REG - Oncimmune Hldgs PLC - Final Results
29/02/2024 07:00
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RNS Number : 8514E Oncimmune Holdings PLC 29 February 2024
29 FEBRUARY 2024
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION STIPULATED UNDER THE MARKET ABUSE REGULATION
(EU) NO. 596/2014 ("MAR") AND THE RETAINED UK LAW VERSION OF MAR PURSUANT TO
THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019 (SI 2019/310) ("UK
MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION
SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Oncimmune Holdings plc
("Oncimmune" or the "Company")
Revenue for FY 2024 for continuing operations expected to grow
New management team and Board continue to execute focused strategy
Final results for the 12-month period to 31 August 2023
Oncimmune Holdings plc (AIM: ONC.L), a leading autoantibody profiling company
to the pharmaceutical and biotechnology industry enabling precision medicine,
today provides an update on recent trading and the outlook for the current
financial year ("FY 2024") and announces its audited results for the 12-month
period ended 31 August 2023 ("FY 2023").
Business highlights and outlook
· The new strategy, which was announced on 12 October 2023, continues
to be implemented. On 30 November 2023 it was announced that contracts had
been signed for four new projects since the beginning of FY 2024, three of
which were with existing customers who are major pharmaceutical companies.
Since that announcement a further three new contracts have been entered into.
· Revenue in FY 2024 expected to be approximately £3m, compared with
FY 2023 revenue from continuing operations of £1.2m, a growth rate of 150%.
Coming up to the end of H1 FY 2024, work to achieve approximately 75% of the
forecast FY 2024 revenue has been secured, with the majority of samples
received or expected imminently allowing lab work to begin and revenue to be
recognised in due course.
· Buildout of commercial team is now nearly complete, with three
members in the US and one in Europe. One additional hire expected in Europe
in FY 2024. As the new commercial team begins to gain traction the full
effect on revenue growth is expected towards the end of FY 2024 and beyond.
· The new senior management team, which has been in place for nearly
six months, has completed a full review of the Group's operational capability
and cost base and expects FY 2024 overheads, including costs associated with
senior management, to be lower than those in FY 2023.
· New equity based rewards for the senior management team are being
considered, to closely align the interests of senior management with those of
the Company's shareholders.
Operational and commercial highlights for FY 2023
· Refocus of business on ImmunoINSIGHTS following sale of Oncimmune
Limited (including the EarlyCDT Lung blood test) to Freenome Holdings Inc for
a total of £13m.
· Reprofiled debt facility with IPF Management SA, including repaying
€7.2m (being €5.6m of principal and €1.6m of interest) and agreeing new
payment terms.
· New leadership team, with Martin Gouldstone joining as Chief
Executive Officer in August 2023 and a new Finance Director, Martin Hudson,
being announced in July 2023 and joining the Company in September 2023.
· Changes to the Board beginning in FY 2023 and completing in FY 2024,
with John Goold joining the Board in January 2023, Andrew Unitt, Tim Bunting
and Dr Annalisa Jenkins retiring from the Board in September, October and
November respectively and Dr Sally Waterman joining the Board in October 2023.
Financial highlights for FY 2023
· Revenue for the period was £2.1m (2022: £3.8m for 15-month period),
revenue for continuing operations was £1.2m.
· Gross profit for the period was £1.5m (2022: £1.8m for 15-month
period), gross profit from continuing operations was £0.8m.
· Administrative expenses were £6.1m (2022: £8.7m for 15-month
period), administrative expenses for continuing operations were £5.0m.
· Profit after tax was £4.1m (2022: loss of £11.4m for 15-month
period), largely arising from a gain on disposal of £12.2m. Loss from
continuing operations was £6.2m.
· Gross cash balance at the period end of £3.2m (2022: £1.4m) and net
debt at the period end of £2.1m (2022: £9.2m), after disposal of Oncimmune
Limited and Oncimmune Europe GmbH (the "Disposal") and part repayment of the
debt facility with IPF Management SA. £1.3m of the consideration relating
to the Disposal remains in escrow and is expected to be released to Oncimmune
in May 2024.
The Company's Annual Report and Financial Statements 2023 (the "Annual
Report") will be available on the Company's website at www.oncimmune.com
(http://www.oncimmune.com) later today.
Martin Gouldstone, Oncimmune's Chief Executive Officer, commented:
"Whilst FY 2023 has seen significant changes to the operations and management
of Oncimmune, I remain encouraged and optimistic about the business outlook
for FY 2024 and beyond. During my first six months as CEO I, together with
the rest of the senior management team, have carried out a root and branch
review of the operations and financials of the business and have formulated a
focused strategy to see the Group reach revenues in its ImmunoINSIGHTS
business not previously achieved. I have been pleased to see some of the
strategy beginning to bear fruit and look forward to being able to report on
more positive progress in the coming months.
