Full Press Release Details
Year ended 30 June 2016
Previous corresponding period:
Year ended 30 June 2015
03 Corporate Directory
04 Chairman s Letter
05 Review of Operations
27 Corporate Governance Statement
28 Auditor s Independence Declaration
30 Financial Statements
31 Consolidated Statement of Comprehensive Income
32 Consolidated Balance Sheet
33 Consolidated Statement of Changes in Equity
34 Consolidated Statement of Cash Flows
35 Notes to the Consolidated Financial Statements
81 Independent Auditor s Report to the Members of Prima BioMed Ltd.
83 Shareholder Information
Ms Lucy Turnbull, AO (Non-Executive Chairman)
Mr Marc Voigt (Executive Director &
Chief Executive Officer)
Mr Albert Wong (Non-Executive Deputy Chairman)
Russell Howard (Non-Executive Director)
Mr Pete Meyers (Non-Executive Director)
Registered office & principal place of business
Level 12, 225 George Street
PricewaterhouseCoopers
Level 31, 1 O Connell Street
National Australia Bank Ltd
Melbourne, Victoria 3000
Stock exchange listings
Prima BioMed Ltd shares are listed on the:
Australian Securities Exchange (ASX code: PRR), and NASDAQ (NASDAQ code: PBMD)
Financially, the company remains in a good position following the successful Share Purchase Plan early in the financial year as well as two
smaller share placements to sophisticated investors in Europe and Australia. We also continue to benefit from significant R&D tax grants in both Europe and Australia, where our clinical trials are being conducted, and from milestone payments
from our pharmaceutical partners.
Due to effective management of cash reserves, a rigorous focus on costs and the divestment from our CVac program in February
2015, the Company s cash reach has been extended into the fourth quarter of calendar year 2017. This is a significant improvement on the outlook provided in last year s Annual Report and our most recent Investor Update.
Partnering CVac to New York-listed SYDYS Corp was considered the best available solution to secure a viable pathway for CVac s ongoing development and prospects for
commercialization. Importantly, this requires no further funding commitment from Prima while providing considerable potential upside should its commercialisation be achieved, which is dependent on SYDYS Corp raising sufficient capital to continue
Prima s two global pharmaceutical partners, Novartis and GlaxoSmithKline, continue to develop their LAG-3 related products in the clinic. As
further clinical development continues, further milestone payments become more likely.
I would like to thank shareholders for their support over the past year and
look forward to updating you on further progress in the year ahead in relation to our LAG-3 programs.
REVIEW OF OPERATIONS
In July and August 2015, we completed a successful capital raising which was essential for initiating our two clinical trials for IMP321.
The Share Purchase Plan ( SPP ), which was heavily oversubscribed, was increased from A$5m to A$10m. The decision to terminate our US$37.4m investment facility with Bergen Global Opportunity Fund, by mutual consent, was followed by two
smaller placements with institutional investors. The aggregate amount of these two placements in October and November 2015 was A$3.55m.
Shareholders ratified the
issue of further securities to Ridgeback Capital Investments L.P. at the Extraordinary General Meeting held on 31 July 2015. In accordance with the approval by shareholders, the Company issued ordinary shares, a convertible note and warrants.
Assuming that Ridgeback Capital Investments L.P. exercises all warrants and convertible notes, an additional 1,067,462,626 ordinary shares may be issued in future reporting periods. The total proceeds from the issuance of the above securities
amounted to A$13,960,794.
These capital raising initiatives, coupled with collaboration cash inflows, have solidified our capital position with projected cash
reach for a minimum of twelve months from the date of this report. We believe that careful, focussed and output-oriented cash management is critical.
Grant income for FY16 was A$887,083 (FY15 A$1,167,190) relate to grants received from Australian Research and Development Rebates, France s
Cr dit d Imp t Recherche, and Saxony Development Bank ( S chsische Aufbaubank ) from Germany. The reduction in grant income for the year is in line with a reduction in Research & Development expenditure
compared to the prior year. It is expected that grant income will increase in FY17 in line with an increase in Research and Development expenditure as the Company progresses its clinical trials in IMP321.
The total corporate administrative expense for FY16 was A$6,982,629 (FY15: A$5,723,106). This increase in administrative expenses is primarily attributable to an increase in
employee share-based payment expenses during the year of A$1,976,417 (FY15: A$738,799) with other expenses remaining consistent with the prior year. The R&D expenses in FY16 have been dominated by the two IMP321 related clinical trials, AIPAC
and TACTI-mel, mostly related to contracts with our clinical research organisations. Despite initiation of these two new trials, R&D expenses (of A$7,059,528) decreased compared to the previous year (FY15: A$8,952,447). This is principally due
to cessation of the costly CVac clinical trials and careful management of our cash resources.
During the year there was an expense of A$542,075 (FY15: A$Nil) in
relation to changes in fair value of a comparability milestone. This relates to an amount paid into a retention account on the acquisition of Immutep which was measured through fair value through profit and loss subsequent to the acquisition in
accordance with applicable accounting standards. Refer to note 21 for further information.
