Interim results for the six months ended 30 June 2024

Interim results for the six months ended 30 June 2024

Strengthened Executive Leadership and Board

Positive Top Line Phase I Data Reported for BEN-8744, Full Data to be Presented at Upcoming Leading Medical Conference

Advancements in Target Identification and Chemistry Collaborations Validate the Benevolent Platform™

Strong Business Development Activities Boosting Collaboration and Out-Licensing Opportunities

London, UK, 19 September 2024: BenevolentAI ("BenevolentAI" or “the Company" or “the Group”) (Euronext Amsterdam: BAI), a leader in applying advanced AI to accelerate biopharma drug discovery, announces its unaudited interim results for the six months ended 30 June 2024.

Peter Allen, Chair, said:

“I was delighted to join the Board as Chair in May, along with the other new Non-Executive Directors, to support the leadership of the Company. BenevolentAI has consistently been a pioneer and leader in AI drug discovery and development, and we are committed to capitalising on the significant potential its leading platform is delivering. Going forward, we are fully focused on positioning the business for growth, ensuring we are executing, both in terms of our pipeline and business development ambitions.”

Kenneth Mulvany, Deputy Chair and founder of BenevolentAI, said:

“As the founder of BenevolentAI, I am pleased to re-join the Board. The Company’s technology platform was designed to fundamentally change our understanding of how diseases can be treated. I look forward to working with the Board and the leadership, with a renewed focus on business development and innovation in response to the rapid and promising evolution of the sector that BenevolentAI has helped shape.”

Dr. Joerg Moeller, Chief Executive Officer (CEO) of BenevolentAI, said:

“I joined BenevolentAI as a strong advocate of AI as a driver of drug discovery and development, innovation and effectiveness. After a career in large pharma, coming into a company with a clear passion to help deliver treatments to patients in need and with a technology platform and capabilities allowing us to address the most challenging problems in pharma R&D, I am ever more convinced of the impact BenevolentAI can continue to make as a leader in AI enabled drug discovery and development.

“Our technology, one of the most established and validated AI drug discovery platforms, has the potential to generate considerable value, not only for BenevolentAI directly through our proprietary pipeline, but also for our partners.

“We were pleased to announce positive topline safety and pharmacokinetic data for our lead clinical asset and novel drug target, BEN-8744, for the treatment of ulcerative colitis and with potential for meaningful differentiation versus existing standard-of-care treatments and the possibility of indication expansion in Crohn’s disease.

“Continued progress in our existing collaborations is evident, as exemplified by AstraZeneca adding two novel targets into its discovery portfolio in heart failure and systemic lupus during the period and our more recent collaboration with Merck KGaA, which is progressing well.

“With the renewed focus and the changes to the business development function, I am encouraged by the increase in the number and quality of discussions ongoing and that this change in approach will be beneficial for the Company in the near and longer term.”

Key Business Highlights (including post period)

Leadership updates

• Appointment of Non-Executive Directors; Peter Allen as Chair, Ken Mulvany, founder of BenevolentAI, as Deputy Chair, Ian Nicholson, and Jeremy Sohn in May.
• Appointment of Dr. Joerg Moeller as CEO in January and Dr. James Malone as Chief Technology Officer in April. Co-founder Michael Brennan returned to the Company on a consultancy basis in June, and Dr. Ivan Griffin, co-founder, transitioned to the role of Chief Business Officer, in July.

Business Development

The BenevolentAI Platform™ represents a pioneering achievement in AI-enabled drug discovery. Engineered for versatility, it uniquely integrates capabilities in target identification, advanced chemistry, and indication expansion. This integration has directly contributed to the development of the only FDA-approved drug derived through AI technologies, distinguishing BenevolentAI as the sole technology provider with these validated capabilities.

Since assuming leadership, the new Board has driven focus and revitalised the approach of the Company’s business development initiatives. During the period, BenevolentAI’s business development team was strengthened and reorganised to enhance focus on execution. This restructuring, supported by the robust R&D leadership network led by Joerg Moeller and the Board, is aimed at accelerating the pursuit of strategic collaborations and out-licensing agreements.

Initial indicators are positive following this realignment. The Company has observed a significant increase in the pipeline of active collaborations and out-licensing discussions with large, mid-tier pharmaceutical companies and biotech firms.

However, despite these intensified efforts and the full focus of the business development team, the complex nature of such agreements demanding meticulous negotiation and precise strategic alignment, may make it challenging for the Company to sign an agreement in the current fiscal year. The Company remains committed to conclude a deal as soon as possible. BenevolentAI is dedicated to transparently managing stakeholder expectations and will provide further updates as more definitive information becomes available.

Capital markets adviser

The Company made significant progress across its highly differentiated proprietary pipeline, which includes a mix of potential first-in-class and best-in-class drugs for high-impact and complex diseases. The therapeutic focus spans immunology, neurology and oncology. All the assets in the pipeline have been generated through the Company’s advanced technology platform and validated at its state-of-the-art biology and chemistry laboratories located at the Babraham Campus in Cambridge, UK.