I would like to thank all of Oncimmune's staff, the Board and the company's
wider stakeholder group for welcoming me to the company and for their support
and positive messages since I joined."
For further information:
contact@oncimmune.com
Singer Capital Markets (Nominated Adviser and Broker)
Philip Davies, Harry Gooden, James Fischer
+44 (0)20 7496 3000
Zeus (Joint Broker)
Dominic King, Victoria Ayton, Dan Bate
+44 (0)20 3829 5000
+44 (0)20 3727 1000
About Oncimmune
Oncimmune is a precision medicine company, specialising in analysing immune
interactions through the autoantibody profile. Taking a platform approach to
generating insights, Oncimmune is partnering with global pharmaceutical and
biotech companies, as well as contract research organisations (CROs) to
discover novel biomarkers for the development of more targeted and effective
therapies across many immune-mediated diseases. Our mission at Oncimmune is to
enable precision medicine. We help our partners to discover novel biomarkers,
drug targets and predict treatment efficacy through the application of our
platform. We are able to do this by deploying our world class scientific team
and our cutting-edge technology platform, built on years of experience in the
field. Our aim is to make this an essential tool in drug discovery and
development.
Oncimmune is headquartered in the UK, with its discovery and development
facility based in Dortmund, Germany and a business development team based in
the US and Europe.
For more information, visit www.oncimmune.com (http://www.oncimmune.com)
Certain statements in this announcement are forward-looking statements, which
include all statements other than statements of historical fact and which are
based on the Company's expectations, intentions and projections regarding its
future performance, anticipated events or trends and other matters that are
not historical facts. These forward-looking statements, which may use words
such as "aim", "anticipate", "believe", "could", "may", "intend", "estimate",
"expect" and words of similar meaning, include all matters that are not
historical facts. These forward-looking statements involve risks, assumptions
and uncertainties that could cause the actual results of operations, financial
condition, liquidity and dividend policy and the development of the industries
in which the Company's businesses operate to differ materially from the
impression created by the forward-looking statements. These statements are not
guarantees of future performance and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
Given those risks and uncertainties, prospective investors are cautioned not
to place undue reliance on forward-looking statements. Forward-looking
statements speak only as of the date of such statements and, except as
required by the Financial Conduct Authority, the London Stock Exchange or
applicable law, the Company undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REVIEW
We are pleased to report the Group's audited results to 31 August 2023, and
provide an update on the further operational and strategic progress made since
year end.
Oncimmune is a precision medicine company, specialising in analysing immune
interactions through the autoantibody profile. Taking a platform approach to
generating insights, Oncimmune is partnering with global pharmaceutical and
biotech companies, as well as contract research organisations (CROs) to
discover novel biomarkers for the development of more targeted and effective
therapies across many immune-mediated diseases.
As a specialist immunology testing business, Oncimmune has a diversified and
growing revenue stream from its discovery and development service-based
platform, delivering actionable insights into therapies under development to
its pharmaceutical and biotech partners.
Oncimmune is headquartered in the UK, with commercial presence in the US and
Europe. The ImmunoINSIGHTS platform team is based in Dortmund, Germany.
Business update
FY2023 continued to be a downturn for the biopharma industry, marked by fewer
IPOs in the life science industry, particularly in the UK. The rising interest
rates in economies around the world, along with persisting geopolitical
tensions, have all impacted investor appetite in the sector, and subsequently
our customers' access to capital. Additionally, large companies whose
valuations rose as a result of the response to the pandemic are now seeing
slumping revenues and valuations, which have had a knock-on effect on the
wider industry. This downturn has impacted our customers' readiness to use our
services.
This period of economic uncertainty and industry-wide cutbacks, has also
affected pharma and biotech companies' access to multidisciplinary experience
and talent. Consequently, pharma companies have been forced to rely further on
the outsourcing market to preserve capital, focus on core competencies, and
de- risk their high-value assets. However, this presents a huge opportunity
for the ImmunoINSIGHTS platform we have established. Our unique expertise in
autoimmune profiling and deep understanding of the immune system will prove
our platform's ability to remain robust and resilient, as reflected in our
growing pipeline, as well as mounting interest from current clients to explore
potential strategic partnerships.
