Ananda Developments - Interim Results to 31 July 2023

24 October 2023 

ANANDA DEVELOPMENTS PLC 

("Ananda" or the "Company") 

Unaudited Interim Results for the six months ended 31 July 2023

The Directors present the consolidated interim results of Ananda Developments Plc, together with its subsidiaries (the "Group") for the period from 1 February 2023 to 31 July 2023.

UPDATE ON OPERATIONS

Ananda's ambition is to be a leading provider of cannabinoid-based medicines for the treatment of complex, chronic inflammatory pain conditions. 

Ananda had two main areas of focus during the period, those being the ongoing cannabis cultivation, trials and genetic stabilisation work in Ananda's wholly owned subsidiary DJT Plants Limited ("DJT") and the drug discovery process, clinical trials and market launch of various cannabis based unlicenced medicines via its 100% owned subsidiary MRX Medical Limited ("MRX Medical").

MRX Medical

MRX Medical was acquired on 27 March 2023 via the acquisition of 100% of the shares of MRX Global Limited  ("MRX") (which in turn owns 100% of the shares of MRX Medical). MRX Medical has developed a proprietary method to formulate cannabis medicines and three proprietary cannabidiol ("CBD") based formulations. MRX1, MRX Medical's first product, is to be used in two Phase II Randomised Controlled Trials ("RCTs") to investigate the effectiveness of CBD in chemotherapy induced peripheral neuropathy ("CIPN") and in patients with endometriosis. After the end of the period, the Company announced that the endometriosis trial is to be funded by the Chief Scientist Office of NHS Scotland via a £300,000 non-dilutive grant. The CIPN trial has also received combined commitments of £1.25 million in external grant funding and both trials are to be carried out by leading investigators at the University of Edinburgh.

MRX's cannabidiol formulations meet the requirements set out by the National Institute for Health and Care Excellence ("NICE") for research into the effectiveness of CBD with no or trace tetrahydrocannabinol ("THC"). MRX1 and MRX2, MRX's second formulation, were launched as unlicensed CBPM's (Cannabis Based Products for Medicinal use in humans) on 27 July 2023.

In March 2023, the Company also raised a total of £427,400 (before expenses) via the issue of 142,466,667 ordinary shares of 0.2p each in the Company at a price of 0.3p per share.

As well as launching the medicines and having them listed on three separate specialist clinic formularies, the MRX website was launched in June 2023. The website provides potential prescribing clinicians with a contact point with MRX via which they can obtain technical data about the medicines, including ingredients, formulation details, ingredient quality information and dosage guidelines. In May 2023, the Company also announced that MRX had filed patents over three cannabinoid formulations: MRX1, MRX2 and its most recently developed formulation MRX3. These formulations have been developed as cannabidiol-based medicines for the treatment of a number of complex inflammatory indications which are unmet by existing treatments. A fourth application was also filed which covers a proprietary method for formulating these products. As part of the acquisition of MRX, Professor Clive Page joined the Board of Ananda as an independent non-executive Director.  Clive is Professor of Pharmacology at King's College London and Chair of the British Pharmacological Society. Clive's main research interests are in the pharmacology of inflammation and respiratory diseases, and he has published over 250 scientific papers. Clive was the 2006 Co-Founder and previous Chairman of AIM quoted Verona Pharma plc, which is now capitalized at more than US$1 billion and quoted on NASDAQ.  At the same time, Jeremy Sturgess-Smith was also appointed to the Board as an executive director.  Jeremy is a founding employee of the Company, its finance director and also a director of MRX Global and MRX Medical.

The Company also appointed SP Angel Corporate Finance LLP as its Aquis Corporate Adviser and Broker during the period, a move intended to help prepare the Company for a potential move to a more senior stock exchange in the future and to gain access to SP Angel's Healthcare research team, which lead to the release during the period of the Company's first formal research report.

DJT

During the reporting period, work continued as DJT refined and progressed its genetic stabilisation programme through to its third generation, collecting 29,000 seeds across 45 genetic lines. DJT now believes it has developed a set of protocols to successfully self-pollinate cannabis and produce enough viable seeds to grow the next generation of plants, each generation of which will be more genetically homogenous than the previous one. This is a significant achievement for a company like DJT and one that the Directors believe will enable DJT to claim IP (Intellectual Property) protections over the unique strains it is breeding.

The genetic stabilisation programme has undergone several refinements and alterations to the methodology. These methodological improvements have now been implemented across the programme and have led to a 50 per cent reduction in the time taken to move from one generation to the next. The improvements have also increased the number of seeds collected per plant by 100 per cent and have also improved the quality of the collected seeds.

The second generation of seeds from the self-crossing programme were planted on 30 March 2023 and, for comparison purposes, several clones of the same cultivar were also planted at the same time. The second-generation seeds have three more generations of self-crossing to complete before they are considered statistically stable, however the difference between the seeds and clones at the third generation is significant. The seed grown plants demonstrate enhanced vigour, faster growth, expansive leaves, and a stronger root system when compared with the plants grown from clones, which exhibit an absence of tap root, age-related stress, and shorter, thicker leaves.

From May - July, DJT also performed a second year of cannabis cultivation trials in its low cost, low carbon cultivation environment in Lincolnshire. This year, three strains with promising cannabinoid and terpene profiles were selected for growing trials. The strains were selected based on both the performance of the first generation plants during the 2022 cultivation trials and the results of the detailed testing performed on the strains. The results of this testing were received in early 2023 and discussed in a Corporate Update released via RNS on 6 February 2023. The results confirmed that DJT had successfully grown high THC, balanced THC/CBD, and high CBD cultivars.

On 10 July 2023 Home Office representatives visited DJT Plants' facility. This visit was a compliance visit as per the terms of the DJT licence and standard Home Office practice. DJT passed the compliance visit successfully. Two seasons of cultivation trials have now been undertaken and the genetic stabilisation programme is at the third generation of seeds. As a result, this phase of research is now complete and DJT's costs were reduced whilst the Company continues to plan for commercial cultivation.

Following the close of the period, Ananda announced that it is pausing operations at the DJT cultivation facility to reduce monthly cash burn.  DJT is exploring opportunities to partner with a university to attract third party grant funding to complete the genetic stabilisation work.  It can scale up commercial cannabis cultivation rapidly, once the UK market has grown to a point where investing the capital to construct the cannabis flower processing and manufacturing facility is possible and makes financial sense for shareholders.

In the period, the Group incurred a loss of £989,893 (Company 2023: £370,287) before tax, which solely represents operational costs. Net assets of the Group at the interim point were £4,842,853 (Company 2023: £7,707,958), the Group figure only includes MRX Global Limited and MRX Medical post 27 March 2023.

On behalf of the board

Melissa Sturgess, Chief Executive Officer

24 October 2023