Regeneus Half-Yearly Appendix 4D and Accounts
Sydney, Feb 19, 2015 AEST (ABN Newswire) - Regeneus Ltd (
ASX:RGS) Regeneus Half-Yearly Appendix 4D and Accounts. Following is the review of operations for the period.
Capital Raising
In the six month period to December 2014, Regeneus successfully completed a capital raising. The capital raising was structured in two parts. The first part, a private placement with institutional and sophisticated investors, raised $3 million issuing 11,538,462 shares at $0.26 and 3,846,154 options (1 for 3) exercisable in August 2015 at $0.40. The second, a normal Share Purchase Plan (SPP), closed oversubscribed by 10% raising $3.3 million from 12,953,604 shares at $0.26 per share.
Costs associated with the capital raising were $200,056.
Strategy
Regeneus is committed to developing and commercialising a diversified portfolio of innovative cell-based therapies to treat the unmet medical needs associated with musculoskeletal disease and oncology conditions for both humans and animals.
The Company remains focused on unlocking value in its product pipeline by partnering its clinical-stage veterinary products and commencing its first-in-man trials for its human products. The Company's products are derived from its proprietary adipose stem-cell and immunotherapy technologies.
Animal Health
CryoShot - allogeneic cell therapy for canine and equine osteoarthritis
The field trials for canine CryoShot have importantly allowed the technical finalisation of the product. Regeneus is now focused on generating placebo-controlled trial data for canine CryoShot while the equine field trial remains ongoing. Regeneus continues to explore commercial partnering opportunities for CryoShot.
Kvax - autologous canine cancer vaccine
During the half-year, Regeneus launched Kvax into the Australian veterinary market, following the safe treatment of a large number of dogs and demand from vets and veterinary oncologists. A marketing trial for the treatment of bone cancer has commenced in the United States with VCA, a leading provider of pet health care services in the US. We are also planning further marketing trials of Kvax for other major canine cancers. As we have regulatory clearance from The Center for Veterinary Biologics at the US Department of Agriculture to proceed with commercialisation of Kvax, we are seeking an appropriate commercialisation partner. Additionally, Regeneus is reviewing regulatory pathways for the launch of Kvax in the UK.
Human Health
Progenza - off-the-shelf cell therapy for human osteoarthritis
During the half-year, the Company reported receiving ethics approval for collecting stem cells from human donors for a first-in-man safety trial for our allogeneic off-the-shelf cell therapy product. Regeneus has been encouraged by Japan passing new regenerative medicine laws, which reform the pharmaceutical and medical regulations and provide a rapid approval process specifically designed for regenerative medicine products, such as Progenza. Regeneus is on schedule to commence a safety trial in the second calendar quarter of 2015. Regeneus is seeking to identify Japanese partners for the phase II trial and product manufacture in Japan.
Personalised human cancer vaccine
Regeneus has the exclusive worldwide rights for a new therapeutic human cancer vaccine and is on schedule to commence a first-in-man safety trial in the second calendar quarter of 2015. The production of the cancer vaccine for an individual patient requires a patient tumor sample obtained either by complete surgical removal or a small biopsy. This approach is a personalised therapeutic cancer immunotherapy. The market for therapeutic vaccines is projected to grow at 55% annually to $13billion in revenues by 2018*.
*Oliver Wynan's MedTRACK analysis, 2012
Cell secretions cream
Following the pre-clinical safety study, that showed the cream to be safe and well tolerated, Regeneus is pursuing various commercialisation pathways including identifying a partner for this product. The recent patent granted for therapeutics for skin conditions, provides protection for the Company's stem cell secretions technology for the topical treatment of acne.
HiQCell - autologous cell therapy for human osteoarthritis
To date, over 600 patients have been treated by licensed medical specialists with HiQCell. The initiative availing patients of the opportunity to cryogenically store cells is now used by more than 80% of the patients, storing their cells for additional future treatments. These cells are stored with Cryosite (ASX:CTE), the second largest biological storage business in Australia.
Almost 400 patients continue to be monitored through the HiQCell Joint Registry with promising data showing patients received a significant reduction in pain, increased joint function, improvement in sleep and a significant reduction in pain medication requirements.
FINANCIAL RESULTS
Operating Results
The net loss before tax for the half-year period, from continuing operations was $5.75m (31 December 2013: $6.36m). The current results include redundancy costs in excess of $0.5m.
Revenue From Continuing Operations
Revenue during the current period was $1,141k an increase of $358k over the same period in 2013 of $783k.
Licence fee income of $548k, an increase of $196k, resulting from the commencement of the R&D licence agreement with Cryosite. Human Health revenue was $528k, an increase of $211k, in part due to the increase in cryopreservation as well as increased patient treatments.
Animal Health revenue generated from the canine CryoShot field trial has declined in the period and this is a reflection of the focus on generating placebo-controlled trial data.
Cost of Sales
The cost of sales for the period was $550k, an increase of $262k. The increase was entirely driven by the sales in HiQCell where sales are now contributing minimal margin. Direct staff have been reduced and this will enhance the margin. Additionally, costs associated with cryopreservation have been a key contributor to the increased costs and this is being addressed in price changes.
Expenses From Continuing Operations
Research
Research expenditure is within $5k of the prior year. The research and development expenditure is a function of the activities being undertaken to achieve the product development milestones. The current period included increased costs associated with the Cryosite research agreement offset through lower salaries and other cost containment measures.
The current accounting policy, and to comply with the accounting standards, is that all costs incurred for research are fully expensed. This is being continually reviewed as some products move towards commercialisation.
Selling
Selling expenses have increased by $190k to $1,253k which is predominantly due to the redundancy costs associated with staff changes in November.
Corporate
Corporate expenses have decreased significantly to $1.5m from $2.2m in the prior year. Significantly the current year corporate expense included $76k of option expense (2013 $604k). Additionally 2013 included $208k of IPO related expenses.
Occupancy
Occupancy expenditure increased $118k to $449k. This increase is reflective of the move to the new corporate leased premises.
Finance
Finance costs were lower in the current period as there were no longer any interest bearing convertible notes.
Income Tax
There has been no accrual included in these results for the R and D tax incentive for the year to 30th June 2015. Currently, the financial year estimate for the R and D tax incentive is $2.3m compared to $3.7m, FY14.
Cash Flows
The net inflows for the period were $4.2m (2013; $6.2m).
To view the full report, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-RGS-843446.pdf
About Regeneus Ltd
Regeneus Ltd (ASX:RGS) is a Sydney-based clinical-stage regenerative medicine company using stem cell technologies to develop a portfolio of novel cell-based therapies. The regenerative therapies seek to address unmet medical needs in human health markets, focusing on neuropathic pain, including osteoarthritis and various skin conditions, with its platform technologies Progenza(TM) and Sygenus. Visit www.regeneus.com.au for more information.
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