Delivering high quality, differentiated results every time for our
ImmunoINSIGHTS customers has allowed us to not only broaden our pipeline of
opportunities, but also further deepen our engagement with key customers. This
year, we have been focused on signing preferred or master service agreements
(MSAs), rather than one-off pilot projects, and we have had the benefit of an
increasing proportion of our pipeline made up of repeat customers, accounting
for 83% of our current client base. This approach will persist through FY2024,
where we will look to not only maximise the value of those MSAs in place, but
also continue to mature relationships of both pilot projects as well as MSAs
through to multi contract commercial engagements with top 20 pharma companies.
In FY2023, the team signed 12 new contracts, including extensions. Despite the
backdrop of the distraction of the Freenome deal alongside the dearth of
capital available for our customers that lead to slower trading in 2023, it
should be emphasised that executing on 12 contracts in this current industry
is an achievement and a true reflection of the platform's resilience and
robustness in delivering quality results and insights.
Strategy update
During Martin's first few weeks of joining the Company, one of his first tasks
as new CEO was to complete an initial assessment of Oncimmune's strategic
positioning as a team, to relaunch our strategic priorities as well as
establish our mission and vision.
Our updated strategy was formally announced post period end on 12 October
2023. We believe that Oncimmune's previous focus on leveraging MSAs with
larger pharma companies, whilst successful in securing a number of these
agreements, led the Group to be vulnerable to delays in contracting and sample
delivery, which impacted on the ability to robustly forecast revenue. The sale
of Oncimmune Limited (including the EarlyCDT® blood test business) to
Freenome Holdings, Inc has allowed us to refocus our efforts on the
ImmunoINSIGHTS platform and scale this business with additional commercial
models, encompassing strategic partnerships and value-based pricing. These
should help us to deliver a more robust, predictable and sustainable revenue
stream from FY2024 onwards.
We will continue to provide ImmunoINSIGHTS service for our customers using a
fee for service pricing model, but aim to expand the business model by
maximising the value of MSAs already in place and exploring strategic
opportunities in new customer verticals, such as translational medicine and
clinical CROs.
Our mission at Oncimmune is to enable precision medicine, by using our
platform, together with our partners, to discover novel biomarkers and drug
targets and to predict the efficacy of treatment. We are able to do this by
deploying our world class scientific team and our cutting-edge technology
platform, built on years of experience in the field. Our aim is to make this
an essential tool in drug discovery and development. Our vision is to become
the global experts in technology which enables breakthroughs in precision
medicine.
We would like to take this opportunity to extend our sincere gratitude to our
dedicated staff, suppliers, and loyal customers for their continued support
throughout the recent fiscal period. Their commitment has been instrumental in
bolstering our performance amid the year's turbulent financial environment. We
also express appreciation to our shareholders for their steadfast support in
navigating uncertain market conditions and the Company's transition during
this period. Furthermore, we would like to thank Oncimmune's Board and
management team, recognising their resourcefulness and resilience throughout
the year.
EarlyCDT sale
In May 2023, Oncimmune sold its wholly- owned subsidiaries, Oncimmune Limited
(including the CE-marked IVD EarlyCDT Lung blood test, antibody platform and
research and development pipeline) and Oncimmune Europe GmbH to Freenome
Holdings, Inc. for a total of £13M.
The disposal of this business enabled Oncimmune to refinance its debt with IPF
Management SA ("IPF Partners") (the "IPF Facility"), allowing us to refocus
the business on ImmunoINSIGHTS, primarily through Oncimmune's subsidiary,
Oncimmune Germany GmbH. Separately, Freenome have signed a long-term MSA,
under which Freenome will leverage the ImmunoINSIGHTS discovery services for
five years, with an initial fixed term of two years, with option to extend for
a further three years on the same terms.
Signing the MSA between ImmunoINSIGHTS and Freenome, in addition to the sale,
adds Freenome as a new global client alongside eight of the top 15 global
pharma companies who utilise the ImmunoINSIGHTS platform. This long-term
agreement recognises the inherent value of our platform to generate actionable
insights for therapy development as well as diagnostics - further reinforcing
our position as a trusted industry leader in enabling precision medicine.
New business model
Since acquiring our immune-profiling business in March 2019, we have built a
flexible multiplexing technology platform, capable of processing tens of
thousands of samples per year, with a library of more than 9,000 antigens
which have been validated for use on the platform (some of which are
proprietary to Oncimmune) and a deep understanding of specific disease areas,
backed by academic publications and intellectual property. We have worked for
eight of the top 15 global pharma companies and have become a qualified
supplier with several long-term master services agreements in place,
generating repeat business.
