Biotechnology group Silence Therapeutics (LON:SLN) today gave a comprehensive run-down on its progress since merging with rival Intradigm at the start of the year.
However there was no update on the “potential offer” for the group received earlier this month from an as yet unnamed suitor.
The lack of tangible news on bid talks prompted a 1p, or 8.5 per cent fall in the share price to 10.5p.
The interim results, which revealed Silence posted an after tax of £7.05 million, represent the first comprehensive update since the Intradigm deal.
Key among the milestones was the £15 million fundraising, which was carried out at 23p a share.
By the end of June the firm had £6.84 million of cash and equivalents remaining after burning through £8.65 million in the period.
This included a repayment of £1.94m of Intradigm's short term loans and a “significant reduction of our other liabilities”.
Silence gets the name because its expertise is 'gene silencing', also known as siRNA technology.
This is a way of controlling or shutting down some of the 40,000 genes in the human body. It copies the body's own method of fighting a virus.
In theory the process could be used to tackle cancers and other diseases that traditional chemistry and biotechnology have failed to eradicate.
However there are just a couple of hurdles that need to be overcome with this cutting edge science.
First, the ‘siRNAs’ have a nasty habit of creating flu like side effects and second, they require a delivery technology to get them to the parts of the body where they are needed.
On both counts Silence is well ahead of the competition so far as the intellectual property, the delivery and the side effects profile are concerned.
During the six months under review the group has made significant progress in developing its pipeline of potential blockbuster products.
It has been issued with a novel RNAi patent issued covering the high-value PKN-3 cancer target in the US. Silence's lead drug candidate, Atu027, specifically targets PKN-3.
At the same time its small interfering RNA delivery collaboration with Dainippon Sumitomo has expanded to additional disease targets selected by the Japanese Pharma giant.
Silence also landed a one-year extension of ongoing siRNA delivery collaboration with AstraZeneca to examine new and enhanced delivery approaches for RNAi therapeutics.
However, the most exciting collaborative development happened after the period end as it emerged the group could earn as much as $65 million from a collaboration deal with Swiss giant Novartis (NYSE:NVS).
The focus of the study will be QPI-1002, an experimental kidney drug discovered by Silence, but licensed to American firm Quark.
The treatment is now being taken into phase II clinical trials.
The $65 million is Silence’s slice of a potential $680 million windfall of potential milestone payments and royalties negotiated by Quark.
Quark will receive $10 million up front. However it is not known how much of this sum will trickle down to Silence.
An injection of funds would go a long way to filling a potential funding shortfall predicted in the second quarter of next year.
Separately, Silence said its strategic plan has now been implemented following the Intradigm merger.
All research activities now take place at the company's Berlin facility, while other functions, including business development, legal and certain drug development activities, have been relocated to its new Redwood City, California operation.
Chief executive Phil Haworth said: "2010 has been a pivotal year for Silence Therapeutics. Our new, more comprehensive structure has facilitated multiple advances in the three areas that we believe will be most critical in the coming years - partnerships, intellectual property and clinical progress.
“We are delighted by our progress in the first half of 2010 and look forward to continued success during the second half of 2010."
Disclosure: The author of this holds no position in the company