Corporate News

Polarean Imaging plc (AIM: POLX), the medical-imaging technology company, with a proprietary drug-device combination product for the magnetic resonance imaging (MRI) market, announces its unaudited interim results for the six months ended 30 June 2019.

CEO Statement Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Cash Flow Statement Notes

Download To view a full version of the results in  PDF format click here

• Significant enrolment in Phase III FDA clinical trials (the “Clinical Trials”) as Clinical Trials near completion
• Third trial site added at University of Cincinnati, in addition to Duke University and the University of Virginia, to improve enrolment rates for its Clinical Trials
• Three new orders for Polarean’s 9820 Xenon Polariser system from the University of British Columbia, The Hospital for Sick Children (“SickKids”) in Toronto and the University of Kansas.
• Third tranche of US$1m confirmed from US$3m Small Business Innovation Research (“SBIR”) grant
• Second London Investor Symposium completed in June 2019
• Appointment of Charles (“Chuck”) Osborne as the Company’s new Chief Financial Officer
• Net cash of US$1.28m at 30 June 2019

Post-period end

• Raised £2.1m (gross) via a placing of 11,666,667 ordinary shares at a placing price of 18p per share in July 2019
• Enrolment for the Clinical Trials has now passed 98% in the lung transplant pathway and 87% in the lung lobe resection pathway, with a total of 80 patients targeted for enrolment
• Delivered and installed a 9820 Xenon Polariser system at SickKids
• Number of Xenon Polariser systems installed or on order is 25

Richard Hullihen, CEO of Polarean, commented: "Our continued global engagement with the expanding base of clinicians and researchers, while extending our technology and discovering new techniques, reinforces our belief that pulmonary medicine patients and their doctors deserve the benefits of our unique three-dimensional, non-invasive, reproducible hyperpolarised xenon gas imaging technology. We have now entered a crucial period for the Company as the Clinical Trials near completion, with the top-line results of the Clinical Trials expected before the end of 2019.  We remain confident and excited for the future of Polarean and are grateful to our shareholders and stakeholders for their continued support."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

 

Enquiries:

Polarean Imaging plc	www.polarean.com / www.polarean-ir.com
Richard Hullihen, Chief Executive Officer	Via Walbrook PR
Richard Morgan, Chairman
SP Angel Corporate Finance LLP	Tel: +44 (0)20 3470 0470
David Hignell / Lindsay Mair / Jamie Spotswood (Corporate Finance) Vadim Alexandre / Rob Rees (Corporate Broking)
Walbrook PR	Tel: +44 (0)20 7933 8780 or [email protected]
Paul McManus / Anna Dunphy	Mob: +44 (0)7980 541 893 / +44 (0)7879 741 001

 

About Polarean (www.polarean.com)

The Company and its wholly owned subsidiary, Polarean, Inc. (together the "Group") are revenue generating, medical drug-device combination companies operating in the high resolution functional magnetic resonance imaging market.

The Group develops equipment that enables existing MRI systems to achieve an improved level of pulmonary function imaging and specialises in the use of hyperpolarised Xenon gas (¹²⁹Xe) as an imaging agent to visualise ventilation and gas exchange regionally in the smallest airways of the lungs, the tissue barrier between the lung and the bloodstream and in the pulmonary vasculature. Xenon gas exhibits solubility and signal properties that enable it to be imaged within other tissues and organs.

 

CEO Statement

Introduction

The six month period ending 30 June 2019 has seen Polarean make substantial progress towards its goal of completing the Clinical Trials for the Company’s medical drug-device combination.

The first half of the financial year was committed to critically analysing the performance of the Clinical Trial sites and their protocols and processes for recruitment as the Clinical Trials progressed and enrolment rates increased.Despite having skilled academic site clinical trial organizations and contract research organizations (CROs), there is always a period of discovery and correction associated with any first of type trial, and we found and fixed several restrictions to our recruitment rates, working collaboratively with our CROs and academic sites.

Results overview

Our financial performance, with sales being made on a research-use-only basis to academic institutions in the US and Europe, remains in-line with management expectations. Revenues for the first half decreased from US$1.0m to US$0.4m, with gross profits US $0.32m (H1 2018: US$0.75m). This is primarily attributable to the timing of polariser sales.  We received three high value polariser orders, during H1 2019, one of which was installed during September 2019.  The other two polarisers are anticipated to be delivered during Q4 2019. Gross operating margins remain at over 50%. Administrative Expenses were flat for the period. Our overall loss before tax increased to US$3.4m from US$2.7m in the same comparable period, due to the lower revenue during the period. Cash controls within the business remain robust and as at 30 June 2019 we held US US$1.28m in net cash or cash equivalents.

