPI-1002 with Novartis for an upfront payment
of US$10 million. Quark is currently conducting a 366 patient Phase II trial of QPI-1002
in prevention of delayed graft function in kidney transplant patients. The trial is due to
be completed before the end of 2012. Based on the results of this study, Novartis may
decide to exercise its option to license QPI-1002. Quark also plans to initiate a Phase II
trial of QPI-1002 in acute kidney injury. In addition to royalties on product sales,
milestones to Silence from these programmes could total up to US$100 million.
Other Research Collaborations
During the last 12 months, Silence has signed a number of delivery collaborations to
evaluate the Company’s three RNAi delivery systems including agreements with InteRNA
Technologies BV, miRagen Inc., Mireven PTY Ltd and Mirna Inc. If successful, these
collaborations could lead to these parties taking a licence to Silence delivery
Continued Intellectual Property Strength
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. Importantly, we have achieved
significant successes in establishing key levels of patent protection for our technologies
in Europe, the USA and Japan, offering opportunities in all of these important markets.
Silence remains committed to the expansion and strengthening of its intellectual
property portfolio in target markets around the globe. So far this year we have
strengthened our intellectual property portfolio via the following:
- Notice of allowance of a US patent that covers certain siRNA molecules specifically designed to silence PKN-3, the target of Atu027. - Issuance of a new European patent that covers so-called 'Blunt-Ended' siRNA molecules. Notice of allowance of this patent has also been received in the US.
Looking forward, the Company will continue to expand and strengthen our intellectual
property portfolio in target markets around the globe. However, it is important to
actively manage a patent estate and therefore where necessary we will review and cease
patent prosecution where the cost of such action is deemed to outweigh the benefits. As an
example of such, following a review of the Company’s Zamore Design Rules licences, Silence
has now decided that their high cost of maintenance is not warranted and has entered into
an agreement with the University of Massachusetts to terminate these licences. This led to
an impairment charge of GBP0.17m in the first half of 2012.
Revenue in the first half of 2012 at GBP0.04m (six months ended 30 June 2011:
GBP0.35m) was below that in the prior year reflecting lower income from licence partners.
Research and development expenditure at GBP1.89m (six months ended 30 June 2011: GBP1.82m)
was broadly in line with the prior year. This reflects continued investment in the Phase I
trial of Atu027. Administrative expenses in the first half of 2012 decreased to GBP1.13m
from GBP1.56m (GBP2.00m including restructuring of the US operations) in the first half of
2011. This reflects cost savings made as a result of the closure of the US Redwood City
operations in August 2011
The net loss for the half-year before intangible assets impairment charges was
GBP2.96m (six months ended 30 June 2011: GBP3.43m; full year 2011: GBP5.74m). The Zamore
Design rules licences were the main asset held by Intradigm. The decision to terminate
them therefore meant the GBP20.4m goodwill held on the balance sheet relating to Intradigm
had to be written off. After reflecting these items, the net loss for the half year after
taxation was GBP23.53m.
Cash used in operating and investing activities in the first half of the year amounted
to GBP2.72m (six months ended 30 June 2011: GBP2.59m) which left the Group with cash at
bank of GBP0.95m at the period end.
Following the period end, 2012 Silence raised GBP5.45m (GBP5.20m net of expenses) in a
subscription and open offer of shares as well as the issuance of a GBP1.00m zero coupon
convertible bond. This funding is expected to provide cash resources that will support the
Company’s operations into the second half of 2014.
RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties that could have a material
impact on the Group’s performance over the remaining six months of the financial year and
could cause actual results to differ materially from expected and historical results. The
risks (identified and outlined in the Annual Report and Accounts 2011 in the Directors’
Report on pages 18-20, which does not form part of this interim statement, include:
- Clinical and regulatory risk - our drug trials may not be successful. - Competition and intellectual property risk - several companies are developing RNAi technology. Intellectual property may expire before products are successful commercially. - Economic and financial risk - with no recurring revenue, the Group is reliant on receiving additional funds.
