- Reported positive results of independent review of utility for MagSense® HER2 breast cancer detection
- Announced plan to advance MagSense® HER2 program to multi-site US study
- Received 2nd CSIRO Federal Government grant for prostate cancer project
- Opened a non-renounceable entitlement offer to raise up to $2.4 million
- Secured a $15 million funding facility with Mercer Street Global Opportunity Fund, LLC
MELBOURNE – Imagion Biosystems (ASX:IBX), a company dedicated to improving healthcare through the early detection of cancer, today released its Appendix 4C Quarterly Cashflow report and update on company activities for the quarter ending 31 March 2023 (Q1 FY2023).
“The momentum from 2022, where we were able to report positive in-human data from the MagSense® HER2 Phase 1 study, has continued into 2023 with further advancements in relation to the HER2 program as well as reporting positive pre-clinical data for our Ovarian Cancer program,” commented CEO Bob Proulx. “The positive independent review of our Phase 1 data by an independent panel of radiologists has given us the confidence to move forward with planning for a multi-site study in the US for the MagSense® HER2 imaging agent. We have had good dialogue with the FDA and feel confident moving forward to an Investigational New Drug (IND) filing which we feel it is achievable in late 2023 or early 2024.”
Summary of Activities
MagSense® HER2 breast cancer program
During the quarter the Company announced that an independent blinded review by a panel of expert breast cancer radiologists corroborated the Company’s previously reported positive findings from its MagSense® HER2 breast cancer phase 1 study.
The radiologists ascertained that the MagSense® HER2 imaging agent produces a change in Magnetic Resonance Image (MRI) contrast and that the contrast in nodes highly suspicious for tumour is distinctly different from the MRI contrast seen in non-involved nodes. The independent reviews are consistent with the Company’s previous assertion that the MagSense® imaging agent provides new information for the radiologist not available through conventional methods, like ultrasound, and has the potential to aid in the clinical assessment of nodal metastasis in HER2 positive breast cancer. The Company now plans to prioritise the development of its pipeline of tumour targeting MagSense® imaging agents for use with widely available commercial MRI systems.
This approach is expected to provide a faster path to patients and commercialization and eliminates near-term expense and risks associated with developing and introducing the Company’s proprietary detection technology (Magnetic Relaxometry). The Company plans to collaborate with academic and industry partners on a new generation of small magnetic sensors that could enable the use of magnetic relaxometry in a doctor’s office.
Please refer to the Company’s announcement on 5 Feb 2023 for further information.
During the quarter, Imagion also announced it has been in communication with the U.S. Food and Drug Administration (FDA) related to its interest in advancing the MagSense® HER2 breast cancer clinical investigations to include sites in U.S. The Company noted that the guidance and recommendations received from the FDA are consistent with regulatory oversight for products entering Phase 2. The Company now plans to proceed with an IND filing in the US for the MagSense® HER2 imaging agent.
The Company noted that activities in the coming quarters would include: collecting additional non-clinical and clinical data (pharmacokinetics) in support of commencing a US Phase 2 study; manufacturing additional MagSense® HER2 imaging agent material to support the US Phase 2 study; and establishing the initial clinical investigators and sites to support the study. Imagion expects to be able to file the IND submission in Q4 of 2023 or Q1 of 2024.
Please refer to the Company’s announcement on 26 March 2023 for further information.
MagSense® prostate cancer program
During the quarter the Company qualified for a second grant of $50,000 under the Entrepreneurs’ Programme of the Australian Government Department of Industry, Science, Energy and Resources. Imagion used the first grant in 2021 to support its early preclinical research efforts for prostate cancer detection in collaboration with researchers at Monash University. The second grant will be used to continue that program, building on the preclinical results that were reported at the World Molecular Imaging Conference in September 2022. These funds will help to further advance the MagSense® prostate cancer imaging agent for use with Magnetic Resonance Imaging (MRI) for clinical detection of the Company’s MagSense® molecular imaging technology.
MagSense® ovarian cancer program
Subsequent to quarter end Imagion’s VP of R&D, Dr. Marie Zhang, presented two scientific posters related to the Company’s ovarian cancer detection program at the Annual Association of Cancer Research in Florida.
Poster 1: Targeted Detection of Ovarian Cancer Using Functionalized Iron Oxide Nanoparticles
Poster 2: In Vivo Targeted Detection and Imaging of Ovarian Cancer by SPMR and MRI Using Anti-Folate Receptor Functionalized Iron Oxide Nanoparticles
Please visit our AACR 2023 poster request page to obtain copies of the posters.
Subsequent to quarter end the Company announced that it had filed a provisional patent application related to the image patterns(s) associated with the presence of the MagSense® targeted imaging agent. The new IP would extend Imagion’s proprietary position for our magnetic nanoparticles across Magnetic Relaxometry (MRX) and Magnetic Resonance Imaging (MRI), providing broader protection against other imaging agents that might try to replicate targeted detection by MRI. Whilst there is no guarantee that the patent will issue, the new IP will provide significant value to Imagion and its commercial partners.
