Interim Results for the Six Months Ended 30 June 2016

Click here to download the full 2016 interim results statement

– Strong NIOX® sales growth; respiratory pipeline progressing –
– Unexpected phase III allergy results; Spring 2017 house dust mite results will inform allergy approach –
– Commercial infrastructure expanded as strategic growth platform –
– Robust portfolio strategy; early work underway on three new products –

Oxford, UK – 27 September 2016: Circassia Pharmaceuticals plc (“Circassia” or “the Company”; LSE: CIR) today announces its interim results for the six months ended 30 June 2016 and a post-period strategic update.

Steve Harris, Circassia’s Chief Executive, said: “While the first half of 2016 was dominated by June’s unexpected and disappointing phase III cat allergy results, we have made good progress in our wider business and are capitalising on a number of strategic opportunities. During the last three months we have taken a prudent approach to our allergy investment and rationalised our cost base.  We have also focused on strengthening our existing business and taking initial steps to broaden our pipeline.  As a result, we have completed early work on a number of new product opportunities giving us additional pipeline options while we await the results of our house dust mite allergy field study that will inform our wider portfolio strategy.  We have also initiated negotiations for the return of EU rights to Fliveo®, our recently approved Flixotide® pMDI substitute, and significantly expanded our direct sales presence to boost our NIOX® revenues and establish ourselves as an attractive commercialisation partner. 

Our ambition to build a world-class specialty biopharmaceutical business remains undimmed and we believe the combination of our marketed products, broad pipeline and robust commercial platform gives us the foundation we need to achieve this goal.”

OPERATIONAL HIGHLIGHTS

NIOX® performing strongly

  • Sales increased 21% (14% at CER1) to £11.1 million (H1 2015 CER: £9.7 million – £0.6 million under Circassia ownership and £9.1 million under previous ownership)
  • Direct clinical sales (ie non-research2) increased 35% (26% CER) compared with H1 2015
  • Study to extend US label down to four year olds on track to report H2 2016

Respiratory portfolio progressing

  • Seriveo® (Seretide® pMDI substitute) filing on track for H2 2017
  • Triple combination study shows no significant safety concerns; all three components bioavailable

Prudent approach to allergy portfolio

  • No major confounding factors identified in cat allergy phase III dataset
  • Allergy investment curtailed following cat allergy phase III results
  • Portfolio review to follow results from house dust mite allergy study (n=715) anticipated Spring 2017

Commercial platform expanded as strategic asset for product in-licensing, partnering & acquisition

  • Global commercial group expanded to 200
  • US sales force increased to approximately 100; managed markets and key accounts teams in place
  • Commercial presence strengthened in Germany and China
  • UK direct sales force recruitment underway

Portfolio strengthened

  • Negotiations initiated with partner for EU rights to Fliveo® (Flixotide® pMDI substitute)
  • Particle-engineered Spiriva® DPI substitute progressed into development
  • Two new product opportunities initiated leveraging respiratory expertise
  • Non-specialty, non-substitutable products to be partnered (including triple combination)
  • R&D reorganised; allergy team and R&D facilities rationalised; device group strengthened
  • Evaluation of further specialty product opportunities underway

FINANCIAL HIGHLIGHTS

  • Revenues increased to £11.1 million (H1 2015: £0.6 million)
  • R&D expenditure £25.1 million (H1 2015: £18.4 million) including £13.8 million on allergy
  • Underlying loss for period £25.4 million (H1 2015: £21.7 million)
  • Provisions against and impairment of allergy portfolio3 £76.4 million
  • Strong balance sheet with £138.0 million cash4 at 30 June 2016 one-off payments of £33.2 million relating to 2015 acquisitions paid H1 2016 (cash4 at 31 December 2015: £203.8 million)
1Constant exchange rates (see note 3 in the Notes to the Condensed Interim Consolidated Financial Statements)
2Direct clinical sales include those to clinicians, hospitals and distributors; research sales include those to pharmaceutical companies for use in clinical studies
3Includes impairment of goodwill (£74.5 million), other intangible assets (£0.3 million) and provision for termination of certain contracts (£1.6 million)
4Cash, cash equivalents and short-term deposits

Analyst meeting and webcast
An analyst meeting will take place today at 9.30am at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. A webcast of the event will be available in the Media section of the Company’s website at www.circassia.com.

Enquiries

Circassia
Steve Harris, Chief Executive Officer                                               Tel: +44 (0) 1865 405 560
Julien Cotta, Chief Financial Officer
Rob Budge, Corporate Communications

JP Morgan Cazenove
James Mitford / Chris Cargill                                                           Tel: +44 (0) 20 7742 4000 

Numis Securities
Clare Terlouw / Michael Meade                                                         Tel: +44 (0) 20 7260 1000 

FTI Consulting
Ben Atwell / Simon Conway / Mo Noonan                                         Tel: +44 (0) 20 3727 1000

About Circassia
Circassia is a specialty biopharmaceutical business with established commercial infrastructure, marketed products, a pipeline of near-term therapies and portfolio of particle-engineered treatments targeting major market opportunities. Circassia sells its novel, market-leading NIOX® asthma management products directly to specialists in the United States and Germany.  Its products are also promoted in a number of other countries by the Company’s network of partners.

Circassia’s broad-based development pipeline includes a range of respiratory medicines. The Company’s lead asthma treatment, Fliveo®, targets substitution of GSK’s Flixotide® pMDI and is approved in the UK and Sweden.  Circassia is also developing a direct substitute for Seretide® pMDI, Seriveo®.  In addition, the Company’s pipeline includes a number of inhaled medicines for chronic obstructive pulmonary disease, including single and combination dose products.  For more information on Circassia please visit www.circassia.com.

Forward-looking statements
This press release contains certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Circassia. The use of terms such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue”, “target” or “believe” and similar expressions (or the negatives thereof) are generally intended to identify forward-looking statements.  These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future.  There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements.  Any of the assumptions underlying these forward-looking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved.  Nothing contained in this press release should be construed as a profit forecast or profit estimate.  Investors or other recipients are cautioned not to place undue reliance on any forward-looking statements contained herein.  Circassia undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances.