REG - Oncimmune Hldngs PLC - Full year results and progress update
02/11/2021 07:00
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RNS Number : 0071R Oncimmune Holdings PLC 02 November 2021
2 November 2021
Oncimmune Holdings plc
("Oncimmune", the "Company" and, together with its subsidiaries, the "Group")
Full year results and progress update
FY2021 revenues of £3.7 million (over 6x increase on FY2020)
Continued delivery against three-year strategy, with FY2022 growth expected to
continue to be driven by ImmunoINSIGHTS services business
Oncimmune Holdings plc (AIM: ONC.L), the leading global immunodiagnostics
group, today announces its audited results for the year ended 31 May 2021
("FY2021") and provides an update on recent progress and the outlook for the
current financial year ("FY2022").
Operational and commercial highlights:
ImmunoINSIGHTS
· Continued to strengthen strategic relationships with Roche and
Genentech as well as with other global pharmaceutical companies
· Following the successful deployment of UK Government funding for
the development of an infectious diseases research tool for use in COVID-19,
the period saw the launch of an infectious diseases panel resulting in
contracts with Roche and multiple contracts with Cedars-Sinai Medical Center,
Los Angeles
· Agreement signed with a leading global pharmaceutical company to
utilise the NavigAID autoimmune disease characterisation panel to explore the
autoantibody profiles of patients with four key autoimmune diseases
· Agreements with three leading global pharmaceutical companies to
utilise the SeroTag immuno-oncology discovery array to explore the
autoantibody binding profiles of solid tumour cancer patients treated with
immunotherapy
· Renewal of existing partnership with Oncimmune continuing to
provide autoantibody biomarker services to a global pharmaceutical company,
with two initial projects started to profile patients in autoimmune trials
· Further research published in leading journals including
Arthritis Research & Therapy(1) and PLOSOne(2), alongside pre-publication
of the first results from collaboration with Cedars-Sinai(3)
EarlyCDT Lung
· Pilot in Norfolk and Waveney Clinical Commissioning Group
initiated, representing the first sales of the EarlyCDT Lung test into the NHS
· iDx Lung(4) programme launched, with 350 patients recruited to
date in Southampton and Leeds
· US partner for EarlyCDT Lung, Biodesix, seeing a recovery in
demand, with planned expansion of its national sales team from 32 to 76 by the
end of 2022
· EarlyCDT Lung authorised for use by the Spanish Public Health
Service with the Galician Health Service (SERGAS), the first public health
service in Spain to use the EarlyCDT Lung test
· Diagnosticos da America, Latin America's largest medical
diagnostic company, to offer EarlyCDT Lung across its extensive laboratory,
private hospital and clinic network
· Successful return of the IP and distribution rights for EarlyCDT
in the People's Republic of China and Hong Kong from Genostics Company
Limited, allowing Oncimmune to pursue the optimum route to market
· Results from the ECLS study published in the European Respiratory
Journal(5) and pre-publication of the three-year follow-up data(6) supports a
trend towards a mortality benefit of the EarlyCDT Lung blood test, confirming
the number of late-stage cancers and deaths to be lower in patients tested
with EarlyCDT Lung
· Additional results published in PLOSOne showed that EarlyCDT Lung
and CT surveillance has been found to be highly cost-effective in early
detection compared to CT surveillance alone(7)
Financial highlights:
· Revenue of £3.7M (FY2020: £0.5M) validates the Company's core
strategy of focusing on building a leading immunodiagnostics group; with
significant growth driven by conversion from an expanding pipeline of
ImmunoINSIGHTS opportunities
· The revenue reported is lower than the headline £5.6M indicated
in the unaudited full-year trading update issued on 8 June, due largely to
revenue recognition relating to an invoice for £1.7M to an historic EarlyCDT
Lung distributor. The Group is unable to recognise this revenue in the year
ended 31 May 2021 as the revenue recognition requirements of IFRS 15 have not
been met at this time
· The ImmunoINSIGHTS service business showed strong growth in
revenue, profitability and cash generation during the period
· Successful equity placing in March 2021 with gross proceeds of
£9M to enable a 4x scale-up in ImmunoINSIGHTS operating capacity to meet
increasing demand from customers, and the expansion of commercial team to
support customers, particularly in the US
· Continued tight management of cost base following the cost
reduction programme initiated in 2018
Recent progress and FY2022 outlook:
· Scale up of the Dortmund facility in progress and capable of
handling upwards of 40,000 samples per annum by Q1 FY2023
· Continued commercial success from the infectious diseases
platform across existing and new contracts
· Commercial sales team expansion in the US underway with recent
key hires on the East and West coasts. With a clear majority of all
ImmunoINSIGHTS contracts currently and historically being awarded are from the
US
· Evaluating additional expansion of scientific and bioinformatics
capability in the US to deliver US-based projects
· Second pilot to provide EarlyCDT Lung tests into the NHS already
signed and expected to commence in Q3 FY2022
· After quieter than expected summer months in which fewer new
ImmunoINSIGHTS contracts were signed than originally expected, there has been
a healthy resumption of activity and a strong rate of conversion of the
commercial pipeline into service contracts, underpinning confidence in FY2022
revenue growth from both new opportunities and follow-on contracts
· Longer term prospects remain compelling, with the conversion of a
number of initial services contracts into multiple projects serving to
demonstrate the Group's ability to develop deeper and broader strategic
commercial partnerships, of increasing value and longevity
Dr Adam M Hill, CEO of Oncimmune, commented: "We are pleased to announce our
full year results for the 2021 financial year. Over the period, the
ImmunoINSIGHTS business has allowed us to broaden our pipeline of
opportunities whilst deepening our engagement with key customers. As
demonstrated by the number of follow-on contracts being signed and our growing
commercial pipeline, we are experiencing increased recognition for our
services by our partners and customers. With significant momentum moving into
the second quarter of FY2022, driven by the highly differentiated
ImmunoINSIGHTS service, we look forward to another year demonstrating the
success against our three-year strategic plan to unlock the Group's growth
potential."
