REG-4basebio Plc: Final Results and Related Party Transaction
11/05/2023 07:15
11 May 2022
4basebio plc
("4basebio", the "Company" or the “Group”)
Final Results, Notice of AGM and Related Party Transaction
The Board of 4basebio plc is pleased to report the results for the financial
year ended 31 December 2022.
The annual report and accounts together with a notice of the Company’s
annual general meeting, which is to be held on 14 June 2023 at 9:00am in the
offices of 4basebio plc are expected to be uploaded to the Company's website
and posted to shareholders shortly.
The annual general meeting will be followed by a presentation from the Company
through the Investor Meet Company platform on 16 June 2023 at 10am. Investors
can sign up to Investor Meet Company for free and register interest here:
https://www.investormeetcompany.com/4basebio-plc/register-investor.
The Company further advises that, on 10 May 2023, it amended the terms of its
loan facility with 2Invest AG, a significant shareholder, which it entered
into on 2 November 2020. Further details of the related party transaction
are included below.
* First commercial revenues from DNA
* First commercial revenues from Hermes™ non-viral vectors
* Clean rooms for manufacture of GMP DNA commissioned
* Six novel patent filings between January 2022 and February 2023
* Continued growth with headcount increasing to 61 staff from 33 at the
beginning of the year
4basebio plc is a Cambridge UK based AIM-quoted holding and service company
for the 4basebio group of companies (“the Group”), which includes
manufacturing and research and development subsidiaries across Cambridge, UK
and Madrid, Spain.
4basebio is engaged in the research and development, manufacture and
commercialisation of synthetic DNA and RNA products and targeted non-viral
vector solutions. With its first revenues from these activities during 2022,
the Group is now focussed on the scaling of its commercial activities across a
range of gene therapy and vaccine applications, with a particular focus on
mRNA and AAV markets.
The Group is able to offer its customers application specific solutions; it
also continues to invest in research and development activities to further
develop its technology platforms and expand its product offering.
Dr Heikki Lanckriet, CEO and CSO for 4basebio, said: “2022 has been a very
exciting year for 4basebio, with the first commercial revenues from its
synthetic DNA and Hermes™ platforms, completion of its manufacturing clean
rooms, filing of fresh intellectual property and the overall growth is size
and capabilities of the group. The group will continue to develop its
platforms and is now also focussed on its commercial development with
increasing revenue a key objective.”
For further enquiries, please contact:
4basebio plc +44 (0)12 2396 7943
Heikki Lanckriet, CEO
+44 (0)20 7213 0880
Cairn Financial Advisers LLP (Nominated Adviser )
Jo Turner / Sandy Jamieson
finnCap Ltd (Broker)
Geoff Nash/Richard Chambers/Charlotte Sutcliffe +44 (0)20 7220 0500
Lionsgate Communications (Media Enquiries)
Jonathan Charles +44 (0)77 91892509
Chairman’s statement
Performance
During the course of 2022, 4basebio made significant progress in the
commercialisation of its platform technologies and the strengthening of the
Group’s research and development, manufacturing and business development
capabilities.
4basebio secured commercial validation of its technologies through first
revenues of both its synthetic DNA and Hermes™ non-viral vectors, an
important step on which it continues to build.
Alongside that, the Group commissioned its manufacturing clean rooms, offering
seven manufacturing suites with an overall capacity of three hundred customer
batches per year, and able to manufacture at GMP grade (“good manufacturing
practice”).
The continued commercial development of the business is naturally a key
objective. Alongside this, the Board considers there to be significant
intrinsic value in the Group’s intellectual property and it remains a key
focus with continued investment in its platforms. To that end, six new
patent applications were filed during between January 2022 and February 2023,
with further filings expected in 2023. The Group also appointed a Director
of Intellectual Property to focus on this aspect.
With the objectives outlined above, the Group continued to invest during 2022
with a resultant net loss for the year of £5.2 million. As in 2021,
recruitment was a key priority both in research and development and
manufacturing teams and with overall headcount of 61 at year end. The Group
continues to recruit into roles within commercial, research and development
and manufacturing.
4basebio will be loss making during 2023 and the Group will utilise its loan
facility with 2Invest AG, a major shareholder and former parent company, to
fund activities. Immediately, prior to year end, 4basebio drew down an
initial €2million from this loan facility and it will continue to draw down
further tranches in 2023.
Strategy
4basebio’s principal objective is to become a leading provider of synthetic
DNA and RNA products and non-viral delivery technology for the cell and gene
therapy and vaccines markets. In order to achieve this, the Group is
focussed on differentiating its product and technology solutions from existing
alternatives.
This differentiation is achieved by developing novel, highly flexible and
widely applicable platform technologies which in turn provide optimised
products and solutions for individual customers.
