REG - Genedrive PLC - Final Results
30/11/2023 07:15
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RNS Number : 1411V Genedrive PLC 30 November 2023
genedrive plc
("genedrive" or "the Company" or "the Group")
Audited Final Results
genedrive plc (AIM: GDR), the near patient molecular diagnostics company,
announces its audited Final Results for the year ended 30 June 2023.
Financial Highlights
· Loss for the year of £5.2m (2022: loss of £4.7m)
· R&D spend of £3.9m (2022: £3.9m)
· Cash at bank of £2.6m (2022: £4.6m)
Operational Highlights
· Genedrive® MT-RNR1 ID Test receives positive final recommendation in
NICE's Early Value Assessment programme
· Genedrive® MT-RNR1 commenced rollout in Greater Manchester hospitals
· Commercial distribution agreements for Antibiotic Induced Hearing
Loss (AIHL) test in place covering Spain, France, Austria, Greece, Saudi
Arabia, Kuwait, Turkey and the Netherlands
· UKCA marking achieved for new Genedrive® CYP2C19 pharmacogenetic
test
· Benefiting from £1.2m multi-partner grant awarded for the validation
of Genedrive® CYP2C19 ID Kit in time critical NHS settings. The Company is
expected to receive c£0.2m directly
· The draft NICE guidance recommends CYP2C19 genotyping for clopidogrel
treatment and Genedrive® CYP2C19 ID test modelled to be a clinically and
cost-effective option. Final NICE recommendations pending
· Investor Placing Agreement of up to £5m secured with £2.3m drawn
down during the year and a further £0.6m drawdown post year end
· Pre-submission process ongoing with the Food and Drug Administration
("FDA") to determine regulatory process and requirements to place AIHL into
the American market
James Cheek, CEO of genedrive plc, said: "I'm excited to be part of a Company
that is innovating pharmacogenetic testing by bringing the test closer to
the patient thereby making a real difference in patients' lives and helping
clinicians make quick insightful decisions that improve patient safety. We
continue to develop and create solutions that challenge what is possible and
improve patient outcomes."
For further details please contact:
genedrive plc +44 (0)161 989 0245
James Cheek: CEO / Russ Shaw: CFO
Peel Hunt LLP (Nominated Adviser and Joint Broker) +44 (0)20 7418 8900
James Steel / Patrick Birkholm
Walbrook PR Ltd (Media & Investor Relations) +44 (0)20 7933 8780 or genedrive@walbrookpr.com
(mailto:genedrive@walbrookpr.com)
Anna Dunphy +44 (0)7876 741 001
About genedrive plc (http://www.genedriveplc.com
(http://www.genedriveplc.com/) )
genedrive plc is a pharmacogenetic testing company developing and
commercialising a low cost, rapid, versatile, simple to use and robust point
of need pharmacogenetic platform for the diagnosis of genetic variations. This
helps clinicians to quickly access key genetic information that will help them
make the right choices over the right medicine or dosage to use for an
effective treatment. Based in the UK, the Company is at the forefront of work
on Point of Care pharmacogenetics. Pharmacogenetics looks at how your genetics
impacts a medicines ability to work for you. Therefore, by using
pharmacogenetics, medicines can be made safer and more effective. The Company
has launched its flagship product, the Genedrive® MT-RNR1 ID Kit, which is a
single-use disposable cartridge which circumvents the requirement for cold
chain logistics by providing temperature stable reagent test kits for use on
their proprietary test platform. This test allows clinicians to make a
decision on antibiotic use within 26 minutes, ensuring vital care is delivered
with no negative impact on the patient pathway.
The Company has a clear commercial strategy focused on accelerating growth
through maximising in-market sales, geographic and portfolio expansion and
strategic M&A, and operates out of its facilities in Manchester.
Chairman's Statement
Innovation for better health outcomes
This year has been both challenging and rewarding, the road to
commercialisation of groundbreaking innovative products is long and
challenging, due to the collection of data required and the sheer size of the
NHS and funding complexities of Integrated Care Systems (ICS).
I am very pleased to see our Antibiotic Induced Hearing Loss (AIHL) test in
routine use at multiple sites, although initially on a small scale, the
Company is well positioned for geographical expansion and I am immensely proud
that we have contributed to the prevention of hearing loss in infants, which
when considered with the NICE EVA recommendation and the potential to generate
significant savings for the NHS, sees us well poised to gain growing
commercial traction in the coming year.