"On behalf of the Board, we would like to thank all our employees for their
dedication during a period of high growth and investment despite the impact of
COVID-19. We would also like to thank investors for their continuing support
through the oversubscribed placing during the period in support of our growth
plans and are pleased to be able to report continued strong delivery against
the Group's goals over the period."
Investor presentation and conference call
The Company's management team will host a presentation and conference call for
analysts at 10:00 GMT today. For conference call details please contact
Alexander Davis of FTI Consulting at Alexander.Davis@fticonsulting.com or 020
3727 1000.
The management team will also host on Investor Meet Company a live
presentation of the results at 15:00 GMT this afternoon which will be open to
all existing shareholders and potential new investors. Access to Investor Meet
Company is free and interested parties can register to attend the presentation
via the following link:
https://www.investormeetcompany.com/oncimmune-holdings-plc/register-investor
1. Vordenbäumen, S., Brinks, R., Schriek, P. et al. Profiling of IgG
antibodies targeting unmodified and corresponding citrullinated autoantigens
in a multicenter national cohort of early arthritis in Germany. Arthritis Res
Ther 22, 167 (2020). https://doi.org/10.1186/s13075-020-02252-6
(https://doi.org/10.1186/s13075-020-02252-6)
2.
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0241189
(https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0241189)
3. https://www.medrxiv.org/content/10.1101/2021.07.15.21260603v1
(https://www.medrxiv.org/content/10.1101/2021.07.15.21260603v1)
4. NHS Lung Health Check Programmes in Wessex and Yorkshire as part of
the iDx-LUNG evaluation programme
5.
https://erj.ersjournals.com/content/early/2020/07/09/13993003.00670-2020
(https://erj.ersjournals.com/content/early/2020/07/09/13993003.00670-2020)
6. https://medrxiv.org/cgi/content/short/2021.08.17.21262105v1
(https://medrxiv.org/cgi/content/short/2021.08.17.21262105v1)
7.
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0237492
(https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0237492)
For further information:
Oncimmune Holdings plc
Dr Adam M Hill, Chief Executive Officer
Matthew Hall, Chief Financial Officer
contact@oncimmune.co.uk (mailto:contact@oncimmune.co.uk)
Singer Capital Markets (Nominated Adviser and Joint Broker)
Aubrey Powell, Harry Gooden, George Tzimas, James Fischer
+44 (0)20 7496 3000
WG Partners (Joint Broker)
David Wilson, Nigel Barnes, Nigel Birks
+44 (0)20 3705 9321
Media enquiries:
FTI Consulting
Ben Atwell, Michael Trace, Alex Davis
Oncimmune@fticonsulting.com (mailto:Oncimmune@fticonsulting.com)
+44 (0)20 3727 1000
About Oncimmune (www.oncimmune.com (http://www.oncimmune.com) )
Oncimmune is a leading immunodiagnostics developer, primarily focused on the
growing fields of immuno-oncology, autoimmune disease and infectious diseases.
Oncimmune has a diversified and growing revenue base, both from its portfolio
of diagnostic products to detect early-stage cancer and its contract discovery
and development service business whose platform delivers actionable insights
into therapies to the Company's pharmaceutical and biotech partners.
Our understanding of the immune system enables us to harness its sophisticated
response to disease to detect cancer earlier and to support the development of
better therapies. The key to improving cancer survival is early detection and
better selection for therapy. As a company, we are driven by our passion to
improve cancer survival and to give people extra time.
Oncimmune's ImmunoINSIGHTS platform enables life science organisations to
optimise drug development and delivery, leading to more effectively targeted
and safer treatments for patients. Oncimmune's immunodiagnostic technology,
EarlyCDT, can detect and help identify cancer on average four years earlier
than standard clinical diagnosis. Our lead diagnostic test, EarlyCDT Lung,
targets a vast market estimated to grow to £3.8bn by 2024. With over 200,000
tests already performed for patients worldwide and its use being supported by
peer reviewed data in over 12,000 patients, we are poised to become an
integral component of future lung cancer detection programmes, globally.
Oncimmune is headquartered at its EarlyCDT product and R&D laboratory
facility in Nottingham, UK and its ImmunoINSIGHTS pharma
services commercial laboratory facility is based in Dortmund, Germany. The
ImmunoINSIGHTS Commercial Team is based in the US and Europe.
For more information, visit www.oncimmune.com (http://www.oncimmune.com)
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REVIEW
We are pleased to report the Group's audited full year results to 31 May 2021
and provide an update on the further operational and strategic progress made
since year end.
Oncimmune is a leading immunodiagnostics developer, primarily focused on the
growing fields of immuno-oncology, autoimmune disease and infectious diseases.
As a specialist immunology testing business, the Group has a diversified and
growing revenue stream from its discovery and development service-based
platform, delivering actionable insights into therapies to its pharmaceutical
and biotech partners, as well as a portfolio of diagnostic products to detect
early-stage cancer. Oncimmune is headquartered at its EarlyCDT product
and R&D laboratory facility in Nottingham, UK and its ImmunoINSIGHTS
pharma services commercial laboratory facility is based in Dortmund,
Germany. The ImmunoINSIGHTS commercial team is based in the US and Europe.
Our understanding of the immune system enables us to harness its sophisticated
response to disease in order to detect cancer earlier and to support the
development of better therapies. The key to improving disease outcomes is
early detection and better selection for therapy. The Group has two
operational divisions providing immunodiagnostics services:
· Oncimmune's ImmunoINSIGHTS platform enables life science
organisations to optimise drug development and delivery, leading to more
effective targeting as well as safer treatments for patients. Our core
immune-profiling technology is underpinned by our library of over 8,800
immunogenic proteins, one of the largest of its kind. This helps identify
clinical trial participants and patients in clinically relevant subgroups,
enabling the development of targeted, more effective treatments with lower
risk of adverse events.