The Company held its second Investor Symposium in London on 12 June 2019. Attendance was significantly higher than it was at our first investor symposium which we held in June 2018, and the feedback from the 2019 symposium was positive. We conducted a review of the latest technology breakthroughs, as well as presentations by Key Opinion Leaders from two sites:  Dr. Jason Woods from Cincinnati Chilldren’s Hospital speaking on Cystic Fibrosis, and Dr. Sudarshan Rajagopal from Duke University speaking on pulmonary vascular disease. The video of the symposium can be viewed here: http://www.polarean-ir.com/content/investors/videos.asp

Post-period end events

Placing to raise £2.1m (gross) at 18p completed

On the 22 July 2019 Polarean announced the completion of a placing to raise an additional £2.1m (gross) at a placing price of 18 pence per share in response to strong demand from institutional and EIS/VCT investors. We are encouraged with the support shown by new and existing shareholders and these additional funds will further support our Clinical Trials in the US, preparation of our New Drug Application (“NDA”) for submission to the US  Food and Drug Administration (“FDA”), preparations for commercial launch and the improvements we continue to make to our polarisers.

Delivery of Xenon Polarisers

Whilst we seek clinical approval for our medical drug-device combination we continue to expand our installed base of systems through additional sales of research units to academic institutions.

Post-period end, we delivered and installed a new system at the SickKids Hospital Toronto. This is an additional system for SickKids who is a long-term collaborator and customer of the Company.

In February and July 2019, we received orders for additional Polarean 9820 Polariser systems.  We anticipate shipping these two systems to the customers in the second half of 2019. The number of systems installed or on order is currently 25*.

* Inadvertently reported as 24 in the RNS dated 10 September 2019 which omitted the system ordered by KUMC as per the RNS dated 11 July 2019.

Outlook

We continue to demonstrate and reinforce our belief that Polarean’s technology can be a tremendous benefit to patients and a powerful new tool for clinicians in discovering and demonstrating treatable traits in pulmonary medicine. In addition, our latest new techniques lead us into the field of cardiology and pulmonary vascular disease which is one example of the upside potential of our technology.  There are 40 clinical trials currently ongoing into the use of ¹²⁹Xe MRI accruing to the FDA website.

The burden of pulmonary disease in the USA is approximately US$150bn, with pulmonary disease widespread and growing, affecting nearly 40 million Americans. Given the limitations of existing methods of diagnosis and lung disease monitoring, we believe that there is a significant unmet need for non-invasive, quantitative, and cost-effective image-based diagnosis technology. We believe that our unique medical drug-device combination utilizing ¹²⁹Xe offers the ideal solution for improving pulmonary disease diagnosis and we are confident that this will be borne out during the Company’s Clinical Trials.

 

Richard Hullihen
Chief Executive Officer

23 September 2019

 

Consolidated unaudited statement of comprehensive income
for the six months ended 30 June 2019

		Unaudited		Unaudited		Audited
	Note	6 months ended 30.6.19 US$		6 months ended 30.6.18 US$		12 months ended 31.12.18 US$
Revenue		399,639		1,026,926		2,439,139
Cost of sales		(75,185)		(279,455)		(633,463)
Gross profit		324,454		747,471		1,805,676
Administrative expenses		(3,068,371)		(3,106,922)		(6,161,916)
Depreciation		(4,661)		(4,489)		(10,140)
Amortisation		(341,937)		(308,426)		(616,852)
Selling and distribution expenses		(147,821)		(20,998)		(31,766)
Share based payment expense		(139,886)		(87,400)		(251,790)
Loss from operations		(3,378,222)		(2,780,764)		(5,266,788)
Finance expense		(22,356) 356)		(52,654)		(188,055)
Finance income		274		27		184
Loss on ordinary activities before taxation	4	(3,400,304)		(2,833,391)		(5,454,659)
Taxation		-		-		-
Loss and total other comprehensive expense		(3,400,304)		(2,833,391)		(5,454,659)
Basic and fully diluted loss per share (US$)	4	(0.034)		(0.057)		(0.078)

 