Our people have worked relentlessly on the successful development of the
Genedrive® CYP2C19 ID test, which is our most complicated assay developed to
date and was delivered in the shortest time frame. It was welcoming to see
the draft guidance from NICE recommending that CYP2C19 genotyping should be
used before clopidogrel administration in the management of ischemic stroke
patients and our inclusion in their Diagnostics Assessment Programme is a
remarkable achievement. The final NICE recommendation, which had previously
been expected in December 2023, has recently been delayed with further details
not yet available.
The DEVOTE programme, led by the University of Manchester (UoM), builds on the
model of the previous successful UoM/genedrive partnership with the PALOH
programme, which supported the development and evaluation of the NICE
recommended Genedrive® MT-RNR1 ID Kit. The DEVOTE grant funding will see us
benefit from access to the Acute Medicine Unit and reduce clinical validation
costs that otherwise would have been fully borne by the Group.
During the year we have consistently advanced our efforts towards transforming
the way in which certain personalised medicine can be delivered aiming to
enhance health outcomes and bring about health economic benefits.
Governance and People
I was delighted to welcome James Cheek and Gino Miele to the Board both with
effect from 11 September 2023. James brings extensive commercial and
operational experience at a senior level through a successful career with
established diagnostic companies and joined as Chief Executive Officer,
replacing David Budd. I would like to thank David for his dedication and
leadership over the past seven years and wish him every success for the
future. Gino joined the Board as Chief Scientific Officer and has
considerable experience in the development of molecular diagnostic
technologies and systems and has been the R&D Director at genedrive since
2015 and its predecessor Epistem since 2011.
The Board continues its commitment to maintaining its own efficiency and
competence, with an unwavering dedication to ensuring that our governance
framework, internal controls, values, and culture are all in harmony with our
strategic goals and the Company's objectives.
Our people are the lifeblood of the Company, and I want to express my
gratitude to each and every one of them for their unwavering resilience,
innovative spirit, and unyielding determination in both the development and
delivery of our products.
Funding
The Board continuously assesses the Group's requirements and funding options
that would bridge the gap before revenue generation allows us to be
self-sufficient. The Investor Placing Agreement entered into on 31 March 2023
provided a committed facility of up to £5m and to date the Group has received
£2.9m (£2m initial payment and further payments of £0.3m in June, July and
November 2023). Further drawdowns are conditional on meeting certain share
trading criteria, which are set out in note 6 and were also set out in the
Company's circular issued on 24 April 2023 and therefore further drawdowns
cannot be considered as guaranteed. The Board is planning for an equity or
debt raise in early 2024 to support the growth and development plans of the
business and allow the Group to continue to operate as a going concern. The
Group does expect to receive an R&D tax credit of c£0.8m in Q1 of 2024
which, if received, would extend the cash runway (absent any further funding
received) towards the end of Q1 2024 and provide a longer window for our
planned financing activities. The Group's current cash runway is limited;
unaudited cash as at 23 November 2023 was £1m and further funding will be
required in early 2024 in order to continue as a going concern. The further
payment of £0.3m pursuant to the Investor Placing Agreement announced on 29
November 2023 is due to be received shortly.
We also remain active in our pursuit of non-dilutive funding, such as the
DEVOTE programme and we have pushed ahead with commercial opportunities
outside of the UK, appointing eight international distributors and achieving
six product registrations. We are continuing to work closely with the NHS to
secure specialist commissioning funding for our MT-RNR1 product, as well as
finalising our 2024 sales strategy and distribution channel for our new
CYP2C19 product. With our commercialisation strategy including the US, we have
recently completed a pre-submission exercise with the FDA which has, with no
predicate device, clarified what would be expected to fulfil for release in
the US of our novel MT-RNR1 test. We are now looking at funding options to
take us forward for FDA approval for the MT-RNR1 product, with substantially
all of the exploratory groundwork completed we are ready to proceed to the
next step. Future funding would also be required to support the ongoing
development of the instrumentation allowing us to capitalise on our
pharmacogenetic positioning in emergency care and add further tests to our
existing menu.
Outlook
Our mission is to leverage our technology to facilitate the improvement of
health outcomes and it is encouraging that we are now beginning to bear the
fruits of our labour. The Group will need to raise further funds in early 2024
to allow us to continue to operate as a going concern and fulfil our mission.
The Company will remain focused on its strengths, with a strong research and
development capability at the core of our company, we will continually strive
to grow our innovative product offering by leveraging our extensive knowledge
in developing novel in-vitro pharmacogenetic assays.
Our Genedrive® platform is at the forefront, offering efficient and speedy
genetic testing solutions and has the capability to address molecular
pharmacogenetics in critical care settings. By harnessing our extensive
expertise in developing in-vitro molecular diagnostic assays for use in
time-critical healthcare settings, coupled with the advantages of our evolving
Genedrive® platform, our company is establishing itself as a pioneer in the
implementation of pharmacogenetics within emergency care.