4basebio’s payload and delivery platform technologies are synergistic and
enable offering of integrated services to customers, as appropriate, by
incorporation of client specific nucleic acid payloads in delivery solutions
tailored to client needs. Consequently, the Group offers a wide range of
solutions for customers depending on their application needs. 4basebio seeks
to establish early development stage relationships with its customers. The
Group anticipates that early revenues will be derived from selling research
grade and HQ grade synthetic DNA products used in early stage therapy
discovery and preclinical development.
As customers progress their programs into the clinic, larger quantities of the
higher quality standard 'GMP product’ will be required and in due course,
4basebio expects this will lead to significant GMP manufacturing batches. The
Group is therefore focussed on engaging with as many potential customers as
possible, recognising there may be a degree of attrition as individual clients
may be unable to progress their clinical development program.
Share Price
Consistent with 2021, the share price experienced some volatility during the
year. The directors believe this in part reflects the modest trading volumes
which consequently can have a relatively large impact on the price. During
the course of the year about 4% of shares in issue changed hands, with a
typical daily trading volume of 2,000 shares.
At year end, approximately 68% of the Company’s shares were closely held
between the Company’s two largest shareholders and Board directors. The
Board believes that a significant portion of the remaining shares is owned by
long term shareholders.
The share price opened the year at 615p, before it softened in the middle of
the year, reaching a closing price of 460p. From there it increased to 710p
at year end. The Board recognises that an increase in liquidity is desirable
and continues to consider how this might be achieved.
People and Culture
4basebio places great emphasis on creating a positive and supportive workplace
centred around its people and the science. Currently, over 75% of 4basebio’s
workforce hold scientific degrees, with a third holding PhDs. This fosters
an environment focussed on problem solving, innovation and progress.
On behalf of the Board, I would like to extend our thanks to the whole team
for their dedication over the past year.
Tim McCarthy
Chairman
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2022
[in £‘000] 2022 2021
Revenues 268 338
Cost of goods sold (29) (69)
Gross profit 239 269
Sales and marketing expenses (245) (132)
Administration expenses (2,711) (1,725)
Operation expenses (928) 0
Research and non-capitalised development expenses (2,081) (1,622)
Other operating expenses (181) (400)
Other operating income 67 83
Loss from operations (5,840) (3,527)
Finance expense (89) (113)
Financial result (89) (113)
Loss before tax (5,929) (3,640)
Income tax income / (expense) 779 405
Loss for the year (5,150) (3,235)
Items that may be reclassified to the income statement in subsequent periods
Exchange differences on translation of foreign operations 447 (608)
Total comprehensive income (4 ,703) (3,843)
Loss per share
Basic and diluted (in £/share) (0.42) (0.26)
All of the loss for the year is from continuing operations.
Consolidated statement of financial position
31 December 2022
[in £’000] 2022 2021
Assets
Intangible assets 2,124 1,271
Property, plant and equipment 3,633 2,759
Other non-current assets 35 30
Non-current assets 5,792 4,060
Inventories 133 156
Trade receivables 54 46
Other current assets 1,359 854
Cash and cash equivalents 4,351 9,586
Current assets 5,897 10,642
Total assets 11,689 14,702
Liabilities
Financial liabilities (415) (432)
Trade payables (490) (353)
Other current liabilities (613) (738)
Current liabilities (1,518) (1,523)
Financial liabilities (2,935) (1,326)
Other liabilities (116) (158)
Non-current liabilities (3,051) (1,484)
Total liabilities (4,569) (3,007)
Net assets 7,120 11,695
Share capital 11,130 11,130
Share premium 706 706
Merger reserve 688 688
Capital reserve 13,307 13,179
Foreign exchange reserve 14 (433)
Profit and loss reserve (18,725) (13,575)
Total Equity 7,120 11,695
Consolidated statement of changes in equity
for the year ended 31 December 2022
[in £‘000] Share capital Share premium Merger reserve Capital reserve Foreign exchange reserve Profit and loss reserve Total equity
Balance at 1 January 2022 11,130 706 688 13,179 (433) (13,575) 11,695
Loss for the year - - - - - (5,150) (5,150)
Foreign Exchange difference arising on translation of 4basebio S.L.U. - - - - 447 - 447
Share based payments - - - 128 - - 128
Balance at 31 December 2022 11,130 706 688 13,307 14 (18,725) 7,120
[in £‘000] Share capital Share premium Merger reserve Capital reserve Foreign exchange Profit and loss reserve Total equity
Balance at 1 January 2021 11,130 706 688 13,099 175 (10,340) 15,458
Loss for the year - - - - - (3,235) (3,235)
Foreign Exchange difference arising on translation of 4basebio S.L.U. - - - - (608) - (608)
Share based payments - - - 80 - - 80
Balance at 31 December 2021 11,130 706 688 13,179 (433) (13,575) 11,695
Consolidated statement of cash flows
for the year ended 31 December 2022
[in £’000] 2022 2021
Net loss for the period (5,150) (3,235)
Adjustments to reconcile net loss for the period to net cashflows
Income taxes (779) (405)
Interest charge 89 113
Depreciation of property, plant and equipment 404 242
Amortisation and impairment of intangible assets 27 78
Other non-cash items 136 12
Working capital changes:
(Increase)/decrease in trade receivables and other current assets 140 (126)
Increase/(decrease) in trade payables and other current liabilities (2) 615
(Increase)/decrease in inventories 30 (34)
Tax receipt 401 -
Net Cash flows from operating activities (4,704) (2,740)
Investments in property, plant and equipment (1,155) (884)
Investments in capitalised development and intangible assets (786) (628)
Cash flows from investing activities (1,941) (1,512)
Net receipt/(payment) of loans 1,412 (331)
Interest paid (93) (76)
Capital lease payments (75) (60)
Cash flows from financing activities 1,244 (467)
Net change in cash and cash equivalents (5,401) (4,719)
Exchange differences 166 (696)
Cash and cash equivalents at the beginning of the period 9,586 15,001
Cash and cash equivalents at the end of the period 4,351 9,586
Notes to the financial statements
1. General
4basebio plc (the “Company” or “4basebio”) is registered in England
and Wales with company number 13519889.