During this period, we have successfully delivered 50 commercial projects for
26 customers, eight of which are the largest pharmaceutical companies by
revenue. Our track record has allowed us to amass a wealth of data,
experimental know-how, and refine statistical workflows across a number of
applications - we are now in a position to productise the technology in
multiple avenues without requiring significant additional capital investment.
As a result, we are now also well-positioned to diversify the Company's
business model, expanding from a price-per-sample approach to more strategic
partnership models, similar to our long-term relationship with Freenome. This
may include co-development projects with upfront project and milestone success
fees, with pricing based on the value generated by ImmunoINSIGHTS.
In addition to partnering with biopharma and biotech companies, we intend to
accelerate new commercial contracts through strategic partnerships with both
translational medicine CROs focused on discovery and pre-clinical projects,
and traditional clinical CROs. This should enable us to reach through to a
wider customer base beyond our existing commercial infrastructure.
Ultimately, this will allow us to expand our scientific expertise in
autoantibody analysis to venture into new areas, such as predicting adverse
events in immuno- oncology therapies and developing companion diagnostics. We
are also planning to explore new areas in Central Nervous System disorders,
longevity and diabetes.
To support the execution of this new commercial strategy, we have augmented
and grown our commercial team. Key hires have already been made in Europe and
the US, with further expansion planned in the short- and medium-term.
Progress against strategy
After setting out our vision and strategic priorities to the Company, we are
pleased to provide the following update on progress against the new strategy
during FY2024 so far:
· Seven contracts have been signed for new projects, with additional
contracts having been approved by customers and expected to be signed in Q2
FY2024.
· Four of the contracts are with three global pharmaceutical companies
who were existing customers, demonstrating Oncimmune's ability to consistently
deliver high quality outputs and win repeat business from key accounts. Two of
the global pharmaceutical companies have entered into long-term MSAs with us,
with the third indicating that it would like to discuss entering into an MSA.
· The fifth contract is with a new customer focused on high throughput
drug discovery, reflecting Oncimmune's ability to expand the scientific
application of its technology platform in line with its strategy.
· The sixth contract is with a new biotech customer, facilitated
through a global CRO. This signals a strong validation of our capacity to
effectively leverage CRO collaborations to grow and diversify our customer
base.
· Certain of the new contracts signed cover projects in adverse event
prognosis and expanding the application of Oncimmune's ImmunoINSIGHTS
platform, similarly in line with the strategic objectives previously set out.
· Oncimmune intends to accelerate the generation of new commercial
contracts by offering its highly specialised services through CROs, enabling
it to reach through to a wider customer base beyond its own direct commercial
infrastructure. Discussions have begun with several CROs, including
translational medicine (discovery and pre-clinical) and clinical trial focused
CROs.
Alistair Macdonald
Chairman
Martin Gouldstone
Director and Chief Executive Officer
FINANCE DIRECTOR'S REVIEW
A summary of the financial highlights of the 12-month period ended 31 August
2023 compared to 15-month period ended 31 August 2022:
· Revenue for the period £2.1M (FY2022: £3.8M). Continuing operations
FY2023: £1.2M (FY2022: £2.3M). Discontinued operations FY2023: £0.9M
(FY2022: £1.5M).
· Gross profit for the period £1.5M (FY2022: £1.8M). Continuing
operations FY2023: £0.8M (FY2022: £1.2M). Discontinued operations FY2023:
£0.7M (FY2022: £0.6M).
· Share-based payment (credit)/charge £(1.2)M (FY2022: £1.7M).
Continuing operations FY2023: £(1.2)M (FY2022: £1.6M). Discontinued
operations FY2023: n/a (FY2022: £0.1M).
· Gain on disposal £12.2M (FY2022: n/a).
· Loss excluding disposal £8.1M (FY2022: n/a).
· Administrative expenses £6.1M (FY2022: £8.7M). Continuing
operations FY2023: £5.0M (FY2022: £4.9M). Discontinued operations FY2023:
£1.1M, (FY2022: £3.8M).
· Cash balance at period end £3.2M (FY2022: £1.4M).
· Profit for the financial period £4.1M (FY2022: loss of £11.4M).
Continuing operations FY2023: loss of £6.2M (FY2022: loss of £6.8M).
Discontinued operations FY2023: income profit of £10.3M (FY2022: loss of
£4.6M).
· Net debt of £2.1M (2022: net debt £9.2M) including lease
liabilities.
· Net debt of £2.0M (2022: net debt £8.6M) excluding lease
liabilities.
· Net cash inflow of £1.8M (FY2022: net cash outflow £(7.2)M).
For continuing operations, FY2023 is the 12-month period to 31 August 2023.