REVIEW OF OPERATIONS CONTINUED
fair value of convertible note liability of A$607,637 (FY15: A$Nil) was attributable to the liability component of the convertible note being measured at fair value as required by AASB 2. Refer to note 15 for further information.
The loss after tax for FY16 was A$62,015,184 compared to A$32,151,696 in FY15. The increase was attributable to non-cash financing costs, including a share-based payment to a
strategic investor (Ridgeback Capital Investments) and non-cash changes in the fair value of the financial liability. Removing the impact of those two non-cash items results in a loss after tax for FY16 of A$13,939,476. This loss is 0.91% higher
when compared to the adjusted previous period loss of A$13,813,681 after removing non-cash financing costs of A$18,338,015.
With careful financial management Prima
remains in a very solid financial position with a cash balance of A$20,879,548 as at 30 June 2016. We anticipate being able to prolong our cash reach to at least the fourth quarter of calendar year 2017. This extended cash reach does not
include potential milestone payments from existing partnerships, which, if received, would extend our cash reach even further.
Strategic development and risks
Our main focus for FY16 was our LAG-3 programs. We have made significant progress in maintaining our position as the global leader in developing LAG-3 related
We believe the prominence of LAG-3 as an attractive scientific and clinical target has been increasing in the pharmaceutical and biotech
industry. In addition to IMP321, there are several clinical and pre-clinical programs underway, including those of our partners Novartis and GlaxoSmithKline. New clinical trials have been initiated in the past 12 months so that more patients have
the chance to benefit from LAG-3 related treatments. Given this strong industry interest, we believe that LAG-3 may follow the success of PD-1 and CTLA-4 related products.
In the past few months we have commenced two new clinical trials, AIPAC and TACTI-mel. AIPAC is the acronym for Prima s multicentre, Phase IIb, randomised, double-blind,
placebo-controlled study in hormone receptor-positive metastatic breast carcinoma patients receiving IMP321 (LAG-3 Ig fusion protein) or placebo, as an adjunctive to a standard chemotherapy treatment regimen of paclitaxel. The primary purpose of the
AIPAC trial is to determine the clinical benefit of IMP321 in terms of Progression-Free Survival as the primary clinical endpoint in this patient population. The first results have been reported in June 2016 with the product being safe and well
tolerated. This clinical trial is focussed on Europe with the study currently active in Belgium, the Netherlands and Hungary. The initial results of all 15 patients from the safety run-in phase of AIPAC are expected to be presented in the fourth
quarter of calandar year 2016.
TACTI-mel (Two ACTive Immunotherapeutics in melanoma) is a multicentre, open label, Phase I study in which patients with
unresectable or metastatic melanoma will be dosed with IMP321 in combination with an approved checkpoint inhibitor. The study will evaluate safety as the primary endpoint and anti-tumour activity and the immune response to the combination as
secondary endpoints. The focus of this clinical trial is Australia.
The Company s intellectual property position has been further strengthened by patent
grants which included a Japanese patent related to IMP321 granted in May 2016.
In February 2016, CVac, our main product in previous years, was licensed to Sydys
Corporation, Inc. Sydys is an Over-The-Counter (OTC) publicly traded company based in New York that has been repurposed as a clinical stage biotechnology company in order develop the licensed CVac assets.
In this spin out transaction Prima received a 9.9% equity stake in Sydys as consideration for the assets being transferred. Given the significant capital requirements for
conducting clinical trials, no upfront payment was paid; however, should CVac be successfully commercialized, if Sydys is able to secure sufficient funding for the commercialisation, Prima could receive development, regulatory and commercial
milestone payments upon the achievement of set commercial sales targets, in addition to low single digit royalties on sales. This transaction allows Prima to fully concentrate on its highly prospective LAG-3 related programs.
REVIEW OF OPERATIONS CONTINUED
like Prima BioMed is exposed to a number of risks: There can be no guarantee that our manufacturing, research, regulatory and clinical development is successful or can be carried out in the anticipated timelines or that our intellectual property
position will be strengthened or not harmed or that our existing partnerships or potential new ones will be successful. In addition the Company will require additional financing in the future and in fact as the Company has a history of operating
losses and may not achieve or maintain profitability in the future, future cash needs are not unlikely.
Business Development
Our commercial partners, Novartis and GlaxoSmithKline, continue to progress the development of the licensed LAG-3 products in the clinic. The blocking antibody (Checkpoint
inhibitor) which was licensed to Novartis (IMP701 or LAG525) entered clinical development in August 2015 in a Phase I/II clinical study resulting in a milestone payment. Prima is eligible to receive further potential development-based milestone
payments and royalties on sales following commercialisation of these products. Novartis have now added a third arm to their trial of a LAG-3 antagonist called LAG-525. The study is testing LAG-525 alone and in combination with a PD-1 inhibitor and
has recently commenced a third trial arm in Japanese patients. The number of patients expected to be recruited has increased with final results expected in 2018. IMP731 or GSK2831781, which is licensed to GlaxoSmithKline, continued clinical