We continue to make progress for FDA approval of our MT-RNR1 product, the US
represents a very important market opportunity. As there is no predicate
product in the US, there is no defined pathway for us to follow. The FDA
have been very supportive of our efforts throughout the process to date to
bring this test to the US market.
Finally, I want to express my appreciation to you, our valued shareholders, as
well as our staff and collaboration partners for your ongoing support.
Dr Ian Gilham
Chairman
Chief Executive's Review
Innovation in Point-of-Care pharmacogenetic diagnostics in Emergency Medicine
Overview
This year has marked significant progress in our efforts to revolutionise the
delivery of pharmacogenetic testing and personalised medicine. We continue to
seek out and address unmet clinical requirements, capitalising on our
proficiency in developing in-vitro pharmacogenetic diagnostic assays.
The UKCA marking of the Genedrive® CYP2C19 test is testimony to this and the
use of our point-of-care test will allow patients to be put on an optimised
treatment plan much quicker than is currently possible. I would like to take
this opportunity to whole heartedly thank the efforts of the entire team here
at genedrive for turning this ambitious and challenging vision into a reality
in an incredibly short time which is a real testament to the quality, ability
and dedication that we have in the organisation.
It is a privilege for the Group to once again collaborate with our esteemed
colleagues at the University of Manchester (UoM) and Manchester University NHS
Foundation Trust (MFT) in developing time-critical genetic test solutions.
The DEVOTE program is an amazing opportunity to engage with the NHS to
demonstrate the effectiveness of a new diagnostic approach. Real time access
to the Acute Medicine Unit has considerable value to the Group and the grant
funding to genedrive and its partners allows us to expediate the ongoing
product development and support the pathway to clinical validation of our
Genedrive® CYP2C19 ID Kit. This level of clinical input and evaluation is
increasingly required by regulatory authorities prior to marketing product
especially in the EU.
Our AIHL test is the world's first pharmacogenetic test in an urgent neonatal
point-of-care setting. It helps avoid lifelong deafness in infants that are
genetically predisposed to the unintended toxic effects in the inner ear from
certain antibiotics. The test delivers a diagnostic result in under 30 minutes
and allows for alternative treatment selections depending on the genetic
variant of the patient.
Last year the Company took the strategic decision of transferring instrument
manufacturing operations to the UK and some assay manufacturing in-house, with
a view to increase visibility and control of its processes. This cost
beneficial action has resulted in elevated transparency and oversight, whilst
enhancing the speed and flexibility in transportation and delivery, reducing
the time-to-market and improving sustainability. Bringing our supply chain
closer together, improves the Group's agility and resiliency, with both
economic and environmental advantages. This was highlighted no better than in
our ability to bring the CYP2C19 assay to market so quickly.
Performance
Both genedrive and our UK distributor have made significant in-roads across
both the Academic Health Science Networks and individual Trusts, we truly
believe that the clinical argument has been won. The next step on our journey
is to secure interim funding until the date that the specialist commissioning
kicks in to support the adoption UK wide. In the meantime, we are not
sitting still and continue to establish distributors outside of the UK. We are
also funding several Key Opinion Leader presentation and discussions across
Europe and beyond. Our commercial team has made solid progress in thirteen
countries internationally as we find wider interest in our products and our
company worldwide.
Outlook
Using genetic and genomic testing for diagnosis and treatment optimisation has
seen a considerable upsurge in recent years. This surge is propelled by rapid
advancements in scientific knowledge and technological innovation. I take
great pride in witnessing genedrive as a front runner in this field.
Our developments have facilitated remarkable advancements in personalised
medicine, making it possible to customise treatment strategies for patients.
We are pioneers in what we do, so there is no well-trodden path between our
technological advances and the commercial benefits. The NICE recommendation
for our AIHL test demonstrates the beneficial impact of the test to both
patients and wider society, whilst simultaneous providing potential and
substantial cost savings to the NHS and we see that as instrumental to our UK
roll out and expansion into international market.
Our focus remains on pharmacogenetic testing as we continue to invest in
product development focusing on maximising the benefits of our continually
advancing Genedrive® platform, characterised by its compactness,
user-friendliness, rapid results, precision, and cost-effectiveness, qualities
that makes it well-suited for extensive adoption. We believe our products are
uniquely positioned for time-critical pre-emptive pharmacogenetic testing in
emergency care and we will continue to explore opportunities outside of
MT-RNR1 and CYP2C19.
