1st April 2020

Restructure Underway At Midatech Pharma

Cardiff-based Midatech Pharma is implementing a strategic review of its operations, with the biotechnology company appointing a new chief executive and outlining plans to close a Spanish facility.

The business, which is focused on oncology and rare disease products, said the review was required in view of prevailing conditions in the capital markets and the prospects for raising additional funds and partnering of assets.

Work towards the completion of the phase three clinical programme of MTD201 (octreotide sustained release) and manufacturing scale-up at its Bilbao facility is to be terminated after it was decided the company was unlikely to conclude a license transaction or raise sufficient funds forthe required remaining investment.

While licensing partners will still be sought for MTD201, the dedicated manufacturing facilities in Bilbao will be closed and redundancy offered to all 42 employees. In addition, a further five UK-based employees in clinical research and administrative roles are being offered redundancy.

A GlioKIDS Phase II trial of MTX110, a drug targeting childhood brain cancer, may also be cancelled if a €2.6m EU grant is not received. Because of a technicality, the EU has not yet confirmed Midatech’s status as an SME, a prerequisite for grant eligibility. Midatech will continue the exploratory Phase I study of MTX110 with Columbia University.

Following these changes, Midatech’s remaining 20 employees and operations will be concentrated in Cardiff.

On the basis of the cost-cutting measures outlined, repayment of Spanish government loans linked to the MTD201 programme, and release of loan deposits, the company expects to have enough cash to stay in operation until early 2021 assuming the GlioKIDS grant is received and the MTX110 Phase II trial proceeds.

Craig Cook has stepped down as chief executive and resigned as a director and has been succeeded by current chief financial officer Stephen Stamp who will have the combined roles of CEO and CFO while the company concludes its strategic review.

In line with Midatech’s streamlined strategy and operations and narrower focus, Dr Huaizheng Peng and Frédéric Duchesne have also resigned as directors.

Chairman Rolf Stahel said: “On behalf of the board, I would like to place on record our sincere thanks to Dr Craig Cook for his leadership, work and tireless efforts over many years establishing our leading edge technologies and pipeline in the most difficult of circumstances, and wish him every success in the future.

“We are also fortunate that in Stephen Stamp we have an internal candidate who can take over responsibility as CEO, ensuring continuity and a controlled handover.

He added: “These are unprecedented times and the decisions we are announcing today regarding MTD201, our Bilbao manufacturing facility, and staff are regrettable but also necessary to give Midatech time to find and deliver a solution for all stakeholders.

“Unfortunately, recent events have caused us to re-evaluate our strategy and priorities to ensure that we can fulfil the potential of our technologies and pipeline.”

Craig Cook said: “I have been with Midatech Pharma for six years and have enjoyed my time at the company, working with ground breaking  technology, a superb team, and a supportive and very capable board of directors.

“We have achieved a great deal together in creating assets as we seek to make a tangible difference for patients suffering from debilitating and lethal diseases.”