30 September 2020

Hemogenyx Pharmaceuticals plc

("Hemogenyx Pharmaceuticals" or "the Company")

Half-year Report

Interim Results for the period ended 30 June 2020

Hemogenyx Pharmaceuticals plc (LSE: HEMO), the Standard Listed biopharmaceutical group developing therapies designed to transform blood disease treatment, announces unaudited interim results for the six-month period ended 30 June 2020.

All financial amounts are stated in GBP British pounds unless otherwise indicated.

Key highlights

CAR-T cells

·    Successfully constructed Chimeric Antigen Receptor (CAR) programmed T cells ("HEMO-CAR-T") for the potential treatment of Acute Myeloid Leukemia (AML) and tested in vitro and in vivo

·    Post period end, entered into a Sponsored Research Agreement with the University of Pennsylvania to advance HEMO-CAR-T toward clinical trials; the agreement is envisaged as the first step of a larger programme that aims to achieve clinical proof of concept for HEMO-CAR-T for the treatment of AML

CDX bi-specific antibodies

·    Extended development agreement with a leading global pharmaceutical company ("GlobalCo") to finalise manufacturability work and successfully bring CDX bi-specific antibody to a state of readiness for pre-clinical development

·    Discussions regarding a potential licensing deal are continuing with GlobalCo following the extension of the Development Agreement

COVID-19 Project

·    Deployment of groundbreaking research capabilities and technologies to develop treatments for COVID-19: using its humanised mice the Company seeks to discover human neutralising antibodies that could be used to fight SARS-CoV-2 infections, the virus that causes COVID-19

Autoimmune diseases

·    Entered into an agreement with Eli Lilly and Company in June 2020 to perform research and development activities aimed at the discovery and validation of novel materials to be used for the treatment of Lupus 

Human Postnatal Hemogenic Endothelial Cell ("Hu-PHEC") cell therapy

·    A patent application entitled Post-Natal Hemogenic Endothelial Cells and Their Isolation and Use was approved by the United States Patent and Trademark Office and a corresponding patent was granted by the European Patent Office

Funding

·    Raised a total of £3.15 million through the issue of equity in January and June to support the Company's drug development programmes and for working capital

Fuller details on these developments are contained in the Interim Management Report below.

Commenting on the Outlook for Hemogenyx Pharmaceuticals, Sir Marc Feldmann, Chairman, said:

"The Board is very pleased with the progress being made with the development of CDX bi-specific antibodies and the development of CAR-T technology for the treatment of leukaemia, as well as the potential value that can be created through the Company's updated humanised mouse model. The Company's efforts to combat the COVID-19 global pandemic and other viral pathogens are of special importance. The Board believes that the Company is well advanced on the planned development steps for its CDX antibodies, and will provide further updates to shareholders as we progress toward the completion of our collaboration with GlobalCo and enter pre-clinical development. In all, the Company is on track to achieve the inflection point in its development to which I referred in the 2019 annual report."

Concert Party Update

At the time of the Company's admission to the Standard Listing segment of the Official List in October 2017, various shareholders were deemed to be acting in concert, further details of which are provided in the Silver Falcon plc prospectus which can be viewed on the Company's website. It has now been agreed with the Takeover Panel that this original concert party can be broken up into two smaller concert parties and several individual shareholders, none of which are interested in shares carrying 30% or more of the voting rights of the Company.

Interim Management Report

Hemogenyx Pharmaceuticals presents an update on the Company's activities for the six months ended 30 June 2020.

Hemogenyx Pharmaceuticals plc is the holding company for Hemogenyx LLC, a US-based biotechnology company developing new medicines and treatments to treat blood and autoimmune disease and to bring the curative power of bone marrow transplantation to a greater number of patients suffering from otherwise incurable life-threatening diseases.

The Company is developing several distinct and complementary product candidates, as well as a platform technology that it uses as an engine for novel product development. These products are:

CDX antibodies - CDX bi-specific antibodies for the treatment of AML and conditioning for bone marrow transplants. CDX antibodies act by redirecting a patient's own immune cells to eliminate unwanted leukaemic and blood stem cells, preparing a patient for bone marrow transplantation;

HEMO-CAR-T - CAR-T* cells for the treatment of AML and conditioning for bone marrow transplants;

Hu-PHEC - a cell replacement product using Human Postnatal Hemogenic Endothelial Cells to generate cancer-free, patient-matched blood stem cells after transplant into the patient;

Anti-SARS-CoV-2 - a neutralising antibody based treatment for COVID-19.

