OKYO Pharma Limited - Interim results for the six months to 30 September 2021

LONDON, Jan. 26, 2022 (GLOBE NEWSWIRE) -- OKYO Pharma Limited (LSE: OKYO) a biopharmaceutical company developing next-generation therapeutics to improve the lives of patients with inflammatory eye diseases and chronic pain today announces its interim results for the six months ended 30 September 2021.

Financial Highlights:

Total assets decreased to £4.2 million (31 March 2021: £5.1 million)

Cash on hand of £3.8 million (31 March 2021: £5.0 million)

During the financial period under review, the Company reported a total comprehensive loss of £1.8 million (restated 30 September 2020: total comprehensive loss £0.5 million).

The Group’s focus is to develop drugs for inflammatory dry eye diseases and ocular pain by targeting G- protein-coupled receptors (GPCRs). GPCRs comprise the single largest family of membrane proteins and are involved in a variety of biological processes. Identifying and developing molecules that target GPCRs has proven to be a highly successful approach to the discovery and development of a wide range of drugs to treat cardiovascular disease, cancer and diabetes. Approximately one third of all Food and Drug Administration (FDA) approved drugs target members of this family.

During the past six months the Group’s primary focus has been centered around the decision to move OK-101 forward for the filing of an investigational new drug (IND) application with the FDA to treat dry eye disease (DED). The intention is to focus the Company on rapid clinical development of OK-101 to treat DED. To do this, on 29 June 2021, the Group announced that it has retained the services of Ora, Inc., a world-class ophthalmology contract research organization, to guide the company's upcoming product development and lead the regulatory strategy of OK-101 for the treatment of dry eye. OK-101, OKYO’s lead pre-clinical drug candidate is a novel long-acting GPCR-based anti-inflammatory drug candidate.

In the Annual Report and Financial Statements for the year ended 31 March 2021, the company stated that based on the results from the DED animal model and ocular tolerance studies, the company would put in place plans to file an IND on OK-101 to treat DED in the third quarter of 2022. This would enable the company to begin clinical trials with OK-101 as early as one month after submission of the IND to the FDA. To support this work, we signed an agreement in June 2021 with Ora, Inc. which specializes in ophthalmic drug development and who will be providing the following services:

Providing quality oversight for development of topical formulation for OK-101;

Providing quality oversight for development and qualification of a drug stability analysis method for OK-101 along with conducting stability studies to establish formulated drug product is stable for at least 90 days;

Support for completing animal toxicology studies in two animal species;

Preparation of the OK-101 Pre-IND briefing document;

Support in requesting and preparing for the OK-101 Pre-IND meeting with FDA; and

Support for regulatory publishing and submission of IND.

During the months of April through September 2021, the Group began the development of a formulation of OK-101 drug product to be used in future clinical studies, along with initiating a myriad of other necessary elements needed for filing the IND. This includes: 1) development of analytical methods to support clinical trials, 2) toxico-kinetics method development, 3) OK-101 toxicology studies, 4) initiation of scale-up of clinical batch manufacturing of OK-101 required for clinical studies, and 5) batch manufacture of sufficient OK-101 needed to initiate the above IND-enabling studies. To this end, we completed the manufacture of a 200-gram batch of OK-101 drug substance in April 2021 which was needed for initiating the IND-enabling studies.

On 2 February 2018, the company obtained a license agreement from Tufts Medical Center for the right to exploit all the intellectual property claimed in patent application PCT/US2016/0611101 ‘Lipidated BAM8-22 and methods of using same’ including claims covering composition-of-matter and methodology for treating symptoms of neuropathic chronic pain, ocular pain and uveitis-associated pain. The Group has been exploring BAM8-22 analogs that have potential to ameliorate inflammation and neuropathic pain. OK-201 is the lead compound from the license agreement with Tufts Medical Center and was the focus of the company’s efforts to develop a lipidated BAM8-22 analogue to treat neuropathic pain.

On 6 August 2019, a collaborative agreement was signed with Pedram Hamrah, MD, Professor of Ophthalmology at Tufts University School of Medicine, Boston, MA to evaluate the Group’s BAM8-22 analogues, including OK-201, as non-opioid analgesics to suppress corneal neuropathic pain using a mouse ocular pain model developed in Dr. Hamrah’s laboratory. Neuropathic corneal pain is a severe, chronic and debilitating disease with no FDA approved commercially available treatments currently available for this condition.

