Alterity Therapeutics(ATHE) - 2025 Q2 - Quarterly Report

Appendix 4D: Half-Year Report Summary Results for Announcement to the Market Alterity Therapeutics reported decreased revenue and increased net loss for H1 FY2025, with net tangible assets per share significantly declining Financial Performance Summary (vs. 31 Dec 2023) | Metric | Change | Value (A$) | | :--- | :--- | :--- | | Revenue from ordinary activities | Down 6.0% | 111,299 | | Net loss after tax | Up 10.2% | 7,173,335 | Net Tangible Assets per Security | Date | Cents per Share | | :--- | :--- | | 31 December 2024 | 0.14 | | 31 December 2023 | 0.62 | - The reported income of $111,299 for the half-year was entirely from interest received on the Group's bank accounts[7] - No dividends have been paid or declared by the Group for the current or previous financial period[8] Directors' Report Review of Operations The company achieved significant progress with positive ATH434-201 Phase 2 trial results for MSA, followed by a successful A$42 million capital raise Lead Compound - ATH434 ATH434 is the company's lead oral agent, inhibiting pathological protein aggregation by redistributing iron, with potential for MSA and other neurodegenerative diseases - ATH434 is an oral agent designed to inhibit pathological protein aggregation by redistributing excess iron in the brain, thereby rescuing neuronal function[23] - The compound has potential as a treatment for Multiple System Atrophy (MSA), Parkinson's disease, and Friedreich Ataxia[24][25] ATH434 Clinical Trials for Multiple System Atrophy (MSA) The ATH434-201 Phase 2 trial showed a 48% slowing of MSA progression, while the ATH434-202 trial also yielded positive interim data - The ATH434-201 Phase 2 trial in early-stage MSA demonstrated a clinically meaningful benefit, achieving statistical significance with a 48% slowing of clinical progression on the UMSARS I rating scale at the 50 mg dose[18] - The ATH434-202 trial in more advanced MSA showed positive interim data, with 30% of participants demonstrating stable or improved clinical outcomes and slower progression compared to a historical untreated group[34] - ATH434 has received Orphan Drug Designation (ODD) for the treatment of MSA from both the U.S. FDA and the European Commission, which provides benefits like market exclusivity and fee reductions[26] Other Research and Development Progress Pre-clinical data showed ATH434 improved motor performance in Parkinson's models, and the bioMUSE study is advancing MRI as an MSA biomarker - In a study on macaques with experimentally induced Parkinson's disease, ATH434 treatment improved motor performance and was associated with reduced iron levels in the affected brain area[37] - A peer-reviewed publication in Metallomics characterized ATH434 as an "iron chaperone" that targets the damaging, reactive form of iron[38] - The bioMUSE natural history study is utilizing advanced MRI and deep learning to track brain volume changes, establishing it as a potential biomarker for MSA progression[42][43] Corporate Activity and Subsequent Events The company appointed a new Company Secretary and successfully raised approximately A$42 million post-period to accelerate ATH434 development - Abby Macnish Niven was appointed as Company Secretary on November 18, 2024, following her earlier appointment as Chief Financial Officer[44] - Subsequent to the period end, in February 2025, the company strengthened its balance sheet by raising approximately A$42 million via an ATM facility and a two-tranche placement[46][48] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group reported a net loss of A$7.17 million for H1 FY2025, driven by significant R&D and general/administration expenses Statement of Profit or Loss (Half-year ended 31 December) | Item | 2024 (A$) | 2023 (A$) | | :--- | :--- | :--- | | Interest income | 111,299 | 118,400 | | Other income (R&D tax incentive) | 1,605,925 | 1,900,724 | | General and administration expenses | (2,984,023) | (2,061,250) | | Research and development expenses | (5,717,901) | (6,361,034) | | Loss for the period | (7,173,335) | (6,507,183) | | Basic loss per share (Cents) | (0.14) | (0.26) | Consolidated Statement of Financial Position The Group's net assets decreased to A$7.79 million as of December 31, 2024, primarily due to a reduction in cash and cash equivalents Statement of Financial Position (As at) | Item | 31 Dec 2024 (A$) | 30 Jun 2024 (A$) | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | 4,536,559 | 12,638,885 | | Trade and other receivables | 5,684,107 | 4,041,675 | | Total Assets | 10,546,933 | 19,223,743 | | Total Liabilities | 2,760,926 | 5,425,686 | | Net Assets | 7,786,007 | 13,798,057 | | Total Equity | 7,786,007 | 13,798,057 | Consolidated Statement of Changes in Equity Total equity decreased by A$6.01 million to A$7.79 million, mainly due to the net loss, partially offset by share-based payments and new share issues Movements in Equity (Half-year ended 31 