· Oncimmune's immunodiagnostic technology, EarlyCDT, can detect and
help identify cancer on average four years earlier than standard clinical
diagnosis. The Group's lead diagnostic test, EarlyCDT Lung, targets a vast
market estimated to grow to £3.8bn by 2024. With over 200,000 tests already
performed for patients worldwide and its use being supported by peer reviewed
data in over 12,000 patients, we believe we are poised to become an integral
component of future lung cancer detection programmes, globally.
Business update
The 2021 financial year has been an important one for Oncimmune, delivering
our second full year of trading since announcing the Company's three-year
strategic plan and demonstrating its impact on the Group's revenue. Launched
in September 2018, the strategy is intended to unlock the latent potential of
the Group's proprietary technology platform by establishing a pharma
partnering services business, ImmunoINSIGHTS. Core to this strategy was the
identification of commercial opportunities leveraging Oncimmune's proprietary
autoantibody-based technology platform and the Group's revenue growth in
FY2021 is a direct result of this service-oriented strategy.
Beyond the growth of in revenues through unlocking value in the platform, the
differentiated product and service offering is also creating additional
optionality for future growth. Delivering high quality, differentiated results
time and time again for our customers on the ImmunoINSIGHTS side of the
business has allowed us to not only broaden our pipeline of opportunities, but
also deepen our engagement with key customers, increasingly contributing to
the biomarker strategy in support of both pre-clinical and clinical drug
development as a valued partner.
As a result of the COVID-19 pandemic and subsequent restrictions imposed
globally, since March 2020 the Company has been working remotely where
possible to minimise the potential impact on the business, whilst ensuring all
laboratory operations are unaffected. Within our Nottingham and Dortmund
facilities we organised the staff's working arrangements to mitigate the
possible effects on the business and our customers and are pleased to report
that COVID-19 has not materially affected our laboratory output.
We would like to take this opportunity to thank our staff, suppliers, and
customers for their resourcefulness and resilience over the last year in
continuing to deliver against the Group's strategy throughout this difficult
time. In addition, we would like to thank Oncimmune's current shareholders for
their continued support in the Group and the management team as we continue to
deliver on our three-year strategy plan and beyond.
Services - ImmunoINSIGHTS
The Group launched the ImmunoINSIGHTS service in February 2020 as Oncimmune's
contract discovery and development service-based platform and, since then, the
pipeline of signed and potential commercial projects with major pharmaceutical
and biotechnology companies has increased substantially. The ImmunoINSIGHTS
service business leverages Oncimmune's technology platform and methodologies
across diseases of the immune system, including cancer, autoimmune disease and
infectious diseases, to offer life science organisations with actionable
insights for therapies across the development and product lifecycle.
ImmunoINSIGHTS utilises two proprietary biomarker discovery platform
technology tools:
· SeroTag discovery arrays: drawing from our library of over 8,800
immunogenic proteins, one of the largest of its kind, to discover and validate
biomarkers which can support life science partners in stratifying patients in
multiple cancer indications, infectious diseases and with different autoimmune
diseases. SeroTag acts as the primary discovery engine that drives the
creation of Oncimmune's NavigAID panels
· NavigAID disease-specific characterisation panels: thoroughly
validated and containing well defined antigens of interest for each of the
disease types being investigated, these tools can be used for targeting
identifiable patients for whom a treatment may be more effective, whilst
avoiding those patients more likely to experience adverse drug effects
During the last financial year, the ImmunoINSIGHTS business signed and
delivered a number of contracts with leading global pharmaceutical companies,
demonstrating its ability to provide strong growth to the Group's revenue.
Throughout the year, we continued to strengthen strategic relationships with
partners like Roche and Genentech, as well as developing and signing further
contracts with leading biotechs and healthcare providers across the globe.
In July 2020, we signed a substantial extension to the Group's second Roche
ImmunoINSIGHTS contract, increasing the number of autoantibody samples to be
profiled within the agreed time period. Then, in late September 2020, we
signed a collaboration with Genentech, a member of the Roche Group, to
characterise the autoantibody profiles of patients in clinical trials for
rheumatological diseases, including Systemic Lupus Erythematosus ("SLE"). As
with previous contracts with Roche and other international pharmaceutical
groups, now that we have delivered the results to Genentech, the contract has
the potential to significantly expand with additional samples being profiled
in the future under follow-on contracts.
Following the successful award of UK Government funding for development of an
infectious disease research tool for use in COVID-19, the Group signed a deal
with Cedars-Sinai Medical Center in Los Angeles ("Cedars-Sinai") to
collaborate in the use of the development panel to better understand, and
therefore stratify, patients infected with COVID-19. Shortly following the
contracting of Cedars-Sinai, we were pleased to announce further work with
Roche to utilise the Company's SeroTag infectious diseases discovery panel to
profile antibody and autoantibody responses in all patient samples from the
Roche COVACTA trial, to look for immune signals of response, non-response and
adverse events. Whilst this contract is still in its initial stages, it has
already produced scientific discoveries that have contributed to the global
effort to better understand the evolution of COVID-19, and its potential
treatment. We expect much more to come from this collaboration in FY2022, and
from additional pharmaceutical customers looking to accelerate their
therapeutic assets in this disease.
Since the financial year end, we have continued to pursue a growing number of
commercial autoantibody profiling contracts in the ImmunoINSIGHTS business
division, with a number of these being substantial follow-on contracts from
work previously completed in FY2020.