On 28 April 2021 the company announced positive results of OK-201, a non-opioid analgesic drug candidate delivered topically in Dr. Hamrah’s mouse neuropathic corneal pain model, as a potential drug to treat acute and chronic ocular pain. Importantly, OK-201 demonstrated a reduced corneal pain response equivalent to that of gabapentin, a commonly used oral drug for neuropathic pain. These observations demonstrated preclinical ‘proof-of-concept’ for the topical administration of OK-201 as a potential non-opioid analgesic for ocular pain. Current treatments for corneal pain are limited to short term NSAIDs, steroids, and oral gabapentin and opioids in severe cases.

Although the results with OK-201 were encouraging, due to subsequent success obtained with OK-101 in follow-on animal model studies utilizing the same mouse neuropathic corneal pain model, the company has decided to stop further development of OK-201 to treat ocular neuropathic pain, and to turn its full attention to the development of OK-101 to treat DED.

OKYO Pharma Limited (LSE: OKYO; OTCQB: EMMLF) is a life sciences and biotechnology company admitted to listing on the standard segment of the Official List of the UK Financial Conduct Authority and to trading on the main market for listed securities of London Stock Exchange plc. OKYO is focusing on the discovery and development of novel molecules to treat inflammatory dry eye diseases and ocular pain.

Website: www.okyopharma.com

Chairman’s statement

I am pleased to report on the Group’s financial results for the six months ended 30 September 2021.

Results to 30 September 2021

During the six months ended 30 September 2021, the Group reported a total comprehensive loss of £1.8 million (restated 30 September 2020: £0.5 million).

The Group’s shareholders’ equity at 30 September 2021 stood at £3.7 million (31 March 2021: £3.9 million).

Cash was £3.8m at the end of the period (31 March 2021: £5.0 million).

We remain cognisant of the potential impact of coronavirus (COVID-19) on our operations and have taken the steps necessary to maintain the integrity of the Group's assets and the health and wellbeing of our employees. We remain hopeful that COVID-19 will not have a material impact on the capability of our research partners ability to commence the next stage of our pre-clinical pipeline. Although it remains unclear at this stage what the medium and long term impact will be on the wider economy and how this will affect the Group.

The Group is confident it should be able to weather all but the worst financial downturn occurring as a result of the outbreak and any variants thereof. Indeed, the Group has successfully raised additional funds during this pandemic.

Operations in Review

On 6 December 2021 the Group announced that it anticipates the filing of an IND in Q3 2022 on OK-101 for the treatment of dry eye disease (‘DED’), and initiating a Phase 2 human clinical efficacy trial in DED patients in Q4 2022. The trial is anticipated to be conducted in approximately 100 to 200 DED patients and the study is being designed in conjunction with, and will be managed and monitored by Ora, Inc., well known for its expert leadership of clinical trial activities. The Phase 2 trial is expected to be completed in 6-8 months from enrollment of the first patient.

Because the drug is designed to be administered topically to DED patients, and with the help of Ora’s deeply knowledgeable team with a proven track record of advancing drug development for dry eye as well as other ophthalmic indications, the Group anticipates skipping standard Phase 1 studies typically expected with orally delivered drug candidates in non-life-threatening conditions and, hence, opening the first human trial with OK-101 as a Phase 2 efficacy trial in DED patients.

On 13 December 2021 the Group announced that its drug candidate OK-101, which was developed to treat DED through its anti-inflammatory mode of action, also shows potent ocular pain reducing property in a mouse model of corneal neuropathic pain, establishing the potential of OK-101 to treat both pain and inflammation, the most common symptoms of DED. This work involved a collaboration with Pedram Hamrah, MD, Interim Chair of Ophthalmology, cornea specialist, and clinician-scientist at Tufts Medical Center, Boston. OK-101 was found to suppress corneal pain in a ciliary nerve ligation mouse model of neuropathic corneal pain developed in Dr. Hamrah’s laboratory. OK-101 was topically administered to mice in contrast to the positive control gabapentin which was administered via intraperitoneal injection. Pain relief was evaluated by an eye-wipe count, and OK-101 was shown to reduce corneal pain essentially equivalent to that of gabapentin, a commonly used oral drug for neuropathic pain. Notably, the drug concentration of OK-101 used in this study was identical to that used in mouse models of DED that demonstrated ocular anti-inflammatory activity.