Dec 2024) | Item | Amount (A$) | | :--- | :--- | | Balance at 1 July 2024 | 13,798,057 | | Loss for the period | (7,173,335) | | Issue of ordinary shares | 398,645 | | Share-based payment expenses | 794,717 | | Transaction costs | (32,077) | | Balance at 31 December 2024 | 7,786,007 | Consolidated Statement of Cash Flows The Group experienced a net cash decrease of A$8.06 million, primarily from A$8.36 million in net cash used for operating activities Statement of Cash Flows (Half-year ended 31 December) | Item | 2024 (A$) | 2023 (A$) | | :--- | :--- | :--- | | Net cash (outflow) from operating activities | (8,359,622) | (4,494,940) | | Net cash (outflow) from investing activities | - | (5,722) | | Net cash inflow from financing activities | 298,319 | 1,050,347 | | Net (decrease) in cash | (8,061,303) | (3,450,315) | | Cash at beginning of period | 12,638,885 | 15,773,783 | | Cash at end of period | 4,536,559 | 12,320,426 | Notes to the Consolidated Financial Statements Funding Position and Going Concern Despite a net loss and operating cash outflow, the company maintains a going concern basis, supported by a post-period A$40 million capital raise - The Group incurred a recurring loss of A$7,173,335 and an operating cash outflow of A$8,359,622 for the half-year ended 31 December 2024[107] - Cash and cash equivalents on hand as at 31 December 2024 was $4,536,559[108] - The financial statements are prepared on a going concern basis, justified by a subsequent capital raise of approximately A$40 million. Of this, A$12.8 million was received in February 2025, with the remainder subject to shareholder approval[109][110] Financial Performance and Position Details The Group's income is primarily from interest and R&D tax incentives, with major expenses in R&D and G&A, resulting in a basic loss per share of (0.14) cents Loss Per Share | Metric | 31 Dec 2024 (Cents) | 31 Dec 2023 (Cents) | | :--- | :--- | :--- | | Basic loss per share | (0.14) | (0.26) | | Diluted loss per share | (0.14) | (0.26) | Breakdown of Income (A$) | Source | 31 Dec 2024 | 31 Dec 2023 | | :--- | :--- | :--- | | Interest income | 111,299 | 118,400 | | R&D tax incentive | 1,605,925 | 1,900,724 | - The R&D tax incentive receivable was A$5,625,211 as of Dec 31, 2024, representing the amount the Group expects to recover[80] Equity and Share Capital The company issued 75.2 million ordinary shares, raising A$398,645, while 1.94 billion options expired and 170 million new options were issued under ESOP Movements in Ordinary Shares (1 Jul 2024 - 31 Dec 2024) | Details | Number of Shares | Amount (A$) | | :--- | :--- | :--- | | Opening balance | 5,245,115,318 | 223,152,985 | | Shares issued during the year | 75,220,800 | 406,193 | | Transaction costs | - | (32,077) | | Closing balance | 5,320,336,118 | 223,527,101 | - On August 31, 2024, 1,935,759,704 free attaching short-dated options expired[90] - During the period, 170,000,000 unlisted options were issued under the Employee Stock Option Plan (ESOP)[89] Events Occurring After the Reporting Period Post-period, Alterity announced positive ATH434-201 Phase 2 trial results and secured A$40 million in capital commitments to accelerate development - On January 30, 2025, the company announced positive topline results from its ATH434-201 Phase 2 clinical trial, demonstrating a 48% slowing of clinical progression on the UMSARS I scale[98] - On February 10, 2025, the company announced it had received binding commitments for a capital raising of A$40 million via a two-tranche placement at A$0.011 per share[100] - Tranche One of the placement was completed on February 17, 2025, raising A$12.8 million. Tranche Two, to raise A$27.2 million, is subject to shareholder approval expected in late March 2025[100][101] Declarations and Reports Directors' Declaration The directors declare the financial statements provide a true and fair view and affirm the company's ability to meet its debts on a going concern basis - The directors affirm that the financial statements give a true and fair view of the consolidated entity's financial position and performance and are in accordance with the Corporations Act 2001[111] - The directors state there are reasonable grounds to believe that Alterity Therapeutics Limited will be able to pay its debts as and when they become due and payable[111] Independent Auditor's Review Report PwC's review found no matters indicating non-compliance with accounting standards or the Corporations Act 2001 for the half-year financial report - The auditor, PricewaterhouseCoopers, concluded that based on their review, they have not become aware of any matter that makes them believe the financial report does not comply with the Corporations Act 2001, including giving a true and fair view and complying with AASB 134[117][121] - The review was conducted in accordance with ASRE 2410, which is substantially less in scope than an audit, and consequently, the auditor does not express an audit opinion[123]