James Cheek
Chief Executive Officer
Financial Review
Revenue for the year was £0.06m (2022: £0.05m) and continues to reflect the
time required for our products to gain commercial traction. The MT-RNR1 test
is in routine use in Greater Manchester, paving the way for other early
adopters in the UK, whereas international revenues are dependent on product
registration and language translation, which has been achieved post year end
in six countries. Research and development costs were £3.9m (2022: £3.9m)
as we prepared for the regulatory approval of our second molecular point of
care assay effectively expanding our range of assays and developing a pipeline
for future innovative products. Administration costs have been tightly managed
reducing by £0.4m from the prior year to £1.4m (2022: £1.8m). The
operating loss for the year was £5.2m (2022: £5.6m).
Financing costs and income
Financing costs were £0.8m (2022: £0.02m) including a non-cash fair value
adjustment in respect of the derivative financial instrument of £0.7m (2022:
£nil) and financing income was £0.03m (2022: £nil)
Taxation
The tax credit for the year was £0.8m (2022: £1.0m). The Group investment in
R&D falls within the UK Government's R&D tax relief scheme for small
and medium sized companies where it meets the qualifying criteria and as the
Group did not make a profit in the year it is collected in cash following
submission of tax returns. The £0.8m is a receivable on the balance sheet at
the year end and is lower than in the previous year due to reductions in the
enhanced relief available from April 2023.
Cash resources
Net cash outflow from operating activities before taxation was £4.8m (2022:
£5.8m). The operating loss cashflows were £4.9m (2022: £5.3m) with a
working capital inflow of £0.1m (2022: outflow £0.4m) mainly due to the
reduction in inventory.
The tax credit received was £1.0m (2022: £1.2m) and relates to cash received
under the UK Government's R&D tax relief scheme.
Capital expenditure in the period was £0.05m (2022: £0.06m) and the proceeds
from investment funding, net of transaction costs were £2.0m (2022: £6.7m).
The decrease in cash for the year was £2.0m (2022: £2.0m increase) meaning a
closing cash position of £2.6m (2022: £4.6m).
Our unaudited cash balance as at the 23 November 2023 was £1.0m, reflecting a
monthly burn rate of £0.4m since the year end. The further payment of
£0.3m pursuant to the Investor Placing Agreement announced on 29 November
2023 is due to be received shortly.
Funding
Requiring additional funding to finance the development of the CYP2C19 project
and commercialisation of AIHL, the Company entered into an Investor Placing
Agreement of up to £5m on 31 March 2023, of which £2.3m was drawn down in
the year to 30 June 2023 and a further £0.6m since then. Further details can
be found in note 6.
The Company also continues to actively seek non-dilutive funding and
participation in the DEVOTE programme will see the Company receive c£0.2m and
avoid a further c£1.0m of costs that would otherwise have been absorbed by
the Company for the validation and verification of our CYP2C19 product.
Balance sheet
Balance sheet net assets at 30 June 2023 were £2.0m (2022: £5.6m). Fixed
assets were £0.4m (2022: £0.2m) and include right to use lease assets of
£0.2m (2022: £0.02m).
Current assets of £4.1m (2022: £6.4m) included cash of £2.6m (2022:
£4.6m). Inventories of £0.5m (2022: £0.7m), consisted mainly of raw
materials used in manufacturing and R&D. The remainder of current asset
values were in receivables of £0.2m (2022: £0.1m) and tax. The tax
receivable was £0.8m (2022: £1.0m) for the current year Corporation Tax
Research and Development tax claim.
Current liabilities were £2.4m (2022: £1.0m) and include a derivative
financial instrument £1.3m (2022: £nil) resulting from the Investor Placing
Agreement, as set out in note 6.
The shares to be issued reserve of £0.5m (2022: £nil) relates to the
warrants issued as part of the Investor Placing Agreement.
Net assets closed at £2.0m (2022: £5.6m). The comprehensive loss for the
year was £5.2m (2022: £4.7m).
Going concern
As outlined in the Chairman's statement, the Group and Company needs to bridge
the funding gap before revenue generation allows us to be self-sufficient. The
Board is actively considering financing options. This short-term funding
requirement is partly as a result of the uncertainty of further drawdowns from
the Investor Placing Agreement which are conditional on certain factors
including the Company's share price. The Company remains in close dialogue
with the investors, further drawdowns would extend the cash runway and
therefore the timeline for our planned financing activities. The Group does
also expect to receive an R&D tax credit of c£0.8m in Q1 of 2024 which,
if received, would extend the cash runway (absent any further funding
received) towards the end of Q1 2024 and provide a longer window for our
planned financing activities. As well as equity or debt financing we are
also actively seeking non-dilutive funding such as grants, funding partners
for the FDA approval and charitable organisations willing to support the
adoption of our quality-of-life enhancing innovations.
