Scancell reported FY19 results in line with expectations. The cash balance at April 19 was £4.6m, with an initial inflow of £3.9m (gross) from Vulpes Life Sciences postperiod. However, the main news is that SCIB1 is back in the clinic, with the Phase II trial in combination with the checkpoint inhibitor pembrolizumab (Keytruda) now underway in the UK. This 25-patient open-label study should produce its first data in H120. The delay in initiating the US study has been frustrating for both the medical community and investors. Other development programmes are progressing as expected and the management team continues to be strengthened. We continue to value the company, using a risk-adjusted NPV model, at £82.0m, or 17.6p a share.
The 25-patient open-label study of SCIB1 in combination with pembrolizumab (Keytruda) in melanoma patients has started in the UK. A US study had been awaiting FDA clearance of the Ichor Medical Systems' TriGrid 2.0 electroporation delivery system; the newer commercial version of the device employed in earlier clinical work. Management has withdrawn the US IND in order to allow the UK study to start; with US sites expected to be added later once Ichor has addressed the FDA’s enquiries. Initial data from the UK study is likely to report in H120, with previous clinical evidence suggesting promising outcomes.
Scancell’s second ImmunoBody, SCIB2, uses a new lipid nanoparticle formulation. The forthcoming CRUK-funded Phase I/II study will employ this via a standard injection, rather than using electroporation. Preclinical studies suggest the nanoparticle formulation is at least comparable to, and could be better than, using electroporation. Successful delivery should ease future regulatory interactions and also help with patient recruitment.
Scancell ended FY19 with a cash balance of £4.6m (vs £7.6m in January 19) with a net loss of £5.63m (£3.24m in H119). An investment of £3.9m (gross) was received in June 2109 through the issue of 77.6m new shares to Vulpes Life Sciences Fund at 5p per share. Vulpes holds 16.67% of the enlarged share capital, overtaking Calculus Capital as the largest shareholder. The cash burn is expected to rise as Scancell enters the clinical stages.
We maintain our valuation of Scancell based on a rNPV and sum-of-the-parts methodology at £82.0m, equivalent to 17.6p a share. There are various catalysts over the coming year with Phase II data with ImmunoBody SCIB1 and the first clinical study with a Moditope due to start.