Silence Therapeutics ready to make a bigger noise in 2021

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Silence Therapeutics PLC (LON:SLN) is cashed up and ready to pick up the pace in 2021 after a transformational 2020, it told investors.

Cash and cash equivalents at the end of 2020 stood at £37.4mln, since when the gene silencing specialist raised £30.8mln through a share issue while it is due to receive £29.4mln in the first half of this year from its breakthrough deal with AstraZeneca.

READ Silence Therapeutics inks blockbuster deal with AstraZeneca worth US$400mln per disease targeted

Full-year results showed revenue rose to £5.5mln in 2020 from £244,000 in 2019.

Research and development (R&D) costs climbed to £20.2mln from £13.3mln, accounting for about half of the widening of the pre-tax loss to £36.0mln from 2019’s loss of £22.9mln.

The firm saw a cash outflow of £10.8mln in the year compared to an inflow of £1.7mln the year before. In 2021, the group expects to make continued investments in R&D to support its clinical programmes and discovery efforts. It also expects general & administrative expenses will rise from 2020’s level to support organisational growth, including its public company needs.

“2020 was a transformational year for Silence Therapeutics, driven by the remarkable resilience of our people in what was a challenging year for the world,” said Mark Rothera, the president and chief executive officer of Silence Therapeutics.

“We have made significant progress with our mRNAi GOLD platform, with both lead programmes now in the clinic and three data readouts due this year. Alongside advancing our wholly-owned pipeline, we continue to progress our high-value partnerships and through this two-pronged approach, our goal is to deliver 2-3 INDs [investigational new drugs] per year from 2023. We are well-positioned for success and motivated by our vision to transform people’s lives through our precision engineered medicines,” he added.

Peel Hunt retierated its ‘hold’ rating following the full-year resuts.

“What is important now is the cash position (very healthy) and Silence’s development plans/timelines for both the existing assets (SLN360 for cardiovascular disease initiated in APOLLO Phase 1 and SLN124 for thalassaemia and myelodysplastic syndrome initiated in the GEMINI Phase 1 study) and Silence’s aim to deliver 2-3 INDs per year from 2023E,” the broker said.

“We will now look to review our model with new management (particularly for revenue recognition of partnership deals, timelines for existing asset development, and R&D spends associated with new programmes). Whilst we think the market will respond well to the pro forma cash position and clinical commitments today, we remain at hold until we have reviewed with management,” it added.

Shares in Silence Therapeutics trade at 574p, unchanged on the day and 31p below Peel Hunt’s target price.

— adds broker comment and share price —

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