*CAR-T therapy is a treatment in which a patient's own T cells, a type of immune cell, are modified to recognise and kill the patient's cancer cells. The procedure involves: isolating T cells from the patient; modifying the isolated T cells in a laboratory using a CAR (Chimeric Antigen Receptor) gene construct (which allows the cells to recognise the patient's cancer); amplifying (growing to large numbers) the newly modified cells; and re-introducing the cells back into the patient.

The Company has also developed a platform technology for disease modelling and drug discovery:

Advanced Hematopoietic Chimeras ("AHC") - The Company has developed a new type of humanised mice to advance the development of its CDX antibodies. The unique properties of the AHC give them a functional human immune system that converts them into a platform technology that is opening up exciting opportunities for the Company. These include disease modelling (blood cancers and severe autoimmune diseases) and pre-clinical testing of novel drugs and treatments. AHC are a source of revenue for the Company via paid collaborations with biopharmaceutical companies and research institutions. In addition, the Company's wholly owned subsidiary Immugenyx, LLC has developed Advanced peripheral blood Hematopoietic Chimeras ("ApbHC"), a novel type of humanised mouse that presents several advantages over other mouse models. Immugenyx was established by the Company to develop and commercialise the Company's humanised mice, and the new ApbHC represents a significant further development in that direction.

To date, Hemogenyx Pharmaceuticals has made impressive progress on its products whilst efficiently using the Company's limited financial resources. The Company's main areas of focus are to progress its CDX antibodies to readiness for clinical trials, to advance HEMO-CAR-T through pre-clinical development toward clinical trials, and to develop a novel treatment for COVID-19.

H1 progress update

During the first half of the year, Hemogenyx Pharmaceuticals made significant progress on several fronts:

CAR-T cells

Hemogenyx Pharmaceuticals successfully constructed and tested Chimeric Antigen Receptor (CAR) programmed T cells ("HEMO-CAR-T") for the potential treatment of Acute Myeloid Leukemia (AML). HEMO-CAR-T was constructed using Hemogenyx Pharmaceuticals' proprietary humanised monoclonal antibody against a target on the surface of AML cells. The Company has demonstrated that HEMO-CAR-T is able to programme human T cells (convert them into HEMO-CAR-T) to identify and destroy human AML-derived cells in vitro and in vivo.

Following the period end, the company entered into a Sponsored Research Agreement with the University of Pennsylvania ("Penn") designed to advance HEMO-CAR-T toward clinical trials. The agreement is envisaged as the first step of a larger programme that aims to achieve clinical proof of concept for HEMO-CAR-T for the treatment of AML.

Dr Saar Gill, Assistant Professor of Medicine, a hematologist-oncologist physician scientist and Scientific co-Director of the Cell Therapy and Transplantation programme at the University of Pennsylvania, serves as Principal Investigator on behalf of Penn. Dr Gill's laboratory is part of the Center for Cellular Immunotherapies ("CCI") whose Director, Dr Carl H. June, conducted pioneering clinical trials of genetically engineered cells including CAR-T cells in patients with HIV and diverse forms of cancer. This work will significantly accelerate the development of the Company's CAR-T product candidate, putting it on a direct path to clinical trials and a possible new treatment for AML, for which there is currently no real effective treatment.

CDX bi-specific antibodies

Hemogenyx Pharmaceuticals extended its development agreement with a leading global pharmaceutical company ("GlobalCo") to finalise manufacturability work and successfully bring its CDX bi-specific antibody to a state of readiness for pre-clinical development. Preliminary discussions regarding a potential licensing deal are continuing with GlobalCo following the extension of the Development Agreement.

Humanised mice

The collaboration agreement with Janssen Research & Development, LLC, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, on the development of a model of systemic lupus erythematosus (SLE) is progressing.

