Audited results for the year ended 31 December 2023 and review of strategic options

Thursday April 25, 2024

Destiny Pharma plc
(“Destiny Pharma” or “the company”)

Audited results for the year ended 31 December 2023 and commencement of review of strategic options to support advancement of XF-73 nasal programme

Brighton, United Kingdom – Destiny Pharma plc (AIM: DEST), a clinical stage innovative biotechnology company focused on the development of novel medicines that can prevent life threatening infections, announces its audited financial results for the year ended 31 December 2023. The company also announces the commencement of a review of strategic options to support the company’s advancement of XF-73 nasal through Phase 3 clinical trials.

Operational highlights

XF-73 nasal – taking steps to maximise value

  • Engaging with a number of potential partners regarding a licencing deal
    • Positive feedback received from various parties regarding the commercial appeal of XF-73 nasal
    • In response to the feedback received to date, the company is developing a new clinical trial design that would, subject to regulatory review, more than halve the previously planned Phase 3 trial costs (post-period)
  • Confirmed significant commercial potential and establishing US Go-To-Market model (post-period)
  • Data from largest study to date on XF‐73 published in Frontiers in Cellular and Infection Microbiology demonstrated effectiveness of XF‐73 against all 2,527 tested antibiotic resistant and sensitive bacterial strains obtained from patient infections
  • Landmark Phase 2b clinical data for XF-73 nasal gel in cardiac surgery patients demonstrating primary endpoint was met (significant reduction in nasal bacteria prior to surgery) published in leading US peer reviewed journal, Infection Control & Hospital Epidemiology

Earlier stage pipeline – focused development of further commercial opportunities

  • Enhanced understanding of the potential commercial opportunity of the XF pipeline with early data (antibacterial & anti-fungal)
  • Encouraging data demonstrating superior efficacy of XF-73 compared to a leading topical antibiotic against MRSA in skin infection models published in Infection & Drug Resistance
  • Preclinical data in NIAID XF-73 dermal funded study supporting the safety profile and efficacy against a broad range of disease-relevant and antibiotic resistant bacterial isolates (post-period); announced intention to progress towards clinical evaluation for the treatment of diabetic foot infections (DFI) and serious burn wound infections, two areas with a clear unmet need and large patient populations (post-period)
  • Discontinued the SPOR-COV development collaboration to focus on potentially higher-value core pipeline assets (post-period)

Strengthened Board and management team

  • Board strengthened with the appointments of Chris Tovey, CEO, and Sir Nigel Rudd, Chair
  • Dr Debra Barker resumed her position as a Non-Executive Director and assumed the role of CMO on an interim basis

Financial highlights

  • Loss before tax reduced to £6.4 million (2022: £7.7 million)
  • R&D expenditure of £3.3 million (2022: £4.9 million)
  • Other operating expenses (excluding share-based payment charge) of £3.8 million (2022: £2.5 million)
  • Year-end cash and cash equivalents of £6.4 million (2022: £4.9 million)
  • Company funded through to Q1 2025.

XF-73 nasal update – review of strategic options to advance the programme

The company today provides an update regarding licencing for XF-73 nasal. The company has engaged with a number of potential partners and has received some strong and positive feedback on XF-73 nasal. However, no potential licencing deal has, to date, been forthcoming that we believe would provide fair value to the company and its shareholders.

Destiny Pharma believes the commercial appeal of this asset is very clear, however feedback from potential partners has highlighted their desire for further clarification regarding the cost of Phase 3 clinical trials and prevailing perceptions of the commercial potential of antibiotics. Destiny Pharma has therefore taken steps to re-evaluate aspects of the final clinical development approach to act on this feedback and enhance the attractiveness of XF-73 nasal. These steps include developing a new clinical trial design that, subject to regulatory review, would more than halve the previously anticipated Phase 3 trial costs without reducing XF-73 nasal’s market potential, label, or benefits to patients. Further, the company is conducting an ongoing exercise to broaden understanding of the market potential for XF-73 nasal in the US to present potential partners with a clearer, more-in-depth picture of the product’s value as a preventative treatment, and how commercial organisations can realise this value. With the benefit of this enhanced proposition, the company will continue to engage with interested parties.

