ReNeuron Secures Financing Into 2011 with new £5 mln equity facility as first half losses narrow

UK based stem cell therapy company ReNeuron (AIM: RENE) announced it has secured a £5 million equity funding facility with its joint broker Matrix Corporate Capital, securing financing into 2011. ReNeuron retains control over the timing and amount of any draw-down.

ReNeuron CEO, Michael Hunt said the facility provides a minimally dilutive source of ongoing working capital which greatly reduces the financial risk in the business.

Also today, ReNeuron released its half yearly report which revealed an ‘enhanced financial position’ and informed investors that it has received approvals to progress to Phase 1 clinical trials for its ReN001 stem cell therapy. According to ReNeuron it remains confident that the trials for the treatment will begin in early 2010.

In the first half ended 30 September ReNeuron narrowed its pratex loss to £2.01 million from £3.1 million a year earlier, while net cash outflows reduced by 50% compared to the comparative period in 2008. Due to its continuing cost reduction programme which was instigated in the previous financial year, the company also reduced net operating expenses by over a third to £2 million and almost halved its research and development expenditure which decreased to £1.1 million.

The half yearly report highlights a number of developments in the company’s pipeline of stem cell therapies, notably the ReN001 therapy for stroke patients. ReN001 has now received both ethical and regulatory approvals to progress with the Phase I clinical trial. ReNeuron said it was finalising the supplemental pre-clinical data package for the UK Gene Therapy Advisory Committee (GTAC) and expects to initiate the trail in early 2010.

Also in the first half, a total of five peer-reviewed papers were published in separate scientific journals regarding the treatment’s efficacy, safety, mechanism of action and manufacture. ReNeuron said it will continue to foster its relationship with academia, to further exemplify the very significant therapeutic and commercial potential of its stem cell therapies.

Among the company’s other treatments, ReNeuron gathered positive pre-clinical efficacy data for ReN009, its stem cell therapy for the treatment of peripheral arterial disease. The company has targeted 2011 to begin clinical trials for this treatment. The company successfully prototyped a second-generation, frozen formulation of the CTX cells for subsequent pre-clinical and clinical use in the Company's ReN001 and ReN009 programmes.

The new long shelf-life, freeze-thaw formulation makes the scale-up and production of CTX cells for wide-scale use possible. According to ReNeuron the scale-up capability should provide a key advantage in attracting commercial development partners for its stem cell therapies.

Additionally, ReNeuron’s ReN003 cell line for retinal diseases and its ReNcell product were the subject of further peer-reviewed papers regarding their respective positive pre-clinical data and research.  In other operational and technological developments, ReNeuron’s new the  based facility was granted a full therapeutic application licence by UK Human Tissue Authority.#

ReNeuron Chairman, Professor Trevor Jones reflected on the company’s first half performance:

"We have made significant progress across all areas of our operations. After a lengthy and exhaustive review process, our pioneering ReN001 therapy for stroke has received both UK regulatory and conditional ethical approvals for a first-in-man clinical study ... Our ReN009 therapy for peripheral arterial disease in diabetics is showing great promise pre-clinically ... Furthermore, we have developed a commercially attractive, second-generation formulation of our lead CTX cell line, our core therapeutic asset ... We look forward to a period of further substantial progress over the coming year.”