For discontinued operations, FY2023 is the period starting 1 September 2022
and ending 19 May 2023.
FY2022 is the 15-month period to 31 August 2022 for both continuing and
discontinued operations.
Revenues and commercial progress
Revenue for the year to 31 August 2023, in particular revenue from the
ImmunoINSIGHTS(TM) business, reflects the tight commercial conditions
prevailing throughout the global pharma support services sector.
ImmunoINSIGHTS continued to service its portfolio of global pharma customers,
although it was disappointing that the potential pipeline of commercial
contracts failed to materialise into signed projects. In some cases, these
project opportunities have been delayed and therefore it is anticipated that
they will be contracted in the future. The EarlyCDT® business was sold during
the year and therefore revenue for the year reflects the absence of revenue
for the period from May to August 2023.
As outlined in the Chairman and Chief Executive Officer's report, the sale of
the EarlyCDT business has allowed the Group to focus its entire resources on
the ImmunoINSIGHTS business. A rebuilding of the commercial team is underway
which is resulting in an encouraging increase in the commercial pipeline.
ImmunoINSIGHTS
During the year the ImmunoINSIGHTS business signed 12 new contracts compared
to 18 in the 15-month period to 31 August 2022. Nine of these contracts were
for existing customers. The current pipeline of potential new opportunities
also reflects the dominance of repeat business from existing customers wanting
to utilise the ImmunoINSIGHTS service.
In May 2023 ImmunoINSIGHTS signed a Master Services Agreement ("MSA") with
Freenome Holdings, Inc. ("Freenome"), under which Freenome will leverage the
ImmunoINSIGHTS discovery services business to further accelerate its pipeline
for multiple cancer diagnostics. The MSA contains a guaranteed commitment by
Freenome to purchase ImmunoINSIGHTS services worth at least €1.14M per year.
The MSA has an overall term of five years, with a fixed initial term of two
years and Freenome's option to extend for a further three years on the same
terms.
EarlyCDT
In May 2023 the Group sold its EarlyCDT business, including the EarlyCDT Lung
product, EarlyCDT platform and autoantibody development business, based in
Nottingham, to Freenome for £13.0M (the "Sale"). The Sale was structured as
consideration for equity of £1.3M, which is being held in escrow for 12
months in the event of any claim by Freenome against the customary warranties
and indemnity given to Freenome in the sale and purchase agreement, and debt
repayment of £11.7M.
Equity fundraise
In December 2022, the Company completed an equity fundraise, raising gross
proceeds of £2.1M to provide the Group with additional near-term working
capital.
Debt funding
In October 2022, the Group reprofiled its debt banking facility (the "IPF
Facility") with IPF Management SA ("IPF Partners"). The new terms provided for
the deferral of all principal repayments until June 2024, no further issue of
warrants and the continued repayment of interest as from September 2023. An
arrangement fee of €1.5M had been agreed, which is payable at final maturity
of the debt, with up to 50% (€0.75M) of this fee able to be offset against
any warrants already issued to IPF Partners.
In May 2023, the IPF Facility had an outstanding principal balance of
€11.6M. As part of the sale of the EarlyCDT business, Oncimmune repaid
€7.2M (being €5.6M of principal and €1.6M of interest) of the
outstanding IPF Facility. At the same time, Oncimmune entered into a new debt
facility (the "New IPF Facility") for the outstanding €6.0M in principal
from the previous IPF Facility under which the principal amount is repayable
over the next three years. There is a principal repayments holiday for the
first 12 months, with interest commencing from September 2023 on the same cash
margin rate as in the previous IPF Facility. Repayments under the New IPF
Facility have been profiled such that 40% (or €2.4M) of the €6.0M facility
will be repaid at the end of the agreement in March 2026. No further warrants
were issued to IPF Partners in connection with the New IPF Facility.
The New IPF Facility is secured by fixed and floating charges over the assets
of Oncimmune and the shares in Oncimmune Germany GmbH and may be repaid at any
time, subject to an early repayment fee. The interest rate is 9% per annum
over three-month EURIBOR (subject to a floor of 0%) and is payable quarterly.
Commentary on financial statements
Research and development activities in the year were largely associated with
the EarlyCDT business, and as such, will be at lower levels within the
ImmunoINSIGHTS business in the forthcoming year.
For the 12 months to 31 August 2023, gross profit was £1.5M.
Administrative expenses for the year were £6.1M (2022: £8.7M). This
reduction reflects an overall decrease in costs as well as the removal of
costs from the sale of the EarlyCDT business and the costs associated with the
restructuring of the board and executive leadership team, announced in June
and July 2023.