Autoimmune diseases

The Company entered into a Biological Investigation and Material Supply Agreement with Eli Lilly and Company in June 2020 to perform research and development activities aimed at the discovery and validation of novel materials to be used for the treatment of systemic lupus erythematosus ("Lupus") and possibly other autoimmune diseases. This work complements the Company's own development efforts in these areas.

COVID-19 project

As announced in April 2020, Hemogenyx Pharmaceuticals is deploying its groundbreaking research capabilities and technologies to develop treatments for COVID-19. Using the exceptional characteristics of its ApbHC humanised mice, the Company seeks to discover human neutralising antibodies - antibodies that are typically developed by the human immune system to neutralise invading viral pathogens - that could be used to fight infections of SARS-CoV-2, the virus that causes COVID-19.

The Company had already been developing treatments to be deployed against other viral pathogens prior to the onset of COVID-19, both independently and with a number of pharmaceutical company partners. The Company's ApbHC mice were developed in part as a discovery platform for the development of such treatments. Hemogenyx Pharmaceuticals' scientists have been transplanting cells from blood samples from convalescent COVID-19 patients into its mice, with the goal of recreating and isolating a set of anti-SARS-CoV-2 virus antibodies.

In addition to the COVID-19 work, this initiative aims to demonstrate how the Company's technology can be deployed rapidly in emergencies in order to discover human neutralising antibodies against a host of viral pathogens, including mutations into possible new strains of COVID-19 and also what infectious disease experts in the bioprotection and biodefence sectors call "Disease X", meaning as-yet unknown viruses that may may break out and that may represent a similar or greater threat than the one presented by COVID-19.

Human Postnatal Hemogenic Endothelial Cell ("Hu-PHEC") cell therapy

The Company is developing Hu-PHEC, a cell replacement product candidate that aims to generate cancer-free, patient-matched blood stem cells after transplantation into the patient.

A patent application entitled Post-Natal Hemogenic Endothelial Cells and Their Isolation and Use was approved by the United States Patent and Trademark Office and issued on 25 February 2020 as Patent Number 10,570,373. A corresponding patent was granted by the European Patent Office on 13 May 2020 as Patent Number 3068875.

Financial Results

During the six months ended 30 June 2020 the Company recorded a loss of £835,189 (H1 2019: £706,670 loss). The increase in loss from the comparable period in 2019 reflects a continued increase in operational development, and in particular diversification of activities, made possible by the fundraisings completed in January and June 2020.

The Company recorded consultancy income of £82,880 during the period ended 30 June 2020 (H1 2019: £82,763) which relates to funds received from a third party under a research collaboration programme associated with humanised mice.

The Company continued to draw on the cash provided by convertible loan facilities from Orgenesis Inc. for a maximum of US$2,000,000. As at 31 December 2019 a total of US$1,500,000 of the total facilities available had been drawn down, and the remaining US$500,000 was drawn down in February 2020.

On 30 January 2020 the Company announced that it had raised £648,200 before expenses through a placing and subscription of 36,011,116 ordinary shares at a price of 1.8p per share. An exercise of warrants at 5.25p per share resulted in the allotment and admission to trading on 22 May 2020 of 668,000 ordinary shares for a consideration of £35,070. The Company raised a further £2,500,000 before expenses on 5 June 2020 through an oversubscribed placing of 35,714,286 ordinary shares at a price of 7p per share.

Outlook

The Board remains very pleased with progress, in particular the rapid advances in the Company's new CAR-T project and its very significant partnership with the University of Pennsylvania that promise to accelerate the Company towards clinical trial stage. The finalisation of the CDX antibody research agreement with GlobalCo is also greatly anticipated, along with the outcome of commercial discussions with GlobalCo. The Company has been able to make strong progress across its main developments thanks to the exceptional productivity of its team of scientists. The Board believes that the Company is well advanced on the planned development steps that were described in the 2019 annual report and the goals set out for the use of  funds raised this year, and will provide further updates to shareholders as the Company progresses. The Company looks forward to the future with confidence.

Responsibility Statement

We confirm that to the best of our knowledge:

§ the Half Year Report has been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the EU; and

§ gives a true and fair view of the assets, liabilities, financial position and loss of the Group; and

§ the Half Year Report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

§ the Half Year Report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

The Half Year Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:

Dr Vladislav Sandler

CEO

30 September 2020

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

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