Since all MagSense® targeted imaging agents use the same underlying nanoparticle technology, the Company would look to apply the intellectual property position broadly across the portfolio of MagSense® nanoparticle imaging agents.
Now that the Company’s MagSense® imaging agent for HER2 breast cancer is progressing towards Phase 2 and our technology is showing positive preclinical results in other areas of high unmet need, including prostate cancer and ovarian cancer, we have a potentially substantial value proposition for the medical imaging sector and are now well-placed to initiate discussions around strategic options with potential commercial partners.
To facilitate this process, we have established a secure data room where we can share confidential information related to the MagSense® HER2 program as well as our growing pipeline of imaging agents and will begin outreach programs to potential partners in an effort to gauge market interest in our technology.
During the quarter the Company announced an entitlement offer seeking to raise up to $2.4 million as well as a funding facility of up to $15 million with Mercer Street Global Opportunity Fund, LLC (Mercer).
The entitlement offer, which closed on 14 April 2023, provided funds of $413k (before costs) from existing shareholders. There is a shortfall of up to $1.97 million available for the Company to place to new or existing shareholders prior to 14 July 2023. The ability for the Company to place this shortfall will be dependent on market conditions and Imagion’s share price trading on or above the entitlement offer price (being $0.017 or 1.7 cents per share).
The funding facility with Mercer initially provided an investment of $1.5 million in convertible securities, which was received during the quarter. A further investment of $1.0 million in convertible securities has been committed by Mercer and is subject to shareholder approval at the Company’s upcoming AGM to be held on 25 May 2023. The facility provides for up to a further $12.5 million in convertible securities subject to mutual agreement between the Company and Mercer as well as either receiving shareholder approval at the upcoming AGM or having available placement capacity in accordance with the ASX Listing Rules.
Please refer to the Company’s announcement on 7 March 2023 for further information.
The decision to enter into the funding agreement was taken to assist in providing liquidity for the Company as it advances its clinical development towards an IND filing and commencement of a multi-site Phase 2 study in the US. The advancement of any medical technology company towards Phase 2 studies and beyond requires significant investment and the Company is utilising its positive relationship with Mercer to provide another avenue of liquidity. This liquidity is in addition to the capital markets and prior to the ability to find any strategic commercial partners (refer above for initiatives in this area). In making this decision the Company is cognisant of the depressed capital markets, particularly in relation to microcap and pre-revenue companies, in Australia and to a lesser extent the US. At this stage the Company has no intention to fully utilise the Mercer facility but is pleased to have this facility as part of its overall capital requirements.
Summary of cash flows
Imagion’s cash balance at 31 March 2023 was $2.6 million, a decrease of $1.8 million from the prior quarter. The Company reported an operating cash outflow of $2.9 million in the quarter, similar to the prior quarter’s operating cash outflow (when adjusting for the receipt of the AU$2.5 million research and development tax incentive received in Q4 2022). This was in line with the Company’s expectations.
Administration and corporate costs, and staff costs increased slightly on the prior quarter while research and development costs reduced slightly. Repayment of borrowings and interest costs reduced slightly during the quarter. These relate to the allocation of rent for our San Diego facility, in line with the lease accounting provisions of the accounting standards.
We anticipate administration and corporate costs to remain relatively consistent through the remainder of 2023. Research and development costs are expected to increase during the remainder of 2023 as the MagSense® HER2 Breast Cancer program progresses towards an IND filing and undertakes activities outlined above. In addition, the Company will also be planning to advance its development pipeline, and therefore this may add to research and development expenditures.
In relation to liquidity the Company anticipates receiving up to $4.9 million from the following financing proceeds in Q2 2023: receipt of $1.0 million (pre-costs) for the second tranche of convertible securities from Mercer (subject to shareholder approval at the Company’s upcoming AGM); receipt of it’s research and development tax incentive in respect of the 2022 year which is anticipated to be $3.5 million (this has been lodged with the Australian Taxation Office); and receipt of $413k (pre-costs from the Company’s recent Entitlement Offer). In addition to this the Company has the ability to raise a further $1.97 million under the shortfall associated with the entitlement offer should favorable market conditions prevail.
The Company also paid $151k to related parties and their associates. These payments are related to director fees and executive director salaries.
About Imagion Biosystems
Imagion Biosystems is developing a new non-radioactive and precision diagnostic molecular imaging technology. Combining biotechnology and nanotechnology, the Company aims to detect cancer and other diseases earlier and with higher specificity than is currently possible.
Authorisation & Additional information
This announcement was authorised by the Board of Directors of Imagion Biosystems Limited