SUMMARY AND OUTLOOK
In the first half of 2012, we achieved the following milestones which we believe
significantly strengthened our business and created value for Shareholders:
- Completed patient recruitment and announced further positive interim data from our Phase I clinical trial of Atu027. Based on the data from the Phase I trial, plans are now well advanced to initiate a trial of Atu027 in combination with chemotherapy. - Signed a collaboration deal with microRNA company Miragen Inc. for our DBTC delivery technology, our third such delivery collaboration. - Established a Scientific Advisory Board with key opinion leaders in the area of liver disease. - Expanded our already strong intellectual portfolio by receiving key patent issuances with global reach.
In light of the advances we have made in the first half of the year, we look ahead to
the second half of 2012 with great optimism.
Thank you for your continued support of Silence Therapeutics.
SILENCE THERAPEUTICS PLC CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2012
Year Six months Six months ended 31 Note ended ended December 30 June 2012 30 June 2011 2011 (Un-audited) (Un-audited) (Audited) GBP000s GBP000s GBP000s 3 Revenue 37 354 694 Research and development costs (1,893) (1,819) (3,361) Impairment of intangible assets (20,565) - - Administrative expenses (1,128) (1,560) (2,647) Restructuring charge - (443) (472) Operating loss 3 (23,549) (3,468) (5,786) Finance and other income 9 38 57 Finance expense - - (13) Gain on sale of fixed assets 14 4 5 Loss for the period before taxation 3 (23,526) (3,426) (5,737) Taxation - - - Loss for the period attributable to owners of the Parent Company (23,526) (3,426) (5,737) Loss per ordinary equity share (basic and diluted) (4.1p) (1.0p) (1.2p)
All transactions, with the exception of the Restructuring charge and impairment of
intangible assets relating to Intradigm Corporation, arose from continuing activities and
there are no recognised gains or losses other than those presented above.
SILENCE THERAPEUTICS PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2012
Year Six months Six months ended 31 ended ended December 30 June 2012 30 June 2011 2011 (Un-audited) (Un-audited) (Audited) GBP000s GBP000s GBP000s Loss for the period after taxation (23,526) (3,426) (5,737) Other comprehensive income: Exchange differences arising on consolidation of foreign operations (696) (63) 5 Total comprehensive income for the period (24,222) (3,489) (5,732)
SILENCE THERAPEUTICS PLC CONSOLIDATED BALANCE SHEET AT 30 JUNE 2012
30 June 30 June 31 December 2012 2011 2011 (Un-audited) (Un-audited) (Audited) GBP000s GBP000s GBP000s Non-current assets Property, plant and equipment 181 269 225 Goodwill 7,289 28,211 28,342 Other intangible assets 513 1,048 971 7,983 29,528 29,538 Current assets Investments - 27 38 Trade and other receivables 113 397 174 Cash and cash equivalents 950 6,486 3,688 1,063 6,910 3,900 Current liabilities Trade and other payables (981) (2,073) (1,260) Net current assets 82 4,837 2,640 Net assets 8,065 34,365 32,178 Capital and Reserves attributable to the Company's Equity Holders Share capital 5,771 5,766 5,771 Capital reserves 80,981 82,886 81,141 Translation reserve 2,342 2,970 3,038 Profit and loss account (81,029) (57,257) (57,772) Equity Holders' funds 8,065 34,365 32,178
SILENCE THERAPEUTICS PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2012
(Un-audited) Share Capital Translation Profit and loss Total Capital Reserves Reserve Account GBP000s GBP000s GBP000s GBP000s GBP000s At 1 January 2012 5,771 81,141 3,038 (57,772) 32,178 Recognition of share-based payments - 109 - - 109 Issuance of warrants - - - - - Transfer upon: - exercise of options in period - - - - - - lapse of vested options in period - (269) - 269 - Shares issued in period, net of expenses - - - - - Transactions with owners - (160) - 269 109 Loss for six months to 30 June 2012 - - - (23,526) (23,526) Other comprehensive income - Exchange differences arising on consolidation of foreign operations - - (696) (696) At 30 June 2012 5,771 80,981 2,342 (81,029) 8,065
SILENCE THERAPEUTICS PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) FOR THE SIX MONTHS ENDED 30 JUNE 2011
(Un-audited) Share Capital Translation Profit and loss Total Capital Reserves Reserve Account GBP000s GBP000s GBP000s GBP000s GBP000s At 1 January 2011 2,799 80,269 3,033 (53,831) 32,270 Recognition of share-based payments - 76 - - 76 Issuance of warrants 1 1 Transfer upon: - exercise of options in period - - - - - - lapse of vested options in period - - - - - Shares issued in period, net of expenses 2,967 2,540 - - 5,507 Transactions with owners 2,967 2,617 - - 5,584 Loss for six months to 30 June 2011 - - - (3,426) (3,426) Other comprehensive income Exchange differences arising on consolidation of foreign operations - - (63) - (63) At 30 June 2011 5,766 82,886 2,970 (57,257) 34,365
SILENCE THERAPEUTICS PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2011
(Audited) Share Capital Translation Profit and loss Total Capital Reserves Reserve Account GBP000s GBP000s GBP000s GBP000s GBP000s At 1 January 2011 2,799 80,269 3,033 (53,831) 32,270 Recognition of share-based payments - 120 - - 120 Issue of warrants in period - 1 - - 1 Transfer upon: -exercise of options in period - - - - - -lapse of vested options in period - (1,796) - 1,796 - Shares issued in year, net of expenses 2,972 2,547 - - 5,519 Transactions with owners 2,972 872 - 1,796 5,640 Loss for the year ended 31 December 2011 - - - (5,737) (5,737) Other comprehensive income Exchange differences arising on consolidation of foreign operations - - 5 - 5 At 31 December 2011 5,771 81,141 3,038 (57,772) 32,178
SILENCE THERAPEUTICS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2012
Six months Six months Year ended to to 31 December 30 June 2012 30 June 2011 2011 (Un-audited) (Un-audited) (Audited) Cash flows from operating activities GBP000s GBP000s GBP000s Loss before taxation (23,526) (3,426) (5,737) Adjustments for: Impairment of intangible assets 20,565 - - Depreciation charges 36 61 91 Amortisation charges 104 87 214 (Gain)/loss on sale of property, plant and equipment (14) (4) (5) Charge for the period in respect of share-based payments 109 77 121 Foreign exchange movement 1 55 - Finance expense - - 13 Finance and other income (9) (39) (57) (2,734) (3,189) (5,360) Decrease in trade and other receivables 53 360 667 Decrease in inventory - 27 27 Increase/(decrease) in trade payables 2 386 (431) Cash absorbed by operations (2,679) (2,416) (5,097) Taxation received - - - Interest paid - - (13) Net cash outflow from operating activities (2,679) (2,416) (5,110) Cash flows from investing activities Investment in assets held for sale - - (6) Proceeds from the sale of property, plant and equipment 16 8 10 Interest received 6 18 27 Proceeds from sale of assets held for sale 39 - - Additions to property, plant and equipment - (33) (27) Additions to intangible assets (104) (163) (248) Net cash used in investing activities (43) (170) (244) Cash flows from financing activities Net proceeds from issue of share capital - 5,507 5,519 Repayment of notes payable - - - Net cash generated from financing activities - 5,507 5,519 Net (decrease)/increase in cash and cash equivalents (2,722) 2,920 165 Cash and cash equivalents at beginning of period 3,688 3,567 3,567 Net (decrease)/increase in cash and cash equivalents (2,722) 2,920 165 Effect of exchange rate fluctuations on cash held (16) (1) (44) Cash and cash equivalents at end of period 950 6,486 3,688 Cash and cash equivalents include Instant access bank accounts 950 6,486 3,688
SILENCE THERAPEUTICS PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012
1. Basis of Preparation and Accounting Policies
This condensed consolidated interim financial information for the six months ended 30
June 2012 has been prepared in accordance with the Disclosure and Transparency Rules of
the Financial Services Authority and with IAS 34 – ‘Interim Financial Reporting’ as
adopted by the European Union.
This condensed consolidated interim financial information has been neither reviewed
nor audited. The interim financial statements do not comprise statutory accounts within
the meaning of Section 434 of the Companies Act 2006. The comparative figures for the
financial year ended 31 December 2012 are not the Company’s statutory accounts for that
financial year. Those accounts have been reported on by the Company’s auditors and
delivered to the Registrar of companies. The report of the auditors was unqualified and
did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
However, the report of the auditors did contain an emphasis of matter paragraph in
relation to the receipt of sufficient additional funds, including the successful
completion of an equity fundraising.