In September 2021 we signed an agreement with a leading global pharmaceutical
company we have worked with previously, this time using the
NavigAID autoimmune disease characterisation panel to explore the
autoantibody profiles of patients with four key autoimmune diseases, namely
systemic lupus erythematosus, Sjögren's syndrome, rheumatoid arthritis, and
sicca syndrome.
More recently, in October 2021, we signed three separate contracts with
leading global pharmaceutical companies to utilise the SeroTag immuno-oncology
discovery array to explore the autoantibody binding profiles of solid tumour
cancer patients treated with immunotherapy. Additionally, the strength of the
ImmunoINSIGHTS autoantibody biomarker profiling technology has been validated
with another global pharmaceutical company renewing their existing
relationship with Oncimmune for biomarker services.
Product - EarlyCDT
Much of FY2021 was disrupted by healthcare systems globally dealing with the
response to the COVID-19 pandemic, which impacted many critical services, not
least cancer diagnosis and care. As such, the sale of EarlyCDT products have
been irregular and difficult for the Group to forecast. However, during the
year the potential downside has been largely mitigated by agreements with our
global distribution partners which require minimum volume sales to continue to
be delivered under their contracts.
Since announcing the positive results of the Early detection of Cancer of the
Lung Scotland ("ECLS") in June 2019, and particularly since the positive
MedTech Innovation Briefing in March 2020, we have been in dialogue with
national health systems globally, including the NHS in the UK, over the
adoption of EarlyCDT Lung for Indeterminate Pulmonary Nodules ("IPNs")
screening. In the UK this has included discussions with both Cancer Alliances
and Clinical Commissioning Groups ("CCG's") which has resulted in EarlyCDT
Lung being chosen to support the iDx Lung programme, run out of the lung
health check programmes in Southampton and Leeds. Following EarlyCDT Lung
being chosen as part of the iDx programme, 350 patients have been recruited in
Southampton and Leeds to date.
Our discussions over the year have also led to the signing of the distribution
of tests to Norfolk and Waveney CCG, representing an important milestone as
the first sales of the EarlyCDT Lung test into the UK's NHS. To date, the
pilot data in Norfolk and Waveney shows 988 smokers were booked for an
EarlyCDT Lung blood test with 277 identified as requiring further
investigation following the result of their EarlyCDT Lung test. A full
clinical evaluation will be delivered in due course, but we are encouraged
with the initial results. In addition, shortly after the end of the reporting
period, we were delighted to sign another contract to provide EarlyCDT Lung
tests into the NHS, albeit that details of this contract are confidential
until the programme is ready to launch later in FY2022.
Further afield, we have experienced a substantial increase in demand for the
EarlyCDT Lung from our US partner, Biodesix, which is quickly recovering from
the lack of demand early in the reporting period as a result of COVID-19.
Given this increase in demand, Biodesix announced that they are planning to
expand its national sales team from 32 to 76 by the end of 2022.
In line with the Group's strategy to increase the availability of EarlyCDT
Lung across the world, our Brazilian partner, Valentech, signed an agreement
with Diagnosticos da America, Latin America's largest medical diagnostic
company, to offer EarlyCDT Lung across its extensive laboratory, private
hospital and clinic network in South America. Then in May 2021, we
successfully agreed to return the intellectual property and distribution
rights for the EarlyCDT technology in the People's Republic of China and Hong
Kong from our strategic partner, Genostics Company Limited, allowing us to
pursue the optimum route to market in this important territory. Recently,
EarlyCDT Lung has been authorised for use by the Spanish Public Health Service
with the Galician Health Service (SERGAS), the first public health service in
Spain to use the EarlyCDT Lung test.
Scientific presentations and publications
In line with the Group's core objectives, during the period we have continued
to demonstrate the leading potential of our platforms in world class
scientific publications and presentations. The scientific and commercial
potential of ImmunoINSIGHTS was highlighted early in the reporting period in a
high-profile scientific presentation and publication. The research publication
entitled 'Profiling IgG antibodies targeting unmodified and corresponding
citrullinated autoantigens in a multicentre national cohort of early arthritis
in Germany' was published in Arthritis Research & Therapy(1) and
demonstrated the autoantibody, cTRA2B-IgG, has the potential to improve
diagnosis of early-stage rheumatoid arthritis, which to date has been
challenging due to lack of availability of diagnostics in the therapeutic
area.
This followed a featured presentation at the American Society of Clinical
Oncology 2020 ("ASCO") Virtual Scientific Programme, which demonstrated that
data from profiling tumour associated antibodies in melanoma patients
receiving checkpoint inhibitors, analysed on the SeroTag immuno-oncology
discovery array, had identified that autoantibodies have a role in predicting
clinical outcomes or immune-related events.
More recently, the ImmunoINSIGHTS team has collaborated with Roche to
undertake a study to develop a panel of predictive biomarkers to identify an
early response in rheumatoid arthritis (RA) patients to Methotrexate or
Tocilizumab, Roche's interleukin-6 (IL-6) receptor inhibitor; and as a result,
'Comprehensive exploratory autoantibody profiling in patients with early
Rheumatoid Arthritis treated with Methotrexate or Tocilizumab' was published
in PLOSOne in December 2020.(2)
Following the close of the reporting period, the ImmunoINSIGHTS team were
pleased to be able to announce the pre-publication of the first results from
our collaboration with Cedars-Sinai Medical Center in Los Angeles, entitled:
"Paradoxical Sex-Specific Patterns of Autoantibodies Response to SARS-CoV-2
Infection".(3) The pre-publication paper focuses on the characterisation of
sex-specific prevalence and selectivity of autoantibody responses to the
SARS-CoV-2 virus.
