ASX Announcements

LCT ended the March quarter with a cash balance of $3,633,042 compared to $3,477,874 in the previous quarter. The cash balance has been boosted by the R&D rebate from Callaghan Innovation, tax credit from the Inland Revenue Department and reduced expenditure at the University of Auckland because of its closure to contain the spread of COVID-19.

Net operating cash flow in the quarter was $140,454 compared to $(967,063) in the previous quarter. Receipts from grants and tax incentives were $648,733 (previous quarter $107,279). Operating payments were $548,032 compared to $1,108,143 in the previous quarter. 

CEO, Dr Ken Taylor says that despite the global impact of COVID-19 and the Level 4 restrictions in New Zealand, business continues for LCT.

“We maintain contacts with the University of Auckland with regards to revised timelines for the obesity and migraine projects, which are dependent on the date the University reopens its laboratories.

“Our activities to pursue the next step for NTCELL® for Parkinson’s disease are also ongoing.”

LCT management work from home during the COVID-19 restrictions. Suppliers have been contacted to obtain relief for payments while LCT’s offices remain closed.

“In all cases suppliers have been very accommodating,” says Dr Taylor. “All the organisations we’ve talked to have understood the need to continue core activities and  pause other services. Our objective is to preserve our cash runway as much as possible.”

The global Covid-19 pandemic and the New Zealand Government’s Level 4 restrictions have had an impact on the two projects LCT has underway with the University of Auckland. Due to the closure of the University during the Level 4 restrictions, progress there is currently halted on these two projects which target treatments for obesity and migraine.

While the University remains closed and the projects on hold, no milestones payments will be made.

In addition, LCT is undertaking a range of prudent cash management actions. These include: Board and management agreeing to a 25 percent cut in fees/salary for three months from 15 April; negotiating a rent reduction; and eliminating international travel costs. LCT continues to negotiate with suppliers to reduce costs further. The company has also applied for the government business relief packages in both Australia and New Zealand and expects to receive these in due course.

As a result of reduced expenditure due to project delays and remuneration savings, there is sufficient cash to last at least to the end of 2021.

LCT’s management team continues to work from home during the Level 4 restrictions. Despite the delays with the university projects and the cancellation of international conferences, LCT CEO Dr Ken Taylor continues to pursue out-licensing agreements with major pharmaceutical companies, predominantly via online meetings and teleconferences.

The development and possible out-licensing of NTCELL® for Parkinson’s disease are not affected by the university closure.

LCT has announced its half yearly report for the six months ended 31 December 2019.

The consolidated loss after tax for the half year amounted to $225,985 (2018 loss: $1,543,294).

Research and development cost were similar to last year due to savings from restructuring now being realised.

This was offset by milestone payments for Obesity and Migraine novel peptide treatment projects. Administration expenses were similar to last year. LCT also made a profit of $1,100,159 from the sale of shares in Semma Therapeutics.

The net assets of the consolidated group have decreased by $158,743 from $4,138,491 at 30 June 2019 to $3,979,748 as at 31 December 2019. The net asset decrease is due to the cash inflow of the sale of shares in Semma Therapeutics and the continued Research and Development expenditure on the milestone payments for Obesity and Migraine novel peptide treatment projects.

The Obesity and Migraine novel peptide treatment projects are progressing as planned. We continue to look for partners/investors for furthering our NTCELL project.

Living Cell Technologies Limited today released its cash flow report for the quarter ended 31 December 2019. The Appendix 4C is attached. The company ended the quarter with a cash balance of $3,477,874 compared to $3,342,174 in the previous quarter. The cash position was boosted by the sale of 121,995 shares in Semma Therapeutics, which realised $1,100,159 when Vertex Pharmaceuticals Incorporated completed its acquisition of Semma Therapeutics during the quarter.

Net operating cash flow in the quarter was $(967,063) compared to $(1,492,377) in the previous quarter. Receipts from grants and tax incentives were $107,279 (previous quarter $284,468). Operating payments were $1,108,143 compared to $1,862,272 in the previous quarter.