We are beginning to gain commercial traction, RNR1 is in routine use at a
small number of hospitals and with the appointment of international
distributors, language packs and registrations complete, we are confident that
significant revenues will follow. NHS specialist commissioning would
expediate this, but as we are not in control of the process, there is
uncertainty as to the timing.
The NICE EVA (Early Value Assessment) recommendation supports our belief that
our RNR1 test quickly and accurately identifies babies, who may be at risk of
hearing loss if given aminoglycoside antibiotics, allowing equally effective
alternative antibiotics to be used instead and that the long-term savings to
the NHS associated with hearing loss and fitting cochlear implants could be
substantial.
As described in the accounting policies, we continue to adopt a going concern
basis for the preparation of the accounts, but the combination of the above
factors represent a material uncertainty that may cast significant doubt on
the Group and Company's ability to continue as a going concern.
Russ Shaw
Chief Financial Officer
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2023
Note Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Continuing operations
Revenue 2 55 49
Research and development costs (3,924) (3,871)
Administrative costs (1,355) (1,793)
Operating loss (5,224) (5,615)
Finance costs 3 (757) (16)
Loss on ordinary activities before taxation (5,981) (5,631)
Taxation 4 831 956
Loss for the financial year (5,150) (4,675)
Loss/total comprehensive expense for the financial year (5,150) (4,675)
Loss per share (pence)
- Basic and diluted 5 (5.5p) (5.5p)
Consolidated Balance Sheet
as at 30 June 2023
Note 30 June 30 June
2023 2022
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 392 206
392 206
Current assets
Inventories 525 748
Trade and other receivables 158 107
Contingent consideration receivable - 15
Current tax asset 831 956
Cash and cash equivalents 2,601 4,589
4,115 6,415
Total assets 4,507 6,621
Liabilities
Current liabilities
Trade and other payables (935) (994)
Lease liabilities (222) (16)
Derivative financial instruments 6 (1,290) -
(2,447) (1,010)
Non-current liabilities
Lease liabilities (19) -
Total liabilities (2,466) (1,010)
Net assets 2,041 5,611
Equity
Called-up equity share capital 7 1,485 1,388
Other reserves 8 52,777 51,294
Accumulated losses (52,221) (47,071)
Total equity 2,041 5,611
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
Share Other Accumulated Total
capital
reserves
equity
losses
£'000 £'000
£'000
£'000
Balance at 30 June 2021 950 45,000 (42,358) 3,592
Transactions with owners in their capacity as owners:
Share issue 426 6,186 - 6,612
Share issue - deferred consideration 8 (8) - -
Equity-settled share-based payments 4 116 (38) 82
Transactions settled directly in equity 438 6,294 (38) 6,694
Total comprehensive loss for the year - - (4,675) (4,675)
Balance at 30 June 2022 1,388 51,294 (47,071) 5,611
Transactions with owners in their capacity as owners:
Share issue - 2 - 2
Investment funding arrangement, net of transaction costs 97 1,385 - 1,482
Equity-settled share-based payments - 96 - 96
Transactions settled directly in equity 97 1,483 - 1,580
Total comprehensive loss for the year - - (5,150) (5,150)
Balance at 30 June 2023 1,485 52,777 (52,221) 2,041
Consolidated Cash Flow Statement
for the year ended 30 June 2023
Note Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Cash flows from operating activities
Operating loss for the year (5,224) (5,615)
Depreciation, amortisation and impairment 61 63
Depreciation, right-of-use assets 193 187
Share-based payment 96 38
Operating loss before changes in working capital (4,874) (5,327)
Decrease / (increase) in inventories 223 (192)
(Increase) / decrease in trade and other receivables (51) 51
Decrease in trade and other payables (59) (292)
Net cash outflow from operating activities before taxation (4,761) (5,760)
Tax received 956 1,166
Net cash outflow from operating activities (3,805) (4,594)
Cash flows from investing activities
Finance income 29 -
Finance costs - (16)
Acquisition of plant and equipment (52) (62)
Proceeds from disposal of discontinued operations 15 107
Net cash (outflow) / inflow from investing activities (8) 29
Cash flows from financing activities
Proceeds from the investment placing agreement 6 2,300 -
Transaction costs relating to investment placing agreement (283) -
Proceeds from share issue - 7,200
Transaction costs relating to share issue - (506)
Repayment of lease liabilities (193) (119)
Net inflow from financing activities 1,824 6,575
Net (decrease) / increase in cash equivalents (1,989) 2,010
Effects of exchange rate changes on cash and cash equivalents 1 5
Cash and cash equivalents at beginning of year 4,589 2,574
Cash and cash equivalents at end of year 2,601 4,589
Analysis of net funds
Cash at bank and in hand 2,601 4,589
Net cash 2,601 4,589
Notes to the Financial Information
for the year ended 30 June 2023
General information
genedrive plc ('the Company') is a company incorporated and domiciled in the
UK. The registered head office is The CTF Building, Grafton Street, Manchester
M13 9XX, United Kingdom.