During the period under review, on the EarlyCDT side of the business, results
from the Early detection of Cancer of the Lung Scotland ("ECLS") study were
published in the European Respiratory Journal(5) demonstrating a 36% reduction
in late-stage diagnoses of lung cancer. The pre-publication of the three-year
follow-up data(6) supports a trend towards a mortality benefit of the EarlyCDT
Lung blood test, confirming the number of late-stage cancers and deaths to be
lower in patients tested with EarlyCDT Lung. Additionally, EarlyCDT Lung and
CT surveillance were found to be highly cost-effective compared to CT
surveillance alone. with results published in PLOSOne in September 2020(7)
Board changes
At the end of FY2020, Oncimmune's Board of Directors believed it was the right
time to restructure the Board in order to be as agile, lean and focused as
possible. As such, Geoffrey Hamilton-Fairley, Carsten Schroder and Julian
Hirst stepped down from the Board on 4 June 2020. In January 2021, the Board
further reduced its number with Dr Cheung To stepping down.
Following these changes, the Board has decreased from nine members to five
members and now comprises of one Executive Director and four Non-Executive
Directors, two of which are Independent Non-Executive Directors. The Board
members are Meinhard Schmidt, Non-Executive Chairman; Dr Adam M Hill, Chief
Executive Officer; Dr Annalisa Jenkins, Senior Independent Non-Executive
Director; Andrew Unitt, Independent Non-Executive Director; and Tim Bunting,
Non-Executive Director.
Corporate social responsibility and sustainability
Advancing medical science through research as well as the provision of a
simple and affordable test to detect the earliest signs of cancer is at the
core of our Company and drives our ethos and culture. We are committed to
diversity and a culture of equal opportunities and respect for the individual,
underpinned by compliant and ethical behaviour. The successful delivery of our
strategy is dependent on, and bolstered by this culture, the work environment
we create and the lasting relationships we build with all our stakeholders.
Oncimmune's approach to product development, subsequent launches, and delivery
of its long-term growth is underpinned by a clear set of economic values aimed
at protecting the Company from risk and securing its long-term future.
As our business has grown and evolved, during this financial year, and post
year end, we have continued to formalise our Corporate Social Responsibility
and Sustainability strategy, which includes adopting a new Code of Business
Conduct and Ethics, putting patients and the advancement of science at the
heart of our business, and ensuring that all our staff are properly trained on
our ethos, culture and compliance requirements.
In June 2020 we founded The Lung Foundation, an independent charity whose
mission is the reduction of the impact of lung disease globally, through the
research and development of effective diagnosis, treatment and preventative
strategies. The Lung Foundation has already funded important research into
COVID-19 and is actively pursuing new projects and funding sources.
Outlook
The year to 31 May 2021 and the period post year end have seen significant and
continuing progress for the Company, both operationally and commercially. Our
ImmunoINSIGHTS service business is a critical enabler of this success, having
developed a pipeline of in excess of 160 commercial opportunities in FY2021
and continues to secure follow-on contracts with customers of strategic
importance.
Given the demand for our services and products, coupled with the opening up of
the health economy as the world emerges from the COVID-19 pandemic, the
Directors have confidence in the continuation of Oncimmune's positive
trajectory, underpinned by our world class technology platform, its market
leading position and expanding pipeline of contractual discussions and future
prospects.
The Board sees the potential for further step changes in revenue growth and
improving visibility, as the momentum in the commercial ImmunoINSIGHTS
pipeline is converted into service contracts. As we are already starting to
see, these initial contracts have the scope to broaden subsequently into
multiple projects and deeper strategic commercial partnerships, with
associated opportunities for additional, long-term revenue.
On behalf of the Board, we would like to thank our shareholders for their
continued support throughout FY2021, and we look forward to updating the
market on Oncimmune's further progress.
Meinhard Schmidt Dr Adam M Hill
Chairman Chief Executive Officer
2 November 2021
CHIEF FINANCIAL OFFICER'S REVIEW
A summary of the financial highlights of the year ended 31 May 2021, including
post year end, is as follows:
· Revenue for the year of £3.7M (2020: £0.5M) reflecting the
increase in ImmunoINSIGHTS contracts signed and executed
· R&D costs for the year were £1.6M (2020: £1.7M) as a result
of the Group's continued focus on developing world leading science
· Administrative expenses for the year were 30% lower at £5.7M
(2020: £8.2M)
· Loss for the financial year was £4.6M (2020: £8.5M),
significantly reduced as a result of the growth in the ImmunoINSIGHTS business
and stated after the effect of increased share-based payment charges of £1.1M
(2020: £0.2M)
· Cash balance at year end of £8.6M (2020: £4.2M) and net debt of
£0.8M including lease liabilities (2020: net debt £4.0M), with net cash of
£0.1M excluding lease liabilities (2020: net debt £3.0M)
Revenues and commercial progress
Revenue for the year was £3.7M (2020: £0.5M), validating the core business
strategy of focusing on building a leading immunodiagnostics group. The
Group's commercial progress materially benefited from the growth of the
ImmunoINSIGHTS' business, reflecting the increase in the number of contracts
awarded and executed. Since the end of FY2021, in particular following the
summer period, business activity within ImmunoINSIGHTS has remained high with
further contracts signed, and a growing pipeline of contracts nearing signing
as well as an increase in the number of proposals out with customers.
During the year the ImmunoINSIGHTS business signed and delivered a number of
contracts, including for Roche Pharmaceuticals ("Roche") and Genentech, a
member of the Roche Group, as well as a number of further contracts for global
biotechs and leading healthcare providers. The launch of the infectious
diseases panel, in Q2 FY2021, facilitated the signing of further substantial
contracts with Roche and Cedars-Sinai Medical Center ("Cedars-Sinai"). The
pipeline of potential contracts across the full range of oncology, autoimmune
and infectious diseases continues to expand, with an increasing number of
these progressing to late-stage commercial negotiation and legal
documentation. Two of these late-stage potential contracts are substantial
follow-on validation contracts with major pharmaceutical companies. As a
consequence of the current and forecast levels of ImmunoINSIGHTS business
activity, we expect further growth in commercial revenues throughout FY2022
which will in turn consolidate the dominance of this autoantibody profiling
services business within the Group.
