Regulatory News: BenevolentAI ("BenevolentAI" or “the Company" or “the Group”) (Euronext Amsterdam: BAI), a leader in applying advanced AI to accelerate biopharma drug discovery, announces its ...
Autore: Business Wire
Strengthened Executive Leadership and Board
Positive Top Line Phase I Data Reported for BEN-8744, Full Data to be Presented at Upcoming Leading Medical Conference
Advancements in Target Identification and Chemistry Collaborations Validate the Benevolent Platform™
Strong Business Development Activities Boosting Collaboration and Out-Licensing Opportunities
LONDON: Regulatory News:
BenevolentAI ("BenevolentAI" or “the Company" or “the Group”) (Euronext Amsterdam: BAI), a leader in applying advanced AI to accelerate biopharma drug discovery, announces its unaudited interim results for the six months ended 30 June 2024.
Peter Allen, Chair, said:
“I was delighted to join the Board as Chair in May, along with the other new Non-Executive Directors, to support the leadership of the Company. BenevolentAI has consistently been a pioneer and leader in AI drug discovery and development, and we are committed to capitalising on the significant potential its leading platform is delivering. Going forward, we are fully focused on positioning the business for growth, ensuring we are executing, both in terms of our pipeline and business development ambitions.”
Kenneth Mulvany, Deputy Chair and founder of BenevolentAI, said:
“As the founder of BenevolentAI, I am pleased to re-join the Board. The Company’s technology platform was designed to fundamentally change our understanding of how diseases can be treated. I look forward to working with the Board and the leadership, with a renewed focus on business development and innovation in response to the rapid and promising evolution of the sector that BenevolentAI has helped shape.”
Dr. Joerg Moeller, Chief Executive Officer (CEO) of BenevolentAI, said:
“I joined BenevolentAI as a strong advocate of AI as a driver of drug discovery and development, innovation and effectiveness. After a career in large pharma, coming into a company with a clear passion to help deliver treatments to patients in need and with a technology platform and capabilities allowing us to address the most challenging problems in pharma R&D, I am ever more convinced of the impact BenevolentAI can continue to make as a leader in AI enabled drug discovery and development.
“Our technology, one of the most established and validated AI drug discovery platforms, has the potential to generate considerable value, not only for BenevolentAI directly through our proprietary pipeline, but also for our partners.
“We were pleased to announce positive topline safety and pharmacokinetic data for our lead clinical asset and novel drug target, BEN-8744, for the treatment of ulcerative colitis and with potential for meaningful differentiation versus existing standard-of-care treatments and the possibility of indication expansion in Crohn’s disease.
“Continued progress in our existing collaborations is evident, as exemplified by AstraZeneca adding two novel targets into its discovery portfolio in heart failure and systemic lupus during the period and our more recent collaboration with Merck KGaA, which is progressing well.
“With the renewed focus and the changes to the business development function, I am encouraged by the increase in the number and quality of discussions ongoing and that this change in approach will be beneficial for the Company in the near and longer term.”
Key Business Highlights (including post period)
Leadership updates
Business Development
The BenevolentAI Platform™ represents a pioneering achievement in AI-enabled drug discovery. Engineered for versatility, it uniquely integrates capabilities in target identification, advanced chemistry, and indication expansion. This integration has directly contributed to the development of the only FDA-approved drug derived through AI technologies, distinguishing BenevolentAI as the sole technology provider with these validated capabilities.
Since assuming leadership, the new Board has driven focus and revitalised the approach of the Company’s business development initiatives. During the period, BenevolentAI’s business development team was strengthened and reorganised to enhance focus on execution. This restructuring, supported by the robust R&D leadership network led by Joerg Moeller and the Board, is aimed at accelerating the pursuit of strategic collaborations and out-licensing agreements.
Initial indicators are positive following this realignment. The Company has observed a significant increase in the pipeline of active collaborations and out-licensing discussions with large, mid-tier pharmaceutical companies and biotech firms.
However, despite these intensified efforts and the full focus of the business development team, the complex nature of such agreements demanding meticulous negotiation and precise strategic alignment, may make it challenging for the Company to sign an agreement in the current fiscal year. The Company remains committed to conclude a deal as soon as possible. BenevolentAI is dedicated to transparently managing stakeholder expectations and will provide further updates as more definitive information becomes available.
Capital markets adviser
In July, BenevolentAI appointed Deutsche Numis as the UK and pan-European capital markets adviser, marking a significant step in initiating more effective market engagement. This new appointment is crucial for aligning capital market activities with the Company’s strategic, operational and financial goals.
Proprietary Pipeline Update
The Company made significant progress across its highly differentiated proprietary pipeline, which includes a mix of potential first-in-class and best-in-class drugs for high-impact and complex diseases. The therapeutic focus spans immunology, neurology and oncology. All the assets in the pipeline have been generated through the Company’s advanced technology platform and validated at its state-of-the-art biology and chemistry laboratories located at the Babraham Campus in Cambridge, UK.