Cash balance at the end of the year was £3.2M (2022: £1.4M) and net debt was
£2.1M including lease liabilities (2022: net debt £9.2M), with net debt of
£2.0M excluding lease liabilities (2022: net debt £8.6M).
Having joined Oncimmune in September 2023 at the start of the new financial
year, I would like to acknowledge the input provided by Matthew Hall, former
CFO, in preparing the Annual Report and Accounts for the year to 31 August
2023.
Martin Hudson
Finance Director
Consolidated statement of comprehensive income
For the year ended 31 August 2023
Year 15-month
to period to
31 August 31 August
2023 2022
(restated)
£'000 £'000
Total Total
Continuing operations
Revenue 1,152 2,316
Cost of sales (360) (1,119)
Gross profit/(loss) 792 1,197
Research and development expenses (1,255) (988)
Administrative expenses (4,961) (4,866)
Share-based payment credit/(charge) 1,182 (1,636)
Total administrative expenses (5,034) (7,490)
Other income 318 6
Operating loss (3,924) (6,287)
Finance income - 8
Finance costs (2,004) (299)
Finance costs - net (2,004) (201)
Loss before income tax from continuing operations (5,928) (6,578)
Income tax charge (223) (261)
Loss for the financial year/period from continuing operations (6,151) (6,839)
Discontinued operations
Profit(loss) after tax for the year/period from discontinued operations 10.255 (4,547)
Profit/(loss) for the year/period 4,104 (11,386)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss, net of tax
Currency translation differences from continuing operations (158) 20
Currency translation differences from discontinued operations
- (150)
Total comprehensive income/(loss) for the year/period attributable to equity 3,946 (11,516)
holders
Basic and diluted loss per share (pence) on continuing operations (8.47)p (9.91)p
Basic and diluted income/(loss) per share (pence) on discontinued operations 14.13p (6.58)p
Basic and diluted income/(loss) per share (pence) on continuing & 5.66p (16.49)p
discontinued operations
All activities of the Group in the current and prior periods are classed as
continuing. All of the comprehensive income for the period is attributable to
the shareholders of Oncimmune Holdings Plc.
The notes contained in the Annual Report form an integral part of these
consolidated financial statements.
Consolidated statement of financial position
As at 31 August 2023
Audited Audited
31 August 31 August
2023 2022
£'000 £'000
Assets
Non-current assets
Goodwill 1,578 1,578
Intangible assets 483 3,017
Property, plant and equipment 471 788
Right-of-use assets 120 552
Deferred tax asset 219 613
2,871 6,548
Current assets
Inventories 235 430
Trade and other receivables 1,959 1,340
Contract assets 162 417
Cash and cash equivalents 3,209 1,425
5,565 3,612
Total assets 8,436 10,160
Equity
Capital and reserves attributable to the equity holders
Share capital 741 695
Share premium 42,683 40,634
Merger reserve 1,095 31,882
Foreign currency translation reserve (223) (42)
Own shares - (1,926)
Retained earnings (43,639) (75,422)
Total equity 657 (4,179)
Liabilities
Non-current liabilities
Deferred tax 104 311
Lease liability 57 295
Borrowings 4,912 3,917
Other liabilities 1,284 2,000
6,357 6,523
Current liabilities
Trade and other payables 894 1,176
Contract liabilities 196 180
Other statutory liabilities - 34
Lease liability 74 321
Borrowings 258 6,105
1,422 7,816
Total liabilities 7,779 14,339
Total equity and liabilities 8,436 10,160
Martin Gouldstone
Director and Chief Executive Officer
The notes contained in the Annual Report form an integral part of these
consolidated financial statements.
The financial statements were approved by the Board on 28 February 2024.
Company registration number: 09818395 (England and Wales)
Consolidated statement of changes in equity
For the year ended 31 August 2023
Foreign currency translation reserve
Share capital Share premium Merger reserve Own shares Retained earnings
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 June 40,497 31,882 88 (1,926) (66,005) 5,227
2021
691
Loss for the - - - - (6,839) (6,839)
period
-
Other comprehensive income:
Currency translation - - (130) - - (130)
differences -
Total comprehensive - - (130) - (6,839) (6,969)
expense -
Discontinued - - - - (4,547) (4,547)
operations
-
Transactions with owners:
Options 137 - - - - 141
exercised
4
Warrants - - - - 278 278
issued
-
Share option - - - - 1,691 1,691
charge
-
As at 31 August 40,634 31,882 (42) (1,926) (75,422) (4,179)
2022
695
Loss for the - - - - (6,151) (6,151)
year
-
Other comprehensive income:
Currency translation - - (158) - - (158)
differences -
Total comprehensive income/(expense) - - - (158) - (6,151) (6,309)
Exchange differences on discontinued
operations - - (23) - - (23)
-
Discontinued - - - - 10,255 10,255
operations
-
Transactions with owners:
Reserves relating to discontinued - (30,787) - 1,926 28,861 -
operations
-
Shares 2,049 - - - - 2,095
issued
46
Share option - - - - (1,182) (1,182)
credit
-
As at 31 August 42,683 1,095 (223) - (43,639) 657
2023
741
The notes contained in the Annual Report form an integral part of these
consolidated financial statements.