Ocular pain, which can exhibit as a severe, chronic or debilitating condition in patients suffering from a host of ophthalmic conditions, is presently treated by various topical and systemic treatments in an off-label fashion. There are no FDA-approved commercial treatments currently available for this condition. The company is excited about these positive results with OK-101 in our neuropathic corneal pain model of this disease, as it indicates that OK-101’s potential to benefit patients with DED may derive from not only its anti-inflammatory activity, but also its pain-reducing potential as well.

The company has decided at this time to postpone for the time being further drug development of OK-201 and focus its full resources on the development of its lead drug candidate OK-101 to treat DED patients.

OKYO is focusing its G-protein coupled technology platform on the development of innovative therapies for inflammatory DED and ocular neuropathic pain management. We have set as our goal the filing of an IND on OK-101 to treat DED by the third calendar quarter of 2022, and the opening of a Phase two efficacy trial in DED patients in the fourth calendar quarter of 2022. To do this, over the past six months the company initiated all of the pre-IND work needed to support the filing of the IND in 2022. A key component of this strategy was retaining the services of Ora Inc., a world-class ophthalmology contract research organization, to guide the company's upcoming product development and lead the regulatory strategy of OK-101 for the treatment of DED.

OKYO believes that obtaining positive clinical data demonstrating potential of OK-101 to treat DED through a successful Phase 2 clinical trial in DED patients will bring considerable value to its shareholders with OKYO’s success in the clinic.

Principal risks and uncertainties

The Group’s principal risks and uncertainties, which could impact the Group for the remainder of the current financial year, are identified on page 8 of OKYO Pharma Ltd’s Annual Report for the year ended 31 March 2021 which is available on the Company’s website. These risks are as follows: clinical studies, ability to scale up, intellectual property, competition, funding and loss of key senior management.

The Directors have reviewed these principal risks and uncertainties and the Directors confirm the risks are still applicable for the remainder of the year.

In May 2021, a large proportion of the outstanding convertible loan notes were converted resulting in the issuance of 149,900,410 ordinary shares.

In May 2021, warrants over 147,969,396 ordinary shares were exercised resulting in cash proceeds of £1,045,333.

In December 2021 the Group announced that it anticipates the filing of an IND in Q3 2022 on OK-101 for the treatment of DED and initiating a Phase 2 human clinical efficacy trial in DED patients in Q4 2022.

In December 2021, Bernard Denoyer was appointed to serve as a non-executive director.

Related party transactions

Tiziana Life Sciences is a related party as it shares common Directors and officers, resources and premises. Transactions with Tiziana and its subsidiaries are undertaken in the normal course of business and during the period the Group charges for services received were £42,387. The amount owed by the Group at 30 September 2021 is £20,277.

Panetta Partners Limited is a related party as it is a shareholder of the Company and also a vendor. As at 30 September 2021 there was a balance due to the Group of £71,135 for the exercise of warrants belonging to Panetta Partner Ltd. The balance is to be offset against fees earned by Gabriele Cerrone, a director of Panetta Partners Ltd, during the year to March 2022.

The Group is in the early stages of developing its business focusing on drug candidates for the treatment of dry-eye, uveitis, ocular and chronic pain and is in its pre-revenue R&D stage. The Directors expect the Group to incur further losses and to require significant capital expenditure in continuing towards the clinical stage for these candidates. The Group has successfully secured additional investment funds to date.

The Directors have prepared cash flow projections that include the costs associated with the continued clinical trials and additional investment to fund that operation.  On the basis of those projections, if additional investment is not obtained, the directors conclude that the company will not be able to meet its liabilities as they fall due for a period beyond the next 12 months from the date when these financial statements are issued. Consequently, in the opinion of the directors there is a material uncertainty that may cause significant doubt about the Group’s ability to continue as a going concern. Despite this material uncertainty, the Directors conclude that it is appropriate to continue to adopt the going concern basis of accounting.