In March 2021, the Company completed an equity fundraise raising gross
proceeds of £9M to provide additional funding principally to the
ImmunoINSIGHTS business. These funds are being deployed to increase the
commercial team headcount, with a focus on the US where over 90% of all
contracts are now awarded, as well as expanding the operational capacity at
the Group's laboratory facility in Dortmund, Germany. This expansion programme
is designed to increase capacity to approximately 40,000 samples per annum by
Q1 FY2023 in order to meet the anticipated increase in demand from customers
for the ImmunoINSIGHTS service offering.
The impact of COVID-19 restrictions in countries where we have distributors
has meant that the sale of EarlyCDT products have been irregular therefore
more difficult for the Group to forecast. In particular, earlier during the
year the Group invoiced one of its historic distributors for £1.7M, however,
the commercial pressures faced by this distributor as a consequence of the
COVID-19 pandemic mean that the invoice has not met the revenue recognition
requirements of IFRS 15 at this time and therefore is unable to be recognised
as revenue in the year ended 31 May 2021. At the point this invoice is paid,
such revenue will then be recognised. As the COVID-19 pandemic comes under
control and restrictions ease, sales by our global distributors are expected
to begin to pick up once again.
Within the UK, sales of EarlyCDT Lung improved markedly on the previous year.
In December 2020, the Group signed its first commercial contract with the NHS;
the contract with Norfolk and Waveney focuses on recruiting people at risk of
lung cancer from community GP practices. The aim of the pilot study is a
real-world assessment of the practicality of introducing the EarlyCDT Lung
blood test into primary and secondary care settings within the NHS in England,
to support the earlier diagnosis of lung cancer. The positive support for
EarlyCDT Lung within the NHS has also led to a further supply contract being
signed and we expect additional contracts to be signed over the remainder of
FY2022. In December 2020, Oncimmune was also selected to supply the EarlyCDT
Lung blood tests to the iDx Lung programme in Southampton and Leeds. This
supply contract is ongoing and is expected to last three years.
In the US, the Group's EarlyCDT Lung partner, Biodesix, announced its
expectation of growth in its core lung diagnostic test service, driven by the
US's emergence from the COVID-19 pandemic, increasing productivity from its
national salesforce, and its continued building of evidence supporting the use
of its tests. Biodesix also commented that Nodify CDT (the name under which
EarlyCDT Lung is marketed in the US) and Nodify XL2(®) are the primary growth
drivers for its revenues. Based on Biodesix's forward order schedule, we
expect sales to continue to recover throughout 2021 and beyond.
Commentary on financial statements
Research and development activities remain a key priority for the UK-based
product scientific group, with a focus on further developments to the EarlyCDT
Lung blood test and as a result, in the year the Group's research and
development spend was £1.6M (FY2020: £1.7M).
Administrative expenses for the year were £5.7M, a substantial reduction on
the previous year (FY 2020: £8.2M). The Group is focused on managing the
overall monthly operating costs and seeks to reduce costs wherever possible.
In September 2020, a new incentivisation scheme for senior management was
implemented which materially increased the IFRS 2 non-cash IFRS 2 charge for
the year to £1.1M (FY2020: £0.2M).
The loss for the year was £4.6M, a substantial reduction on the prior year
(FY2020: loss of £8.5M) and reflects the continued growth in the high margin
ImmunoINSIGHTS services business. The Group received £502k of R&D tax
credit payments in the year (FY2020: £853k), reflecting the Group's continued
focus on new and innovative cancer diagnostic projects, building on its
library of immunogenic proteins, and validating additional NavigAID panels to
facilitate the investigation of more disease types.
Cash balances at year end were £8.6M (FY2020: £4.2M) reflecting the equity
fundraise conducted in March 2021. Net debt was £0.8M including lease
liabilities (FY2020: net debt £4.0M) and net cash of £0.1M excluding lease
liabilities (FY2020: net debt £3.0M).
The Company entered into an €8.5M credit facility with IPF Management SA in
September 2019 which was further extended by €6.0M in October 2020, of which
€3.0M has been drawn. The Company did not exercise its option to draw down
the remaining €3.0M before the deadline of 30 June 2021. Each tranche of
the total loan is repayable over a four-year term, interest-only for the first
12 months, with principal repayments commencing thereafter. There is a cash
covenant requiring the Group to maintain nine months of cash which is tested
each quarter. The total loan has been used to support the Group's operational
activities, in particular the growth of the ImmunoINSIGHTS service business.
Financial outlook
The Group's ImmunoINSIGHTS service business has emerged as the growth driver
for the Group, and this is expected to be increasingly the case for the
Group's foreseeable future. The ImmunoINSIGHTS business is a high margin
business and therefore as its revenues continue to grow, it is anticipated
that the Group's profitability and cash generation will improve. There has
been an increase in the level of business activity since the quieter summer
months. A number of contracts have recently been signed and these will be
delivered and invoiced before the end of the current financial year (FY 2022).
Accordingly, management is comfortable with its expected delivery of growth
for the ImmunoINSIGHTS business for the full year. The expansion of the
commercial team is expected to further enlarge the ImmunoINSIGHTS commercial
pipeline.
Within our EarlyCDT product business, sales in the UK continue to grow as do
sales for our US partner, Biodesix. Elsewhere, as the world emerges from the
COVID-19 pandemic we are expecting an uptick in distributor sales activity.
The Directors are confident that current cash and other available financial
resources are sufficient to deliver the Group's continued growth. The Board
continues to review the Group's activities to ensure it maintains a
differentiated offering and will consider the most appropriate capital base
from which to optimise this growth at the same time as maximising returns to
stakeholders.
