Pharma firm confident in its potential, despite drop in sales and deeper losses
C4X Discovery Holdings, the Manchester-based drugs discovery company, saw annual revenues fall and losses widen, but hailed its deal with pharma giant AstraZeneca which it said brings the total potential value of its deals to $1.2bn.
Revenues for the 12 months to July 31, 2022, fell from £5.642m to £2.699m, and pre-tax losses deepened from £5.907m in 2021 to £10.534m, which C4X said was due to the companies continuing operations.
R&D expenses increased by 14% to £9.4m during the reporting period, reflecting focused investment in key drug discovery programmes.
The company has net assets of £11.8m, compared with £19.3m a year ago, and, as at July 31, 2022, net cash of £5.1m, against £17.1m the previous year.
Post-period, it achieved a successful £5.7m investor-led fundraise, and received a £2.1m R&D tax credit.
The company said it had made progress on several fronts, including its first milestone payment of €3m from Sanofi under the out-licensing agreement worth up to a total of €414m for its IL-17A inhibitor programme, entered into in April 2021.
It also highlighted a research project agreement with HitGen, a Shanghai listed, world leader in DNA-encoded libraries to identify novel, small molecule hits against an inflammatory target.
During the year C4X appointed Bhavna Hunjan as chief business officer and executive director and Dr Mario Polywka as non-executive director.
The company announced its agreement with AstraZeneca, worth up to $402m, in November, and CEO, Dr Clive Dix, said: “This third agreement across our partnered programmes with truly world-renowned industry leader, AstraZeneca, brings the total potential value of our deals to $1.2bn, and our ambitious strategy and vision is now validated and visible.
“With our partnered programmes making good progress, we now look to advance the lead programmes in our portfolio to a partnerable stage and transition our early stage programmes into the next phase where we will be able to provide more detail on the targets and our ambitions for the portfolio.
“C4XD is in its strongest position ever, with supportive investors and a reputation for unique expertise in drug discovery, attracting world-class partners in the pharmaceutical industry.”
Investment bank Panmure Gordon analysts, Dr Julie Simmonds and Dr Mike Mitchell, said: “Full year results reiterate the strong progress made over the past 12 months.
“C4XD has conclusively demonstrated the value in its early stage programmes through three licensing deals which have resulted in potential milestones of $1.2bn plus royalties, of which £20m could reasonably be expected over the next two-three years.
“This enables the company to accelerate investment in the earlier stage portfolio, continuing its successful strategy of generating oral-molecules for difficult to address targets.
“We update our estimates, reiterate our BUY recommendation and increase our target price to 48p (previously 47p).”