genedrive plc and its subsidiaries (together, 'the Group') is a molecular
diagnostics business developing and commercialising a low-cost, rapid,
versatile, simple-to-use and robust point-of-need or point-of-care diagnostics
platform for the diagnosis of infectious diseases and for use in patient
stratification (genotyping), pathogen detection and other indications.
genedrive plc is a public limited company, whose shares are listed on the
London Stock Exchange Alternative Investment Market.
1. Significant accounting policies
The financial information for the year ended 30 June 2022 has been extracted
from the Group's audited statutory financial statements which were approved by
the Board of Directors on 18 November 2022 and which have been delivered to
the Registrar of Companies for England and Wales. The report of the auditor on
these financial statements was unqualified, did not contain a statement under
Section 498(2) or Section 498(3) of the Companies Act 2006.
The report of the auditor on the 30 June 2023 statutory financial statements
was unqualified, did not contain a statement under Section 498(2) or Section
498(3) of the Companies Act 2006, but did draw attention to the Group's
ability to continue as a going concern by way of a material uncertainty
paragraph.
The information included in this announcement has been prepared on a going
concern basis under the historical cost convention as modified by the
revaluation of financial assets and financial liabilities (including
derivative instruments) at fair value through profit or loss, and in
accordance with UK-adopted International Accounting Standards.
The information in this announcement has been extracted from the audited
statutory financial statements for the year ended 30 June 2023 and as such,
does not constitute statutory financial statements within the meaning of
section 435 of the Companies Act 2006 as it does not contain all the
information required to be disclosed in the financial statements prepared in
accordance with UK-adopted International Accounting Standards.
This announcement was approved by the board of directors on 29 November 2023
and authorised for issue via RNS.
Going concern
The Group's business activities, market conditions, principal risks and
uncertainties along with the Group's financial position are described in the
full annual accounts. The Group funds its day-to-day cash requirements from
existing cash reserves and drawdowns from the Investor Placing Agreement,
which are subject to certain conditions as described in note 6. These matters
have been considered by the Directors in forming their assessment of going
concern.
The Directors have concluded that it is necessary to draw attention to the
revenue and cost forecasts in the business plans during the period to June
2025. The Group and Company does not currently have sufficient cash resources
to continue as a going concern during the forecast period due to the time
expected to be needed to gain commercial traction in its revenues. Therefore,
the Company will need to raise further equity, or other funding, in early 2024
in order to continue as a going concern. The forecasts prepared by the
Directors include a plan to raise additional funds from equity investors or
debt providers in early 2024 to allow the Company to continue as a going
concern.
The Company is confident that given the health benefits and economics that
RNR1 will be a commercial success. The NICE EVA (Early Value Assessment)
recommendation is testimony to it. Our CYP2C19 product is now at validation
and verification stage and has a much larger potential market than RNR1 with a
far less complex route to market. The Company recognises the uncertainty
regarding the timing of the associated revenues, given we are first to market
for RNR1 and the funding complexities within the NHS. NICE recommendations
and Specialist Commissioning will bring significant upside to our sales
forecasts, but they are outside of our control and are therefore uncertain.
The Directors have reasonable confidence in their ability to raise additional
funds given the progress described above and having made enquiries, have a
reasonable expectation that the Group has access to adequate resources to
continue in operational existence for the foreseeable future.
While the Board has a successful track record in raising funds, there remains
uncertainty as to the amount of funding that could be raised from shareholders
or debt providers. The combination of the above factors represents a material
uncertainty that may cast significant doubt on the Group and Company's ability
to continue as a going concern.
Accordingly, the Directors have concluded that it is appropriate to continue
to adopt the going concern basis of accounting in preparing these financial
statements. These financial statements do not include the adjustments that
would result if the Group and Company were unable to continue as a going
concern.
2. Operating segments
For internal reporting and decision-making, the Group is organised into one
segment, Diagnostics. Diagnostics is commercialising the Genedrive® point-of
need molecular testing platform. In future periods, and as revenue grows, the
Group may review management account information by type of assay and thus
split out Diagnostics into segments - however, for now, the single segment is
appropriate.
The chief operating decision-maker primarily relies on turnover and operating
loss to assess the performance of the Group and make decisions about resources
to be allocated to each segment. Geographical factors are reviewed by the
chief operating decision-maker, but as substantially all operating activities
are undertaken in the UK, geography is not a significant factor for the Group.
Accordingly, only sales have been analysed into geographical statements.
The results of the operating division of the Group are detailed below.
Business segments Diagnostics Corporate Total
segment costs £'000
£'000 £'000
Year ended 30 June 2023
Revenue 55 - 55
Operating loss (3,869) (1,355) (5,224)
Net finance costs (757)
Loss on ordinary activities before taxation (5,981)
Taxation 831
Loss for the financial year (5,150)
Total comprehensive expense for the year (5,150)
Business segments Diagnostics Corporate Total
segment costs £'000
£'000 £'000
Year ended 30 June 2022
Revenue 49 - 49
Operating loss (3,822) (1,793) (5,615)
Net finance costs (16)
Loss on ordinary activities before taxation (5,631)
Taxation 956
Loss for the financial year (4,675)
Total comprehensive expense for the year (4,675)
Diagnostics Corporate Total
segment costs £'000
£'000 £'000
Year ended 30 June 2023
Segment assets 960 3,547 4,507
Segment liabilities (877) (1,589) (2,466)
Year ended 30 June 2022
Segment assets 1,003 5,618 6,621
Segment liabilities (905) (105) (1,010)
Additions to non-current assets: Diagnostics segment £353k (2022: £124k) and
Corporate costs £88k (2022: £31k).
Geographical segments
The Group's operations are located in the United Kingdom. The following table
provides an analysis of the Group's revenue by customer location:
All on continuing operations Year ended Year ended
30 June
30 June
2023
2022
£'000 £'000
United Kingdom 35 37
Europe 16 10
United States of America 4 2
Rest of the world - -
55 49
Revenues from three customers accounted for more than 10% of total revenue in
the current year (2022: two).
3. Finance income/(costs)- net
Year ended Year ended
30 June
30 June
2023
2022
£'000 £'000
Interest income on bank deposits 30 -
Transaction costs relating to investment placing agreement (note 6) (81) -
Movement in fair value of derivative financial instrument (note 6) (675) -
Finance lease costs (31) (16)
(757) (16)
4. Taxation
(a) Recognised in the income statement
Current tax:
Year ended Year ended
30 June
30 June
2023
2022
£'000 £'000
Research and development tax credits (831) (956)
Total tax credit for the year (831) (956)
(b) Reconciliation of the total tax credit
The tax credit assessed on the loss for the year is lower (2022: lower) than
the weighted average applicable tax rate for the year ended 30 June 2023 of
20.5% (2022: 19.0%). The differences are explained below:
Year ended Year ended
30 June
30 June
2023
2022
£'000 £'000
Loss before taxation on continuing operations (5,981) (5,631)
Tax using UK corporation tax rate of 20.5% (2022: 19.0%) (1,226) (1,070)
Adjustment in respect of R&D tax credit claimed (295) (412)
Items (taxable) for tax purposes - permanent 140 (7)
Items not deductible for tax purposes - temporary (2) (3)
Deferred tax not recognised 686 703
Rate differences (134) (167)
Total tax credit for the year (831) (956)
No deferred tax assets are recognised at 30 June 2023 (2022: £nil). Having
reviewed future profitability in the context of trading losses carried, it is
not probable that there will be sufficient profits available to set against
brought forward losses.
The Group had trading losses, as computed for tax purposes, of approximately
£21,676k (2022: £19,032k) available to carry forward to future periods; this
excludes management expenses.
5. Earnings per share
2023 2022
£'000 £'000
Loss for the year after taxation (5,150) (4,675)
Group 2023 2022
Number Number
Weighted average number of ordinary shares in issue 94,165,295 84,860,240
Potentially dilutive ordinary shares - -
Adjusted weighted average number of ordinary shares in issue 94,165,295 84,860,240
Loss per share on continuing operations
- Basic (5.5)p (5.5)p
- Diluted (5.5)p (5.5)p
The basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders for the year by the weighted average
number of ordinary shares in issue during the year.
As the Company is loss-making, no potentially dilutive options have been added
into the EPS calculation. Had the Company made a profit in the period:
Group 2023 2022
Number
Number
Potentially dilutive shares from share options and warrants 1,163,817 971,238
Potentially dilutive shares within the SIP 339,967 208,703
Potentially dilutive ordinary shares 1,503,784 1,179,941
6. Derivative Financial Instruments
On 31 March 2023, the Company entered into an Investor Placing Agreement for
up to £5m with RiverFort Global Opportunities PCC Limited ("Noteholders").