2. Going concern
The financial statements have been prepared on a going concern basis that assumes that
the Group will continue in operational existence for the foreseeable future.
During the period the Group met its day-to-day working capital requirements through
existing cash resources. The Group had a net cash outflow in the six months ended 30 June
2012 of GBP2.72m and at 30 June 2012 had cash balances of GBP0.95m. However, the Group
raised GBP5.45m before expenses in August 2012. The directors have reviewed the working
capital requirements of the Group for the next 12 months from the date of the approval of
these interim financial statements and are confident that these can be met.
Given the continued efforts noted above, the directors consider that the continued
adoption of the going concern basis is appropriate and the accounts do not reflect any
adjustments that would be required if they were to be prepared on any other basis.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2012
3. Segment Reporting
For the Six Months Ended 30 June 2012
Unallocated RNAi Corporate Business Segments Therapeutics Immunotherapy items Consolidated GBP000s GBP000s GBP000s GBP000s Revenue 37 - - 37 Operating results (22,691) - (858) (23,549) Finance and other income (net) 16 - 7 23 Net loss for the period (22,675) - (851) (23,526) Segment assets 8,356 - 690 9,046 Segment liabilities (808) - (173) (981) Costs to acquire property, plant and equipment - - - - Costs to acquire other intangible assets 104 - - 104 Depreciation and amortisation 139 - 1 140 Charge for non-cash expenses 20,565 - - 20,565
In accordance with IFRS 8 ‘Operating Segments’, the identification of the Group’s
operating segments is based on internal management reporting as reviewed by the senior
management team in order to assess performance and allocate resources.
The Group is managed on a business segment basis – RNAi Therapeutics, Immunotherapy
and unallocated corporate items. Transfer prices between segments are set on an arm’s
length basis. Segment revenue and profit include transfers between segments, which are
eliminated on consolidation. The operations, segment assets and liabilities of the RNAi
Therapeutics segment are located in Germany. The operations segment assets and liabilities
of the remaining two segments are located in the United Kingdom and the USA.
In accordance with IAS 36 Impairment of Assets, the carrying value of goodwill is
assessed comparing its carrying value to its net recoverable amount. The recoverable
amount is calculated by the Directors as being the value in use. For the purpose of
impairment testing of goodwill, the Directors perform risk adjusted discounted cash flow
analysis of the RNAi therapeutics business area, the cash generating unit that encompasses
Silence Therapeutics AG and Intradigm Corporation. Following a review of the Company’s
portfolio during the period, the Group decided that the high cost of maintenance of the
Zamore Design Rules licences (Intradigm Corporation) was no longer warranted and decided
to terminate these licenses with the University of Massachusetts. This led to an
impairment charge of GBP0.17m in the first half of 2012 and triggered a test of the
goodwill for impairment.
Given the Group plans to fully exit the Intradigm business, the goodwill that arose
from acquisition was fully impaired and a charge of GBP20.4 million was recorded for the
first half year. The impairment loss has been recognised in Research and development
The remaining goodwill in the the RNAi therapeutics business area, which totals GBP7.3
million, is supported by the value in use of the on-going business.
For the Six Months Ended 30 June 2011
Unallocated RNAi Corporate Business Segments Therapeutics Immunotherapy items Consolidated GBP000s GBP000s GBP000s GBP000s Revenue 354 - - 354 Operating results (2,964) (1) (503) (3,468) Finance and other income (net) 33 - 9 42 Net loss for the period (2,931) (1) (494) (3,426) Segment assets 30,219 6 6,213 36,438 Segment liabilities (1,869) (1) (203) (2,073) Costs to acquire property, plant and equipment 33 - - 33 Costs to acquire other intangible assets 163 - - 163 Depreciation and amortisation 147 - 1 148 Charge for non-cash expenses 72 - 5 77
4. Earnings per share
The loss per share is based on the loss for the period after taxation attributable to
equity holders of GBP23.53m (year ended 31 December 2011 – loss GBP5.74m; six months ended
30 June 2011 – loss GBP3.43m) and on the weighted average of 577,114,517 ordinary shares
in issue during the period (year ended 31 December 2011 – 466,864,698; six months ended 30
June 2011 – 352,015,733).