Consolidated unaudited statement of financial position
As at 30 June 2019

		Unaudited		Unaudited		Audited
		As at 30.6.19US$		As at 30.6.18 US$		As at 31.12.18 US$
Assets	Note
Non-current assets
Property, plant and equipment		13,091		23,403		17,752
Intangible assets		3,735,973		4,352,824		4,044,398
Right-of-use asset		131,773		-		-
Trade and other receivables		5,539		12,536		12,539
		3,886,376		4,388,763		4,074,689
Current assets
Inventories		1,233,039		1,069,342		651,781
Trade and other receivables		1,094,988		1,148,306		4,226,585
Cash and cash equivalents		1,277,195		1,374,866		875,601
		3,605,222		3,592,514		5,753,967
Total assets		7,491,598		7,981,277		9,828,656
Equity
Share capital	5	49,767		36,396		49,427
Share premium		11,200,461		6,432,812		11,063,075
Group reorganisation reserve		7,813,337		7,813,337		7,813,337
Share-based payment reserve		1,218,221		913,945		1,078,335
Accumulated losses		(15,619,993)		(9,591,499)		(12,212,767)
Total equity		4,661,793		5,604,991		7,791,407
Liabilities
Non-current liabilities
Deferred income		87,029		-		70,726
Borrowings	6	83,168		-		-
Contingent consideration		316,000		316,000		316,000
		486,197		316,000		386,726
Current liabilities
Trade and other payables		1,604,792		1,908,079		1,590,482
Borrowings	6	82,716		149,878		5,213
Deferred income		656,100		2,329		54,828
		2,343,608		2,060,286		1,650,523
Total equity and liabilities		7,491,598		7,981,277		9,828,656

 

Consolidated unaudited statement of changes in equity
As at 30 June 2019

	Share capital	Share premium	Group re- organisation	Other equity	Share-based payment reserve	Accumulated losses	Total equity
Balance as at 31 December 2017 (audited)	23,291	1,448,037	7,813,337	87,305	826,545	(6,758,108)	3,440,407
Loss and total comprehensive income for the period	-	-	-	-	-	(2,833,391)	(2,833,391)
Transaction with owners
Issue of shares	13,105	5,124,897	-	(87,305)	-	-	5,050,697
Share issue costs	-	(140,122)	-	-	-	-	(140,122)
Share-based payments	-	-	-	-	87,400	-	87,400
Balance as at 30 June 2018 (unaudited)	36,396	6,432,812	7,813,337	-	913,945	(9,591,499)	5,604,991
Loss and total comprehensive income for the period	-	-	-	-	-	(2,621,268)	(2,621,268)
Transaction with owners
Issue of shares	13,031	5,036,577	-	-	-	-	5,049,608
Share issue costs	-	(406,314)	-	-	-	-	(406,314)
Share-based payments	-	-	-	-	164,390	-	164,390
Balance as at 31 December 2018 (audited)	49,427	11,063,075	7,813,337	-	1,078,335	(12,212,767)	7,791,407
Change in accounting policy	-	-	-	-	-	(6,922)	(6,922)
Restated total equity at 1 January 2019	49,427	11,063,075	7,813,337	-	1,078,335	(12,219,689)	7,784,485
Loss and total comprehensive income for the period	-	-	-	-	-	(3,400,304)	(3,400,304)
Transaction with owners
Issue of shares	340	137,386	-	-	-	-	137,726
Share-based payments	-	-	-	-	139,886	-	139,886
Balance as at 30 June 2019 (unaudited)	49,767	11,200,461	7,813,337	-	1,218,221	(15,619,993)	4,661,793

 

Consolidated unaudited cash flow statement
for the six months ended 30 June 2019

	Unaudited	Unaudited	Audited
	6 months ended 30.6.19 US$	6 months ended 30.6.18 US$	12 months ended 31.12.18 US$
Cash flows from operating activities
Loss for the period before taxation	(3,400,304)	(2,833,391)	(5,454,659)
Adjustments for non-cash/non-operating items:
Depreciation of plant and equipment	4,661	4,489	10,140
Amortisation of intangible assets	341,937	308,426	616,852
Share based compensation	139,886	87,400	251,790
Interest paid	22,356	52,654	188,055
Interest received	(274)	(27)	(184)
	(2,891,738)	(2,380,449)	(4,388,006)
Changes in working capital:
Increase in inventories	(581,257)	(419,482)	(1,921)
Increase in trade and other receivables	(301,448)	(659,448)	(69,517)
(Decrease)/increase/ in trade and other payables	36,955	10,026	(315,894)
Increase/(decrease) in deferred revenue	617,575	(24,233)	98,992
Net cash flows used from operating activities	(3,119,913)	(3,473,586)	(4,676,346)
Cash flows from investing activities
Purchase of plant and equipment	-	(6,551)	(6,551)
Net cash used in investing activities	-	(6,551)	(6,551)
Cash flows from financing activities
Repayment of loans		(116,126)	(307,623)
Issue of shares	3,577,509	4,063,539	5,093,775
Interest paid	(22,356)	(52,654)	(188,055)
Interest received	274	27	184
Principal elements of lease payments	(42,793)	-	-
Interest elements of lease payments	8,873	-	-
Net cash generated from financing activities	3,521,507	3,894,786	4,598,281
Net increase in cash and equivalents	401,594	414,649	(84,616)
Cash and equivalents at beginning of period	875,601	960,217	960,217
Cash and equivalents at end of period	1,277,195	1,374,866	875,601

 

Notes

The notes to the financial statement are available in the PDF download.