Whilst licencing activities continue, Destiny Pharma believes that it is appropriate to evaluate alternative options to maximise value from XF-73 nasal and progress the programme. To that end, the Board and management are now undertaking a review of strategic options to determine how best to support the company’s advancement of XF-73 nasal through Phase 3 clinical trials.

This review will consider a range of strategic options for XF-73 nasal, including licensing and the company securing finance to enable it to conduct the Phase 3 clinical studies. Currently, the review is not actively considering an offer for the company.  A further announcement regarding the outcome of this review will be provided in due course.

Chris Tovey, Chief Executive Officer of Destiny Pharma, commented:

“In the eight months since I joined Destiny, everything I have seen and heard furthers my belief in the value our pipeline can bring to patients and health systems around the world. XF-73 nasal has enormous market potential and can make a huge difference in the prevention of surgical site infections, and the reduction in the usage of antibiotics.

‘Whilst we will now be presenting an enhanced proposition for the product to potential partners, we also have initiated a wider review to evaluate a range of strategic options to progress the programme and to maximise value from XF-73 nasal. We have a team with a strong track record of bringing products to market and I believe that we can bring this expertise to bear to give XF-73 nasal and Destiny Pharma the best chance of success.”

Webcast

Destiny Pharma will host a webcast presentation followed by a live Q&A session at 11:00 am BST today, accessible via the Investor Meet Company platform.

The presentation is open to analysts and all existing and potential new shareholders.

Investors can sign up to Investor Meet Company for free, and add to meet Destiny Pharma plc via:

https://www.investormeetcompany.com/destiny-pharma-plc/register-investor. Investors who already follow Destiny Pharma plc on the Investor Meet Company platform will automatically be invited.

For further information, please contact:

Destiny Pharma plc
Chris Tovey, CEO
Shaun Claydon, CFO
+44 (0)1273 704 440
pressoffice@destinypharma.com

FTI Consulting
Ben Atwell / Simon Conway / Michael Trace
+44 (0) 203 727 1000
destinypharma@fticonsulting.com

Shore Capital (Nominated Adviser and Broker)
Daniel Bush / James Thomas / Lucy Bowden
+44 (0) 207 408 4090

About Destiny Pharma

Destiny Pharma is an innovative, clinical-stage biotechnology company focused on the development and commercialisation of novel medicines that can prevent life-threatening infections. The company’s drug development pipeline includes two late-stage assets XF-73 nasal gel, a proprietary drug targeting the prevention of post-surgical staphylococcal hospital infections including MRSA, a microbiome-based biotherapeutic for the prevention of C. difficile infection (CDI) recurrence which is the leading cause of hospital acquired infection in the US..

For further information on the company, please visit destinypharma.com

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) (“UK MAR”). Upon the publication of this announcement, this inside information (as defined in UK MAR) is now considered to be in the public domain.

Forward looking statements

Certain information contained in this announcement, including any information as to the company’s strategy, plans or future financial or operating performance, constitutes “forward-looking statements”. These forward looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “projects”, “expects”, “intends”, “aims”, “plans”, “predicts”, “may”, “will”, “seeks” “could” “targets” “assumes” “positioned” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors concerning, among other things, the company’s results of operations, financial condition, prospects, growth, strategies and the industries in which the company operates. The Directors of the company believe that the expectations reflected in these statements are reasonable but may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward-looking statement speaks only as of the date of the particular statement. By their nature, 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 or are beyond the company’s control. Forward looking statements are not guarantees of future performance. Even if the company’s actual results of operations, financial condition and the development of the industries in which the company operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

The full text of the announcement may be found here.