Statement of Directors’ responsibilities

The Directors are responsible for preparing the half-yearly financial report in accordance with applicable laws and regulations.

The Directors confirm to the best of their knowledge:

The interim consolidated financial statements, prepared in accordance with International Accounting Standard 34 Interim Financial Reporting give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole; and

The Chairman’s statement includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

Non-Executive Chairman

Consolidated statement of comprehensive income

for the six months ended 30 September 2021

The notes on pages 11 to 25 form an integral part of this financial information.

The Directors consider that all results were derived from continuing activities.

Consolidated statement of financial position

As at 30 September 2021

The notes on pages 11 to 25 form an integral part of this financial information.

Consolidated statement of changes in equity

for the six months ending 30 September 2021 and restated 30 September 2020

The notes on pages 11 to 25 form an integral part of this financial information

Consolidated statement of changes in equity

for the year ended 31 March 2021

The notes on pages 11 to 25 form an integral part of this financial information.

Consolidated statement of cash flows

for the six months ended 30 September 2021

The notes on pages 11 to 25 form an integral part of this financial information.

Notes to financial statements

for the six months ended 30 September 2021

1.     Reporting Entity

OKYO Pharma Limited (the “Company” or “OKYO”) is a company domiciled in Guernsey and listed on the standard market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (the “Group”) are to next-generation therapeutics to improve the lives of patients with inflammatory eye diseases and chronic pain. Our goal is to develop first in class drug candidates that prevent the disease instead of controlling it, and we achieve this through our collaboration with pioneering scientists in the field.

The ultimate parent of the group is Planwise Group Limited, incorporated in the British Virgin Islands.

2.     ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been applied consistently to all the periods presented unless otherwise stated.

Basis of preparation

These interim consolidated financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, IFRIC interpretations and the Companies (Guernsey) Law 2008 as applicable to companies reporting under IFRS. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31 March 2021 Annual Report and Financial Statements.  The financial information has been prepared in accordance with IAS 34 Interim Financial Reporting. The annual consolidated financial statements of the group are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 31 March 2021 included within this report does not constitute the full statutory Annual Report for that period.

The Group has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2021 annual financial statements, as set out in Note 2 of that document.

Basis of measurement

Functional and Presentation Currency

The financial statements of the Group are presented in Pounds Sterling (£) which is the parent Company’s functional currency. All financial information presented in Pounds Sterling has been rounded to the nearest pound.

The Group incurred losses during the period and has net liabilities at the period end.

The Group is in the early stages of developing its business focusing on drug candidates for the treatment of dry-eye, uveitis, ocular and chronic pain and is in its pre-revenue R&D stage. The Directors expect the Group to incur further losses and to require significant capital expenditure in continuing towards the clinical stage for these candidates.

The Directors have prepared cash flow projections that include the costs associated with the continued clinical trials and additional investment to fund that operation.  On the basis of those projections, if additional investment is not obtained, the directors conclude that the company will not be able to meet its liabilities as they fall due for a period beyond the next 12 months from the date when these financial statements are issued. Consequently, in the opinion of the directors there is a material uncertainty that may cause significant doubt about the Group’s ability to continue as a going concern. Despite this material uncertainty, the Directors conclude that it is appropriate to continue to adopt the going concern basis of accounting.

The financial statements do not include the adjustments that would be required if the going concern basis of preparation was considered inappropriate.

Basis of consolidation

Subsidiary undertakings are all entities over which the Group exercises control. The Group has control when it can demonstrate all of the following: (a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability to use its power over the investee to affect the amount of the investor’s return.

The existence and effect of both current voting rights and potential voting rights that are currently exercisable or convertible are considered when assessing whether control of an entity is exercised. Subsidiaries are consolidated from the date at which the Group obtains control and are de-consolidated from the date at which control ceases.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated upon consolidation. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Operating segments are reported in a manner consistent with the internal reporting provided to the Board.  The Board allocates resources to and assess the performance of the segments.  The Board considers there to be only one operating segment being the research and development of biotechnological and pharmaceutical products.

Foreign currency translation