BEN-8744
BEN-34712
BEN-28010
Pipeline Flexibility and Business Development Opportunities
The Company has invested in more than ten additional programmes that are regularly evaluated for their potential to replenish the pipeline. This robust portfolio management ensures that as certain programmes are successfully out-licensed, others are ready to advance into the business development cycle or further along the drug development pipeline.
This approach not only mitigates risk but also sustains a continuous flow of innovation and potential revenue streams, keeping investors informed of our proactive strategy to maintain and expand our market presence.
Collaborations
The BenevolentAI Platform™ has been instrumental in enabling collaborations with key industry players, demonstrating the platform’s unique capacity and scope to drive innovation in drug discovery and development. Over this period, significant milestones have been achieved, further validating the impact of our AI-enabled approach in target identification and chemistry capabilities.
AstraZeneca – Target Identification (Target ID)
Merck KGaA – Chemistry
Financial Highlights
| Six months ended 30 June |
| Six months ended 30 June |
|
| |
| 2024 |
| 2023 |
|
| |
| £'000 |
| £'000 |
| % Change
| |
Revenue | 2,834 |
| 5,297 |
| -46 | % |
Cost of sales | (3,551 | ) | (765 | ) | 364 | % |
Reported research and development spend1 | (19,927 | ) | (36,282 | ) | -45 | % |
Normalised research and development spend1 | (19,534 | ) | (32,230 | ) | -39 | % |
Reported administrative expenses | (12,245 | ) | (14,209 | ) | -14 | % |
Normalised administrative expenses | (10,282 | ) | (12,971 | ) | -21 | % |
|
|
|
| |||
Reported operating loss | (32,311 | ) | (45,850 | ) | -30 | % |
Normalised operating loss | (29,955 | ) | (40,560 | ) | -26 | % |
Reported basic and diluted EPS, expressed in pence | (20.3p) | (31.2p) | -35 | % | ||
Normalised basic and diluted EPS, expressed in pence | (18.4p) | (27.0p) | -32 | % | ||
| 30 June 2024 |
| 31 December 2023 |
| ||
Cash, cash equivalents and short-term deposits | 38,078 |
| 72,906 |
| -48 | % |
1The comparative information for the six months to 30 June 2023 has been adjusted to reflect cost of sales being presented for the first time in the period. See note 3 of the interim condensed consolidated financial statements for further details. | ||||||
The action taken by the Company, announced in April, has successfully resulted in reducing the Company's cash burn by around 20%, extending the cash runway to late Q3 2025 and before taking into consideration any unsigned revenue from the out-licensing of any proprietary pipeline asset or signing any new collaborations. The Company’s overall headcount has reduced by c.30% with the company’s headcount expected to be around 180 employees at the end of 2024.
Analyst and Investor briefing
Management will host an analyst briefing at 09:30am BST, 19 September 2024, at the offices of Deutsche Numis, 45 Gresham Street, London, EC2V 7BF. To register your interest in attending either in person or virtually, analysts should contact BenevolentAI@icrinc.com. A recording of the webcast will be made available in the investor section of the Company’s website shortly afterwards.
About BenevolentAI
At BenevolentAI (AMS: BAI), we serve patients by leveraging our proprietary and validated Benevolent Platform™ that integrates AI and science to uncover new biology, predict novel targets and develop first-in-class or best-in-class drugs for complex diseases. By applying proprietary advanced AI tools, in combination with in-house scientific expertise and wet-lab facilities, BenevolentAI is well-positioned to identify and accelerate novel drug discovery.
The Company’s business model presents multiple routes for value creation including discovery collaborations with pharma companies like AstraZeneca and Merck KGaA and advancing in-house pipelines to inflection points. Headquartered in London, with wet labs in Cambridge (UK), BenevolentAI is at the forefront of reshaping the future of drug discovery and delivering innovative medicines.
Forward-looking Statements
This release may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "plans", "targets", "aims", "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "should" and similar expressions. Forward-looking statements include statements regarding objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; economic outlook and industry trends; developments in BenevolentAI’s markets; the impact of regulatory initiatives; and/or the strength of BenevolentAI’s competitors. These forward-looking statements reflect, at the time made, BenevolentAI’s beliefs, intentions and current targets/aims. Forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The forward-looking statements in this release are based upon various assumptions based on, without limitation, management's examination of historical operating trends, data contained in BenevolentAI’s records, and third-party data. Although BenevolentAI believes these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond BenevolentAI’s control. Forward-looking statements are not guarantees of future performance, and such risks, uncertainties, contingencies and other important factors could cause the actual outcomes and the results of operations, financial condition and liquidity of BenevolentAI or the industry to differ materially from those results expressed or implied by such forward-looking statements. The forward-looking statements speak only as of the date of this release. No representation or warranty is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved.
FINANCIAL REVIEW
Revenues
Revenue recognition follows the IFRS accounting basis which determines the revenue recognised in the period in respect of each performance obligation. The Group’s revenues for the first half of 2024, were £2.8 million, a decrease of 46% from £5.3 million (H1 2023). The change reflects the facts that in the period January to June 2024, the Group was still in the early stages of delivery of the Merck collaboration, which started in September 2023. The Group is also in the final phase of the work for the AstraZeneca target identification collaboration, with the majority of work and revenue delivered in the prior year. Revenue from AstraZeneca in the period included milestone revenue from the selection of two targets in HF and SLE.