The options outstanding at 30 June 2012, 31 December 2011 and 30 June 2011 are
considered to be non-dilutive in that their conversion into ordinary shares would decrease
the net loss per share. Consequently, there is no diluted loss per share to report for the
5. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have
been eliminated on consolidation and are not disclosed in this note. On 2 August 2012
Robert Keith and ACP IV LP subscribed for GBP1m of loan notes as described in note 6.
Before the issue they held 92,682,266 shares (16.06%) of the Company.
6. Post-balance sheet events
On 31 July 2012, Shareholders approved a share capital reorganisation whereby each
existing ordinary share of 1 pence nominal value was converted into an ordinary share of
0.1 pence nominal value and one deferred share of 0.9 pence nominal value. The Company
then purchased all of the issued deferred shares.
On 2 August 2012, the Company raised GBP5.45m in cash before expenses. The fundraising
was conducted by way of a subscription and open offer of 889,088,220 new Ordinary shares
of 0.1 pence each at a price of 0.5 pence per share as well as the issuance of a zero
coupon convertible GBP1.00m loan note maturing on 1 August 2019. The nominal value of the
shares issued was GBP889,088.22. The convertible loan note is convertible into shares by
the bondholder at anytime at a conversion rate of 0.5 pence per share.
Notes for editors
About Silence Therapeutics plc (http://www.silence-therapeutics.com)
Silence Therapeutics plc (AIM: SLN) is a leading biotechnology company dedicated to
the discovery, development and delivery of targeted, systemic RNA interference (RNAi)
therapeutics for the treatment of serious diseases. Silence offers one of the most
comprehensive short interfering RNA (siRNA) therapeutic platforms available today based on
a strong intellectual property portfolio and large clinical safety database. Silence’s
clinical siRNA product pipeline is one of the broadest in the industry. The Company
possesses multiple proprietary siRNA delivery technology platforms including AtuPLEX(TM),
DACC and DBTC. AtuPLEX enables the broad functional delivery of siRNA molecules to
targeted diseased tissues and cells, while increasing their bioavailability and
intracellular uptake. The DACC delivery system allows functional delivery of siRNA
molecules selectively to the lung endothelium with a long duration of target mRNA and
protein knock-down. The DBTC delivery system enables functional delivery of siRNA
molecules selectively to liver cells including hepatocytes. Additionally, the Company has
a platform of novel siRNA molecules based around its AtuRNAi chemical modification
technology, which provides a number of advantages over conventional siRNA molecules.
Silence’s unique RNAi assets also include structural features for RNAi molecules and
specific design rules for increased potency and reduced off-target effects of siRNA
The Company’s lead internal drug candidate is Atu027, a liposomal formulation in
clinical development for systemic cancer indications and one of the most clinically
advanced RNAi therapeutic candidates in the area of oncology. Atu027 incorporates two of
the Company’s technologies, AtuRNAi and AtuPLEX(TM). Silence is currently conducting an
open-label, single-centre, dose-escalation Phase I study with Atu027 in patients with
advanced solid tumors involving single, as well as repeated, intravenous administration.
Encouraging interim safety and pharmacokinetic data were presented at the American Society
of Clinical Oncology Annual Meeting in June 2012. The study was completed in July 2012 and
results are due shortly.
The Company’s RNAi therapeutic platform has received key validation through multiple
partnerships with pharmaceutical companies including AstraZeneca, Dainippon Sumitomo,
Pfizer/Quark, and Novartis/Quark. Silence is actively pursuing the establishment of
additional partnerships. Silence Therapeutics has operations in both Berlin and London.
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
For further information, please contact: Silence Therapeutics Jerry Randall / Ali Mortazavi T: +44-20-7491-6520 email@example.com firstname.lastname@example.org Singer Capital Markets Shaun Dobson T: +44-20-3205-7500 email@example.com firstname.lastname@example.org M:Communications Mary-Jane Elliott / Sarah Macleod / Claire Dickinson T: +44-20-7920-2333 email@example.com
SOURCE Silence Therapeutics Plc