Full Press Release Details
Interim Financial Report
For the Half-Year Ended
(previous corresponding period: half-year ended 31 December 2015)
To be read in conjunction with the 30 June 2016 Annual Report.
In compliance with Listing Rule 4.2A
ASX/Media Release (ASX: PRR)
Appendix 4D Interim Financial Report
Results for Announcement to the Market
Current Reporting Period - Half-year Ended 31 December 2016
Previous Reporting Period - Half-year Ended 31 December 2015
| Revenues | Down | 100 | % | to | - | |||||||||
| Loss after tax attributable to members | Down | 92.7 | % | to | (4,062,655 | ) | ||||||||
| Net loss for the period attributable to members | Down | 92.7 | % | to | (4,062,655 | ) |
| Dividends (Distribution) | Amount per Security | Franked Amount per Security | ||||||||||
| Final dividend | n/a | n/a | ||||||||||
| Previous corresponding period | n/a | n/a | ||||||||||
| Record date for determining entitlements to the dividend, (in the case of a trust, distribution) | n/a |
| Net Tangible Assets per Share (cents) | ||||||||||
| As at 31 December 2016 | 0.57 | |||||||||
| As at 31 December 2015 | 0.91 |
| Directors' Report | 2 | |
| Auditor's Independence Declaration | 7 | |
| Consolidated Statement of Comprehensive Income | 8 | |
| Consolidated Balance Sheet | 9 | |
| Consolidated Statement of Changes in Equity | 10 | |
| Consolidated Statement of Cash Flows | 11 | |
| Notes to the Consolidated Financial Statements | 12 | |
| Directors' Declaration | 22 | |
| Independent Auditor's Review Report to the Members | 23 |
Your directors are pleased to provide the following half-year report on Prima Biomed Ltd and its subsidiaries (referred to hereafter as the Group or Prima or the Company) for the half-year ended 31 December 2016.
The following persons were directors of Prima during the whole of the half-year and up to the date of this report unless otherwise stated:
Ms Lucy Turnbull, AO (Non-Executive Chairman)
Mr Marc Voigt (Executive Director & Chief Executive Officer)
Mr Albert Wong (Non-Executive Deputy Chairman)
Dr Russell Howard (Non-Executive Director)
Mr Pete Meyers (Non-Executive Director)
Principal Activities
Prima BioMed is a globally active biotechnology company that is striving to become a leader in the development of immunotherapeutic products. Prima BioMed is dedicated to leveraging its technology and expertise to bring innovative treatment options to market for patients and to maximise value to shareholders.
Prima's current lead product candidate is IMP321, based on the LAG-3 immune control mechanism which plays a vital role in the regulation of the T cell immune response. IMP321 is a soluble LAG-3Ig fusion protein and an active APC activator, boosting T cell responses. IMP321 is currently in a Phase IIb clinical trial as a chemoimmuno-therapy for metastatic breast cancer termed AIPAC and in a Phase I combination therapy trial in metastatic melanoma termed TACTI-mel. Additional LAG-3 product candidates, including antibodies for immune response modulation in autoimmunity and in cancer, are being developed by Prima's large pharmaceutical partners. Prima is also developing an agonist of LAG-3 (IMP761) for autoimmune disease.
Prima BioMed is listed on the Australian Securities Exchange and on the NASDAQ in the US.
Review of Operations
Key highlights and significant events of the reporting period included:
IMP321 development and clinical trial updates
IMP321, a first-in-class Antigen Presenting Cell activator based on the immune checkpoint LAG-3, is the company's lead compound and currently in later stage clinical development.
Overall understanding and appreciation of the importance of LAG-3's role in the immune system continues to grow, with Prima's clinical development program for IMP321 making good progress during the period.
In December 2016, Prima announced interim data from its Phase IIb clinical trial of IMP321 in combination with paclitaxel for patients with hormone receptor-positive metastatic breast cancer, called AIPAC (Active Immunotherapy PAClitaxel). The data from all 15 patients in the safety run-in phase demonstrated that IMP321 is safe and well tolerated at both the 6mg and 30mg dose level. Immune monitoring data also confirmed that IMP321 generated the desired immune response.
Directors' Report (continued)
On December 30 2016, the Dose Escalation Committee approved the 30 mg dose and commencement of the enlarged, randomised study of 226 patients with patient screening and enrolment underway across Prima's European centres. In December, the trial was also broadened to include the U.K. in addition to Belgium, the Netherlands and Hungary. In further European countries Prima will seek Competent Authority and Ethics Committee approval to accommodate the planned increase in patient numbers.
Throughout the study, a data monitoring committee will continue to review patient safety, survival rates and demographics at regular intervals. The primary end point of the study is progression free survival (PFS).
Also in December 2016, Prima announced interim data for its Australian pilot phase I trial for IMP321 in combination with PD-1 checkpoint inhibitor pembrolizumab (KEYTRUDA ) for the treatment of unresectable or metastatic melanoma, called TACTI-mel (Two ACTive Immunotherapies in melanoma). The Database Safety Monitoring Board confirmed that IMP321 was safe and well tolerated at the first 1mg dose level and no drug-related serious adverse events were reported.
The trial will now proceed with the 6mg dosage. As announced since the end of the period, the first of six patients in the second cohort was dosed in January 2017. The study will mainly evaluate the safety, pharmacokinetics, pharmacodynamics and anti-tumour activity of IMP321 at the various doses as well as the nature of the immune response in the combination. The primary endpoint of the study will be safety.
During the period Prima advanced a number of collaboration and development programs as it continues to consolidate its leading position in the LAG-3 space around the world.
In November 2016, Prima's partnership with WuXi Biologics, a leading innovative technology platform dedicated to global biologics development, was further strengthened by way of a new development and manufacturing memorandum of understanding for the exclusive clinical and commercial manufacturing of IMP321 for Prima worldwide1. This was a key component of the Company's commercial development strategy, by securing a robust global supply of IMP321 for the foreseeable future.
In July 2016, Prima announced the first ever investigator-led collaborative study into intra-tumoural injections of IMP321, called INSIGHT. The study will assess the potential for IMP321 as an activator of local dendritic cells found within solid cancer tumours, in contrast to AIPAC and TACTI-mel which boost antigen presenting cell responses to solid tumours. INSIGHT is being conducted by the Institute of Clinical Cancer Research in Frankfurt, Germany with up to 40 patients. This is an exciting new therapeutic application for IMP321 that will not require any significant near-term funding commitments from Prima. Study commencement is subject to competent authority and ethics approval.
The Company also further consolidated its LAG-3 related intellectual property with the grant of a new patent for IMP731, providing protection for specific sequences of anti-LAG-3 antibodies. Rights for the development of the IMP731 antibody were granted in December 2010 to GSK, which has commenced first-in-human clinical trials of the proprietary antibody (GSK2831781) derived from IMP731. Prima may receive payments and potential milestones and is eligible for single-digit, tiered royalties if all objectives are achieved.
Competitive Environment
In general, the space of immune checkpoints is of great and increasing importance for the treatment of cancer. After the checkpoints, PD-1 and CTLA-4, LAG-3 has the chance to become the next big checkpoint. This is underpinned by the increasing awareness among the big pharmaceutical industry players, illustrated by a substantial increase in LAG-3 related clinical trials and the number of patients in these trials. Prima - as the leader in the LAG-3 space - is very well positioned in this escalating race to market.
Directors' Report (continued)
Industry Conferences
In November 2016 Prima's Chief Scientific Officer and Chief Medical Officer, Dr Fr d ric Triebel, presented "Lag-3lg (IMP321) in combination with anti-PD-1 therapy" at the 2016 Society for Immunotherapy of Cancer Conference in the U.S.A. Prima's Director of Clinical Development presented the abstract for each of Prima's two active clinical trials for IMP321 at the European Society for Medical Oncology (ESMO) Symposium on Immuno-Oncology - Advances in cancer immunotherapy in Switzerland.
As a result of careful financial management, Prima remains in a solid financial position, with approximately A$16.57m of cash as of 31 December 2016. Based on the Company's forecasts, it is now expected that the current cash reach will extend to the first quarter of 2018. This extended cash reach does not include potential milestone payments from existing partnerships, which, if received, would extend our cash reach even further.
The license revenue for half year to December 2016 was nil and $175k for half year to December 2015. The revenue of $175k received in 2015 related to an out-licensing deal of one of the company's Intellectual Property assets.
Other revenue consists of interest income, cash tax rebates, grant income, gain on foreign exchange and other miscellaneous income. Other income increased to $1.7m for half year to December 2016 from $1.3m for the half year to December 2015. The increase was primarily attributable to the recognition of the income from the French and Australian cash tax rebates. The increase in grant income for the half year is in line with an increase in Research & Development expenditure in development of IMP321.