Consolidated statement of cash flows
For the period ended 31 August 2023
Year to 15-month period to
31 August 31 August
2023 2022
(restated)
£'000 £'000
Cash flows from operating activities
Income/(loss) before income tax from continuing operations (5,928) (6,578)
Income/(loss) before income tax from discontinued operations 10,255 (4,981)
Income/(loss) before income tax 4,327 (11,559)
Adjusted by:
Depreciation and amortisation 981 1,643
Share-based payment (credit)/charge (1,182) 1,691
Interest receivable - (8)
Interest expense 2,954 1,562
Gain on sale of discontinued operations (12,160) -
Gain on lease modification (47) -
Changes in working capital:
Decrease/(increase) in inventories 158 (287)
Decrease in trade and other receivables 50 629
(Decrease)/increase in trade and other payables (231) 363
Cash used in operating activities (5,150) (6,692)
Interest paid (1,635) (597)
Interest received - 8
Income tax (paid)/received (6) 409
Net cash used in operating activities (6,791) (6,872)
Cash flows from investing activities
Purchase of property, plant and equipment (31) (306)
Proceeds on sale of property, plant and equipment 39 -
Purchase of intangible assets - (625)
Settlement of liabilities assumed by acquirer on disposal 11,700 -
Net cash generated from/(used in) investing activities (125) -
Net cash from/(used in) investing activities 11,583 (931)
Cash flows from financing activities
Net funds raised through share issues 2,095 141
Loan advances - 2,546
Loan repayments (4,885) (1,643)
Principal elements of lease repayments (225) (392)
Net cash (used in)/generated from financing activities (3,015) 652
Net (decease)/increase in cash and cash equivalents 1,777 (7,151)
Movement in cash attributable to foreign exchange 7 (55)
Cash and cash equivalents at the beginning of the year/period 1,425 8,631
Cash and cash equivalents at the end of the year/period 3,209 1,425
The notes contained in the Annual Report form an integral part of these
consolidated financial statements.
1. General information
Oncimmune Holdings Plc (the "Company") is a limited company incorporated and
domiciled in England and Wales. The registered office of the company is 1 Park
Row, Leeds, LS1 5AB. The registered company number is 09818395.
The Group's principal activity is the development and commercialisation of
technologies that enable cancer diagnosis.
The Directors of Oncimmune Holdings Plc are responsible for the financial
information and contents of the financial information.
Electronic communications
The Company is not proposing to distribute hard copies of the financial
statements for the year to 31 August 2023 unless specifically requested by
individual shareholders. An electronic copy of the Annual Report will be
available on the Company's website later today.
The Board believes that by utilising electronic communication it delivers
savings to the Company in terms of administration, printing and postage, and
environmental benefits through reduced consumption of paper and inks, as well
as speeding up the provision of information to shareholders.
News updates, Regulatory News and Financial statements can be viewed and
downloaded from the Company's website, www.oncimmune.com. Copies can also be
requested from; The Company Secretary, Oncimmune Holdings plc, 1 Park Row,
Leeds, LS1 5AB or by email: contact@oncimmune.com
2. Accounting policies
The principal accounting policies applied in the preparation of the
consolidated financial information are set out below. These policies have been
consistently applied to all periods presented, unless otherwise stated. The
financial statements are for the Group consisting of Oncimmune Holdings Plc
and its subsidiaries.
Basis of preparation
The Group has prepared its consolidated financial statements in accordance
with UK-adopted international accounting standards.
The financial statements have been prepared on a historical cost basis, except
certain financial assets and liabilities which are measured at fair value.
The Company was incorporated on 9 October 2015 and was re-registered as a
public limited company on 14 December 2015. On 23 November 2015, a Group
reorganisation was completed, by means of a share for share exchange, as a
result of which the newly incorporated company, Oncimmune Holdings plc, became
the parent company of the Group.