BEN-8744

• BEN-8744 is an orally administered, peripherally restricted PDE10 inhibitor in development as a potential first-in-class treatment for patients with moderate to severe ulcerative colitis (UC).
• PDE10 was identified using the Benevolent PlatformTM as a novel drug target for the treatment of UC, offering potential significant differentiation from existing standard-of-care treatments.
• With a differentiated mechanism of action and potentially disease-modifying efficacy, BEN-8744 could also be investigated for broader inflammatory bowel disease indications. The Company has preclinical data showing a robust anti-inflammatory response in ex-vivo Crohn’s disease patient biopsies, supporting the potential for indication expansion.
• In March, the Company announced positive topline safety and pharmacokinetic results from the Phase I clinical study of UC treatment in healthy volunteers. Notably, 20-40% of moderate
  to severe UC patients
  fail to respond to standard of care treatments, which frequently carry severe adverse effects (black box) warnings. The complete study results will be presented at an upcoming leading medical conference.
• Extended regulatory toxicology studies and biomarker qualification studies are underway, supporting the extended dosing planned for further clinical development in patients.
• Out-licensing / partnering discussions are actively ongoing for this asset, bolstered by recent and significant early stage IBD deals.

BEN-34712

• BenevolentAI’s oral, potent and selective brain penetrant RARɑβ (retinoic acid receptor alpha beta) agonist under development as a treatment for amyotrophic lateral sclerosis (ALS) is progressing in IND-enabling studies, expected to be IND-ready in H2 2024. The programme has entered active partnering discussions under the new business development initiative set by the Board.

BEN-28010

• BenevolentAI’s oral brain penetrant CHK1 inhibitor under development as a CNS penetrant drug for glioblastoma multiforme (GBM) and metastatic brain tumours has completed regulatory toxicology studies and is ready for onward partnering / out-licensing.

Pipeline Flexibility and Business Development Opportunities

The Company has invested in more than ten additional programmes that are regularly evaluated for their potential to replenish the pipeline. This robust portfolio management ensures that as certain programmes are successfully out-licensed, others are ready to advance into the business development cycle or further along the drug development pipeline.

This approach not only mitigates risk but also sustains a continuous flow of innovation and potential revenue streams, keeping investors informed of our proactive strategy to maintain and expand our market presence.

Collaborations

The BenevolentAI Platform™ has been instrumental in enabling collaborations with key industry players, demonstrating the platform’s unique capacity and scope to drive innovation in drug discovery and development. Over this period, significant milestones have been achieved, further validating the impact of our AI-enabled approach in target identification and chemistry capabilities.

AstraZeneca – Target Identification (Target ID)

• The Target ID collaboration with AstraZeneca continues to show strong results, with two additional novel targets added to AstraZeneca's portfolio during the period – a heart failure (HF) target in May and a systemic lupus erythematosus (SLE) target in June. This brings the total number of milestones achieved in the original and extended collaborations to seven.

Merck KGaA – Chemistry

• The collaboration with Merck KGaA, initiated in September 2023, leverages BenevolentAI’s platform to identify and develop small molecule drug candidates in oncology, neurology, and immunology. This partnership, still in its early stages, is progressing well and is expected to demonstrate the platform’s strengths in AI-driven chemistry and early drug discovery.

Financial Highlights

• Reported operating loss reduction of 30% from £45.9 million (H1 2023) to £32.3 million, reflecting both the impact of reduced restructuring costs and the prioritisation of research and development activities.
• Revenue has decreased by 46% from £5.3 million in H1 2023 to £2.8 million, primarily due to the anticipated scaling down of the target identification efforts within our AstraZeneca collaboration with the newer Merck collaboration now generating revenue to replace it. Additional revenue is expected from the Merck collaboration in the second half of 2024 through to 2026, once the development milestones are received for work already completed. Since its inception in 2019, the AstraZeneca collaboration has generated approximately £32 million, and BenevolentAI continues to be eligible for discovery, development, and commercial milestones,
  as well as tiered royalties on net sales.
• Reported research and development spend1 reduction of 45% from £36.3 million (H1 2023) to £19.9 million, reflecting continued and focussed investment in the proprietary pipeline and innovation of the Benevolent PlatformTM and excluding directly attributable cost of sales.
• Normalised research and development spend1 reduction of 39% from £32.2 million (H1 2023) to £19.5 million, consistent with the reported research and development spend, but excludes the one-off costs of restructuring in the period.
• Normalised operating loss reduction of 26% from £40.6 million (H1 2023) to £30.0 million.
• Operating cash flow before changes in working capital reduced by 23% from £37.9 million (H1 2023) to £29.3 million.
• Cash, cash equivalent, and short-term deposits reduced by 48% from £72.9 million (FY 2023) to £38.1 million with the cash runway extended to late Q3 2025.

^{1The comparative information for the six months to 30 June 2023 has been adjusted to reflect cost of sales being presented for the first time in the period. See note 3 of the interim condensed consolidated financial statements for further details.}

The action taken by the Company, announced in April, has successfully resulted in reducing the Company's cash burn by around 20%, extending the cash runway to late Q3 2025 and before taking into consideration any unsigned revenue from the out-licensing of any proprietary pipeline asset or signing any new collaborations. The Company’s overall headcount has reduced by c.30% with the company’s headcount expected to be around 180 employees at the end of 2024.

Analyst and Investor briefing

Management will host an analyst briefing at 09:30am BST, 19 September 2024, at the offices of Deutsche Numis, 45 Gresham Street, London, EC2V 7BF. To register your interest in attending either
in person or virtually, analysts should contact BenevolentAI@icrinc.com. A recording of the webcast will be made available in the investor section of the Company’s website shortly afterwards.