The company has benefited from cash grants of 618,307 (approximately A$860,000) from the French Cr dit d'Imp t Recherche scheme (received in February 2017). The application for Australian cash tax rebates is currently in process and is likely to be received in fiscal year 2017. The company has received the approval for Advance Overseas Finding from Ausindustry and as a result is entitled to claim some eligible overseas research and development expenditures which would increase cash tax rebates during the period of our Australian clinical trial.
The interest income for the half year to December 2016 was $64k versus $165k for the half year to December 2015. The decrease was due to a decrease in the level of cash held on term deposits and a reduction in interest rates on term deposits.
Our R&D expenditure arises from contracts with Contract Research Organisations (CROs), Contract Manufacturing Organisations (CMOs) and clinical investigators. Research and development and intellectual property expenses decreased by $1.3m to $2.7m for the half year to December 2016 from $4.0m in the half year to December 2015. The reduction was primarily due to the cessation of the costly CVac clinical trials in the second half of fiscal year 2015, as well as the higher costs related to the initiation of the AIPAC and TACTI-mel clinical trials in the half year to December 2015.
Corporate administrative halved for half year to December 2016 from $4.2m to $2.1m due to a decrease of $795k in finance, legal and consulting expenses, a decrease of $447k in labour expenses, and a decrease of $809k in employee share-based payment expenses in the half year to December 2016.
Depreciation and amortisation expenses decreased to $865k for the half year to December 2016 from $1.0m for the half year to December 2015 due to the Intellectual Property Assets and Plant & Equipment of CVac being written off during the fiscal year 2016. Loss on foreign exchange was $203k for half year to December 2016 compared to $498k for the half year to December 2015, which was driven by the impact of changes in exchange rates on our U.S. and Euro cash holdings compared to the prior year.
The Share Based Payment to strategic investor expense was nil for the half year to December 2016 compared to $47.5m for the half year to December 2015. The amount represents the difference between the accounting fair value of convertible notes and warrants issued to Ridgeback Capital Investments and the cash received, which was expensed on grant date in accordance with AASB 2. Finance costs were nil for the half year to December 2016 compared to $8.2k in the half year to December 2015. The interest expense incurred in the half year 2015 related to other borrowings which were repaid in August 2015.
Directors' Report (continued)
The net change in fair value of the convertible note liability of $374k incurred during the half year to December 2016 compared to $279k in the half year to December 2015. The increase was attributable to the liability component of the convertible note being measured at fair value.
Changes in fair value of comparability milestone were nil for half year to December 2016 compared to $542k in the half year to December 2015. This amount related to an amount paid into a retention account on the acquisition of Immutep which was measured at fair value through the profit and loss account in accordance with AASB 3.
No Performance Rights were granted as Long Term Incentives ("LTIs") or Short Term Incentives ("STI") under the Executive Incentive Plan during the half year to December 2016. On Vesting of either LTIs or STIs granted in prior years, shares will be issued for no consideration. The expense recorded for the first half amounted to $498k.
Directors' Report (continued)
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 7. This report is made in accordance with a resolution of directors.
CEO and Executive Director
Dated: 24th Day of February 2017
Auditor's Independence Declaration
Auditor's Independence Declaration
As lead auditor for the review of Prima BioMed Ltd for the half-year ended 31 December 2016, I declare that to the best of my knowledge and belief, there have been:
This declaration is in respect of Prima BioMed Ltd and the entities it controlled during the period.