Cost of sales
Costs directly attributable to the revenue recognised from both collaborations are separately presented for the first time and include the prior period’s comparison. Cost of sales consists of research and development expenditures that directly relate to work carried out on revenue generating collaboration agreements. This includes salary costs that are apportioned based on time spent by employees working on these agreements as well as the cost of materials and costs incurred including those under agreements with contract research organisations (CRO’s). Cost of sales for the first half of 2024 has increased by 364% from £0.8 million (H1 2023) to £3.6 million, reflecting the costs of operating the chemistry collaboration which are similar to those incurred by the Group on a proprietary programme basis. Over the lifetime of the collaboration a positive gross margin is expected, but in the early stages, the cost of sales is anticipated to be higher than the revenue recognised on an accounting basis. Once subsequent stage gates are unlocked revenue can be recognised for work already completed, having a positive impact on the gross margin.
Alternative performance measures and normalised presentation
The normalised presentation of the Group’s performance can be found in the interim condensed consolidated statement of comprehensive income and is explained further in note 2.4 of the financial statements.
Research and development (R&D) expenses
Normalised spend in research and development for the first half of 2024, excluding employee-related share-based payments, has decreased by 36% from £30.7 million (H1 2023) to £19.8 million. This is primarily driven by a reduction in cost base arising from each restructuring programme announced on 25 May 2023 and 23 April 2024 and reflects the Group’s efforts to prioritise certain programmes in its proprietary pipeline.
Reported spend in research and development, excluding employee-related share-based payments, has decreased by 42% from £34.8 million (H1 2023) to £20.1 million due to planned reduction as described in the normalised spend section above and which includes a decrease of £3.7 million in restructuring cost reduction initiatives in the first half of 2024 compared with prior period.
For both normalised and reported spend in research and development, the comparative information for the six months to 30 June 2023 has been adjusted to reflect cost of sales being presented for the first time in the period. See note 3 of the interim condensed consolidated financial statements for further details.
Administrative costs
Normalised administrative costs for the first half of 2024, excluding employee-related share-based payments, has decreased by 17% from £11.9 million (H1 2023) to £9.9 million, reflecting the cost reductions made under each of the restructuring initiatives.
Reported administrative costs for the first half of 2024, excluding employee-related share-based payments, has decreased by 9% from £13.1 million (H1 2023) to £11.9 million due to a reduction of £0.8 million in restructuring programme expenses offset by a £1.5 million one-off charge relating to the fair value reduction in one of the Group’s unlisted equity investments, not present in the comparative period.
Operating loss
Normalised operating loss for the first half of 2024 has decreased by 26% from £40.6 million (H1 2023) to £30.0 million.
Reported operating loss decreased by 30% from £45.9 million (H1 2023) to £32.3 million, reflecting the cost savings arising from the restructuring and a further decrease in employee-related share-based payment expenses of 92% from £2.6 million (H1 2023) to £0.2 million.
Finance income
Finance income for the first half of 2024 has decreased by 43% from £2.3 million (H1 2023) to £1.3 million, driven in part by there being no fair value revaluation of the warrant liabilities in the period (H1 2023: £0.3 million). Excluding the fair value revaluation of the warrant liabilities held, normalised finance income has decreased 35% from £2.0 million (H1 2023) to £1.3 million, reflecting interest income earned from the balance of bank deposits during the period.
Taxation
Taxation income for the first half of 2024 has decreased by 9% from £7.0 million (H1 2023) to £6.4 million. This reflects the lower level of eligible R&D expenditure incurred, further to the restructuring and pipeline prioritisation initiatives, and an increase in R&D collaboration work which receives a lower rate of recovery than that for which BenevolentAI bears the full cost. These changes are partly offset by a £2.2 million increase to the 2023 R&D tax receivable which has been recognised in the first half of 2024 due to a retroactive increase in the 2023 small and medium enterprise (SME) tax recovery being granted Royal Assent in February 2024. This is consistent with expectation and to information disclosed in the 2023 Annual Report and accounts. The 2023 claim submitted in June, for £12.1m, was received in July 2024, as claimed and inclusive of the increase described above.
Loss per share
Normalised basic loss per share for the first half of 2024 has decreased by 32% from 27.0p (H1 2023) to 18.4p, driven by the fall in operating costs and share-based payment expenses and reflecting the increase in weighted average ordinary shares outstanding at the end of 2023.
Current assets
Current assets at 30 June 2024 have decreased by 30% from £91.4 million (31 December 2023) to £63.8 million, largely driven by a £34.8 million decrease across cash, cash equivalents and short-term deposits due to funding of operations in the period.
Cash, cash equivalents and short-term deposits
Cash, cash equivalents and short-term deposits as at 30 June 2024 have decreased by 48% from £72.
Fonte: Business Wire