The companies involved in the above share for share exchange had not
previously been presented in the consolidated financial statements of a single
legal entity. However, the underlying business was ultimately controlled and
managed by the same parties before and after the share for share exchange, and
that control was not transitory. The transactions outlined above, therefore,
met the definition of a common control transaction in accordance with IFRS 3
Business Combinations.
IFRS does not provide any specific guidance on accounting for common control
transactions and IFRS 3 excludes common control transactions from its scope;
therefore, the Directors had selected an accounting policy in accordance with
paragraphs 10-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors. Prior to the disposal of the subsidiaries as discussed in Note 33
in the Annual Report, the consolidated financial statements have been prepared
as if Oncimmune Limited and its subsidiaries had been held by Oncimmune
Holdings plc from inception, and the results and position of Oncimmune Limited
have been reflected in the comparatives.
The preparation of financial statements in accordance with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a high degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements, are disclosed in Note 3 in the Annual Report.
The reporting period for this set of financial statements is the 12-month
period to 31 August 2023. Generally pharmaceutical companies' year ends are 31
December, and so they start January with a new budget. An August year end
allows the Group to win contracts in the first six months of each calendar
year and recognise the majority of the revenue. As the preceding period (the
period to 31 August 2022) is three months longer than the current period, the
amounts presented in these financial statements are not directly comparable.
The consolidated financial statements are presented in Sterling and have been
rounded to the nearest thousand (£'000).
Principles of consolidation and equity accounting
Subsidiaries are entities over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business
combinations.
Inter-company transactions, balances and unrealised gains and losses on
transactions between Group companies are eliminated. Accounting policies of
subsidiaries have been changed where necessary, to ensure consistency with the
policies adopted by the Group.
Where a Group company has acquired an investment in a subsidiary undertaking
and applies merger relief, under section 612 of the Companies Act 2006, the
difference between the nominal value and fair value of the shares issued is
credited to the merger reserve.
Discontinued operations
Discontinued operations are excluded from the results of continuing operations
and are presented as a single amount as profit or loss after tax from
discontinued operations in the consolidated statement of comprehensive income.
Additional disclosures are provided in Note 33 in the Annual Report. All other
notes to the consolidated financial statements include amounts for continuing
operations, unless indicated otherwise.
Going concern
The Group has prepared the 2023 financial statements on a going concern basis.
In preparing the accounts on a going concern basis, the Directors have
considered a forecast for the period to 31 March 2025, which includes the
impact of the Group's debt obligations, which are described below (base case
scenario). The base case scenario assumes cash from contracts with customers
for the forecast period being a mix of contracted amounts, contracts currently
under negotiation, repeat business from already contracted work and contracts
from as yet unidentified opportunities. The base case also assumes that the
Group will receive the sum of £1.3M in May 2024, which is currently held in
escrow related to the disposal of Oncimmune Limited, as also detailed further
below. It is assumed under the base case scenario that budgeted operating
costs are sufficient to support the forecast revenue without the need for
material additional cost increases.
In respect of the Group's funding position, the Group continues to have a
credit facility with IPF Management SA ("IPF Facility" and "IPF Partners"
respectively). As at 31 August 2023, the outstanding principal value of the
IPF Facility was €6.0M. Interest payments commenced from September 2023 and
principal repayments begin in June 2024. Repayments under the IPF Facility
have been profiled such that 40% (or €2.4M) of the €6.0M facility will be
repaid at the end of the agreement in March 2026. An arrangement fee of
€1.5M has been agreed which is payable at final maturity of the debt, with
up to 50% (€0.75M) of this fee able to be offset against any warrants
exercised by IPF Partners. As is customary with a debt facility such as this,
there is a cash covenant requiring the Group to maintain nine months of cash.
To monitor compliance with the terms of the IPF Facility, the Directors review
monthly management accounts. The base case does not result in breaches of the
cash covenant with IPF Partners in the period under consideration.
As part of its disposal of Oncimmune Limited to Freenome Holdings, Inc. in May
2023, the Group agreed that the proceeds of £1.3M be held in escrow for 12
months as security against contractual obligations. Such arrangements are
common in disposal transactions of this type. Although the Directors do not
anticipate any material claims against the escrow funds and therefore expect
the funds to be released to the Group in May 2024, a severe but plausible
downside case was also considered. This severe but plausible downside case
modelled lower order intake than the base case, and the absence of escrow
funds being received. The Directors are satisfied that, in this unlikely
scenario, the Group has sufficient headroom and mitigations to continue
operating.
Based on the above, the Directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence for the
foreseeable future. For these reasons, they continue to adopt the going
concern basis in preparing the Annual Report and Accounts.
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