The instrument was entered by way of an initial drawdown in the amount of £2m
and related issuance of 6,250,000 shares priced at nominal value of 1.5 pence
to be used to facilitate the settlement of amounts advanced under the
investment agreement. A further drawdown was made in June 2023 of £0.3m and
the remaining balance as at the balance sheet date of £2.7m under the
Facility is available for the Company to drawdown, at its discretion, but
subject to there being no trading Material Adverse Change:
(a) the Share Price falling below 16 pence
(b) the 3 day average volumes traded being less than £100,000
(c) the 10 day average trading volumes being less than £100,000 and
(d) the amount outstanding under the Facility being no more than £700,000;
Any outstanding liability after the disposal by the Noteholder of the shares
issued in exchange for each drawdown can be settled at the discretion of the
Noteholder by further subscription to the Company's shares. The Company can
also elect to settle the outstanding liability with a 10% premium on the
balance. As the value of the outstanding amount is expected to move with the
Company's share price, the instrument met the definition of a derivative and
is initially recognised at fair value with changes in fair value recognised in
profit and loss.
Pursuant to the facility, the Noteholders were granted warrants exercisable at
41.6p to subscribe for 2,500,000 ordinary shares and were granted warrants
exercisable at 24.607p to subscribe for 682,731 ordinary shares. All warrants
remain outstanding at 30 June 2023 and can be exercised at any time from the
date of issue for a period of four years.
The warrants are initially valued using a model which utilised observable
market factors such as the share price at the date of the grant, the term of
the award, the share price volatility and the risk-free interest rate (Level 2
inputs).
The Company made drawdowns of £2.3m during the financial year which can be
summarised as follows:
Derivative financial liability Finance Equity Warrants Total
£'000 costs £'000 £'000 £'000
£'000
Proceeds 615 - 1,117 568 2,300
Transaction costs - (81) (191) (91) (363)
615 (81) 926 477 1,937
Fair value movement 675
At 30 June 2023 1,290
Transaction costs include fees of £80,000 payable to the Noteholders that
were settled by issue of shares and included in share premium (note 8).
7. Share capital
Allotted, issued and fully paid:
Number £'000
Balance at 30 June 2021 63,320,048 950
Share issue - equity-settled share-based payments 271,546 4
Share issue - deferred consideration 500,000 8
Share issue 28,450,852 426
Balance at 30 June 2022 92,542,446 1,388
Share issue - equity-settled share-based payments 7,500 -
Share issue 6,500,000 97
Balance at 30 June 2023 99,049,946 1,485
On 1 October 2021 the Company issued 28,450,852 shares as part of a placing
and open offer to shareholders for net proceeds of £6.6m.
On 10 December 2021 the Company issued 500,000 shares in genedrive plc to the
former owner of Visible Genomics as part of a Deed of Amendment agreed in
December 2018 to the Visible Genomics Sale and Purchase Agreement.
On 3 April 2023 the Company issued 6,500,000 shares with a nominal value of
£97,000 as part of the Investor Placing Agreement detailed in note 6.
8. Other reserves
Share premium account Shares to be issued Employee share incentive plan Share Reverse acquisition reserve Total equity
reserve
options reserve
£'000 £'000
£'000 £'000
£'000 £'000
Balance at 30 June 2021 46,055 115 (196) 1,522 (2,496) 45,000
Share issue - deferred consideration 107 (115) - - - (8)
Share issue 6,264 - - - - 6,264
Equity-settled share-based payments - - - 38 - 38
Transactions settled directly in equity 6,371 (115) - 38 - 6,294
Balance at 30 June 2022 52,426 - (196) 1,560 (2,496) 51,294
Investment funding arrangement (note 6) 910 477 - - - 1,387
Equity-settled share-based payments - - - 96 - 96
Transactions settled directly in equity 910 477 - 96 - 1,483
Balance at 30 June 2023 53,336 477 (196) 1,656 (2,496) 52,777
Shares to be issued relates to the warrants issued; full details are contained
in note 6.
The employee share incentive plan reserve is the historic cost of shares
purchased to satisfy share rights under the Share Investment Plan ("SIP") of
£196k. The Company no longer buys shares to satisfy the SIP.
The reverse acquisition reserve arises as a difference on consolidation under
merger accounting principles and is solely in respect of the merger of the
Company and Epistem Ltd, during the year ended 30 June 2007.
9. Post balance sheet events
The Company made two £0.3m drawdowns under the Investor Placing Agreement
(note 6) and issued 724,997 and 1,614,669 warrants to the Noteholders in July
2023 and November 2023 respectively.
The Company signed the DEVOTE funding grant post year end.
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