| Eddie Wilkie | Sydney | |
| Partner | 24 February 2017 | |
| PricewaterhouseCoopers |
PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Consolidated Statement of Comprehensive Income
For the Half Year Ended 31 December 2016
| Note | 31 December 2016 | 31 December 2015 | ||||||||||
| $ | $ | |||||||||||
| REVENUE | ||||||||||||
| License revenue | - | 175,052 | ||||||||||
| OTHER INCOME | ||||||||||||
| Miscellaneous income | 225,202 | 201,878 | ||||||||||
| Grant and research and development incentive income | 1,364,637 | 887,727 | ||||||||||
| Interest income | 63,711 | 164,657 | ||||||||||
| Total other income | 1,653,550 | 1,429,314 | ||||||||||
| EXPENSES | ||||||||||||
| Depreciation and amortisation | (865,195 | ) | (1,026,367 | ) | ||||||||
| Research and development and intellectual property | (2,709,225 | ) | (4,011,362 | ) | ||||||||
| Corporate administrative expenses | (2,116,641 | ) | (4,180,666 | ) | ||||||||
| Share Based Payment to strategic investor | 8 | - | (47,468,071 | ) | ||||||||
| Loss on foreign exchange | (203,164 | ) | (497,711 | ) | ||||||||
| Finance costs | - | (8,199 | ) | |||||||||
| Changes in fair value of comparability milestone | 10 | - | (542,075 | ) | ||||||||
| Net Change in fair value of financial liability | (373,836 | ) | (278,904 | ) | ||||||||
| Loss before income tax | (4,614,511 | ) | (56,584,041 | ) | ||||||||
| Income tax benefit | 551,856 | 562,176 | ||||||||||
| Loss for the half-year | (4,062,655 | ) | (56,021,865 | ) | ||||||||
| Other Comprehensive Income | ||||||||||||
| Exchange differences on the translation of foreign operations | (491,904 | ) | 269,013 | |||||||||
| Other comprehensive income for the half-year, net of income tax | (491,904 | ) | 269,013 | |||||||||
| Total comprehensive loss for the half-year | (4,554,559 | ) | (55,752,852 | ) | ||||||||
| Loss is attributable to: | ||||||||||||
| Owners of Prima BioMed Ltd | (4,062,655 | ) | (56,021,865 | ) | ||||||||
| Total comprehensive loss is attributable to: | ||||||||||||
| Owners of Prima BioMed Ltd | (4,554,559 | ) | (55,752,852 | ) | ||||||||
| Loss per share for loss attributable to the ordinary equity holders of the company: | ||||||||||||
| Basic and diluted loss per share (cents) | (0.18 | ) | (2.86 | ) |
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Balance Sheet
As at 31 December 2016
| Note | 31 December 2016 | 30 June 2016 | ||||||||||
| $ | $ | |||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 16,570,128 | 20,879,548 | ||||||||||
| Current receivables | 4 | 1,600,042 | 168,300 | |||||||||
| Other current assets | 7 | 492,429 | 623,020 | |||||||||
| Total current assets | 18,662,599 | 21,670,868 | ||||||||||
| Non-current assets | ||||||||||||
| Plant and equipment | 5 | 23,812 | 31,500 | |||||||||
| Intangibles | 6 | 19,472,732 | 20,851,699 | |||||||||
| Total non-current assets | 19,496,544 | 20,883,199 | ||||||||||
| Total assets | 38,159,143 | 42,554,067 | ||||||||||
| LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Trade and other payables | 1,245,419 | 1,422,798 | ||||||||||
| Current tax payable | - | 21,549 | ||||||||||
| Employee benefits | 36,892 | 27,694 | ||||||||||
| Total current liabilities | 1,282,311 | 1,472,041 | ||||||||||
| Non-current liabilities | ||||||||||||
| Convertible note liability | 8 | 5,401,004 | 5,027,168 | |||||||||
| Deferred tax liabilities | 171,171 | 694,194 | ||||||||||
| Employee benefits | 50,344 | 43,151 | ||||||||||
| Total non-current liabilities | 5,622,519 | 5,764,513 | ||||||||||
| Total liabilities | 6,904,830 | 7,236,554 | ||||||||||
| Net assets | 31,254,313 | 35,317,513 | ||||||||||
| EQUITY | ||||||||||||
| Contributed equity | 9 | 195,041,526 | 194,530,932 | |||||||||
| Reserves | 62,747,048 | 63,258,187 | ||||||||||
| Accumulated losses | (226,534,261 | ) | (222,471,606 | ) | ||||||||
| Equity attributable to the owners of Prima BioMed Ltd | 31,254,313 | 35,317,513 | ||||||||||
| Total equity | 31,254,313 | 35,317,513 |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the Half Year Ended 31 December 2016
| Note | Issued Capital | Reserves | Accumulated Losses | Total | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||
| Balance at 1 July 2015 | 179,878,436 | 5,267,729 | (160,456,422 | ) | 24,689,743 | |||||||||||||||
| Loss for the half-year | - | - | (56,021,865 | ) | (56,021,865 | ) | ||||||||||||||
| Other comprehensive income | - | 269,013 | - | 269,013 | ||||||||||||||||
| Total comprehensive income for the half-year | - | 269,013 | (56,021,865 | ) | (55,752,852 | ) | ||||||||||||||
| Transactions with owners in their capacity as owners: | ||||||||||||||||||||