The Company is domiciled in England and the registered office of the Company
is 25 Norman Way, Over, Cambridge CB24 5QE. 4basebio plc is the parent of a
group of companies (together, “the Group”). The Group focusses on life
sciences and in particular the development of synthetic DNA and nanoparticles
suitable for inclusion in, or delivery of, therapeutic payloads for gene
therapies and gene vaccines.
The Company trades on London Stock Exchange’s AIM market, having been
admitted on 17 February 2021. The international securities number (ISIN)
number for its AIM traded shares is GB00BMCLYF79; its ticker symbol is 4bb.l.
The consolidated financial statements of 4basebio plc and its subsidiaries for
the year ended 31 December 2022 were authorised for issue in accordance with a
resolution of the directors on 10 May 2023.
2. Basis of preparation
The consolidated financial statements of 4basebio UK plc (or “the Group”)
for the financial year ending 31 December 2022 have been prepared using UK
adopted international accounting standards.
The consolidated financial statements for 2022 and 2021 comprise the results
of 4basebio plc, 4basebio S.L.U., 4basebio UK Limited and 4basebio Discovery
Limited for the whole year.
The above summary has been extracted from the report and financial statements
and, accordingly, references to notes and page numbers may be incorrect.
Shareholders are advised to read the full version of the report and financial
statements which will be available from the Company’s website.
3. Going concern
The directors have, at the time of approving the financial statements, a
reasonable expectation, taking into account the unutilised existing loan
facility with 2Invest AG, a shareholder in 4basebio plc, referred to in note
22, that the Group has adequate resources to continue in operational existence
for at least 12 months from the date of approval of the financial statements.
Thus, they continue to adopt the going concern basis of accounting in
preparing the financial statements.
4. Earnings per share
2022 2021
Numerator [in £‘000]
Result for the period (5,150) (3,235)
Denominator [number of shares]
Weighted average number of registered shares in circulation (ordinary shares) for calculating the undiluted earnings per share 12,317,473 12,317,473
Basic and diluted earnings per share (0.42) (0.26)
The calculation of the basic and diluted earnings per share for continuing
operations was based on the weighted average number of shares as determined
above. The numerator is defined as result after tax from continuing
operations. The average number of share options outstanding during the period
was 642,878 (2021: 522,860) which have not been included in the calculation of
the diluted Earning per share because they would be anti-dilutive since the
business is loss making.
5. Approval of the financial statements
The financial statements were approved by the Board of directors and
authorised for issue on 10 May 2022.
Related Party Transaction
On 2 November 2020, the Company entered into a loan agreement with 2Invest AG
(“2Invest”) (formerly 4bb AG) pursuant to which the Company could draw
down up to €25 million at any time prior to 31 October 2026. Details of the
loan agreement are included in the Company’s admission document published on
12 February 2021.
On 10 May 2023, the loan facility was amended by reducing the available
facility by €2 million in consideration for extending the repayment date.
As a result, the loan facility with 2Invest, which is denominated in Euros, is
now for up to €23 million which can be drawn, with notice, at the discretion
of 4basebio plc until 31 October 2026. Interest is charged at 5% per annum
on all loan amounts outstanding and compounds annually on all loan tranches
outstanding. The capital and interest are now due to be repaid in a single
payment on 31 October 2028. Early repayment is permitted. No other fees are
due under this facility.
As a result of 2Invest being a significant shareholder, the amendment of this
agreement constitutes a related party transaction pursuant to Rule 13 of the
AIM Rules for Companies. With the exception of Hansjörg Plaggemars, a
director of the Company and 2Invest, the directors of the Company, having
consulted with the Company's Nominated Adviser, Cairn Financial Advisers LLP,
consider the terms of the Transaction to be fair and reasonable insofar as the
Company’s shareholders are concerned.
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