Matthew Hall
Chief Financial Officer
2 November 2021
Consolidated statement of comprehensive income
Year to Year to
31 May 31 May
2021 2020
£'000 £'000
Notes Total Total
Revenue 4 3,722 509
Cost of sales (865) (537)
Gross profit/(loss) 2,857 (28)
Research and development expenses (1,615) (1,677)
Administrative expenses (5,652) (8,174)
Share-based payment 24 (1,046) (174)
Gain on disposal of assets 9 - 579
Total administrative expenses 5 (8,313) (9,446)
Other income 6 311 206
Operating loss (5,145) (9,268)
Finance income 10 403 111
Finance costs 10 (954) (626)
Finance costs - net (551) (515)
Loss before income tax (5,696) (9,783)
Income tax credit 11 1,068 1,324
Loss for the financial year (4,628) (8,459)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss, net of tax
Currency translation differences (91) 84
Loss after tax and total comprehensive income for the year attributable to (4,719) (8,375)
equity holders
Basic and diluted loss per share 28 (7.17)p (13.36)p
All activities of the Group in the current and prior period are classed as
continuing.
All of the comprehensive income for the year is attributable to the
shareholders of Oncimmune Holdings Plc.
The accompanying notes form an integral part of these consolidated financial
statements and can be found in the annual report and accounts being made
available on the Company's website later today.
Consolidated statement of financial position
31 May 31 May
2021 2020
£'000 £'000
Notes
Assets
Non-current assets
Goodwill 12 1,578 1,578
Intangible assets 13 4,116 1,138
Property, plant and equipment 14 664 390
Right-of-use assets 15 930 982
Deferred tax asset 30 937 -
8,225 4,088
Current assets
Inventories 17 143 174
Trade and other receivables 16 7,079 1,716
Contract assets 4 200 97
Cash and cash equivalents 18 8,631 4,240
16,053 6,227
Total assets 24,278 10,315
Equity
Capital and reserves attributable to the equity holders
Share capital 23 691 635
Share premium 23 40,497 31,459
Other reserves 4,094 3,048
Merger reserve 31,882 31,882
Foreign currency translation reserve 88 179
Own shares (1,926) (1,926)
Retained earnings (70,099) (65,471)
Total equity 5,227 (194)
Liabilities
Non-current liabilities
Deferred tax 30 374 133
Lease liability 22 671 762
Other liabilities 20 2,000 -
Borrowings 21 6,239 6,147
9,284 7,042
Current liabilities
Trade and other payables 19 1,979 1,037
Contract liabilities 4 5,175 570
Other statutory liabilities 55 65
Lease liability 22 310 227
Other liabilities 20 - 428
Borrowings 21 2,248 1,140
9,767 3,467
Total liabilities 19,051 10,509
Total equity and liabilities 24,278 10,315
The accompanying notes form an integral part of these consolidated financial
statements and can be found in the annual report and accounts being made
available on the Company's website later today.
The financial statements were approved by the board on 2 November 2021.
Dr Adam M Hill
Director and Chief Executive Officer
Company registration number: 09818395 (England and Wales)
Consolidated statement of changes in equity
Share Share Other reserves Merger
capital premium reserve
£'000 £'000 £'000 £'000
As at 1 June 2019 633 31,382 3,295 31,736
Loss for the year - - - -
Other comprehensive income:
Currency translation differences - - - -
Total comprehensive income - - - -
Transactions with owners:
Share warrants issued - - 142 -
Shares issued on acquisition 2 77 (563) 146
Share option charge - - 174 -
As at 31 May 2020 635 31,459 3,048 31,882
Loss for the year - - - -
Other comprehensive income:
Currency translation differences - - - -
Total comprehensive income - - - -
Transactions with owners:
Shares issued in year 50 8,331 - -
Options exercised 2 106 - -
Shares issued in relation to prior year acquisition 4 601 - -
Share option charge - - 1,046 -
As at 31 May 2021 691 40,497 4,094 31,882
Consolidated statement of changes in equity (continued)
Foreign currency translation reserve Own shares Retained earnings Total
£'000 £'000 £'000 £'000
As at 1 June 2019 95 (1,926) (57,350) 7,865
Loss for the year - - (8,459) (8,459)
Other comprehensive income:
Currency translation differences 84 - - 84
Total comprehensive income 84 - (8,459) (8,375)
Transactions with owners:
Share warrants issued - - - 142
Shares issued on acquisition - - 338 -
Share option charge - - - 174
As at 31 May 2020 179 (1,926) (65,471) (194)
Loss for the year - - (4,628) (4,628)
Other comprehensive income:
Currency translation differences (91) - - (91)
Total comprehensive income (91) - (4,628) (4,719)
Transactions with owners:
Shares issued in year - - 8,381
Options exercised - - - 108
Shares issued in relation to prior year acquisition - - - 605
Share option charge - - - 1,046
As at 31 May 2021 88 (1,926) (70,099) 5,227
The accompanying notes form an integral part of these consolidated financial
statements and can be found in the annual report and accounts to be made
available on the Company's website later today.