| Contribution of equity, net of transaction cost | 13,479,739 | - | - | 13,479,739 | ||||||||||||||||
| Issue of convertible notes | 8 | - | 9,331,297 | - | 9,331,297 | |||||||||||||||
| Share based payment | - | 42,527 | - | 42,527 | ||||||||||||||||
| Share based payment to strategic investor | 8 | - | 47,468,071 | - | 47,468,071 | |||||||||||||||
| Employee share based payment | 1,017,900 | 242,731 | - | 1,260,631 | ||||||||||||||||
| Balance at 31 December 2015 | 194,376,075 | 62,621,368 | (216,478,287 | ) | 40,519,156 | |||||||||||||||
| Balance at 1 July 2016 | 194,530,932 | 63,258,187 | (222,471,606 | ) | 35,317,513 | |||||||||||||||
| Loss for the half-year | - | - | (4,062,655)) | (4,062,655 | ) | |||||||||||||||
| Other comprehensive income | - | (491,904 | ) | - | (491,904 | ) | ||||||||||||||
| Total comprehensive income for the half-year | - | (491,904 | ) | (4,062,655 | ) | (4,554,559 | ) | |||||||||||||
| Transactions with owners in their capacity as owners: | ||||||||||||||||||||
| Contribution of equity, net of transaction costs | (6,217 | ) | - | - | (6,217 | ) | ||||||||||||||
| Employee Share based payments | - | 497,576 | - | 497,576 | ||||||||||||||||
| Exercise of vested performance rights | 516,811 | (516,811 | ) | - | - | |||||||||||||||
| Balance at 31 December 2016 | 195,041,526 | 62,747,048 | (226,534,261 | ) | 31,254,313 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the Half Year Ended 31 December 2016
| 31 December 2016 | 31 December 2015 | |||||||
| $ | $ | |||||||
| CASH FLOWS RELATED TO OPERATING ACTIVITIES | ||||||||
| Payments to suppliers and employees (inclusive of Goods and Service Tax) | (4,347,108 | ) | (8,095,889 | ) | ||||
| Interest received | 63,711 | 164,657 | ||||||
| Miscellaneous income | 158,220 | 376,929 | ||||||
| Tax refund / (paid) | 7,367 | (2,066 | ) | |||||
| Grant income | - | 887,727 | ||||||
| NET CASH (OUTFLOWS) FROM OPERATING ACTIVITIES | (4,117,810 | ) | (6,668,642 | ) | ||||
| CASH FLOWS RELATED TO INVESTING ACTIVITIES | ||||||||
| Payments for plant and equipment | (1,228 | ) | (6,436 | ) | ||||
| Proceeds from disposal of plant and equipment | - | 64,105 | ||||||
| NET CASH (OUTFLOWS) / INFLOWS IN INVESTING ACTIVITIES | (1,228 | ) | 57,669 | |||||
| CASH FLOWS RELATED TO FINANCING ACTIVITIES | ||||||||
| Repayment of borrowings | - | (1,508,473 | ) | |||||
| Proceeds from issue of convertible notes | - | 13,750,828 | ||||||
| Proceeds from issues of shares and options | - | 13,761,076 | ||||||
| Share issue transaction costs | (6,217 | ) | (281,336 | ) | ||||
| NET CASH (OUTFLOWS) / INFLOWS FROM FINANCING ACTIVITIES | (6,217 | ) | 25,722,095 | |||||
| NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS | (4,125,255 | ) | 19,111,122 | |||||
| Effect on exchange rate on cash and cash equivalents | (184,165 | ) | (387,318 | ) | ||||
| Cash and cash equivalents at the beginning of the half year | 20,879,548 | 6,759,615 | ||||||
| CASH AND CASH EQUIVALENTS AT THE END OF THE HALF YEAR | 16,570,128 | 25,483,419 |
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Notes to the Financial Statements
1. Summary of Significant Accounting Policies
a) Basis of Preparation
The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standard AASB 134: Interim Financial Reporting, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.
The half-year report does not include full disclosures of the type normally included in an annual report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of Prima as the annual report.
It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2016 and any public announcements made by Prima BioMed Ltd and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.
International Financial Reporting Standards form the basis of Australian Accounting Standards adopted by the AASB. The half-year financial report complies with International Accounting Standards ("IAS") 34 Interim Financial Reporting as issued by the International Accounting Standards Board ("IASB").
The accounting policies adopted are consistent with those of the previous financial year and corresponding half-year reporting period.
The company resolved not to declare any dividends in the half-year ended 31 December 2016.
3. Segment Reporting
Identification of reportable operating segments
Operating segments are reported in a manner consistent with internal reports which are reviewed and used by Management and the Board of Directors (who are identified as the Chief Operating Decision Makers ( CODM')). The Group operates in one operating segment, being Cancer Immunotherapy.