Consolidated statement of cash flows
Year to Year to
31 May 31 May
2021 2020
£'000 £'000
Notes
Cash flows from operating activities
Loss before income tax (5,696) (9,783)
Adjusted by:
Depreciation and amortisation 13,14,15 740 500
Share based payment charge 1,046 174
Interest received 10 (403) (111)
Interest expense 10 954 626
Gain on disposal of assets - (579)
Fair value movement on contingent consideration and liabilities 176 78
Changes in working capital:
Decrease in inventories 31 107
Increase in trade and other receivables (5,837) (807)
Increase / (decrease) in trade and other payables 4,841 591
Cash used by operations (4,148) (9,204)
Interest paid (885) (663)
Interest received 3 111
Income tax received 503 853
Net cash used by operating activities (4,527) (8,903)
Cash flows from investing activities
Purchase of property, plant and equipment (446) (236)
Purchase of intangible assets (625) -
Proceeds from sale of assets 215 583
Net cash (used in)/ generated from investing activities (856) 347
Cash flows from financing activities
Net funds raised through share issues 8,489 -
Loan advances 2,728 7,598
Loan repayments (1,135) -
Principal elements of lease repayments (303) (138)
Net cash generated from financing activities 9,779 7,460
Movement in cash attributable to foreign exchange (5) (22)
Net increase / (decrease) in cash and cash equivalents 4,391 (1,118)
Cash and cash equivalents at the beginning of the year 4,240 5,358
Cash and cash equivalents at the end of the year 18 8,631 4,240
The accompanying notes form an integral part of these consolidated financial
statements and can be found in the annual report and accounts to be made
available on the Company's website later today.
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
MediCity - D6 Building, 1 Thane Road, Nottingham, NG90 6BH. 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.
2. Basis of preparation
The Group financial statements consolidate those of the Company and its
subsidiaries (together referred to as the 'Group').
The financial information set out in these preliminary results has been
prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006. The accounting policies
adopted in this results announcement have been consistently applied to all the
years presented and are consistent with the policies used in the preparation
of the statutory accounts for the year ended 31 May 2021.
The consolidated financial information is presented in sterling (£), which is
the company's functional and the Group's presentation currency.
The financial information set out in these results does not constitute the
company's statutory accounts for 2021 or 2020. Statutory accounts for the
years ended 31 May 2021 and 31 May 2020 have been reported on by the
Independent Auditors. The Independent Auditor's report for the year ended 31
May 2021 was unqualified, contained an emphasis of matter highlighting a
material uncertainty related to going concern and did not contain a statement
under section 498(2) or (3) of the Companies Act 2006. The Independent
Auditor's report for the year ended 31 May 2020 was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
Statutory accounts for the year ended 31 May 2020 have been filed with the
Registrar of Companies. The statutory accounts for the year ended 31 May 2021
will be delivered to the Registrar in due course.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chairman
and Chief Executive Officer's Review and the Chief Financial Officers Review.
The Financial detail above describes the financial position of the Group, its
cash flows and liquidity position. In addition, note 29 to the financial
statements includes the Group's objectives, policies and processes for
managing its capital, its financial risk management objectives and its
exposure to market risk, including foreign exchange rate risk, interest rate
risk and price risk, credit risk and liquidity risk.
In respect of the Group's funding position, the Company entered into a €8.5M
credit facility with IPF Management SA in September 2019 which was further
extended by €6.0M in October 2020, of which €3.0M was drawn. The Company
did not exercise its option to draw down the remaining €3.0M before the
deadline of 30 June 2021. Each tranche of the total loan is repayable over a
four-year term, interest-only for the first 12 months, with principal
repayments commencing thereafter. There is a cash covenant requiring the Group
to maintain nine months of cash which is tested each quarter. The total loan
has been used to support the Group's operational activities, in particular the
growth of the ImmunoINSIGHTS service business. In order to monitor compliance
with this financial covenant, the Board prepares monthly financial accounts
including a calculation of covenant compliance for the following 12 months.
The Group has prepared the 2021 financial statements on a going concern basis.
In preparing the accounts on a going concern basis the Directors have prepared
forecasts and budgets for the period to 31 December 2022 and which also
considered the Group's existing debt covenant obligations up until this date.
These forecasts and budgets model a range of scenarios, including taking into
consideration the impact of COVID-19. 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 together with contracts from as yet unidentified
opportunities. The base case scenario shows the Group is able to meet its
financial obligations as and when they fall due for the forecast period.
The Directors have also considered downside scenarios that reflect the current
unprecedented uncertainty in the UK economy and which the Directors consider
to be severe but plausible. The first downside scenario took the base case
scenario and removed a total of 50% of forecast EarlyCDT Lung product revenues
excluding the US with a corresponding reduction in cost of sales and a
reduction in third party R&D subcontract manufacture of EarlyCDT Lung
product. The second downside scenario took the base case scenario and removed
50% of forecast EarlyCDT Lung product revenues excluding revenues from the UK
and the US as well as a 20% reduction in ImmunoINSIGHTS' revenues and with a
corresponding reduction in cost of sales. The results of these scenarios show
that the Group has sufficient resources to meet its obligations for the
forecast period and will not be in breach of its covenant under the IPF
Management SA facility.
In addition to the above the Directors have performed a more severe downside
stress test. The most severe of these tests reduced EarlyCDT Lung product
revenues outside of the UK but excluding the US by 50% of forecast and reduced
ImmunoINSIGHTS revenues by 50% with an appropriate reduction in ImmunoINSIGHTS
cost of sales. At the time of approval of the financial statements, the
revenue performance for the current financial year reflects the revenue
modelled under this stress test. This may mean that under this more severe
downside stress test scenario the Group will not comply with the financial
covenant attached to its external borrowings for the duration of the going
concern review period. Should the financial covenant not be met the Group's
borrowings could be recalled by its lender. Such a scenario gives rise to a
material uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern. However, as has been detailed in the
Chief Financial Officer's review, there has been an appreciable uplift in
business activity within the ImmunoINSIGHTS business with several contracts
signed and a number of other contracts moving into legal contracting and
expected to be executed before the end of this calendar year. Furthermore,
although not modelled, the Directors have identified costs within the business
which could be reduced within a relatively short time period.
After considering the above and after making appropriate enquiries, the
Directors have formed a judgement at the time of approving the financial
statements that there is a reasonable expectation that the Group has
sufficient resources to continue in operational existence for the foreseeable
future. For this reason, the Directors consider the adoption of the going
concern basis in preparing the consolidated financial statements is
appropriate.
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